Hugh Allan

For other people named Hugh Allan, see Hugh Allan (disambiguation).
Sir Hugh Allan
KCMG
Born 29 September 1810
Saltcoats, Scotland
Died 9 December 1882 (aged 72)
Edinburgh, Scotland
Nationality Scots-Canadian
Occupation Empire Builder, Shipping magnate, financier and capitalist.
Known for Allan Shipping Line of Montreal

Sir Hugh Allan, KCMG (September 29, 1810 – December 9, 1882) was a Scottish-born Canadian shipping magnate, financier and capitalist. By the time of his death, the Allan Shipping Line had become the largest privately owned shipping empire in the world. He was responsible for transporting millions of British immigrants to Canada and the businesses he established from Montreal filtered across every sphere of Canadian life, cementing his reputation as an Empire Builder. His home, Ravenscrag was the principal residence of the Golden Square Mile.

Early Years in Scotland

Born at Saltcoats, Ayrshire, he was the second son of Captain Alexander Allan and his wife Jean Crawford (1782–1856). He was a first cousin of Sir Alexander Tilloch Galt and his father was a first cousin of the Scottish bard, Robert Burns. In 1819, Allan's father established the Allan Shipping Line, which became synonymous with running goods and passengers between Scotland and Montreal. Hugh Allan received a parish education at Saltcoats before starting work in 1823 at the family's counting house of Allan, Kerr & Co., of Greenock. Three years later he was sent by his father to Montreal to work as a clerk for the grain merchant, William Kerr. In 1830, he took a year off to travel through his native Scotland (he later named his home, Ravenscrag, after his favorite childhood haunt in Ayrshire) and continued via London, New York and Upper Canada.

Rise of the Allan Line at Montreal

The offices of H & A Allan by the Montreal harbour. Built 1863

Returning to Montreal in 1831, Allan became a commission merchant with one of the city's leading importers, who had also acted as the Montreal agent for his family's company, J & A Allan, back in Scotland. Concentrating on shipping, shipbuilding and purchasing grain, Allan advanced rapidly, aided by capital raised and contacts gained through family connections, as well as social bonds he developed himself in the predominantly Scottish business community at Montreal. By 1835, Allan was made a partner in the firm that from then was known as Millar, Edmonstone & Co. With his father's encouragement and capital, Allan expanded the company's shipping operations, and J & A Allan (then headed by his elder brother, James, in Glasgow) became closely involved with building of the merchant fleet. By the time (1839) Hugh's younger brother, Andrew, had joined now Edmonstone, Allan & Co., it had the largest shipping capacity of any Montreal-based firm.[1]

By the 1850s, Edmonstone & Allan was described by a credit-rating service as an "old, safe and respectable House... one of the wealthiest concerns in the Province", known for its responsible management and its links to trading houses in London, Liverpool, and Glasgow. Helped by Allan's spreading influence into allied shipping, railway and banking concerns, the firm was "as good as a bank". From 1863, the company became known as H & A Allan, of Montreal — one segment, but an important and intricate part of the Allan family's empire.[2]

The Allan Royal Mail Line

The Canadian, 1855. Along with the Indian these superior ships helped Allan to secure the Royal Mail contract in 1856

In 1851, Hugh Allan had been elected President of the Montreal Board of Trade. As an entrepreneur and the chosen head of Montreal's business community, he used this position to advocate the establishment of a regular government-subsidised steamship line between Britain, Montreal and Portland. The service, Allan declared, would deliver Royal Mail to both sides of the Atlantic Ocean while transporting immigrants to North America. Though it was Allan's idea, competition for the contract was fierce. Despite significant support on both sides of the Atlantic and careful preparation, Allan lost the bid in 1853. However, the consortium that won the contract, headed by Samuel Cunard, ran into trouble almost immediately and Allan reacted by building more ships on the Clyde using superior technology (notably the Canadian and the Indian). These ships formed the nucleus of Allan's Montreal Ocean Steamship Company, incorporated by him and his brother, Andrew, in 1856. It was carefully created to be Canadian, but it was inextricably linked (and financed) by the Allan family in Scotland.[3] In 1856, with the help of conservative politicians such as Sir John Rose, Sir George-Étienne Cartier and Lewis Drummond, the Montreal Ocean Steamship Company (popularly referred to as the Allan Line) wrested back the contract from Samuel Cunard. By 1859, service was on a weekly basis and Allan reported his capital investment in the company at £3.5 million.[4]

Beyond mail and emigrating passengers, the Allan Line carried Royalty (converting one of its ships with no expense nor detail to attention spared), troops (in the Crimean and Zulu wars), general cargo, manufactured goods and much needed Canadian wheat to Britain. After the Victoria Bridge opened in 1859, Allan became dependent on the Grand Trunk Railway and signed a ten-year deal with them. But, he soon became frustrated with the Railway when he wanted them to triple their deliveries from the American Midwest, and he felt threatened by the Railway's plans to form a steamship line of its own with rival firms in New York and Boston. By 1873, Allan expressed "a desire to protect ourselves".[5]

Railways and the Pacific Scandal

At the same time that Allan was falling out with the Grand Trunk Railway, the Canadian government had committed to building a railway across to British Columbia. Though slow to move into the railway business, by the 1870s Allan had become Canada's most flamboyant railway entrepreneur. He helped to place trusted colleagues (such as his lawyer John Abbott, agent Louis Beaubien and the politician John Hamilton) in senior positions with railways connected to the venture. Allan himself invested heavily, particularly in those that would link the Port of Montreal to the Canadian West, and became president of the Montreal Northern Colonization Railway in 1871. Garnering the support of French-Canada (helped in a large part by his relationship with Antoine Labelle), Allan’s railway gained major benefits in Quebec, including a $1 million subscription from the City of Montreal. Allan was reckoned the most influential capitalist in 1870s Canada, and having staved off American interest in the Pacific Railway, he was the logical choice for winning the contract.[6]

He created a syndicate to build the national railway, promised as a condition of British Columbia joining Confederation. To ensure the contract, he bribed Prime Minister Sir John A. Macdonald, subscribing over $350,000 for Macdonald's re-election campaign in 1872, but the Pacific scandal (and Macdonald's defeat) ended his dreams of supremacy in the railway business. However, through his bank, the Merchant's Bank of Canada, he still financed and maintained a vested interest in many of the Canadian railway companies.

Merchant's Bank of Canada

Merchant's Bank Building on St. James Street, Montreal. 1870

While still in his thirties Allan became a director of the Bank of Montreal and remained on the board for ten years (1847–57). He also held significant shares in the Commercial Bank of Canada, the Bank of Upper Canada, the Maritime Bank of the Dominion of Canada and the City Bank of Montreal. He was a director of the Montreal Credit Company and president of the Provincial Permanent Building Society which became the Provincial Loan Company in 1875. Hugh Allan founded Merchant's Bank of Canada in Montreal, Quebec in 1864 with a capital of $6.78 million and a reserve fund of $6.8 million.[7]

To service his financial needs and as a source of capital, Allan established the Merchants’ Bank of Canada. Run as a family business, it was chartered in 1861 but did not open until 1864. Allan served as president of the bank until his death when he was succeeded by his brother, Andrew. The bank soon became known as one of Canada's most aggressive. They took over the failing Commercial Bank of Canada and by the mid-1870s had branches in New York and London.

Allan's association with the bank facilitated his growth in other profitable ventures. Allan had interests in new communications technology,[8] manufacturing,[8] and mining.[9] In 1852, he became president of the Montreal Telegraph Company,[9] ultimately selling MTC's "telephone plant" to Bell Telephone for $75,000.[9] He also established coal mines in Nova Scotia and factories for textiles, shoes, paper, tobacco, and iron and steel in Central Canada.[9] The Merchants Bank Building on 92-94 Water Street, Charlottetown, Prince Edward Island, built in 1871, is on the Registry of Historical Places of Canada.[10]

Family life and death

Allan's home, Ravenscrag in Montreal's Golden Square Mile, completed in 1863
Lady Matilda Caroline (Smith) Allan by William Notman
The drawing room at Ravenscrag

In 1860, Hugh bought part of the estate of Simon McTavish and demolished the old manor house that stood there to make way for his new home, Ravenscrag, a sumptuous Italian Renaissance house and the principal residence of the Golden Square Mile. The house, which surpassed Dundurn Castle in scale and grandeur, was completed in three years in 1863, and the ballroom alone could comfortably accommodate several hundred guests. After his death it was lived in by the Allan's second son, Sir Montagu Allan, until he donated it to the Royal Victoria Hospital, Montreal in 1940. The Allans entertained Prince Arthur of Connaught, Lord Lisgar, Earl of Dufferin, Viscount Wolseley etc.

At Montreal, August 13, 1844, Hugh Allan married Matilda Caroline Smith (1828–1881), the eldest of the four daughters of John Smith (d.1872) of Athelstane Hall, Montreal, and his wife Betsy Rea. John Smith was a native of Athelstaneford in Scotland and became one of Montreal's leading dry goods merchants. Caroline's sister, Isabella, married Hugh's brother Andrew in 1848. Lady Allan's two remaining sisters married respectively Hartland St. Clair MacDougall (brother of George Campbell MacDougall) and James St. George Bellhouse, of the firm Bellhouse & Dillon. Lady Allan died in Montreal, June, 1881, aged 53.[11] They were the parents of four sons (a fifth predeceased his father) and eight daughters,

In 1871, Hugh Allan was created a Knight Commander of the Order of St Michael and St George by Queen Victoria for his services in connection with the development of ocean steam navigation in Canada.[9] Not long after the death of his wife, he died while visiting his son-in-law, Sir George Houstoun-Boswall, in Edinburgh, December, 1882. At his death he was one of the richest men in the world with a fortune estimated to be between eight and twelve million pounds. His remains were brought back to Montreal and he was buried with his family at the Mount Royal Cemetery.[8] The Allan's Canadian enterprises, almost entirely built by Hugh, were continued by his brother, Andrew Allan.[13]

Sources

Notes

  1. ↑ Hugh Allan's Biography at Clyde Shipping
  2. ↑ Hugh Allan, Dictionary of Canadian Biography
  3. ↑ Allan's Clyde Biography
  4. ↑ Allan's entry in the Canadian Biography
  5. ↑
  6. ↑ Allan Canadian Biography
  7. ↑ Pound, Richard W. (2005). 'Fitzhenry and Whiteside Book of Canadian Facts and Dates'. Fitzhenry and Whiteside.
  8. ↑ 8.0 8.1 8.2 McCallum, p.63.
  9. ↑ 9.0 9.1 9.2 9.3 9.4 McCallum, p.64.
  10. ↑ http://www.historicplaces.ca/visit-visite/affichage-display.aspx?id=5856 Merchants Bank Building
  11. ↑ Morgan, Henry James Types of Canadian women and of women who are or have been connected with Canada : (Toronto, 1903)
  12. ↑ 12.0 12.1 Morgan, Henry James Types of Canadian women and of women who are or have been connected with Canada : (Toronto, 1903)
  13. ↑ Farr, D.M.L. "Allan, Sir Hugh Andrew Montagu", op.cit., p.64.

References

External links

Wikisource has the text of the 1911 Encyclopædia Britannica article Allan, Sir Hugh.