Mr. Smallwood Mr. Chairman, last night we
finished clause 6 and were ready to go on with
clause 7; well, actually, clauses 7, 8 and 9, and a
number of clauses from here on are under the
general heading "Financial Arrangement".
Mr. Chairman Yes, with one qualification, and
that is subsection 7 of clause 5 which was
deferred pending the attendance of Mr. Ballam.
Now, I don't know whether it is Mr. Ballam's
intention to address himself on this question or
not, or what the reason was.
Mr. Smallwood I think he just wanted to be
present while we were debating the matter of
pensions and rehabilitation of war veterans and
merchant seamen; I don't understand that it is his
desire to have it gone into at this particular moment. We are to go back to it before
the debate is
over.
Mr. Higgins Mr. Chairman, so that we won't
have to go back again, there are a couple of
matters that I believe the chairman passed over.
One was housing. I believe he said he did not
have his notes there at the time. I don't know if
he discussed it afterwards, but rather than go back
854 NATIONAL CONVENTION November 1947
again over a three page memorandum on the
situation I thought we might finish it now, if that
is satisfactory to Mr. Smallwood.
Mr. Higgins This particular memo was
prepared while we were in Ottawa, and submitted
to Mr. Mansur at the time, and he agreed to it
basically — the position of the housing acts.
Mr. Smallwood I think maybe Mr. Higgins
would not mind if I pointed out that it was Mr.
Higgins himself who raised this question. Mr.
Mansur, the head of the Central Mortgage and
Housing Corporation, I think it is called, could
only tell us what happens and what can be done
under the existing arrangements in Canada, and
if these existing arrangements do not cover our
Newfoundland situation in the matter of housing,
then it would become a matter for the minister
himself; that is the Right Honourable C.D. Howe,
the minister in charge of that department. Mr.
Higgins raised the matter with Mr. Howe himself,
and my recollection is that Mr. Howe said he had
no doubt that something could be worked out to
cover the Newfoundland situation from the
standpoint of housing, but that that would be a
matter for the future. It was not something that he
could very well do until and unless Newfoundland became a province.
Mr. Chairman Yes, well, if you don't mind Mr.
Smallwood, if there are any remarks that you
wish to address based upon what Mr. Higgins has
to say, I think it would be time to make them later.
At the moment I am interested in what Mr. Higgins has to say.
[Mr. Higgins read a summary of Canadian housing acts, and information about the committee]
Mr. Higgins Now with reference to the few
remarks that Mr. Smallwood made, I was principally interested in the St. John's Housing
Corporation, and the possibility of obtaining further
loans under the set-up of their Housing Association up there, and Mr. Mansur and Mr.
Howe
explained that under the present set-up it would
be impossible to obtain financing for the St.
John's Housing Corporation. But at the last plenary session Mr. Howe informally told
us that it
was possible that some legislation would be
provided whereby loans could be made for the St.
John's Housing Corporation to continue its
operations.
Now I want to go a little further, not on the
Housing Corporation, but just to bring matters up
to date, so that we won't have to go back over
them again. When we were discussing the paragraph 5, the Newfoundland Railway, I believe
a
question was asked as to whether the present
employees of the Railway would be retained.
And I believe the answer was that they would be
retained.... As you know the committee dealing
with transportation consisted of Mr. Ballam, Mr.
Smallwood and myself, and we met with the
committee set up by the Canadian govemment,
consisting of Mr. Fairweather of the CNR and
some other officials. As a result of that meeting,
and the facts we gave them, the report made by
the Vice-President and those associated with him
was given to each member of our committee....
Look for Appendix 7 (Black Book, Volume 2),
and you will see a preliminary statement of what
would be involved in the integration of the Newfoundland railway and steamship system
with the
Canadian railway system.... This particular part
of the report was not included in the Black Book:
"It is not anticipated that the re-arrangement of
the organisation and other duties of the administrative personnel would result in
demotions
or dismissals, although no assurance should be
given on that point, since it would be necessary
to have discretionary power to deal with situations as they might arise".... Now you
have there:
"It is noted that the staff of the railway at the
present time numbers 2,990, and of the steamers
761, a total of 3,751" ... but this is not included:
"This looks to be an undue number in relation to
the size of the operation, but only a careful,
detailed study would reveal whether or not the
staff would likely be decreased under Canadian
National administration"....
Now that is all on that, but before I finish I
want to get it all over and done with, and there
was a debate yesterday on the advantages that
would accrue to Prince Edward Island under confederation.
Mr. Chairman There were some questions
asked, I believe, by Mr. Bailey.
Mr. Bailey I think there was quite a bit yesterday.
Mr. Smallwood Not on the advantages or otherwise accruing to Prince Edward Island. There
was some discussion of the ferry service.
Mr. Chairman There was a discussion in a
November 1947 NATIONAL CONVENTION 855
qualified sense on the advantages of confederation to Prince Edward Island insofar
as it affected
the ferry service between Prince Edward Island
and the mainland.
Mr. Higgins And arising out of that, sir, do you
permit me to admit any reference as to the value
of confederation to Prince Edward Island at the
same time? I understood it was opened up for that
one aspect.
Mr. Smallwood It is rather a wide field if Mr.
Higgins opens that.
Mr. Higgins I did not intend making any speech
myself, I was merely quoting, Mr. Chairman,
from the Premier.
Mr. Chairman Of course it was opened up, but
not altogether in a general sense. The discussion
thus far, if I remember correctly, was confined to
a specific aspect of the advantages of confederation to Prince Edward Island, and
I....
Mr. Higgins Was not the statement made that
Prince Edward Island had improved as a result of
confederation?
Mr. Chairman No, it was restricted to the ferry
service only. That point was discussed, and the
impression I gathered was that Prince Edward
Island had benefitted in that particular only.
Mr. Higgins Well, would you permit me to refer
you to a few remarks by the Premier of Prince
Edward Island with respect to the advantages
derived from confederation? I think it is in order,
from what little I know of the debate yesterday.
Mr. Smallwood If Mr. Higgins is permitted to
quote the Premier of Prince Edward Island, obviously I will be allowed to quote letters
from him
to me.
Mr. Chairman Just a moment, please. Mr. Higgins is obviously entitled to quote the Premier of
Prince Edward Island provided he is quoting him
on a matter which has been discussed or is under
discussion. At the moment I am rather afraid, Mr.
Higgins, at this particular time it would not be
relevant. I am not questioning your right to do it
in the course of the present debate, but in view of
the fact that I don't want....
Mr. Higgins It has to do with the ferry service,
as well you know.
Mr. Chairman Then I will ask you to confine
your remarks as nearly as possible to the benefits,
if any, accruing to Prince Edward Island as a
result of the ferry service.
Mr. Higgins I will do it as nearly as possible, I
can assure you. I am referring now to one of the
official handbooks that were supplied in Ottawa,
The Dominion-Provincial Conference of 1945,
Dominion and Provincial Submissions and Plenary Conference Discussions, Official Handbooks.
Mr. Bailey I think our debate yesterday was on
the ferry and the train service, and the changeover
from narrow gauge to broad gauge. I think that
was brought in, on what could happen to us if we
came into confederation with regard to our ferry
service. That is what I was speaking about.
Mr. Chairman Yes, that is my understanding,
and I am reluctantly but none the less compelled
to ask you if you will please confine your remarks
to these two specific matters.
Mr. Higgins I will do the best I can. Naturally
you will allow me a certain amount of leeway.
After all, I was only quoting the Premier of Prince
Edward Island, and I believe one of the main
ideas he had at that time was trying to force the
federal parliament to give...
Mr. Chairman Is your point this, that in order
to deal with these two specific aspects of confederation as they effect Prince Edward
Island, it
now becomes necessary for you to quote a
general statement which may include other
things?
Mr. Chairman All right.... I would like members to be clear. I can't allow you to paraphrase
a statement. Therefore if the quotation or quotations to which you are about to direct
our attention, Mr. Higgins, notwithstanding the sweeping
character that they may have, if they cover the
questions already discussed by the House, then
you are justified in quoting them.
[Mr. Higgins read from a speech delivered in
August 1945, by Premier Jones of Prince Edward
Island]
Mr. Smallwood Mr. Higgins, through the words
of the Premier of Prince Edward Island delivered
in 1945, has been telling us something about the
conditions on Prince Edward Island. Let us first
of all remember where and when Premier Jones
made that statement. The Government of Canada
had called a conference of all the provinces in
Ottawa to lay before the nine provinces proposals
for the rearrangement of certain taxing powers.
Each provincial premier got up and washed all
856 NATIONAL CONVENTION November 1947
the dirty linen of his province. Premier Jones did
it on that occasion. Prince Edward Island ... is
one-twentieth as large as the island of Newfoundland. Its population is double that
of St.
John's, 90,000-odd people, yet it is a province....
It is just one big farm, and it has only a handful
of people. Ever since they came into confederation in 1873 they have been clamouring
and
clamouring for more and for more from the
federal government, and they have been getting
more and more from the Government of Canada.
Since 1917, the Government of Canada has spent
$40 million to provide that little island with a
ferry service. In 1917 they built them a train ferry
at a cost of$1 million.... In 1927 the government
built them a new ferry — a $2 million ferry. Just
two years before that we thought we did very well
when we got the
Caribou on the Gulf. She cost
half a million dollars.... They ran that from 1927
until she was lost last year. They ran that for the
people of Prince Edward Island at a loss of $1
million a year, after spending $2 million to put
her there. And this year they gave them a brand
new ferry at a cost of $5 million; and on top of
that they spent another $6 million to build up-to-
date wharves and terminals at each end of that
ferry run. Let's look at the ferry. She is the biggest
ice-breaker ferry in the world today; carries 750
passengers, 60 motor cars, and 20 train cars. Now
I don't know how many that would be equal to of
our cars for our railway. The Canadian cars are
bigger than ours, and 20 Canadian cars would
perhaps be equal to something between 20 and
30 of our cars.... On top of all that, sir ... Prince
Edward Island has another ferry that the
Canadian government subsidises every year.
Now what is their complaint? In 1945 they did
not have the big new one, they still had the $2
million ferry and the extra ferry that the Canadian
government was subsidising. What was Premier
Jones' complaint made at the annual provincial
council that Mr. Higgins was quoting from?
What was his complaint? That the ferry boat
would not take trucks and buses while the other
one would, so that you could load up your truck
somewhere on the island and run her right on to
the ferry.... The main ferry would not take it, but
the other one would, the one that the Canadian
government was paying a subsidy to. $40 million
since 1927 the Government of Canada has spent
to provide that little farming province ... with a
good ferry service, and from 1873 to 1927 it was
nearly another $40 million. And when you discover what that tiny province has cost
the
Government of Canada just to give them ferry
service, just about as much as our whole railway
system has cost us, then you have to ask yourself
the question, would the federal government treat
Prince Edward Island as well as you know....
Mr. Smallwood I agree, sir, but Mr. Higgins
raised it, and I have the right to do the same thing;
and I am willing to take it province by province,
the whole nine provinces of Canada, and argue
from now till doomsday as to whether it did them
good or bad to go into confederation.
Mr. Chairman No, I mean now, before you
attack my integrity.
Mr. Chairman Well, I don't know what you are
doing, but I want to make this clear. I did state
that Mr. Higgins was entitled to quote from the
Premier of Prince Edward Island upon the railway and steamship service, but I insisted
that he
should quote, and not attempt a paraphrase. If, to
cover his point, he was compelled to deal with
other matters, I had to decide that we would hear
his quotation or we would not. In view of the fact
that the quotation in part had a bearing upon the
discussions, I ruled he was entitled to quote. I did
not hold that Mr. Higgins was entitled to go into
the general terms of confederation as existing
between the Canadian Parliament and Prince Edward Island.
Mr. Chairman On one occasion I was compelled to rule you out. Would you please, Mr.
Smallwood, confine your remarks as nearly as
you can to the ferry service and railway service.
Mr. Smallwood I have no more to say on the
question at the moment. I will bring in here a
letter which I received from the Premier of Prince
Edward Island, the very gentleman whom Mr.
Higgins has just read from. I will produce a letter
written by the Premier dealing with this very
matter and with your permission, I will read it.
Mr. Chairman You will be permitted to read it
for the same reason. As long as it bears directly
November 1947 NATIONAL CONVENTION 857
upon the question, I must allow it.
Mr. Reddy Mr. Higgins has quoted something;
Mr. Smallwood elaborated on it; could I quote a
headline from
The Family Herald?
Mr. Chairman No. We must draw the line
somewhere. You will appreciate that I allowed
the distinguished member to quote from a speech
made by the Premier of Prince Edward Island; if
Mr. Smallwood or any other member proposes to
introduce something from the same source, then
I must allow it. But as to the
Family Herald, I am
not prepared to recognise it.
Mr. Harrington ....Mr. Higgins has quoted
from some documents, the greater part of which
we have before us; some sections we did not
have. Apparently, as far as I can make out, these
sections are in the possession of other members
of the delegation. If that is the case in connection
with the Railway, have members other sections?
I think that is a fairly serious matter. We had quite
a fuss a while ago about another delegation that
went to London; some members were in possession of certain information, others were
not, and
it was agreed that it be produced.
Mr. Chairman If you send a delegation
anywhere and they bring back any information,
surely it belongs to members. If there are excerpts
which should be in these Black Books for our
benefit and for the benefit of the country, I think
we should have them all. There may be in existence some supplementary documents or
information not generally in possession of members. If
that is so, we would like to get it for members.
Mr. Smallwood The position is this: there was
a committee of the Ottawa delegation appointed
to meet with a committee from the Government
of Canada to discuss the question of the Newfoundland Railway, with a view to finding
out
what problems would be brought up if the railway
system were to be taken over by the Canadian
government. That Canadian committee consisted
of the Minister of Transport, Mr. Chevrier;
Deputy Minister of Transport, Commander Edwards; the Vice-President of the Canadian
National Railways, the President of the Clarke
Steamship Company and other officials. We
handed over to them what information we had
about the Railway. They asked for still more and
we sent back to Newfoundland and got that information. With all the information we
had given
them, the Canadian National Railways and ship
ping experts got their heads together....
Mr. Chairman I am not interested as to what the
personnel of any particular committee was, or the
negotiations of the respective committees or
delegations; what I am interested in dealing with
is the point raised by the member for St. John's
West, Mr. Harrington, in which he expresses the
fear that because we have already discovered in
the possession of one or more members some
information which has not been generally made
available, there may be other such information,
and he raised the question, quite properly,
whether such information is to be made available
to members. The point I would like you to address
yourself to is whether there is in the possession
of that Ottawa delegation information in any
form which has not been made available. If so,
have you any objection to this information being
made available to members, and if so, why so?
Mr. Smallwood It is exactly on that point that I
am addressing you. I do not know any other way
to do it.
Mr. Smallwood As one member of that delegation, I am not going to have it hinted or suggested
that anything is being kept back — not by you,
sir.
Mr. Chairman Mr. Harrington is raising the
question; I want it disposed of.
Mr. Smallwood I say, the Canadian National
Railway and steamship experts having been
given what information we could give them, then
made on their own ... a study of our railway and
steamship system, insofar as they could make a
study on the information they had. There was not
the time to come to Newfoundland and make a
study of the Railway on the spot. They took the
data and information that we gave them, and on
that information they wrote a report on our railway and steamship system, not for
the Newfoundland delegation, but for their employers —
the Government of Canada. I have never seen it,
but I was informed that it was a long report. A
small extract from that report was provided to the
members of the Transportation Committee of the
Ottawa delegation. I received a copy of it, and no
doubt Mr. Higgins received a copy of it, and he
has quoted from it this afternoon, and whoever
was the other man.
Mr. Smallwood Mr. Ballam was the other mem
858 NATIONAL CONVENTION November 1947
ber, and without a doubt he received a copy of it
also. What was it? It was merely a small extract
from that very large report provided to the
Government of Canada by its own experts. It was
the Government of Canada which compiled these
two Black Books, and it was the Government of
Canada which decided what should go in these
books and what should not. It was their choice. If
the Government of Canada chose, in inserting
into this Black Book, part of the report they had
received from their own officials, it was their
right to do so. What we have is the same as you
have here, with the very significant exception
that one or two clauses have been dropped from
the Black Book that were in the original report.
Why is it significant? The original report, the
copies of which were handed to the three of us,
contained the clause which Mr. Higgins has read
out this afternoon. You don't find that clause in
the Black Book. The Black Book is what the
Government of Canada compiled, what their own
officials compiled as their report to them. What
we go by is this Black Book.
Mr. Smallwood What is official is what is in the
Black Book, which was given to the delegation
as a whole.
Mr. Chairman Just a moment, Mr. Smallwood,
please. That may be regarded as an official
source, but I am not going to hold that that is the
only source. Therefore if members of that delegation were in possession of supplementary
information it is the property of this Convention and
we are entitled to have it.
Mr. Smallwood I am not questioning that for
one moment. I am merely drawing this distinction, that as it appears in the Black
Book it is
officially inserted by the Government of Canada;
the other thing is not official because it did not
come from the Government of Canada. It came
from officials of the Government of Canada, and
had not been passed on by the Government of
Canada.
Mr. Chairman Did I understand you to take the
position that when the provinces were called
together to consider the implementation of the
Royal Commission which brought in that report,
that any statement made by the premier at that
conference is not to be regarded as an official
statement?
Mr. Smallwood I was referring to the paragraph
that Mr. Higgins read concerning the railway of
Newfoundland, a paragraph which he read from
a document, which paragraph does not appear in
the Black Book. What I say is this: that so far as
concerns our Newfoundland Railway service,
which includes the steamships, we have here a
document, put in this Black Book by the Government of Canada. Mr. Higgins quotes a
paragraph
from another document, which was written by
officials of the Government of Canada. What we
must take as being official is what the Government of Canada itself put in this Black
Book, not
another document which has not been put in the
Black Book at all.
Mr. Chairman I am afraid we have to part
company on that point. I said that the fact that we
have to accept that as official, as you put it, by no
means implies that we are not to accept something else as official. Suppose I accept
your
premises that that is official, then I say that that
is official so far as it goes, but that is not to be
taken to mean that that is to be the sole source of
information available to the members of this
house if and when it is discussed. There are other
sources of information.
Mr. Smallwood No, sir. I agree with you completely, but what I say is this, that so far as our
Newfoundland Railway service is concerned we
have here in the Black Book a document inserted
by the Government of Canada. That we take as
being the official statement. We have also, Mr.
Ballam, Mr. Higgins and I, another document...
Mr. Smallwood We have another document
which has not been given to us by the Government of Canada, because it does not form
part of
the Black Book.
Mr. Smallwood No sir, so long as that is made
clear. Understand, I was not objecting to the
production of that other document, from which
Mr. Higgins is quoting, I was merely pointing to
the fact that the one we go by is the official one
inserted here by the Government of Canada.
November 1947 NATIONAL CONVENTION 859
Mr. Chairman I say whether it is Mr.
Smallwood, or Mr. Higgins, or Mr. Ballam or
anyone else, if they had in their possession information which came to them while
they were
serving in the discharge of duties assigned to
them by this Convention, it is clear and unmistakable to me that it is their duty
to produce these
supplementary documents and make them available to members.
Mr. Ballam I was on that committee, and I agree
with Mr. Smallwood that that quotation there was
taken from the report that these gentlemen made
to the Canadian government, and the Canadian
government findings are included in this Black
Book.
Mr. Chairman I agree with you as far as you go.
I am not suggesting for one moment that any
information gathered by any member of that
delegation from any source other than the
Canadian government is official and therefore
has to be introduced. Let me make myself clear.
I say that any information that the members of
that delegation, or any committee of that delegation, received as such, should be
and is, as far as
I am concerned, a proper matter to be placed
before the Convention.
Mr. Smallwood I put this to you, Mr. Chairman.
Some members of the delegation received from
the Government of Canada a certain secret and
confidential book which had been prepared for
the Government of Canada, by their own experts
and officials, and we were given the courtesy...
Mr. Chairman Now just a moment, before you
go any further. In what capacity did they receive
it?
Mr. Smallwood Purely as a courtesy and kindness, so that we could read it and gather what
information was in it, but on condition that it was
strictly secret and confidential. We have it, I have
a copy now, and I tell you that all the Conventions
that are created will never get me to divulge it —
not all the Conventions in the next hundred years.
Mr. Chairman I am not suggesting for one moment that you should break faith.
Mr. Higgins Is it improper, sir? I brought that
up. I did not think it was improper at this particular point.
Mr. Chairman Insofar as it did not cover railway and steamships or ferry service it was ir
relevant.
Mr. Higgins I was not talking about the Prince
Edward Island affair, but this business about the
Railway and with reference to two things that
were not included in the Black Book.
Mr. Chairman Now just a moment. How did
you come to receive it?
Mr. Higgins Sometime prior to July 31, I am not
sure of the exact date now, there was a committee
set up consisting of Mr. Ballam, Mr. Smallwood
and myself, to meet with representatives of the
Canadian government, who would be buttressed
by their railroad
Mr. Chairman You were appointed a committee by the chairman of the delegation?
Mr. Higgins The chairman of the delegation,
Mr. Bradley, appointed Mr. Ballam, Mr.
Smallwood and myself to be a committee from
the Newfoundland delegation to meet with representatives of the Canadian government.
Mr. Chairman You were deputising for the
delegation as a whole?
Mr. Higgins That's right. We met with that
committee sir, and, to the best of my recollection
we only met them once, but information that we
asked from the government here was supplied. I
believe Mr. Ballam will bear me out in that.
Mr. Ballam We met them twice. The second
time was to do with the steamship part of it. We
met the railway part only once. I think that's so.
Mr. Higgins All right, we met them twice. Now
as a result of that meeting we did not discuss
anything with them, and again I am going by
memory, except give them what information they
required. All that we had with us, and all that they
wanted that we had to acquire from Newfoundland, we gave them that. As a result they
made a report to, I presume, the committee that
was meeting us from the Canadian government.
I presume that because the only thing I have to go
by now is our minute of our meeting, a memorandum of July 31, and at that meeting
it is stated that
the secretary...
Mr. Higgins Yes, the secretary of the plenary
session had reported that the sub-committee had
reviewed the whole matter and the Canadian
members had obtained a substantial amount of
information from the Newfoundland members of
860 NATIONAL CONVENTION November 1947
the sub-committee, and had submitted reports to
the chairman of the sub-committee, the Minister
of Transport. This special sub-committee had
obtained the information and had submitted it to
Mr. Chevrier, who acted as chairman of this
sub-committee on transportation.
The substance of these reports had been made
available to members of that delegation, and I,
with Mr. Ballam and Mr. Smallwood, was passed
these copies at that time. I read the report in the
Black Book, and I read this, and you will find that
practically everything that's in the report is in the
Black Book, with the exception of these two very
important matters. I make no report on it, I merely
draw it to your attention.
Mr. Chairman But I still have to deal with the
report raised by Mr. Harrington, and as I have not
discussed it yet, would you mind answering my
question. Had I been in Ottawa as a private
professional man would I have received that
document?
Mr. Higgins I doubt very much if the other
members, Mr. Burry and Mr. Ashbourne,
received it. I don't know, I am not able to say.
Mr. Chairman By virtue of the fact that you
were a member of the committee?
Mr. Chairman Well now, while you are on your
feet let us try to dispose of this. Is that the property
of the Convention, and if not, why not?
Mr. Smallwood Sir, speaking on that, we have
two documents picked and inserted in the Report
of the Ottawa Delegation by the Government of
Canada. The other is another document altogether. There has been a process of selection
carried out by the Government of Canada. If the
other document, the one which Mr. Ballam, Mr.
Higgins and I received, is tabled, let it be tabled,
but on the clear understanding that the official
one is the one that is selected by the Government
of Canada and put in the Black Book. I don't
object to it, but I want the distinction drawn, and
when you remember what are the two paragraphs, you will see the necessity for the
distinction. Officials are hired men, they are civil
servants, employees of the government. Those
officials of Canada are not concerned with
politics, or policy. They are not concerned with
matters of high level policy, or decision, they
merely report on the conditions of a railway. It is
the Government of Canada which decides what
it will do about that railway should we become a
province, therefore the document which is compiled by officials is not official from
our
standpoint, and the one that is inserted in the
report is official, because it is from the Government of Canada.
Mr. Chairman If the Canadian government
decides that this is to be regarded as official, I am
not quarrelling with the decision of the Canadian
government at all.... But that does not mean that
information which came to the delegation while
in Ottawa from official sources should be kept
from members.... If there is other documentary
information in the possession of members of that
delegation, unless they received it upon the express condition and understanding that
they were
not to divulge it, I am duty bound to say that it
should be made available to us for what it is
worth.
Mr. Smallwood And always on the understanding that it was not the final picture. The final
picture is in the Black Book.
Mr. Ashbourne Mr. Chairman, that was my
understanding sir, about the situation, that at the
last plenary session we had with Mr. St. Laurent,
that this was the official declaration or documents
that we were to take to Newfoundland, and the
others, which we received as members of subcommittees, as far as I am concerned myself,
were given to us as secret and confidential; and
that's as I understand it. Now Mr. Higgins can see
how he misunderstood it. He was there at the last
meeting.
Mr. Higgins Mr. Ashbourne will agree that up
to the point that we came back I was there. We
can't have anything secret and confidential from
the delegation, surely.
Mr. Chairman It is a matter for members to
decide in their own consciences....
Mr. Smallwood All the documents handed to us
from time to time had in broad scarlet letters on
the cover "Secret" and "Confidential", and I hope
that all documents we received from time to time
are superseded, and put right out of date, by this
official Black Book in two volumes. This is what
we go by, together with the Grey Book, which
November 1947 NATIONAL CONVENTION 861
came sometime since then. I have an armful of
them down there, we all have, marked "Secret"
and "Confidential" in broad red on the cover.
Mr. Chairman I must hold that these were only
received by His Excellency the Governor of
Canada, and therefore must be regarded as being
the official pronouncements upon the...
Mr. Higgins These were not received from His
Excellency the Governor, sir.
Mr. Higgins They were received by us from the
Department of External Affairs.
Mr. Smallwood The Department of External
Affairs was merely the department through
which the government functioned. It was from
the Government of Canada.
Mr. Higgins I submit that the Government of
Canada did not see these so-called Black Books
before they were delivered to us, because they
were only completed and finished and delivered
to us as we got on the train.
Mr. Chairman Even so, the Department of External Affairs is for all purposes the Government
of Canada.
Mr. Higgins I think we are getting away from
the point.
Mr. Penney May I suggest that we are wasting
too much time on generalities. It is one and a half
hours since this Convention was opened, and we
have not touched upon this, I don't know what
you call it, this Grey Book, and it will be a week
tomorrow since we started this business, and we
are not down to page 2 yet; according to that we
will never get through it till Doomsday, let alone
Christmas. I think there ought to be some way,
Mr. Chairman, of cutting this down. The whole
matter of terms of confederation means one thing
to me; it is an attempt to sell out Newfoundland
for a price.
Mr. Chairman Yes, I am afraid you will have
to withdraw that remark.
Mr. Penney If it is inflammatory or not, on your
request I will, but certainly not on Mr.
Smallwood's.
Mr. Chairman I must ask you to withdraw it.
Mr. Penney I withdraw it at your request, Mr.
Chairman.
Mr. Chairman The position is that you have
dragged me into matters of conscience, and I
don't see how I can go around the place probing
the minds of the Ottawa delegation, or the
Canadian government or anybody else. All I can
do, Mr. Harrington, is to ask members to confine
themselves to the Black Books and the Grey
Book; and if any reference is made to anything
else I will require the members desiring to quote
from it to satisfy me (1) that he is free to quote
from it, and (2) that it is necessary to an understanding of the position as reflected
in the Black
Books and the Grey Book.
Mr. Bailey As far as I can see we made a mistake
in sending this delegation to Ottawa. We should
all have gone, and then we would all have the
information. I said from the first, whatever information was given, privately or publicly,
was
given to the Ottawa delegation as servants of this
Convention. We are the delegates of the people,
and they were sent there by us, and whatever
information is private or secret, there is not any
more honour in a man from Bay St. George than
there is in a man from Trinity South. We are all
the same men, doing the same job, and whatever
information there is should not be kept from
anybody. I can't see why a thing should be secret
when 25 or 30 men elected to send these men to
get it for them. Now I don't say to put it all over
the earth, but we do have private sessions here,
and whatever is necessary we should have.
Mr. Chairman I am not going to ask any member to prostitute his undertaking.... I am not going
to put any member in the position where he is
expected to repudiate an undertaking, that he
would regard as confidential and secret the information which was passed to him on
that express
condition.
Mr. Bailey I agree with you 100%, but any
member of a delegation should not be bound by
that. That is my meaning.
Mr. Chairman Well, that is something else, but
having given that undertaking, then I think it
would not only be highly immoral but highly
improper for me to suggest that he should violate
the confidence reposed in him.
Mr. Bailey Perhaps I have not made myself
clear. He should not be asked to do it. After all
the Government of Canada was talking to 45
862 NATIONAL CONVENTION November 1947
elected members of this National Convention,
and whatever was given to one man should be
given to the whole Convention. Why should
things be culled out, and why should they be
passed on to some? Then we can get down and
get a clear picture of the whole thing.
Mr. Chairman Whether they should have given
that undertaking or not is something on which I
am not prepared to comment. I am sure that they
were acting in good faith, but whether they
should have given the undertaking or not is entirely immaterial. If they gave the
undertaking
you have no right to require them to break the
undertaking.
Mr. Bailey But my argument is that they should
not have been placed in that position in the first
place, because every member of this National
Convention should have access to the same information.
Mr. Burry I would like to make myself clear on
that point. When I accepted these minutes and
other information in those envelopes marked
"Secret", I accepted them as secret, but not with
the understanding that it was to be kept away
from this Convention. It was a convenience
agreed among us that it should be done that way,
and we were to receive official documents when
we left; and these are the official documents. I
have read them through, and I have my secret
information and minutes, and I have read these
through, and there is nothing in that secret information that is not embodied in these
documents
here, if not word for word, certainly in the spirit
of it. I accepted the secret information with the
understanding that it would be given to us officially, and we were to take back to
this Convention official documents that we would agree upon
as a result of our meeting there. There is nothing
in the secret documents that I would not have this
Convention receive. If I had known that I would
not have accepted them. When I went to Ottawa
I went there to do my best, and to bring back
everything that went on there, as far as I could
possibly do it. I have done it, sir, in these official
documents, and I have nothing whatever to hold
back from the Convention....
Mr. Hickman I am glad that this point was
brought up. I was going to ask why they were left
out, but I don't have to ask now. Mr. Smallwood
has said that what was in the Black Book, the
official handout from the Canadian government,
was selected by the Canadian government, and I
can quite understand why some paragraphs may
have been left out. The Canadian government
would not select something that would not look
very good to some Newfoundlanders. I brought
up that question yesterday, and asked Mr.
Smallwood if there was any assurance or any
guarantee that if the Canadian National Railway
took over our Railway that they would retain the
same number of employees that we have working
today. Mr. Smallwood said that there was no
assurance, and possibly there would not be. I can
quite see that, but, as Mr. Fogwill just pointed
out, when I asked him this question, and if he had
this information in front of him, why could he not
have answered me and told me that? As it says
here: "This looks to be an undue number in
relation to the size of the operation." If that's the
opinion of the officials who constitute the
government and from whom the cabinet take
their findings, it may be that they might say, "We
will cut this staff 25%, and lay 90 or 100 men
off." I asked that yesterday, and I don't see why
Mr. Smallwood could not have brought that out.
It would have satisfied me. I heard nothing about
it until Mr. Higgins brought it up today. I don't
want to say too much, but it doesn't seem right to
me the way some things are going. Twice Mr.
Smallwood was reading words there that were
not in the report, and if we are going to have the
report...
Mr. Smallwood I rise to a point of order. I ask
Mr. Hickman to take that back.
Mr. Hickman You read the other night "freely
provided", and it was not in the report.
Mr. Chairman Mr. Hickman, you are not entitled to say that. Where it said "gratuitously" he
said "freely", which of course has the same
meaning.
Mr. Hickman I am not making insinuations, but
I want to get what is in the Black Book, and not
Mr. Smallwood's interpretations.
Mr. Chairman But it happens to be a fair interpretation of the word "gratuitously", and I don't
think you are imputing any ulterior motive to
him.
Mr. Hickman I was not imputing an ulterior
motive, but I can't agree that "gratuitously" and
"freely" are the same in this matter here.
Mr. Smallwood Mr. Chairman, if Mr. Hickman
will turn to page 5, section 17, he will see why I
November 1947 NATIONAL CONVENTION 863
did not refer to the paragraph in this other document.
Mr. Chairman We have been here two hours
and accomplished practically nothing. I am not in
a position to rule on this question because there
are three schools of opinion amongst the Ottawa
delegation as to what is confidential, if it is confidential, and to what extent it
is confidential.
Therefore, since I can't get unanimity of opinion,
all I can do is to say that we will go on as we have
been going, and if any member is going to refer
to anything outside the Grey Book and the Black
Books I will have to ask him to lay his foundation
for it.
Meanwhile, I feel that if members of the
delegation came into possession of information
... and if they have given an undertaking to keep
it secret then I can't ask them to violate it.
Mr. Bailey I am not laying any stress on the
Ottawa delegation. I am laying the stress on this,
that the Government of Canada should have
given to each and every individual everything
they gave to the Ottawa delegation. It was us that
sent them there, and it is up to us to know what
went on. Whether we work for or against confederation, and whether it is a good thing
or a bad
thing, that's what we sent the delegation to Ottawa for, and that is what the Canadian
government should have given them — not a little bit
here and little bit there. Mr. Fogwill asked the
question, and Mr. Hickman asked the question.
There's nobody going to be laid off in the Newfoundland Railway. That's balderdash,
as Mr.
Higgins said.
Canada will assume and provide for the
servicing and retirement of the 3 per cent
Stock Issue maturing 1943-63 guaranteed by
the United Kingdom. (This, in the opinion of
the Canadian government, represents a fair
estimate of the amount of debt incurred for
purposes which would presumably have been
the responsibility of the Government of
Canada had Newfoundland been a province
of Canada when the debt was incurred.) All
sinking funds against this portion of the debt
will be taken over by Canada.
The Province of Newfoundland will continue to be liable for the remaining portion
of
the Newfoundland debt and retain all sinking
funds against that portion.
The apportionment of the debt and sinking
funds is set forth in Annex II hereto.
[Mr. Smallwood read Annex II]
The position then would be that Canada would
take over $63,569,000, and Newfoundland
would have $6,354,000. I don't know that there
is anything I need to add to that. This public debt
falls under two headings — what is guaranteed
by the United Kingdom, and what is held here
locally.... Canada will take over our external debt,
and the Province of Newfoundland would be left
with an internal debt owed to the people of Newfoundland....
Mr. Cashin Mr. Chairman, there are a couple of
questions there. Do I take it, Mr. Smallwood, that
Canada takes over $63 1/2 million of our debt?
That's about right isn't it?
Mr. Cashin The outstanding debt then would be
about $6 1/2 million from Newfoundland?
Mr. Cashin When you were discussing this national debt offer, did you talk to them at all with
regard to the per capita debt of Canada as against
the per capita debt of Newfoundland, and what
was their reply?
Mr. Smallwood We did, Mr. Chairman, we had
a committee on public debt. I know I was on it,
but there are two others as well. I was secretary
of the delegation, and I was therefore a member
of all the committees. I forget now — it is in the
Black Book.
Mr. Smallwood We met the men from the
Department of Finance, and also some man from
the Bank of Canada, and they gave us the history
of what had been done by the federal government
with the different provinces as they came in, what
they did about the public debts.
Mr. Smallwood ....In our case it is a very much
higher proportion, higher per capita figure, than
in any other province. As a matter of fact, the
highest amount of provincial debt that Canada
ever took over was $50 a head of the debt of
Prince Edward Island. In our case I don't know
what it works out at, but it is more than that. It is
864 NATIONAL CONVENTION November 1947
the highest proportion yet.
Mr. Cashin That's not my point. My point is
this: This delegation went to Ottawa to get terms,
or what would be a good base to go into confederation. If you and I are going into
partnership,
the first thing I will say to you is, "Now what have
you got?" And you will say, "Cashin, I owe
$100"; I will say, "I owe $50", consequently I am
$50 better off than you. Now Canada owes
roughly $1,300 or $1,400 per head, and Newfoundland owes $150 per head. Now we are
going into business with Canada, and according
to this thing here, we are going to forget our
indebtedness of $150 a head and take on an
indebtedness of $1,300 or $1,400 a head. That
does not sound like good business to me. In 1895,
if my memory serves me right, a delegation went
to Ottawa and was there 11 days, and that's where
that $50 a head came in, and the Canadian
government had a less per capita debt than Newfoundland, and our people here, because
Canada
would not take over $5 million of our debt,
refused to go into confederation at that time. Now
the boot is on the other foot. The position today
is that Newfoundland has a net per capita debt say
of $150 per head, and Canada has $1,300 per
head. It is more than that I think, and consequently the difference between the two
is $1,150. Now
if you multiply $1,150 by 320,000 people, you
will find that if we carried out their agreement, or
the arrangements in 1895, that Canada would
have to pay Newfoundland to go into confederation somewhere around $350 million. The
position now as I see it is that they are taking over our
indebtedness of $63 1/2 million. What do they get
for it? All Newfoundland, and all Labrador, the
Railway and buildings and everything for $63.5
million; a railway which cost $72 million; all our
public buildings, everything for $63 million. I
think that's poor business. Now apart from my
prejudices with regard to confederation, I feel
that this situation on the public debt is not a
square deal.... They are going to take on a debt of
$50 per head, and we will take on a debt of
$1,300. Is it going to be easier to pay off $l,300
than it is to pay of $50? Other people may see it,
but I can't. I will probably have more to say on
this debate before it is concluded, but I want to
know whether the delegation directly asked the
Canadian government that question, whether,
based on our per capita debt, that they did not
think that Newfoundland was entitled to the difference between $150 a head and $1,300
or
whatever it may be.... In making up the estimates
of expenditure — I have not looked at it — did
you take into account the interest and sinking
fund? That is $350,000 added to the provincial
expenditure, not included in the books. Do our
interest and sinking fund go into the provincial
budget study? It is not included in here, when
those figures were made up of what the provincial
expenditure would be. I would like to know
whether the delegation asked the Canadian
government what they were prepared to do for
Newfoundland now in view of the fact that our
debt is $150 a head and their debt is $1,300 a
head.
Mr. Smallwood I am glad Major Cashin raised
that point. He put it very well. Two men going to
join a partnership. Major Cashin says, "What do
you owe?" And one says "$50". The other says,
"I owe $100". Difference of $50. Something
should be done about that, when they start in
partnership. The Government of Canada owes
per capita somewhere between $1,000 and
$1,100.
Mr. Cashin A little more. They added to it a
couple of days ago.
Mr. Smallwood A paltry $300,000, temporary
accommodation. It is like my going to the bank
and borrowing $30 or $40. The per capita debt of
Canada is $1,000 to $1,200, and our per capita is
$200 or somewhere around there. The difference
is quite a bit. Therefore something should be done
to compensate us for that. That is perfectly true.
I hold something has been done. The Government of Canada has got to pay into Newfoundland,
one way or another — some direct to
the provincial government, and some to the
people of Newfoundland direct. Some of it is for
the performance of services for the people —
running the railway, lighthouses, post offices,
etc. The Government of Canada has got to pay
something between $10-l5 million a year into
Newfoundland.
Mr. Cashin Point of order. My question was,
when you were talking to the Canadian government, did you or did you not put to them
the
question about the difference in the debt? I do not
care what they will pay in here. If you did not ask
them, well and good.
November 1947 NATIONAL CONVENTION 865
Mr. Smallwood We went into the question of
public debt—that question was raised, discussed
across the table, as we might in your office,
informal and friendly. The answer was, "No".
The reason was that the terms given one
province must be guided by the terms given to
other provinces. The Government of Canada for
many years will have to pay into Newfoundland
between $10-15 million more than they can take
out of Newfoundland. I hope it will not be too
many years; I hope the day will come when things
will be so developed, industries so productive,
our people so prosperous that we will be paying
a lot more taxes to the Government of Canada
than we will be paying for some years to come.
Put it at $10 million — the difference between
what the Government of Canada will pay into
Newfoundland and what they take out — that is
$100,000 every ten years. These subsidies are
paid; some in return for the grant of certain taxes,
direct taxes, income taxes, corporation taxes and
death duties. The government will take so much
money in taxes. That government will pay so
much into Newfoundland every year. If we take
it at the lowest figure — $10 million — that is
$100,000 a year that the Province of Newfoundland would cost the Government of
Canada. That is something.
One other point far more important — the per
capita debt of any country, the public debt is
important to the people of that country for one
outstanding reason, ... and in this I hope Major
Cashin will agree ... you have to service that debt,
pay interest on it, put a sinking fund forward; and
you have to pay it back when it falls due. You pay
so much a year for this debt, you pay in your
taxes. So what matters in a country, what counts,
is not so much the size of the public debt, but the
size of your taxation.... That includes public debt,
it includes family allowances, it includes public
services, it includes the Railway, your taxes that
you pay, the total amount you pay.... There is not
a special tax collected from people to pay the
interest on the debt, it is paid out of the regular
revenue that the government collects, and the
only real importance of a public debt is how much
it adds to your taxation....
Incidentally, in Newfoundland too there are
very bitter experiences with public debt. We have
in this country a great horror of public debts. I
find that in larger countries they don't have that
same dread. In Canada, certainly Mr. Higgins and
all our delegation will agree, all the officials and
cabinet ministers used to smile at our great concern and our dread of public debt.
Maybe they
can afford to smile, because nearly all their debt
is internal. It is owned in Canada. When they pay
interest on it they are paying it to Canadians. It
still stays in Canada. I think every year it is
around $400 million that the Government of
Canada pays on the public debt, and nearly all of
it goes to Canada and is used for the general
purposes of providing capital. Maybe that is why
they don't fear public debt.
If a country is growing, has good industries
and their prospects seem to be very good, then
they look upon debts as something natural, not
something to be scared of; because if they were
to be scared the United States today would be a
nation frantic with fear and debt; and the same
applies to Great Britain.... However, the question
of public debt is so much connected with the
question of taxation, because taxation includes
public debt, that I hesitate to go into the matter
now. I would suggest to Major Cashin that we
have got to get down to brass tacks in this debate
before it is over, get down to this question of
taxation, then we can have it out about our public
debt as well.
Mr. Cashin I think I am inclined to agree with
my friend Mr. Smallwood for once. To go into
the matter of revenues and expenditure and
public debt is a very important matter in connection with this debate. It is the only
matter really
that is worth talking about, and I think that this
matter should be put off until some of the questions that appear on the order paper
are correctly
answered, because I don't want to be guessing
any more. Whilst I want to get this thing over, I
want to be in a position to discuss the public debt
from an economic standpoint as far as the country
is concerned. So far I have got the answer that
they put it up to the Canadian government who
said they were not prepared to give us anything
for the difference.
Mr. Smallwood Would you allow me for a moment? We did not exactly put it up to the Government of
Canada, we put it up to the financial men,
and we got so little encouragement that we did
not raise it in the plenary session at all.
Mr. Cashin In other words you got no pity and
you gave it up.
866 NATIONAL CONVENTION November 1947
Mr. Higgins I think we were told that it would
be out of the question. The amount would be too
high.
Mr. Ashbourne Regarding the matter of the
difference between debts, I particularly raised
that point.... If I mistake not the matter was gone
into and I believe one of the officials of the
committee went into the matter and in one of our
meetings read us a memorandum or a digest of
the points to cover that, and I don't know where
that is. I don't know if Mr. Bradley has it, or the
secretary, Mr. Smallwood...
Mr. Ashbourne It was very enlightening, and as
far as I am concerned I realise that some of the
assets of Newfoundland have been put on the
other side to look after the debt. It is a small
country with a small debt and small assets,
whereas in a big country like Canada it would
naturally be expected that they have big assets.
There are other countries contiguous to Canada
that have a bigger debt than Canada has, and on
the other side as well, but that does not debar
them from raising money. If they are in a liquid
position, it is the assets they have that you have
to look upon.... Furthermore, I would like to ask
Major Cashin, since he gave us the figures of the
per capita debt that we would be called upon to
pay, if he would kindly give us the amount of
interest at 2 1/2% that is on that money over in the
Bank of England.
Mr. Ashbourne Would you kindly give us that
amount of interest and deduct it from the
$3,232,000 that is over on the other side?
Mr. Cashin Oh no, you are wrong there, that
$3,232,000 that is over on the other side is put
there for a particular purpose, and it is to pay a
debt that is coming due in 1950-52. That is not
included in the $6 1/2 million.
Mr. Ashbourne It is included in the $10 million.
What is the rate of interest if we have got to pay
that on $6 million — 5-6% isn't it?
Mr. Cashin The $3.5 million coming due in
1950-52 is taken care of by the setting aside of
£800,000, which is invested at the present time
by the Crown Agents in London at 2 1/2%. There
is one loan coming due in 1950, and they will pay
it out of that, and the other comes due in 1952,
and the accrued interest added on to that
$3,232,000 will be sufficient to meet both of
these loans, consequently that's out altogether.
Therefore the balance of the loan would be
charged up to the government, as I said it would
be $6.25 million or $6.5 million. Now on that
$6.25 million you have got to find $300,000
annual interest and sinking fund, and when you
come to these matters as to where you got your
revenues and expenditures, etc., it is not provided
in here in the estimates of expenditure at all. That
is another amount that's got to go on to this
so-called deficit.
Mr. Smallwood When we were drawing up our
guess, if you like, of what it would cost to run the
province, we left out all the interest on public
debt, because we hoped that Canada would take
over our debt, not leave us even with $6 million
as they have done.... But on the question of raising the cost of running the province,
I suggest that
we leave that until we come to it. I don't want to
duck it.
Mr. Smallwood All this financial stuff should
be left until we come to the discussion of taxation,
etc.
[There followed an interchange between Mr.
Cashin and Mr. Ashbourne on the public debt and
its service]
Mr. Smallwood It is a good thing that Mr. Ashbourne did labour the point. The story would be
that we start off with a public debt of anywhere
between $400,000 a year, and pay the interest
and sinking fund on it. This would have to be
provided by the provincial government, and
added in to the provincial government's budget.
We start off as a province with a debt of roughly
$6 million, and we would owe that to ourselves,
and the interest on it we would be paying to our
own people.
[The committee rose and reported progress.
Various items were deferred]
Mr. Bailey I give notice that I will on tomorrow
ask His Excellency the Governor in Commission
to obtain copies for the members of the Convention of the year books of the different
provinces
of Canada; also statements of the urban, rural and
municipal taxation system, whether by boroughs,
ridings, counties or parishes of all the provinces
of Canada; also copies of the taxation returns for
all the provinces of Canada and the various
November 1947 NATIONAL CONVENTION 867
municipalities and/or rural or urban communities
thereof.
Mr. Smallwood That is quite a tall order to ask
the Government of Canada to do, to give you the
taxation in every municipality in Canada. If you
were to ask the provincial governments of the
nine provinces you would get it; after all, it is no
concern of the federal government what taxes are
collected by some little town council. That concerns the provinces, not the federal
government.
Frankly, they don't know.
Mr. Bailey Pardon me, Mr. Smallwood, I am
asking the Governor in Commission.
Mr. Bailey No, fairly simple, it is only to ask the
government of each of the provinces. I think it is
very easy. I think it is something that we should
have in the light of what we have got ahead of us.
I think this has more bearing on what we have got
to do that anything else, when you have to show
our people what form of government they have
got to go to. Remember we are breaking a new
path.
[The Convention adjourned]
