Canada’s biggest big businessmen

Their decisions help shape our daily lives, control nearly half of our resources and more wealth than we have money—yet some of them are almost unknown. Here’s a revealing study of the men who stand at our economic summit

Peter C. Newman October 12 1957

Canada’s biggest big businessmen

Their decisions help shape our daily lives, control nearly half of our resources and more wealth than we have money—yet some of them are almost unknown. Here’s a revealing study of the men who stand at our economic summit

Peter C. Newman October 12 1957

Their decisions help shape our daily lives, control nearly half of our resources and more wealth than we have money—yet some of them are almost unknown. Here’s a revealing study of the men who stand at our economic summit

Garfield Weston, though he’s lived abroad since 1934, retains vast food holdings, including Loblaws, in Canada. He’s our wealthiest expatriate. He shows a grandson his Riviera home.

Within the last dozen years most Canadians have become acutely and happily aware that more money is circulating in Canada than ever before. At the same time they have become somewhat more vaguely aware that the men who command the largest portions of it are, for the most part, much harder to name and recognize than the Sir Herbert Holts, Sir Henry Pellatts and Sir William Van Hornes of an earlier age.

Blandly and almost without notice, our postwar prosperity has spawned a new hierarchy of big businessmen whose decisions help shape the economic existence and influence the working life of nearly all Canadians.

Canada’s paper money and coinage stocked in banks, cash registers, wallets, purses and under mattresses totals $1,800 million. There are more than a hundred individual Canadians who, as corporation directors, help to control, invest and distribute business assets that are

valued at more than the total Canadian currency in circulation.

Who are these men at the country's economic summit? How can their influence he measured?

There is no definitive or final yardstick. But in an effort to find some pattern in the anatomy of Canadian financial power in this year 195?, Maclean s recently made a survey based on two roughand-ready. if inexact, criteria: How many business directorships arc held by our hundred busiest directors? What are the total assets of the various companies on which each ol these men serves as a director?

A study based on such arbitrary terms cannot, of course, provide a complete or completely accurate index to the relative influence of individual businessmen. It cannot assess strength of personality which often outweighs statistics in the impact of any executive.

John David Eaton, president of the T. Eaton Company, owns nearly all its stock, but, because Eaton’s is a private concern and does not make its financial reports public, his great wealth can only be guessed at.

The standards chosen — number of directorships and reported assets of the firms involved — also inevitably eliminate the names of some very powerful Canadian businessmen, in spite oí their obviously Himalayan stature at the country’s economic summit. John David Eaton, for instance, does not appear on the list because the Eaton firm is a private concern and does not, like most other business complexes, publish financial statements. Nor is the immensely wealthy Garfield Weston included, because so many ol his holdings are outside Canada.

Some men whose names rank high on this informal listing of leading Canadian directors are not, in fact, particularly wealthy or particularly powerful. But they have won the confidence ol a great number of stockholders, large and small, in a substantial number of businesses. A man can hold more directorships than anyone else in Canada and have less economic influence than the small-town lawyer who becomes minister of finance, or the accountant who is appointed governor of the Bank of Canada.

The inclusion of trust-company assets in the compilation creates some added anomalies, because not all trust companies include the value of the estates they administer in their asset figures. Also, some of Canada’s largest corporations are the wholly owned offspring of American parent companies and do not publish separate figures. General Motors of Canada, for instance, had to be left off the tabulation. although it has a payroll of five million dollars a month and ranks with the first half dozen Canadian companies in size of assets. And the directors of some U. S.-owned Canadian firms are merely powerless appointees.

In spite of these reservations, some of the main features of Big Business ’57 do emerge from the Maclean’s survey of directors. Among the most striking conclusions are these:

  • Through their directorships, about ten dozen Canadian businessmen today exercise a decisive measure of policy control over almost half the country’s material wealth, as represented in factories, banks, railroads, mines, oil wells and other resources.
  • Economic decisions often come from little-known figures whose names even businessmen only vaguely recognize. The Canadian who sits on the most boards of directors, for instance, is R. A. Jodrey, an obscure apple farmer who lives in Hantsport. N.S.
  • The director whose board seats represent the greatest sum of assets is Charles Dunning, a farmer-politician who retired from public life nearly twenty years ago. He now serves as a director of industrial installations with a greater value than the ten billion dollars in hills and coins printed for the Bank of Canada and stamped out by the Royal Canadian Mint since their establishment.
  • The centre of gravity of Canadian business power is slowly shifting from Montreal to Toronto. But of the hundred most active Canadian company directors, forty-four arc still Montrealers. Twenty-eight live in Toronto. Vancouver, Canada’s third largest city, has only seven representatives on the list.
  • In spite of the eleven-and-a-half-billion-dollar U. S. investment in Canadian resources. Americans make up a relatively insignificant contingent in the roll of leading Canadian directors.
  • French-Canadian names are surprisingly rare. Little of Quebec’s industry is controlled by French-speaking businessmen.

This list of a hundred directors of Canadian companies includes most, though not all, of Canada's most influential businessmen. It is based on the publicly reported assets of public companies doing business in Canada. Thus the list omits such business giants as Samuel Bronfman and Garfield Weston, whose main holdings are outside Canada; John David Eaton, who heads a private family concern that does not issue public statements; nor does it include the many non-resident investors having interests within Canada. It is, therefore, a good cross-section of Canada's economic summit rather than a definitive directory.

Those who live and work in the rarified atmosphere of Canada’s economic summit are as various in their beginnings and their characteristics as. say, an equivalent number of schoolteachers or hockey stars. A few common denominators of habit and background recur without being universal. These  include graduation from a Canadian private school (not necessarily followed by a university degree), membership in about a dozen private clubs, and an absence of personal ostentation. Few Canadian businessmen are active openly in politics. Many have developed avid nonbusiness interests and personal hobbies.

“The world of the economic elite,” says Professor John Porter, a Carleton University sociologist who has studied the characteristics of Canadian business leadership, “appears as a complex network of small groupings interlocked by a high degree of cross membership. Throughout the network runs a thin, but nonetheless perceptible, thread of kinship.”

Samuel Bronfman, president of Distillers Corporation-Seagrams, earns what may be Canada’s highest salary. To U. S. government he reported $351,042 in 1956. Bronfman family own stock worth hundreds of millions.

Canada’s fifteen most important universities have eighty prominent businessmen on their boards of governors. Fifteen of the University of Toronto’s twenty - six - member governing board are corporation directors. The Stratford Shakespearean Festival has eight leading businessmen on its twenty-five-member board of governors.

How does a Canadian become a corporation director?

“In many countries a directorship is often offered as a plum to a deserving someone whom the company can do something for,” said Russell D. Bell, who was killed recently in a plane crash. He was head of Greenshields and Company, an important Montreal investment firm. “Here the director is chosen as someone who can do something for the company.” The only way to become a director of a company is by the election of its shareholders. Nominations are usually based on business experience and the hope of the investors that their nominee will safeguard their interests and, if possible, increase dividends.

When Canadian business consisted mostly of small local operations, managers were directly responsible to shareholders, who functioned more as partners. Rut as business has developed its complex national corporations, directors elected by the shareholders not only originate and approve company policies, but act as the operating owners.

Directs most assets Charles Dunning, still a financial giant at seventy-two, was premier of Saskatchewan, MP and, at forty-four, youngest federal finance minister.

Directors have the power to move factories without moving employees, they can hatch new company towns or, as one B. C. court case confirmed, sell the company’s entire assets. "Being a director,” says Frank M. Covert, a Halifax lawyer who is a member of twenty-one boards, “is a continuous education by virtue of association and the process of seeing how different people tackle the same or similar problems.”

Directors, in practice, nearly always are the dictators of company policy. But they only operate as the elected trustees of the shareholders who can fire them if they so see fit.

Multiple directorships, of course, multiply any director’s power. Whether this is good or bad for the country at large and for business at large has long been a point of debate. “As long as the need for competent board members exceeds the supply, the situation of interlocking directorates will exist,” says Peter N. Thomson, a director of Nesbitt, Thomson, one of Canada’s largest investment houses. “However, I do not believe that such directorates in any way hinder competitive enterprise.”

R. C. Berkinshaw, president of the Goodyear Rubber and Tire Company and a director of eleven other corporations, insists that “it does not necessarily imply that businesses are tied together just because some of their directors’ names are the same.” Others disagree. C. A. Ashley, a University of Toronto commerce professor who has studied the anatomy of Canadian business leadership, recently concluded, “A comparatively small group of directors, who are constantly meeting with others of the group, and who, almost necessarily, develop some community of interest, if not a common outlook, constitute the real economic elite of Canada.”

The biggest banker James Muir left school to clerk in a bank at fifteen, rising eventually to become the president of the Royal Bank of Canada, the nation’s richest and world’s sixth largest.

“Business policy must start somewhere,” says F. G. Winspear, an Edmonton accountant who is a director of thirteen companies, “and it should best start with men who have experience, imagination and vitality. This, of necessity, must represent a small group in any business community. But there is no indication of any real danger to the competitive system in Canadian business.” Interlocking directorships have long been a favorite target of the CCF, and David Lewis, national chairman of the party, claims that the growing concentration of corporate wealth has resulted in a virtual economic dictatorship by a privileged few. “A relatively small number of men,” he says, “have almost complete control over our economic life. They have the power to decide if production will he expanded or contracted, if prices will be raised or lowered. Their decisions affect the welfare of thousands of people, but they do not have to answer to anybody.”

Another recurrent debate concerns the real power exerted by American businessmen in Canada. Americans control nearly half of our industrial wealth, but hold only fifteen percent of the directorships in our dominant corporations. The only two Americans who appear high on the list of the hundred busiest Canadian directors are L. J. Belnap, an electrical engineer who heads Consolidated Paper Corporation and is a director of thirteen other companies, and Ray Powell, senior vice-president of Aluminium Limited, who is on ten other boards. Both are Canadian citizens.

Most influential French Canadian Joseph Simard, one of few French-Canadian big businessmen, makes pews and hosiery, runs Canada’s largest private tanker fleet and one of world’s important armament works.

Automobile manufacturing, the Canadian industry most commonly associated with American influence, is almost completely controlled by U. S. parent companies, but nearly all its management is Canadian. Only two senior executives of Chrysler Corporation of Canada were born in the U. S., and one of them has lived here since he was four. All the department heads and executives of General Motors of Canada are Canadians. Of the fourteen members of Ford of Canada’s administrative committee, only two are Americans. Of course the extent to which these non-U. S. directors take their voting instructions from the U. S. varies with each firm, but usually the extent is considerable.

Although they make up more than one third of the country’s population, the representation of French Canadians among Canada’s nationally influential corporation directors is limited to Alphonse Raymond, a Montreal food manufacturer. Wilfred Gagnon, president of Dow Brewery, Raymond Dupuis, head of his family’s Montreal department store, the presidents of the two FrenchCanadian banks, half a dozen lawyers, and the little-known Joseph Simard.

This is partially explained by Quebec’s educational system, which, until recently, did not stress either economics or science. But nearly all the Quebec universities now have commerce courses and the next generation of important Canadian company directors is expected to include a sharply increased contingent of French Canadians.

New leadership in the west With an oil and lumber boom of its own, the west is producing its own leaders. A. E. (Dal) Grauer (seated), fifty-one and president of B. C. Power, was a Rhodes Scholar and a professor at the University of Toronto.

Probably Quebec’s most influential businessman today is Joseph Simard, who runs a private duchy at Sorel. Que., where he owns a forest of industrial installations, strewn around the junction of the Richelieu and St. Lawrence Rivers. He is a director of twenty-three firms whose assets aggregate well over a billion dollars. His companies sell church pews, warships (he built the RCN’s icebreaker Labrador), TV cabinets, rocket launchers, garbage trucks, gasoline-station signs, railroad cars and hosiery worth more than thirty million dollars a year. He also runs Canada’s largest privately owned tanker fleet, a 104-ship towing and dredging flotilla, and a fifty-two-acre naval gunshop, which is one of the world’s largest private armament works.

One recent transaction revealed the scope of Simard’s international interests. In 1953 he sent a tug to Seattle to bring home the seven-hundred-ton, four-masted schooner Fantôme, which he acquired by paying her overdue docking charges. The Fantôme had been abandoned in Seattle by A. E. Guinness, the Irish brewing millionaire, at the outbreak of World War II. She is one of the most luxurious vessels ever built, requiring a crew of forty. There are only eight passenger cabins. The ship has a built-in fresh-milk dispenser—a deck locker to accommodate a sea-going cow.

Holds most directorates R. A. Jodrey, a Nova Scotia apple grower and pulpmill operator, is little known outside boardrooms but he holds greatest number of directorships—56.

Simard bought the thirty - year - old yacht because he wanted to put her two auxiliary engines into one of his tugboats. But a personal inspection persuaded him to wait for a customer. Last year Aristotle Socrates Onassis, the Greek shipping czar, saw the ship and immediately bought it for many times Simard’s investment, as a wedding present for Prince Rainier and Grace Kelly.

Simard is almost totally unknown outside his own circle of intimates. Whenever Montreal reporters renew their requests for interviews too vigorously, he goes fishing in Labrador.

In spite of the scarcity of French-Canadian names on the roster of Canada’s busiest directors, this country’s brightest financial constellation is still centred in Montreal, where most of the fortunes dating back to pioneer Canadian railroad, mining and industrial ventures originated. Toronto's Bay Street, however, is gradually threatening to eclipse Montreal’s more sedate St. James Street.

The greatest concentrator of business power in Canada is Argus Corporation, a Toronto-based empire of ownership whose stock interests control companies employing more than sixty thousand, with annual gross sales of $1.3 billion. Argus consists of a stenographer-lined corridor in a downtown Toronto office building, where a staff of fifteen looks after the company’s only asset: seventyfive million dollars’ worth of shares in six of Canada’s most important corporations—Dominion Stores, Massey-HarrisFerguson, Canadian Breweries, B. C. Forest Products, Dominion Tar and Chemical, and St. Lawrence Corporation.

Man most talked about E. P. Taylor’s brewery mergers and part in building Argus Corporation (controlling assets of $777 million) have kept him continually before public.

By being the largest single shareholder in these firms (ranging from 13.1 percent in Canadian Breweries to 22.4 percent in St. Lawrence Corp.) Argus can place enough of its directors on their boards to control policy. The seventy-five-milliondollar stock investment of Argus thus rules assets worth more than $777 million.

Four Argus executives—E. P. Taylor, Col. W. E. Phillips, M. W. McCutcheon and John A. McDougald—have seats behind more than one hundred board-room tables. Their individual totals of assets directed aggregate to $19,054 million— enough to wipe out Canada’s national debt. These men do not own Argus, but by holding forty percent of its 1,370,272 common shares, they can and do regulate its investment activities.

Taylor recently has been spending more and more of his time directing the development of the four thousand acres of sandy ocean frontage he bought on New Providence, the tiny island capital of the Bahamas. He is building rows of ocean-side mansions and a luxurious new golf club. Taylor’s main hobby and recreation is horse racing. His stables employ a hundred men. have a financial turnover of eight hundred thousand dollars a year and in 1956 produced seventyfive winners for $235,000 in purses.

After he graduated as a mechanical engineer from McGill in 1922, Taylor organized Red Line Taxis Limited, one of the earliest and still one of the largest Ottawa taxi fleets. Using his father’s Brading’s Brewery as the first link, he eventually daisy-chained twenty-three Ontario, Quebec, Manitoba, Saskatchewan, Alberta, B. C. and U. S. beer companies into Canadian Breweries Limited, one of the world’s biggest brewing organizations. With his partners and associates, Taylor has been widening the scope for his financial dexterity by super-mergers of food, lumber and chemical firms. His Argus-dominated control structure has become a sort of maypole, with corporate ribbons reaching into nearly every Canadian industry.

Most sought-after corporation lawyer J. S. D. Tory, who holds a law doctorate and sits on 33 boards, devotes his spare time to raising prize Aberdeen Angus and Guernsey cattle on his King, Ont., farm. Tory shows off a $30,000 Aberdeen Angus—“the finest bull in the country.”

Although he is usually portrayed as the prototype of Canadian big businessmen, Taylor's name is seldom brought up when Canadian economists play their favorite parlor game of guessing who is Canada’s richest man.

John David Eaton, who owns nearly all the stock in his family’s retailing empire, is a leading candidate, but the company’s private books permit little informed guessing. Probably the man most frequently mentioned is Samuel Bronfman, the head of the giant Distillers Corporation-Seagrams Limited. This Montreal company and its U. S. subsidiaries sell more than two million dollars' worth of liquor a day.

The Bronfman family owns Seagram Mock worth nearly a hundred million dollars, through a private holding company called Seco Investments Limited. This portfolio alone brings in a dividend income of more than four million dollars a year.

Bronfman is also a director of large petroleum companies and a bedding firm, but he does not sit on the boards of any Canadian banks or major industrial corporations. His job as head of the Seagram complex pays him what is probably Canada’s highest salary. Because his companies do so much business in the U. S., they have to submit detailed reports to the American Securities and Exchange Commission, which include executive salaries. The SEC lists Bronfman’s 1956 pay cheque at $351.042, ranking close behind the salary of Henry Ford 11, president of the Ford Motor Company in the U. S., which is the world's third largest corporation.

Allan Bronfman, a Seagram vice-president. is thought to be Canada’s secondhighest-salaried executive, with 1956 wages of $200,521. The presidential salaries of major Canadian corporations range up from forty thousand dollars. The SEC statements show that J. R. White, the head of Imperial Oil, receives $81,666 and that Henry F. Wingate, president of International Nickel, gets $155,050.

Many companies grant their chief executives extra compensation by giving them options on treasury shares below market values. Most firms also have special executive pension plans. This can be important. Sir George Bury, for instance, who retired as a CPR vice-president in 1919, is now ninety-one but still enjoys his daily visit to the Vancouver Club. In the past thirty-eight years he has collected well over half a million dollars in pension cheques.

Section 108 of the Canadian Companies Act allows directors to make bylaws "as to their own compensation.” But most boards pay themselves modest fees. R. A. Jodrey, the Canadian with the greatest number of directorships, receives an average annual fee of two hundred and fifty dollars for each of his fifty-six board-room seats.

Jodrey is an aloof, sixty-seven-year-old apple grower and pulp-mill operator who Juives in austere seclusion at Hantsport, a dent in the rocky shoreline of Nova Scotia’s economically ailing west coast. A blocky Baptist with cart-horse affinity for hard work, he spends a hundred hours a month sitting on the boards of corporations whose three and a half billion dollars' worth of assets extend from Newfoundland into South America. “The most important thing for successful operation.” he says, “is good management. It is when management gets poor that control brings about a shake-up.”

Jodrey is not listed in any Who's Who. He belongs to few clubs and no societies.

During most evenings he slouches on his living-room divan, reading company balance sheets, accompanied by a constant replaying of his Stephen Foster record collection. The son of a Gaspereau Valley cabinetmaker, Jodrey left school at thirteen hafeicome an apple-picker. He established the Minas Basin Pulp & Paper Company in 1927 and now owns more than three hundred thousand acres of Nova Scotia timberland and two large power plants. More and more directorships were offered him in recognition of his sound business advice.

Of all the Canadian businessmen who established their own companies, none expanded their holdings faster than H. R. MacMillan, the dominant personality of MacMillan & Bloedel Limited, a Vancouver lumber complex which sells more than three million dollars' worth of wood products a week.

MacMillan's first profit was three hundred dollars from an ice-cream stand he set up for visiting farmers, while he was a student at the Ontario Agricultural College, in Guelph. In 1915, he resigned as B. C.'s chief forester and four years later with one stenographer he started timber export business. By 1935 he was the world’s largest charterer of merchant shipping and making so much profit selling other companies’ timber that most of the firms decided to set up their own export departments. MacMillan immediately began buying up sawmills. They now cut up more than 500 million board feet of lumber a year.

Unlike MacMillan, most of the businessmen who have reached this country’s economic summit attained their positions in companies already operating when they began their careers. Many simply took over the desks of their fathers, uncles or fathers-in-law. Charles L. Gundy, the president of Wood Gundy and Company, a leading Toronto investment house, inherited most of the twenty directorships in the companies financed by his father, including Canada Cement, Massey-Harris-Ferguson and Dominion Steel and Coal Corporation.

Their heredity did not save some sons from dreary years spent learning the business. G. Blair Gordon, the president of Dominion Textile and a director of nineteen other companies, worked as a fitter’s helper in one of his father’s mills, in spite of his preference for playing polo. He still has a scar on his brow from an inkwell hurled at him by a striker at Montmorency Falls in 1938 during a stormy labor dispute. John David Eaton spent twelve years selling men’s underwear and being moved through other departments before he was named to head Canada’s largest retailing chain.

No Canadian has capitalized on an inheritance more spectacularly than Garfield Weston. When he took over George Weston Limited, in 1924, his father’s small bakery was earning twenty-five thousand dollars a year. Weston, who had spent his leaves as a World War I sapper poking around English biscuitmanufacturing plants, began buying out Canadian biscuit makers and other food firms. The fifty-seven companies he has since absorbed into George Weston Ltd. showed a 1956 net profit of nearly five million dollars.

Since 1934 Weston has lived mostly in England, where his chain of bakeries has become the largest consumer of flour. But recently he has been satisfying his expansion impulses back on this side of the Atlantic. His ownership of Loblaws added to his purchase, two years ago, of a controlling interest in the National Tea Company of Chicago, the fourth-largest U. S. supermarket chain, moved the annual food sales of his companies into the rarefied billion-dollars-plus bracket. Weston is rumored to have tried to gain control of the 2,100-unit Safeway Stores Inc., of Oakland, California. If he succeeds he will be able to outsell the A & P organization and become the world’s greatest food merchant.

Few men possess the restless drive even to try empire-building on Weston’s scale. The first step frequently is the transition from ambitious neophyte to company director and it takes place most commonly in the Toronto or Montreal law firms specializing in corporation problems. The lawyer sets the legal limits for most important company decisions. He often casts the deciding director’s vote.

The most sought-after lawyer-director in Canada is J. S. D. Tory, of Toronto. A doctor of law from Harvard and one of the most talented corporation lawyers on the continent, Tory now sits on thirty-

three boards. His diminishing spare time is taken up with trying to improve the strain in his Aberdeen Angus and Guernsey cattle, on a five-hundred-acre farm near King, Ont.

The next most important directors’ spawning grounds after the legal profession are the banks and investment houses. Canada’s nine chartered banks—run by 246 directors—have assets aggregating fourteen billion dollars.

Until the early Thirties bank directors were frequently named to the boards corporations because of their bank connections. Now the reverse is becoming common. The ninety-seven directors of four of Canada’s largest banks hold 905 important company directorships.

Canada had thirty-six banks at the turn of the century. The mergers that have reduced their number to nine have made the Canadian banking system one of the world’s most concentrated. The U. S., with roughly ten times the population, has fifteen hundred times the number of banking institutions.

Directors without degrees

The Royal Bank, with assets of $3.6 billion, is not only Canada’s richest bank, but the sixth largest in the world. James Muir, its president, is so conscientious about shareholder relations that when he was told a new shareholder was blind, he had earnings reports transcribed into Braille.

Muir’s climb to the Royal’s presidency is fairly typical. He left school at fifteen to clerk in a cash cage. After thirtyseven years in a dozen jobs at branches and in head office he moved into the bank’s top job. Indeed, only two Canadian bank presidents—J. S. Proctor, of the Imperial, and J. Edouard Labelle, of the Provincial—have university degrees. A college education has not in the past been essential to leadership in Canadian business. Many of the directors on the list accompanying this article have honorary doctorates. Fewer than half ever attended university lectures.

A notable exception is A. E. (Dal) Grauer, the president of B. C. Power Corporation, and a director of thirteen other companies. Grauer enrolled in the University of British Columbia at fifteen, was a Rhodes Scholar at Oxford and later got a PhD in economics and political science from the University of California. He joined B. C. Power in 1939 after two years as head of the social-science department at the University of Toronto. He became president seven years later. He’s one of scarcely more than a half dozen Canadian corporation heads who refuse the aid of speech writers.

Almost one third of Canada’s hundred most influential company directors are private-school graduates—half of them from Upper Canada College in Toronto. “The idea here,” says the Reverend C. W. Sowby, the principal of Upper Canada, “is not just to be good at a thing, but to be excellent.”

Upper Canada College students are taught the value of money by being strictly budgeted to an allowance of between seventy-five cents and a dollar and a quarter a week. Most students have a head start in their careers over the average youngster through family connections, but their success is not limited to business. Of the fifteen hundred Upper Canada graduates who served in World War II, twenty-six became generals or the equivalent.

In spite of the success of such comparatively youthful Upper Canada old boys as Colonel Eric Phillips, chairman of both Argus Corporation and MasseyHarris-Ferguson, the older generation of self-taught businessmen continues to hold the major share of important seats in Canadian corporation board rooms.

This group's patriarch is seventy-twoyear-old Charles Dunning, a quiet, pipesmoking farmer-politician, who disappeared from the headlines in 1939 when he resigned from parliament after a heart attack. Although he now commutes less frequently between his large Cote des Neiges home and his combination office-and-board-room in Montreal’s Sun Life Building, he still commands respect at the board meetings of. corporations whose assets total close to eleven billion dollars—that’s what it costs Ottawa to run the country for two and a half years.

Dunning left school at eleven to run errands for a lawyer in his native Leicestershire, England. At fourteen he ruptured his heart valves in a swimming race and doctors certified him a permanent invalid. He emigrated to Canada at seventeen and settled on a quarter section near Beaverdale, Sask., twenty-five miles beyond the end of steel, where he survived his first winter on seventeen dollars’ worth of supplies. When he was elected local delegate to the Saskatchewan Grain Growers’ Association annual meeting, he earned his board at the Regina Hotel by stoking the furnace.

Dunning was appointed an association director, became interested in politics and ten years later was premier of Saskatchewan. He went to Ottawa as an MP in 1926 and in three years, at forty-four, became Canada’s youngest minister of finance. When the King government was defeated in 1930, Dunning became a “business doctor,” reviving various Canadian companies. Through his resultant contacts, he was named a director of Consolidated Paper Corp., the Bank of Montreal, CPR and Ogilvie Flour Mills.

Dunning’s activities in helping some of these corporations to absorb smaller firms personify the new approach to business growth. For some companies it has become far too slow and cumbersome to expand through a systematic building up of sales. It is much faster to buy out competitors.

Since 1900 more than twenty-six hundred large Canadian companies worth about four billion dollars have disappeared through mergers. Dominion Textile, Consolidated Mining and Smelting, Steel Company of Canada, and Canada Cement are some of the most productive results of the many corporate marriages. B. C. Packers is the amalgamation of fifty-five companies; Canadian Canncrs gulped fifty-three private canneries before it was itself swallowed by the California Packing Corporation last November.

The effect of this continuous corporate clustering has been to concentrate nearly half of Canada’s industrial output in about two hundred corporations.

The investors who own the stock of these dominant companies have the right to fire or re-elect directors annually at will. “The power of the shareholders,” said the late Russell D. Bell, who was head of Greenshields and Company, “serves as a check on the proper performance of duties by the directors in office.”

This theoretically formidable economic force of the shareholder is seldom exercised because most Canadian investors seem to agree that most Canadian directors are successfully safeguaiding their interests. Then too, shareholder power remains iargely latent because few Canadians take the time to attend annual meetings. They prefer to elect directors by mail on one-slate proxy forms sent out by the existing board.

When U. S. investors don’t like directors’ decisions, they often contact fellow shareholders and organize a proxy battle to place their representatives on the board. Canadian stockholders usually shy away from such tactics, partly because they’re naturally more conservative, but also due to the difficulties of initiating a protest among the many, widely dispersed holdings. Canadians who object to directors’ policies usually prefer to call a broker and sell the stock.

A dramatic exception is W. R. Sweeny, a Toronto investor who buys one share in companies that he suspects could be better managed. His holding allows him to attend the annual meeting, where he badgers directors with embarrassing questions. Originally a taxi driver in Elizabeth. New Jersey, “One Share Sweeny,” as he's known on Bay Street, has capitalized so effectively on his remarkable investment instinct, that he recently bought a large downtown office building. “I look at things and sometimes

I don’t like them,” says Sweeny. “Before I’m through they’re corrected.”

Occasionally shareholders do attempt an organized uprising. In 1954 the directors of Coleman Collieries Limited, a coal mine at Coleman. Alta., mailed out requests to bondholders that they exchange their five-percent first-mortgage certificates (which included a provision for sharing in any petroleum discoveries on company land) for a new issue at a lower over-all interest rate and with no oil rights. Notice of the December 29 meeting to discuss the switch didn’t reach most shareholders until December 20. Meanwhile a rumor had leaked out that the company had made a deal with a U. S. petroleum firm to explore some land on which it had drilling rights.

Only six irritated bondholders, who battled Christmas weather for the hundred miles from Calgary in a chartered taxi, reached Coleman in time. But at the meeting it turned out that F. J. Harquail, the managing director of Coleman Collieries, had voting control of a company called Hillcrest Collieries, which held ninety-two percent of a subsidiary named Hillcrest Mohawk Collieries. Hillcrest Mohawk’s main asset was three and a half million dollars’ worth of Coleman bonds—enough to outvote the dejected, travel-weary bondholders. They eventually went to Alberta’s Supreme Court and won a more favorable bond exchange.

Canadian shareholders never came closer to fisticuffs than at the 1951 annual meeting of the Premier Trust Company in Toronto. As shareholders began yelling for more financial information, Thomas B. Holmes, the president of Premier, shouted back, “You are out of order! You are all out of order!”

A St. Catharines, Ont., farmer-shareholder compared the directors’ antics with the tricks of his wiser poultry. “This meeting,” he said, “reminds me of my old hen on the farm. She is slopping around and all of a sudden there is danger. She sounds the alarm and all the hens flop underneath the trees. That’s what’s going on here.” Other shareholders took up the chant, yelling, “He thinks we’re all chickens! We're all plucked fowl!”

After eight hours of similar whooping and a semi-direct reference to one director as “a skunk,” the meeting broke up. By next year Premier Trust had slipped back into the dull routine of most Canadian shareholder meetings.

Canadian corporation law requires directors to buy stock in any comparv within ten days after joining its board. And many companies have rules of their own as well. The Bank of Montreal demands that each director own at least five hundred shares (worth about $21,500). The investment of some directors in their companies, however, amounts to only one dollar.

Most Canadian firms disqualify directors from voting on contracts involving their outside interests, and the federal department of justice continuously patrols inter-company arrangements to guard against the restriction of competition. Almost every Canadian industry has been investigated for illegal combinations since the discovery, in 1888, of a group of Toronto undertakers conspiring to keep coffin prices high. But T. D. MacDonald, the director of combines investigation and research, still gets a hundred complaints a year against suspected monopolies.

A much stronger deterren* to the unlimited accumulation of wealth than anti-combines legislation was the introduction to Canada of personal income tax in 1917. The ledgers of Canada’s banks show that 975 Canadians have savings accounts of more than a hundred thousand dollars and economists estimate there are still about three hundred Canadian millionaires. But few of Canada’s present business aristocrats are able to behave as colorfully as some of their predecessors.

Wealthy Canadians today live in large and comfortable homes, but seldom in huge mansions. The old-time tycoon didn't feel properly attired without a cane, a cigar and morning coat. E. P. Taylor likes best to work in a blue sport shirt, puffing at a rarely lit Dunhill pipe.

Sir James Dunn’s death last year removed the last Canadian millionaire with the large and lavish habits that once characterized his class. Dunn not only had his favorite barber flown in from Montreal to his summer estate at St. Andrews, N.B., but once also imported a Montreal veterinary to clip his wife's poodle.

Melba McMartin, the daughter of a prospector who helped grubstake the discovery of the Hollinger gold mine, bought a sixty-four-carat diamond the size of a man’s thumb joint, but only wore its paste imitation. Her cousin Jack used to march into Montreal bars and with his walking stick smash every bottle behind the counter. Weary bartenders charged him a fiat thousand dollars a performance.

The pomp that once flavored big business is best preserved in about a dozen exclusive clubs discreetly located in Canada’s main cities. They are extensions of English club tradition — a second home for their members, where their privacy is as sacred as their shaving brushes. Membership is never restricted by written rules. Admittance committees act as a fine-mesh screen against those who are not wanted.

The most valued memberships are in the Halifax Club, the St. James’s, Mount Stephen and Mount Royal in Montreal; the York. Toronto, and National clubs in Toronto; the Garrison in Quebec City; the Manitoba in Winnipeg; the Ranchmen's in Calgary; and the Vancouver Club.

The St. James’s Club, founded a hundred years ago by a group of Montreal businessmen fed up with waiters eavesdropping on their noonday chatter, is the most revered institution. The only concession to the gaming instinct of its members is a little-used billiard room. Much more popular are the overstuffed fauteuils in the club's library which prop up a daily stream of gently rumbling afterdinner dozers.

Clubmanship being a curious business of exclusion, those on the outside who can’t get in simply set up a grander club. That’s how Montreal’s Mount Stephen Club began on Drummond Street during the late 1920s. Its four-inch-thick front door is adorned with a knob and hinges plated in twenty-two-carat gold.

The very rich and social Mount Royal Club on Sherbrooke Street offers silver toothpick containers with each ashtray. The Mount Royal’s greatest crisis occurred at a bridge tournament in 1931 when Sir Herbert Holt socked a dull partner on the jaw. The game continued without explanation or apology.

Holt built up the greatest corporate kingdom in Canadian economic history. He sat on the boards of two hundred and thirty-five corporations and once boasted that he wasn’t a director of any firm in which he didn’t have a large personal investment.

No Canadian businessman today wields economic decision-making powers equal to Holt’s, but a large share of Canada's productive assets remain under the effective command of a relatively small group of directors.

The Maclean's study of Canada’s economic summit showed no evidence that these men form any kind of monolithic compact, manipulating the country’s destiny to their own ends. They do form a fairly small group. But it’s divided into platoons which compete with Olympic game vigor.

“Regardless of where the control of Canadian business rests today,” says H. J. Carmichael, a St. Catharines, Ont., industrialist who sits on the boards of fifteen major corporations, “there has never been a time in the history of our country when business has been more competitive.”