Newfoundland National Convention, 20 November 1947, Debates on Confederation with Canada


November 20, 1947

Mr. Higgins Before, sir, we go on to the business on the order paper today I would like to submit to you and the Convention, an idea that I think is well worth our consideration. As you know, representatives of this country have been attending a convention at Geneva for many months, and have made a report in recent days to the government through Mr. Howell, Secretary for Customs. I suggest it would be most important for the members of this Convention to understand exactly what good is to be derived from the meetings held at Geneva. For that purpose I propose that, if the Convention will agree to it, I will move that we have a private session at the completion of today's business, or at the earliest possible moment, with Mr. Howell, to get an understanding of what this whole business means for the country, for our trade, and for general customs duties. I don't know what time would be convenient or agreeable, but we might have it in the night, or have a private session tomorrow afternoon. It should be part of the Economic 776 NATIONAL CONVENTION November 1947 Report, that we ought to understand the meaning of this convention at Geneva....
The practice has been that civil servants do not want to appear before the Convention in public session so, with the consent of the Convention, I would make a motion now that we ask Mr. Howell to attend a private session of the Convention, tonight if possible, or tomorrow afternoon, or tomorrow night, whatever time is convenient.
[There followed a lengthy procedural debate. The Convention moved into committee of the whole, and the following motion was put and carried:
That Mr. Howell shall be invited to appear before the committee of the whole to give evidence touching on the Geneva conference, which bears upon the Economic Report now before the House for consideration, but that a motion to adopt the report shall be deferred until the committee knows when and if Mr. Howell is prepared to appear before the committee and give the required evidence]

Report of the Finance Committee: Economic Report Committee of the Whole

Mr. Cranford ....Being a member of the Finance Committee, I had no intention of speaking on this Economic Report as I had given it every consideration before endorsing it. But the critics of this report have not even given the Committee the credit of admitting that some points of our report have been made by surmise or even conjecture. One member has shouted, "Let us be honest with ourselves — let us face the brutal facts". I cannot help but accept that challenge, and will not forget it while this Convention lasts, as it rings in my ears day and night; not because I am afraid of being charged with dishonesty, but because I wonder if the people who are listening in will take it in the same spirit of why it was said as I do, and that it was nothing more or less than playing politics; I am sure that the person who shouted such words would not attempt to accuse any member of the Finance Committee of being dishonest.
Again, there has been thrown at the Committee the condition of the fisherman in certain sections of the country. Certainly these critics do not mean to try to say that the members of the Finance Committee have no regard for the fishermen of this country, particularly myself who has been a fisherman all my lifetime and has met with many reverses, perhaps more than any other than in this country, as I have always tried to market my own products. How well I remember 18 years ago when I began shipping fresh salmon to the Boston market on commission basis, salmon I had caught and bought. The largest shipment for that season had reached Boston on a Friday afternoon, too late for that day's consumption. It was the only salmon that my agent had for that day, and would have fetched a fair price but for the fact a Newfoundland firm had gone to a cold storage and got two carloads of frozen salmon and placed it on the market. Their salmon were bid in and placed back in cold storage and mine was sold at a loss, as the commission agent had no cold storage facilities. I lost more than the value of my whole season's catch. The commission agent could not understand the attitude of this experienced firm, to have salmon from the cold storage on the market on a Friday afternoon. Of course, I understood it thoroughly and so do all my listeners. This did not discourage me as I have been shipping salmon ever since.
So you see, fishermen are going to meet reverses through bad voyages and poor markets. But the point I want to make is this: the critics of the Economic Report who bring in the misfortune of our hard-working fishermen and throw it at the writers of the report, are only doing it for the purpose of political propaganda and playing upon the misfortunes of our fishermen for their own political ends. My sympathy goes out to those fishermen who have toiled all season with practically no returns; and only fishermen like myself who have had the same experience know the feeling of it. And I, as a fisherman, dare any person to say that I have not used all my energy and influence in the interest of the fishermen while at this Convention. Many members have heard me say that the only industry that should have any protection, particularly customs tariff protection, is the fishermen. Also I have said, "Never mind the businessmen, protect the fishermen and workers of this country to the extent of having them support their families, and businessmen are duds if they cannot do business".
Mr. Chairman If no other member rises and November 1947 NATIONAL CONVENTION 777 occupies the floor, I will assume that they or he as the case may be, are not interested in expressing any further views on the Economic Report.
Mr. Smallwood That is not quite the case. Parliamentary practice provides that when a man moves a resolution he is entitled to make two speeches, when he moves it, and when he closes the debate. After he has closed the debate no one else may speak. In committee of the whole that is not the rule. No one has the right to close the debate in committee of the whole. He may be lucky enough to be the last speaker, but no one has the right to be the last.
Mr. Higgins You have actually given your ruling on that, Mr. Chairman. You said if no one else proposed to speak, you assumed the debate to be closed.
Mr. Chairman It is time I made my position clear on the matter. The debate will be presumed to be tentatively closed by virtue of the fact that if no member occupies the floor, I must assume no member is interested at this moment in addressing himself any further on the Economic Report. In view of the fact that it has been found that the introduction of Mr. Howell might very well result in some new evidence coming before the committee, and in view of the fact that a motion to adopt would be deferred from day to day until it has been determined when and if Mr. Howell is appearing before the committee of the whole, I am afraid, Mr. Smallwood, that I intend to call upon Major Cashin to conclude, or tentatively conclude, the debate on the Economic Report. I must assume a member is not interested at this moment in addressing himself further if he does not rise. I am not going to call members up if they do not get up voluntarily. At this time it is proposed to defer from day to day.
Mr. Higgins If Mr. Howell does not meet us, this will be the final part of the debate?
Mr. Chairman I do not see what further matter there will be to debate. Let us deal with the present position before the Chair. The position is tentative pending the determination as to whether or not Mr. Howell is prepared to appear. If he does not appear, I think you are justified in assuming for all practical purposes that the speech which Major Cashin will ultimately make in reply may be fairly regarded as the final speech.
Mr. Smallwood It may be, but not necessarily so. When Major Cashin finishes his speech, if any member wishes to speak, he has a perfect right to do so in committee of the whole. Speaking for myself, I hope I will not feel like commenting on Major Cashin's speech. I cannot guarantee that. I have not heard his speech.
Mr. Chairman Let me remind you that if upon the termination of Major Cashin's reply a motion to adopt the report was placed before me, you would have the right to speak to the motion, and any member has a right to move that the question be put without further debate and I would have to put it.
Mr. Cashin Do I understand the situation now? Before I go ahead, when I wind up this farce here this afternoon, I can move that the committee rise, report progress and ask leave to sit again and that this report can be adopted or not adopted later on?
Mr. Chairman If the motion made by you is to the effect that the committee rise and report progress, that is going to remain on the order paper until disposed of, I presume pending the hiatus between the termination of your speech and the appearance of Mr. Howell....
Mr. Smallwood Neither Major Cashin or anyone else has the right to wind up the debate. He may be lucky enough. He has not the right. Such right does not exist.
Mr. Chairman Let us not be too technical. If no other member desires to speak to the report, and Major Cashin has to reply to no end of questions addressed to him, surely in calling upon Major Cashin, I do so upon the fair assumption that no other member desires to express himself further at the moment. They can address themselves when the report comes up for adoption.
Mr. Smallwood Yes, and also as long as the house is in committee of the whole.
Mr. Chairman If Major Cashin, upon the conclusion of his speech, moves that the committee rise, report progress and ask leave to sit again, I am going to put that motion. If it is carried, I then propose going back to the Chair.
Mr. Smallwood If he makes that motion, that motion is debatable.
Mr. Higgins The motion to put the question is not debatable.
Mr. Chairman I am not under the impression that this matter is of necessity finally disposed of by Major Cashin's speech, if that is what you mean.... In conformity with the rules I ask you to 778 NATIONAL CONVENTION November 1947 proceed, Major Cashin.
Mr. Cashin After some 12 days the debate on this Economic Report has been concluded, and it now remains with me to wind up the discussion and to answer as best I possibly can the questions which have been put through you, Mr. Chairman, in order to clarify the whole situation. The speeches of the delegates generally were of a high order and showed that the various reports submitted to this Convention had received their closest attention. However, there were one or two speeches which were devoted primarily to destroying the basis on which the report was compiled, and to generally paint a gloomy picture of the country from every possible angle. Notably was the speech of the delegate from Bonavista Centre directed in this avenue. It reminded me of speeches delivered by soap box orators in Times Square in New York and in Hyde Park in London. None of our critics whose object was to paint a gloomy picture attempted to show any alternative, and in this respect it is proven that there was a deliberate attempt by a few delegates to tear down the economic structure of the country, solely for the purpose of trying to advance their own fanatical cause.
Mr. Smallwood Point of order, "solely for the purpose of trying to advance their own fanatical cause". Major Cashin has no right to impute motives to any member of this Convention.
Mr. Cashin I have not imputed motives.
Mr. Higgins Why do you think it is you, Mr. Smallwood?
Mr.Smallwood He did mention the member for Bonavista Centre, and he was speaking generally.
Mr. Cashin If the cap fits you, you can wear it.
Mr. Chairman I remind members of the rule - "No member is to use offensive language...." I would suggest you refrain from personal references as far as possible, Major Cashin.
Mr. Cashin I must first deal, Mr. Chairman, with the deliberate attempt to discredit the report made by Mr. Smallwood particularly, and I now refer to the question put to me by the junior member from Grand Falls, Mr. MacDonald. This particular question relates to our present liquid assets in the form of cash and other securities. Mr. Smallwood has been attempting to convey the idea that the figures contained in our report regarding this matter are false and untrue. The same gentlemen made a similar attack on the Finance Report and was forced later to withdraw these attacks....
Mr. Smallwood Point of order. I withdrew nothing. Can Major Cashin show me where I withdrew anything?
Mr. Chairman I was compelled to rule against you.
Mr. Higgins He should have withdrawn, but he did not.
Mr. Cashin The figures as regards revenues and expenditures contained in the Finance Report were proved to be absolutely correct. In connection with this latest attempt to discredit our report and to try and show the country that the figures have been cooked up, so to speak, Mr. Smallwood states that our estimate of cash surpluses is incorrect. I refer to the amount of $35 million shown in the last paragraph on page 2 of the Economic Report. I am referred to the budget speech made by Mr. James on May 7, 1947. I do not propose at this time to criticise Mr. James' budget speech, but at the same time I am compelled to point out that this budget speech does not reveal the true situation of the country. Before proceeding, let me point out that the Finance Report was compiled on information received from the various departments of government, but particularly its statements of figures were compiled on information requested from the Department of Finance; also on information given the Convention by former Commissioner Wild over one year ago. This Economic Report was compiled and presented to this assembly on November 3, nearly seven months after the presentation of the Financial Report. The figures in the Economic Report were based on information contained in the Finance Report, as well as information obtained since the presentation of this latter report. Now, what are the facts?
In Mr. James' budget speech delivered in May last he stated that the total accumulated surplus, as at March 31, 1947, amounted to $28,789,000. Now, Mr. Chairman, if we take the revenue and expenditures from April 1, 1947 to October 31, 1947, what do we find? We find that the total revenues for this particular period amount to $26,271,459, whilst the expenditures for the same period amount to $23,492,591. This period November 1947 NATIONAL CONVENTION 779 therefore shows a surplus of $2,771,868. These two amounts now added together make a total surplus of cash, as at October 31, of $31,560,868.
I said a moment ago that the budget speech of Mr. James is anything but a complete picture of the affairs of Newfoundland. Why did I make that statement? For the simple reason that it is the truth. From information received by the Finance Committee, it will be observed that a sum of $3.5 million was loaned to the St. John's Housing Corporation and other housing associations, and which is consequently an asset. Today the St. John's Housing Corporation and other housing associations owe the treasury over $4 million; $115,000 of this amount was a free grant; $625,000 is a recoverable advance but bears no annual interest charge, whilst over $3 million is bearing interest at an annual rate of 3.5% and debentures have been issued or are being issued by the Housing Corporation to cover this amount. In all, approximately $4 million. Mr. Chairman, I consider this particular $4 million asset just as good as our interest-free loans to Britain. I will go further and say it is better. We have security in this instance for our money and we unfortunately cannot say that with respect to our interest-free loans to Britain. In addition to these amounts, the Savings Bank shows an accumulated profit, together with its reserve, of not less than $800,000, and I refer delegates to the Auditor General's Report of 1946, wherein it states that $719,000 is to the credit of that surplus. It is reasonable to expect that as at March 31, 1947 this had increased to $800,000. Then we must take into account the amounts owed the Department of Public Health and Welfare by the United Kingdom government and also the amount owed by the British government to the Department of Public Utilities on account of the operations of the Gander airport, as well as other recoverable loans due the government for advances in connection with the development of the fisheries, together with the amount that would lie to the credit of the Board of Liquor Control in the bank, all four of which will exceed $1 million. Now what is the result of this recapitulation? Is it as follows:*
This amount is exclusive of $3,232,000 which lies to our credit with the Crown Agents in London for the purpose of redeeming two loans coming due in 1950 and 1952. It is bearing interest at present at 2 or 2.5%.
Again I must refer to Mr. James' budget speech of May 7 last. He states that after taking an amount of $3,232,000 from our interest-free loans to Britain for the purpose of redeeming two loans coming due in 1950 and 1952, that there remains to the credit of our country in this particular respect, $7,868,000. I now draw your attention to an answer to a question by the Finance Committee on January 11 last as to how this particular loan stood. The reply given by the Secretary for Finance on January 15 last states: the total amount of the advances made by way of interest-free loans which were outstanding at December 31, 1946, was $9,068,000 (London, firm figure) and $242,000 (St. John's, approximation only) a total of $9,310,000. If we turn to the Finance Report we find that the total amount of interest-free loans made to Britain amounted to $12,300,000. We have told you that $3,232,000 were taken from this amount and placed in a special account with the Crown Agents in London for the purpose of redeeming two loans coming due in 1950 and 1952. This should show a balance to our credit on account of these loans of $9,068,000. The difference therefore between the two amounts is $1.8 million, and this amount should be added to our surplus cash, as it represents the purchase of war savings certificates by our people and these certificates are shown as part of our national debt. Therefore the total cash surpluses, if we take this particular amount into account, is over $39 million. This amount has not been considered as a cash surplus by the Department of Finance even though they 780 NATIONAL CONVENTION November 1947 show the war savings certificates as part of our national debt.
If we turn to page 102 of the Finance Report we find that our gross national debt amounts to $83,993,047. The first amount of $3.5 million coming due in 1950 and 1952 has been taken care of by the deduction from our interest-free loans of $3,232,000 which is invested at 2.5% and is sufficient with accumulated interest to take care of these two issues as they fall due. The second amount the Dominions Office agreed to cancel when the London delegation discussed Newfoundland affairs with the United Kingdom representatives in May last. $1,600,000 or $1,700,000 against our sterling indebtedness of approximately $72 million. There is a sinking fund of $8,342,000, which leaves this amount of sterling debt at approximately $64.25 million. Now our local debt in bond issues and war savings certificates is approximately $7 million. Against this latter amount there is a sinking fund of $800,000, thus reducing our local debt to $6.25 million. If we add this we have a debt of $70.75 million. Against this we have cash and other securities, including war savings certificates, debentures from the St. John's Housing Corporation, advances paid on account of the United Kingdom government and loans to private corporations of an amount in round figures of not less than $39 million. If we deduct this amount then from our total national debt we find that our net national debt on October 1, 1947, amounted to approximately $32 million.
This, Mr. Chairman, was practically the exact position of the finances of Newfoundland on October 1, 1947. These figures are critically correct. In our Economic Report we stated that we had $35 million approximately in liquid assets to the credit of the country. The above statement shows the assets accumulated since 1940-41, to the amount of $39 million or possibly $40 million. The question of the advances to the Housing Corporation may be raised. Someone may say they are not worth the paper they are written on. That depression has been used in here before, but even if you did take that into account — $4 million deducted from that — and give all the people their houses for nothing, we still have $35 million left to the credit of the country.... When Mr. Smallwood makes the statement that the figures contained in the Financial Report and the Economic Report are incorrect, he suggests the dilemma of Tennyson's grandmother, which I read about the other day in an English magazine, and it says that a lie which is all a lie may be met with and fought, but a lie which is part the truth is a harder matter to fight.
Mr. Chairman, there is an adage to the effect that fools rush in where angels fear to tread...
Mr. Smallwood Hear, hear!
Mr. Cashin And this was strongly brought to my mind. Now, Mr. Chairman, if we want to have any kind of decency in this place...
Mr. Chairman And we are going to, and therefore I want to make it clear now that Major Cashin is not going to be interrupted by any other speaker unless and until he rises to a point of order or a point of privilege.
Mr. Cashin I am not referring to that at all. I have a very strong suspicion that the galleries have been fixed up in the past two or three days.
Mr. Chairman I am not interested in the galleries. I am charged with the maintenance of order here. If the galleries are biased and interfere with me, I am going to have the galleries cleared.
Mr. Cashin This was brought to my mind recently when I listened to the member from Bonavista Centre go into his song and dance. He is our prize jumper in the dark, and when someone throws the light of information on him he is usually up to his neck in a bog of misunderstanding. This is the subject of our finances, and he bites off more than he can chew on our sinking fund. After listening to his hysterical oration I wonder whether he had read our reports at all. If he read the report he did not understand it, and that would account for his not knowing what he is talking about. I have to try and dispel some of the fogs in which this delegate is wandering and send him back on the road. I do this in the hope that it will save me the trouble of doing it later on.
Mr. Chairman, nearly a year ago I was informed by our finance department that the total of our interest-free loans amounted to $12.3 million. They were given, not at the request of the United Kingdom government, but out of the bigheartedness of the local Commissioners, who decided to be generous with other people's money.... It is my firm conviction that it is doubt November 1947 NATIONAL CONVENTION 781ful if ever a dollar will come back to us. The government of the United Kingdom must think we are a mighty generous country. This business began in 1941-42, when the sum of $3.8 million was passed over, free of interest, to Great Britain. At the same time they had to raise a loan of $2.1 million from the United States to put our railway in good shape for war purposes, on which we had to pay 2½% annual interest. There's frenzied finance for you, if ever there was. There's honest handling of the people's money by trustees. We shipped out of this country $4 million as an interest-free loan, and then turn right around and hang on our people's neck a debt which, up to now, has cost them in annual interest nearly $200,000.
Again in 1942-43 the trick was repeated. Another burst of generosity at our expense, and another $4 million leaves our shores. Again it is interest free, and we are told without the United Kingdom asking for the loan, and again our Commissioners go out and borrow this sum from our own people, $1.5 million at 3 1/2 % annual interest, whilst our people invested some $400,000 in war savings certificates. What can we say of this sort of thing, this taking in two years almost $8 million and sending it right out of the country? In the first place we lost the interest we should be making on it. We are losing this money just as if it had been stolen from us. It is just as if our treasury had been looted by thieves. What else can I call it but large scale plunder? And if Mr. Smallwood doesn't like that he can call it robbery, thievery, breach of trust or whatever he wishes.
Mr. Smallwood Mr. Chairman, I rise to a point of order. I ask you, sir, quite seriously, is it in order for a man to stand on the floor of this Convention, admittedly covering himself with veiled language, but nevertheless broadly to attribute thievery and plunder to the government? Can anyone do that with impunity? Is that in order?
Mr. Chairman Not with impunity. I think that as a matter of discretion Major Cashin is positively unwise, but if he cares to risk the consequences of his language, that is not a matter for me to question.
Mr. Cashin In reply, I would like to know, and I put it to you as a businessman, if you had $100,000 and you were going to lend it to me interest free, and then I go over to Mr. Hollett and borrow another $100,000 and pay him interest on it, that does not look like sense to me.
Mr. Chairman We might call it foolish, but we could hardly call it plundering and robbing.
Mr. Cashin Well, what can I call it?
Mr. Chairman You can call it foolish and be on the safe side.
Mr. Cashin Oh no, foolish people don't do things like that!.... All we in Newfoundland know is that we have been deprived of what should be ours. Let us trace this claim. In 1943-44 still another $25 million shipment went from our treasury, and again it went without any interest. What a wonderfully self-supporting country they must have thought us! And again in that year, the old trick of borrowing another $2 million at an annual interest rate of 3%, to add another yoke to the neck of our taxpayers. This year we did something extra, by way of a tilly, as it were. Those gentlemen who do business in the outports will appreciate it better than I do — a man who buys ten gallons of molasses figures he should get another gallon for "tilly". We sent other monies to redeem a loan which was not due for another year, and thereby lost another $50,000 in interest. The final spasm was in 1944-45 when the Commission sent out another $2 million to Great Britain under the usual interest-free conditions. The total of this whole business shows that the local agents of the government took $12 million of our money and loaned it free of interest, whilst at the same time they borrowed between $9-10 million. In short, whilst they went looking for loans of $9 million on which they knew we had to pay interest, they gave away $12 million free of interest. Now if the member for Bonavista can show you or me that such conduct was giving a fair deal to this country, or that it was politically honest, I will give him a gold medal with his name engraved on it.
This sort of conduct on the part of an ordinary individual in the capacity of a trustee of the people's money would qualify him for a gaol or a mental asylum. It can only be regarded as a stripping of the people's treasury, no more and no less, and the self-appointed champion from Bonavista Centre will have to be a far better hand with a whitewash brush than he is. It will take more wind than he can summon, and that is not a little, to remove the stench of this thing from the 782 NATIONAL CONVENTION November 1947 nostrils of our people. I estimate that if they had loaned that $12 million at current rates of interest, we should have earned nearly $2 million. On the other hand, if we had not had to pay the interest on the other $9 million we borrowed we should have received another $2 million. Working on the basis that a penny saved is a penny earned, this country has lost $4 million. We have been told that the United Kingdom did not ask us for these loans, and that the Commission government gave them as a voluntary gesture; but I do not think that there is anybody in the sound of my voice so gullible as to believe this. Behind it all can be seen the guiding hand of the United Kingdom government.
Now, Mr. Chairman, we come to the matter of the sterling sinking fund. Mr. Smallwood admits that he had been hearing me talk about this matter for the past two years, and apparently he wants to hear me talk about it again. It is such a novelty to hear the member from Bonavista Centre say that he wants to listen to somebody else, that I think I should not lose the opportunity — I may never get it again, and I mean that. To those of us who can use ordinary intelligence, what I have to say will be an old, old story. In 1933 an act was passed which provided that beginning not later than July 1, 1938, there would be paid into a sinking fund for the redemption of our outstanding 3% sterling stock an amount equivalent to 1% of that stock, in this instance an amount equivalent to £177,950. On July 1, 1938, the first such payment was made. Each year this is paid to the trustees of the fund, and the trustees go out in the market and buy in the equivalent of this amount to the principal of our debt. They have been doing this for nearly ten years. Instead of reducing the principal of our debt each year by the amount of payment to the sinking fund, it is left to itself, consequently we have been sending over interest on interest. Therefore, if we compound these ten year payments at 3% each year, and allowing for the pound an average of $4.60, we find that the fund as at July 1, 1947, should total in the vicinity of $9.5 million.... I hold, Mr. Chairman, that each year when this sinking fund amounting to £177,950 is sent to England, and the trustees purchase our 3% stock, that then the national debt should be reduced by this amount and the stock cancelled; but if we survey the estimates of expenditure we find that no such thing has been done, and our treasury has lost no less than $1 million. I apologise to Mr. Smallwood, when I said $1.75 million the other day I spoke in the heat of argument, and I was thinking of the interest-free loans as well. In other words, it means that this country has been improperly and unlawfully deprived of the amount referred to, but I want it distinctly understood, Mr. Chairman, that the implication that I accused John Doe of the British Treasury of putting this money into his pocket is, of course, ridiculous. What I intended to convey was that through the unbusinesslike methods of some person, the treasury of Newfoundland has been deprived of around $1 million.
No official statement has been furnished regarding the handling of that particular fund, although I have requested the same, neither has Mr. Smallwood been able to give me this statement. He merely got an answer telling him what was happening. Also in the budget speech (last May) no statement was given, and the only statement given was in the annual statement of the Auditor General. Why should we lose this $1 million? Are we so rich that we can afford to overlook it, or are we so generous that we can come out and defend it? That $1 million would do a lot of good over where Mr. Bradley, Mr. Smallwood and Mr. Burry so often shed their crocodile tears. The position is that the people who control our cash are $1 million short, so to speak, in their bookkeeping. There may be a satisfactory explanation, but in this case, until they prove their innocence, I shall hold them guilty of negligence.
[Short recess]
Mr. Cashin Reverting back to the interest-free loans, there is another point which I should like to bring to your attention. At the time we were in London in May, there stood to the credit of this country as interest-free loans to Great Britain roundly $9 million. We discussed with Lord Addison the possibility of applying this amount to the reduction of our sterling debt. Lord Addison made what I regard as a most astounding answer. He told us that the Commission of Government had recommended that these loans remain intact and should not be used for this purpose. Now, when these interest-free loans were given, the pound sterling was valued at $4.45 and consequently Britain received pounds based on that November 1947 NATIONAL CONVENTION 783 figure. Today the pound sterling is valued at $4.04, which is 10% less than the figure quoted. If Britain had agreed to our suggestion, Newfoundland would stand to gain approximately $900,000 and Britain would lose this amount because of the dropping of exchange rates. In addition, if the interest-free loans had to be applied to the reduction of our sterling debt, our treasury would have been relieved of paying interest accordingly, as well as the sinking fund, and thus an additional $400,000 annually would have been saved. For the first year, approximately $1.25 million would accrue in saving. Consequently, if we summarize the matters to which I have referred, we find that in the case of the interest-free loans, we would have saved $4 million. Secondly, in the case of the sinking fund another $1 million, and finally by the application of the interest-free loans to the reduction of our national debt, another $1.25 million. A grand total, Mr. Chairman, which proper management would have saved Newfoundland, and which we would have to our credit today, of approximately $6 million.
I think it is timely to refer to the much-discussed base deal. I regard this deal as the most far-reaching, and as far as we are concerned the most deplorable of all the acts perpetrated in our name by the Commission of Government. I refer to the negotiations which they conducted with the British and American governments, whereby the sovereignty of Newfoundland territories was given over to a foreign power under terms which amount to an absolute assignment and forfeiture of all our rights of ownership and administration into and over these particular parts of our country. We were never told then and we do not know today, the circumstances and conditions under which Newfoundland territory was placed under a foreign flag. But those who come after us will look upon this deal as the most shameful and traitorous act which has ever stained the pages of our history. For by that act there was taken, I might almost say stolen from us, something so priceless that other men and other nations have not hesitated to defend it with the last drop of their blood. It is a truly pathetic spectacle to read the story of that time, when Mr. Emerson and Mr. J. H. Penson, representing Newfoundland, were apparently ordered by Prime Minister Churchill to come to England and sign away our rights on an agreement which had already been written. What a tragedy that Newfoundland was not governed by her own people. How different might the story have been. What an opportunity there was here, if in the interests of our common war effort this national sacrifice was necessary, to obtain our proper compensation!
I hold, Mr. Chairman, that if proper steps had been taken at that time, the national debt of Newfoundland would have been cancelled by Great Britain, and Newfoundland would have arranged and even demanded favourable trade concessions for her fishery products from the USA. But what happened? The United States was given the strategic bases it required, and Great Britain received material help in return for these bases from the United States. Newfoundland received nothing, unless we are to regard as a favour the monies which Uncle Sam was compelled to spend here for the erection of these bases. But even in this case the benefits we reaped were restricted ones, inasmuch as they were restricted upon the direct or indirect instructions of the Commission government, which advised the American contractors not to pay Newfoundlanders the same rates of pay as those paid to either Canadians or Americans. The result of this infamous measure was that it was not uncommon to find Newfoundland workmen doing similar work, just as efficiently as the Canadian or American workmen, but receiving in many instances not more than half the wages of these outsiders. Would the people of Newfoundland have tolerated any such action under any of our former governments, or would any of our former governments so callously ignore the rights of bare-armed labour?
Directing our attention to another phase of this base deal, I have no hesitation in stating, Mr. Chairman, that the Commission of Government and the Dominions Office had no moral or constitutional right to alienate Newfoundland territory to a foreign power. If we concede for one moment that they could have justly performed such an act, then we must also concede that they could for the same reason have given away our entire country to whomsoever they wished. Their first duty was to protect our sovereignty. This they did not do. And there is another feature in this connection which is worth mentioning: the British government, through its agents the local 784 NATIONAL CONVENTION November 1947 Commissioners, were legally and morally bound under their own agreement to return this country to the people intact when she became self-supporting. But as it is, she can never give us back our country as it was when she took it from our control. It is no longer the Newfoundland of 1933. It is now a country with which we will be forced to share ownership with Canada and the United States. And so it is, Mr. Chairman, that a foreign flag flies over our country today, and a part of Newfoundland is no longer Newfoundland. Viewing the matter from a purely financial angle, a survey of the situation shows that because of the wage-cutting policy of the Commission government, our Newfoundland workmen were deprived of at least an additional $20 million or $25 million in eamings....
There were several notes I took during the debate in connection with the Economic Report and on which I did not prepare any set speech. I will try to the best of my ability to answer the questions asked. The first one was asked by Mr. Northcott. I was not here that afternoon, but I understand it was how much gasoline comes into Lewisporte, lands at Gander and on which no duty is paid. I think it is 10-12 million gallons. If we got one cent a gallon on it, it would mean $120,000.
Mr. Burry asked what authority we had for the forecasts regarding this development on the Labrador. In reply, I would say we understand there is a piece of legislation, which has received its first or second reading, whereby a railway is to be built by the Labrador Mining Company from the St. Lawrence River right into this mine; 150 miles of this territory is Newfoundland's, and the balance is Canadian. This piece of legislation is in the course of being adopted or negotiated with the Commission of Government. In connection with this 350 miles of railway, if my estimates are worth anything, it will cost that company in docks, loading piers and rolling stock, something around $100 million. I saw Mr. Timmins, President of the Labrador Mining Company, and he told me that this railway and docks would cost in the vicinity of $65 million. Half this railway is to be built in Newfoundland territory and considerable labour will be given our people.... Mr. Timmins would not be interested in speculating such vast amounts of money if he did not think there were some prospects of returns. The development started in 1935 by Mr. McKay, and it was later handed over to the Hollinger interests and Hanna interests of Cleveland.
Prior to becoming interested in this development, these interests checked the reserves of iron ore in the Mesabi Range and I was told that from their investigation they felt that high grade ore on the Mesabi Range would be depleted within ten years, consequently they were taking no chances. Mr. Timmins told me that he felt that within ten years ten million tons of iron ore would be produced annually. The big steel mills in the United States consume 100 million tons of ore annually. When the Mesabi Range is closed out there is only one place. The Labrador Company's property is good. Everyone is optimistic about it, and we find stock which went on the market at $l is now selling up to $8 and $9. There must be something to it. I have great faith in Labrador, and I think it is our greatest potential asset. In preparing this report in connection with Labrador we were conservative. Within ten years Labrador mineral deposits should be able to pay off the national debt of Newfoundland.
In connection with the timber areas on the Labrador, when we went into the Forestry Report[1] there was some question about the amount of timber available for pulp and paper. Mr. Burry was rather dubious as to the estimates of 50 million cords on the Labrador. Finally we brought in a supplementary report after we had had an interview with the General Manager of Bowaters, and in the Hamilton-Melville area alone there was shown to be 25 million cords. I realise timber in Labrador is difficult to transport as navigation is open only four months a year; but I am confident that within the next five or ten years the forest areas of North America will become depleted, even in Quebec. Then there will be only one place to go, and that is Labrador. That is why we discussed the possibility of a mill on the southwest coast. I discussed that matter with the General Manager of Bowaters — they were not interested at the present time, but the newsprint industry is now flourishing, they cannot meet the demand, they have contracts signed for the next ten years.... There is 150,000 horsepower in Bay D'Espoir which can be developed fairly reasonably. Consequently, we felt that in November 1947 NATIONAL CONVENTION 785 the course of the next three or four years it is not improbable that another paper mill would be promoted and built on the southwest coast to be fed with timber from Labrador. Some people seem to think that the newsprint business is good, but it is not going to stay that way. No one can tell what is going to happen tonight.... Bowaters have faith in the country; they have borrowed up to $8-10 million to further develop that industry. If they have faith, how could we give a pessimistic report on woods operations in Labrador?
Mr. Burry....I did not challenge 50 million cords; I did challenge the amount of 100 million cords.... The question I asked was not in relation to the great possibilities of the Labrador. I asked what authority they had for saying that the Grand Falls[1] would be developed... What reason have they for saying 1.5 million horsepower will be developed, and that it will be used in connection with Labrador and will be exported across the border?
Mr. Cashin We got the survey from the files of the Department of Natural Resources. The survey was made by the Aluminum Company of Canada in 1941. It was nearly developed in 1940-41, and it was unfortunate it was not. When the Aluminum Company at Arvida went down to survey it, they were seriously contemplating it for the production of aluminum and other products.... It was held under agreement with the Labrador Mining Company. Undoubtedly an agreement could have been made. I was told that by the General Manager of the Royal Bank of Canada. That is my authority. It may not all be developed at once. When the mine is developed within ten years, we are informed, it will produce 10 million tons in ten years, probably more. They have to have water-power to run the railway, they are not going to run it on coal.... I think the Committee felt justified in saying the water-power on the Labrador would be developed.
Mr. Northcott wanted to know why the subsidy on the Gulf steamer was cancelled in 1930. Newfoundland took over the railway in 1923; up to that time the Reid Newfoundland Company had been operating the railway, though the government had been financing it from 1920 or 1921. Once the government took over the railway officially, all subsidies were cancelled. I was a member of the delegation which went to Ottawa to try to negotiate a subsidy for the operation of the boat on the Strait. We discussed it with members of the Mackenzie King cabinet at that time and they assured us that they were going to give serious consideration to giving us a subsidy. We pointed out that we felt we were justified, particularly in view of the fact that then the private companies operating on the Gulf had received substantial subsidies from the Canadian government. I am not in a position to say how much it was.
Mr. Smallwood Was that really the reason? One was a company and the other a government. Governments don't charge governments anything.
Mr. Cashin I don't believe that, Mr. Chairman, because they generally soak each other every opportunity they get. Now, my friend Mr. Smallwood and I have got to disagree again in connection with this mercantile marine.... The Amulree Report recommended that we should have a merchant marine, since we were shipping a lot of money out of the country annually. Now how much money does go out of the country on freights, etc.? Today we must have a gross business of some $70 million in and out, and I figure that at least 10% of that is freight.... That means $7 million a year in freight. How much of that goes out of the country today? Today we have nine or ten Clarenville ships which cost a lot of money, and now they are employing a lot of men from Newfoundland. We have two freighters, the Random and the Rockfield Park. They employ about 50 Newfoundlanders between the two of them, and the other ships have ten men each. That's only 140 seamen in the mercantile marine, apart from small ships that are operated by some local mercantile firms in the city who, I am glad to say, are going into the business further.... Our suggestion of a mercantile marine is one of the best things in our Economic Report because, apart from the employment it will give, it will keep money in our country and keep our seamen employed. I am prepared to back a mercantile marine tomorrow if we had the necessary funds to do so, and I feel that we should have a mercantile marine. If a private outfit wants to buy it let them buy it, or let the government guarantee the money and take a mortgage on the ship, or establish one of their own under a Crown company.
The government bought two ships during the war, and if you look up the records of the railway department you will find that they paid about $700,000 for these two ships, and that they made a profit of over $1 million during the war....
I am going to refer shortly to our national debt. In my remarks this afternoon I stated that the national debt should have been cancelled when the base deal was put through. That is my own personal opinion. Why should I make that statement? These people who are operating the government were trustees and they have no right to give away our territory without some compensation, and they should have at least cancelled the sterling debt.... I am confident that if Newfoundland was governed by a government of its own, one of the first steps could be to negotiate with the British government as to the reduction of that sterling debt. Why? War debts all over this world have been cancelled. $45 million of that money was spent during the war from 1914-18, that is to date what it has cost Newfoundland. Well, if all other countries cancelled war debts we are just as much entitled to cancel them as anyone else, and I am compelled to state that if I was ever in a government of Newfoundland, one of the first things I would do would be to start negotiations with the British government for the cancellation of that debt.
There is one more matter, Mr. Chairman, and that is the matter brought up by my friend the Rev. Mr. Burry the other day, about this Labrador Development Company that's going out of business at the present time. I know something of the struggles the promoter of that company has had during the past 12-14 months trying to keep it afloat, trying to get sterling converted in dollars, that's been the great difficulty. He has 10-12,000 cords of pit props which are required, mind you, on the other side.... This company was prepared to put up ÂŁ50,000 in London and to cash it, so to speak, out here for $200,000, and the government would not do that. What is the result? The business closes down. The further result, the most unfortunate of all, is that these poor unfortunate people down there have got to be fed during the winter at government expense. I contend that it is criminal.... It means the loss of $300,000 this winter just because the Commission of Government or the Dominions Office, or the British Treasury refused to cash a cheque for ÂŁ50,000 and give $200,000 worth out here and apply the ÂŁ50,000 over there to the reduction of our debt.
Mr. Smallwood Did the government agree?
Mr. Cashin The government here agreed to do it, and on the other side they said "no". Well, what can you expect? I can't understand my friend Mr. Smallwood disagreeing with me at times when I make critical remarks about Dominions Office in London, and the manner in which they handle our financial affairs. A few days ago Mr. Bradley took up the time of this House by over an hour. I am sorry Mr. Bradley is not here. He is one of the ablest speakers in this country. I have been a member of this House with him, and a member of the government with him, and I realise that he is one of the outstanding public speakers of Newfoundland, and I am sorry he is sick.... He gave us an instance of how easy it is, with a big brush and lots of black paint, to smear an entire country. He went scavenging back to our national ash barrels for half a century, resurrecting the decayed corpses of this country's misfortune, and rattled the bones of past history before us. His general motto seemed to be that if he could find nothing bad to say, he would say nothing good anyhow. I waited to hear him say something even faintly optimistic, something with a promise of hope, something that could be called constructive or helpful, but I waited, and you waited, and the country waited in vain. In presenting the economic picture of this country we have been accused of trying to lop off a few million dollars, but Mr. Bradley goes further than this — he lops off seven years as if they had never existed. Truly an amazing performance. He spoke of the dole days, just as if Newfoundland was the only country which had known dole. He spoke of the hard times of our people as if we were the only people in the world who had known hard times. He spoke of depression as if we were the only ones to feel its bite. Now we all know the meaning of fair criticism, but anyone listening to Mr. Bradley could only receive the same impression that I received, that I was not listening to a fair critic and an impartial discussion of the economic condition of this country, but to the voice of a person who had painstakingly and exhaustively and labouriously compiled what I regard as the most depressing wail of pessimism and despair which it has been my misfortune to hear in this House for nearly a quarter of a century.
Take note of the fact that Mr. Bradley makes no discrimination in the manner in which he placed the responsibility for the evils of which he complains. He conveniently combines the misdeeds of Commission government with those of our previous responsible government. Mr. Bradley made much of the fact that our present prosperity is the result of war boom. He is apparently unable to see the real position, which is this: from an economic angle it does not matter a tinker's curse why or how our prosperity began. All we are concerned with are these two questions, first: do we enjoy favourable economic conditions? and secondly: what are the probabilities in favour of their continuance?.... All this talk of how they came about has nothing to do with the case. Let us be done with such childish quibbling.
There is another point in Mr. Bradley's speech which I feel I cannot allow to pass. In drawing up his picture of this country he has actually wiped off the years from 1939 to 1947, with the idea of showing how our economy would have looked without the benefits of the war. Now I am going to take a similar liberty, and remove another war from our history.... I refer to the first world war, 1914-18. Now as the speaker has fancied it a good idea to tie up war with finance in the years 1939- 47, let us apply the same measure to the first world war, and see what effect it had on our economic life. What do we find? We find that ... this country would be the richer by some $45 million. I am speaking now from the wholly economic standpoint, and would not dare to presume to put any value on the priceless lives of those who made the supreme sacrifice, and whose maimed and crippled bodies are still with us, some of whom are in this very chamber. I suggest that the speaker put that in his calculations, and he will find that the picture he sought to make is not so favourable to his cause as he fondly hoped it would be.
We have been accused of including guesswork and conjecture, but in the speech to which I refer there has been more that's outright guessing than in our entire Economic Report. I regard as a prize instance of this the delegate's reference to the United States bases. He takes it upon himself, without any authority whatever to inform us that the United States will give us nothing in return for these bases. He tries to show that we are entitled to nothing.
For myself, I can see as far through a stone wall as Mr. Bradley, and I expressed my firm belief that there is every reason to believe that we will be able to make satisfactory arrangements with the United States, provided we have the proper form of government in this country. I would remind Mr. Bradley of another interesting event which took place in his 50 year period. I refer to the Bond-Blaine treaty. At that time America had no bases in Newfoundland. We had nothing to give her by way of a quid pro quo, and she was prepared to accept our product, she was prepared to do business with us on favourable terms, but what happened? Canada interfered, she skilled the deal, she destroyed our high hopes. I ask Mr. Bradley how this deal would have compelled him to change his economic picture, and what this country would have been like today, praticularly for our fishermen in every section of the country if this deal had not been deliberately sabotaged by the interference of the Canadian government.
This speech I regard as an effort by one who is politically partisan. It is a demagogic appeal to stir unrest and dissatisfaction among our people.... Certainly we had bad times, but so had all other countries. Canada was throwing out dole money by the millions. The USA was doing the same.... Is anyone so foolish as to think that we can find a way of life to banish hard times? What nonsense! Look at England today, look at all of Europe.... In our case we should thank Almighty God that things were no worse with us. We were one of the most fortunate countries in the world all things considered, and I am inclined to repeat Mr. Bradley's words about marching to Zion. There is no Zion in this fallen world, where man must earn his bread by the sweat of his brow, and do not expect me or Mr. Bradley or anyone else to lead you to it.
Mr. Chairman, I believe I have dealt with the several matters contained in this report which seem to call for some additional information. But before I go any further there is one matter that was referred to me outside this House the other day, which I think I should like to speak about. A member of this Convention asked me to explain something to the best of my ability about what happened in 1932, or 1931 I think, in connection with the gold standard. I have told it many times, 788 NATIONAL CONVENTION November 1947 and I am going to do the best I can to give him that information. In 1931 I happened to be Minister of Finance in Newfoundland, unfortunately. When our loans were turned down, and when we cut everything to the bone, as I described it here the other day, at the end of October, 1931, the banks came to the government, asking us to go off the gold standard. At that time our people had some $24-25 million in gold, in money in the banks, which they could take out on demand in gold. We refused for two months. Finally we had to go off. As an Executive Council member at that time you will understand that I am not in a position to reveal anything of what happened. Mr. Bradley was a member at the same time. But here is what did happen: when we eventually went off the gold standard, gold was $20.67 an ounce. It did not rise to a very great extent during the next year, but when the last President Roosevelt took over the administration of the affairs of the United States in March 1933 ... he rose the price of gold in order that the banks would be able to issue more paper, and give more employment, and gold went up to $35 an ounce. That meant that if we had not gone off the gold standard, and we had compelled the Canadian banks to bring down that $25 million in gold to pay our depositors, in 1930 or somewhere in that vicinity, their money would be worth 80% more than it was before. Now who made that money? Some people think that the Canadian chartered banks here made it. I hold that they did not. There was a central bank established in Canada which controlled currency, and they took over all the gold and they, if anyone, made the money, not the chartered banks; and I have no brief for the chartered banks, because I hate to go into one of them if I owe them a note or something, but I give them credit they did not make all that money. I think they got a commission, so to speak.... They made the profit, but Newfoundland lost that profit. Whoever's fault it is, it is done and we can't undo it.... That is the story of the bank people. I have not given it to you in full, Mr. Reddy, because I am not in a position to do so.
Mr. Smallwood Mr. Chairman, would Major Cashin explain how, when the government brought in the act which put us off the gold standard, it was not a mandatory act but merely a permissive one, that would have enabled the government to put us back on the gold standard at any moment.
Mr. Cashin That's what happened. I went out of the finance department shortly after that. We went off the gold standard New Year's Eve, about 12.30. It was really New Year's Day. We were technically defaulting on December 31, and before they would give us any money to pay our interest, they put the gun to our head and told us we had to go off the gold standard....
Mr. Chairman I think in fairness to yourself, Major Cashin, you did point out the other day that the banks of Canada had that money, and if you insisted on their bringing down that $25 million worth of gold to depositors they would have gone broke.
Mr. Cashin The commercial houses owed the banks a lot of money, and they did not know what was going to happen — anything could happen.
I think you will admit, Mr. Chairman, that our Committee had to give its findings to this Convention under anything but favourable conditions. This report, instead of being treated in an impartial manner as it should have been, and regarded as the best efforts of the Committee was subjected to vicious attack from the moment it was laid on the table. From every conceivable angle its critics attacked it, making it a political football. They went through all its 45 pages, looking for an uncrossed "t", or an undotted "i", to furnish them with ammunition for their denouncements. Mr. Chairman, when you opened the debate you said all holds were fair, and the critics came out and tore the report to bits...
Mr. Chairman If you don't mind Mr. Cashin, I hope you don't...
Mr Cashin I don't mind a bit. Those political windjammers...
Mr. Chairman I made the order because I knew that no holds were going to be barred.
Mr. Cashin Those political windjammers hit below the belt, because they could not hit any higher. They charged it with being a dishonest report, but that has been cast back in their teeth. Their efforts have been in vain, and now, after a 12 day barrage, when these critics have slung all their mud and exhausted their bag of tricks, our report has come through intact on all its fundamental points. It came through for the same reason that truth always comes through. It came through because it was based on unassailable and November 1947 NATIONAL CONVENTION 789 undeniable facts. It was the job of the Finance Commmittee to ascertain the standing of our country, and viewing the handicaps under which they laboured, I think we have been reasonably successful. We distorted no figures, we neither enlarged or lessened the facts of things as we found them, and we came to our conclusions because there were no other conclusions at which we could honestly arrive. As the report shows, our ultimate findings were first that Newfoundland was self-supporting, and that finding is still unchallenged — it is a proven fact. Our second conclusion was that this report showed that we would remain so in the foreseeable future. No arguments have been produced to prove or even indicate the contrary....
The impression has been created that the future of this country must necessarily be limited to the figures forecast in this report. For instance, we allow for future revenues of approximately $30 million per year. This does not mean that our revenues may not far exceed this amount. And for the same reason, the amounts which we have estimated as available for old age pensions and other social services may be far in excess of the figures we have given. Indeed I would hazard the guess that undreamed of prosperity awaits this country. And why do I say this? Because of something which is only briefly touched on in the report, an asset which we have not included in our estimate of revenue. I refer to Newfoundland- Labrador.... I now make another forecast and it is this: that if a Newfoundland government is ever in a position to capitalise on our Labrador possession, she will in less than ten years be, for her size and population, the richest little country in the world. But why have we not heard more about the Labrador? Simply because it is not in the interests of those who want to exploit our territory to advertise the fact. They are keeping very quiet about it all.
Mr. Chairman, I realise that the discussions on this Economic Report have gone far over the time we thought would be necessary. However, realising the circumstances under which this report was introduced and the varying political sentiments which are held by delegates, a prolonged and bitter debate was perhaps all that could be expected. As chairman, I wish to extend my sincere thanks to each individual member of our Committee for his help and co-operation in the compiling of the facts. Also do I thank the various other committees for the valuable information which their various reports made available to us.... Our work is finished and it remains for the delegates to accept our report or reject it.
I move that the committee rise, report progress and ask leave to sit again.
[The Convention recessed to 8pm.]
Mr. Chairman ....Mr. Hollett the other day requested certain information from the High Commissioner of Canada. In conformity with that request, a letter was addressed to the High Commissioner, to which the following reply has been received:
Capt. W. Gordon Warren, RA., Secretary of the National Convention, Colonial Building, St. John's, Nfld.
Dear Sir:
I wish to acknowledge receipt of your letter of November 18 in which you advise me that you have been requested by the Chairman of the National Convention to enquire from us if it would be possible to procure copies of the official publications set out in Appendix XV of the Summary of Proceedings of the talks between a Committee of the Canadian Cabinet and a delegation from the Newfoundland National Convention. I have passed on this request to Ottawa and shall keep you advised as soon as I receive further information.
As we have on hand at this Office the publications entitled "Canada From Sea To Sea" and "Canada, 1947," I am taking the liberty of sending to you 100 copies of the former and 40 copies of the latter for the use of the members of the National Convention.
Yours sincerely, A.E.L. Cannon, Official Secretary Office of High Commissioner for Canada
Mr. Smallwood The next order of business is a motion under the name of Mr. Bradley, as follows: "To move that the Convention resolve itself into a committee of the whole to consider and discuss the proposals received on November 6 from the Right Honourable the Prime Minister of Canada." Mr. Bradley, as most people know, is suffering from a very bad cold and has handed me this letter:
St. John's, November 20, 1947.
Dear Mr. Smallwood:
Due to my absence from the Convention, I wish you to move the motion that is on the order paper in my name, and to pilot the debate in committee of the whole.
Sincerely, F. Gordon Bradley.
I therefore move order No. 2 on the order paper.
Mr. Chairman The motion is that the Convention resolve itself into a committee of the whole to consider and discuss the proposals received on November 6 from the Right Honourable the Prime Minister of Canada.
Mr. Higgins Before that motion is put, I would like to make a few remarks. Two or three days ago I suggested a private session to discuss the manner in which this particular motion is to be discussed. It was not thought fit by members at that time that we should have a private session, but that it should be discussed in public. Therefore I should like to have a full discussion on how it is proposed to give effect to this resolution. If the Convention goes into committee of the whole, how is it proposed that we discuss this matter? Are we going to read through the Black Books? I think we should have some definite plan of action before we turn ourselves into a committee of the whole, and know where we are going. Probably you, sir, could give us some idea of how we should be guided in the matter.
Mr. Chairman This is a procedural question before the Chair. The advisability or otherwise of proceeding with this matter by committee of the whole is a procedural question which must be decided by the Convention.... I think, however, your request is quite reasonable. In view of the fact that Mr. Bradley is sick, his request is that Mr. Smallwood should pilot this matter though committee of the whole; if you do not mind, Mr. Smallwood, would you be good enough to enlighten us on how you think you should go about it?
Mr. Higgins The last part of Mr. Bradley's letter is quite improper. It is a matter for the committee to appoint its chairman. Mr. Bradley has nothing to do with appointing him.
Mr. Chairman In my own limited experience here, the Finance Report and the Economic Report were piloted by a chairman not nominated by this Convention. Therefore there is no departure from established precedent in Mr. Smallwood's presiding without a vote to that effect from the Convention.
Mr. Higgins Surely it must be agreed to by somebody.
Mr. Chairman It is purely a procedural matter which should have been dealt with, perhaps, by the Steering Committee.... I am not prepared, not having examined the documents, to express an opinion as to the modus operandi if and when the Convention resolves itself into a committee of the whole.
Mr. Smallwood What I had in mind was, first of all, not to make any long speeches in committee of the whole; secondly, not to read through this communication from the Prime Minister of Canada; thirdly, not to read through the Black Books (that is, the report of the delegation). My proposal was to do this: immediately upon going into committee of the whole to read first, two or three passages from the speech of the Prime Minister of Canada opening our conference in Ottawa; secondly, one or two passages from the speech of Mr. Bradley in reply to the Prime Minister, because these two speeches gave the setting to the conference. Then, thirdly, I was going to read the letter of the Prime Minister contained in the Grey Book. Having done that, I was going to read clause one of the communication of the basis of union, explain what that clause meant, and then sit down. If any member wishes to direct questions at me, bearing on clause 1, I would attempt to answer. If any member cared to make comments on Clause 1, he would, of course, be free to do so. Clause 1 having been disposed of, I then proposed to read clause 2, with some brief explanation of it, then sit down. Same procedure, clause by clause; to refer to the Black Books (the report of the delegation) only by way of explaining any point that required explanation. It seems to me that if we followed that procedure in a businesslike fashion, and tackled this communication clause by clause, consulting the documents — the supporting papers, so to speak, we should be able to get through this thing in eight or ten days.
Mr. Fudge As I understand it, due to Mr. Bradley's illness he is unable to appear and he asks Mr. Smallwood to take over the piloting. Does that mean that when Mr. Bradley is medi November 1947 NATIONAL CONVENTION 791cally fit and able to come to this chamber, will he carry on?
Mr. Chairman I think we better discount that from our calculations. I have no knowledge of Mr. Bradley's condition....
Mr. Hollett I think you know my attitude regarding the whole confederation idea. I maintain we are not a competent body to deal with it. I always felt we had no authority to do it and I still hold that. I suppose if I followed my conscience I would try to keep the thing from coming in here at all; but we did vote to send the delegation to Ottawa, and as a result His Excellency has chosen to send us some documents which he got from Mr. King. I therefore think we are duty bound to do something.... The point Mr. Higgins raised is well taken. There were seven men on that delegation and either one, of course, would be eligible to take the chair. I have no objection to Mr. Smallwood's taking the chair and piloting it through. Would you tell me this, sir, are you not in a similar position as the Speaker of the House of Assembly in the position which you hold now?
Mr. Chairman No. If I were Speaker of the House, I would not be occupying the committee chair at all. There would be a chairman of committees to whom the thing in the ordinary course would go. I am in the paradoxical position of having to leave the equivalent of the Speaker's chair, take the chair of committee, come back and report to myself; it is most unusual.
Mr. Hollett ....I would suggest in carrying out Mr. Bradley's request, it would be quite in order for you to appoint whom you please, and I would say the logical person would be the person whom Mr. Bradley suggests. To keep the record straight, I think it is definitely up to you to make the appointment.
Mr. Chairman I am not so sure about my position here.... There is nothing in our Standing Orders which permits me to appoint a chairman. I therefore hold our Standing Orders are silent on that point. That being so, I must take refuge in the rules of the House of Assembly of Newfoundland which brings me to Rule 122: "in forming a Committee of the Whole House, the Speaker before leaving the Chair shall appoint a Chairman to preside who shall maintain order in the Committee." That order presupposes the appointment of a chairman to preserve order in committee, which I have been doing heretofore. Therefore Rule 122 does not apply to the case in point, namely the appointment of somebody to pilot the business before the House which is different from appointing a chairman for the purpose of maintaining order.
Mr. Hollett How do you construe that section?
Mr. Chairman "The Speaker, before leaving the Chair, shall appoint a Chairman to preside who shall maintain order in the Committee", that is to say, appoint a chairman of the committee for the purpose of maintaining order. In the House of Assembly a bill is piloted through, usually, by the person who introduces it. Now, this Grey Book was introduced here by me, or at my direction, in conformity with directions I had received from His Excellency the Govemor....
Mr. Hollett You introduced the documents; these are the ones we are to discuss and I hold it is your prerogative to appoint whom you please to pilot it through. I want to be clearly understood in this — I have no objection to Mr. Smallwood's being appointed, but I would like to see it done right.
Mr. Higgins I would suggest we decide whether we will go into committee of the whole first, then you will have a motion from the floor, and I can assure you it will not be embarrassing. Before we go on, there is one other point I would like to discuss. All the members here, with some apprehension and with just cause, are wondering how long the debate will continue. Is it possible, if we go into committee of the whole, that a motion under section 48: "A motion may be made during the proceedings of a Committee that the Chairman do report to the Convention" —do you view that as closing off the debate?
Mr. Chairman At any time a closure motion may be made. A closure motion is without debate. If it is deferred for any reason, it will be the right of any member to move that the question be put and I will have to put it. At any stage, it would be open to any member to move a closure motion, whereupon I would have to put the motion without debate.
Mr. Higgins Under Section 47, "when all matters have been considered the Chairman shall report to the Convention." It is up to you to decide when all the matters have been considered that have been referred to the committee.
Mr. Chairman Let us take three positions. Suppose ... we get the motion to rise, report progress 792 NATIONAL CONVENTION November 1947 and ask leave to sit again. I report that back to the Convention. If it goes to the other extreme, the report is received or rejected, I report that back to the Convention and I put it to the Convention to accept or reject the decision of the committee of the whole. Take the midway position of no debate and debate ad infinitum; I get a closure motion, I have to put that motion.... A closure motion is non-debatable. If I receive that at any time, I have to put it.
Mr. Higgins That is your ruling?
Mr. Chairman That is my ruling as far as a closure motion is concerned.... I have to put any motions received in committee to you.
Mr. Hickman The method outlined by Mr. Smallwood for procedure was probably the best way to tackle it. But I would like to be clear on this. Mr. Smallwood said in going through it clause by clause, we would go on from one to the other. I would want to make sure there is nothing to prevent a member from reverting back to a previous clause at any time.
Mr. Chairman The context of any clause may only be resolved perhaps in reference back to other clauses. I can give you a definite assurance on that.
Mr. MacDonald Coming back to this question of appointing someone to pilot this through committee of the whole. We have a precedent to follow. Major Cashin steered the Forestry Committee's report through committee of the whole. I know the Chairman of the Convention did not appoint him.
Mr. Chairman Furthermore, even if it was the practice to have the chairman of a committee pilot it though the committee stage, I would rule that it is not applicable here. For this reason, Mr. Bradley was a member of that delegation by virtue of the fact that he was Chairman of the Convention.
Mr. Higgins He was a member ex officio.
Mr. Chairman Therefore, the moment he resigned his office, he lost his right to appoint anyone. The more I go on, the more I become convinced of the soundness of what Mr. Hollett says; that it is going to devolve upon me to appoint somebody to steer it through, if and when you decide to go into committee of the whole. Therefore, if the motion to go into committee of the whole is accepted, then I think I will appoint a person to do it. In view of the fact that Mr. Bradley is absent, then I propose to appoint Mr. Smallwood to pilot it through.
Mr. Hollett One other question I would like to ask, there is going to be certain information which we will require, to whom shall one direct these questions? To you or to whom?
Mr. Chairman I think the questions should be directed, in the first instance, to the person piloting it though. If you are not satisfied with the information supplied, because it lacks official standing, then you should address your questions to me....
Mr. Harrington Before you put the question, I just want to say I associate myself with the remarks made by Mr. Hollett earlier in the proceedings. When the House divided on this question, on both occasions my name appeared in the negative. I did not think we were competent to deal with this matter as a Convention.
Mr. Chairman You are stopped now from commenting on the competency or otherwise of the Convention, by virtue of the fact that you should have determined it before you sent the delegation to Ottawa....
Mr. Harrington I did not send them at any time. I had nothing to do with it, first or last. Surely I can say that. Now that we have the documents before us, I suppose we have to make the best of it.
Mr. Chairman If there was a division taken twice, and you voted against it, your position is already a matter of record, twice. In this particular instance, Mr. Smallwood, I will appoint you to take over, by virtue of the fact that you were a member of that committee and in view of the fact that Mr. Bradley is absent and has requested you to pilot it through....
Mr. Hollett Is that in view of Mr. Bradley's absence, or is it for the duration? I take it, when Mr. Bradley comes back, he will take over.
Mr. Chairman Mr. Smallwood's appointment will be deemed to stand unless, upon his appearance in the House, Mr. Bradley is prepared to assume the responsibility. Obviously I cannot force on him the assumption of duties he may not want to assume or may not be able to assume.
Mr. Higgins It will depend on good behaviour?
Mr. Chairman Quite so.

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

Mr. Smallwood As I said, I propose reading first a few passages from the speech delivered by the Prime Minister of Canada at the opening of the sessions at Ottawa. That was on the morning of June 25. The speech was broadcast throughout Canada on all the networks, and the reply of Mr. Bradley was broadcast that night.
[Mr. Smallwood then read extracts from the speeches][1]
Now sir, I ask you to take the Grey Book. I will read you the letter from the Prime Minister to His Excellency the Governor....[2]
Now, sir, I would ask you to turn to the next page of the Grey Book[3], this communication from the Prime Minister of Canada, the title of it is "Proposed Arrangements for The Entry of Newfoundland Into Confederation". Clause 1:
1. Newfoundland will have, as from the date of union, the status of a province of Canada with all the rights, powers, privileges and responsibilities of a province.
No, sir, I do not know the meaning of that clause, it so happens. It is so utterly clear to me, I do not need to explain it.
Mr. Higgins Mr. Smallwood said he would read it and sit down.
Mr. Smallwood I said I would read it, make a brief explanation and then sit down.
Mr. Higgins Mr. Smallwood said he would read it and sit down.
Mr. Smallwood I guarantee you that what I said was, "I will read it, make a brief explanation and sit down." I have not made the brief explanation. The explanation is this: from the time we would become part of the Canadian union, we would have the status of a province with all the rights, powers and privileges and responsibilities of a province. That means this: as I see it, Canada is a union of countries called provinces — there are nine of them. If we became a province, there would be ten provinces. Canada is a union of provinces or of countries. Each of these provinces has its own legislature which it elects itself. That House of Assembly or legislature governs the province in all matters that are laid down for it to govern it. The other matters are handled, of course, by the government of the whole union, that is the federal government. Turn to Vol. 1 of the Black Books, page 81.[4] You will find there a description of provincial governments. Section 29:
29. Provincial governments in Canada have various origins. Nova Scotia, New Brunswick and Prince Edward island came into Confederation with their pro-existing constitutions practically unaltered by the union. This was also the case with British Columbia, although representative institutions were not fully developed there at the time of union and were later regulated by provincial statute. The Governments of Ontario and Quebec were provided for in the British North America Act of 1867. The constitutions of Manitoba, Saskatchewan and Alberta, which were created out of federal territories, were laid down in the Manitoba Act of 1870 and in the Alberta and Saskatchewan Act of 1905.
Mr. Higgins I understood this Black Book was not going to be read.
Mr. Chairman Except by way of reference or explanation.
Mr. Higgins We have the Black Book in front of us.
Mr. Smallwood The people have not got it in front of them.
Mr. Higgins We have "to consider and discuss amongst ourselves". The matter I object to — I agree with Mr. Smallwood's brief explanation — but a brief explanation does not include reading the Black Book.
Mr. Smallwood I do not propose reading the Black Book.
Mr. Chairman I would like to clear this up. I gathered that it was not your intention to refer to the Black Books except as may be necessary to 794 NATIONAL CONVENTION November 1947 explain some clause which may be read. I understood you were to give a brief explanation and sit down; that questions would be addressed to you; in the course of your replies, if and when it became necessary, you would refer to the Black Books as independent corroboration of the explanation you would give. If my interpretation of your remarks is correct, I think you are premature in referring to the Black Books at this time.
Mr. Smallwood We are at clause 1 . In this document there are 23 clauses. We are at the shortest one of them all. It might be very useful if we determine in advance that very point. A clause is given. An explanation of that clause is contained in the Black Books — that is, the report brought back by the delegation. There is no suggestion that we take up those two thundering great volumes, begin at the first page and read through to the end.... The background of the Grey Book is in the Black Book. The Black Book explains the Grey Book. What is the use of telling the people of Newfoundland that "Newfoundland will have, as from the date of union, the status of a province" if you do not explain what is the status of a province?
Mr. Chairman Are you not anticipating the position? If, as Mr. Higgins contends, the clause is unambiguous and unequivocal, and is generally understood, then we must credit the people with at least as much intelligence as we have.
Mr. Smallwood As much intelligence, but with as much information?
Mr. Chairman If the clause or any phrase of the clause is ambiguous, then that will be a matter for question; and in reply to any questions, then of course you should be at liberty to then refer to the Black Books. I think you should, in conformity with the position as I understand it, and as I must assume the House understands it, content yourself with reading the clause, then give your explanation or interpretation of the clause. If any questions arise out of that, or if your interpretation if questioned, then and only then may you refer to the Black Books.
Mr. Smallwood Does that mean that unless some member of the Convention happens to ask a question, the answer to which can only be found in the Black Books, I may not refer to the Black Books? In that case we might as well take these and throw them out the window. Are the people not to get the information in this report? This is a report of the Ottawa delegation.
Mr. Chairman That is for members to decide. If they want to get the information before the people; if they have any doubt about the ability of the people outside to understand any of these documents or the nature or construction of any of these clauses, then it is not only their right but it is also their duty to make sure that they are understood.
Mr. Smallwood Am I a member of this Convention?
Mr. Chairman Yes.
Mr. Smallwood Then I have that right?
Mr. Chairman To address a question to yourself?
Mr. Smallwood Not to address a question to myself, but to convey the information to the people on the matter we are now debating. I am an elected member.
Mr. Chairman You have the right to read the clause, then you have the right to give an interpretation of the clause. If that brief explanation is not challenged, that is enough. You will be reading the clause; there may be cases where you can summarise your report and give your interpretation of it.
Mr. Smallwood There may be occasions when I can summarise and other occasions when I will have to read the actual words. May I say this? I am eager to do only one thing, to have the people of Newfoundland understand it; they are entitled to that much.... They are the ones who have to vote next spring. They have to understand it. Any explanation that is going to enable them to understand it, surely they are entitled to that explanation.
Mr. Chairman Then if this House, by a rule of procedure, comes between the people and the understanding to which you say they are entitled, the responsibility is the Convention's, not mine.
Mr. Higgins The first clause of this document is very clear.
Mr. Chairman To you, perhaps, Mr. Higgins; but it may not be to others.
Mr. Higgins We have to give the people some credit for having intelligence.
Mr. Chairman On the other hand, we cannot assume they are all King's Counsel, like the distinguished member for St. John's East. [Applause from gallery]
Mr. Higgins Thank you for that remark. I might November 1947 NATIONAL CONVENTION 795 say that there is an undue amount of applause, and the applause is not altogether fitting.
Mr. Chairman We are labouring under a very heavy strain here and it is anything but humourous or funny. I would request you, please, to refrain from any exhibition of satisfaction or dissatisfaction with remarks expressed by any member or by the Chair.
Mr. Hollett I am perturbed by the actions in that gallery, so much so that I am suspicious about its make-up. I want to ask, if these exhibitions are to take place, has any member the right to ask that the gallery be cleared?
Mr. Chairman As long as I am in this Chair, I am going to maintain order, not only as far as members are concerned, but also as far as the public is concerned. I am going to maintain order, if I have to send for the riot squad; and I will send for them in a hurry. I want no more demonstrations from the gallery.
I do not want it to be unfairly alleged against me that I am coming between the Convention and the people in the receipt of information concerning the work of this Convention. But I will have to remind you, Mr. Smallwood, the manner in which information is disseminated must depend, in the first instance, according to the explanation given by you yourself.... Let me also suggest that whether the explanation as given by you is universally accepted by the house, or whether it is taken from the Black Books and accepted by the house, the fact is that whichever modus
operandi is employed, the country has the advantage of having you read the clause and give an explanation. I do not feel that reverting to the Black Books is necessary to explain the context or meaning of any clause, unless your interpretation of that clause is challenged, in which event you could revert to these books.
[Short recess]
Mr. Smallwood We are still at clause no. 1. I do not know if any member has any questions or any observations. I will wait a moment and, if not, we will pass on to clause 2.
Mr. Penney We have not all got our books with us. We did not expect this discussion of confederation tonight.
Mr. Chairman It is on the order paper...
Mr. Hollett One question I would like to ask in reference to speeches which were made by the chairman of the delegation, and also the speech of Mr. King. After stating that the matter is one for the Newfoundland people to decide, Mr. King goes on to say, "On the part of Canada, no final decision would, of course, be taken without the approval of Parliament". I would like to ask Mr. Smallwood, what body makes the final decision with regard to Newfoundland? In Canada no final decision would, of course, be made without the approval of Parliament, but assuming that the people of Newfoundland vote for confederation at the referendum, who makes the agreement with the Government of Canada?
Mr. Smallwood Let me repeat the question, if I may. "In the case of Canada, the decision to receive Newfoundland as a province is made by the elected Parliament of Canada. In the case of Newfoundland, who makes the decision that Newfoundland become a province?" The answer is, the decision to have Newfoundland become a province or not is a decision to be made, if it is made at all, by the people of Newfoundland in the referendum. I am sure Mr. Hollett will agree that in Newfoundland we have various institutions — magistrates' courts, Commission of Government, National Convention, etc. Over and above all these institutions are the people. They are supreme and they are sovereign. You cannot go higher than the people. In deciding what form of government we shall have, they are the last word of all. If anyone decides, the people of Newfoundland will decide that Newfoundland shall become a province, or Newfoundland shall not become a province.
Mr. Hollett Mr. Smallwood has missed the point. I am aware that the people of any country are the people to decide the approved policy. Assuming the people of Newfoundland decided by referendum that they would like to go into union with Canada under proper terms, I am asking what body in Newfoundland ... would approve any terms of agreement which may be drawn up between the two countries?
Mr. Smallwood That is a very good question. Let us look at it. If we were a self-governing country, we have a House of Assembly, made up of government and opposition...
Mr. Hollett We have not got that. We all know that.
Mr. Smallwood It is worth explaining. If we had our own legislature, as we had up to 1934, the position would be this: that to the King or to the 796 NATIONAL CONVENTION November 1947 Parliament of Great Britain, two joint addresses would go. One from the Parliament of Canada, and a joint address from the legislature of Newfoundland. These two addresses go to the Parliament of Great Britain, praying that Newfoundland be made a province of Canada.
Mr. Hollett That is common knowledge.
Mr. Smallwood It is not common knowledge. Most people have not read the BNA[1] Act. The British Parliament would pass an act making Newfoundland a province. That would be an amending act of theBNA. There is no parliament in Newfoundland. Your question is, how would Newfoundland be made a province if once the people of Newfoundland decide in the referendum that this should be a province. How would it be brought about? I suggest to you there are a number of possible ways.
Mr. Hollett There cannot be "a number".
Mr. Crummey Mr. Smallwood will remember that that question was asked at one of the plenary sessions, and the Chairman, Mr. St. Laurent, said the Commission of Government would take the necessary steps to effect union.
Mr. Smallwood I do not like to contradict Mr. Crummey, but I am afraid I must. I do not like repeating the statements made at the plenary sessions...
Mr. Crummey We went up there to get information, and the question is asked now and the question has to be answered.
Mr. Chairman It seems to me your point is properly taken, Mr. Crummey....
Mr. Smallwood In reply to Mr. Crummey...
Mr. Hollett I would like to have my question answered first.
Mr. Smallwood It arises out of your question.
Mr. Chairman Mr. Crummey has made a statement of fact.
Mr. Smallwood Commenting on that statement of fact, it is still bearing on Mr. Hollett's question. Mr. St. Laurent was asked by what procedure could Newfoundland become a province. His reply was that there were various ways, in his opinion, in which it could be done. Commission of Government might do it.
Mr. Crummey It was a straight question and a straight answer in the plenary session.
Mr. Chairman Is that a matter of record?
Mr. Crummey We were not supposed to take records.
Mr. Smallwood It is a record of memory and I am not exactly defective in memory. I am supposed to have a good memory.
Mr. Chairman Mr. Hollett has addressed a question to you and in the course of your reply, Mr. Crummey raised a point of order and he took exception to your stating that those plenary sessions should be regarded as private or secret or something of that sort. I ruled in Mr. Crummey's favour; that disposes of that. We are reduced to the position where I would like you to address your reply to Mr. Hollett, forgetting the point of order which Mr. Crummey raised.
Mr. Crummey I considered Mr. Smallwood was going in a long circuitous route to answer Mr. Hollett, and so I answered it.
Mr. Chairman I sustained you on your point. With that in mind, Mr. Smallwood, would you answer the question?
Mr. Smallwood Surely I am not to be put in the position of being told how I am to answer a question? Am I to be told I must state it in two or three or 19 words? I must answer it in my own way. I cannot get outside my own skin and become someone else. Getting back to Mr. Hollett's question. We have no legislature in Newfoundland, so the legislature of Newfoundland cannot make a joint address to Britain. We have not got a legislature, not an elected one. The Commission is the legislature of Newfoundland at the present time; they are both government and legislature, filling both functions. That is one way; to have the purely formal petition go to the British Parliament; it would only be a formality once the people have pronounced upon it in the national referendum; all the rest is a mere formality, a mere technicality. The real thing is what the people want. If the people want confederation, one way is to follow the BNA Act and say, "All right, there is a legislature in Newfoundland now". It was not elected, it is true. But it is the legislature. No one is going to deny that...
Mr. Hollett Is this the answer, that the Commission of Government would do it? Remember that the Commission is composed of four Englishmen and three Newfoundlanders.
Mr. Smallwood It is not the ideal way, but it is the legislature, though not an elected one. Another way is this — take the parliament we November 1947 NATIONAL CONVENTION 797 already have, not the one in Newfoundland, but the one that governs us, that administrative branch of the Parliament of Great Britain. Suppose the Parliament of Great Britain... holds the referendum in Newfoundland and the people declare their choice, the British Parliament is the one who receives the people's answer. If the answer is, "We want confederation", the British Parliament might well amend the BNA Act to make us a province, provided always the Parliament of Canada also requested it. In this way, the British Parliament has two requests — from the people of Newfoundland to make it a province; and from the Parliament of Canada to make Newfoundland a province....
Mr. Chairman I might point out that the BNA Act has already made provision, under section 49, for the entry of Newfoundland into confederation.
Mr. Smallwood In a specific way — the joint addresses of the legislatures; but we have not got a legislature. We have the position that if in the referendum the people of Newfoundland say, "We want confederation" the rest is a mere technicality. I am not going to get excited over a mere technicality. What I am excited over is how the people will vote. The rest is mere formality. It is perfectly constitutional.
Mr. Hollett Some people do not care whether it is constitutional or not. But I also read the letter. Mr. King emphatically stated, apart from one or two matters like education, that this is the last word as far as terms are concerned.
Mr. Smallwood Financial terms.
Mr. Hollett These are financial terms — that is what concerns the country most. I also point out there is a big discrepancy between the needs of this country as a province and the actual receipts from revenues. You made it out slightly over $1 million; I figured it out myself at $2 million. Mr. King says, "This is the last word; we are afraid we will not be able to do anything further". The reason I asked the question as to who will negotiate these financial terms is, I want to know whether it will be the Newfoundland government or the British government?
Mr. Smallwood Mr. Hollett has hopped from the letter to some clause.
Mr. Hollett I do not hop, I jump. I am talking about the letter. I want it understood that if in the referendum a majority voted for confederation, then you say it is a mere technicality — "We do not care about technicalities" — a mere $2-3 million short on running the province, that is nothing, the British Parliament has got that. I want to bring that home.
Mr. Smallwood We will deal with that when we come to it.
Mr. Hollett It is in the letter; you read the letter.
Mr. Smallwood Reverting to the letter, the Prime Minister says: "I feel I must emphasise that as far as the financial aspects of the proposed arrangements for union are concerned, the Government of Canada believes that the arrangements go as far as the Government can go under the circumstances."
Mr. Hollett This is something more important than mere money; it touches on matters of conscience.
Mr. Smallwood I read from page 2[1] of the Grey Book.
Mr. Hollett I read from the Black Book.
Mr. Smallwood
With respect to those matters which are primarily of provincial concern, such as education, the Government of Canada would not wish to set down any rigid conditions, and it would be prepared to give reasonable consideration to suggestions for modification or addition.
When the government says these are financial terms, they mean on the financial side, the money side. On the conscience side, such as touches the dearest beliefs of our people, you have no hard and fast conditions. We can go back to the Government of Canada and say to them, "We are not quite happy over such and such a clause".
Mr. Hollett Who can go back?
Mr. Smallwood This Convention.
Mr. Hollett Again?
Mr. Smallwood Cable back; write back; telegraph; or send a pigeon.
Mr. Hollett Would we not then be bargaining with Canada? Have we the right to bargain? I understand the delegation had no such authority.
Mr. Smallwood If an enquiry were sent tomorrow to the Prime Minister asking whether the Government of Canada, in the event of union, 798 NATIONAL CONVENTION November 1947 would be prepared to change say, a certain clause not dealing with finance, such as education, do you think the government would not send back a reply at once saying whether that was final or whether they were prepared to change it? Would that be bargaining? Would that be negotiating?
Mr. Hollett Another thing I would like to ask. These speeches are very enlightening. We have occasion to refer to them many times. On page 15,[1] Mr. Bradley says, "We believe we possess at least the basic possibilities of enduring prosperity." I want to refer to that.
Mr. Smallwood Why not read the whole paragraph?
Mr. Hollett I might be asked to read the whole book.
Mr. Smallwood That is distortion. You are not reading the whole sentence. You are beginning in the middle of something.
Mr. Hollett Mr. Chairman, would you tell me where I have to start to read a sentence? "We believe we possess at least the basic possibilities of enduring prosperity; if once we come by the type of government that will be a help rather than a hindrance to sound development." I want to ask Mr. Smallwood does he honestly believe we possess at least the basic possibilities of enduring prosperity?
Mr. Smallwood Indeed I do.
Mr. Hollett I want to ask him what is meant by that?
Mr. Smallwood ....If it means anything, it means this, a government that will give us free trade, take off customs duties on things going into basic industry, bring down cost of production and bring down cost of living. That is what that means. The kind of government that will give us free trade and thereby help, not hinder sound development.
Mr. Hollett I take it the Commission of Government which we have now, who in accordance with the report of Mr. Howell about reduction of duties are endeavouring to reduce taxes, they are not the proper form of government?
Mr. Chairman That is a statement made by Mr. Bradley, not by Mr. Smallwood. I do not know, in fairness to Mr. Bradley, whether his alleged antipathy towards Commission of Government should be stated here. It is capable of almost any construction.
Mr. Hollett Did I say anything about alleged antipathy?
Mr. Chairman ....The tenor of your question was whether Mr. Bradley regarded Commission of Government a hindrance rather than a help.
Mr. Hollett I asked Mr. Smallwood if he thought so.
Mr. Smallwood I certainly regard Commission of Government as a hindrance in development. They are not giving us free trade, they are still keeping on duties. If you are referring to the international multilateral trade agreements made between 23 countries, they have fallen in line with 22 other countries. You cannot credit the Commission government with that.
Mr. Hollett Could you tell us a form of government which will give us free trade?
Mr. Smallwood Free trade with one other unit of the world? You can have free trade with all the nations of the earth — you can have it with the United States, if you became part of it; you can have it with Canada, if you become part of it; you can have it with Great Britain, if you become part of it. Read the whole paragraph. We are distorting this paragraph. We are lifting a bit out of it and debating that bit. The paragraph reads:
In the 42,000 square miles of Newfoundland herself, and the 110,000 square miles of our Labrador, we believe we possess very great possibilities of development and expansion along industrial lines. We have lacked the capital and the adequate population — and here I am thinking of numbers — to develop our natural resources to anything more than a token of what we believe they might be. We believe we possess at least the basic possibilities of enduring prosperity, if once we come by the type of government that will be a help rather than a hindrance to sound development. We are wondering frankly whether confederation is that type of government. We are here, with your sympathetic and understanding co-operation, to see if it is. Our fellow countrymen in Newfoundland are following our movements with very deep interest.[2]
Mr. Hollett "We have lacked the capital and the adequate population". I would ask Mr. November 1947 NATIONAL CONVENTION 799 Smallwood by what means we could go about increasing the population of this country?
Mr. Smallwood I could give you an answer, but it might lead to bloodshed. Maybe the answer is in section 3 of the Grey Book, family allowances. I will drop the matter right now.
Mr. Hollett That is what you want?
Mr. Smallwood I was only joking.
Mr. Hollett This is no place for joking.
Mr. Smallwood Sometimes it is better to joke than get angry.
Mr. Hollett Perhaps that is good advice for some of us to take.
Mr. Miller When we were discussing what body would eventually approve the terms of agreement, if Newfoundland were to enter into confederation, Mr. Crummey gave an opinion. He was present at the meeting.
Mr. Chairman He quoted Mr. St. Laurent. He did not give an opinion.
Mr. Miller The thing is not cleared up. There is a disagreement between Mr. Crummey and Mr. Smallwood. We are in a disarming position, we cannot get an agreement between two members of the delegation. It is a matter of indifference to me who is right.
Mr. Chairman Are you asking me to make a decision on a matter in connection with which no records were kept?
Mr. Miller I was wondering if Mr. Smallwood would concede to Mr. Crummey, and say that Mr. Crummey was right.
Mr. Smallwood No.
Mr. Crummey Do you say I was wrong?
Mr. Smallwood Yes, indeed.
Mr. Crummey I was the one who asked the question, and I asked how to go about it and Mr. St. Laurent said that Commission of Government was the government today, and we will have to proceed through them; they would have to go to the Commission of Government and dicker with them.
Mr. Miller Anything that may follow may be ill-founded.
Mr. Chairman There is a disagreement. You must not draw conclusions, Mr. Miller, as to what may happen tomorrow or the next day.
Mr. Hollett As I see it, Mr. Crummey must be right, because Mr. St. Laurent sent these terms to the Commission of Government. Mr. St. Laurent or Mr. King sent them to the Commission of Government.
Mr. Smallwood No, he did not.
Mr. Hollett It looks that way.
Mr. Chairman They were addressed to His Excellency the Governor. I remind you that under the Letters Patent, His Excellency occupies two offices — one as the King's representative, and the other as Chairman of the Commission of Government. They were addressed to the Governor of Newfoundland.
Mr. Smallwood Clause 2:[1] "The Province of Newfoundland will include the territory of Labrador defined by the award of the Judicial Committee of the Privy Council in 1927 as Newfoundland territory." This Convention knows and this country knows that Labrador was awarded, defined, laid down and declared in 1927 by the Judicial Committee of the Privy Council to be Newfoundland territory. This clause says that that territory defined, described by the Privy Council as Newfoundland territory shall be included "The Province of Newfoundland shall include..."
Mr. Hollett No, it does not say that. It says "will" not "shall". Two different words. "Shall" is mandatory; "will" is not.
Mr. Chairman I have to uphold you in this connection. The proper expression to be used is "will", as the expression "shall" implies that the Canadian administration would order Newfoundland-Labrador to be a part of the Newfoundland province. In point of fact, it is...
Mr. Hollett I ask why that statement is there at all?
Mr. Smallwood To resolve any doubt. To make the position beyond all doubt.
Mr. Hollett What has Canada got to do with it?
Mr. Smallwood It has everything to do with it, if we are a province. Remember this, these words, if we became a province, would be enacted as a law; and the word "will" would become "shall".
Mr. Hollett This is not a law.
Mr. Smallwood It is not a law until it becomes a law. That can be done by the Parliament of Great Britain.
Mr. Chairman It is merely a proposal. This is not a legislation.
Mr. Hollett Mr. Smallwood kept repeating the word "shall".
Mr. Smallwood Newfoundland owns Labrador. What Labrador does Newfoundland own? The Labrador defined by the Judicial Committee of the Privy Council in 1927. There is another part of Labrador on the other side of that boundary, which does not belong to Newfoundland. This clause 2 says if Newfoundland becomes a province, the Newfoundland part will still be Newfoundland-Labrador.... The boundary laid down in 1927 can be changed only with our consent.... That boundary can never be changed, except with the consent of the legislature of Newfoundland. If the legislature should be foolish enough to do what they tried to do a few years ago, try to sell for a paltry $10 million, if the legislature wanted to sell it; if they wanted to change the boundary; they could allow the Parliament to do it. It is up to the legislature. No one else can do it.
Mr. Hollett That is a very good point which Mr. Smallwood raises. He says the boundary is all right; it is Newfoundland-Labrador, but it can be changed with the consent of the Newfoundland legislature — the provincial legislature.
Mr. Smallwood It can be changed now, without confederation. The government can sell it.
Mr. Hollett That is what your provincial government is going to do when we strike hard times. Canada will come across and say, "Look here, you are in a bad state. Let us see now, can we make a deal over Labrador? We will take that strip off. We will give you a loan to carry you on." That is their intention.
Mr. Smallwood Did they tell you that?
Mr. Hollett They told you a lot of stuff. You do not have to be told that.
Mr. Penney In connection with what Mr. Smallwood says about Labrador, the Prime Minister of Quebec, Mr. Duplessis, thinks very different from that. The Province of Quebec controls the government of Ottawa.
Mr. Chairman That is not quite so. The Province of Ontario and the Province of Quebec supply the majority members to the Parliament of Canada.
Mr. Smallwood Let us deal with that. Everyone knows that Quebec would like to have Labrador. We all know that.
Mr. Penney She is going to have it, she says.
Mr. Smallwood Mr. Duplessis says more than his prayers. We know the Government of Quebec and we know that Mr. Duplessis wants Labrador. He is the Premier of Quebec. He is one of the nine provincial premiers. That one premier would like to have Labrador.
Mr. Penney Will you tell me who has the most control in the government of Ottawa?
Mr. Smallwood Certainly. I am not trying to dodge it. We all know the Government of Quebec would like to have Labrador. So what? They were never satisfied to lose it, but did by the law case that was fought out in 1927 between Newfoundland and whom? Between Newfoundland and Quebec? No! Between the Government of Newfoundland and the Government of Canada. Not the Government of Quebec. Where should the boundary lie between Newfoundland and Canada down in Labrador? That was the question submitted to the Privy Council.... Quebec was trying hard. They had a lawyer sitting in the court with what they call a watching brief. Now, will any member of the delegation who was present in Ottawa substantiate what I am saying when I say this: that Mr. St. Laurent told us as categorically, as plainly, as certainly and as finally as words could make it, that the Government of Canada accepted the award of the Privy Council, and what in the name of goodness else could they do? Is the Government of Canada not going to accept the award, the decision, the judgement, the verdict of the Privy Council? Of course they accept it, and they can do no other. Now I come to your question. We know Quebec wants Labrador. They were disgusted because they lost it.... But, you say, Quebec controls the Government of Canada. Let us deal with that. First of all, I bring you back to section 3 of the BNA Act. Mr. Penney knows the difference between government and Parliament: "The Parliament may, with the consent of any province, increase, diminish..." With the consent! The Parliament, not the government. The Parliament includes the Liberal party (who happen to have a majority in the government); the Conservative party, the Social Credit party and the CCF. Four political parties make up the Parliament. The Parliament, not the government could change the boundary, and Parliament could do it only with the consent of the Province of Newfoundland. That means that Mr. Duplessis, if he should live long enough and still be premier, when he is an old man, he may still be roaring and bawling that he wants November 1947 NATIONAL CONVENTION 801 Labrador; and if he likes he can shout it when he dies, and if they open him up they will find Labrador engraved on his heart. He has nothing to do with it. It is the Parliament of Canada. The Parliament of Canada is not the Government of Canada.
Mr. Penney I am not convinced over that. The Government of Canada is controlled by the Liberal party and the Liberal party is governed by the control of the Province of Quebec. It could be upset in the next general election. It holds the key. That is why I say there is something in what Mr. Duplessis says about Labrador and the boundary in particular.
Mr. Smallwood The Province of Quebec elects 65 members to the House of Commons. Ontario elects 96. A good many more than the Province of Quebec. Let me tell you something: there was a time when Quebec was not as big as it is now. At that same time, Ontario was not as big as it is now. What happened?.... Quebec was pushed north to the sea as far as she could go; Ontario was pushed north to the ocean as far as it could go. The last thing that can happen is that Quebec can be made bigger, because Ontario controls the government more than does Quebec. Quebec has 65 members whom she elects; Ontario has, I think, 80-odd. Look in the Black Book and you will find the number. If you say Quebec controls the Parliament, why not say Ontario controls it still more? Do you think Ontario is going to sit by and allow Quebec to be made bigger? No. It cannot be done.
Mr. Penney It has been proven those last years that Quebec is Liberal and it is their province that elected Mr. King and the government and kept them in power, and Ontario, although just as big, could not do anything to help her.
Mr. Higgins I agree with Mr. Penney.
Mr. Smallwood That tells us a lot. That is a great contribution to the debate. It is very enlightening. Mr. Higgins tells us a lot. Now we know all about it.
Mr. Higgins I understood reflections on any person by any member was not to be tolerated.
Mr. Chairman I am afraid I must sustain Mr. Higgins on this. Your words are offensive and I ask you to withdraw them.
Mr. Smallwood I withdraw them.
Mr. Hollett Would you tell us what is the population of Quebec? What is the proportion of people in Quebec in relation to the whole of Canada? Please remember all these people in Quebec want that Labrador.
Mr. Smallwood All what people?
Mr. Hollett All the people in Quebec.
Mr. Smallwood Can you answer for four million people? Have you canvassed them?
Mr. Hollett I have canvassed them as much as you have canvassed the l00,000 voters in this country. Probably you have canvassed them; you were up there three months.
Mr. Smallwood The population of Ontario is one million more than the Province of Quebec.
Mr. Hollett I do not want to know the population of Ontario.
Mr. Smallwood You would like to talk about Quebec. The population of Canada is 12.5 million. The population of Quebec is of the order of four million. The population of Ontario...
Mr. Hollett I am not interested in Ontario. When I ask a question, can I have the answer, not a roving commission?
Mr. Chairman Mr. Hollett asked you, Mr. Smallwood, the population of Quebec.... You have not specifically answered his question.
Mr. Smallwood I said it was of the order of four millions.
Mr. Hollett Four million against the total population of 12.5 million.
Mr. Smallwood If by that token, the four millions of Quebec can control Canada, by the same token, more than four millions of Ontario can more than control Canada. That follows, does it not?
Mr. Hollett No. If Quebec went the other way, the present government would be out and we would have to get new terms.
Mr. Smallwood If Mr. Hollett is worried about the chances of the Liberal government of Canada falling, I would remind him that a matter of a month ago the thing that held up the delivery of this Grey Book was a by-election in a Conservative constituency where the Liberal party won with the most thumping majority in recent history of Canada.
Mr. Hollett The Liberal government spent $1 million there in that election.
Mr. Smallwood I wonder if the Conservative party told you what they had spent? I wonder how you know the Liberal party spent $1 million in that by-election? Did they tell you?
Mr. Hollett I did not ask them. I was not in touch with them.
Mr. Smallwood I am well aware that there will be an effort made, in fact Mr. Penney practically made it, to indicate that because the Province of Quebec — one of the nine provinces — has 65 members in the House of Commons out of 245, Quebec controls Canada; therefore if Quebec wants Labrador she will get it.
Mr. Penney I said nothing like that. I said the province controls the Liberal party at Ottawa.
Mr. Chairman What I understood him to say was that the Liberal party supplied the balance of power. Quebec held the balance of power.
Mr. Penney That is what I said and I do not want Mr. Smallwood to put it in a different light.
Mr. Smallwood On that point, the suggestion is being made, that the members elected from Quebec ... would somehow or other persuade or force the Parliament of Canada, which has 245 members in it, to force Newfoundland to give Labrador to Quebec.
Mr. Chairman That fear has been expressed.
Mr. Smallwood The answer to that is this: I admit there may be a revolution. Quebec may raise an army and march into Labrador and be an army of occupation and say to the Newfoundland province, "Get us out if you can". They might do that.
Mr. Penney They might do it in a peaceful way.
Mr. Smallwood They might do it in an illegal way. They might — I do not suggest that will happen. How can they do it in a peaceful way? They have to bring into Parliament an act to change the boundaries of the Province of Newfoundland....
[The committee rose and reported progress. The other items on the order paper were deferred, 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:

  • Cash surplus as per Budget 1947 $28,789,000
    Surplus from April l, 1947, to October 31, 1947 2,771,868
    Housing Corporation debentures (approx.) 4,000,000
    Nfld. Savings Bank 800,000
    Owed miscellaneous departments 1,000,000
    Total liquid assets as at October 31, 1947 $37,360,868
  • [1] Volume II:56. [Volume II is not in The Confederation Debates Collection]
  • [1] Now Churchill Falls.
  • [1] Paul Bridle (ed), Documents on Relations Between Canada and Newfoundland, Volume 2 (Ottawa, 1984), p. 523.
  • [2] Volume II:510. [Volume II is not in The Confederation Debates Collection]
  • [3] Volume II:511. [Volume II is not in The Confederation Debates Collection]
  • [4] The Black Books are not reproduced here.
  • [1] The British North America Act.
  • [1] Volume II:510. [Volume II is not in The Confederation Debates Collection]
  • [1] Bridle (ed.), Documents on Relations Between Canada and Newfoundland, Volume 2, Volume 2, Part 1, p. 528.
  • [2] Ibid.
  • [1] Volume II:511. [Volume II is not in The Confederation Debates Collection]

Personnes participantes: