Some 1870s storekeepers made careers out of failures

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.

The liveliest period of business history in Wellington County was the span between 1870 and the mid-1880s. 

Those years saw the first railway lines into the area north of Guelph, the consequent disruption of trading patterns, and the replacing of old business connections with new ones. New and important market towns grew quickly, at the expense of the old ones of Guelph, Elora and Fergus. And through much of that period an economic downturn depressed prices for agricultural products and resulted in considerable unemployment.

During the 1860s Elora, with its cattle market, grain buyers and a half-dozen huge stores, had developed into the second largest market town in Wellington, after Guelph. Within three years of the opening of the railway, all those stores save one had failed, along with a score of smaller retail businesses. For the rest of the 1870s, it seemed that every week brought news of a new store opening or another closing, the proprietor unable to eke out a living.

Bankers and wholesalers complained that Canadian insolvency laws, revised in 1875, were far too lenient. Store keepers, some honest, others less so, could easily place their assets and liabilities in the hands of an official receiver, who would collect what he could and distribute the proceeds to the creditors on a pro rata basis. Often the wholesalers who had supplied the goods had to settle for as little as 10 cents on the dollar.

A central figure in Elora during this period was a fellow named John Haffner. Born in the United States, the young bachelor appeared in the village in August 1870, impressing people as an energetic businessman of 21. With a silent partner he formed a company named Haffner, Mills & Co., and took over the three-storey brick building on Mill Street that had been Benjamin Taylor’s store. 

The store seemed to do a good business with full lines of groceries, clothing, dry goods and liquor, but not everyone admired Haffner. More than once he started price wars, much to the annoyance of his competitors. Occasionally he advertised specials at prices that were obviously below his costs.

For three years young Haffner and his partner put on a bold front, but in July 1873 they were forced to sell the building, and rent it back from the new owner, Duncan McIntyre, a Montreal wholesaler who would later become famous as a member of the syndicate that built the Canadian Pacific Railway. The sale of the building, obviously, was to settle a long overdue account.

Two months later Mills, the partner, left the firm and Haffner carried on alone. In February 1874 he published a notice asking those who owed money to pay up. Most retail business then was still done on a credit basis. Such notices usually meant that creditors were pressing for payment.

As usual, Haffner put on a bold front, bringing in a huge stock, including a carload of whiskey, and insisting that he would not be undersold by anyone in the county. That precipitated a major price war that later claimed two of Haffner’s competitors. The strategy of making up for slim margins with a big volume and turnover looked attractive, but it was not successful for Haffner. 

At the end of June 1874 his suppliers cut off further credit. He responded with yet another sale, this one for cash only, or butter and eggs in exchange for goods.

Amazingly, Haffner hung on for almost another year, but in April 1875 he advertised a clearance sale, for cash only, until June 1. He claimed he had failed due to the number of slow accounts on his books, rather than lack of business.

With most of the store’s stock sold, Haffner placed his business affairs in the hands of the official assignee in July 1875, not quite five years after he started in business. He spent part of the summer on an extended vacation and fishing trip with Elora lawyer John Jacob, the brother-in-law and junior partner of George Drew. They got as far as Manitoba.

The assignee agreed to let the store remain open for another six months. Haffner continued to sell off his stock. New items appeared in the store from time to time. In January 1876 Haffner announced that he was moving to Listowel to start a new business. He closed the Elora store on Jan. 30, and a week later had an auction sale to sell his furniture.

That seemed to be the end of Haffner’s career in Wellington. He failed in Listowel as well, lasting a little more than two years there. But he was soon back in Wellington. 

In January 1879 he received an appointment as official assignee for Wellington County. Many thought the appointment a curious one. It may have resulted from a political or personal connection with someone in high places. Or perhaps some official thought that a man like Haffner was likely to know every trick in the book used by those using the insolvency laws to their own advantage. 

Most who got appointments as official assignees were grizzled veterans of commerce. John Haffner was just approaching his 30th birthday.

Haffner had a main office in Guelph, but he opened one in Elora as well. Failed Elora businesses claimed a large share of his attention. From his desk there he had the bittersweet satisfaction of sorting out the affairs of old competitors and business associates, collecting debts and discovering where failed businessmen had placed hidden assets. 

One of the first files Haffner took over was that of the Good Brothers, who in 1874 had opened the New Cheap Store in the building at the corner of Mill and Metcalfe Streets later occupied by the Elora Oddfellows lodge (in 2026, Shepherd’s Pub).

The Goods had to endure Haffner’s sales from the time they opened, and they more or less survived by bringing in stock from other failed stores. They struck up a deal with Haffner at the time the latter was winding down his business, taking some of his stock and opening a second outlet in Fergus.

The New Cheap Store did not prosper, and in 1876 the Goods made an agreement with their creditors for an extension of their credit. That bought them another two years. The Goods failed in the summer of 1878, a few months before Haffner returned to Elora as assignee.

Two weeks after the Goods closed forever on Sept. 1, 1878, the store re-opened under a new proprietor, Alex G. Duncan. He had the remainders of the Good Brothers’ stock, plus new items from some mysterious source. From the time that John Haffner returned to Elora five months later, he had suspicions about Duncan’s business activities, and he would keep a constant eye on Duncan for the next two years. In February 1879 Alex Duncan acquired the stock from Wortley’s store in Drayton, which, for most of the 1870s, had been the largest general retail business in that town. There was so much stock that Duncan rented a second store in Elora to sell it. Duncan advertised it extensively, and opened the second location only between 7 and 10pm, three nights per week.

It may have been a legitimate operation, but some people, including Haffner, suspected that Wortley still had an interest in the stock, and that the scheme was worked up to defraud the creditors. Most sales were for cash. Duncan would grant credit only on purchases over $40, a huge sum in the days of dollar-a-day wages. The sale continued into April 1879.

Although Duncan raked in a considerable quantity of cash during the sale, he was in trouble himself by the end of the year. Creditors forced him to turn his affairs over to the official assignee in February 1880. 

That put John Haffner in the driver’s seat. Alex Duncan, it seems, did not realize the tenacity of Haffner, and continued his questionable business activities right under the nose of the assignee. In less than two years he would regret his actions.

*This column was originally published in the Advertiser on April 14, 2006.