HALIFAX -- It reads like over-the-top historical fiction: Raids by American privateers, an invasion of the United States, tales of war booty and, incredibly, the loss of what could have been Canada's 11th province.

But that's just the first chapter of how Halifax's Dalhousie University was founded -- 200 years ago Tuesday.

"If you look at the history of the college, it's a miracle that it survived its early years," says Michael Moosberger, the university's archivist.

Dalhousie, now seen as one of the top universities on the East Coast, was born of a series of struggles, he said: "There was tension between the various Christian religions back then. These guys did not play nice with one another."

The story begins as the War of 1812 was winding down, when the Royal Navy in Halifax decided to put an end to harassment by American merchant vessels outfitted for war, otherwise known as privateers.

Moosberger says the colonial secretary asked Sir John Coape Sherbrooke, the lieutenant governor of Nova Scotia, to ensure the Americans didn't disrupt the lines of communication between Halifax and Quebec.

"Sherbrooke was authorized to occupy as much land in Maine as he could," Moosberger says.

In late 1814, a British invasion force was dispatched from Halifax. The redcoats were met with little opposition, as most residents of New England were opposed to the war.

The occupation pushed the Canada-U.S. border about 160 kilometres to the south, effectively absorbing the huge chunk of American territory that now protrudes between southern Quebec and New Brunswick.

Despite the obvious advantages of making northern Maine part of British North America, which included access to vast forests, the British government was preoccupied with rising tensions with France. And in February 1815, the Treaty of Ghent was ratified, ending hostilities between the United Kingdom and the United States.

After occupying the sparsely populated Maine frontier for eight months, British forces left in April 1815, and the 50,000-square-kilometre territory was ceded to the Americans.

What could have been Canada's 11th province -- the British called the Crown colony New Ireland -- was gone.

However, the British soldiers and sailors returned to Nova Scotia carrying a substantial booty -- about 10,000 British pounds collected as customs duties at Castine, Maine, a strategic port near the mouth of the Penobscot River.

The spoils of war would be used to establish Dalhousie College.

The institution was named after the man who called for its creation, George Ramsay, Nova Scotia's new lieutenant governor and the Earl of Dalhousie.

Founded on Feb. 6, 1818, the university marked its bicentennial Tuesday with a special ceremony, including the reading of a lengthy poem by Nova Scotia playwright George Elliott Clarke, who recently ended a stint as Canada's Parliamentary Poet Laureate.

In the poem, Clarke says Dalhousie University "originates as a trophy -- a profit -- of War, as actual booty."

It was Ramsay's idea to set up a non-denominational school open to all in Halifax and modeled after the University of Edinburgh, near his home in Scotland.

But his plan didn't sit well with the local clergy, and Ramsay soon left Halifax after he was appointed governor-in-chief of British North America.

"Without his influence, the institution faltered," the university said in a statement released earlier this week.

"To have a secular college in competition with a Roman Catholic (St. Mary's) college and an Anglican (King's) college, they were not enthusiastic about that," says Moosberger.

As a result, the first instruction was not offered at Dalhousie College until 1838 and the first degrees were awarded in 1866 -- almost 50 years after its founding.

In 2006, the institution boasted about having more than 100,000 graduates.

Today, the university has more than 18,000 students spread across three campuses in Halifax, and an agricultural campus near Truro.

"From the outset, the little college aspired to the highest academic standards," university president Richard Florizone said in a statement. "Two centuries later, Dalhousie University has grown from that 'little college by the sea' to become a national university, and the leading research university in Atlantic Canada."