why newfoundland should've joined confederation in 1867

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1. Guest3010
   

   Hi There,
   The Dominion of Newfoundland
   
        The closing decades of the nineteenth century brought poor fishing and economic stagnation. Two of the largest banks on the island collapsed in 1894 but the event marked the end rather than the beginning of the economic downturn. Canadian banks stepped in to avert a panic and a program of economic diversification was undertaken with the aid of British capital. A railway linking Saint John’s with Port aux Basques was completed in 1898 opening the island’s interior for exploitation of its forest and mineral resources. Pulp and paper mills were established at Corner Brook and Grand Falls. Iron ore mines, most notably at Bell Island, further diminished the country’s dependence on spawning habits of cod. Heady times indeed for a country long used to eking a bare existence from the sea. The title of Dominion was formally adopted by the Government of Newfoundland in 1908.
   
   The Great War
   
        Newfoundlanders played a small but distinguished part in World War I. The now prosperous dominion supplied a regiment which served with the British Army at Gallipoli and on the Western Front. Five thousand islanders served in the Royal Newfoundland Regiment, a thousand in the Royal Navy and still more in the forestry brigades. One day seared the horror of modern warfare into the collective conscience of Newfoundland, July 1st 1916. On that day 801 officers and men of the Royal Newfoundland Regiment went over the top at Beaumont - Hamel on the Somme. When the fighting ended only 68 answered the roll call.
   
   The Decline
   
        Newfoundland entered the post-war era in a mood of somber optimism. Prime Minister William Lloyd represented the Dominion at the January 1919 Paris Peace Conference as a member of the British delegation.
   
        Aviators flocked to the island after the Daily Mail renewed its offer of 10,000 pounds to the pilot of the first plane to cross the Atlantic non-stop. John Alcock and Arthur Brown took off from Saint John’s on June 14th. Sixteen hours later they crash landed their Vickers Vimy in an Irish bog. Both survived to claim their prize and deliver the first pouch of transatlantic airmail. Newfoundland continued to play an important role in transatlantic aviation until the introduction of long range jet aircraft eliminated the necessity of refueling stops at Gander in the late 1950s.
   
        Feats of international statesmanship and aviation heroics, uplifting as they were, could do nothing to halt the post-war rip tides that were about to pull the country’s economy into an abyss. A quarter century of unaccustomed prosperity came to a close with the end of the Great War. The decades that followed would be ones of unprecedented economic hardship, even by the standards of a people used to living close to the margins.
   
        The causes of Newfoundland’s post-war economic problems were legion. The Mediterranean countries, traditional markets for Newfoundland cod, now favored the catch of Scandinavian trawlers operating off Iceland. Prewar diversification programs had succeeded in reducing the fishery’s share of Newfoundland’s GNP to about 25% but it still employed nearly half the work force. Demand for minerals and forest products also slumped as pre-war trading patterns reasserted themselves. The Government was forced to expend ever increasing sums to keep the unprofitable railway in operation. Eventually it was forced to take over from the private operators. Debts incurred to finance the war effort also added to the nation’s fiscal burden.
   
   The Land God Gave Cain
   
        Jacques Cartier explored the coast of the great peninsula dividing the waters of Hudson’s Bay from those of the Atlantic in 1535. He found a land so barren and devoid of prospects as to make a fitting place of banishment for history’s first murderer. He dubbed Labrador, "the land God gave to Cain."
   
        Following the conquest of New France in 1763, a royal proclamation placed the coast of Labrador under the jurisdiction of the Governors of Newfoundland. Care of Labrador’s few scattered native bands was entrusted to the German speaking pastors of the Moravian Brethren and Newfoundland largely ignored its dependency for the next century and a half.
   
        The limits of Newfoundland’s jurisdiction over Labrador first came into question in 1902. Quebec officials challenged the Grand River Pulp and Lumber Company’s right to harvest timber on the upper reaches of the Churchill River, a right granted by the Government of Newfoundland. The dispute hinged on the definition of the word "coast" as used in the proclamation. Canada held that Newfoundland was entitled only a small strip of shore extending inland no more than a mile and only as necessary for the operation of the fishery. Newfoundland defined the word "coast" to mean the entire watershed draining from the height of land into the Atlantic. Adjudication of disputes between dominions was the responsibility of the Judicial Committee of the Privy Council. After twenty years of legal and diplomatic maneuvering Canada and Newfoundland finally agreed on the wording of a question to be placed before the Committee. On November 2, 1922 the Committee was asked to determine, "What is the location and definition of the boundary as between Canada and Newfoundland on the Labrador peninsula…?"
   
        The Committee spent the next four years pondering the evidence before rendering judgment in favor of Newfoundland on March 1, 1927. The boundary with Canada was fixed at, "… a line drawn north from the eastern boundary of the bay or harbour of Anse au Sablon as far as the fifty second degree of north latitude, and from thence westward along that parallel until it reaches the Romaine River, and then northward along the left or east bank of that river and its headwaters to the source and from thence due northward along the crest of the watershed of the rivers flowing into the Atlantic Ocean until it reaches Cape Chidley." Exhaustive research by Newfoundland’s advocate Sir Patrick McGrath and J.A. de Villers, the curator of the British Museum’s map collection, had paid off. Newfoundlander’s cheered news of the decision tripling the national territory. Ottawa accepted it gracefully but Quebec continues to publish official maps ignoring the ruling.
   
   The Fall
   
        Newfoundland remained remarkably creditworthy throughout the 1920s. The Dominion’s old debts were rescheduled and its new ones covered. The Banks paid little heed to the country’s dubious fiscal policies and reputation for political corruption. The income tax was repealed in favor of higher tariffs and a sales tax on selected products. Ceaselessly shifting alliances of the needy and the greedy produced nine governments in as many years. Development schemes produced charges of graft and corruption but little else. Yet, Newfoundland’s ability to borrow seemed to grow in inverse proportion to its ability to repay.
   
        The Great Depression brought an end to the free lending ways of the international financiers. The Bank of Montreal, Newfoundland’s bond broker, informed the Government that it was no longer able to raise funds in the market in May, 1931. The public debt had reached $100 million and interest payments were absorbing 65% of current revenues. Prime Minister Richard Squires traveled to Ottawa for a meeting with Prime Minister Bennett. He convinced his Canadian counterpart that a default by Newfoundland would have adverse consequences for the Canadian banking system. Newfoundland was able to secure a loan of $2,000,000 from the Canadian banks, thanks to Bennett’s intercession, and agreed to a study of the country’s finances by committee chaired by British financier Sir Percy Thompson. The committee’s recommendations for reform of Newfoundland’s fiscal policies were delivered in November, 1931 just as another economic crisis was coming to a head. The Government was not only unable to repay the Canadian loan but requested an additional $2,000,000 to avert a run on guaranteed savings bank deposits. Bennett intervened once again but this time the banks insisted on assuming control of Newfoundland’s expenditures as a condition of the loan. An austerity program was instituted. Government services and civil service salaries were cut. The desperate quest for funds continued. Newfoundland offered to sell Labrador to Canada or Quebec but neither government responded. The Imperial Oil Company stepped in as lender of last resort in the spring of 1932. It agreed to loan the Dominion $1,750,000 in exchange for a monopoly on the sale of petroleum products.

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