The steel plant in Sydney, Cape Breton, opened in 1901. It promised to be a modern facility with state-of-the-art Coke Ovens and an advanced steel making process. After the First World War, the steel industry experienced a recession, which caused hardship for many plants. In 1920, the Sydney steel plant was acquired by British Empire Steel and Coal Company (BESCO) along with steel and coal companies in Sydney Mines and Newfoundland. BESCO proceeded to lay off workers and cut wages at the Sydney plant. The resulting working conditions were said to be intolerable – shifts up to 24 hours long, few or no days off, and no vacations or holidays. After the governor general, Baron Byng, and his wife visited Sydney in the summer of 1923, Lady Byng recalled that she had never seen "a more wretched lot of hovels or a complete lack of any attempt at social service for the employees."
The Sydney steel workers tried to unionize, seeking better working conditions and wages. BESCO refused to recognize the union and, fearing retaliation, pleaded with the provincial government for protection. Provincial "special police" were sent from Halifax on March 28th to keep workers in line. Their presence only heightened tensions between the company and its workforce. Negotiations with BESCO broke off, and on June 28th, 1923, the steelworkers called a strike and began to shut down the plant. The strikers blocked strikebreakers from entering the plant, forcibly removed workers from the boiler houses and coke ovens and threw stones when Sydney's police squad came and read them the Riot Act. The radical militancy of the steel workers was believed to be influenced by a prominent communist organizer, J. B. McLachlan, who was a union leader from District 26 (Nova Scotia) of the United Mine Workers of America (UMW). By BESCO's request, soldiers were sent from Halifax on June 30th – a total 350 troops and 74 horses from the Royal 22nd Regiment, according to the Sydney Report. The military pitched tents and set up searchlights and machine guns around the steel plant. The provincial "special police" reassembled and joined the soldiers as did Sydney's police squad. In total, there were over 1000 soldiers and police on the scene. The Maritime Labour Harold remarked sarcastically, "Such devotion to the BESCO is touching!"
On Sunday evening, July 1st, the provincial police went on the offensive, attempting to drive the strikers away from the plant gates. Finding themselves outmanoeuvered, the police recklessly pursued the fleeing strikers into Whitney Pier along Victoria Road, attacking both pedestrians and strikers along the way and damaging property. The July 7th issue of the Maritime Labour Harold described the events as a "reign of terror." According to the newspaper, an insurance agent, Jack Murphy, was leaving his house with his wife just as the police came galloping down the street. Murphy, who had nothing to do with the strike, was struck on the head by one of the police officers, and he was bedridden for four days afterward. The newspaper further reported that a 52-year-old man was hit on the head twice despite telling police he was heading home. His wife was also beaten on her way home from church. A man with one leg and a visually-impaired child were also beaten by the police, knocked over, and left lying on the road. Because of these and other instances of police brutality that day, July 1st, 1923, came to be known as "Bloody Sunday."
Although he was not witness to the "Bloody Sunday" attack, union leader J.B. McLachlan, released an official letter to the UMW, hoping to rally their support for the steelworkers' strike. In it he described the police brutality, including the beating of a 70-year-old woman nearly to death, a nine-year-old boy being trampled, and a pregnant woman bludgeoned, which caused the premature birth and death of her child. McLachlan's letter had the desired effect: beginning July 3rd, coal miners across Cape Breton and Nova Scotia's mainland, plus from one District in Alberta, went on strike in solidarity with the Sydney steelworkers, demanding the military and police withdraw. The union had delivered copies of McLachlan's letter to BESCO and local residents, and on July 6th, arrest warrants were issued for McLachlan and the president of District 26, Dan Livingstone. They were accused of "publishing false tales" that could incite "mischief" amongst the public. Legal battles ensued, which both distracted union organizers and took skillful and radical organizers out of the picture. Without McLachlan or Livingstone out of the picture, the UMW leader, John Lewis, tried to shut down the sympathetic strike. On July 17, all officials from District 26 were removed from office, leaving the union in shambles. The sympathetic strike dissolved, and with it the steelworker's power to achieve their goal. On August 2nd, the steelworkers voted to return to work.