Newfoundland National Convention, 5 November 1947, Debates on Confederation with Canada


November 5, 1947

Finance Committee: Economic Report[1] Committee of the Whole

Mr. Cashin Mr. Chairman, before we proceed this afternoon there are a few remarks I want to make. One is that about 12 months ago Mr. K. M. Brown, a delegate to this Convention, was stricken here in the discharge of his duty. Yesterday I received the following message from Mr. Brown, which I propose to read:
Mr. P.J. Cashin, St.John's.
I eagerly awaited your report and sat up until midnight and listened to every word. It was one of the finest ever delivered in that famous chamber. Congratulations. We must have responsible government and all the freedom that goes with it. You are fighting hard, keep it up. Warmest regards. KM. Brown.
To which I sent the following reply:
On behalf of the Finance Committee and myself wish to thank you for your kind remarks regarding Economic Report. I am sure that you will continue the fight for freedom until victory won. All delegates hope for early recovery your health and that you will be with us once again. Regards. P.J. Cashin.
Mr. Hollett Mr. Chairman, I rise to make a few remarks with regard to this long awaited Report of the Finance Committee on the economic side. First and foremost I would like at this moment to offer to that Committee and to its chairman, Major Cashin, my heartiest congratulations for the manner in which this report has been presented to us, and I feel that we owe them a debt of gratitude for the promptness with which they brought this report before us at such short notice. I am quite sure that we all agree, as we read through this, that these men have done an excellent job.... Each and every one of these men who has signed this report is in my opinion definitely an honest man.
Mr. Chairman Let there be no question about that, Mr. Hollett.
Mr. Hollett Referring to a remark which was made in yesterday's session, it was definitely said here that this report was not an honest report. What am I to infer from that statement? Can I infer any other than this, that the men who signed that report are not honest? If they are not honest, then they are dishonest. I cannot agree with the remark which was made by a certain speaker in yesterday's session. Now I would like to ask Major Cashin one or two questions before I proceed.
On page 1, Major Cashin, you referred to the Financial Report, and you say that the total revenue from 1897 to Sept. 30, 1947 amounted to, in round figures, $496 million, whilst the expenditures come to approximately $500 million. I would like to ask you, were these figures properly audited, properly copied from the records, or were they guesswork?
Mr. Cashin They were properly copied from the records — Auditor Generals' reports and the budgets.
Mr. Hollett Thank you. If you will turn over to page 2, with regard to the reduction in the debt, I see you have the net debt as $35 million. How did you arrive at that?
Mr. Cashin Our gross debt, after deduction of sinking fund, etc., is approximately $70 million in round figures. We have $35 million in cash, $9.25 million of which is on loan to Great Britain free of interest, and the balance to the credit of the country here in Newfoundland, and some small amounts to the credit of Newfoundland with the Crown Agents in London, in all $35 million, and if we deduct that $35 million it leaves us a net debt of $35 million.
Mr. Hollett That would be sterling?
Mr. Cashin Yes, converted into dollar exchange.
Mr. Hollett There is another debt.
Mr. Cashin Yes, there's $6-7 million in dollar debt.
Mr. Hollett Has that been taken care of?
Mr. Cashin Yes, that's included.
Mr. Hollett Let us turn to page 3, a matter relative to insurance and savings. You will see there at the bottom of Page 2, "Therefore today we can definitely state that Newfoundland's capital account shows a surplus in cash of $35 million; and in addition the people of the country 652 NATIONAL CONVENTION November 1947 have on deposit in the various savings banks not less than $80 million..."
Mr. Cashin That's right.
Mr. Hollett "Also our people carry life insurance with a cash value of at least $30 million..."
Mr. Cashin Those figures regarding the total amount of insurance which was carried were also obtained from an official source...
Mr. Hollett Turn to page 7, in regard to the matter of conversion. "When a delegation from this Convention met representatives of the British government in London several months ago, we were advised by the Dominions Office that, beginning January 1, 1948, the conversion of our 3% guaranteed stock, which amounts to £17,790,000, or in dollar currency approximately $72 million, which is at present bearing interest at 3%, would be made, and that new stock would be issued bearing interest at 2 1/2%." I know that is correct. Did your Committee make any inquiries as to why that conversion will not be carried out?
Mr. Cashin Mr. Hollett will know that when Lord Addison made that statement he said that three months' notice had to be given, that is on October 1, but three or four days prior to that date an announcement was made here by the government that conditions would not permit this sterling debt to be converted at this time. In looking up the financial papers since that time, the London papers, and looking up the prices paid for bonds, I find that the Newfoundland 3% stock was selling on the London Stock Exchange at that time at 102 point something.
Mr. Hollett Did your Committee endeavour to find out why conditions would not permit?
Mr. Cashin No, we did not, I will be quite frank about that. It was done and that's all there is to it. We hold that it should have been done, and we feel it could have been done, but the point is this —I know why it was not done... It was because it would mean an extra $500,000 saving to the country, and it would mean an extra $500,000 that Great Britain would not get, and which she is now anxious to get in dollar exchange. That's my personal opinion.
Mr. Hollett You did not enquire from any official source?
Mr. Cashin No, it was an official announcement.
Mr. Hollett Will you turn to page 10? You say there: "For purposes therefore of explanation we give herewith proposed expenditures under the various departmental headings..." Could you tell me on what you based these figures?
Mr. Cashin I can, Mr. Hollett. We have first of all Consolidated Fund service, that means the servicing of our public debt. That means today the totals are $3,374,000, but the conversion on that sterling debt, and by the application of the interest-free loans we have given Great Britain, and by the application of the sinking fund, and, as I said the conversion of the balance of our sterling debt to 2 1/2%, we would save approximately $1 million. Now if we take $1 million off $3,374,000, which is the Consolidated Fund service, we find that it would amount to $2,374,000, but for the purposes of more accuracy, and to create more discussion, I made it a round figure of $2.5 million...
Mr. Hollett Now with regard to Finance...
Mr. Cashin I will explain them as you go along, Mr. Hollett. With regard to Finance, if you take the estimate of expenditure for the present fiscal year, 1947 - 48, there is an amount of $2 million voted for the Railway, and there is a remark which says: "Provision is made there for a general subsidy of $100,000, which is included in the $1.2 million." That subsidy is paid annually anyhow, therefore the deficit is $2 million. Now the General Manager of the Railway stated that once those capital expenditures were finished, the deficit on the Railway would not be more than $750,000; and so we deducted this $750,000 from the $2 million, and it leaves us $1.25 million paid in this respect.
Mr. Hollett Thank you, and Customs?
Mr. Cashin They are all present estimates except with the Education Department when there is an increased vote under this proposed plan of $650,000 a year, which would be used no doubt for giving school teachers more money, or in a general way.
Mr. Hollett I have elicited from the chairman of the Committee with regard to these figures of $500 million and $496 million, that these are definite facts taken from the Financial Report which was presented and passed... An insinuation was made here yesterday that these figures were poppycock, pure nonsense, tomfoolery. This is not the first time that the figures of the November 1947 NATIONAL CONVENTION 653 Finance Committee have been disputed, but I am glad to say that they have so far been disputed without any success....
In dealing with the period from 1920 to 1934, much ado about nothing was also made in the remarks of the member from Bonavista Centre. A long array of finance ministers was presented to us, and it was intimated that scarcely one of them ever made a correct budget. That, of course, we can all understand. I fail to see how any finance minister in any government, business, or household, can make a sure estimate of what the expenditures or deficits or surpluses will be from year to year. But the point I want to raise is this: much capital was meant to be dispersed to the other needs of this country, and many finance ministers not only failed to make an accurate estimate of the surplus or the deficit, but they made such errors and such estimates which in the end proved to be very wrong. In touching upon that point I would like for you to remember that period from 1920 to 1934, remember that the Great War had been fought and won. You will remember that for two or three years after peace was signed this little country enjoyed unwonted prosperity. Fish was selling in the markets of the world at higher prices than ever before, and consequently the people up to 1921 or 1922 were enjoying such prosperity as had been undreamed of before these days. Also you will remember that shortly after that time conditions were not so good. There were ups and downs and ins and outs, if you like. And that's the way it was, I suppose, with the finance ministers. But they were not getting the price for the fish, and unfortunately, at this time, they were not even getting the fish; but they certainly were not getting the price they had got some years before. Our merchants had been stocked up to the hilt. Our banking owners (I come from the southwest coast where they go to fish in deep waters) had up-to-date vessels; firms had from five to six bankers costing anywhere from $10-25,000 and more, new vessels too. They had been perhaps unwise in this era of prosperity to think that it was going to continue, and they had gotten rid of the old vessels and gotten themselves new up-to-date vessels, built in Lunenburg, Shelburne and other places, at very high cost. That was the situation, and suddenly the price dropped and the bottom dropped out of the market, and the merchants who were overstocked, the fishing plants or vessels, or shore plants on Labrador, found themselves with good expensive gear and they could not sell their fish. Under these circumstances I ask you who could you put in as finance minister to budget the surpluses or deficits from 1922 or 23 onwards?
I come down to 1931, but first I must remind you of that great depression which struck the world, not only Newfoundland, in 1929. Everybody was broke, and by 1931 it was coming in with a surge on this country, an absolute tidal wave, and my friend Major Cashin at that time was finance minister. Yesterday it was intimated that because he made the colossal mistake of budgeting for a small deficit and succeeded in getting a deficit of $4 million, then this, what we have here, was only tomfoolery. That was the idea which it was the endeavour of the member from Bonavista Centre to convey to you, and to the country at large. I am quite sure you see now how ridiculous that idea was. If my friend from Bonavista Centre had explained to you that at that time no finance minister in this world could definitely make a correct budget, then I would have no complaint whatsoever with the member from Bonavista Centre.
New 1931 was a bad year. In order to prove how uncertain things then were and in order to prove how difficult it might have been for my friend from Bonavista Centre, if he had been finance minister, to make the correct estimate, I would like to quote from a sort of history, an economic history if you like, of this country, written by my friend from Bonavista Centre in the year 1930.[1] 1931 was well in sight. If any of you have that book I would ask you to turn to page 9. This is how my friend from Bonavista Centre saw things in Newfoundland in the future:
The Newfoundland note then is distinctly one of hope. The country has put its worst behind it. The future is most promising. This march to industrialism is no flash in the pan. Newfoundland is around the corner. Much remains to be done to make conditions ideal it is true, but the encouraging fact is that much of it is being done to...
Mr. Chairman I must ask you are you speaking on the Economic Report, or are you rather divert 654 NATIONAL CONVENTION November 1947 ing your remarks to prognostications made by the member from Bonavista Centre in 1931, and if so what relevancy is there between your remarks and the matter in hand?
Mr. Hollett I am trying to prove that this report is a good report, and the remarks made relative to 1931 yesterday have no bearing whatsoever; and I am trying also to prove that my friend from Bonavista Centre forgot these things which he wrote in an economic history, which I thought I ought to read.
Mr. Chairman My only point is this: that if the soundness or unsoundness of the report is to be determined in the light of the soundness or unsoundness of the opinion expressed by the member from Bonavista Centre yesterday, then of course I can see a visible connection between the two, but if the report is to appear on its own merits then the opinion expressed yesterday can only be regarded as his own opinion... 1 can't see that there is any connection between statements made by him in 1931 and the opinions held by him now, which could alter our opinion when we are called upon to decide upon the merits of the Economic Report.
Mr. Hollett Mr. Chairman, may I refer to you the fact that the member from Bonavista Centre yesterday read to us two letters from Bonavista Bay or other places? On that basis, may I ask you to allow me to finish this short paragraph? Mr. Chairman With consistency with the latitude I allowed Mr. Smallwood yesterday this allows rue no alternative. Under these circumstances will you go ahead.
Mr. Hollett Thank you, sir.
And after all when all is said, where is there another country in which life is so comparatively tively free and easy? Where men can live so easily in health and happiness as in Newfoundland? One has only to witness the bread lines in front of hospitals and various charitable institutions, and see the vast crowds of hungry and unemployed men in New York and other American and Canadian cities, and read of the same terrible conditions in every country in Europe to appreciate just how well off we really are in Newfoundland. Those of us who are interested in the great changes that are coming over Newfoundland, and have had some contact with the industrial life of the United States and Canada, have one fervent hope, and that is that with the coming of modern industrialism to Newfoundland we may never lose the fresh bloom of that wholesome life which constitutes much ofthe charm of our country.
I just draw that to your attention to show how difficult it was for the finance minister to make up a correct budget in 1931. I also draw your attention to the fact that there were bread lines in New York and in many cities in the United States and Canada in 1931. My mind goes back to 1934, and I remember this: there were 90,000 people on the dole here, and the government spent $1.5 million, and I do know our people were in dire distress even in 1931. This book was not published for use in Newfoundland, but for Newfoundlanders in Canada and the United States. I will refer later to another document which was prepared for export information and not for Newfoundland.
Now the Committee, on page 2, continues to try and assess the value of the fixed assets of this country, those things which are practically impossible to remove, not like money in the bank. And they found out that we have a Railway which was valued at $72 million; some highroads here which they further valued at $20 million; some public buildings, lighthouses, public wharves, breakwaters, etc, valued at $10 million. And there was another $10 million for breakwaters and telegraphs, making a total in all of $112 million fixed assets. Now fixed assets is something which you have which remains. Sometimes you have to get repairs, but anything you have spent to get them, such as money which made up our national debt, you have these fixed assets to go against it. We have $112 million worth of fixed assets, but there is a point I want to make in connection with the Railway. In yesterday's discussion the chairman of the Finance Committee was more or less ridiculed because he had valued the Railway at $72 million; we found that he had got that figure from the report of the Ottawa delegation, a figure which the delegation had presented to the Canadian government to show them how valuable we were. You will remember the remark which was made by the member from Bonavista Centre: "Of course we valued it at $72 million. We were fooling them, but we don't want to fool you people at all."
Mr. Smallwood Point of order. I did not say that November 1947 NATIONAL CONVENTION 655 we had valued the Railway, 1 said the management of the Railway had valued it.
Mr. Chairman I must sustain you on that point...
Mr. Hollett I do remember that the idea of the value of the railway being $72 million was pooh- poohed in your oWn snappy way, Cashin.
Mr. Smallwood Point of order. Is the member from Grand Falls permitted to refer to a member of this Convention by his surname without the courtesy of the added title of Mister or his military title? Is he allowed to say just "Smallwood" or "Cashin"?
Mr. Chairman No.... I don't think it is proper for any member to refer to another by his surname.   I think he should prefix it by "sir", or his title or whatever it may be.
Mr. Cashin I have been called so many things I do not mind.
Mr. Chairman That is not the point at all.
Mr. Hollett It was you, Major, I referred to. I am glad I did not refer to the member from Bonavista Centre in such disrespectful terms. At any rate it was definitely the opinion that it was all right to tell a Canadian that we had a Railway worth $72 million, but you fellows know better than that. We would not try to fool you fellows, not at all! Are all the facts in that Black Book compiled in that spirit, and if so, are the answers given by the Canadian people in the same spirit?
Getting back to the various assets... The Committee refers to the Savings Bank, and says there is $80 million belonging to the people there, and $100 million worth of life insurance, whose cash surrender value is $30 million. How much is that? $110 million. That in itself gives us some idea of the economy of our people. The mere fact that our people have $80 million in the Savings Bank and $30 million in life insurance would justify the Finance Committee coming to the decision which they did in their report...
The Committee then takes a look at the Railway, ships and docks, and they advocate that the ships that are now in the mercantile marine class should be put over in some sort of a Crown agency, and they make it out in such a way that they can save $1.25 million thereby, and in other ways. Then they go on to the servicing of the national debt. Major Cashin explained if interest-free loans and sinking fund were applied to our debt, reducing itto $54 million, we could save $1 million in interest on the service of that debt.
Gander airport they also discussed and very fully. They say they can save $750,000. That is the only point upon which I must agree with my friend from Bonavista Centre, that I can't agree on the information which we received when we were in London. I believe, and it was intimated, that if the deficit was $750,000 we would have to pay $250,000 and Great Britain would have to pay the rest. I can see I think Major Cashin's point. How is Great Britain going to pay that? How can she send us over the dollars? Where is she going to get the dollars? Evidently we will have to supply the dollars for the time being anyway, and I suspect that is what he had in his mind. Anyway, they figure out that there will be a total saving of $3 million, and it looks to me quite sound.
Then they come on to the proposed expenditure   of $25 million... And then they logically go on and ask themselves, "Where are we going to get the money to pay for this?" And they quote the 1940-41 revenue - $16.25 million — and they tell us that in 1946-47 it amounts to $27.25 million, and that the indications were that for this year, 1947-48, the revenues would come close to the staggering amount of $40 million. Then, having decided that, they take a very realistic view of the industries in this country. They refer to the value of the pulp and paper industry and refer to the proposed expansion in the Comer Brook area, and generally they say that the pulp and paper industry in Newfoundland is tops. They also refer, which I think does not concern this report, to the possibilities of the pulp and paper industry in the Labrador area; I think I must touch upon this matter although I cannot see that the revenues will derive any benefit therefrom in the three year period which they forecast.... When we think of the possibilities of a new paper or sulphite mill in Labrador, or a new paper mill in the Bay d'Espoir area, and the value to the workmen, the clergymen, doctors, businessmen and everybody, then I think we can take a pretty good view of the pulp and paper industry, especially in view of the fact that they inform us that the Comer Brook and Grand Falls people have contracts for the next ten years. Is that correct?
Mr. Cashin That's right.
Mr. Hollett So there is nothing to worry about as far as the pulp and paper industry is concerned, 656 NATIONAL CONVENTION November 1947 so far as we can see at the moment.
They go on then to mining and refer to Wabana, with a payroll of $4 million or thereabouts. They also refer to the contract of ore for Great Britain of about 750,000 tons. We never did ship very much ore to Britain prior to the war, and we took that up over in London with the Dominions Office, and they assured us that they would do everything in their power to see that this would be continued in the future. Then we have Buchans. The lead and zinc and copper which they produce always finds a ready market, and they have a payroll of $1 million. La Manche, they tell us, is about to be opened up, at least they hope to open it up and find some lead there. Then they refer us to the story we have heard about the Newfoundland Labrador. All of us now have heard of the Labrador Mining and Exploration Co. The thing is so vast, and so huge, that one's mind fails to grasp it. It is anticipated by this company that they hope to find enough ore in a year or so to warrant them spending $150 million to open up the iron ore deposits down there. That again would not come within the three year period for which the Finance Committee has made a forecast.
Mr. Chairman I am compelled at this time in fairness to our reporter to declare a 15 minute recess. Our alternative reporter is sick and is unable to be with us, and you will appreciate the strain under which Mrs. Abbott is labouring....
[Short recess]
Mr. Hollett Mr. Chairman, this new development on Bell Island, whereby they are shipping ore to Great Britain, is really a peace-time industry, something that has grown out of peace, not out of war. There again you will see that the Finance Committee was justified in being optimistic with regard to mining conditions. The same applied, of course, to the pulp and paper industry. They are continuing. The war has been over for two years and still they have all they can produce sold for the next ten years; so we see that when the Finance Committee took a glimpse at that industry they were justified in being optimistic.
Mr. Butt May I ask a question?
Mr. Chairman A point of order?
Mr. Butt No, just a point of privilege. A question. The contracts that are made with the paper company, are they at a fixed price for the next ten years, or is it not a question of price?
Mr. Chairman I don't know. In fairness to Mr. Hollett I understand he is simply commenting on the contents of the Economic Report. He was not a member of the Economic Committee, and he takes it just as is.
Mr. Hollett I could answer that, but I think Mr. Butt could look that up himself and find out. I fail to see how any company or individual would make a contract for ten years at any fixed price, but having due regard to conditions in the United States, and the lack of paper in the United States and Mexico and these places, I do think that the price of newsprint in the future will not go below $90 a ton, but will probably reach the amount of $100 a ton... Then they took up the matter of agriculture and referred to the new agricultural development on the west coast, and arrived at the conclusion that the value of agriculture was in the vicinity of $15 million. That in itself is quite an item, which the Finance Committee were right and proper in looking at with an optimistic view.
And then they came to our basic industry — the fisheries. They gave an exhaustive survey of the fisheries... They pointed out that in the new methods of curing, freezing, putting up the fish in fillets and shipping it away, the enterprising firms here in St. John's and elsewhere have invested the amount of $6 million. Now I put it to you that these enterprising men are not going to invest $6 million unless they themselves have an optimistic View of the future, not only for three years but for a much longer period. I think the Finance Committee were right and proper in the conclusions they came to with regard to that. Take herring. I remember the days when herring was caught in a seine and brought in and dumped on an American vessel's deck and frozen, and it was only in the winter when you could sell them anywhere, and they were taken out of the country right away and shipped to foreign markets. Now they have created all sorts of industries. Not only do we Scotch-pack them, not only do we fillet herring and make herring oil, but we do almost everything with herring, and there again enterprising businessmen have put their money and brains into the development of the herring fishery along lines whereby it will not only assure a living to the people who catch herring and cure them, but also it will offer them something in return. Lobster. I just have to look down at my November 1947 NATIONAL CONVENTION .657 friend from Lewisporte, Mr. Northcott, and he could tell us more about lobster than we know. Lobsters today are not canned so much as they were in the old days, they are shipped away alive. I would like to pay a tribute to my friends in the co-operative business, for the manner in which they have cornered this lobster fishery in their area and arranged to ship them properly and co-operatively, and thereby assure to the people whom they are serving greater returns.
Salmon. Again, we have the same thing there as in the lobster fishery. Mr. Job would be able to tell us more about salmon, because I think he was shipping them to England in a frozen state for a good many years at any rate; but even today salmon are at a premium, and are being shipped away in the frozen condition. And then, as you know, our seal fishery for many years has been more or less a dud. Most of us remember when we had eight or ten huge ships prosecuting the seal fishery, and for some reason or other the seals got scarce, or the market collapsed or the strips were sold. For a good many years the seal fishery just more or less faded out of existence and gave no returns whatsoever to our people. Now in the last couple of years you have seen what has happened. That is not a wartime boom — it is peace. We have starving people all over the world, and we have unlimited fish, and therefore it is our job to have brains and money enough, government or otherwise, to catch and ship it so that we can get something in return, and our people can pay the necessary revenues into our own exchequer to carry on our own government expenditures.
Mr. Chairman ....As a matter of general principle I think I should now lay down that all questions arising out of the report should be addressed to the chairman of the Finance Committee....
Mr. Smallwood ....In all parliamentary circles when a member has the floor it is quite customary for another who wishes to have the member speaking, who has just made a point, to elucidate a bit, to ask him to do so, if the member speaking is willing.... In the House of Commons and all parliamentary bodies, and in our House of Assembly, when a man had the floor if another member wished to interject a question it was regarded as proper to do so.
Mr. Chairman My ruling is according to the rules of the Convention, and it is my duty to say that a member occupying the floor shall not be interrupted unless some member is arising to a point of order, and if he does not like my ruling he can appeal to the House.... We are in committee of the whole and the chairman of the Finance Committee is responsible for the introduction of this report... It is his responsibility, and in fair ness to all the members here I think the question should be properly addressed to him.
Mr. Smallwood Again on that point. If a member on the floor expresses an opinion, or a conclusion, may not a member seated, with the consent of the member speaking, put a supplementary question to him? I don't mean to usurp his place, but in the manner: "Excuse me, would you mind and he says, "Yes", and the member speaking, if he wishes, can deal with it. If not he can say, "You can have the floor later". That's so customary in every parliamentary body, and if we are going by parliamentary rules....
Mr. Cashin We are a glorified debating society, according to a judge of the Supreme Court.
Mr. Chairman This is really a glorified commission, and rules have been laid down by the Rules Committee, which I am bound to enforce without any reference to established British parliamentary practice... Are you ready to continue Mr. Hollett?
Mr. Hollett Thank you, Mr. Chairman.... The whaling business is in a very flourishing condition, and the industry does give considerable labour. All in all then, our fisheries last year were valued by me, or at least that was the finding of the Finance Committee, at $34.5 million. That in itself is a huge amount of money.
Then there are our local industries which as you know, are more extensive than they were.... These altogether employ about 2,378 men and women, and the volume of business in local industries last year was practically $15 million, and we did not have that after the last war, I remember.
There is one other thing that is neither fish nor local industries, but which is very close to us at this time. That is that American citizens are here in their hundreds at the American bases, but by reason of the fact that they are here we have some 3,500 men and women employed in these bases. Now that is not a wartime industry either. These 658 NATIONAL CONVENTION November 1947 bases are here for 99 years. At the present time at Harmon Field they are expending some $20 million, if my memory serves me right, which means that eventually more than 3,500 men and women of this country will find employment at Harmon Field and Argentia and here in St. John's.
I think, having looked at all these things, I cannot conceive how any man in this assembly could possibly come to the conclusion which they did when they said that they could put our revenue safely in the years to come at $30 million. They took account of a possible depression. On top of that they tell you we have new peacetime industries which are not going to leave and that is what we want. They have told us this and I would almost be optimistic enough to put the figure at a much higher price than $30 million. Therefore I have to come to the conclusion that they were very conservative in their estimate.... Of course if the whole world goes, we will not need it then at all. They also pointed out the possibilities of the Marshall Plan if it goes into effect. We know the trouble we have had in finding the price of our salt cod for the year. The Marshall Plan would, I hope, cure all that. So as we were on the top of the pig's back after the last war I think we will be on the top of the elephant's back in this peace, which I hope will last for a long time. I commend very strongly the action of the Finance Committee in coming to the conclusions which they did.
I want you to look at the table on page 33. There you will find when making up the estimate for $30 million revenue, they tell us where they are going to get it.... Now just look at that table, andI want to show you — mind you, this is a very handy book, Mr. Smallwood...
Mr. Chairman What connection is there between Mr. Smallwood's book and the debate?
Mr. Hollett If you wish to adjourn the debate, I shall have to ask to have the comparative statement of imports and exports by revenue for the years 1929-32.
Mr. Chairman Before you go on, am I expected to presume that that book is an authority?
Mr. Hollett I was going to prove it from figures in the book of the member from Bonavista Centre, that went back to 1929. I did not have the estimates in my office last night when I was trying to think of this, and I turned to the back of that book and it was there. In any book which our friend puts out you will always find something of value.
Mr. Smallwood Hear! Hear!
Mr. Hollett I have read both your books.
Mr. Smallwood I have written seven.
Mr. Hollett I have not read the seven, but I would like to.
Mr. Smallwood You should.
Mr. Hollett As long as there are no more fables or fairy stories in them...
Mr. Chairman Unless it is accepted by the house as being an authority, I must regard any book which Mr. Smallwood has written as being merely his expressions of opinion on certain subjects at the time the book was written. We are not discussing Mr. Smallwood's books, we are discussing the Economic Report.
Mr. Hollett Thank you very much. I hope that will put you in your place. There is nothing official in them at all... The Finance Committee arrived at a point where they said: "Here we are going to have a revenue of $30 million, and an expenditure of $25 million, and that will leave us a surplus of $5 million. Now turn to page 37. We will see what they are going to do with that surplus. They say: "The surplus which would be shown on ordinary administration of government affairs we suggest should be expended as follows: Additional Old Age Pensions ...$600,000," As you know, at the present time the government are expending $250,000 on old age pensions.
Mr. Smallwood $260,000.
Mr. Hollett Well, it is gone up then. $260,000, and this Committee proposes to add another $600,000 for our pensioners to endeavour to increase their pensions, which are not enough, albeit they only get $30 a month in Canada.
Mr. Cashin We are not going to take a mortgage on his property when we give it to him.
Mr. Hollett I know that they do that, and they take his property if he dies, but that's another matter. You are not going to do that in your Finance Committee.
Mr. Cashin No.
Mr. Hollett I should think not. I think it is about time the old age pension was increased, and I hope it will be further increased. And while I am on that point I would like to indicate the condition of the poor in this town. I suppose it is much the same as the condition in the outports. The man who is out of work, or the women who is out of November 1947 NATIONAL CONVENTION 659 work, what does he get? $11 a month to live on. How would you live on $11 a month if you had to? Would you know what to buy? I think not. If there are two people needing relief what do they get? $20.80, and that's for 30 days.... I hope the Finance Committee will consider putting some of that surplus to help those people who, through no fault of their own, are unable to get work... Now Fishermen's and Mariners' Insurance, and other Social Services — $400,000. That is something that many of us have been advocating for a long time, and it is about time something was done about it....
Now there was $1 million allotted for "Encouragement of Tourist Traffic by building Roads from Port-aux-Basques to Corner Brook — linking up Grand Falls and Gander, also Lewisporte with Gander." You do remember the remarks made about that paltry million dollars? How much would it take? Our friend from Bonavista said: "$1 million, you would want $10 million", but don't you see he is in a hurry to get across the Cabot Strait. I say $1 million is not enough too, but you have got to cut your garment according to the cloth. This is only one/tenth of the schemes; when and if we ever do get a government, their expenditure may be along different lines.
Then "Further encouragement and development of Fisheries, particularly Fresh Fish — $1,000,000." I am partly in accord with that because our saltfish products go to people who are low wage earners in Europe and the West Indies and other places. They are not able to pay high prices for saltfish. Saltfish is not worth a high price, consequently if we are to raise the standard of living of our fishermen we must enable them to be paid more for their fish.... Mind you I am not damning the saltfish trade, that's what I grew up on. I dare say I cut my eye tooth on a piece of salt cod. Our people here lived on salt cod, don't forget that. There were no woods industries, or mining industries, or anything, just salt cod, and still they did not want to go across the Cabot Strait. Now we have those new industries and I am quite sure there is an unlimited future ahead of us. Mind you, it is not going to be easy going for everybody.... Our efforts for mankind are to raise the number of people who can so get to that standard of living where they will be able to live in comfort, and I hope in peace.
Local Public Works — $500,000. I have nothing to say about that because I know very little about public works. Now the next one, Mercantile Marine — $500,000. That man yesterday said, "$500,000, what are you going to do with $500,000? You might just as well put it down some pool or tank". That was the opinion of the member from Bonavista Centre. "It is absolutely useless to buy them now and sell them for half price in two years", that's what he said. We are a maritime people — wholly surrounded by ocean. We are catching fish and cutting trees and making newsprint, and digging out the ore, and we have not got a ship — we may have one or two, but we have no mercantile marine, and yet when the Finance Committee suggests that they should spend some money in order to build up a mercantile marine the man from Bonavista Centre says, "No, you are only wasting money." I put it to you, is that sensible? $500,000 is not enough at all. That will only build you a couple of small ships, won't it?
Mr. Cashin You can get a ship, a nice ship for $300,000. The Clarenville ships cost $300,000 each, and they can only carry 300 tons.
Mr. Hollett Then there's the Railway capital expenditure too.
Mr. Cashin Well, it would need all that.
Mr. Hollett That is with regard to what you are going to do with your surplus. Now turn to page 41. The honesty of that Committee, as I said before, was brought into question, and in order finally to prove that I think that any man who insinuates anything against the honesty of these men, or says they did not make an honest report, once you read that paragraph on page 41 you will see that these men were absolutely sincere:
In presenting this report on the economic position of Newfoundland, we are aware that in all respects we cannot, as in the case of the Financial Report, deal with fixed values. There are instances wherein we are unavoidably compelled to deal in the realm of surmise and even conjecture. To some, this may give the impression that we may be colouring the picture to suit our particular idea or political inclinations. Such however is not the case. For throughout, our object has been to try and give as accurate a picture as we possibly can of the state of our country. Any figures used by us have, in most cases, 660 NATIONAL CONVENTION November 1947 been already submitted to mis Convention in the various Committees' reports and have received the approval of the delegates. And in cases where we do express opinions we have taken care to have their correctness endorsed by those competent to do so.
Now I ask you, do you think that this Committee were not candid when they presented this report for our consideration? Anybody who thinks so should be examined. Then we go a little further down in the next paragraph. "We are conscious of the fact that there may be some delegates who will be satisfied with nothing less than an absolute gilt-edged guarantee of our solvency for the next 20 years, before they will accept the fact that Newfoundland is self-supporting." So they were under no illusions. Now about this matter of self-support. Luckily, under the Convention Act, Major Cashin, you did not have to decide whether we were self-supporting. That was the people away back in 1933 in the Newfoundland Act. They said, "You can have your government back when you are self-supporting", but not the Convention Act. They say, "No, you have to consider the financial conditions of this country due to wartime conditions etc., and satisfy yourselves, and make some recommendations." You did not have to find out whether we are self-supporting. No country in this world is ever self-supporting, no man or woman is ever self-supporting over any predestined period. This country, Canada, Great Britain — the mother of a good many countries, the country which we thought in our young days would be always self-supporting. She is not, and never was, and never can be. Don't let us forget that we ourselves can never be self-supporting for any particular period. We can only hope and pray to Almighty God that prosperity will continue to keep us self-supporting as long as possible. So you did not have to decide, although you said we are self-supporting. There were some remarks made yesterday aboutoptimism, realism and pessimism. The gentleman from Bonavista Centre says you are too optimistic. I don't want it optimistic, or pessimistic, but realistic. I ask you, who is a pessimist in this House? Is it not the man who said these words yesterday?
I am afraid I have taken up a lot of your time. I did not intend to speak nearly as long, but as I went along I thought I might just as well finish my review of this report, which I think is an excellent report, and I have no fear whatsoever in recommending that when the time comes to vote upon it, it is your bounden duty to say, "Yes, we are self-supporting. The report is all right as far we can see." Never mind the experts and statisticians you are going to bring in. We are supposedly commonsense men, and sometimes I think statisticians are not. They are ordinary men, they will bring you in a set of figures which you can't possibly grasp or understand...; but you are hardheaded businessmen, every one of you 44 men, and there is that report, and I ask you to read it and ask yourselves, "Is that a fair report?" Think of the new industries. Think of the fisheries and mining and forestry, and all the others. Think of the $25 million that's in the Bank ofNova Scotia. Think of all these things, and you will have to come to the conclusion that they have brought in a fair and honest report, and that we are self-supporting as far as it is at all possible for us to be.
Mr. Vardy Mr. Chairman, after making a very careful analysis of the figures and statements made in this report, my wonder is how any person continuously accused of being crammed full of politics could bring in such a comprehensive, informative, and conservative estimate of the true economic position of Newfoundland. There are no wild, exaggerated statements.... Treating the overall picture as we should, and as we would a private business, our liquid position is most encouraging. If we were attached today and sold lock, stock and barrel, we are solvent and would have a surplus after all creditors were paid. The Ottawa delegation has done a splendid job by confirming in substance and in fact the essence of everything contained in this Economic Report and for this they deserve our congratulations. I would say to these gentlemen, stick to your guns, you have built a good case and some day you may have a chance to see your dreams come true; but do not come back and before the ink is dry on the paper tell the world you painted a false picture and were just trying to get money from Canada under false pretences. This will react badly and will cast a reflection on the whole delegation. We have agreed the country is watching, other countries beside ours are watching also, and they will judge us on our merits by the permanent good and loyalty that is in us.... We all have a common duty to perform, regardless of the par November 1947 NATIONAL CONVENTION 661 ticular form of government we favour. That duty is to restore and maintain lost confidence and pride in Newfoundland. We owe this to those who sent us here and to ourselves. This document is a contribution toward this end and let us adopt it without delay after the meat from it has been handed to the public through debate.
While we know there has been an enormous amount of waste, the same applies to every country on earth. Yet when we look at our vast coastline and consider the huge area over which we have to serve such a very small population, the amount spent even on capital account is negligible and ample justification exists for this moderate amount, for which we have fair value on the credit side of the ledger.
There are enough concrete facts in this report to convince the strongest critic that the charges so frequently laid against past statesmen in this country were, on the whole, unwarranted. A net debt of about $35 million after 450 years of inhabiting and opening up a wilderness is not a bad showing. The amount at credit to capital account of treasury and people of $150 million is, in my opinion, most conservative. I feel whichever government succeeds the present, steps should be taken to effect a saving on our interest, and if possible transfer our debt to the dollar area by floating in the United States or Canada.
I feel the merchant navy branch of the service should have been segregated from the Railway many years ago; but now that we have acquired that magnificent property known as the naval dockyard the time is even more opportune to create a fleet manned wholly by Newfoundlanders which would not only serve Newfoundland in peace but the general allied cause in war, which is inevitable on our shores. I do not treat the suggested half-million dollars as a waste, neither would anyone who has a true sense of appreciation for the men who manned these ships in the dark days of 1939 to 1945. We are on an island, we are not self-sufficient, and we must of necessity have ships to bring food to our shores and our fish and other products to foreign markets.
With reference to Gander airport, it just does not make sense or reason for Newfoundland to be maintaining this terminal chiefly for foreign airlines, and showing a deficit on the operation.
In an unsettled world no country can forecast exactly what may happen. The compilers of this report have, in every paragraph, kept within the bounds of reason. Our paper industry is making rapid strides, which can only be retarded by a general depression in our foreign markets. Our mining industry is only really being developed in a small way in comparison to what Newfoundland offers in this field of employment to men of initiative and capital. Agriculture in a real way is only in its infancy, and despite our climate, vast and rapid improvements are being made in producing fruit and vegetables in a really big way. What we need now are proper storage facilities to save what we grow. Our fishery products will represent the most important part of our economy, and as we have only recently entered the machine age in this respect, we can from now on compete with the modern product and can hope for fair returns.
It has been generally agreed that it would not be a very wild guess to say that the gross earnings of our people at present exceed $100 million annually. If this is correct the Economic Committee is justified in expecting a revenue for the foreseeable future of $30 million.
Social improvements will be made because we are in an age of social reform, and no government will try to impede progress in this direction. Therefore fishermen's insurance, improved old age pensions, increased widow's allowance and all the rest, will come as the evolution of the time and age we live in, and not as a result of any particular form of government. Therefore I subscribe my name to the belief that Newfoundland is at present a self-supporting country based on sound economic factors; and that all the evidence available to us indicates that this position of self-support will continue in the foreseeable future.
Mr. Fogwill Mr. Chairman, this Economic Report is the last report to be presented to this Convention, with the exception of the report of the Ottawa delegation. This report is beyond doubt the most important of them all. In respect to the financial side of the report, I do not intend to try and develop any long thesis in support of the idea that this country is, and can continue to be, self-supporting. I am not going to produce a maze of figures and percentages dating back to the days of responsible government. What we are 662 NATIONAL CONVENTION November 1947 trying to do is to find out if our island is self-supporting. How are we going to define the term "self-support" as it applies to Newfoundland?
To be self-supporting means the extent to which the people can produce the necessary goods and services in sufficient quantities to maintain its population in reasonable comfort, and that can only be done by the effort and ability of the people themselves, to provide these goods and services from the natural resources at their command. There is no standard by which we can measure self-support; as a country is developed its standard of living is measured accordingly. As an example, compare the standard of living in the United States and Canada, 100 years ago with that of today. Do likewise for Newfoundland, and judge for yourselves. I maintain that we in Newfoundland have progressed in parallel with our western neighbours. I am not trying to convey the idea that our standard of living is equal with those countries, but rather, our program has been comparatively even. I want you to consider our retarded development of the first two centuries after discovery, which, historians claim, was planned as a deliberate act, We were a very late starter in the race of progress.
As far as the revenue and expenditures are concerned, for the period which the Committee had under review, if we go back further than that, we find that for very near a century, since 1856 to 1947, this country has accumulated a national debt of only $72 million. If we consider the late start of our national life, and if we consider the cost to Newfoundland for her participation in two world wars, then I maintain that our national debt is a paltry sum indeed. Perhaps if our national debt was ten times as great, we would have more friends. The Committee has shown quite clearly that as far as revenue and expenditure was concerned, the record is good, most definitely good.
In respect to the economic side, it is evident to me that in regard to the fishery, forest and mining industries, the Committee has reviewed all the evidence and factors pertaining to those industries, and have made their forecast accordingly. To some members, the forecast may appear to be too optimistic....
There is another section of the report on which I want to say something, and that is in regard to agriculture. The Committee has not been too optimistic in their forecast. Our agricultural industry is capable of being expanded to at least twice its present value. I want to point out some very pertinent facts. During the 20 years immediately proceeding World War II, this country imported approximately $60 million worth of farm produce. This volume of imports was composed of only those articles of food which can be produced here in this country by our local farmers. I am going to quote three items of food imported during the 20 year period mentioned: imports of eggs — 3,361,300 dozen; milk — 50,140,920 liquid lbs.; meats — over 380,899,700 lbs. Or, if we take it another way, and include imports of vegetables we find a total of over 300,000 tons of food imported during those 20 years. Here we have one of the causes of our troubles, an undeveloped and unorganised agricultural industry. This condition can and should be corrected. I believe that with the proper farm marketing organisation, and with more encouragement and determination on the part of our citizens to obtain their requirements from our local farmers, such a large volume of imports can be considerably reduced.
I am declaring myself in support of the opinion that this country is self-supporting now, and we can continue to be self-supporting in the future. I for one am proud of our historic record, Lord Amulree to the contrary notwithstanding, and I feel that we would have made progress along regular and ordinary lines without the intervention even of World War II, with its so- called boom of non-productive prosperity. We are no different from other people of the world in matters of native ability, industry and vision. What the future hold for us is anybody's guess. That holds good for every country, and our future depends entirely upon our own efforts to make that future as bright as possible.
[The committee rose and reported progress, and the Convention adjourned]


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).



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


  • [1] Volume II:425. [Volume II is not in The Confederation Debates Collection]
  • [1] J.R. Smallwood, The New Newfoundland (New York, 1931).

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