Newfoundland National Convention, 4 November 1947, Debates on Confederation with Canada


November 4, 1947

Report of the Finance Committee: Economic Report:[2] Committee of the Whole

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. Chairman Or any matter arising out of these reports....
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. Cashin Did it in style!
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]
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. Cashin I made it as a statement of fact.
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. Cashin Quite.
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. Smallwood You are perfectly correct.
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. Chairman I must sustain you there, Mr. Bradley.
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. Cashin Continue the next sentence.
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. Smallwood If you will excuse me I am.
Mr. Cashin I am going to read this now supposing this roof falls in.
Mr. Smallwood Read it, read it!
Mr. Chairman Order, please!
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. Cashin I am not nervous.
Mr. Smallwood We are both old timers in this House.
Mr. Cashin You were never a member.
Mr. Smallwood I was here before you were here.
Mr. Chairman Come to order, please.
Mr. Smallwood I was here before you were.
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. Chairman Is the Major satisfied now?
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. Hollett Don't look at me!
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. Cashin No, no.
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. Cashin Keep her going. Wasting time.
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. Higgins Mr. Chairman, we have only one reporter.
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]


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] Volume II:425. [Volume II is not in The Confederation Debates Collection]

Personnes participantes: