Mr. Smallwood Mr. Chairman, I understood
Major Cashin to say that 1,200 civil servants
would be laid off under confederation. Now what
are the facts? Our government at the present time
employs directly 4,615 civil servants. Under confederation 1,947 of them will be taken
over by
the federal government, and lucky persons they
will be. These 1,947 civil servants ... are as follows:
| 256 |
from Customs |
| 1031 |
" Posts & Telegraphs |
| 31 |
" Assessor's Department |
| 15 |
" Defence |
| 4 |
"" Consolidated Fund |
January 1948 NATIONAL CONVENTION 1159
| 19 |
" Home Affairs |
| 26 |
" Justice |
| 61 |
" Natural Resources |
| 90 |
" Health and Welfare |
| 369 |
" Public Works |
| 1947 |
altogether... Now that would leave
2,688 civil servants still employed by the provincial government of Newfoundland: |
| 40 |
in Finance |
| 38 |
" Customs |
| 33 |
" Home Affairs |
| 90 |
" Education |
| 445 |
" Justice |
| 308 |
" Natural Resources |
| 151 |
" Public Works |
| 1542 |
" Health and Welfare |
| 65 |
" Liquor Control |
| 2668 |
altogether. |
Now, out of that total left to the provincial
government it is very probable that between 40
and 50 would no longer be needed, but they
would have the first chance in the new federal
offices that would have to open in Newfoundland.
While we are at it, it would be interesting to
see just how many persons are employed by our
Newfoundland government today, both as civil
servants and otherwise. In the civil service we
have 4,615, in the Railway system we have 3,700,
in civil aviation we have 1,300, and of teachers
we have 2,200, giving us a grand total employed
by the Newfoundland government today of
11,815 persons, nearly 12,000 persons altogether. That is now. What would the position
be under confederation? The federal government
would take over 1,947 civil servants, 3,700 railroaders and coastal boat men, and
1,304 for civil
aviation, a total of nearly 7,000, which would
leave a total of 4,864 still to be paid by the
provincial government The total number to be
employed or paid by the provincial government
will thus fall from nearly 12,000 down to just
under 5,000, the rest of them, of course, becoming employees of the federal government.
I noticed that Major Cashin came back again
to this question of what constitutes revenue for a
government. It was in connection with my estimates of what the provincial government
would
spend and collect. I included in that estimate
interest and repayment of principal on loans advanced to the Housing Corporation as
revenue for
the provincial government. He says it is not
revenue. I say that every cent and every dollar the
government receives is revenue ... and every cent
of it has to go into the Consolidated Revenue
Fund, to be shown as revenue. Within the Fund
it can be sub-divided into various groupings, but
it has to appear in the Fund as revenue I will tell
you how far the United States government goes
in this matter. If they lend money to another
country then that entire amount goes into that
year's account as expenditure, and if they receive
back any interest or any of the principal then that
goes in there as revenue. It is not a matter of
quoting what Webster says about the meaning of
"revenue", it is a matter of knowing what is the
actual practice of governments such as the United
Kingdom, Canada and the United States. I have
followed their practice and I have done right. The
Commission of Government did the same thing,
and I for one would rather follow the practice of
the Commission government in a matter like this
than all the finance ministers we had put together
in the days of responsible government.
Major Cashin says that confederation would
mean the end of the clause in the Labrador Mining Company agreement with Newfoundland
which requires the company to employ Newfoundlanders. That clause will go, he says,
and
French Canadians will take the jobs from our
Newfoundlanders. There is not one word of truth
in that statement. The agreement made with the
Labrador Mining Company will stand, and every
clause in it will stand. Confederation won't
change it at all. It is true that under confederation
French Canadians or any other Canadians may
enter Labrador, but getting work with the
Labrador Mining Company is a horse of another
colour. There is nothing at all under confederation to stop any provincial government
from
making such an agreement with a company, as
our government has made with this Labrador
Mining and Exploration Company. If the Nova
Scotia government, for example, makes an agreement tomorrow with some company giving
that
company special concessions, or any concessions, the Nova Scotia government can insert
a
clause in the agreement stating that nobody but
Nova Scotians may be employed by that company. They have a perfect right to do it.
Any
government or any province can do that if it cares
to do it. This argument is nothing but a political
1160 NATIONAL CONVENTION January 1948
dodge, a red herring, something put out to try and
turn people from confederation. I think, sir,
speaking to that point, a reply was received from
our own government here by one of our own
members who addressed a question as to what
would happen to that clause, and our own government has replied that that clause would
stand. I
am right.
Major Cashin referred to the government
Savings Bank, who would own it under confederation, what will the interest rate be
and who
will control it? Well, sir, who owns and controls
it now? Who sets the interest rate now? The
Government of Newfoundland. And they will go
right on owning and controlling it, and setting the
interest rates payable. Confederation will make
no difference whatsoever to the Newfoundland
Savings Bank, so the depositors don't need to pay
any attention whatever to Major Cashin's advice
to withdraw their money from it. Once before
Major Cashin talked about the Newfoundland
Savings Bank, and the governors of the bank had
to come out with a denial to prevent a rush on it.
Mr. Chairman Now, Mr. Smallwood, just deal
with Major Cashin's remarks.
Mr. Smallwood All right, sir, I will say merely
this, that our depositors in the Savings Bank do
not need to fear confederation. It will not affect
the Newfoundland Savings Bank whatsoever.
Now Major Cashin, in referring to Canada's
great old age pension scheme, and her pensions
to the blind, says, in the first place, that the old
age pensions are paid only to paupers, and second
that before they can get the pension they must
turn their property over to the government. Well,
he is completely wrong on both points. The old
age pension is not given only to paupers, but it is
provided that a person may have his own private
income of $240 a year, and still get the full
pension of $30 a month, or $360 a year. A married
couple can have a private income of $360 a year
between them and still get the full pension of
$720 a year between them, and even if a person
has more than $240 a year of private income he
can still get the pension. If he has $10 a year more
than the $240 allowed, it only means taking the
$10 off the amount of the pension. He is allowed
a total of $600 a year altogether, putting the
pension and his private income together.... As for
having to turn their property over to the government before getting the old age pension,
that
simply is not true. Let me see if I can make this
matter very simple, so that everyone in Newfoundland will understand. Let us suppose
some
old age pensioner dies, leaving his widow behind
(I mean under confederation), and he has a little
property. The property falls to this widow, and
she goes on getting her old age pension of $30 a
month as long as she lives. Then she dies. What
happens to the property then? It can be left to
anyone in the family or out of the family, anyone
the pensioner wishes to leave it to, if the property
is worth $2,000 or less. And remember this: the
value is not what that property would be worth in
St. John's, or Grand Falls, or Corner Brook, but
right in the settlement where it is. That means that
nine properties out of ten would fetch less than
$2,000 cash. Maybe one out of ten might fetch
over $2,000 cash. If the property is worth over
$2,000, what happens to it when the pensioner
dies? Well, if some relative or anybody else has
contributed regularly to the pensioner's support
the property can fall to him or her, and he would
have a good right to it, or she would. It may be a
grandson, son or nephew, or anyone else, who
had contributed to the support of the pensioner
for the last three years of the pensioner's life. But
suppose that nobody has helped out the older
person for those three years, and suppose it is
worth over $2,000 net in that settlement, what
happens then? The government steps in and gets
back what it had paid out in pension before the
pensioner's death. So if a man has an old father
and mother getting $30 a month each in old age
pension, and if the old people have property
which would fetch over $2,000 cash in that settlement if sold, and he wants to come
in for the
property he knows what to do. All he has to do is
to contribute regularly and reasonably towards
the support of his old father and mother, and then
if the property is worth over $2,000 it will fall to
him, and as I said, if the property is worth $2,000
or less then the pensioner can leave it to anyone
he likes, though of course under the law he must
leave it to his widow if she is a pensioner as well,
and as every member in this Convention knows
just as well as I do, it's got to be a pretty good
property in most parts of this country to be worth
over $2,000 net.
Now, Major Cashin does not think very much
of experts. These Canadian government estimates of what they would collect from us
in
January 1948 NATIONAL CONVENTION 1161
taxes, and what they would spend in Newfoundland, were made up by the financial and
commercial experts of that government. Now I
wonder if Major Cashin's contempt for experts is
as real as he makes out? What is a doctor, Mr.
Chairman, but an expert in the diseases of the
body and how to cure them? What is a lawyer but
an expert in the law? Do we despise these legal
experts, or do we go running to them when we
get in trouble? We are very glad to take their
advice, and to pay them for it too, as no doubt you
have found out, sir, in the past few years. What is
a musician but an expert in music, and a motor
mechanic and an aeroplane pilot, experts in those
fields of human endeavour; can't there be experts
in the field of public finance and trade and commerce? Major Cashin called Mr. Gordon
Howell
an expert in customs matters here in this country,
and Mr. George Allan an expert in income tax
matters. Is there anything strange in the Government of Canada having experts to assist
them?
Their Department of Finance is a great department of government, and as a matter of
fact the
Government of Canada is extremely lucky in the
calibre of their experts, and it was those men who
made these estimates of what the government
would spend and collect should we become a
province. These are the men who make up
Canada's own budgets, and if we think that's a
job that any slouch can do, then we had better
think again. They have to know exactly what they
are talking about, just as Mr. Walter Marshall in
our own Finance Department has to know what
he is talking about, and Mr. Herbert Russell has
to know what he is talking about before he can
run our Railway.
....What is the good of special training if there
is no such thing as experts? There are experts, and
it was experts who compiled these estimates.
Some of them are experts in our Newfoundland
trade, because it's been their business to study it,
and know it inside out. Hundreds of millions of
dollars of our trade has passed through their
hands in Ottawa in the past few years through
allocations and quotas and the like, and on top of
that Canada has stationed here a trade commissioner in the person of Mr. Britton to
study our
trade and see what we import, and how our trade
is conducted. It is his job to do that, just as it is
the jobs of dozens of other Canadian trade commissioners scattered around the world.
Do you
know, Mr. Chairman, that these Canadian trade
commissioners are obliged to visit the very factories and plants in Canada where they
produce
the goods that are sold in the countries where
these commissioners are stationed? They have to
secure samples of the products of Canada's competitors sold in the countries they
are stationed,
together with prices and similar trade information, and keep sending that type of
information
regularly back to the Department of Trade and
Commerce. I spent many hours in the Department
of Trade and Commerce in Ottawa, and I happen
to know that it is one of the finest organisations
of its kind in this world today. They know our
trade inside out, and they were at the elbows of
the financial experts when those experts were
making up the Canadian government's estimates
of what revenue they would collect here in Newfoundland should we become a province.
There
are about 6,000 men and women in that great
department, and amongst them all you will find
specialists and experts with very intimate
knowledge of every country in the world with
whom Canada trades; and you will find men
whose specialty is the trade of our own Newfoundland. I hope we will hear no more
of this
contemptuous talk of experts, this attempt to
sneer at them.
Major Cashin told us that the Bank of Canada
had this very month withdrawn its support price
for long-term bonds. I do not know just what we
were supposed to infer from this simple fact, but
I suppose it was intended to make us think that
there was something wrong with the value of the
bonds. What Major Cashin failed to tell us was
that the Bank of Canada's action was taken exactly ten days after the United States
Treasury
had done exactly the same thing with regard to
United States bonds. In both countries it was
official government policy, and it was part of the
mutual American-Canadian policy of anti-inflationary measures. And what Major Cashin
did not
tell us is that a few days afterwards the Bank of
Canada resumed its support-price policy. Mr.
Chairman, a lot of statements can he made that
sound bad, that sound as though there was something wrong, but which are capable of
a perfectly
reasonable explanation. Truly, a little knowledge
is a dangerous thing.
I was greatly interested when Major Cashin
tried to make our blood run cold with his talk
1162 NATIONAL CONVENTION January 1948
about the terrible taxes they have in Canada ...
federal taxes, provincial taxes and municipal
taxes, income and corporation taxes, and estate,
customs and excise taxes, amusement and liquor
taxes, until he was almost out of breath reeling
off the list. By the time he had finished he almost
had us in tears for the poor, poverty-stricken
Canadians, crushed beneath that awful burden.
We wondered how the Canadians manage to
breathe, let alone live. The one thing we simply
could not understand is how Canada managed to
exist at all during the five years of war, for if they
have this awful burden of taxation today, what
must they have had during the war, because since
the war ended three different reductions have
been made in Canada's taxes. The only trouble
with Major Cashin's list is that by changing the
names of some of them it is our own Newfoundland we would have thought he was talking
about, for here in Newfoundland we have income
taxes, bank taxes, excise taxes, mining taxes,
lumber taxes, stumpage taxes, motor taxes,
drivers' taxes, restaurant taxes, hospital taxes,
harbour taxes, radio taxes, death taxes, accident
insurance taxes, game license taxes, waterpower
taxes, insurance agents' taxes, dog taxes, mining
prospectors' taxes, boiler inspection taxes. We
have our beautiful, our artistic, our delightful
customs taxes which grab more out of us than all
those other taxes put together. Mr. Chairman, let
us not allow our common sense to become
paralysed just by the mere mention of the word
taxes. Let us keep our feet on the ground. There
are taxes that fall heavily on the poorest of the
poor, and taxes that fall lightly on the richest of
the rich. For example, if you will turn to page 73
of vol. 1 of the Black Books, you will see something that should make you think. It
is a table
supplied us officially by the Tax Assessor's office and it shows us the profits cleaned
up in the
year 1945 by our companies and firms in Newfoundland. You will find that 105 companies
declared a combined profit between them that
year of over $15 million.... And what tax did they
pay the government on those $15.5 million? Just
a third — $5.5 million in taxes. That is not how
they do it in Canada. But it is how we do it in
Newfoundland. We allow 100-odd concerns to
clean up $15 million in just one year, and the
government takes only $5 million from them in
taxes — but meanwhile our babies, our children,
our old people, our fishermen, our labourers are
taxed, the life is crushed out of them by the high
cost of living, and the high taxes that help to drive
up the cost of living. And then after all these huge
and shameful profits have been gouged out of us,
the government brings a man from England to
hold an enquiry into the cost of living. After the
horse is stolen the stable door is —is what? Is the
stable door locked, even then? No! For all the
enquiry tells us is that the high cost of living
cannot be helped, we have to grin and bear it. Call
me anything you like, but what I am saying is the
stone, sober truth and the whole country knows
it. Call me anything you like, but after you have
done so, I will still come back and ask you to
defend or explain how it is that in one short 12
months, $15 million are squeezed out of this
handful of Newfoundland people by 105 concerns; $5 million of it taken in taxes, and
$10
million distributed in dividends to a few
shareholders. And then Major Cashin gets up and
talks about taxes in Canada!
Major Cashin devoted himself also to the
question of family allowances. He says they are
held out as bait to Newfoundland. How can that
be, when the fact of the matter is that family
allowances came into force long before this confederation talk started at all, long
before this
Convention was even thought of? Major Cashin
must think Canada wants us pretty badly if they
are willing to pay out $250 million a year in
family allowances to her own people just to provide a bait to Newfoundland. Then he
gets off the
prize one of all — he will never live it down as
long as he lives — when he calls family allowances "immoral legislation". I think
that is the most
grotesque statement I have heard in this Convention since it began — to call family
allowances
"immoral". The churches in Canada have supported family allowances, the clergymen
— and
speaking of clergymen, it was Father Labelle
who was the great pioneer advocate of family
allowances in Canada — the trade unions, cooperative societies, social welfare agencies
and
organisations, and all political parties and leaders
of Canada have supported family allowances,
and do so today. All these and many, many others
have hailed family allowances, and praised and
supported them as the best piece of legislation so
far introduced into the New World; but Major
Cashin calls them immoral — à 1a Hitler, he says.
January 1948 NATIONAL CONVENTION 1163
The sober truth is that never was there a more
moral piece of legislation, for family allowances
are a strong bulwark for the strengthening of
family life. The family, sir, is the foundation of
society and civilisation, and anything that fosters
and strengthens the family is not immoral, but
highly moral, and family allowances are the
finest system so far developed by any government anywhere to strengthen and encourage
the
family. New Zealand has family allowances,
Australia has family allowances, Great Britain
herself has family allowances, but Major Cashin
says family allowances are immoral. But, after
working himself up into a lather of moral indignation against these immoral family
allowances,
Major Cashin cools down again and reassures us
that we need not worry any more about these
family allowances, and why? "Because", says he,
"they are going to be done away with soon."
What is his reason for believing this? He forgot
to tell us. Why does he think they are going to
end? He did not think we would need any more
proof than his bare word.
Mr. Chairman, if I were to tell you that the
Commission of Government were soon going to
close down our entire railway system; that the
United States government is soon going to do
away with their army, navy and airforce; that the
British government is soon going to invite Joe
Stalin to come from Moscow to London and take
over the governing of Great Britain; if I were to
tell you that and ask you not to ask for proof, but
to take my word for it, what would you say? But
without any proof Major Cashin says that these
family allowances are soon going to be done
away with. Whether he meant minutes, days,
weeks, months or years or decades, he did not
say, but just "soon". Now, sir, people can talk till
they are black in the faces against family allowances. They can call them immoral,
and say
they are Ă la Hitler, they can twist and distort
them, and when it is all said the simple truth
remains, that we have 120,000 children in Newfoundland today, 120,000 children, sir,
under the
age of 16 — over one-third of our whole population. Every one of those children, under
confederation, would receive the family allowances
— $5, $6, $7, or $8 a month, according to the
child's age. The parents may be rich or poor, high
or low, sick or well, working or unemployed, it
makes no difference; all the children will get the
family allowance every month of the year, rain or
shine, winter or summer, good times or bad times.
Into every nook and comer of this island and
Labrador these family allowances will go every
month, into 1,300 settlements to those 120,000
children. With confederation our children under
16 will get family allowances. Without confederation what will they get?
Sir, you will notice that up to the present time
I am only replying to Major Cashin, that is because being the good speaker he is,
being the
experienced public man he is, and the ardent and
enthusiastic anticonfederate he is, Major Cashin
has for three days arrayed all the facts and arguments he could think of against confederation,
and I, sir, one by one, am knocking these arguments on the head and throwing them
under the
table. That is why I am taking so long. It was
worth a reply, it was a good speech. He is a fine
fellow and I like him. Nevertheless, sir, he is an
anticonfederate, God help him .
Well, he had a fling at the income tax in
Canada, and was very careful to point out that
here in Newfoundland a single person must earn
at least $1,000 a year before any income tax has
to be paid by him, whereas in Canada it is $750
a year. Now before dealing in any detail with this
question of income taxes there is one general
observation I want to make. Before the late war,
the income tax in Canada was not very different
from ours here in Newfoundland, but during the
war Canada put up a very mighty war effort. Her
taxes rose higher and higher and higher. That was
during the war. But since the war ended Canada
has reduced her taxes, not once, or twice, but
three times, and it is believed throughout Canada
that Finance Minister Abbott is bringing in further reductions in taxation when he
brings down
his new budget next month or the month after.
Members of the Ottawa delegation will remember my joking attempt, at one of our plenary
sessions, to draw Mr. Abbott out as to what
reductions in taxation he is likely to bring down
in his new budget this winter. He, being very well
aware of the fact that a finance minister mustkeep
that deadly secret till the last minute, refused to
be drawn, but it is believed that there will be
reductions again in the next budget a month or so
from now.
Well, sir, to get back to that single person, that
that means a person with nobody in the world
1164 NATIONAL CONVENTION January 1948
depending on him, what income tax does he pay?
I mean now in Canada, and here if we become a
province. If he makes $800 a year, $66 a month
all the year round, he pays 42 cents a month
income tax, and it is deducted from his pay ... but
if his income is $900 a year, or $75 a month all
the year round, he pays $1.33 a month income
tax. If that single person makes $1,200 a year,
$100 a month, he pays $5 a month income tax. Is
that so terrible for a single person without a chick
or a child to support? $5 a month out of his $100?
Now take a married couple with no children
or any other dependents, just themselves. A married man making $1,800 a year, if we
go into
confederation, $150 a month all the year round,
will pay $15 a month income tax out of his $150.
If he makes $3,000 a year, or $250 a month all
the year round, he pays $35 a month income tax
out of $250. That is, remember, a married couple
with no dependents, only the two of them. Now
take a married couple with three children under
16. On any income that that man makes, anything
up to $1,500 a year — $100, or $500 or $1,000
or $1,500, anything up to $1,500 a year — that is
$125 a month every month in the year, he pays
no income tax; not only does he pay no income
tax, but he is paid money, $216 a year by the
Government of Canada in family allowances.
Now if his income is $2,000 a year, this same man
with three children, at $166 every month of the
year, he still pays no income tax, but instead the
Government of Canada pays him $194 a year in
family allowances. Now if his income is $2,500
a year, $208 a month every month, he still pays
no income tax, but instead he receives $106 a year
from the Government of Canada in family allowances, and of course the more children
he has
under 16 the more family allowance money that
family receives. The simple truth is that at least
80 persons out of every 100 in Newfoundland
under confederation will pay not a cent of income
tax. God help us, their income does not bring
them into the income tax group!
Again, Major Cashin tried to curdle our blood
by telling us of the almost incredible and unbelievable number of taxes imposed on
all kinds
of products. For example, and this is one of the
easiest ones, he says there are 52 taxes on a loaf
of bread in Canada. There was one he mentioned
that had 250 taxes on the one article. How do they
live up there? Are they still alive, or are they all
dead? Now about those 52 taxes on a loaf of
bread. Supposing he is right, what does it matter
to people if there are 52 taxes on a loaf of bread,
and the loaf still sells for 13 cents? 13 cents a loaf
for a 20 ounce loaf. In St. John's a loaf is what?
18 cents. How many ounces? What is the size of
our loaf in St. John's?
Mr. Smallwood I think it is 24 ounces. My wife
buys the bread, which she won't bake. We should
go out in the real Newfoundland where they bake
their bread. I am not going to deny that there are
all these taxes actually imposed on all these
things, for the simple truth of the matter is that
that is how it is all around the world. It is the same
here. These taxes, sir, are paid on all our imports
before we import them, and then we pay them
back in the price we pay for what we buy, and
besides paying all those taxes that Major Cashin
mentioned, besides paying those in the price of
the article when we buy it, we also pay customs
duty on top of them all, and on the customs duty
we also pay a profit, in fact a double profit to the
wholesalers. You can take almost any article you
would like to mention, and if you can trace it back
far enough, and trace back all the various articles
that go into that one article, you will find dozens
and sometimes hundreds of taxes have been collected on it at one point or another,
from one
country or another, and the consumer pays it all.
Now, sir, I want to address myself for a moment to this question of sales taxes. In
my opinion
a sales tax is not an ideal tax. It is not direct
taxation, which I prefer, but indirect taxation,
which I do not like. The sales tax is put on by the
Government of Canada. How long it will be left
on I don't know. It may be left on for two or three
years yet. I don't know. The rate of the sales tax
is 8%. How long it will remain at 8%, again I
don't know. Before the Government of Canada
abolishes the sales tax altogether they may reduce
it to 4-5%. That is something I can't prophecy.
Well, there it is — a sales tax of 8%. It is collected
mainly from the manufacturer of the article. It is
included in the retail selling price of the article.
The consumer knows nothing about it, he simply
buys the article in the shop and the price of that
article includes the sales tax, if the article includes that. It is like our customs
duties, and
that's another reason why I don't like the sales
tax. But the sales tax is not put on everything, and
January 1948 NATIONAL CONVENTION 1165
when you take your total imports into Newfoundland for a whole year, and take off
from that
total the things that do not pay the sales tax at all
it comes to a very large figure. Last night, until
late this morning, after I went back at 11 o'clock
from this chamber, I took up the Newfoundland
Customs blue book for March, 1946. That happened to be the latest issue I had in the
house, and
I discovered that in the year 1945-46, ending
roughly a year ago, Newfoundland imported
nearly $66 million worth of goods. Out of that,
here are the goods that would pay no sales tax,
none at all.
Fresh foods, $1 million
Flour, $2.5 million
Animal and poultry feed, $600,000
Hay, $ 170,000
Fertilisers, over $100,000
Meat, beef and poultry, over $1.5 million
Butter, over $200,000
Cheese, over $300,000
Milk, around $1 million
Sugar, around $1 million
Vegetables, around $1 million
Eggs, nearly $500,000
Salt, over $500,000
Building materials, well over $1.75 million
Solid fuel, nearly $4 million
Animals and livestock, over $1 million
All that was imported last year, nearly $18 million in that list, and on top of that
you can put
another $3 million at least, because I could not
get it all out of the book, and it shows a total of
about $21 million worth of Newfoundland goods
that would pay no sales tax at all — none. Now
you take that $21 million from the total $66
million we imported, and it leaves $45 million
worth of goods that would pay the sales tax; $45
million is subject to sales tax, but you can add to
that another $5 million to cover locally produced
articles that would also be subject to the sales tax,
and it is a total of $50 million. Eight per cent sales
tax on that $50 million would be $4 million
altogether. Now, sir, turn to the Grey Book, and
turn to the Canadian govemment's own estimate
of what revenue they would collect from us under
confederation, and what do you find? You find
that their estimate of what the sales tax would
bring them is $4 million.
Mr. Smallwood No, sir. Is there only one steno
grapher? I would like to save all the time possible,
and I want to use up every moment to answer
these points. No thank you, sir.
So you see, Mr. Chairman, it was no guesswork after all on the part of the Government
of
Canada, when they estimated $4 million revenue
from sales tax; no guesswork, but highly scientific. accurate, knowledgeable facts.
Possibly I spoke too quickly there, sir. I have
noticed that the members do like a recess for five
or ten minutes, because it gives them a chance to
get a breath of air and gives me a chance to get a
smoke, so if you don't mind, I think I will take it.
[Short recess]
Mr. Smallwood Mr. Chairman, there is one
statement by Major Cashin that needs to be
cleared up, and that is his statement that the
people of Newfoundland would be compelled to
pay their proportionate share of running the
Government of Canada. Just what did he mean
by that? Take our own government here in Newfoundland for example, our present government
or any past government, Does Major Cashin
mean that the Newfoundland people were not
compelled to pay their proportionate share of the
cost of running our government? And what does
he mean by proportionate? Take this very year.
The present government are collecting $40 million from all of us in taxes, that is
$120 a head, or
say from a family of five, $600. That would be
the proportionate share, $120 a head, or $600 per
family. Now does every person pay his proportionate share? Does every family? Of course
not,
because those figures are only average. Some
persons and families pay much more, some pay
much less. The government does not send a bill
to each person in each family each year for $120.
Or look at it another way. Does it mean that every
settlement in the country must pay its proportionate share? Does our government collect
a
certain fixed amount from every person or every
family, or every settlement? Of course not, there
just isn't any such thing as a proportionate share.
That's just a word, and in this connection it means
nothing. That simply is not the way the Government of Canada collects its taxes. It
does not start
off by saying, "Now, we will need so much for
the next year to run the country; we will collect
an equal or proportionate amount from every
person and family in Canada." Do they do that?
No, they don't. Do they say, "We have nine
1166 NATIONAL CONVENTION January 1948
provinces and we will collect so much from each
province?" They don't. What do they do? They
simply put on a number of taxes. They have a
number of taxes, but the bulk of the revenue
comes from income tax and the corporation tax.
The bulk of their revenue will naturally come
from those parts of Canada where most of the
very wealthy industries and corporations, and
wealthy individuals are. Those places happen to
be the provinces of Quebec, Ontario and British
Columbia. They pay 89% of all the revenue the
Canadian government collects, and that leaves
only 11% of the revenue to come from the six
other provinces. This shows very clearly what
truth there is in Major Cashin's statement, that
we would have to pay our proportionate share of
the Canadian government's revenue. In three of
the provinces of Canada, the three I mentioned,
the Canadian government collects much more
money than they pay out; in the other six provinces the Canadian government pays out
much
more money than they collect — the same as they
will do in Newfoundland. I have explained all
this before, and it is very tiring to have speakers
telling us that we will have to pay our proportionate share of Canada's revenue, but
I suppose
the anticonfederates must have something to use
against confederation.
I come to a really important subject, a matter
about which Major Cashin had a great deal to say.
I refer to the present commotion with regard to
the shortage of United States dollars in Canada.
He summed it up with a sort of epigram when he
told us that Canada had sent out an SOS to Uncle
Sam for financial help. Now what is the truth in
that matter? Last year the Government of Canada
had a surplus of $352 million, nearly $1 million
a day for every day of the year. That is, they met
all their expenses as a government for the year
and had $352 million left over. This present year
does not end until the spring, yet already they
have another surplus, but this time of over $500
million and still climbing. Does that sound like
the Canadian government being hard up, or anything like that? I would remind you that
during
the year the Government of Canada gave Great
Britain free, free, a gift, first of $800 million, then
$1 million, and then $425 million. I would
remind you that since the war ended Canada has
loaned to Great Britain $700 million, and on top
of that $125 billion. I would remind you that to
other countries ... Canada has loaned another $3
billion. These figures hardly sound like poverty,
do they sir? That is the Government of Canada;
but what about the people of Canada, her industries, her general economy? Well, the
answer
is that never in history was Canada so well off,
so prosperous, so booming as she is right now.
Her industries this very year just past have set up
new records for production. Her exports of goods
around the world have established a new record,
greater even than during the war. A record number of people is employed in Canada
now, new
records have been established in the past year.
They will be broken again this year, but in 1947
new records were established in Canada for the
number of brand new industries starting up. Do
you know that there are in Canada today over 200
entirely new products more being manufactured
than there were three years ago? In many parts of
Canada today things are booming so much that
there is actually a shortage of manpower, and
Canada is bringing immigrants and settlers in by
the tens of thousands. They are even flying them
in, and they have plans to bring in hundreds of
thousands of settlers from Great Britain and other
parts of Europe.
Sir, this will interest you. In the first ten
months of 1947, do you know how many people
went into Canada from Newfoundland to settle
down and become Canadians? Sir, I would venture to say that you have probably not
seen the
figure, and you are probably not aware of the
number of Newfoundlanders who went to
Canada in the first ten months of 1947. I have not
got the figures for the last two months, but in the
first ten months of 1947 how many Newfoundlanders moved into Canada to make it their
home, from this little island of ours? 2,469 Newfoundlanders. Two of them I am sorry
to say are
brothers of my own; two others are sisters of my
own. I don't like to see Newfoundlanders moving
out of Newfoundland, I like to see them stick it
out here, and try to make it better than it is.
Canada is immensely prosperous right now. In
fact, her very prosperity is one of the causes of
this shortage of United States dollars. What has
been happening is that they have been bringing
in too many goods from the United States out of
their tremendous prosperity, and to make it
worse, prices on everything in the United States
have gone stark, staring crazy, and are still going
January 1948 NATIONAL CONVENTION 1167
up. So Canada found that she was using up her
supply of United States dollars at a rate that began
to make them think, and scare them a bit, so what
they have done is this: the government has
selected a list of things that Canadians are not
allowed to import from the United States, not
things that you must have, but things that you can
do without. For the next year or so Canadians will
have to do without such things or make them
themselves — vacuum cleaners, refrigerators,
radios, motor cars, etc. In the second place, the
Canadian government has made up another small
list of things, which they have not exactly
prohibited from being imported from the United
States, but they have put a higher excise tax on
them to discourage people from buying them in
the next year or so until the US dollar shortage
comes to an end. In the meantime, having
adopted these temporary ways of saving the
United States dollar supply, Canada has embarked upon what is perhaps the biggest
program
of home production and development in her
whole history. C.D. Howe, the cabinet minister
who did such a marvelous job during the war in
controlling and stimulating all Canada's wartime
production, has been given charge of that mighty
program of increasing Canada's industries to
enable her to produce for herself the things she
has in the past imported from the United States.
The effect of the first World War was to turn
Canada from an agricultural economy into an
industrial country. The effect of World War II
was to turn Canada into a very much greater
industrial nation than she had been, and now this
new programme under one of the greatest administrators in the world today, C.D. Howe,
the
man who built half the grain elevators of the
United States and Canada, the man who built Port
Churchill, one of the great engineers and administrators of the world, has been given
tremendous power by the Government of Canada,
almost like the wartime powers he had, to inaugurate and shape and mould and encourage
the
development of brand new industries in the
Dominion of Canada.... There is one big way that
Canada could adopt, if she wanted, that would
very quickly end, her shortage of American dollars, and that would be to sell to the
United States
and other dollar countries a much greater share
of what Canada produces, all kinds of products
for which Canada was famous. But if Canada did
that ... the old mother country would have to go
short; the British people would have to pull their
belts tighter, and British children would feel the
pinch more than they do today, and Canada,
which stood at Britain's back during the darkest
days of the war, is still standing by her in these
very trying days of peace. Canada has deliberately given up her chance to get $3.25
a bushel for
wheat, for example, and is selling it to Britain this
year for $2, and up to this year she only asked
$1.55 for it. She could sell every bit of it for
American dollars at $3.25 a bushel, and that
would give her lots of American dollars. Instead
of grabbing this opportunity to sell her vast
products for American dollars, Canada prefers to
continue her assistance to Great Britain, not only
selling at lower prices than she could get elsewhere, but selling a very large portion
of it on
credit. It is not very helpful in this debate, not
very helpful to try and paint this temporary
shortage of United Stated dollars as a sign that
Canada is poor, or that she is financially embarrassed, weak, that is not very helpful
to any of us.
It is not helping our people to understand confederation to put out such statements.
Canada today is one of the two or three
countries in the whole world that has a stable and
sound economy. Her banking system is the
soundest in the world. Her insurance companies
are, to say the least, as sound as any in the world.
Her industries are booming, her trade is increasing every day, employment is growing
every day.
This temporary shortage of United States dollars
is a mere drop in the bucket, a mere passing
incident, a thing that sounds big today, but will
be all forgotten about a year from now.
Now, but for the fact that it is against our rules
in this House, I would like very much to read you
some of the things said about Canada and
Canada's economy in a special section of 14
pages devoted to Canada by the New York
Herald Tribune a few days ago. That famous
American newspaper paid a wonderful tribute to
Canada's greatness. At one point that paper tells
us...
Mr. Smallwood No, sir, I am only summarising.
At one point the paper tells us ... that democratic
Canada and the United States are the only two
important nations with the vitality and resources
necessary to restore the world to economic
1168 NATIONAL CONVENTION January 1948
health. They alone among the nations produce
more than they can consume. Together they are
gradually integrating their economies into a
North American pattern unmatched in a world of
poverty and aggressive nationalisation. Again we
are told that in 1947 Canada easily maintained
her position as the world's largest trading nation.
No nation with so small a population ever occupied so important a place in world trade.
Like
many other nations Canada has a United States
dollar problem, but this did not result from any
weakness in her own internal economic position.
Again, if I were permitted to quote directly from
a newspaper, which I am not, I would quote from
a very recent issue of
News of Washington.
Mr. Smallwood No sir, I will not quote it. This
tells that to the world's end, in peace or war,
Canada makes a great centribution, but she does
it quietly and without fanfare, and it is a sturdy
and noble people that they have to the north of
them. Canadians are a bulwark of democracy and
decency. They are fortunate in their neighbours.
The whole world recognises Canada's greatness
amongst the nations, but to listen to what you hear
in this Convention, you would think not that our
British cousin is a vast nation, but a poor, poverty-stricken nation, hungry to get
Newfoundland
in her claws to abuse us and save themselves from
disaster. It is as grotesque a picture as was ever
painted.
[1]Now sir, one thing that hurt me, the only
thing that Major Cashin said that hurt me, was
that in this budget ... these estimates I brought in
of what I estimated the provincial government
would spend and collect in Newfoundland, Major
Cashin says that I've cutout this and I've cut out
that. And when he did that, I turned to him and
said, "Now be fair, be fair". He said, "All right,
I'll be fair". And I thought that he meant to go
ahead and say, "Yes, I know that these things
which Smallwood has cut out of the provincial
budget have been cut out because they've become federal expenditures" — that's what
I
thought he was going on to say. But he didn't. He
went straight on to say that he supposed that what
I had in mind was to put on special taxes, an
education tax for example. A queer thing happens
to a man very often when he stands up to speak.
He says things that he's astonished afterwards
when he reads them in the paper, or hears them
on the recording. "Did I actually say that?" Now
I dare say it's like that with Major Cashin, but I'm
sure he couldn't have thought he was going to get
away with that. He must have known that I was
going to answer it.... The simple truth is that in
my provincial budget I did cut out a whole lot of
things, over half of it. I cut out the Railway
system, because that system would come under
the federal government of Canada. I cut out lighthouses and beacons and buoys and
dredging, and
public wharves and breakwaters and marine
works generally — cut them all out, because
they'd be federal. I cut down on the Department
of Public Health and Welfare, because veterans'
pensions and rehabilitation, which come under
that department now, would not come under it in
confederation. Those things would be federal. I
cut out a lot of things from the provincial government for the simple reason that
such things would
not be handled or paid for by the provincial
government at all. Would Major Cashin want
such things to be done twice, once by the provincial government and once by the federal
government? After cutting out the things that would be
called federal expenditures, I also cut down on a
few items that would be saved through ordinary
economy. One example of that is the cost of
supplies going into the public institutions. These
things would come into Newfoundland duty-free
and the provincial government would save quite
a bit on duty which it pays today. My suggested
provincial budget shows only ordinary expenses.
That's all it shows, expenditure on ordinary accounts.
The Commission government this present
year are spending nearly $40 million. But over
$10 million of that is shown in their estimates as
special or capital expenditures. Reconstruction is
what they call it — over $10 million. Now, these
items are capital expenditures and they are so
shown. Under ordinary conditions the money to
pay for those reconstruction expenditures would
come out of capital account. The government
itself expects that they'd have to pay for them this
year — they expected to draw upon the accummulated cash surplus to pay for some of
those
capital expenditures. Because they didn't figure
that they were going to take in enough revenue,
January 1948 NATIONAL CONVENTION 1169
ordinary revenue, to pay these capital expenditures. So they figured they'd have to
dip into the
surplus to do it. But as it happened, they've been
taking in enough ordinary revenue this year to
meet those special costs or nearly enough. I'm
told that they will have something of a deficit, I
don't know. Now that fact does not change the
situation. Those expenditures amounting to over
$10 million are not ordinary expenditures, but
capital account — reconstruction expenditures.
One such item is $500,000 for building new
schools, and repairing and equipping old ones.
The government, you may remember, laid out a
three-year plan to spend $500,000 each year on
building new schools or helping to build them,
and repairing old ones and equipping them or
helping to do it.... And this present year is the
second year of that particular three-year plan....
[1]
Now in my provincial budget of ordinary expenditures I have shown exactly why it says
ordinary expenditures. All the rest would be special reconstruction, or capital expenditures.
Now
that is reasonable. Because I have dropped this
$500,000 from my list of ordinary expenditures
it does not mean that that $500,000 would not be
spent. Of course it would be spent, but it would
be shown as capital expenditures, not ordinary,
and this comes out of capital account, as it would
have come out of capital account this very year
had not the ordinary revenue kept up so high. I
explained all this in clear simple language when
Iintroduced my so-called provincial budget, and
it is just downright misrepresentation, I will take
that back, it was too bad for Major Cashin to
make out that I was trying to do our school system
out of the $500,000 merely because I did not
show it in ordinary expenditure.
I am coming pretty close to an end of my reply
to Major Cashin. He used up a large part of his
speech dealing with the purely financial side of
confederation. Now that's exactly what we
would expect Major Cashin to do, he being the
former Minister of Finance. He is interested in
that more than anything else. I have detected in
Major Cashin from time to time a sort of impatience at anything and everything that
came
into this Convention that was not financial. He
took up a large part of his speech dealing with the
purely financial side of confederation, but I don't
think he did much to make the position clear to
our people. On the contrary he was so hopelessly
mixed up and muddled by his own figures, that I
was at a loss to know which figures he meant us
to accept. Let us see if we can rescue the simple
truth from his conglomeration of figures. At one
point he told us that the Government of Canada,
the federal government, would take $75 million
a year from us in taxes. Just remember that figure,
please — $75 million, that is what the Government of Canada would take from us. But
what
does he do? A few minutes earlier, when he was
examining the Canadian government's own estimates of the taxes they would collect
from us
— their estimate you may remember is $20 million a year, but that figure does not
satisfy Major
Cashin, so he ups it to $32 million. He says the
Canadian government sent down this Grey Book,
and if you turn to Annex IV in the Grey Book you
will find that the Government of Canada estimates that all they will take from the
people of
Newfoundland in taxes is $20 million. Precisely.
Foolishness, it will be more, it will be $32 million. Well, why doesn't he make up
his mind?
Major Cashin should make up his mind. Is it the
$32 million he tells us in one breath, or the $75
million he tells us in the next breath?
Mr. Cashin In those estimates in the Grey Book
the Canadian government did not take into consideration the interest on their own
public debt.
Mr. Smallwood ....I will come to that, in fact I
think it's the next note I have. If that's it, it's
really comical. However, the difference between
his estimates of $32 million and $75 million is
$43 million a year, surely too big a difference in
any man's figures. It is simply delightful how
Major Cashin flings around those millions upon
millions. Now, how much would the federal
government actually collect in Newfoundland
each year? The financial and commercial officials of the Canadian government estimated
it at
$20 million a year made up in this way:
| Personal income tax |
$3,200,000 |
| Corporation income tax |
7,500,000 |
| Duties on inheritance, or
succession duties |
320,000 |
| Customs |
2,000,000 |
| Liquor and tobacco taxes |
900,000 |
| General sales tax |
4,000,000 |
1170 NATIONAL CONVENTION January 1948
| Misc. excise taxes and other items |
1,500,000 |
| Post Office |
750,000 |
These estimates were made by the Canadian
financial officials upon the basis of their intimate
knowledge of Newfoundland's trade and also
their estimate of what our trade would be under
confederation...
Major Cashin professed to scoff at them, but
I tell you frankly that when it comes to choosing
between the estimates of Major Cashin and the
very able financial officials of the Government
of Canada I do not hesitate a moment. However,
when Major Cashin first tried to throw doubt on
the Canadian government's own estimates I addressed a question to the Canadian government
asking them to give us an idea of how they made
their estimates, and what they based them upon.
They came back with a detailed reply which
satisfied every reasonable minded man in this
Convention, everybody whose mind is not
blinded against confederation and all its works.
Now the next point is what the provincial
government, our own government should we become a province, would collect from us.
You will
remember that I brought in my estimate of what
that would be — $15 million a year from the first
four years, and over $15.5 million a year for the
second four years, and also you will remember
that my estimate was for eight years, because
within eight years there is to be a royal commission to go into our financial position
to see what
additional subsidies, if any, we would need from
the federal government. Mr. Hickman said my
estimate is too low, it should be $17 million a
year. Mr. Hollett said it should be $19 million a
year. Almost like an auction, sir, and Major
Cashin goes them one better, and drives it up to
$19.2 million a year. "In my view", says Major
Cashin, "this is the least possible." That is the
lowest that the provincial government can get
along on. I wonder, sir, if Major Cashin realised
— I'm sorry he is not here just now, I would like
him to hear this — what that did to his own
proposed budget? You will remember under this
budget, $25 million a year is what it would take,
he estimated, for Newfoundland to carry on
under Commission or responsible government—
$25 million a year to pay all the ordinary costs of
government, including interest on our public
debt, sinking fund, operating losses on the Railway, the annual cost of lighthouses,
fog alarms,
beacons and buoys, public wharves, dredging,
pensions and rehabilitation for all war veterans,
both wars, the post office and telegraph system,
the losses on Gander — and that reminds me,
don't be surprised if you find that in the current
year the losses on Gander will run to $1.25 million, not counting the capital expenditure
of
$500,000.... The Government of Newfoundland
has to pay — what is it? — one-third of $1.25
million, but Major Cashin's budget of $25 million included the losses on Gander, and
the cost
of the Fisheries Department, and a large number
of other services and expenditures which would
not appear at all in the provincial government
budget under confederation. Remember, his $25
million a year is supposed to cover all ordinary
expenditures, including these items I have just
mentioned. If his guess of $19.2 million a year
for all ordinary expenses of the provincial
government is correct, if that is what it would cost
to operate Newfoundland's government under
confederation, then without confederation the
cost would be $11 million higher than the figure
of $25 million he gives us in his budget. As the
old saying goes, he is on the horns of a dilemma;
either he has to agree with my estimate of $15
million or $15.5 million for the province, or else
he has to stick another $11 million on his own
estimate, and raise it from $25 million to $36
million a year. He can take his choice.
I hope I have made myself clear on that, it is
simple enough, really. The danger of trying to
make a thing simple is trying too hard to make it
simple, but here are two budgets, one that I bring
in and one Major Cashin brings in. The one that
I bring in shows what the provincial government
would have to spend each year, and Major Cashin
shows what the Government of Newfoundland,
if we do not have confederation, would have to
spend each year. My estimate is $15.5 million a
year, and his is $25 million a year. Now, if, if he
will not allow me to take off from his $25 million
those expenses which we would not have to pay
under confederation, if he won't allow me to take
that off his $25 million and bring it down to $14
million, then he has got to add $11 million on to
his $25 million. He can take his choice, but
whichever Major Cashin may choose, the result
is clear and simple: under confederation the
federal government of Canada will handle and
pay for quite a number of costly public services
January 1948 NATIONAL CONVENTION 1171
which, without confederation, our own government will have to pay for, and these services
run
to $11 million a year. With the federal government paying for these services it would
be stupid
and silly to include them in the provincial budget.
I am not stupid or silly, so in my provincial budget
I have taken those items of expense out, which
brings the provincial budget down to $14-15
million a year. Not the estimate of $17 million of
Mr. Hickman, or the $19 million of Mr. Hollett,
or the $19.2 million of Major Cashin.
Now let's take it again. The federal government will take in profit $20 million, and
the
provincial government $5 million or $6 million,
a total for the two governments of $25 million or
$26 million a year — call it $26 million a year
taken from all of us in taxes, and don't forget the
coming budget of the Canadian government,
which everybody believes is going to reduce
Canadian tax rates still more next month or the
month after. If the Newfoundland people have to
pay $26 million a year in taxes to the two governments, what will they get in return?
Let's look
and see First, what will the Canadian government spend each year in Newfoundland?
Under
the tax rental agreement, $6.82 million. Old age
pensions and pensions to the blind, $2.6 million;
family allowances, $8.35 million; other
departmental expenditures, $9.4 million; transitional grant, taking the yearly average,
$2,843,000; interest on our sterling debt, that they
will take over, $2,156,000 a year; Railway
operating losses, at least $2 million a year. It is
costing us $1-2 million a year, but it will cost the
Government of Canada much more than that,
because they will have less revenue. They have
to reduce the Railway force, taxpayers' rates and
freight rates, to bring them down to Canadian
rates, and in some cases they have to increase the
wages to the Railway men, and then on top of
that, railway and other capital expenditures by
the Government of Canada, $2 million a year.
Remember, they have to spend $17 million for
the first ten years, or they estimate that is what
they will have to spend on the railway alone, so
that is $2 million a year for capital account. That
is a total of $36.5 million a year which the federal
government would spend in Newfoundland —
$36.5 million a year. Some of it will come to the
provincial government, some direct to the New
foundland people in social security payments,
and some of it to pay for public services carried
on here by the federal government. $36.5 million
a year to be spent by the federal government, and
$15.5 million a year to be spent by the provincial
government, makes a total of $51 million a year
to be spent in Newfoundland by the two governments together. So we pay $26 million
a year in
taxes, and receive benefits amounting to $51
million a year, clear gain for us as a people of $25
million a year for the first eight years of union.
On a purely cash basis confederation would mean
a magnificent gain for the people of Newfoundland. Confederation, during the first
eight
years of union, will cost the public chest of
Canada over $16 million net each year: $16 million a year is what the entry of Newfoundland
into
the Canadian union will cost the Canadian public
chest. That is, they will spend $16 million a year
more than they will get from Newfoundland. It
sounds like a lot of money in our ears, I admit
that, for the Government of Canada to be out $16
million a year by taking us into the family, but,
as Mr. St. Laurent said when the Canadian
reporters pointed this out, "That is only chickenfeed to the Canadian government,
where we are
handling thousands of millions each year in these
times."
Sir, that concludes a point. I have only one
other point, I think, in connection with Major
Cashin's speech, and it is a little too long to do at
this moment before 6 o'clock. I wonder, sir, if I
could have your indulgence and rise until 8
o'clock tonight? Would that be satisfactory?
Mr. Cashin To me anyhow, I don't know about
the other gentlemen.
Mr. Chairman Is the House agreeable? We will
rise then, until 8 o'clock.
[The committee adjourned to 8 pm]
Mr. Smallwood[1] As I said before the recess, I
have only one point left in Major Cashin' s speech
with which to deal. And that is the question of
Canada's public debt. Major Cashin has made a
great deal out of the fact that Canada has what
sounds like a very large public debt. I say sounds
like a large debt, though actually it is not large at
all. There used to be nothing easier than to confuse people about this public debt
question. An
awful lot of nonsense is still talked about it, and
1172 NATIONAL CONVENTION January 1948
there are many people who have very hazy and
very often very strange ideas about it. Here in
Newfoundland we look at public debt quite differently from other countries, because
we have
had a very sad experience with our public debt.
Our public debt has everything wrong with it that
it could have. It was too big to start with. It was
a crippling burden on us, a millstone around our
necks. In the second place, it was owed to people
outside the country — practically all of it. Instead
of borrowing it from ourselves, we borrowed it
from people in other countries — no doubt because we couldn't borrow it from ourselves
because we didn't have it amongst ourselves to
borrow it from ourselves. In the third place, we
paid too much interest on it. We paid out scores
and scores of millions of dollars in interest on our
debt, and we paid it out to people in other
countries. It was a terrible drain to pay out all that
interest. I think in the Finance Report there's a
table showing the amount of money that this
country paid out over a number of years in interest that it had to send out of the
country. I don't
remember that figure, but I do remember compiling it myself years and years ago, showing
that
up to that time we had paid out over $100 million
of our hard-earned money in interest and we had
had to ship that money out of the country altogether. In the fourth place, most of
what we
borrowed we spent for unproductive and often
wasteful purposes. Yes, our public debt was the
worst kind of debt a country could have. And it
was very little credit to us that we had such a debt.
Anyway, the day finally came when we found
ourselves at the end of our rope. We couldn't find
enough money even to pay the interest on our
public debt. As a country we were bankrupt and
insolvent. At that point Britain came to our rescue. She took over practically all
our debts,
guaranteed the principle and interest to the
people we owed it to, and cut the rate of interest
down to 3% per year. However, we still ... are
draining our country, draining ourselves of millions of dollars just to pay the interest
on our debt.
Now, Major Cashin says that Canada's public
debt is $17 billion. Actually, their debt is $12
billion, because $5 billion is what's called self-
liquidating, or is otherwise an asset rather than a
liability. But, $12 billion or $17 billion, it really
doesn't matter very much at all because the big
point is that practically all of it is owed right in
Canada herself — owed by the Canadian government to the Canadian people. The yearly
interest
on that debt is paid out to people living right in
Canada. It hasn't got to be shipped out to people
in some other country. The Canadian government
has borrowed $12 billion net from the Canadian
people. And back to the Canadian people that
government pays around $400 million every year
in interest. The money stays right in Canada
where it can be used for capital to start industry,
to employ people and produce still further wealth
for Canada. Now that's one difference between
Canada's public debt and our own, and a pretty
big difference it is — the difference between a
debt draining a country of its money and keeping
it right in the country for further development.
There's another very important point. It's this.
That a country's public debt is big or small according to the resources developed
and undeveloped of that country. That is, according to
whether the total amount of wealth produced in
the country is enough to pay the interest on the
debt without feeling it. On this test, Canada's
public debt is a small one, for to find around $400
million a year to pay the interest on their debt is
scarcely anything at all out of the vast yearly
wealth produced in Canada. They're producing
over $12 thousand million worth of wealth a year
in Canada now — over $12 billion a year. We
must not forget that Canada is the third largest
trading nation in the whole world. And out of all
that fabulous wealth, to find $400 million a year
for interest is no burden at all worth mentioning,
especially when we remember that the $400 million is paid right back to Canadian people
living
right in Canada... The national debt of Canada is
owed to the Canadian people. It was borrowed
from the Canadian people and corporations, and
the interest on it is paid to the people and institutions of Canada. All the people
owe all the money
making up the national debt to some of the people
of Canada. Interest on that national debt is paid
to some of the people and collected from all the
people generally....
President Roosevelt once said, when he was
defending his policy of increasing the national
debt of the United States, that it made no difference how high the national debt of
a country
is so long as it is owed to its own people. The
Canadian people are well able to add a few more
billion to their national debt before they'll have
January 1948 NATIONAL CONVENTION 1173
cause for worry. I remember myself very well,
living as I did at that time in the United States,
when the public debt of the USA was something
of the order of $42 billion. They came out of
World War I with a public debt of something over
$20 billion, and it rose to something around $42
billion. Franklin D. Roosevelt, started his New
Deal. He spent fabulous amounts of money he
borrowed, the government of the USA borrowed
fabulous amounts of money, and there were
economists who said that when the USA reaches
$100 billion public debt, she's finished, that's the
end of her. Well, sir, Congress passed a law that
the public debt of the USA must not rise above I
think it was $75 billion. They put a limit on it —
$45 billion, Major Cashin says, anyway they put
a limit on their public debt. Now, what happened?
They borrowed and they borrowed and they borrowed and they borrowed. And today the
USA
has a public debt, I think, of a billion dollars for
every day in the year. Somewhere around $350
or $360 billion — a fabulous amount, we can't
conceive that amount. But the USA doesn't mind
that public debt at all. They take it in their stride.
Now, there's one final point that needs to be
made on this question of a public debt. It's not the
size of a country's public debt that matters, if it
is owed to its own people. Not that, but the total
amount of taxes a man pays. A government collects a certain total amount of taxes
from its
people. It spends that money. Some of that money
it spends to pay the interest on the debt — but
only some of it. What really matters, therefore, is
the total amount of taxation that the people pay,
or to boil it down still further, what matters to
each individual is the total amount of taxes that
he pays. A part is never as great as the whole: the
interest on the public debt is only a part, whereas
the total taxes a man pays is the whole.... You see,
we mustn't imagine that if we go into confederation the Government of Canada will
then send
each one of us a bill as our share of the public
debt, or the interest on that debt. It's not done that
way. We pay our taxes mostly according to our
income or our earnings, and out of what they take
from us in taxes, they use so much to pay the
interest on the public debt. We don't need to
worry about the public debt. If we need to worry
about anything, it's about how much taxes we
will pay, for those taxes will include something
towards the public debt or the interest on the
public debt. We'll pay our share of the total taxes,
and when we do, we can forget about the public
debt because our taxes will help to take care of
the public debt. And one of the really big things
about confederation in my view is that most of
our people, the great bulk of them, will pay less
in taxes than they are paying now. That's all I
wanted to say about this public debt question just
now. It's nothing to get worried about. The
Canadian people are not worried about their
public debt, and we won't need to be worried
about it if we go into confederation. The people
of Canada are living well in spite of their public
debt. I can guarantee you, Mr. Chairman, that
there's more talk here in Newfoundland about
Canada's public debt in one day, one day, then
there is in Canada in a year....
[1]
Now this afternoon Major Cashin explained
what he meant when he said that Canada would
take not the $32 million a year that he told us at
one point, but $75 million. He explained that he
was referring to our share of the public debt.
Now, when a country owes a public debt, it's the
interest on that debt that matters. And the interest
on the public debt of Canada is around $400
million a year. Three provinces of Canada —
Ontario, Quebec and British Columbia — three
provinces pay the Canadian government 89% of
all the revenue that the Canadian government
gets. That means that these same three provinces,
if they pay 89% of all the revenue of the Government of Canada, then they pay 89%
of the interest
on the debt. Because the interest on the debt is
only $400 million a year, whereas the whole
revenue is three, or four, or five times as much as
that. So therefore these three provinces pay 89%
of whatever it costs to service the public debt —
89% of that $400 million.... That leaves only $40
million to come from all the rest of Canada. What
would our share of that $40 million be? Pretty
small. But whatever it is, it'll come out of the total
taxes that we pay to the Government of Canada,
which would be $20 million a year. Now, where
does Major Cashin get his figure of $75 million?
We're still in the dark on that, at least I am — still
in the dark. I don't know where he got that figure.
Well, sir, that's Major Cashin's speech —
what's left of it. He spoke for part of four days.
He spoke many thousands of words. He's getting
1174 NATIONAL CONVENTION January 1948
almost as bad as I am. He made many hundreds
of statements, but amongst them all there's really
only one statement that deserves attention, for
that one statement stands out above all the rest of
his speech — I quote his exact words: "I like
Canada, she's a great country." Now, sir, why
shouldn't he like Canada? Why shouldn't he
think she's a great country? He worked in
Canada. He travelled right across Canada. He
fought in the Canadian army. He's an ex-officer
of the army of Canada, retired with the rank of
major from the Canadian army. For the past eight
or nine years he has made Canada his home,
although within that period he has managed to
visit us here in Newfoundland a few times. His
home is in Canada now, in Montreal. When the
Christmas recess came a year ago, and again this
year, when we all trooped off to our homes,
Major Cashin did the same thing. He went to his
home in Montreal. Evidently Major Cashin is not
so scared of all those terrible Canadian taxes that
he's been telling us about. He can't be so very
scared of them when he has his very home in
Montreal at this very minute. I sometimes
wonder to myself, I sometimes wonder what
would have happened if Major Cashin had been
the first to think of advocating confederation
instead of myself. I sometimes wonder if he isn't
just a bit sorry that he didn't come out for confederation in the first place. What
a fine champion he would have made for the great cause of
confederation. In his heart he must know that
confederation would be the best thing that could
happen for the great mass of our Newfoundland
people. But he started by boosting responsible
government and now he's stuck with it. He's
stuck with it, and finds that he can't very well
change before the referendum. But I wonder, I
wonder if there will be a happier man in all
Newfoundland when the votes are counted in the
referendum this spring and he finds that confederation has won with a thundering great
majority? Will there be a happier man in Newfoundland? I leave Major Cashin for the
time
being. I leave him, sir, with an invitation to come
over with us, an invitation to become a confederate right out in the open — drop this
nonsense about responsible government. The people
are not going to vote for it anyway, so what's the
use of wasting time over it? Let Major Cashin
join up, let him enlist, let him enrol right now in
the great and growing army of confederation in
Newfoundland.
I turn, sir, to Mr. Higgins. There are really only
three or four points in his speech that seem to call
for attention. Mr. Higgins told us that a lawyer
often takes on a case that he doesn't especially
like and sometimes acts for a client that he isn't
a bit fond of. But he takes it, he takes the case and
he does his best. I know that's true, and Mr.
Higgins has demonstrated that truth very well in
this Convention. When Major Cashin made that
early speech of his, a few days after the Convention opened, Mr. Higgins got up and
attacked
what Major Cashin had said, and in very trenchant language told Major Cashin that
he disagreed
absolutely and completely with him. We all
remember Mr. Higgins' speech on that occasion.
It was eloquent, logical and persuasive. Then two
or three months later Mr. Higgins gotup and took
it all back, apologised to Major Cashin and in
effect said that he now agreed with him. We all
remember another occasion when Mr. Higgins
delivered a trenchant and eloquent speech, the
best speech that he has delivered in this chamber,
when Mr. Jackman introduced his motion to send
a delegation to the United States to discuss
Newfoundland's pulling down the Union Jack
and running up the Stars and Stripes to become a
part of the USA. Mr. Higgins spared no words.
He hit that motion and he hit it hard, and he told
us we weren't going to be like rats deserting a
sinking ship. His speech made an excellent impression at the time. But now he gets
up and tells
us he's changed his mind again. Now he thinks,
after reading about the expanding American imperialism that he told us about in his
speech, that
Mr. Jackman's motion wasn't so bad after all.
Mr. Chairman Well Mr. Smallwood, lawyers
have a right to do that.
Mr. Smallwood Yes, sir, that's what I'm finding out. Now, now Mr. Higgins has attacked
confederation. But I wonder What will happen a
few weeks or a few months from now — will he
be out supporting confederation? "While the
light holds out to burn, The vilest sinner may
return." Sir, the people, the people...
Mr. Chairman Well, if you don't mind Mr.
Smallwood, since we all occupy the same state
as Mr. Higgins...
Mr. Smallwood The people of Newfoundland
may be prepared to listen to advice from some of
January 1948 NATIONAL CONVENTION 1175
their public men, such as Major Cashin and
myself, but they'll pay precious little attention
to weather vanes that are blown every direction
by every wind that blows. Mr. Higgins says in his
speech, here's Newfoundland sitting with a pat
hand. That's a term used amongst card players. It
means holding all the cards you need in your
hand, you don't have to draw.... Here's Newfoundland, says Mr. Higgins, sitting with
a pat
hand. I wonder if Mr. Higgins is aware of the fact
that we have nearly 1,200 veterans of the late war
out of jobs and unable to get jobs right here in St.
John's tonight. I wonder if he's aware of the fact
that we have thousands on the dole. I wonder if
he knows that the price of fish fell last year and
that tens of thousands of fishermen are wondering what's going to happen this year.
Why, Mr.
Chairman, just let the price of fish take a serious
fall and this country would be on the broad of her
back. Would he call that situation one in which
we hold a pat hand? He may, but I certainly don't.
I turn to my good friend Mr. Bailey. Now I
won't take much time replying to Mr. Bailey.
He's got it in his head that because most of the
provinces of Canada go in heavily for municipal
or town councils, therefore Newfoundland must
if she becomes a province. He knows that towns
or municipal councils have their own local taxes.
So, from this he can't be persuaded that we won't
have to have local taxes, whether we want to or
not. It's no use my arguing with Mr. Bailey,
because "A man convinced against his will/Is of
the same opinion still." Mr. Bailey has his mind
made up that whether we like it or not, we must
have all our 1,300 little settlements governed by
town councils or county councils. And why?
Because that's the way they do it in most of the
other provinces. Now, in a way Mr. Bailey is a
shrewder opponent of confederation than all his
friends in this House put together. I pay him that
compliment. He's shrewd enough to realise that
the only way, the only way to turn our people
from confederation is to convince them that
they'll all have to have these town or county
councils, that they'll have to pay taxes on their
little spots of land, on their homes, houses and so
on, even their fishing gear. If he can convince
them of that, they're not going to vote for confederation; and he knows it, so that's
why he
always talks about that. But incidentally, sir, it's
time for Mr. Bailey to make up his mind on one
point. In the one breath he tells us that we'll be
taxed to death if we go into confederation and in
the next breath he tells us that we'll be wards of
Canada living on the people of Canada. Which of
these two statements does he want us to believe?
Or does he want us to believe both? Perhaps he
has one eye on the people in Newfoundland who
are scared of all those terrible taxes. For them, he
has a lot of talk about how we'll be taxed to death,
and the other eye he keeps on the proud people
amongst them; for them, he has a lot of talk about
our being too proud to live on Canada. Now
which does he mean? We'll be wards of Canada,
living on Canada, or does he mean that we'll be
taxed to death by Canada? He can't have it both
ways. Both these statements can't be true and Mr.
Bailey really should make up his mind. Oh, I'm
sorry, I got Mr. Bailey mixed up with Mr. Higgins. I got my notes mixed. I'll come
back to Mr.
Higgins. I'm sorry if he felt neglected.
Sir, Mr. Higgins tells us that an elected
government would get better terms for Newfoundland, better terms then the Ottawa delegation
got. Now, would the members of a
delegation to Ottawa be better men merely because they had been elected to a government
before they went to Ottawa? Would they be
smarter because they were members of a cabinet?
Would the Government of Canada take them
more seriously then they took the Ottawa delegation? The answer to all these questions
is, "No".
Let's look at this Ottawa delegation. Mr. Bradley
is one of the greatest lawyers this country ever
produced - an eminent King's Counsel, a
former Solicitor General, a former member of the
cabinet — would he have been a better man?
Would he have been treated with greater respect
if he had gone there as a cabinet minister? Mr.
Higgins himself is a practising barrister and
solicitor, a King's Counsel, incidentally. Would
Mr. Higgins become automatically a better man,
merely by becoming a member of an elected
government? Mr. Ashbourne is one of the best
known and most widely respected businessmen
in this country. He's a former member of the
House of Assembly, a university man, an ex-
army officer of World War I. Would it make him
a better man just to become a member of a
government? About the Reverend Mr. Buny, I
will say nothing more than the fact that he is a
university graduate, and the man who is probably
1176 NATIONAL CONVENTION January 1948
better informed, certainly better informed, about
one great part of Newfoundland, namely
Labrador, than any man who ever sat in this
chamber. Mr. Ballam is a veteran of World War
I. He's a major of the CLB.
[1] He's a businessman.
He has had a long and honourable record as a
trade union leader. He was the second president
of the Newfoundland Federation of Labour. He
has represented Newfoundland at several international trade union conventions in Canada
and
the United States. His own international union
selected him to represent Newfoundland on a tour
of the principal paper mills of Europe just before
the late war broke out, and he travelled widely on
that continent. Would it make Mr. Ballam a better
man than he is just to make him a member of a
cabinet? Mr. Crummey is a businessman, a
former teacher and a former inspector of schools.
He is just as good a man now as he would be
merely by entering a government. Well, there you
have the Ottawa delegation and in intelligence,
ability, integrity, that Ottawa delegation would
be the equal of any delegation that a government
would send up there. They were absolutely as
competent to ascertain the terms of union as any
cabinet committee or delegation. There's nothing
very special about a cabinet or a government.
Men do not become smarter or abler or more
intelligent just by entering a government. And
what real difference would it have been made in
our talks with the Canadian government if we had
had some of the government officials along with
us? We have some able men in our civil service.
But all they would have been able to do, if they
had gone with us, was to supply information to
the Canadian government. Well, we supplied
them with all they needed. Is it suggested that the
permanent officials would have been better able
to understand and assess these terms then we are?
If the officials were not needed for the purpose
of giving information to the Canadian government, and if they are no better fitted
to understand
and explain these terms than we are ourselves,
what purpose would there have been in taking
them along, or what did we lose by not having
them? There were seven of us on the Ottawa
delegation. If we had an elected government, and
that government sent a delegation to Ottawa, then
that government delegation would not have numbered more than seven. And I have never
known
a government in Newfoundland that could have
produced a seven-man delegation possessing a
higher average of intelligence, ability, integrity
and knowledge of Newfoundland than our Ottawa delegation. Now, let Mr. Higgins write
himself down all he likes. Let him dismiss himself, if
he desires, as being less intelligent or knowledgeable than a cabinet minister or
a civil servant. But
let him not underestimate the abilities of his
colleagues on the Ottawa delegation, and I'm
sure he doesn't. They not only did a good job, as
he himself has told us, but they did as good a job
as any cabinet or elected government could do
any day. We got the very best terms that the
Government of Canada can offer. No Canadian
government could possibly offer Newfoundland
better terms, not even if an elected government
fought for it. It may be smart tactics to say as Mr.
Higgins has said, "Yes, the terms appear to be
fair, but an elected government would get better
terms." That may be smart tactics, it may even be
smart politics, but it has this serious point against
it. It just is not true.
And then I find that Mr. Higgins said that it's
often used as an argument against responsible
government, where do you get the men? Where
do you get the men to run the country? But I think
that Mr. Higgins was merely putting up a man of
straw to knock him down. Nobody that I ever met
has used that argument. I know that we're told
that the argument is used, but nobody ever tells
us who uses it. Newfoundland has the men all
right. She has the men to run Newfoundland and
she has men who could run Canada herself. It's
not any lack of men that's in the way. It's a lack
of means. That's what Newfoundland lacks —
not men, but the means to do the things that those
men would like to do.
And now I turn to Mr. Harrington. I have
already privately complimented Mr. Harrington
on his speech. To me it was the best speech that
he has delivered in this chamber.... I don't agree
with all of it, I don't need to do that, but I can still
think it was a fine speech. I don't know if Mr.
Harrington was aware of the fact, but at one point
in his remarks he put his finger right on the nub
of this whole question.... He said this: the Grey
Book only represents the application to Newfoundland of the regular features of confederation.
That's absolutely true. These proposals or
January 1948 NATIONAL CONVENTION 1177
terms of confederation are the regular, the normal
terms of confederation. These are what the other
provinces get. These are the things which are laid
down in the British North America Act, Canada's
constitution. Sir, what else could they be? Canada
has only one constitution and so far as financial
terms are concerned, that is what binds all parties
to confederation.
We hear a lot in this debate about going up to
Ottawa and negotiating better terms. The man
who put forth that argument about negotiating
showed plainly that he just doesn't understand.
He doesn't even begin to understand confederation. Such a man probably has in his
mind a
picture of confederation something like this— of
a couple of shrewd bargainers meeting and haggling and dickering and bargaining, each
trying
to get the best of the bargain — each trying to get
the better of the other. And somehow, for such a
man it seems likely that an elected government
would get better terms. But nothing, nothing
could be further from the truth. Whoever the
Canadian government are, and whoever it is that
they may be dealing with, the Canadian government is tied hand and foot in this matter.
They
cannot go outside the British North America Act
or outside of any special regional financial arrangement made with a group of provinces.
And
even any such regional arrangement must have
its basis in the BNA Act. That's the hard fact that
knocks on the head the idea of an elected government going up there and negotiating
better terms.
To start with, it's not a matter of negotiating at
all. It's a simple matter of going up there and
ascertaining, learning, finding out what the terms
are. In the second place, the Government of
Canada are bound by the constitution of Canada
known as the British North America Act. So,
when Mr. Harrington complains about our not
having been offered special terms, he put his
finger right on it. We had not been offered special
terms because no Government of Canada can
offer special terms. And drat's why all this talk
about an elected government going up there and
getting better terms is completely beside the
mark. It's off the track altogether. Here are the
terms, and on the financial side, as the Prime
Minister tells us in his letter, they go as far as
Canada can go under the circumstances. What
circumstances? The circumstances that I have
just mentioned. They are bound by precedent,
bound by what is done for other provinces.
They'd soon hear from the other provinces if
Newfoundland were offered special financial
terms that they hadn't been offered themselves.
In 1864 we were not offered special terms; in
1895 we were not offered special terms; although
on both occasions an elected government went up
there seeking better terms, or special terms, terms
better then any other provinces had been given.
We've already had two elected governments that
went to Ottawa looking for terms. And what did
they get? The same terms as the other provinces.
And now we're told if we'll send an elected
government up there, that elected government
will get better terms. That's the final, the unanswerable answer to those who tell
us that an
elected government would get better terms: the
fact that already two elected Newfoundland
governments have gone to Ottawa and neither
government got them. If, instead of the Ottawa
delegation that went from this Convention, members of a government had gone up to
Ottawa, the
terms they'd have brought back to Newfoundland
would be what? They would be exactly these
terms that we have before us today. I thank Mr.
Harrington for bringing this matter to our attention.
Now Mr. Harrington told us that old age pensions were introduced into Canada in 1927,
which he says was years after old age pensions
were introduced here in Newfoundland. I'm
sorry, but Mr. Harrington is all astray there, all
astray. Old age pensions were introduced into
Canada 20 or 25 years before 1927. What happened in 1927 was merely this, that the
federal
government began to pay part of the costs of old
age pensions. Up to 1927 each provincial government paid its own old age pensions.
The federal
government paid nothing towards the costs. The
trouble with that arrangement was that the richer
provinces could and did pay bigger old age pensions than the other provinces could
afford to pay.
So in 1927 the federal government stepped in
with a plan to pay part of the amount. What they
did was to pay half the cost of old age pensions,
leaving it to the provincial governments to pay
the other half. Then around 1934 the federal
government stepped up its contribution and
began to pay three-quarters of the full amount.
The full amount was then $25 a month. Last
summer the Canadian government raised the pen
1178 NATIONAL CONVENTION January 1948
sion to $30 a month, and of this amount they paid
$22.50 and the provincial government pays
$7.50. In a year or two, as Ihave said, the federal
government is going to pay all of it, the full $30
and make it universal to all persons reaching the
age of 70 without any means test at all — universal, an old age pension of $30 a month
to all
persons of 70 and over without regard to their
means or lack of it.
Now, touching on the matter of the old age
pension, Mr. Harrington quoted a statement
made in the House of Commons by Mr. John
Bracken, leader of the opposition, in which he
referred to the Canadian government's plan to
wipe out the means test in giving old age pensions. I'm very glad that Mr. Harrington
mentioned this. What Mr. Bracken was talking about
was something else altogether. The Government
of Canada has a plan to take over the old age
pension completely for all persons of 70 or
over.... And then on top of that there would be a
pension for all those who needed it between the
ages of 65 and 70. In other words, there'd be a
means test for those between 65 and 70 and the
Government of Canada would not pay all of it but
only half, the government in each province
paying the other half. That's for persons between
65 and 70 who needed it. But all who reached the
age of 70 would receive it without any means test
and the Government of Canada would pay the full
amount. That's the plan to which Mr. Bracken
referred in his speech and that plan has not yet
come into force. It's expected to be put in force
within the next year or two. Mr. Chairman, as we
have only one stenographer, perhaps we might
have a short recess.
[Short recess]
Mr. Smallwood Mr. Harrington, in discussing
the confederation election of 1869, tells us we did
not have the secret ballot in 1869 when our
people voted on confederation. But then, neither
did the people anywhere else on this side of the
Atlantic at that time. But what's that got to do
with it? The fact is that there was no secret ballot
80 years ago when our people voted on confederation. Every voter had to walk into
a booth
and in a loud voice declare whom he was voting
for. There was nothing secret about it. The local
merchant or his agent was right there in the booth.
He was the agent for Charles Fox Bennett, the
biggest merchant in Newfoundland, who was the
leader of the anticonfederates. And it took a
pretty brave fisherman in those days long ago, to
go against the local merchant. Now, what actually happened in that confederation election
80
years ago, what did happen? Thirty members
were elected to the House of Assembly. Ten of
them were confederates, 20 of them were anticonfederates. But that does not tell the
story at
all. One thousand votes more for confederation
in that election, just another 1,000 votes, and it
would have been 20 confederates and 10 anticonfederates elected. If only 1,000 of
those who
voted in that election had voted the other way, we
would have become a province in 1869. Just a
few hundred votes more in Bonavista Bay and
three confederates would have been elected
there. Just another couple of hundred votes or so,
and three confederates would have been elected
in Trinity Bay instead of the two confederates
who were elected.... And so it was in most districts. A mere thousand votes more for
confederation in the whole country and confederation
would have won. You see, Mr. Chairman, I too
have read the whole story of that famous election.
And while we are at it, I noticed that Mr.
Harrington did not tell us anything about the
famous and patriotic Newfoundlanders — as a
matter of fact Lady Squires was kind enough, a
few months ago, to tell me of the last interview
Sir Richard Squires gave before he died. It was
given to the Winnipeg Free Press in 1938. In that
interview Sir Richard Squires declared — it was
the last thing he ever said to the public — that
confederation was the only hope for Newfoundland.
Sir, Mr. Harrington touched on the question of
education and referred to the clause about education in the terms of union. There's
really only one
point in his remarks on this subject that calls for
any cement. He will not, I think, deny that the
education clause protects all our rights as they are
now. Every denomination with its own schools at
the time of union will go right on with its own
schools just so long as it wishes to. That right is
guaranteed in the terms. Not only that, but each
denomination is guaranteed its rights, to its share
of the public money spent on education. Then
again, if any two or more denominations should
ever wish to unite or amalgamate their schools,
January 1948 NATIONAL CONVENTION 1179
that right is guaranteed also together with their
right to their share of the public funds spent on
education. In other words, sir, all rights are
guaranteed. We have in Newfoundland what is
known as denominational education. Confederation does not change that one bit, not
one bit....
Mr. Harrington does not deny this. But what he
does suggest is that under confederation this
guarantee might be upset or cast aside. And what
reason does he suggest? The Manitoba school
case, which was one of the most famous cases of
its kind in North American history, about as
famous as the Oregon school case. The Manitoba
school case brought the Government of Canada
toppling down when it happened And that case
taught all the governments of Canada a lesson
they'll never forget. It taught them this lesson —
not, not to meddle in educational matters in the
provinces. Why, you couldn't dynamite the
Government of Canada today into getting itself
mixed up in educational matters. They won't
touch it... In our clause on education all
denominational rights are guaranteed and our
provincial government is not allowed to make
any laws or changes that would prejudicially
affect the rights of any denomination. But suppose some provincial government ever
tried to do
so. What then? Would the denomination concerned have to go to the Government of Canada
seeking redress? No, they would not. The
Government of Canada wouldn't be in the picture
at all. They would go to the Supreme Court of
Newfoundland, and there they would get justice.
The Supreme Court would have to carry out this
clause, which guarantees the rights of all the
denominations. And if by any chance, if by any
remote chance, our own Supreme Court failed to
carry out this clause, that would not end it either.
For then, the case could be appealed to the
Supreme Court of Canada itself. That, sir, is a
vast improvement over the Manitoba clause. It's
not with governments or cabinets or parliaments
we'd have to deal, but with the very seat of justice
— the Supreme Court itself. Mr. Harrington can
rest his mind in this matter. I can tell him this. I
for one would not be so foolish, so short-sighted
as to advocate confederation if this education
matter had not been fixed up to the satisfaction of
all concerned. Not for one split second would I
waste my breath advocating confederation if this
education matter had not been thoroughly and
absolutely fixed up. I know my country, sir,
believe me. I know the deep and unshakeable
loyalty of our people — all our people — to their
denominations. I know the loyalty of our people
to their various school systems. We have a school
system which is a Newfoundland system, that has
grown up out of our Newfoundland ideals, our
Newfoundland outlook on life. It is a system that
has grown up naturally, and I am the last person
who would upset it or allow it to be upset. Believe
me, I went to Ottawa with that thought uppermost
in mind. I cared not what material advantages
there might be for us in confederation. My mind
was made up. I was detemiined not to advocate
confederation unless and until all denominational
rights were fully guaranteed. Sir, it's bad enough
to have to fight prejudice, but the one thing I will
not fight is the deepest loyalty of our people.
Thank God I do not have to do it, for the school
rights of all our denominations have been fully
protected and guaranteed. All education matters
under confederation have been left just where
they belong — right here in Newfoundland. So
that's one question that won't turn our people
against confederation.
I turn to Mr. Butt. I am frankly puzzled to
understand what Mr. Butt was getting at when he
mentioned the Sacco-Vanzetti case. He was
speaking at the time about the Privy Council's
Labrador boundary award, and the impression I
gathered from his remarks was that he was trying
to make out that maybe the Privy Council award
is not binding and final seeing what happened in
the Sacco-Vanzetti case... I agree with you, sir,
it is a matter for smiling. What the Sacco-Vanzetti case in Boston has to do with
the Privy Council
of Great Britain, is frankly more than I can see.
Sacco and Vanzetti were sentenced to death by a
court in Massachusetts in the United States. It
was admittedly a terrible miscarriage of justice
But what has that got to do with the character or
the nature of the Privy Council, or with a decision
of the Privy Council of Great Britain? Instead of
hinting, why doesn't Mr. Butt come right out and
say definitely that he places no dependence on the
decision of the Privy Council?
Mr. Butt says if you give away your control
over your communications, if you give away your
right to control your fishery, if you give away
your right to set your own system of taxation, if
you give away these rights you're in a bad way.
1180 NATIONAL CONVENTION January 1948
Now, just what does that mean? What does it boil
down to? Mr. Butt could possibly mean that the
federal government will operate our postal
telegraph system, that the federal government
will spend hundreds of thousands of dollars on
the protection and encouragement of our
fisheries, and that in place of our present unfair,
unjust, and oppressive system of taxation, which
crushes the life out of our producers, we'd have
the very much fairer taxation system of Canada,
which places the greatest burden on the people
best able to bear it. That is, in place of taxation
which puts a terrible burden on our basic industry, we'd get one in its place that
would lift a
great portion of that burden off our producers.
Mr. Butt is welcome to the belief that this would
be bad for Newfoundland I believe that it would
be the best thing that ever happened to our
country.
Then Mr. Butt gave us a homily on the subject
of morale — of faith in ourselves, pride in our
country. I listened with a great deal of interest to
this dissertation because he was expressing the
view that I happen to share. Is it too much for me
to say that more perhaps than any other man in
this country, I have pointed to the desirability,
indeed the need, for pride in one's country? I was
on the air every weeknight for nearly seven years,
and I don't think I ever tired of driving home the
importance of taking legitimate pride in everything that's good about our country
and about
ourselves. I delved into our country's history to
bring out examples of the fine things our people
have done. I roamed all around the world in my
mind to find examples of Newfoundlanders who
had made good in other lands. As Florenz Ziegfeld was said to glorify the American
girl in his
famous follies, so I tried to glorify Newfoundland
and Newfoundlandcrs nearly every night for
seven years. I take back none of that. I still think
we are a fine people and we can hold our heads
up with the best of them. I still think we have very
real possibilites of greatness within us. But here
in this Convention we are not theorists, we are
not here to spin fine theories, however true and
however beautiful. We are here as elected representatives of the people. We are here
for a particular purpose....
[1] A practical purpose. We
would be false to our people if we allowed ourselves to be carried away by fears,
if we failed to
keep our feet planted firmly on the ground. I like
to think of the remark Major Cashin made to Mr.
Neill, the Commissioner for Public Utilities,
when, a committee interviewed Mr. Neill about
Gander. When we tried to find out definitely who
was going to pay the operating loss on the airport,
Mr. Neill made the remark, "I have faith, I have
faith". "Yes," said Major Cashin, "we all have
faith, but you can't balance a budget on faith."
I've never forgotten that. Neither, sir, can you put
food in your childrens' stomachs, or clothes on
their backs, just by faith in a theory of national
pride. What good would national pride have been
to the 90,000 men, women, and children who
suffered and starved on the dole in this country?
When the icy blasts of world depression strike us
again, when our fish is once more a drag on the
market as it will be, when our income dwindles
to a shadow of what it is today, our people will
want something more substantial than pride of
country. This very winter there are thousands of
our men who can't find a day's work, many
hundreds of them veterans of this late war, who
risked their lives for the brave new world they
were promised. They demonstrated their pride of
country but they can't live on it this winter. They
can't balance their family budgets on it. Let's be
practical about this thing, Mr. Chairman. We all
know our Newfoundland people are as fine a race
of men as you'll find in Canada or the United
States or any other country in this world. They
have magnificent qualities of heart and mind.
They have courage and endurance. They know
how to work and they're not lazy. The thing that's
wrong with this country is not our people; but
there is something seriously wrong.
The thing that's most wrong about our country
is that there just are not enough of us. We're only
a handful of people, 327,000 souls scattered
about the island living in 1,300 separate little
towns, settled villages — the population of only
one small city, if we were all put together. A
mutual friend of Mr. Butt's and mine said that if
he took a week off, and practised hard, he could
learn off by heart the names of our entire population —— if not their Christian names,
then certainly
their surnames. It's a hard country to govern, for
which to provide all the varied public services
that are needed, because we're so small in number and so scattered, scattered. And
we have
January 1948 NATIONAL CONVENTION 1181
punished ourselves as a people, or we've been
punished, with a system of taxation that makes
decent living absolutely impossible except when
there's a global war raging.
Above everything else, what's wrong with our
country is the fact that we have persisted and
insisted on acting as though we were a nation, or
as though we thought we could be a nation.
Whereas the fact is we're only a large family.
Most of our trouble stems from that misguided
policy. Sir, you could bring Winston Churchill
and Ernest Bevin and Herbert Morrison to Newfoundland, and along with them Mackenzie
King
and Franklin D. Roosevelt if he were alive, and
Lloyd George too if he were alive, and you could
put those men at the head of affairs in Newfoundland, They could do their best, and
their
best would not be good enough. They would fail.
They would be licked before they started, because it's impossible to make things right
for the
people of this country so long as we hold out
stubbornly against the one thing that can make a
prosperous Newfoundland really possible. They
would fail so long as they tried to run Newfoundland as a separate independent country
pretending that it was a nation. They would fail
so long as they failed to link Newfoundland onto
a much greater, at much larger, a much more
stable unit. That's the first lesson we all need to
learn when we come to figure what's wrong with
our country and what the cure might be. To stay
isolated from the great continent besides which
God placed us, to persist in a mistaken and hopeless independence, to continue our
vain hope of
paddling our own canoe, that way has produced
untold misery for our people and will produce
more misery if we don't wake up to our mistake.
And it is also needless, Mr. Chairman, so needless. A great British nation is asked
by us, asked
by this Convention, to receive a delegation. They
received the delegation, and they say, "We invite
you to link up with us to make one great strong
British nation stretching all the way from St.
John's to Vancouver." And what do we do? What
do we do? We look suspiciously at them. We
thought it was a land full of Hitlers, Hitlers trying
to gobble us up, trying to rob us of our little store
of natural resources, trying to get rich out of us.
We pick holes in the terms and conditions they
offer us. The moment we receive their invitation
to join up with them, we get suspicious and put
up every trumpery excuse we can think of for not
accepting. Yes, by all means let us have national
pride, but let us also have national common
sense. Now, sir, I turn to Mr. Northcott. Just two
points. He tells us he wants out Newfoundland
people to know how the burden of taxes under
confederation would compare with our burden of
taxes today. He asks the question, "Would
federal, provincial and town council taxes all put
together he more or less than we're paying out
now in taxes?" That's a very fair question — a
very practical question and a very useful question, and I thank Mr. Northcott for
asking it.
Today our taxes amount to about $40 million a
year, not counting municipal or town council
taxes. That's what we're paying the Commission
of Government, $40 million a year. Under confederation we would pay taxes to both
the federal
government of Canada and the provincial
government of Newfoundland. What would these
amount to? That's what Mr. Northcott wants the
people of Newfoundland to know. The Government of Canada estimates that they would
collect
$20 million a year profits in federal taxes. That is
if the present rates of taxation continue as they
are in Canada, if they don't fall ... and if the
present level of economic activity stays as it is
now in Newfoundland. Very few of us expect it
to do that, for already it has started to drop. $20
million, the Government of Canada would take.
The provincial government of Newfoundland
would collect $5 million or $6 million a year from
us in taxes. At least it would for the first eight
years of union. Well, that's a total of say $26
million a year between the two governments. Mr.
Northcott can add to that if he likes. He can add
a couple of million to the provincial budget and
he can add a couple of million to the federal
budget and get a grand total of $30 million. Even
then, our total taxation would fall $10 million
short of what we're paying now. We're paying
$120 a head to our government now. We'd pay
at the most $91 a head under confederation, a
saving of $29 a head. Mr. Northcott may or may
not be willing to accept my figures. So I'll stretch
the thing all out of shape to see how he'll like it
then. Let's say the Government of Canada are as
much as 50% out in their estimate — 50% out.
They say they'll collect $20 million from us. Let
us say they'll collect $30 million from us. I say
the provincial government will collect $5-6 mil
1182 NATIONAL CONVENTION January 1948
lion from us. Let's say that I'm out as much as
50% in my estimate. Let's say it would be $9
million a year that the provincial government
would collect. In that case, stretching it like that,
the two governments between them would take
$39 million from us a year, or still $1 million less
then we're paying now. Mr. Northcott may say
that in that case, we'd only be $1 million dollars
better off under confederation, just $1 million
dollars a year better off. But that is not so. Besides
that $1 million a year, 120,000 of our children
under the age of 16 would be getting $8.5 million
a year in family allowances, and 10,000 of our
senior citizens would be getting $2.5 million a
year in old age pensions. Our railroaders would
be better off, our civil servants would be better
off, our cost of living would be lower than it ever
could be without confederation, and our people
would have the satisfaction of knowing that their
country was linked up with that great British
nation we call Canada.
Mr. Northcott asks me to say something on the
question of divorce...
[1] I am trying to fathom why
Mr. Northcott is so interested in the question of
divorce. I know Mr. Northcott is happily married,
and that's why I've been trying to figure why he's
been so interested in having me say something
about divorce in case we go into confederation.
I'm sure that he has no motive except a perfectly
good one. And so for that reason I'm going to say
something about divorce in case we become a
province of Canada. Sir, we have no divorce laws
in Newfoundland. We never did, and 1 hope we
never will. Those provinces of Canada that are in
the union now, some of them had divorce laws
before confederation was started in 1867. They
took their own laws into the union with them.... I
don't think that any other province since then has
passed any divorce law of its own. If Newfoundland goes into confederation, I would
give
it as my opinion that it's very unlikely, highly
unlikely, that we'll ever get a House of Assembly
elected here that will pass a divorce law, I don't
think that's likely to happen. If Mr. Northcott was
a member of that provincial House of Assembly,
I don't think he'll vote for any law to grant
divorce in Newfoundland. I know I won't. I don't
think Mr. Starkes or Mr. Vincent or Mr. Harmon
or Mr. Jackman or Mr. Watton or any of us who
should happen to be in the provincial legislature
of Newfoundland, will ever vote to pass a divorce
law. That's very unlikely. But even if we don't,
we might still be able to get divorced, that is true.
We could do as the people do in the Province of
Quebec. Quebec has no divorce law — never did
have one and I don't suppose she ever will have
one.... There are only two possible grounds for
divorce — adultery and desertion. And if a person in Quebec wishes to get a divorce,
what he's
got to do, or she, is this: go to the Parliament of
Canada, the Parliament mind you, and get the
Parliament to pass an act for him or for her, one
law for him or for her, not a law for everyone or
for a lot of people, just for him or for her. First of
all the application is put before the Senate of
Canada. There's a committee of the Senate —
they're poisoned with it, they hate it, it stinks,
they don't like it, this committee — but it has to
go before that committee. The committee passes
on it, like a court. And if the committee agrees
that the evidence that's produced is good enough,
they will pass a law in the Senate, then from the
Senate it goes to the House of Commons and if
they agree with it, the Governor-General of
Canada signs that bill, and that one person is
divorced. Or rather, I should say those two persons are divorced. If we become a province
we
can do that. A person in Newfoundland wishing
a divorce can hire a lawyer, and the lawyer can
prepare his case. If he can prove to the Senate of
Canada either adultery or desenion, the Parliament may pass an act divorcing that
one person
from his spouse. That costs from $1,000 to
$1,500. So while I am not prepared to guarantee
that under confederation there would never be
anyone divorced, I am firmly convinced that if
you have one or two or three people getting
divorced, it's as many as you'll have. If you take
this country in the last number of years you'll find
this, that although we have no divorce law there
are still Newfoundlanders who get divorces. Oh
yes, there are Newfoundlanders who get divorces, not in Newfoundland, and they marry
again.
We have people who have been divorced from
their first wives and who are now married to a
second wife although we have no divorce law. So
under confederation there might be one or two or
three cases. I don't think we need to worry about
it. We needn't lose any sleep.
I'm sorry that Mr. Hillier is not present
January 1948 NATIONAL CONVENTION 1183
tonight, because there is just one point in Mr.
Hillier's very fair and honourable speech of
yesterday, one point on which I wish to offer a
word of comment. It was what he said about
Canada's old age pension scheme. Now I happen
to know that Mr. Hillier is deeply interested in the
subject of our senior citizens, our old people. I
agree with Mr. Hillier absolutely when he says
that the pensions should start before a man or a
women gets to be 70 years of age. I think he's
perfectly right. And I'm sure that he'll agree with
me when I say that 75 is a criminal and shameful
age limit to place on our senior citizens before
they are entitled to the old age pension. And that's
the age, 75, an elderly person has to reach in
Newfoundland today before we pay him the pension. At least Canada is five years better
off in
that way than Newfoundland because she gives
the pension at 70. And I agree with Mr. Hillier
that $30 a month is not a cent too much to pay to
our worn-out toilers, but surely he'll agree with
me when I say that $30 a month for one is a lot
better then $30 a quarter for two. That's what we
pay here in Newfoundland for two elderly persons, $30 a quarter for the two of them,
$10 a
month. Just compare two elderly persons in the
two countries. In Newfoundland they have to live
to be 75 before they get the pension, in Canada
70. In Newfoundland we pay two persons $30 a
quarter between them, in Canada they pay $30 a
month to each of them. What's the difference?
The old people in Canada get $60 a month between them, whereas two old people in Newfoundland
get $10 a month between them. The
old couple in Canada are $50 a month better off
than our old couple, and that's $600 a year.
I won't go over the question of a pensioner's
property again. I've already explained that
several times. It's enough now to say this, that if
that bit of property is worth $2,000 net or less, the
pensioner is free to do whatever he likes with it,
give it to whoever he likes. It covers the vast
quota of the 10,000 old people who would receive
the old age pension if we go into confederation.
I would ask Mr. Hillier to cast his mind over his
own native home, and the other settlements he
knows in his district, and ask himself how many
persons of 70 and over have property that would
fetch over $2,000 cash if it had to be sold. For that
matter, I would ask all our members, apart from
those from the capital city and perhaps Grand
Falls and Corner Brook and one or two other
places, I'd ask all our members to cast their minds
over their districts and ask themselves the same
question. And don't forget, Mr. Chairman, that if
an old age pensioner has property that would
fetch over $2,000, the sons or other relatives still
have a way to get that property when the old age
pensioner passes away. They can contribute
regularly and reasonably to the support of the old
age pensioner for at least the last three years of
his life. That's fair enough, isn't it?
Now, I have only two more points. Ever since
the confederation terms were laid before us,
speaker after speaker amongst the anticonfederates has harped and harped and harped
on
the matter of taxes. It's been almost the second
word in every speech. The impression aimed at
is that our people would be smothered by taxes,
that they'd be taxed to death if we enter confederation. There may be a country somewhere
in this world where they have no taxes. If there
is, I've never heard of it, unless it's a country
without a government. All countries have taxes,
as we know so well here in Newfoundland. They
say there are two sure things for all mankind —
taxes and death. I certainly don't say that if we
enter confederation there'll be no taxes. Now
there are many principles of taxation, but the
greatest principles are these two. First, that there
should be equality of sacrifice in paying taxes.
The second principle is that it's not so much how
much taxes you pay, as what you have left after
you have paid your taxes. These are the two
greatest principles of taxation. I know of no
country in the world that offends against those
two principles as much as our own Newfoundland does. Our chief way of raising taxes
in
Newfoundland is through the customs tariff, the
customs duties on our imports. This is called
indirect taxation. Of course there are other kinds
of indirect taxation as well as customs duties, but
what do we mean by indirect taxes? If a government sends a bill to a man for a certain
amount of
money as his share of paying the cost of running
the country, and if the man knows exactly how
much it is and puts his hand in his pocket and pays
the government himself, then that is direct taxation. It is paid directly by the person
who is
supposed to pay it. It goes direct from the taxpayer to the government, so to speak...
But with
indirect taxation you have something altogether
1184 NATIONAL CONVENTION January 1948
different. In this case, the taxpayer doesn't put his
hand in his pocket and hand over the taxes to the
government direct himself. With indirect taxation somebody else puts his hand in his
pocket,
takes out the money and hands it over to the
government, not the man who pays it at all. In
fact, the man who really pays it doesn't know just
what he is paying, because it was taken out of his
pocket by somebody else. And that somebody
else forgot to tell him how much he took out for
taxes. If a fisherman goes into a shop and pays
$50 for a bedstead, he pays $50 for it. Does the
shopkeeper tell him how much of that $50 goes
to the government in tax? No. And all the fisherman knows is that he paid $50 for
the bedstead.
He knows that he probably paid some tax on it,
that some part of that $50 went to the government, but how much? He doesn't know.
If he had
a copy of the customs tariff he could look it up
and find out that the duty on that bedstead is
50%.... But not only does some of that $50 go to
the government in tax, but the shopkeeper has
made a profit on that duty — I don't mean a profit
on the bedstead itself now, but a profit on the duty
that was paid on the bedstead. He doesn't tell the
fisherman that and there's no reason why he
should. The shopkeeper has already paid the
duties to the government. He has paid out that
money and he, the shopkeeper, is entitled to make
a profit on the money he puts out, whether it's put
out to buy the bedstead in Canada in the first
place, or to pay the government the 50% duty on
it. It's all the same to the shopkeeper. He's invested the money and he's expecting
to make a
profit on it. And that's how it goes, all the way
through, wherever a customs duty is paid on an
article. A profit is made on that duty as well as on
the article itself. Two profits — and they both
come out of the customers' pockets. Even when
the customer has some idea of this, he usually
doesn't know how much more the article cost him
because of the duty and the profit on the duty.
That's what we call indirect taxation. And that's
how the bulk of our govemment's money is made
in Newfoundland.
Suppose the wholesale merchant here in St.
John's imports $100 worth of goods from
Canada. He pays $100 wholesale for the goods in
Canada. The goods are all at the wharf, but can
he go and take it off to his own store? No, not till
he pays the government say $40 duty. So they
cost him $140 landed in his store. So he puts his
profit on the $140.... Say his profit rate is 20%,
that's $28. So he sells the goods to a retail shopkeeper for $168.... The government
has its $40
tax, the wholesale merchant has his $100 back
and his $40 back, together with his profit on $100
and his profit on the $40 duty. Now the retail
shopkeeper has the goods. They cost him $168.
So he puts on his 20% profit, and that makes the
goods worth $201. The retail shopkeeper sells
them to the public, to the fishermen, and loggers,
and miners, and everybody else, for $201. Now
what's happened? The wholesaler pays the duty
tax to the government and gets it back with a
profit from the retailer. The retailer gets it all
back, together with his own profit from the
public. The customer, the consumer, the man
who finally forks over his money across the
counter, he pays it all — a tax to the government,
a profit to the wholesaler on the tax, and the
retailer's profit on the wholesaler's profit —
profit piled on profit. And the customer pays it all
and wonders why the cost of living is so high.
Yes, and some of them shiver when they're told
in this Convention about the awful taxes they'll
have to pay if we go in with Canada. That system
of taxation is one of the most unjust, yes, one of
the most vicious in this world today. It's bad
enough to have to pay taxes to the government,
but a lot worse when private individuals, private
businessmen, are able to make their own private
profit on those very taxes. That's what we get
when we raise the bulk of our taxes through
customs duties.
Last year we paid the government, all of us
Newfoundlanders, around $20 million in customs duties. That was bad enough, and it
certainly drove the cost of living up high enough, but on
top of that $20 million we paid at least another
$5 million to the wholesale and retail merchants
between them as profits on that $20 million duty.
You see, sir, the merchants paid the duty to the
government. They laid out their money to pay the
duty and they were fully entitled to make a profit
for themselves on that money. I'm not saying one
word against the merchants on this point. We
can't blame them a bit. They have got to do it if
they're going to stay in business. But the fact
remains that the general trade of the country last
year took at least $5 million out of all of us, to
compensate themselves for collecting the
January 1948 NATIONAL CONVENTION 1185
government's revenue for them. They're agents
for the government, collecting the government's
revenue... That's indirect taxation. That's customs duties. That's how the system
works, and
that's one of the biggest reasons why the people
of this country are suffering the way they are
today from the high cost of living, and always did.
You can take note of this fact, Mr. Chairman, the
higher the prices go in the countries we buy the
goods from, the worse this position becomes. I
told you what happens when the article costs
$100 abroad, and the profit is made on the duty,
but if the price goes way up, say to $150 in the
States or Canada, then the duty is no longer $20
but $30, and the profits made on the duty are no
longer what they were in the first case, but that
much higher, half as high again. The higher the
prices in the countries we import from, the more
duties we pay, and the more profits we pay on the
duties, and so it goes until the ordinary man can't
live at all. His dollar shrinks and shrinks and
shrinks. It'll buy less and less all the time. And
who feels it worst of all? The poorest of the poor.
Not the family that can afford two or three motor
cars, or a couple of trips away every year, or life
insurance policies running up to a $100,000, or
even $2-300,000, not the family that can send its
children to school in Canada, England or the
States, certainly not the family that can afford to
spend $4-5,000 a year just on ordinary household
expenses, because to such a family another few
hundreds or even another thousand a year won't
make or break them. No, it's the family that has
to watch every cent. The family that has to stretch
the last penny, that has to go without and never
knows anything year in and year out but penny-
pinching economy. They're the people who feel
the pinch where it hurts most — in their
children's stomachs and on their children's
backs. The great majority of our population,
those tens of thousands of our people who ache
and yearn for a square deal and don't know where
to turn for it, those are the people who will be
helped by confederation. Oh yes, confederation
will tax them too. But not in the same way — not
so heavily, not so harshly and above all not so
unjustly.
Mr. Chairman, this is the fifth week since this
debate began, and for all of that time we've been
discussing and debating the details of these confederation terms. I am afraid that
more than once
we haven't been able to see the forest for trees.
We've wrangled and disputed so much over the
details that we've failed altogether to give the
people an intelligent picture of the whole thing in
the round. It would be useful therefore, if before
this debate closes, I should try to give a general
picture of confederation as these terms describe
it. The first fact is that confederation means that
Newfoundland would join the family of
Canadian provinces. Where there are nine
provinces now, there would be ten if we joined
up. Newfoundland would have all the rights,
powers, privileges and responsibilities of a
province of Canada. We'd no longer be on our
own — no longer would we be trying to paddle
our own canoe, trying to get along by our own
unaided efforts. We'd be part of the family of
Canadian provinces. The second fact is that the
Province of Newfoundland would consist of
152,000 square miles, 42,000 square miles in the
island of Newfoundland and 110,000 square
miles in our territory of Labrador. Labrador as
defined by the award of the Privy Council in 1927
would be part and parcel of the Province of
Newfoundland, and the boundaries separating
Newfoundland-Labrador from Quebec-Labrador
could never be changed except with the full free
consent of Newfoundland. The third fact is that
the Government of Canada would take over our
entire external public debt — the debt of $60-odd
million we owe in Great Britain. Canada would
relieve us of this debt and would pay the yearly
interest on it, and would pay it off when it fell
due. Newfoundland would be left with a public
debt of around $6 million, which amount we
really owe to ourselves. That is, it's an internal
debt borrowed by our government from people
here in Newfoundland. The interest on it would
go to the people in Newfoundland.
The Government of Canada would take over
and operate at their expense our railway and
coastal boat system, the Newfoundland Hotel if
we want them to take it over, the post and
telegraph system, Gander airport, all lighthouses,
fog alarms, beacons and buoys, public wharves
and breakwaters, what we call marine works; the
pensions and rehabilitation of all veterans of both
wars, the protection and encouragement of the
fisheries, the geological survey and the
topographical, geodetic and hydrographic surveys. The civil service employed in these
public
1186 NATIONAL CONVENTION January 1948
services would also be taken over by the Government of Canada. They would become federal
civil servants and they would suffer no loss in
wages, salaries or pension rights. The employees
of the railway system would also be taken over
without loss of salary, and they would be guaranteed the same continuity of employment
as other
employees of the Canadian National Railways.
The Government of Canada would provide
family allowances to all children under 16, old
age pensions and pensions to the blind, old age
beginning at 70, blind persons at the age of 21.
They would provide unemployment insurance
benefits, sick mariners' and fishermen's benefits,
and assistance to housing. The Government of
Canada would place a new ferry on the Cabot
Strait. This boat would be specially fitted to carry
motor cars, but it will not be put there until the
road from Comer Brook to Port-aux-Basques is
finished. The Government of Canada would also
bring Newfoundland under the Maritime Freight
Rates Act, which act provides a 20% reduction in
freight rates on all goods moved by rail, moving
within or going outside of the Maritime region —
that is, the whole region this side of Point LĂ©vis,
near the city of Quebec.
On the financial side the Government of
Canada would pay to the government of the
Province of Newfoundland the following amounts
of cash: $180,000 each year, and 80 cents per
head of our population each year, and $1.1 million cash each year as a special subsidy
for all
time, and $22.75 million in the first eight years
of union — an average of over $2.5 million each
year as a special transitional grant. These
amounts, together with the amount which the
Government of Canada would pay under the tax
rental agreement, would average $9.5 million a
year. Then in addition to that, the Government of
Canada would pay back to us the amount which
we will have paid them for the purchase of their
rights in Gander — $666,000. And the Government of Canada will also pay back to Newfoundland
the cost of these two new boats that are
still in Scotland to be delivered over here to us.
The Government of Canada within eight years
after we entered the union would appoint a royal
commission to reassess our whole financial position as a province. That is, to see
if we need any
additional subsidies, and if so how much to
enable our provincial government to carry on
without imposing taxation too burdensome for us
to pay, compared with taxation in the Maritime
Provinces, and having regard always to our
capacity to pay tax. And within two years after
we entered the union, if we wished to institute an
economic survey of Newfoundland — which of
course includes Labrador — the Government of
Canada would provide the services of technical
personnel and agencies to make this survey for
the purpose of finding out what resources we
have that may profitably be developed, and what
new industries may be established, or what existing industries may be expanded.
Our accumulated cash surplus will remain our
own. The Government of Canada would be willing to receive it on deposit for us and
to pay us 2
5/8% interest on it each year. One-third of our
whole cash surplus would have to be set aside to
be spent, if we like, on the ordinary purposes of
the provincial government. And the other two-
thirds of the surplus would have to be set aside
by us to be spent on the general development of
Newfoundland. The provincial government
would have the right to lend money out of the
surplus to industries or fishermen or other
producers, but it would not have the right to
subsidise industries which were in competition
with similar industries in the rest of Canada.
Education is left entirely and absolutely with
ourselves. The Government of Canada would not
and could not interfere with our school system.
All the denominational schools existing at the
time of union would have their rights guaranteed.
That is, they could keep right on as they are, and
they would continue to be financed out of the
public chest. Any two denominations that wanted
to unite or amalgamate their schools would have
the right to do so, and if they did so they would
continue to receive their full share of public
money spent on education.
Newfoundland would be entitled to have six
members of her own in the Senate of Canada and
would also be entitled to elect seven members of
her own to the House of Commons. So far as our
own House of Assembly or provincial legislature
is concerned, we could elect any number we like,
ten or 15, 20 or 30, or whatever number we
decided on ourselves.
The Government of Canada would collect
about $20 million a year from us in taxes, these
are income tax, corporation tax, excise tax, sales
January 1948 NATIONAL CONVENTION 1187
tax, liquor tax, customs tax and tobacco tax. They
will collect $20 million a year from us and they
would spend on an average about $36 million a
year in Newfoundland, about $16 million more
then they would take from us. In addition to the
$20 million a year that the Government of
Canada would take, the provincial government of
Newfoundland would take another $5-6 million
from us in taxes. The two governments between
them would take perhaps as much as $26-27
million a year from us, which is $12-13 million
less then our own government is taking this
present year.
These terms, Mr. Chairman, would make a
new country of Newfoundland. They would
make a new country for the people of Newfoundland — a new country where the poor man
would have a chance. A country where the poor
man would have a chance to live and breathe, a
chance to bring up his family decently. These
terms would give our people a chance, and that is
something they have never had yet. And when I
say our people, I mean the toiling masses of our
people, our fishermen and loggers, our miners
and millworkers, our railroaders and teachers,
our clerks and labourers, all our people who toil
by hand or brain to make a living in this country.
I do not mean our great masters of trade and
industry. I do not mean our millionaires, our
half-millionaires, our quarter-millionaires—I do
not mean the people with two or three motor cars.
I do not mean the people with $1,300 rugs on their
floors. I do not mean the people who can take
their holidays in Canada and send their children
to Canada to school. I do not mean the people
who have done very well out of Newfoundland,
I mean the great masses of our hardworking
people, those tens of thousands of our workers
and fishermen who never got a break, the vast
bulk of our population who have been kept down
all through the ages, the people of Newfoundland. These terms would be a new charter
of happiness for our children. Never as children
would they know hunger or nakedness, never
would they know the pinch of extreme poverty
under confederation. Newfoundland would be a
happier and a healthier land for our junior
citizens. For our senior citizens, those men and
women of 70 and more who have passed their
toil, those worn-out toilers, whose earning days
are over, for them these terms would bring a little
sunshine in the evening of their years, a little
holiday from the grinding poverty they have
known most of their days — a last gentle stand
of comparative ease and comfort. For the people
of Newfoundland these confederation terms
would mean a happier land, a land of hope and
progress. The people would come at last into their
own. For the country in general, these terms
would mean hitching Newfoundland's wagon to
the rising, shining star that we call the great
British nation of Canada. It would mean linking
our own dear Newfoundland to the third largest
land in the world — a land where the common
people get a break, where they get a decent
chance to live and rear their families. For Newfoundland these terms mean security
and political
freedom. I support them with all my heart. I
commend them to my fellow Newfoundlanders
for their serious and solemn consideration. God
guard thee Newfoundland.
[The committee rose, reported progress, and the
Convention adjourned]
