General Articles

TYCOON OF THE TALL TIMBER

ROLAND WILD March 15 1948
General Articles

TYCOON OF THE TALL TIMBER

ROLAND WILD March 15 1948

TYCOON OF THE TALL TIMBER

ROLAND WILD

THE TIME is five minutes to two on a Friday afternoon and the place is downtown Vancouver.

A big man in a loose grey suit steps from the solid, respectable doorway of the Vancouver Club. His powerful shoulders are hunched forward, he has an air of complete preoccupation. His objective is the doorway of an office building 100 steps away. He covers the distance in a quick, rolling gait and takes the elevator upward.

H. R. MacMillan, one of Canada’s top industrialists, is bound for his weekly directors’ meeting.

It is right to be introduced to MacMillan in a hurry and against the half-pioneer, half-sophisticated atmosphere of downtown Vancouver, for he is the biggest man in town, in the Province of British Columbia. A symbolist-painter might portray him accompanied by a forest (half growing and half falling), a ship in the yards, a salmon on the line or about to enter a can, a globe of the world and a hook of history. He is a complex character, unusually charming when he wants to be, unusually forthright when he decides not to be charming.

One piece of MacMillan news for 1947 practically tells the story of his life: for $9 millions, his company bought the Victoria Lumber Co. Not a huge deal, as MacMillan deals go, hut significant. His first major business job, in 1916, was with the Victoria Lumber Co. He was assistant manager. He left because he didn’t think the manager was doing his job right and told him so.

How rich is MacMillan? Only a few people know, but it’s correct to put him in the multimillionaire class. The net profit for 1947 in the H. R. MacMillan Export Co. and its 22 subsidiaries was $7,128,000 on a total business of $63 millions. The assets of the main company Continued on page 46

Tycoon of the Toll Timber

Continued from page 13

and its subsidiaries, all of which are related to the lumber or fishing industries, are about $20 millions. In addition, MacMillan serves on the directorates of several major Canadian companies with total assets running into billions. It would be a reasonable guess to place his annual income (exclusive of capital holdings) well up in six figures. (Income tax takes more than 85% of it.)

He got up into the rarefied atmosphere of the multimillionaire zone because he liked to buck the established method of doing things. He believes that human beings are apt. to set themselves targets they feel fairly certain of achieving. In his own business and when he was working in government jobs, he told people to set impossible targets. They got there.

It is only fair to say that he uses the same system on himself. “When I started in business for myself,” he says, “I had so little money and so little knowledge and the job was so great that 1 didn’t know it couldn’t be done. So I went ahead and did it.”

MacMillan fits easily into the role of tycoon, in looks and methods, even to objecting to being called a tycoon. There is a touch of Middle Ages regality, too, in the repetition of the initials “HRM” throughout his commonwealth on the Pacific Coast. Every plank leaving one of his sawmills bears his initials. His ships are all called “Harmac.” The company magazine is the “Harmac News.” “It’s a good principle to make the name good and then make it known,” he says.

Tale of a Dog

The most widely used adjective in connection with MacMillan has undoubtedly been “ruthless.” A newspaperman once called MacMillan to ask for information and the abrupt reply was: “1 haven’t time to educate you!” But the newspaperman has since become his good friend. Even when HRM has blasted the ethics out of a

smug civil servant with the straight language of the great outdoors, he has often turned round later and said to a friend: “You know, I’m afraid he

resented that. I’m just not good at that sort of thing.”

Harvey Reginald MacMillan was born at Newmarket, Ont., Sept. 9,1885, to John Alfred and Joan MacMillan of United Empire Loyalist stock. When he was two his father died and he went to live with his grandparents while his mother worked to pay for his education. He attended public and high schools and the Ontario Agricultural College at Guelph, where he graduated in 1906 with the degree of bachelor of science in agriculture. He took the postgraduate degree of master of forestry at Yale.

One incident of his Yale days is revealing. His class had to travel to Alabama after a 10-day vacation. MacMillan had $25 to cover both the vacation and the journey. Before he left, he had bets neatly stacked against his arriving in the South with his $25 intact 11 days after leaving the university. He set out, by freight train and deck passage on coastal ships. But when the dealine was six days away he had 240 miles to go and no ride. MacMillan set off on foot.

During the second day, he was joined by a dog. On the fourth day a man stopped him and said, “Fine dog you’ve got there, mister, want to sell it?”

“Twenty-five dollars exactly,” said HRM. Then he went to collect his winnings—or they might have been earnings.

He was 23 when he joined the Department of the Interior back in Canada. That was 1908. He toured the prairies and the Rockies on survey work for settlement. One day he was riding ahead up into the rolling hills east of the Rockies in the sunshine of an unseasonably warm day. He had slung his mackinaw over the load carried by one of the packhorses. The packer slacked along without paying attention to his job and too late raised the alarm that one of the horses had broken and headed forborne—bear ing themackina%v with it. The mountain air turned cold and when the expedition was over, Continued on page 48

Continued from page 46 MacMillan returned East with a heavy and persistent cold. Then came the bad news. He had tuberculosis.

First he went to a sanatorium at Saranac Lake, New York (“until it began to look as though I was going to last longer than my money”), then a sanatorium at Ste. Agathe in the Laurentians. The three years before he recovered had a major effect on his life.

Month after month, flat on his back, MacMillan read, mainly classics and history—particularly Canadian history. Today the Canadian section of his library is one of the best in the Dominion and few Canadians can approach his detailed knowledge of the country down from French colonial days.

The hospital days weren’t wasted.

The man in the corner cot on the veranda was figuring out what gave Sir John A. Macdonald his power, what gave the Duke of Wellington his organizing capacity, what manner of men got. things done, what were their mental processes, what other attributes did they bring to their jobs besides singleness of purpose? The story of John Jacob Astor and his Astorians, of the North West Company and the Hudson’s Bay organization, the heads of India House, the lives of the railway builders in Canada and the United States—all this went into the unplanned and incidental reading course.

The result was that when the day of discharge came in 1911, young MacMillan had a lot of theories to test out.

Two months later he married a girl he had known in Newmarket, Edna Mulloy, and went west to B. C. As first chief forester for B. C. with a salary of $3,000 a year at the age of 27, he could have settled back for a long time and considered himself well off. But he decided the job needed more than that. The province was rich in timber, but Canadian lumber was handled through San Francisco and given second place to American orders. “British Columbia only got the orders the United States didn’t want,” he says, “and none of the cream. Production was low. There didn’t seem to be anyone in the province ready to take a chance as a merchant buyer, and nobody who could command freight.”

Saying “No” to Sir George

So he began a campaign of telling the federal Government what should be done about marketing timber and the reward came in 1915 in the shape of an offer to be special Timber Trade Commissioner, to tour the world and find markets for Canadian lumber. He was on his way to complete the job when he was recalled, in 1916, to be offered the job of Canadian Commissioner of Commerce. (The bout with T.B. had made him unfit for other war service.)

It must have been an impressive scene in the Empress Hotel, Victoria, when he declined. Sir George Foster, representing the federal Government, and MacMillan paced the corridor and the young man asked for impossible powers. He wanted the unprecedented right to fire Canadian trade commissioners in foreign countries. But this was too revolutionary a proposal and MacMillan didn’t get the job. He took his brief job with Victoria Lumber then, but his boss insisted on doing things his own way. Late in 1917, he became an assistant director with the Imperial Munitions Board.

One of his jobs was to get airplane spruce from the Queen Charlotte Islands. There had been difficulties with the tugmen towing the vital rafts of timber from the islands. The men jumped ship too easily and too often

and refused to sail unless they had a full crew. MacMillan’s remedy was to turn the tugs around so fast the men had little time for festivities ashore.

One day, somehow, a cook got ashore at Prince Rupert and disappeared. No cook in sight and the skipper wouldn’t sail without one. In desperation, HRM went to the chief of police.

“Haven’t you anyone in the jail we could use?” he asked.

But the only prisoner was in for murder.

“Now look here, chief,” said MacMillan. “In a town of this size there’s bound to be someone who should be in jail.”

The co-operative chief rounded up a drunk who was dumped on a bunk near the galley.

“He’ll have to do,” MacMillan told the skipper.

“Why,” said the captain, “he’s a pretty good cook. But how did you know he was the guy we lost?”

Rising With the Boom

With the war over, MacMillan’s job with the Imperial Munitions Board ea*¿ed. It was obvious that there would be a big demand for lumber. In 1919, out to B. C. came Montague Meyer, of London, Wartime Timber Controller for Britain and in peacetime one of the world’s great lumber buyers. Meyer, who had met MacMillan both in London and in Canada, said: “A boom is certain. Britain is planning an immense building program. I’ll back you if you go into export.”

MacMillan agreed and settled himself with a solitary stenographer in the same building in Vancouver where he now has four floors. It was the beginning of the H. R. MacMillan Export

Co. Then he went after the markets. “Any amount above 20,000 feet to any retailer anywhere,” was the gist of the new slogan.

His first partner was W. J. Van Dusen, formerly district forester for Vancouver district, soon to be joined by Harold H. Wallace, then the accountant for the new firm. Both, with L. R. Scott, who was hired to help out for a month in 1922, are directors of the firm today, the fifth being E. Blake Ballentine, who joined in 1932.

From the start, HRM and his codirectors believed in going after things themselves and in the next quarter century 18 men in the company visited 23 countries other than the United States, a total of 106 times. It needed only the hint of a big deal for MacMillan to change his plans and skip to another continent.

Once, in 1921, he was in Australia when he heard of a railroad tie order for the Bengal Railway and the Nizam of Hyderabad in India. HRM was on the next boat, but in Calcutta there seemed to be nobody authorized to make the deal. He cabled Meyer in London, who said he thought there was a lead there. So HRM sailed for London where he tracked: down a decidedly unspectacular-looking agent who confirmed that he was indeed authorized to sign the papers on behalf of the Bengal Railway and the Nizam. MacMillan closed this two-million-dollar deal before leaving the office.

This first major operation in 1921 put the new company into the big time. The Canadian dollar was at 75 cents in the free market, so that the settlement was made with a 23%% premium to the company.

In 1923 the connection with Meyer was severed and MacMillan went on his

own. After the Japanese earthquake of the same year, there was a MacMillan representative on the next boat leaving Vancouver. With the Japanese Government as guarantor, lumber was shipped to the limit of the firm’s resources. When the debt threatened to strain the company’s credit, HRM went to Japan to collect.

The Government in Tokyo seemed bound in red tape. MacMillan’s Japanese agent admitted he could get nowhere. Neither could MacMillan, at first. Then he found why. It was a case of pay the customary squeeze or go broke. He paid.

When MacMillan refused to recognize the agent’s commission because the agent had failed to collect, the agent was enraged. MacMillan was tipped off that an attempt would be made on his life and the same night he caught a thug entering his hotel window. “I understand,” said MacMillan, “he landed in a flower bed, so he probably wasn’t badly hurt.”

When he sailed, several Japanese gangsters tried to drag him off the boat. He grabbed a stanchion and hung on. When the ship’s police arrived, they found a man somewhat ruffled but still in possession of one of his tenets—that if you have established a sound position you shouldn’t let go.

HRM Expands

MacMillan’s added offices in New York, Portland, Tokyo, Yokohama, Kobe, Montreal, Sydney and Shanghai. Enquiries came from all over the world direct to Vancouver. “It wasn’t easy,” MacMillan says. “We wrote and called on one firm in the Far East for five years before we got an order.” Eventually B. C. couldn’t handle all the demand for lumber and MacMillan bought heavily from mills in Washington and Oregon—a direct reversal of the situation not many years before.

In 1924 he founded Canadian Transport to do his own chartering and shipping (once previously he’d had 52 ships under charter). The MacMillan house flag, a green fir tree on a field of white, was now seen all over the world. When the Canadian Government sold its wartime fleet of 10,000-tonners, Canadian Transport bought six.

In 1935 HRM faced a major crisis, the decision of the manufacturers of about 80% of the exportable lumber produced in B. C. to form their own export sales company. MacMillan’s had to decide whether to retrench or go into sawmilling. HRM and his partners plunged. They bought the Dominion Mills and Alberni Pacific Lumber Co., redesigned them, paid top wages arid stepped their capacities up 50%. Then HRM went in with Blake Ballentine, a big plywood exporter, to organize B. C. Plywood Limited, Ballentine becoming the fifth director of the company. Before long MacMillan and his associates had become the largest producers of plywood in the British Empire.

He got into fish packing without trying. An Eastern industrialist told him: “You Westerners are always

yelling about the East not putting money into your country. We’ve got a million dollars in a fishing company in B.C. and we’re very unhappy about it. Why don’t you people out there help fix it up? Get into the picture yourself, for instance . .

HRM took this to be a challenge to the good name of B. C. and took on the running of B. C. Packers. As president, with a new all-local directorate, he found canneries working at a loss and on conservative fines. There were too many canneries in too remote places, each working a few weeks a year and then idling.

Unencumbered by the traditions of the business, MacMillan waded in. He slashed overhead, consolidated canneries and added clams, crabs and pilchards to the line. The red figures on B. C. Packers’ hooks changed to black and the company paid its debts and resumed dividends.

When war came again, MacMillan was the obvious choice for federal Timber Controller. In November, 1940, he was moved to chairmanship of the Wartime Requirements Board.

At times the usual interdepartmental difficulties were almost too much for HRM. His two sons-in-law (his daughters both married prior to the war) had commissions in the Navy and had it not been for this family interest, he might have returned to the West Coast.

Shipbuilding Czar

In the spring of 1941 MacMillan had just completed a series of reports on Canada’s potential capacity to build cargo and naval ships. On the basis of the reports, Hon. C. D. Howe asked him to be president of a Crown company, Wartime Merchant Shipping Ltd., to make Canada into a great shipbuilding nation.

MacMillan immediately wired a group of 15 ship repairers to meet him in Montreal. He wired some of his own men from the West, notably H. A. Stevenson, managerof Canadian Transport, to come east. Then, one Sunday morning, he met the ship repairers. His brief speech had a touch of the high-pressure salesmanship and drama. He told the shipping men to decide how many 10,000-ton ships they could possibly build in a year and to err on the side of optimism. “The man’s mad,” said one of them.

MacMillan didn’t know anything about shipbuilding, but his office, he said, would take care that there would be no delay because of material shortages—a boast that in wartime is usually regarded as proof of instability. In the next few months staid executives complained that they were treated like children by this beetle-browed brusque man of the forests. It wasn’t the way to do business, they said. MacMillan agreed. But from that start Canada became the second greatest shipbuilding nation in the world.

His job finished, (and later recognized with a C.B.E.) MacMillan returned to Vancouver, to find that his companies had lost half of their 3,600 employees to the forces. He foresaw rightly that labor relations would be one of the biggest problems in Canada and the world. He took steps to head off trouble.

Keeping Them Happy

Open-shop union contracts cover all MacMillan hourly employees (he has 5,000 on the payroll now) and though there has been strike talk in the woods during the past year, the men themselves agree that they’ve never had it better. What’s more, there’s something about MacMillan that the men like personally. A union official said: “HRM seems to have been one jump ahead of us again; the conditions are so good and the old silvertip has his ear so close to the ground that we would have difficulty in finding a reason for improving our condition.”

Posters in every camp and slogans in the Harmac News tend to prove that it is a privilege to work for HRM. A safety drive has cut the accident rate far below the average for the industry. The tables groan with food. Up in the woods above Chemainus, Vancouver Island, the supper menu for loggers reads: “Soup, stew, roast beef, cold meats, vegetables, pudding, pie, fruit,

cheese, coffee, tea.” It costs the company $3 a day per man to keep this up and the logger pays $1.50.

Outside the big mess-hall, the traditional iron triangle hangs on a nail so that Charles Preveneau, the chef, can beat it with a spoon and sing, “Come and get it!” But he doesn’t. He calls them in over a public address system.

In the little gasoline buses that run up to the woods every morning, the talk is about such things as these. Archie Turner, turned 60 and a flunky who has been within sound of the shout of “Timber!” for 47 years, is a little ashamed of the clean sheets on his spring bed in the camp, the closet for his clothes and the showers. He says: ‘T used to report at camp and he told: ‘Draw your bed boards and there’s straw in the horse lines.’ ”

In Archie’s day, loggers worked for 15 cents an hour; today the average is $240 a month. The habits of the men have changed too. There isn’t so much drinking of hard liquor and while the conversation is often colored with those military words, there is a barrage at table of “please” and “thank you” like a schoolmarm’s picnic.

The Pressure is Off

Linked up with HRM’s interest in working conditions is his long fight for proper conservation of the forests. He started, for the first time in B. C., the “patch” system of logging, a plan in which 130 to 200 acres are harvested, leaving the living forest to provide the seed. When the new cut-over patch is found to be well restocked, the adjoining land is logged. In 60 to 80 years the area will be ready for another harvest. MacMillan has tried hard to make converts to the system through evidence and speeches.

Slander is almost inevitably attracted toward a man who has gone out and made a pile for himself. One anti-MacMillan charge is that he has forced competitors out of business. This is an obvious thing to say, but in fact MacMillan never cried “Timber” with any jubilation when another Canadian lumberman fell. In a business with a high mortality rate, he has survived by a combination of gambling, hard-driving salesmanship and by hiring young men, paying them good money and persuading them to forget their homes, wives, hobbies and private lives for the benefit of the good old initials HRM.

Things are rolling easily for HRM these days—he has time on his hands. “I don’t play bridge or golf or anything like that,” he says.“Maybe I’ve missed something. But I don’t get interested.” So he puts his energy and money into a farm on Vancouver Island which can’t possibly pay an economic return.

He puts down riding as a hobby, but he still regards the horse as just another means of getting from point A to point B, preferably in search of big game. He fishes, expertly, with a light rod for salmon or trout, and in these mellower days he has gone back to his history books.

A man with a serious mind, he is not content to deal long in the flimsy currency of small talk, at which he can be adept. At social affairs he is likely to turn the conversation to some serious subject.

Closest to his mind now is construction of a Vancouver Island pulp mill which will cost $12 millions when finished and will feed entirely on his company’s logging waste. But he hasn’t stormed into an office in London or Manila in years and, right now, with the world screaming for timber, there isn’t a single serious crisis on the horizon to keep him happy. -fa