Failed factory caused major financial loss to Grand Valley

The name Acme Handle Company sounds like a reference to a Roadrunner cartoon.

To the taxpayers of Grand Valley in 1925, though, it was anything but amusing. A firm by that name opened a plant in the village in 1924, largely on the strength of a $10,000 loan from the village, in the form of a purchase of bonds of the company.

The news that Grand Valley had secured a factory created much excitement and enthusiasm in the small village. Ratepayers were happy to back their excitement by approving an investment in the company.

A year later the outfit was broke, taking Grand Valley’s money with it.

The history and financial structure of the Acme Handle Company is somewhat murky. The firm began in Toronto in the early 1920s, and was probably associated with a business of the same name based in Warren, Ohio. It was a specialized concern, making enamelled and japanned wooden handles and knobs that were purchased  by other manufacturers.

In 1924, the president of the Canadian operation, W.L. Storey, and the general manager, Neil Stevens, decided to move the firm out of Toronto, where it had operated for a couple of years. Among the potential sites they approached Grand Valley, seeking a loan of $10,000 from the village to help finance a new plant there. The money, council was told, would finance the building and the equipment necessary for production.

Storey and Stevens assured council that they would put in a considerable investment themselves to finance inventory and provide the working capital needed.

That was a late example of what was known as bonusing of industry. By the 1920s, most villages and towns in Ontario had burned their fingers by giving financial assistance to manufacturers. Most, by then, refused to consider such aid. Nevertheless, many were desperate to add a manufacturing sector to their local economies. Grand Valley was one of them.

The Acme Handle Company moved its office and manufacturing facilities to Grand Valley during the summer of 1924. The firm placed a few advertisements in Toronto newspapers during September, advertising that their products were available in all colours, as well as custom wood turnings.

Virtually all potential customers were other manufacturers, such as makers of pots and pans and other kitchenware. The payroll was small, with about a dozen employees. Despite its small size, the firm was a big deal for Grand Valley, which at that time had no other manufacturing businesses.

Acme Handle seems to have run into immediate difficulties. Sales volumes did not met expectations, and soon the firm was using funds intended for capital expenditures to meet day-to-day expenses. Some weeks there was not sufficient money on hand to meet the payroll.

Sensing that the writing might already be on the wall, several employees left for more promising pastures. The company advertised for replacements in the Toronto newspapers, requiring that new employees bring in some money to invest.

In April 1925, the firm advertised in the Toronto Globe for a wood turner, “Capable, with some capital.” The company also needed a new secretary-treasurer, “to Act as Bookkeeper and Office Manager, salary arranged according to investment of one thousand dollars or over.” The company also wanted a salesman to sell stock in the company on a commission basis. Rumours that the firm was in trouble began a couple of weeks after it began production in Grand Valley, and they continued to plague the firm during the ensuing months.

It is not known whether Acme Handle found any employees willing to invest their life savings in a business that was obviously on shaky ground. In any case, the financial situation continued to deteriorate into the late spring of 1925.

A major crisis developed on June 15, when the firm was unable to meet an interest payment of $300 on the bonds held by Grand Valley. Councillors met several times to discuss their course of action.

A couple of days later, Grand Valley’s Public Utilities Commission cut off the electrical power as a result of the firm’s overdue account, which then topped the $1,000 mark. That, of course, meant the end of production. Council realized that its $10,000 investment was almost the entire capital invested in the factory.

At the end of June, the company released a financial statement. It showed liabilities of about $7,400, plus unpaid accounts including $1,000 owed to contractors who constructed the factory building, $1,000 owed on the electrical account, and $1,800 in unpaid wages. On the other side of the ledger were receivables of some $1,200 and inventory of $1,100.

Despite the appalling state of affairs, Storey and Stevens put on a brave front. They asked the village to grant an extension of six months on the overdue interest payment and the hydro account. They claimed that they had hope that additional capital would soon come into the firm, and that there would be a re-organization of the management.

Grand Valley’s council spent most of July 1925 discussing and weighing their alternatives, and consulting village solicitor Harold B. Church. The loss of a $10,000 investment would be a serious blow to the small municipality. Management of Acme Handle seemed to think that it had the village over a barrel, and that council would agree to almost anything to avoid admitting that it had made a very imprudent investment. There was also pressure to do everything possible to keep the men on the payroll employed.

A more detailed accounting showed that the net liabilities of the company totalled about $6,000. Council suggested that the unpaid employees hire their own lawyer. Lewis Menary took on that assignment, even though prospects for the men seemed slim indeed. The remaining men at the plant stood to lose about $200 each, a huge amount for a working man in 1925.

Councillors did not act as management anticipated. They refused to have the hydro turned back on, and tried their best to sort out the details of the company’s affairs. Further discoveries made them realize that there was no hope to rescue the venture.

Grand Valley council made its move at a special meeting on July 28. Realizing that there was nothing to be gained from further delay, councillors instructed lawyer Church to commence foreclosure proceedings.

Acme Handle’s Grand Valley plant never re-opened. There was little that could be realized in the way of assets, although the file remained open for a couple of years. The affair was a bitter lesson for Grand Valley of the dangers of bankrolling industries that were unable to stand on their own feet.

Today, some 87 years later and given the meagre details of Acme Handle’s operations, it is impossible to say whether the company was a victim of inept management or a deliberate scheme to bilk the ratepayers of Grand Valley. In truth, it is hard to see how any business could be managed so poorly.

If nothing else, Storey and Stevens were guilty of deliberately misleading Grand Valley’s council and the village’s ratepayers.

As well, there is also the possibility that there was a connection with the Acme Handle Company of Warren, Ohio that played a part in the fate of the Grand Valley operation.

That was a limited liability company, so none of the burden of the loss fell on either W.L. Storey or Neil Stevens. Today the Acme Handle Company, and Grand Valley’s attempt to build an industrial sector is largely forgotten.


Stephen Thorning