Sunday, 14 November 2010

The British American Land Company

The leader-associate system failed to bring about the expected settlement of the Eastern Townships. Land held by speculators remained undeveloped and off the market. Speculators were waiting for the pioneers to clear their lands and build roads, schools, and churches. Once this happened, they knew that more settlers would want to come, land prices would rise, and their profits would soar. The first project for establishing a colonisation company for Lower Canada occurred in 1824. The idea was proposed by William Felton, a rich landowner from Sherbrooke who knew about the Canada Land Company directed by John Galt that had been set up in Upper Canada.[1] Felton asked for the concession to invest in the road network, bridges, Protestant schools and other infrastructure.[2] The project received support from several influential Londoners including Ellice, Gould and Gillespie but the financial crisis on the mid-1820s in Britain resulted in the idea being put on hold.

After the crisis, the project did not resurface in London until 1832 when a group of English merchants formed the British American Land Company (BALC). It was based on a scheme for colonisation and land speculation in Lower Canada devised by John Galt. Two Montreal merchants, Peter McGill and George Moffat, were appointed commissioners of the company in Lower Canada.[3] They organised the financing necessary to send Samuel Brooks, former deputy of Sherbrooke[4], to London with a petition supporting the establishment of the BALC.[5] In May 1834, a regional office of the BALC was opened in Brooks’ house in Lennoxville and he became its first secretary. The following year, the office was moved to Sherbrooke. [6]

The company received a torrent of protest from the Parti Patriote and its practices were denounced in the Ninety-Two Resolutions.[7] Also the reformist weekly British Colonist, printed in Stanstead by Silas Horton Dickerson, denounced the arrival of the BALC in the Cantons de l’Est. Ironically, after many financial problems, the presses of this newspaper were taken to Sherbrooke and subsequently used to print the Tory newspaper Farmer’s Advocate and Townships Gazette financed by the BALC and the merchants of Stanstead.[8] However, the Russell Resolutions in March 1837 made the government’s support for the BALC clear:

6. That the legal title of the North American Land Company to the land holden by the said company, by virtue of a grant of from His Majesty, under the public seal of the said province, and to the privileges conferred on the said company by the Act for that purpose made, in the fourth year of his Majesty’s reign, ought to be maintained inviolate.

The company began with more than 500,000 acres of Crown lands in the comtés de Shefford, Sherbrooke and Stanstead.[9] The aim of the company was to sell land specifically to British colonists but American settlers also purchased land. It also gave contracts for road and bridge building. Wishing to extend the amount of land it owned, the company bought further land recommended by its agents. The problem was that this led to widespread land speculation. Owners of land close to that owned by the company were able to sell them to the BALC at a handsome price. This led speculators to buy land located close to future roads or land developments that they could then sell to the BALC for a profit generally without having made any improvements. Between 1835 and 1837, the colonisation project was a striking success; the BALC built roads, bridges, and even villages for immigrants and transformed Sherbrooke from a modest village into a small town with well laid-out streets. However, in the crisis of 1837-1838, the undertaking virtually collapsed. The dwindling of European immigration and fear of possible rebellion in Sherbrooke and in the region generally reduced the sale of land, a situation not helped by the departure of some colonists, who abandoned their cleared lands to the United States. By 1841, only 400 of a possible 28,000 immigrants had been established in the Cantons de l’Est.[10] The company was faced by a financial crisis since many of those who had purchased land were unable to pay for it within the agreed time. This did not prevent it from buying all the land located on the banks of the Magog River.[11] The company became the exclusive owner of the natural energy from the waterfalls in the river and built mills, factories and dams that it rented to companies on long leases, such as Adam Lomas’s woollen manufactory, the flour-mill belonging to Edward Hale and George Frederick Bowen, and William Brooks’s paper-making firm with its two factories that wanted to establish themselves in the area.

In 1840, the financial problems facing the BALC, which was no longer bringing in anything to its British shareholders, were addressed by Alexander Tilloch Galt, who had worked by the company since 1835. He proposed selling land to carefully selected colonists on credit: for the first ten years, they were expected to pay interest on the loan and only after this when they were established was the capital paid off. He also suggested the company should encourage settlement by more French Canadian and American colonists since they had more experience of pioneering and who had an interest in the long-term development of the area.[12] His proposals were accepted and resulted in greater financial stability for the company. His plan for long-term credit attracted many French Canadians to the area, a process than led to them becoming the largest ethnic group of the early 1860s.[13]

The twelve years that Galt acted as secretary for the BALC in Lower Canada saw major advances in its profitability. This can best be seen in the Sherbrooke Cotton Factory, the first cotton mill in the province and the first joint-stock industrial company to be incorporated in Canada that had been launched with local capital in 1845. Galt personally contributed £500, and when in 1847 the factory was on the verge of bankruptcy, hampered by the constraints of its charter and the inability of numerous small shareholders to pay for their subscribed shares, Galt himself bought back the assets for BALC. With help from Edward Hale and an American manager, Charles Philipps, he started it up again in 1848 by providing more capital and overseeing operations. So successful was he that by 1851 the company was flourishing and he was able to sell it for £3,000. After 1844 Galt also distinguished himself as a railway promoter. Galt’s growing involvement in railway projects and his election as a deputy led to him leaving his post with the BALC in 1856.[14] His replacement as assistant commissioner, Richard William Henecker, remained in post until the beginning of the twentieth century. After 1866, the BALC took a different approach to its lands selling some to industrialists for commercial development.[15]

The BALC’s activities in the 1830s and 1840 resulted in significant British immigration to the area, a process reversed in the 1850s when French Canadians became the dominant immigrant group. The BALC did much towards opening up the country and preparing the way for these settlers, encouraging them by building churches, establishing schools, constructing roads and bridges for their convenience. In addition to developing agriculture in the area through its land sale, the company was also responsible for the creation of an effective system of road communication and established the first important manufacturing industries in the region. Its balance sheet of December 1895 showed that it had disposed of 463,326 acres to settlers.


[1] Coleman, Thelma, The Canada Company, (County of Perth & Cumming Publishers), 1978, and Karr, Clarence, The Canada Land Company: the early years, an experiment in colonization, 1823-1843, (Ontario Historical Society), 1974, provide the best introduction. Lee, Robert C., The Canada Company and the Huron Tract 1826-1853, (National Heritage), 2004, is especially useful on the Huron Tract.

[2] Ibid, Kesteman, Jean-Pierre, Peter Southam et Diane Saint-Pierre (eds.), Histoire des Cantons de l’est, p. 93.

[3] Ibid, Kesteman, Jean-Pierre, Peter Southam et Diane Saint-Pierre, (eds.), Histoire des Cantons de l’est, p. 95.

[4] DPQ, p. 111.

[5] Montreal Gazette, 19 March 1833.

[6] Archives nationales du Canada, British American Land Company, 1832-1936, pp. 863, 1005.

[7] Though the BALC was not specifically mentioned in the Resolutions, the Patriote position on tenure was made clear in resolutions 56-60.

[8] Ibid, Kesteman, Jean-Pierre, Peter Southam et Diane Saint-Pierre, (eds.), Histoire des Cantons de l’est, p. 211.

[9] Montreal Gazette, 10 December 1833

[10] Skelton, Oscar Douglas, The Life and Times of Sir Alexander Tilloch Galt, (Oxford University Press), 1920, p. 7.

[11] Ibid, Kesteman, Jean-Pierre, Histoire de Sherbrooke Tome I: De l’âge de l’eau à l’ère de la vapeur (1802-1866), p. 162.

[12] Ibid, Skelton, Oscar Douglas, The Life and Times of Sir Alexander Tilloch Galt, pp. 8-9.

[13] Ibid, Skelton, Oscar Douglas, The Life and Times of Sir Alexander Tilloch Galt, p. 13.

[14] DPQ, p. 307.

[15] Ibid, Kesteman, Jean-Pierre, Histoire de Sherbrooke Tome I: De l’âge de l’eau à l’ère de la vapeur (1802-1866), p. 168.

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