Great War turned N.S. economy to ‘have not’ province
Nova Scotia paid an enormous economic price for its participation in the First World War.
And it’s a burden still being felt 100 years after the 1914-1918 conflict that saw Nova Scotia’s fortunes reverse from a “have” to a “have not” province in the Canadian confederation.
“It’s not hard to believe in the context of the times,” military historian Brian Douglas Tennyson said in a interview of an era of blind political ambitions and false hopes and expectations.
The Bridgewater author of numerous books on Nova Scotia’s military role in the Great War painted a little-known picture of how in four short years, a once thriving province found itself in the depths of an economic depression.
He noted that prior to the war’s beginning, Nova Scotia’s economy was booming thanks to three steel mills and numerous coal mines that operated in northern Nova Scotia and on Cape Breton Island.
The plants in Sydney, Sydney Mines and New Glasgow were owned by Nova Scotia Steel Co., which he said “was the largest steel producer in Canada at the time.”
Thomas Edison and the ‘shell committee’
At the beginning of the war, Tennyson said Sam Hughes, then Canadian Minister of Militia and Defence, realized that artillery was going to play a major role in the war. The minister became aware that Great Britain, unable to produce its own shells, was ordering huge quantities of highquality precision casings from the United States.
Wanting to get in on the lucrative market, he said Hughes contacted fellow Conservative and general manager of the Nova Scotia Steel Co. to see if his plant could produce the same highquality shells as their U.S. counterparts.
Sample shell casings were produced and shipped off to England. “The British thought they were just fine, so Hughes decided to make money by starting a Canadian munitions industry in Nova Scotia.”
Tennyson said a “shell committee” made up of executives from the three steel plants was formed. Steel plants were regeared and a huge munitions industry was built that proved very beneficial to Nova Scotia because of shared contracts with Ottawa.
“They would sub-contract to other plants and machine shops throughout the province to do certain components. We became a major producer of munitions for the war effort. The economic impact for the province was enormous.”
He said it was soon realized that the high quality casings being produced needed the explosive ingredients to go in them. And, in one of those quirks of fate, those ingredients were abundant in the waste gases emitted from the open hearth steel-making process at the province’s three steel mills.
American inventor Thomas Edison was brought to Nova Scotia to supervise the process of harnessing those gases and turning them into highly explosive TNT. He noted, Edison helped install an explosive-making facility, the only one of its kind in the country capable of producing the needed ingredients.
Built on debt
But, Tennyson said Nova Scotia Steel ran into financial difficulties and was unable to produce the 200,000 shells required in the first year of its contract with the British government.
The company was saved, he said, when then Prime Minister Robert Borden — a former corporate lawyer from Halifax — and some of his business associates came up with a grand scheme to get some Montreal interests to buy into and take over the plants.
The new ownership also gained control of all of the province’s coal mines and steel production.
About the same time, Tennyson said Borden decided to help the struggling Port of Halifax by moving its main shipping piers from the north to the city’s south end, to get them closer to the sea. To accommodate the new piers, a rail line was carved through the rock in south end Halifax.
Halifax’s waterfront dry dock and ship repair facility was expropriated and handed over to the same Montreal interests who already had control of the province’s steel mills, coal mines and fabricating plants.
He said the government also pumped money into the Sydney steel mill to make plates to build ships.
“So the government is spending all this money. Huge amounts of money for this master plan.
“But it all falls apart just after the war. The renamed British Empire Steel Corp., built like a deck of cards, didn’t have the financial backing to support itself. It was all built on debt in Canada, the United States and Great Britain. It all collapsed.”
Tennyson said there were other factors including a slump after the war.
Before being thrown out of office in 1921, he said the Borden government had nationalized the country’s railways — the govern- ment-owned Canadian National Railway became a Crown corporation, with headquarters in Montreal.
The move drew attention to the Intercolonial Railway that ran from Halifax to Saint John, N.B., to Montreal. For years, the government-built railway had benefited from subsidized freight rates, so Nova Scotia companies could compete with manufacturers in central Canada. But, in response to complaints from Ontario and Quebec manufacturers, those subsidies were removed after the war.
“Nova Scotia’s economy collapsed just like that and that helped bring down British Empire Steel,” Tennyson explained.
He noted there was terrible unrest In Cape Breton during the 1920s. Steel plants were unable to sell their products to the rest of Canada, plants and mines were closed and thousands of workers laid-off.
“No longer able to compete, the only way to keep costs down was to cut labour costs.”
Tennyson said things were desperate in Nova Scotia during the 1920s, especially in the industrial communities.
“Everything just collapses.
The 1920s was a period of depression,” he said.
“Some of the older people in the area would say they never noticed the Great Depression of the 1930s because they had already experienced in the decade before. While Tennyson conceded that not noticing may have been an exaggeration, he added, “That really was when Nova Scotia became a have not province.”