Mr. Chairman ....The Economic Report represents the accumulated effect of your efforts since
you have been constituted as a National Convention. It is designed to co-ordinate
or correlate all
the reports heretofore tabled respecting the
economic potentialities of the several industries
which the reports are designed to relate. In consequence, I feel duty bound at this
stage to inform
you that, with one exception, forms of government, any member talking on any point
arising
out of any report heretofore tabled, shall be ruled
by me to be in order....
Mr. Hollett When you say "any matter", do I
take it to mean that you refer to any matter
embodied in the reports already tabled?
Mr. Smallwood Mr. Chairman, I want to say at
the outset everything that I can say complimentary about this report. I happen to
be one who has
a great respect for hard work. Major Cashin, who
wrote this report, is a hard worker, and I take my
hat off to a hard worker any time. Secondly the
report shows this, if nothing else did, that he is a
man of great optimism, and I take my hat off to
him for his great optimism also.... I am afraid that
what I have got to say from this point on is not
very complimentary. But Major Cashin has been
a Minister of Finance. He has introduced three
budgets before, and it won't be a new experience
642 NATIONAL CONVENTION November 1947
to him to find his report criticised....
Mr. Chairman, I call this document a budget,
because that is exactly what it is. It sets out what,
in the opinion of the Committee, will be the
necessary expenditures of the government, and
what, in their opinion, will be the revenues that
the government will get to meet those expenditures. Now there's this to be said about
budgets
in this country: in the period from 1920 to 1932,
we had a number of very notable Newfoundlanders who occupied the position of
finance minister. We had Mr. H. J, Brownrigg,
Sir Richard Squires, Mr. W.H. Cave, Sir John
Crosbie, the Hon. P.J. Cashin, and the Hon. R.C.
Alderdice, and each of them introduced his
budget. Now the difference between their
budgets and this one that the Finance Committee
has introduced is that those budgets only looked
ahead for one year whereas this budget goes a
lot further than that, because it attempts to
forecast
three year's expenditure and
three years'
revenue. If, therefore, it was a hazardous and
dangerous thing for the finance ministers to
forecast for a year, how much more hazardous
and dangerous is it to forecast for
three years?
Let us look at just how dangerous it is to
forecast even forcne year. In 1920-21 the Hon.
H. J. Brownrigg made his budget, and he forecast
...a surplus of $200,000.... But what happened?...
When the year was over he had a deficit of $2.5
million. Well, in the next year Mr. Brownrigg
was not well, so the Prime Minister had to act as
finance minister — Sir Richard Squires — and
he brought in his estimate for the next year.... The
forecast he made for 1921-22 was a surplus of
$96,000, but when that year ended they found
that they had a deficit of $867,000.... Well then,
in the next year Sir Richard Squires was finance
minister again. On that occasion Mr. Brownrigg
was in New York, so the Prime Minister brought
down the budget, and what he forecast was a
surplus of $108,000, but when the year was over
he had a deficit of $675,000. In the next year the
finance minister was the Hon. W. H. Cave. He
said that [there would be] ... a surplus of $43,000.
When the year was over they had a deficit of
$1,620,000, so his guess was not very good. Then
in 1924-25 the late Sir John Crosbie became
finance minister, in my opinion one of the best
finance ministers we ever had. Sir John Crosbie
estimated a surplus of $105,000. When the year
was over it showed a surplus of $347,000.... Then
in 1925-26, Sir John forecast a surplus of
$207,000, and he had a deficit, I am afraid, of
$112,000.... For the year 1926-27 he brought in
an estimate of a surplus of $300,000, and they had
a deficit of $1.6 million instead. Then 1927-28
rolls around, and Sir John made another estimate,
a very large surplus of $845,000, and when the
year was over there was a deficit of $ 1.25 million.
The last year he brought in his budget, 1928-29,
he estimated for a deficit of $268,000. When the
year was over he had the deficit all right, and it
was $1.1 million. The next year was 1929-30, and
the present chairman of the Finance Committee,
the Hon. P.J. Cashin, was the minister. I was in
the gallery there and I heard him deliver his
budget speech, and he did it with real gusto and
it was a pleasure to hear him deliver that
speech.... He estimated a deficit of $187,000. He
was the second finance minister to estimate a
deficit, but he was the first finance minister in the
history of Newfoundland who estimated a deficit
and turned up with a surplus of $144,000. That
was his first budget. His next budget was 1930-
31; he forecast a deficit of $27,000.... When the
year was over he had a deficit of $3,242,000.
Mr. Smallwood Yes, did it in style no doubt.
Well then, in 1931-32 he estimated a deficit of
$1,456,000, and I suppose he figured, "That will
certainly cover any deficit that we can possibly
have", but when the year was over their deficit
was $4 million. I can't help remembering that in
his first budget Major Cashin, stated to the House
and to this country: "The outlook for the future I
regard as decidedly encouraging", and he lived
to see the greatest deficits that Newfoundland had
ever had in its whole history....
With that dismal record before us of forecasting the revenues and expenditure for
one year at
a time, we should be very careful about accepting, without close scrutiny, any estimate
for a
year, and still more for three years at one time. I
would not have the house under any misapprehension about this. Mr. Brownrigg, Sir
Richard Squires, W. J. Cave, Sir John Crosbie,
Major Cashin and Mr. Alderdice were able men.
It was not their fault that they could not estimate
the revenue or the expenditure for a year... They
exercised their very best judgement, but it was
Newfoundland's fault, because the economy of
November 1947 NATIONAL CONVENTION 643
Newfoundland has always been such, that it was
next door to impossible to make a forecast accurately, realistically, conservatively,
for even
one year ahead. We should bear that point in mind
when we consider this budget for three years to
come.
Now I touch on another point. On page 1 of
the report, there is set forth a picture of Newfoundland, a photograph of Newfoundland
of the
last 50 years, all drawn in one short paragraph.
What does it show? It says ... that for the 50 years
which came to an end last month, September
1947, the government spent $500 million, and
took in $496 million, so they had a shortage of $4
million on current account. But this paragraph
goes on to say: "If you deduct from the $500
million that the government spent, $20 million
that the present government spent on capital account since 1935, that brings the total
expenditure
down to $480 million. Thus, with an expenditure
of $480 million and a revenue of $496 million,
the government showed a surplus of $15 million,
or an average of $300,000 a year for the 50
years." In other words, if this paragraph is correct, what it means is this: that
for the last 50 years
the government has balanced its budget. More
than that, it has had an average surplus of
$300,000 a year, so it appears that the Government of Newfoundland came out of it
with flying
colours. Then those of us who remember the
1920s, and more of us who remember the 1930s
begin to prick up our ears. We begin to show
some great interest. If the government balanced
its budget and showed a surplus, and we remember the unemployment of the 19205, and
the
parades of the unemployed, when we remember
the rock sheds, and the "roads-de-luxe", and the
pit-prop cutting schemes, and the riots, and the
dole; when we remember 90,000 of our people
only eight or nine years ago rotting with beri-beri
and TB on the dole, when we remember our
roads, wharves and bridges falling down because
there was not a dollar to spend on them, when we
remember the Gethsemane that our people went
through from 1920 to 1940 roughly, and we are
told that for these 20 years, and another 30 with
them, the government not only balanced its
budget but had a surplus as well, and the people
at the same time rotting in poverty many of them,
we begin to wonder — does it matter very much
to the people of Newfoundland, the fishermen,
the miners, the loggers and the railroaders, the
clerks and office workers, teachers, etc., does it
matter much to them if they rot in poverty and the
government balances its budget? ls balancing the
government's budget so very much after all, if the
people can rot in poverty while our budget is
being balanced?
Of course the truth of the matter is that the
govemment's budget was not balanced in those
50 years. What happened was this: from 1920 to
1934 the government never, never once took in
enough money in taxes from the people to pay
theirexpenditures. Never once in the years, What
they did was this: the finance minister would
bring down the loan bill, asking the House of
Assembly to authorise the government to
authorise him to go out and borrow money and
in the bill the law required that there had to be
stated the purpose for which the money was to be
borrowed. That was one reason why they had to
state some reasons. There was another reason.
They could not go to the States or Canada or
England and borrow $5-6 million and tell them
frankly and honestly, "This is money that we
can't get out of our people. We can't get enough
taxes to meet our expenses, so we have to borrow
so much to make it up." They could not tell them
that, so they called it "capital account". Always
it was for capital expenditure. To meet operating
losses on the Railway, and give relief, to give
dole to keep people alive, and to balance the
budget year after year, for 14 years without a
break.... $50-odd million gone out and borrowed
to meet the expenditures of the government, the
ordinary expenditures, or what they used to call
in those days "current account expenditures".
That was a word that covered a multitude of
things that ought not to be called "capital expenditure" at all. They should have
been called by
their proper name.
Well, the report goes on again, still on page 2,
and here's the picture we get: it points out what
our public debt is. It says this — If we were to
take out present public debt, and take off of it
what we have saved up for sinking fund, and then
take off of what's left what we have in accumulated surplus, take all that off our
public debt and
what we have left is a net debt of $35 million....
But, they say, that's not so bad, because look
what we have got to go against it. We have got a
Railway that's worth $72 million. Now where did
644 NATIONAL CONVENTION November 1947
they get that figure of $72 million? I will tell you,
in fact they say it here. What happened was this:
the Ottawa delegation spent weeks before it went
gathering information about Newfoundland, and
amongst that was gathered information about the
Railway, which it got from the manager. One of
the things we knew they would want to know in
Ottawa was, "What is your railway worth? What
is the value of it?" So naturally we asked the
manager to give us an inventory.... They gave us
an estimate of $72 million... Remember we made
Newfoundland out while we were in Ottawa to
be sitting on top of the world, so we gave them
the estimate of $72 million that our Railway is
worth, but let us not here fool ourselves. If a
Railway has cost millions upon millions upon
millions of dollars, taken from the public in taxes
by the government, brought into the public exchequer and handed over to the Railway
to meet
their operating losses, millions upon millions of
dollars to meet the operating losses year by year
since we took over the Railway in 1923, and for
two years before that, if we are paying their losses
and they have come to many millions of dollars,
let us not fool ourselves into thinking that our
Railway is actually worth $72 million in cash. I
am afraid you would have ajob to get anybody
to pay that for the Railway, unless you would
undertake to pay the operating loss. They might
do it then for the sake of having the job of
manager.
You say we have $20 million worth of highroads. I happen to believe strongly in highroads,
but when it takes a million a year to keep up those
roads, just barely to keep them up, I am not
willing to accept the figure of $20 million as an
asset against an actual public debt. And then they
put in another $10 million for public buildings
and hospitals, and finally another $10 million for
lighthouses and public wharves and breakwaters
and our telegraph system, making a total of $1 10
million of assets to go against our net liability of
$35 million, showing that we have made a net
gain for the last 50 years, it says, of $75 million,
or, now I quote the exact words, "... an average
annual surplus of$1.5 million" for the last 50
years That is how they arrive at the figures.
Of course if we want to fool ourselves and fool
others we will let those figures pass, and not
throw any doubt upon them. If we have a Pollyanna optimism, if our motive and our
purpose is to
fool the people of Newfoundland that everything
is rosy, and the government has really balanced
its budget for 50 years, they might answer it
something like the man in gaol, who was visited
by a well-meaning old codger who went in to
cheer him up and said, "Stone walls do not a
prison make, nor iron bars a cage"; and the old
man said, "Well, if they don't, they have got me
pretty well mesmerised." He thought really he
was in gaol. And if you tell the people that for the
last 50 years the government has balanced its
budget, all the people are going to tell you to
remember the dole years, to remember that only
eight years ago Labrador fish was worth $3 a
quintal, and that all our fish and fishery products,
when we exported them to all the countries of the
world, were only worth $8 million. Just barely
eight years ago. Tell people who remember that,
tell a man that's in Fair Island:
October 20, 1947
Mr. J. R. Smallwood
St. John's, Nfld.
Dear Sir:
I am sending to you to see if you can
please give me any information as to what I
am going to tell you.
Well sir, I was fishing on the Labrador this
summer, and we did nothing with the fish.
We got 235 quintals, and we shared $140 a
man. I owed $121 of that to Mr. Murray in
St. John's, and $60 to Mr. So and So of this
place.
I am a man with six in family, besides my
wife and myself, and I have no help, so I am
sending to you, sir, to see if you can get a job
for me, or whether the Government can do
anything. I am not able to buy a pound of
anything for my family for the winter.
If you insist I am willing to expose his name to
vouch for the genuineness of his letter. Tell that
man in Fair Island that this country is good, that
the future looks rosy and optimistic, and that for
the last 50 years his government has not only
balanced its budget, but had a surplus of
$300,000 a year. Tell him that!
Mr. Chairman I regret to inform the Convention that we have only one reporter here today,
and therefore, in order that the reporter may have
the opportunity of resting her hand, I propose to
adjourn for 15 minutes and then resume again.
[Short recess]
November 1947 NATIONAL CONVENTION 645
Mr. Smallwood Mr. Chairman, I was saying,
when the House rose for a short recess, that that
fisherman in Fair Island, Bonavista Bay would
not appreciate at all this rosy and optimistic picture of Newfoundland. Nor would
the fisherman
in Plate Cove West who says in his letter to me,
"The people here never saw worse times in the
worst years of the depression than they are now.
They are starving slow but sure." And so I could
quote letters from many parts of Bonavista Bay
and from many other bays and many other coasts.
And if you were to tell the fishermen on the north
side of Bonavista Bay, and more especially those
skipper men, who are amongst the finest breed
that this country ever produced, who are finding
it necessary now to sell their schooners and gear
to get enough money to live on after three years
of failure of the Labrador fishery, if you were to
tell them that they have nothing to worry about,
that the last 50 years were good years, and the
next 50 years will be good, they would only laugh
in your face, they would not believe it any more
than I believe it. If you were to tell the fishermen
who came back from the water and from
Labrador this year, only to find that their fish was
not worth a single, solitary dollar in cash, that it
was only a receipt which could not name a price
in many cases, that Newfoundland was on a firm
foundation, these men too would refuse to believe
you, and with every good reason.
Now I want to pass on to page 6 of the report.
It tells us that the country should have a mercantile marine. Now I am not going to
argue whether
we should or should not, whether we should have
our own local bottoms to do our own foreign
trade. That is a big subject. It has been debated a
good many times, but I want this House to be on
its guard against taking the ipsy-dipsy and unsupported and unproved word of the Economic
Committee on this question. I remember an article by
Mr. H.R. Brookes of the firm of Job Bros, a man
who has had a great deal of experience with
shipping, I remember a conversation here between Mr. Bailey and the Hon. R.B. Job
on this
very question. This is a very, very vexed question, not one on which we can speak
glibly. And
yet in comes the Finance Committee, bravely as
though there were never any questions on it, as
though there was only one side to it. It is obvious,
according to them, that we should start a mercantile marine, and the government should
defray,
should set aside public money to finance a mercantile marine...
Mr. Chairman Just one point if I may.... I think
in fairness to the compilers of this report I should
again remind you that opinion is merely a matter
of judgement upon which men may reasonably
differ, and I do not feel that in the expression of
an opinion merely that the Committee, or the
chairman of the Committee, should be placed in
the position where they had to defend a mere
question of opinion. If they were making it a
statement of fact, yes. Then, of course, independent corroboration would be necessary
to sustain a statement of fact as opposed to mere
conjecture.
Mr. Chairman Well in that case Mr.
Smallwood, will you please...
Mr. Smallwood Well, it is obviously a statement of opinion; if it were a statement of fact we
would naturally call for evidence upon the statement so made; but as in fact it is
a statement of
opinion it is very much open to objection. Then
any member of the House may state his opinion
at variance with the Committee.
Mr. Smallwood If it had been proposed by the
Finance Committee around the year 1940 or 1941
that the government, out of the public revenues,
should devote certain money to purchase or subsidise a local merchant marine there
would have
been a lot to be said for it, because the shipping
business was on the upward trend and a lot of
money was made out of shipping during the war.
But now the war is over. How much longer can
the Finance Committee guarantee this country or
the government that it would be a safe investment
to put public money behind the acquisition of a
merchant marine? We know the state of the
world, and what a hazardous thing it would be to
risk public money in the acquisition of merchant
ships, given the lack of knowledge of what is
going to happen in the world.
Page 9 deals with Gander airport. I am not
going to discuss Gander. I did that when we
debated Gander, at the time that the Report on
Transportation and Communications was
debated. I think I may fairly say that I happened
to be the one who drew the House's attention to
the situation at Gander, and for that reason I am
not going to go into the details today, but there
646 NATIONAL CONVENTION November 1947
are two statements to which I would direct your
attention. "This matter", it says, the matter of
Gander, "was also taken up with the Dominions
Office by the British delegation on its recent visit
to London. The result effected, as you are
aware, savings to the treasury of the country of
some $500,000." That, as I understand the situation, is not at all in accordance with
the facts,
which are these: that before the London delegation went across the Atlantic at all
the Newfoundland government announced that a special
commission was coming from the Ministry of
Civil Aviation in London to inquire into Gander,
and a statement would be made. The statement
was made, namely, that the British government
would absorb two-thirds of the operating loss on
Gander, and the Newfoundland government
would absorb the other third. So it was not the
result of any work or suggestion of the London
delegation whatsoever in any shape or form that
this arrangement was made.
The second point is this: "For", it says, "if we
were rid of this airport liability it would effect a
further saving of not less than $750,000 in our
annual expenditure." I don't follow that at all.
The total operating loss at Gander is estimated to
be $750,000, of which $250,000 is to be paid by
the Newfoundland government. Not three
quarters, but one quarter of a million dollars,
unless, in that sentence, the Committee wishes to
convey the thought that the capital expenditures
being made at Gander in the last two years are
going to continue indefinitely, and therefore,
with capital expenditure on the one hand and that
$250,000 on the other it comes to $750,000.
On page 10 the Committee gives us its estimate of the government's expenditure for
three
years to come, and the amount is roughly $25
million. They have brought it from $27.25 million, which they tell us is what the
present
government is now spending on ordinary account, to roughly $25 million, and they have
brought it down by saving $1.25 million in the
operation of the Railway, $1 million in servicing
the public debt, and $750,000 for Gander. Now
that $750,000 for Gander, just how they get that
I will ask the chairman to explain before the
debate is over, but even allowing for all that it
stands at $25 million. Then we find them estimating a revenue of roughly $30 million
a year for
the next three years. That would be a surplus of
$5 million a year. Incidentally, I hope that estimate of a surplus ... is at least
a little more
accurate and better founded than the estimates of
all the finance ministers from 1920 to 1932, but
assuming that it is, we then find the Committee
having glorious fun for itself.
It is always fun to spend money, and they start
out to spend that $5 million a year for those three
years. What are they going to spend it on? Additional old age pensions — $600,000
a year for
three years. Fishermen's and mariners' insurance
— $400,000 a year for three years. Encouragement of tourist traffic by building roads
from
Port-aux-Basques to Comer Brook, linking up
Grand Falls and Gander, also Lewisporte with
Gander, total $1 million a year for three years.
Further encouragement and development of the
fisheries, particularly fresh fish — $1 million a
year for three years. Local public works —
$500,000 a year for three years. Mercantile
marine, ... — $500,000 a year for three years, and
Railway capital expenditure, including rail relaying of entire system — $1 million
a year for three
years. Total, $5 million a year for three years.
Now number one, that $5 million is a purely
hypothetical sum of money. It does notexist, only
in a man's mind.... The first question is this: we
spend $600,000 a year on additional old age
pensions for three years. What about the fourth
year? Do you cut it out or stop it? Are you going
to give old age pensions only if you have a
surplus? Must our worn out toilers wait until the
government has a surplus before you increase old
age pensions? Is it something that you think of
only when you have spent all your money, and if
you have everything you can think of, and you
have a bit left over, well then you will give the
worn out toilers a little bit more, out of a surplus,
not an ordinary expenditure at all, but just purely
a surplus?
What are you going to get with $1 million for
three years in building roads?.... $3 million won't
build much more than one quarter of the roads
you are talking about. You are going to spend too,
out of that surplus that we have imagined, on
encouragement of the fisheries, and particularly
the encouragement of the fresh fish industry, $1
million. What will $1 million a year do? You will
have to spend $10 million if you are going to put
the fishery on its feet. What are you going to do
with the people on the north side of Bonavista
November 1947 NATIONAL CONVENTION 647
Bay when the Labrador fishery is given up altogether? What will you do with the people
in
Greenspond? There is not a Labrador schooner
left. All they can do is go out in the bay with the
boats they have left. You have got to spend millions upon millions of dollars if you
are going to
save the fisheries of this country. A lot of that is
for the fresh fish industry alone. What about the
salt fishery?
Then $500,000 on public works — a mere flea
bite. Why the breakwater in Bonavista, to repair
that breakwater, will take $500,000, and the
member for Bonavista East says, "Yes, and you
can add another half a million to that". $1 million
for that one breakwater. What about the one in
Bay de Verde? Now you have, if my memory
serves me right, 376 public wharves and slipways, and you are going to spend $1.5
million for
three years. You would not begin to touch it....
You are going to fling away half a million for the
mercantile marine — down the sink, down the
sewer.... You buy your boats at a high price and
sell them two or three years later for half the price,
and lose on them while you are running them.
And you are going to spend $3 million capital
expenditure on the Railway — about one third of
what needs to be spent, just about one third. If you
turn to the Black Book that we brought from
Ottawa you will find the estimate of the CNR. For
the next year they expect to spend $17 million,
and you are going to spend $3 million to put the
Railway into condition. It just can't be done, just
can't be done...
Mr. Hollett Mr. Chairman, may I rise to a point
of order? I understand that these Black Books are
private property to this Convention so far. Has
there been any release by you, sir, to publish
them?
Mr. Chairman ....On that point I have to speak
subject to correction. The impression I gathered
was that the reports were to be distributed to
members and to the press, but not to be
publicised....
Mr. Bradley If I may intervene, that is not exactly the position. The documents in question
were distributed to the members of the Convention on October 10. On the same day copies
were
given to the local press and various radio commentators, and certain other prominent
citizens.
Since that time I have noticed that some of the
press have been freely commenting on the contents of these two volumes, and surely
it is not
contended that if the press can comment on them
a member of this Convention cannot.
Mr. Smallwood Now I must ask you to turn to
page 41, and we find this sentence: "Now in
connection with our use of the phrase 'foreseeable future', we think we should explain
what we
mean. We are conscious of the fact that there may
be delegates who will be satisfied with nothing
less than an absolute gilt-edged guarantee of our
solvency for the next 20 years.... In our case,
however, we have exceeded the ordinary government budgetary period of one year and
made our
estimate on a basis of things as we believe they
will be for the next three years." Now, this report
sets out very frankly, and I take it sincerely, to
give an estimate of our probable revenue and
expenditure per year for the next three years.
Mr. Smallwood It is not germane to the point I
am making. It sets out to give an estimate of the
government's probable revenue and probable expenditure each year for the next three
years. No,
I beg your pardon again, what they set out to do
is to give it for the "foreseeable future", and then
further on they say that the "foreseeable future"
amounts to three years Not two and a half years,
not three and a half years or four years, but
exactly three years. They say that we should
explain what we mean by...
Mr. Cashin I beg your pardon, Mr. Chairman, I
must insist. What page is that? If you won't read
it I will have to read it.
Mr. Cashin I am going to read this now supposing this roof falls in.
Mr. Cashin I am not tolerating any more abuse
here.
Mr. Smallwood Mr. Chairman, he says he is
going to read this if the House collapses to ruin.
I put it to you, he has no such right to read it
whether you allow it or not.
Mr. Chairman Unless you are rising to a point
of order you must not interrupt a speaker. You
have to state your point of order.
Mr. Smallwood He has no right whatever to
648 NATIONAL CONVENTION November 1947
announce to you that he is going to read this, no
matter who likes it.
Mr. Chairman I will sustain you on that point.
Unless a member rises to a point of order he is
not to interrupt a speaker when he occupies the
floor, and on that point, Mr. Smallwood, I will
have to sustain you; but in fairness to Major
Cashin I must sustain him in that the statement
might be' misleading, since you have not gone on
to read far enough. Will you please read the next
few lines, Mr. Smallwood?
Mr. Smallwood I will read the whole thing from
the beginning. "Our task in the preparation of this
report was in fact, somewhat similar to that of
persons appointed to examine a business concern. We had to find out if the business
was
solvent. We had to examine the assets and
liabilities. We had to see how much it costs to run
the business, and we finally had to satisfy ourselves that the business would continue
to be a
paying proposition in the foreseeable future.
Now in conclusion, with our use of the phrase
'foreseeable future', we think we should explain
what we mean. We are conscious of the fact that
there may be delegates who will be satisfied with
nothing less than an absolute gilt-edged guarantee of our solvency for the next 20
years before
they will accept the fact that Newfoundland is
self-supporting. 'Things are all right now,' they
may say, 'but what of the future?" Now don't
get nervous.
Mr. Chairman If you don't mind, gentlemen,
there need to be no exchanges at all. Mr.
Smallwood has undertaken to read the statement,
and he is reading the statement, and let's have no
more interruptions.
Mr. Smallwood "To such we reply that we do
not know about our future. We do not know what
the future of Newfoundland will be five years
from now, any more than the governments of
Canada, the United States or Great Britain know
how things will be with them five years from
now. All we can do is to follow the example of
these various governments and plan for the future
in the light of such facts and information as are
presently available. We do what the ordinary
businessman does, who satisfies himself that he
is financially sound and then takes his chance on
the future. Businessmen in this country have been
doing just this sort of thing for over 100 years and
they are still going strong." Now is the Chairman
satisfied that I have read the thing correctly and
completely?
Mr. Cashin Yes, I am satisfied now. In view of
the fact that my friend opposite was trying not to
read that in order to prove that our statement did
not prove that...
Mr. Chairman I can't allow you to draw this
conclusion at all, Major Cashin...
Mr. Smallwood The point I want to make is this:
the Committee sets a period of three years as
being the "foreseeable future". Three years exactly, and they say that some delegates
may object to that, and may want an absolutely
gilt-edged guarantee of Newfoundland's solvency — for the next three years? No. The
next five
years? No. For the next 20 years? I don't know,
I can't speak for other delegates, and there may
be some who demand an absolute guarantee of
this country's solvency for the next 20 years. I
don't. I am not that unreasonable, but I do insist
that I shall look further ahead than three years.
I think it is my duty so to do. Whether I do it or
not, whether the Finance Committee does it or
not, whether this Convention does it or not, take
this from me, that the people will look ahead
much more than three years when they come to
decide what kind of government they want. I say
not 20 years, nor three years, but eight or ten or
12 or 15 years. I don't know that actually 20 years
is very far to look ahead. We have looked back
for 50 years, and I think we might justly look
ahead to 15 or 20 years, because when we come
to recommend forms of government it will not be
for the next three years. Here is a report which
sets out to give a forecast of what Newfoundland
will be like in the next three years. If that's all we
have to go by, are we going to say to the Newfoundland people before this Convention
ends,
"Look, we have had the report of the Finance
Committee on the economic side, and the
Finance Committee can see how Newfoundland's government can finance itself for the
next
November 1947 NATIONAL CONVENTION 649
three years, and even have a surplus. That's as far
as we can see. Therefore we will recommend a
form of government for three years." Can we do
that? Well, if we do the whole country would
laugh at us. Now remember, I don't expect the
Committee to bring in a budget for three years. I
think you brought it in for two years too many. I
doubt if the Commissioner for Finance, when he
brings down his budget, will be able with any real
accuracy to forecast the government's revenue
and expenditure for just 12 months.... You are
estimating for three years what revenue and expenditure you will get. On the other
side you have
not gone far enough. You have not given the
Convention any kind of picture of what the
general economy is likely to be in the next eight,
ten or 12 or 15 years....
Mr. Chairman In fairness to the Committee it
is impossible for anyone other than an industrial
economist to make such a forecast.
Mr. Smallwood I don't think it would be possible for an industrial economist, or a statistician
economist that I wanted to get into this country a
few days after the Convention opened, and that
the Convention decided it did not want, and now
I find the Finance Committee saying they recommended the same thing. Major Cashin
said that
he was sick of experts in this country, and he
pointed across the table at Mr. Hollett...
Mr. Smallwood I will look at you if I want to.
You are not too big to be looked at.
Mr. Chairman Gentlemen, please come to
order. Mr. Smallwood will you kindly address
me. However hard I am to look at I still require
you to address your remarks to me.
Mr. Smallwood Yes sir, I will do that. Well Mr.
Chairman, they tell me that I am very long-
winded...
Mr. Smallwood Don't you think so? Those who
say I am long-winded, to them I would say that I
have heard the chairman of the Finance Committee occupy five and six hours of the
time of this
house, and I have heard his late father speak for
something like a day and a half, so if I take up an
hour, or an hour and a half discussing what is
perhaps the most importantreport brought in here
yet, I am not being so long-winded as I sound.
Mr. Chairman I must hold that is not so. Here
it is you are dealing with the productive economy
of this country.... If you don't mind, Mr.
Smallwood, you can continue.
Mr. Smallwood It is very pleasant to have both
you, Mr. Chairman, and Major Cashin encouraging me to go on. I did not expect to live
to see that
day.
Mr. Chairman I am not encouraging or discouraging you. I am saying that you are entitled
to express yourself if you so desire, and that is the
right of any other member of this Convention.
Mr. Smallwood Thank you sir, I will try to be
serious. If the gentlemen will turn to page 42, we
come to the crux of the whole business.... We all
know we have had high revenues in the past few
years, and the Convention Act tells us that we are
supposed to pronounce as to whether these high
revenues are the result of wartime conditions, or
whether they are normal.... What are we going to
do Mr. Chairman? Are we going to make a report,
and if we adopt this report that is what we are
doing, to Newfoundland and to Great Britain
along these lines: Before the war we were running in the red all the time. We were
losing
money, the government was losing money,
deficit after deficit, year after year we were sinking money. From 1920 to 1934 we
borrowed over
$50 million. From 1934 ti11 the war broke out we
still did not get enough to pay expenses, so the
British government had to give us a grant-in-aid
every year to make up our loss. So from 1920 to
1940 we either had to go out and borrow the
money to pay our way or get it as a grant-in-aid
from the old country, but in spite of that the war
came and our revenues have gone up and up. So
have our expenditures, but not as high as our
revenues, and we have had a Surplus. But now we
want to report to you as follows: that these great
revenues that have poured in on the government
since 1940 or 1941, these great revenues are not
the result of the war, oh no. What are they the
result of? The growth of our main industries.
But what made our main industries grow, if
they have grown? Which they have not. Our main
industries have not grown. It is true that at Corner
Brook they have been installing additional equipment, which when it is ready to operate
will mean
that that industry has grown. We have, in the last
few years installed some freezing equipment,
cold storage equipment, for the fresh fish part of
our fishing industry, which is only a small part of
650 NATIONAL CONVENTION November 1947
our fishing industry, remember. We have done
that. What have we done by way of making our
mining industry grow? What have we done by
way of making our main fishing industry grow?
What has happened to make our main forest
industry grow? They have not grown. Their
figures are swollen because prices have gone up,
and they are handling more money just as the
government is handling more money. What made
them grow? The war. And yet we are going to
turn around and tell the British government and
the people that those revenues are not the result
of wartime conditions. Why? Because the war is
over for two years, therefore they cannot be the
result of the war. What kind of logic is that?
Is there a man in this Convention today, one
man, who will tell me sincerely and honestly that
the present price of newsprint is not the result of
the war? Is there a man who will tell me that the
present price of fish is not the result of the war?
That the present price of fish oils is not the result
of the war? That the present price of Buchans ore
and Bell Island ore is not the result of the war? Is
there a man who will tell me that? If there is, I
will not believe him, because I know that these
prices are the result of the war, and the wartime
boom. How can we adopt that part of the report,
saying as it does that these inflated revenues of
the government, and of the AND Co., the
Buchans Company, Bowaters, Bell Island and all
the other companies, that these inflated values are
just the ordinary result of the growth of these
industries, and are not the result of wartime
boom? I don't believe it, and I don't believe the
people of this country are going to believe it
either, and I for one will not vote for that report
so long as that section is in it. Not only that
section, but there are several others I would want
taken out before I can support it, because I do not
believe that the report is an accurate, true, fair
account of our country's economy now or in the
years to come. It is neither correct nor fair.... If it
was an honest report, realistic, trying to face the
hard facts, it would paint a different picture altogether. Not a picture of blue ruin,
or of disaster,
any more than of rosy hopeful optimism.... It
should try to paint for the people of this country,
who are looking to us for an honest to God,
truthful statement of how our country shapes —
their country, not our country. The fishermen
want to know what the future is likely to be before
they cast their votes for some kind of government
next spring. The miners want to know what conditions are likely to be in Newfoundland
before
they go out with an easy heart to vote for some
kind of government. The railroaders want to
know, the loggers want to know, and the
labourers, the teachers and civil servants want to
know, the shop workers, clerks and office
workers want to know, the loggers want to know,
and our decent Newfoundland people want this
Convention, in God's name, to give them a fair
and square picture of how Newfoundland stands
today, and how she is likely to stand in the years
to come before they can go ahead with any kind
of heart and confidence to cast a vote for some
kind of government when the referendum comes
around next spring. That, Mr. Chairman, this
report is not. It is neither fair nor accurate. It is
optimistic and it should not be optimistic. It
should be realistic — not pessimistic or optimistic, facing the hard, brutal, real
facts, and this
report does not do it, and as such this Convention
should not adopt it, and as such the people of
Newfoundland should spurn the report and throw
it out. It is not worth the paper it is written upon.
Mr. Chairman Yes, I think I ought to declare a
recess for 15 minutes.
Mr. Cashin I move that the committee rise, and
report progress and ask leave to sit again tomorrow.
[The motion carried, and the Convention adjourned]
