Part 7 (1/2)
Such temporary measures as the nature of the crisis admitted were taken locally. The Legislature pa.s.sed two Bills guaranteeing a portion of the note issue of both the Union Bank and the Commercial Bank; while a loan of 400,000 dollars was procured from the Bank of Montreal, and additional loans from the Bank of Nova Scotia and the Royal Bank of Canada: thus ”the financial sceptre pa.s.sed to Canada.”[49] At the same time the manager and directors of the Commercial Bank were arrested on a charge of having presented a fraudulent balance sheet. Reuter's correspondent at St. John's noted that in this time of trouble the idea of union with Canada gained ground rapidly. How hopeless the position seemed to calm observers on the spot may be gathered from the following vivid extracts from a letter by _The Times_ correspondent at St. John's:[50]
”Twelve large firms controlled the whole export trade of the colony--fish oils and fish products, valued at about 7,000,000 dollars. Of these twelve only two remain ... and these are sorely stricken. These firms occupied the whole waterside premises of St.
John's, gave employment to hundreds of storekeepers, coopers, stevedores, and others, beside some thousands of unskilled labourers occupied in the handling of the fish. All these men are now without a day's work, or any means of obtaining it. The isolation of the colony, away out in the Atlantic with no neighbour, is its greatest curse.
People unemployed cannot emigrate, but must swell an army of industrials depending on the Government for relief. The city is a veritable aggregation of unemployed; it is a city to let. Every business, factory, wharf, store, or shop employing labour has either suspended business or has curtailed the number of its employees to the lowest possible limit. It is not unreasonable to estimate the number unemployed here to-day at 6,000, every one of whom must be without work until spring opens.”
It is not surprising to find that in this difficulty the minds of the colonists turned towards the Imperial Exchequer. But the distinction is vital between an Imperial grant in relief of a visitation of nature and a grant in relief of financial disasters which may be the result of improvidence or extravagance. The Imperial Exchequer is drawn from complex sources, and cannot be diverted to irregular purposes without injustice to large numbers of poor people. These facts were not unnaturally overlooked in Newfoundland, for in trouble the sense of proportion is apt to disappear. Thus on March 2nd, 1895, Sir W.
Whiteway, the Newfoundland Premier, in a letter to _The Times_, said:
”We have approached Her Majesty's Government, and solicited a mere guarantee of interest to the amount of a few thousand pounds per annum for a limited period, in order to enable the colony to float its loans and tide it over the present temporary difficulties. Up to date the people of this old, loyal colony have received no response. They have been struggling against difficulties in the past, and if they still have to trust to their own inherent pluck, and to the resources of the country, they must only pa.s.sively submit, although they may the more bitterly feel the heartless treatment of the Imperial Government towards them.”
The touch of bitterness in Sir William Whiteway's letter was, perhaps, unreasonable. Mr Goodridge was Premier at the time of the crash, and his Government at once appealed for help to England, on the ground that if it were not forthcoming the colony would be unable to meet its obligations. A proposal was added that a Royal Commission should be appointed to inquire into the whole political and commercial position of the colony. Mr Goodridge was unable to keep his place, and his Government was followed by that of Mr Greene. The new Government at once inquired whether, if the Newfoundland Legislature acquiesced in the appointment of a Commission, financial help would be immediately forthcoming. They desired information also as to the scope of the Commission and the terms on which a.s.sistance would be given. To this the answer was inevitable, that all these points must depend upon the findings of the Commission. In fact, the Colonial Government wished for an unconditional loan and an a.s.surrance that the Const.i.tution of the island would not be interfered with. Mr Greene, in turn, proved unable to hold his ground, and was succeeded by Sir William Whiteway.
The latter subst.i.tuted for the earlier proposals a request that the Newfoundland bonds should be guaranteed by the Imperial Government; the suggested Commission being ignored. This was the request referred to in Sir William's letter. Now it is very clear that although the amount involved was relatively small, a very important principle was raised. Responsible government has its privileges and its obligations, the latter of which flow logically from the former. The Imperial Government charges itself with responsibility for the finances of a Crown colony because it directs the policy and determines the establishment on which the finances so largely depend. It is not reasonable to ask that the British taxpayer should a.s.sume responsibility for liabilities incurred by a colony with responsible government. The _toga virilis_ has responsibilities. The case might, perhaps, be different if there were no danger that the concession of help might be drawn into a precedent. But it must never be forgotten that the aggregate public debts of the self-governing colonies at about that time exceeded 300,000,000.
The crisis of 1895 has been dealt with at some little length, because it would be impossible otherwise to understand the occasion of the great Reid Contract, which will form the subject of the next chapter.
It so happens that the last ten years of the nineteenth century have been more momentous than any equal period in the history of the colony.
FOOTNOTES:
[41] The census of this year showed that the population had increased to 146,536.
[42] _Op. cit._, p. 495.
[43] This question of union was frequently raised--notably in 1906, and during the Great War in 1916 and 1917 (see end of chap. ix.).
[44] Sir Robert Bond, the ex-Premier of Newfoundland; Mr J.G. Blaine, the American Secretary of State.
[45] House of Commons Papers, Miscellaneous, No. 3, 1910, Cd. 5396.
[46] See chap. ix.
[47] December 14th, 1894.
[48] See General Dashwood's letter to _The Times_, December 18th, 1894.
[49] Rogers, p. 189.
[50] January 17th, 1895.
CHAPTER IX
THE REID CONTRACT--GENERAL PROGRESS AND RECENT HISTORY
The next few years may be dismissed briefly, for they were years of unrelieved melancholy, from the point of view of the public financial policy and the political development of the colony. Nor did the disease admit of a readily applicable remedy. The experience of each decade had shown more and more clearly that the colony had nothing in reserve--no variety of pursuits to support the general balance of prosperity by alternations of success. Potentially its resources were almost incalculably great, but their development was impossible without capital or credit. The colony had neither. Under these circ.u.mstances took place the General Election of October, 1897. The a.s.sets of the colony were not before the electorate, and there was no reason to suppose that financial proposals of an extraordinary kind were in contemplation. The result of the election placed Sir James Winter in power. In six months the famous ”Reid Contract” had been entered into--a contract which must be described at some length in these pages, partly because it throws a vivid light upon the const.i.tutional relations between the Mother Country and a self-governing colony, partly because it appears to be incomparably the most important event in the recent history of Newfoundland.
On February 22nd, 1898, Mr Chamberlain received a telegram from the Governor, Sir Herbert Murray, advising him that a novel resolution had been submitted to the Houses of Legislature by his responsible advisers. A fuller telegram six days later, and a letter intervening, explained the proposals in detail. To put the matter as shortly as possible, the Government advised the sale to a well-known Canadian contractor, Mr R.G. Reid, of certain valuable colonial a.s.sets. In the first place, Mr Reid was to purchase all lines of railway from the Government for 1,000,000 dollars; this amount was the price of the ultimate reversion, the contractor undertaking to operate the lines for fifty years on agreed terms, and to re-ballast them. If he failed in this operation his reversionary rights became forfeit. For carrying the Government mails he was to receive an annual subsidy of 42,000 dollars. Minute covenants by the contractor were inserted in the draft contract, ”in consideration whereof,” it continued, ”the Government hereby covenant and agree to and with the contractor, to grant to him in fee simple ... 5,000 acres of land for each one mile of main line or branch railway throughout the entire length of the lines to be operated: the expression 'in fee simple' to include with the land all mines, ores, precious metals, minerals, stones, and mineral oils of every kind.” Besides these general concessions a particular grant of mineral land was made. The areas of land near Grand Lake, in which coal had been discovered, were transferred to Mr Reid, on condition that he should so work the coal mines as to produce not less than 50,000 tons of coal per annum.