The Revolution as Opportunity
Though the resident population suffered hardship during the early years of the war, this was not of immediate concern to the government or to the merchants involved in the fish trade. The British government still frowned on large-scale settlement in Newfoundland, and merchants there regarded the Revolution as an opportunity to eliminate American competition in the supply trade. The fact that prices for food soared to triple their usual price was simply an additional bonus, and though that perception gave way to alarm when the full implications of the Revolution for Newfoundland's provisioning needs became apparent, the crisis could be seen as advantageous rather than harmful.
From 1776 to 1779 the fishery and trade generally thrived. In part this was because the Americans had been eliminated from the North Atlantic cod fishery and trade. Then, in preparation for their own entry into the conflict, the French abandoned their fishery. These two developments gave the English fishery exclusive access to the European markets, where prices had climbed in response to dwindling and insecure supplies of fish. These price increases more than compensated for any losses caused by the outbreak of the war. According to one observer at the time, "the balance of gain exceeds anything they have seen for seven years."
The removal of the Americans also opened up new opportunities in the West Indies for Newfoundland merchants. From 1771 to 1773 the West Indies imported 160,000 quintals of dry fish and 16,000 barrels of pickled fish. Most of this was supplied by the Yankees, with Newfoundland merchants providing only 25-30,000 quintals. When the Americans left this trade, English-based merchants were slow to take their place. They preferred not to get into the business of producing the "refuse fish" which the Caribbean market favoured. Refuse fish fetched a lower price, and the Caribbean fish trade was not as profitable as the European trade. But more importantly, once they discharged their cargoes, their ships would have nothing to carry from the West Indies to England, since the sugar trade to England was in other hands.
However, the emerging community of Newfoundland-based merchants was very much interested in this trade. They saw they could develop a reciprocating commercial pattern, in which ships carried fish to the Caribbean and returned with molasses and rum. Such a trade stimulated shipbuilding and shipping at Newfoundland and through the employment this provided, settlement as well.