Fire strikes Monkland Mills in Fergus – again

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.

(Note: This is the continuation of an article about Monkland Mills on St. Andrews Street East in Fergus.)

The young Wilson brothers made the worst business decision of their lives in 1910, when they sold Monkland Mills, Broomfield Mills and the grain elevator to the Canadian Cereal and Milling Co.

The purchase price of $150,000 (worth 30 or 40 times that amount in today’s dollars) seemed like a windfall. This was perhaps four times the actual value of the business, but it was paid in preferred shares in the new company, not in cash.

Canadian Cereal and Milling was one of a number of planned conglomerates in this period. Typically, these companies bought up smaller independent industries and attempted to forge them into single firms. In general, they were overcapitalized, and hoped to derive more profits from stock manipulation than from production.

At first, the situation looked good. The Wilsons remained as local managers. The new owners undertook repair and renovation work at Monkland Mills (severe spring floods had done damage to the mill and dam), and there were plans for increased production.

To keep their scheme afloat, Canadian Cereal and Milling mortgaged all their holdings for $1,000,000. Most of this money was squandered or disappeared into the pockets of promoters.

Another setback occurred in 1911, when Broomfield Flour Mills was burned to the ground. This mill was considered too small to rebuild. In 1913 the conglomerate was reorganized as the Canadian Cereal and Flour Mills.

The First World War removed some foreign competitors from the world market, but transportation problems and rising costs made distribution difficult. With so many men enlisting, it was difficult to maintain a reliable workforce. To boost efficiency, the Canadian Cereal and Flour Milling Co., of which Monkland Mills had been a component since 1910, decided to concentrate oatmeal production at a mill in Tilsonburg.

Upset about the downgrading of the mill established by his father almost 60 years prior, and increasingly leery about the financial stability of Canadian Cereal and Flour Milling, James Wilson, Jr. decided to repurchase Monkland Mills. This time he was on his own: brothers Matthew and William did not join him.

In making his offer, Wilson was supported by a group of Fergus businessmen who provided bridge financing. The community still valued the business for its sizable payroll and its place in the local grain market. Unable to secure long-term financing from mortgage lenders or investors, Wilson turned to Fergus council in August 1915, two weeks after repurchasing the property.

Municipalities had tried to build industrial bases in the 1870s and 1880s with loans and outright grants to industrialists. Many had turned out poorly. This development strategy fell into disrepute in the 20th century. Yet Wilson’s request came late in the game of municipal subsidies and Fergus council needed little persuasion to agree.

The Wilson bylaw passed by council offered a loan of $25,000 for ten years at 6% interest, and a fixed assessment of $15,000 on the mill property. In addition to maintaining payments, Wilson was to spend $4,000 on repairs and to employ at least 15 people. As security, Fergus held a first mortgage on Monkland Mills. Recalling past disasters, council insisted that Wilson take out a fire insurance policy, payable to Fergus. The bylaw went to the voters for the mandatory referendum on Sept. 27 and passed by a vote of 214-20.

Under the old management, employment had dwindled to four. James Wilson soon had the payroll up to 25. He installed new barley processing equipment and increased the chopping and feed mill capacity.

Annual purchases of grain in the 1916-17 year totalled 43,000 bushels of oats and 56,000 bushels of barley. Production consisted of almost 11,000 barrels of oatmeal and rolled oats, 8,000 barrels of pot and pearly barley, and 3,700 tons of feed. As well, the mill chopped 40,000 bags of feed for farmers.

The business was humming as smoothly as could be expected during wartime conditions. But two years after Wilson took over, disaster stuck again.

For the third time in its history, Monkland Mills was destroyed by fire.

At about 10:30 on the evening of Sept. 28, 1917, the 14 men on the night shift were startled by an explosion and sudden fire. It appears that an overheated journal on the top floor produced a dust explosion. Part of the wall along the river was blown out, and the roof was soon in flames.

There were several injuries. Two men jumped from a third floor window onto the roof of the boiler room when their exit was cut off. Miraculously, they were not injured. They quickly reentered the building to rescue other men. Four other workers suffered bad burns, and two also had broken legs. Thomas Elliott’s injuries were the most severe. He died in Fergus hospital nine days after the fire.

While the fire burned in the upper stories, employees and volunteers salvaged what they could from the lower floors. Miss McGowan, the stenographer, directed volunteers in removing the office records.

The fire brigade soon arrived. Immediately concluding that the mill was doomed, they concentrated their efforts on saving the storage building to the east, which also contained the barley mill.

Elora’s firefighters arrived after three hours to allow the Fergus men some rest. Together, the two forces were able to contain the fire to the main mill building.

Smoke was still rising from the ruins when insurance adjusters began poking around three days later. There was never a real doubt that the mill would be rebuilt. James Wilson had a strong emotional attachment to it. Oats were in good supply and market prospects appeared excellent.

At the time of the fire the mill was working at full capacity, with a total payroll of 33. The bulk of the output was going to France, and this market seemed secure. Most importantly, Fergus held the fire insurance money, and would only release it to pay for rebuilding.

Wilson announced his plans four weeks after the fire, and hired an architect. The new Monkland Mills would be larger than before, with double the capacity. Interior supports would be concrete rather than wood, and the structure would be five storeys high.

Fergus already had an interest in the property as the holder of the mortgage, but Wilson asked council to increase the stake with a further loan.

Supported by several businessmen, he asked council for an additional $10,000 in early November, 1917, five weeks after the fire. Council approved a bylaw in early December, and submitted it to the ratepayers at the same time as the municipal election in early January 1918.

The terms of the new loan resembled those of the  1915 loan. Fergus would loan Wilson $10,000 for 10 years at six per cent interest, by a second mortgage. In rebuilding he was to spend $20,000 on the building and $40,000 on equipment. Employment had to be at least 25, and he was to continue to manufacture oatmeal and barley to provide a local market for grain.

Fergus ratepayers approved the loan by a margin of 260-7. The huge majority was probably helped by the fact that the rebuilding was almost complete at the time of the vote. James Wilson was able to take advantage of the boom in agriculture commodities in 1918 and 1919 to get back on his feet.

Monkland Mills enjoyed a period of relative stability during the 1920s, though the milling business was far less lucrative than in the pre-war years. With a new building and equipment, Wilson remained competitive even during the first years of the 1930s Depression.

Pressures, though, were rising.

The exchange rate on British currency kept moving to more unfavourable levels. By 1932, this currency drift was costing Wilson about 25 per cent of his former income on exports to Britain. There was also competition on the British market from oatmeal exported from pre-Hitler Germany.

Bigger problems developed closer to home. A couple of Wilson’s distributors succumbed to the Depression, leaving him with a drawer full of uncollectible receivables. His banker then reduced his line of credit.

By Christmas 1932 there was no more money in the till. On a cold January day in 1933, James Wilson recognized that he was bankrupt, and placed the business in the hands of a trustee, N.L. Martin, a Toronto accountant.

It was the saddest day of his life.

(Next Time: Monkland Mills re-opens under new management.)

*This column was originally published in the Fergus-Elora News Express on Sept. 13, 1995.


Stephen Thorning - 1949-2015