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Oscar Douglas Skelton and Canada’s Economic History

Terry Crowley, University of Guelph

Oscar Douglas Skelton (1878-1941) provided the essential bridge between the founding of Canadian economic history by Adam Shortt in the late nineteenth century and its larger development by Harold Innis from the 1920s to the 1950s. More than Shortt, Skelton was the first to identify the parameters of the economic history of the northern dominion. Long before Canada became officially independent of Britain in 1931, Skelton’s writings hypothesized a nation that he saw coming into existence on the basis of colonial economic activities. These ventures were forged in both private and public spheres in defiance of a vast geography that otherwise would have prohibited the formation of a national identity.

As one of the earliest professionally trained political economists, Oscar Skelton turned to history after acquiring a distaste for intellectual attempts to make the world conform to theoretical paper sketches purporting to elucidate immutable laws. The diachronic methods of historical study appeared to him to provide knowledge with more satisfying richness and complexity than the synchronic approaches of the more theoretically minded. As a scholar who was also a public intellectual intimately involved in the political and economic currents of his time and place, Skelton taught at Queen’s University in Kingston (Ontario), published extensively in a variety of media, and eventually became Undersecretary of State for foreign affairs and the closest advisor of two Canadian prime ministers, William Lyon Mackenzie King and Richard Bedford Bennett.

Born into Anglo-Irish stock in Shelbourne, Ontario, Oscar Skelton received his earliest education locally and in neighboring Orangeville, north of Toronto. At Queen’s University he studied Classics and went on to graduate work in the subject at the University of Chicago, but finding the program unsatisfactory, he returned to Kingston to take more courses in political economy from Adam Shortt. Having already developed a fine writing style that communicated with verve and color, Skelton returned to Chicago in 1905 where he prepared a thesis in its department of political economy on Marxism. Department chair James Laurence Laughlin, who had founded the Journal of Political Economy, served as his advisor, but by the time he graduated in 1908 he regretted that he had not studied with Robert Hoxie, a labor economist. Work in political economy at Chicago proved formative to the young man by introducing him to such great thinkers as Thorstein Veblen. With this intellectual formation Oscar Skelton was soon able to surpass Adam Shortt whose academic preparation had been in philosophy and science before he had turned to economic history. Skelton’s doctoral dissertation about socialism (largely Marxism) led to his disenchantment with formalized theory and his turn to historical study. By the time the thesis was published as book in 1911 – acclaimed by Vladimir Lenin and British guild scholar G.D.H. Cole – Oscar Skelton not only accurately predicted the command economy that would ensue under communism but he also arrived at a position that sided fully with the historicists within the emerging discipline of economics rather than with the marginalists.

Employed at Queen’s University, Skelton held the Sir John A. Macdonald Chair, became chair of the Department of Political and Economic Science as the two disciplines progressively disentangled themselves, and then Dean of Arts before he was appointed to the federal government in 1924. During this time he published seven books of history and economic history, as well as innumerable scholarly and popular articles. More than any of his other works, Skelton’s volumes on the economic history of Canada from Confederation in 1867 to 1912, his studies of banking, and his volume on railroad builders gave shape to an emerging subject. In these writings Skelton reinvented a colony of the United Kingdom as the North American nation that he wanted to see come about.

As a liberal nationalist Skelton was concerned with collective identities as they expressed themselves in both political and economic spheres. His economic history of Canada since Confederation was the first to examine consistently how markets were organized and economic space was shaped by public and private sectors. Concerns about structures, evolution, and state policy were interwoven with a keen eye to external developments over which the country had little control. Canadians were viewed as restless people striving for material betterment within a context that was only partially of their own making. As a trading nation and as a colony, Canada was dependent on the vagaries of strangers; the talents of Canadians rested in being able to make the best of changing conditions in the United Kingdom or the United States. The country’s nineteenth-century regional economies based on fishing, farming, lumbering, mining, and manufacturing had moved increasingly into national and international markets through the force of technological change and commercial policies. Reciprocity between the British North American colonies and the United States from 1854 to 1866 had extended the possibility of increased trade, but after it failed, both countries pursued protectionist policies despite Canadian efforts to break the juggernaut. This trend reached its apogee in 1879 with John A. Macdonald’s national policy tariffs, but in Skelton’s view protection had been waged at a price to consumers and the country as a whole. Economic stagnation in the 1880s and the return of depression between 1893 and 1896 increased emigration to the United States.

Canada’s fate was only partially determined by her geographical proximity to the burgeoning republic; Canadian ingenuity and ties to the United Kingdom were equally important. Willingness to grasp opportunities provided by technology allowed the creation of a country that might otherwise have been little more than remotely scattered regions pursuing desperate policies. “The railway found Canada scarcely a geographical expression and made it a nation,” Skelton exclaimed. This bold stroke bordered on technological determinism and flew in the face of Canadian imperialists who saw the country as only British North America. It also countered Toronto historian Goldwin Smith’s view that rampant anti-Americanism alone seemed to hold the country together. While carefully delineating how Canadian interest in railroads developed, and not ignoring its seedier side as a corrupting influence in political life, Skelton pursued his argument, reserving the most fulsome praise for the Canadian Pacific Railway completed to British Columbia in 1886. Prior to its construction, Skelton thought, Canada “covered half a continent, but in reality it stopped at the Great Lakes. There was little national spirit, little diversity of commercial enterprise. Hundreds of thousands of our best born had been drawn by the greater attraction of the United States’ cities and farms, until one-fourth of the whole people were living in the republic.”

There was also a larger conclusion to be drawn. If Canadians had managed to construct the largest railroad in the world before the Russian Trans-Siberian, and since the ratio of people to railroad kilometers was also the highest, the C.P.R. carried even greater significance. “Here, again,” Skelton thought, “if railways were Canada’s politics it was not only because Canadians were materialists, but because they were idealists. They were determined in spite of geography and diplomacy, in spite of Rocky Mountains and Lake Superior wilderness, Laurentian plateaus and Maine intrusions, that Canada would be one and independent.” Skelton’s principal contentions about the role of geography and historical links to Europe in Canadian history were not far from the mind of a young Harold Innis when, two years after Skelton’s The Railway Builders appeared in 1916, he embarked on a doctoral program in political economy at the University of Chicago to write a dissertation on the Canadian Pacific Railway.

Skelton also struck another theme in Canada’s economic history that proved enduring. What, Skelton asked, was the country’s fate: “to link our commercial destinies with Great Britain or the United States – or neither?” Maintaining that Canadians sought advantage where they could, his question proposed the context within which he saw national history evolving. Oscar Skelton portrayed Canada as having existed precariously not just within a colonial relationship but between two poles on either side of the Atlantic. Sometimes, as his statistical studies of World War One finances showed, Canada moved closer to the United States, other times it stood more aloof despite the advantages he believed that freer trade would bring, especially in stemming emigration to south of the border.

If Adam Shortt was the father of economic history in Canada as Harold Innis said, then Oscar Skelton was the vital spur who combined Shortt’s rigorous methodology with far reaching interpretations challenging the imagination. Shortt had been so entranced by the new methodology of documentary evidence that his output was highly fragmented and displayed little coherence. Skelton, in contrast, had the ideas, flare for writing, and dedication and discipline, although his political histories were unabashedly whiggish in their present-mindedness and Liberal bias. Oscar Skelton made his most original contributions in economic history where his connection of state policy and market logic in economic development was suggestive to Innis and his work influenced other economic historians such as William A. Macintosh. Innis’ studies in the economic history of Canada, and later of communications, also assumed the same determinist bent that had appeared in Skelton’s work. Oscar Skelton proved to be a formative influence in the development of economic history in Canada.


Berger, Carl. The Writing of Canadian History: Aspects of English-Canadian Historical Writing since 1900. Toronto: University of Toronto Press, 1986.

Crowley, Terry. Marriage of Minds: Isabel and Oscar Skelton Reinventing Canada. Toronto: University of Toronto Press, 2003.

Ferguson, Barry. Remaking Liberalism: The Intellectual Legacy of Adam Shortt, O.D. Skelton, W.C. Clark and W.A. Mackintosh, 1890-1925. Montreal: McGill-Queen’s University Press, 1993.

Innis, Harold. Staples, Markets, and Cultural Change: Selected Essays. Daniel Drache, editor. Montreal: McGill-Queen’s University Press, 1995.

Skelton, Oscar. Socialism: A Critical Analysis. Boston and New York: Houghton Mifflin, 1919; London: Constable & Co., 1911.

Skelton, Oscar. General Economic History of the Dominion, 1867-1912. Toronto: Publishers’ Association of Canada, 1913. Prepared for Canada and Its Provinces, vol. 9: 95-276.

Skelton, Oscar. “Early Banking in Upper and Lower Canada”; “The Merchant’s Bank of Prince Edward Island”; “The Bank of British Columbia.” In A History of the Canadian Bank of Commerce, edited by Victor Ross, vol. 1. Toronto, 1920.

[Skelton, Oscar]. “Historical Sketch.” In Fifty Years of Banking Service, 1871-1921: The Dominion Bank. Toronto: Dominion Bank, 1922.

Watson, A. John. Marginal Man: The Dark Vision of Harold Innis. Toronto: University of Toronto Press, 2006.

Citation: Crowley, Terry. “Oscar Douglas Skelton and Canada’s Economic History”. EH.Net Encyclopedia, edited by Robert Whaples. January 16, 2007. URL