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Unused Capacity as a Factor in Canadian Economic History

Published online by Cambridge University Press:  07 November 2014

H. A. Innis
H. A. Innis*
Affiliation:
The University of Toronto
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Extract

The significance of navigation in the economic development of a region penetrated by the St. Lawrence to the south and by Hudson Bay to the north has been evident in concentration on production of raw materials for consumption in the highly industrialized area of Europe, and in problems which have arisen with intense specialization, such as unused capacity in terms of vessel space as a result of inability to secure a balanced two-way cargo. The green fishery as conducted from French ports on the banks and along the coast required heavy outbound cargoes of salt to balance return cargoes of fish, but the dry fishery, which became important with the development of Spanish trade at the beginning of the seventeenth century, required smaller quantities of salt and equipment on the outgoing voyage and made necessary the carrying of ballast. The English dry fishery in Newfoundland involved a further lack of balance in that crews necessary to carry on the industry were larger than those necessary to man the vessels, and, because of the seasonal fluctuations and agricultural limitations of that area, men were carried back at the end of the season. Sale of fish in the markets of Spain and the Mediterranean necessitated the dispatch of vessels to England with the men necessary to carry on the fishery, and additional larger vessels (sack ships) with cargoes of fish to market. The addition of sack ships lowered the cost of provisions and facilitated the beginnings of a settlement in which men remained over the winter. Consequently, competition between sack ships and fishing ships for cargoes of fish and for profitable return cargoes of salt, tropical products, and specie from Spain and the Mediterranean to England, contributed to the long severe struggle which dominated the history of Newfoundland and placed severe restrictions on the introduction of political institutions. New England, with a winter fishery and a favourable area for the development of agriculture, lumbering, and shipbuilding, offered possibilities of all-year-round operation. Settlers rather than ballast, therefore, were brought to New England. Expansion of settlement contributed to more effective exploitation of the fishery, shipbuilding, and trade and to the decline of control of fishing ships from England. Numerous small New England vessels extended the fishery to the banks and the shores of Nova Scotia, participated in the coastal trade to Newfoundland in spring and summer, and carried products to the West Indies to exchange for sugar and molasses in winter when these products came on the market and there was freedom from hurricanes. Relative absence of unused capacity in New England shipping meant low costs and contributed to rapid economic development which facilitated control over Nova Scotia after the expulsion of the French in the Treaty of Utrecht in 1713. The expansion of New England involved a continued drain of labour from Newfoundland and weakened the position of settlement in that area.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 2 , Issue 1 , February 1936 , pp. 1 - 15
Copyright
Copyright © Canadian Political Science Association 1936

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References

1 See Innis, H. A., Problems of Staple Production in Canada (Toronto, 1933), ch. ii.Google Scholar

2 Numerous regulations were enacted against the dumping of ballast in the harbours of Newfoundland.

3 “It is to be hoped that the folly of expecting any large results from local and isolated railways is already fully demonstrated to both Nova Scotia and New Brunswick, and that it has now become a first consideration with them to direct their attention to the means by which both may be relieved from the consequences of a large debt incurred for works not only unproductive of any directly remunerative results but also unattended by any substantial advantage to our trade or commercial importance. The conviction must have forced itself upon the public mind that we must extricate ourselves from these difficulties by obtaining connection with the railways of Canada and the United States by one or other of the routes proposed. Much has already been done towards achieving that result” (From a speech by Sir Charles Tupper at Saint John, 1860, quoted in SirTupper, Charles, Recollections of Sixty Years in Canada, Toronto, 1914, pp. 34–5).Google Scholar “There is a little over a hundred miles of railway in the province but owing to some cause which is unintelligible to an outsider and many less important reasons, which are easily understood, this undertaking has burdened the province with a heavy debt and consequently heavy taxation while it has irritated politicians, and been a cause of deferring … perhaps for ever … many important acts of local legislation. The primary error, undoubtedly, was the making it a government work, instead of leaving it to a company. Heavy sums raised at six per cent on provincial debentures make sad havoc with revenue of the country. And the next great error … patent to all … is the custom too prevalent in our colonies under the system of representative government, of changing every official, however petty, at every change of government” ( Duncan, F., Our Garrisons in the West, London, 1864, p. 100 Google Scholar). “Provincial isolation and a blundering neglect to make railways which individually are burdens but would become as a grand whole a source of revenue and profit, are among the features at present most apparent in our British American railway system…. It is well said, by one of their own journals ‘We cannot afford to bear the burden of our present incomplete road’“ (ibid., p. 280).

4 “Although sentiment in Vancouver Island on the whole was unfavourable to Confederation, the entire mainland including Cariboo, then an important factor, was practically a unit in its favour” ( SirTupper, Charles, Recollections, p. 126 Google Scholar).

5 Ibid., p. 140.

6 Gibbon, J. M., Steel of Empire (Toronto, 1935).Google Scholar

7 See “A Note on Problems of Readjustment in Canada” (Journal of Political Economy, 12, 1935)Google Scholar for a discussion of the implications of Mackintosh, W. A., Economic Problems of the Prairie Provinces (Toronto, 1935)Google Scholar; for further discussion of the problems of overhead costs in the depression, see The Canadian Economy and its Problems, edited by Innis, H. A. and Plumptre, A. F. W. (Toronto, 1934), ch. iGoogle Scholar; in relation to foreign trade, Laureys, H., Foreign Trade of Canada (Toronto, 1930), pp. xi–xv Google Scholar; to government finance, Innis, H. A., Problems of Staple Production in Canada, pp. 17–23, and 98 ff. Google Scholar, and Canadian Problems as Seen by Twenty Outstanding Men of Canada (Toronto, 1933), pp. 69–90.Google Scholar