Chapter 7

Gault And Amalgamation

The Cotton and Print company continued its precarious struggle for survival throughout most of the 1880’s. These were days in Canada’s industrial story when many small manufacturing concerns were experiencing similar difficulties to those of the textile industry, largely through their inability to compete as small individual units with the great companies of the United States and Europe. They could compete in quality, and the young Dominion’s industries had more cheap waterpower than they could utilize. But they were fighting foreign competition under a heavy handicap of scattered markets and therefore high transportation costs. In addition, the units of each industrial group were competing bitterly with each other to their own serious detriment.

It was natural that men of broad vision should see the unsound economic position of much of Canada’s industry, and that they saw the best possibilities in amalgamation. There were many industrial mergers at that time, groups of small plants under individual control being incorporated into larger organizations.

It was early in this industrial phase, though just in time, that such a man appeared on the Magog scene with a plan for amalgamation of several textile firms – the plan and the man that, in the end proved the salvation of the Magog Cotton and Print Company and of Magog’s textile future.

This man was Andrew F. Gault of Montreal. He was another man of vision, who had faith in Canada’s development and the part that textiles would play in it. While still a young man, Gault had become President of Gault Brothers of Montreal, one of Canada’s leading drygoods firms. He was also a director of the Bank of Montreal, and of the Montreal Cottons Limited, of Valleyfield, Quebec. Mr. Gault was well aware of the information that Moore had turned up a few years earlier, which showed that Canada was endeavouring to support too many cotton mills. He knew that unless the situation changed they would all become bankrupt, and Canada would lose much of the industry with consequent loss of employmeent. So, as an alternative, Gault proposed a far-reaching amlgamation.

The Dominion Cotton Mills Company was formed to carry out the Gault plan. It was believed that if the numerous small cotton manufacturing plants located in Eastern Canada, each with their separate managements, selling staffs and purchasing divisions, could be welded into one organization, the Canadian cotton industry could be placed on a less shaky foundation.

The Dominion Cotton Company Limited was formally incorporated in 1890 with Gault as its president, and included controlling interests in mills at Halifax and Windsor in Nova Scotia), Moncton in New Brunswick, Magog, Coaticook, St. Ann’s and Hochelaga, in Quebec, and Kingston and Brantford in Ontario.

The Magog mill was to be converted from a print works to a bleachery for whitewear goods. It was found that the waters of Lake Memphremagog were free from minerals. The decision was strengthened in view of the insecure financial position of the print works.

Mr. W. T. Whitehead of the Hochelaga mill was transferred to Magog as local manager. After securing statistics of the printed and dyed cotton used in Canada, together with import figures, Mr. Whitehead convinced the Company that a large amount of grey goods, unbleached cotton, could be converted into cash, if the print works was allowed to continue. The decision to retain the Magog mill in its capacity as a print works resulted, years later, in Magog-labelled fabrics being known in almost every world market.

For a number of years this arrangement was successful. Reduced operating costs in other divisions of the Company allowed the Magog plant to operate more efficiently. They found that they were at least able to cover expenses, rather than drift further into debt as the mill had been inclined to do in the past.

Between 1890 and 1900, it appeared that the Canadian textile industry was going to survive. There was much unforeseen grief and many vicissitudes lying ahead, but for the time being, previous uncertainties and anxieties had been tranformed into clear going.

It was during this period of comparative calmness and apparent stability that one thing became plain; as the textile industry thrived in the future, so would thrive Magog. From 1890 to the present day, that interdependance of Magog on textiles has remained unchanged. Even then, both plant and people realized it, accepted it. Both municipality and manufacturer had come to see that they must progress and develop together.