Blue Skies and Boiler Rooms: Buying and Selling Securities in Canada, 1870-1940

H. Graham Rawlinson is co-author of The Canadian 100: The 100 Most
Influential Canadians of the 20th Century.

Based upon broad and evidently persistent research, historian
Christopher Armstrong’s new book concludes that regulation of the sale
of securities was always a half-hearted affair in Canada. By the late
19th century, as stock exchanges became established and cases of
trusting investors being fleeced by crooked salesmen became commonplace,
the exchanges themselves took tentative steps toward policing their
profession. These steps were mostly a failure, however, and as
securities moved into the mainstream of investment options in the 1910s
and 1920s, provin-cial and federal governments took turns at trying to
corral the bad guys and protect the public.

Despite anti-fraud statutes, amendments to the Criminal Code,
registration provisions, and intermittent enforcement efforts, the
independent investor remained, up to the 1940s, mostly at the mercy of
some impressively sophisticated stock scams. Why? The answer is implicit
rather than explicit in the narrative, but it is a classically Canadian
allegory: business and government agreed that business should be allowed
to mind its own affairs.

This is a story worth telling, and it is mostly well told. At times,
teeming statistics tracking trading volumes, index fluctuations, and
profits and losses start to overflow the page and threaten to drown the
reader; perhaps fewer numbers might have made the story more compelling.
Still, there is a highly readable narrative throughout the
book—complete with smooth talkers, con artists, and gullible
widows—that bends, but does not break, under the weight of the vast
amount of research. A companion volume, bringing the story up to 1980,
is eagerly awaited.