Mr. Chairman I have just received a communication from the Newfoundland Broadcasting Corporation,
which the Secretary will now
read to you.
Broadcasting Corporation of Newfoundland
April 18, 1947.
F.G. Bradley, K.C., LL.B.,
Chairman, National Convention.
Honourable Sir,
In view of certain statements made by
Mr. P.J. Cashin, a member of the National
Convention, during the proceedings at a
recent case in the Supreme Court, the Broadcasting Corporation feels it should have
some
assurance from the Convention on its attitude
towards the recording and subsequent broadcasting of proceedings of the sessions of
the
Convention.
Would you please ascertain the wishes of
the Convention in this respect and advise us
accordingly.
Yours faithfully,
The Broadcasting Corporation of Nfld.,
W.F. Galgay, Manager.
Mr. Chairman This communication is now
before you, gentlemen.
Mr. Higgins I presume the intention of this letter is that the Corporation wishes to know the
feelings of the Convention with respect to broadcasting — whether it is our direct
wish that the
broadcasting of the debates be continued or not.
Speaking for myself, I am sorry that it happened
at the beginning, butnow that it is here and people
have been listening in as fully as we feel they
have been, it might be rather regrettable if it were
discontinued at this stage.
Mr. Starkes I agree with Mr. Higgins. The
people in the outports have no chance whatever
to hear the proceedings of the Convention as far
as newspapers are concerned. The people in
St. John's have the daily papers, but the people
in the outports, if they can't listen in, have no
means of hearing it.
Mr. Bailey In the district I come from, the
people look to the radio for the broadcasting of
what the Convention is doing. I agree with
Mr. Higgins too, that I would have voted against
it had it been put to the question, but since it is in
the House I feel it should be continued.
Mr. Higgins I feel that I would prefer to keep
them in, so that there would be no implication
with respect to a certain case arising out of the
use of it.
Mr. Miller Our duty here is to survey
Newfoundland's position. Now in doing that we
must sometimes be ruthless. We must go without
regard to the law. We are not always going to be
free of libel. Are we going to forfeit the right to
give the public this information, or are we going
to forfeit half the issue as far as Newfoundland is
concerned? Fifty years hence, will it be better that
the people will have gotten our chatter here,
limited and restricted, or will it be better that we
disregard that? We will be at a loss, too, if we
don't get out and talk to our districts, and the
people will be at a loss, but won't we do a better
job if we disregard that and go into the situation
deeply and having fully explored it all, then give
our just opinion on the whole thing?
Mr. Hollett I notice some remarks have been
made about one of the remarks of a certain member of this Convention yesterday. I
don't exactly
know what these references were, but I do know
this: that this Convention was definitely referred
to yesterday as a debating society. If we are
purely and simply a debating society, I think there
is very little room for these microphones here.
That came up, as I remember, in a discussion on
the matter of privilege. We were compared to a
debating society, and had no more privilege than
that. I feel that the presence of the microphones
very certainly informs the general public as to the
proceedings that have taken place. I do feel,
however, that there are occasions when it would
be wise that the prior discussion of certain matters, at any rate, should not go out
over the air,
but merely the decision arrived at by the Convention by a discussion which, in some
cases, might
possibly be heated. I don't think that is conducive
500 NATIONAL CONVENTION April 1947
to the well-being of the public. It also retards the
full expression of the individual members of the
Convention as to their ideas on certain things. I
do believe there are occasions when this long-
suffering public, which was referred to yesterday
by a certain member of the Bar, might be spared
arguments. I do say, as far as a certain member
of this Convention is concerned yesterday, he
said nothing more derogatory about the
microphones than were said by anyone else. I do
think they are serving their purpose provided they
are not monopolised by one or two or a few. I do
think it should be your prerogative to cutout the
broadcasting at certain times.
Mr. Fudge I agree with Mr. Hollett. I may say
that this is the first time I heard of anything
coming in to find out if we wanted this broadcasting. It has been here for a long
time, and now we
have a letter asking if we wish to keep it. They
did not ask us first, and now, as far as I am
concerned, it can stay here....
Mr. Hillier I support Mr. Higgins in what he
said. As the microphones have been here practically the full time for every session,
I see no
reason why they should be removed. I think they
can serve a useful purpose if we, on our part, keep
as near to the point as possible.
Mr. Higgins To bring the matter to a head, I move
that we request the Broadcasting Corporation, from
today, to have the microphones in this chamber.
Mr. Newell I would like to second that motion.
If I might speak briefly, there are one or two
things I would like to point out. First of all, we
should look at this logically, and not be carried
away by anything that anyone says here or somewhere else. If people want to exercise
their
freedom of speech, let them go ahead and do it.
There are one or two things that appear to me, and
the first is that broadcasting is about the only
means of having accurate reporting of what goes
on here. If we do not broadcast proceedings, the
only reporting we can rely on is newspaper
reporting, and they, not being machines, cannot
give full reports of what transpires here, and the
people on the outside have to rely on secondhand
information of what somebody else heard, and
will not really get a full and accurate report.
The other point is this: I feel that if we have
any reason for refusing to broadcast our proceedings, in other words if we put the
microphones
out, I don't see why we should let the public
occupy the galleries. I don't think there is any
necessity for the Convention being conducted in
secret. If it is not being conducted in secret, and
if people care to exercise the privilege of coming
here in person, then I think everybody should be
allowed in through the microphones and broadcasting.
Finally, whether or not we express ourselves
too fully (it has been argued that some of us do
express ourselves too fully because of the
microphones, and its also been argued that we
don't express ourselves as fully as if they were
not here), I don't think the presence of the
microphones should affect in any way at all the
orderly conducting ofour business. and if we, as
a body of 45 people, are not capable of conducting our business in an orderly way
in the presence
of the microphones, I don't think we would be
capable of doing it if the microphones were out....
Mr. Vardy I wish to support the motion, and
frankly I do not see any other way that we can
impart the knowledge that we glean here on the
affairs of the country to the people, except over
the radio. I fail to see in what way it excuses us
from making any fair, full or frank statement in
this Convention. It definitely does not save us in
any way, because if we make a libelous statement, it is still libelous whether the
microphones
are here or not, and the only way that we could
come out in the open and make statements not for
the public would be for the Chairman to call a
secret meeting. I know that the Convention was
referred to yesterday in a very low manner, but I
say that the public of Newfoundland can be the
best judges of that.
Mr. Smallwood I would like, while we are at it,
to say a word that l have been threatening now
for some time to say, a word of praise for the
gentlemen who sit here each day in the press box.
I am myself an old newspaper man, and I covered
sessions of this chamber for many many years
and for various governments, and sat in that same
press box, and I know something about the job of
sitting in here, and reporting for the public the
proceedings that go on. I am full of admiration
and respect for the gentlemen who sit in the press
box daily, representing the newspapers and the
radio stations. To my mind the job that the Doyle
News Bulletin
[1] does each night is masterly — a
April 1947 NATIONAL CONVENTION 501
complete, comprehensive and intelligent compilation of the news of each aftemoon's
proceedings — a masterly job. The job done by Mr.
Jamieson, not exactly as a newscast but as a
commentary, is a job of which all of us as Newfoundlanders ought to be proud, proud
that we
have a Newfoundlander who turns in a first-class,
finished, professional job of commentary each
night. The gentleman who prepares a broadcast
for VOCM each day, again deserves commendation. The same of the men representing the
Evening Telegram and the
Daily News — fair,
impartial and competent. I think our satisfaction
with the Broadcasting Corporation itself, broadcasting the actual proceedings, and
our satisfaction at that being done, ought not to overlook the
splendid service rendered to the people of Newfoundland by the gentlemen who sit in
the press
box....
I have been accused of talking too much. Like
my friend Major Cashin and Mr. Hollett and
Mr. Bailey and Mr. Fudge and other gentlemen
here, perhaps I talk too much. As a matter of fact
I doubt it. I think that's what we were sent here
for — to talk, and think, and study, and carry on
research, and then talk, so that the people of
Newfoundland can hear. Not just talk nonsense,
but talk about our reports. Ten gentlemen here
were appointed as a Finance Committee They
have spent months digging up the facts about this
country's finances for many year past. Major
Cashin turned in a splendid job here the other day,
reading that report. What is the good of doing all
that work, if it is not debated and broadcast for
the people of Newfoundland? Take this magnificent report of the Mining Committee.
The like
of it has never before been assembled in the
history of this country, and I have readjust about
everything published on mining in Newfoundland. What is the good of it, if the people
can't hear the debate?
While I am at it, Mr. Chairman, I don't think
the people of this country owe any gratitude to
the half dozen people, maybe nine, in the last five
or six months mostly hiding behind a
nom de
plume, who have written letters to the papers
sneering at the Convention. We talk too much,
etc., and they have not got the brains to know that
that's what we are here for. If they were elected,
and had to come in here, they would have to hold
their mouths because they have no brains. That's
all we
can do — talk. We can't order anybody to
do anything. We can only study out our reports
and come in here and debate them. We debate the
reports so that the people of Newfoundland will
know what is going on. There is one other thing.
An old friend of mine in Elliston, Simeon Tucker,
a fisherman since he was born almost, was in
town the other day, and he said, "Mr. Smallwood,
what we can't understand in Elliston is this: the
way you fellows there in the Convention cross-
hackle
[1] each other." That's an outport expression, but they forget two things, first that
the
Governor, the day he opened this Convention,
prophesied for us as an old-timer himself in the
House of Commons, he said this, "Now,
gentlemen, you will do your work and make your
studies, and your feelings will run high sometimes, and when men's feelings run deep
their
language will sometimes become a bit heated,
and they will be a bit excited". Save me from the
cold-blooded brute whose feelings can't get
worked up, and a man who can't express himself,
or does not express himself with heat and enthusiasm. I would not trust him. Give
me a man
like Major Cashin or Mr. Higgins, or Mr. Bailey
or myself, a man that feels a thing in his heart and
gets up and says it. But now the people of the
country are not used to that. What do they think
the House of Assembly was — a Sunday school,
where everybody got up and bowed and scraped
and never lost their tempers? Oh no! Is the House
of Commons a Sunday school? Oh no! A man
whose name commands respect in this world, the
Rt. Hon. Winston Churchill, I myself saw
Mr. Churchill in the House of Commons take up
a book in a row that was going on, take up a book
and fling it across the floor at another man. He
was good and excited....
For the first time in their lives, our people have
heard the proceedings of the House broadcast. If
our people could compare our proceedings with
those in the houses of parliament in other
countries, they would say how decent and simple
our debates are. We are a crowd of ordinary
people trying to find out what we can. "Why is it
taking so long?" some say. The Amulree Royal
Commission came'out here and it took them six
months, and they had all kinds of help and experts. Their job was not one hundredth
as big as
502 NATIONAL CONVENTION April 1947
this Convention's. It took six months to produce
a report not as big as one of our nine reports....
What is it we are doing? We are doing the biggest
job so far as digging into, finding out and passing
on, ever done in this country. People who ask that
question have not the brains to get out of their
own way.
Mr. Ashbourne When this Convention opened
on September 11 the microphones were here, and
I for one would not like to debar any person from
hearing what was going on in this chamber. If
there is anybody who does not wish to listen to
the broadcasts, all they have to do is switch their
radio over and listen to another programme.
Mr. Penney I was one of the delegates who said
I would like to see the microphones thrown out
of the room.... At the time I made the statement
in this House, I think we were all kind of upset
with long-winded speeches and I blamed it on the
microphones. I would not want the people of this
country to think I would be a party to depriving
them of information regarding this Convention. I
am just as fully for the obtaining of public information for the people of the outports
as any other
delegate in this Convention. One thing, I would
like to see addresses confined to 15 minutes.
Mr. Butt I think the people of this country are
just as much a part of this Convention as the
actual members sitting here and they are entitled
to every bit of information they possibly can get.
The radio was made for this country, as isolated
as we are....
I had a feeling from the letter that there was
an implication that we ought to soft-pedal our
language. I do not know if that was intended. I
agree with Mr. Smallwood, who already has said
it is up to each individual member, in accordance
with his ability, to say anything he believes and
it is up to each individual to take the risk afterwards, if it be treated as not proper.
I do feel that
we ought to get a little harder, and consequently
to speak of the things on our minds regardless of
who likes it or who does not like it. If we get into
a jam, let us take the rap. The sooner the people
get that attitude, the better for the country.
Mr. Harrington I want to go on record as agreeing heartily with Mr, Butt. When I made my
initial speech in support of Mr. Job's motion, I
felt we should speak our minds with due regard
for the rules of procedure and respect for the
Chair, and we should not be awed in any way by
anyone in the House or outside. In broadcasting
at Christmas I said I had no intention of making
an apology for anything said here. We could not
be expected to turn into Roosevelts or Churchills
overnight. Fourteen years we have been without
taking part in politics and it takes time to become
reueducated. I would like to pay tribute to the
various speakers. As for the microphones, I for
one would like to see them stay, particularly as it
would be a wrong time, now as we will soon be
coming to the forms of government, to have them
removed....
Mr. Miller I wish to clear up a misunderstanding that perhaps I wanted to have the
microphones removed. I asked the Convention to
think of two things: one was the removal of the
microphones; the other was just what it would
mean. We may this afternoon be required to
discuss a paragraph of the Mining Report already
read which may be embarrassing to us, to others
or to the country. If we are to do a thorough job
we have to speak fairly and frankly.... There are
things crippling Newfoundland's economic position. If we are going to get up and make
pretty
speeches we are not going to get at it.
Mr. Northcott I wish to support Mr. Higgins'
motion. The people of Newfoundland are paying
to keep the microphones here. I wish Mr. Higgins
had included VOCM....
[The motion carried]
Report of the Mining Committee:[1]
Committee of the Whole
Mr. Higgins Before we go into the report
proper, there are a couple of questions I am going
to try to answer. A question was asked with
respect to the 15 cents tax on horsepower to be
developed at Grand Falls. We cannot give all the
information regarding the taxed horsepower. In
Quebec the price is $l on installed horsepower.
We do not know the meaning of "installed horsepower." We are going to try and find
out from the
hydroelectric engineer. It may be the term "installed" would mean "capable of producing."
With respect to Mr. Harrington's question
April 1947 NATIONAL CONVENTION 503
dealing with water-power, and the possibility of
taking away rights from these people who have
not complied with the requirements of the act....
With respect to the taking of property from
people who have not complied with the necessary
requirements under which they got them, and
reference to which was made in the portion on the
table on water-power, the position is this. Some
years ago there were timber leases on which the
people who had rights had to erect mills. They
did not erect mills, and the government took
action for cancellation of licenses. But the
government had accepted rentals. Upon action
being taken it was ultimately decided by the Privy
Council on appeal in the case of the Newfoundland Government vs. Jardine ... that
the
condition had been broken, but if after the breach
the government had accepted the rent, then the
government had waived its right to cancel the
leases, and the licenses must continue on that
understanding as long as the rents were paid and
in good standing.
[1]
In respect to expropriation of property, I am
answering from the judgement in Dillon and
others vs. the St. John's Housing Corporation.
[2]
That judgement traces the history and powers of
Commission of Government; it is excellent reading....
The judgement is very long, gentlemen, but
you understand the situation At that time it was
being argued by counsel for the plaintiffs that the
Housing Corporation had no right to expropriate
the land where the Housing Corporation development is now situated without the consent
of the
British Parliament through one of the Secretaries
of State, as the property being expropriated was
not the property of British subjects residing in the
colony. I trust, Mr. Harrington, that makes the
point clear?
Mr. Smallwood I wonder if Mr. Higgins could
tell us were there royal instructions to the Governor of that same kind under the
old Letters
Patent?
Mr. Smallwood You mean that even under the
kind of government we had before Commission
of Government, the Governor had his instructions from the King as to what he might
and might
not do? He was instructed that he was not to sign
or agree to any act of the government that would
confiscate the property of any person in Newfoundland?
Mr. Higgins That is my impression. I will let
you know the proper answer.
Mr. Smallwood Sitting beside you is the Chairman of the National Convention, who was once
Solicitor General of Newfoundland, and as such
once instrumental in serving quite a number of
writs on the owners of timber lands, who had
been granted those timber lands on condition that
they would develop them. They had not
developed them, I believe, and they had not met
the conditions, and he issued writs running up to
a value of millions of dollars, one of the biggest
actions ever taken in the history of Newfoundland. I was wondering if we could provoke
him — it was a case where a lot of natural
resources had been granted to certain individuals
on certain conditions. They did not develop them,
and he decided to get them back for the Crown.
The government backed him and their licenses
were cancelled.
[3] It may not be quite the same
kind of case, but if it were, there is a case where
the government could get them back, and here's
another case where we could not get them back.
Mr. Chairman I can only speak from memory
and my recollection is that the owner of the
property was a limited company which was
domiciled in Newfoundland. I believe it was the
Reid Newfoundland Company, so that any Letters Patent or Instructions to the Governor
would
have no application. I have also to add that while
those writs were in fact issued the leases were not
cancelled. That was prior to the case which went
to the Privy Council. Beyond that I cannot go,
because I would be talking politics, and I cannot
talk politics in this Chair.
Mr. Higgins I trust, Mr. Smallwood, that is sufficient answer.
Mr. Ashbourne Regarding the matter of water
504 NATIONAL CONVENTION April 1947
power, would Mr. Higgins be able to tell us about
the scope and cost of the survey which the
government intends to make here, having this
engineer come in for a short time?
Mr. Higgins I am afraid the Mining Committee
knows very little as to the scope of his work. I
assume he is not far enough advanced to tell us
what he proposes to do, but from what little
information we have, he is going to assess the
horsepower of each of the rivers in Newfoundland, whether they are granted or ungranted.
Mr. Higgins No. He is on a regular salary, and
I presume whatever help he is going to require,
plus his salary, will be the cost.
Mr. Higgins I agree with you, and as you know
from our report, we comment that we approve of
such an appointment, and we think it should have
been made many years ago. Unfortunately, practically all the water-power in the country
has been
given away, and in a good many cases for that
very valuable article, a peppercom, whatever that
is.
Mr. Hollett Do I understand that the counsel for
the plaintiff lost the case or won it? Some person
owning property sued the Housing Corporation
for expropriating their property?
Mr. Higgins Yes, they were suing the Housing
Corporation on the grounds that they no powers
to expropriate their land. Judgement was given
against the plaintiff.
Mr. Smallwood On the grounds that the plaintiff was local and not foreign?
Mr. Higgins That does not come into it. The
judge ruled that the act had been properly
negotiated and the assentof the Secretary of State
had been obtained....
Mr. Higgins Is that all on that particular point?
If so, we will go on to the next part of the report.
There is one section of the Mining Report that
we started the other day, with respect to the
Committee's findings on the question of the
change in the 1938 act and the 1944 act.
[1] The
explanation that was given us for the change in
the 10 cents per ton of iron ore to the present
arrangement under the 1944 act of 5% of the net
proceeds. Now you will note the comment of the
Committee on page 5 with respect to that explanation, and so that there will be no
doubt I
would like to read that. "Iron ore is the cheapest
metal commodity in the world ore deposits on
the Quebec side of the border." The Committee's
comment on that explanation was this: "Your
Committee does not find itself in a position to
accept this explanation, as we are of the opinion
that even though the company operating the iron
ore deposits may not be actually showing a substantial profit, the parent company,
that is, the
steel manufacturing company, is actually making
real profit. As far as we can gather, the companies
operating the deposits are merely holding companies of some large steel manufacturing
corporations."
[2] With respect to that comment of the
Mining Committee, I have to inform you that the
members of the Committee are not in full agreement, consequently it was decided that
they
should bring up the matter and, having heard all
the comments and the reasons, you could either
order that section deleted or otherwise. However,
we are not able to go into the full argument on
that right now. When this section was put in we
did not have the Quebec act, which is before you
now. This morning, we had a meeting with the
solicitor of the company, Mr. Eric Cook, K.C.,
Mr. Claude Howse and Mr. George Allen. I want
to have the minutes of that meeting before I
debate this particular aspect. I would suggest that
we let it stand at that point till I get the minutes,
and in the meantime the Secretary will continue
reading the report, if that's satisfactory to the
members.
[The Secretary continued reading the report]
Mr. Higgins Gentlemen, at that point I would
suggest to you that we might read the speech of
Hon. Mr. Hugessen, who introduced the bill for
that railway in the Canadian Senate. I understand
it has been passed now.
[The Secretary read the Labrador Railway bill attached to the report[3]]
April 1947 NATIONAL CONVENTION 505
I would prefer that if there are any questions
dealing with the second part of the report we take
those and let the rest stand over, as I have still not
got the full minutes of the meeting this morning.
Mr. Vincent In connection with the 350 mile
railway may I refer you to page 8 of the report, in
the letter: "To justify the railway and to justify
commitments of the large sums involved, there
must be a known quantity of at least 300 million
tons of commercial ore".... Does this mean that
before the undertaking starts that must be ascertained?
Mr. Higgins Before development of the mine is
begun they have to be sure they have in sight 300
million tons of commercial ore.
Mr. Higgins They hope that will be found by the
end of this present year.
Mr. Smallwood I notice it says on page 8:
"Owing to the short working season, it will take
not less than three years to detemtine the iron ore
tonnage available and, until a reasonable estimate
can be made, it is impossible to state when
production will begin."
Mr. Higgins You must remember the date of
that letter, October 28. The situation changed at
the end of the year.
Mr. Higgins It's not by any means definite, but
they hope to.
Mr. Smallwood On page 11 ... what do you
mean by "standard price"?
Mr. Higgins Mr. Howse told us that was the
price fixed by the iron ore producers association,
and it was the price of ore laid down at Lake
Superior ports, unless of course there are any
deductions for sulphur, phosphorus, moisture,
etc.
Mr. Smallwood When was that agreement
made as to the standard price?
Mr. Higgins I understand it was sometime ago,
I should think years ago. It was not as a result of
Labrador.
Mr. Smallwood No, but I was wondering if it is
the result of the war. How permanent or how
standard is it?
Mr. Higgins If you will give me five minutes to
inquire I will let you know...
Mr. Vincent Mr. Chairman, in Professor
MacKay's very excellent book
[1] on Newfoundland he has this to say: "As soon as the new
discovery is developed it might have important
effects for Newfoundland On the one hand it
might provide an important outlet for employment on the other hand it may mean reduced
markets for Wabana." On page 11 your report
says that it is your opinion that it won't.
Mr. Higgins We got that opinion from Mr.
Howse, and also from the General Manager of the
Bell Island mines, Mr. Anson.
Mr. Fudge I wonder if the chairman of the Mining Committee could enlighten me on the meaning
of this on page 12'? "Negotiations over the
Newfoundland-Canada boundary between
Labrador and Quebec have begun between the
Canadian and Newfoundland governments and it
is possible that the actual delimiting of the boundary on the ground may begin in
1947." What is
the meaning of that word "delimiting"?
Mr. Higgins The boundary has been generally
determined by that famous decision of the Privy
Council in 1927. The position is that the actual
boundary runs through this big ore deposit, so
that we have to have it accurately determined, and
this will be done this year. "Delimiting" means
marking out on the ground the actual boundary.
Mr. Fudge In other words they are going to
stake it off.
Mr. Smallwood That would be the height of
land, just determine what is the height of land.
Mr. Higgins A mile one way or the other might
make a great difference. It is a watershed.
Mr. Smallwood In this letter from Mr. Timmins
to Mr. Cook, paragraph two: "Preliminary surveys are now being made with a view to
locating
a railway, with suitable grades to an all-year port,
but until a survey is completed no definite location and terminals can be stated.
The company
proposes applying for a charter for a railway
company with authority to construct a railway
running generally north and south through the
western portion of Labrador." Does that mean
that an entirely separate company altogether, one
separate from the Labrador Mining and Exploration CO., and the North Shore Mining
and Exploration Co.,
[2] that an entirely different company
is going to build and operate the railway? Or just
506 NATIONAL CONVENTION April 1947
build the railway, or operate it, or both?
Mr. Higgins It will be a separate company as far
as the legal entity is concerned, but obviously it
will be only for sewing these two companies.
Mr. Smallwood How will that company be affected insofar as it operates in Newfoundland
Labrador? How would it be affected by the 1944
act?
Mr. Higgins They have no rights under the
1938 or 1944 act to export power for this railway.
Mr. Smallwood But have they got permission
to develop it? Can they use that water-power,
without any more legislation, on the railway
within Newfoundland Labrador?
Mr. Higgins I believe that for the railway in
Labrador they would have the power to use it,
provided they develop the mine sufficiently to
warrant it.
Mr. Smallwood They can only develop the
water-power if they start mining. But if they
develop the mine they can use the water-power
on the part of the railway in Newfoundland-
Labrador, but to use it on the rest of the railway
they have to get a special act?
Mr. Smallwood Suppose a separate company is
formed, a railway company, is it true that it will
be owned by those two mining companies?
Mr. Smallwood But although it is owned by
them, it is a separate company.... I was thinking
of taxation. Often the franchise to run a railway
is worth something to the government that carries
the franchise. Would there be any possibility of
getting out of that railway company taxes that we
cannot get out of the 1938 act and the 1944 act in
regard to mining? Let us suppose, for the sake of
argument, that the government has made a
serious mistake and that where they mighthave
got something out of the 1938 act, under the 1944
act they will get nothing. Now along they come
looking for a franchise to run a railway; would
the government be in a position to re-open the
whole matter of taxation — use the application
for the railway to remedy any mistake they made
in abolishing that 10 cents per ton royalty?
Mr. Higgins Not in my opinion. Remember we
have no knowledge except insofar as Mr. Cook
had told us. I assume that the application is with
respect to the export of power to be used on the
balance of the railway not in Labrador.
Mr. Higgins In my opinion they have the right
to use it in Labrador.
Mr. Smallwood They can start a railway now
and no one can stop them, is that the position?
Mr. Higgins That's the particular part that has
met with a lot of non-agreement among the members of the Committee. That's part of
it. My
recollection is that they can now run the railway
on the power of Grand Falls, the railway that's in
Labrador, but not in Quebec, provided they
develop the mine enough to haul the ore over the
railway.
Mr. Smallwood But you must first establish the
fact that they have the power to run a railway
there.
Mr. Hickman I am glad Mr. Smallwood raised
that question, because i was going to raise it too,
with a definite object in mind. If this railway is
going to be a transportation company owned by
the mining company and hauling their ore out, the
haulage charges could be very great indeed with
a consequent loss, or very little profit out of the
mining end of it, and our 5% on that might be very
little. I can appreciate that any company going
into an investment or gamble such as this must be
assured of a certain profit but it strikes me that
this quotation referring to Lake Superior was six
cents, which was the low. I notice they don't give
what the high would be. The way it seems it might
be a bit of a red herring drawn across the deal.
The inference that I get from the report is that the
present company could not possibly operate
under the agreement, and they would have to
withdraw if a different form of royalty could not
be worked out. The inference is that they would
not be making the 10 cents profit. Let us assume
that they were going to make 6 cents on it. Further
on, in the letter Mr. Timmins states that there
should be a known quantity of at least 300 million
tons, of which they will take out a minimum of 5
million tons a year. If they take out 30 million
tons they will make a profit of $l8 million over
a period of six years. That, on the original investment, would bring it about 1¹/₂%
profit per year
as a return on their investment. I can't believe
they are going into it with that profit. They have
got to see a return on their investment, and I can't
April 1947 NATIONAL CONVENTION 507
be persuaded that it will be 1 1/2%. If they made
that $18 million profit based on 6 cents per ton
profit, our portion that would accrue to the Newfoundland treasury on 5% of the net
profit, would
be $900,000 over six years, whereas we would
have got $30 million with 10 cents per ton.... I
don't know what advice the government had at
that time, or whether they could not see far
enough. They made an error of judgement, I
would say, in changing over from that l0 cents
per ton to the 5% basis...
The point is that this transportation company
can be put in a position whereby they can haul the
profits out, and leave the producing company
showing a very small balance and this country
won't benefit from it....
Mr. Higgins In answering that I would refer you
to the 1938 act, paragraph 39, which you have
before you. I will read it for your benefit... That
answers your question. They have the right to
apply, but subject to such conditions and terms as
to rental, etc., as the government may fix.
Mr. Higgins That section of the 1938 act is still
in force.
Mr. Smallwood Clause 7 of the 1944 act. Does
that seem to bear on it? Section I.
Mr. Higgins ....That's only over private properties, it has nothing to do with obtaining the
rights.
That would be where there would be properties
and land over which they put the railway.
Mr. Higgins They have the tight to apply to the
government for the right-of-way for a railway,
and the government will grant it on such terms
and conditions as may seem reasonable and equitable. Their application has been made,
and I
presume the government is forging what will be
reasonable and equitable terms.
Mr. Smallwood In the 1944 act, page 5, it
speaks of things on which they are exempt from
customs duty, and the things on which they have
to pay it. Have they got to pay duty on the
railway?
Mr. Higgins That would be one of its operations. In the 1938 act, page 19: "The operations
of the Company referred to shall include only the
following ... transportation of such minerals."
That would be one of the operations of the company, and would come under a deduction.
Mr. Smallwood "They shall be exempt for a
period of 20 years ... in Labrador." All duty free.
Mr. Hollett It includes railway too if you follow
on, Mr. Smallwood.
Mr. Higgins On replacements they can only get
up to 20% of the value.
Mr. Job I am going to ask the chairman of the
Committee if he could tell me whether the royalty
on Bell Island ore of 10 cents has been paid all
along and is being paid? My reason for asking is
that it would seem that if Bell Island with its ore,
which is 52%, can stand a royalty, surely this
other ore, which is 62%, can stand it.
Mr. Higgins There is a limit in Bell Island as to
how much royalty they must pay.
Mr. Job That's an interesting point, but no
doubt a better basis from a Newfoundland point
of view, would be a definite royalty per ton rather
than a very indefinite 5% on the profit It seems
a pity we don't know where we are.
Mr. Higgins Obviously the 1944 act from the
point of view of the company is very much better
than the 1938 act. They had the best advice they
could get both times.
Mr. Job On the face of it it seems not very
satisfactory. We don't know what Newfoundland
is going to make out of it.
Mr. Higgins That's the point the Mining Committee did not agree about.
Mr. Job Can you tell us where the disagreement
comes in?
Mr. Higgins They are not satisfied that Newfoundland is getting a good deal on it.
Mr. Penney That was the point I was going to
raise, Mr. Chairman. I wonder could you tell us,
do you believe Newfoundland has proper protection in the agreement with the Labrador
Mining
Company?
Mr. Higgins I would much prefer to wait until I
can give you all the facts. I am afraid I will not
be able to answer the question. We will either
have to have another session, or we will put it in
a supplementary report. I would not like to give
you my own opinion.
Mr. Penney I did not think you would. I have
been listening to the debate this last several days,
and the impression I have is that Newfoundland
has not got proper protection in the agreement.
The Grand Falls of Labrador is situated in the
heart of unexplored territory believed to contain
precious mineral deposits as well as timber areas,
and is therefore the key to future development.
508 NATIONAL CONVENTION April 1947
To tie up that great potential asset at this time for
a fee of 15 cent per kilowatt hour cannot be
regarded as in the best interests of Newfoundland, more especially when that great
waterpower may be used to develop the Quebec side
of the Labrador boundary, giving Newfoundland
benefit through labour returns only. It is my belief
that the delegates of the National Convention
should register protest, or demand the agreement
be re-written or changed so as to protect Newfoundland in greater measure.
Mr. Fudge Going back to the 15 cents per
horsepower, if my memory serves me correct, on
Wednesday one of the delegates and a member
of the Committee, the representative for
Labrador, said when the question was put to him,
that the Commission of Government did not want
to commit themselves.
Mr. Higgins I must disagree with you there.
Another member of the Convention made that
statement.
Mr. Fudge He replied. I realised some of the
solicitors putting through the deals were Newfoundlanders and I was a bit sore; but
after hearing that, we will have to pat him on the back,
because if the Commission did not know what to
charge, the solicitors would have said 5 cents a
horsepower.
Mr. Higgins We have nothing to show that the
Commission did not know what price to fix.
Mr. Hollett I did not intend to have anything to
say on this. I appreciate the point brought out by
Mr. Hickman, Mr. Job and Mr. Smallwood, that
the Mining Committee are not all as one on
certain particular sections. Some of us realise the
act is not so hot as far as Newfoundland is concerned. We may be wrong. We are trying
to find
out. We ought to have no further debate until the
chairman of the Mining Committee is prepared
to bring in a supplementary report. I appreciate
the point brought out by Mr. Hickman: if we have
made a bad deal so far, and any water-power they
want is to be exported, and we have to issue a
permit for the railway, there may be something
to save out of the wreck.
Mr. Miller I agree with Mr. Hollett's remarks.
Maybe we can do justice to this after we get the
minutes of the meeting. It is well for every man
in this house to be thoroughly acquainted with it
all. This 10 cents per ton is objected to, and the
company hopes to pay Newfoundland substantially well! I will give you a comparison:
up to
recently the Newfoundland fishermen were
charged an export tax of $10 per ton on codfish.
How does it compare with 10 cents on iron ore?
[The committee rose and reported progress, and the Convention adjourned]
