"THE SUN RISES IN THE EAST"
An Address by LIONEL AVARD FORSYTH
President, Dominion Steel and Coal Corporation Limited
Thursday, October 22nd, 1953
CHAIRMAN: The President, Mr. A. E. M. Inwood
MR. INWOOD: During our first three meetings of this year, we have had the pleasure of hearing three distinguished persons from the United Kingdom--a British government official and author: a British airline executive and a noted British musician.
Today, we return to the scene of our own national life and welcome a chief executive of the Canadian steel industry and head of one of Canada's largest and most vital steel companies--Dominion Steel and Coal Corporation.
DOSCO conducts operations in Newfoundland, Nova Scotia, New Brunswick, Quebec and Ontario, employing some 30,000 Canadians. Last year its assets exceeded 115 million dollars: it disbursed 146 million dollars and paid taxes amounting to ten million dollars.
The man who leads this industrial empire--Mr. Lionel A. Forsyth, is a Nova Scotian, having been born in MountDenson. He attended King's College, graduated from its University, taught there for a year and a half, followed by post graduate studies at Harvard. He then served in Mr. Enman's great financial institution-the Bank of Nova Scotia in Toronto, but subsequently returned to his Alma Mater to accept an appointment as professor of modern languages, much I am sure, to Mr. Enman's eventual regret.
To commence a brilliant legal career he was called to the bar of Nova Scotia in 1918, practiced in Halifax and Montreal and was appointed Queen's Counsel. He had the distinction of arguing three appeals before the judicial committee of the Privy Council in London, being successful, of course, in all three. Following this outstanding legal career, he became general counsel for Dominion Steel and Coal Corporation upon its formation in 1928 and eventually assumed its presidency in January 1950.
He is an ardent, but a happily indifferent golfer, a fisherman and duck hunter. Mr. Forsyth says he is a successful farmer and breeder of dairy cattle if one eliminates from consideration, the financial aspects of farming.
His subject is: "The Sun Rises in the East."
MR. FORSYTH: Although this is the first time that I have ever been privileged to attend a gathering of the members of the Empire Club in any capacity, the reputation, not to say renown, of this Club is such that I deem it a great honour to have been invited to lunch with you even though, like Tommy Tucker, I must sing for my meal.
I am no stranger to the City of Toronto. When I was introduced to this meeting a reference was made to my service in the Bank of Nova Scotia. That important episode in my life began in this City some forty years ago.
It is, indeed, a far cry from the palatial structure which houses the activities of my former employer in today's Toronto to the premises to which we gained entrance through the grimy and forbidding doorway of 38 Melinda Street, and where, practically single-handed, as it seemed to me, I carried on the business of the Bank of Nova Scotia. Of course better men than I was have come to take my place, certainly they are better builders.
I look back upon my association with and activity in the banking world as an experience which later proved to be of inestimable value and as the source of friendships which have been durable and satisfying.
All this has little to do with my subject "The Sun Rises in the East"; and I had better get on with that. I chose this title for my address to you today not because of any cryptic thought comprised within those words, nor because I intend to imbue them with a meaning other than their plain and simple import.
I really chose the title because it appealed to me as a straightforward statement of fact, about which there can be, I suggest, a minimum of controversy.
However, if any one doubts the soundness of the statement and is not satisfied as to the location of the sunrise, I suggest that the logical step for him to take is to rise early and look toward the eastern sky. The nature of sunlight, its effect upon our world and its place in the phenomena of the universe are matters which, of course, require further study which may be carried on looking upward, downward, north, south or west; but no one will ever see the sunrise unless he takes a look at it and to do so he must look toward the east.
I am, as the brighter minds here may have gathered from the Chairman's remarks, the President of a company entitled to use the name Dominion Steel and Coal Corporation, Limited--but more frequently known as "DOSCO".
DOSCO, like the sun, has an eastern origin. I have found that, apart from this one fact, there are few people outside the Maritime Provinces who have much accurate factual information about it; and, whether you like it or not, I propose to enlighten you upon it, because I think that every Canadian ought to be accurately informed concerning the great and permanent industrial institutions of his country.
The Sun rises in the East and covers a lot of territory. Dosco also covers a lot of territory, although not quite as much as the Sun. I have been asked many times-why, at your time of life, with a reasonably successful career at the bar behind you and a future not less promising in that profession, did you forsake it to take office in a concern which, over the years, has, to say the least, had its ups and downs, with perhaps more downs than ups.
My answer has been and still is that we live in a country where the past is history, glorious or inglorious as it stands on the record, and it belongs to the people who made it--the future is romance, adventure and a challenge to those of us who are to make the history which is as yet unrecorded; and so far as I am concerned, Dosco is destined, whether through the effort of myself and those associated with me or of others to take a large and important place in the industrial history of Canada, and I want to help write that history.
I have frequently said that I am a fortunate man. I have worked at many different occupations in my life; I have never worked at anything I didn't enjoy and I take sixty minutes pleasure out of every hour that I work for Dosco. To know why I say this, one must know what Dosco is.
We, who are intimately connected with Dosco, speak of it with pride as the only steel producer in Canada which produces a Canadian finished product from raw materials which are entirely of Canadian origin. We like to stress the fact that no industrial enterprise in Canada employs a larger labour force; we emphasize our position as the largest producer of coal, in Canada, and as being engaged in a greater versatility of operations in steel and its products than any other Canadian concern.
I have said that to appreciate Dosco one must look to the east. On Bell Island, on the south coast of Newfoundland, we mine iron ore from submarine deposits estimated to be of vast extent. Through every hour of every working day, the longest belt conveyor in the world carries one thousand tons of iron ore from beneath the sea a distance of two miles to the surface.
This ore is the foundation material for our blast furnace operations at Sydney, Nova Scotia, and is also exported for use in the steel plants of the British Isles and of Germany.
On the west coast of Newfoundland we operate limestone quarries, and the product fills the requirements of the Sydney plant for this important ingredient in the production of iron and steel.
The coal mines of Dosco's associated and subsidiary companies produce from 16 collieries located on the island of Cape Breton and the Nova Scotia mainland a tonnage of 24,000 net tons of coal per day.
Of this production a quantity of about 1,000,000 tons a year feeds the coke ovens of our Sydney steel plant. The remainder finds its use for domestic and industrial purposes in the Maritime Provinces, in Quebec, and to a limited extent in the Province of Ontario.
The Cape Breton mines are unique in that their coal deposits are largely in submarine areas, from which coal is won at a vertical depth as great as half a mile and at a distance in some cases of 61/a miles from the pit mouth, beneath, in certain places, ocean water 20 fathoms deep.
I am sure that if time permitted me to do so, I could interest every one of you in the problems which arise from day to day in these operations and the solutions which are found for them.
The coal mining industry is often reproached, and with some justice, for its failure to keep in step with the accelerated tempo of modern industry, but we, in Dosco, have, I think you will agree, at least lengthened our stride and quickened our pace.
Our coal operations in Nova Scotia have been for some years beset by steadily increasing costs of production, lower productivity of man power and intensified competition from hydro-electric power, oil and natural gas.
To meet these conditions, we have found it necessary to revise both policy and methods of operation; and you will, I am sure, be interested to know that the steps taken in both directions are beginning now to show such results as encourage us to believe that the industry can eventually be restored to good health.
In the course of our program to improve our mining methods, we have engineered, designed and constructed a machine--which is known as the "Dosco Miner"--which I personally regard as the most significant development in the history of longwall mining the world over.
I shall not attempt to describe the machine, but I content myself with saying that I, myself, have seen this machine--engineered and designed by Dominion Coal Company engineers and constructed in Dosco's shops at Trenton--extract from the longwall face in one of our collieries and deliver to the loading conveyor one and one-half tons of coal in thirteen seconds. No explosives are required in this sort of mechanical mining and little manual labor. Substantial cost reduction and improved safety conditions are, I think, inevitable results; and the extended use of the Dosco Miner, as now planned, will introduce a new operating era not only in our collieries but wherever conditions admit of its operation.
This machine is the foundation garment of the "new look" in coal mining, and when the operation is completely adorned with the conveyor belts which are to replace outmoded hoisting methods and modern plants for preparation of the coal which will, as our first wash plant has demonstrated, improve its quality, we have every reason to hope that coal will retrieve and hold its rightful position in the world of industrial fashion.
So much for the moment for coal. What else does Dosco do?
At Sydney we operate blast furnaces, coke ovens, open hearth and electric furnaces for the production of iron and steel.
Our electrically driven blooming mill, recently completed and now in operation, is the last word in equipment of its kind, has a rolling capacity sufficient to process our entire ingot production, and enables us to boast of an installation second to none on this continent.
At Sydney we produce the billets from which our plants in other locations produce axles, angles, shapes, bars, bolts, nuts, nails and wire; but we also have at Sydney mills in which we roll and finish rails and turn out bars, rods and nails, to mention only those products which occur to me as I rapidly review our operations.
In Trenton, Nova Scotia, we build railway cars, forge axles, marine shafting and like products. Our shell plant at this location is admittedly unsurpassed on the continent; and our machine shop where Dosco Miners and a variety of machine tools are produced is a living memorial to fine craftsmanship and engineering skills of a high order.
The largest forging press in Canada has recently been installed in our Trenton plant; and at this place where the first steel in Canada was poured some seventy years ago, Pictou County craftsmen are turning out forged and machined products which yield place to no others in the world for quality and workmanship.
At Halifax and Dartmouth, Nova Scotia, we have two Shipyards. At the former a graving dock and the only floating drydock in this country are available for repair service to ships of both merchant and naval services. During two world wars this yard has been one of the bulwarks of allied naval activity in the Western Atlantic.
From the building berths at Halifax, destroyers, escort vessels and merchant ships have been added contributions of Canadian industry to Canada's naval strength and marine economy, if such an expression conveys a meaning.
In Dartmouth smaller craft are repaired and serviced on a scale, which, to be fully appreciated, must be seen. Moving westward I pause to mention a plant in St. John, New Brunswick, which bears the name of its founder, James Pender. Here, in a modest but thrifty operation, we produce, from Sydney steel, wire nails and similar light products.
In the City of Montreal the plant of Canadian Tube and Steel Products Limited has electric furnaces, rolling mills, a pipe mill, nail and bolt and nut mills, wire drawing facilities, a woven wire fence plant, and a new high carbon wire mill of most modern and up-to-date design and construction.
In your own City of Toronto our subsidiary--Graham Nail and Wire Products--is in daily operation producing from steel shipped from Sydney those products which its name indicates as its objectives.
At Walkerville, Ontario, our Canadian Bridge Company designs, engineers, fashions and erects bridges, transmission towers, cranes and all types of structure in which steel in structural shapes and forms finds ultimate use.
At this location also our controlled subsidiary--Truscon Steel Company of Canada--operates in the engineering, design and production of lighter structural steel, reinforcing steel, window sashes, hangar doors and a variety of kindred products.
Lastly, and farther west at Ojibway, Ontario, Canadian Steel Corporation Limited--wholly owned subsidiary of Dosco--manufactures fencing and other wire products, also made from Sydney steel, to supply Ontario and Western markets.
I find that I have failed to mention the operation of three railway companies and a fleet of steamships.
Two of the railway companies--the Sydney and Louisburg and the Cumberland Railway & Coal Company--operate in Nova Scotia. The third--the Essex Terminal Railway Company--functions in the Windsor area of the Province of Ontario.
Our steamships which ordinarily are used in the transport of ore, limestone and coal from the Corporation's mine and quarries are now inactive due to a strike of the crew personnel of all Canadian sea-going vessels.
I have endeavoured to give you a brief but, I hope, comprehensive picture of what Dosco is and what it is doing.
Now what does this mean to Canada and what does it mean to you?
When I accepted your invitation to speak here today, I had no thought of mentioning Dosco; but a friend of mine in Toronto only three weeks ago made this remark to me--"Forsyth", he said, "in Toronto financial circles DOSCO is a dog. Most people here think of it as a sort of Government charity supported by subsidies, subventions and doles supplied from Ottawa as a sort of grudging insurance against unemployment of a needy and indolent Maritime population-a pap fed industry, incapable of survival on its merits."
I made up my mind at once that, come what might, I would, in Toronto, justify Dosco as an asset of Canada and myself as something more than a sort of topflight mendicant seeking alms for the Maritimes from the taxpayer's bounty.
What do the statistics show? I speak now of the period during which I have been President of Dosco; and I was elected to that office as of the 1st of January, 1950.
During the three years ended December 31st, 1952, this allegedly decrepit industry has produced 16,713,830 tons of coal and 2,198,262 tons of steel in primary form. From the steel produced we have marketed about 1,500, 000 tons of finished steel products in addition to 250,000 tons of semi-finished steel.
During the same time we have built 6187 railway cars for the two great Canadian railway systems and have exported to Germany and England 2,258,000 tons of iron ore above and beyond our own requirements.
I hesitate to quote further figures but the nature of the case requires it.
During the same three years, Dosco, through its associate and subsidiary companies, has paid to its employees in wages, salaries and pensions-$222,900,000.-and has expended for the purchase of material and supplies, $237, 360,000.00
The Corporation and its affiliates have paid income taxes in the amount of $13,814,300.00 and have deducted and remitted to Ottawa employees' income tax in the sum of $12,274,273.14.
These latter figures assume, I think, some importance, amounting as they do to over $26,000,000.00, when we discuss, as I propose to do, the matter of Government assistance to the industry.
On your behalf I ask myself the question, how much of the taxpayers money was expended in aid of the steel industry, during this period, as compared with its Canadian competitors-the answer can be and is concise-not one damn cent.
The next question is, what assistance did your coal operations have from the Federal Treasury during this period; and my answer is that those of our coal operating companies who are engaged in the transportation of coal to markets in Quebec and Ontario received subventions in aid of the freighting cost amounting to $7,273,923.79.
The policy of coal subventions is, as I conceive it, as distinguished from the negative protective provisions of the customs tariff, one of affirmative action to assure the marketing of Canadian coal, and you will notice that I say Canadian, because all coal produced in Canada, not only that originating in the Maritimes, when carried by rail or water to certain areas, carries with it the right of the carrier to claim subvention in reduction of the transportation cost.
This policy which has been in force in Canada for many years is an ingenious concept founded upon the fundamental principle of protection of national industry and the development of the utmost in self-sufficiency in an important strategic material.
Canada's coal is located in the extreme east and west. Industrial and other demands in central Canada exceeding, as they do, the available supply make it imperative that foreign coal supplies be utilized when available.
The application of a tariff structure similar to that which protects most goods of Canadian manufacture would, it appears, in the case of coal, impose upon central Canadian industry an undue burden, perhaps necessitating higher tariffs on its production.
These, I suggest, are some of the reasons for the subvention policy.
But I do wish to point out that the Canadian coal producer does not, except to the extent that he, as a carrier, transports his product to the so-called subvention areas, received one cent of Government aid, although I would not stultify myself, nor would I attempt to deceive this audience by any suggestion that the payment of subventions toward the cost of the carriage of coal to Quebec and Ontario markets is not an indirect benefit, without which coal production in Canada would of necessity be curtailed to such an extent as to be of serious consequence in any critical periods such as we experienced during two world wars.
But, on balance, the steel and coal industry as carried on by Dosco, has in three years paid into the public treasury nearly four times the amount of subvention monies received by its coal divisions; has provided a livelihood, at standard wages, for over 30,000 Canadians making up its labour force, has contributed over $20,000,000 in exports in support of our international trade balance, has paid over $2,000,000 in customs duties; and disbursed to several thousand shareholders over $6,000,000 in dividends to make no mention of millions of dollars paid in interest to holders of its interest-bearing securities.
I maintain that on that record it is a great and valuable asset on our national balance sheet; and I prophesy, and I think I know whereof I speak, that Dosco is and will be an increasingly important industrial unit in this country as Canada consolidates its claim to industrial world leadership in the Twentieth Century.
For myself, I have always been an incurable romantic. The steel and coal industry may seem to you to afford little romance, less adventure and a complete absence of the lure of the unknown.
For me, thank God, it's different, something I've not yet seen, heard or experienced, awaits me around every corner, in the ore mines, the collieries, the mills, shipyards and shops of Dosco.
You will pardon me, I know, if I close with a quotation from a favourite verse which perhaps expresses what I have not said, and cannot otherwise express:
"It is the seas I have not sailed That beat against my breast.
It is the heights I have not scaled That will not let me rest.
It is the ways I have not gone That tempt my restless feet.
It is the flowers I've never known That are forever sweet.
It is the lips I've never kissed That lure my soul astray.
It is the voice my soul has missed That calls me night and day."
THANKS OF THE MEETING were expressed by Mr. D. H. Gibson, C.B.E., a past President of the club.