In the years immediately after the end of the American Revolutionary War in 1783, the migratory fishery appeared to be prosperous and healthy. The number of British ships in the fishery reached unprecedented numbers, especially in the bank fishery, and so did the quantity of fish caught and exported. The American fishery was temporarily uncompetitive, since it had been damaged by the war, and it was now British policy to exclude the Americans from participation in British trade. For their part, French outfitters aimed their production at the domestic market in France and the French West Indies. Thus the British were left in a commanding position in the traditional markets of southern Europe. It was this situation, together with a post-war buoyancy in prices, which triggered a remarkable growth in shipping and productivity within the British fishery at Newfoundland after 1783.

Yet the British migratory fishery faced serious problems. Much of the increase in shipping occurred within the bank fishery, a response, no doubt, to a system of bounties that the British authorities introduced in 1775 and revised in 1786. At the same time, the number of bye boat fishermen began to decline. The loss of income which British-based bank ships had once earned by carrying the bye boat men and their servants to and from the fishery exacerbated the financial difficulty in which the bank fishery found itself when market conditions in Europe finally deteriorated in the late 1780s. At the same time the resident fishery's share of total production was increasing steadily.

Cod spread out to dry, n.d. This late 19th century drawing reflects the predominant method of fish drying used in the resident fishery in Newfoundland from the late 18th to the mid 20th century. Illustration by Percival Skelton. From Joseph Hatton and M. Harvey, Newfoundland, the Oldest British Colony (London: Chapman and Hall, 1883) 290. (58 kb)

The crisis in the migratory fishery began in 1788, when the combined British fisheries at Newfoundland produced a record-breaking catch of nearly 950,000 quintals. This was far more than the 500,000 to 600,000 quintals that the southern European markets could absorb, and the quality was poor. This combination drove down the price of fish. Although the size of the annual catch fell steadily in the years that followed, the price of fish remained low until the glut of 1788 could work itself through the market.

The collapse affected the many servants, planters, and bye boat men who had set themselves up as small merchants, as well as the established merchants who had expanded their operations between 1783 and 1788. It affected the many so-called "new adventurers", who had no previous experience in the fishery but who had invested heavily in response to the favourable conditions before 1788. Left without the means to repay their creditors, many had to declare bankruptcy. The repercussions spread like a chain reaction through the West Country, Ireland, Scotland, and of course Newfoundland, affecting everyone from the modest ranks of the middling investor up to the great merchants themselves.

The collapse of the markets after 1788 was temporary and, given time, the migratory fishery would have recovered. Indeed, the more experienced investors were able to weather the storm reasonably well. Firms like Lester and Company had already sufficiently diversified their activities, so that they could absorb the collapse of the market by retrenching and concentrating on ship-building, the salmon fishery (where prices remained firm), the seal fishery, the supply trade, and so on. We also know that some of the fish which would have been exported to Europe was re-directed to the Caribbean. Finally, a relatively poor catch in 1791 helped ease the pressure on the market. By 1792, some of the merchants who had withdrawn from the trade entirely felt confident enough to re-enter it. Then, just as it looked as if the worst was finally over, a new and ultimately fatal crisis overtook the migratory fishery. In 1793, England and France began the war which would last for an entire generation.