The Life and Death of the Newfoundland Railway
Newfoundland’s railway, conceived in hope, was at the centre of political and public debate throughout its life, and died in controversy.
It is still mourned by countless Newfoundlanders. Sir William Whiteway, three times prime minister in the last quarter of the 19th century, may truly be called its father. Those were the years when huge railway projects commanded wide public attention and dominated political debate in Canada and throughout North America.
Railways were seen as the key to a bright economic future. Governments of every political stripe committed huge sums of public money to build them.
Visions of great mines along Newfoundland’s north-east coast and even greater agricultural development throughout the island’s interior danced like sugar plums in the heads of our politicians from the middle of the century on. But it wasn’t until 1878 that Whiteway took up the cause.
The next year, the House of Assembly voted to lend $5 million to a company that proposed to build a railway from St. John’s to Hall’s Bay in Green Bay. (The suggestion that it be extended to the West Coast came to nothing, because France still possessed extensive fishing rights along the so-called French Shore). Line reached Harbour Grace The line of rail reached Harbour Grace in the fall of 1884. The Newfoundland Railway Company fell into bankruptcy a short time later, however, and construction on the line west from Conception Bay was halted.
The Thorburn administration (1885-89) built a branch line to Placentia, which cost twice as much as the $500,000 originally forecast, but it was not until Whiteway became prime minister again in 1889 that work on the main line resumed.
Robert G. Reid, a prominent Canadian railway contractor, agreed to complete the line — to Port aux Basques rather than Hall’s Bay — at a cost of $15,600 a mile, to be paid in government bonds.
The first cross-country train from St. John’s arrived in Port aux Basques at 10:45 p.m. on June 30, 28 hours after it left St. John’s. The 546 miles of rail that carried it there had cost Newfoundland just shy of $11 million. Three branch lines had also been built — from Harbour Grace to Carbonear, from Brigus Junction to Tilton via Clarke’s Beach, and from Notre Dame Bay Junction to Lewisporte, at a cost of more millions. They were begun by Whiteway and the Liberals, and completed by Sir James Winter, the new prime minister, and his Conservatives after their victory in the election held in the fall of 1897.
Reid soon befriended the Conservatives and began to negotiate a new deal with Winter, which became the infamous 1898 Railway Contract. Reid agreed to operate the entire railway, including the branch lines, until 1948, in return for grants of 5,000 acres of Crown land for each mile of rail, and the right to buy the railway at the end of the 50-year period.
He also got the franchise to operate the coastal boat service, the St. John’s drydock, the ferry across the Cabot Strait, the St. John’s street railway and the island’s telegraph system. Furor over deal The 1898 deal touched off a furor. Robert Bond, Whiteway’s successor as Liberal leader, led the campaign to rewrite it. He won the 1900 election overwhelmingly, and immediately began negotiations with the Reids. The government regained full ownership of the railway itself and the telegraph system, but Reid retained the right to operate the railway until 1951.
The government, for $ 850,000, bought back 1.5 million acres of land granted to him. The remainder of the 1898 contract stood unchanged.
The railway was always a disaster financially. By 1914, it had cost Newfoundland nearly $23 million. It lost money from the first day of operation; these losses came to $7 million in the 20 years before 1921.
R. G. Morgan, a Canadian expert called in by the government that year, reported that it cost the Reids 10 times as much to move a ton of freight along a mile of track as it did the CPR, adding that the CPR earned $16,000 per mile per year, but the trans-island one earned only $1,500.
Two years later, in 1923, the government paid a further $2 million to the Reids, and assumed full responsibility for operation — and for the operating losses. By 1934, when Newfoundlanders forfeited the right to govern themselves, the railway had gobbled up another $11 million. An immense strain The Newfoundland railway had consumed far more than one-third of all the money borrowed by all Newfoundland governments since 1855.
The Railway continued to be an immense strain upon the public finances throughout the Commission era, although it actually made money for two years during the Second World War. (The finance committee of the National Convention set the operating profit at $20,000).
Confederation meant that the financial burden was assumed by the taxpayers of Canada. By 1988, matters had come to the point where the Government of Canada sought to shut it down.
Premier Brian Peckford agreed to do so, in return for the payment of $800 million. The money was paid, and the rails were taken up. The Newfoundland railway became history. The rail bed subsequently became a provincial park, now incorporated into the TransCanada Trail.
Edward Roberts has had a lifelong interest in the history of Newfoundland and Labrador. He was an MHA for 23 years, and served as the province’s lieutenant-governor from 2002 to 2008.