Trade and Commerce in Newfoundland
For nearly four hundred years all economic activity in Newfoundland centred around the prosecution of
the fishery. West Country merchants in England funded the expeditions of the migratory fishing vessels,
outfitting and supplying them with provisions and men. With the growth of a resident population along
Newfoundland's coast West Country merchants, and later local Newfoundland merchants, supplied the
resident fishing families with the goods and equipment necessary in their pursuit of the fishery. Where
merchants had once organized and supplied the fishing vessels heading to the waters surrounding
Newfoundland, they now provisioned settlers on credit at the start of the fishing season, being repaid at
the end of the season with the fisherman's produce, dried salt cod.
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Water Street east, Ayre & Sons, St. John's, ca. 1948.
Courtesy of the Centre for Newfoundland Studies Archives, (Historic Photographs Collection of the Department
of Geography, Collection 137, Photo 1.02.004), Memorial University of Newfoundland Library, St. John's, Newfoundland.
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As the number of merchants in Newfoundland increased to serve a rising settled population in the 19th
century, the most influential and prominent of them set up shop in St. John's along Water Street. These
merchants imported goods - primarily food and fishing gear in the early decades - to supply the smaller
outport merchants who in turn supplied local fishermen. At the end of the fishing season, the outport
merchant collected the catch, settled the accounts with the fishermen, and settled his own accounts by
transporting the fish to the premises of the St. John's fish merchant who, in turn, sold it on the European
market. Thus, St. John's became the centre of commercial activity in Newfoundland. In the merchant
houses lining the city's waterfront the island's main export - dried salt cod - was exchanged for imports
from Britain, the US and Canada.
The St. John's merchant community in the 19th century was small and tightly-knit. Firms were passed
on from father to son, brothers worked as partners, and former clerks of these firms started up their
own businesses with the support of former employers. Benjamin Bowring immigrated from England to
start a business in St. John's in 1811, passing it onto his sons who formed a partnership, Bowring
Brothers. Another firm, Steer & Ayre, the predecessors of Steer's and Ayre & Sons, was begun by
John Steer and Robert Ayre, both former clerks at Bowring Brothers, with Bowring's aid.
Occasionally, merchants would pool their resources to start up a new business venture such as the
Newfoundland Boot and Shoe Company, the White Bay Mining Association and the Newfoundland
Pioneer Woollen Company.
Interior of Bowring's store, Water Street, St. John's.
Courtesy of the Centre for Newfoundland Studies Archives, (Historic Photographs Collection of the Department
of Geography, Collection 137, Photo 2.01.019), Memorial University of Newfoundland Library, St. John's,
Newfoundland.
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The insular nature of the merchant community, while allowing for much cooperation and mutual support,
has also been blamed for many of Newfoundland's economic troubles. This is particularly evident in
the 1894 Bank Crash, which was caused by an over extension of credit to St. John's merchants. The
large-scale extension of credit by merchant companies to fishermen and the tendency of retiring
partners in the merchant houses to withdraw money from their businesses had left many of the firms
with little working capital, leading them to take out large bank loans. As many of the merchants were
also bank directors, unbiased reviews of the banks' lending practices were not common. All of these
factors contributed to the collapse of the banks, devaluation of the currency, business failure, and high
unemployment.
Although the merchants were considered largely responsible for the disaster, city merchants who were
not made bankrupt by the bank crash offered aid to many of those worst affected. Rather than lay off
half their workers, some firms kept employees on at half-time. To pay their workers, Bowring Brothers
printed their own wages notes which were meant for use in their own stores. Because of the
devaluation of the currency and the firm's relative financial stability, these notes came to be accepted at
stores across the island.
Despite their implication in the crash, many Newfoundlanders considered the finances of the merchant
firms to be more secure than those of the banks. Some Water Street firms began offering banking
services, allowing customers to deposit savings in accounts paying interest and to make purchases in the
firms' stores on account. So popular were these banking services that some of the firms were in debt
to their customers rather than the reverse. Some also offered loans, such as the one Ayre & Sons
provided to The Evening Telegram after a fire had destroyed the presses and the owners were unable
to obtain a bank loan.
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Water Street west, Ayre & Sons, St. John's, ca. 1948.
Courtesy of the Centre for Newfoundland Studies Archives, (Historic Photographs Collection of the Department
of Geography, Collection 137, Photo 1.02.003), Memorial University of Newfoundland Library, St. John's,
Newfoundland.
(38 kb)
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Clearly, St. John's merchants had interests beyond the fishery. In fact, events like the Bank Crash and
poor fishing seasons convinced many that they needed to diversify their activities. Some invested in
mining ventures, manufacturing and insurance, while others focussed their attentions on the wholesale
and retail trades. With the growth of the St. John's population, particularly that of the mercantile and
professional classes, city stores began expanding their operations and their lines of merchandise.
As the standard of living rose and the economy became more diversified during the 19th century,
Newfoundland's imports began to include an increasing proportion of luxury and industrial items as well
as food and fishing gear. Although imports fell again during the Depression, wartime prosperity
reversed the trend. Confederation in 1949 accelerated another trend, and Newfoundland began to
import more from Canada than either Britain or the US.
The Broadway House of Fashion, 331-333 Water Street, St. John's.
Courtesy of the Centre for Newfoundland Studies Archives, (Historic Photographs Collection of the Department
of Geography, Collection 137, Photo 2.01.037), Memorial University of Newfoundland Library, St. John's,
Newfoundland.
(40 kb)
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The impact of Confederation on the merchant community has been little studied but the influx of
Canadian chain and department stores had a deleterious effect on local business. Although many
supporters of Confederation had sought to break the monopoly of local merchants on trade and lower
the price of goods by introducing competition and getting rid of the tariff on Canadian imports, they
probably did not intend the destruction of local merchant companies. In the long run, however, the
inability of local manufacturers and retailers to produce and sell goods as efficiently and cheaply as their
mainland counterparts, led to their failure. By the 1970s and 1980s, many of the old Water Street firms
such as Bowring Brothers and Ayre & Sons had closed their doors or severely curtailed their interests.
Rather than compete with a mainland grocery chain, Ayre & Sons sold off their Dominion Stores and
attempted to consolidate their interests.
Newfoundland continues to import many of the products its people consume while exporting primarily
raw materials, a trade imbalance which has served to exacerbate the island's economic troubles.
© 1999, Carla Wheaton
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