To approach this question, one needs to understand the usage of "comma + verb-ing."

"Comma + verb-ing" must refer to the previous clause's subject, and in this case, nineteenth-century settlers.

So another way of looking at the subordinate clause is:

"nineteenth-century settlers making do without timber and nails."

So the only choices available are A, C, and D.

We can eliminate C for wordiness and incorrect usage of "...having..." participle.

A is awkward because "it" is ambiguous, and placeholder should be ahead of its subject (if I remember the rule correctly).

D is the correct answer.

Thanks uWhusky....