539. If it were possible for the Canadian Government to envisage a form of political union, under which Newfoundland, while becoming a partner in the Canadian Confederation and making a contribution to the Canadian Exchequer, would, for a time at least, retain the right to fix her own tariff and to collect her own Customs duties, such difficulties could no doubt be largely discounted. But any such scheme would involve the retention of Customs duties on Canadian goods entering Newfoundland, and it is clear that this would make such demands on the generosity of the Canadian taxpayer as would, in present conditions, be regarded as unjustifiable. Moreover, it must be borne in mind that the conditions of entry into the Canadian Confederation were fully expounded in the British North America Act of 1867; and, though in the section of that Act which allows for the possible inclusion of Newfoundland some latitude as to the terms to be arranged is permitted, it is clear that any striking differentiation between the terms accorded to Newfoundland and those accorded to the other partners in the Confederation might lead to embarrassing repercussions.

  540. Apart, however, from the hostility which proposals for political union might be expected to evoke among certain interests in Newfoundland, it is fair to say that such proposals would at least receive more enlightened consideration and discussion to-day than would have been the case, say, twenty years ago. Since 1895 the currency of the Island has been the Canadian dollar and the entire banking business of the Island has been in the hands of Canadian Banks; during the present century imports from Canada have shown a steady increase, until to-day they amount to nearly 50 per cent. of the whole; Canadian interests in the Island have expanded; increasing advantage is being taken of educational facilities in Canada; and, finally, the Methodist and certain other Churches in Newfoundland have recently become part of the United Church of Canada. In view of the strength of denominational influence in the Island, this last development is of special significance.

  541. Among Canadian interests in the Island may be instanced the ownership by a Canadian company of the important mine at Bell Island, reputedly the largest deposit of iron-ore in the Empire. Of the two Paper Mills, that at Corner Brook is affiliated to and shares orders with three Canadian mills and is probably the strongest partner of the four. Canadian life-insurance Companies do a large business in the Island, and there are numerous minor channels of commercial contact. Newfoundland will doubtless be brought into even closer relationship with Canada when developments in aviation lead to the introduction of a regular transatlantic service.

  542. The people living on the south and west coasts of Newfoundland do a constant trade with Nova Scotia and Prince Edward Island, and objections to political union have in this part of the country lost much of their force. The seasonal employment obtained by Newfoundlanders in the mines of Cape Breton and in Canadian workshops and factories has led also to a wider knowledge, and appreciation, of Canadian conditions. It cannot be said, however, that the tradition of distrust of Canada has, even in these parts of the Island, been entirely dispelled. The possible disadvantages which might be felt by a small unit on being absorbed by a large one are apt to be stressed, while the positive advantages of such a course are ignored. Chief among the possible disadvantages is placed the necessity for direct taxation, hitherto unknown to the fisherman in Newfoundland. The fear of such taxation, due in part to the credit system restricting the circulation of money, has, indeed, reached such proportions that many Newfoundlanders are unable to think reasonably on the subject or to appreciate that any obligations which they would incur in this respect would be much more than counterbalanced by a decrease in the cost of living and in the cost of fishery supplies.

Baie [sic] de Vieux, 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. (73 kb)

  543. Hitherto, the discussions on the subject of a political union have proceeded on the basis of a Confederation under the British North America Act. If the sentiment and feeling of the two countries had been different, it might have been possible to establish a union of another kind, outside the British North America Act--something entirely new. The two countries might have worked out a union of some or all such services as are common services--Railways, Agriculture, Fisheries, Mines, Public Health, Postal Facilities and other similar services. In each of these services there might be one common service for Newfoundland and Canada; and Canada, as the larger partner in the common adventure, might contribute towards the easing of Newfoundland's burden of debt and thereby enable Newfoundland, by improving her trade and commerce, to contribute an increasing share to the common fund. But, having regard to the present feeling in the two countries, we feel that such a union is not practicable, and that it would serve no useful purpose to consider the question at the present time.

  544. The other possible courses of action falling within the category now under discussion are all dependent in some degree on assistance from the United Kingdom.
  Reluctant as we are to recommend any proposal which would have the effect of throwing an additional burden on the United Kingdom taxpayer, we are left, by a process of elimination, with no alternative. In must, indeed, be frankly recognised that it is wholly beyond the powers of such a small and impoverished community as the population of Newfoundland to grapple successfully with the unprecedented difficulties now confronting them. The Canadian Government, for reasons which have already been explained, is precluded from lending assistance at the present time. Such assistance can therefore only come from the Mother Country, and we have no hesitation in saying that the interests of the Island make it imperative that an immediate appeal should be made to the sympathy and good offices of the Government of the United Kingdom.

Image description updated May, 2004.