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Chapter 6

Expansion and Failure in the Dirty 30's

I n Setting the stage for coming expansion, the Portage Mutual obtained a Dominion charter in 1930 and adopted a new name, The Portage la Prairie Mutual Insurance Co.

New Crest - 1931
from "The Mutual" - 1931

There were several reasons for obtaining a Dominion charter. The first of these was the matter of "reinsurance". It is a fact that insurance companies, after insuring a large risk, will go to another company and RE-insure part of the line. It is all a matter of "spreading the risk" so that, if there is a large loss, the company will not suffer too greatly. By 1930, The Portage Farmers' Mutual found itself with an insufficient reinsurance contract, and the new one they wanted demanded quite a higher volume of business than they could offer.

New Company Letterhead of 1930
New Company Letterhead of 1930

Also, since farm business had a high loss ratio, the Directors wanted to look at more profitable areas. By going out of province and writing mostly cash business on schools, churches, commercial establishments and even automobiles, the Directors hoped to spread their risks. When they applied for the charter, they dropped reference to farmers. As an experiment, the Company opened an office in Edmonton.

They also realized they could experience difficulties in getting individual provincial licences but with a Dominion charter, they needed only one licence.

The Board of Directors - 1934

Meanwhile, there were several drought years across Western Canada's wheat-growing areas in the 1930's, drying up farmer's crops. And with no soil erosion protection, the wind readily took precious inches of top soil away. These problems combined with plagues of grasshoppers, led many farmers to sell out for next to nothing. The great mechanical age regressed as the horse replaced the reprocessed tractor, as farmers struggled simply to survive. It was an era when "riding the rails" and working from day to day was the norm.

Wheat dropped to below 60¢ per bushel between 1932 and 1933. Not until the late 1930's to early 1940's were farmers able to eke more than an existence off the land.

The atmosphere at the Portage Mutual was much more encouraging, for the moment. But the despondency felt by the farmer would soon be felt at the Portage Mutual. Under Whitaker's guiding hand, the company expanded across the country. Edmonton, Vancouver, Toronto and Saskatchewan offices had been established and were followed shortly afterwards by a Quebec office in mid-1931.

Interior of the Toronto Office of the Company - 1934
Interior of the Toronto Office of the Company - 1934

To meet the requirements of the new charter, the number of Directors on the Board was increased from seven to nine.

It was a heady time for Directors. The company wrote $19 million additional amount of risk, mostly on a cash basis. This added to its $73 million in risks written to date (three year premium notes), translated into a stunning 26% rise in new business in one year.

At Delta - Staff picnic - Mid 30's
At Delta - Staff picnic - Mid 30's

The workload was becoming a strain. The Portage office was departmentalized and more staff hired.The staff had grown to 44 by 1933, a growth of two staff per year since 1919. The assessment period was moved from November 1 to October 1.

Art Carver
Art Carver

Art Carver

Art Carver started as a an underwriter in 1932 and continued in that capacity until he became Chief Underwriter and Assistant Manager in 1958, a post he held until he retired in 1974. Carver was largely responsible for developing many of the policy features offered by the company today.

In 1932, the Cooperative Commonwealth Federation (CCF) was formed with support from several farm groups. The Canadian Broadcasting Commission (CBC) was born that year too. The following year wasn't a good one for the farmer nor the Portage Mutual. Grain prices, which started on the downward cycle in the late 1920's were running 70¢ to 80¢ a bushel. Manitoba's population exceeded 700,000.

As business grew for the Portage Mutual, ominous signs of trouble began to appear. In 1933, competition and perhaps poor judgement saw the company cut automobile premiums to 60% of the previous year's levels.

In early 1934, the Dominion Superintendent of Insurance advised the company its cash reserves were too low. The company charter stipulated if its cash deposits dropped below a certain point, the cash business could not exceed one half the amount written on the mutual system. Therefore the company would have to increase its reserves or reduce its cash business. The latter choice proved its only practical alternative.

Earl Brown
Earl Brown

Earl M. Brown

Earl Brown was born in 1911 near Portage la Prairie. Rising in the ranks of the company, he eventually became President. He started as an underwriter in 1932; in 1935, he was made the company accountant, and in 1950 Treasurer. Brown left the company to fight in World War II, returned after five years with the rank of Lieutenant-Colonel. He remained Treasurer until 1958 when he was made Manager. In 1973, Brown replaced Joe Miller as President and holds that office today.

As Treasurer, Brown attended many Board meetings and had a good understanding of what Directors wanted from a Manager. He was an expansionist, but knew the company's limits having experienced the company's first abortive expansion attempt in the 1930's. He was determined a second expansion plan would work. Like Thorpe, Brown had accounting background and a military career to provide the discipline needed.

With the support of the Directors and men like Joe Miller, the Company did expand both its policies and its territory. Brown was a major contributor to the farm package or umbrella policy introduced in the 1950's which included liability and other protection under one policy with one premium.

Brown gave largely of his time to the company including special projects like the design of the Company's new office building in the early 1960's. He also found time for community affairs, including serving on the Portage Fair Board.

Consideration was given to pulling out of the East and dropping marginally profitable automobile insurance. In the summer of 1934, the company returned to its regular premium structure for automobile coverage and eventually those policies were reinsured with another company to reduce risks. Whitaker instructed the branch managers to cut costs to the bone. It was obvious the company had not underwritten its policies well. It assumed too many bad risks, depleted its reserves and forced a retrenchment. Whitaker stepped down as Manager, resigned his seat as a Director and Treasurer Thorpe took over as Manager. A.G. Hall became the new Treasurer.

In 1935, Edwin Muir stepped down as President, and was replaced by M.G. Tidsbury. He assumed the position of Vice President, and also went on the payroll of the Company as the Manitoba inspector.

After Whitaker resigned as a Director, Joe Miller was elected to replace him.

Joseph Miller
Joseph Miller

Joseph C. Miller, Q.C.

Born in 1894 in Portage la Prairie, Joe Miller was called to the Bar on June 26, 1918. A lawyer and businessman, Miller's experience was a great asset in his many positions in the Mutual.

He is a member of the Manitoba and Canadian Bar Association, was elected Bencher of the Law Society of Manitoba and made an Honorary Life Bencher. He has been a member of the Council of the Canadian Bar Association. Miller was also President of the governing bodies of the Association of Law Societies of the Canadian Bar Association.

Miller was Mayor of Portage from 1932 to 1934 and an Alderman for two years. He also served as Vice Chairman of the Manitoba Public Utilities Board for six years.

His involvement with the Portage Mutual began when he was appointed a Director in 1945. He served until 1973. Miller took the helm as company President from 1950 to 1973 when he retired. Those who worked with Joe Miller agree that he and several other key Directors in the mid-1930's were instrumental in guiding the company through one of its more difficult times. Working with Directors like Arthur Sullivan and Doug Campbell, he set the stage for the company's successful expansion in the late 1950's and early 1960's.

Still active at 89 years of age, Joe Miller is a partner in the Saskatchewan Avenue law firm of Miller, Miller and Pressey.

In 1935, the B.C. office was closed. Arthur (Colonel) Sullivan was elected as a Director but not without some controversy. Sullivan's election was something of a shock to the Directors who considered him a "brewery man".

Head Office in the 30's
Head Office in the 30's
Arthur Sullivan
Arthur Sullivan

Arthur (Colonel) Sullivan

Born in Charlottetown, P.E.I. in 1880, Arthur Sullivan, another prominent lawyer and businessman, served in the First World War with the 43rd Battalion, Queen's Own Cameron Highlanders, as Lieutenant-Colonel. A senior partner in the law firm Sullivan and Turner, Chairman of the Board of Shea's Winnipeg Brewery (now owned by Labatt's) and a Director of John Labatt Ltd., Sullivan provided a guiding hand to the company during the 1930's.

Called to the Bar in 1905 after studies in Charlottetown and London, England, he was a Director of the Portage Mutual from 1935 to 1957 when he died.

One by one other offices were closed as the company drew in its tentatively spread tentacles back to its main body in Portage. The only regional office to remain open was in Alberta. In 1936, Doug Campbell was elected as a Director.

Douglas Campbell
Douglas Campbell

Douglas L. Campbell

Doug Campbell, one of seven brothers and sisters, was born in 1895 near Portage la Prairie and raised on the family farm. After two years at the Brandon College (now Brandon University), he went home to the farm where he began to take deep interest in farmer concerns.

About this time, the Progressive Party was making its voice known both provincially and ultimately federally. Campbell took a keen interest in the United Farmer groups (predecessors of The Canadian Federation of Agriculture). His Progressive liberal stand helped elect him to the Manitoba riding of Lakeside in 1922. He remained in politics until 1960 when he retired. He eventually joined the Manitoba Liberal Party.

Campbell was a Director on the Portage Mutual from 1936 to 1972. He was Agricultural Minister while a Portage Mutual Director and was the Liberal Premier from 1948 to 1958. It was Campbell's Government that brought electricity to Manitoba farms.

Head Office in the 30's
Head Office in the 30's

Out of the ill winds of the 1930's, the Portage Mutual took stock and consolidated. A.H. Thorpe proved to be an excellent manager, but the effect of the failed expansion, the depression, and the war which followed, was a slow rate of growth in the decade to follow. It wasn't until the 1950's, when E.M. Brown took the reins, that the Company really started to grow and expand again.

In 1938, the Urban Mutual was unable to continue and was absorbed by Portage Mutual. Myrtle Rose, who started with the Urban Mutual in 1920, was hired to work in the premium note department for the Portage Mutual. After 40 years in the insurance business, 22 of which were at the Portage Mutual, she retired in 1960.

In the late 1930's the company extended its policy coverage to include such areas as falling aircraft, civil commotion and personal property insurance, to increase consumer appeal. Later it would add liability to this list.

At the close of the 1930's, farm prosperity returned and feelings of better times just ahead displaced the gloom. The visit of the King and Queen to Portage in June 1939 was a joyous moment soon to be shattered with the announcement of war.

The "Mutual" boys - late 30's
Des McInnerny, Earl Brown, Art Carver
Bob Kirkland, Frank Russell
An advertisement of 1932
An advertisement of 1932
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Please note: The information provided within this page was originally published in 1984. Any "current", "new", "present" or  other such references within this information were correct in 1984 but are not necessarily so now.
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