IF YOU WANT TO BE POOR…


[An Excerpt from Flim Flam: Canada’s Greatest Frauds, Scams, and Con Artists, Bourrie, Mark. Dundurn.]

 

The Viola MacMillan mineral gallery at the Canadian Museum of Nature in Ottawa is one of those new – style museum displays that drive people bananas. It’s set up so that people don’t linger. The audio – video equipment is often broken, so many visitors don’t get to see snippets of the National Film Board movie about Viola’s life. Photos are not labelled. Fat security guards whisper into walkie – talkies and try not to make eye contact with the public. There’s virtually no explanation about the minerals themselves. Some are displayed by colour: blue crystals, green crystals. For the serious mineralogist, the display is an exercise in frustration; for the casual tourist, it’s a display of pretty rocks.

The MacMillan Gallery takes up a tiny portion of the museum’s second floor; the rest of the wing is devoted to a fake Nova Scotia beach, a fake mine, and a fake cave that has been so worn by children’s play that pieces of foam rubber are exposed. Yet the MacMillan Gallery is worth seeing, especially at a time of day when few people are around. There are incredible crystals, beautiful cut gem, and carved semi – precious stones. There are also remarkable specimens of gold and silver ore: gold crystals, silver wire, nuggets of gold the size of a child’s fist, a hunk of silver the size of small loaf of bread. Even without decent explanations of the minerals, it’s obvious that they must be rare. If things that beautiful were common, everyone would have a chunk in their homes, and people would send crystals instead of flowers. Part of the gallery is devoted to prospecting, complete with a tent and camping gear, geologists ’ equipment, and the stuff that Viola would have used on her frequent trips to the subarctic wilderness. Viola MacMillan was, above all, a prospector.

The gallery cost Viola a cool $ 1.25 million. It was money well spent. As a mineral gallery, it, despite the museum’s blunders, is a showcase of one of the best collections in the country. As a shrine to Viola and as a glorification of prospecting, it’s a first – rate piece of propaganda. One word, however, is missing from the exhibit: Windfall, the name of the scandal that was the single black mark on Viola’s life. It was a scandal that took her years to live down, yet unlike so many other people caught up in greed and scammery, she did, in fact, come back from her big fall.

Viola MacMillan was born Violet Rita Huggard in the Muskoka, Ontario, hamlet of Windermere on April 23, 1903. Today, Windermere is the cottage country for the elite of Toronto, but in those days, it was a tough place for a family of settlers to make a living. Farming in that part of the province produces little but rocks, and for a family with fifteen children, life was especially hard. Viola was the thirteenth in the brood, but by the time she was in grade school, she was the leader of her siblings. A photo of her family, taken when Viola was a child, shows a clutch of impoverished children and two parents approaching late middle age.

She never got to high school. Three of her brothers enlisted in the army during World War I, and Viola had to quit primary school when she was 12 to look after the rest of the Huggard brood and do farm chores. Viola always regretted that she had been pulled out of school. She educated herself, staying up into the early hours of the morning to read. In 1914, the family’s house burned down and the team of horses died. Viola’s life had become grist for a country and western song.

She made it through those war years and went back to school when her brothers came home. It took only three months of studies and tests for her to get a high school diploma. In 1919, one of Viola’s brothers, a silver miner in Cobalt, smuggled her underground with a nudge and a wink from his foreman. It seems impossible that she could have passed for a hard rock miner at five feet tall, even when wearing coveralls and with her face smeared with dirt. In the mine, Viola entered a wonderland of riches. The impoverished young woman saw the veins of silver in the mine walls. She heard the story of how the Cobalt ore body was discovered by a blacksmith who threw a hammer at a fox. She met miners who prowled the woods during their time off and who returned home with big, valuable chunks of native silver.

Viola was hooked. When she got home, she sent letters to every province asking for copies of their mining laws. Then she applied for, and got, a prospector’s license. While working in a law office in Windsor, Ontario, she met the perfect man for her, George MacMillan. He was a railway clerk and would – be prospector who encouraged Viola to pursue her dream of finding gold. She took George home to meet her father, who gave his approval to their engagement by saying, “If you think you can handle her, it’s all right by me.” By the time they married in 1923, Viola was spending summers in the bush and winters at business college. In 1930, she quit office work to go gold hunting full time. She put the idea to George in her typical way: “You can come with me, or you can stay here.”

For most people, 1930 was not a good time to quit a job. The Depression was settling in. For people living in towns and cities, life was hard enough, but for a young couple, survival in a tent deep in the wilderness was tenuous. Viola learned how to live off the land, surviving the first summer on the wild leeks that grew around her campsite. Every morning, she got up and lit the campfire, and at night, she cooked meals on the hot sand below the embers. She also built outdoor privies out of logs laid out across holes in the ground, and washed the couple’s clothes on rocks in the water. All the while, she was busy honing her skills as a geologist.

The winters were just as hard as the summers. When the outcrops of the Canadian Shield were covered with snow, she and George returned to Windsor to flog Christmas cards door – to – door and work at other odd jobs. Their work paid off. Within two years, Viola had found her first gold mine and was on her way to becoming rich.

The fabulous strike had come almost by accident. Viola had picked up a hitchhiker on a road in northeastern Ontario and had talked the young man into coming to work for her and George. He was not made of the same stern stuff as the Macmillan’s, and developed a near – fatal case of pneumonia. For a few days, she nursed the young man in her tent, then took him to a hospital in Kirkland Lake.

While she sat in the waiting room, people nearby talked about a farmer who had ploughed up a chunk of gold outside of the town. Viola left, drove back to get George, and by dawn the next morning, the couple had begun staking two thousand acres. In the middle of that claim was the Hallnor gold vein, which eventually yielded one million ounces of gold. The MacMillans sold the claim to Noranda, and set out to find another gold deposit. In the same region, they discovered and developed Canadian Arrow Mines, a gold strike that was even more profitable than Hallnor because it was much cheaper to mine. By the end of the Depression, the MacMillans were so rich that they never had to work again. Like most dynamic people, however, they couldn’t stop. With the business skills, she had learned in the 1920s and the money she had earned in the Depression, Viola went into business for herself. In 1945, she founded Viola – MacMines and got control of the Kam – Kotia base metal mine in the Timmins region. She raised the money to develop it, then set to work to mine the ViolaMac silver – lead ore bodies in Sandon, British Columbia. She developed budgets, wrote prospecti, and clawed the money out of bankers and venture capitalists. Prospectors knew that Viola was more skilled than most of them, while investors knew that Viola had a faultless track record as a mine developer.

During World War II, Viola helped the country expand its mineral production to fuel the Allied war machine. She lobbied the federal government, especially de facto prime minister C.D. Howe, to support the Canadian mining industry through the price slump that was bound to occur as wartime production wound down. At the same time, she convinced Howe to support the mine development industry through the coming bad years. Viola’s campaign made Canada the prospecting centre of the world and set the stage for the huge increase in Canadian mining in the 1950s, which, in turn, turned Toronto from a financial backwater into a major investment market.

In 1943, George MacMillan was elected president of the Prospectors and Developers Association; Viola became secretary, and did most of the work. After two years, she was elected to the top job and held it for twenty – two years. The prospectors ’ group had been a small organization of geologists who got together once a year for a booze – soaked convention. Viola whipped it into a professional development group for engineers, geologists, investors, and miners. She increased its membership fortyfold, from a group of a hundred geologists to that of four thousand, with regional chapters across the country, and often said its success was the greatest achievement of her life. At the association’s conventions, which were still boozy affairs at the Royal York Hotel in Toronto, the band played “ Let Me Call You Sweetheart ” as Viola took the stage.

Many of the prospectors resented Viola, both for the fact that she was a woman and for her success both in the field and on Bay Street. No one successfully challenged her for the presidency of the prospectors ’ association, although some of its members believed she used the group to give her projects respectability. Viola was tough enough to face down any challengers. She was perfect for the rough world of mining, and she was in love with it. To understand Viola, you must realize that the thrill of finding mines and making money was much more important than the satisfaction of having a fat bank account.

By the mid – 1950s, the MacMillans had amassed a fortune of at least $ 10 million in cash and mining stock. Summers were still spent in the bush at prospective mine sites. Winters were a social whirl in Miami, where Viola entertained the cream of the mining industry and the elite of the Canadian snowbirds wintering in Florida. She spent lavishly on her parties, and on mink coats, cars, and jewellery. Back at home, though, Viola had drawers filled with blue jeans and plaid shirts, the clothes she was more comfortable with.

During the 1957 prospectors ’ association convention, Maclean’s magazine writer Christine McCall tried to keep up with Viola for four days. It was no easy task. It had been three years since Viola had spent much time in the bush, but she was constantly hurrying to meetings in Toronto’s financial district. At least she wasn’t on one of her monthly trips to the mines she owned.

Viola’s life in Toronto was nothing if not opulent. She had a mansion on Oriole Parkway and a penthouse apartment downtown. The penthouse was a picture of 1950s gaudiness. Everything in it was pink: the broadloom, the ice buckets, the piano, even the napkins on the table were pink. Floor – to – ceiling mirrors added to the effect. At the same time, there was something cold and impersonal about the place. Viola told McCall she kept it that way so she could easily walk away from it; she was perhaps one of those people who never believed that success would last. From her early days as a gold hunter, Viola had stayed on top of Canadian industry’s need for rare and exotic metals. After the war, when the country needed uranium, she raised the money to open the Lake Cinch uranium mine in Beaverlodge, deep in the wilderness of northern Saskatchewan. She also sank mines for lithium, titanium, and other metals needed for hightech products. Her friends and her enemies called her “the Queen Bee.”

Through it all, George was there to provide a safe emotional haven for the driven woman. He was a slow – talking, supportive man who was proud of his wife. In a time when women still had a long way to go to reach social equality, George liked to tell stories of ways in which Viola had overcome what one book of the time called “the handicap of her sex.”

In Quebec, which was still dominated by the Roman Catholic Church, she had an especially rough time. She was prospecting in the Val d’Or area near the Quebec – Ontario border when she ran headlong into the legal system of a province that, at the time, hadn’t given women the vote. George picks up the story:

“As everybody knows, Viola likes to look after her own business. We were both out staking claims and had recorded some in each name. Viola was smart enough to find a buyer for her share. It was a big deal — she was going to get fifteen or twenty thousand dollars.

She took the buyer to the records office, but the clerk refused to transfer her claims, because, as he explained, under Quebec law, everything she had belonged to her husband. Mad as she was, all Viola could do was go fetch me to sign over her share. “That was really the only time I had her over a barrel.”

By the early 1960s, Viola had sold her interests in her larger mines. She was becoming too old to traipse around the wilderness. Rather than find new mines, she hired prospectors, set up companies, and peddled mining claims. Likely, she didn’t need the money. She just hated to be inactive.

Fortunately, the Las Vegas – style atmosphere of the Toronto Stock Exchange was virtually at her penthouse doorstep. Millions of dollars in mining capital had been raised by Viola and by other promoters, simply on the planting of a rumor or two. Viola was likely no worse than most of her colleagues, but seldom has a penny stock done so well and fallen so hard as the one that would soon make Viola infamous.

In the late winter of 1964, Texas Gulf Sulphur geologists working near Timmins found a copper – silverzinc ore body estimated to be worth $ 2 billion. Near the strike were claims registered to one of Viola’s companies, Windfall Oils and Mines. For several months, the stock languished at thirty cents. Then, in early July, rumours began swirling on Bay Street that the ore body reached under Windfall’s property. On the first day of the Windfall rush, speculators bought $ 1 million worth of the stock. Brokerage offices and boiler – room operations pushed the stock to investors. Windfall became the hottest stock on a bull market, and anyone who had inside information on it stood to make a fortune.

Both George and Viola stayed away from newspaper reporters during the first days of the Windfall run – up. Windfall issued a statement on July 7 saying its officials were encouraged by drilling samples from the site, and that more cores were being cut. That statement sent Windfall’s stock above one dollar, but stock exchange officials wanted more information. On Friday, July 10, they sent a telegram to Windfall, asking for a better explanation of the drilling results. Windfall issued a press release nearly identical to the July 7 statement.

Regulators at the Ontario Securities Commission awoke from their slumber long enough to ask for a meeting with the MacMillans and stock exchange officials on July 14. It was a nasty session. Viola demanded to know why she was being pressured to release results from unfinished test drilling. Securities regulators stopped short of accusing her of manipulating the stock by floating the rumours of a Windfall bonanza.

Still, there was something to those accusations. In June, Viola had driven up to Timmins to see the Windfall drilling. Later, she would deny planting a kiss on one of the drillers and saying, “Thanks for finding me a gold mine,” but she had, indeed, acted as though the drill samples were valuable.

Viola had some of the rock loaded into the trunk of her Cadillac. She and George made the eight – hour drive back to Toronto, and carried those drill cores in their car until the securities commission took them away from her in the middle of July. During the time that the cores were in the car, a selected few investors were allowed to see them. If they had known what they were looking at, they might have realized the rock was worthless.

Despite Viola’s fury, the regulators put the drill cores under guard and extracted a promise from her that the assay results would be made public as soon as they were back from the lab. During the last two weeks of July, the stock roared up to $ 5.70. One of George MacMillan’s best – known lines was delivered in a bar to a Globe and Mail editor: “If you want to be poor all your life, don’t buy Windfall.”

Still, there were rumours on Bay Street. Things were happening with Windfall that were not reported in the financial papers. At Queen’s Park, government officials seemed to know the truth about Windfall before it collapsed, and secretly ordered an investigation of the company. Whether that news was leaked to selected investors may never be known, but there was an unloading of the stock before the big crash.

When the stock slumped by about a dollar, bogus telegrams went out to six of the country’s largest newspapers. Supposedly, they were from George MacMillan, saying the assay lab results were in, and they showed the Windfall drill cores were full of metals. More information would be released soon, the messages said. Only one newspaper fell for the hoax, and there was never proof that the telegrams came from anyone connected with the MacMillans.

Finally, on the last Thursday night of July 1964, Windfall had to go public with the fact that the drill cores were worthless. That day, the stock had risen by $ 1.05, but when the exchange opened Friday, Windfall fell from $ 4.80 a share to 80 cents, the biggest one – day percentage drop in the history of the Toronto Stock Exchange, to that time. The $ 3.11 drop cost speculators nearly $ 10 million. One in six shares traded on the Toronto exchange that day was Windfall. When the stock collapsed, it took most of the penny gold stocks with it.

In Ontario, the first Monday in August is a holiday. Through the long weekend, the MacMillans were in agony. Viola was publicly raging, telling The Globe and Mail that the fiasco was the fault of the regulators.

“Imagine them trying to tell a mining company how to run its business,” she fumed to a Globe reporter. Stock exchange officials fired back by demanding to know if anyone connected with Windfall had made money on the speculation. Securities commission executives talked darkly of investigations and criminal charges.

For three days, Viola stormed around the pink penthouse. Meanwhile, outside Toronto, events were taking place that would have more historical impact. U.S. President Lyndon Johnson had gone on television to accuse North Vietnam of attacking American ships in international waters in the Gulf of Tonkin. That incident would spark the escalation of the Vietnam War from a minor Cold War skirmish to a full – fledged bloodletting.

The opening of the stock exchange brought more bad news. The stock continued its plunge, and the Toronto Stock Exchange launched an investigation of trading in another of Viola’s stocks

Consolidated Arrow. This was trouble for Viola, since she had used Consolidated Arrow to manipulate the price of Windfall. Consolidated Arrow had been buying and selling blocks of Windfall shares through July to skim off profits and artificially push up Windfall prices. This was illegal. And, to make matters much worse for Viola, a special new stock exchange computer had tracked all of the trades in Windfall.

The next year, George and Viola were charged with fraud.

It took four years to be cleared of those charges. Viola, though, was in deeper trouble over her trades with Consolidated Arrow. Investigators had read the results from their new computer, and they were bad for Viola. She was hip – deep in stock manipulation. She had traded Consolidated Arrow through fifty – two accounts with six different brokerage firms. Finally, Viola had to give up her presidency of the prospector’s association when she was hauled off to jail on a nine – month sentence in 1966. She spent sixty – six days in a women’s institution in Brampton, Ontario, where she taught fellow inmates secretarial and life skills. Few of them were as tough as Viola.

A Royal Commission inquiry into the Windfall affair in 1965 concluded that the MacMillans had taken the worthless samples from the northern Ontario drill site specifically to foster rumours that they were valuable. The commission said that there was no proof that the MacMillans started the rumours swirling around Windfall, but “their conduct was such as to heighten the element of suspense and promote a belief in these rumours.”

Friends and supporters argue convincingly that Viola went to jail for something that every insider was doing on the Toronto exchange at the time. Windfall had been an embarrassment for securities regulators and the exchange, but none of them had paid for their inability to do their jobs. Instead, they succeeded in shifting all of the blame to Viola. At least George was there when she got out.

In a National Film Board movie made about Viola years later, she hinted that Ontario government officials were in on the Windfall collapse and profited from it. “But it’s okay now,” Viola said. “They cleaned up a lot of things at the Toronto Stock Exchange. I think everyone should go to jail for one or two nights to see what it’s all about. But I was glad when it was time to go to bed, to get away from all the characters that were in there.”

It became clear to Viola that everything that she had accomplished, all the mines she had found and built, all the towns that had risen from the bush, all the jobs and fortunes that had been created, would be lost in the shadow of the scandal. She spent the rest of her life trying to expunge its stain.

In 1978, she applied for, and received, a pardon from the federal government. That same year, George died.

Like Harry Oakes, Viola MacMillan has a niche in the Canadian Mining Hall of Fame, which inducted her in 1991. The citation in the Hall of Fame notes “her driving commitment to transforming the Prospectors and Developers Association from a small group of less than one hundred to a vital organization of more than four thousand.”

She had never lost the mining bug. Her last trip to an ore field was in 1989, when she was eighty – six years old. She planned another trip to Timmins in 1993 to visit a gold prospect, but death interfered with her plans.

Probably Viola’s most lasting legacy is the Pinch Collection, a mineral hoard assembled over a span of fifty years by mineralogist William Pinch of Rochester, New York. The Canadian Museum of Nature picked up the collection for the bargain price of $ 5 million in 1989. The largest single donation to the acquisition fund came from Viola: $ 1.25 million. The museum had the good grace to name the gallery after her, and the theme of the display is Viola’s life. The word “Windfall” does not appear anywhere, and Pinch is barely mentioned. Most visitors believe the collection was assembled by Viola during her prospecting days.

Her philanthropy, which included donations of Group of Seven art pieces to Rideau Hall and other kindnesses to official Ottawa, did not go unnoticed or unrewarded. In 1993, a few months before her death, she was presented with the Order of Canada.

In those last years, Viola stayed in the pink penthouse and led a more tranquil life. In her 80s, she commuted between a Bradford – area farm and her Toronto home. Her one vice was shopping. When she died, at the age of 90, her friends found great quantities of clothes, some of them bought in the 1920s. The Salvation Army was deluged with hundreds of pairs of top – quality size – five shoes. The estate was locked up until 1998, when sixty beneficiaries began receiving bequests. About half of the recipients are friends of hers, who received between $ 1,000 and $ 25,000, but the bulk of her money went to some thirty charities, universities, and hospitals. Meanwhile, members of her family got nothing.

She always denied she’d done anything wrong in her life, and once said: “There are so many great Canadians, and I consider myself one of them.”

A bit of bad luck has dogged the Prospectors and Developers Association since its most famous president was packed off to jail. In 1997, for example, it chose Bre – X’s John Felderhof as its Prospector of the Year. A few hours later, the process of exposing the Busang gold field as a hoax began when Bre – X’s executives received a call at their Toronto hotel from the independent investigators in Indonesia, asking where the gold field was. A few weeks later, Felderhof had the grace to return the award.

In 1998, the selection committee decided to honour Mark Rebagliati, a thirty – four – year – old veteran of prospecting in British Columbia. During his career as a geologist, no scandal had come near him. But the day after the association’s board had settled on Rebagliati, his son, Ross, tested positive for marijuana at the Nagano Olympics and seemed about to lose his gold medal in snowboarding. Only when the snowboarder won his gold medal back after appealing to the good senses of the International Olympic Committee was Mark Rebagliati able to pick up his award. The Prospectors and Developers Association hunkered down, waiting and wondering what would happen to the next year’s winner.

 

[An Excerpt from Flim Flam: Canada’s Greatest Frauds, Scams, and Con Artists, Bourrie, Mark. Dundurn. Many thanks to author Mark Bourrie. If you haven’t read this book, get it now on Kindle, fantastic work.]

 


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