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Newfoundland, Economic and Political I. The Amulree Report (1933): A Review

Published online by Cambridge University Press:  07 November 2014

A. F. W. Plumptre
A. F. W. Plumptre*
Affiliation:
The University of Toronto
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Extract

A sorry state of affairs was discovered by the Newfoundland Royal Commission of 1933. This article is a review of its Report. No attempt is made to describe subsequent events or to consider the actual results of the publication of that remarkable document. These matters are treated elsewhere. Here we are only concerned to disclose its substance and to criticize its arguments and recommendations.

The immediate cause of the appointment of the Commission was financial. The government of Newfoundland was unable to meet its obligations. At the end of 1932 the governments of Canada and the United Kingdom had arranged an advance to save Newfoundland from default and a further advance had been made by the United Kingdom on the following first of July (p. 55). This explains why the Commission was appointed by His Majesty on the advice of his ministers in Canada and Great Britain, as well as in Newfoundland. The commissioners were Lord Amulree, a British lawyer with wide experience of official investigations and industrial conciliation, raised to the peerage under the Labour government of 1929-31; Mr. C. A. Magrath, whose most outstanding work had been as chairman of the Canadian section of the International Joint Commission; and Sir William Stavert, who had “had the privilege of establishing the first Canadian Bank, the Bank of Nova Scotia, in the island” (p. 29), whose later banking connections had been with the Bank of Montreal, “bankers of the Government” (p. 45), and who had become in 1932, on the recommendation of the latter bank, the government's “financial advisor” (p. 55). The secretary was Mr. P. A. Clutterbuck of the Dominions Office; and two other British civil servants were also assigned to assist in the Commission's work (p. 233). The whole of the terms of reference consists in the few words: “To examine into the future of Newfoundland and, in particular, to report on the financial situation and prospects therein” (p. 1).

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 3 , Issue 1 , February 1937 , pp. 58 - 71
Copyright
Copyright © Canadian Political Science Association 1937

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References

1 Newfoundland Royal Commission, 1933. Report. London: H.M. Stationery Office. 1934. (Cmd. 4480).Google Scholar

2 See the following articles by Mr. Fraser and Professor Innis.

3 The figures in brackets refer to pages in the Report.

4 See Hackett, W. T. G., “Canada's Optional Payment Bonds” (Canadian Journal of Economics and Political Science, vol. I, 05, 1935, p. 161).CrossRefGoogle Scholar

5 A fuller description of the Commission may be found in the accompanying descriptive article by Mr. Fraser; for the Report's recommendations have been put into effect.

6 The Commission held its hearings in camera. It is therefore impossible to know exactly what evidence was given both upon this point and upon the willingness of the people at large to welcome a government-by-commission. An article in the Round Table (vol. XXIV, 1933–1934, p. 226)Google Scholar asserts that “though time prevented the taking of a plebiscite of the whole population, all who are in touch with opinion on the Island agree that such a vote would have resulted in an overwhelming majority for the Commission's scheme”.

7 Here again, the recommendations of the Report have in general been implemented; and Mr. Fraser's article will serve as a guide to them.

8 Since this was written I have heard that investigations indicate the amount of deposits held by indigent fishermen to be a small, even a negligible, part of the total.

9 Cf. Innis, H. A. and Lower, A. R. M., Select Documents in Canadian Economic History, 1783-1885 (The University of Toronto Press, 1933), p. 368 Google Scholar: “One of the chief problems of a new country is to secure and retain a supply of currency. Its wants are so much larger than its production ….” In this connection Professor Innis has suggested to me that in a new community there are usually a number of people who will not part with their hoards of cash at any price. Perhaps the Commission's attention was attracted to a number of such people and too wide an inference was drawn from these examples. But whether cash is drained away to foreign countries or to private hoards, it is equally difficult to keep it circulating.

10 The actual date of default might be claimed to be June 15, 1933. (The Newfoundland Report was dated October 4, 1933.) It will be recalled that Great Britain actually paid in gold the full amount due in December, 1932, but the government expressly stated that this payment “was not to be regarded as a resumption of the annual payments contemplated by the existing agreement”, but was intended “as a capital payment of which account should be taken in any final settlement”. (Shades of Mr. Aberhart!) On June 15,1933, the British government actually paid $10,000,000 instead of the $75,950,000 called for in the bond. For the official notes passing between Great Britain and the United States, see “The Debt Finale” (London Economist, vol. CXVI, 06 17, 1933, pp. 1287–8Google Scholar).

11 In the end, after all the fuss, a certain degree of default was permitted, or undertaken, by the British government on behalf of Newfoundland. The holders of Newfoundland securities were given the option of exchanging these for a new issue of stock with a British guarantee and lower interest rates; but in cases where these securities were not British trustee securities and where the “option” to convert was not exercised, the British government felt “unable to accept any responsibility” for their continued service. Indeed, it was made quite clear that so long as Newfoundland accepted advances from, or owed money to, the United Kingdom, there would be no payments made to these bondholders. See Memorandum on Proposed Financial Resolution on Newfoundland (London, H.M. Stationery Office, 1933, Cmd. 4481).Google Scholar

12 The British Parliament and the British taxpayers were led to believe that their generosity was being extended to the poverty-stricken fishermen. “The inhabitants of Newfoundland seem likely to be warmly grateful for the assistance offered them. And in the circumstances the Mother Country will gladly kill as fat a calf as it can afford to rescue the oldest and, one may perhaps add, the most prodigal of its sons” ( Economist, vol. CXVII, 11 25, 1933, p. 1005 Google Scholar). Some reference to the controversy raised in the British Parliament may be found in Mr. Fraser's article.

13 Newfoundland's approach to default, and the preferential treatment meted out by the British government to holders of those Newfoundland bonds which happened to be on the trustee list, raised the whole question of the government's obligations regarding trustee securities. Thus the Economist writes: “Would the Treasury … have guaranteed New South Wales loans during the regime of Mr. Lang, in the absence of a guarantee by the Commonwealth?” (vol. CXVII, Nov. 25, 1933, p. 1024). And later says “None of the Treasury's semi-official apologists … has squarely faced the question of the unknown future liability arising out of the implication that the British Government has a special moral responsibility towards holders of trustee securities, as such” (Dec. 30, 1933, p. 1290). Perhaps the inaction of the Treasury in the face of Alberta's default suggests that it has thought better of assuming special responsibilities towards such bondholders.

14 As a warning to the reader it must be repeated that this is a review of the Amulree Report and its proposals; not of the actual activities of the existing commission government.

15 For a description of the British abandonment of responsibility to colonial populations in favour of the interests of British manufacturers, the reader is referred to “The Future of Colonial Trusteeship” (Round Table, vol. XXIV, pp. 732–45).Google Scholar

16 As a writer in the Round Table (vol. XXIV) puts it: “Self government did not die by a murderer's hand; the verdict must be suicide while temporarily insolvent” (p. 256). And the “shrewdest criticism” of the Amulree Report is said to take the line that the ardour of the Newfoundlanders for the new system might cool (pp. 268-9).