While the getting is good

Jones_Falls_Dam-560X372I’ve written (here) about the Scottish strain in Canada. Their masterful hands sculpted the historic Rideau waterway, including the largest dam in North America in its day (1832) at Jones Falls (above). Their great qualities of prudence and moderation pervaded the banking system and large segments of Canadian business until the country was a hundred years old, an era I’ve written about here. Today I’m reminded how profoundly things have changed in the past half century or so. Scots are no longer in the ascendant. We now have moguls of English, German, Austrian, Hungarian origin. Even Irish. Even from among Pammy‘s fast spreading family. And the change is nowhere more evident than in pay packets.
The July-August 2013 edition of the Globe and Mail Report on Business Magazine (ROB) tells the tale in its analysis of the Top 1000 corporations in Canada. The Royal Bank of Canada leads the list, as it usually does, with profit of $7.4 billion. Its CEO, Gord Nixon, collects $14 million for steering RBC.
Way down at the bottom of the ROB list is gas-producer Encana Corp. of Calgary, No. 1000 with a loss of nearly $3 billion. (ROB ranks the Top 1000 companies in Canada by profitability but just over half of the thousand — 544 to be precise — show any profit at all. The rest are all losers for 2012.) Encana’s CEO last year, Randy Eresman, was paid only $7 million. As ROB meanly calculates, Mr. Nixon’s bank made $542 of profit for every loonie he was paid. Mr. Eresman was paid more than $2,500 for every million dollars down the toilet at Encana. According to a calculation by Corporate Knights magazine, Mr. Nixon and Mr. Eresman were each paid 92 times the average salary in their respective companies, an intriguing coincidence.
Who decides this kind of compensation practice, and why? There’s no denying that, like the Big Mac, it’s an importation from the U.S. of A. Mr. Nixon explains it this way in the ROB. “It is a global market, a competitive market . . . most of my top executives have been offered very big positions in the United States and elsewhere.” As if on cue, Mark Carney makes his debut as the new governor of the Bank of England, filched by the Brits from the Bank of Canada. Mr. Nixon might point to this but he refrains. Mark Carney’s salary will be $1.4 million (decimal point not misplaced). He’s a public servant. At the Royal Bank of Scotland, which predates RBC by a hundred and forty years, the CEO was dismissed last month amidst a scandal over high salaries and bonuses. His salary had been the equivalent of $3.5 million with a chance three years forward at another $2.6 million. These are all big numbers. But some are a lot bigger than others. So who decides? Does Mr. Nixon set his own pay level? Does Mr. Eresman? No way. These are Board decisions. Directors decide.
Research for the New York Times (June 29), finds that for the “top 200 chief executives at public companies with at least $1 billion in revenue . . . the median 2012 pay package came in at $15.1 million — a leap of 16 percent from 2011.” Of course even the most ambitious and self-confident Canadian business executive might feel it a long stretch to become CEO of a multi-billion dollar American enterprise. That’s OK because it’s not necessary to reach the very top in order to become very wealthy. As the NYT points out, “Because the data shows only chief executives’ pay, it does not reveal how good it still is to be a prince . . . compensation of the No. 2 executives at some of these companies would have vaulted them to the top ranks on the C.E.O. roster.”
Jim Hynes recalls that, “My father retired as President of C-I-L with a very modest pension just about a decade before it became fashionable to push CEO compensation up to obscene levels. Had I stayed in the banking business, I might have gotten a monumentally unearned slice of this pie myself. This phenomenon, like the credit default swap, is an American invention that we’re stuck with, and like gun control, it isn’t going to get fixed anytime soon.”

David, Pammy's great2grandson

David, Pammy’s great2grandson

At least noone in Canada tried to push Larry Ellison last year. The larger-than-life CEO of Oracle took $84.5 million from the company to fund his expensive and enduring pursuit of yachting’s America’s Cup. Peter Munk’s gold-plated lures for directors at Barrick or Frank Stronach’s platinum-lined parachute from Magna don’t compare. Not since 2001 have we seen anything like it, when Canadian Pacific was split into five independent and self-sustaining companies after a century at the core of Canadian business and regional development. The CEO who made that break-up call received compensation, according to reports, somewhere above $83 million. This was Canadian money, of course, not American like Mr. Ellison’s. Then again it was a dozen years ago.
Who makes these decisions? Directors do and primus inter pares of directors is the Chair. The Chair usually gives a lead and the Board decides. In some cases the Chair and the CEO are one and the same. This was the case at CP in 2001, when the Chair and CEO who got the Canadian break-up fee of the century was Pammy’s great2grandson, David. The titles used to be joined at the RBC as well, in Earle McLaughlin‘s day (Earle’s day was about the same as Jim’s dad Leonard Hynes and he had a similar restrained grasp), but they’ve been split for some time now at Canada’s biggest bank. Mr. Nixon is CEO. The Chair is Pammy’s great2grandson David. Similarly at Encana. Mr. Eresman was succeeded early this year as CEO by Clayton Woitas. But the Chair remains the same as before. That would be Pammy’s great2grandson David.
Pammy’s starting wage as lockmaster at Chaffey’s on the Rideau Canal was $0.80 a day. During the boating season that was a 24 hour day. I write about some of that here.

One, two and through for Joey

Joey Smallwood-180X280“You saw they got Joey?” Pammy’s great2grandson Jon was calling from Toronto. A Royal Commission had nailed Canada’s only living Father of Confederation. It had made the Globe and both network newscasts.
In Quebec governments are always investigating their ousted opponents. There’s no reason it should be any different in Newfoundland and Labrador, where political nest building is equally a way of life. The ins put the boots to the outs. The only novelty in Newfoundland was that it was was the first time, for the very good reason that it was first change of government.
“Sure.” I had caught the item but I hadn’t been in Newfoundland for a while.
“How do you like what they did with your report?”
My report . . .???
The article July 6, 1972 in the Globe by John Zaritzky from St. John’s opened, “Joseph Smallwood and two associates bought $1.5 million worth of shares in Brinco Ltd., while Mr. Smallwood as Premier of Newfoundland was negotiating a $950 million deal with the firm on behalf of the province, a royal commission reported yesterday. The commission said that Mr. Smallwood and his associates borrowed money to buy the stock from the Bank of Montreal, which was and is the provincial government’s banker as well as Brinco’s.” There was some detail. Premier Frank Moores said his government would go after Smallwood in the courts. Finance Minister John Crosbie was flying to Toronto to confer with a top criminal lawyer. “The commission, headed by Fabian O’Dea, a former Lieutenant Governor of the province, was appointed by Mr. Moores on Feb. 29,” the Globe report concluded.
What had that to do with my report?

Accra-700X200

Accra, Barbados, West Indies

In May 1969 I was a resident of Barbados in the West Indies working on various economic development projects, including communications, hotel and restaurant management and an assignment with Gerry Bull’s controversial but highly innovative Space Research Corporation. I had departed Canada — mon pays c’est l’hiver — eight months before. There was still warmth in my heart for the old places, but I hadn’t been back. I had grown accustomed to the sun in my face.

Late on a Sunday afternoon, just home from a lazy day at Accra beach, Mary-Lea was laying the table for a supper of flying fish, christophine and breadfruit. Mary-Lea was cook and staff sergeant-major. But she couldn’t make a decent daiquiri so I was mixing the Mount Gay and lime when my daughter called from the den, “Daddy, it’s Canada.”
Jon asked, “Can you come to St. John’s?”
“Where?”
“Newfoundland.”
Kieran 1-168X211When in Canada, Jon (pictured right) was seldom away from where the money is, mostly Toronto. Since quitting school at fifteen shy a diploma and sticking out his thumb heading west, Jon had fashioned a sophisticated PR and lobbying consultancy. This belied his village origins. He had spent his infancy and pre-school years in the family hamlet on the Rideau Canal, Chaffey’s Lock with its population out of fishing season of a hundred and change. He bunked with his grandparents while his father was in prison on a DWI manslaughter conviction. He had vivid memories of his granddad Henry Fleming, who was Pammy’s eldest grandson and Kate’s big brother. Henry put in more than thirty years of service as lockmaster at the old stand, extending the family’s tenure  at Chaffey’s to as near a full century as dammit (1832-1929).
“Why are you in Newfoundland?”
“Can’t explain on the phone. Can you come?”
“It’s not really a good time.”
“Would ten thousand dollars persuade you?”
“And expenses.”
“Naturally.”
“When?”
“As soon as possible.”
I left the next day, figuring to stop a day or two in Montreal, which was home town. Forty eight hours later– I hadn’t even said hello to family and friends — he tracked me down at the Hotel Bonaventure.
“I need you right away,” he said.
“I’ll try to get out tomorrow.”
“My office has you booked on the midnight flight tonight. You can pick up your ticket at the airport. You have plenty of time.” It was 10 p.m.
The flight by DC8-F from Barbados had been five hours. From Montreal to St. John’s took twelve. A turbo-prop Viscount added undreamed-of dimension to the term “milk-run” as it chugged up from Dorval, down at Moncton, over to Halifax, to Sydney to Stephenville, to Gander where it sat motionless on the tarmac for two hours. Stops for weather. Passengers deplaning, emplaning, complaining. Stops for new crew. For refueling. From Gander the flight was wrapped in a fog soup. I first saw ground at St. John’s ten feet above it.
Jon was there. As we drove to the hotel he filled me in on what-was-really-happening in Newfoundland.

John Crosbie1-138X206

John Crosbie

In his autobiographical Recollections of a Streetfighter, which was privately printed but deserves study by anyone in the rough and tumble of winning business and influencing governments, Jon writes of “the Smallwood Project” he took on after “two very high profile recently appointed provincial cabinet ministers resigned to protest the abuses of privilege, the patronage, and the anti-democratic dominance of Joey Smallwood.” The two who resigned were John Crosbie and Clyde Wells.
Now Boss Smallwood, it appeared, was going to retire, although nobody knew for sure. He said he would, probably. He had called a Liberal leadership convention for the fall. He had loosed his grip on the provincial Liberal party, which he had founded and always controlled. Some constituency organizations had exercised their newfound freedom to choose delegates to this convention who would not simply rubber-stamp Joey’s decisions.

Clyde Wells

Clyde Wells

As I arrived John Crosbie was the only declared candidate for the leadership. He had once appeared to be the heir apparent. Born to the St. John’s merchant clique that Joey baited with such devastating effect on the outport hustings, Crosbie had won a seat for the Liberals — no difficult task for they had dominated political life ever since the province had opted for Canada. After Joey took a liking to him he was named to the cabinet where as Health Minister he began to look like the anointed one. But he ran afoul of one of Joey’s pet industrial giveaways, a passel of government goodies for New York financier John Shaheen, who was promoting an oil refinery at Come-By-Chance, a hamlet with a deepwater port. Crosbie resigned from cabinet rather than endorse a deal that gave Shaheen a $15 million unsecured loan.
By the standards of the day in the province this arrangement was not extraordinary. It hardly compared in generosity, for instance, with the mineral rights and loans provided for John Doyle’s Javelin empire. Or the local pork-barreling that had turned the Lundrigan family from impecunious owners of a small sawmill into multi-millionaire construction czars. Or the benefits over a quarter-century that had siphoned millions of Canada’s transfer payments into the pockets of the established merchants — not excluding the Crosbie clan, which controlled construction and building materials companies, the regional airline, insurance and shipping companies, and a St. John’s daily newspaper. (This empire, run by Andrew Crosbie, John’s brother, was destined to collapse of mismanagement some years later.)
But Shaheen and the deal stuck in Crosbie’s craw and he withdrew to the backbenches. When Smallwood announced in early 1969 that he would retire it was widely understood that he would promote his own successor. Joey didn’t like it at all when Crosbie decided to make a contest of it and announced he would be a candidate for the Liberal leadership.
Joey Smallwood was the first and, until then, only Premier of Newfoundland. Almost singlehandedly against the opposition of the colonial-minded administration and the merchants of St. John’s he had persuaded the Islanders to opt for union with Canada in 1949. This coup had brought hundreds of millions of dollars into the new province, money which Joey had shrewdly distributed in ways to ensure the loyalty of the electorate. He was Premier-For-Life, or as long as he wanted to be.
However John Crosbie had got religion. He believed the time had come to call a halt to Joey and bring Newfoundland into respectable alignment with fiscal probity, at least to the extent it existed in other provinces. An autocracy was no longer tolerable, and Joey himself had dangled the possibility of change by calling for the leadership convention. The opening was slight and diminishing every day as Joey reconsidered, but Crosbie finally decided to run against Joey’s man, or against Joey himself if that became necessary, as indeed it would.

Jon swinging

Jon swinging

Jon was Crosbie’s campaign manager.
I wasn’t surprised; Jon is a great believer in improbable causes. He had put his talents at the disposal of Eric Kierans’ bid for the federal Liberal leadership (against Trudeau at his most charismatic), Bob Nixon’s hope to become Premier of Ontario (against unbeatable Bill Davis), and the First Nations’ fight for a fair future (against the weight of centuries). Managing opposition to Smallwood in Newfoundland seemed right in character.
”We don’t expect to beat him if he runs,” said Jon. “But we think we can create enough of a stink — or threaten to — that he’ll have to make a deal to leave soon. The first priority is to get Joey out. Getting Crosbie in is secondary.” It would be an expensive sacrifice.
What he wanted of me, I should have known, was “to provide the stink.”
In Streetfighter, written some forty years later, Jon describes how he “had taken a lot of heat from Andrew Crosbie” over a contract he had put out “to a financial journalist who had a unique forensic ability. The deal was $10,000 plus expenses for a publishable article that, if ever printed, would result in the biggest public scandal since the financing of the Canadian Pacific Railway. Its key value was that if the Smallwood campaign got unduly dirty, we had the capability to offer a scorched earth response.”
Before decamping for the West Indies I was associate editor of Financial Times of Canada. Anything remotely comparable to the CPR scandal had my attention, especially if it had scorched earth potential. After checking in to the Hotel Newfoundland, which would be home for two weeks, I walked to Jon’s headquarters, a two-storey frame house on a pleasant, tree lined, middle-class street not far from the hotel. It was leased for the summer from a family vacationing in Europe. What a treat it would have been to hear the neighbours describe that summer scene to the homeowners on their return. The place was erupting.

Jon in later years and six of Pammy's great3grandchildren. Their eldest sibling Susan died suddenly when just a young mother.

Jon in later years with six of his kids and Pammy’s great3grandchildren. Their eldest sibling Susan died suddenly when just a young mother.

Jon had three of his seven children visiting from the mainland. There was a red-haired girl friend in residence (Jon was in the midst of what he himself referred to as a “somewhat messy divorce action”), a brunette secretary and blonde transient. A young law student, who ran the campaign office, was encamped. And his girl friend. A private detective dropped in frequently to check for bugs. One was discovered and cleverly turned to deliver misinformation to the enemy camp. Public relations counselors were draped over the couches at all hours of the day and well into the nights. The freezer was stocked exclusively with steaks, the refrigerator partitioned between white wine and tomato juice. Much of the shelf space was occupied by cartons of Islay Mist scotch whiskey.
The strategists were from Toronto and the runners from Memorial. But the local strength was impressive. Brian Peckford, a political activist, was among the first to join the team. Clyde Wells, a Cornerbrook lawyer and Crosbie’s fellow defector from the Smallwood cabinet, organized volunteers. They would each become Liberal premier of Newfoundland in their day. Though his assistance had to be kept “in deepest confidence,” as Jon put it, Frank Moores “happily helped with the fund raising.” Moores belonged in the enemy camp. He was MP for Bonavista-Trinity-Conception and president of the Progressive Conservative Party of Canada. He too would become premier, finally ousting Smallwood and the Liberals and bringing the first Conservative government to the province since joining Canada. All this was to come but known to none of the Crosbie cabal at that time.

Brian Peckford

Brian Peckford

“You’re not to tell anybody what you’re really doing here,” said Jon. “As a cover, you can say you’re researching a story on economic conditions in the province.”
“What will I really be doing?”
“You’ll be digging up all you can find on Smallwood.” After I had dug out whatever there was to be found, Jon wanted a report. He wanted it in publishable form, though there was no plan to publish it. “We want it as a lever,” he said. “This campaign is going to be bitter. If we have this in reserve it might keep Joey’s camp from going overboard.”
Crosbie had already paid for a wide-ranging survey of public attitudes done by one of the top American pollsters. He discovered that Newfoundlanders believed that their government was corrupt but didn’t much care. Joey was a folk-hero. Whatever he took for himself was alright with them.

Frank Moores

Frank Moores

At the time Joey talked the island into confederation just after the end of World War II, he had been a failure at almost every business he had tried. Before becoming premier he had run a pig-farming operation into the dirt. His salary for the top political job in the province had been $6,000 a year. Yet he lived in a lavish home that he had built privately and then, in an imperial gesture, willed to the people of the province.
But the Crosbie camp was convinced that the people had no idea of the extent of the rip-off. Particularly, they weren’t aware that, while Joey was well off, some of his friends and associates were wealthy beyond avarice. A complete accounting might be able to topple the tyrant. But perhaps just the threat of it could induce him to retire gracefully.
“We really want to avoid an all-out battle between Joey and Crosbie,” Jon said. “That can only undermine the party, and might mean a Conservative win at the next provincial election.”
Obviously, if I was going to be nosing about on this tight island, no cover story we could concoct would fool anyone for very long. This was alright, Jon said. It didn’t matter if Joey’s gang found out. In fact they were supposed to; it might throw the proper scare into them. But it would be more useful if they thought they were being clever while discovering me.
In fact I’d already been discovered. As Geoffrey Stevens reports in The Player: The Life and Times of Dalton Camp, “Smallwood was known to have informants at the airport who kept him personally posted on the arrival of suspicious strangers from the mainland.” By my May tan alone I was suspicious.
Jon suggested I get a copy of Richard Gwyn’s biography of Smallwood. He made an appointment for me with Baron Macdonald, an executive with the Crosbie companies, for the next day. I had a number to call in case I needed anything. I saw him only twice again in the next two weeks — once by chance at the Candlelight and once when I delivered my report.
In fifteen years of reporting there were a few luxuries I had missed. One was a research assistant. No employer had ever seen fit to provide one. Now that I was being paid so munificently, I thought to fill the gap myself. It seemed likely to be useful to have someone around who knew something about Newfoundland and its politics ¾ not to mention somebody to escort me about St. John’s. It didn’t take long to find Helen, a young widow who was under-appreciated by the daily paper where she worked and willing to moonlight.
She had the important qualification of family links to one of St. John’s old families. She knew a lot of skeletons, some still clicking.
Gwyn’s biography of Smallwood is excellent, very chatty, full of detail, some of it even critical. It was only after I had been in the province a few days that a strange omission struck me. All kinds of people were in the book, friends and enemies, rich and influential, politicos, merchants and fishermen. But there were no Lundrigans. This was very curious indeed because the more I tried to find out about Smallwood’s business affairs and the economic policies of his government, the larger Lundrigan loomed.
A courtly and charming clerk informed me with regret that there, were no open records of debates in the Newfoundland legislature. He had them of course, and they were scrupulously kept. But they weren’t to be made public. The reports of the provincial auditor-general were stored in the basement of the Confederation Building. When I asked for all the reports over the past 15 years, the guardian of the stores looked at me with quizzical condescension.
“You’d better come back tomorrow,” he said.
I called the number Jon had given me and told the young law student that I could use some expense money. Thirty minutes later there was a knock at the hotel room door. The girl standing there was very pretty, very young and very serious. She would have made a popular beauty queen at Memorial University but her manner said she would rather be student president.
“Mr. Patterson?”
”Yes.”
She reached into a shoulder bag and pulled out a thick, white, unaddressed envelope, handed it to me and left without another word. The envelope was stuffed with $20, $50 and $100 bills. There was no note.
The next day the guardian of the stores had the A-G reports ready, except for two that were “out of print.” For several days I pored over these records, particularly the sections dealing with grants to private companies. There were dozens of these, for everything from fish packing to motel building. A number of companies, after taking the government’s money, had been somewhat improvident with it and come to the edge of bankruptcy. The practice then was for the government’s industrial development agency to take control of the company, and frequently hand over management to another business group. One of the most prominent of these business-fixers was Lundrigan’s Ltd.
Armed with the names of the companies I visited the provincial corporate records department to find out who was behind them. I was surrounded by law clerks in the dimly lit, meshed-in storeroom. We all suffered from eyestrain and the mugginess of an early summer heat wave.
It became clear that millions of dollars of government money had been pumped into ventures that had little or no chance of commercial success but had been sponsored by close friends of the Liberal party. Of the government-supported companies that survived, many had a remarkable congruence of directors.
The name that appeared most frequently was D.W.K. Dawe, a St. John’s lawyer whose clients included Lundrigan’s Ltd. and Joey Smallwood. Oliver Vardy, a senior public servant and Smallwood’s closest friend, and Arthur Lundrigan, who never met a benefactor he didn’t like, also sat on many recipient boards.
Arthur Lundrigan was a director of the Bank of Montreal, which was the province’s official banker. One of the first things I’d learned about Joey’s financial affairs was that he had a loan from the BofM that he used to buy stock in Brinco, the company that was building a gigantic power complex at Labrador’s Churchill Falls. Jon had known about it and so had Baron Macdonald, the Crosbie lieutenant. In fact it was almost a matter of common gossip.
One afternoon drinking screech in the hotel bar with one of the best freelance journalists in town, I told him of a complicated maneuver involving the provincial agricultural marketing board and a large chicken farm that Joey owned and his family ran. “Hell,” he came back, “I had that months ago. Sent a query but nobody bit.”
It was interesting and frustrating. Each time I discovered a particularly unorthodox situation involving Smallwood and company, I found the essentials of the deal were fairly well known in the corridors of St. John’s. My research was just confirming rumours that everyone believed anyway.
That night I saw Jon at the Candlelight and mentioned this problem. He didn’t seem concerned about the cost. “Put it all together with some documentation,” he said. “Nobody’s done that before. It should be enough to scare Joey. That’s all we want to do.”
I had several meals at the Candlelight during my time on the job. At first glance it appeared the typical eastern short-order lunch counter. But the Wyatts orchestrated a kitchen and a homey warmth into a rare experience. The place was a jewel.
It was also a traffic centre. My first evening there I met enough people to keep successive conversations going well past midnight.
Newfoundlanders are great storytellers and Joey was one of their favourite topics. It was something of a temptation to include in my narrative for Jon some of the more delicious scandals told me with serious conviction by more than one respected citizen. But most of the worst tales of venality were simply impossible to document. In the end I stuck very close to what was in the public records. On the tenth day I rented an IBM Selectric and started to write. After work Helen would drop over and we’d discuss my notes. She was a fount of knowledge on relationships ¾ where the family ties were, or the long-standing friendship, or the submerged but powerful business links ¾ the kind of things you learn by osmosis when you’re born into a community.
Two nights later the final version was ready. It fell short of proving malfeasance but showed a pattern that explained how a political cadre had been able to manipulate public funds in order to raise themselves from impoverishment to opulence and develop the clout to borrow millions of dollars from one of the nation’s Big Five banks. One original, no copies, per instruction. I delivered it to Jon the next morning and that afternoon the young woman arrived again with another unmarked envelope stuffed with bills. I left on a Wednesday.

Alex Hickman

Alex Hickman

The report that was supposed to increase pressure on Joey to see the light didn’t work at all the way it was intended. Events moved faster than anyone anticipated. Less than a week after I arrived Smallwood announced he would indeed be a candidate to succeed himself as Liberal leader. Crosbie’s campaign would feature an attack on “Newfoundland’s LSD — Lundrigan, Shaheen and Doyle,” but it fell well short. Joey was a shoo-in at the convention. Crosbie’s team secretly subsidized Alex Hickman, the justice minister, to join the race. The subsidy, Jon writes in Streetfighter, was delivered “in a shopping bag containing $25,000 in $100 bills.” Hickman’s entry split the vote three ways and spared Crosbie the ignominy of a head-to-head trouncing by the wily old veteran.
The report never surfaced during the campaign. A top libel lawyer provided an opinion that any action arising from its publication could be “successfully defended,” but it represented too much escalation for the Crosbie family, which still had to do business in the province after the votes were counted.
Only one person outside the Crosbie entourage ever saw the complete document. Jon told me a year or so later (he didn’t repeat it in Streetfighter – perhaps memory had faded after forty years) that he brought it himself to Frank Moores as soon as the Crosbie’s loss was certain. After all, the two men shared the same basic objective. Moores was a boyhood friend of Crosbie’s; they had been schoolmates together at St. Andrew’s College in Ontario. Both millionaires, from old island families. Both politicians. They shared many objectives, including the basic conviction that Joey had to be gone if Newfoundland was to have any chance to prosper.
As it happened, they soon accomplished this goal in a classic one-two combination. Crosbie weakened Joey’s credibility in the no-holds-barred fight for the Liberal leadership in 1969. Moores took over the PC Party in Newfoundland the next year. In the 1971 provincial election Moores’ Progressive Conservatives beat Smallwood’s Liberals to form a minority government, which became a knockout majority in early 1972.

Lt. Gov. John Crosbie

Lt. Gov. John Crosbie

Once Frank Moores became Premier, John Crosbie crossed the floor to become his finance minister. His political career took a federal turn that would include senior cabinet posts in both the Clark and Mulroney governments. In 2008 Harper appointed him Lieutenant Governor of the province, a gig that lasted until March 2013 when he was eighty-two. Joey left for London to write his version of the province’s history. Though he would live another two decades and die a nonagenarian, he was a spent force politically. It had all come about much as Jon had predicted.
Among the items flagged in my report, now in the hands of Joey’s opponents in power, were the unusual leasing practices of the Newfoundland Liquor Commission. Moores picked this peccadillo to invoke the Public Enquiries Act and establish a Royal Commission to investigate breaches of trust, conflicts of interest and other ways and means that public funds had been misused by his predecessor.

Fabian O'Dea

Fabian O’Dea

Fabian O’Dea found much the same pattern of private gain at public expense for a small group of Smallwood intimates that I had. He had access to private documents and could call witnesses to testify under oath, so his findings were more detailed. Even so there was not enough evidence to sustain criminal action. All the government could do was try to recover some excess payments through the civil courts. This would prove no more successful than recovering any of the billions from Churchill Falls that were recklessly ceded to Quebec by Smallwood, with a hydro obsession but blind to fiscal reality while he was in power.

A century standing by

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On a warm summer day in 1985, Pammy’s great3grandson* looked on as Elmer MacKay, solicitor general of Canada, inaugurated the recently established museum of prison artifacts at Kingston Penitentiary, on the occasion of that cruel dungeon’s sesquicentennial. He was a member of the ministerial party because he had co-authored a history of KP. A hundred and fifty years before, on June 1, 1835, Matthew Tavender became Inmate Number One, sentenced to three years for grand larceny. Tavender and the convicts who followed him inside were forced into labour gangs that would greatly expand the fortress-like prison on the shore of Lake Ontario, but the earliest work on the massive stone building was done by local tradesmen. (A generation later the ancient stone walls would give up their last inmates at the instigation of Elmer’s son, Peter MacKay, minister of justice. KP, which overlooks the harbour where the sailing events were hosted during the 1976 Olympics, was one of the oldest prisons in continuous use in the world when it closed finally on September 30, 2013.)

+ For an explanation of the convention designating various generations of Pammy’s family, see About Rideau Canal And All That on the bar above.

In Kingston, the local workers who knew best how to work with stone were those who had just finished the Rideau Canal. The new pen, destined to be still in use in the twenty first century, wasn’t the only lucrative construction contract in those days in Kingston. Fort Henry, which commands the city’s entrance heights was — is — an imposing fortification. Some of the last Martello Towers ever built are in Kingston. It was a bit late for these defensive forts when they went up — another example of the military preparing for its last war — but they still stand tall for tourists. These were massive works of construction and times were good in Kingston, which in another half-dozen years would be the first capital of what would become Canada and where the young John Alexander Macdonald was entering upon a legal career, his thought not yet turned to politics. It was a bonanza for stone workers. Good times would come again for their descendants in the 1860s with work on Parliament buildings for the new country then being born. In the meantime they built many great houses along the Rideau corridor between the first Canadian capital (Kingston 1841) to the one we have now (Ottawa 1867), including the official residences on Sussex Drive for prime minister and governor general.

Many of the stone workers were among or had been trained by those who came to work on the canal in 1826. There were two companies of Royal Sappers and Miners recruited to assist Lt. Col. John By (right) in his great task, a complement of a hundred and sixty two men. Fifty seven were lost to accident, disease and desertion through the six years of construction. When the work was finished, seventy one of those remaining accepted hundred acre grants of land and settled along the corridor of the canal, planting outposts of settlement where none existed. And then there were the lucky few who got the land and a job as well. But few were as fortunate as William (Pammy) Fleming, who got all of that and the lady too.

Everything Jim Simmons owned was sold after he was killed in a blasting accident on the canal at Newboro in 1830. His wardrobe and kit and ‘necessaries’ went to provide some relief to his family.  Pammy, who had been a friend and fellow bricklayer among the sappers, bought a pair of regimental trousers for twelve shillings. Elizabeth Simmons, mother of a girl and seven-year old Jim Jr., received thirteen pounds, eight shillings, ninepence. Not a fortune but a tidy sum and with a widow’s pension from the military Elizabeth could bide her time. There was no shortage of suitors. There were many more men than women in Upper Canada. Women could choose. She waited two years, until it was sure that the colonel would give Pammy the job at Chaffey’s Lock. He wasn’t a big man, just five and a half feet tall, but strong. (It wasn’t a time of tall men, then or for a long time after. The mean height of a company of British soldiers en route to India in 1865 was 5’5. Winston Churchill, who was almost a teenager when Pammy died in 1887, was well short of 5’7.) He hadn’t been a non-com. Sergeants and corporals were getting preference for canal jobs. But Pammy was made an acting corporal before discharge. And she knew he had one of the essential requirements. Pammy could read and he could write, one of the few who could.

In his survey of the Rideau route in 1826 John MacTaggart, Colonel By’s clerk of works, wrote that at Chaffey’s “I am not ashamed to own that I was more puzzled to know how to act, than on any other part of the route.” This was because MacTaggart wanted to bypass the mills that Sam Chaffey and his brother had built on both banks near a waterfall of thirteen feet. It would be too expensive to expropriate the distillery and the grist, carding and sawmills that the Chaffeys had put up in the six years they had been in the area. “High banks on either side of the river, and mills choking up that river, seemed to defy the science of engineering to pass them with the Canal . . .”

But the problem would be resolved by tragic circumstance just a year later when Sam Chaffey died of malaria. His widow decided to sell the millworks and two hundred acres of land to Colonel By for two thousand pounds. His brother Ben had already departed for the United States and the family spread later to Australia, producing significant memorials wherever they settled. They are inveterate builders. One of Sam’s nephews was back at Chaffey’s in 1872 to construct a stone gristmill.

The contract to remove the mills and build a lock with nine feet of lift and a twenty foot high dam went to John Sheriff & Co. The project became known as Haggart’s Job after Sheriff’s partner, “a jolly bachelor of that name, well known for convivial hospitality to all travellers by this route.” Another year, another tragedy, when John Sheriff succumbed to malaria in 1828, along with several labourers on the lock.

Over the six year construction period more than five hundred men and an unknown number of women and children at and near the canal works died of malaria. It was a disease that had been present in eastern North America for many years. The mosquito that transmitted it could and did live here. But it was groupings of people that helped to spread the disease. In construction camps one worker to another was a zip for a mosquito. No one escaped, from Colonel By down through the ranks to the wives and children of workers. Everyone suffered. During the “sickly month” of August, six out of ten workers took to their beds with terrible pain, stomach upset, vomiting and general debility. The only known antimalarial treatment was quinine but it was quite rare and very expensive. It was hard to get in Canada and few had it. The old Chaffey’s graveyard is said to contain the remains of more unrecognized malaria victims than any other. (In the picture, Mary Anne Chaffey’s plot is fenced in, with fieldstones and headstones in the distance marking early graves where wood crosses have rotted away.)

But the work continued. And what a work it was that the colonel had conceived. To build the canal, John By had two options. The conventional and proven option was to use excavated channels of considerable length to link existing waterways that were navigable, bypassing falls, rapids, swamps and rocky shallows. By dismissed this approach as being too expensive and time-consuming, given the terrain, geology and configuration of the lakes and rivers.

Through what would be called “a fundamental stroke of creative genius” he envisioned another option, the relatively untried technology called ‘slackwater’. It would use a large number of embankments and high dams to inundate shallows, swamps, and rapids, creating a series of basins deep enough to navigate the full length of the canal. This dramatically reduced the need to excavate channels. Costs and construction time were greatly contained and compressed.

Slackwater techniques had never been attempted in North America near the complexity of what By conceived to join the Rideau and Cataraqui rivers into a corridor linking the Ottawa River with Lake Ontario. This would become the swiftest route of the day from Montreal, where most British troops were stationed, to the frontier opposite the United States at Kingston. It was the threat from the U.S. that By was addressing. He never forgot that. Speed was essential. His Corps of Royal Engineers designed an ingenious system to exercise unprecedented control over water levels. They included seventy four dams and forty seven locks at twenty four lock stations, allowing vessels to ascend eighty five metres to the summit of the canal from the Ottawa River, and then descend fifty metres to Lake Ontario.

Part of By’s genius was his foresight in planning for the future dominance of steamboats. The specs for the canal that he was given called for locks just sufficient to pass durham boats, flat-bottomed vessels propelled by sail or oars. By sought and got authorization to build larger locks able to accommodate the bigger boats that would use the emerging technology of steam power.

“It is the best preserved example of a slackwater canal in North America,” UNESCO wrote in designating the canal a World Heritage Site. “It is the only canal dating from the great North American canal-building era of the early nineteenth century to remain operational along its original line with most of its original structures intact.”

Once built, with what even today would be considered blazing speed, the problem became one of operations. By’s final task before departure was to ensure that key posts along the waterway were filled with the best candidates available. Literacy was a prime requirement for a lockmaster, but not the only one. They are outlined by Ed Bebee in his original and masterful portrayal of the workers who have kept the canal operating almost the way it was built for almost two centuries. His book is entitled Invisible Army: Hard Times, Heartbreak and Heritage, and he writes:

“What were the qualifications to be a lockmaster? First, military experience, generally as a Non-Commissioned Officer (NCO), either Corporal or Sergeant; second the ability to read and write, because of the flood of written orders and the extensive record-keeping; third, basic arithmetic and some sense of book-keeping to be able to manage the accounts of tolls and local rents; fourth, robust good health; fifth, ‘steadiness’, which could mean anything. Sobriety was not a requirement, as soon became evident.”

Canal jobs were the pick of the province. The Army built the canal. The Army owned the canal. There was nothing more stable in all of Canada than the British Army. The pay was not bad and it came in cash, a rare perk in an economy that operated almost entirely on barter and long-term credit. Pammy was a lucky man and knew it the year the widow and the colonel said yes. It was 1832.

Lockmasters initially got housing (or materials to build their own) and permanent lock labourers had small houses or stayed in dormitories at larger stations. Garden plots were also provided. Lockmasters and workers were strictly admonished to avoid political partisanship and even voting. They were front line public servants and expected to behave as such. Patronage was endemic in the early days of colonial semi-self-government. The Rideau Canal was one of the few major generators of jobs and contracts in eastern Ontario. Politicians were very much aware of the opportunities. The local MP, or the defeated candidate if his party happened to be in power, would provide a list of acceptable candidates.

Pammy and his bride Elizabeth (later Gammy) had little time to consider their circumstances in those first months at Chaffey’s, after the military had departed and the first ceremonial passage was through the lock, en route from Kingston to Bytown. Colonel By and his family were joined by aides and dignitaries aboard the canal tug Pumper, renamed Rideau for the journey, greeted all along the great waterway he had built with rousing cheers that fell not far short of adulation. In this place and time he had made a wonder of the modern world. The people along the Rideau corridor, some who had been his soldiers and many who had worked on the canal, sensed greatness. Sadly, he was to fall victim to bureaucrats and petty politics on his return to Britain, his world-class achievement never celebrated by the British, whose taxes had paid for it.

The Pumper, built for Robert Drummond, one of the primary canal contractors, would be followed through the years by a succession of maintenance tugs well into the twentieth century. The longest lasting and most famous was Loretta, whose captain into the 1930s was Pammy’s grandson. Captain Ned, Kate’s brother, also had captained the Rideau King (left), one of the passenger steamers owned by his brother-in-law. For many years the Rideau King and Rideau Queen, with their musical steam whistles that could be heard for miles, provided a luxurious cruise along the beautifully crafted waterway between two of Ontario’s principal population centres. He was known as the ‘poet laureate’ within the family. When tied up overnight at a station along the waterway, the sweet sound of Captain Ned’s violin would often swell from Loretta’s deck and fill the summer evening all around.

In 1832 the population of York (Toronto) was 5,000, Kingston was 4,200 and Bytown (Ottawa), which hadn’t existed six years earlier, was 3,200. It was the beginning of urban society but not yet an urban economy. As one merchant wrote, “No one here can do business and obtain payment short of a year’s credit.” Almost all sales to farmers were on credit. They had no cash until the crops were harvested. Some debts were settled by a merchant buying land and having debtors supply labour or materials to erect a house or building.

Pammy, who built a ‘log house’ for his family when he arrived, was paid the lockmaster’s wage of $0.80 per day. The days were long, sometimes stretching through the nights and into new days. A lot of labour and time went to stretching the salary. There was a plot to grow vegetables. The potato was a staple of the daily diet, which made for hardship in the mid 1840s when a blight struck. Ireland was being devastated at the same time by this crop failure but the famine that prevailed there was in no way repeated here. Canadians were survivors in the toughest climate of the new world. They kept a cow, pigs and chickens. Fish were plentiful as were venison, ducks, muskrat. Drowned logs or trees from the surrounding forest were fuel for winter fires. They might have been colonists, or even colonials, but they weren’t landless peasants so weakened by life as the 20,000 Irish who died of disease and malnutrition on their way to Canada in 1847, one out of five who sailed.

In the colony the Rideau Canal was about to become an economic lifeline. It would get busier and busier, day and night, week after week, month on month until ice checked the flow. Ultimately, of course, the onset of a navigable St, Lawrence and the railroad combined to overpower the canal as a commercial route. But for a century the scene was the one described by an anonymous writer at Newboro, quoted by Robert Legget in Rideau Waterway. The canal was “crowded with boats carrying the produce of the country and bringing in such goods as were needed and the growing prosperity of the country could afford. City of Ottawa, Rideau King and Rideau Queen were some of the boats that carried passengers and freight and looked to one in their day like monsters of marine architecture. Tugs were towing 2, 3 and 4 barges; about 40 sailing scows carried out wood, lumber, pressed hay, grain, horses, cheese, whatever the country had to sell and brought in goods the merchants sold, the implements that were needed, the foodstuffs not grown in this climate and furnished employment to hundreds of men. Rafts of squared timber and of rough logs running up to hundreds of lock bands, built up with cook and bunk houses, stables for horses gouged by 20 or 30 men made their slow way to mills and market every year and left behind a fire menace. I have seen the men at work without a break for over sixty hours. They slept on the grass while the locks were filling and ate their meals that were brought to them sitting on a swing bar. They worked 24 hours a day, slept when they could. At first the lockmen were paid 60 cents a day for 71/2 months each year. Later their pay was raised to $1 a day and there never was a time when there was any trouble getting men to work on the lock.”

It was non-stop “when the horn blew we’d lock ‘em through” twenty four hours a day, seven days a week until 1871, after which Sunday was allowed off. Sleep between lockages was often snatched on a cot on the lockmaster’s porch. The biggest problem were the “blue barges” of logs, huge flotillas of lumber that had to be passed through the lock bit-by-bit, hour-after-hour.

For more than seven months a year there was no shortage of activity or company at the station. But in the winter it was thoroughly isolated. Distances to Kingston or even Elgin, a few miles away, were over trails rather than roads. The few people in the area had to make do with one another’s company. Pammy’s house, the largest around, was often the centre for euchre games, Christmas parties and impromptu dancing. “One of the high spots during the winter,” Melinda Warren writes in Hearth and Heritage: History of Chaffey’s Lock and Area, “would be when the carpentry crew came. The crew, of about twelve members, would camp at the station, sleeping on bunks in the storehouse. This work force was provided with their own cook, for a crew could live at the lock site for sometimes two months, building a new set of gates or a new dock. Because of their long stay they would become temporary members of the small communities. They provided a friendly diversion from long winter boredom. At night when the day’s work was done the crew, Lockmen and families would sit around the wood stove; stories and homemade bread in abundance. When the families retired for the evening, more stories and other ‘refreshments’ would be in greater abundance!

“It was a special time for the Lock Station when this crew came. The empty space which the crew left in the community when they moved on, would soon be filled by hard work to prepare for the new navigation season; and later new faces to relate the past winter’s tales to. . .”

Lockstations were strengthened in 1837-38 in response to rebellion troubles in both provinces (Upper and Lower Canada at that time, to become Canada West and East in 1841 and Ontario and Quebec in 1867) that pointed to the susceptibility of canal works to attack. Government durham boats loaded with ammunition and troops were passing through. Lock workers were called out to train with the militia. A report in Pammy’s hand describes “the loyal men who turned out to defend the lock and other works at Chaffey’s, Rideau Canal, on the 4th, 5th, 6th and 7th of July, 1838,” when the lock was menaced by sympathizers with the rebellion in Upper Canada. Under Pammy’s command twenty seven volunteers, including fifteen-year-old stepson James Simmons Jr., mounted sentries and patrolled the area to deter aggression.

Captain Billy, Pammy’s son, in 1890.

In the meantime Pammy and Elizabeth had a son William in 1833. As a boy he became a lake sailor and earned his captain’s papers at an early age. He would eventually be the first master of the Rideau Queen, owned by his son-in-law, and become widely known along the Rideau as Captain Billy.

As word spread of employment possibilities, good farmland and world class sport fishing at Chaffey’s, immigrant families began to arrive, many of them fleeing the famine in Ireland. Among these were the Doyles, who arrived from near Dublin in 1830 with an infant daughter. Young Billy and Margaret Doyle grew up together and just before Christmas 1854 they eloped and married. Elopement was necessary because the English Protestant Flemings and Irish Catholic Doyles were not ready mixers. They had to get over it eventually though as Captain Billy and his bride made passionate use of the long winters over the next two decades to produce five sons and three daughters, most born in a little log cabin on a section of Pammy’s property. The first born, Mary, married Captain Dan Noonan, who owned the Rideau Navigation Company. Henry, the second, became the third Chaffey’s lockmaster. A younger brother, Edward, would succeed Captain Billy as master of the Rideau Queen and earn his own local fame as Captain Ned.

Kate, christened Catharine, was the third, born in 1859. At nineteen she married James O’Brien, fifteen years older, the only son of Little Ned O’Brien, who had arrived in Chaffey’s from Ireland in 1840. Little Ned’s property would become the core of Queen’s University’s Biological Station (pictured) on Opinicon Lake a century later, where Pammy’s great3grandson Roberto would one day pursue studies toward his doctorate in zoology.

Jim O’Brien, who had been a lakeboat captain, tried farming at Chaffey’s as he and Kate started the family that would eventually number eight girls and five boys. But in less than a decade that toil was abandoned and they picked up and left for Montreal, the first ever of the family to move from Chaffey’s. Jim would be a milkdealer at first, then a grocer, and died in 1925. Kate would live to ninety nine in 1958 with the patience and quiet acceptance of the poker player and lifelong fisher she was.

The log cabin they were born and raised in had long outlived its comfort level by the time Captain Billy got around to building a proper home for his fast growing brood. Margaret would reminisce years later about the day in 1870 when the house was ready and what a pleasure it had been “to walk down the hill carrying baby Charles and take my family into our new home.”

And what a home it was. It’s described in a remarkable family manuscript written by Pammy’s great-granddaughter Catherine in 1975. Catherine was born at Chaffey’s in 1899 and knew Captain Billy intimately. They lived in the 1870 house together while she was growing up. Pammy had died a dozen years before but his memory lived strong in the neighbourhood where there were many old friends and much family. Catherine writes of the times, the neighbourhood, the customs, schools, entertainments, home life for the girls and the boys, a full and telling evocation of what it was to grow up and live at Chaffey’s Lock through the nineteenth century and into the twentieth. The manuscript is contained in the privately printed genealogical masterwork by Pammy’s great2grandson, James, entitled The Fleming Family Tree. Suffice to say the new home for Captain Billy and family was “the nicest and largest farm house in the community” with an iron roof, room to house a three-generation family of ten and an annex with a winter kitchen. It was still in use more than a hundred years after going up and may be still.

It was in this context that Pammy got the name he was universally known by, and which has descended to a property at Chaffey’s still referred to as Pammy’s Farm. A fourth generation grandson once suggested that it was derived from the derogatory slang for Englishman, ‘pommy’. This was impossible. Pammy was a man of respect in the county around Elgin. He had been discharged an acting corporal. There were very few field promotions in the two companies of sappers and miners of the Royal Engineers working with Lt. Col. By on the building of the Rideau Canal. Pammy was the Lockmaster at Chaffey’s, in command of a link on a vital waterway, holding one of the few permanent, paying jobs in the colony. He wouldn’t have been dissed by his neighbours.

Then, there were hundreds of demobbed sappers after the work was finished. Could Pammy have been a generally used nickname? Well no. Finally, there’s no record of the word ‘pommy’ being used before 1912, and then primarily in Australia. That’s well after Pammy’s day and far away. So how did he come by that nickname? For anyone with grandkids, it’s clear enough.  Pammy (William Fleming) had only one natural son, Billy. But he had eight grandchildren, all born at Chaffey’s, all within hailing distance for most of his life. He lived with one of his grandsons and family in later years. It was these kids who called him Pammy, an easy childish mangling of Papa or Grandpa. One after another they made it stick. Only they would have been innocent enough, and well enough loved, to have dared. For Pammy was far from a figure of fun. He had an aristocratic bent and, according to family account, in retirement “always dressed in a swallow tail coat, wore a high silk hat and carried a cane.”

A one storey, defensible lockmaster’s house was built in 1844 and after a dozen years in the log house Pammy, Gammy and family were finally able to move in. It was completely renovated in 1894-85 for their grandson Henry, another of Kate’s brothers, who was the third lockmaster at Chaffey’s. A second storey was added and a wood frame back kitchen. This house (pictured) is now a museum. Chaffey’s was a Fleming family fief for a century. After retiring in 1856, Pammy was succeeded by his stepson, Jim, who served until 1894. There was some fuss when grandson Henry got the next appointment. Patronage was alleged. Henry was dismissed in December 1896 but rehired three months later. He’d hold the job for more than three decades.

As Ed Bebee writes in Invisible Army, “An affable lockmaster with thirty-five years service at a popular station met a lot of people. When his family is there for generations, then relationships run deep.” Henry was such a person.

A combination of age (65 in 1922) and years of service (39) meant that Henry would most likely retire in the early 1920s. Knowing he’d have to move from the Lockmaster’s house, he wanted to acquire a property nearby where he could build a home. He wanted to get it at a good price and avoid an auction that might increase it, particularly since the CNR had built a station at Chaffey’s and local land prices had soared. So he wrote his good acquaintance, George Buskard, private secretary to Prime Minister Arthur Meighen, enquiring casually after family members and enclosing a sketch of the land he wanted. Within a day, enquiries on Henry’s behalf were dispatched on prime ministerial letterhead. The sale transpired as he had wished, helped by an Order-in-Council that designated him the buyer and sidetracked any other potential bidder. Perhaps most remarkably, the government had changed in the interim. Mr. Meighen had been replaced by Prime Minister Mackenzie King. But the change hadn’t bothered Henry. Rather, he lobbied again to have his retirement postponed. He wasn’t finally succeeded as Lockmaster until 1929. The family had held the job just three years shy of a century from the day Pammy got it from Colonel By.

James and Kate O’Brien. First to leave Chaffey’s, Pammy’s granddaughter Catharine (Kate) Fleming was the motherlink of the clan with thirteen children in Montreal. She lived to ninety nine.

After 1847, when work on the St. Lawrence River canals was completed, the Rideau system gradually lost its commercial prominence, though it long remained a gracious and comfortable route for passengers on the Rideau Queen, Rideau King and their like that plied regularly between Kingston and Ottawa. Until today the Rideau Canal, now a UNESCO World Heritage Site, remains a destination for boats and yachts from near and far as well as the focal point for local festivals in summer and, never forget, the largest skating rink in the world in winter.