The Red Deer Milling and Elevator Company

The turn of the last century was an exciting time for the fledgling town of Red Deer. Large numbers of new settlers were flooding into the area. The population of the community quintupled in less than five years.

There were all kinds of great new business opportunities for the entrepreneurs.

For those willing to take a gamble, fortunes could be made in a relatively short period of time. However, gambles meant risk and sometimes the gambles went bad. One spectacular business collapse involved the Red Deer Milling and Elevator Company.

At first, the Company looked like a “sure bet.”

Red Deer was in the middle of an emerging agricultural heartland. There was an abundance of high quality grain. It made sense that this high quality grain could be turned into high quality flour for local and outside markets.

In the summer of 1905, M. ‘Little Mac’ McDonald arrived in Red Deer with a proposal that a fully equipped flour mill and elevator be constructed in the community.

He had an impressive-looking set of credentials. After coming to Alberta from the Klondike goldfields in 1901, he became president of the Pincher Creek Mill and Elevator Company, the Battle River Land and Investment Company and the McDonald-Dunlop Company of Calgary. He also promoted the Western Elevator Company, said to be backed by capitalists from Minneapolis.

This company was interested in building a chain of elevators along the Calgary-Edmonton Railway (a subsidiary of the C.P.R.) and partnering with local flour mills.

The business community of Red Deer greeted the proposal enthusiastically.

John T. Moore, a local entrepreneur, who was soon to become Red Deer’s first MLA, offered to donate a site for the mill on the north side of the Red Deer River.

However, a site south of Douglas (55) St., on the west side of Gaetz Ave., was deemed to be a better location.

The Board of Trade gave its strong endorsement and many members purchased shares in the Company for $100 apiece. The Town Council agreed to loan a large sum of money to get the project going. The ratepayers strongly ratified that decision in a special plebiscite. The Bank of Commerce also became a major lender to the Company.

A three-storey mill and warehouse were quickly constructed. The Stratford Milling Company supplied the necessary equipment. An adjacent elevator was soon added to the complex.

The promoters proclaimed that Red Deer now had “The finest flour mill west of Winnipeg.” However, the Company lacked experienced millers. Insufficient operating capital was also a major problem. Once the mill began producing flour, the product met with lukewarm customer response.

By late 1906, it was obvious the company was in trouble. There were corporate reorganizations and recruitment of new management. However, it was much harder to restore the reputation of the company’s product than it was to launch it.

In May 1907, the company fell into bankruptcy. The Stratford Milling Company seized its equipment and shipped it to Asquith, Saskatchewan.

Attempts to sell the mill and elevator failed several times. Eventually, the Alberta Pacific Grain Company agreed to buy the buildings and site for a grain elevator complex, but at a large discount from the original asking price.

At best, the Red Deer Milling and Elevator Company shareholders got 9¢ back on every dollar invested.

A brief, but sharp economic global recession set in during 1908. Red Deer suffered from the recession more than other western Canadian communities because of the heavy local losses from the milling company venture. The great gamble had failed. It took some time to rebuild the local economy and restore the Town’s finances.

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