Article on Russel's 40th Anniversay, from Boating Magazine Feb. 1947. Paul Capel collection.
History of Russel Brothers Ltd.
1907 to 1982, by Eric M. Cordrey, March 27th, 1984.
In the early years of the twentieth century, two young men were working as machinists in the Grand Trunk railway shops in Winnipeg, Manitoba. Their names were Colin and Robert Jardine Russel who were born and raised in Ottawa, Ontario. Being ambitious and having faith in the future of Canada, they decided to go into business for themselves and they opened a small machine shop to do general machinery repairs in the town of Fort Frances, Ontario. Fort Frances is situated on the north bank of the Rainy River which flows from Rainy Lake on the east, to Lake of The Woods, and separates part of the state of Minnesota, U.S.A., from north western Ontario. In 1907 when they opened their shop there were no roads more than a few miles out of the town.
The Russels chose this location because there were at that time a number of saw mills in the vicinity and there was considerable activity in boating both in work boats and pleasure boats on the Rainy River and the adjacent Rainy Lake.
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Owen Sound Sun Times Wed. Aug. 11, 1943
NEW VIEW OF OWEN SOUND PLANT OF RUSSEL BROTHERS, LIMITED, MAKERS OF "STEELCRAFT" BOATS Shown above is an excellent new picture of the plant of Russel Brothers Limited, manufacturers of "Steelcraft" welded steel boats, and some recent expansions to the plant made necessary in order to take care of increased business. The picture was taken from the high ground east of the plant, which is situated on 3rd avenue east, Owen Sound. In the background is seen the expanse of water of Owen Sound Bay and the west shore. One of the new steel tugs recently turned out of the plant is also seen in the harbour.
About 1912, the Russels decided to begin building small boats for the Canadian logging industry. This type of boat was known at that time as "a headworks" or an "alligator". The name "headworks" was given to the log raft on which was installed a windlass or capstan. This was operated by a team of horses ahead of a boom of logs when they were being moved across a still water lake, and was known by the lumberjacks as the works ahead of the boom. The name "alligator" was given to the steam powered boats that replaced the headworks in later years. This was fitted with two heavy timbers or skids underneath to allow them to ride over log booms without damage to the propellers. These boats were also able, by the use of their winch, to pull themselves from one lake to another over land.
However, the Russels decided to power their boats with gasoline engines instead of steam and for this they used an engine known as the Campbell engine, made by the Campbell Engine Co. in Wazatta, Minnesota, U.S.A. This engine had a crankshaft that extended from the frame both fore and aft. The after end of the crankshaft was fitted with a friction clutch and a reverse gear that would allow the propeller to turn both clockwise or counterclockwise, or stay still when the winch was being used. The foreward end of the crankshaft was fitted with a friction clutch only to drive the winch or stay neutral. The winch was comprised of a series of gears that connected to a drum on which was wound between 1000 and 4000 feet of steel cable. This drum could also be allowed to run free if desired.
The method of operation to move log booms across a lake was as follows. The boat would leave the boom and run ahead of it between one-half mile and one mile, depending on the size of the boat and the length of the cable. It would then drop a large anchor over the bow, which was fastened to the forward mounted winch cable. The boat would then turn 'round and run back to the boom of logs. They'd fasten a short length of cable between the tow post on the after deck and one of the short logging chains that connected the boom timbers. They would then engage the winch and wind in the forward cable, thereby moving, or warping, the boom of logs in the direction they wished to go at a speed of between one-half and one mile an hour, depending on the velocity of the wind.
While this may seem a very slow rate of speed, it was very efficient and an economical method of bringing large booms of logs to the mill and did the work of much larger and more costly steam boats.
When the boat had wound in all the cable, it would lift the anchor onto the deck and the procedure would be repeated until the logs were at the mill. Russel Brothers changed the name of the type of logging boat that they built from "headworks" or "alligator" to "winch boat" for one under 27 feet long, and "warping tug" for the ones over 27 feet in length.
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In 1923 the Campbell Engine Company, realizing that the demand for the slow speed open type gasoline marine engine was finished in the U.S.A., offered Russel Brothers the opportunity of purchasing all their drawings, jigs, fixtures and parts on hand, of this engine.
With the help of the Bank, they made this purchase and in 1924 began the building of this engine in their plant in Fort Frances.
That year they built and sold about twelve boats powered with their own engines. However, as is often the case with new products, many "bugs" and difficulties were encountered, and the company ended the year in debt to the Bank and to their suppliers, who both refused to advance them any further credit until these debts were reduced. The brothers, on the advice of their lawyer, decided to incorporate and become a limited company and sell shares to the general public.
They, therefore, applied to Ottawa for a charter, which they received and the company was capitalized at $100,000 of common shares and $20,000 of 7% preferred shares. The common shares were all taken up by the two Russel brothers for $50,000; this was paid for them by turning over to the corporationall their equipment in the plant. The preferred shares were subscribed for by the local residents of Fort Frances for $17,000 cash. The company name was then changed to Russel Brothers Limited. While this was not enough to pay off all their debts, it allowed them to make payments to the Bank and their suppliers and obtain further credit to stay in business.
The years 1925 to 1928 were fairly successful, and 1929 a very prosperous one; so much so that they were able to pay a bonus to the officials and a small Christmas bonus to their employees. They were also able to purchase the rights from the Hill Diesel Company to build their diesel engines in Canada, although this was never done. It is interesting to note that in 1929 the Russels built a small electric welded steel boat, believed to be the first electric welded steel boat built on the North American continent.
As some people may remember, and others may have read, the Stock Market in the fall of 1929, this year was the forerunner of the Great Depression. No boat or engine orders were received during the years 1930-31-32 or 1933, as most of the paper and saw mills had either closed down or were operating at a reduced capacity. Russel Brothers existed during these years on local repair work or small parts orders from those mills still in operation.
One morning in the early spring of 1934 the telephone rang - it was a long distance call from the International Paper Company wanting Russel's to build them two 35 foot warping tugs for a new operation they were opening up in Québec. This changed the whole outlook of the company and their employees. Suffice it to say that before this order was completed more boat orders were received. The years 1934-35-36 and 1937 were quite good years. So much so that the company was able to pay off all its outstanding debts, pay the preferred shareholders all back dividends which had been omitted since 1930, although no dividend was paid on the common shares.
In 1936 the management realized that their chance for expansion or growth was limited in Fort Frances. Also most of their raw material and components had to be obtained from Eastern Canada and most of their boats were shipped east, so they decided to look for a suitable location in Eastern Ontario.
Two locations were offered to them in 1937. One at Kingston, Ontario, and the other at Owen Sound, Ontario. The Owen Sound location was considered to be the most suitable as there was a good building on the property and also the channel from the property to the main channel entering Owen Sound harbour would be dredged by the Federal Government to a depth of sixteen feet.
An interior view of the machine shop. An automatic gear cutter
is shown in the foreground. Jan. 29th, (likely 1943)
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The company, therefore, disposed of its Fort Frances land and buildings to Mr. Cyril Maffey on September 1st, 1937, and that month moved fourteen railroad carloads of machinery, parts, and the furniture and personal belongings of those employees who wished to move to Owen Sound, and by October 1937 were in operation there.
Before closing the saga of Fort Frances, it should be stated that the greatest advantage of this location was the fact that the Rainy River was open all winter long, due to the Power Company about one-half mile down stream keeping the water flowing, even when it was 30 degrees below zero fahrenheit.
In all fairness it should be stated that while Russel Brothers Limited did not at this time have any outstanding debts, neither did they have any spare cash and were having difficulty in raising enough money to finance their move to Owen Sound. The banks were not interested or able to help them, and neither were the insurance companies or other financial institutions. However, with the help of the late Mr. Allen Stewart, who was the mayor of Owen Sound in 1937, the company was able to float a bond issue of $20,000 that was totally subscribed for by some of the leading citizens of the City at that time. It is interesting to note that the entire issue was retired in about five years. An incident occurred just before they left Fort Frances which at that time did not appear to be of any importance to us, but was later to have the most important bearing on the company's financial well being and the fortunes of many of their personnel. The story is as follows:
Shortly before we left Fort Frances a gentleman walked into the office and said that he was from the U.S.A. and had come to The Fort as it was the best place in Northern Ontario where a person could, in a few minutes, walk from Canada to the U.S.A., and as he had a few hours to spare before train time he decided to see some of the town. He further informed us that he had been travelling through Ontario trying to find an organization that would be suitable and willing to become the Ontario distributor for Cummins Diesel Engines built in Columbus, Indiana, U.S.A. He asked if Russel Brothers would be interested in doing this. We thanked him but advised that this was a decision that only Mr. Colin Russel, the general manager, could make and who was out of town. But we would see that it was brought to his attention. With this he left and with the move under way was soon forgotten.
It should be mentioned here that most of the credit for the move to Owen Sound should be given to Mr. N. E. Hipwell, a vice president and secretary treasurer, of the company. Without his persuasive talent and drive it is very doubtful we would ever have left Fort Frances.
It is interesting to note that the entire move and start up in the new location was completed for less than the $20,000 subscribed. It is also worthy of note that everyone who moved paid their own expenses for themselves, their families, and furniture, although the company did advance money to those who requested it - to be paid back out of wages at a later date.
In 1938 the Ontario Government gave Russel's an order to build a 40 foot patrol boat for the Department of Game and Fisheries to operate on Lake Superior and St. Mary's River. They requested that this vessel be powered with a diesel engine of between 75 and 100 horsepower, which made the company think of Cummins. As they had a suitable engine, an order was placed, and the engine was later installed in this boat.
When the boat was ready for trials and testing, the Cummins Engine Company, as was their custom, sent a service engineer to Russel's to check the engine installation and instruct the owners in its proper care and operation. He suggested to Russel's that they should have one or more of their men visit the Cummins plant at Columbus to become familiar with their engines. This was not well received by the management. However, one of their mechanics, who had holidays due, decided to go there and learn about their engines. Shortly after his return, Cummins phoned Russel's saying that as one of Russel's men had been at the Cummins plant, would Russel's have him go to Kitchener, Ontario, and investigate a complaint that they had received about one of their engines, and, if possible, correct the trouble. This he did and as the trouble was only minor, he was able to correct it.
A corner of the Cummins service section, testing fuel pumps, generators and accessories. Enlarge to 1024 pixels Enlarge to 600 DPI
Some months earlier the International Nickle Company, who had a large surface ore body, had decided to mine it by the "open pit" method. While open pit mining had been done for many years in the U.S. and other countries, it had always been done on rails, the ore cars being drawn by steam locomotives. The Mack Truck Company of Allantown, who had during the first world war built a number of large heavy duty trucks for the U.S. government, persuaded I.N.Co. to haul their nickle ore from the pit to the crusher in their diesel powered trucks powered by Cummins Diesels. As Cummins had not received any report regarding the performance of their engines, they asked Russel Brothers to have their service man go to Sudbury, give any help he could to I.N.Co. regarding the engines, and report his findings back to them. This was done.
Some time later that year Russel Brothers signed a formal agreement to become the sole distributor for Cummins Engines in Ontario.
History tells us that on September 3rd, 1939, Hitler gave the order for his army to invade Poland thus starting world war two, and Canada immediately became involved. The Canadian Government requiring electric generators for the training of their personnel in radar operation gave Russel Brothers an order for three twenty-five kilo watt diesel powered generator sets. They later required more of these units of British design, using British diesels, but as Britain had agreed that they would export any product of a type or class that the U.S.A. was shipping to them under lend-lease, this meant that an American diesel had to be used. The Cummins diesel was found to be the most suitable. As Russel Brothers were the agents, they received an order to build 40 twenty-five kilowatt mobile generator sets. This order was later increased to 999 units and was placed through a Government owned company called Research Enterprises Limited of Toronto.
Russel Brothers then decided to erect a large building on the south section of their property and to form another company to build these generator sets to be called Cummins Diesels of Ontario Limited and to operate independently of Russel Brothers Limited. As Russel's were building a number of boats for the Royal Canadian Navy, powered by Cummins diesels, Cummins of Ontario obtained the the exclusive distributor-ship for Cummins Diesels for all of Eastern Canada. They opened a sales and service branch in Haslifax, Nova Scotia. Some years later, as the company was selling and servicing other makes of diesels, the Cummins people objected to their name being used and the name was again changed. This time to Russel Hipwell Engines Limited.
In early 1950, Mr. Hipwell decided that as he had the controlling interest in both Russel Brothers and Russel Hipwell Engines Limited, there was no further advantage in operating both companies and decided that Russel Hipwell would purchase all the Russel Brothers shares they did not then own, by an exchange of the three Russel Hipwellshares for each Russel Brothers Limited share. The name Russel Brothers Limited was dropped but the Charter was retained in good standing, though dormant.
In the early 1960's, Mr. Hipwell decided that it would be to most people's advantage if he gave up the Steelcraft division, as the boat building division was then called, and concentrated his efforts on the diesel division or engine division. He, therefore, moved the head office to Toronto, where he had some years previously opened a branch.
A Russel gasoline and a Cummins diesel being tested. The Clayton Dynamometer gives instant speed and horsepower ratings. Enlarge to 1024 pixels Enlarge to 600 DPI
The Russel Brothers Charter was reactivated and the boat building or steelcraft division sold to three of his senior employees.
Due to the introduction of heavy duty trucks and road building equipment, many of the logging companies were finding it more economical to build roads from their woods operations to the mills, and give up the transporting of logs and pulpwood by water. This meant that Russel Brothers were no longer receiving orders for the type of boat that was their speciality. As they were not in a position to compete with European or Japanese builders on larger vessels they found themselves in financial difficulties in the mid 1960's. They were taken over by the bank, who appointed one of the local auditing firms to run the company. This firm appointed Mr. Richard Warkentin to be the resident manager. The company was operated this way for about a year, then Mr. Warkentin purchased the common shares not owned by his family and became the financial and operating owner of the company.
He purchased and installed many modern and up to date machines, added a large building on the extreme south of the property, and was able to obtain a different line of work to successfully run the company until he sold it to Paccar Corporation of Bellevue, Washington, U.S.A.
In the story of Russel Brothers and Russel Brothers Limited, it is only right that some remarks be made of the people who ran and controlled the company. The two Russels who began the company were raised in Canada in the latter part of the 19th century, when to exist was a struggle and a work week consisted of ten hours a day, six days a week, with no such things as coffee breaks or restperiods. They were very hard workers and expected everyone who worked for them to be the same. They were, however, very fair men in their dealings with their workmen. In the early days of their business, money was scarce and often non-existant, and they would never issue paycheques unless they were sure that there was money in the bank to cover them. Wages in the early days were often six weeks or more overdue, and they would not attempt to cash their own pay cheques until they were reasonably sure that all their employees had cashed theirs. On more than one occasion, they dug down into their own slim pockets to help one of their workmen, who, through no fault of his own, was in distressed circumstances.
Mr. N.E. Hipwell was a very difficult man to work for and very unpredictable. He was, however, a very fair man where money was concerned and many of the people who worked for him and in their later years were quite wealthy, could credittheir good fortune to his generosity and good management of the companies under his control.
While I do not believe that the Russel Brothers ever did anything that was famous, I believe the following is worth recording.
They built the first all electric welded steel boat on the North AmericanContinent.
During their existence as a Canadian Corporation, they built over 1200 boats ranging in size from sixteen foot log sluicers to two hundred foot barges, and over 400 engines, the name of which they changed from the Campbell engine to the Russel heavy duty marine gasoline engine.
They built the first boat to travel up the Lachine Rapids on the St. Lawrence River under its own power.
During the second world war, they built a number of eighty foot tugs and forty foot supply boats for the Canadian Navy.
Also during the second world war, they built landing barges and sixty foot tugsfor the British Ministry of War Transport. These were used in the Allied landing in Europe.
Some of their most notable vessels were the "Atomic", a slavage and ice-breaking tug that operated in the Detroit River. For three years in a row, this tug won the International Tug Boat Race held on the Detroit River between U.S. and Canadian tug boats. The "P.J. Miller", a logging tug. The owners refused to accept this tug after it broke all the propeller shaft coupling bolts after only two hours of operation. After repairs and the cause of the damage was corrected, this tug went on to be one of the most successful tugs in logging operations in Canada, and twenty years later is still in operation. Three of the passenger vessels for the Maid of the Mist Steamship Company were built by Russel Brothers. These vessels operate on the Niagara River below the famous falls. They built one of the first, if not the first, floating oil well drilling rigs ever built in Canada. And last, but not least in the shipbuilding industry, they built the one hundred and fifty foot vessels "Ville Marie" and "Montmagny" for the Canadian Coast Guard.
They designed and built the first electro-hydraulic ships steering gear made in Canada. They assisted in placing in service on the T. & N. O. Railway (now The Ontario Northland) the first diesel powered locomotive in Ontario, and on the Wabash Railroad in St. Thomas, Ontario, the first deisel powered switching locomotive to operate in Canada. They were one of the few shipbuilding companies in Canada to operate entirely on their own without assistance from any government agency, and one of the few to survive the great depression of the thirties.
One of the may parts stores housing over 15,000 different parts.
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They moved their whole plant and machinery over one thousand miles from Fort Frances to Owen Sound by their own efforts and the assistance of the C.N.R.
It is interesting to note that the picture on the present day Canadian dollar bill shows a Russel built warping tug and a winch boat operating on a boom of logs on the Ottawa River below the Parliament Buildings.
In closing this saga of Russel Brothers and Russel Brothers Limited, we can only say that we hope that the company will be as successful and rewarding for its American owners in the future as it has been for the Canadians who owned and worked for it in the past.
This account is written entirely from memory, and while the dates may be up to a year out, every other statement is correct.
Their associate company, Russel-Hipwell Engines Limited, also had a number of firsts and notable achievements, but that is another story.
Eric M. Cordrey
March 27, 1984
Jan. 2nd, 1963 factory grounds plan, drawn by Don Moon.
Aerial shot of the plant in 1967.
Original in Grey Roots Museum, Owen Sound, roughly 16 x 20".
Aerial shot of the plant in 1967, version 2.
Taken on the same flight, provided by Elizabeth Smith of Owen Sound. Original print is 4 x 2.5 feet.
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Aerial shot of the plant in the late 70's.
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The closer jetty was built largely from iron slag and tailings from the old adjacent Empire Stove Works facility. Note the
Keenan toothpick factory in the background, on the site of the current Harry Lumley Bayshore Community Centre.
The End: The SunTimes Sat. July 17th, 1993