Don't Tell the Newfoundlanders

by Greg Malone

  In 1908, during the electoral contest between the nationalist Sir Robert Bond and the pro-Confederate Sir Edward Morris, Canadian Governor General Lord Grey promised: “The Canadians who have interest in Newfoundland can be relied on to do whatever is possible to stiffen Morris and to assist him in the battle against Bond. All the money he wants to enable him to conduct an educational campaign [for Confederation] will be forthcoming.”4 But the vote produced a tie and left Morris in no position to carry off Confederation. Once again, Newfoundland remained independent.

  By the turn of the nineteenth century, Newfoundland was an autonomous country with a population of almost a quarter of a million. In 1907 at the Imperial Conference in London it was elevated to dominion status along with Canada, Australia and New Zealand. Despite the huge sacrifices Newfoundland made during the First World War, the country enjoyed both good government and prosperity throughout the opening decades of the twentieth century. It was the bank crash of 1929 and the worldwide Depression that followed which proved to be the country’s undoing.

  The years directly leading up to 1929 were plagued with political and financial turmoil. World markets for Newfoundland fish collapsed, and successive administrations struggled to pay the growing national debt. In a one-year period, no fewer than five governments were elected. The ever-resourceful Sir Richard Squires, prime minister during much of the decade, even tried to sell Labrador to Canada for $100 million. But the price was too rich for the Canadians, who, like the British, preferred to acquire empire on the cheap. By the early 1930s civil service salaries were cut in half, and there was mass unemployment and widespread hunger. Charges of embezzlement against Squires brought a mob to the doors of the legislature. The ensuing riot brought down the government.

  Such scenes were not unusual across North America during the “Dirty Thirties.” Certainly people in the Maritimes of Canada and the Dust Bowl of the United States suffered as much as Newfoundlanders did during this grim period. However, Newfoundland relied almost exclusively on world markets to sell its fish, and it could not survive such a protracted calamity without help. It was a large country to be sure, almost three times the size of the Maritime provinces, but it was undeveloped and had only a small population. It simply did not have the credit base of large federations such as Canada or the United Kingdom to withstand a deep and sustained financial crisis. In 1885 Canada had come through with the necessary financial backing to avert the crisis, but in 1933 it declined to assist its sister dominion. That left Newfoundland entirely dependent on Great Britain for financial support.

  The Newfoundland debt was by then more than $100 million, at 5 percent interest. During the 1931 session in the House of Assembly, Major Peter Cashin, the finance minister in the Squires government, had proposed rescheduling a portion of that debt from 5 percent interest to 3 percent. The United Kingdom had already struck such an agreement with the United States for its own enormous war debt. Frederick Alderdice, the leader of the opposition, initially opposed such a default, but by 1933, when he was prime minister, he had come around to Cashin’s way of thinking.5 Faced with the spectre of bankruptcy, Alderdice, even though a staunch fiscal conservative, proposed that Newfoundland be allowed to reschedule a portion of its debt and thereby carry on. The British government declined, on the basis that a default by one of the dominions would have a damaging effect on the credit of the whole empire. This philosophy was puzzling even to Canadian observers. O.D. Skelton, the Canadian under-secretary of state for external affairs, observed to W.D. Herridge, the Canadian ambassador to Washington: “I have never been able to understand why Newfoundland should not be allowed to repudiate a portion of its debts when the United Kingdom government is declining to pay its government debts and the US is meeting gold obligations with paper money.”6 Instead, Britain advanced the necessary credit for Newfoundland to make the next interest payment on its debt and avert disaster on one condition: Britain would appoint a royal commission to assess Newfoundland’s financial and political situation, and Newfoundland would be obliged to accept its findings. Alderdice had suggested such a commission in his election campaign the year before, so he readily consented to the terms. He had also promised that the final recommendations would “be submitted to the electorate for their approval” and that “no action [would] be taken that [did] not first have the consent of the people.”7 This promise was never kept.

  The Newfoundland Royal Commission, led by the Scottish peer William Warrender Mackenzie, 1st Baron Amulree, and popularly called the Amulree Commission, arrived in St. John’s in the spring of 1933. The other members were bankers Charles A. Magrath from Ontario, as Canada’s nominee, and William Stavert from Prince Edward Island, as Newfoundland’s representative. From the Canadian viewpoint, the British seemed already to have made up their minds. In Paul Bridle’s opinion: “The decision to set up the Amulree Commission was as tough-minded as the Commission’s findings and virtually foreshadowed them.”8 The commissioners immediately set out to observe conditions across the Island and gather information for their conclusions. Their final report on Newfoundland that fall was written not by Lord Amulree but by commission secretary Peter Alexander Clutterbuck, the Newfoundland expert in the Dominions Office.

  Born in India in 1897 in the era of the Raj, the period of British rule, Clutterbuck was educated at Cambridge University and served with distinction in the Coldstream Guards during the First World War. Diligent, discreet, and devoted to the Dominions Office and the empire, he embodied the ideals of the British civil service and brought considerable diplomatic and literary talent to his assignments in Newfoundland. He would remain on the Newfoundland file until 1949, rising to the highest ranks in his department. Clutterbuck’s pervasive presence in the great events in which he participated is little known outside official dispatches and top-secret memos. He moved behind the scenes, where he promoted his department’s policy with remarkable detachment.9

  Clutterbuck’s report, written in colourful language by official standards, gave the British government the pretext it required to resume direct control over the Island. Newfoundland’s financial crisis, he concluded, was not the fault of a worldwide Depression and the collapse of the fish markets but the result of corrupt and venal politicians. He began with this sweeping generalization: “Politics in Newfoundland have never been such as to inspire wholehearted confidence in the ability of the people to govern themselves wisely, but there is general agreement that a process of deterioration, which has now reached almost unbelievable extremes, may be said to have set in a quarter of a century ago.”10

  “Never” is no doubt excessive and fails to take account of the work of able politicians such as Sir Robert Bond or even Sir Edward Morris. Clutterbuck continued:

  For a number of years there has been a continuing process of greed, graft and corruption which has left few classes of the community untouched by insidious influences.

  The twelve years 1920–32, during none of which was the Budget balanced, were characterized by an out-flow of public funds on a scale as ruinous as it was unprecedented, fostered by a continuous stream of willing lenders. A new era of industrial expansion, easy money and profitable contact with the rich American continent was looked for, and was deemed in part to have arrived.…

  The public debt of the Island was in 12 years (1920–32) more than doubled; its assets dissipated by improvident administration; the people misled into acceptance of false standards, and the country sunk in waste and extravagance. The onset of the world depression found the Island with no reserves, its primary industry neglected and its credit exhausted.11

  As for the Island’s financial difficulties, the report allowed that they “have been intensified by the world depression, but they are also due primarily to the persistent extravagance and neglect of proper financial principles on the part of successive Governments during the years 1920–31.”12 Lord Amulree attributed all this bad government to his view that:

  There is no leisured class, and the
great majority of the people are quite unfitted to play a part in public life.

  The so-called “modernization” of politics and the introduction into political life of men who sought to make a living out of their political activities, have been responsible for this deplorable state of affairs.13

  In short, Newfoundlanders did not have the leisure for democracy. The report recommended that Great Britain should guarantee the Newfoundland debt, but that the Newfoundland legislature should be revoked and the Island put into a form of receivership:

  a) The existing form of government would be suspended until such time as the Island may become self-supporting again.

  b) A special Commission of Government would be created.…

  c) … subject to supervisory control by Your Majesty’s Government in the U.K. and the Governor-in-Commission … responsible to the Secretary of State for Dominions Office in the U.K.

  “… it would be understood that … as soon as the Island’s difficulties are overcome and Newfoundland is again self-supporting, responsible government on request from the people of Newfoundland would be restored.14

  This arrangement, the report breezily concluded, would provide Newfoundlanders with a “rest from politics.” The Amulree Commission had already decried the lack of municipal government outside St. John’s, but its recommendation to abolish the legislature in the capital city was hardly consistent with those democratic concerns.

  It is curious to note that most of the Newfoundland debt with which Sir Richard Squires grappled in the 1920s was incurred by Sir Edward Morris during the First World War and in the construction of the Newfoundland railway. Morris resigned as prime minister of Newfoundland in 1917 during a trip to London. The next year he was honoured with a rare hereditary peerage and became a minister in the UK government. Here at least was one improvident Newfoundland politician of whom London seemed to approve.15

  The drastic course recommended by Amulree was not his own invention. When he returned to London, he found that everything had been carefully worked out between Neville Chamberlain at Treasury and Sir Edward Harding at the Dominions Office, and these two men informed Amulree and Clutterbuck what the key points in the report should be.16 When Canada’s representative, Charles Magrath, read the draft, he objected strongly to the harsh and demeaning portrait that Clutterbuck had painted of Newfoundland politics and politicians and to the conclusion that Newfoundland was unfit to govern itself. He registered his objection bluntly in a personal letter to Lord Amulree: “Who can throw the first stone at Newfoundland?” he asked. “There is not a province in Canada or a state in the U.S. that has lived within its income.… I seem to recall that the May Commission in the U.K. found, rightly or wrongly, the government of that country guilty of extravagance which threatened the ruin of that country.” As for Britain’s refusal to allow Newfoundland to default on its war debt, he noted that “practically every country in the world is today in financial difficulties. Some have defaulted on their public obligations. In none has it been found necessary to send in the sheriff.… The criticism is apparently exaggerated for the purpose of building up a case for drastic and extravagant remedies in substantial reversion of Newfoundland to a Crown Colony.”17

  Some of the stronger language in the commission’s draft report disparaging Newfoundland culture and politics was softened for Canadian sensibilities, and both Magrath and William Stavert bowed to British pressure and signed Clutterbuck’s final text. It recommended revoking the Newfoundland legislature and handing the country over to Britain in receivership. Canada’s prime minister, Richard Bennett, had already announced that Canada would not participate in any financial assistance to Newfoundland, so Magrath and Stavert were left with little leverage. Besides, they knew that Canadian banks would do very well under the proposed British plan, enabling them to recover immediately the loans they had earlier made to the dominion.

  With the gun to his head, Prime Minister Alderdice accepted the verdict. He realized that certain members of his government would find it difficult to vote for the establishment of a Commission of Government from Great Britain which would be the instrument of their own extinction and leave them without jobs. Alderdice himself and several other favoured men received appointments within the new British administration. As for the others, Governor Sir David Anderson, the chair of the new commission, cynically assured Alderdice that “the few thousand dollars annually to be spent to ensure acceptance would be well invested.”18 Compensation for the losing party was not uncommon in deals between imperial and colonial elites: it provided for the smooth running of the empire. In this case, however, Noel Trentham, the British financial supervisor already in Newfoundland, objected to the bribes, and they were never given out.19

  Confederation was never considered. Britain now had other plans for its new possession. The elected legislature in St. John’s would be replaced by a governor and six commissioners—three Englishmen and three Newfoundlanders—and the country would be run directly from the Dominions Office in London. Lord Macaulay’s famous description of the rule by the East India Company—“the strangest of all governments designed for the strangest of all empires”—proved an apt description a century later for Britain’s oldest, now newest, colony.20 Newfoundland’s Commission of Government was a novel arrangement in every sense and a very odd constitutional duck, but the British were determined to make it quack.

  Both Magrath and Stavert felt strongly that federation with Canada was the best long-term solution for Newfoundland. And, when the new British governor, Sir Humphrey Walwyn, arrived in St. John’s in February 1936, he agreed with them. Although many Canadian officials felt the same way, they were in no hurry to make the deal. Ambassador W.D. Herridge in Washington wrote to his boss, O.D. Skelton, in Ottawa in November 1933: “Some day we shall have to take it [Newfoundland] over, but at present I would regard the price as too high.”21 It was the familiar Canadian complaint, and Skelton was of similar mind. But the mood was entirely different in Newfoundland. Despite the hard times brought on by the Great Depression, public opinion almost unanimously opposed any association with the “cold and comfortless Canadian fold” that had recently rejected the country in its hour of need.

  In reflecting on this complete reversal in British policy towards Newfoundland, Paul Bridle notes: “There was a period especially during the Second World War, and after it, when the British Government veered towards keeping Newfoundland in the British fold and nurturing it.” He then offers this generous explanation: “More than anything else this probably reflected the affection which had developed for Newfoundland because of its unflinching and self-effacing support of Britain in two wars.”22

  Similar sentiments should have carried more weight with British thinking in 1933. Newfoundland had raised its own regiment, at its own expense, and sent its young men into battle for Britain in the First World War. The Newfoundland Regiment was virtually destroyed in one day in its first engagement at the Battle of Beaumont Hamel as part of the huge disaster that began the Battle of the Somme. Nevertheless, the regiment was reconstituted with new recruits from home and, at war’s end, it was rewarded as the only one in all the British Empire to have “Royal” incorporated into its name. “The men of the Newfoundland Regiment rapidly showed their adaptability and ultimately developed a battle discipline equal to that of the old British regiments and probably surpassing that of all the overseas troops,” stated the Cambridge History of the British Empire. “The seamen of Newfoundland … readily undertook almost impossible boarding operations in wild seas which others would not face. Nothing but praise was accorded to the Fleet.”23

  Newfoundland had suffered some of the heaviest losses per capita of any country in the British Empire. Of the 5,482 Newfoundlanders who went to war in 1914, 1,500 died, 2,314 were wounded, and 234 were decorated. By 1933 the portion of the Newfoundland debt dating from the First World War was approximately $40 million. Certainly Newfoundland had a strong case for honourable default, and if Br
itain had allowed the country to reschedule just that portion of the debt, it would have enabled the Island to carry on until better times. But Britain was not guided by such sentiments in 1933—or, later, in 1948.24

  The period of the Great Depression was an inauspicious time for institutions of democracy generally. It was often democracy, not capitalism, that was seen as the root of the economic catastrophe: the people were too ignorant to elect good governments, and democracy was too inefficient to guarantee the smooth running of industry. Many in the financial and political elites of Europe and America wanted a strongman, a dictator who would guarantee a cheap supply of resources and labour. It was in this negative political climate that Hitler came to power in Germany, and Mussolini in Italy, giving both these countries a “rest from politics” and setting the stage for the ultimate confrontation between raw, unregulated capitalism, or facism, and the forces of democracy. As Churchill is famously said to have remarked: “Democracy is the worst form of government, except for all the rest.”

  In the Dominion of Newfoundland in 1933, however, the population was judged by Lord Amulree and Alexander Clutterbuck as simply not fit for democratic rights. Clutterbuck concluded smoothly that, in Newfoundland, “considerations of constitutional status were regarded more as a matter for academic discussion than as a practical issue.”25 The Amulree Report, written very much in the spirit of the times, reduced the institutions of democracy to little more than a bureaucratic option for Newfoundland. The freedom of self-determination, deemed so essential for the great democracies, was here brushed aside. Democracy would enjoy a better reputation after the war, but little better treatment.