were in operation and producing from 450 to 500 tons of iron daily; that two more furances would be at work in sixty days, a new mill shortly finished and the manufacture of steel commenced in 1902. Their skilled labour was largely obtained from Germany and they were in this respect independent of the United States and its labour conditions.

Another development in Nova Scotian industries took place during 1901 in the re-organization of the Nova Scotia Steel Company. Originally organized at New Glasgow in 1882 it acquired control, in 1895, of the New Glasgow Iron, Coal and Railway Company and the Nova Scotia Steel and Forge Company and in 1900 purchased, as a going concern, the business and property of the General Mining Association, Limited-which dated from 1829 and had profits in 1898-99 amounting to $192,973. The profits of the Nova Scotia Steel Company in these years were certified at $414,586. The capital of the reorganized concern was announced in June 1901 as being 50,000 shares of common stock of $100 each or a total of $5,000,000; 20,000 shares of 8 per cent. cumulative preferred stock at $100 each, or a total of $2,000,000; and $2,500,000 first mortgage 6 per cent. 30 year gold bonds.

After organization as the Nova Scotia Steel and Coal Company and providing for the purchase of the property of the Nova Scotia Steel Company it was stated that $1,910,000 of the common stock and $970,000 of the preferred stock would remain in the treasury for future needs of the new concern. For the redemption of a temporary loan of the old company $1,500,000 of new capital would be required, and another $1,000,000 for the development of the coal mines, furnaces, shipping pier, coke ovens, etc. On January 1st the net. assets of the concern in book debts, cash balances and stock in trade were $635,789 and their property in April, 1901, was valued at from $4,250,000 to $4,500,000. Later in the year the Company issued $2,500,000 of six per-cent., first mortgage 30 year gold bonds through Messrs. Osler and Hammond, of Toronto, and with the statement that their average annual profits for three years past had been $512,215; that they expected future average profits of $742,500; that the concern was a combination of old and tried interests whose success and capacities had been known for many years. The Canadian Mining Review, of November, strongly endorsed and recommended the bonds as an investment. The Directors for the year 1901-02 were Messrs. J. Walter Allison, Thomas Cantley, Simon A. Fraser, J. D. McGregor, G. F. McKay, Robert Reford, Frank Ross. George Stairs and the Hon. L. Melvin Jones.

The Industries at Sault

Ste. Marie

Hardly less striking than the developments in Nova Scotia was the progress during 1901 of the various industrial interests of Mr. F. H. Clergue at Sault Ste. Marie, Ontario. The beginning of the operations of this American financier in Canada was the formation of the Lake Superior Power Company in 1894. Then followed the acquisition of water power privileges, the building of pulp mills, the acquisition and

operation of nickel mines, the use of sulphur in making chemical pulp, the building of docks for the shipment of Michipicoten ore, the mining and utilization of the iron ore found in that region, the building of the Algoma Central Railway as a mineral transportation line from Sault Ste. Marie to Missanabie, on the Canadian Pacific Railway, and the creation of an industrial city of 10,000 people out of a little village.

Various concerns were acquired by the original Company from time to time, and in 1899 the Consolidated Lake Superior Company was formed as a combination of varied interests, with Mr. E. V. Douglas, of Philadelphia, as President, Mr. F. H. Clergue as VicePresident and General Manager, and Mr. F. S. Lewis, of Philadelphia, as Treasurer. The capitalization of the concern was stated to be $20,000,000, while the branch concerns included the Nickel Steel Works, with a capital of $2,000,000; the Pulp and Paper Company, with $2,500,000; the Lagona Water and Light Company, with $200,000; the Canadian Electro-Chemical Company, with $1,000,000; the Algoma Central Railway Company, with $10,000,000; the Algoma Commercial Company, with $10,000,000; the Ontario Lake Superior Company, with $20,000,000.

On February 15, 1901, a great banquet was given to Mr. Clergue by the citizens of Sault Ste. Marie, under the auspices of the Board of Trade, and he was also presented with a gold watch and chain and an illuminated address. Mr. John Dawson, President of the Board. occupied the chair, and among those present were Senator Dandurand, of Montreal; Charles Marcil, M.P., of Montreal; A. E. Dyment, M.P.; T. B. Flint, M.P.; C. B. Heyd, M.P.; James Conmee, M.P.P.; the Hon. H. R. Emmerson, M.P.; George E. Drummond, of Montreal; W. J. Douglas, of Toronto; and Messrs. F. Pardee, R. E. Truax, C. F. Farewell, D. Burt, A. Miscampbell, John Dickenson and J. Loughrin, of the Ontario Legislature. In his lengthy and elaborate speech upon this occasion, Mr. Clergue first referred to the courageous and enlightened Americans who had joined with him in putting many millions into his Canadian enterprises, and compared the gloomy prospects of the struggling town of six years before with the growing population and strenuous activities of to-day. He then described the present position. The foundry and machine and blacksmith shops employed 300 men, and the pay-roll amounted to $200,000 annually. For the iron works, more than $300,000 had been expended in Canada for supplies and materials, and $200,000 in wages paid. The Pulp Mill Company had expended over $2,000,000 upon buildings, etc., and over $1,000,000 for labour in operation, while the annual pay-roll now amounted to $500,000. The Water and Light concern had expended $300,000 on construction, and $50,000 on labour. The Lake Superior Power Company had spent over $5,000,000 upon construction, and now employed 1,000 men, with a daily pay-roll of $1,500. Upon the Algoma Central Railway over $3,000,000 had been expended, and expenditures upon the Steamship line already amounted to $600,000.

"A summary of these figures shows that we have already expended in works at Sault Ste. Marie, or tributaries, over $9,000,000, and that we have over $9,000,000 more to expend before the projected works are completed; and these sums do not include our outlays at Sault Ste. Marie, Michigan. It indicates that the 3,000 men on our pay-roll will be increased to over 8,000, and that about $10,000 in cash will be distributed daily at Sault Ste. Marie among the builders and operatives of these works."

Mr. Clergue then passed on to consider the basis for future prosperity and work. There has never been an industrial failure where the raw material existed to the best advantage, combined with the force necessary for its transformation into practical use." These conditions he claimed to exist at Sault Ste. Marie in the most pronounced forms. Another guarantee for the future was the fact that "every dollar of the past expenditure has been provided directly from the pockets of the shareholders of the Company. Not a mortgage nor a bond of the Company has ever existed." He spoke of the great resources around them-the water power, the sulphur for papermaking, the nickel for nickel-steel, the high-grade iron ore of the Helen Mine, the unlimited hardwoods available for charcoal. It seemed as if Providence had given them every reward which enterprise and energy could desire.

The vast undeveloped resources of Canada, in his opinion, made Government aid necessary, and he had personally been received with consideration and cordiality at Ottawa. But Mr. Clergue was not impressed with Canadian political patriotism. "We have pestered the Government so persistently with arguments in favour of Canada that they are reasonably well impressed with their own assets, though the general impression among Canadians still seems to be that land is of value, mines are of value, railways are of value, every where except in Canada." Yet nowhere was there a people more industrious and intelligent than in the Dominion. The trouble was due to a misdirection of industrial efforts, whereby labour had not received an adequate recompense. His hopes for the future were very strong. The lumber mills of Maine and Michigan must have Canadian logs; the pulp and paper mills of New York and New England must have Canadian spruce; the United States Government must have Canadian nickel for their navy; the iron industries of the United States were demanding Canadian iron; Boston required Nova Scotian coal, and the Pacific States must have that of British Columbia. Canada has now acquired a position which will enable her to ask for and secure a more just condition of industrial exchange.' Larger works would be established in Canada from time to time, higher wages paid, emigration would be checked and the current of population turned toward the Dominion. Mr. Clergue concluded a singularly able speech with a review of the financial requirements and condition of the Company, and with renewed expression of confidence in the future of the great interests concerned.

On May 7th it was announced in Chicago that the Consolidated

Lake Superior Company and the Ontario Lake Superior Company, controlling the railway and steamship lines at the Sault, were to be amalgamated, and the joint capitalization of $65,000,000 increased to $117,000,000. The statement was confirmed by Mr. H. C. Hamilton, a member of the Clergue syndicate, in a despatch to the Toronto World. A little later, the Algoma Steel Company was gazetted at Ottawa with a share capital of $20,000,000, and with Messrs. E. V. Douglas, W. K. Stager and J. S. Freeman, of Philadelphia, F. H. Clergue and H. C. Hamilton, of Sault Ste. Marie, as Directors. The objects stated were the manufacture and trade in iron, steel and nickel, and the products thereof, and the manufacture of charcoal and coke and their by-products. The Directors also stated their intention to carry on the business of an engineer and contractor for the manufacture and building of iron and steel bridges, cars and locomotives, steamship and other structures, in connection with their business.

Speaking at a banquet, held in Owen Sound on June 7th, at which the Hon. Mr. Tarte was present, Mr. Clergue referred to this new enterprise and declared that the discovery of the Helen Iron Mine had brought them this extra capital of $20,000,000 and that they would soon be manufacturing steel rails. Later in the year, Sir Christopher Furness, the eminent English capitalist, visited the Sault, and in the Globe of October 24th, expressed amazement at the immensity of the works and especially at the economy of labour and the greatness of the Power House. To the latter he referred as the largest in the world. Some fears were expressed during the year that the American capital in these concerns- a part of which was said to come from Senator Mark Hanna-might not always be employed for Canadian interests and the London Free Press of December 26th declared that the iron mines were already being worked for the benefit of industries in Ohio. The hope was expressed by this paper (Conservative) that the Provincial Government had retained some power of control over these concerns.

Mr. Clergue's Enterprises in Parliament

In connection with one of the great enterprises of Mr. F. H. Clergue, at Sault Ste. Marie, a discussion took place in the House of Commons on April 9th. The Hon. Mr. Haggart asked for particulars of a vote of $500,000 for steel rails and fastenings, and Mr. Blair, Minister of Railways, went into the matter at some length. The rails were required for the Intercolonial Railway and were to be obtained by the Government from one of Mr. Clergue's concerns the Sault Ste. Marie Power Company-as the result of a proposition from them to put in a steel rail plant which would manufacture in Canada an important product hitherto purchased in the United States. "They satisfied us of their ability to do this work and that they would be capable of establishing a very efficient plant, using ore of a superior quality. They said the steel which would be made from it would contain a percentage of nickel which would be found in the rails they would make for us. Although this formed no element in the price it would add materially to the desirability and value of the rails, and we felt

that there was additional inducement for us to make the arrangement with them."

The establishment of the industry was contingent upon securing an order from the Government sufficiently large to guarantee initial work for their factory and to encourage the necessary investment of capital. The price for the rails was to be $32.60 a ton and the same as had been previously paid to American concerns for rails. The Government, therefore, had felt that this opportunity to establish an apparently permanent and important Canadian industry was something which would appeal to the people generally. It would secure a supply of Canadian-made rails for Canadian railways; would employ, directly and indirectly, a large number of people; and would benefit the general industrial development of the country. In view of the season of year in which these arrangements were completed, and apart from their general desirability, it was found impossible to place advance orders elsewhere upon satisfactory terms so that a contract was made for the manufacture and delivery of 25,000 tons at $32.50 per ton. "We have no definite and explicit contract with them for the future although in their proposal they asked us to give them a contract for a period of five years." The arrangement with Mr. Clergue was for the delivery of the rails in Montreal in August of the current year.

On the succeeding day the Hon. Mr. Haggart criticized the arrangement as the most extraordinary contract ever presented to a House of Parliament. He pointed out that it was made on the verge of a general election and was really for a term of five years; that it involved the country in a heavy liability of $4,000,000 for the purchase of 125,000 tons of steel; that the future price of these rails was uncertain, and that the whole transaction was consummated without consulting Parliament. The contract read as follows:

"It is, therefore agreed by and between Her Majesty for herself her successors and assigns that Her Majesty will in each year from the year 1901 to the year 1905, both inclusive, purchase from the company and take delivery of 25,000 tons of 2,240 pounds to the ton, of first quality steel rails, eighty pounds to the yard, of section from time to time prescribed and approved by the said Minister."

The price in other years than 1901 was to be that obtainable in the open market of Great Britain at the time when the order was given. In addition to this arrangement Mr. Clergue would get $3 per ton for pig iron and $3 per ton for steel from the Dominion bounty as well as another bounty from the Ontario Government. "What better thing could a man desire?" He protested against the growing habit of letting contracts without tenders and without approval by Parliament. The Hon. Mr. Blair in reply declared that no complaint was made as to the actual terms of the contract and that the Government was simply buying rails at the market price while creating and developing a great industry in Canada. He argued that the contract was not binding except at current rates and