Arthur loaned $8,000 to start shoe factory in 1918

The following is a re-print of a past column by former Advertiser columnist Stephen Thorning, who passed away on Feb. 23, 2015.
Some text has been updated to reflect changes since the original publication and any images used may not be the same as those that accompanied the original publication.

Between 1870 and 1920, most municipalities in Ontario attempted to attract new industries through a system of bonuses.

These were grants, loans and tax concessions provided by the local government to prospective new industries. There were some successes, but most of the industries established with bonuses proved to be failures. 

In some cases, municipal governments sustained major losses that crippled their governments for years. The provincial government eventually intervened, severely restricting the perks that could be given to industry.

Palmerston, Harriston, Guelph, Fergus and Elora all experimented with bonusing in the 19th century, none with great success. The village of Arthur was a late entry into the field: the council there did not provide major benefits to an industry until 1918.

Arthur had solidly established itself as a minor market town and railway shipping point by 1880, but the village stagnated for the next five decades. It attracted no major mills or manufacturing industries, and stores in Mount Forest, Harriston and Fergus ate into its trading area with their more modern stores and larger inventories.

Through the spring of 1918, Arthur council and the Arthur Board of Trade met several times with Charles H. Cooper of Toronto. He was a man with wide experience in the shoe business, and he desired to start a manufacturing facility in a small town. 

He considered Arthur an excellent prospect, with its pastoral setting, low cost of living and pool of available labour – there was no factory of any kind in the village to compete for help.

Chuck Cooper saw a suitable building the first time he strolled up Arthur’s main street. The old Arlington Hotel had been constructed in the early 1870s by Peter Grieve as the Ontario House. Some 20 years later, E.J. O’Callaghan purchased the property, and greatly expanded it in 1895, renaming it the Arlington Hotel. The doors closed in 1916 following the introduction of temperance in Ontario. The three-storey building was available and could easily be fitted up as a shoe factory.

Discussions with council and the Board of Trade resulted in an agreement made public on Aug. 19, 1918. The provisions called for a loan of $8,000 to Cooper repayable over 10 years, an exemption on taxes except for the school portion, and a guarantee that Cooper would employ at least 25 people for at least 10 months each year. In return, Cooper gave the village a mortgage on the Arlington Hotel building (appraised at $3,300), on the equipment he would install, and on a piece of property in York County.

The value of this loan in modern terms is hard to pinpoint precisely due to wartime shortages and price aberrations in 1918, but would be in the range of $350,000 to $500,000.

Cooper found a minority partner, James Valentine, who guaranteed $2,000 of the loan. Valentine was from Waterloo County, and connected with the thriving shoe industry there.

Arthur would finance the loan with an issue of debentures. Measures such as this had to be approved by the ratepayers in a referendum. Council scheduled the vote for Sept. 16. The Board of Trade, which was very anxious to expand and diversify the local economy, led the campaign in favour of the measure.

There was no opposition. Arthur ratepayers approved the loan by a vote of 242-4. When the votes were counted, a smiling Chuck Cooper expressed his gratitude for the confidence shown by Arthur’s residents, and said he would try to be in operation by year’s end.

Cooper hired contractors and labourers to undertake renovations to the building during October and November. Most of the interior walls came out. There was new wiring to go in, and a large electric motor to run the machinery from a line shaft system.

Local people purchased all the debentures issued to finance the $8,000 loan. Despite the stagnant economy in Arthur, there was considerable accumulated capital in the village. As well as purchasing this debenture issue, Arthur residents also bought $35,000 of victory bonds in the fall of 1918.

Chuck Cooper beat his promise about the start-up date. The factory, operating as C.H. Cooper and Son, began production on Dec. 10, 1918. There were only eight employees at the beginning, but Cooper had a large order for boy’s boots that would keep things humming for a few months. And more equipment was on order.

In January 1919 Cooper received an order for uppers for women’s shoes from another factory. He hired more people, both men and young women, during the winter and spring of 1919. The payroll soon hovered in the 30 to 40 range.

At this point he was using only half the space in the old hotel building. The office was on the ground floor, on the right side, with the shipping department beside it. Cooper hired two foremen, both British born and trained.

T. Selby was in charge of the lasting department at the rear of the ground floor. Here the soles were put on the shoes, and other workers trimmed the finished product. Upstairs, foreman Sanders ran the cutting and sewing room, where workers cut out pieces and passed them to a row of young women at sewing machines.

The Arthur Board of Trade held its annual dinner meeting in late January 1919. For the first time, a feeling of genuine optimism permeated the group. Arthur had its first real industry, and it seemed to be growing week by week. President A.W. Buschlen predicted that the population of Arthur, then around the 1,100 mark, would hit 2,000 by 1922.

C.H. Cooper and Son had a promising start and did well for a year or two, but the unstable economy of the 1919 to 1922 period, inflation, and intense competition presented constant challenges to the new firm. Orders for shoes and sub-contracts for components from other factories only came sporadically. A positive development was a series of sales to distributors in western Canada.

By 1925 the firm was struggling. Cooper was only able to make a partial payment of his loan instalment that year. He managed to make a smaller payment in 1926, but the factory was operating at a loss. The crunch came in the summer of 1927. By then the firm owed over $10,000 to various creditors, including $4,500 to the Village of Arthur in loan instalments, electricity and unpaid school taxes.

In the last week of October 1927, Chuck Cooper threw in the towel, and assigned the assets of the firm to his creditors. At a creditors’ meeting a few days later in Toronto, Cooper offered to give the Village of Arthur the building and $400 in cash from the sale of the assets. Council spent a week considering the proposal, and after consulting with their solicitor, J.M. Kearns of Guelph, accepted the offer on Nov. 7, 1927.

This disappointing and costly conclusion was the end of Arthur’s experiment with the subsidizing of industry. More than 40 years would elapse before another major industry would select the village, with the announcement by Bell Thread for its Arthur plant in 1969.

Arthur now owned the old Arlington Hotel, but the structure was something of a white elephant. No other industry seemed interested, and the renovations made by Cooper rendered the building unsuitable for reopening as a hotel.

In 1929 Alex Chambers purchased the building from the village, and began major renovations to permit a garage on the first floor and a recreational hall upstairs. Chambers died before the work was finished, but his family finished the job. The Arlington Hall opened on the second floor in 1930. Weekly dances there became very popular, drawing people from a wide area in Wellington, Grey and Bruce counties.

Regrettably, the reincarnated Arlington did not survive long. At about 2am on the morning of April 10, 1932, George Jackson of Cumnock was driving by on his way home. He noticed smoke and flames coming from the building, and immediately turned in the alarm. Arthur’s firefighters arrived within minutes, but by then the fire was well advanced. They spent their energy in saving a half dozen commercial buildings in the immediate vicinity. Flying sparks and embers threatened the roofs of houses a couple of blocks away. Motorists between Fergus and Guelph reported seeing the glow in the sky.

Today, the site of the Arlington Hotel and the C.H. Cooper and Son factory is occupied by the Arthur branch of the Royal Bank.

*This column was originally published in the Wellington Advertiser on Feb. 2, 2001.

Thorning Revisited