Sir. James Dunn, who controls a steel empire, a big lake shipping line and the destiny of Sault Ste. Mare, is also famous for the lavish life he leads in two-Canadian mansions, a Riviera villa and a permanent hotel suite

IAN SCLANDERS September 15 1951


Sir. James Dunn, who controls a steel empire, a big lake shipping line and the destiny of Sault Ste. Mare, is also famous for the lavish life he leads in two-Canadian mansions, a Riviera villa and a permanent hotel suite

IAN SCLANDERS September 15 1951




SIR JAMES HAMET DUNN, Baronet, a spry and dashing septuagenarian of St. Andrews, N.B., is in his own way as rare a bird as the Ipswich sparrow or the Hudsonian Godwit. Time has dealt harshly with the legendary and once-hardy species to which he belongs the freewheeling multimillionaire who stakes out. his personal financial empire, runs it pretty much to suit, himself and speeds a handsome portion of his money living the way a multimillionaire is supposed to live. But so long as Sir James personally rules his industrial domain of iron, steel, coal, chemicals and steamships, his two mansions, his villa on the Riviera, his seventeenhundred-acre sporting lodge and his permanent; hotel suite, and has his choice bí' four company planes, the species will not be extinct.

Sir James’ fortune has been estimated as high as a hundred million dollars and he has never been afraid to indulge his fancies. He has on impulse saved the lives of total strangers and there is the legend that, he once bought a nine-story hotel so he could fire a chef who displeased him. He holdfs the destiny of a medium-sized Canadian city in his palm. More important to a man of his highly individual bent, he has been in control of his own destiny for most of his seventy-six years and has thrived on it. His cheeks are still ruddy, his features still strong and sharp and his personality as vigorously unpredictable as ever. He expects to live to be a hundred and has a 20-year program of development mapped out for his steel empire.

He works hard and is constantly on the move, usually in one of his aircraft, which like many another industrialist he maintains because he believes they save time and consequently money.

No Canadian lives more lavishly. Dunn is a gourmet who will have delicnc'es flown to him from Montreal when they aren’t stocked by the grocers of St. Andrews, N.B. If he feels like seeing a horse race in Europe—as he did in June when the Grand Prix was being run in France—he flies to New York and crosses the ocean first class on the best steamer available.

He has one of the best private libraries in the world, an air-conditioned private theatre and an art collection that includes works by Fra Filippo Lippi, the fifteenth-century Italian master, and Sir William Orpen.

He has his own brand of whisky, blended for him in Scotland, with his name on the label of each bottle. He has his own brand of king-sized cigars, imported from Cuba at a cost of more than a dollar apiece. His wine cellar is stocked with rare and expensive vintages. His automobiles range from a Morris Minor to a Rolls Royce.

His romances (he is thrice married, twice divorced), his explosive temper and his general flamboyance sometimes tend to obscure Dunn’s real accomplishments. You are more likely to hear that he has a barber flown all the way from Montreal to New Brunswick to cut his hair than that Ins Algorna Steel Corporation is embarking on a seventy - five - million - dollar expansion program. His associates call him a genius. He was once able to sell twenty-five million dollars in securities in forty-eight hours. Otto Kahn, the famous banker, as early as 1925 called him “a greater financier than all of us.”

He did not become an industrialist until he had turned sixty, when he became chairman, president and, for all practical purposes, owner of Algorna Steel. Then its plant at Sault Ste. Marie, Ont., was engaged mostly in rail production and was financially on the rocks. Dunn has built it up until it produces a third of Canada’s steel output.

Half the wage-earners of Sault Ste. Marie (pop. 32,000) are on his payroll and the future of the city depends on his decisions. At the moment thic future looks brigÍL, He has obtained control of Canada ^Steamship Lines, thus assuring h im of lake freighters to ccf|Js iron ore.

He belongs near the tf'rb‘ toy list of the richest and most

Sir. James Dunn, who controls a steel empire, a big lake shipping line and the destiny of Sault Ste. Mare, is also famous for the lavish life he leads in two-Canadian mansions, a Riviera villa and a permanent hotel suite

powerful men in North America. Ben Fairless, head of U. S. Steel Corporation, once remarked somewhat enviously that Dunn is the only steelcompany president on the continent who enjoys the status of a proprietor and has to answer to nobody but himself.

Dunn’s home at St. Andrews, beside Passamaquoddy Bay, an arm of the Bay of Fundy, is just

a sea gull’s cry from salt water. It resembles a turreted medieval castle, an architectural style that suits him, for in his more formidable moods he’s like a feudal lord.

St. Andrews is a picturesque old fishing community founded by United Empire Loyalists. In the summer it blossoms as an ultrafashionable resort. The inhabitants are accustomed to rubbing

elbows with millionaires. But they don’t quite know what to maktof Sir James. He will stop and chat amiably with them in the street and he often sits irr the back room of Bob Cockburn’s corner drugstore. He doesn’t mind wearing clothes so rumpled that strángers have mistaken him for one of his own gardeners. Yet he can be so autocratic that he once refused to let property assessors enter his cream-colored stucco home. They had to prepare a plan of its two towers, thirty rooms, five baths, five fireplaces and two iurnaces from information provided by his lawyer.

Sir James’ long-distance calls—often trans-Atlantic—keep St. Andrews operators hopping. But no other customer sends each of them fifty dollars for Christmas. His personal phone bill is one of the largest in Canada.

Oriental Rugs on Tiled Floors

Although most St. Andrews folk are a bit frightened of Dunn because of his explosive temper he has qualities they appreciate. In 1950 Marilyn Noel, a college student employed at the Algonquin Hotel in St. Andrews during her vacation, dived into a nearly drained swimming pool and broke her neck. Dunn volunteered his plane to speed her to Montreal’s Neurological Institute for treatment. In 1949 Dunn was at Bathurst, N.B., when a young plumber, Temple McArdle, was injured so seriously in an automobile accident that it was doubtful if he would live. Dunn had him flown to Montreal where specialists were able to save him.

When a new hospital was being erected to serve the area of St. Andrews Sir James and Lady Dunn were canvassed for a donation of thirty-four hundred dollars. They gave the sum requested and tossed an extra ten thousand into the pot. Previously Dunn had given forty thousand to a hospital in Bathurst, the town of his birth; and two months ago his wife opened the Lady Dunn hospital at Jamestown, site of an iron-ore development. He contends Jamestown was not named for him.

Dunn’s St. Andrews mansion cost two hundred and thirty thousand dollars when it was built in the 1920s by I. E. Smoot, a Washington, D.C., sand-and-gravel magnate. In the past few years Sir James has spent tens of thousands changing it. The pretentious establishment with its heavy lustrous Oriental rugs, ornately patterned tiled floors and massive furniture is staffed with English servants who function with clockwork efficiency. In the built-in movie theatre the picture flashes on the screen the instant Dunn’s trousers touch the seat of his chair.

Dunn is pernickety about interior decoration. Once in London he paid Mrs. Somerset Maugham, the author’s wife and a distinguished interior decorator, several thousand pounds to do a single room. He didn’t like the result and paid her more thousands of pounds to do it over in different motif.

A Summer Stream of Celebrities

A tall thick cedar hedge marks the three acres of carefully groomed lawns and gardens in which Dunn’s St. Andrews home is set. Around this hedge there is an eight-foot wooden fence which so enraged some residents that in the night they covered it with painted inscriptions such as “Dunn done it!” and “Don’t fence me in!” The furious baronet summoned the Royal Canadian Mounted Police but the culprits were never caught.

In Toronto Dunn insists on the vice-regal suite at the Royal York, a CPR hotel. But for a short time during the last war he deserted it for the King Edward. This was because Lady Dunn and her dogs were with him and a CPR edict had banned all dogs from the system’s hotels. Royal York executives declined to exempt the Dunn pets from the ruling and say that Sir James retired gracefully to the King Edward when the situation had been explained. Later, unaccompanied by dogs, he was welcomed back.

In the summer at St. Andrews the Dunns are the centre of a lively social circle. Their warmweather neighbors include such well-known people as Rt. Hon. C. D. Howe; Hon. Cairine Wilson,

first woman to be appointed to the Canadian Senate; Lady Davis, widow of Sir Mortimer Davis (tobacco); Hon. D. L. MacLaren, New Brunswick’s Lieutenant-Governor; the Howard Pillows (Canadian Bank Note Company); and two daughters of the late Lord Shaughnessy of the CPR, Hon. Marguerite Shaughnessy and Hon. Mrs. R. A. D. Redmond. A constant procession of other celebrities drifts in and out, among them Field-Marshal Viscount Alexander, the Governor-General; Lord Beaverbrook; the Toronto financier, E. P. Taylor and Barbara Ann Scott.

Dunn is a physical-culture enthusiast and no matter how late he gets to bed he rises early for a walk before breakfast.

When he walks his shoulders are thrown back like a soldier’s, his stride is swift, and he swings his arms briskly. Recently he has added brewer’s yeast and wheat germ to his diet and has lectured friends on the benefits of yoga deep-breathing exercises. His preoccupation with health is not new. Years ago he was an avid reader of an English publication, Golden Health, and experimented with bodybuilding formulas it offered.

At one stage London newspapers reported Dunn would eat no meat and that his meals consisted of potatoes cooked in their jackets, fresh greens, fruit and bread baked with Canadian flour. This phase didn’t last. Lord Castlerosse, a Fleet Street gossip columnist, wrote soon after this item that he watched the alleged vegetarian consume a huge plate of roast beef. Castlerosse reported that Dunn paused between mouthfuls to condemn vegetarians and proclaim that potatoes and greens were cow fodder.

Dunn expects to live to be a hundred and the betting at St. Andrews is that he’ll succeed. Whether or not diet and gymnastics have been a factor, his energy

is unbelievable. Recently he completed a deal in Detroit at 3 a.m.; seven hours later he was hiking around St. Andrews as fresh as a twenty-year-old.

Two of Dunn’s airplanes, a DC-3 and a Beechcraft, are based at the airport at Pennfield Ridge, close to St. Andrews, and two of his pilots, Bill Thompson and John Michie, live at St. Andrews. Dunn’s other planes, another DC-3 and a Norseman, and his other pilots, Bill LeSauvage and Carl Houser, are at Sault Ste. Marie and are at the disposal of Algoma Steel officials when the boss

doesn’t want them. Dunn enjoys flying and says he can “think better up where the air is clear.’’ New Brunswick people have dubbed his favorite DC-3 “The Flying Castle.’’ Dunn has the interior laid out like a lounge in an exclusive club, with a thick carpet, deep couches and easy chairs, a writing desk and a table. It has equipment for all-weather flying and Sir James studies meteorological data and offers his pilots advice when storms are encountered.

If he’s grounded by bad weather he hires a private railway car from the CPR and invariably asks for the same veteran steward, Percy V. Butler. There’s a story that when Butler first waited on Dunn years ago Dunn bellowed at him and Butler bellowed right back. It's said that the fiery baronet was so impressed by the steward’s spunk that he has liked him ever since.

There was a time when Sir James had to count his pennies. When he was a year old his shipbuilding father, Robert Dunn, died at Bathurst. Young James had to work for his pocket money as a boy. When he graduated from high school he read law with George Gilbert, of Bathurst, who today is New Brunswick’s oldest active attorney.

He was in Chatham, fifty miles away, on an errand for Gilbert when he met Dick Bennett and Max Aitken, two young clerks in the law office of Hon. L. J. Tweedie of Chatham. He struck up a warm friendship with them. Bennett later became prime minister of Canada and Aitken became Lord Beaverbrook, the newspaper publisher. All three were to receive British titles.

When Bennett enrolled at Dalhousie Law School at Halifax Dunn frantically saved every cent so he could follow him there. But at Continued on page 68

Continued from page 9

Dalhousie he still didn’t have enough money to cover expenses and toiled at a variety of odd jobs, including one as deckhand on a freighter.

Dunn got his degree in 1898 and he and Aitken hit out for Calgary where they hoped to get rich. The first person they looked up was their old pal Bennett. Bennett instantly offered to advance them the fare to Edmonton. “One town isn’t big enough for three like us,” he told them, and the remark was prophetic enough. The pair took Bennett’s advice: Dunn opened a law office in Edmonton; Aitken sold insurance. Neither was successful. Aitken went back to the Maritimes. Dunn went to Ottawa. An Edmonton client had asked him what he would charge to represent, him in the capital on a case. “The price of a one-way ticket,” Dunn replied. He never returned to the prairies.

Presently he was appearing before parliamentary committees to promote legislation on behalf of private individuals. His eloquence prompted J. N. Greenshields, a prominent Montreal lawyer, to give him a junior partnership. By 1902, the year after his first marriage, he was recognized as one of the most promising men in his profession, but he was restless, impatient, hungry for wealth and influence.

His real future, he concluded, was in finance, not law. So he bought a seat on the Montreal Stock Exchange on a borrowed twenty thousand dollars.

In his student days at Halifax young Dunn had attracted the attention of Dr. S. F. Pearson, a lawyer who was identified with South American enterprises in which Canadian capitalists had invested heavily. Pearson knew these investors were seeking somebody who could market their South American securities to the public at a profit. He suggested that Dunn might be the man. Dunn was.

They Hobnobbed With Dukes

He was next approached to participate in the financing of the Havana Electric Company in Cuba. He invaded London and sold a million dollars of Havana Electric bonds to British buyers The issue met such a ready reception that he stayed in London and formed his own banking house, Dunn, Fisher and Company. His partner, Fisher, soon withdrew from the firm, though it still bears his name.

Dunn established branches on the Continent and underwrote tramway, power and railway developments in

South America, Central America and Mexico. Pearson was linked with most of these ventures. Over a luncheon table in Paris Dunn and Pearson planned the merger of the Rio de Janeiro Tramway, Sao Paulo Tramway and Sao Paulo Electric into what is now Brazilian Traction, Light and Power Company. Another of their projects was the Barcelona Traction, Light and Power Company in Spain.

By 1914, when he was thirty-nine, Dunn was already a multimillionaire. Meanwhile Max Aitken, still in his early thirties but, worth fifteen million dollars, had joined Dunn in London, been elected to Britain’s Parliament, bought a newspaper, the Daily Express, and been knighted.

The two men from little towns in New Brunswick were a sensation in the world’s biggest city. Brilliant, dynamic, fun-loving, they lived like kings and were invited everywhere. They were wined and dined by dukes and duchesses and they hobnobbed with Lord Northcliffe, Aitken’s fellow publisher, and with David Lloyd George and Andrew Bonar Law, another New Brunswicker who succeeded Lloyd Ceorge as prime minister.

Then Dunn dropped out of sight.

He had offered his services to the British government at the outbreak of World War One and had been appointed to two or three committees. These appointments were intended to mask hazardous undercover missions which Dunn undertook and for which he was rewarded with a baronetcy in 1921. Details have never been revealed, but one of his assignments was to stem the flow of nickel from neutral European countries to Germany.

After the Armistice Sir James cloaked his business activities in secrecy. He was mentioned in London’s financial section as the architect of many major deals. But he surrounded himself with such an aura of mystery that he was compared with such inscrutable and baffling figures as Sir Basil Zaharoff and Alfred Lowenstein. Lowenstein, the Belgian financier who plunged to his death from an airplane carrying him across the English Channel, was rumored to be associated with Dunn. He frequently visited Dunn’s London office, and one of Dunn’s former employees recalls him as a “pleasant excitable little man.”

wSir James and his first wife, Gertrude Paterson Price, a Montreal heiress and the mother of his son and three of his four daughters, were divorced in 1924. On Jan. 18, 1926, in Paris, with Lord Beaverhrook among the guests, Dunn married the Marchioness of Queensberry, who had also been divorced.

Dunn and the gay ex-marchioness were soon leading lights in an international society set which included the present Duke of Windsor, who was then Prince of Wales. They bathed on the Riviera, golfed and shot grouse in Scotland, skated in Switzerland. Sir James rented Sutton Court, the plush estate of the Duke of Sutherland. He bought the Duke of Norfolk’s residence in London and installed a gymnasium, a swimming pool and a squash court. His wine cellar was the best in England. Even his wardrobe aroused comment. One of his outfits was a white serge suit worn with a white shirt and bright red necktie. He liked fast automobiles and had an assortment of custom-built English, Continued on page 70

Continued from page 68 French, Italian and German models. His lavish spending gained him the reputation of being the “richest man in the British Empire,” which he wasn’t.

All this time he was enlarging and consolidating his investments. When he was in London a secretary would meet him at his home in the morning and ride to his office with him in a Rolls Royce, taking dictation on the way. Dunn and Beaverbrook dined together frequently and the Ontarioborn peer, Lord Greenwood, sometimes joined them. So did Bennett when he moved to England after his defeat in the Canadian election of 1935.

Meanwhile Dunn was beginning to realize an ambition he had cherished since a day in 1907 when an industrialist named Francis Hector Clergue had taken him along the shoreline of the wild Algoma country near Sault Ste. Marie, waved an arm dramatically and said: “You’ll find eight billion

tons of ore there.” Today, Dunn recalls, “I was just young enough to feel he was right.”

Clergue, a Maine lawyer, had visited Canada as a tourist in 1894, seen the Sault rapids roaring out of Lake Superior, and determined to harness them. He built a powerhouse on St. Mary’s River, a pulp mill and saw mill and a railway—the Algoma Central and Hudson Bay. When a prospector stumbled on an iron deposit along the railway Clergue bought it too, together with four other ore deposits, and named them after his sisters, Helen, Elsie, Josephine, Eleanor and Gertrude. He moved a steel mill from Ohio to the Soo and rolled the first steel rails manufactured in Canada.

Between 1895 and 1907 he spent seventy-five millions and turned Sault Ste. Marie from a village into a lusty

city. Then his financial wells in the U. S. dried up and his empire fell apart. Dunn was retained by an American investment syndicate to untangle part of the mess. The rich natural resources of the area intrigued him.

After Clergue’s bankruptcy Algoma Steel was reorganized. Dunn seems to have sensed that the company would have to go through the wringer of a second bankruptcy before settling down on a profitable basis. Thus, through the years, he bought Algoma Steel’s five percent first mortgage and refunding bonds, knowing that in the event of another liquidation the bondholders would take over the assets. When the collapse came in 1932 he had more than

enough bonds to climb into the driver’s seat. They had cost him a mere fraction of what had been spent to develop the property. In 1935 after a second reorganization he emerged as Algoma’s chairman, president and principal owner.

Dunn hit Sault Ste. Marie like a typhoon, junking old machinery, installing new, expanding facilities, eliminating waste. Work, wages and retail siles increased.

In the depression years 1932 to 1935, before Dunn personally took control, things were sliding from bad to worse ia the Soo. One week end in June the employees were paid on the Friday and that evening and on the Saturday the Soo merchants cashed thousands of pay cheques. One Queen Street department store held fifteen thousand dollars worth of them. Monday morning the banks wouldn’t honor the cheques and panic spread.

How He Saved the Soo

Although Dunn had not yet appeared in the picture it was he who put up the money to cover the cheques three weeks later. This immensely wealthy and powerful man literally saved Sault Ste. Marie. Before he stepped in as boss of Algoma a building lot now valued at seventy-five hundred dollars was sold to satisfy a threekundred-dollar tax bill. The unemployed were leaving in droves to seek work elsewhere.

Under the Dunn regime the population has increased from 23,000 to 32,000. Wilfred Hussey, secretarymanager of the Chamber of Commerce, boasts that it will be sixty thousand by 1960. He could easily be right. On all sides at Sault Ste. Marie there are signs of a boom—block after block of new houses, the seventy-five-million-

dollar expansion program at Algoma, extensions and improvements to such other industries as Abitibi Pulp and Paper, Chromium Mining and Smelting and Roddis Lumber and Veneer. There are new schools, new supermarkets, new office buildings, a new sports arena.

More than eleven thousand citizens have industrial jobs and of these six thousand are at the steel plant, where the average hourly wage was $1.83 in 1950 compared with 45 cents in 1936.

Yet Sir James, who put Sault Ste. Marie back on its feet, is viewed there with mixed feelings.

In June 1947, in recognition of his “tireless efforts in building up the steel mills and creating a livelihood for the great majority of people who live in the Soo area,” he was given a gold key at a public ceremony attended by twenty-five hundred people. He and the present Lady Dunn, a tall attractive brunette who was once his secretary (he married her in 1942 after his second divorce), were entertained at a civic reception.

Dunn, who likes everything on a grand scale, repaid the hospitality in September 1948 by inviting the whole community to an “at home” at the Algoma plant. More than fourteen

j thousand accepted and the guests ate thirty thousand hot (logs and drank forty thousand bottles of pop.

In spite of these outward signs of good will many Soo residents grumble that Sir James “wants to own the whole town” and that no one man should have so much power. His temper is a favorite topic of conversation and you aren’t in Sault Ste. Marie half an hour before you hear that he bought the nine-story Windsor Hotel so he’d be able to lire the cook. Actually, he seems to have bought the Windsor because it was an excellent investment. Changes in the kitchen staff did follow. Dunn is notoriously fussy about his meals. His valet superintends the preparation of his food, even at hotels famed for their cuisine.

A Billion Tons of Ore

When Sir James is at the Soo he likes to sit at an oversized picture window on the top floor of the Windsor. He had a section of the wall torn out to make way for the huge sheet of glass. When he looks through this he is master of much that he surveys, for he owns around sixty percent of Algoma’s shares, and Algoma owns twentythree hundred acres of the city’s land and four miles of its waterfront, as well as such odds and ends as the hotel itself j and the bus system.

Algoma’s bristling chimneys cast a red glow against Sault Ste. Marie’s night sky. Its coke ovens, blast furnaces, open-hearth furnaces and rolling mills now have an annual capacity of 1,000,000 tons of steel ingots, 1,035,000 tons of pig iron and 1,250,000 tons of coke. Algoma manufactures ! .six chemical byproducts of coke, including millions of gallons of light oil; 150 kinds of alloy steel, and rolls most of the steel rails made in Canada.

One hundred and twenty miles north are Dunn’s iron mines. Geologists say they contain more than a billion tons of ore. To the south across the border | are his limestone quarries in Michigan j and his coal mines at Cannelton, W. j Va., which yield more than a million tons of coal a year. Hundreds of miles ! to the east is another corner of Dunn’s empire— the Canadian Furnace Company at Port Colborne, Ont., which can turn out seven hundred tons of pig iron a day.

So determined is Sir James to make Algoma Steel an industrial giant that at seventy-six, an age at which most men have long since retired, he is working harder than ever. The earnings of his corporation have been substantial but the shares have yet to pay a dividend because Dunn is plowing all profits back into development. He 1 told a friend recently: “I have twenty ; years work to do up here and $50 millions to spend.”

Dunn has not confined his attention to Algoma Steel. Last April he gained j control of Canada Steamship Lines and replaced seven of its fifteen directors so there would be no argument about who was running the show. By


adding CSL to his possessions Dunn acquired fifty Great Lakes freighters, seven passenger vessels and a fleet of tugs, grain elevators at Midland and Kingston in Ontario, shipyards at Kingston, Collingwood, Midland and Port Arthur in Ontario and at Lauzon in Quebec, and hotels at Murray Bay and Tadoussac in Quebec. Lady Dunn is his constant companion, whether he’s at his mansion at St. Andrews, his second mansion at Jamestown on a summit above his Ontario iron mines, his sporting lodge in the forest near his native Bathurst, his villa at Cap Ferrât on the Riviera,

or at his hotel suite. His intimates say she has a smart business brain and that he respects her judgment. For several years she has been a director of Algoma Ore Properties, an Algoma Steel Subsidiary.

Dunn’s children are all married and living in England. His son Philip was once publisher of the News of the World, a London weekly which chronicles ripe scandals. Philip attempted to play down the more lurid items and introduce cultural features. It was not a success. The News of the World’s vast circulation tumbled rapidly; Philip and the newspaper parted company.

Wherever Sir James is he rules his domain with an iron hand, in which a telephone is usually clenched. He snaps orders across continents and oceans at all hours. An executive of one firm with which he has frequent dealings hasn’t seen Dunn for eight years: “When he wants anything he

just telephones.”

In recent years Sir James has endowed a chair of advanced law studies at Dalhousie University, where he is president of the Alumni Association; founded a chair of geology at Mount Allison University at Sackville, N.B., and established scholarships at the University of New Brunswick. In turn he has received honorary degrees from Dalhousie, New Brunswick, Bishop’s University at Lennoxville, Que., and Queen’s University at Kingston. But these honors don’t seem to have mellowed the fiery baronet.

In Bathurst, which Dunn revisits every few months, there are still people who have known him all his life. Even to them he’s an enigma. One Bathurst resident recently rubbed his chin thoughtfully when asked w'hat Sir James was really like.

“Well,” he said finally, “he lived in England for a long time—maybe thirty years-—but he came home without a trace of an English accent. A fellow who can do that is a pretty amazing character.” •^-