Newfoundland

Part of the debate – in the House of Commons on 16th December 1943.

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Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

I think we are all grateful to the Deputy Prime Minister first for helping to arrange this Debate and for giving this subject the time which it deserved. Also we are very glad that he has been able to get down to the House and make the statement he did, even if it was a somewhat limited one. In my opinion this House was not properly aware of the action that it took in 1933. There was a small group of Members who seemed to know what would happen, and the Deputy Prime Minister practically admitted that he was one of that group. What happened in this House in 1933 was a monstrous denial of democracy. Ten years have passed by, and because that has come to pass which everyone knew would come to pass, because the people of Newfoundland have lost their political instinct very largely, the Government are looking at the matter as though nothing could be done about it, almost with a sense of satisfaction, as if to prove that what they did in 1933 was right. Let us admit that there were desperate circumstances. Sir Richard Squire's Government had been in office for a long time and had become very corrupt. But this is something I have not heard in any of the Debates, that there was a General Election and that the Squire Government was swept out of office. I think every member of the party except two was defeated. A new Government was formed on the policy of retrenchment and reform, headed by Mr. Allerdice. The economic blizzard which had crashed Wall Street and which was to bring us to the very edge of bankruptcy struck Newfoundland. They could not meet the de- mands for interest. They had not enough money in the Exchequer to pay their way, and the misery in their country was very great. The question has arisen to-day, and it has been said over and over again that Newfoundland asked us for a Commission Government. That is only partially true. They were in extremis and sent word to us, "Will you send a Royal Commission to inquire into our difficulties?" We did so. It was the Royal Commission that recommended that the Parliament House which had been open for a 100 years must be locked and barred.

All this happened in the oldest overseas territory this country had, which for 85 years had been a Dominion. Did we say to this new Government, this untried Government, "We will help you, we will co-operate with you"? Not a bit. The Royal Commission said, "You are finished. We will take from you your Dominion status. We will close your Parliament and we will put in a government by commission. That is what they recommended, and the Allerdice Government could do nothing but humbly petition his Gracious Majesty to wind up the democracy of Newfoundland.

In the Debates at that, time the noble Lord opposite played a very fine part in opposing it. So did the Deputy Prime Minister. There was another Member of the Government who I wish were here today to repeat the words he said with prophetic prescience on that occasion. I refer to the right hon. and learned Gentleman the Minister of Aircraft Production. This is what he said then. I ask the House to be patient with me if I quote him. We do not realise what we did at that time. The Minister of Aircraft Production said: This is the first time that there has been any inroad on democratic government of any dominion, the first time we have ever taken a retrogressive step in that gradual advance to free government within the Commonwealth. He added: It does not necessarily follow that the solution of the troubles of Newfoundland is bound up with the abolition of democracy. There for once, if he never did it again, he spoke in the language of Burke. He concluded: Capital punishment is not the only punishment for democracy. He went further. Realising that to take from the people of Newfoundland the exercise of democratic government, the exercise of the franchise, with the discussions and elections that go with it, would result in their becoming politically paralysed—and the three hon. Gentlemen who have come back tell us that the people have lost political interest very largely—the Minister of Aircraft Production moved an Amendment to the Bill, to limit the unhappy experiment to three years, because he said, "If you do not do that, these people will lose the political instinct." He foretold exactly what has happened.

What was the financial crisis that let Newfoundland down? It is not a pleasant story. It starts with the Squires Government. The Squires Government did many good things, but they became terribly corrupt. In 1933 Newfoundland owed, all told, about £20,000,000. Of that 26,000,000 dollars were owed to the bankers of New York in gold bonds payable at the gold price. Another 6,000,000 dollars had been loaned by the Canadian banks to help to pay the interest. The Canadian banks charged on that five and even five and a half per cent—a very heavy rate of interest, indicating that they took a certain risk. The rest was owed here. Newfoundland tried to pay her interest. When she could not, we took the debt over. Her interest charges on her external loans were over £1,000,000 a year. Had she not had to pay that on the year when she went bankrupt, she would have had 3,000,000 dollars surplus in her Treasury to meet the cost of the social services.