The Promised Land: Settling the West 1896-1914 (38 page)

According to Preston, the N. A.T. Company – or Syndicate – would “have in its number some of the most experienced Booking and Emigration Agents in Germany – men of responsibility, who thoroughly understand all the various phases of Continental Emigration Laws and who intend to start with a capital of $200,000 to prosecute this work.” At no time, however, was it made known to anyone in the Immigration Department who these men were; nor did anybody ask. Preston himself, at one point in later testimony, indicated that even
he
didn’t know, although he clearly did.

The scheme was obviously designed to circumvent the law, especially in Germany, yet the loose agreement arranged through an exchange of letters with the department in the fall of 1900 specifically stated that “the company is to do nothing in contravention of the laws of the country named.”

In 1906, when the details of the various agreements with the mysterious company caused a public sensation, Sifton’s successor, Frank Oliver, tried to blame Lord Strathcona. The High Commissioner shot back a firm telegram of denial. On the contrary: his lawyers had warned him of possible diplomatic complications. He’d gone along reluctantly because Preston seemed to want it. The two men had no use for each other.

From the N.A.T.’s point of view, it was a profitable arrangement. The company was to get a five-dollar bonus for every man, woman, and child over twelve who arrived in Canada from Europe. Later the deal was sweetened: even babes in arms would be worth a pound sterling. The bonus was supposed to be paid only for bona fide farmers and their families carrying with them at least one hundred dollars in cash – two hundred dollars in the case of the Galicians. But even though only 12 per cent of the Galicians who arrived in Canada had the required cash, the company was paid for them all. Hundreds moved directly on to the United States, but the company got paid anyway. In 1901, a group of 275 Jews arrived; the N.A.T. Company had nothing to do with bringing them out, but under the contract the bonus had to be paid.

In fact, there was no way whatsoever for Ottawa to check up on the mysterious company. It claimed to be distributing maps and pamphlets in sixteen languages, to be planting articles in newspapers, to have
agents secretly moving through European villages touting Canada, but there was little firm evidence to back up these statements. Sample pamphlets arrived in Ottawa, but there was no way of finding out whether they had been distributed. Vouchers arrived for work done; but
was
it done? Nobody knew. Did the immigrants pouring into Canada arrive as the result of the N.A.T.’s work? Again, no one had any idea. There is no evidence that either Preston or Smart ever spoke to a single emigrant to discover why he had decided to leave his birthplace. The most curious aspect of the N.A.T. story is that nobody
was
curious – not Preston, not Smart, not Sifton himself. Nobody asked any questions.

For some time the very existence of the company was shrouded in secrecy. James Mavor first heard of it during a trip to Vienna. In London he asked Preston about it. Preston claimed he’d never heard of it. None of the agreements, letters, or contracts were submitted to the scrutiny of Parliament; all had been arranged through orders-incouncil. The first brief public reference to the company occurred about 1903, but most M.P.s were in the dark as to the details as late as 1905. There’s little doubt that Preston
was
the company. He paid one N. A.T. agent with his personal cheque. He went off to Scandinavia, not on government business, but for the explicit purpose of hiring agents for the company. More often than not he spoke for the company: the correspondence, from the company’s Amsterdam office, was signed with a stamp or an indecipherable initial. Nobody seemed to think that odd.

February, 1904. James Smart, Deputy Minister of the Interior, arrives in Amsterdam – a bulky man with a balding head and a black smear of a moustache. For more than three years he has been in correspondence with the North Atlantic Trading Company, a corporation believed to be licensed under Dutch law and, if vouchers mean anything, to be operating a bustling head office at 73 Damrack in the heart of the city’s business district
.

The department’s auditor has already called attention to the company’s claim for office expenses, which he considers suspiciously high. Eight thousand dollars a year for rent, postage, and clerks! In Toronto you can rent a seven-room house for $15.00 a month, buy a wool serge suit for $6.95, and enjoy a three – course roast beef dinner at Mc Conkey’s for a quarter. Eight thousand dollars is an enormous sum! The place must be humming
.

But Jim Smart discerns no sound of humming at 73 Damrack. There is nothing at street level to indicate that the North Atlantic Trading Company exists. Smart negotiates the steep flight of stairs to the first landing, looks about, discovers a door bearing the company’s name, knocks, waits. Nothing. The door is locked, the one-room office empty
.

Smart searches about, finds some neighbours, asks about the locked, empty office. Ah yes, they tell him; there is a man who drops in periodically to pick up letters – nothing more. The office, in short, is nothing but a mail drop
.

Does this not pique James A. Smart’s curiosity? Not a bit. He seems perfectly satisfied, makes no further inquiries, does not discuss the matter with anyone, does not even raise it with Preston when the two meet in London. No doubt the eight thousand dollars went mainly for postage, Smart tells himself – or so he will testify when, two years later, he is asked about this unproductive visit
.

All this time, the government had operated without a formal contract with the mysterious company, only a loose exchange of letters. Not until the summer of 1904 did it think to tighten its agreement with a legal document designed to weed out the sick, the mentally ill, the non-farmers, and the transients for whom it had been paying five dollars a head. As for those impoverished Galician immigrants, the company now would receive a flat annual bonus of five thousand dollars, no more.

Nobody seemed to be aware that this contract was being made with a non-company, whose letters were still being signed with a stamp or an illegible signature that seldom carried a title. Nobody seemed suspicious that some letters were typed by an amateur. As for the identity of the principals – their financial status, their business background, their immigration experience – this was known only to Preston and perhaps to Smart; the later testimony of both was vague, evasive, and contradictory.

In the summer of 1905, the Opposition grew suspicious. Who were these people who were being paid out of public funds without any reference to Parliament? Preston moved swiftly to create a real company. The N.A.T. was suddenly incorporated, not in the Netherlands, but on the Isle of Guernsey, which allowed corporate directors to hide behind the names of nominees. The job was done by Preston’s son-in-law, A.E. Alexander, two of whose relatives became bogus directors.
According to Preston, the bulk of the shares were held by one Albert Pfeifel, said to be an officer of the company in Amsterdam and as mysterious as the company itself. When an English paper, the London
Tribune
, tried to find Pfeifel, it couldn’t uncover any trace or memory of him.

What was the reason for all this secrecy? Historians have accepted the explanation of both Smart and Preston that it was necessary to protect the anonymous directors from legal action by European governments. Yet nowhere in all of the correspondence or in the contractual agreements between the N.A.T. Company and the Canadian government was a pledge of secrecy asked for or given. Preston insisted he’d made a verbal commitment to the directors and that the government’s honour was at stake to protect that commitment. Smart backed him up. In the face of the most persistent questioning both men stuck to their insistence that the principals behind the company would be in great danger if their names were revealed, and refused to identify them.

These excuses seem as thin as parchment. When Lord Strathcona’s lawyers pointed out possible future problems, especially in Germany, where it was illegal to promote emigration, the N.A.T. negotiators had treated the presumed difficulty with contempt and scoffed at the prospect of arrest. Or at least that was Preston’s original report to Smart in 1900. Later on he changed his tune.

In the original agreement, the company had promised not to break the law. Then what was it afraid of? It couldn’t legally advertise in Germany and, according to its own reports, it didn’t. If some of its operations were clandestine, there wasn’t any documentary evidence that would stand up in a court.

It is true that it collected names and mailed literature to German addresses, but it did so from England under another front name – the Farmers’ Auxiliary. Indeed, there is no evidence that the mysterious company operated in a manner different from such countries as Brazil, Australia, or the United States, which were also competing for European immigrants. Nonetheless, it was broadly hinted that certain people might go so far as to commit suicide if the names were released; and they never were.

The Opposition’s suspicions were increased when it was disclosed that, at Smart’s suggestion, Preston had given, without public tender, $58,000 worth of government printing work in London to the Arundel Printing Company. Preston and Smart were almost certainly silent
partners in this firm, whose front man was the son of a former Liberal M.P., Roy Somerville. Somerville farmed the work out. The Immigration Department was his only client, and when the government work was done the company went out of business. When Preston’s deputy, C.F. Just, complained that the prices were exorbitant, that one fifteen-thousand-dollar job could have been done by the department’s regular printer for less than four thousand, Preston suspended him. Later Preston denied any connection with the company. But if Somerville was the only principal in the firm, why was one account paid with four cheques-three issued on the same day?

In the words of Alfred Jury, Preston had two “gold mines,” the N.A.T. Company and the Canadian Labour Bureau. The front man for the bureau was a German named Louis Leopold, who had been an N.A.T. agent and who was remarkably cosy with Preston. The two had adjoining offices; they shared a telephone; they both used the legal services of Preston’s son-in-law. Preston set up Leopold as a ticket agent for several steamship lines and channelled all non-agricultural business his way, using a stock form he’d devised for that purpose.

In fact, the Canadian Labour Bureau was a fraud. To the unwary, it was an official arm of the government: its stationery bore the Canadian coat of arms and the address of the Immigration Department. Actually, it operated in direct contravention to Sifton’s policy, which was that only farmers and female domestics were wanted in the West. With Preston’s connivance, the bureau was used to attract mechanics and artisans in order to provide Canadian employers with strikebreakers. It also guaranteed work that didn’t exist and caused hundreds of disgruntled English immigrants to walk the streets of Winnipeg, inveigled into Canada with false advertising, which claimed that twenty thousand jobs awaited them. The immigrants’ loss was Leopold’s gain, and also, presumably, Preston’s.

The Labour Bureau was supposedly a one-man operation, but Preston was clearly in charge. If Leopold was sole owner, why was he sneaking around, booking passengers on his own, and pocketing the money without reference to the bureau? When the bureau was hired to break a coal miners’ strike at Fernie, B.C., the money was banked in Preston’s name. But Preston denied everything. When a parliamentary committee examined him on his blatant disregard of department regulations, he blandly replied that he hadn’t studied them carefully and had no knowledge of a public policy that had been shouted from the housetops since 1896. He was skilled in the art of stonewalling; but
only the Liberal majority in the Commons saved him from dismissal.

In the face of bitter protests from the Canadian labour movement, Leopold’s bureau vanished from the scene. So, in time, did the mysterious company. In 1907, Frank Oliver found a loophole in the contract and cancelled it. A government auditor was able, at last, to go through the company’s books. It had, in its final three years (the only ones for which there were adequate accounts), spent $84,000 and received $239,000, a profit of $ 155,000, or more than $ 1,250,000 in 1984 terms.

Was it worth it to Canada? Nobody knows, since nobody bothered to look for a cause and effect between the company’s advertising and those Europeans who arrived in Canada. And Canada was the only country that farmed out its continental immigration and the only one that paid a bonus of five dollars a head. The United States paid no bonuses; on the contrary, it charged between two and five dollars for the privilege of landing on its shores. None of its agents hid behind a syndicate or corporation; none got into trouble with the law. In 1905, some 828,000 emigrants left Europe for the United States. But then, as Preston and Smart kept saying, the United States was much better known in Europe than was Canada.

Preston was enraged at the cancellation of the N.A.T. contract and so was Sifton, who told Laurier that it “represents unquestionably the best plan of immigration of the best class.” Preston, in his memoirs, said the cancellation of the contract was a “flagrant breach of faith and lack of common honesty.” In his view “there was never a more honest contract or one more honestly carried out.” But Preston was not in Europe when the contract was cancelled. His Liberal friends defeated a motion in Parliament to fire him, but he was obviously too hot to handle in his old job. The time had come to get Mr. Preston as far away from Canada as possible. Even Europe was not far enough. And so, on August 31, 1906, he was given a new post on the opposite side of the Pacific Ocean as trade commissioner to Korea, China, and Japan.

3
A favoured relative

It was Clifford Sifton’s boast that he “never recommended a relative for an office much less appointed one.” That was certainly true. On one occasion he was asked to authorize the appointment of a
J.D. Sifton as a digger of artesian wells. The Minister refused: “He is a distant relative of mine and that is sufficient reason why he should not have any business connection with the Department.”