Part 8 (1/2)
6. The colony is divested for ever of any control over or power of influencing its own development, and of any direct interest in or direct benefit from that development. It will not even have the guarantee for efficiency and improvement afforded by compet.i.tion, which would tend to minimize the danger of leaving such services in the hands of private individuals.
7. Of the energy, capacity, and character of Mr Reid, in whose hands the future of the colony is thus placed, both yourself and your predecessor have always spoken in the highest terms, and his interests in the colony are already so enormous that he has every motive to work for and to stimulate its development; but he is already, I believe, advanced in years, and though the contract requires that he shall not a.s.sign or sublet it to any person or corporation without the consent of the Government, the risk of its pa.s.sing into the hands of people less capable and possessing less interest in the development of the colony is by no means remote.
8. All this has been fully pointed out to your Ministers and the Legislature, and I can only conclude that they have satisfied themselves that the danger and evils resulting from the corruption which, according to the statement of the Receiver-General, has attended the administration of these services by the Government, are more serious than any evils that can result from those services being transferred unreservedly to the hands of a private individual or corporation; and that, in fact, they consider that it is beyond the means and capacity of the colony to provide for the honest and efficient maintenance of these services, and that they must, therefore, be got rid of at whatever cost.
9. That they have acted thus in what they believe to be the best interests of the colony I have no reason to doubt; but, whether or not it is the case, as they allege, that the intolerable burden of the Public Debt, and the position in which the colony was left by the contract of 1893, rendered this sacrifice inevitable, the fact that the colony, after more than forty years of self-government, should have to resort to such a step is greatly to be regretted.
10. I have to request that in communicating this despatch to your Ministers you will inform them that it is my wish that it may be published in the _Gazette_.
I have, etc., J. CHAMBERLAIN.
Some of the inferences set forth in the Colonial Secretary's lucid letter were questioned by the Newfoundland Government, but substantially his conclusions were not a.s.sailed. The decision of the Imperial Government by no means stayed the voice of local agitation, and the stream of pet.i.tions continued to grow. In a further letter to Governor Murray, dated December 5th, 1898, Mr Chamberlain laid down the great const.i.tutional doctrine which is the Magna Charta of Greater Britain. Every student of colonial politics should be familiar with these pa.s.sages:
”The right to complete and unfettered control over financial policy and arrangements is essential to self-government, and has been invariably acknowledged and respected by Her Majesty's Government, and jealously guarded by the colonies. The Colonial Government and Legislature are solely responsible for the management of its finances to the people of the colony, and unless Imperial interests of grave importance were imperilled, the intervention of Her Majesty's Government in such matters would be an unwarrantable intrusion and a breach of the charter of the colony.
”It is nowhere alleged that the interests of any other part of the Empire are involved, or that the Act is any way repugnant to Imperial legislation. It is a.s.serted, indeed, that the contract disposes of a.s.sets of the colony over which its creditors in this country have an equitable, if not a legal claim; but, apart from the fact that the a.s.sets in question are mainly potential, and that the security of the colonial debt is its general revenue and not any particular property or a.s.sets, I cannot admit that the creditors of the colony have any right to claim the interference of Her Majesty's Government in this matter. It is on the faith of the Colonial Government and Legislature that they have advanced their money, and it is to them that they must appeal if they consider themselves d.a.m.nified.
”No doubt, if it was seriously alleged that the Act involved a breach of faith or a confiscation of the rights of absent persons, Her Majesty's Government would have to consider it carefully, and consider whether the discredit which such action on the part of a colony would entail on the rest of the Empire rendered it necessary for them to intervene. But no such charge is made, and if Her Majesty's Government were to intervene whenever the domestic legislation of a colony was alleged to affect the rights of residents, the right of self-government would be restricted to very narrow limits....
”The fact that the const.i.tuencies were not consulted on a measure of such importance might have furnished a reason for its rejection by the Upper Chamber, but would scarcely justify the Secretary of State in advising its disallowance even if it were admitted as a general principle of const.i.tutional government in Newfoundland that the Legislature has no right to entertain any measure of first importance without an immediate mandate from the electors.”
The pa.s.sing of the particular Bill by no means brought the Reid controversy to an end. In fact, the General Election in Newfoundland, of which the result was announced in November 1900, was fought entirely upon this absorbing question. The issue arose in the following way. The contract contained a clause providing that Mr Reid should not a.s.sign his rights over the railway without the consent of the Government. Mr Reid applied to the Government of Sir James Winter for such consent, but when that Government was defeated in February 1900, no answer had been received. Mr Reid wished to turn all his holdings in the colony over to a corporation capitalized at 25,000,000 dollars, he and his three sons forming the company. On the properties included he proposed to raise 5,000,000 dollars by debenture bonds, this sum to be expended in development.[51]
A Liberal Ministry under Mr Bond, who had consistently opposed the Reid arrangements, displaced Sir James Winter. Finding himself unable to hold his own in the a.s.sembly, Mr Bond formed a coalition with Mr Morris, the leader of a section of Liberals who had not a.s.sociated themselves with the party opposition to the contract. The terms of accommodation were simple: ”The contract was to be treated as a _fait accompli_, but no voluntary concessions were to be made to Mr Reid except for a consideration.” Consistently with this view, Mr Reid was informed by the Government that the permission he requested would be given upon the following terms:
(1) He should agree to resign his proprietary rights in the railway.
(2) He should restore the telegraphs to the owners.h.i.+p of the Government.
(3) He should consent to various modifications of his land grants in the interest of squatters able to establish their _de facto_ possession.
To these terms the contractor was not prepared to accede. It is difficult not to feel sympathy with his refusal. I had the advantage of hearing the contention on this point of a well-known Newfoundland Liberal, who brought forward intelligible, but not, I think, convincing arguments. The clause against a.s.signment without the consent of Government ought surely to be qualified by the implied condition that such consent must not be unreasonably withheld. In the private law of England equity has long since grafted this implication upon prohibitions against a.s.signment. If, however, the Government had been content with a blunt _non possumus_, a case could no doubt have been made out for insisting upon their pound of flesh. They chose, however, to do the one thing which was neither dignified nor defensible: they offered to a.s.sent to an a.s.signment on condition that Mr Reid surrendered his most valuable privileges. It is no answer to say, as many Newfoundland Liberals did say: We opposed the contract from the start, and it is therefore impossible for us to a.s.sent to any extension of the contractor's privileges. In fact, such an argument seems to betray an inability to understand the ground principle on which party government depends. That principle, of course, is the loyal acceptance by each party on entering office of the completed legislation of its predecessors. To borrow a metaphor from the Roman lawyers, the _hereditas_ may be _d.a.m.nosa_, but the party succeeds thereto as a _haeres necessarius_. Any other rule would subst.i.tute anarchy for order, and an endless process of reversing the past for a salutary attention to the present.
It must, on the other hand, be admitted that Mr Reid's conduct was not very well chosen to rea.s.sure his critics. He threw himself heart and soul into the General Election which became imminent, and displayed little judiciousness in his selection of nominees to fight seats in his interests. It is hard to suppose that independent men were not discoverable to lay stress on the immediate relief to the colony which the contract secured, and the inexorable necessity of which it might plausibly be represented to be the outcome. Mr Morine was Mr Reid's solicitor. He was a prominent Conservative and Minister of Finance, and his influence in the a.s.sembly (where his connection with Mr Reid was apparently unknown) had been exerted in favour of the contract.
When challenged on the point, Mr Morine a.s.serted that he advised Mr Reid only on private matters, in which his interests would not come into conflict with those of the colony. Compelled to resign, however, by Governor Murray on account of the apparently incompatible duality of his position, he was reinstated (April, 1899) by Governor M'Callum, on an undertaking that his connection with Mr Reid should be suspended during office. Mr Morine became leader of the Conservative party on the retirement of Sir James Winter, rea.s.suming at the same time his business relations with Mr Reid. In concert with the latter he began a political campaign in opposition to the Liberal party. His partner, Mr Gibbs, fought another seat in the same interest. _The Times_ correspondent above referred to gives an amusing account of other candidates:
”One of Mr Reid's sons has been accompanying him through his const.i.tuency, and is mooted as a candidate. Two captains of Reid's bay steamers are running for other seats. The clothier who supplies the uniforms for Reid's officials is another, and a s.h.i.+pmaster, who until recently was s.h.i.+p's husband for the Reid steamers, is another. His successor, who is a member of the Upper House, has issued a letter warmly endorsing Mr Morine's policy, and it is now said that one of Reid's surveying staff will be nominated for another const.i.tuency.”
It may easily be imagined that to the ordinary voter the Conservative _personnel_ proved somewhat disquieting. Success at the polls would have enabled Mr Reid to say, with Louis XIV.--”_L'Etat, c'est moi._”
Amid extraordinary excitement the election was fought in the autumn of 1900 on the sole issue of the Reid contract, and resulted in a sweeping victory for the Liberal party, supporting Mr Bond in his policy as to Mr Reid's monopolies.
The Reid Contract has been dealt with at this length at a sacrifice of proportion which the writer believes to be apparent rather than real.
Newfoundland is newly emerged from infancy. The story of its childhood is relatively uneventful, but the political experiments of its adolescence must be of absorbing interest to all students of politics.
In 1901 an Act was pa.s.sed giving sanction to a new agreement with Mr Reid in regard to the railways, and incorporating the Reid Newfoundland Company. Under the agreement the sum of one million dollars was to be paid to him in consideration of the surrender by him of the right to own the railway at the end of 1938; and 850,000 dollars instead of 2 million acres of land to which he had become ent.i.tled as a bonus for undertaking to operate the railway until 1938.
He still had, however, claims in respect of certain rolling-stock and equipment that had been provided under earlier contracts; and also claims arising through the surrender of the telegraphs. All these were submitted to arbitration, resulting in awards to Mr Reid of 894,000 dollars and 1 million dollars respectively. However, under the new arrangement, Mr Reid ceased to be the virtual owner of the railway system; and became merely a contractor for its operation. The Reid Newfoundland Company, by agreement with Mr Reid, and with a capital of 25 million dollars, came into possession of over 2 million acres of land, with timber, mineral, and other rights thereon, and took over all existing contracts for working the railway, and mail and steamboat services of the colony, including St. John's Dry Dock and the St.
John's tramways, as well as powers for electric lighting in the capital. The new Company commenced operations on September 1st, 1901.
With the beginning of the twentieth century was inaugurated an epoch of political as well as economic progress in the history of the island. The numerous and widespread activities of the new enterprise gave a great impetus to the colony: it ensured the efficient working of the railway, and gave employment at a good wage to an army of working men in the various branches, and also in connection with the flotilla of steamers that were run. Other spheres of activity were gradually opened up, _e.g._ the establishment of a sawmill to furnish the timber necessary for the various needs of the scheme, the opening of a granite quarry to supply material for bridge building and paving the streets of the capital, the development of a slate area and oil boring, coal mining, the construction of a hotel in St. John's, etc.