Why we surrendered self-government in 1933
Most Newfoundlanders and Labradorians know that we surrendered our right to govern ourselves in 1933 because our own government — the one elected by the voters of the Dominion — was on the verge of bankruptcy. In a phrase, we couldn’t pay our bills.
But most of us have no idea how that came to be, and what it meant to the ordinary man or woman and their families.
Newfoundland’s economy had known both ups and downs, but the years before the First World War in 1914 and the war years themselves were prosperous. Government’s revenues, drawn mostly from customs duties, brought in more each year than it cost to operate the public services, the so-called current account.
The 11 years between 1909 and 1920 produced an operating surplus of $7 million. That money was spent on capital account, to build harbours and roads and public buildings and the railway. But it was not enough to pay for all the projects thought to be necessary, and so successive governments raised loans on Newfoundland’s credit.
By 1920, the Colony-turnedDominion owed $43 million. Mean- while, the cost of operating public services rose steadily. Between 1920 and the coming of Commission at the end of 1933, another $20 million was added to the debt, simply to cover day-to-day housekeeping costs. Other loans were used to pay for capital projects. Still further monies had to be borrowed each year to pay interest on the debt.
The Newfoundland Railway took the biggest part of the money. It had cost close to $45 million by the early 30s, and a further $2 million was being eaten up each year in operating losses.
The First World War was the second biggest cost. The government borrowed $ 13 million to maintain the Newfoundland Regiment between 1914 and 1919, and incurred obligations to pay $700,000 a year in pensions to the men who had returned and to the survivors of those who had died. These had cost $9 million by 1933.
Capital projects, roads and wharves and the Newfoundland Hotel (owned by the government) and such added another $ 12 million.
The Depression hit Newfoundland very hard. Individual Newfoundlanders suffered, and many were unable to earn enough money to provide even the basic necessities to their families. The government suffered, too as revenues fell well behind expenditures.
By the end of 1933, the Newfoundland government owed $98.5 million. Interest costs alone were running close to $ 5 million a year, and consumed more than half the government’s total revenue from all sources. Canada and Great Britain both passed laws to reduce the interest on their national debts, but Newfoundland did not.
Successive governments struggled to deal with the situation. (Richard Squires and the Liberals were in office until June 1932, when Frederick Alderdice and the Conservatives won the general election). Both administrations cut expenses to the bone, and then cut into the bone itself.
Squires had reduced the education budget by several hundred thou- sand dollars, and in September 1932, three months after his election to victory, Alderdice cut a further $200,000, which reduced expenditure for schools and teachers to one-half of what it had been in 1930-31.
The relief assistance paid by the government to destitute families — the hated dole — was set at “six cents a day.” But still the financial crisis grew, like a snowball rolling down a steep hill. The government’s efforts to borrow more money came to nothing.
The last general election, in June 1932, turned on the widespread and unchangeable decision of the people of Newfoundland to reject Richard Squires and his Liberal government. Frederick Alderdice and his Conservatives took 70 per cent of the popular vote, a tally not to be equalled until Danny Williams and the Conservatives did so in the 2007 general election.
The Liberals won only two of the 27 seats in the House, which had been reduced from 40 seats to 27, as an economy measure. Alderdice undertook in his election manifesto to investigate the advisability of establishing a form of Commission of Government ( not the one that came to be in the end), and pledged that any proposal would be “submitted to the electorate for further approval,” adding that “ no action would be taken that does not first have the consent of the people.”
The end was inevitable, and could not have been postponed. Alderdice’s promise to consult the people was overwhelmed by the financial problems. Newfoundland had no choice but to turn elsewhere for help, and nowhere to turn but to Britain, “ the Mother Country.”
Britain grudgingly offered some assistance. The price to be paid for it was the suspension of self-government, with Newfoundland’s public affairs being run by a Commission of Government. The House of Assembly and the Legislative Council agreed to pay that price in a session that took less than a week, at the end of November and early in December 1933.
Gordon Bradley and Harold Starkes, the two Liberals, were the only members to oppose the decision to do so.
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.