101. The refusal of the Imperial Government to intervene by no means settled the controversy. The Bill became law, but the agitation did not subside and Sir James Winter's Government was defeated in the House of Assembly early in 1900. A Liberal Ministry, under Mr. (later Sir Robert) Bond, who had been a consistent opponent of the Reid contract, then assumed office. A short time before, Mr. Reid had applied to the Government of Sir James Winter for permission to assign his rights over the railway to a limited liability company, with an authorised capital of $25,000,000. No answer had been received before the Government fell. The new Government under Mr. Bond saw in this application an opportunity to effect a modification of the contract. Having first strengthened his position in the House of Assembly by forming a Coalition with Mr. (now Lord) Morris, the leader of another group of Liberals, Mr. Bond informed Mr. Reid that the permission which he requested would be granted on the following conditions:--

  (1) The additional areas of land granted under the 1898 contract should revert to the Colony.
  (2) A guarantee should be furnished that a specified proportion of the sums to be raised by the new Company would be spent in the Island.
  (3) The telegraphs should be restored to the ownership of the Government.
  (4) Mr. Reid should agree to resign his proprietary rights in the railway.

  102. To the last two conditions Mr. Reid was not prepared to assent, and the General Election which took place in the autumn of 1900 was fought upon this issue. The result of the Election was a sweeping victory for Mr. Bond, who was thereby confirmed in Office.

  103. Following the election an agreement was reached with Mr. Reid which provided for the incorporation of the Reid Newfoundland Company. Under the terms of this agreement, in consideration of the surrender by Mr. Reid of the right to own the railway at the end of 1938, the sum of $1,000,000 paid by him for his right under the 1898 contract was to be returned to him with interest at the rate of 6 per cent. as from the date of payment; and $850,000 was awarded to him in return for the cancellation and reconveyance to the Government of the grants of land made to him under the 1893 contract. His claims in respect of rolling stock and equipment, and those arising from the surrender of the telegraphs, were submitted to arbitration, as a result of which he was awarded sums of $894,000 and $1,570,555 respectively. The Reid Newfoundland Company, by agreement with Mr. Reid and the approval of the Government, came into possession of over 2½ million acres of land, with timber, mineral and other rights thereon, and took over all existing contracts for working the railway, mail and steamer services of the Island, including the St. John's Dry Dock and the tramway and electric lighting services in the capital. The new company was inaugurated in 1901, and the terms provided in the 1898 contract for the maintenance and operation of the railway was extended to 50 years from the 1st August, 1901.

Grand Bay, looking North (showing Railway), n.d. Photographer unknown. From the album of photographs furnished to the Newfoundland Royal Commission, August 1933. Courtesy of the Centre for Newfoundland Studies Archives (Coll-207), Memorial University of Newfoundland Library, St. John's, Newfoundland. (56 kb)

  104. It will be seen from the foregoing survey of these momentous transactions that the alterations effected in the 1898 contract, for the sole purpose of enabling the Island to re-acquire rights which need never have been parted with, cost the country some $2,500,000. As an offset against this expenditure, it could now be claimed that the ownership of the Island's principal means of communication had been safeguarded and that the additional land grants granted under the 1898 contract had been withdrawn. The allegation that the country had been subjected to the domination of a single contractor could now be refuted, though the Reid Newfoundland Company remained for some years the biggest paymaster in the Island, bigger even than the Government itself.

  105. The years following 1901 were years of progress. Sir Robert Bond was sustained in power by the General Election of 1904, and remained Prime Minister until 1908. He left behind him a reputation of far-sighted devotion to the interests of the Island and is generally regarded as the most statesmanlike figure in the line of Newfoundland Prime Ministers. To-day, a disillusioned people, looking back on the past, single out the years of his Premiership as a period of orthodox finance and sane government when the fortunes of the Island were at their zenith; there was almost unanimous agreement among witnesses that the present period of misfortune might be regarded as having originated with his fall from power in 1908. We have already seen what great services he was able to render the Island, as Colonial Secretary, during the financial crisis of 1895; during his period of office as Prime Minister a notable advance was made both in the domestic and in the international fields.

  106. In 1901, arrangements were made for the establishment of a branch of the Royal Naval Reserve at St. John's, and in the following year an Act was passed by the United Kingdom Parliament making the enrolment and maintenance of reserves in Newfoundland an Imperial undertaking. Abundant proof was forthcoming, only a decade later, of the benefits derived from the establishment of this force not merely by the Island but by the Empire as a whole.

  107. Great progress was made at this time with the development of the iron-ore mine at Bell Island under the auspices of the Nova Scotia Steel and Coal Company, a Canadian company, which had begun to work the deposits in 1895, and the Dominion Iron and Steel Company, also a Canadian company, which had secured a lease of one of the beds in 1899. The discovery of these deposits, and their subsequent exploitation, was to provide Newfoundland with a new industry of increasing importance, bringing prosperity to Conception Bay and giving employment to hundreds of fishermen in the off season. The activities of the mine, and the vicissitudes through which it is at present passing, are described in detail in Chapter VII.*

  108. Other, and equally important outlets, were to be provided by the events of 1904 and 1905. In 1904 was signed the Anglo-French Convention† which put an end at long last to the bitter disputes over French fishing rights that had vexed the Colony for nearly two centuries and had effectively prevented the colonisation and development of the West Coast. In return for the abandonment of her rights under the Treaty of Utrecht, 1713, France received territorial compensation in Africa; this took the form of a modification of the boundary line between British and French possessions in the Niger and Lake Chad district and a re-arrangement of the Gambia-Senegambia frontier, giving Yarbutenda to France. The Los Islands opposite Konakry were also ceded to France. The Convention further provided for the payment by the United Kingdom of a pecuniary indemnity, to be determined by an arbitral tribunal, to French citizens engaged in fishing on the "Treaty Shore" who might be obliged in consequence of the changes brought about by the Convention to abandon their establishments. The awards eventually made by the tribunal and paid by the United Kingdom were as follows:--

An exchange of notes annexed to the Convention provided for the reciprocal appointment of a British Consul at St. Pierre and a French Consul at St. John's.

  * Paragraphs 435-445.
  † United Kingdom Parly. Papers, C. 8867, 1898, No. 8.

Image description updated May, 2004.