Old Missoula

John Toole shares a big story – C. H. McLeod and the Missoula Mercantile

Missoula historian and prominent businessman, John H. Toole, wrote a fascinating 4-part series of articles for the Missoulian in 1983, dealing with Charles H. McLeod and the Missoula Mercantile. In these articles he gave us a glimpse of the organization that controlled a good deal of Missoula’s business community for well over half a century. As a contemporary of these times, John Toole was one of only a few who could lead us through the maze of personalities and circumstances that resulted in the Missoula Mercantile’s brilliant success. Though he may have been reluctant to address every aspect of these times, his tale reflects his unusual gifts while presenting a very intriguing story.

 

The McLeod Empire by John Toole

Special to the Missoulian

Recently I was having a bull session with a group of young businessmen in downtown Missoula. I was telling about C. H. McLeod and how he reigned over Missoula for 52 years. One of my companions asked:

“Who was C. H. McLeod?”

The question absolutely floored me. How could any businessman in Missoula ask such a question? Then it struck me. The years have slipped by and McLeod has been gone now since 1946. That powerful personality and that pervasive influence on the Missoula business community exist now only in the pages of postgraduate theses or in the files of old Missoulians. And even in these days you don’t find much – he never had his name out front and he ran his empire from a little office on the second floor of the building now occupied by The Bon.

I thought of my first encounter with him. I was very young and I was in the Merc (Missoula Mercantile Co.) store with my mother.

McLeod appeared at the head of the stairs. He was a big, ruddy-faced Scot with a bristling mustache and a full head of carefully combed white hair. He always dressed impeccably in a high-quality, blue, serge suit with white shirt and polished shoes.

He descended the stairs and at the bottom there were always people to greet him, to shake hands or just to chat. He was a jovial man and every kid got a handshake or a pat on the head. My mother said, “There’s Mr. McLeod. Let’s go see him. I want you to meet him.”

Then McLeod walked through the store. He might stop in the shoe department and withdraw a box of shoes from the shelf and inspect them carefully. At the hardware department he might stop at a new bicycle and test the steering.

At the crockery department he would hold a goblet to the light and critically inspect it for imperfections. Around him always were clerks, managers and townspeople. The procession was almost regal.

The Merc retail store was only the nucleus of a far-flung business empire in western Montana, the full extent of which was unknown even to the people of his time.

In retailing, McLeod had stores in Kalispell (the Kalispell Merc), Demersville, Ronan, St. Ignatius, Charlo, Hamilton, Darby, Victor, Arlee, Corvallis, and Hope, Idaho. He controlled stores in other small towns through his wholesaling and banking facilities. None of these stores bore the McLeod name or even the Missoula Merc name. They bore the name of the local storekeeper who ran the store.

But it was in wholesaling that McLeod excelled.

At wholesale he had an organization which sold groceries, clothing, hardware, plumbing fixtures and appliances, electrical supplies, structural and reinforcing steel, sporting goods, paint and building materials (except lumber), fencing, small construction equipment and furniture.

The range of his inventory was amazing. It contained such items as horseshoes, gold pans, harnesses, peavies, saddles and bridles, wedding gowns, whiffle trees, wagon tires, automotive supplies, draperies and “notions.”

Until almost the end of his life, McLeod paid all his employees with cash. Even after payroll deductions turned such a process into a nightmare, the practice continued. One reason for this was to enable him to reward diligent clerks with an extra $10 or $20 bill on payday. No worker knew what his fellow worker’s pay envelope contained and there was much peeking and bragging.

Unions never got far in their attempts to organize the Merc, but shortly after McLeod’s death the retail clerks threw a picket line around the retail store. McLeod’s son, Walter, organized the defense. A local creamery declined to cross the picket line to deliver milk to the retail store. The store ran out of milk and the situation was serious. Scuffles took place in the alley. Walter McLeod sent his managers out into the community and found a creamery which agreed to deliver milk come hell or high water. Hundreds of Missoula families were asked to switch their milk purchases from the errant creamery to the aggressive one. Most did.

After a fruitless six months, the retail clerks were pulled off the picket line. The McLeods had powerful muscles.

McLeod also was in the grain business on a large scale with a company called “Misco Feeds” and had 12 grain elevators scattered from Bozeman to Eureka.

The immense grain department had its headquarters on the south side of the Burlington Northern tracks near Lowell School. Misco Feeds had a logo and a well-known trade name, but only the knowledgeable knew that the word “Misco” was a contraction of “Missoula Mercantile Co.”

C. H. McLeod also had western Montana’s largest farm implement business, which was located on the ground floor of the present Elks Club building. A huge papier-mache white horse with red, flaring nostrils greeted you as you entered this place.

Then there was the Florence Hotel. There had been two previous Florence Hotels. The first two burned, and when the last was built in 1941 (the present Glacier Building), it was called “America’s Finest Small Hotel.” Indeed it was. The first fully air-conditioned building in Montana, it boasted a richly decorated, palm-bedecked lobby, a large banquet room and several smaller meeting rooms.

McLeod’s Scotch frugality showed when he simply dug a tunnel under Higgins Avenue and had the hotel boiler also heat the Merc across the street. The Florence became Missoula’s community center. It was named after Florence Hammond, the wife of A. B. Hammond.

C. H. had a quirk about wealth which to us today would seem strange. He didn’t believe in holding wealth in the form of property. He believed that it should be held in the form of cash. He lived in a time of stable currency and low property values; consequently, he rented an immense amount of floor space in Missoula. His retail furniture, toy, sporting goods, and farm equipment departments were in nondescript buildings. Some of his warehouses were rented.

He acquired considerable property through foreclosures arising from his investment-banking business. He came into ownership of large pieces of property on Highway 93 South at a time when the city stopped at Mount Avenue. He let his property go for taxes during the Depression!

With his penchant for cash, he sailed through the Depression in style, but he failed to foresee the tremendous land boom in western Montana which occurred after World War II.

His warehouses strung along north of the Burlington Northern tracks on North First, along the Bitterroot tracks between Alder and Pine, along East Front and on the south end of Pattee. All were unmarked and few had signs.

Helping McLeod run his businesses was a stable of very competent managers, some of whom were stockholders in the company. Most of his managers did well financially.

He had an in-house attorney named George Shepard who roamed western Montana. Some called him McLeod’s hatchet man, but this appellation doesn’t fit. Shepard was an agreeable, outgoing, kindly man. He took one trip too many and was killed in an auto accident.

L. E. Bunge was McLeod’s chief executive officer and financial supervisor. He looked cold and hard but he wasn’t.

Over the years, thousands of University of Montana students completed their education by working part time for the Merc. The boys swabbed the floors or ran the elevators; girls clerked or typed.

In addition to the Missoula area, McLeod entertained a keen interest in the Flathead country. He worked hard to promote a railroad between Missoula and Kalispell which would be routed either by way of the Swan River or from Polson up the west shore of Flathead Lake. He owned a ranch near Kalispell known as the Hubbart Cattle Co. He followed affairs on the Flathead Reservation closely and pushed hard to open the reservation to white settlement. His attitude toward the members of the Flathead tribe is interesting. In a letter to George Beckwith of the St. Ignatius store, McLeod wrote:

“The reservation is bound to improve rapidly and I think you can stimulate the half-breeds and Indians to much greater exertions which will be beneficial to your business and to them and their families. The more grain they grow, the more goods they can buy and the more comfortable they can be. This is what you should teach them. An education of that kind will aid you in doing an increased business and be a great benefit to the residents of the reservation.”

The Kalispell Mercantile Co. was housed in downtown Kalispell in a building similar to the design of the Missoula Mercantile. This retail store, managed for many years by H. C. Keith, always did a good business. McLeod felt the need for a bank in the Kalispell area and he bought the First National Bank of Kalispell. His Kalispell unit was one of the most self-contained operations he controlled. The lack of a railroad between the two cities and the difficulties involved with detouring around Flathead Lake over miserable roads made it so.

He also was interested in Kalispell politics. A letter has been found addressed to Keith, the manager of the Kalispell Mercantile Co. It reads approximately:

“Dear Harry, John Doe of your county is running for the legislature.

“I don’t think he’s on our side. I am enclosing a check for $400. Please see that he is defeated. Very truly yours, C. H. McLeod.”

In the McLeod era, zoning in Missoula was accomplished in the city by covenant; covenants covered the university district and other areas on the south side. Sometimes McLeod intervened personally.

He conceived the idea that no saloons should be allowed in the downtown district east of Higgins Avenue. He said there were too many churches there and there was the Carnegie Library (corner of Pine and Pattee), the Central School, and the Federal Building. Furthermore he lived in a house on the cite of the present City-County library.

He went to the City Council and forcibly presented his views. Needless to say, the council went along. Applicants for the establishment of saloons east of Higgins were told: “Mr. McLeod doesn’t want it.” And that settled the matter.

Even today, Missoula has very few bars east of Higgins in the central business district. The same rule applied east of Higgins south of the Clark Fork River.

McLeod also made many farm loans. Most were tied to his farm implement and grain departments. He had a great advantage over commercial banks in this area. He supplied farmers with farm equipment and seed grains. This gave him an additional source of profit not available to banks so he could keep his interest rates low and his terms generous. He was no skinflint.

Sometimes he made loans which had been declined by the local banks and which were not in any way connected with merchandising. He was known to finance bars and restaurants, contractors and loggers. He was successful in most of these ventures. He was successful because he was a keen judge of character, and because George Shepard, his eyes and ears, roamed the town and the countryside and reported to him in detail about the local economy, the people, governmental activity, Indian tribes, demographic trends, lumbering, railroads, weather – you name it. And McLeod had an army of salesmen covering every nook and cranny of western Montana. He also was successful because he was bold and had a wad of cash instantly available. And he was unregulated by government. No commercial bank could wheel and deal the way he did.

George Sutherland was a small contractor and farmer who lived near the Cold Springs School.

McLeod held a mortgage on his farm. George struggled through the Depression and finally got totally mired in the financial mud. One day he walked into McLeod’s office and handed him the keys to his house.

“Mr. McLeod,” he said, “I can’t make it. You might as well take over the place.”

C. H. handed the keys back, saying, “George, I don’t want your place. Now I want you to go back and go to work. Things are looking up in the country. Now I don’t want to see you back up here until you come in with enough money to pay the mortgage, including all the back interest.”

Sutherland went back to work. Eventually he paid off the McLeod mortgage and died a well-to-do man.

At the time, McLeod was western Montana’s only investment banker. But he was not basically a lender of money. The loans he made or the stock he purchased were usually connected with his merchandising. If a man wanted to start a general store in Charlo, for example, McLeod might make him a loan, taking his merchandise or his real estate for collateral, or he might buy stock in the store, perhaps a controlling interest. The latter is where he was a jump ahead of the local commercial banks. They lacked such flexibility.

And there was always a strict requirement attached to such financing. The budding merchant would be required to purchase all his merchandise from the wholesale departments of the Missoula Mercantile Co. Many small merchants in western Montana prospered from these arrangements.

Many western Montanans grew up under the McLeod shadow. He supplied the discipline so necessary to their lives; he commanded their respect and possibly, at times, he drew upon their fears.

But over all this there was a cloud. The cloud was the muttering to be heard everywhere about the McLeod “stranglehold,” the “Merc monopoly” and the McLeod “dominance.” That is why the McLeod name and the Missoula Mercantile seldom appeared out front.

 

End of Part 1 – from the Sunday Missoulian 9/25/1983.

 

Hammond, McLeod made a powerful alliance

Andrew B. Hammond was a formidable man. He made a fortune in Missoula, first in merchandising, later in lumbering.

He came to Montana in 1867 by steamboat up the Missouri River, almost losing his scalp to the Blackfeet on the way, while he was away from the boat cutting firewood for the steamer’s boilers.

He was broke when he reached Fort Benton and went to hunting buffalo. His finances restored, he headed for the gold fields to the west, but they didn’t seem attractive, so in 1870 he came to Missoula and hired out to the store of Bonner and Welch as a handyman.[1]

Shortly after he arrived, he was made a partner in the store, with E. L. Bonner (after whom the town of Bonner is named) and R. A. Eddy (a Missoula pioneer after whom Eddy Avenue is named). Welch retired and the firm took a new name; Eddy, Hammond and Co.

Hammond’s career then began to bloom. Eddy, Hammond and Co. put in branches in the Bitterroot, Frenchtown and even had a branch in Old Beartown, the wild mining camp near Garnet. The company went into the cattle business in the Flathead and constructed the first section of the building occupied today by The Bon. By 1880, Hammond had branched out into lumber and the staff had to be enlarged.

He had always had a high opinion of the stout, diligent, frugal, Scotch Canadians from his native New Brunswick.

Upon hearing that a young Canadian from near his home named Charles Herbert McLeod wanted to come west, Hammond sent a wire: “Come on out!”

So the 21-year-old McLeod, armed with only a grade-school education, left his New Brunswick home in 1880 and headed for Missoula. He came on the Union Pacific to Corinne, Utah, then took a stagecoach to Missoula. On the afternoon of March 29, 1880, he walked into the two-story building on the corner of Front and Higgins which would be his business home for the next 60 years.

He was shown a bare countertop and told that it would be his bed. His job was to sweep the floors, hoist 100-pound bags of grain into waiting wagons, split the wood, keep the stoves going, care for the lights and, in his spare time, wait on customers.

He performed jobs like these for the next three or four years. He had no working hours. He simply worked from dawn until after dark.

In his entire lifetime with the Merc he never took a vacation.

By 1885, Hammond had spread his wings into lumber and railroading. Bonner spent most of his time on buying and financial trips and Eddy had retired. McLeod was placed in charge of the Missoula store as general manager. He was given an opportunity to plow some of his wages back into the purchase of stock. He now had a stake in the success of the Missoula Mercantile Co. His five years in Montana had brought him a long way.

In 1883, the Northern Pacific Railroad arrived and the economy of Missoula took off. Hammond had secured a contract to furnish railroad ties from The Dalles, Ore., to Miles City, an immense undertaking. The burgeoning mines in Butte were taking 40,000 board feet per day for mine timbers. Hammond had sawmills strung all along the Clark Fork River, and in 1884, he constructed the big mill at Bonner, a mill that is operating today. It is one of the oldest continuously operating sawmills in the country.

He formed a new corporation to handle his timber operations and called it the Montana Improvement Company. Eddy, Hammond and Co. changed its name to the Missoula Mercantile Co.

In 1889, Montana held its first Constitutional Convention, as preparation for becoming the 41^st state in the union. John R. Toole[2] was a delegate to this convention from Deer Lodge County. On Aug. 11, 1889, he wrote his wife: “As of tonight, Missoula is the temporary capital of Montana.” Toole was actively promoting his own city of Anaconda for temporary capital, so that it would have a leg up in the coming election which would choose the permanent capital.

Missoula, however, had a powerful lobby, composed of Hammond and McLeod, operating in the 1889 convention. But these two men knew that in future balloting they could not hold their position. The thrust of the Marcus Daly forces, representing Anaconda, and the W. A. Clark forces, representing Helena, could not be stopped in the convention, but Hammond and McLeod had garnered an imposing number of votes, which were pledged to Missoula for capital. They used these votes to get what they wanted.

They wanted the University of Montana and they obtained a pledge from the Helena and Anaconda supporters to give them the university if they would agree to pull out of the capital fight. Happily for Missoula, their strategy worked.

This shows the quality of business leadership existing in Missoula in its early days. We have no such business leadership since these men passed from the scene.

They came home and occupied themselves in building a new street railway (horse-drawn), in completing the city water system, in acquiring the land to be donated to the university, and in platting the residential area now known as the university district.

In the census of 1890, Butte had a population of 10,723; Great Falls boasted 3,979, and Missoula was 3,426. Billings scarcely existed; it had 836. Missoula was growing fast. And such a knot of population attracted the attention of Copper King Marcus Daly. He decided to move in, but he encountered two of the most thorny community leaders in Montana.

Hammond had decided that he needed a financial instrument, so he started moving in on the First National Montana Bank. This bank, founded by C. P. Higgin in 1873, was and is the oldest bank in Montana. In the struggle for power, Hammond and McLeod ended up in control. They named S. T. Hauser of Helena, the territorial governor, to the board of directors and sold him a substantial block of stock. But wrangling between Higgins and Hammond continued; Hauser became impatient and sold his stock to Daly. Now the great copper king not only had his nose under the Hammond-McLeod tent, he had his whole corporate body inside.

Hammond was highly irritated by these doings. Then, to make matters worse, Hauser’s bank, the First National of Helena, went broke as the result of a run in the Panic of 1893. This run precipitated a run on the First National Montana Bank in Missoula.

Hammond determinedly scraped together all the money he could muster and kept the Missoula bank solvent, but he wrote a blistering letter to Hauser and accused him of not knowing how to run a bank. Furthermore, he had to gaze into the eyes of Marcus Daly at monthly director’s meetings, a man who, by this time, had made up his mind to drive both Hammond and McLeod out of Montana. Then Daly launched an attack from another flank.

He got one of his sycophants, a merchant from Butte named D. J. Hennessy, to put in a department store just one block north of the Missoula Mercantile, at the intersection of Main and Higgins. The avowed aim of the Hennessy store was to put the Missoula Mercantile Co. retail store out of business. Daly canceled all his orders for mine timbers, which he had been buying from Hammond, and built his own sawmill at Hamilton. This was a blow. Daly’s mines took 40,000 board feet of lumber per day.

1894 was the year of the great plebiscite to determine the permanent capital of Montana. Daly was determined that his city of Anaconda be made the capital. He approached McLeod on the matter. He didn’t get far. The Missoula Mercantile was not about to assist the man who was trying to put them out of business. Daly even offered a truce. McLeod didn’t bite. He tried a threat, saying that he would “make grass grow on Higgins Avenue if McLeod did not support Anaconda. McLeod still didn’t bite. So the great battle started.

Hammond and McLeod fought for Helena with vigor. McLeod’s wife formed the “Women’s Helena-for-Capitol Club.” McLeod hauled booze and other goodies to the Bitterroot to influence voters.

McLeod and Hammond lost this battle. And they found themselves in a difficult position. Daly was furious because they had supported Helena and the Helena committee was irritated because they had lost Missoula. The state as a whole supported Helena by a plurality of 2,700 votes, but Missoula went for Anaconda. The power of Marcus Daly was all-encompassing.

Daly kept up the pressure. He announced his intention to start a new bank in Missoula and resigned from the board of First National. He stated that he would build a railroad to Missoula via Phillipsburg to service a sampling works and a new smelter. The Hammond-McLeod press commented sourly.

“It is more likely that the permanent terminus of the road will remain at Hamilton and a rival city to Missoula will be built in the Bitterroot.” Then further:

“What has Anaconda ever done for Missoula anyway? If Christ came to Anaconda, he would be compelled to eat, sleep, drink and pray with Mr. Marcus Daly.”

 

End of Part 2 – 9/26/1983

 

McLeod answered critics with confidence, contempt

Copper king Marcus Daly, an enemy of both C. H. McLeod and A. B. Hammond, knew that the Missoula Merc – the center of McLeod’s empire – was vulnerable on the charge of monopoly.

Daly played on this charge to the hilt. He worked on it through his employees, his newspapers and his rumor mills and it elicited this remarkable statement from Hammond:

“Business is all right, with us at least, and doubtless for that reason, the howl of monopoly is raised. Now what is a monopoly? Any concern that will come into this country and build railroads, hotels, sawmills, bank buildings, brick and granite city blocks, and the grandest mercantile establishment, while others in town, instead of investing the earnings which have come back to them through the energy of others, stand back and howl ‘monopoly,’ it is likely that such a concern will monopolize the trade of the country.”

“That is the true state of affairs here, and we shall not count the day lost when we see other fellows tearing down shacks rented for immoral purposes and erecting in their stead magnificent buildings, opera houses, newspaper offices, water works, and participating in other public enterprises. Let them do these things; we have set the example; then they can join the procession without fear of being run over. With such tangible features in existence, there can be no such thing as monopoly. It is loafers and kickers who create monopolies and then try to down them.

“Now let me offer a few suggestions. Let people conduct their businesses, politics and newspapers in the interest of honest government. Let them sink their personal prejudices and work to a man for the interests of Missoula. Let them make earnest efforts in behalf of this fair city; save the University of Montana, Fort Missoula, the Flathead railroad and other contemplated enterprises. In that way, they will best show their loyalty and sincerity.

“As for ourselves, we will pursue the same course in the future as we have pursued in the past. The different organizations with which we are associated are too well organized and our interests are too large to be run out by the mouthings of a few passing birds whose stock in trade consists of spleen and malice, which, when expressed, only rebound to the harm of the circulator. We are here to stay, and while we are ever ready to join with the people in all public enterprises, we are also prepared, if others do not join us, to go it alone.”

These remarks of bold defiance by a Missoula businessman are unique in the history of the town. The words, uttered by a man under great pressure, ring with self-confidence, contempt for lesser men and a complete determination to build the community. The day is long gone when a businessman would have the courage to express himself in this way. And even if he did, he probably would not find a receptive audience.

And the day is long gone when powerful leaders such as Hammond and McLeod could determine the destinies of communities.

About this time, Missoula decided to build a new Higgins Avenue bridge. (We seem to be cursed with rebuilding or repairing the Higgins Avenue bridge. In the summer of 1983, we were at it again. A repair job this time took about a year!)

Hammond and McLeod had planned a southern terminus for the bridge which would eliminate the dogleg curve at the south end, but the Merc was still feuding with the Higgins family over the First National Montana Bank.

Arthur Higgins[3] persuaded the county commissioners to hold an election regarding the southern terminus. Higgins wanted the terminus to line up with South Higgins Avenue, thus deviating from the axis of North Higgins. Hammond and McLeod lost this election, thus making permanent a curve in the town’s main street.

The Merc press lamented:

“We came, we saw and they conquered.”

“We have met the enemy and we are theirs.”

“Say, where is South Higgins anyway?”

In 1894, Hammond abruptly left Missoula permanently. He said he didn’t like the weather here. The fact was, however, that Hammond had become a major capitalist on the Pacific coast with lumber, railroads and ocean freighting. His largest lumber freighter was named the “Missoula.” Once when I was visiting California with my grandfather, I was taken to the docks and shown the “Missoula.” She was loading lumber to be carried across the Pacific to that mysterious island, Japan.

McLeod was left with a Missoula Mercantile Co. in deep financial trouble. The nation was being swept by the Depression of 1893. The mining industry was plagued by the chronically-depressed price of silver. Daly’s Hennessy store in downtown Missoula continued to skim off Merc profits. The struggles over the First National Montana Bank and the state capital had wounded the business.

Hammond was a Democrat but he flitted in and out of the Republican party when it suited him. His flittings into the Republican party did not please that stalwart Democrat, Daly, and one day Hammond awakened to find himself under violent attack from the Missoulian.

This paper had always been mildly Republican, but a new editor, one Harrison Spaulding, hurled epithets at Hammond, calling him a “bully and a monopolist.” McLeod and Hammond got their heads together and canceled all Missoula Mercantile advertising. The advertising was given to the Missoula Gazette, a Republican paper.

But what to do about the Missoulian, now apparently a Democratic paper? The Missoulian sniped at the Missoula Mercantile until 1894, at which time a mysterious transaction took place through the money and the good offices of the First National Bank, after which the Mercantile controlled the Missoulian.

But the Missoulian, by 1894, was losing money. One detects the heavy hand of Daly in this apparent attempt to use the Missoulian against the Mercantile until it went into the loss column, then turn it over to his enemies. Hammond and McLeod now had their captive newspaper, but it was losing money hand over fist.

Most vexing of all was the behavior of the Merc stockholders. R. A. Eddy, Mrs. Marcus Daly, and Mrs. Lenita Spotswood owned substantial blocks of stock. All were completely uncooperative. They would not sell their stock and would not consent to any major reorganization. The ability to sell the stock was very important to McLeod. He wanted it to fund a stock purchase plan for his employees.

The Merc’s profits plunged from 1894 to 1900 as a result of these problems. McLeod’s letters to Hammond became acrimonious. Finally, they decided to sell the business.

But who would buy a company with such a bewildering array of activities, particularly one losing money? No one. He even accosted his competitor, D. J. Hennessy, but Hennessy couldn’t swing it.

Then, in 1900, some bright rays of light appeared at the end of the tunnel. Marcus Daly died. Hennessy’s moved out (to reappear at Southgate Mall 78 years later!)

The money-losing Missoulian was sold. The First National Montana Bank was sold.

McLeod’s efforts to keep Fort Missoula open were successful. The Flathead Reservation was opened to white settlement. W. A. Clark built a new street railway. There was talk of many railroads, one up the Blackfoot and down the Swan River to Kalispell, still another over Lolo Pass, another from Kalispell to Dixon. Finally, a new transcontinental railroad, the Milwaukee, was built through Missoula. McLeod’s letters took on a buoyant tone. He increased his annual salary to $7,500.

During good times and bad, McLeod labored for the Republican party at a time when all the big businessmen of Montana were Democrats. This could be dangerous. Daly, for example, had threatened to make grass grow in the streets of Missoula if McLeod failed to support certain Democratic candidates. McLeod replied that his Republicanism was a matter of principle and that he would walk out of town with nothing but the clothes on his back before he would support a Democrat.

But by 1908, things were once again looking rosy for the Mercantile. McLeod had served notice on the stockholders that he would quit if they simply sat by and collected dividends without ever bothering to visit Missoula and permit him a free hand to operate as he saw fit. This ultimatum brought Hammond bouncing back to Missoula, stockholder problems were temporarily patched up and McLeod embarked on a span of productive years.

What was the key to the success of the Missoula Mercantile Co.? First of all, it was the character and personality of the boss, McLeod, and how he made use of those personal qualities. If anything drove this man, it was concern about the quality of the merchandise sold by the Merc. If a customer received an item which was defective, he or she received either an immediate refund or an item in its place which had no defect.

He was bold in depending on the abilities of subordinates. He never got dangerously in debt, and when the worst depression in U. S. history hit, he was prepared with a good cash balance.

He possessed no ego and always kept his own name and his company’s name out of the public eye. The only permanent markers of the McLeod name in Missoula are a small park in the southwest part of town which was donated to the city by Walter McLeod, a small bronze plaque in the former Florence Hotel arranged for by the friends of C. H., and a street in the university district.

He was generous with his employees but not overly so. He realized that the welfare of his customers, his borrowers and his employees was synonymous with his own welfare.

But most important of all, the final business decisions were made in Missoula and they were made by him. He had no “home office” or “regional headquarters” to which he had to report and he had no examiners or auditors breathing down his neck. Except for the influence of Hammond, his principal stockholder, he ran the show. And, as the years went by, he found that he could even wrap Hammond around his finger.

 

End of Part 3 – 9/27/1983.

 

McLeod’s passing ended a chapter of state’s history

In 1917, the Great Western Sugar Co. came to Missoula and erected a sugar factory. Sugar beets were becoming a significant crop in western Montana.

C. H. McLeod went to company officials and informed them that their sugar in western Montana must be marketed through his wholesale outlet. The officials of this large company in Denver raised their eyebrows at this ultimatum and ignored him. The Missoula Mercantile thereupon declined to buy any Great Western sugar and made arrangements in Butte and Anaconda for the stores there to take the same action. Battle lines were drawn.

Great Western Sugar did not take orders from small-town wholesale merchants. They operated until 1919, but the loss of local outlets was just enough to turn their operation here from a profit situation to a loss and in that year they abandoned their new plant with its white smokestack. Farmers in the area were somewhat provoked; Great Western offered them better prices than they could get elsewhere. They all owed a great deal to McLeod, however, for favors granted or money loaned to them, so he weathered the storm.

In 1928 the U and I Sugar Co. reopened the plant and relations were better. U and I went along with McLeod.

But by 1934 there were a few cracks in the McLeod monolith. American Crystal bought the sugar plant in that year and chain stores and franchises had invaded western Montana. McLeod couldn’t hold the fort. American Crystal operated here in peace until 1960. The sugar plant caused tremendous air pollution, and most people were glad to see it go.

The University of Montana had always wanted to honor McLeod for his service to the university and to the community. Finally, in 1938, they decided to present to him an honorary doctor of laws degree. The English department was put to work on an elaborate tribute. It was transcribed to a beautiful rare parchment and a calligrapher was retained to make it complete. It was encased in an expensive frame.

The university officials felt that they should call on McLeod and tell him their plans. A small delegation came to his office armed with the tribute and its elaborate frame. The delegation included President George Finlay Simmons and Registrar J. B. Speer. Dr. Simmons opened the conversation:

“Mr. McLeod, the university, its faculty, students and the Board of Education have decided to honor you with the honorary degree at the commencement exercises to be held in June. Here is the wording to be read at the ceremonies.”

McLeod took the frame and read the inscription, raising his eyebrows slightly. He then said:

“I’m much obliged to you fellows for wanting to do this. But I’ve never been in a college classroom in my life. I’m not entitled to this and I won’t accept it. If I ever go to college I’ll start at the bottom, not at the top. Now you fellows look around and find somebody else to give this to. I don’t want it.”

The university officials were thunderstruck. They retired in confusion and J. B. Speer, holding the framed degree before him, said to President Simmons; “Now what do I do with this thing?”

McLeod was a totally rational man. He possessed no ego. He would commit no act which could in any way damage the image of the Missoula Mercantile Co. He was offered the presidency of the Chamber of Commerce many times but he always declined, saying:

“The man who carries the flag gets shot.”

He had no use for chambers of commerce, business trade organizations, or directorships of railroads or utilities, though he was offered these honors many times. He was a director of the First National Montana Bank until A. B. Hammond, McLeod’s partner, sold his control of that institution, at which time he promptly resigned.

His living standards were modest. For many years he lived in an attractive but small house located on the site where the City-County Library is now located. Hammond had built this home. Later he moved to a somewhat more pretentious house on the corner of Gerald and Keith avenues.

In his later years, he employed a driver and handyman named Henri Parent of the well-known Parent family in Frenchtown. He enjoyed his weekends at Seeley Lake where he had a cluster of small, log buildings. He entertained there frequently, but the parties were very circumspect.

While McLeod was well off financially when he died, he accumulated no great fortune. He paid himself a salary which reflected exactly what he thought he was worth to his company. He did draw substantial dividends, but that was not because he approved of a generous dividend. The dividends declared were the result of pressure from powerful stockholders such as Mrs. Marcus Daly, Mrs. Lenita Spottswood (the daughter of E. L. Bonner) and Hammond, who retained substantial ownership in the Merc.

In November 1943, a nattily-dressed reporter for the Wall Street Journal arrived in Missoula. He asked where he could find McLeod and presented himself at McLeod’s office. He began:

“Mr. McLeod, the style of operation of the Missoula Mercantile Co. has come to the attention of the Journal staff. We consider it one of the most unique merchandising companies in the United States. We would like to make a study of your operation and give you a story on the front page concerning the unusual nature of your business.”

McLeod was unimpressed and replied:

“What good would that do me?”

“Well, Mr. McLeod, the Journal is the most prestigious business newspaper in the world. Most businesses would be immensely pleased to be featured on our front page.”

McLeod said, “Well, that may be, but I can’t see what good that kind of publicity would do for this business or its customers. Nobody reads your newspaper around here.”

“Well, Mr. McLeod, I must say that you are the only businessman I ever met who would turn down a front page article in the Wall Street Journal.”

“Well,” McLeod said, “There’s always a first for everything. I’m not interested. Maybe some of the other outfits around here would want it. Why don’t you go see them?”

The Journal reporter picked up his hat and turned to leave, saying, “Mr. McLeod, I’m utterly dumbfounded.”
The reporter left and McLeod shook his head and chuckled.

McLeod died Sept. 6, 1947.[4] The funeral was held at the Episcopal Church.

The church was soon filled and the crowd spilled out on the churchyard and boulevard. I was standing against the west wall to one side of the pews, looking out over the congregation.

The organ rang out solemnly. The body of McLeod lay in the closed casket under the lectern.

Suddenly a slight stir rippled through the audience and all eyes turned to the rear of the church. The great men of the Anaconda Copper Mining Co., were filing in.

First came Con Kelley and behind him Dan Kelly, Jim Carrigan, Ed McGone, Bill Rad, Harold Hoover, Jim Dickey and in the rear hobbled ancient William Scallon, who had been president of Anaconda at the turn of the century. They proceeded to a pew near the front which had been reserved for them. All knelt, prayed and crossed themselves and were seated.

Irish all, Catholics all, Democrats all – some called them the Irish Mafia. They fascinated me – their poise, their coldness, their self-assurance. FDR had called them “economic royalists” and indeed there was an air of royalty about them, though the trappings were absent.

Con Kelley’s head rose above the crowd and his penetrating eyes fixed on the minister as he listened intently to the service. Kelley’s grandiloquent presence dominated the entire church and the eyes of the congregation darted constantly in his direction.

Fortune Magazine had said that the Anaconda Co. was unique among the great corporations of America in that a chair in Anaconda’s executive suite was, above all things, tied to race, religion and political party.

They had come to bury a man who was one of their own kind, yet not quite of their own kind. McLeod was a merchant and banker and was a Scotch-Protestant Republican. He never hesitated to lock horns with these great men of Butte. The Irish Mafia tolerated him but had declined to do battle with him after McLeod and Hammond had singed the hair of their patron saint, Marcus Daly.

The services were concluded. The Anaconda men filed out, nodding graciously to the crowd. Their black, chauffeured limousines pulled away from the curb, and with gunning motors, the Irish Mafia headed for the highway which would take them back to Butte. The people of Missoula drifted away to their homes.

None were aware that this funeral would mark the beginning of cosmic change in Montana. In a few years, the Missoula Mercantile would be gone, and the Anaconda Copper Mining Co. would be gone. Powerful businessmen would no longer run the state. The centers of power would be fractured and gravitate toward government.

How to evaluate this era in terms of the public weal? One falls easily into the trap of the conventional wisdom which tells us that these men were terrible; they were ruthless, and that their companies created a colonial economy and stultified Montana’s progress, all for the sake of their own private gain.

Perhaps that is what they did, but I remember little of that. In my memory is the ineffable aura of power and grandeur and of McLeod coming down the stairs in the Missoula Mercantile, joshing with the townspeople and benevolently patting the little kids on the head.

He was a symbol to be respected and, perhaps feared, but he gave the people of Missoula a firm rudder in their lives.

You can make the value judgements.

 

End of Part 4 – September 28, 1983.

 

Charles Herbert McLeod married Clara L. Beckwith in Missoula on November 3, 1886, according to his obituary from The Daily Missoulian, September 6, 1946. She was also a native of New Brunswick, Canada, and was a niece of A. B. Hammond. They were parents of two children, Walter Herbert born in 1887, and Clara, born in 1892. From a family of 16, Mrs. McLeod was known for her work in her church and in charities. She died in Missoula in 1935.

9/25/1983

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9/26/1983

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9/27/1983

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9/28/1983

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