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Newfoundland National Convention, 18 April 1947, Debates on Confederation with Canada

April 1947 NATIONAL CONVENTION 499

April 18, 1947

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 โ€” 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. Reddy I concur with Mr. Higgins.
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 โ€” a April 1947 NATIONAL CONVENTION 501 complete, comprehensive and intelligent compilation of the news of each aftemoon's proceedings โ€” 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 โ€” 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 โ€” 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 โ€” 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 โ€” 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. Harrington It does and it does not.
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. Higgins I believe there were.
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 โ€” 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. Ashbourne Do you know the cost?
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. Ashbourne I think it is a very pertinent question.
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.
Mr. Chairman Is that satisfactory, gentlemen?
[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. Smallwood When will that be?
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. Smallwood As a result they hope to know this 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 It is not in any way affected.
Mr. Smallwood What rights have they?
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. Higgins That's right.
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. Higgins I should imagine.
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 โ€” 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. Smallwood Have they the right to use a railway 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 1ยน/โ‚‚% 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. Smallwood That's in 1938?
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. Smallwood How do we stand then?
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]

Source:

Newfoundland. The Newfoundland National Convention, 1946-1948 Vol 1: Debates. Edited by J.K. Hiller and M.F. Harrington Montreal: Memorial University of Newfoundland by McGill-Queen's University Press, 1995).

Credits:

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Selection of input documents and completion of metadata: Gordon Lyall.

Footnotes:

  • [1] A news programme Sponsored by Gerald S. Doyle Ltd. on VONF, the government radio station.
  • [1] To cross-examine, to argue, to question (Dictionary of Newfoundland English, p, 123).
  • [1] Volume II:313. [Volume II is not in The Confederation Debates Collection]
  • [1] Attorney General and Minister of Agriculture and Mines vs. Jardine and Martin, 1930, Decisions of the Supreme Court of Newfoundland, 1927-1931, pp. 446-484.
  • [2] Dillon vs. Canning and the St. John's Housing Corporation, 1946, Decisions of the Supreme Court of Newfoundland, 1941-1946, pp. 386-416.
  • [3] Attorney General and Minister of Agriculture and Mines vs. Mines and Forests (Newfoundland) Ltd. et al., July 1931. Decisions of the Supreme Court of Newfoundland, 1927-1931, pp. 446-484.
  • [1] An Act for the Confirmation of An Agreement Between the Government and Labrador Mining and Exploration Company, Limited, 2 Geo. Vl c40 (1938). An Act further to Amend the Act No. 41 of 1938 Entitled "An Act for the Confirmation of an Agreement Between the Government and Labrador," 8 Geo. Vl c47 (1944).
  • [2] Volume II:355. Most of this sentence was deleted in the final report. [Volume II is not in The Confederation Debates Collection]
  • [3] An Act to Incorporate Quebec North Shore and Labrador Railway Company, l l Geo. Vl c80, (1947).
  • [1] R.A. MacKay, Newfoundland: Economic, Diplomatic, and Strategic Studies (Toronto, 1946).
  • [2] The Hollinger North Shore Company. Volume II:355-6. [Volume II is not in The Confederation Debates Collection]

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