525.--(c) There is a number who think that the problem would be best solved by the United Kingdom taking over the territory for a consideration and administering it either alone or in conjunction with Newfoundland. The suggestion was based on the grounds that the United Kingdom, with her wide experience of governing and administering new territories, would be better equipped to administer the territory than any other country; and that Labrador is so situated geographically that in the world of the future it may well come to occupy an important commercial and strategic position in the British Empire. This suggestion has never, so far as we are aware, been broached by either of the two Governments concerned, but it is noteworthy as showing the views entertained by a certain number of thinking people in the Island.

  526.--(d) Another suggestion is that the territory might be sold or leased to a trading company operating under charter or other authority, the company administering the territory and paying to Newfoundland either a lump sum or annual rental for trading rights. Suggestions to this end have been put before us from more than one quarter. It was claimed that, apart from the money payment, the trading operations of the company would indirectly benefit the Island.

  527.--(e) It has also been suggested that, in addition to or apart from any industrial and commercial development, the territory should be opened up by the construction of new roads and the establishment of inns, hotels and hostels; and that by this means the territory might be made an attractive country for tourists, sportsmen and others. Kindred proposals have been put forward from time to time; indeed, as far back as 1892, it was proposed that a railway should be built through Labrador which would greatly shorten the distance between England and Canada and promote union between Canada and Newfoundland. Until the territory has ben explored and surveyed, proposals of this kind must lie outside the immediate range of practical possibilities.

  528. As will be seen from this analysis of the suggestions put before us, the problem of the future of Labrador is one which has not only engaged the attention of successive Governments of the Island but has been a constant topic of speculation and discussion by Newfoundlanders throughout the country. It has also been the subject of consideration by individuals and companies outside the Island. Possibly the most helpful suggestion is that of a trading company, but, failing the establishment of such a company, we think that Newfoundland should retain the territory and administer it. The general opinion is that the territory is capable of great possibilities. Hitherto these possibilities have only been guessed at. As soon as funds permit, an aerial survey should be undertaken to ascertain with some degree of particularly the nature of the territory and its approximate value. What we have said as to the encouragement of the industry of fur-bearing animals* in Newfoundland applies equally to Labrador.

Cape White Handkerchief, Labrador, 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. (49 kb)

  529. In any scheme that may be adopted for the disposal of the territory, it is probable that Newfoundland will require that the fishing rights of the Newfoundland fishermen on the coast of Labrador be safeguarded.

  530. It will be seen from what has been said above that we do not regard default by Newfoundland on her loan obligations as providing a solution of her present problems; and we are satisfied that any of the proposals or suggestions last mentioned, if accepted, would offer only a temporary alleviation of existing difficulties. There are no other measures which Newfoundland can herself take to avoid default on the 1st January, and we turn now to alternative possibilities the fulfilment of which would be dependent on external assistance. The first of these is the possibility of negotiating some form of political union with Canada.

  531. We do not propose here to enter into a detailed discussion of what at first sight would appear to be an attractive solution of Newfoundland's difficulties. It will have been seen from the historical summary in Chapter III that the question of political union between the two countries is one which has frequently been debated in the past and which arises with some acuteness about once in a generation. In 1867, when the Canadian Confederation was first formed, there was a general expectation that Newfoundland would link her fortunes with those of the other Colonies of British North America. This expectation, however, was rudely dispelled in 1869 when the issue was put to the people and decisively rejected. The question was not seriously discussed again until 1895 when, following the acute financial crisis in which Newfoundland was then involved, negotiations were opened with the Canadian Government. These negotiations came within measurable distance of succeeding but, as will be seen from the account given in Chapter III, a deadlock finally arose over the financial terms, the Canadian Delegation refusing to agree to the assumption by Canada of the whole of the Island's public indebtedness, and their maximum offer falling short by some $5,000,000 of what the representatives of Newfoundland considered essential.† Appeal was made to the United Kingdom in the hope that the Imperial Government would consent to take this burden upon their shoulders and thus enable a statesmanlike solution to be reached; but the matter was regarded in England as one for settlement between Canada and Newfoundland and the Imperial Government felt unable to undertake such a commitment. The negotiations were therefore abandoned.

  532. Passing by unofficial discussions from time to time, we come to an important debate in the Canadian Senate, in 1928, which revealed a preponderance of opinion sympathetic to the idea of union; and in which the similarity of interests in Newfoundland and the Maritime Provinces of Canada was emphasised and a vision entertained of a great consolidated Dominion embracing all British countries on the Western side of the Atlantic.

  533. Now, in 1933, the subject comes again to the forefront, and it was urged by some of the witnesses who came before us that the union of the two Dominions would provide a solution of Newfoundland's difficulties and would at the same time lead to the consolidation of an enlarged Canadian Dominion. But it is clear for a number of reasons, which will be detailed later, that, unless the Canadian Government were prepared to offer strikingly generous terms, no such solution would be acceptable to Newfoundland public opinion.

  * Chapter VII, paragraphs 484-491.
  † Chapter III, paragraph 86.

Image description updated May, 2004.