Source: Link

RITCHIE, SAMUEL J., businessman; b. 24 Nov. 1838 in Boston Township, Ohio; m. 15 June 1865 Sophronia Hale of Bath, Ohio, and they had two sons and a daughter; d. 18 Sept. 1908 in Charleston, W.Va, and was buried in Akron, Ohio.

The eldest of seven children of Presbyterian immigrants from Londonderry (Northern Ireland), Samuel Ritchie was raised on a farm in Boston Township, near Akron. Educated in local schools and then briefly in the mid 1850s at Western Reserve College in Cleveland, he began his working life as a school-teacher. In the early 1860s he entered the lumber business as a railway subcontractor, supplying ties. He became a partner in 1867 in a carriage-manufacturing firm at Tallmadge, Ohio, his place of residence for all but a few years of his life. Ritchie and his associates sold the business in 1871, investing part of the proceeds in coal properties in West Virginia, which would not pay dividends until 30 years later, and the remainder in a sewer-pipe factory in Tallmadge. The latter took Ritchie, the archetypal travelling salesman, to Washington, where he spent much of the mid 1870s hawking its product.

When the factory burned in 1878, Ritchie severed his connection with the firm. At loose ends but, for one of the few times in his life, with investment capital at his disposal, he was introduced to the prospects of iron mining in Hastings County, Ont., by George William McMullen, a colourful Chicago-based railway promoter, formerly of Picton, Ont., who had gained notoriety in Canada for his part in the Pacific Scandal [see Sir Hugh Allan*]. In 1880 Ritchie, McMullen, and his brother, J. B. McMullen, acquired the Prince Edward County Railway, running from Picton to Trenton. A year later the three men, along with William Coe of Madoc, purchased 70,000 acres of iron lands in north Hastings.

In 1882 the railway was transformed into the Central Ontario Railway (COR), with Ritchie and George McMullen as president and vice-president respectively, and their majority ownership of the most promising iron property was transferred to the newly formed Coe Hill Mining Company. Two years later, by which time the railway had been extended to the mine at Coe Hill and ore was being shipped to Cleveland, disaster struck. Analysis revealed that the ore was metallurgically unworkable, leaving the heavily indebted COR and its chief financial backer, Ritchie, on the verge of bankruptcy.

Ritchie’s search for other investment opportunities led him in 1885 to recently discovered copper deposits in northern Ontario, in the area of Sudbury Junction on the Canadian Pacific Railway. That autumn he went there and acquired a number of mining properties which, he later claimed, he intended to convey to the COR, as its charter permitted. However, his creditors and financial associates, Senator Henry B. Payne and judge Stevenson Burke of Cleveland and Thomas Cornell of Akron, favoured a different strategy. At their insistence, in January 1886 two companies were incorporated under Ohio law. One was the Canadian Copper Company (CCC), with a capitalization of $2 million and Ritchie as president. To it were transferred the Sudbury properties. The other, the Anglo-American Iron Company (AAIC), of which Ritchie was vice-president, was endowed with the remaining iron lands along the COR. Special acts of the Canadian parliament passed later in the year empowered both firms to operate in Canada, although only the CCC would do so.

The history of the CCC in its first five years was largely that of the work of Sam Ritchie. In addition to marshalling the financial resources necessary to begin its operations, he begged, borrowed, and bought second-hand mining equipment and supplies. He was also responsible for assembling its managerial and technical workforce, drawing upon his contacts in Ohio for a general manager and a chemist and in Hastings for an accountant and mine-captains. Company headquarters remained in nearby Sudbury and the hail-fellow-well-met Ritchie forged close personal ties with that community, which served the CCC well.

Ritchie’s most important contributions, however, came in the field of marketing. As the name of the company and of its associated town, Copper Cliff (now part of Sudbury), indicated, at the outset Ritchie and his backers had thought they were getting into copper mining, but tests made in 1886 had shown the presence of even greater quantities of nickel in the ore. The nickel presented difficulties, one of which was the lack of an effective, economical refining process. Ritchie was no metallurgist and had to depend for a solution on Robert M. Thompson’s Orford Copper Company of New Jersey, one of the few companies in North America with any experience in the matter. In December 1888 the first smelter was blown in at Copper Cliff and by the early 1890s the CCC was the area’s foremost mining and smelting firm.

Much the greater problem was the lack of sales. In the late 1880s the world consumption of nickel was barely 1,000 tons per annum, an amount easily supplied by the French penal colony of New Caledonia. An American, Ritchie naturally turned to the United States as an outlet for the large quantities of nickel the CCC could supply. To gain access to that market he first spent many months in Washington in 1888–89, successfully lobbying for the removal of the American tariffs on Canadian nickel-copper ores and mattes. The next step was to find uses for the metal. Fortuitous circumstances had equipped Ritchie with the answer. In the mid 1870s he encountered in Washington an English inventor, John Gamgee, who had been experimenting with a nickel-steel alloy for industrial purposes. Though nothing materialized from Gamgee’s experiments, in 1889 Ritchie recalled the promise of that extremely hard alloy. Coincidentally, reports were circulating that British and European scientists were experimenting with its use in naval armaments. Putting two and two together, Ritchie approached the American secretary of the navy, Benjamin Franklin Tracy, and persuaded him to investigate the military potential of nickel.

Tracy responded in the fall of 1889 by sending naval officer Benjamin H. Buckingham to accompany Ritchie on a fact-finding tour of England and Europe. Ritchie returned with a number of parties, including representatives of the Krupps of Germany, who were interested in purchasing the CCC’s output, but, most important, Buckingham provided a favourable recommendation. In 1891, consequently, the CCC and its refining partner, Orford Copper, received the first of the American government contracts that would set them on the path to profitability.

More than any other individual, Sam Ritchie was responsible for making the CCC a viable enterprise. Yet, paradoxically, he was the one to profit least from its success. The explanation lies in the fact that Ritchie, a promoter and entrepreneur par excellence, lacked financial resources. Any capital he possessed had been absorbed by the COR, and he was forced to rely increasingly upon the goodwill of his Ohio associates, Payne, Burke, and Cornell. They were willing to lend him money, but insisted that he put up his shares and bonds in the COR, the CCC, and the AAIC as collateral. As early as September 1887, therefore, Ritchie had been replaced as president of Canadian Copper by Cornell because he no longer held clear title to any of its stock. He nevertheless continued to play a dominant role in its direction, partly because Cornell and the others, being involved in other businesses, had limited time for it, and partly because he was willing to use his business and political connections to advance the interests of the company.

By 1891 Ritchie’s relationship with his associates had become strained beyond repair. Notes in his name guaranteed by them, amounting to more than three-quarters of a million dollars, were falling due and he refused to discuss the matter of renewal, let alone repayment. They were willing to put up with this refusal so long as his efforts on behalf of the CCC were beneficial to them. During the winter of 1890–91, however, Ritchie tried to take the company in a direction that jeopardized their entire investment, and this was more than they could tolerate.

In reality, for all his entrepreneurial bravado, Ritchie had never valued the CCC as an investment in its own right. He had got involved in its formation in order to save the fortunes of the COR, and as its president he continued to think in these terms even after the enormous possibilities of the copper company became apparent. In 1890 he began to press for the reorganization of the CCC, the AAIC, and the COR into a single, integrated company, much along the lines he had initially envisaged. His plan was to extend the railway to Sudbury so that nickel mined there could be transported to a nickel-steel refinery at Trenton, to be used with the iron ore from Hastings, which he now claimed could be worked profitably.

Cornell, Burke, and Payne, on the other hand, were unwilling to saddle a profitable venture, the CCC, with the dead weight of the railway. Matters came to a head in 1891 when Ritchie, after ignoring warnings not to commit Canadian Copper to the course of action he was proposing, publicly challenged the authority of its officials to enter into long-term sales agreements that conflicted with his own plans. Faced with this challenge, the CCC directors concluded that they had no option but to disavow the man popularly considered the father of Sudbury. In a circular dated 16 March notice was given that he no longer had any connection with the company.

The close association between Ritchie and Canadian Copper thus came to a bitter end in the spring of 1891. Over the course of the next year the breach between him and his associates widened when they used their financial clout to remove him first from the AAIC and then, most devastatingly, from control of the COR. The following decade witnessed a welter of suits and counter-suits as Ritchie desperately sought restitution. In the courts of both Ohio and Ontario, for example, he attempted to recover control of the COR, the CCC, and the AAIC, claiming ownership on the basis of the stocks and bonds held as collateral by his creditors. The courts did not agree, and in November 1897 his assets were sold by judicial auction, purchased from themselves by Burke and the estates of Cornell and Payne, who had died in 1892 and 1896 respectively.

Determined to get revenge if he could not get retribution, Ritchie launched a three-pronged attack on Canadian Copper and its owners. First, he instituted a fresh round of suits against the company, calling for its dissolution on grounds such as its inability to own property in Ontario; none was upheld. In the courts, too, he brought new proceedings against Burke and the Cornell and Payne estates. Secondly, on the business front, he found new allies, Hamilton industrialists John Patterson*, Andrew Trew Wood, and John Morison Gibson*, and proceeded to promote a series of nickel-steel related companies – the Nickel Copper Company of Ontario, the Hoepfner Refining Company, and the Nickel Steel Company of Canada – to compete with Canadian Copper and its Orford reining partner. Although these ventures ultimately failed, from 1897 to 1901 Ritchie and his associates were able publicly to maintain the façade of their competitive viability and thereby keep pressure on the CCC.

The third prong of Ritchie’s attack was political. During the 1880s he had been a leading proponent of free trade between Canada and the United States, a stance underscored by his private advocacy of the annexation of Canada to the American republic. In 1888, at a time when the issue of commercial and political union was generating much debate in Canada, he described Erastus Wiman in private correspondence with him as the future “Senator from Ontario.” In the late 1890s, however, he experienced a radical conversion to Canadian economic nationalism. To facilitate the development of the nickel-steel industry in Canada, he spearheaded a campaign to persuade the federal government of Sir Wilfrid Laurier* to impose an export duty on nickel and copper ores and mattes. For this campaign he had chosen his business partners well, since Patterson, Wood, and Gibson were influential Liberals. In 1897 parliament passed legislation providing for such duties but appended a proviso requiring an order in council to put them into effect. When this order failed to materialize, in 1899 Ritchie and his associates redirected their energies towards the government of Ontario, calling upon it to impose a “manufacturing condition” on nickel ore, which would require refining in Canada, a condition similar to that applied to sawlogs in 1897 [see Arthur Sturgis Hardy]. Here they were on firmer political ground, for Gibson was the province’s commissioner of crown lands and, from 1899, its attorney general. As a result, in 1900 the Mines Act was amended to provide for the imposition of a licence fee on unrefined matte destined for export, though once again an order in council had to be issued, by the provincial cabinet, for this amendment to become operative and once again no such decree was forthcoming. Although none of these schemes came to fruition, they proved to be more than a little bothersome to Canadian Copper, which had thwarted the official challenges by threatening to leave Copper Cliff.

In 1901 Ritchie’s fortunes finally turned for the better. In one of his interminable suits against the estate of Thomas Cornell, Ritchie’s lawyers proved that Cornell’s will had been forged by its executors. This finding lent weight to Ritchie’s claim that the estate had failed to honour an agreement made four months before the judicial sale of 1897 whereby Ritchie’s wife (heiress to a fortune in her own right) had purchased his stocks and bonds from the Cornell estate. Almost simultaneously and, according to Ritchie, not coincidentally, Burke and the executors of the Payne estate decided that settlements were in their best interests. Beyond the embarrassment of the forged will, they had wanted to get out of the nickel business but found their efforts to sell Canadian Copper frustrated by Ritchie’s lawsuits. Although the settlements were not finalized until November 1902, it was surely more than coincidence that in mid March of that year, just two weeks before the formation of the International Nickel Company, which combined the assets of the CCC, Orford Copper, and others, all suits between Ritchie and the owners of the CCC were withdrawn from the courts of Ohio and Ontario.

After more than a decade, Sam Ritchie had gained a measure of satisfaction from his CCC opponents. While the full extent of the restitution is unclear, what is certain is that by the beginning of 1903 he was once again president and majority owner of his oddly prized possession, the still heavily indebted COR, which would later become part of the Canadian Northern system. Beyond this, the 1902 settlements also provided him with sufficient wealth to build The Frontier, a palatial mansion in Akron, and to redirect his litigious energies toward extracting his coal properties in West Virginia from the legal morass in which they too were mired, the task to hand at the time of his death from apoplexy in 1908.

“Mr. Ritchie was simply incomparable. . . . There was a vast massiveness to the man. He was big in heart and brain, as he was stalwart in physical frame.” So, according to the Akron Beacon Journal, intoned the Reverend W. D. Marsh at the private funeral held for Ritchie in Akron. Struggling to speak well of a professed non-believer and convinced materialist (“I have not allowed my children to waste their time conjugating Latin and Greek verbs,” Ritchie once wrote to Andrew Carnegie. “I have tried to have them understand that it would be folly for them to spend their time and effort in acquiring an asset which could be neither utilized or sold.”), the minister devoted part of his oration to damning Ritchie’s enemies, that “tribe of bastard lawyers, Ishmaelites, sons of the bond woman. . . . who . . . tend themselves to a systematic blackmailing of the successful man.” Whatever its accuracy, the comment suited the occasion, for Ritchie had reportedly died as he had lived, while engaged in yet another legal battle far from home.

Matt Bray