The Nova Scotia Steel and Coal Company and the Anatomy of an Urban-Industrial Landscape, C
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Document generated on 10/01/2021 9:54 a.m. Urban History Review Revue d'histoire urbaine Fragmented Integration: The Nova Scotia Steel and Coal Company and the Anatomy of an Urban-Industrial Landscape, c. 1912 L. D. McCann Volume 22, Number 2, June 1994 Article abstract This paper examines how forces of fragmentation within the Maritimes URI: https://id.erudit.org/iderudit/1016714ar contribute a partial but important explanation of the urban-industrial collapse DOI: https://doi.org/10.7202/1016714ar that marked the region in the early 20th century. Specifically, weaknesses that affected the spatial strategies of the vertically-integrated industrial giant, the See table of contents Nova Scotia Steel and Coal Company, provide evidence of limited interaction within the Maritime urban system. Profits from exporting staples, pig iron, and steel products to foreign and national markets, although initially aided by Publisher(s) tidewater location and control over all phases of production, were not sufficient to overcome, in the long-run, such forces of fragmentation as Urban History Review / Revue d'histoire urbaine dispersed and limited regional markets, increased costs of producing poor quality resources, or the minimal presence of external economies. With ISSN "Scotia's" eventual demise, towns like Sydney Mines, Trenton, and New Glasgow suffered economic and population decline. 0703-0428 (print) 1918-5138 (digital) Explore this journal Cite this article McCann, L. (1994). Fragmented Integration: The Nova Scotia Steel and Coal Company and the Anatomy of an Urban-Industrial Landscape, c. 1912. Urban History Review / Revue d'histoire urbaine, 22(2), 139–158. https://doi.org/10.7202/1016714ar All Rights Reserved © Urban History Review / Revue d'histoire urbaine, 1994 This document is protected by copyright law. Use of the services of Érudit (including reproduction) is subject to its terms and conditions, which can be viewed online. https://apropos.erudit.org/en/users/policy-on-use/ This article is disseminated and preserved by Érudit. Érudit is a non-profit inter-university consortium of the Université de Montréal, Université Laval, and the Université du Québec à Montréal. Its mission is to promote and disseminate research. https://www.erudit.org/en/ Fragmented Integration: The Nova Scotia Steel and Coal Company and the Anatomy of an Urban-Industrial Landscape, c.1912 L.D. McCann Abstract: In 1912 ["Scotia" was] a corporation eral location (see Figure 1). "Scotia" This paper examines how forces of with fourteen million dollars capital, six achieved corporate leadership by pro• fragmentation within the Maritimes thousand persons on its payrolls, oper• gressing successfully through Alfred contribute a partial but important ating on land and sea and under land Chandler's evolutionary three-stage explanation of the urban-industrial and sea, owning its own iron ore and model of modern industrial enterprise.2 collapse that marked the region in coal mines, blastfurnaces, steel Over four decades from 1872 to 1912, it the early 20th century. Specifically, works, rolling mills, forges, steel finish• (1) developed various production facili• weaknesses that affected the spatial ing shops, and annually freighting over ties; (2) put in place marketing, distribu• strategies of the vertically-integrated one million tons of ore and coal to two tion, and purchasing networks; and (3) industrial giant, the Nova Scotia continents under its own house flag. implemented a hierarchy of management Steel and Coal Company, provide along functional lines to operate a vast, evidence of limited interaction within Basing all its operations on the two ele• vertically-integrated enterprise. This the Maritime urban system. Profits development was clearly evident in 1912 from exporting staples, pig iron, and ments essential to all modern industrial (see Figure 1). "Scotia's" New Glasgow steel products to foreign and progress, possessing unlimited stores national markets, although initially of raw materials and controlling every head office was located in Pictou aided by tidewater location and stage in the manufacture of the most County, the historic centre of Nova control over all phases of highly finished steel, "Scotia" is in an Scotia's industrial revolution. In nearby production, were not sufficient to unrivalled economic position, being Trenton was the large metallurgical overcome, in the long-run, such ever assured of a market for all its works that included rolling mills, forges, forces of fragmentation as dispersed products by the continued growth and and various finishing departments. Steel and limited regional markets, progress of Canada and the tidewater and some pig iron were shipped to Pic• increased costs of producing poor location of all its works, with con• tou County from Sydney Mines on Cape quality resources, or the minimal sequent low freights to all the world's Breton Island. This was the location of presence of external economies. markets.1 "Scotia's" blast and open hearth steel fur• With "Scotia's" eventual demise, naces, as well as its collieries and lime• towns like Sydney Mines, Trenton, On the eve of the First World War, the stone and dolomite quarries. From and New Glasgow suffered economic directors of "Scotia" were certainly well Wabanaon Bell Island, Newfoundland, and population decline. aware of the strategies of vertical and iron ore was freighted by the company's spatial integration that propelled the steamers to North Sydney where it was company's growth and development as unloaded into the hopper cars of one of Canada's largest industrial enter• "Scotia's" private railroad and then prises. The company's promotional bro• moved several miles to the blast furnace chures (such as the one quoted above), at Sydney Mines. Although sharing tide• its financial press statements supporting water locations, these production sites the sale of stocks, and its annual reports were scattered some 600 miles apart. all spoke of the essential need to main• Markets were even more dispersed. tain tidewater access to material inputs "Scotia" sold iron ore to customers in and markets, and also to control all Europe and along the eastern United phases of production—from mining coal States seaboard; shipped coal through• and iron ore, producing basic pig iron out the Maritimes and the St. Lawrence and steel, through to manufacturing fin• River valley; and sent finished steel prod• ished steel products. ucts as far away as Canada's west coast (see Figure 1). To function in this way, "Scotia" main• tained a "sphere of operations"—a spe• Urban-Industrial Decline in the cific spatial strategy and structure—that Maritimes sought integration across Atlantic Can• ada and more broadly within the North "Scotia's" management believed firmly Atlantic economy, albeit from a periph• that the lower costs associated with inte- 139 Urban History Review /Revue d'histoire urbaine Vol. XXII, No. 2 (May, 1994) Fragmented Integration: The Nova Scotia Steel and Coal Company and the Anatomy of an Urban-Industrial Landscape, c.1912 Résumé: Cet article montre comment les forces defragmentation à l'intérieur des Provinces maritimes offrent une explication partielle, mais importante, de l'effondrement urbain-industriel qui marquait la région au début du vingtième siècle. Plus précisément, les faiblesses qui influaient sur les stratégies spatiales de la Compagnie "Nova Scotia Steel and Coal, " un géant industriel à l'intégration verticale, témoignent de l'intégration limitée à l'intérieur du système urbain des Provinces maritimes. Malgré les avantages initiaux d'une situation au bord de la mer et de l'autorité sur toutes les étapes de production, les profits provenant de l'exportation des produits de base, de la fonte brute et des produits d'acier aux marchés nationaux et internationaux étaient Figure 1: The 'Sphere of Operations' of the Nova Scotia Steel and Coal Company, 1912. insuffisants, à longue échéance, pour surmonter les forces de grated production and location at tidewa• trialization and urban population losses fragmentation tels les marchés 4 régionaux dispersés et limités, les ter sites would sustain the continued via• of this hinterland region. Writing in the coûts augmentés de la production bility of the company. But considering 1940s, the New Brunswick economist des ressources de mauvaise qualité, the eventual demise of "Scotia" in the B.S. Keirstead argued that the region's ou la présence minimale des 1910s, how realistic was the company's limited market and industrial environment économies externes. Tout cela spatial strategy of dispersed, integrated could not provide the external econo• aboutit finalement à la fin de la production and its heavy reliance on mies necessary for sustained and inte• compagnie "Scotia, " et des villes waterborne distribution? We know a grated urban-industrial development. comme Sydney Mines, Trenton, and great deal about the Nova Scotia Steel Maritime businessmen were forced to New Glasgow subissaient une baisse and Coal Company's rise and fall, its compete against central Canadian firms del "activité économique et une business leaders, and its workers in vari• which had accumulated considerable diminution de la population. ous divisions of labour, but much less benefits from a core region's more favour• about whether "Scotia's" long-developed able agglomeration economies.5 There• spatial structure of integrated operations fore, for most Maritime manufacturing could remain economically feasible in a companies to grow in size, to remain hinterland region characterized by con• competitive by acquiring economies of siderable fragmentation.3 scale and scope, and in turn to stimulate urban growth, an essential strategy was Fragmentation in a core-periphery urban for them to sell their products in extra- system is one possible explanation that regional markets. But this business plan needs to be considered more fully in the runs into problems of market accessibil• growing debate about the process of ity. In this regard, some argue that rising urban-industrial decline that plagued the freight rates played a role in hindering Maritimes in the early 20th century.