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Canada and the Position and Progress of Newfoundland in 1905



[Canadian Annual Review, 1905; for full citation, see the end of the text]


The Island of Newfoundland had a year of considerable prosperity and at various points came into touch with Canada or indirect connection with its interests. During 1904 the annual revenue had increased to a total of $2,700,000, the prices of fish had been excellent, lumbering and mining had been most successful, industrial development had been marked and the export of minerals totalled $1,241,912 in value. At the beginning of 1905 the Arbitration Commission, appointed to give an award in the case of the Reid-Newfoundland Company against the Island Government, and resulting from the latter's expropriation of the Telegraph lines of the Island , met in Toronto. The first sitting had been held in Newfoundland during October. The Arbitrators were the Hon. Edward Blake, M.P., of London, Mr. Donald MacMaster, K.C., of Montreal , and Mr. P. S. Archibald, C.E., of Moncton , N.B. The Newfoundland Government was represented by the Hon. Sir E. P. Morris, K.C., Attorney-General and the Hon. L. O'B. Forlong; and the Company by the Hon. Sir J. S. Winter, ex-Premier of the Island and Mr. A. B. Morine, K.C., Leader of the Opposition. Mr. R. G. Reid, himself, was also present. His claim was for $3,500,000 compensation under the Act of 1901 which provided for valuation of the Telegraph interests by arbitration. The decision was finally come to on Jan. 14th but the Award was not made public until Feb. 3rd.


Under this decision signed by all the Arbitrators, with Mr. Archibald as Chairman, Mr. Reid was awarded $1,503,100 with interest from Oct. 1st, 1903, at three per cent., until paid. The Arbitrators were to be paid $15,000 each for their services. Some discontent was expressed in the Island - mainly with the policy which originally gave Mr. Reid vast interests of which this was only one, or a portion of the whole.


Some months later Mr. Reid offered to sell to the Colony his eight coastal steamers and 46 years' leasehold of the Island Railway system for sums varying in published statements from $1,000,000 to $3,000,000. This amount was to include his still-pending claims against the Government although he proposed to retain the lands, dry-dock and electric concessions. Since 1901, it may be added, Newfoundland had paid him $1,000,000 for relinquishing proprietary rights in the Railway, $850,000 for relinquishment of certain lands, and $854,000 for improvements on the Railway, in addition to the $1,500,000 recently awarded. His explanation of this offer was that he could not get on with the Bond Ministry which, he claimed, had for years steadily discouraged instead of aiding him in the endeavour to develop the Island interests under his control.


On July 18th it was announced that the Government of Sir Robert Bond had refused the propositions made and, in the Montreal Star of Aug. 2nd, Mr. W. D. Reid explained that there had been two proposals by their Company - one to relinquish the whole development enterprise to the Government for $9,500,000 and the other to sell simply the transportation interests at a figure which, he claimed, would not recoup them for their expenditure in the opening years of operation, to say nothing of the now certain remunerative return in the future. The reasons for this offer were given as follows: "An idea had long been prevalent in Newfoundland that the Reid Company had paid far too little to the country for the railway and other franchises and that the country had suffered materially from the bad bargain they had made. This idea had been so fostered and harped upon for political ends, keeping alive a constant feeling of bitterness, and creating so much friction, that in order to remove the feeling by giving the Colony a chance to re-acquire all the properties involved the Company had made this offer."


He also maintained that the Company had done much for Newfoundland. "Up to 1898 when the railroad was completed and the Reid Company took over its operations, the country's annual revenue was $1,500,000. The exports and imports combined amounted to about $10,000,000 with the balance of trade slightly against the Colony. And these figures had remained about the same for years. In 1904 the revenue had increased to $2,700,000 with imports and exports, combined, to about $20,000,000, and the balance of trade was in favour of the Colony." It was announced on Sept. 26th that the Premier had completed arrangements in London for the issue of a loan of $2,000,000 at 3½ per cent. to pay off Mr. Reid in connection with the Telegraph Award. On Dec. 1 st it was stated that the Reid-Newfoundland Company was pressing another claim of about $1,000,000 against the Government for additional improvements on the Railway since the Arbitration of 1902.


Meantime, the Harmsworth interests of London , under the name of the Anglo-Newfoundland Development Company, had made arrangements with the Island Government to acquire some 2,000 square miles of pulp and timber lands in the heart of the Island under a 99-year renewal lease. The concern was capitalized at $5,000,000 and under the agreement must spend $1,000; 000 in development work and, especially, in the erection of large pulp and paper mills from which the Harmsworth newspaper interests would he supplied. The contract was duly approved by Act of the Legislature with careful regulations as to prevention of forest fires; admission of materials for construction and manufacturing purposes duty free; public liberty to fish, shoot, hunt and trap and navigate streams, lakes and rivers, within the area granted; Government rights as to railways, wharves, etc.; and the enforcement of the law as to protection of animals, birds and fish. There was some agitation against the arrangement and the legislation and a public meeting of protest was held in St. John's.


It was urged that the Harmsworths were getting too much and the Island too little; that the measure (which passed the House on June 15th ) was rushed through the Legislature in a hurry; that the Harmsworths, for an undertaking to spend $250,000 in four years and $750,000 more in the sixteen years following, received a grant of 2,500 square miles of the best lands in the Island in perpetuity; a concession of free entry for all machinery for original installation of mills, but not in substitution for old machinery, in perpetuity; the rights to the minerals for a royalty of five per cent. of the net profits; a grant of 10,000 acres of land outside their main area, for warehouses, etc., on the same terms as the original tract; the right to expropriate property (anywhere in the Islands, some critics claimed) necessary to the conduct of their business; and that the very stringent regulations provided to prevent the area from being injured by bush fires were too harsh in their operation upon the people of the Island.


In answer to these criticisms and to questions asked in the British Parliament Sir Robert Bond cabled on June 23rd to the press the following explanation: "The facts are that a private firm in England purchased from private parties here, for $600,000, their leasehold and interest in 1,100 square miles of timber property, including the fee simple of mills, houses, and 23 miles of private railway built thereon. In order to encourage the investment of British capital in the establishment of a paper and pulp industry the Government has transferred to the English firm about 800 square miles of unappropriated land forming a watershed, most of which is barren, and is required by the English firm as a firebreak over which they could exercise control, and without which they would not risk the investment of their capital. They have to pay the Government a rental on all timber, agricultural and mineral land within the whole area leased, and a royalty on all minerals mined therein. The fishing and hunting privileges and free access to all lakes and rivers within the leased area are reserved to the public. No monopoly has been conferred."


An important issue of the year, more directly affecting Canada - although the cherished Canadian hope of some day bringing the Island into the Union made all these matters of interest - was Newfoundland 's relation with the United States . As to the general development of trade in this connection it may be said that in 1887-8 the total trade of the Island with the United Kingdom was $5,637,658 and in 1903-4, $4,473,133; with Canada, $2,569,779 and $4,525,933 respectively; and with other countries $4,657,146 in the former year and $6,369,976 in the latter - including in 1903-4 a United States trade of $4,461,519. The issue with the United States was a trade and tariff one in the form of the long-standing and unsettled Bond-Hay Treaty of 1902; mixed up with the Fishery privileges accorded the United States in Newfoundland waters. Early in 1905 the Bond Government made a strong effort to get the pending Treaty accepted by the United States Senate and was understood to have offered further concessions. The New England fishing interests, however, led by Senators Lodge and Hale, succeeded in further postponing settlement by amendments which practically destroyed the Treaty.


On Mch. 24th, following this action of the Senate, the Island Government ordered its Customs collectors to refuse American fishing vessels licenses to procure bait in Colonial waters and, when the Legislature was opened on the 31st, the Speech from the Throne announced that the Government had decided to withdraw existing privileges to United States fishermen. These had been granted since 1888 and included the right to buy bait, to obtain stores, to sell small fish and to ship crews. Without these privileges it was impossible to continue operations on the Banks. An Act was promptly passed by the Legislature providing powers for the seizure and forfeiture of any Foreign fishing vessels hovering within three marine miles of the coast and a revenue cruiser was despatched to the scene of fishing operations to carry out the retaliatory policy. The measure was opposed in the House by Mr. A. B. Morine, the Opposition Leader, but passed by 19 votes to 6. Practically, the relations of the Colony and the United States were put back under the Treaty of 1818.


A clause was added to the Bill, before its final passage, giving the Government power to suspend its operation and with the obvious hope that the United States Senate would be persuaded by this legislation into accepting the Reciprocity Treaty. The United States Government was said to have replied to this action by appealing to the British authorities for a veto of the legislation and occasional difficulties developed in the rigid enforcement of the law. They were eventually disposed of without actually calling upon British warships. Upon the whole the policy was carried out and certain valuable herring fishery concessions were also withdrawn. Meantime, a British man-of-war watched operations during the season as did an American cruiser. Bitter complaints were sent to Washington by the Gloucester fishermen, who were now getting a dose of their own medicine, some vessels were seized and negotiations followed between the British and American Governments. To the London Times (Sept. 8th) Sir Robert Bond made the following statement:


When it became evident that the Senate was not prepared to confirm the Convention my Government felt that in justice to its own people it could no longer continue the privileges that had been freely given to the United States fishermen for years past in anticipation of the ratification of the Convention by the Senate as soon as opportunity offered. These were very important concessions, for the United States fishermen had free access to our unlimited bait supply, and the success of the New England Fisheries very largely depended upon their continuation. Not only could they come into the harbours and bays of the Island to obtain bait, but they had the privilege of procuring ice for the storage of that bait, and supplies and crews for the conduct of the Fishery. We have now withdrawn these privileges, putting in force the Foreign Fishing Vessels Act, which prevents entry into any ports of the Island for any purpose whatsoever except under stress of circumstance. This Act will be continued in force unless and until a fair measure of reciprocity is vouchsafed to the Colony by the Senate of the United States. If any movement in this matter takes place it must emanate from the United States .


Confederation with Canada was not a live issue during the year. Sir Edward Morris, when in Montreal, told The Herald (Jan. 10th) that: "I believe that Confederation is further away than it ever was, for the reason that Newfoundland is now doing for itself what the advocates of union contended Canada would do for us. It will be remembered that the advocates of union contended that the Canadians would develop our Island and reduce the burden of taxation on the poorer classes. We have, ourselves, been able to reduce taxation by over $200,000 in placing flour, molasses, kerosene oil, limes and twines, salt and agricultural and mining machinery, on the free list. There is, in fact, no sentiment in favour of Confederation, and if there is any sentiment at all, it will be in favour of working out our own destiny." In the Toronto Globe of the same date appeared an interview with him expressing similar views and adding: "At the same time if the Canadian Government want the union and take it up as they would any other national question, going to work in dead earnest to bring it about and, after consulting the Government and people of the Island, put generous terms and sound national reasons before the electorate, it would be very rash to say what the result might be." The sentiment of the Island was described as strongly British and as unanimous in favour of Mr. Chamberlain's policy. The Hon. James Baird, M.L.A., one of the few avowed advocates of Confederation in the Colony, told the Toronto World on July 19th that it was bound to come sooner or later but had never been put squarely before the electorate.


During the year Labrador came into Canadian prominence partly because of the visit of Dr. Wilfrid T. Grenfell, the noted philanthropic worker in that wild dependency of Newfoundland, to Toronto in April, and his addresses in various other places; partly through the adventures of the Dillon Wallace and Hubbard exploration parties in its unknown interior; partly through the visit of Sir William McGregor, Governor of Newfoundland, to the Coast region in the summer; and mainly because of a little boundary dispute which developed. For some time a difference had been pending as to the ownership of Hamilton Inlet in particular and the boundaries in general of the Canadian Territory of Ungava and the Island dependency of Labrador. The Island claimed, though not very aggressively, all that part of the mainland from the coast to the watershed between the Atlantic Ocean and Hudson's Bay, and including a fine spruce country and certain areas claimed by the Province of Quebec.


The Statesman's Year Book credited Newfoundland in this connection with 120,000 square miles while the Dominion Year Book restricted its possessions to 7,000 square miles. In Sep­tember, Quebec and Newfoundland got into a slight clash over the former Government's seizure of some logs cut in Newfoundland timber concessions near Hamilton Inlet . The Canadian Govern­ment promptly asked that the whole matter be submitted to a decision of the Judicial Committee but in a London interview on Oct. 2nd, Sir Robert Bond expressed his preference for a Com­mission of an arbitral character. He could not quite understand the sudden immergence of this question. In 1892 the difference had been apparently settled by "the representatives of both Gov­ernments agreeing to appoint jointly a geographer to determine the question in dispute. The matter would appear to have been lost sight of by the Governments during the succeeding ten years. In the meantime the Newfoundland Government had received and approved applications for timber and mineral areas within its Labrador jurisdiction made by Canadian citizens almost ex­clusively." The matter remained unadjusted at the end of the year with an intimation from Quebec that it would be carried into the Courts for settlement. It may be added that the popula­tion of Newfoundland in 1901 was 224,931; that the value of its factories in that year was $1,299,400 and of the goods produced $2,055,264; that the value of the Fisheries in 1902 was $8,605,­881; that the exports of 1903-4 were $9,448,664 and the imports $10,381,897; that the revenue in the latter year was $2,711,158, the expenditures $2,590,810 and the Funded Debt $19,992,901.


Source: J. Castell HOPKINS , The Canadian Annual Review of Public Affairs, 1905, Toronto, The Annual Review Publishing Company, 1905, pp. 477-482.



© 2004 Claude Bélanger, Marianopolis College