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Early Industry Case Studies

Small Vs. Big

Log boom, Lethbridge, AlbertaOne of the earliest mills was started by two brothers from Manitoba. Benjamin and David McKenzie managed to transport all the necessary machinery for a small sawmill, along with their settlers' goods, overland by wagon to what was then the wilds of central Alberta. They established their little mill on the south side of the Red Deer River and were sawing wood for settlers in the district by September 1883. A flood the following year prompted a change of location to the other side of the river and further north. The McKenzie operation was so popular, being the only sawmill in the area, that the brothers could not keep up with demand. In 1887, the mill went into 24-hour production. Competition, however, was not long in coming.

In 1887 a consortium of American interests began ambitious plans to create a large lumbering interest in the Red Deer area under the name of the Alberta Lumber Company. Investing some half-million dollars in the venture, they proposed a huge mill to make use of the large timber berth they had obtained from the Dominion Government. It might have seemed to some that to build a large mill in the middle of nowhere was an expensive and foolish undertaking, especially since the company's production would exceed local demand and the excess production was without ready access to market. The method behind the madness was the proposed Alberta and Athabasca Railway. This railway was supposed to build its line close to the Alberta Lumber Company's mill, providing the transportation the mill needed and an immediate local market. No wonder there were close ties between the two companies from the very beginning.

The Alberta Lumber Company tried to convince the Dominion government that it required a monopoly on lumber production in central Alberta in order to be profitable. The Department of the Interior did not concur, but it did alter its lumber regulations to require that all future permits for logging would be issued through competitive tender for specific berths. The result was to pressure the McKenzie brothers' operation, which could not hope to compete with the huge Alberta Lumber Company. Still it appeared that fate was on the side of the little guys as the Alberta Lumber Company began to suffer a series of setbacks. First, in 1888, its half-built mill was almost destroyed by a grass fire. This set construction back and severely reduced the proposed output. The second and more important setback was the collapse of the Alberta and Athabasca Railway in 1889. Lacking a market and transportation, the lumber company folded in 1892.

Meanwhile, the McKenzie mill had managed to keep going. Ironically it was another small mill that eventually caused the McKenzie brothers to move their business to another area. In 1890, R. Leonard Gaetz started a small mill in Red Deer. It used a small 30 horsepower engine and produced 30,500 metres of lumber a year.

Kelly Buziak. Toiling in the Woods: Aspects of the Lumber Business in Alberta to 1930. n.p.: Friends of Reynolds-Alberta Museum Society and Alberta Culture and Multiculturalism, Historic Sites and Archives Service, 1992. With permission from
Friends of Reynolds-Alberta Museum



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