Mr. Chairman Order of the day.
Presentation of the reply of His Excellency the
Governor to the address of loyalty and the address
of thanks. I beg to inform you, gentlemen, that
pursuant to your appointing, and on the request of
the Governor, a delegation attended upon
His Excellency, and presented to him the address of
loyalty and the address of thanks for the speech
with which he opened the Convention. The address of
loyalty will be forwarded to His Majesty, and His
Excellency was pleased to make the
following reply to the address which was presented
to him:
Mr. Chairman and Gentlemen of
the National Convention:
I thank you for your address in reply to the
speech with which the Convention was
opened on Wednesday, Sept. 11, 1946.
Gordon Macdonald
Governor
Government House
St. John's, Nfld.
21 Sept. 1946
[The Convention resolved into a committee of the
whole]
Mr. Chairman I have the pleasure to
bring to you this afternoon the Honourable the
Commissioner for Finance who has
very kindly consented to address you today on the
eve of his departure Gentlemen, Mr. Wild.
Mr. Wild I am not going to address
you formally; I hoped thatI might have a
chance of speaking on some of the points raised by
members of the committee who would like further
information on some of the general topics covered at
our last meeting. I cannot give you figures as I am
not the type who can carry masses of figures in his
head, but I would be glad to give your any
information in a very broad manner.
Mr. Chairman Has any member any
question to direct to Mr. Wild?
Mr. Cashin The first question I would
like to ask Mr. Wild is, does he think it is good
business to borrow money when there is money in the
treasury? In 1942-43 the government borrowed
$1.5 million; from 1940-41 up to the end of 1945, $3
million was invested in war savings certificates with interest at 3% per annum. $8.5
million
was borrowed altogether. We did not have to borrow
that money. What was the idea of borrowing
that money?
Mr. Wild I would like to point out that the surplus at the
end of March, 1946, was $28.5 million; since then we
have set aside $3 million for the redemption of two
sterling loans, which leaves us a surplus of $25
million. At the moment the revenue from April I,
1946, is considerably in excess of expenditure; but
that surplus at the moment is no indication that
increases will be continuous. Revenue comes in more
quickly from income tax in the first two months of
the year. It is not a clear indication of the
ultimate picture. For instance, we budgeted for a
deficit this year on account of reconstruction
expenditure. Major Cashin's
question was mainly why did the government do a
certain thing? I do not know that it is the intention
of the committee that the reasons why should be
investigated. There are certain answers that I could
give, but on general principle, I would say that your
main intention is to get the position as it was some
years ago. If one is to give reasons for every
action, I am afraid we shall not get very far. I make
that as a matter of principle. Actually, there were
very good grounds for the loans we raised during the
war. The main reason was anti-inflation. It was not
that we wanted money; we didn't. The question
was what to do with it when we had it. If I had
been able to dispose of the money, I would have
gone out for bigger borrowing. We had the War
Savings Committee most of the members were
residents of St. John's, but there were also outport members — we had a committee
which
used to give us advice before borrowing. It was
largely for the purpose of encouraging thrift, and it
had been done to a greater extent in other countries.
What we did was the best thing. We borrowed in
September 1946
NATIONAL CONVENTION
59 Newfoundland from the people who
had money to invest, money made during the war, in
order to pay off sterling debt. It was not spent. It
was a conversion operation. That was a sound thing
to do. In fact it has been suggested to me quite
recently that we should go much further than that,
and use our surplus to pay off external debt. It is
required either for reconstruction development or
to meet the needs of a rainy day. If we use the
whole of that money now to pay off sterling loans
or other loans — the only ones we have to pay off
— and depression hits us, or is required to go
ahead with reconstruction development, we should
have to borrow again. Why pay off 3% loans when, if
the country went out to borrow, we would have to pay
more than 3%? It is extremely doubtful if
Newfoundland could go into the open market and
borrow at 3% to a large extent. If we wanted a
limited loan we would get 3%, but if we wanted more
than $5-6 million we would have to go to Canada. Our
experience in that regard, as far as Newfoundland is
concerned, has been disappointing. Some of
the work of the local branches of the savings
committee was, I regret to say, disappointing.
Mr. Cashin You did not want the money
— the idea was to avoid inflation?
Mr. Wild The first loan — 1940, 6
year loan - went to balance the budget. I do think,
if we put a loan out we would get $2 or 3 million,
but for a larger amount we would probably have
trouble. If we went to Canada to raise it, the
investors would want a higher rate of interest. We
did, in addition to using the proceeds of that small
loan — the first $1.5 million and the other about $2
million — we used that money to pay off our
sterling indebtedness and in addition we used some
of our revenue; we dipped into the surplus also.
Mr. Ashbourne I should like for Mr.
Wild to elaborate about the international trade
discussion, as regards discussions
that have been under way for some time.
Mr. Wild The discussions were
inaugurated by the United States who last December
issued an invitation to the United Nations generally
to discuss establishment of an
international trade organisation. That
organisation covers a very wide ground — banking
matters, trade practices and the whole set-up, as
well as the question of tariffs,
the point on which we are most interested. It was
suggested having a preliminary meeting and then
there was some delay; some nations were not
ready; then the Americans wanted to get the
Congressional situation out of the way; and
generally it was the political situation which
slowed things The timetable is now drawn up. The
first meeting of the members of the Commonwealth and the dominions, and, of course,
the
colonies, will be held in London. The preliminary
meeting is not to discuss detailed tariffs but arrangement of trade agreements such
as
banking, subsidies and matters of that kind; to
determine their general attitude to matters which
were a subject of a white paper. If members are
interested in seeing that white
paper, I think we could get a copy. The first
meeting will just be a preliminary. The second
meeting follows immediately and is being
attended by the bigger nations. It is an
international affair. Then the delegates go home and
wait until January 1; the date tentatively set....
All international discussions will be held
in London. The Newfoundland delegation has not yet
been decided. Had I been staying here, I should have
gone myself; actually the Chairman of the Board of
Customs, Mr. Howell, is going and also Mr. Raymond
Gushue. I am hoping that when they come back
they will be able to throw light on the general
questions as they will affect us. The tariff questions will be of most interest. We
have
invited major manufacturing concerns in Newfoundland
to submit their views. We were asked over six
months ago to indicate what tariff concessions we
would like from the United States. That is what
would interest us most. We have had the benefit of
the Board of Trade, the Fisheries Board and the
paper companies. I have a list of the requests we
want to make against other countries and dominions;
they in turn will send us a list of what they want
from us. We sent another circular to different
associations and manufacturing concerns.
There is a committee of the Board of Trade sitting
with Mr. Howell to get this question settled. I do not think we could do more than
that.
We have not only to decide what benefits we want
from them but what we are prepared to give and not
prepared to give.
Mr. Job Are they
going to bargain only in the way of tariff
concessions or will they try to make up a case for
special consideration or special
60
NATIONAL CONVENTION
September 1946 treatment in view
of what we have already given?
Mr. Wild If there is any chance of
advancing those considerations and having them
accepted; but we should not pull any punches. They
decided at the beginning, we were to bargain
tariff against tariff. At Chicago, I know, they
would only bargain aviation rights against aviation rights.
Mr. Job We should prefer to ask for
special consideration on account of the bases being
here. It ought to be some form of direct negotiation
with the United States.
Mr. Wild You could hardly have direct
negotiation.
Mr. Smallwood Mr. Wild, the
information on the possibilities of this forthcoming
or final international conference on
tariffs would be coming undoubtedly to the United
Kingdom at pretty high levels through the British
embassy in Washington. Some of that might trickle
through here from London.... I wonder if any of it
would be, or has been, of such an interest as to
give you some personal opinion of the likelihood of
the success of the international conference. Some of
these conferences often start off well and end up
a complete failure. What are the chances of a
successful reduction of tariffs coming out of that
conference?
Mr. Wild Nothing, Mr. Smallwood. If
the information had been given me it would
probably have been very confidential. Actually we
have had nothing. We do know that the Massachusetts
fishery interests are getting on the war-path. We
have been informed of preliminary discussions
with New Zealand as to how they interpret the
American offering. Mr. Frazer, the New Zealand prime
minister, has had talks in London. This is only
preliminary, and we have had nothing trickle through
from the United States except what has come direct.
Mr. Crosbie Would it be wise to use
some of our surplus to retire some of the sterling
debt?
Mr. Wild If I had to say "yes" or
"no", I'd say "no". The exchange is favourable now
at the moment, and it may be more favourable, but if
we are going to pay off our sterling debt, there is
a big whack of it — about £16 million in loans
and sinking fund. It is no good trying to work a
conversion Operation, or paying-off policy of a big
debt of that kind, unless you wipe the whole thing
out, or a large proportion. The finance
people don't like handling little bits. I raised
this point myself during the war. Major Cashin asked
about the raising of the local bonds, and I said,
had I known how I could have used the money to
advantage I would have raised another war bond, but
we paid off all we could. I made inquiries as to
whether we could pay off some of the 3.5% sterling
loan, but it was not an operation in which the
people on the other side were interested. The loan
is callable any time now up to 1963. The main point
is, when you mention paying off part of it, you are
thinking of the surplus, you are not thinking of
raising more money.
Mr. Wild We have a surplus of $25
million. We used $3 million last month for a special
deposit account in Great Britain and it is being
invested at interest, but we were thinking of
redeeming it in 1950 or 1952. We have therefore $3
million invested. Shall we say we have $22 million
left, and we may have at the end of the year a
little more to add to it. Suppose we use $10 million
of it. That represents only ÂŁ25 million in relation
to the ÂŁ16 million outstanding. That is very small.
1 don't think they would welcome it.
Mr. Crosbie It may be small to them,
but not to this country.
Mr. Wild The drawing of bonds like
that is quite expensive. Before we retire more of
that sterling indebtedness I think we ought to be
quite sure that we won't need this surplus, because
if you do need it later on you may have to borrow it
for more than 3%, and that would not be good business.
Mr. Higgins I believe there is quite
adeposit of money in the bank with the Crown Agents
without interest, If that had been invested in
Canadian bonds it would have been earning a good
interest. Why was it left on deposit?
Mr. Wild There has been none of the
Newfoundland government money kept
anywhere without interest except those loans which
we made the British government during the war as
interest-free loans, part of which has now been
repaid.
Mr. Higgins I understood from the
Auditor General's report that this money was left
without collecting any interest at all.
Mr. Wild Take our surplus at the end
of last month, and the position is very similar
today, there was $10.5 million at that date loaned
inter
September 1946
NATIONAL CONVENTION
61est-free to the United Kingdom, and
there was about $300,000 which we are using to
finance agents' accounts in the service departments.
The balance was on interest at the Bank of Montreal
at very favourable rates of interest. I also mentioned last week that, in addition
to
that $300,000 which we had outstanding on these
allotment accounts, we have guaranteed an overdraft
of approximately $1 million for the same thing, the
allotments, the Public Health and Welfare
Department, and the Department of Finance. They have
made certain payments to the wives and families of
men overseas, and as soon as we get that we will
send it back. We have not been getting any interest
on that money. I think that is possibly what you are
referring to.
Mr. Wild That's a grand show. We get
a better interest over there than we do here. We had
that account over there because we have expenditures
over there, also it was getting more interest over
there. We were getting 2% until quite recently,
now we are getting 1.5%. We get 1.5% at the
Bank of Montreal.
Mr. Higgins On that point, you could
get 3% or 3.24% from Canadian war bonds within a
very short time.
Mr. Cashin In connection with the
loan in 1943 of $2 million, I think I gathered that
that was to repay a loan on the other side. It is
right here in the Auditor General's report. I have
not the 1944 Auditor General's report here, but if I
remember correctly it was sent over there in
1943-44, two years before it was due.
Mr. Wild There were two loans, but
the 1943 one was to pay off the Colonial Development
loan, and the second to repay that sterling loan.
Mr. Cashin That was sentover two years before this loan was
due.
Mr. Wild No, the 1943 loan was to
repay the loan for the
Burgeo and
Baccalieu.
Mr. Cashin That was made in 1941 —
$1.5 million more.
Mr. Wild There were three loans, in
1941, 1942 and 1943, to balance the budget, the
Colonial Development Fund, and the third loan was
raised to pay off the sterling debt, and was sent
sometime before it was due. That
was discussed at great length with the National
Savings Commit
tee. We raised that
loan because we wanted to encourage thrift and
savings, and we wanted to use the money to pay off
external debts and the only external debt left to be
paid off was the loan due in 1945, and, with our
eyes wide open, at the end of 1943 we went all out
for a savings campaign, and it was a
successful campaign and did a lot of good to
encourage deposits in the Savings Bank and we got
our objective. We knew at the time that we were
going to use the money for the debt which came due
18 months later on. We were getting a legal opinion
as to whether we could repay that loan before its
maturity date, but they told us no. In the meantime
we got 2% on our money on the other side. The
proceeds of war savings were loaned to the other
side free of interest.
Mr. Smallwood Late in 1933 or early
in 1934 the public debt was part of the deal whereby
Commission of Government came here, the public
debt was converted by the United Kingdom and they
guaranteed it as to principal and interest. What
actually happened? Isn't it that the Newfoundland
government issued new bonds at the lower rate, which
bonds then became guaranteed as to principal and
interest by the United Kingdom, or was it that the
United Kingdom issued its own bonds?
Mr. Wild Oh no, the Bank of England
managed it on our behalf, but it is definitely a
Newfoundland bond, it is just
guaranteed by the United Kingdom. The name was the
Newfoundland guaranteed 3.5% loan.
Mr. Smallwood Do you recall the exact
terms of Britain's guarantee of the principal and
interest? If any time the
Commission of Government ceased to be in
Newfoundland does that involve automatically the
ending of Britain's guarantee?
Mr. Wild Certainly not. It is unconditionally guaranteed.
If you would like that confirmed I can do so,
although I have not the exact words here with me,
butI would give you $1 million to one that it is
unconditionally guaranteed.
Mr. Smallwood Well then, regardless
of the form of government we have, as it stands now,
the British government are behind our guarantee.
Mr. Wild Nobody would have taken these bonds if they were
conditionally guaranteed. Mr. Bradley, you are
probably familiar with the bill, but what happened at
the time, if I remember, the holders of the
Newfoundland bonds were told
62
NATIONAL CONVENTION
September 1946 that no more
interest would be paid on those bonds unless they
convened. If they convened they would get 100%
conversion, otherwise they would get no interest.
It's all been converted except a very small figure
left outstanding
Mr. Smallwood How much of the total is in sterling and how
much in dollars?
Mr. Wild It is all sterling. All the guaranteed money is
sterling.
Mr. Wild No. Oh well, mere are about $12,000 worth that
people did not convert.
Mr. Smallwood Then the total of dollar bonds indebtedness
is roughly what?
Mr. Wild About $5 million. We have got that railway loan
which is about $1.5 million.
Mr. Smallwood We owe no dollars out of Newfoundland except the regular loan, and all the
sterling is guaranteed by the UK?
Mr. Wild All except what I have mentioned.
Mr. Harrington There is one sentence here: "There is
considerable increase in direct taxation since the
war, and it now amounts to more than half the yield
from customs duties, on which we used mainly to
depend." Could you foresee the time when all our
revenue would be raised by direct taxation?
Mr. Wild If you mean by income tax I would not like to say
anything for the future, but may I put it this way. I
assume you mean that in regard to balancing our
budget, can we get the whole thing without some other
taxation?
Mr. Wild I think the answer physically could be "yes", but
it's going to be the devil of a job to do. It means
that you have got to drop your exemption.
You have to start collecting taxes from your
fishermen. The small farmer or fisherman does
not pay taxes in Canada. The trouble is your small
farmer and fisherman is, in a small way, a
capitalist. He is in business on his own, but if we
ask him to pay taxes we have to ask him to render
a balance sheet, etc., and how many fishermen
are going to do that? If the country wanted to tax
workers in industry then we would be getting
somewhere, but we are a long way from that. The
larger proportion will always have to be gotten
by some other taxes than income tax. There are
many things to be said for it. Income tax may not
be quite fair. Why should anybody pay a tax on
his smokes and drinks? If you dropped customs
duties I think we should have to have sales taxes,
and sales taxes are rather difficult in application.
In Canada they have a very successful tax
through the wholesalers, but the other retail taxes
mean an awful lot of trouble, you have to have a
system of stamps or an army of accountants. One
might check on the merchants in St. John's and the
big towns, but it would be very difficult in other
districts. Sales taxes are possible, but they mean a
lot of work.
Mr. Smallwood Would they be very much more difficult to
enforce in this country than income tax is now?
Mr. Wild Income tax is not difficult in this country now.
Mr. Wild It is a gradual process and is going to take some
years, but I think as time goes on we can do better.
We have got 10,000 income tax payers now as against
2,000 previously. It is surprising how many people
are getting used to paying income tax.
Mr. Smallwood You are getting about $2 million
in direct taxation from liquor, licenses, etc.
Mr. Wild Well, I call liquor an indirect tax.
Mr. Smallwood You said the other day that the least amount
necessary to maintain ordinary expenditure
at its present level would be $23 million
a year, and then as to the capacity of the country to
pay that $23 million you looked ahead a bit and saw
newsprint fairly good for a few years to come, some
minerals, etc., and the possibility that
for the next three or four years the country would be
fairly well off to pay the $23 million, and maybe
more. But you mentioned the possibility that it is
anyone's guess as to when the slump might come. If we
have to devise a system of government, it is not for
five or ten years, but for 50 or a 100. Have you
formed any personal opinion as to the capacity of
this country's economy, beginning five or ten years
from now, to produce that amount of money yearly?
Mr. Wild I said that I
expected that it would not be below that, butl said
that that included nothing for unemployment relief.
That $24 or $25 million contains little or nothing
for public relief. If you have a slump in trade it
may not be enough to cover your $25 million, it would
not be enough to meet the $28 million to cover your
public relief.
Mr. Smallwood Well, if the slump comes we
September 1946
NATIONAL CONVENTION
63 may not be able to raise even the
$25 million.
Mr. Wild There is a point that may be of interest. The Department of Public Health and Welfare
has been giving more relief to
people. We have got the money to do it, and we are
assisting people who are infirm and unable to work,
and one of the facts coming out is that we are
finding a large number of ex-fishermen and lumber
men, who are not really fit to work, between the ages
of 55 and 60. In the past we did not help them,
but now we are prepared to do so. It is surprising
the heavy incidence of illness from 55 onwards.
Mr. Cashin We got into an awful mess by borrowing — we were running the country on borrowed
money. I take it your reply was
that it was for inflationary purposes.
Mr. Cashin Was the retroactive tax in 1943 for the same
purpose?
Mr. Wild I am not discussing why it was done. I agree that
the effect of raising income tax does prevent
inflation, or helps to prevent it.
Mr. Cashin As far as inflation is concerned, the government
takes the money and spends it themselves.
It goes anyhow. I take it you do not like to answer
my question?
Mr. Wild I am not prepared to go into details as to why
Commission of Government has made certain decisions.
It is not a proper question. It is a question of what
happens in Commission.
Mr. Cashin The policy of any government is open to public
criticism, no matter how good or how bad. Surely it
is not insulting the government to ask them why they
did a certain thing.
Mr. Wild I do not think it is the intention of the
Convention to ask why a certain thing was done.
Mr. Chairman These matters may be controversial,
Major Cashin, rather than go behind and find reasons
why.
Mr. Hickman When you cannot understand a situation, it is
necessary to find the reasons why.
Mr. Wild You asked was the purpose anti-inflation. I say one of the objects was anti-inflation.
Mr. Hollett One of the matters which
we have to decide is self-support. We have this $23
million plus $34 million we have to
borrow from the surplus, and on top of that we have
reconstruction plans costing $60 million over a
period of ten years. What I cannot reconcile with
that picture is the statement in the Chadwick-Jones
report that we are now self-supporting. I am
wondering if
Mr. Wild could give us some idea of
the yardstick used in finding out whether or not we
were self- supporting?
Mr. Wild I do not know what yardstick Chadwick
and Jones used. At the moment I would say, "Yes, we
are self-supporting." But if we are to incur this
expenditure and will still be able to balance our
budget, I would not like to express an opinion. As
far as that reconstruction matter is concerned, we
should not proceed with the whole of that unless we
could see daylight in regard to money. We feel that
there are indications of greater economic prosperity
where new roads have been opened — for example, the
Deer Lake- Corner Brook road, this has
opened up new farms.
Mr. Hollett Do you call it balancing a budget when you have
to borrow the money to do it?
Mr. Wild This $3 million for the Housing Corporation, we should have been justified in borrowing
that money. Judge Dunfield
thought we should borrow from the public on
government guarantee. The Commission of Government
cannot guarantee — it is a legal
point— unless there is a resolution passed in the
House of Commons.
Mr. Smallwood Just why was this reconstruction
plan laid before the Convention? It is not a
statement or description of changes that have
occurred since 1934.
Mr. Wild These are things still to be done.
Mr. Bradley Things regarded as necessities but not
essentials.
Mr. Wild Some of them were pledged — the vocational
training of our servicemen, for example.
Mr. Hickman It is a picture of possible future expenditure?
Mr. Wild Yes. We have kept it down to high priority
projects. Take one of the things we have there — the
question of tuberculosis clinic in St. John's. Two
doctors came out here and gave a very distressing
report on TB. It is essential, they say, to have this
TB clinic started in St.
64
NATIONAL CONVENTION
September 1946 John's.
Mr. Smallwood That programme as to
social services is a continuation of the policy you
have been carrying on?
Mr. Smallwood In your preamble to
this reconstruction and development scheme it is
stated that as much as possible of the amounts
mentioned should be raised out of ordinary revenue,
and as little as possible out of the surplus. Is it
not rather tantalising to dangle all those
unavoidable improvements — all of them desirable —
before us, involving an increase over ordinary
expenditure — all those new hospitals, new roads —
with no indication whatever of how it will be paid
for?
Mr. Wild I do not know what the
increased expenditure will be. I know it
will be double for roads.
Mr. Higgins Are we to understand that
if the Commission of Government were remaining,
that programme would be gone through?
Mr. Wild It would be our intention to
go ahead with that. They even got it down to the
next two years. I do not think we would do it if it
meant using the whole of the surplus. A certain part
of it should be kept for a rainy day. We are in a
trustee position as a Commission of Government.
We figure we are caretakers. We do not want to
take the island too far. If the island should choose
another form of government, and they as a government
should decide to spend the whole surplus, that is a
matter for them.
Mr. Higgins If we decide to keep
Commission of Government, will that money be found?
Mr. Wild You mean the grant from the
other side?
Mr. Wild I think the Secretary of
State in his statement was not very forthcoming. He
said referring to earlier proposals for an outright
reconstruction grant to the Newfoundland
government, "Our relations with Newfoundland have
been so special and Newfoundlanders have played such
a gallant part in the war, that it would, I know, be
the wish of us all to assure to any new government
which may take over in the island the fairest
possible start. But we must all be careful not to
promise what we may not be able to perform, and the
special difficulties of our financial position over
the next few years may
well preclude us from undertaking fresh commitments."
Mr. Smallwood Just what new
commitments are meant? Was it not part of the deal
when we got Commission that they would underwrite
our indebtedness?
Mr. Wild The normal practice is not
to give grants in order to maintain services. If the
Convention should wish further
information on that I think the question will have
to be asked of the Secretary of State.
Mr. Bradley All this tends to darken
the possibility of our future
self-sufficiency, does it not?
Mr. Wild There is $10 million coming out this year.
Assuming that tomorrow you have responsible government, and you say "Let's cut out
income
tax", of course you will not be able to meet it, but
if you continue, I think that ...
Mr. Bradley This programme then means
more in annual burden.
Mr. Wild If I might hazard a guess, I
would say the additional burden will chiefly be on
roads. The hospital side of it, including the new
sanatorium, etc., I mentioned last time, $500,000
would be the extra cost, but we are already committed to that.
Mr. Wild Yes. The new sanatorium on
the west coast and the new hospital at Botwood.
Mr. Wild I should not doubt it. The $2.5 million from the
salt fund will partly meet it. I can only give you a
guess, not a reliable indication, but for what my
view is worth I would say about another $1 million.
Mr. Smallwood I thought roads alone
would give another million. The $12.5 million spent
on roads and bridges would mean extra expenditure.
Mr. Wild The full cost of roads would mean another million.
It is not only the cost. You can't have revenue
unless you have the industry to pay the cost. The
question is how far the revenue will drop. A lot
depends on that.
Mr. Smallwood The ordinary
expenditure would be about $24 million if that plan
were gone ahead with.
Mr. Wild We might say about that
figure. Sir Wilfred Woods gave a rough estimate of
$2.5
September 1946
NATIONAL CONVENTION
65 million a year. That excludes the
resurfacing of the road to Topsail.
Mr. Smallwood Mr. Wild, are there any
negotiations at all proceeding or about to proceed
with the government from any industrial concerns for opening any new industries
whatsoever in Newfoundland, apart from what have
been published in the papers?
Mr. Wild I don't know of anything.
The only new industries are Connors
[1] on the west coast
and one or two mining developments, La Manche is
one.
Mr. Smallwood Apart from what has
been published there are no negotiations?
Mr. Wild Yes, there are always
negotiations. I am trying to think what I can
remember. They are rather confidential with
businessmen, and I don't know how far I am right in
telling it. There has been a proposal concerning
Labrador, but it has not been accepted one way or
another.
Mr. Crosbie Do you think, in your
opinion, that the country is self-supporting?
Mr. Wild At the moment it is
balancing its budget.
Mr. Crosbie Well, do you call that
self-supporting, sir?
Mr. Wild It is not for me to say
that. The House has to decide that.
Mr. Vardy Don't you think a lot of
this increase in the civil service was a wartime
expediency?
Mr. Wild The Department of Defense, the Purchasing Department and the Department of Supply.
That is only a small section, and
will remain as a small section of the Department of
Public Works. The general increase in the service,
no.
Mr. Vardy I am not referring to increases in salaries, it
is the number of the personnel.
Mr. Wild Yes. The point is mostly the
hospital nurses, doctors, orderlies, etc. They are
put in as government personnel, and that's what they
are, but if you close your hospitals, that will
cover that.
Mr. Hollett I wonder if Mr. Wild will
tell me if it is our government's financial practice
to spend $11 million on new construction at this
time.
Mr. Wild The general government policy is to defer all
capital expenditure to a time of lack of prosperity
in order to give stimulus to trade, but we have
regarded the reconstruction scheme
which we are undertaking now as a matter for
which the need is so very great that we can't afford
to ignore it. The increase is because previously we have not had the opportunity.
Let us
look at this year's reconstruction scheme. We have
been held up during the year because of lack of
materials. You will find that the first is in
regards to the Newfoundland Railway for capital
improvements. Mostly it is rolling stock.
Telecommunication service. Well, we think, and Mr.
Brown agrees, that we ought to improve the service.
Housing. The housing situation is desperate. Civil
re~establishment. We must do that. There is one item
which could be deferred — the improvement of school
buildings — half a million this year and for the
last two or three years. That is part of a long-term
plan. We have started on ships, the other measure is
new roads. We think the improvement of roads is
needful. Construction of hospitals. You could not
have had a more needful reform than the TB
hospitals. The answer is that all this is extremely
needful.
Mr. Butt My question is quite simple. I would like to know
if the government has ever attempted to
draw an international balance of payments,
which would include not only our visible assets but
our invisible ones. How do you base it when you come
to look for a trade preference for example?
Mr. Wild We have actual figures of
exports and imports, but that's something tangible.
Mr. Butt I was thinking of invisible
ones too, sir, insurance, shipping and dividends,
etc. I think at some time or other we will have to
come to that.
Mr. Wild One of the troubles lies with our currency. If we had our own individual banking
system
it would make it much easier. We tried to get these
figures for the Jones and Chadwick report, and Jones
had to admit that he was beaten.
Mr. Butt He found it impossible to get such a statement?
Mr. Wild Yes. We would have to get a
new system of returns from everybody. We can't
through the normal returns.
Mr. Smallwood Surely you can get the
invisible returns on insurance, dividends, shipping,
foreign capital, brokerage fees, etc.
Mr. Wild It is possible to get it,
but it means a lot of collection.
66 NATIONAL CONVENTION September 1946
Mr. Smallwood But how has the
government for 13 years, and before that for 90
years, how have they been estimating the proportion
of the total wealth of the country or anything else
accounted for by taxation?
Mr. Wild There has been a great deal
of groping in the dark. These are some of the
difficulties of finding national wealth or
production. These things can be done, but you will
have to increase your civil service personnel. If
the Convention wants any further information on that
question the Commission can't give you the
information. I would not like to give you any
suggestion one way or the other.
Mr. Smallwood Why was it that during
the war when the railway was so badly in need of new
rolling stock, etc., and the Americans needed
railway service so badly that, instead of giving
money under Lend Lease, instead of giving us the
money, they merely loaned us the money with which to
purchase new rolling stock, and which we have to
repay? This poverty stricken country has to borrow
money for them.
Mr. Wild There is a long story to
that. We got big freights from them. The Americans
wanted to spend $5 million immediately. We were
hoping to get something for nothing, and we tried
to do so. The one thing we would not touch was
Lend Lease. The Americans wanted us to take $5
million on that Lease. They said they never met
anyone before who refused to take money. We got the
interest down; we got the terms improved; we got
2.5%. We just took the amount required to finance
the particular scheme which we agreed to. There were
a lot of freight cars. We did less than they wanted
us to do. At that time we had had a surplus.
Mr. Higgins Did they pay for the
lands expropriated, or did the United
Kingdom pay?
Mr. Wild We paid it in the first instance, but we got it
back. The United Kingdom paid all the money.
Mr. Wild Yes, the Higgins tribunal.
[1] We advanced the
compensation money out of our funds; generally
speaking it came out of the surplus. We have since
got it back, including the
costs of the arbitration. All compensation monies
for the bases have been paid by the United
Kingdom. That is another thing you might remember
that the United Kingdom paid.
Mr. Wild I could not say exactly —
two or three millions, or more. You could get the
exact figures from the department.
Mr. Smallwood It was not part of the
'destroyer deal'; the government agreed with the
United Kingdom to let the Americans come in and
build the bases on land which the Americans did not
buy?
Mr. Wild At that time we thought the
Americans were going to buy.
Mr. Smallwood Apart from the labour —
they were short of labour themselves — and they had
to have the bases, they, of necessity employed our
men — they imported everything duty free, what
did we get out of it?
Mr. Wild Would you, as a level-headed
businessman advocate closing these
bases when they are giving so much employment? I was
not here at that time, but the state of the war was
such that I believe that if you had a free vote in
Newfoundland, Newfoundlanders would
have agreed.
Mr. Job Do you not think the
Commission of Government might have made a
reservation saying that although it was no time to
discuss recompense for these bases, the time may
come when we might take it up. I think we are
entitled to special consideration.
Mr. Smallwood If they did that when
President Roosevelt was in the chair, what would
they do now with a draper for a president?
Mr. Wild At the time the agreement
was that the Americans should pay.
Mr. Wild All compensation for
Canadian bases was paid for by Canada.
Mr. Job I move the adjournment and at
the same time I propose a vote of thanks to Mr. Wild
for coming here today. During his stay here, first
as Auditor General and later as Commissioner for
Finance, he has come to understand our position
September 1946
NATIONAL CONVENTION
67 pretty well. I would like to say
now that he is going across to England after his
lengthy stay and perhaps will put in a good word for
us with the Dominions Office to get the help we
want. We want future help in connection with this
tariff question. I sincerely hope Mr. Wild will be
able to do something for us in that direction. I
take great pleasure in proposing a vote of thanks to
Mr. Wild and wish him the best of luck in the
future.
Mr. Smallwood Is it the intention
that Mr. Wild will not come back?
Mr. Job I suggest we adjourn
sine die.
Mr. Brown I would like to support the
proposal of a vote of thanks so ably proposed by
Hon. Mr. Job. I have known Mr. Wild since he first
came to this country. We had many good tiffs; there
were times when he was perhaps wrong and there
were times when he was critically correct; but I
have always found him co-operative and he did the
best he could in his way, and he did a fairly good
job. Let us wish him bon voyage and hope that he and
his good wife reach the homeland safely. I hope also
that he will be able to help us in the future.
Mr. Chairman You have heard the
motion proposed by Mr. Job, seconded by Mr. Bailey
and supported by Mr. Brown for a very hearty vote of
thanks and deep appreciation to Mr. Wild for his
courtesy in coming here this afternoon, and for
this helpfulness, and to wish him bon voyage and
the best of health and happiness for himself, his
wife and family
[The motion carried]
Mr. Chairman Mr. Wild, I present you
with this vote of thanks and our best wishes for
your future.
Mr. Wild I deeply appreciate your
kind wishes and I can assure you it has been a great
pleasure to me to come here and meet you. I am sorry
I have not been able to tell you more or spend
longer with you. I was in Newfoundland from 1934 to
1938 and when I was asked to come back again in
1944, I gladly did so. I think, as Mr. Dunn says,
Newfoundland gets in your blood. I can assure Mr.
Job that when I go back I shall have the welfare of
Newfoundland in my heart and shall be willing to do
anything I can do. I hope Newfoundland will put up a
good show in the tariff negotiations, and even
though you are a small country, the very fact that
you are small is all the more reason that you
perhaps can put something across. I do hope that the
deliberations of the Convention will go forward with
the same promise shown in the last two weeks. I do
wish you the very best success in your efforts.
[The Committee rose and reported, and the Convention adjourned]
