The richest Canadian who ever lived
Aloof, mysterious, monomaniacal in pursuit of money and power, Sir Herbert Holt pyramided intricate financial transactions that — at one point — put him in command of three billions and almost gave him a corner on Canada
PETER C NEWMAN
The bottom of the fifth inning during the September 28, 1941, International League baseball game at Montreal's Delorimier Stadium was interrupted by the rude spit of a loudspeaker announcing: “Sir Herbert Holt is dead.”
The crowd hushed, whispered, then cheered. This was the public elegy to the financial recluse who built up the greatest empire of ownership in Canadian business history — the guiding force of more than three hundred companies on four continents. In the forty years before he died, there was scarcely a productive agency in Canada that did not feel the consequences of Holt’s rivalry.
To most Canadians of his time, Holt represented an obsolescent business aristocracy which could easily be blamed for the country’s economic difficulties. Montreal wags during the 1920s claimed that when some of Holt’s blood was used in a transfusion to one of his grandchildren, the youngster froze to death.
During the 1931 strike of the Canadian Union of Linemen and Helpers against his power companies, Holt's life was threatened so often that Montreal papers had his obituary set and waiting in their composing rooms. Holt refused to give up his morning habit of walking to work. He marched through downtown Montreal, enclosed in a square formed by four guards with cocked rifles. A year earlier he had ducked under his mahogany desk barely in time to avoid the bullets of a deranged stockbroker.
Holt did not, as his enemies often charged, control the fiscal policy of Canada. But he approached that status closer than any other businessman before or since. Canada in 1928 had paper money and coinage in circulation totaling three hundred million dollars. Holt in the same year was shepherding assets worth nearly three billions, among them banks, mountains of ore, fur shops, hotels, streetcar systems, railroads, forests, flour mills, shipyards, theatres, life-insurance firms and world-spanning utilities interests.
The Canadian economy did not have enough resources to allow him an accumulation of corporate power equivalent to that of John Rockefeller or Henry Ford, but in the days of multimillionaire mystery men, Holt was the Canadian equivalent of Sir Basil ZaharotT, the secretive Greek who became the greatest armaments salesman in history, and Montagu Norman, the tradition-shattering Bank of England governor. Holt’s spectacular instinct for profitable business situations gained him international stature. “Sir Herbert is the business brain of Canada,” wrote the Daily Express of London in a 1926 editorial. “He holds a position in the commercial and industrial life of the Dominion, for which it is impossible to find any parallel. He is certainly a more important figure in the Canadian world than the prime minister is in that of Great Britain.”
Holt was president of twenty-seven major corporations, ranging from the giant Montreal Light, Heat & Power Consolidated, which he founded, to a railroad through the Peruvian Andes, which he surveyed on mule-back. When members of the 1934 House of Commons Committee on Banking and Commerce angrily insisted that Holt reveal the exact number of his corporate affiliations, he calmly replied: “I cannot tell you. I have never kept any sort of record.”
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Holt’s financial accomplishments branded him so decisively as a money mogul that many Canadians, even in his lifetime, ignored his more practical achievements. He had been the engineer in charge of punching the Canadian Pacific Railway through the sliding-earth passes of the Rocky Mountains, in 1914 he designed the railroad transportation network which supplied the ammunition to halt the Kaiser’s decisive thrust across France, it was this tough field engineer that Holt’s personality suggested; he had none of the bankcrish qualities of the financial mystery man.
Three inches over six feet, he walked with the heavy gait of a tugboat skipper, flexing his knees as though to compensate for the roll of a ship. His face resembled nothing so much as a carefully washed and smoothly polished Irish potato punctured by pinched blue eyes. The broad, crewcut head bulged as if straining to hold the turmoil of its contents. His rain-grey suits and still white collars, supporting funereal neckties, fitted him with the awkwardness of a Presbyterian minister’s go-to-picnic outfit. He had an illogical hatred ol barbers.
Holt heard the jeers of his many detractors, but never bothered to answer them. He could not understand why his tactics required any defense under a system purporting to encourage individual enterprise.
He lived in the agony of self-imposed solitude. He had no intimates and few diversions. He wove brilliant, intricate financial webs, remaining always within a seldom-punctured cocoon of anonymity.
Holt was not a business administrator. He promoted his fortune by acquiring control or a dominant position in companies through trading and retrading their stock. At the edge of the depression, he was about to become head of the world s largest corporation — Hydro Electric Securities Limited, a utilities holding combine. He was well along in his plans to merge all of Canada s primary steel producers into one giant monopoly. His mills were turning out ten percent ot the world's newsprint.
Although Holt's remarkable career made him the Canadian financial monarch of his age. his name survives in none of his corporate creations. Holt. Renfrew & Company, the chain of luxury clothing stores which he controlled, was not. as many contemporaries believed, named after him. The firm's title commemorates a Quebec City fur trader called John H. Holt, who died in 1915.
Holt's economic legacy, although it doesn't stretch to the name in the furchain title, includes the commercial seigniories from which have grown such key Canadian firms as the Consolidated Paper Corporation, the Dominion lextile Company. Canada Cement, and the Dominion Steel & Coal Corporation. Holt seldom saw a movie, but Famous Players Corporation, which he organized, introduced Canadians to talkies and still dominates Canada's film industry.
The mention of Holt's name could create stock-market fortunes, or garrote them without appeal. When shareholders of Brazilian Traction. Light & Power panicked during the 1925 revolution in Sâo Paulo, rumors were leaked to the floor of the Montreal Stock Exchange that Holt was becoming a company director. The sell-off stopped, although the revolution continued and Holt never did join Brazilian's board.
Holt wanted it said of him that he had been a power. Long past the point where money could have any meaning, he worked fourteen hours a day multiplying his investments. "Sir Herbert,” says R. O. Sweezey, a Montreal investor who often fought with him. "was a ruthless, lonesome old cuss with no friends, but fundamentally sound and honest.”
Money was his driving force, only because it provided a measure of his achievements. His labors were founded on the conviction that there were certain things he could do better than anyone else. He could not bear to have them done by those less competent. “He was quite determined to get on in the world," remembers his son, Herbert P. Holt, a retired British Army officer. "Probably his two chief characteristics were a passion for efficiency and a love of work for its own sake.”
He wove brilliant financial webs, but remained a mystery man’
Holt’s closest associate was Sévère Godin, his private secretary for thirty-seven years and later one of French Canada’s richest businessmen. “Sir Herbert." Godin recalls, "wanted everyone to think that he was a man of steel. Actually, he was lonely and extremely shy.”
Holt's private life was prudishly spartan. He tried golf, but stomped off the green arguing about the number of strokes he had taken. He slept an invariable seven hours, never drank and seldom smoked. After dinner, he often went for a walk along the south side of Sherbrooke Street. Alone and unrecognized, he watched the games at the Westmount Lawn Bowling Club.
Montreal society's gossip highlight of 1931 was an account — more highly colored at each telling — of Holt’s first tournament bridge game at the Mount Royal Club. At the end of a lost rubber, Holt punched his dull partner in the jaw. The game continued without explanation or apology. But next day. a club member appeared carrying a shotgun, explaining that he thought he might be asked to play with Sir Herbert.
When he was seventy-six Holt took a mineral-bath cure at Karlsbad, in Czechoslovakia. In two days he became bored with the chatter of old men. He climbed a nearby mountain, slipped near the summit and tumbled down a cliff, partly paralyzing his right side. Two years later he suddenly joined the Montreal Light Aeroplane Club.
He did not buy an aircraft, nor did he ever own a yacht. He had no holiday home until 1935. Then he built a small, frescoed mansion at Nassau in the Bahamas. where he spent most of his last five winters. Holt’s three-story stone house on Stanley Street in Montreal impressed its visitors more as a mosque than as a rich man's comfortable sanctuary. The large entrance hall was backed by a floor-to-ceiling fireplace with set-in family crests. A drab dining chamber led into the main drawing room, which was always spotless but somehow transmitted the musty mood of a first-class railway carriage. Fourteen bedrooms and seven bathrooms were spread through the top two floors.
Lady Holt, the quietly dignified daughter of a Sherbrooke, Que., industrialist, filled many cupboards with her china collection, later willed to the Montreal Museum of Fine Arts. The house was demolished in 1942 to make way for office construction.
Just after eight every weekday morning. Holt walked the mile and a half from his house past the Craig Street pawnshops to his third-floor office in the Montreal Power building. He was chauffeureti to directors’ meetings in a 1912 Rolls-Royce. Because the automobile operated satisfactorily, Holt kept it six years.
Holt's office manners were those of a compulsive housewife. He worked behind a desk as big as a dining-room table in a puritanically unadorned, forty-foot-long room. Objections from subordinates were cut off with stiff finality. “You," he would say, "have had a bad brainstorm.”
Holt spent most of each day dictating letters to his chief assistant. Sévère Godin, at a staccato pace of two hundred words a minute. Godin seldom talked about Holt outside the office. When he did. it was usually to assure the legion of doubters that in his opinion, “Sir Herbert is the greatest Canadian that ever existed."
Holt hated publicity. "There are no family records bearing on his career,” says his son. "My father was born in an age when life was taken seriously and he retained this outlook up to the time of his death."
Although Holt headed the Royal Bank of Canada for nearly three decades, and his portrait and signature were featured on the bank’s five-, ten-, twentyand hundred-dollar bills, his personal files in the bank’s morgue contain only the copies of his speeches to annual meetings. The only personal data Holt ever passed for publication was the antiseptic description of himself in the Canadian Who’s Who, as "Civil Engineer and Capitalist.”
He was an enemy of paternalism in any form. He believed that Canada offers every man the opportunity for financial independence and that charity is bad because it keeps people from working. He usually frustrated those who approached him for philanthropic contributions. His gift to the machine-gun battery organized by Sir Clifford Sifton in 1914, for instance. consisted of a little cash and the recommendation of a young recruit, who, wrote Holt, "owns a first-class motorcycle which he is willing to place at the service of the Empire."
But he could be generous. In 1910 he financed the Typhoid Emergency Hospital in Montreal. When Dr. E. A. Garrow, a Montreal surgeon, successfully operated on him. Holt overpaid his modest bill, took over the management of the doctor’s investments and made him a millionaire.
His largest donation was a cheque for $250,000 to Canada’s Wings for Britain fund in 1941 In a thirty-two-word note, he asked that the money be used to buy Spitfires. In World War 1 Holt's contribution had been of a different kind. Soon after the war broke out the British War Office asked him to apply his railroading experience in planning the war-zone French railways. For two months he stalked around the trenches, then outlined an emergency transportation system which helped provide the Allies with enough ammunition to halt the Kaiser’s initial attacks. The 1915 honors list of King George V rewarded him with a knighthood.
Despite the fact that he had little time or patience for community projects, Holt in 1916 became chairman of the Federal Plan Commission, set up to redesign Ottawa and Hull into a properly impressive capital. His 160-page report suggested the rearrangement of Ottawa’s railway lines much as it is now being completed by the Federal District Commission. He also recommended a dramatic alternative. This would have eliminated level crossings by burying the railroads in an eastwest crosstown tunnel. Holt’s report predicted a 1950 Ottawa population of 250.()()() — within fifteen thousand of the actual count.
Holt was a lukewarm Anglican. His politics were Conservative. “But,” a colleague remarked, “Sir Herbert really understood nothing about politics except how to manage cabinet ministers.” During the depression Holt had a brief and involuntary brush with political power. Marcel Desbois, leader of the Montreal Association of French-Canadian Youth, tried to organize the province's young men into revolt to overthrow the Quebec government. Desbois calculated that doing away with the expense of parliament would save two million dollars a year. He named Holt as the “General Manager of Quebec,” at a salary of $250.000. Hoit sent the job offer to the police.
It was then almost sixty years since Holt had landed in this country during the 1875 depression—a freckled nineteen-year-old civil engineer, freshly graduated from Trinity College in Dublin, his birthplace. His first job, surveying the Toronto islands for waterworks installations, brought him in contact with James Ross, later one of the CPR’s builders and an eariy Canadian coal baron.
Ross hired Holt to be assistant engineer for the laying of a crude lumbering line called the Victoria Railway, running from Lindsay, Ont., north into the Haliburton bush. Two years later Ross picked Holt as his superintendent of construction for the Credit Valley Railway, now part of the CPR’s main Montreal-Windsor line. The road’s credit was at first so poor that part of Holt's job was to collect the fares at Parkdale, the Toronto terminus, take the money to a nearby dealer, and buy enough coal for each trip.
In 1883 Ross was awarded the major contract for CPR construction west of Winnipeg and took Holt with him as his chief engineer. A year later Holt resigned to form his own construction firm.
When Holt’s construction gang reached the Selkirk Range, the CPR temporarily ran out of funds. The gambling bosses at nearby Beavermouth, deprived of their income, fanned the men into a strike mood. Holt armed his clerks with all his available weapons—nine Winchesters and six revolvers—threw a log across the trail from Beavermouth, and waited with six-shooter drawn. I he army of strikers, many of them carrying rifles, marched toward Holt's platoon. "The first man that crosses that log. I shoot. Holt warned them. “We have guns enough to take care of the hundred and fifty of you. Now you know." Not a man moved.
The present location of Calgary owes something to Holt’s imaginative abruptness. When his tracklaying crews got as far as the Bow River, settlers of the hamlet called Calgary objected to their distance from the rails. Holt couldn't change the path of the railroad so he moved Calgary. He hitched a team of oxen to the Calgary post office and dragged the shack closer to the tracks. The settlers gradually moved, so they'd have a shorter walk for mail.
Provision was made for Holt to be in the front row during the driving of the last CPR spike at Craigellachie, B.C., on November 7, 1885. But when he was asked where he stood during the ceremony, he said: “I wasn't there, I was too busy.” He couldn’t attend because he was repairing the still-shifting rails west of Revelstoke, to ensure the safe passage of' the inaugural train.
In the last eighteen years of the nineteenth century, Holt and his partners threw five hundred and fifty miles of track across the prairies, built most of ihe CPR links through the Rockies and the Selkirks, and constructed many of the pioneer lines in New Brunswick, eastern Quebec and Maine. In 1901 Holt permanently deserted the contractor’s car and moved to Montreal.
During the next twenty-three years he methodically bought up the eighteen gas and electricity firms distributing energy on Montreal Island, merging them into Montreal Light, Heat & Power Consolidated, which eventually became the largest privately owned utility in the world. Stockbrokers marveled at Holt’s intuitive market touch. Each share in Montreal Light, Heat & Power Consolidated, originally worth a hundred dollars, had by 1925 multiplied to $1,140. The huge utility was expropriated by the Quebec government in 1944 for $112 million.
In 1924 Lord Atholstan, the founder and publisher of the Montreal Star, ran a series of well-documented articles showing the details of how Holt had watered Montreal Light’s stock structure. Values of the shares tumbled thirty-three points. Frantic investors clamored for Holt to make a statement. He refused to defend his company. Instead, Holt quietly ordered his brokers to buy up the depreciated stock. As values gradually recovered, Holt’s calculated silence netted him a million dollars in trading profit.
Most Canadian corporate quarrels are settled in a broadloomed hush, between the walnut paneling of board rooms. Holt provided a dramatic exception by challenging Sir Adam Beck, the founder and chairman of the Ontario Hydro Electric Commission, to a strange public duel. Beck had told a reporter that Holt’s stock manipulations had forced the price of Montreal electricity from forty-two dollars to seventy-five dollars per horsepower. Holt exploded. He offered ten thousand dollars to any charity named by Beck if he could prove his charges. “The disparity is so heavily in the commission's favor," Beck replied, “that the challenge isn’t worth the time required to pick it up."
Holt extended his power empire to international proportions in 1926 by joining the board of SIDRO, a Belgian holding trust with effective control over fifty utilities, including the huge Mexican Light & Power and Barcelona Trae tion, Light &. Power. The head of SIDRO was Captain Alfred Loewenstein, one of the world’s richest and most influential businessmen.
In 1928 Loewenstein wanted to amalgamate his holdings with Holt’s properties into a trust called Hydro Electric Securities Limited. In terms of its controlled assets, it would have been the world's biggest corporation. Holt agreed, with one provision: that he would become the merger’s president.
To settle the preliminaries, Holt sent Godin to Loewcnstein’s New York hotel room. The talks started badly. The European financier traveled with a staff of forty and wanted at least a dozen assistants to witness the negotiations. Holt's man insisted on privacy. Godin finally sketched out the anatomy of the world's largest company while squatting on the ledge of Loewenstein’s bathtub. The Belgian agreed to Holt’s presidency while soaping his armpits.
The ambitious arrangement endcX abruptly on July 28, 1928, when Loewenstein leaped into the English Channel during a private flight from London to Brussels. His secretaries testified at the inquest that he had opened an exit instead of the washroom door by mistake. But many theorized that it had been suicide. Holt eventually became the dominating influence in sixty-five power companies, including the municipal systems of Monterrey in northern Mexico, Calgary. Fort William. Sydney, the Okanagan Valley and most of Quebec.
During his twenty-six years as its president, he multiplied the Royal Bank of Canada's assets fifteenfold to $750 million. ‘He did more to build this bank than anyone else." says Sydney Dobson, the Royal's general manager under Holt's chairmanship. Just before Hoh died the Royal outgrew the Bank of Montreal, fulfilling one of his great ambitions. It has since become the world’s seventh largest bank.
Holt's banking connection cost him the presidency of the Canadian Pacific Railway. He had been a CPR director and member of the executive committee since 1911. He was nominated for president in 1918. but that would have meant a switch of the railroad’s banking account to the Royal from the Bank of Montreal. which had enough representatives on the board to kill the appointment.
Holt's most ambitious scheme, launched when he had passed seventy, was his attempt to weld all of Canada's steel producers into a super-corporation w'ith assets of more than a billion dollars. As a start, he paid fifty million dollars for control of the British Empire Steel Corporation in Sydney. He added to it an assortment of thirty associated industries, renamed it the Dominion Steel & Coal Corporation, and made it into what was then the biggest industrial empire in the country. Holt remained a Dosco director until 1940. but his plans for further mergers were balked by his inability to interest the Steel Company of Canada and Sir James Dunn's Algoma Steel.
Holt attempted a similar agglomeration in the pulp-and-paper industry, with his 1929 formation of the Canada Power and Paper Corporation. By trading Canada Power and Paper stock in exchange for the shares of the recruited companies. he acquired control in nine major paper producers with assets of more than $250 million, timber limits half the size of the British Isles, and mills producing one tenth of the world s newsprint.
To provide his company with more pulpvvood he bought the island of Anticosti. at the mouth of the St. Lawrence, sent in three thousand lumberjacks and built five ships to bring out the wood. Because of the high initial investment. Anticosti timber cost ten dollars per cord—almost twice as much as most other Canadian pu Ip wood. The shareholders of Anticosti bitterly referred to their company as the "Aint-lt-Costly Corporation." In 1934 they realized three dollars on an average original per-share price of ninety-four dollars.
As the depression of the I hirties cut world demand for newsprint, the shares of Canada Power and Paper plummeted from a 1929 high of fifty-five dollars to a 1931 low of one dollar. Shareholders rioted at annual meetings, demanding withdrawal of their original companies out of the floundering dinosaur. Holt's vision of a pulp-and-paper empire was snuffed out on October 31. 1931, when Canada Power was replaced by the Consolidated Paper Corporation. Shareholders received one Consolidated share for ten in the old company. Consolidated has since become Canada’s third largest papermaker, but it didn't recover from its debt-ridden birth sufficiently to pay dividends until 1946. The 1929 crash dissolved Holt's previous immunity to financial flops, but paradoxically left his personal fortune only slightly dinted. His position was never in jeopardy. According to Sydney ITobson. the former Royal Bank president: “Sir Herbert got out of the market in time. He never played on margin."
“Whatever may have been the result of the crash." recalls Holt’s son. ‘I noted no change in my family's way of living.”
Holt's death at eighty-five, on September 28. 1941, came after the shock of having stepped into an overheated bath. “More than anyone else,” wrote London's Daily Express, "Sir Herbert made Canada great in peace and powerful to defend her greatness in war." The Montreal Gazette summed up his career: "Not only was he the richest man in Canada, but his activities, direct and indirect, covered a field which for variety was unequaled by those of any financier in the world."
Eight carloads of flowers followed Holt's coffin out of St. George's Angli-
This article is excerpted from a chapter to he included in a forthcoming book, The blame of Power, which will he published later by Longmans, Creen.
can Church. But even in death he presented Montreal society with a dilemma. Senator Lome Webster, another of Canada's great business princes, had died five hours before Holt and was being buried an hour and a half later at Dominion Douglas United Church. Most ot the mourners thought it more diplomatic to be seen at Webster's funeral. ★