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Newfoundland in 1921

Canadian Relations with the Island Dominion



[Canadian Annual Review , 1921; for the full citation, see the end of the text]


The interest of Canada in the historic Island which lies at its front gate has always been considerable; in recent years its pulp and paper manufactures, its great fishing industry, its increasing trade, its large railway interests represented by the well-known Reid-Newfoundland Company of St. John's, its great coal resources and its Paradise for sportsmen, had attracted a growing attention. Its trade of late years had expanded with Imports of $15,193,726 in 1914 (year of June 30) and Exports of $15,134,543 to $26,392,946 of Imports and $30,153,677 of Exports in 1918 and to $40,533,388 and $34,865,438 respectively in 1920. The Pulp and paper industry, chiefly in the hands of Lord Northcliffe's Company at Grand Falls-the Anglo-Newfoundland Development Co.-had grown from a total value of $2,168,164 in 1913-14 to $2,413,601 in 1917-18 and $5,059,936 in 1919-20. Fishery values had fallen, however, although the value of its herring catch was, in 1920, still three times that of 1913-14 and totalled $1,235,864.


Like Canada, Newfoundland shared in the shock of the U.S. Tariff adjustments; its unfavourable trade balance was already $4,000,000 but, on the other hand, its larger volume of trade was with Canada and Britain; in 1920 (calendar year) its Exports totalled $34,856,000 or a decrease of $2,000,000 and its Imports were $33,297,000 or an increase of over $3,000,000. This situation enhanced the importance of its Canadian relations. The United States was chiefly concerned with the export of manufactured foodstuffs, items of clothing and personal furnishings, leathers and leather goods, marine equipment and ships chandlery, musical instruments, tools, vehicles and certain building materials to the Island; Canada sup­plied the largest proportion of Newfoundland's needs in dairy and packing-house products, vegetables, fresh meats, coal, lumber, steel and agricultural implements. The new opportunities for Canada in this market during 1921 were chiefly in condensed milk, groceries, pickled meats, granulated sugar, corn meal, tobacco and cigarettes, cotton fabrics, boots and shoes and India rubber footwear, hats and caps, millinery, paints and varnishes and hardware connected with the fishing trade. There was, also, a considerable demand for motor engines for fishing boats, automobiles, sewing machines, electrical fixtures and specialties, tools and building materials. The Imports in the year of June 30, 1921 were $28,909,727 and the Exports $22,441,261.


Canadian capital and enterprise could do much to develop the admitted resources of the Island; its hardy and thrifty race of workers should prove a useful help in the organization of new in­dustries; its difficulties, in this year, with the American tariff promised to make financial relations with both Britain and Canada closer. Speaking to Canada, the London journal, on Jan. 1st, H. D. Reid, President of the Reid-Newfoundland Co., described certain conditions: "A new tendency has arisen in the Fisheries of Newfoundland, namely, freezing fish and smoking fish - not only codfish but salmon, halibut, turbot, capelin, and herring. Besides this, methods of fishing are changing. Instead of line-fishing, the more intensive trawler fishing is being tried out with success. Every year 75 steam trawlers from France go to the Newfoundland banks. Why do not British trawlers go also?" In Newfoundland there existed at this time on Bell Island, the second largest iron mine in the British Empire, and its output had averaged during the past three years no less than 700,000 tons. The Bell Island hematite deposits extended under the sea and the tonnage of ore in this area was estimated at an enormous total; there were other localities which required only the serious consideration of capitalists and mining experts to develop them into extremely valuable producing areas. Manufacturers of pulp and paper from the United States were in 1921 establishing mills in Newfoundland. In the Canadian Gazette, London, a little later, Mr. Reid declared that:


Newfoundland is one of the greatest undiscovered and undeveloped countries, though in the midst of civilization, in the world. It lies in a most advantageous position between the United States and Great Britain . It possesses vast potential wealth in forests, water-powers and minerals. It has at Wabana one of the greatest iron mines in the world; there are lying dormant the greatest copper mines in the North American con­tinent-mines that are on the seaboard and are nearer to British smelters than any other sources of supply; all kinds of other minerals are to be found in the Island-mica, manganese, slate, marble, molybdenum and silver. Newfoundland presents unrivalled facilities for the prosecution of pulp and paper manufacture. There are immense areas covered with spruce and fir, easily accessible, well watered, and near the seaboard. Many water-powers ranging from 1,000 to 40,000 h.p. are awaiting development. The supply of spruce is unending. There is no need to reafforest after cutting, for the forests reproduce themselves every 40 years. I cannot imagine a country with greater attractions for sportsmen than Newfoundland possesses. All the rivers - and there are thousands of them - abound in salmon and trout, and are free. The salmon are very like Scotch salmon. Why should English sportsmen go to Norway to fish when Newfoundland can offer the best of sport?


As the year passed on, considerable unemployment developed and a strike at the Anglo-Newfoundland Pulp mills caused trouble; several new Pulp mills were started and the Fishing season was well up to the average with, in October, market conditions improving; the Newfoundland Fish Products, Ltd., sent over to Europe one million pounds' worth of frozen fresh salmon, and with improved means of collection were increasing their trade and getting a good market. Difficulties developed in the Fishing industry and as to Government's control over the marketing of codfish and, before the U.S. Tariff complications came to a head, Hon. W. F. Coaker, Minister of Marine and Fisheries, told a London journal (Jan. 15) that Newfoundland might "have to seek a safe market in the United States and the countries under American influence, such as Cuba and Porto Rico, and, in return, give the United States a trade preference on imports because Newfoundland had received little aid from Britain in the disposal of her fishery products or the development of her resources in lumber and minerals." The timber-cutting industry almost collapsed in the first part of the year as a result of low prices and the seal industry closed its season on Apr. 30, 1921, with a catch of 101,452 pelts for the nine steamers - not enough to make the business profitable because of low prices though the catch was greater' in bulk than in the previous two years.


Considerable depression followed owing to the general fall in prices, over-purchase of imports at preceding high prices, reduction in returns on codfish and shrinkage in the book debts of merchants. But it was not as bad as pictured and Sir Richard Squires, Prime Minister, wrote to the New York Tribune (May 20) stating that there was no financial embarrassment, that the newspaper articles of Sir Patrick McGrath in Canada and the United States were too pessimistic-the latter being Opposition leader in the Legislative Council; that

"Newfoundland's trade and labour conditions have certainly been the subject of depression, as in all parts of the world, but the depression has not been as great, nor is there any sign of its becoming as acute, as it has been both in the United States and Canada."


The Legislature was opened on Mch. 30 and the Budget presented on May 25 by Sir Richard Squires, Prime Minister, showed the revenue to June 30, following, as $8,244,104 and the estimated expenditures as $11,171,821. It was pointed out that the merchants had imported in the previous fiscal year $7,000,000 worth of goods over and above current requirements and this had to come off the imports of the fiscal year 1920-21 and thus lessen the revenue as the reduction in prices, also, was doing; Newfoundland, besides, had interest burdens on a war expenditure of $16,000,000 and the total funded Debt was $49,000,000. Sir Michael Cashin, Opposition leader, was vigorous in his criticism and, in dealing with the Labrador boundary dispute with Canada which, it was announced, had been referred under joint agreement to the Imperial Privy Council, claimed that it might become, financially, a question of handing that region over to England or Canada. The Railway situation also became a difficult one during the year and the Premier stated in the Legislature (May 25) that when the Railway Commission's term of office expired the relations between the Reid-Newfoundland Railway and the Government would be a serious question.


During the Session a measure was passed providing for the operation of the Railway system for one year ending June 1st, 1922, by the Reid-Newfoundland Co. The Government guaranteed a loss in operation up to $1,500,000 under the provisions of the Bill, but the Company would meet losses above that figure; it was passed by a vote of 18 to 14. Sir George Bury, of Canadian Railway experience, had been appointed Commissioner to investigate con­ditions and he had reported that since 1904 operating costs had exceeded earnings by $5,750,000; that the joint Commission of the Reid interests and the Government, appointed in 1920, and since in control, had not improved matters. The Legislature was pro­rogued on Aug. 12 after the longest Session in 70 years. Sir P. T. McGrath shared the pessimism of Sir Michael Cashin at this time and, in a despatch to the Halifax Chronicle on July 21 stated that the country "might be compelled to seek terms of Confederation with Canada ." Sir Richard Squires was in Washington early in October and registered Newfoundland's protest against the Fisheries' duties of the Fordney tariff; Hon. W. R. Warren, Minister of justice, was in London during December presenting the case of Newfoundland, in regard to the Labrador boundary, before the Privy Council; Sir P. T. McGrath spent three months at this time searching the archives of Canada and the United States for evidence to be used in connection with this dispute regarding the boundary between Labrador and the Province of Quebec.


Trade conditions bettered at the end of the year and on Oct. 3rd, Capt. Edwards, British Trade Commissioner, stated to the Montreal press that the situation was improving rapidly, that there never had been a serious depression in Newfoundland and that what existed was greatly exaggerated in reports; that the readjust­ment taking place in the ocean service from Newfoundland, as recently inaugurated by Steamship companies, would be a big factor in bringing about a general betterment; that Portugal had recently placed an embargo on Norwegian fish with Newfoundland making a determined bid for the market; that some progress was being made in the development of mineral resources, especially copper mines, with indications of very satisfactory results. During his English visit the Minister of Justice (Mr. Warren) stated that a British corporation was "trying out" copper ore at Green Bay, with a view to development while the Anglo-Persian Oil Co. had a staff of geologists prospecting under arrangements with the Government


Sir Edgar Bowring, Newfoundland 's High Commissioner in London, told the Canadian Gazette on Nov. 3rd that the value of the Dominion's crops and live-stock in 1921 actually exceeded that of her Fisheries. For some years Agriculture had been making slow but sure progress and the movement had hardly been noticed. The crops had been good and the Minister of Agriculture reported to him that there were in Newfoundland 21,000 horses, 80,000 sheep, 28,000 head of cattle, 14,000 goats and 13,500 pigs; a remarkably fine showing for a small population not hitherto credited with being agricultural. The estimated value of agricultural products in 1920 was $19,513,604. He added that: " Newfoundland is financially sound and able to meet her obligations satisfactorily. There is a certain amount of unemployment in the Island, but that has been relieved by schemes of work started by the Government, and as the autumn approaches there is less and less unemployment until at the present moment, I think everyone is fully employed. The Fisheries have been excellent so far as quantity is concerned-well above the average." At a Newfoundland Club dinner, in London on Nov. 24, Sir Edgar pointed out again that Fishing no. longer was the staple industry and that


We get out of the land twice as much as we get out of the sea. Our potato crop, amounting to 600,000 barrels, is more valuable than our Labrador fisheries; our hay crop, combined with roots, such as turnips, is more valuable than our shore fisheries, while the live-stock trade - cattle, horses, sheep, goats, etc. - is more valuable than the Bank fishery; so that Newfoundland, which has always been considered entirely a fishing country, turns out to be an agricultural country. Not that we have by any means developed our fisheries to the extent that we ought. Far from it. There is an undeveloped field there that might claim profitable investment for millions of capital for many years to come. We have only touched the fringe of the fresh fish business, and Mr. Reid will bear me out when I say that his cold storage plant, so far as he has gone, has been successful, and that his huge establishment, exporting many thousands of tons of fish a year is doing very well.


In December H. D. Reid announced, at St. John's, extensive plans for the development of the natural resources of Newfoundland with the immediate employment of 2,000 men and stated that, while in London, he had negotiated a contract with the Armstrong, Whitworth Co. Ltd., to develop the resources of the Humber Valley; by that project paper mills would be established twice the size of the Harmsworth plant at Grand Falls with a capacity of 1,000 tons daily; the contract guaranteed the expenditure of $7,000,000 within two years with the establishment of aluminium works and other industries and extensive water-power development. It may be added that, in 1920, the Newfoundland Legislature had turned down Woman Suffrage and that in 1921 - the fourth year of operation - there were some Prohibition troubles in the Island-Dominion though nothing so marked as in Canada and the United States .


Source : J. Castell HOPKINS , " Newfoundland in 1921: Canadian Relations with the Island Dominion", in The Canadian Annual Review of Public Affairs, 1921, Toronto, The Canadian Review Company Limited, 1923, pp. 188-192.



© 2004 Claude Bélanger, Marianopolis College