ARSENAULT & GAUDET LTD.

 

My grandfather, Emmanuel Gaudet, is the ‘Gaudet’ in the company known as Arsenault & Gaudet Ltd. People of my vintage and earlier knew it as one of Wellington’s most prominent landmarks and a thriving business in its heyday. I have my grandfather’s copy of the agreement that formed the joint stock company in 1906. I’ve decided to incorporate it into this blog, although it makes for labourious reading.

The agreement was drafted by Albert C. Saunders of Summerside. My research indicates that he was a four-time Mayor of Summerside and sixteenth Premier of Prince Edward Island; serving from 1927 to 1930 when he was appointed to the provincial Supreme Court. A smart man he may have been, but punctuation was not his strong suit!

Here’s a bit of context. Prior to the formation of Arsenault & Gaudet Ltd. two stores operated in Wellington: one owned by Fidèle T. Arsenault, the other by Joseph-Félix Arsenault. Fidèle T., nephew of Senator Joseph-Octave Arsenault, managed his uncle’s store from the time it first opened in 1874 when the railway arrived in Wellington. Shortly after Joseph-Octave’s son, Joseph-Félix, entered the family business in 1897, Fidèle T. crossed the street and opened a store of his own.

In 1900, Joseph-Félix Arsenault opened the magnificent three-and-one-half storey structure pictured below. A healthy gathering of village citizenry appears in the photo, and lumber strewn about indicates the store is barely finished. An advertisement in the November 23, 1899 issue of the Pioneer states:

“In a short time we will be moving our large stock of general merchandise into one of the largest, if not the largest, and best finished country stores of this Island. We have no hesitation in saying that when our goods will be displayed in their respective departments in the new store it will please the eyes and tastes of the most fastidious.”

Unfortunately, the business soon fell on hard times. It was acquired in 1904 by James A. Sharp of Summerside, probably for the amount owing on the mortgage. James’ son, Herbert (pictured below), a shareholder in the new company, was an 1890 graduate of Mount Allison University.

 

 

Emmanuel Gaudet (pictured below), a native of Miscouche and graduate of the Charlottetown Business College, worked as a clerk and bookkeeper in the store when it was owned by Joseph-Félix Arsenault. He stayed on in that role when the Sharps acquired the business.

 

 

In 1906, Fidèle T. Arsenault (pictured below at his granddaughter's wedding), his son, Edmond, and the Sharps decided to merge their two mercantile businesses, and to take in Emmanuel Gaudet as a fifth partner. According to the agreement Fidèle T. and his son owned 60 shares, or one-half of the new company, and the Sharps owned 55 shares between them; Gaudet owned the remaining 5 shares. The new company was valued at $12,000, incidentally, the same amount it cost to build the Mont-Carmel Catholic Church. In today’s dollars, the business was valued at approximately $300,000.

 

 

The agreement indicates the Sharps were interested in getting their money out of the business as quickly as possible. The full value of their stock was to be determined according to a formula, and anything over $6,000 was to be secured by promissory notes from the new company to James A. Sharp at 6% annual interest, to be paid in full within one year. The same rule applied to stock owned by Fidèle T. Arsenault; anything worth over $6,000 was to be secured by a promissory note, payable within eighteen months.

The agreement includes a few other interesting details. For example, stock in both stores was valued at 80% of the invoice price, except for grain, flour, coal, cheese, corn meal, egg cases, and goods on order, which were valued at 100% of invoice.

James a. Sharp's shop furniture was to be priced separately and acquired by the new company "at a price to be agreed on between the parties." His safe and Simpsons Computing Scales were not included in the agreement.

 

Interestingly, dress-making supplies and equipment were exempted from the agreement. I suspect this was because they were owned by someone other than the partners, possibly my grandmother, Mannie (Cormier) Gaudet. Also, the new partners agreed that they’d buy fire insurance from Herbert S. Sharp, but only if he offered it at a competitive price!

The final clause in the agreement specifies that neither Fidèle T. Arsenault nor James A. Sharp can offer merchandise at a reduced price between the date of the agreement and the date of the granting of letters patent. In other words, they agreed that neither could liquidate his stock for a quick buck before the new company was up and running! Just in case ...

The picture below may have been taken at the time of the official opening of the new business in 1907.  It shows the Wellington Cornet Band and dignitaries gathered for the occasion..

 

Dated 29th Octob 1906

 

 

Fidele T. Arsenault

Emmanuel F. Gaudet

James A. Sharp

Herbert S. Sharp

and

Edmund Arsenault

 

Agreement respecting formation

of Joint Stock Company and

Sale of Stocks in Trades

 

This agreement made and entered into this twenty ninth day of October AD 1906 between Fidèle T. Arsenault of Wellington in Prince County in Prince Edward Island Merchant Emmanuel F. Gaudet of the same place Clerk Edmund Arsenault of the same place Clerk Herbert S. Sharp of Summerside in Prince County aforesaid Accountant and James A. Sharp of Summerside aforesaid Merchant trader whereas the said mentioned parties have agreed with each the other of them respectively to form a Joint Stock Company under the name and style of Arsenault and Gaudet Limited under the Joint Stock Companies Act of this Province with a paid up capital of twelve Thousand dollars divided into One Hundred and twenty Shares of One Hundred dollars each for the purpose of carrying on a general mercantile business at Wellington aforesaid with all the parties hereto as directors of the said proposed Company. And whereas the said James A. Sharp is at present engaged in a mercantile business at Wellington aforesaid and has a large stock in trade of the value of Six Thousand dollars and upwards and whereas Fidèle T. Arsenault is at present engaged in a general mercantile business at Wellington aforesaid and has a large stock in trade of the value of Six Thousand dollars and upwards and whereas the said James A. Sharp has agreed with the said Fidèle T. Arsenault, Emmanuel F. Gaudet, Edmund Arsenault and Herbert S. Sharp to sell and assign his said stock in trade to them on the terms hereinafter mentioned and the said Fidèle T. Arsenault, Emmanuel F. Gaudet, Edmund Arsenault and Herbert S. Sharp have agreed with the said James A. Sharp to purchase his said stock in trade on the terms hereinafter mentioned and whereas the said Fidèle T. Arsenault has agreed with the said Emmanuel F. Gaudet, Edmund Arsenault and Herbert S. Sharp and James A. Sharp to transfer all his stock in trade to the said proposed Company on the terms hereinafter appearing and whereas it is understood and agreed between the parties hereto that the stock in trade so sold by the said James A. Sharp and purchased by the remaining parties hereto and the stock in trade so to be transferred by the said Fidèle T. Arsenault shall form the paid up Capital of the Company and the Capital Stock of the said proposed Company shall be held in the following proportions by the parties hereto namely the said Fidèle T. Arsenault fifty six shares and the said Edmund Arsenault four shares the said James A. Sharp thirty five shares the said Herbert S. Sharp twenty shares and Emmanuel F. Gaudet five shares now this agreement witnesseth that in consideration of the premises the said parties hereto doth hereby covenant each with the other of them in manner following. The said James A. Sharp will sell and assign to the said Fidèle T. Arsenault Edmund Arsenault Emmanuel F. Gaudet and Herbert S. Sharp and the said Fidèle T. Arsenault, Edmund Arsenault, Emmanuel F. Gaudet and Herbert S. Sharp will purchase the said stock in trade for the sums or prices following namely Eighty percent of the invoice price for the goods wares and merchandise including costs of transportation excepting thereout grain, flour, coal, cheese, corn meal, egg cases, and goods ordered and in transitu which are to be taken at invoice price including cost of transportation (it being expressly understood and agreed that p heads, trimmings and dress stays are not to be included in this agreement) and to be paid for in manner following that is to say the surplus over and above Six Thousand dollars of the consideration money is to be secured by two promissory notes to be made by the said Company when duly incorporated in favor of the said James A. Sharp one of the said promissory notes to be for the sum of Nine hundred dollars and to be payable on the first day of July AD 1907 together with interest thereon at the rate of Six percent per annum from the first day of January AD 1907 and the other promissory note for the residue of the said consideration money and to be payable on the first day of January AD 1908 together with interest thereon at the rate of Six percent per annum from the first day of January AD 1907 and also the said James A. Sharp will sell and assign to the said Fidèle T. Arsenault Edmund Arsenault Emmanuel F. Gaudet and Herbert S. Sharp and the said Fidèle T. Arsenault Edmund Arsenault Emmanuel F. Gaudet and Herbert S. Sharp will purchase the shop furniture of the said James A. Sharp excepting the safe and Simpsons Computing Scales at a price to be agreed on between the parties hereto and also the said Fidèle T. Arsenault’s said stock in trade to be purchased by the said proposed Company when duly incorporated excepting any dead or unmerchantable stock for the sum or prices following namely Eighty percent of the invoice price for the goods wares, and merchandise including cost of transportation and to be paid for in the manner following that is to say the surplus over and above Six Thousand dollars of the consideration money is to be secured by a promissory note made by the Company when incorporated in favor of the said Fidèle T. Arsenault and to be payable on the first day of July 1908 together with interest thereon at the rate of six percent per annum from the first of January 1907 and also the said Fidèle T. Arsenault Edmund Arsenault Emmanuel F. Gaudet and Herbert S. Sharp further understate and agree with the said James A. Sharp that the said proposed Company when duly incorporated will give to the said James A. Sharp the free and exclusive use and enjoyment of one of the two sections of the warehouse at present in the occupation of the said James A. Sharp and more commonly known by the name of the Railway warehouse situate at Wellington aforesaid until the first day of June AD 1907 and also the said parties hereto when the said Company is duly incorporated will keep the stock in trade fully insured against loss or damage by fire and also the said parties hereto when the said Company is duly incorporated will do their insuring in a company or companies represented by the said Herbert S. Sharp provided the rates of the said company or companies so represented by the said Herbert S. Sharp are equal to those of other good and reliable insurance companies and also stock taking of the said James A. Sharp’s stock in trade is to begin when and as soon as letters patent are issued by the Lieutenant Governor in Council authorizing the said proposed Company to do business and delivery of James A. Sharp’s stock in trade is to be given by the said James A. Sharp to the said Company immediately on completion of the stock taking and the giving of the said promissory notes by the said Company to the said James A. Sharp and also the James A. Sharp will not from the day of the date hereof until the letters patent are issued as aforesaid sell any of the goods wares and merchandise at a reduction of his usual and regular price and also the said Fidèle T. Arsenault will not from the day of the date hereof until the letters patent are issued as aforesaid sell any of his goods, wares, or merchandise at a reduction of his usual and regular price. In witness whereof the said parties to these presents have hereunto their hands and seals subscribed and set the day and year first above written

Signed sealed and                                                          F. T. Arsenault

delivered in the presence                                               Emmanuel F. Gaudet
of                                                                                    Edmund Arsenault
Albert C. Saunders                                                         Herbert S. Sharp
                                                                                       James A. Sharp

I don’t know what the Sharps or Fidèle T. were paid, if anything, for stock valued over and above $6,000 since the company’s books have not survived. Neither do I know when the Sharps sold their 55 shares to Emmanuel Gaudet. What is clear is that Gaudet owned 50% of the company by the mid-1920s when the value of its capital stock was increased to $48,000.

Arsenault & Gaudet Ltd. operated until 1972. Like many other rural country stores, it succumbed to competitive pressures from other businesses. The Wellington Co-op gradually increased its share of area customers, and residents were attracted to new stores in Summerside where they travelled increasingly to work and to shop.

My grandfather died on May 30, 1949. According to my late Aunt Bernice, he visited the store for the last time on May 17, 1949, the day the picture below was taken during the federal election campaign. It shows the local MLA, J.W. Arsenault, Prime Minister Louis St.-Laurent, and the local Member of Parliament, J.W. MacNaught.

 

 

When my grandfather’s will was probated in 1949, the estate’s 24,000 shares of Arsenault & Gaudet Ltd. had an audited value of just over $37,000, approximately $350,000 in today’s dollars. For the sake of argument, assuming he bought Sharps’ shares for $8,000 in 1915 and invested an additional $18,000 when the capital stock of the company was increased in 1921, his return on equity would have equalled approximately 9% per year by the time of his death in 1949. Not bad!