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Newfoundland National Convention, 7 January 1948, Debates on Confederation with Canada

January 1948 NATIONAL CONVENTION 1061

January 7, 1948

Mr. Fudge I give notice that I will on tomorrow ask the Commissioner for Natural Resources if during the past six months he has received an offer for the purchase of Labrador for a sum of $150 million. If so, to table a copy of such offer for the information of the Convention and to further advise the Convention if any negotiations are now taking place regarding such offer.
1062 NATIONAL CONVENTION January 1948

Report of the Ottawa Delegation Proposed Arrangements for the Entry of Newfoundland into Confederation Committee of the Whole

Mr. Cashin When the committee rose yesterday afternoon, I was addressing the Convention on the issue of confederation. This afternoon, whilst it would be my privilege, according to what has been going on here lately, to give some "tedious repetition", as it would be termed, it is not my purpose to do so.
When I took my seat yesterday I was discussing the Marshall Plan and how it would affect Canada. I pointed out that Canada is longing for this Marshall Plan to go through in order that she may get some very badly needed American dollars. For this reason, if this plan goes through it will involve an expenditure of $7 billion a year, a lot of purchases for which might be made in Canada, and consequently will give Canada considerable American funds which she now needs so badly. I intend to go on from that part of my talk.
Let us take another look at these proposals. Annex IV in the Grey Book[1] tells us that the total revenue which Canada will expect to obtain from Newfoundland, if we become a province, is slightly over $20 million annually. These figures may be just guesses, otherwise they are fraudulent and dishonest.
Mr. Smallwood Point of order. Major Cashin is now attributing very dishonorable motives, to say the least, to the Government of Canada. A former Chairman, Judge Fox, ruled that it is not competent for members of the Convention to refer in disrespect or in terms of that type to His Majesty's Government in Canada.
Mr. Chairman I do not think you can impute dishonesty.
Mr. Cashin They cannot substantiate the figures.
Mr. Chairman It does not follow that if the figures are incorrect they are fraudulent. I am not listening to charges of fraud.
Mr. Cashin These figures were handed by the Canadian experts to the Newfoundland delegation to take home. They are not worth the paper they are written on. Mr. Smallwood never questioned the figures. Why? Because it was part of his game.
Mr. Smallwood Point of order. Is it correct for Mr. Cashin to be imputing dishonest motives to me?
Mr. Chairman No.
Mr. Smallwood He has done so and was not called to order. Must I rise in my own defense?
Mr. Chairman You must. It will be thought I have some ulterior motive in intervening when it is not justified.
Mr. Smallwood Unless I rise and claim protection of the Chair, I am not to have it?
Mr. Chairman Unless there are questions of grave disorder, I am not bound to intervene. I must ask you, Major Cashin, not to impute dishonesty.
Mr. Smallwood I am anxious to sit here and listen as long as he does not make charges of that kind. If he wants to make the same charges again, I will not stand for it.
Mr. Chairman That fact that you believe the figures are incorrect, Major Cashin, does not lay any foundation for your making an allegation of fraud.
Mr. Cashin When I presented the Economic Report, I never interrupted Mr. Smallwood. I let him go to town on it. He does not like some of his own medicine.
These figures, of course, are not ours. They were handed by the Canadian experts to the Newfoundland delegation to take home. And the Ottawa delegation apparently took these figures without even asking a word of explanation; never questioned them. They have no explanation to offer. I want to compliment Mr. Fogwill on the effort he made in dissecting these figures. I know, as a former minister of finance, what he was up against. He had to go through that Blue Book and he had to go through it from cover to cover, trying to prove his figures. We have no proof here. No Canadian representative has been brought to this house. Mr. Smallwood has been acting on behalf of the Canadian government.
Mr. Smallwood I rise to a point of order. I was appointed by you, Mr. Chairman, to pilot this report through the House. I have been acting on behalf of this House. Am I to be charged with acting on behalf of the Canadian government?
Mr. Chairman You are going too far, Major January 1948 NATIONAL CONVENTION 1063 Cashin. As an appointee of the Chair, it does not follow that he is the agent of the Canadian government.
Mr. Cashin These figures were handed by the Canadian experts to the Newfoundland delegation to take home; and the Ottawa delegation took these figures without even asking a word of explanation. Mr. Smallwood eulogised these Canadian experts as individuals who knew more about our country than we do ourselves. We are sick and tired, Mr. Chairman, of hearing about experts in this country. Nicholas Murray Butler, the late President of Columbia University in New York gives the definition of an expert as follows: "An individual who knows more and more about less and less."
Anyhow, let us see how these estimates from these Canadian experts stand up against the hard facts. Today we are collecting $10.5 million annually in personal income tax, corporation tax, and death duties (or, as they call it in Canada. "succession duties"). The Canadians say that under confederation they expect to collect from these sources about $11 million annually. Now, I ask, is this reasonable? Is this an accurate estimate in view of the actual position? The first point is that, under confederation, this particular field of taxation would be far larger than it is now. Also, the Canadian rate of taxation would be higher. Just consider, for instance, the matter of Newfoundland income tax. With us, this tax applies to single persons earning over $1,000 yearly. But in Canada it takes in everyone who is single and not married, earning over $750 yearly. In Newfoundland a married man does not pay income tax on earnings up to $2,000 yearly. In Canada, it takes in persons earning over $1,500 annually. The ordinary clerk on Water Street earning $1,000 a year if he is a single man, or if he is a married man and earning $1,500, under the income tax law he is not allowed to put in his own income tax; the Canadian government does not trust the employee; it is deducted off his salary each month. In Canada today there is $80- odd million in refunds to be made, some of them to persons who are dead and buried and I hope are in heaven, and to whom the income tax refunds are no good. These were taken by the Canadian government and used during the past seven or eight years.
Will not then this increase in the income tax brackets place hundreds, and possibly thousands of Newfoundlanders under taxation who are now free? This means that under Canadian income tax laws, all fishermen, loggers, farmers, miners, longshoremen, labourers, stenographers, nurses and clerks who are single and earn over $750 annually will be subject to income tax, and will not this increase the amount of taxes collected? The same applies to married people earning over $1,500 yearly. And does it not indicate that when these Canadian experts say that they expect to collect only $3.2 million from personal income tax annually, that the rest of it is incorrect? I asked about that the other day and the answer they gave me was evasive. They told me, in so many words, to read the Grey Book and I would get the information, as if I had not read it. The most insulting document that ever entered the doors of this assembly. Mr. Chairman, I say they will collect not less than $4 million annually or nearly $1 million in excess of the figure they give. And the same thing applies to corporation tax and succession duties, they will also be higher than the misleading figures given us. And there is another feature. With us, no death duties attach to life insurance policies made payable to beneficiaries. But this is not so in Canada. If we enter confederation we will have to pay death duties or succession duties on these policies. And we were told we were not going to have any new taxes! And as we know, in this country there are some hundreds of thousands of dollars paid beneficiaries annually by Canadian life insurance companies. Here again we have an instance where, under confederation, new taxes would be imposed on Newfoundlanders, and consequently we have another source whereby the taxation payable to Canada would be increased. Mr. Fogwill made a breakdown of these taxes. The experts did not come down here and tell us all about these taxes, neither did they give the Ottawa delegation any information.
Mr. Smallwood said that there will be much duty free goods coming in here and that will decrease revenues correspondingly. I want to say that all kinds of goods are coming in here today and those goods originate in the United States β€” take cotton goods, steel products, Canada has to pay duty on them entering Canada. Did these experts take the invoices in the Customs? Did they get the points of origin of things? Certainly 1064 NATIONAL CONVENTION January 1948 not. They took the Blue Book and they guessed at them. Furthermore, are we to take it that because Mr. Smallwood says so, that we will be importing our goods from Canada? Will we not be permitted to buy anywhere else? Why, last year, we imported $25 million worth of goods from the United States on which duties of not less than $3 million were paid β€” I am estimating that. I say they probably collected nearly $4 million; and those so-called experts say we will get $2 million. And again on flour; we are told we will get it in duty free from Canada. That reminds me, in connection with flour coming into the country, the Canadians are tipping Newfoundlanders with the flour, because they are selling wheat in Great Britain for $1.50 a bushel, market price, and it is $3 a bushel in Newfoundland. We in Newfoundland have been paying on wheat based at $3 a bushel; while in Great Britain they are paying on wheat based on $1.50 a bushel.
They say they will collect $400,000 in liquor taxes. If you can tell me they were not guessing, I will eat my hat. In 1946-47 we collected over $1.5 million in taxes on liquor. I am glad I am talking on this liquor business. In Canada, they can never unload the Scotch manufactured in Canada on the Canadian people. The distillers, like Seagrams, have to pay $12 a gallon in the form of excise duties to the federal government. It is coming here duty free, but they forgot to put in the $12 a gallon they collect there. It was deliberately done or else they are not experts. The same thing applies to mm which they import from the West Indies; the duty is much higher than it is here at the present time. And again on cigarettes β€” take Lucky Strikes; they are 52 cents to 55 cents in Canada. You do not hear them telling us that. Under confederation we will probably pay 20% or 25% more than we pay now. I have a package I bought here for 37 cents; I bought them in Montreal the other day for 44 cents.
Prior to that I referred to the significant fact that the gentleman who is now High Commissioner in Ottawa for the United Kingdom played a prominent part in the compilation of the infamous Amulree Report; I gave his name, Sir Alexander Peter Clutterbuck. I understand that during our recess β€” I was out of the country β€” Commissioners went on the air and advised the people to vote in the referendum; they advised them on many things, but neither one of them told the people of Newfoundland what they were parties to and are continuing to be parties to, that is the violation of the 1933 agreement. They are more concerned β€” some of them β€” with referring to the morals in St. John's East and St. John's West; whilst these violations are offences, they themselves violated the very statutes under which they exist.
Now, Mr. Chairman, I think I have shown conclusively that based on our present financial and economic position, if Newfoundland entered into confederation Canada would stand to gain many billions of dollars annually over and above the subsidies paid to this Country.
Let us for a moment refer to Annex IV of the Grey Book which gives the possible expenditures of the federal government annually in Newfoundland. Great stress has been made by Mr. Smallwood on the importance of the payment of family allowances which are estimated to amount to $8.35 million yearly. I refer now to what is generally called the "baby bonus". To get to the root of this matter, it is necessary to give a somewhat brief history of how it was brought about in the Dominion of Canada. I go so far now, Mr. Chairman, as to term this piece of Canadian legislation the most immoral and corrupt enactment that has ever stained the pages of the statutes of Canada.
In 1944 the Mackenzie King government was on the verge of total collapse, because efforts were being made by many of its outstanding members to bring about conscription into the armed forces of Canada for the purpose of reinforcing the Canadian army.... Prime Minister King β€” who has always depended for his political support and his retention of the government on the political backing of the French province of Quebec β€” was trying to dodge the conscription issue. He compromised, so to speak, with the French element in his party, putting through the conscription legislation; but on the other hand, in order to placate his followers and the people of the Province of Quebec he introduced this Family Allowances Act, which is the "baby bonus" legislation. This particular legislation was introduced principally forthe purpose of healing the political sore which was created in the French Province of Quebec by the passing of the Conscription Act, which compelled the French Canadians to join January 1948 NATIONAL CONVENTION 1065 the various armed forces of Canada β€” it being a well-known fact that the people of French Canada were not enthusiastic to take part in any wars that did not involve their homeland directly. Mind you, there were several outstanding French Canadian regiments, but it is generally speaking I am talking about. The same thing applied to the First World War. This corrupt legislation has cost the Canadian nation and the Canadian taxpayers over $200 million annually. The same immoral legislation is now being held out as a bait to the people of Newfoundland to induce them to join the federal union; but I would like to point out that there is no definite indication that this particular legislation will be continued. As a matter of fact, there are thousands of Canadian citizens throughout the entire Dominion of Canada who are advocating its repeal. And in view of the fact that Canada is today in a difficult financial position, having to impose further taxation on its already over-taxed people, it is not unlikely that this legislation will be stricken from the statutes within a very short period.
Mr. Smallwood Nonsense.
Mr. Cashin It is not nonsense. If that is all you have to offer, it ought to be thrown out through the window. Go into the Province of Ontario and see what you will find. Everyone who knows anything about the legislation, knows they are only doing it for political purposes. Prime Minister King had to do that, otherwise he would have had to resign. And incidentally, he was defeated in his own constituency of Prince Albert.
This particular feature of the proposals for the union of Newfoundland with Canada is being stressed with every effort by the advocates of confederation. They feel that it is the one bright spot in their annexation platform. They realise that the other terms of union have no basic or solid foundation, and at every opportunity that is afforded them, they try to drill into the minds of our people that once they become a province of Canada all our difficulties will be ended, and the Newfoundland people will at last have entered into a land of milk and honey. They conveniently forget that the taxpayers of the country will be compelled to find these fictitious monies through either direct or indirect taxation. One would imagine to hear some of these people talk, that money is growing on trees. They deliberately try to avoid discussing the present average tax of Canada as compared with the average tax of Newfoundland, which as I have already said, is favourable to Newfoundland in the amount of $110 per head for every man, woman and child in the country. Let me repeat and further emphasise the fact that union with Canada means extra taxation on our people of an additional $35 million annually.
Now let us make a brief review of the Old Age Pension Act as it exists and functions in Canada. A man or woman, to become eligible for this stipend, must be practically a pauper, and then before he or she receives this $30 per month allowance, he or she must assign to the federal government any property or assets they may have; which in the event of death is taken over by the Canadian government and sold in order to repay the federal treasury the amount so paid.
Mr. Smallwood No.
Mr. Cashin You will have plenty of opportunity to reply to me later. We can get the act. The people of Canada are raising Cain over the means test. It is wrong to give a man an old age pension if when he dies the government takes his estate, unless he violates a law and has it made over to his successor some years before. It is an inducement to law-breaking. In our Economic Report we outlined a plan whereby we would be in a position to supplement our present old age pensions scheme to bring the stipend up to $25 per month. But never in the history of our country, since the old age pension was first instituted some 40 years ago, has the pensioner been compelled to assign or mortgage his properties or assets to the government in order to become eligible for this pension.
Also, with respect to the unemployment insurance scheme now in force in Canada, it is proper that our people should know that those affected or those eligible for recompense under this particular plan, in the event of union with Canada, would not be our primary producers. It does not affect our fishermen, our loggers, our miners, our farmers, our longshoremen or others of the labouring class, and consequently would be of little help to the employed of Newfoundland.
If we refer now to the probable expenditures under Annex IV, we find that the sum of $9.4 million is set down to be spent by the federal government annually in what they term "Other 1066 NATIONAL CONVENTION January 1948 Department Expenditures". It took a question from Mr. Hollett to get some information on it. I have not seen the answer. Here is the position I take: the members of the Ottawa delegation looked at this $9 million, surely they should have asked about it. They took what they gave them and brought it home. That is the way it appears. We have asked the Ottawa delegation to give us some idea of what these expenditures would be, and through what particular channels the monies will be disbursed, but they have failed to give us any concrete answer. They do not know definitely and can only surmise. Again I am forced to point out that nearly all the estimates contained in these Canadian proposals, given us through the efforts of the Ottawa delegation on behalf of the Commission government, are absolutely fictitious and most unreliable. They are based on nothing concrete. The Ottawa delegation, through Mr. Smallwood, has admitted to this Convention that these estimates of both revenues and expenditures contained in the Grey Book were prepared by the federal government of Canada months before the Newfoundland delegation went to Canada.
Mr. Smallwood I never said that.
Mr. Cashin You told us that in the Steering Committee. Mr, Higgins, Mr. Hollett and Mr. Hickman were there and they know I am telling the truth. We will have a showdown on this.
Mr. Chairman I do recall a statement that something was prepared; but frankly, honestly, I do not recall at what period it was prepared.
Mr. Cashin It is too bad we do not keep minutes of those Steering Committee meetings.
Mr. Smallwood Let me first say that I said at the Steering Committee that the bulk of the material given to us by the Canadians was prepared long before we arrived. The first public meeting was held that afternoon. They presented us with two volumes of black books; not these Black Books.
Mr. Cashin Where are they? They are not the same.
Mr. Smallwood That is smart. You do not want the solid truth. You want to get off a few gags. I am not dumb.
Mr. Cashin You are not dumb β€” you occupied 70% of the time in this Convention, talking for the last 16 months. I wonder, Mr. Chairman, on what authority or on what basis were these figures prepared by the Ottawa experts. Who asked the Canadian government to have these estimates prepared? On what supposition did the Canadian government anticipate a delegation from this Convention? When Mr. Smallwood went to Ottawa shortly after the Convention election in July, 1946, did he inform the Canadian government that such a delegation would be forthcoming and did he request the Ottawa experts to prepare these estimates at that time? Is it not conclusive proof, Mr. Chairman, that this whole confederation idea had been planned long before this Convention met here over 16 months ago? Is it not just a further confirmation of the facts of history, that it has been the policy of the imperial government for nearly 80 years to force Newfoundland into confederation? Is it not definite proof of this whole scandalous transaction, and that the Commission government, who are the local agents in Newfoundland for the British government, are aiding and abetting the present move? Let me repeat what I have frequently stated before: that if this is not the case, why has not the United Kingdom government carried out its solemn agreement made with the Newfoundland government in 1933? Lord Addison refused to tell us when he was confronted with this matter in London last May. Is it a case of the British government treating its sacred pledges to one of her own dominions as just merely another scrap of paper? If that is not so, then will someone tell me why this particular agreement has not been carried out? I appeal to His Excellency the Governor to come out and tell the people of Newfoundland why His Majesty's Government in the United Kingdom has failed to keep its promise to the Newfoundland people. In that agreement there was no mention made of confederation with Canada, conventions or plebiscites. The people of this country are entitled to know the truth in this respect and I know of no other person in the country today more capable of telling them the truth than His Majesty's representative. The time has arrived, Mr. Chairman, when all cards should be laid on the table and this trifling with the people and their rights should cease immediately.
There are niggers in the woodpile somewhere, Mr. Chairman, and I think that after 16 months existence of this National Convention, the delegates here today know that the niggers are the United Kingdom government and the Canadian January 1948 NATIONAL CONVENTION 1067 government. Mr. Chairman, if I were as ardent a confederate as Mr. Smallwood, I would go out and campaign vigorously for the carrying out of the agreement of 1933, and then I would further campaign this country in the interests of the retention of Commission of Government. I would do this because I feel sure that it is the policy of the United Kingdom government, the historical imperial policy, that Newfoundland must become a part of Canada. I would campaign, if I were Mr. Smallwood, for the retention of Commission government, because I would feel confident that the Commission government, through its bosses in Downing Street, would hand this country over to Canada, lock, stock and barrel, within six months after the referendum was taken, should the people decide to continue under commission form of government. I challenge any member of the Commission government, and particularly do I challenge the representative of the United Kingdom government on that Commission, to come out openly and honestly and tell the people that their bosses in Downing Street are not using their efforts to bring Newfoundland into union with the Dominion of Canada. If they deny that such is the case, then I say to them, each and every member of the Commission government: tell us why you are not prepared to carry out your agreement with the people of Newfoundland, and why you have been spending and are continuing to spend the money belonging to the people of Newfoundland like a bunch of drunken sailors, which in my opinion is being done for the sole purpose of trying to break our country. Take up this morning's paper β€” the revenue and expenditures are given β€” $31.6 million in revenue and practically the same in expenditure for nine months; and an indication given by the Commissioner of Finance, that we are going to have a deficit this year on a $40 million revenue. What is that but deliberately squandering the taxpayers' money, and it is being done purposely.
I go further now and state, Mr. Chairman, that the financial policy of the Commission government is more or less being run from Ottawa at the present time. We all know that because of the financial difficulties of the Canadian nation, with particular emphasis on its shortage of American dollars, that an austerity program has been launched in order to conserve United States dol lars; that heavy increases in taxation have been imposed; that Canadians travelling between Canada and the United States are at present being subjected by Canadian Customs officials to the most undignified examination of their person and their personal belongings, which treatment is also being meted out to Newfoundland citizens travelling between Canada and the Untied States on their own business with their own money. This policy is now being felt right here in our own country, despite the fact that Newfoundland has a favourable balance of trade with the United States. Now here is the position. All the newsprint is sold in American funds, plus all the ore from Buchans. At least $40 million of American funds coming out of Newfoundland, whereas we buy very little, $20 million or $25 million from the United States, therefore we have a credit which Canada benefits from, and our people are being subjected to undignified search in case they have a $20 American bill stuck down in their sock or anything like that. Their own money. An announcement has been made from Ottawa that this policy will be continued until 1950. Again with respect to the controlling of our finances by Canadian politicians, I would like to bring your minds back to February, 1943, when the Commission government imposed the retroactive income tax legislation. You yourself, Mr. Chairman, as a member of the Newfoundland Board of Trade, proposed a motion at a public meeting of that body condemning such iniquitous and dictatorial legislation. Let me tell you, sir, and let me tell the people of Newfoundland, that this particular legislation, what I would term immoral legislation, was enacted at the instance of the then Canadian finance minister, for the purpose of curbing inflation. The people of Newfoundland, who include the businessmen as well as the ordinary workers, were reaping rewards which has been due them for over 80 years.
I have heard people saying that all our prosperity was due to the war. Why 80 years ago this base construction was recommended to the British government, but it took them 80 years to find out the importance of the country. Our people had just emerged from untold suffering and privation. Their every belonging had been swept away during the depression of the 30s. They had been forced to exist on six cents a day for nearly ten years. The construction of 1068 NATIONAL CONVENTION January 1948 American bases in the country brought the first real money we had seen for over ten years. They were making efforts to rehabilitate themselves. But the Canadian government, in order to bolster up its own financial position, influenced the Commission government to inaugurate this vicious and immoral legislation. Now again the story repeats itself, and we find the Canadian government again financially embarrassed, and they are compelled to stoop to a low level in order to curb our disbursement of our own moneys. Let me also remind you, Mr. Chairman, that just a few months ago, the financial position of Canada became so acute that she was forced to seek aid from the American government. Yesterday, in answer to a question which I placed I received an answer, or the Convention did, from the Canadian government, an evasive answer, to the effect that they had made arrangements with the International Bank for $3 million. But they did not tell the truth. My question was, "How much did they apply for from the Americans, and how much did they receive?" The Canadian government asked for a temporary loan of around $700 million but received temporary assistance by way of a loan of $300 million. This is the country with which we, as a solvent and prosperous people, are now asked to enter into partnership.
Before I enter into discussion of the attempted fictitious budget presented by Mr. Smallwood over a month ago, which purports to cover the administration of the affairs of Newfoundland as a province, let me make a sort of recapitulation of the moneys and assets which would accrue to the Canadian government, as well as the disbursements which will be made by that government in Newfoundland, should we unite with Canada
I have stated that the amount of $20 million shown in Annex IV of the Grey Book is not correct. In my opinion the amount would be closer to $30 million annually in the form of revenue that would be collected by the federal government. The Canadian government would assume our sterling debt, which would amount to some $64 million. This sterling debt would be added to the national debt of Canada, and it would appear that the people of Newfoundland would not be liable for the interest and sinking fund, as well as the final payment of the principal and interest. If that is not trying to deceive our people, I don't know what is. It really means that the people of Canada would assume an additional $5 per capita debt, whilst the people of Newfoundland would assume a per capita debt of over $1,400 as against a present per capita debt of slightly over $250.
The Canadian government according to the Grey Book would assume the responsibility for the operation of our railway and general transportation system, which includes coastal boats, etc. However, the Canadian government does not agree, either in the Black Books or the Grey Book, to keep up our present railway schedule or coastal boat schedules. Yesterday afternoon Mr. Smallwood was trying to tangle up my friend Mr. Fogwill in connection with the figures he had in connection with the 15% tax on passengers, pointing out, he said, that the rate in Canada was 3 1/2 cents, while it was 5-7 cents here. He forgot to tell us that at the present time both the CNR and the Canadian Pacific are trying to get an increase amounting to 30%, which, if you add it to 3 1/2 cents would bring it close up to 5 cents. I think he estimated $400,000.
Mr. Fogwill $400,000 total, sir.
Mr. Cashin I figure he is $100,000 short. You have not been able to figure it out. We have got to take into consideration that every man who goes on a bus from here to Carbonear has to pay 15% on his ticket, and every man travelling on TCA and the Furness boats and everything else coming into this country. It would be interesting to find out the total monies paid by our people annually for transportation. I am sure the Canadian government do not know. Everything is grand with the Canadian government. Neither does it agree to maintain our present Railway employees in their jobs or agree to the present pension system of our Railway workers.
Mr. Smallwood Yes, it does.
Mr. Cashin No. Rather has the Canadian government indicated to us that it would be their policy to dispense with a large number of our Railway workers, and thereby create considerable unemployment. In this connection I quote from one of the so-called secret documents supplied the Ottawa delegation by the Canadian authorities. This is what the Canadian delegation told me, and I remember that when Mr. Higgins brought it up he said it was not official, what was official was in the Black Books:
Number of Employees: It is noted that the January 1948 NATIONAL CONVENTION 1069 staff of the Railway at the present time numbers 2,990, and of the steamers 761, a total of 3,751... 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 creased under Canadian National administration.
And they tell us they would be offered employment by the CNR. Where? Vancouver or St. John's? Would they have to pick up their things and move out of here?
In view of this and in view of the fact that the General Manager of the Railway has indicated that once our present capital expenditures are completed, the Railway and its various subsidiaries would be operated at a loss of not more than $750,000 annually, we must draw the conclusion that under the management of the Canadian National Railway system, the railway accounts would be balanced and that no deficits would be incurred. Therefore in federal revenues the Canadian government would collect an amount of not less than $30 million annually.
Now what amount does the Canadian government propose to spend annually in Newfoundland? We have no definite information on this matter beyond what appears in Annex IV in the Grey Book (and the reply which Mr. Hollett received yesterday, which was very indefinite), which states that including subsidies the federal government would spend in Newfoundland some $27 million annually. This includes $8.35 million in family allowances which amount may, and probably will, be eliminated very shortly. I have already referred to this matter in the early part of this address. However, the amount of $27 million does not include $3.5 million transitional grant, which in my opinion is nothing more or less than a "coaxer", or attempted bribe to influence our people to join Canada. It is not a permanent grant, as it expires within 12 years. Therefore, in addition to taking over all our assets, which I estimate are worth not less than $120 million and which would be under Canadian control, the Canadian government would make an annual profit on the administration of Newfoundland of around $3 million. Yesterday Mr. Higgins had a reply to a question as to what they could replace all these things for, what it would cost, and everything. The Commission government had not brains enough to figure it out, because he had a nil answer. This does not take into account any profits that may accrue from the development of our Labrador iron properties or the further development of our forest industries on the Labrador. Neither does it include any possible revenues that may accrue from the earnings of those people who would be employed in the development of those industries.
Another possible source of revenue for Canada, or if not revenue we will call it bargaining power, has not been taken into consideration. I refer now to the American bases located in our country, the 99-year leases of which were granted the American government by the government of the United Kingdom during the latter part of 1941. During the course of this Convention, many questions have been asked and addressed to the Commission of Government, requesting information which we thought would be necessary for our deliberations, and many times we have failed to receive satisfactory answers. In some instances we were practically told to mind our own business. It was therefore with some surprise that I noticed that Mr. Hollett had succeeded in dragging forth an answer to his question respecting the position of our military bases, if and when Newfoundland should enter confederation with Canada....
As you know, the text of this answer is that in such an event, the Government of Canada would replace the Government of Newfoundland as the lessor of these bases. I regard this position as most significant, because what does it mean? It means this: in the event of confederation, Newfoundland would lose all and every right, privilege, and benefit which might have been otherwise hers. Our people, the people of Newfoundland, would be finally and absolutely deprived of all opportunity of capitalising on our leased territories. And in this connection, it must be remembered that it was one of our hopes to be able to use our rights in these bases as an important bargaining power in connection with the possible export of our fish and other products to the American market.
Now this is but one phase of the matter. There is another one which to me at least seems of even greater importance. It is a well known fact that during 1946 a mutual defence pact was made between Canada and the USA relating to the defence of North America. And under the terms 1070 NATIONAL CONVENTION January 1948 of this pact it was provided that Canada would control and maintain all defense locations under the Canadian flag. What does this mean? It means that all military, naval and air bases in this country would be occupied by Canadian forces. It would mean that all Americans would be evacuated. It would mean that some $3,500 or more Newfoundlanders now employed on the American bases would be in jeopardy of losing their jobs. It would mean that this country would be deprived of the very considerable amount of American dollars which are now being expended and circulated. Of course, such a set-up should be highly profitable to Canada, inasmuch as it would consist of her receiving a free gift, as it were: after all we have given them for nothing β€” the Torbay airport and the Goose Bay airport.
Mr. Chairman Major Cashin, the chamber is very warm, do you think that you would like a few minutes recess?
Mr. Cashin Just a minute, sir, I want to finish this American thing. I will sing out. Military and naval property and equipment to the value of hundreds of millions of dollars. I have no hesitation in saying, that if the people of this country, and in particular the delegates to this Convention, had been informed of the matters to which I have just alluded, there would never for a moment have been any consideration given or consent obtained to the sending of any delegation to Ottawa. It is worth noting that neither in the Black Books, nor in the Grey Book, nor in any of the so-called secret documents in the possession of the members of the Ottawa delegation, is there any evidence or any statement to show that this most important matter received any consideration by the delegation which went to Ottawa...
Mr. Smallwood Yes, we did.
Mr. Cashin Well, why is it not in the records?
Mr. Smallwood Ask Mr. Higgins.
Mr. Cashin Well, why is it not in these Grey Books, and the "Mourning Books" that is, the Black Books? I suppose up in Ottawa you were going to get away with it and it would not be brought up here. I am going to repeat that statement: it is worth noting, that neither in the Black Books, nor in the Grey Book, nor in any of the so-called secret documents in the possession of the members of the Ottawa delegation, is there any evidence or any statement to show that this most important matter received any consideration by the delegation, or that they took any steps to bring the matter to the attention of the Canadian government. I regard such an omission as evidence of gross neglect and dereliction in their duty of protecting and safeguarding the interests of Newfoundland. But it would seem that as far as Ottawa is concerned, the rights of Newfoundland are of no importance whatever in this one-sided contract which they have sent to us. Why, Mr. Chairman, if there was nothing else of an adverse nature, I question whether we have not in this instance alone grounds, ample grounds, for condemning the Canadian proposals and washing our hands of the whole matter. Now, Mr. Chairman, if you want to.
Mr. Chairman If it is agreeable to members we will take a recess.
[Short recess]
Mr. Cashin Now Mr. Chairman, before I begin to refer in detail to Mr. Smallwood's proposed budget, let us see what is to happen to our accumulated surplus. This, according to Mr. Smallwood, would amount to somewhere in the vicinity of $30 million. According to the Economic Report it was $40 million, but it is $38 million now, seeing that the Commission government has seen fit to do away with $2 million. However, we will use Mr. Smallwood's figures and say the accumulated surplus is $30 million. Nevertheless, we must remember that with the advances made to the Housing Corporation, with the inclusion of loans to various firms for the development of the fisheries, with balances owed by Great Britain in connection with her account for the operation of the Gander airport, together with other amounts owed for pensions, etc., our accumulated surplus today must be around $38 million. However, as I said, we will use Mr. Smallwood's figure. Take page 3 of the Grey Book:[1]
(1) One-third of the surplus at the time of union shall be set aside during the first eight years of union, either in trust or on deposit with the Government of Canada at Newfoundland's option, withdrawable by the Newfoundland Government as required only for expenditures on current account in order to facilitate the maintenance and improvement of Newfoundland public services, any January 1948 NATIONAL CONVENTION 1071 unspent portion thereof at the end of the eight-year period to become available for the unrestricted use of Newfoundland.
In view of this, it is seen that under these proposed terms of union that $10 million of this accumulated surplus at the time of union shall be set aside either in trust or on deposit with the Government of Canada at Newfoundland's option, withdrawable by the Newfoundland government as required, only for expenditures on current account. Therefore $20 million of this surplus remains. Nearly $10 million of this money is now to our credit in London in the form of interestβ€”free loans to the United Kingdom government, and therefore it will become necessary to convert this money to dollar currency, and no provision has been made for this in the proposals now before us. Mr. Smallwood tells us in an offhand way that he feels confident that it can be arranged. The Canadian government does not undertake to do this, either in the Black Books or the Grey Book. We therefore, under these arrangements find ourselves in the position where $10 million has to be set aside in trust for current expenditures and another $10 million is located in England, and no undertaking to convert it to dollars. Therefore, there is only another $10 million available. Now, of this latter $10 million, at least $6 million will be necessary for the purpose of payment of fish this past year; so out of all our surplus there will remain only $4 million available in actual dollar currency for purposes of capital expenditure. This means that $16 million of our surpluses is now held in sterling and there is no indication when it will be converted into dollars. 1 would like to know how much money has been paid for the conversion of sterling as payments for fish, particularly in View of the fact that in recent weeks the government has made available to Italy considerable money, and it would have been necessary for us to find dollar currency for Italian fish. These are matters one can only get if in contact with the government daily. We all know the difficulties that the United Kingdom government are having with regard to dollar currency, but even despite the shortage in Great Britain of American dollars, they have been compelled to help Canada with American dollars during the past 12 months, and when Mr. Dalton was Chancellor of the Exchequer, he made a public pronouncement to the effect that Canada was in just as great a need of American dollars as Great Britain. However, Mr. Smallwood may have something up his sleeve in this respect, for if we follow his explanations of all these matters we must conclude that he has been appointed the representative of the Canadian government as well as the Commission government. However, I feel certain that any such statements made by Mr. Smallwood have been based purely on personal opinions, and that he has no foundation in fact for any of these wild statements he has been making.
Then again, I am forced to refer to the present serious financial predicament in which Canada finds herself. It is only a couple of months ago, whilst Prime Minister King was on an official visit to England, that serious steps had to be taken by the Canadian government to deal with the financial position. As a matter of fact, unprecedented steps were taken. These were the restrictions of the purchase by Canadians of a long list of consumer goods from the United States. In addition, extra taxation had to be placed upon consumer goods at home and all this was done by minute of council. Now it is well known that under British procedure, no taxation can be legislated for by minute of council. Such legislation must be passed by Parliament. We had it happen here over 50 years ago β€” an incident whereby a certain gentleman who was in public life went down on the wharf and took goods off it because the budget had not been passed and he got away without paying any duty. Some of their relatives occupy high positions in the present set-up of our civil service. However, I ran into conflict before, and I do not want to do it again.
As I said a moment ago, the situation was so serious that this present austerity programme was instituted by the Canadian cabinet and at the present time it is being fought bitterly in the Canadian House of Commons. Canada had applied many months ago for a loan of $800,000 in the United States and was forced to accept a temporary loan of but $300,000. In addition, the Canadian National Railway, which is seeking a loan of some $60 million from the public, has been forced to withdraw the application for such loan temporarily because underwriters' offers were unsatisfactory, according to reliable reports. In view therefore of these known facts, how are we to expect the Canadian government to be in a 1072 NATIONAL CONVENTION January 1948 position to convert this $16 million now owed us by the United Kingdom, when the records show us conclusively that Canada is on the hard dark road of austerity herself, and is at present, through the medium of Canadian banks operating in Newfoundland, taking advantage of our credit balance of American dollars to bolster up her own credit. In my opinion this whole matter is a matter of such serious importance that I consider that this Convention as a body is not competent to deal with it. It is a matter for proper negotiation between two governments elected by the people of both countries.
Again I state that this confederation issue has been deliberately engineered by both the Canadian government and the British government for the purpose of confusing the minds of our people in such a way as to convey to the world that we Newfoundlanders do not know what we want, what we really want in the form of government. People have come out from England during the past five or six years and went back, and said that we do not know what we want, and that is the way they want to keep us. It is a definite violation of the solemn pact made between the Government of Newfoundland and the Government of the United Kingdom in 1933, and we as delegates to this National Convention have made ourselves parties to the violation of that agreement. Today, many of our people have forgotten about this agreement of 1933, but there are a great number of those who voted for that legislation in 1933 still in this country, several of whom now occupy positions of trust in the service of Newfoundland. I hold that these gentlemen who voted for that legislation in 1933 should now come forward in the interest of the country and give to our people the particulars of what happened at that time β€” what undertakings, if any, were given regarding the passing of this legislation I say, sir, that these gentlemen should come forward now and make public what transpired, unless they also are prepared to see a solemn agreement to which they were a party, unless they too wish to witness that solemn pact being ground in the mud under the iron heel of the United Kingdom government...
Mr. Chairman You are drawing a conclusion. You are on thin ice.
Mr. Cashin That is my personal opinion as a Newfoundlander, and I am entitled to it. They should come forward and tell the people what actually transpired and what was the understanding in 1933. I will go further and say that if they do not come forward, if they fail to do that, then they fail in their duty to the country and to the people of the country and will be considered as such.
As I have stated before, the Ottawa delegation brought back no report to this Convention. The Ottawa delegation has not been able to supply us with any definite or concrete replies to our numerous questions. There has been no effort by any other delegate of that delegation to enlighten us in any way with the exception of what we have been told by Mr. Smallwood. And even Mr. Smallwood has admitted to the Convention and to the people of the country that these various estimates of expenditures and revenues were prepared for the Newfoundland delegation months before they arrived in Ottawa.
Mr. Smallwood I have not. That is not true.
Mr. Cashin We have not received any explanation of this from any other member of the Ottawa delegation and we can only surmise that the Ottawa government had been supplied with various statistical information in advance by the Commission government. It is therefore apparent that the Ottawa delegation were acting more or less as a sort of international brokerage association on behalf of the Commission of Government.
Mr. Smallwood Point of order. The Ottawa delegation was sent to Ottawa by this Convention and acted for this Convention, not as agents of the Commission of Government. I ask him to take that back. If he is fair, he will retract that.
Mr. Chairman The actual position is this: this Convention ... appointed and sent a delegation to Ottawa.... Whether it did a good job or a bad one, two things are clear:
1. The Convention has to accept collectively the responsibility for sending the delegation to Ottawa; and
2. The delegation is open to criticism by this Convention.
But criticism should, of course, be limited and circumscribed within the limits of fair comment. The status of the delegation was as agent of this Convention. It was the created representative of this Convention and nothing else in fact and in law, no amount of argument can convert it into anything else.
January 1948 NATIONAL CONVENTION 1073
Mr. Cashin The Ottawa delegation went to Ottawa, they brought back two Black Books. That was their report. The Grey Book which contains the terms and proposals was sent here, not brought here by the Ottawa delegation; it was sent here by special courier to His Excellency. The delegation did not have anything to do with bringing them in here.
Mr. Chairman The facts are that these documents were forwarded here as a result of the visit of the delegation.
Mr. Cashin Why did they not bring them back themselves?
Mr. Chairman That is a question you are properly entitled to ask.
Mr. Cashin The delegation should have been given them; but instead, they sent them to the Governor, who is Chairman of the Commission of Government.
Mr. Chairman I am not going to permit you to refer to His Excellency in a manner calculated to reflect upon his dignity as the King's representative. It is an appalling breach which I cannot allow. These documents were sent by the Prime Minister of Canada to His Excellency the Governor as the King's representative, and were forwarded by him to this House at the request of the Prime Minister of Canada. That is the position.
Mr. Cashin His Excellency had a letter which is tabled in this report. I am not reflecting upon him as the King's representative.
Mr. Chairman It is my duty to see that you do not.... Here is a request by the Prime Minister to the King's representative here to forward certain information which ostensibly was prepared as a result of a visit of the delegation which this Convention sent to Ottawa. All His Excellency the Governor does is comply with the request of the Prime Minister in sending these documents in question.
Mr. Cashin It is quite evident that the Ottawa delegation did not receive any terms or proposals. They came back with two Black Books.
Mr. Chairman That is right.
Mr. Cashin They went up there, spent three months and brought back nothing.
Mr. Smallwood What are we talking about here today?
Mr. Cashin We should not be talking about it.
Mr. Smallwood We did not have an empty visit.
Mr. Cashin You got nothing. You were sent back with your tails between your legs. You got the cold shoulder. The Canadian government knew you had no power to negotiate such things as confederation. They just told you to go home and they would send you something in two or three weeks. It is the most outrageous document that ever came in through the doors of this assembly.
However, when we were unable to drag from Mr. Smallwood any definite information, we finally encouraged him to present to this Convention and to the country a proposed budget of the anticipated revenue and expenditure of the Newfoundland provincial government. This document, by the way, is not presented on behalf of the Ottawa delegation, but rather by Mr. Smallwood himself, and we must therefore conclude that the Ottawa delegation had no act or part in its compilation. At the outset, let me say that in my 25 years experience as a member of the House of Assembly, and as a close student of our financial affairs β€” after having read every budget speech since 1909, Imust confess that Mr. Smallwood's attempt displays the most glaring and highfiying attempt at "frenzied finance" that I have ever witnessed. Well do we remember Mr. Smallwood's deliberate attempt to belittle the efforts of the Finance Committee in its presentation of both the Financial and Economic Report, how he used every conceivable method to show to the country the hopelessness of our financial and economic position; now he has the gall to attempt to shove down the throats of the delegates and the people of Newfoundland this proposed provincial budget, which in my opinion is cooked up from beginning to end.
Mr. Smallwood Mr. Chairman, to a point of order.
Mr. Cashin I am going to prove that it is cooked up, so sit down.
Mr. Smallwood I may say that the word "cooked up" is a favorite word of Mr. Cashin's. Does he mean falsify ?
Mr. Cashin I said "cooked", not "falsified".
Mr. Smallwood Will he explain what he means by "cooked up"?
Mr. Cashin It is soggy, it is not done. Did you ever see a soggy doughboy? It is not based on any sound foundation whatever. To use Mr. Smallwood's own words, there is nothing in these few pages worth tearing to pieces. Let us have a 1074 NATIONAL CONVENTION January 1948 look at this mysterious proposal, this personal Smallwood plan for the proposed administration of the affairs of Newfoundland as a province of Canada. It is not a budget in the strict sense of the word. This thing does not contain any explanations of the various items of revenue and expenditures in its few and scattered pages and guesswork estimates.
When Mr. Smallwood went in to hysterics in his feeble effort to tear to pieces the Economic Report, he ridiculed the Finance Committee for its attempt to introduce a document which forecast the future of Newfoundland for a period of three years. He now has the impudence to come into this chamber and introduce a concocted document based on practically nothing, but he tells us, and he tells the people of Newfoundland, he is making his forecast, not for three years mind you, but for a period of eight years. He practically tells the world, as Mr. Reddy so aptly put it, that he alone, Joseph R. Smallwood, is the only individual in this Newfoundland of ours who should be permitted, and who is capable of producing such a forecast. He tells us, so to speak, that he is infallible, and that the people of the country, north, south, east and west, must recognise in the delegate from Bonavista Centre the only individual in the country who knows what will happen within any given period.
Mr. Smallwood Pretty clever, what?
Mr. Cashin Mr. Smallwood has stressed the infallibility of Canadian experts. He now evidently has taken upon himself the role of astrologer or fortune teller for the people of Newfoundland.
Now Mr. Chairman, Mr. Smallwood himself has admitted that the forecasts which the Ottawa delegation, of which he was secretary, gave to the Canadian government with regard to the revenues and expenditures of a Newfoundland provincial government were incorrect, and in view of that fact he has taken upon himself to present a corrected estimate on his own. In the Black Book, Volume 2, is to be found the estimates of expenditures of Newfoundland as a province of Canada. These amount to $14.4 million. Today the estimates of expenditure presented by Mr. Smallwood for the administration of the province of Newfoundland come to approximately $15.5 million, or $1 million more per annum than contained in the Black Book. This deficiency was made up by the fact that the Ottawa delegation forgot to include in their expenditures approximately $500,000 in interest and sinking fund on our local debt, as well as an additional $100,000 for civil pensions.
If we peruse these estimates what do we find? We find that at least 1,200 civil servants will be laid off from work, but Mr. Smallwood tells us that once we become a province these people who have been dispensed with provincially will be employed in other departments of the federal government established in Newfoundland. In fact, he went so far as to say that an additional 1,000 people would be required to administer the affairs of the Canadian federal government. This to my mind was a wild and incorrect statement, and there is no evidence contained in any of the documents to show that this will occur. Rather do I hazard the opinion, my personal opinion, that many hundreds of our civil servants would be put on the unemployed list. In the estimates for Public Health and Welfare as contained in the Black Book we are told by the OttaWa delegation that an amount of $4,767,000 will be sufficient. However, Mr. Smallwood has increased this by another half million dollars.
Now let us survey the various departments which would have to be financed by the province of Newfoundland should our people decide that Newfoundland would unite with Canada. What do we find? We find that the following departments would be those over which the control of expenditure would come within the scope of the province: Education, Justice, Natural Resources, Public Works, Public Health and Welfare, the Liquor Control, Home Affairs and provincial treasury. All these departments, according to Mr. Smallwood, would involve an annual expenditure of approximately $15.5 million. Let us see what these departments are disbursing now in comparison to Mr. Smallwood's estimate....
[The committee rose and reported progress and the Convention adjourned]

Source:

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

Credits:

.

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

Footnotes:

  • [1] Volume II:520. [Volume II is not in The Confederation Debates Collection]
  • [1] Volume II:512. [Volume II is not in The Confederation Debates Collection]

Participating Individuals: