This is the second of a two-part column on the stormy history of the Superior Knitting Company in Mount Forest.
Mount Forest ratepayers approved the granting of aid to the Superior Knitting Company in a plebiscite held in the early summer of 1923, but there were a number of people in the town who were opposed to the plant, and among them several people on council.
Councillor Young was the most strongly opposed. He voiced legal objections to the aid, but was overruled by a majority of council, which confirmed the granting of the loan.
It should have been smooth sailing for company president Max Steinberg from that point, but he succeeded in shooting himself in the foot.
As well as troubles with Mount Forest council, Steinberg had suffered through an acrimonious wildcat strike in 1922. Not surprisingly, that had resulted in ongoing troubles for him.
His shop gained a reputation as something of a sweatshop. In interviews with area newspapers he boasted of the high salary levels employees could make at the Mount Forest plant, and bemoaned the fact that he could not find sufficient employees in the Mount Forest area.
He claimed in late spring of 1923 that he had about $70,000 of orders on hand that he could not fill, and that he could easily hire another 75 employees if that number were available in the Mount Forest area.
There is no way to confirm or refute those claims, though they have a strong scent of hyperbole, if not worse.
The wages that Steinberg claimed he paid were far in excess of the rates prevailing in the textile industry. That was improbable. The huge order book is also extremely unlikely. The Canadian textile industry as a whole in the early 1920s suffered from overcapacity, and export markets fell below the volumes of the First World War years.
Whatever the real situation, Steinberg spent much time talking up his operation, trying to convince ratepayers that aid to his plant would be a sound investment for Mount Forest.
While he was involved in discussions with council over aid to his plant, Steinberg could easily be charged with duplicity. He began talks with politicians and business leaders in Owen Sound, where a suitable vacant plant was available for an operation such as his.
Around Mount Forest, Steinberg kept his lips buttoned about his talks with business interests in Owen Sound. Unfortunately for him, the two towns were sufficiently close that rumours quickly began to circulate. Many believed that Steinberg was trying to play one town against the other.
When Steinberg gave an interview to an Owen Sound reporter he probably wasn’t counting on a front-page story in the Owen Sound Sun. Several other papers in Ontario copied the story, and most notably, the Mount Forest Confederate and Representative.
The story reported that Steinberg had signed a lease on an industrial building. He had placed an order for knitting equipment that would soon arrive. The Mount Forest plant would continue in operation, he said, producing knitted wear. The Owen Sound operation would turn out overalls and shirts.
Mount Forest residents were quick to pick up on the fact that the Owen Sound plant’s lines were new ones for his firm, and would do nothing to answer the supposed problems he had at Mount Forest meeting orders for knitted goods. Steinberg’s reputation and goodwill in Mount Forest had reached bottom.
Though the voters had approved the $14,000, Steinberg would not get his money even though the file had been reviewed and approved by the Ontario Municipal Board. A number of municipalities had dug themselves into holes through unwise bonusing of industry, through grants, loans, tax concessions, or a combination of them.
By the 1920s the OMB reviewed all such proposals carefully, evaluating both the borrower and the financial viability of the municipality.
During that process, after the stories of the new Owen Sound location began to circulate, Mount Forest council became increasingly disenchanted with Steinberg. The village ran large advertisements in the Confederate and Representative for weeks, urging objectors to file their cases with the OMB. No one did so, but the criticism of Steinberg, both on and off council, continued through the summer and into the fall of 1923.
After a wait of over three months, the Ontario Municipal Board approval came in mid-October. Council met in special session to approve the bylaw authorizing the loan. It should have been a brief and routine meeting, but tempers flared moments after the meeting commenced.
Councillor Young, Steinberg’s most vocal critic on council, started things off by moving that Steinberg be required to inform council of the names of the shareholders in the Superior Knitting Company. It was not an unreasonable request. If council was to support a business to the tune of $14,000, they would probably want to know who owned the shop.
Steinberg, who was present at the meeting, vehemently refused to supply the names. His actions and words made it seem that he was trying to hide something. Soon other councillors were involved in what the local paper characterized as “an acrimonious discussion.”
As things continued to degenerate, Reeve Campbell became so disgusted that he left the table, put on his hat and coat, and walked out without saying another word.
The discussion dragged on for another hour. Eventually the mayor called the vote on councillor Young’s motion requiring a list of owners before the cheque would be issued. It lost on a tie vote. A milder motion, simply requesting Steinberg to name the owners, also went down on a tie. Steinberg again declared that he could not legally be forced to provide names.
On the last vote that night, council decided in favour of asking town solicitor R.O. Kelgan to investigate the ownership of the Superior Knitting Company. That one passed by a single vote.
After that lively evening the Superior Knitting Company dropped from the public record of Mount Forest. Council did not bring the subject up again, and the local paper does not mention it being brought up at the nomination meeting at the beginning of 1924.
Steinberg, apparently, realized that he had few friends left in Mount Forest, and fewer still on Mount Forest council. There was no further action on his $14,000 loan from the town, and in early 1924 he seems to have wound down his operations there. His name is not on the property tax roll for 1924.
It is very likely that Steinberg, despite his ability in talking up a good story, was in serious financial difficulty in 1923. The entire textile industry was in a price squeeze, caused by rising wages, flat or declining prices, and overproduction. Successful operators tried to cope by increasing their efficiency and the scale of their operations. Steinberg’s operation was a minuscule one. He did not have the salesmen to tap wide major markets, or the capacity to supply large orders.
Most of all, Steinberg’s reliance on municipal loans, rather than bank financing, is a good hint that he was not a good credit risk. His appeal for help to Mount Forest council was one of the last of its kind in Wellington County. It was an experience that provided a lesson for councils elsewhere.