The American Consulate and World War I

The reports produced by Charles Freeman and other individuals working at the United States Consulate in Sydney provide us with a first-hand account of the economic conditions throughout industrial Cape Breton during World War I (1914-1918).

In the days following the announcement that Canada would be going to war, although the majority of individuals were patriotic and enthusiastic to contribute to the war effort, they were also worried about what this would mean for Cape Breton’s economy. Sydney was a one-industry town and all enterprise depended on the success of the Dominion Iron and Steel Company.

On August 8, 1914, Freeman wrote, “There is a general feeling of uncertainty amongst all classes as to the future; the laborer fears losing his job, the clerical man his salary, the merchant, contractor and manufacturer his business.”

In the months that followed, Industrial Cape Breton experienced an economic depression in the iron and steel industries which caused a partial shutdown of the plants owned by Dominion Iron and Steel Company. This was the first slowdown in business the city had seen and Freeman predicted that commercial conditions within Industrial Cape Breton would not improve for some time.

Coal was one of the few industries predicted to continue as usual as it remained a product in high demand. It was so important, miners were exempt from conscription as their work was deemed essential to the war effort.

At the close of 1914, the coal industry in Cape Breton saw a dramatic increase in shipments to the United States as tariff duty on coal coming into that country was removed. The quantity of coal exported to the United Stated from Industrial Cape Breton continued to increase throughout the war.

To increase business, the Dominion Iron and Steel Co. found opportunities to produce products that were formerly manufactured by companies located in countries affected by the war, such as war munitions.

In 1915, conditions began to improve as orders for war munitions and products such as iron and steel that were used by manufacturers were in higher demand. Charles Freeman predicted that large manufacturing plants would soon be operating full-time, increasing the opportunity for the import of American products and the export of raw materials to the United States.

By the end of 1915, local industries were having some of their most successful years, thanks to the production of war munitions and orders for steel and iron ore. By the end of the war, economic conditions within Industrial Cape Breton had some businesses experiencing some of the best years they ever had.

Cape Breton – Import and Export

Writing in September 1914, Charles Freeman remarked that many of the goods coming into Cape Breton were produced by European countries affected by the war. For instance, Germany supplied drugs, jewelry, toys, and some linen and woolen goods. Britain, the largest importer, exported woolen textiles, most cookery products, thread, cotton, gloves, clothing, paper, jams, liquors, preserves, canned goods, and more. The supply of these goods was cut off due to the threat of attack from German submarines on vessels sailing across the Atlantic Ocean.

Freeman saw the events of the war as an opportunity for U.S. business. Despite the recession, individuals were still buying cotton hosiery, which before World War I was supplied by Germany, and now could be imported from the United States. Most dealers bought their cotton goods from agents in commercial centers in Canada and they sold them to businesses in Cape Breton.

Trade from the United States increased but this was not solely through work completed by the Consulate. Large corporations operating in Sydney bought supplies exclusively from the United States through purchasing agents. They would hire the purchasing agents who they believed knew the market better than the Consul. The agents would place orders with American exporters and travel to the United States to select goods.

Due to the war, large steamers bunkering in the ports of Sydney, North Sydney and Louisbourg needed to buy coal for fuel. The American steamers were first seen in Sydney harbor in 1915. Freeman remarked that, “The sight of large vessels flying the American Flag is a novelty.” By 1916, American imports had increased by 25 percent. American exporters were finding a ready market as the European goods that were formerly shipped to Canada were unavailable.

Cape Breton also became an exporting district to the United States. Below you will find a table showing the increase in exports from Cape Breton to the United States. Coal exports account for the most significant improvement.

When the Americans came into the World War in 1917, many American sailors and merchant seamen were stationed in Cape Breton, mainly in North Sydney. Their arrival increased the work load of the Consulate. Below is a table showing the increase in work completed by the U.S Consulate from 1917 to 1918.

February 10, 1919

Attention is called to the greatly increased work at this office for the past year as set forth below: