As one of the earliest settlement areas in North America, the Maritime region has been an emblem of heritage roots throughout the course of Canadian history. Often referred to as a symbol of regional sovereignty, historians have labelled the Maritimes as a pioneer of the earliest commerce and trade activities. It is for this very reason that many have alluded to the Golden Ages of the Maritimes, a period marked by regional economic growth. With a pre-existing maturity in the fishing, logging, farming, and shipping industries, the technological improvements brought by industrialization at the turn of the 19th century led to the boom of industrial bases for steel and coal markets. This enabled the three provinces to capitulate their geographical advantage since the area was abundant in coal deposits, and lead to one of the wealthiest expansions in Maritime history. As Acheson famously points out, the local attitude was that despite transportation problems, it would still become the industrial centre of Canada because only it had commercially viable iron and coal deposits, and only it could control Montreal fuel resources. Why then, did the end of an era dominated by manufacturing lead to an economic stagnation that left a permanent imprint over the course of the century? Over the years, historians and economists alike have deemed a variety of factors as accountable for the general economic backwardness that prevailed. While some of these academic research pose contradictions amongst themselves, the general proposition is that the phenomenon was driven by a mixture of social economic rationalization, political incentives, and geographically inherent conditions. To shed more in-depth light on the analysis of the Maritime experience, a preliminary examination is required on the various proposals of when the downturn started. These different arguments on timing serve as the framework, and derive fundamentally different conclusions as the reasons causing the pecuniary difficulties. For instance, historian Kris Inwood claims the early decline of Maritime industry, finding signals that indicated the end of the boom era in 1870. T.W Acheson and Richard Caves, however, take on the converging view that the decline initiated in late 1880s, though their reasons differ. David Alexander is notable for claiming that earlier declines are side-effects of the global Long Depression, and that the Maritimes' backwardness was only relative, since the rest of Canada benefited more from the boom of the early 1900s compared to the region. Perhaps the most controversial view is posed by E.R Forbes, who claims that the downturn was due to poorly implemented post-war railway policies as late as 1919. These differing opinions on timing lead to diverging views on the root causes, all of which may be classified into two general categories. One conceptual perspective examining the regional differences on manufacturing is known as Structuralism. This associates Maritime development with loss of local control over political and economic decision-making. Employing a policy-based approach, advocates of Structuralism argue that Maritime backwardness is due to a series of government policies that are unfavourable to the region. Economic stagnation in this sense is due to external factors, and the resulting consequences may have been avoided. On the other hand, the Staples Theory claim that economic production is largely dependent on geographical and technological conditions surrounding the environment. In line with Innis' Staples Thesis, this school of thought attributes Maritime backwardness to inherent factors beyond the region's control, and employs a less critical and more passive view on the government's role. As supporters of Structuralism have noted, significant contributors to the declining Maritimes industries are government policies. Inwood claims that “an inward-looking or continentalist Central Canada dominated the political union and established policies unsuitable for an outward-looking Maritime region”(41). The basis of structuralist arguments, he refers to the example of deindustrialization in the steel and coal industry as due to lo ss of local control, and as “a casualty in the international concentration and centralization of capital”(57). One of the main proponents of this view is T.W Acheson, who claims that the policies of Confederation were geared towards Central Canadian

interests and not compatible with the needs and conditions of the Maritimes. These criticisms, along with many others, centre on a few “infamous” policies as the culprits behind industrial issues. Firstly, the emergence of the Intercolonial Railway in 1870s connected the Maritimes with Central Canada. This removed the barrier for domestic trade, and regional trading patterns shifted from New England, Britain, and West Indies towards the rest of Canada due to the pressures imposed by the National Policy and the Tariff of 1879. According to Acheson, “the railroad with its implications of organic unity, its inflexibility, and its assumption that there was a metropolitan point at which it could end, provided an experience entirely alien to the Maritime tradition”(27). As Maritime regions were distinguished by key small communities, and lacked a focal metropolitan entity, the high tariffs and freight charges became detrimental to economic growth. Forbes provides historical data which showed that the transportation advantage of a Toronto producer over Amherst producer was 66%, and that for Toronto shipping to Montreal, an advantage of 79% existed over Amherst. As a result, Atlantic transportation costs had doubled by 1919 and was on the verge of bankruptcy by late 1920s. Despite this, Forbes argues that the Intercolonial railway actually expanded the economy, and that it was the under-representation of Maritime cabinet and dominance of the West that led to poor results in protecting Maritime businesses. Similarly, additional domestic competition brought about by the railway put downward pressure on prices, diminished demand, and hindered business interests in the east coast. Out of the “15M$ interregional commerce in 1876, 70% of it [was] imported from central to Maritimes” (22). Another critical implication of Confederation is that the regional businesses were now also susceptible to outside interest. Acheson and Caves both refer to the consolidation movement of Quebec business' attempts to consolidate the cotton, sugar, and iron/steel industries in the Maritimes. The movement of Montreal railway entrepreneurs to control the rail system of New Brunswick and coal fields led to some of the greatest acquisitions in history, including the Springhill Mining Company and the establishment of Dominion Cotton Mills. As a result of these acquisitions, the Maritime economy, most specifically the manufacturing sector's steel and coal plants, was stifled due to restricted output and limited expansion. Having explained the initial setback in the manufacturing sector, the analysis extends further in the 20th century to trace additional factors. E.R Forbes, whose research is mainly focused on this timeframe, contends that capital expenditure on national defence during the war again shifted national interests towards Central Canada. This jeopardized the economic sectors of Maritime shipyards and manufactures, an example of the Structuralist forces at work. A more holistic approach is adopted by Michael Clow, who in his Politics and Uneven Capitalist Development emphasizes the need to examine the role of the Canadian state, balance of social forces, and Confederation for explanations of Maritime backwardness. In this regard, Clow attributes the phenomenon as due to uneven capitalist development, and attempts to trace this to the process of financial and industrial consolidation within British North America. Clow begins his analysis by asserting the effects of Confederation on the Maritime region. While he agrees with Acheson and Forbes' theory that political dominance led to this demise, Clow claims that these consequences were due to the regional social class itself. Prior to Confederation, ProConfederates optimistically hoped that a national aggregation would help Maritime ports replace American ones, and fuel regional manufacturing by western market expansion. At the same time, AntiConfederates feared loss of political power and control over development. The class struggles within the Maritimes upon this issue “took subordinate position in the new economic and political environment” (12). Ultimately, Confederation was deemed to have the same effects as Acheson and Forbes claimed, inter-regional domestic competition in manufacturing intensified, and the “sea-going Maritime economy was hindered” (12). Further deterioration, Clow claims, was caused by the Import-Substitution Industrialization policy associated with the National Policy. This policy forced the Maritimes to abandon in its overseas

economic endeavours, and caused the region to be entirely dependent on the success in the competition with Montreal manufacturers. The centralization of banking system due to Montreal's control of regional distribution systems led to difficulties in securing finances, a challenge that regional manufacturers were already thriving against. In essence, Clow argues that these effects made deindustrialization and dismantlement of manufactures the only viable option. To this degree, Clow's argument is that capitalist development should be perceived “as the social project of the bourgeoisie, not a process governed by automatic capitalist laws of motion”(21). The factors noted by Acheson and Forbes, therefore, only serve to “intensify and calcify regional effects of capital concentration and centralization”(21). Structuralism, ultimately, depicts external political or social forces that are accountable for the Maritime economic stagger. In more recent years, these views have resonated with what is known as a Dependency Theory. This theory notions that resources flow from a periphery of poor and underdeveloped states to a “core” of wealthy states, enriching the latter at the expense of the former. “It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the world system.” (Meteck). Though less extreme, structuralists have attested that the Maritime phenomenon, alone with its regional implications, manifests itself in a more moderate form of dependency at work. Nonetheless, this peripheral methodology to Maritime backwardness which places significant blame on political policy execution is repudiated by the Staples approach. Based upon the underlying Innis school of thought, advocates of the Staples approach focus on the influence of location, technology, and geographical resources on Maritime economic development. The underlying ideology here is that the geographic diversity, climate, and conditions of the various regions are unsuitable for vast economic expansion, which in turn had an indirect effect on the manufacturing sector. As S.A Saunders mentions, careful examination of regional resource endowment showed that the geographical disadvantage relative to Central Canada led to the failures of the shipbuilding and fishing industries. One proponent of the Staples approach is Kris Inwood, who regards geographical conditions as the key inherent reason that incompatible government policies led to Maritime decline. According to Inwood, the main contributors to a slower economy were a lack of major urban centres, a lack in fresh water resources, as well as poor agricultural conditions. The first factor has led to a rise in transportation costs, which, along with a withdrawal of labour, led to “diminishing returns and rising costs undermining the region's coal and steel industries (13). The surge in transportation costs also meant that “the major primary products of the Maritimes did not sustain as much processing as in Central Canada, either because of the intrinsic characteristics of a product or because it could not be produced locally at a competitive cost”(14). Unfortunately, less production processing meant less labour available, which meant less capital invested in the region. In the long-run, Inwood argues that this impaired the growth opportunities of the Maritimes. Secondly, Inwood asserts that the lack of fresh-water supply was a hinderance to Maritime production. With the introduction of steam engines, Central Canada manufactures improved their productivity levels significantly. However, the Maritimes was unable to support this new method due to a lack of water supply that led to cheap hydro-electric power. As a result, Maritimes capital productivity was significantly higher than labour productivity, which caused a 30% lower capital/labour ratio compared to Central Canada, deflated regional wages, and caused a relative profitability drop. These reasons explained the manufacturing development in Western regions versus the difficulties experienced in the coast, and while the rest of Canada benefited from the wheat boom, the Maritimes missed out on the opportunity. The most significant factor, however, lies in the geological impacts on the iron/steel and agricultural sectors. The geological complications posed by the region's natural terrain led to higher

extraction costs of resources such as coal and steel, which not only limited expansion opportunities, but attracted competition from Montreal. Inwood claims that this disparity led to an opportunity for Montreal manufacturers for exploitation, and led to the consolidation movement that Acheson speaks of. At the same time, the terrestrial disadvantages posed by thinner and poorly nutritioned soil, along with short growing seasons in the Atlantic Coast, caused the agricultural sector to suffer. Gerriets and Winson both argue that incompetent agriculture was a major reason for Maritime underdevelopment, though each proposes different reasons for the deficiency. According to Winson, “Agriculture after 1850 was stimulated.... by the construction of railways and the general worldwide revolution in transportation” (10). Despite this, they were unable to establish wheat farming as a viable cultivation from 1840-1870 due to land incompatibility. In turn, this led to a lag period during which Ontario was enjoying the wheat boom. Ultimately, both Ontario and the Maritimes employed mixed farming agriculture that included livestock management for income, which Winson argues led to problems balancing over-production and price-cutting since most farms were self-sufficient. The decline in manufacturing, he proclaims, caused farms to rely on local market for sustenance, negative growth rates for dairy and cattle populations, and collapsed the fishing industries. In this regard, Winson advocates that the declining manufacturing industry led to the agricultural collapse, which caused the underdevelopment of the region since agriculture was the base for any society. A more conventional thought that is in line with most census data is offered by Gerriets, who proposes the reverse causality; the fall of agriculture led to de-industrialized manufactures. Gerriets employs a substantive procedure in examining the geological impacts on agriculture by dividing land into nine classes ranked by arability. His findings show that: Prince Edward Island has very good farmland, possessing 646,000 acres of class two lands or 46 per cent of its land area. The remainder of the Maritimes contains 900,000 acres of class two lands, but they are scattered in pockets in northwestern New Brunswick, along the St. John River, in central Nova Scotia .... Finally, the south and east shores of Nova Scotia, the coast of the Bay of Fundy and the counties along the Northumberland Strait of New Brunswick contained only small amounts of the best farmland, so that very few farmers in these areas had access to soils better than class three. (136) Gerriet's rationale is that people migrated when they expected to receive higher income through farming. However, census data showed that satisfactory land in most accessible districts was preferred to land in more remote districts due to a higher standard of living offered. As a result, “good land in remote districts was often unclaimed while settlement proceeded in more conveniently located districts”(139). In this manner, terrestrial distribution dictated patterns of settlement, and the resulting notion discouraged agricultural ambition, hindering the sector in the long-run. In Gerriet's terms, the tendency was to have less agricultural development rather than less productive agriculture, and farmers grew certain produce according to their geographical advantage. Unfortunately, this also meant that farmers earned substantially less than counterparts in Ontario, and many took on side-jobs in other industries to earn enough financial support. This phenomenon, described as “occupational pluralism” encouraged its own pattern of diversification. Farmers produced hay and potatoes instead of wheat and barley, and the inherent nature of product yields meant that the agricultural setback relative to Central Canada was inherent and inevitable. Simultaneously, the low population density caused few variety and local markets for goods, which in turn discouraged settlement. In this manner, the agriculture stagnation takes a rewinding loop that contributed to permanent fallback. Alexander, meanwhile, attempts to develop causality between agriculture setback and manufacturing backwardness. By conducting his study upon the framework of Newfoundland and the

Maritimes, Alexander deems that the Maritimes shift from agriculture to manufacturing along with resulting failures in the latter sector lead to the economic stagnation. This is proven as the otherwise similar Newfoundland, which focused on agriculture, fared generally better. For instance, “the average Newfoundland wage was 27% higher than in the Maritimes”(64). Apart from terrain factors, another issue of examination under the Staples approach is the impact of technology. As mentioned previously, the invention of the steam engine enabled Central Canada to garnish higher productivity capabilities but restricted the Maritimes. The revolution in transportation, upon the introduction of the Intercolonial Railway, created the gateway to competition and industrial consolidation within the Maritime. This susceptibility to inner influences shifted trade patterns from overseas towards domestic provinces. The obsolescence of wooden sail ships that had sustained Maritime shipbuilding (due to faster steel steam ships), along with this decline in sea commerce, virtually eliminated the shipping industry. The most illustrious examples of technological advancements is depicted by Winson, who details three changes and their aggregate impacts. The implementation of steel ploughs, the mechanical power of steam engines, and the “tractorization of agriculture” all facilitated the substitution of human labour for capital. The results of these, Winson summarizes, include higher output/capita of 120% in Canada, farm size increases of 31%, and a growing labour shortage which inflated wages. Evidently, the Maritimes' geographical restrictions did not permit these benefits, and as a result regional farms could not compete with counterparts that had tremendous capital and cost-efficient productivity. In all retrospect, these historians attribute the Maritime de-industrialization experience to a series of geographic and technological factors based on resource commodities. Underlying this inherent disposition however, is the fact that the staples only indirectly impacted the manufacturing sector through other mediums such as agriculture. This indirect causation link rested upon the assumption that agriculture itself negatively impacted manufacturers, a foundation that many research data seem to support. The last school of thought, and one that has lost favour in recent years, assigns the Maritime development to social economic factors. For instance, Sager mentions the possibility of analysis based upon a Marxist Model which states that “the pre-existing social relations of production in Maritime agriculture and primary production militated and continued to militate against successful capitalist development”(115). Under the framework, suggestions allude to possible internal preconditions for underdevelopment in Maritimes. These qualifications consist of resource industries of low productivity and resource industries that permitted easy substitution of labour for capital. For example, research showed that the Maritimes had relatively low per capital incomes by comparison with central Canada. Similarly, at the time of confederation industrial bases was smaller and different than that in central Canada. Sager argues that the pre-existing tendency and social preferences within the region led to an infrastructure that was less capital intensive, and led to specialization in industries which had little linkages for vertical integration within the economy. It is due to this very reason that the Maritimes had lower income and productivity. Meanwhile, a likewise social economic theory calls on the lack of entrepreneurial leadership. Many blamed the social familial structure as the reasons for small families putting all their money into bank savings instead of investing in major projects. The lack of capital capabilities meant that fuelling of manufacturers had to come from individual entrepreneurs of the time. “These men of substance were gained in trade and staples and sought substantial, more secure future for themselves within framework of traditional community through instrumentality of new industrial mercantilism”(Acheson,11). Proponents of this social economic explanation deduce that as “old men to be embarking upon new careers”(12), all of them “had the ignorance of both technical skills and complexities of financial and marketing structures involved in new enterprises”(12). While the technical skills may be supplemented through import of specialized labour from other areas, the latter issue was deemed vital in initiating the

de-industrialization. Since many did not know how to project budgets and underestimated costs of new projects, these entrepreneurs followed normal mercantile practice of “raising only sufficient capital to construct and equip the plants”(12). This means that operating costs were entirely financed by bank loans, an inefficient process that made the industries susceptible to western takeover. Despite these accusations, Acheson vehemently rebukes this as inaccurate, and claim that the effect was more due to the incompatibility between policy and regional conditions rather than inherent social factors. After arguing that the entrepreneurs were capable men who understood the problems they were facing, he blames the effect entirely on “the inability of the Canadian market to consume his output [and] the spectacle of a metropolis which devoured its own children had been alien to the Maritime colonial experience. Ultimately, perhaps inevitably, the regional entrepreneur lost control to external forces which he could rarely comprehend, much less master” (28). Similarly, Alexander's article contradicts the social economic approach by comparing Maritime performance with that of Newfoundland. Since both areas had similar preconditions and social norms, the fact that Newfoundland outperformed the Maritimes in this aspect undermines the theory. Ultimately, the various schools of thoughts, for their own reasons, paint a thorough depiction as to the various forces at play during the Maritime experience. For whatever reasons, the failure of a Maritime metropolis dictated the fate of these Atlantic provinces. Throughout the early 1900s, increased reliance of stock markets to raise capital gradually shifted a de-industrialized region to one of concentrated financial capitalism. Despite the challenges that the region thrived under, many notable feats were accomplishments such as the dominance of the Nova Scotia Steel Company. Through the doctrines of John Stairs, “financial hegemony”(Acheson,27) spread across the region and by 1910, New Glasgow was deemed the centre of industrial capitalism and Halifax the centre of financial capitalism. This established the role that the Maritimes played in a national perspective up to this day.

Works cited: http://www.meteck.org/dependency.html