Newfoundland's Entry into the Dominion

• Published in: Canadian Journal of Economics and Political Science
• Main Author: Mayo, H. B.
• Format: Article in Journal/Newspaper
• Language: English
• Published: Cambridge University Press (CUP) 1949
• Subjects: General Earth and Planetary Sciences; General Environmental Science; Canada; Newfoundland
• Online Access: http://dx.doi.org/10.2307/138044; https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0315489000015279

In view of Newfoundland's long tradition of separation from Canada, and its rich heritage of anti-confederation feeling, how does it happen that union has come about on March 31 of this year? The answer is best seen as it emerges from the background of recent events in Newfoundland. Faced with imminent default in the early nineteen-thirties, the Newfoundland government resorted to all the traditional tactics, such as reductions in the salaries of civil servants and teachers, and increases in the rates of the customs tariff; and under the spur of necessity resorted to more ingenious measures. The stream of willing foreign lenders had dried up by 1932, and the government fell back upon temporary loans from Canadian banks, upon a deal with the Imperial Oil Company, and upon joint advances from the governments of the United Kingdom and Canada. When to these was added a controller of the treasury, Newfoundland had in fact lost full control of its finances, and hence of its political destiny, even before self-government was formally abrogated. It was in the midst of this desperate situation in 1933 that the Royal Commission presided over by Lord Amulree was appointed, at Newfoundland's request, “to examine into the island's future and finances.” The Commission duly found bankruptcy imminent, and the debt burden beyond the capacity of the island to carry. Newfoundland's public debt had grown but slowly in the nineteenth century and early part of the twentieth. Including $13 million added for war purposes, by the beginning of the nineteen-twenties, the debt stood at only $43 million. More spectacular increases occurred after 1920, the total debt being more than doubled in the space of twelve years. Throughout this period the average annual deficit was some $2 million, including losses on operation of the railway system which, early in the decade, passed from private hands to government ownership. The current deficits, together with capital expenditures upon public works, were covered by borrowing from abroad at interest ...