EATON, TIMOTHY, merchant; b. March 1834 in Clogher, near Ballymena (Northern Ireland), fourth son of John Eaton, a tenant farmer, and Margaret Craig; m. 28 May 1862 Margaret Wilson Beattie, and they had five sons and three daughters; d. 31 Jan. 1907 in Toronto.
Descended from Scottish bondsmen taken to Ulster before 1626, Timothy Eaton, according to family research, was born two months after the decease of his father, who died on 30 Jan. 1834. He was raised on a farm outside Ballymena, one of Ulster’s major linen markets and a regional centre for the export of agricultural produce. Attendance at the local National School was followed by a brief period at an academy in Ballymena, from which Timothy was withdrawn in 1847 on the master’s advice. Whether his removal was solely due to lack of academic interest or the result of problems arising from the Great Famine is unclear. Thus, at the age of 13, Eaton was apprenticed to a Mr Smith, related by marriage to the Craig side of the family, who owned a general store in nearby Portglenone. Smith was strict and Eaton found some aspects of his employment onerous enough to wish the agreement terminated. Rather than lose the £100 bond posted at the commencement of his service, his mother persuaded him to continue. Her death in 1848 undoubtedly reinforced the sturdy self-reliance that had been fostered by both farm life and a Presbyterian unbringing. Upon completing his apprenticeship in 1852, he worked briefly for another Portglenone merchant, employment that allowed him to acquire the funds necessary for a move to the New World.
Emigration had increasingly been the resort of Ulster Presbyterians anxious to better conditions damaged by the British move towards free trade in place of colonial trade preferences. In 1854, following the path taken earlier by three of his sisters and his brothers Robert and James, Eaton travelled to the Georgetown area of Upper Canada, where a maternal aunt and her husband had settled in 1833. He found employment as a junior bookkeeping clerk at a small general store in Glen Williams, just outside Georgetown.
From 1853 to 1856 Upper Canada experienced a period of prosperity, the result of demands arising from the Crimean War and the construction of the Grand Trunk Railway. Motivated by the possibility of greater local development and personal success farther west, Eaton and his brothers moved in the winter of 1855–56 in order to start up business in the Huron Tract, an area still undergoing settlement. Robert established himself in St Marys, Blanshard Township’s largest centre; Timothy and James opened a small general store in the nearby hamlet of Kirkton. In July 1856 James became postmaster there and received the contract for the mail service between Kirkton and St Marys. Timothy, the active partner in J. and T. Eaton, had overall responsibility for the daily business of the store and post office, while James involved himself in other business ventures. The store’s merchandise, initially dry goods and groceries, was purchased on long-term credit from Adam Hope* of London, then affiliated with Peter* and Isaac* Buchanan of Hamilton. In 1860, perhaps in an attempt to use up produce received in exchange for his wares, Timothy Eaton added baked goods to his grocery line.
The economic depression of the late 1850s severely confined trade and commerce in Canada. Wholesalers, among them the Buchanans, tried to reduce losses by requiring firm security, in the form of property mortgages or life-insurance policies, on strictly limited quantities of goods. The Eaton business seems to have weathered the depression better than most and mortgage accommodation granted by the Buchanans was rapidly repaid. With possibilities for further growth restricted by the Eatons’ rural location and the establishment of another store in Kirkton, Timothy moved in the winter of 1860–61 to St Marys, where he established a bakery, but local competition shortly compelled its dissolution.
In May 1861 Eaton, again in partnership with his brother James, opened a general store in St Marys. Though he advertised his intention to sell all goods for cash, he continued to advance credit to his customers. Despite long-accepted myths, Timothy Eaton was not the first merchant to introduce cash sales to Canadian shoppers, for even before the depression this concept was gaining acceptance. Many North American urban merchants had found that selling for cash allowed them to offer cheaper prices and thereby increase their volume of sales. Widespread adoption of this practice, however, was rendered impossible in much of rural Canada by the severe shortage of specie.
During the period 1860–67, one of agricultural prosperity in western Upper Canada, the Eaton business expanded and raised its ranking with Hope and Isaac Buchanan to the top 10 per cent of their more than 250 customers. Just as Toronto wholesalers used the Grand Trunk to penetrate much of the western part of the province in search of markets, Timothy Eaton extended his own commercial horizons by establishing an early connection with John Macdonald*, a leading Toronto wholesaler and a fellow Methodist. (Eaton had converted to Methodism in 1858.) However, any hopes for expansion in St Marys were restricted by limited growth in a centre served by numerous general stores, and in December 1868 the Eaton brothers’ partnership was dissolved. Leaving James in possession of the store, Timothy moved with his family to Toronto, where, early in 1869, he took the route traditionally followed by retailers and established a wholesale business. Little evidence exists regarding this venture, which he set up with an investment of $5,000 at 8½ Front Street West. It seems likely, however, that its out-of-the-way location and a generally unstable business climate, including extremely stiff competition, caused its swift termination.
Rejecting the possibility of opening a grocery store because of his dislike of dealing with “Licquors,” Eaton returned to a familiar retail line, dry goods. In December 1869 he paid $6,500 to James Jennings and John Brandon, fellow worshippers at Elm Street Methodist Church, for their dry-goods business in rented premises at 178 Yonge Street, known as Britannia House. All goods would be sold at fixed prices for cash only, an excellent concept for a merchant whose custom would be derived from strangers of unknown financial circumstances. Although located near Queen Street, well away from the fashionable retail district of King Street, Eaton was now established in the line that would serve as the advance guard of the retail industry in the changes it was undergoing. Furthermore, by directing his appeal to the growing ranks of working men and women who received regular cash wages, he tapped a developing market that would form his base for future growth. Increasing urbanization and industrialization, a burgeoning population, and rising living standards ultimately effected a democratization of luxury. Demand increased for goods formerly purchased only by a middle-class or wealthy clientele at retail stores such as those in Toronto of Robert Walker or William Allan Murray.
Eaton initially purchased most of his merchandise on long-term credit from John Macdonald. However, convinced that the prices charged by Toronto wholesalers were excessive, in the early 1870s he made the first of many trips to Great Britain, where he located cheaper sources of supply. Despite early difficulties, annual sales at the Eaton store rose from $25,416 in 1870 to $154,978 in 1880. Since expansion was obstructed by Robert Simpson*’s store, which moved to 174–76 Yonge Street in 1881, and by Knox’s Church on Queen Street West, Eaton acted instead to fulfil an earlier wish, and in 1881 he opened a wholesale house at 42 Scott Street. Guided by a strong sense of what was practical and profitable, he soon realized that the wholesale industry was experiencing diminishing returns and that the retail trade offered greater opportunity for gain, from increased volume and rapid turnovers of stock rather than mark-up, as had earlier been the case. He therefore brought his wholesale business to a swift end in the summer of 1883.
In order to achieve his retail goals, Eaton had purchased property in November 1882 at 190–96 Yonge Street from Charles Page for $41,000. By demolishing the stores there, he was able to erect an imposing, three-storey building featuring many architectural innovations, such as electric lighting, large skylights that allowed light to penetrate all floors, and a fire-sprinkler system. Since he did not wish to frighten away his working-class customers, no attempt was made to imitate the luxurious décor of some American stores. The new store opened on 22 Aug. 1883, but, in an indication of his competition with Simpson, Eaton kept his old store at 178 Yonge locked and vacant for the duration of his lease, more than six months, so that Simpson could not move in and take advantage of the Eaton connection.
Eaton’s store underwent almost continuous expansion from 1884 through the purchase of properties on Yonge, Queen, Albert, James, Orde, and Louisa streets and on Trinity Square. By 1907 the business covered 22 acres of prime downtown land. Operating a vastly expanded establishment demanded a larger market. Many new services were therefore introduced: waiting-rooms, restaurants, parcel checks, free bus service from train and boat stations, and shoe repair – all designed to prevent customers from patronizing other stores. The initiation in 1884 of a mail-order service using catalogues extended the concept of cash sales for fixed prices and gave Canadians across the country access to merchandise not otherwise available. As in the store, goods found unsatisfactory could be exchanged or the money was refunded. In Toronto special sales drew people to the store during seasons formerly accepted as slow, January, February, and August. Attractions such as animated exhibitions, after-hours musical programs, fashion shows, and the Santa Claus parade introduced in 1905 kept the Eaton name to the fore. As the store grew in size so too did the company’s expenditure on advertising, until by 1900 the Toronto Daily Star was carrying a full-page advertisement each day. This was a far cry from the two-inch insertion common in the 1870s, but the stress as then was on the Eaton guarantee of quality, value, and service.
Having thus established his reputation, Eaton firmly repudiated attempts by family members to trade on the Eaton name. In 1888 his brother James, who had moved to Toronto in 1882, advertised his clothing store as a branch of Timothy’s establishment. James’s son John Weldon took similar liberties in 1895 when he opened a full-line department store. Timothy publicly dissociated himself from both ventures, which were established on shaky foundations, achieved only limited success, and soon failed.
To the ever-increasing variety of dry goods sold in his store Eaton added new product lines, among them sporting goods, musical instruments, drugs, groceries, and furniture. By the early 1890s his early dry-goods store had been transformed into a new entity, the department store, examples of which also developed in other major Canadian cities [see Henry Morgan*; Joseph-Narcisse Dupuis*]. The official incorporation of T. Eaton Company Limited on 21 April 1891, with a capitalization of $500,000, resulted in few changes in the firm’s procedures. In line with its president’s belief in financial privacy, the company continued as a family-owned institution and no financial reports were made public. Although some senior personnel were allowed to acquire an interest in the company, more than 80 per cent of the shares were held by family members at all times. In April 1905 capitalization was increased to $1,000,000.
Eaton’s enormous influence on merchandising trends in the 1890s, notably through his willingness to venture into constant expansion and innovation, set him apart from all his Toronto competitors. In an attempt to secure ever better prices, he was quick to take advantage of the desire among manufacturers to procure stable markets and a reduction in their costs by selling direct to retailers. Manufacturers’ agents seeking large orders regularly besieged Eaton’s buying office in Toronto, as well as those opened in London (1892) and Paris (1898). Backed by the power of volume and sure financial security, the company could persuade them to meet its terms. Eaton even got some manufacturers to produce goods marked with the Eatonia brand.
The alacrity with which other retailers adopted the practice of direct buying was in large measure responsible for the decline in the wholesale sector of the dry-goods industry, and the 1890s saw the failure of several large businesses, among them those established by Adam Hope and William McMaster*. Toronto wholesalers, however, successfully dissuaded some Canadian manufacturers from making direct sales. To enable him to acquire the Canadian material necessary for his growing production of a wide range of ready-to-wear clothes for men and women, Eaton was compelled in 1892 to establish a separate firm, Wilson and Company. The entrance into manufacturing in 1890, a logical extension of the production of custom-made garments by his store’s millinery work-room, was but another attempt to reduce costs and prices. Eaton’s establishment of the Paint, Oil and Chemical Company of Toronto Limited in 1897 and the T. Eaton Drug Company in 1906 allowed for further diversification. Additional savings were achieved through Eaton’s farms at Georgetown and Islington (Toronto), which supplied dairy products for the store and feed for its delivery horses.
Growth in population and an expanding retail sector in Winnipeg convinced Eaton of the need to protect his market in western Canada, where his mail-order catalogue had become an institution. Despite his initial misgivings about managing a store so far from Toronto, the company’s first branch store opened in Winnipeg in the summer of 1905. The decision proved a wise one for, although the five-storey building was located away from the city’s retail centre, it achieved such success as to require immediate expansion.
In an environment where bankruptcy was common, Eaton’s success was due in large measure to his close attention to costing and accounting and the early departmentalization of his store to maximize responsibility and accountability. With each department functioning independently, nothing was left to chance for the profit test simplified the process of decision-making. As the store grew in size and its operation became more complex, its future would not be jeopardized by conservative complacency and extravagant waste. Despite his published statements to the contrary, Eaton, by urging his buyers to secure the best possible terms from suppliers, continued to take advantage of the traditional long-term credit system when purchasing merchandise. Cash sales and rapid turnovers of stock, exceeding the store average of four times a year in many departments, then ensured excellent fiscal fluidity.
Eaton’s vivid memories of his early working life gave him a sympathetic attitude towards his employees. A pioneer in the early closing movement, in 1876 he began a reduction of working hours from the 12-hour day then customary. By January 1904 the store closed daily at 5:00 p.m. and beginning in 1886 employees enjoyed a half holiday on Saturdays during the summer months. Since the company’s statistics clearly demonstrated that shorter hours would effect no appreciable decline in sales volume, Eaton could reduce overhead costs while promoting his reputation as a benevolent employer. The implementation of a primitive medical plan in the 1890s further enhanced this image. Although Eaton strongly opposed trade unions, and he faced strikes on different occasions in his departments, it seems likely that the growth of these organizations during the 1880s and the expressed concern of the provincial government about working conditions also influenced company policy.
During Eaton’s business career, the number of employees rose from four in 1869 to more than 7,000 in 1907. His considerable ability to manage this vast sales and administrative staff, many of whom were unskilled women entering the workforce for the first time, was the result of his willingness to delegate authority. In common with many of his contemporaries, such as John Macdonald, Eaton initially recruited members of his family in the management of the store. His eldest son, Edward Young, began his career at the age of 17 in 1888; he was joined in 1893 by his brother John Craig*. However, like other employees, they were required to work their way up. Both inherited the Eaton flair for business and it was largely at Edward’s urging that many technological changes were introduced into the store’s operations. John was primarily responsible for the establishment of the Winnipeg store, having persuaded his father of the need for a western outlet. Edward’s early death in 1900 compelled Timothy to remain as president until his own death in 1907, at which time John assumed the burden. Eaton also hired professional managers and, by encouraging their initiative, he benefited from the implementation of ideas that increased both efficiency and productivity. At their urging, for instance, notice was taken of changes introduced in large American stores.
Because of Eaton’s novel sales techniques and aggressive expansion, his store, and others like it, became the focus of widespread hostility. Indeed, department stores on both sides of the Atlantic drew the wrath of many small retail merchants. In Canada complaints also emanated from the pharmaceutical industry, the Patrons of Industry [see George Weston Wrigley], rural merchants, and wholesalers. The strong lobbying for a special tax on department stores undertaken by the Association of Retail Merchants, founded in Toronto in April 1897, and the complaints lodged before Toronto’s municipal Court of Revision in 1895 and 1897 regarding evasion of existing taxes by the Eaton company, resulted in an increase in its assessment each time. These actions also drew attention to a commercial grievance, the personalty tax on stock-in-trade, which merchants had long denounced, especially since they already carried the burden of customs duties and taxes on land and buildings. The legislation that resulted from the investigation into municipal taxation by the Ontario assessment commission in 1900 abolished the personalty tax but subjected department stores to a special tax similar to one implemented in Prussia.
Buttressed by a personality of great independence, Eaton deplored the idea of government intervention in business and, given his enormous volume of imported merchandise, heartily resented the National Policy tariff introduced in 1879 [see Sir Samuel Leonard Tilley*]. He believed that success naturally accompanied industry and efficiency and in 1883 saw no reason for the government “to impose upon the working classes of Canada” merely to encourage expansion in the manufacturing industry. Though never openly identified as a Liberal supporter, he was known to be a great admirer of Sir Wilfrid Laurier*. In 1899 he acted with other Toronto businessmen, among them George Albertus Cox* and Walter Edward Hart Massey, to create a second Toronto paper committed to the Liberal party, by financing the takeover of the Evening Star. Members of the group received shares in exchange for several large payments, but little return was expected on this investment. Since Eaton was wholly occupied in the operation of his store, he seldom participated in other commercial activities, though he was elected a director of the Dominion Bank in 1899.
Eaton’s social beliefs, which reflected his business philosophies, and his religious faith played a role in his philanthropy. (Compared with those of Macdonald, the Masseys, and other leading Methodist businessmen, Eaton’s givings were limited in range.) He was guided by the optimistic and practical maxims of the day regarding hard work, thrift, and punctuality; he had sympathy only for those in genuine need. Ailing employees, Christian organizations overburdened with debt, among them the Salvation Army and the Young Men’s Christian Association, and victims of a fire near Ottawa in 1897 all had reason to be grateful for his generosity. In 1905, at the request of Joseph Wesley Flavelle*, Eaton pledged to help build a new general hospital in Toronto.
In converting to Methodism at age 24, Eaton had followed a path already taken by his brothers Robert and James. Perhaps he also felt that Methodism, with its emphasis upon the principle that God helps those who help themselves, afforded a more positive doctrine for life in Canada than did Presbyterianism, with its Calvinistic stress on predestination. For Eaton, God through the saving grace of Jesus Christ was a real presence. This belief was a sustaining force when he and Maggie suffered the loss, in infancy, of two sons and a daughter during their early years in Toronto and the tragic death of their son Edward in 1900. From 1869 Eaton was a regular worshipper at Elm Street Church. In 1887, in his capacity as an elder, he became involved with others in establishing a new church in the Bloor–Yonge area, Western Methodist (later Trinity), which he and his family formally joined two years later.
An ardent enthusiast of evangelical religion, Eaton enjoyed attending revival meetings when visiting preachers, as he wrote to James in 1874, attempted to wake “up all the old crochety & stiff dead members” in the city. His faith led him privately in 1897 to oppose the introduction of Sunday streetcars since he was convinced that this would produce a city no longer fit to be called Toronto the Good. Although he expected his buyers to abide by his own strict Sabbatarian principles when on business, no such constraints were placed on their private lives. He firmly believed that a person exposed to the proper Christian behaviour of others could be persuaded to improve. Hence he opposed the “Soup and Bread” operations of the Salvation Army in Toronto. “Persons who fall under your control in the Shelter,” he lectured Commissioner Herbert Henry Booth in 1894, “are surrounded by Christian people and you get acquainted with them, obtain an influence over them, and ultimately lead them to Christ in this way; not so by distributing promiscuously to ‘Dead-beats’ and ‘tramps’ on the Street. . . . I like best to deal personally man to man; know your man and help him all you can.” Though equally impatient with those within the Methodist community who did not share his evangelical drive, Eaton reputedly remarked that, as he grew older, he came to the conclusion that he could not judge everyone by his own standards. That may have been the case, but he continued nevertheless to try to exert his influence in those realms, spiritual and commercial, where he wielded power.
By the turn of the century Toronto’s retail sector was vastly different from that which had existed earlier. The city’s growth and the introduction of streetcar service on Yonge Street in 1861 had been responsible for the gradual movement of retail activity from King to Yonge. Wholly aggressive in outlook, retailers now operated in an environment of highly impersonal competitive trading. Timothy Eaton, and others like him, by taking advantage of market forces. had effected an overall change in the industry. The sheer weight of manufacturing output and the pressure of population growth and consequent demand created retail needs that could not be met by traditional shopkeepers. Eaton’s experience compelled him to recognize that the merchant who wished to survive had to change with the times. He himself thrived on the competition that forced the elimination of many small retailers. As just one player in such a market, he served as a vital link between the producing and consuming ends of the economy. This role is amply reflected in his company’s sales volume. It rose to $53,367,000 by 1914, vastly outpacing the $14,081,451 of the Robert Simpson Company, which had continued to cater primarily to the middle class.
By the mid 1890s financial success allowed the Eatons outwardly to adopt the comfortable life-style of other wealthy Torontonians. However, they continued to maintain their former, simple ways and eschewed the social vices of cards, dancing, drinking, and smoking. Their large residence at the corner of Spadina Road and Lowther Avenue, to which they moved in 1888, allowed them to walk to Western Church, and thus to conform to the Sabbatarian principles of the head of the family, who refused to use his horse and carriage on Sunday. The summers spent at a lake-front property in the Muskoka area allowed Timothy to enjoy the company of his grandchildren. As in the past, the store and his involvement with the church absorbed by far the major portion of his life. By nature abrupt, gruff, and outspoken, although sentimental and kind where his family was concerned, he had little time for or patience with the superficial niceties of social intercourse. Consequently, the family demonstrated little interest in participating in Toronto’s active social scene.
Timothy Eaton spent his last years in a wheelchair because of a series of accidents at the turn of the century. He died suddenly from pneumonia in January 1907 at the age of 72, and his passing stunned Toronto’s commercial community. He left an estate worth $5,250,000, the result, it was pointed out in obituaries, of his operations in the Toronto retail trade and of “his enlightened faith in printer’s ink.” He had come a long way from the time when he assured John Macdonald that his assets were “a wife, five children and seven dollars.”
The main source for this study is the T. Eaton records, which were deposited in 1988 at the AO, where they are now identified as F 229. Other sources are noted in the footnotes and “Note on sources” in the author’s Timothy Eaton and the rise of his department store (Toronto, 1990).