The rejection of Confederation in 1869 by Newfoundlanders, the historian J.K. Hiller has observed, meant that in the future the "basis from which all governments now had to work was the colony's continued independence. Newfoundland began to take independent, nationalistic attitudes towards such questions as the North Atlantic fisheries, reciprocity, and the French Shore, much to the annoyance of both Ottawa and London...." Yet, Premier Carter, and his successor, William Whiteway, never lost their perspective of a continental orientation in looking for a development strategy to diversify the local economy, a perspective which in the 1860s had distinguished them as well from the Bennett anti-confederates. In embracing a policy of building a railway to open up the Island's hidden resources, they followed the Canadian government's model of developing its west through the building of the Canadian Pacific Railway in the 1870s and 1880s.
A 1880 report of the Newfoundland legislature summarized best the situation facing the colony, whose population increased by 35% between 1869 and 1884 and which the fishery could no longer support by itself.
"The question of the future of our growing population has, for some time, engaged the earnest attention of all thoughtful men in this country.... The fisheries being our main resource, and to a large extent the only dependence of the people, those periodic partial failures which are incident to such pursuits continue to be attended with recurring visitations of pauperism, and there seems no remedy to be found for this condition of things but that which may lie in varied and extensive pursuits. Our fisheries have no doubt increased, but not in a measure corresponding to our increase in population. And even though they were capable of being further expanded, that object would be largely neutralized by the decline in price that follows a large catch, as no increases of markets can be found to give remunerative returns for an augmented supply. It is evident, therefore, that no material increase is to be looked for from our fisheries, and that we must direct our attention to other sources to meet the growing requirements of the country." (Quoted in Hiller, "Newfoundland Confronts Canada," p. 438)
The 1880s were an "important benchmark in Newfoundland's economic history" for the economy which was based on the cod fishery, economic historian David Alexander has written, had reached a "limit to its extensive growth and further development was perceived as a function of modern resource industries, with emigration acting as a mechanism to balance a labour force growing faster than employment opportunities" (Alexander, "Newfoundland's Traditional Economy"). From the 1880s politicians concentrated their efforts on interesting foreign capitalists to the colony to exploit major forestry and mineral resources, while some Water Street merchants like Moses Monroe and Augustus Harvey invested in local marine-related industries that were protected behind high tariffs (see Melvin Baker, "Moses Monroe," and "Augustus Harvey," Dictionary of Canadian Biography, vols. 12 and 13 respectively).
The 1880 legislative report had strongly endorsed the construction of a railway and was the rallying cry of the Whiteway government from 1878 to 1885. In 1881 his government chose an American capitalist syndicate led by Albert L. Blackman to construct a narrow gauge line, as well as to construct a dry dock at St. John's. This "Policy of Progress" enabled Whiteway to win re-election in 1882 with the tacit support of the opposition Catholic Liberal Party against an opposition party--The New Party--led by St. John's merchant James J. Rogerson. In the election, Rogerson allowed his supporters to be "presented as backward-looking conservatives, fish-bound exploiters, and monopolists.... In their view the railway policy was inappropriate, given that the fisheries were the foundation of the local economy and likely to remain so. Far wiser, they argued, to concentrate on agricultural and rural development in general in connection with the fisheries, and to build roads rather than railways. Development should be linked to the existing resource base and to the country's capacity to pay" (Hiller, "Newfoundland Confronts Canada," p. 439). This appeal to fiscal restraint was not welcomed by voters.
Whiteway easily won the 1882 general election on a policy of "Progress" versus "Stagnation and Starvation," but the Blackman company soon experienced serious financial problems leading to its bankruptcy by the fall of 1884 with only a line completed from St. John's to Harbour Grace. Merchants opposed to railway construction had reorganized by early 1885 as the Reform Party. To achieve political power in 1885, the opponents of the Whiteway government shamelessly manipulated sectarian antagonisms for political expediency, in particular Protestant outrage resulting from the Harbour Grace Affray of December 1883. In early 1885 they succeeded during the legislative session to force the Roman Catholic Liberals to leave government ranks and sit in opposition. Then, later in the year, they convinced Whiteway to resign the Premiership in favour of Thorburn--with the promise of a judgeship--who then led an all Protestant party to victory in a general election against an opposition of Roman Catholic Liberals led by Ambrose Shea. In 1886 Shea resigned his St. John's East seat and accepted a position as Governor of the Bahamas. While some Liberals joined Thorburn's cabinet--despite a Thorburn election promise that there would be "No Amalgamation with the Liberals"--others remained in official opposition until just before the 1889 general election when they formally joined the Thorburn Tory Party.
The election in 1885 of the Reform Party government led by Robert Thorburn was a reaction by Water Street merchants to their concerns over the high cost of railway construction and Whiteway's apparent neglect of the fisheries in favour of the railway. Such neglect they readily saw in Whiteway's willingness to make concessions to the French on the French Shore in return for more local control of the area for industrial purposes. The railway had become an issue around which political life could polarize--whether Newfoundland should even build a railway. If so, at what pace of development and how could the fisheries pay for it? Political polarization, hence, centered around divergent attitudes towards economic development instead of being based on religion.
Moreover, the building of a railway across Newfoundland meant that the colony needed greater control over the French Shore for industrial and agricultural development. Since the 1860s, successive Newfoundland governments had attempted to exert their control over the area, details of which can be found in Neary's The French and American Shore Questions as Factors in Newfoundland History. During the late 1870s and 1880s the colony gradually extended its authority over the west coast as Newfoundland pressed the Colonial Office for a final settlement to French fishing rights to the area. While Britain remained sympathetic to Newfoundland's claims, it was reluctant generally to do anything to offend the French. Premier Whiteway proved willing to compromise on certain aspects of French fishing rights in return for local control over land and mineral rights. This was the case, for instance, in 1884 when Whiteway was prepared to accept an agreement between France and Britain to settle the French Shore Question.
The basis of that 1884 agreement was that France would concede the right of a concurrent fishery on the Shore in return for a guarantee that her citizens would not be molested by local authorities while fishing there. The Agreement also recognized that the river fishery would be in colonial hands, except where the water was salt. It would leave the matter of fixed establishments on the Shore undisturbed and all new fishery establishments forbidden. It would, however, allow the construction on certain parts of the Shore of some buildings for industrial purposes (F.F. Thompson, The French Shore Problem in Newfoundland, Toronto, 1961, 6273). However, the change of government in 1885, which saw Whiteway replaced as Premier by Water Street merchant Robert Thorburn, resulted in Thorburn repudiating the proposed agreement and in 1886 enacting legislation to regulate the sale of local bait to French fishermen on the Grand Banks (see Hiller, The Railway and Local Politics). Their concern was over French and Norwegian competition for Newfoundland fish.
The Bait Act received approval, after considerable reluctance, from the Imperial government in 1887 and put in force in 1888. The Act prohibited the catch, sale and export of bait to French fishermen without a license from the Newfoundland government. Judge Daniel Prowse was appointed to enforce the Act and had a special bait protection service at his disposal for this purpose. Much to his government's surprise, in 1888 Prowse had considerable success that year in ensuring that no local bait ended up in French hands. For instance, he broke up a fleet of Newfoundland schooners trying to run his blockade of St. Pierre and fishermen feared that there would be high penalties for bait smuggling. After 1888, however, the rewards of success far outweighed the risks of capture and local fishermen regularly evaded capture between the south coast and St. Pierre. Also, after 1888 French fishermen found that they could get bait for the bank fishery by either going to St. George's Bay where they caught their own bait, or by acquiring it from licensed American and Canadian fishermen. They also brought some bait out with them from France. Consequently, in 1890 the Whiteway Liberal government relaxed the enforcement of the Act and permitted the sale of bait to the French in return for the payment of license fees. In 1893 the colony abandoned this bait protection service.
In 1887 the government also appointed a commission of inquiry to study the fisheries of its competitors, to suggest how a local fisheries department could be established and to examine why fish landings were declining. The following year it appointed Adolph Nielsen, a Norwegian fisheries expert, to head a government funded non-partisan body to be "kept entirely apart from the movements of political parties" to oversee the establishment of cod hatcheries and to promulgate regulations governing the fisheries. In 1889 Nielsen constructed a cod hatchery at Dildo, Trinity Bay, that would see young fish introduced into local waters to improve local stocks and thus the fishery. The hatchery closed about 1897 (and Nielsen had gone on to promote Norwegian investment in an emerging whaling industry in Newfoundland), and it is impossible to establish objectively if the hatchery was successful. But Nielsen's presence in Newfoundland in the 1890s did provide the impetus for the development of new perspectives on a variety of local fisheries, particularly through the introduction of improved methods, regulations and initiatives in the cod, herring, and lobster fisheries (see M. Baker, A.B. Dickinson, and C.W. Sanger, "Adolph Nielsen: Norwegian Influence on Newfoundland Fisheries in the Late 19thEarly 20th Century," Newfoundland Quarterly (April 1992), pp. 2532, 33 and Keith Hewitt, "The Newfoundland Fishery and State Intervention in the Nineteenth Century: The Fisheries Commission, 18881893," Newfoundland Studies (Spring 1993), pp. 5880).
The other major fisheries problem confronting Newfoundland politicians in the late 19th century concerned American fishing rights in Newfoundland territorial waters (see Neary, The French and American Shore Questions). Concerning the Fortune Bay incident in 1878, it should be noted that the three local laws Newfoundland claimed the Americans had contravened were fishing on a Sunday, seining in close season, and in barring herring (J.K. Hiller, A History of Newfoundland, 18741901, Ph.D. Thesis, Cambridge University, 1971, 5960).
The Thorburn government initially followed a cautious policy towards economic development yet, when it sought re-election in 1889, it had nearly doubled the public debt to $4,133,202.43 and had raised the colony's first direct foreign loan, in London, England. Increased public expenditures was the price for acquiring the support of the Liberal Party. The Liberals had the government build a branch line to Placentia under the guise of a road and to provide money for a sewer system in St. John's. The former cost the government $500,000 to build, while the latter came as part of the government's efforts to give St. John's its own elective government in 1888 with the municipal board having control of the water, sewer, and fire protection services, street lighting, streets, and parks. However, it was a civic body with a limited elective and administrative structure as, for instance, the government could appoint two of the seven councillors (Melvin Baker, "The government of St. John's, Newfoundland, 18001921," Ph.D. thesis, University of Western Ontario, 1980).
In the 1889 election, the Thorburn government adopted wholeheartedly Whiteway's policy of railway development in a desperate re-election bid against a rejuvenated opposition led by Whiteway. Having not received the promised judgeship, he returned to active politics and won the election under the old Liberal Party label, uniting under his wing a new generation of young Protestant and Roman Catholic politicians dedicated to completion of railway construction and industrial development through the attraction of outside foreign capital to exploit Newfoundland's land-based resources. Foremost among the Protestants was Robert Bond, while Edward Patrick Morris was the most significant of Whiteway's Catholic followers. Source: Melvin Baker, "History 3120 Manual: Newfoundland History, 1815-1972", Division of Continuing Studies, Memorial University, 1994, revision of 1986 edition)