St. Mary's University, 2002, M.B.A. Thesis, Merchant Princes:
EXCERPT Max Aitken and Maritime Finance Dartmouth Ropeworks 1869-1958
"The Development of a Gateway Hub
at the Port of Halifax".
EXCERPT
Probably no other economic issue better exemplifies Halifax's aspirations and its frustrations than the development of the Port of Halifax. Since at least 1850, it has sought to become a gateway to North America. In the 1960s, with the opening of the St. Lawrence Seaway and the commencement of ice-breaking on the St. Lawrence River, a group of bold and imaginative civic leaders embraced the new technology of containerisation and the Port of Halifax became a container port. From the start, Halifax was an innovator ‚ it was one of the first North American ports to embrace on-dock rail transfer.
In the 1980s, the port endured the loss of its largest customer, Dart Container Line, and was able to take full advantage of the three most important trends in the container shipping industry: the trend to round-the-world services, the introduction of large Generation III vessels and the emerging trend towards consolidating port cargo at so-called 'load centres'. In 1989, Halifax came within 50,000 containers of its arch-rival, Montreal. Within a generation, however, from 1980 the port has slipped from 33rd in world rankings to 90th in 2000, and continues to lose market share to Montreal, New York and Norfolk. It risks becoming marginalized as a container port and unable to achieve the scale economies that will enable it to compete with its larger rivals.
The late 1990s has seen the emergence of three significant trends in container shipping: the consolidation of shipping lines into large consortia or vessel sharing agreements; the emergence of large global container terminal operators; and the emergence of regional transhipment hubs throughout the Far East, South East Asia, the Middle East, the Mediterranean and the Caribbean. With a new generation of massive 12,000-15,000 ton vessels on the horizon, this study examines the potential for Halifax to attract investment from a global terminal operator and become a North Atlantic transhipment hub and gateway port.
Halifax's First Family of Finance, Ships and Steel
FORMAC Publishing
In one form or another, William Stairs, Son and Morrow, the Stairs family firm, was a fixture in Halifax from 1810 until it was sold in 1975. It is a remarkable story. While they did not reach the exalted heights of some of the better-known Upper Canadian family firms, they managed to avoid many of the pitfalls experienced by family-owned enterprises, and persisted through five generations. Unlike many of their pre-Confederation contemporaries in the Maritimes, the Stairs were able to adjust and even flourish under continually changing, and often trying, circumstances. It was perhaps their unique quality as business people.
When historians have examined the economic development of the Maritime provinces after Confederation, the factors which have most often been given to explain their relatively underdeveloped state have been an inadequate resource base, technological change, the lack of a large metropolis, a dependent relationship with a larger metropolis, discriminatory transportation policies, distance from markets, entrepreneurial failure, and political weakness.
Despite the renaissance in the study of Maritime history which has flowered over the past twenty-five years, there is as yet no significant body of work in Maritime business history. It is usually written about in the context of economic history, and more particularly, in the context of Maritime underdevelopment. There are few studies of Maritime shipowners, banks, industries, or even entrepreneurs. There are many sweeping syntheses, but surprisingly few case studies of Maritime or Nova Scotia firms. For a region rich in history, this is regrettable. The new social historians have preferred to look at history from the bottom up, rather than from the top down, and have instead emphasized labour, women, and the family, as well as social relationships in general. Business or economic history has been used to set the stage for a closer examination of larger issues, rather than as an end unto itself. The present volume will attempt to correct what the author feels is an oversight.
Except for corporate histories of the Bank of Nova Scotia and the Royal Bank of Canada, there are no scholarly studies of the region's contribution to the Canadian banking system, with the exception of the author's modest study of the Bank of Nova Scotia. The Atlantic Canada Shipping Project did exemplary work on the region's shipping industry, but little in-depth analysis of any single shipowner. T.W. Acheson's seminal 1972 article on the impact of the National Policy enlightened a generation of historians about the development of Maritime industry in the wake of the National Policy tariff in 1879, but there has been little work done on individual industries or companies, with the exceptions of the steel, coal, sugar and, to a lesser extent, the cotton industry. If there is a recent trend in Maritime economic historiography, it is that, reflecting the times we are living in at beginning of a new century, a neo-conservative approach to issues has come to the fore, with respect to analyses of banking, rail rates, entrepreneurship, and major industries such as steel-making. By-and-large, this new approach is far less sympathetic to the region's plight, and takes a much more deterministic view than previously. What are still needed are more case-by-case examples such as the one we are attempting to put forward here.
There was also a time when Halifax rivalled Montreal and Toronto as a centre of finance. At the time of Confederation, there were five banks based in the city of 25,000 people, as well as a number of insurance companies. The Maritime region was home to twenty-two banks, some with just one branch, and others with dozens. They were closely linked to the traditional economy of wood, wind and sail, but increasingly supported the burgeoning industries that sprouted from every nook and cranny. While the smaller ones never rivalled the nation-building exploits of their central Canadian brethren, they represented a spirit of self reliance and independence which was smothered by the emerging 'national economy' and changing economic circumstances. Nearly every sizable community could boast of its own bank, from the Pictou Bank to the Exchange Bank of Yarmouth and the Farmer's Bank of Rustico. By 1914, the only regional banks which had survived were the Merchants' Bank of Halifax, which renamed itself the Royal Bank of Canada in 1901, and the Bank of Nova Scotia, which had moved its General Office to Toronto in 1900. The last two holdouts, the Union Bank of Halifax and the Bank of New Brunswick, were purchased by the Royal Bank of Canada and Bank of Nova Scotia respectively, in 1910 and 1913. Contrary to the image portrayed by romantic notions of 'wooden ships and iron men', or indeed the region's current fetish with idyllic tourist images of pre-industrial fishing villages, the Maritime region was very innovative when it came to creating new forms of finance, and new kinds of financial institutions. True to their inimitable selves, the Stairs led the way, by establishing a bank, a trust company, and perhaps their most enduring legacy, a securities firm. They were also pioneers in developing the new legal framework within which these highly complex deals were structured.
Another part of the story is the family's entry and participation in politics, which was very much out of a sense of noblesse oblige, as opposed to a higher calling. In this respect they were very much reluctant brides. The Stairs were involved in some of the most important political events of the time, including the fight for Responsible Government, the Confederation Debates, the National Policy, as well as the Repeal Movement in Nova Scotia. In many respects John F. Stairs and his family came to epitomize the National Policy, in both politics and business. Never ones to cry over spilt milk, they had long since abandoned the anti-Confederate cause of W.J. Stairs and Joseph Howe, and got on with the task of expanding both their business interests and political influence. In many respects, the younger Stairs' career as a federal Tory is a remarkable illustration of a political transmogrification. Unfortunately, his later career was also characterized by a blurring of the lines between politics and business, sometimes to the detriment of the latter. Nonetheless, he espoused a number of causes that would resonate with modern day residents of the Halifax Regional Municipality.
Acadiensis
EXCERPT
Has any entrepreneur made as big an impact in such a short period of time as Max Aitken did? He burst on the scene in 1902, as John F. Stairs' executive assistant, and basically never looked back from the time his mentor died two years later. For this writer, the most interesting part of Aitken's career, is the early part when he and Stairs were the biggest players in Maritime industry and finance. In some respects, the questions first raised in an article published by Acadiensis Press in 1993 are even more pertinent than Gregory Marchildon's recent biography (Profits and Politics: Beaverbrook and the Gilded Age of Canadian Finance) of Aitken during his short, but remarkably influential, Canadian career. In examining the Scotia Group's activities in the Maritimes and the Caribbean in the period just after the turn of the (last) century, Marchildon rejects the notion that John F. Stairs was a regional patriot, instead suggesting that he was merely driven by profit-maximization and acting as would any member of his class. He has also examined the evolution of the corporate law tradition in Atlantic Canada, which emerged from within the Scotia Group, in support of their various financial undertakings. Marchildon also examined the genesis of Montreal Engineering Company, a true creature of Aitken's genius, which was spawned by the Royal Securities Corporation (RSC) in 1907, and which constituted one of the world's first consulting engineering companies which provided in-house engineering and purchasing management services to RSC and its various utility promotions in the Caribbean and Latin America.
One of John F. Stairs' talents was his ability to bring together seemingly disparate interests, to work towards a common goal. There is much evidence to this effect, in his work with Nova Scotia Steel, Acadia Sugar and Consumers Cordage. Clearly, however, he would not have tolerated the friction between Harris and Aitken. But would he have been able to control the upstart Aitken, his protégé? One way of controlling Aitken was by rewarding him with jobs and increasing responsibility. Harris was too short-sighted and insecure to see this. It is reasonable to conclude that Harris' enmity for Aitken kept Scotia out of both the Canada Car and Foundry and Stelco mergers, and thus sealed its fate forever. Scotia was eventually absorbed into the British Empire Steel and Coal (BESCO) merger in 1921, with disastrous consequences. The small (by North American standards) Nova Scotia Steel and Coal Co., built and nurtured by local interests, was ultimately sacrificed at the altar of high finance and hubris. It is difficult to disagree with Marchildon's assertion that "Just six years after John F. Stairs' passing, Aitken had turned his mentor's small Maritime bond house into a transatlantic investment bank, and was operating in the very centre of the British Empire and world finance. Stairs himself would have been astonished". It is tempting to ask what would have happened if Stairs had lived past the age of 56, and if he could have continued to harness Aitken's many talents. Would they have succeeded with their Alliance Bank merger, a shipbuilding project they were negotiating with Swan Hunter, and the continuing development of Scotia? Would Aitken, Killam, Nesbitt and Pitfield have all ended up in Montreal and London, or would Halifax have emerged from Montreal's shadow?
Fernwood Books
EXCERPT
Much has been written about the National Policy and the response to it in the Maritime provinces, which in many cases was quite positive. While there was nothing in the legislation intended specifically for the Maritimes, such as a shipbuilding policy, it was readily embraced in northeastern Nova Scotia, where many truly felt that the region would become the industrial heartland of Canada, with the newly completed Intercolonial Railway providing access to the vast markets of central Canada and the West. In short, these Maritimers turned their backs on the sea and, for a short time, prospered.
Having been arch anti-confederates, the Stairs family of Halifax in many respects came to epitomize the National Policy in the Maritimes. Besides their ongoing interests in chandlery, shipowning, and banking, they would go on to play a prominent role in the region's sugar refining, steelmaking, and financial services industries, in the form of Acadia Sugar, Nova Scotia Steel and Coal, and Royal Securities Corporation, to name but a few. They also represent a Maritime example of "merchant" capital making the transition to "industrial" capital, another issue that historians once hotly debated. The issue of whether the Stairs acted more as financiers than industrialists is, for our purposes, moot. Their expertise clearly lay in facilitating the movement of capital into industrial enterprises. With the notable exception of their ropeworks in Dartmouth, they preferred to let experts run their factories. Nonetheless, they remained committed to an industrial future for Nova Scotia long after many of their "mercantile" colleagues had abandoned hope. To some extent, the Stairs's participation in industrial enterprises was directly linked to their other interests, such as William Stairs Son and Morrow (WSS&M), the family's chandlery. Both the ropeworks, established in 1868, and their participation in the sugar industry in the 1880s had a few tenuous links to their ownership of vessels.
By November 1867, four months after confederation, W. J. Stairs, having been an arch anti-Confederate, evidently had a change of heart, perhaps influenced by anticipated changes in the Canadian tariff, or by the new reality facing Nova Scotia. Alternatively, he simply may have felt that the firm could make more money by purchasing their own raw materials, shipping the hemp in their own vessels, and selling it to their own customers through WSS&M, instead of continuing to import it. Having partnered with many other owners and investors, especially in Maitland, New Glasgow, and along the South Shore, and already having an established market for their chandlery business, the Stairs were able to give Dartmouth Ropeworks a brilliant head start. At the peak of shipbuilding activity in 1875 there were 2,787 registered vessels in Nova Scotia alone, representing a huge potential market. Even before the National Policy was begun in 1879, Stairs must have felt that confederation would provide unprecedented opportunities for such an enterprise . He believed that not only could they supply their traditional shipping market, but also the expanding fisheries and, more alluring still, the market for twine in Ontario and on the Prairies.
The Stairs family decided sometime in 1867 to build an enormous industrial complex north of the town of Dartmouth to manufacture rope. They invested their own money in the enterprise, with $150,000 of working capital provided by the Union Bank of Halifax. The complex covered four hectares, took almost two years to construct, and was fully operational by early 1869. It was located between Wyse Road and Common (now Victoria) Road, and originally consisted of six buildings. Curiously, given the Stairs' ownership of waterfront property in Dartmouth at the foot of both Lyle and Jamieson Streets, as well as the need to import most of the raw material required for rope making, the plant was not built on tidewater. Nor did it have rail access, an issue that would later play a role in John F. Stairs' entry into politics. But the property did have a stream running through it, and there was plenty of room for expansion.
The art and mystery of rope making have been described elsewhere, and the industry itself immortalized in a poem by Henry Wadsworth Longfellow. The Stairs¼ complex in Dartmouth was typical of those found in New England in the same period. The principal building was a four-storey brick structure 33.4 metres by 15.2 metres. The first floor contained administrative offices, while the second storey housed 13 rope machines. On the third floor were 40 spinning machines and three marline machines, and on the fourth floor six drawing-out machines. A huge ropewalk stood at the rear of this building, which fronted on Wyse Road. It was built of wood, was two storeys high and measured 365.8 metres in length, the longest building in Nova Scotia, and probably one of the largest in the Maritime provinces. The length of the ropewalk ultimately determined the longest length of rope made. It turned out rope of all types, including 30.5-centimetre and 35.6-centimetre hawsers used to tie up ships and pay out anchors. Tarring, which was used to bind the ends of the ropes together, was done in an adjoining building. An oakum factory occupied another two-storey structure 19.8 metres by 12.2 metres. On the first floor was a clipper, a washer, and three pickers, capable of transforming two tons of „junk oakum¾ daily into the market-ready article. On the top floor, new oakum was prepared by a picking machine and five carding machines. From those devices, oakum was rolled out ready for the caulker's use. Oakum was (and is) used to seal the area between wooden planks in wooden boats. Another building housed the engines and boiler room, while still another was used for repairs and fitting out. A storehouse 27.4 metres by 12.2 metres kept Russian hemp, oakum, and manila that was processed into rope, while yet another building stored the finished product...
...Dartmouth Ropeworks, however, fared better than most nineteenth-century Maritime enterprises. Because of the involvement of John F. Stairs, the pre-eminent Maritime financier of his time, it actually benefited from the consolidation movement of the 1890s. Rather than being swallowed up by some central Canadian company, as was the norm, Dartmouth Ropeworks became part of a larger entity, Consumers Cordage, which was managed from Dartmouth until George Stairs¼ untimely death in 1908. Moreover, despite the oddity of the federal government¼s support for the establishment of rope making facilities in Canadian prisons, as well as its tariff policy that allowed American rope into Canada while Canadian exporters themselves had to contend with an American tariff wall, the company was able to adjust once again, just as it had to the loss of its deep-sea sailing fleet a generation earlier, when it became a major supplier to the Maritime fishing industry. Only when competition from international producers and synthetic materials became prevalent in the late 1950s did the company finally succumb.
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