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Alberta Online Encyclopedia

Land Speculation

Taylor-Hunter and Company

The real estate boom rekindled land speculation, which had declined since 1881 when the first subdivision of land on the Hudson's Bay Co. Reserve occurred. Visitors to the City of Edmonton such as Wilhelm Cohnstaedt, who was in the city in 1909, reported that it was impossible to sit in a hotel lobby for more than five minutes without someone offering to sell land. His experience in the west led him to the conclusion that "a country in the process of settlement is overrun by real estate agents and land speculators." In 1911, J. Burgon Bickersteth, a lay Anglican missionary in Edmonton, also marveled at everyone's preoccupation with real estate.

Most of the land subdivision promoters were individuals and companies who were solely interested in creating a subdivision for immediate sale without any interest in actual development of the land. They were content to merely print advertisements extolling the beauty and investment potential of their respective subdivisions.

Stories about western Canadian land speculation appeared in newspapers such as The Economist of London, England, and the Toronto Saturday Night. The latter was particularly aggressive in its efforts to sort out legitimate investments from the frauds promoted by the "land sharks." The December 23, 1911, issue deals specifically with Edmonton in an article entitled "Fleecing the Credulous Land Buyer." It includes a detailed description of one method used. According to the article, real estate firms in Edmonton and in other western cities employed professional "cappers" from New York, to gather in "suckers" to buy their land. The plan involved placing an attractive painting of a subdivision in the window of a real estate office. Passersby who stopped to admire it were engaged in conversation by the "cappers." The victims were induced to enter the office and invited to see the property offered for sale at the company's expense and in the company's automobile.

If the prospective buyer appeared sceptical about the value of the land, the "capper" would go along on the trip to the subdivision posing as a buyer. When they arrived at the property, the "capper" assumed the role of an experienced buyer who had seen real estate propositions in every town in the west, but had never seen any to equal this one. He would finally select two or three lots for himself while declaring he had not intended to buy when he left the office. With this example before him, the investor would be convinced that the property must be a safe deal.

Promotion if the Highlands subdivision

The speculators bought lands adjacent to the city limits (and thus evaded city taxes), divided these into subdivisions, and sold as many as they could before the pre-World War One depression. In this way they forced the city to annex these areas. Because the lots were outside the city and were unserviced, and because Edmonton refused to extend utilities to them, the residents of these areas began to apply to the Alberta Government for permission to be incorporated as towns. Edmonton disapproved of the incorporation of such municipalities into the city until their population warranted it. The villages of North Edmonton and Calder and the subdivisions of Elm Park and City View were annexed in this way. The result was the rapid extension of Edmonton's boundaries, with the last extension of the era being made in 1917 with the annexation of the Village of Calder. By 1914 the total area of the city was 40.8 square miles (105.7 square km) but the developed area was only 5.5 square miles (14.3 square km), representing 13.4 percent of the area of the city.

This article is extracted from John Gilpin, Responsible Enterprise: A History of Edmonton Real Estate & the Edmonton Real Estate Board. (Edmonton: Edmonton Real Estate Board, 1997). The Heritage Community Foundation and the Alberta Real Estate Foundation would like to thank John Gilpin and the REALTORS® Association of Edmonton for permission to reproduce this material.

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