CHAPTER VII.--PROSPECTS FOR THE IMMEDIATE FUTURE. (continued)

Aviation.

  492. There is little doubt that Newfoundland and Labrador are destined to play an important part in the future development of Trans-Atlantic Air Services.

  493. Newfoundland was the starting point of the first successful flight across the North Atlantic, carried out by Sir John Alcock and Sir Arthur Whitten Brown in 1919. Since then, many other transatlantic flights, too numerous for separate mention, representative of many countries, e.g., the United Kingdom, the United States of America, France, Italy, Denmark, Hungary and Lithuania, have either started or finished in Newfoundland or passed over the country en route to places further afield. The culminating demonstration was the recent spectacular flight to Chicago by 24 Italian flying boats under the leadership of Air Marshal Italo Balbo which passed over Labrador in July last, and on their return flight made Newfoundland the point of departure for Europe.

  494. There are three transatlantic routes to which serious consideration is being given, viz.:--

(1) The Greenland or Sub-Arctic Route.
(2) The Great Circle Route via Newfoundland and Ireland.
(3) The Southern Route via Bermuda and the Azores.

  Of these, the Great Circle Route is the shortest route to operate and involves a shorter sea crossing than the Southern Route, the actual distance of the sea crossing being approximately 1,980 miles. It also has the advantage that it does not involve operation in or transit over any foreign territory.

  495. In July of this year, a conference, attended by representatives of the Governments of the United Kingdom, Canada, and Newfoundland, and of United States interests, was held at St. John's, when a provisional agreement was reached; and, as a result, it is expected that a flying boat service between St. John's and New York via a port of call in Canadian territory will be started in the summer of 1934. St. John's will thus become the most easterly point of the vast air system of North America, and the point in closest proximity to the European network which extends almost throughout the whole of Africa and to distant parts of Asia.

  496. Approach to Newfoundland being over water, the aircraft will probably be of the flying boat type, for which alighting facilities abound in the Island. Inland, there are lakes of convenient size. On the south coast, there are harbours such as those of Trepassey and Mortier Bay, while on the east coast there is an infinite number of harbours available with every natural protection.

General View of Trepassey Bay, looking North, 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.
Larger Version (44 kb)

  497. The domestic policies of the Governments of the Island has never apparently included adequate appreciation of the value of the aircraft operated in Newfoundland. It is countries such as Newfoundland and Labrador which particularly benefit by aviation. Great distances, remote settlements, winter isolation and the hazards of forest fires in the summer, all make quick communication from point to point desirable, and offer a field of use for aircraft hitherto ignored. A policy encouraging the use of aircraft would bring results which would amply repay any expense involved, and render the people more alive to the possibilities of a form of transport pursued so aggressively in other parts of the world and destined to become a most important factor in commerce, communication and defence of the nations.* The opening of a service between St. John's and the mainland of the American Continent should result in a considerable volume of tourist traffic and provide facilities for the carriage of merchandise and in particular of perishable goods.

  498. Newfoundland can also play a part in the development of a combined service with steamships and aircraft, the former being used for the long ocean crossing until such time as regular transatlantic flying is possible. For this combined service, the route would be varied seasonally, and use would be made of a port on the west coast of Newfoundland in the summer and of a port on the south-east in the spring and autumn. Connection with the American Continent would be effected at a suitable point in Canada.

  499. The indirect benefit which will accrue to the country, both from the mere fact of its situation on the main trunk route between Europe and North America and from the establishment of high speed communications, should in the future be considerable.

Assistance of Foreign Capital.

  500. Various suggestions, mostly relating to the future rather than the present, were made to us by witnesses who emphasised the lack of foreign capital, and urged that it was only by the attraction of foreign capital that the natural resources of the Island could be developed and utilised to full advantage. Among, and typical of, these suggestions was a complicated scheme put forward by a representative of a firm of construction engineers in the United States. This scheme we think it well to outline since it has received a certain degree of publicity, mostly of a misleading nature, both in the United States and in Newfoundland.

  501. The scheme provided in brief for the formation of a Company with the object of developing the resources of the Island, taking over the operation of the railway and increasing employment by the expansion and diversification of industry. For the financing of the Company, of which the promoting firm would be managers, it was proposed that an "Interior Development Fund" should be formed, the resources of the Fund being provided over a period of years by the proceeds (less commission and operating costs) of monopolies to be granted by the Government to the Company of the importation and sale in Newfoundland and its dependencies of principal foodstuffs and other commodities. The commodities proposed were flour, sugar, coal, automobiles of every kind, including parts and tyres, wheat, sugar beet and raw sugar, kerosene, gasoline, and crude and lubricating oils; all of which would be imported and sold exclusively by the Company or its subsidiaries at certain fixed prices, to be approved by the Government, above c.i.f costs, duty paid Newfoundland. The Fund, which would draw its income in this way, would be administered by three trustees, of whom two would be representatives of the Company and one a representative of the Government. It would be the object of the Company to finance itself by public subscription and also to promote the formation of subsidiary companies similarly financed; in order that the raising of the necessary capital might be facilitated, the Company would be free to pledge the assets and income of the Fund. Until such time as the necessary could be raised from the public, the trustees of the Fund would make advances to the Company for the purposes of construction and development work in the Island, such advances to be made against cash or securities of the Company and its subsidiary companies. The scheme requires the Government of Newfoundland to make large free grants of land, easement rights and other concessions.

  502. Such an outline was the scheme put before us. We will not enter here into the detailed conditions put forward by the promoters since these have, we understand, been modified. But it is understood that, however the details may vary, the principle of the scheme remains as outlined above. Two features of the scheme will at once be apparent, first, that the proposals are entirely dependent on the grant to the Company of monopolies of the importation and sale of essential commodities and, secondly, that no risk whatever would be run by the promoters of the scheme. All the risks involved would be borne by the Government and the people of Newfoundland. The promoters would be assured of a safe income as managers, to say nothing of the prospect of large profits from the operations of one or other of the proposed companies. The Government of Newfoundland, so far from being able to look to the Fund for a source of revenue which would assist them towards reducing the burden of the public debt, would be in a minority on the Board of Trustees and would be liable to find that the whole assets of the Fund had been pledged by the Company as security for public issues. Should the undertaking be successful, the Government would lose the money advanced, and the income of the Fund, derived from the public of Newfoundland by a species of indirect taxation, would be devoted to the satisfaction of the claims of bondholders. The promoters of the scheme, so far from suffering, would in any case make a profit.

  503. Proposals of this kind will not bear, and do not merit, serious examination. It is unthinkable that in these days any Government with a sense of responsibility could bring itself, by the grant of a series of monopolies relating to essential articles, to place the future well-being of its people in the hands of a private company. The objections would be no less strong even if such a Company should offer to contribute from its own resources the capital necessary for the projects in view.


  * Cf. Journal of Commerce, Newfoundland; August, 1933.


Image description updated May, 2004.



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