THE HISTORY CANADIAN BUSINESS Volume II Industrial development FOREWORD BY ERIC KIERANS Digitized by the Internet Archive 2012 in http://www.archive.org/details/historyofcanadiaOOnayl The History of Canadian 1867-1914 Business Volume Two The History of Canadian 1867-1914 Business Volume Two Industrial Development R. T. Naylor James Lorimer & Company, Publishers Toronto 1975 Copyright © 1975 by R. T. Naylor. All rights reserved. No part ofthis book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, or by any information storage and retrieval system, without permis- sion in writing from the publisher. 0-88862-093-4 paper 0-88862-095-0 cloth Cover design: Robert MacDonald Design: Lynn Campbell James Lorimer & Company, Publishers Egerton Ryerson Memorial Building 35 Britain Street Toronto Printed and bound in Canada Published with the assistance of the Social Science Research Council, using funds provided by the Canada Council. Canadian Shared Cataloguing in Publication Data Naylor, R. T. The history ofCanadian business, 1867-1914. 2v. Bibliography: — Contents: v. 1. The banks and financial capital. v.2. Industrial development. ISBN 0-88862-094-2 (v.l) ISBN 0-88862-092-6 (v.l) pbk. ISBN 0-88862-095-0 (v.2) ISBN 0-88862-093-4 (v.2) pbk. 1. Canada - Commerce - History. 2. Canada - Industries - History. 3. Canada - Economic conditions. I. Title. HF5349.C2N39 380'.0971 8 CONTENTS CHAPTER IX/Staple Production and the Canadian Railway System 2 Western Expansion, 1870-1896 2 The "Laurier Boom" 10 The Agricultural Frontier 13 The Grain Trade 15 Railway Competition and Cartels 1 Freight Rate Discrimination 26 Manufacturers Versus Railroads 30 Notes to Chapter IX 33 CHAPTER X/Patents, Foreign Technology, and Industrial Development 38 Invention and Industrial Growth 38 Pre-Confederation Patterns 40 Post-Confederation Patterns 44 The International Movement of Patents: I 49 The Migration of Patents: II 56 Canadian Industry and Its Northern Vision 62 Conclusion 63 X Notes to Chapter 64 CHAPTER Xl/Commercial Policy and Direct Investment 70 Manufacturing Investment, 1878-1895 70 Manufacturing Investment, 1896-1914 73 — Foreign Investment and Resource Development Forest Industries 78 The History ofCanadian Business — Foreign Investment and Resource Development Mining 83 Conclusion 97 Notes to Chapter XI 98 CHAPTER X11/ Federalism and the Rise of the Corporate Welfare State 104 Bounties and Bonuses 104 Bonusing Before Confederation 108 Bonuses to Infrastructure After Confederation 109 Primary Iron and Steel Subsidies 1 14 The Beet Root Sugar Industry 121 Notes to Chapter XII 124 CHAPTER XIll/The Bonusing System andSecondary Industry 130 Bonusing Agribusiness 130 The Textile Industry 133 Bonusing in Ontario 138 Bonusing in Quebec 140 Bonusing in the Maritimes 144 Bonusing in the West 145 Municipal "Fire Insurance" 146 Subsidizing Internal Migration 147 Subsidizing Foreign Immigrants 149 Costs ofthe Bonusing System 152 Notes to Chapter XIII 156 CHAPTER XIV/The Rise of Big Business 162 Industrial and Commercial Organization 162 Mercantile Cartels 163 The Cotton Industry 168 The Agricultural Implements Industry 171 The Resource Industries 174 The Food Processing Industry 178 Iron and Steel Industries 182 Consumers' Goods Industries 184 Industrial Mergers, 1907-1914 186 Conclusions 193 Notes to Chapter XIV 194 CHAPTER XV/Reciprocity 202 Early Debate 202 Reciprocity, 1911 209 XV Notes to Chapter 214