On May 27, the government dispatched a “most secret” telegram to London, where the attitudes at the best of times were those of anxious parents towards a wilful, mouthy child. The telegram essentially told London to ignore “mischievous and misleading reports” of an impending financial crisis.10
Two days later, there was another “most secret” telegram to London, assuring Whitehall that Newfoundland was considering a dire response to those “mischievous and misleading” reports. “In conjunction with cable companies, consideration is being given to possibility of taking action to prevent transmission of prejudicial and false reports by telegraph.”
By then, Squires and Cashin were on their way to Montreal, caps in hand, to meet the bankers. But as one prominent Newfoundland writer would observe years later: “May 22, 1931, brought no catastrophic fire, epidemic, bank crash, fatal charge towards loaded machine guns, collapse of an industry, or sealing disaster, but it truly was one of the Dominion’s blackest moments.”11
And nowhere was the darkness more impenetrable than on the southern end of the Burin Peninsula.
AS FAR as the people on the south coast were concerned, St. John’s might as well have been a suburb of London, England, or on another planet entirely. In 1931–32, the prospect of starvation was a looming presence in the daily lives of thousands of people scattered through communities that had been devastated by the tsunami and the sudden collapse of the fishery.
Their lives were a grim continuation of November 18, 1929. All around them were the reminders of that day. For those who had rebuilt or repaired homes, there were the painful memories of lost children, parents, friends and cousins. Loud sounds from nature, from the normal turbulence of the ocean or the wind, now stirred anxiety. Over many generations, they had learned to live with nature in all her many moods, but now they knew she could never again be trusted.
They were living hand to mouth, fending off starvation on a meagre diet dictated by dole administrators, a recipe for malnutrition. And all the while being told by bureaucrats in London and St. John’s that they were bankrupting the country, these able-bodied men who sat home doing nothing.
The particular plight of the south coast would have been far from the immediate concerns of the people running Newfoundland in 1931. The dole itself was under pressure. Canadian bankers and British politicians were squeezing the dominion government to cut back on relief or face dire consequences.
If they were at all aware of what Walter Seibert was up to in St. Lawrence, it would have been good news: the promise of jobs, wages to take pressure off the dole. The peculiar details of how he proposed to go about the project would not have mattered. He was launching his new industry in what would turn out to be a place where entrepreneurial initiative was unhampered by rules and regulations and red tape—a great advantage for an empire builder.
And from the point of view of an empire builder, the situation would get better, even more permissive, as things got worse for Newfoundlanders.
IT took two nerve-shredding weeks in the spring of 1931, with much political string-pulling by Squires and Cashin, to persuade the Bank of Montreal to put together a four-bank consortium that would extend a short-term loan of $2 million at 5.5 percent interest to prevent default on July 1. The banks, essentially, agreed to lend Newfoundland just enough to pay the interest on money Newfoundlanders already owed the bankers. And even then, there were conditions.
On June 19, the British high commissioner in Ottawa notified London that the Canadian prime minister, R.B. Bennett, had been instrumental in putting together the deal, and that Sir Richard Squires, in a concession to Bennett and the banks, had agreed to ask the British treasury to send across a fixer who would help overhaul Newfoundland’s woeful finances.12
After so much stress, Sir Richard Squires required a holiday, and in July he and Lady Squires set off for England for ten weeks of recuperation. But the time Squires spent in England wasn’t wasted, and while in London, he was able to recruit his budgetary expert—a senior British treasury official.
Sir Percy Thompson, deputy secretary in the Department of Inland Revenue, agreed to spend some time in Newfoundland sorting out the island’s finances. But he didn’t come cheap, and he demanded first-class travel to the remote dominion for himself and his assistant, as well as Lady Thompson and their two daughters. His salary would be more than $18,000 a year.13 And one of his first priorities, as the man now ultimately controlling the dominion’s purse strings, would be to reduce the dole.
The irony was later noted in the legislature—Sir Percy pulling down $18,000 a year (in Canadian dollars) while “the poor mortals of people in the outports are forced to live on six cents a day.” Squires was unsympathetic, retorting that the poor mortals should be grateful “that they had someone who could find six cents a day for them.”
THE June bailout was obviously just a bandage, and the “most secret” wires were humming once again in November as another deadline loomed for payment of interest on the nation’s debt. January 1 would prove to be another nail-biter for Peter Cashin, and he was working on it even in September, when Sir Richard was still in London recovering from the travails of the pinch in May and June.
Squires finally headed home in mid-September, but via New York, where he and Lady Squires decided to unwind for a few more weeks. Cashin had to go there to discuss what he saw as a steadily deteriorating situation in Newfoundland. Squires was sympathetic but really couldn’t offer any fresh ideas.
ON December 21, ten days before what was looking like a catastrophic default, another wire came from London: “Not possible for HM government . . . to intervene.”14
The telegram acknowledged that failure by Newfoundland to “meet obligations” would have “a serious impact on Empire credit,” but the Brits had financial problems of their own, and in any event, a bailout for Newfoundland would set a dangerous precedent at a time when many of the Commonwealth dominions were facing financial difficulty.
It was December 28 before Sir Percy Thompson, now up to his neck in Newfoundland’s affairs, was able to reassure his British colleagues that once again, at the very last minute, the banks had come together to save the hide of this prodigal pseudo-country. There were strings attached as usual, but the strings this time would begin the slow strangulation of Newfoundland’s political autonomy.
Across the island, from St. John’s to Port au Choix, from St. Lawrence up to St. Anthony, ordinary people were suffering. There were reports of malnutrition, even starvation. The government was broke, and some hard-liners in the British Dominions Office were complaining that a large part of the problem was malingering and laziness, an inability by the able-bodied common man to help himself because of moral failure, ignorance, weakness of character. It was not a good time for anyone who was struggling to survive on the Burin Peninsula, or anywhere else on the island, to expect help or even sympathy from people in authority.
Meanwhile, Sir Richard and Lady Squires had come home and moved into the Newfoundland Hotel, where they were conspicuously entertaining the better quality of Newfoundlanders at lavish dinner parties.
19.
IT was no secret that Peter Cashin was sick of Squires, his lifestyle and lackadaisical approach to the ongoing financial crisis, his long absences from Newfoundland, his unwillingness to consider new ideas for solving problems.
In October 1931, Cashin and two other members of the cabinet had bluntly told Squires that he should resign—that the only way to restore confidence in the dominion was to create a new coalition government under new leadership. Squires should quit. They should all quit. Hand the reins of power to someone else. Squires refused. There would be an election in 1932. Let the people decide who should run the country then. What’s another year?
But another year was too much for the bankers and the British bureaucrats, and by the end of 1931, they, not Cashin and certainly not Squires, were calling all the shots. And now Peter Cashin discovered that Sir Richard had been using the p
ublic treasury as a private piggy bank, and he believed that Squires had altered cabinet records to conceal the fact.
Cashin had no choice but to resign. And he did so, on February 1, 1932. Squires accepted his resignation and ignored the uproar the major had incited in the assembly when, in his resignation speech, he hinted at systemic corruption in the government. But there was no way that Squires could ignore the common people forever—although he tried. He avoided public appearances. Holed up in his hotel. Occasionally he had to surface for urgent government or party business, however, which was how the people got to him on February 11.
On February 16, five days after the attack on the PM on Duckworth Street, Peter Cashin—now the former finance minister—went public with specific accusations in the assembly. The public galleries were packed and rowdy as he read out a litany of charges: misappropriation of funds, forged orders-in-council, deliberate deception of the parliament and governor, a criminal cover-up.
Squires just shrugged it off and stalled for time. But time, like money, was rapidly diminishing for Sir Richard Squires and Newfoundland.
BY March 1, 1932, the finances of the dominion were, for all practical purposes, being managed out of London. Sir Percy was reporting to his boss, J.H. Thomas, British secretary of state for dominion affairs, who was reporting to his boss, the chancellor of the exchequer and future prime minister, Neville Chamberlain.
The budget for that fiscal year was bad news all around. The deficit, according to Sir Percy’s figures, would be just above $4 million, almost three times what he had hoped for. The cost of “able-bodied relief” would be $1,170,000. Sir Percy called that figure “the most disturbing item” in the budget and warned that it was only going to get worse.
Squires delivered the bad news in a budget speech that was obviously written by Sir Percy. It begged for private charity to relieve the public burden of the dole, “the help of neighbours and churches, local charities and local organizations, the settlement or the town . . . to recognize their responsibilities toward the distressed before the government is called to step in. The state should be the last and not the first resort.”
It was an ironic twist, and galling for the neighbours and churches and charities that would have known about Sir Percy’s salary and were reading in the social columns of the newspapers about the first family’s dinner parties in the Newfoundland Hotel—reports that included guest lists and menus in mouth-watering detail.15
Sir Percy was aware that while the public purse was empty, well-off Newfoundlanders were sitting on about $25 million in private bank accounts. He implored them to dig down and cough up a substantial share of what he was calling “a prosperity loan” to the Newfoundland government—essentially a loan of $2.5 million to themselves, which he termed “a safe and profitable investment.”
The public was sceptical, and the call for lenders seemed to be falling on deaf ears. The “prosperity” appeal sounded like desperation.
There was, around this time, a bizarre proposal, briefly entertained, to import Scotch whisky from the UK, reduce its alcohol content to zero, then export it to the dry United States, where, presumably, enterprising Americans would find a way to restore the original integrity. It would create jobs in Newfoundland and a windfall in import duties, proponents said. Sir Richard laughed at the idea: “I don’t think that it is a scientific or potable proposition,” he declared in the assembly.16
There was also a half-hearted attempt by Squires to sell Labrador to Canada, but he wanted $100 million. Ottawa declined.
Sir Percy finally cut a deal with Imperial Oil Ltd., in which the mainland company agreed to underwrite the prosperity loan to the tune of $1.75 million and to make annual cash advances to the treasury in exchange for a fifteen-year monopoly on the sale of petroleum products on the island. Well-off Newfoundlanders then came up with the balance.
It all helped, but it was crisis management at best, and in the long run, the financial and social burdens would be borne mostly by ordinary people—new taxes on food; increased taxes on income, profits, sales; and so on. In 1932, there would be a drastic cut in civil service salaries and a 25 percent reduction in the salaries of cabinet ministers—convincing evidence of desperation—and most incendiary of all, cuts in the pensions of war veterans and the widows and orphans of the war dead.
There was an instant outcry and Squires was forced to back down, at least on veterans’ pensions—especially when he was confronted with the fact that one of the pools of public money he’d been pilfering was funded by war reparations from Germany. But it wouldn’t be the end of the controversy. The protests would continue and get worse.
20.
THE first paragraph in the story on the front page of the Daily News of St. John’s on April 6, 1932, neatly summed up the crisis that now paralyzed the government of Newfoundland. “Every window of the Colonial Building is glassless: the Prime Minister practically a refugee, the law of enforcement of the city turned over to the authority of ex-servicemen, as the result of discord which marked the culmination of weeks of protest and dissatisfaction with maladministration of the government.”
At a rowdy public meeting on the night of April 4, a parade of speakers from among sixty platform guests vented public outrage over the budget and the allegations of corruption.17 One war veteran at the gathering declared that if Squires had been convicted of such charges on a battlefield, he would surely have been shot by a firing squad.18
The meeting resolved that there should be a protest march the next afternoon, assembling at the Majestic Theatre on Duckworth Street and timing its arrival at the assembly, about a mile away, as the members were beginning their daily sitting at three o’clock. The protestors would present a petition demanding action on the Cashin accusations.
By 2:15 the next afternoon, the Majestic was packed and Duckworth Street was “a mass of moiling humanity,” according to the April 6 Daily News, waiting for the start of the “parade.” One of the demonstration leaders, the prominent lawyer and sometime politician J.A. Winter, from Burin, begged for order. There was music from a military band. The “moiling” crowd was estimated at eight to ten thousand men, women and children.
They set out along Water Street on a staggered course that avoided the most daunting hills of downtown St. John’s. They eventually swarmed up Cochrane Street, past a hotel rumoured to have once given hospitality to Leon Trotsky, past the palatial home of the Newfoundland governor and onto the grounds of the parliament. There were thirty policemen, four on horseback, waiting when they reached their destination.
After half an hour, and as the grumbling of the crowd became intimidating, the military band struck up the dominion anthem, the “Ode to Newfoundland,” and it seemed to calm things temporarily. As the Evening Telegram reported on the following day, “Every man and youth in the vast assembly stood with a bared head until the piece was finished. It was a most impressive sight.”
Finally, four leaders, including Mr. Winter, were admitted to the assembly to present their petition. Squires listened, then rose and, obviously stalling—a tactic that often worked for him when faced with peril—began another tedious discussion about procedure. How to handle the petition and its insinuations.
Outside, the protestors, many of whom were hungry and impatient, were growing restless again. There was shouting at the front of the crowd, causing those in the rear to press forward to find out why the people at the front were yelling. Tension built. Mounted police officers blocked the steps to the entrance of the building. Several demonstrators ran at the police and tried to drag them from their horses. Almost got one down, tore his cape off. The band struck up the national anthem once again. Once again, the struggle ceased. Men and boys dutifully doffed their caps. But as the last stirring strains of the anthem faded, the crowd renewed the struggle. A Union Jack at the entrance to the parliament was torn from its flagstaff.
The four petitioners, who were inside listening to the politicians talking about procedure, heard
the racket, rushed outside, begged for order. But by now the crowd was beyond persuasion. Young men at the front attacked the entrance. The police retreated inside, blocked the doors and held them shut. Someone outside found a five-foot iron bar and used it to smash through the panels in the door.
The police, from inside, used their nightsticks on the people closest. But their effectiveness was limited. They were inside, reaching out, weakly threatening the nearest demonstrators. Then, as the Evening Telegram reported the next day, the besieged police “threw off their overcoats and with flailing batons, rushed outside and charged the crowd.” It went downhill from there. Someone threw a rock. Soon there was a hail of rocks and other projectiles. Windows, doors and doorframes were shattered. A crowd of citizens became a mob.
The mob was soon inside. Someone tried to steal the ceremonial mace, symbol of the authority of parliament. Another stole the sword of the sergeant-at-arms. A piano was hauled outside and demolished. Offices were ransacked. Two young men found four bottles of White Horse whisky. Shared the liquor with their mates. There were two attempts to set the place afire.
The ruckus lasted all night long. Inevitably, hidden supplies of liquor were discovered. Posses of war veterans took over the policing duties and patrolled the streets, doing what they could to safeguard lives and property. Miraculously, nobody died in what was now officially recorded as a riot.
Days later, on April 9, Sir Percy Thompson, in a chatty letter to a high-placed friend in the Dominions Office in London, blamed the riot on young men—numbering between 100 and 150—who had been waiting at the legislature before the main body of protesters got there. “There is considerable evidence,” Sir Percy wrote, “that this crowd of youths had been organized and instigated by certain politicians to create a disturbance with a view to forcing the resignation of Squires.”19
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