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Newfoundland National Convention, 14 November 1947, Debates on Confederation with Canada

724 NATIONAL CONVENTION November 1947

November 14, 1947

Mr. Smallwood I give notice that I will on tomorrow ask His Excellency the Governor in Commission to furnish the National Convention, in non-technical language, with a complete description and account of the creation, nature and operation of the sinking fund against the guaranteed 3% sterling public debt.
Mr. Cashin I give notice that I will on tomorrow ask the Honourable the Commissioner for Finance to table the following information:
(a) The total revenue and expenditures from April 1, 1947 to October 31, 1947.
(b) The total accumulated profits of the Newfoundland Savings Bank which would include the reserve fund as at March 31, 1947.
(c) The total recoverable advances to date made to the St. John's Housing Corporation from its inception, as well as the total recoverable advances made to other housing associations from their inception.
(d) The total amounts due by the United Kingdom government to the Department of Public Health and Welfare on account of navy and army allotments and war pensions, etc., as at October 31, 1947.
(e) The total amount owed by various firms on account of advances made for the en November 1947 NATIONAL CONVENTION 725 couragement of the fisheries as at October 31, 1947.
I give notice that I will on tomorrow ask the Honourable the Commissioner for Finance to give a statement showing the actual cash balance to the credit of the Board of Liquor Control account in the bank at St. John's.
I give notice that I will on tomorrow ask the Honourable the Commissioner for Public Utilities to table a statement showing the total amount owed by the United Kingdom government on account of the operation of the Gander airport.... Mr. Smallwood I would like to amend the notice of question I gave yesterday by omitting the words "for the most recent date" and substituting the words "on December 31, 1946 and March 31, 1947".
Mr. Chairman Your question is "to ask His Excellency the Governor to inform you of the amount of the government's accumulated cash surplus, together with details, on December 31, 1946 and March 31, 1947"?
Mr. Smallwood Yes.
Mr. Chairman Those questions will be passed on to the Information Committee.

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

Mr. Cashin Before we proceed with the business this afternoon, I want to express to you, Mr, Chairman, my apologies for yesterday afternoon. I am very sorry indeed that the incident occurred.
Mr. Chairman Thank you. That is very kind and gracious of you.
Mr. Newell I am not going to address myself at any length on the contents of this Economic Report and hope I will not in any way disturb the even tenor of our ways with which we started this session. There are a few comments I must make about our economic condition generally. I am not going to quibble about individual sections, sentences, figures or anything in the report which, allowing for human fallibility, presents a fairly comprehensive picture. However, I would like to compliment my colleague from St. George's West who, while he did not see fit to sign the Economic Report, nevertheless gave a very clear and concise expression of the point of view he holds as a co-operative worker, and which, also as a co-operative worker, I hold....
On questions of economics there is bound to be disagreement, because we all see things from different points of view. Certainly, when we come to speak on the economic position of our country, which is a matter of grave concern for all of us, there is room for wide disagreement. The thing that bothers and annoys me is that we seem to have run into a son of iron curtain which separates us into different and opposing camps and through which we find it difficult to see.
Looked at from my attitude towards economic matters, there are certain things about this Economic Report and the discussions on it which we have tended to overlook. I think, like the rest of the world, we are a little too much concerned with money. That is one of the fallacies of the materialistic age.... There are other things besides money. Let me say that I reiterate the views expressed by another delegate some time ago in discriminating between money and real value. I feel the discussions have, in other than one brief reference, overlooked the question of value. We have not taken into account in assessing economic value, the value of the dollar. Money is a standard of value. It is not wealth.... We have to take into account such things as our $80 million in savings today, which may not have a great deal more purchasing power than the $25 million we had in the Savings Bank in 1934. I must hold the view that the war economy has affected the situation. The effect of the war, in my view, was whilst it increased our cash savings, at the same time it placed a limit on the purchasing power of these cash savings.
The question of real values was brought to my attention by a person who is not an economist - he is a fisherman. They were arguing about the cost of providing twine for a fish net. Today, although you had to pay more for twine, he argued, it was cheaper than it was ten years ago, because whereas it took ten cases of salmon to get it then, today you get it for the price of one. The difference in the price in salmon was brought about from the co-operative market.
There has been a great deal of talk about optimism and pessimism. I am optimistic because 726 NATIONAL CONVENTION November 1947 of a certain unit of statistics not in here at all. There are 10,000 people in the co-operative movement in Newfoundland, where in 1934 there were not any. If there were we will probably hear from them.
A lot of our troubles here might have been saved if we had agreed at the beginning of the debate to define our terms. I do not hold entirely with the view that debating a report is a waste of time. I can sympathise with that view, and particularly after hearing some of the debates we had on some of the reports. I feel the big question is not the report; it is the economic condition of the country. If the report serves no other purpose than as a starting point from which to assess the economic condition, it is our business to evaluate the economic condition as we see it, and get on with what we are going to do about it afterwards. Perhaps if we had defined our terms we would have saved ourselves a great deal of needless discussion. There is the term "country". There is the term "self-supporting". It has been said here that no country is self-supporting; in that case there is no use discussing it. Suppose we use the word "solvent".... What do we mean by "the country?" Do we mean the government of the country? I would excuse, readily, any man who had spent considerable time in the government, if such a one were to consider the country as the government. I find it less excusable for a representative of the labour movement referring to the government as the businessmen of the country. Democracy must be in the interest of the majority. We must consider whether or not the country is economically sound on the basis of whether or not the economy is sound in the interests of the majority. We must consider whether we are completely and 100% self-supporting; we are not, if you think of all the people who are more self-supporting than in 1934. And yet I wonder if that is a fair comparison to make. In 1934 we were going through unusual times. It has been said that the world was upside down. It was inside out also. Has the position of the majority of the people changed in relation to the economic entity that is the state? As one interested in these matters in point of view of co-operatives, that is something which causes me very great concern.
....I hold and have held for many years that this country is capable of producing a frugal living for the majority of the people. I do not think that such is possible under the economic set-up we have at the present time. I think we need better economic arrangements than we have. I do not think that under such an economy there is room for millionaires β€”I would like to see 325,000 of them here in Newfoundland. I do not think our economy can make the majority of people self- supporting and still allow 66 corporations in a population of 325,000 people declare net taxable income of $250,000 each; which makes it one for every 500,000 population.
Also I do not agree with the philosophy which expresses itself in these terms, "the poor you have always with you". That was the attitude adopted by tired and effete governments a little over a generation ago, that produced in large measure the chaos that we have in those countries today. The modern statesman does not accept that view. It smacks of defeatism. It is certainly not a philosophy for avowed optimists.
I find it necessary, when considering a subject like the economy of our country, to be critical. I know that I will be accused of running down the country. I will, perhaps, be further accused of running down the country if I suggest that if you put a group of Scandinavians in southern Labrador or northern Newfoundland they would make a good living for everybody. Why? Because they would work harder? No, they couldn't. Because they have a different sense of social justice from ourselves; because they have a co-operative economy based on that sense of social justice. One thing has not changed since 1934 β€” there is just too much of every man for himself; we want to make our own little pile quick. Perhaps this would be a good time for me to disassociate myself from the 44 hard-headed businessmen we are all supposed to be.
I find very little in the report relating to the standard of living of our people. I want to make one discrimination of terms between standards of living and scales of living. By "scale of living" I mean that which we have achieved as compared to that which we aim at β€” which is the standard. Our scale of living has immeasurably improved since 1934, but if our scale of living has improved, standards have also gone up since 1934. We must consider...is there enough left over unto our people to provide them with the good things of life? You will notice I have upped the ante from three square meals a day. My contention is, November 1947 NATIONAL CONVENTION 727 it is possible for us to do that, but it is only possible if we realize our shortcomings and are prepared to start in realising them and working for a more socially just economy.
....I agree with the two members who said it was not necessary for the Committee to prepare a budget; but having prepared it, it is subject to our scrutiny. I wonder if in making up allowances for old age pensions the Committee is not basing the estimate on the standard of old age pensions given today? I worked it out myself.... I am puzzled just what we will have to do to qualify for one of these pensions. In a matter such as that, I think the Committee's estimate is too low.
I am not going to discuss either the merits or demerits of setting up a merchant marine. I do not think it is incumbent upon the Committee to make such recommendations at this time. However, if you are going to discuss such things, perhaps it would be well for the Convention and the Committee to discuss not only the setting up of a merchant marine, but also the setting up of a Crown company to run that paper company on the south coast in which there will be a great deal of money. All our wealth in one form or another is being shipped holus-bolus out of the country. We have no control over it. We benefit very little from it except in the matter of labour. While I am on this subject, I might offer this suggestion: how much stronger would the economy of this country be if the $8 million we have invested in the banks, were invested in organisations which could put that capital to work here in Newfoundland. Because capital is the means of production, and as the report shows we have twice as much money as we had in 1934, or more. I imagine in the case of capital goods as well as money, we are also far ahead of 1934, and our means of production is a great deal ahead of what it was in 1934. To what greater extent than in 1934 is this means of production controlled and used by and for the people? The means of production, whether it lies in the Savings Bank, insurance or other forms, are being shipped out of this country and being used to produce wealth for other countries.[1] Presuming that the means of production is twice as great as in 1934, is Newfoundland producing twice as much wealth? Is the Labrador fishery twice as great? Are we producing twice as much salmon, timber, and so on?
Newfoundland is hitched to the banking system of another country, with the result that real wealth leaks out of this country. Consequently, Newfoundland money is being used to develop and create wealth in other countries. As things stand at the moment the Canadian banks could depreciate Newfoundland's savings by 10% or 15% at a stroke of a pen, and Newfoundland could not do a thing about it. One of the primary functions of a bank is the control of credit, and the control of Newfoundland's credit is vested with outside interests. This control could be used to Newfoundland's disadvantage. When Newfoundland went broke in 1934, for example, there was $25 million in the banks. Yet the government could not borrow this money. Newfoundland could not control the financial system, and thus was not an independent financial unit.
Another point in Newfoundland's economic set-up which bothers me is that this country has little control over the production of foodstuffs. The question of Newfoundland's ability to double her agricultural production has been raised. But I wonder how far it can be pushed towards covering essential supplies. I am of the opinion that the gap left between this production and the actual requirements represents the degree to which Newfoundland must export or perish - in other words, the degree to which Newfoundland is dependent on other countries, and thus the degree to which Newfoundland is dependent on the export policies of these other countries.
I want to disassociate myself from the report's remarks on a lack of faith in the country. Actually I prefer the word "trust" to "faith". The people do have hope for the country, and if they lack trust, it is a lack of trust in political leaders. They need new leaders, or old leaders with new ideas. The report is definitely wrong in suggesting there is a lack of hope and trust. A recent storm did $ 10,000 worth of damage in one settlement. But the people did not sit back and bemoan the fact, they began to rebuild.
The report ends with the words of President Roosevelt: "We have nothing to fear but fear itself". The people of Newfoundland are not afraid. If they are, perhaps, afraid of politics, it is 728 NATIONAL CONVENTION November 1947 because they have never controlled politics. Going on to another statement by Roosevelt about four freedoms, you cannot have political freedom without economic freedom. And given the latter, people would be less hesitant about taking over their political responsibility. Roosevelt's freedoms are passive freedoms: freedom from want, freedom from fear, etc. I prefer an active freedom. Freedom to β€” freedom to live in comfort and basic security; freedom to buy food and education for children; freedom to develop natural abilities.
I feel the Convention's discussions have not gone deeply enough into the roots of things. There are inequalities which stand in the way of economic and political freedoms, and in the way of social justice. I wonder if it is not time we examined our methods and attitudes. The attitude taken in economic matters will go far in determining the action taken in political matters. Old age pensions and fishermens' insurance are not enough. They are only salve where surgery is needed. The Convention's search for political constitutions will be ineffectual if it is not allied to a desire for social justice, and an economic set-up more in keeping with the principles of Christian democracy.[1]
I maintain that how we think about these matters will determine our choice of a constitution. We must take chances on the future, but our job is to reduce those chances as much as we can. Neither optimism or pessimism will get us anywhere. We must know where we stand. It is a grand thing to walk with your chin up, but we must have our feet on the ground. If I have a criticism, it is that I have wondered if our feet were planted on the ground.
I have tried today to get outside of the political issue. I have considered it, if not as an anarchist, than as one who is not interested in any particular form of government. One point and I will close. In the early days we heard a lot about an open mind, and I doubted then that there was any such thing. But I say now that I do have an open mind.
Mr. Bailey I must apologise to the people for the barrage of words from the National Convention, but I must give an explanation as to why I feel this country is in a sound economical position.
Full justice cannot be given to our position without considering the epoch we live in. Much can be done for a country to solve its internal problems, but this has a limit. For example, the first blow to our economy was a revolution in Brazil, then sanctions against Italy. Both of these contributed to our economic state. If one studies history then one will see that whenever there is a war there is a surge forward in human endeavour. War and revolution bring men to their best, and make them see clearly. If we had had a war near our shores maybe we would see clearer. Today's events are the greatest leap forward the world has ever seen, and the future is bright. Notwithstanding what our pessimists say, that wave of progress will reach us here in Newfoundland. The Americans are spending billions of dollars on the Marshall Plan, and we should keep this in mind. You should examine the conduct of the United States, and ask why they care about people thousands of miles away. In the 1920s the US withdrew into itself and left Europe in a slum of poverty and discontent, in which fascism grew. But that is not happening now because great minds are working against that, because we are all in the front lines now. The world has learned that it has to help itself. And the benefit of that will come to Newfoundland. There cannot be another world depression, and that's the reason that I know government revenue will stay up.[2]
Ask ourselves the question and think deeply about it: is the great USA, having shouldered the expenses of the Marshall Plan, and aid to Greece, Turkey, UNNRA, and the other billions the world will want, going to sit idly by and allow the eastern tide of communism to swamp all the sacrifices that the US government and people will make? All of you can and do remember that not alone Newfoundland, but the world was poorest when all the necessities of life were most plentiful. Can anybody believe that the veterans of this war, not only in the US, but all over the world, will sell apples on the street corners? If you do, then you have another guess coming.
The bomb that fell on Bikini cleared many more cobwebs than that, and whether we have capitalism or communism or socialism or whatever ideology we are burdened with, there November 1947 NATIONAL CONVENTION 729 must and will be a free exchange of goods throughout this earth.... I believe we are on the threshold of a new world, and we, as a free people, should gear our productive capacity, and hand in hand with our comrades throughout the world look forward to that day when the fear of not having the three meals a day, the tight roof and the clothes to cover, will be a thing of the past. The day won't come again when my genial friend, the member from Green Bay, will have to go through Naples or Leghorn or even Oporto, with a yaffle of fish, rolling a roll of paper before him, trying to sell them, and neither will anyone be able to make a couple of thousand dollars before breakfast. It seems that this is what our pessimists are afraid of. I am fully persuaded that these days are past. Those who control the wealth of this world cannot afford to let them come again, because if they do then all hell will break loose.
I know a little of the feelings of the underdog. I have given this extensive study, talked with men high in labour movements as well as the rank and file, both on this side of the Atlantic and on the other side. Labour is getting more world-minded. You'll see, if a country has a strike, then other countries won't scab.
These are the reasons why I strongly believe in this report and would emphasise the fact that we should get ready to take our place in the economic niche allotted to us by nature. Let us fulfill our destiny like men unafraid.
Mr. Butt You refer to the amount of savings and insurance. Did the Committee take into consideration the amount of money invested in stocks and bonds available for capital: and also current interest as well?
Mr. Cashin You will appreciate that would be difficult under the circumstances. We would have to go to the Registry of the Supreme Court to see what stocks and bonds are held by individuals. We know there are a number of people holding stocks and bonds of which we know nothing; there is no record of them.
Mr. Butt There is no mention made of that, and it must be a considerable amount. There must be a considerable amount of money invested outside the savings banks.
Mr. Cashin There were $5 million in loans raised locally; you have war savings certificates also. The deposits in the banks is actual cash. War savings certificates were $2 million. That is another $7 million. We know it is around there somewhere. There are other stocks and bonds - Canadian bonds, bought during the war. We could not check up on them.
Mr. Higgins We have $6 million in the fresh fish industry alone, have we not?
Mr. Cashin We mentioned that as being invested in the fresh fish industry. A lot of it has been exported to bring in machinery, equipment, etc.[1]
Mr. Higgins The money is invested...
Mr. Miller At this stage of our deliberations, there are two documents that concern us most. One is the report of the Royal Commission of 1933 under the chairmanship of Lord Amulree...
Mr. Chairman No, I have no reference, we have nothing to do with that at all.
Mr. Miller You haven't, sir?
Mr. Chairman No ... nothing to do with the terms of the Convention Act.
Mr. Miller All right then, sir. I presume I could draw some comparisons with condition of the country when Lord Amulree made that report?
Mr. Chairman Oh yes, that's in order.
Mr. Miller To this I might add as a sidekick the report of Chadwick and Jones.[2] Now, if I make comparisons, this Amulree Report, it presents a story of conditions and reasons therefore. Submitted in the report are plain admissions that we are not self-supporting and it makes recommendations for its correction. Our Economic Report takes into consideration the results of these recommendations, or as we know it better, the reconstruction programme of Commission of Government up to and including the war period, and assessing this latter period as well. It deals with our main industries, our revenue, and refers to the fact that our national debt, $101 million in 1933, is down to $35 million in 1947. It gives our deposits in the bank, $26 million in 1933, at an all time high of $80 million today. It is helpful then, and interesting to make these comparisons. 1933 β€” might I be permitted to put the terms of reference of the Newfoundland Royal Commission, 1933, in comparison with our terms of reference?
730 NATIONAL CONVENTION November 1947
Mr. Chairman No, Mr. Miller, I don't want to, because if a precedent is established in this case, it lays a foundation for more serious departures than in the past. We'll have to remember this, that this Convention is constituted by legislation of the Commission of Government. Now the functions and duties of this Convention are set forth in section 3 of the act, and they are of a three-fold character. Any is not to be referred to unless of course it is incorporated by reference into the act constituting this Convention. You have to understand, your functions and duties and your liberties and all the rest are strictly defined by section 3. Therefore, if you can read in the Letters Patent suspending our free political institutions, if you can do that, then of course there is no limit beyond which ...
Mr. Miller ....I intend to confine my remarks to the economy of the country and to the survey made by Lord Amulree at that period. And to draw comparisons if I may with our present economic ...
Mr. Chairman If you don't mind, Mr. Miller, I would prefer if you would deal with the condition of things as Amulree found them. And deal with our present position if you don't mind. If you would disassociate the Amulree report with anything you have to say then as far as I am concerned it is wide open.
Mr. Miller Well, turning to this Amulree Report we find such passages as this: "The broad facts of the financial position in Newfoundland are unfortunately all too plain. Ever since the war period the country has been living beyond its means. The Island is now in extreme financial difficulty." That is about our finances and our economics at that period. Now our Economic Report presents a budget, and a loud clamour is raised that its proposed expenditures are too high. We want more for this and more for that. We want to repeat the mistakes of the 1920s β€” spend our surplus and have nothing for the rainy day. And yet in the same breath they claim that three years is not enough to look ahead β€” it must be 20, 50 years, what fantastic reasoning....
Again, 1933 β€” "The situation today is that, as a result of the extravagance of the post-war period, a debt has been incurred which is out of all proportion to the country's capacity, and we cannot avoid the conclusion that, given this scale of indebtedness, there is no prospect of the Island being able to pay its way even under normal trade conditions...."[1] In the preceding paragraph they give the national debt as $101 million, or a per capita debt of $400. These are the facts, Mr. Chairman, and in the calmer moments of our deliberations let us neither neglect nor fear to analyse them....
And so submitting these passages from the Amulree Report, I expect to find comparative answers in our Economic Report on present day circumstances. On page 41 of the Economic Report, "all throughout our object has been to try and give that good a picture as we possibly can of the state of our country. Any figures used by us, in most cases, have already been submitted to the Convention in the various committees' reports and have received the approval of the delegates. And in some cases, where we do expect opinions, we have taken care to have their correctness endorsed by those competent to do so." With these remarks for a background they continue on page 43, "Our present revenues therefore, are substantially solid in their structure and seem capable of carrying on without any serious decline. However, in estimating future revenue, we prefer to err on the conservative side." From there it goes on to say that whereas present revenues have dropped at the $40 million mark, in their budget, they make allowances for a drop back to a normal figure, back to $30 million. Dealing with the country's capacity to maintain this greatly reduced figure, a step-by- step presentation of the position of our country's industries is submitted. And may I be again permitted to examine briefly and compare just a few with the findings of previous investigators? Mining β€” very conservatively the Amulree Report said, "In general it may be said that the possibilities of mineral development in Newfoundland have been by no means exhausted." What does Chadwick and Jones say? Very discreetly they sum up, "it is not however possible, at this stage, to indicate what effects these developments may ultimately have on the economy of the Island". What does our Economic Report say, page 17. Summing up on the sale of iron ore it says, "Thus we feel that under November 1947 NATIONAL CONVENTION 731 reasonable conditions a continuation of the industry can be reasonably assured." I put it to you Mr. Chairman, that that statement is just as conservative and just as discreet as the report of Lord Amulree or the report of Chadwick and Jones... Well, Mr. Chairman, I think I have full right to refer to a report of Chadwick and Jones.
Mr. Chairman On what authority.
Mr. Miller On the authority, sir...
Mr. Smallwood The Chadwick-Jones Report is a report that was compiled by the British government for this Convention.
Mr. Chairman I beg your pardon. I stand corrected.
Mr. Miller I'll read a passage to you, Mr. Chairman. Paragraph 3. "It was also proposed that His Majesty's Government should prepare and make available for the Convention when it meets a factual and objective statement on our economic situation. This would analyse development in revenue and expenditures since 1934, the particulars of maintaining the various public and social services, review the country's import and export trade, and the main branches of its economic activity, and survey the principle lines of policy followed by Commission of Government and their financial implications." I read that for you because as I see it, financial implications are subject to change with change of policy, as we are asked to consider policy. Therefore if we cannot deal with possible changes in policy, which must necessarily come with possible changes in form of government, well, I think that those who compiled the Chadwick-Jones Report were a little bit astray or I am afraid we are astray. But I do feel that I have every right to refer to Chadwick and Jones.
Mr. Chairman I do know that the Chadwick and Jones Report had been prepared for the benefit of this Convention, I did not know your intentions, but you are perfectly in order. I was wrong.
Mr. Miller I have no business, no intention of trying to make your road any harder to travel than it purports to be.... Mercantile marine.... Now what does Lord Amulree say. I'll quote again, "We have already indicated the serious loss which the country generally, and St. John's in particular, suffers through the absence of a local mercantile marine. It is, to say the least, highly anomalous that in a maritime country, proud of its seafaring traditions, with an extensive European and South American trade, use should be made of foreign vessels to carry its products to market. It is still more anomalous that the foreign vessels generally employed for this purpose should be those of a nation which is one of Newfoundland's chief competitors in the codfish markets of the world."[1] Lord Amulree concludes, "We content ourselves with recording the facts and suggesting that a special enquiry should be instituted, with a view to the elaboration of a practical scheme for encouraging the formation of a local carrying fleet."[2] I am satisfied that the Economic Report has been constructive in their suggestions. Agriculture. As I foresee the future of agriculture in Newfoundland in its different phases ... I would say that its possibilities are unlimited.... I base my conclusions on the progress made over the last 15 years. And if I must, I give credit for it to the reconstruction programme of Commission of Government. Our people have become farm conscious. We have started an era of commercial farming. True, we are late, as some speaker remarked a few days ago, we come in a period when pioneering is a forgotten word and competition from farm mechanisation confronts us. Despite all this we are progressing. We are equal to the task, and nothing can more effectively cushion a national setback in any country than the products of the land. It's as symbolic as the action of a man who throws himself on the ground when an explosion passes over him. But these prosperous years have not tended to continuity of purpose. Money came easy of late. Further, the high values for cattle encouraged people to sell perhaps a little too much. Add to this the meager supply of cattle feeds, and there a new phase of farm life must be tackled, the cultivation of seeds. This may take half a century to climatise growth, but it can be done and will be done. The greater purchasing power of our people and the greater distribution of money has created demand. Our farmer is watching as keenly as he watches the farm life, the plant life he fosters. Again I am satisfied to think that the economic committee has been correct.
732 NATIONAL CONVENTION November 1947
Fisheries. The most unnerving feature of Newfoundland life is, or was, our dependence on the fishery. In the past it was the incontestable argument explaining our slow advancement and low standards. In prosecuting this industry we were not alone in the world. We were unquestionably left with a bounty of supply, but we were carefree, we were lax. Our government, our merchants and our fisherman were all to blame for the gradual loss to competitors of our markets. And so the tide flowed against us, and this had reached crippling proportions by 1933. Let us not lose sight of the fact that whilst we were sliding downhill our competitors, Norway and Iceland, were consolidating their positions in the fish markets of the world. Iceland's dependence on fishery was even greater than ours. I'll have to give you some figures on just what Iceland did in comparison to Newfoundland's progress. I am forced to give them, because we had an argument that Newfoundland was producing more than the demand was capable of absorbing. In 1885 Iceland exported less than 100,000 quintals of wet and dry salted codfish, Newfoundland 1.3 million. In 1932 Iceland exported 1.5 million quintals and was then ahead of Newfoundland by 450,000 quintals of fish. I presume that they sold all that fish, that there was no overproduction. They produced it and they sold it, and we lost the market. And if you read the papers today we will find that we are losing markets in herring too. These are figures. Production must always keep a keen eye to the requirements of demand. In this we were neglectful. However, that age is past. Perhaps slowly but surely, Newfoundland's fish is finding an honoured place on the food counters of continents far and near. This has been brought about by the combined effort of government and capital and has been furthered, in no little measure by the vigilance of the fishermen themselves. Perhaps the most reassuring event of late was the recent increase in the price of fresh fish at some of our larger filleting plants. Yes, the weaknesses of our old position have been recognised and are being corrected β€” corrected by Newfoundlanders themselves. Read the Economic Report on this, page 26. It says, "...during the year 1930-31, when a financial crisis engulfed the world suddenly, prices for our saltfish product during the early thirties and practically up to the beginning of World War II, had reached the lowest figure in history." I consider this part of the report incomplete, for it offers no explanation why the price was down, other than in a general sense. That reason can be clearly and unmistakenly defined and here it is. We were selling our fish in sterling and converting to Canadian dollars β€” a condition much as exists today existed on the money markets. The value of the pound was down in its relation to the Canadian dollar. And the value of the Canadian dollar was down in its relation to the American dollar. This caused the fishermen to suffer a loss of 20% on the value of fish. In other words, by way of example, $10 of fish was sold for $8. Moreover, this $8 was in some cases spent in buying American clothing, footwear, etc. There we had to pay a tithe of $ 1.22 Canadian funds for American funds. Converted into American dollars then, the price of $10 fish is reduced to slightly more than $6.50. If we had had our currency tied to the pound sterling the fishermen could have received the full $10 value for thier fish.... This condition is due entirely to the fact that we use Canadian currency in Newfoundland β€” or until such time as Canada buys all our codfish and pays for them in dollars. What are the possibilities of this happening? I am extremely fair when I say I see no possibility of it happening. Something that reduces the price of fish from $10 down $6.56 is a great big enemy of ours and should be removed. I do not propose to go any further here on this subject. To continue with the sections of their report on fisheries. It was during this period that modern methods in handling, curing and marketing of both fresh, frozen and salt codfish were begun by the establishment in various sections of the country of bait depots and cold storage plants, financed in many cases by our own government. I'm urged here to give the figures for the amount of bait that was used 1933-1947: 1933, 1.8 million pounds; 1945, 6 million pounds. As a result our people became confident of thier capability to secure paying voyages in fresh, frozen or salted fish. It is not unreasonable then to draw this conclusion (page 31): "And it is not unreasonable to say that the adoption of methods that have brought prosperity to such a country as Iceland cannot fail but bring similar results to 30,000 of our people engaged in the fishing industry of Newfoundland."
And so, as a member who had nothing to do November 1947 NATIONAL CONVENTION 733 with the compilation of the Economic Report and having giving it due perusal, it wins my unqualified praise. It was indeed a colossal undertaking.... All over it shows reference to previous reports that were approved in this House as authority for its statements. In essence then, it is a summing up of our work which was approved and thus in its collective stage must win our accord if we are to be consistent. Criticism of course can be worthwhile, but to be worthwhile it must be sound, practical and fair. It can be perverted, fanatical even, when dealing with a question so important, so all important as this present one. In some instances our standard of criticism has not been hard. And one tends to disregard these, for we are here for constructive purposes, not destructive. In the argument set forth there are some points which we seem to accept in our financial and economic set-up as being unavoidable and insurmountable. I feel it is unfortunate that these points should go unquestioned.... For instance, it is said in a manner foreboding ill, ours is an export economy, Newfoundland must export to live. I say, what is wrong about that? Let me repeat briefly these established facts about our natural resources and production. It has been proven to the satisfaction of the most critical, and it is thus no longer questioned, that our fish, ore, and paper industries are of the greatest potential value, are very substantial in quantity and are being soundly and progressively administered. Demand in the foreseeable future is excellent for these products. Our equipment, wherewith we produce, has been greatly improved and enlarged during the war period and is now at a high point of efficiency. From this we could almost deduce certain issues. We could say that our production will be up and that our sales will be up. Consequently we shall go on living, go on exporting, but dark and sinister forebodings cannot easily be dispersed from the minds of those who would cherish them. And so a new insurmountable obstacle is introduced and in the calm air of "I told you so", they sit back to await the realisation of their horrors. I must pause here, Mr. Chairman, to say that a nation or a country so disposed, so devoid of all initiative and aggressiveness can only sink, sink to the low level of a kept people. Great God, what an answer. I feel, Mr. Chairman, that it is another type of people whose interest we serve here today, that they are not lowlife vermin-infested individuals some would lead us to believe, but Newfoundlanders in the true sense of the word. If I thought otherwise I would not be here. But to go on. This new obstacle in our path to prosperity and self-support, in high sounding phraseology, is termed the vulnerability of our economy due to currency fluctuations. Yes, we are subject to just that. I admit it. But I cannot accept it as being insurmountable. True, we have in the past never tried to correct this situation. We have never fought back, we have never tried to forewarn ourselves and thereby forearm ourselves against these fluctuating currencies β€” mainly, I say, because we were in no position to do so. I grant exception to this in one instance only, and I refer now to the effort of the present government in correcting to our advantage the situation which arose this year when Great Britain decided to suspend sterling conversion. Just so many years ago this would have been impossible and beyond our ability to correct. Today it appears in the light of ordinary business, nothing at all exceptional about it, just plain ordinary business β€” so ordinary, that similar methods could be adopted, and I believe to some extent were, by the business houses, they having the added advantage of being able to purchase English goods with sterling funds. I mention this but briefly in passing, because I feel that by next year Britain will have regained her position in the export trade. Latest reports show her production to be increasing favourably. Added to this, there is a greater awareness in Canada and other countries of the necessity, for their own preservation, to increase their purchases from her, and that well describes our position too.
One point relative to this subject warrants further comment and better understanding, and that is that when the government agreed to convert the sterling, no guarantee of the value the pound was made. At that time conversion was being negotiated on the basis of $4.03 for each pound sterling. It now appears that dollars will be made available only after sterling credits have been set up. This means that should the pound be further depreciated and is pegged at this artificial price, and subject to the whims of world financiers, then the fisherman or the exporter would get proportionately less for his fish. It would appear that conversion of the estimated dollar 734 NATIONAL CONVENTION November 1947 requirements should have been guaranteed at $4.03. There's where the government broke faith with our people, for this and only this could have stabilised the price of codfish for 1947. And that, Mr. Chairman, is what I mean when I say we do not fight back. Further, no loss to our treasury need be incurred as it is unquestionable that the pound will recover given time, and we having no immediate need for our surplus, could await that time. Just such a transaction suggests the feasibility of holding some of our surplus in pounds sterling β€” an amount say equivalent to the interest-free loan, though not with the Crown Agents but in a special trading fund. It emphasises the selection of business where and when it best serves our country. In other words our purchases should get channelled in the direction where they are best calculated to stabilise our economy. Can we do this? Most certainly we can.... I am urged to suggest what machinery of government would be necessary to affect this. As I see it an actively functioning department of supply and a foreign exchange advisory board would be sufficient. We are years behind in attending to these matters. If we are to protect the fishermen's catch of 1948 as well as our other exports to sterling purchasers, it is essential that we act along these lines immediately. No one need get hurt. In fact, it would be good for all.
But presently, a line of low grade commodities is saturating our shelves. Where it isn't low grade it is high grade, too high for the economy of our people. Our people have been on a spending spree. Some confuse that with a standard of living. The profits have been eagerly garnered, and I have good reason to believe are being smuggled out of this country to go on deposit in United States and Canadian banks. How then, unless this is stopped, can we have our local investments made and our local industrial life developed? This is not an anticonfederate argument. The question of government is far from my mind. It is my suggestion, Mr. Chairman, of possible methods of dealing with a situation which makes our economy vulnerable. I say this, because our trade with Canada has been, is, and will continue to be the greatest of all deterrents to Newfoundland's progress. It has been so under past and present governments, it can be only increased if by chance we subjugate ourselves as a province of the Canadian government. Mr. Smallwood Mr. Chairman, a point of order. Mr. Miller says what is going to happen if we should subjugate ourselves as a province a Canada. Is that in order in this debate on economic affairs? Is that in order, sir?.... Isn't that a discussion of confederation? Hadn't that better wait until we debate confederation?
Mr. Miller I just mean in relation to policy. It is policy.
Mr. Chairman It is a question of propriety. Please don't bring it in.
Mr. Miller Am I allowed to draw comparisons again, Mr. Chairman?
Mr. Chairman Not with political institutions, no.
Mr. Miller I will keep on the economic side.
Mr. Chairman Speak on the economic facts and you can't go wrong.
Mr. Miller Thank you. Suppose we take a look...
Mr. Chairman No. If you don't mind, Mr. Hollett, I have a ruling. It isn't a matter for comment at all. He won't discuss Australia or America or anything else, save insofar as the economy of the particular country referred to has a bearing upon the productive economy of this country. We are discussing the Economic Report.
Mr. Miller I just want to know Mr, Chairman...
Mr. Hollett I'm not disputing your ruling at all...
Mr. Smallwood Point of order, Mr. Chairman. Mr. Hollett is not on a point of order, he is making a speech about your ruling. My point of order is, is he permitted to do that?
Mr. Chairman I have given my ruling and I wish members would do either one thing or the other, that is all I can say. I don't want.... I beg your pardon?
Mr. Hollett Am I out of order?
Mr. Chairman No, you were simply commenting as I see it, Mr. Hollett.
Mr. Hollett Thank you, Mr. Chairman.
Mr. Smallwood Mr. Chairman, I asked for a ruling to a point of order. I ask now for a ruling as to whether Mr. Hollett is permitted to discuss your ruling on my other point of order.
Mr. Chairman No.
Mr. Smallwood Well sir, may he do that?
Mr. Chairman Let me hear what Mr. Hollett has to say first....
Mr. Hollett Don't jump down somebody's throat as soon as they get up.
November 1947 NATIONAL CONVENTION 735
Mr. Chairman Mr. Hollett, please!
Mr. Hollett True, you're small enough to crawl down a man's throat!
Mr. Chairman Mr. Hollett...
Mr. Hollett You made a ruling and I respect it. It's perfectly right, probably, but I wanted to ask you this question in case I did get up at some other time on the Economic Report. If I'm talking about the economy of this country, have I not the right to compare certain aspects of the economy of this country with any other country in this world?
Mr. Chairman Yes.
Mr. Hollett Well, I won't say more. Thank you very much.
Mr. Chairman Except, Mr, Hollett, except you must not get off the Economic Report to make any reference to political institutions as such at this time.
Mr. Miller If I were humoured, sir, I would say...
Mr. Chairman I am not interested in the expression of senses of humour, I am merely interested in getting on with the business of the House. Please continue.
Mr. Miller Yes, sir. Suppose we take a look at what Canada is doing under very similar circumstances. Canada, too, is an exporting country. In fact she is referred to as great exporting country. Turning our eyes to Great Britain, she too found it difficult to market her produce due to the limited dollar credit available to the old country. And if the people of Britain had decided to tighten their belts another hitch, which incidentally they do willingly in their country's interest, then we'd be buying Canadian bacon in Newfoundland at a very low figure. However, Britain continued its collective purchasing and relied on currency control to reinstate her position, and Canada realising this decided there and then to reduce, curtail to the very skeleton of its agreement its trade with the United States of America, and increase its trade with Britain. This was done of necessity to protect Canadian exports to Great Britain which amounted in the first half of the present year to $352 million. What the loss of this market would have meant to the Canadian farmer can be best appreciated by the Newfoundland fisherman when he remembers the uneasy time he has just passed through. True, Canada continued unchecked its purchase of essentials such as coal, oil and cotton, using US dollars from its tourist traffic β€” US dollars that Britain has been spending in Canada, and resorting as well to the sale of its gold to the US Federal Reserve Bank. All this it is feared is not enough to offset the unfavourable balance of trade, and rumour now has it that Canada will seek a loan of $500 million American. Yet Canada is considered a selfβ€”supporting country. All this gives little credence to Canada's economic nationhood. And I'm glad, Mr. Chairman, that we too assist Canada in no little way through the US dollars received for our exports to that country, and by the receipts in Canadian banks in Newfoundland of US dollars. On that sir, I am going to again refer to my old friend, Chadwick and Jones, section 39.
Newfoundland's balance of payments position cannot be determined with the available statistical material. The net balance of trade was positive throughout the thirties but the gains from the visible trade were more than offset by invisible imports. During the war the balance of trade became negative and the negative balance on invisibles increased because of higher costs and mounting net insurance remittances. Exchange losses are, however, borne by Canada since the Canadian dollar is legal tender in Newfoundland and all banking transactions are carried on by Canadian banks. Any losses on Newfoundland trading account were probably more than balanced by the earnings from the purchase of Canadian dollars by United States forces which for the four years ending 1945 amounted to $77 million US. This money should directly be held in Newfoundland as Newfoundland credits for our essential purchases in American markets. We have to buy US dollars at a premium and thereby further impoverish our economy. So as we consider the stability of our own economy, we would be well advised to view the clouds on the economic horizons of other countries
What does all this add up to? Presently, a mess. Is the world full of insurmountable obstacles? Not at all, but to go forward we must act with initiative and aggressiveness.... We must shake off some misconceptions of our forefathers. We are doing it, let us pick up speed. It has been said that the outline of Newfoundland's economy lies in the shadow of the economy of other countries. I say it has been held there, and 736 NATIONAL CONVENTION November 1947 I further say that like a plant held in the dark once submitted to sunshine, it will grow, develop and be firm. Can we do this? Again the answer is yes, but first we must have representation, Newfoundland representation. Now don't jump up, Mr. Smallwood, I am not talking about political representation. Newfoundland representation in the world programme. Turning again to the picture of world trade relationships, whilst we are not a contributor to the political influences which determine the shape of things to come and the stabilisation of western Europe, there is every reason to believe that we will have a strong, favourable reaction in our fish markets. How will all this be removed from the scheme of things which in years gone by prevented us from selling our produce because trade sanctions were being enforced against our customers? The effect of these sanctions is shown in the Chadwick-Jones Report, Mr. Chairman, on page 23, and I quote, "Sanctions against Italy and civil war in Spain threatened to eliminate two of the most important European markets, and the value of exports of dried cod to European countries fell from $3,400,000 in the financial year 1934-35 to under $1,520,000 in 1937-38." Sanctions, Newfoundland backing up sanctions, poor crippled Newfoundland backing up sanctions for the British Empire.[1]
The programme for Europe envisions the removal of all trade barriers. I do not wish, sir, to labour this point, the programme for Europe envisions the removal of all trade barriers β€” and while I have not wished to labour this point, I hoped to express the importance to our economy of our external relationship, as well as an appreciation of the now apparent fact that an effort is about to be made to assist the countries of western Europe. A substantial proof that they will stand together in peace as in war is now evident, equally evident is their need to do so against the progressive assaults of communism; for once the world is divided into two camps of such dissimilar thinking, military and naval tension will not ease. And so we with our bases remain target no. 1 on the Atlantic seaboard. This is not a position to be coveted, but it is a part of our future whether we like it or not....
Perhaps as we speak here we do so as the last body of Newfoundlanders elected for a national purpose. Let it not be said of us that we did not protest the injustices committed against our country by the impairment of our economy. Sometimes I think we accepted too quietly the restrictions enforced on us by Commission of Government in preventing us from talking trade relationships and similar matters with the USA. In any other country such muzzling could have but one reaction, for how closely trade is interlocked with economy has been amply shown in the Economic Report. How different this report could have been if the Committee had been permitted to interview the American government on the aforementioned subjects. Evident now is their great handicap in forecasting the foreseeable future in a comprehensive manner by not knowing the condition and disposition of those with whom we do business....
And so the final report of the National Convention has been submitted, and I approach the climax of my responsibility when I say I corroborate it. From now on the responsibility slowly shifts to the people, and we will be left to justify our recommendations in our own hearts. That our conclusions will be based on actions governed by neither fear, favour nor prejudice will be our consolation, whatever the eventual result. That the road ahead will have its ups and downs, in this country as in other countries, one cannot dispute. Such are the realities of this earth and one would be a fool to disregard them. One would be a greater fool not to use all means to guard against them. Our economy is sound. Our future can be but the result of the actions of our people. That their actions will be governed by neither fear, favour nor prejudice, I am happy to think.
[The committee rose and reported progress. Mr. Smallwood and Mr. Higgins moved that various motions be deferred]
Mr. Higgins I move that the Convention hold night sessions on every day that a day session of the Convention is held.
Mr. Watton I second that motion.
Mr. Chairman Since you gave notice of this motion, the possibilities of giving effect to your motion have been explored I have to report it is not, for two important reasons, possible to hold night sessions other than on Mondays, Tuesdays and Thursdays. If it is decided to give full effect November 1947 NATIONAL CONVENTION 737 to the motion, the possibilities are we will find ourselves within the next two weeks without any reporters at all.... Therefore I would accept an amendment to that effect.
Mr. Job I move an amendment that the Convention hold night sessions on every Monday, Tuesday and Thursday of each week instead of every night.
I would like to add to the Chairman's remarks that, in consultation with our very efficient reporters, they very clearly stated it was not possible to report on every night. This is a compromise to meet the situation, and I believe it is very desirable.... I think that broadcasting can be done, even if it is a little delayed.
Mr. Chairman They will be recorded but the broadcasting must of necessity be a little behind.
Mr. Hickman I am glad this amendment was made. I felt that six nights a week would not be suitable to all members. I have much pleasure in seconding the amendment. I feel we cannot get through this any too soon....
Mr. Chairman There seems to be some misapprehension that perhaps members of the Convention are not trying to push the work of the Convention as fast as people think it ought to be done. That is not so. It was not possible before now to have evening sessions.... I do not want the position of the Convention to be misconstrued. We have gone into the matter and after investigation β€” we have to consider reporting and broadcasting β€” we find it is not possible to hold more than three night sessions per week....
Mr. Smallwood On the question of meeting at night time. I would like to say this. There may be in this Convention delegates who enjoy more than I do, being in here. I have yet to meet them. I enjoy being here as much as anyone. I love every moment of it, I hate to think of its closing. That is frank and it is sincere. Because, in my view, the people of Newfoundland are getting an education in the affairs of the country that they have never gotten in the history of the country since 1497. I love the thought of the people finding out for the first time something of what is going on in their country. As far as I am concerned, I would like Mr. Higgins' motion to carry β€” to meet every night. Not only every night, but every day but Sunday. There cannot be too much of a good thing.
There is another matter. If this Convention is going to close around the middle of December... that leaves one month between the end of this debate and the closing of the Convention. During that month we have two orders of business to deal with: the question of confederation, and the question of the forms of possible future government that we will recommend to His Majesty's Government in the United Kingdom to be laid before the people in the national referendum. A month in which to do that! As far as I am concerned ... there should be a thorough debate on the terms of confederation, and that debate should be known and heard by all the people of Newfoundland. To the extent that the holding of night sessions might prevent the people from hearing the debates, I would not advise holding night sessions. If the night sessions are not to be broadcast, it means the people are hearing only half the debate, and that might be a half when some essential matters are debated. I would like to be satisfied that debates held at night time are broadcast.
I do not feel like making an amendment to the amendment; possibly it might be agreeable to add, "but that no night session shall continue beyond eleven o'clock on any night".... I would suggest that amendment to Mr. Job. Could that be done, with the understanding that the debates be broadcast so that the Newfoundland people will know what is going on?
Mr. Chairman I cannot give you any undertaking that the evening sessions or any of them will be broadcast. All I can tell you is that Mr. Ryan, our Assistant Secretary, has contacted the Broadcasting Corporation and has been advised that they are very sympathetic.... I am advised that the facilities of the Broadcasting Corporation, insofar as human endeavour will permit, will be placed at the disposal of the Convention. It depends upon the outcome of the motion.
Mr. Smallwood I do not anticipate any violent opposition to any of the motions. Would the mover be willing to let it stand over until Monday so that the Broadcasting Corporation can be approached with this request β€” in case we had sessions three nights a week, could they undertake to broadcast on these three nights?
Mr. Chairman This motion has been brought about by the fact that the members of this Convention and myself have been criticised for not proceeding as thoroughly and as exhaustively as 738 NATIONAL CONVENTION November 1947 we might have in this work. That is a criticism that the public is entitled to make. It is a criticism we must take cognisance of. I feel that the feeling is so strong, the work ought to be speeded up and I think this motion should be disposed of one way or another at this time.
Mr. Job I have no objection to the sessions ceasing at 11 o'clock, I am convinced that the broadcasting will be done, but not the same day.
Mr. Smallwood I have made my point. I am quite sure the broadcasting people will have heard the point and they appreciate the profound interest of the people. I feel they will do everything in their power to see that the people of Newfoundland hear every word said.
[The motion as amended was carried. 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] Volume 11:425. [Volume II is not in The Confederation Debates Collection]
  • 1 The following section of Mr. Newell's speech was reconstructed from The Evening Telegram, 15 November [1]947, p. 26.
  • [1] The section reconstructed from the Evening Telegram ends here. The rest of Mr. Newell's speech and the start of Mr. Bailey's speech are taken from the recording of the proceedings.
  • [2] The section taken from the recording ends here.
  • [1] The following section was taken from the recording of the proceedings.
  • [2] Volume II: 16. [Volume II is not in The Confederation Debates Collection]
  • [1] Newfoundland Royal Commission, 1933 Report (Cmd. 4480, 1933), p. 46.
  • [1] Newfoundland Royal Commission, 1933 Report (Cmd. 4480, 1933), p. 139.
  • [2] Ibid., p. 139.
  • [1] The section taken from the recording ends here.

Participating Individuals: