Newfoundland National Convention, 24 September 1946, Debates on Confederation with Canada


September 24, 1946

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. Chairman Thank you, Mr. Wild.
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. Crosbie Using part of the surplus.
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. Higgins What about the joint colonial account?
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. Wild Well, it is always a risk.
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 Committee. 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. Smallwood There are dollar bonds?
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. Harrington Well, the greater portion.
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. Smallwood Judging by all the talk it is.
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. Wild Anti~inflationary purposes.
Mr. Cashin Was the retroactive tax in 1943 for the same purpose?
Mr. Wild It had that effect.
Mr. Cashin You did not answer my question.
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. Smallwood It was not the intention.
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. Bradley Can Mr. Wild answer for the government?
Mr. Chairman I do not think he can.
Mr. Wild You asked was the purpose anti-inflation. I say one of the objects was anti-inflation.
Mr. Hickman What were your other objects?
Mr. Wild We wanted revenue.
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. Wild Yes.
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. Higgins Yes.
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. Bradley I do not think they are committed to that.
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. Smallwood Half a million dollars more extra maintenance.
Mr. Wild Yes. The new sanatorium on the west coast and the new hospital at Botwood.
Mr. Smallwood $2.5 million extra per year.
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.
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. Higgins I am referring to the compensation.
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. Higgins How much did it amount to?
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. Higgins Does the same thing apply to Canada?
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. Bailey I second that motion.
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]


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



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

Notes de bas de page:

  • [1] Connors Brothers of Canada built a canning and processing plant for herring in the Bay of Islands.
  • [1] The Commission of Government appointed Judge William J. Higgins of the Newfoundland Supreme Court as Chairman of a Board of Arbitration to settle land claims in areas where the American armed forces wished to build bases. For further information see Peter Neary, Newfoundland in the North Atlantic World, 1929- 1949 (Kingston and Montreal, 1988) p. 141.

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