The Rejection of Confederation with Canada, 1865-1874


Melvin Baker


Hurrah for our own native Isle, Newfoundland,

Not a stranger shall hold one inch of its strand,

Her face turns to Britain, her back to the Gulf,

Come near at your peril, Canadian Wolf.

(anti-Confederation song)

Within ten years of attaining responsible government in 1855, Newfoundland faced another political debate concerning its constitutional future, one which was not resolved until Confederation with Canada was resoundingly rejected in the 1869 Newfoundland election. The Confederation issue of this period was played out against a background of several years in the early 1860s of economic depression, a depression which led many Newfoundlanders to regard the issue as a viable option to their economic woes. This depression was of local origins caused by a succession of short cod and seal fisheries, market difficulties, and potato blight.

With approximately 162,000 people scattered along the Island's many bays and inlets, 89% of the workforce was involved in the fishery and fish and seal products made up 95% of Newfoundland's total exports, which went chiefly to Europe, the West Indies and Brazil. There was little market agriculture and most of imports came mainly from Britain and the United States (about 65%), while Canada provided the other 25%, and remainder came from elsewhere. The fisheries itself ran on a credit system.

Fishermen were advanced supplies on credit in the spring, and they sold their catch to their supplier in the fall receiving payment--assuming they had a credit balance--in goods rather than cash. Cash was a scarce commodity in outport Newfoundland. Merchants tended to charge as much as they could for supplies advanced on credit, and to pay as little as possible for the fish. This practice, together with the natural uncertainties of both the seal and cod fisheries, and the vagaries of the markets, kept most fishermen either in poverty or on the brink of it. (Quoted in Hiller, "Newfoundland Confronts Canada", in E.R. Forbes and D.A. Muise, eds. The Atlantic Provinces in Confederation, 1993, p. 435)

With regard to the fisheries, dried cod exports declined from over 1,138,000 quintals in 1860 to less than 850,000 in 1864. This represented a drop in value for the same period from £846,000 to £798,000. As for the seal fishery, the total catch of seals declined from over 440,000 in 1860 to about 268,000 in 1862. Technological change in the seal fishery during the 1860s, which saw St. John's and the larger Conception Bay towns begin to dominate the fishery with large steam vessels, also resulted in fewer men being employed. In the late 1850s over 14,000 men were engaged in the seal fishery; by the early 1870s there were only approximately 9,600 men declining further to 3,600 by 1900 (Hiller, "Newfoundland Confronts Canada," p. 435).

Naturally, there was also a resultant decline in government revenue for the early 1860s which dropped from £133,000 in 1860 to £90,000 in 1861. For the years 1862, 1863, and 1864, the Hoyles government ran a deficit on current account; in 1861 the floating debt stood at £18,000, whereas in 1865 it had doubled to £36,000. Bishop Feild observed in 1862 that, except for the St. John's fire and hurricane in 1846, never had the colony been in a worst depressed condition in the past twenty years. He noted that "it has been brought into this condition partly by political troubles, but mainly by three years' decline of the seal-fishery and two years bad, the last very bad, cod-fishery.... This spring the coast has been blockaded with ice in a manner and degree never before known in the memory of any living man.... The distress and poverty, in consequence, all over the island have been dreadful" (Edward C. Moulton The Political History of Newfoundland, 1861­1869, M.A. thesis, Memorial University, 1960, 119­22). Compounding matters was the large increase in the Island's population, which between 1857 and 1868 increased by 19.5% or 24,000 inhabitants, almost all by natural increase.

By the early 1860s many public men recognized that the fishery would not in itself be able to continue to support the Island's growing population. In his 1863 pastoral message, for instance, Bishop Mullock stressed the urgency of finding alternate sources of employment, while in his 1864 Throne Speech, Governor Bannerman warned that widespread poverty would be the end-result if such sources were not found. As for the Hoyles government, it attempted to stimulate other fisheries such as herring, salmon, mackerel, and cod on the Grand Banks. It also encouraged efforts to diversify the economy and in 1864 instituted a geological survey to examine the mineral potential of the island. In 1866 it established a scheme of bounty payments for the clearing and cultivation of wastelands in the hope that people would mix farming and lumbering with their fishing activities. There was also growing government interest in the French Shore area as an outlet for population and fishing, farming, and mining development, especially in light of encouraging reports from the geological survey that such potential existed there. By 1874 the French Shore had approximately 8,600 Newfoundland settlers who had no political representation in the colonial legislature, and paid no taxes.

The major problem facing the Conservative governments of the 1860s, as it did the previous Liberal administrations, remained poor relief. With the decline in government revenue in the early 1860s, the colony's ability to meet the growing demands for relief expenditures became pushed to the limit. In 1861 relief expenditures totalled £20,000 as compared to £6,000 the previous year. Attempts by the Hoyles government to bring in stringent regulations for applicants as well as limiting relief to the permanent poor-- "the sick and infirm and destitute widows and orphans"--met with abject failure. Relief expenditures for 1862 climbed to £32,000, a total equalling one-quarter of all government revenue for that year, because assistance had to be given to the able-bodied poor as well. 1863 did not bring any relief in such expenditures, the figure for that year being slightly lower at £26,000. In closing the legislature for 1863, Governor Bannerman direly warned that, if such expenditures continued then the colony would soon be bankrupt (Moulton, The Political History of Newfoundland, 1861­1869, 134­35). In summary, relief expenditures between 1861 and 1865 averaged about 23 percent of current revenue. In 1864 the Hoyles government brought in legislation to provide for the levy of poor rates, but it had to be withdrawn in the face of Liberal opposition that the people could not afford such assessments and that the bill did nothing to alleviate the real problem behind pauperism--the need to find employment for the people. The following year the Assembly again refused to act on the notion of imposing a property assessment despite its strong endorsement from Governor Musgrave.

It is against this background that the issue of political Confederation with Canada in 1864 first beckoned on the Newfoundland political scene. Newfoundland did not send any delegates to the 1864 Charlottetown Conference but sent two observers, Frederick Carter and Ambrose Shea, to the Quebec Conference held later in the year. The two men had no authority to bind the island to any kind of agreement, although they believed that Confederation would lead to greater outside investment in and diversification of the local economy. They brought back with them proposed terms of union. In summary, these were, first, the federal government would assume Newfoundland's public debt and pay in addition an annual amount of $115,000 which was equal to an amount of 5% on the difference between the greater per capita public debt of the proposed federal government and the lesser per capita public debt of Newfoundland. Second, the federal government would pay Newfoundland an annual subsidy of eighty cents per capita of its population. Third, the federal government would take over all crown lands and mineral rights in return for an annual payment of $150,000. In Newfoundland, there was cautious reaction to the proposals, but there was one prominent merchant and mining speculator, Charles Fox Bennett, who strongly condemned them and would emerge as the major opponent of Newfoundland confederating with the other colonies.

Bennett owned about one million acres in mineral rights, which would be transferred to the federal government under such terms of union and had much to lose. Born in Shaftesbury, Dorset, England in 1793, he had come to Newfoundland in 1808 where he soon became a mercantile clerk in St. John's. By the early 1820s he had established his own general fishery supply company supplying fishermen in Placentia, St. Mary's, and Fortune Bays. Bennett supported the campaign for a colonial legislature in the late 1820s and was a confidant of Governor Cochrane. From the 1830s he differed from his fellow merchants involved in the fish trade through his efforts at economic diversification; besides operating a brewery, a distillery and a foundry at St. John's, he acquired extensive land rights on which he searched for minerals. He was active in agricultural pursuits, owning a large farm outside St. John's. Unlike many of his fellow merchants, Bennett, exhibited his "life-long conviction that Newfoundland had considerable economic potential in addition to its fisheries, a point of view that was regarded as visionary in the first half of the 19th century" (J.K. Hiller, "Charles James Fox Bennett", Dictionary of Canadian Biography, vol. XI). In the campaign of the 1850s for responsible government, Bennett was an ardent opponent as an appointed member of the Legislative Council and a member of the Executive Council. He consistently argued that Newfoundland was ill-suited for responsible government, because it would give control of any elective government to the Roman Catholic population.

With an election due in 1865, Premier Hoyles had decided to retire and postponed any discussion of the terms of union until after an election to prevent Confederation from becoming a divisive issue in any forthcoming campaign. In April 1865 he retired from politics to accept a judgeship of the Supreme Court. His successor was Carter who formed a coalition government with the help of two prominent Liberals, Ambrose Shea and John Kent. While Carter and Shea were well-known confederates, the basis for the coalition, as noted earlier, was to implement the principle of elite accommodation, or denominational compromise, that all public figures acknowledged would be necessary for sectarian harmony as a result of the political events of 1861. Because there was considerable opposition among the mercantile community to Confederation, Carter also decided not to make Confederation an issue in the election to be held in 1865, promising, instead, that another election would be held on the matter. Carter's coalition government, which easily won the election, included in its ranks both confederates and anti-confederates.

Little active public discussion took place in either 1866 or 1867 on the Confederation issue. In 1868, however, the Carter government seized the initiative sensing that continued economic hard times may convince people to see Confederation more favourably. Faced with a poor fishery and declining revenues in that year, the government found itself forced to increase taxes on staples products such as flour, pork, butter, and tea, as well as levy a 20% increase in the duty on most other imported items. Alarmed at these tax increases, many merchants began to look to Confederation as a means of lowering taxation, while confederates became more vocal in advocating their cause, which had the support of all newspapers in St. John's except the Patriot. The confederate cause also had the strong backing of Governor Musgrave, who frequently urged his ministers not to delay any further the Confederation issue, now that four of the British North American colonies had united in 1867. Anti-confederate feeling among the St. John's Irish ran high; one petition, for instance, in 1868 against political union had over 2,000 signatures and the endorsement of ten leading mercantile firms.

The battle lines for the Confederation issue became drawn in 1869 when Carter decided to bring the matter before the legislature. He had terms, based on those brought back from the 1864 Quebec conference, brought before the Assembly, which accepted them on the pre-condition, that no attempt would be made by the government to bring about union until after the holding of an election on the issue. The Canadian government accepted Newfoundland's proposed terms with minor modifications and had them ratified by the Canadian Parliament. The terms were the following: first, the federal government would assume all Newfoundland's debts and liabilities and provide an annual payment of $106,000 to make up for the difference in the per capita debt of Canada and Newfoundland; second, Newfoundland would receive a grant of eighty cents per capita or $104,000 annually on an upward escalating scale as the population increased; third, Newfoundland would receive $150,000 annually from the transfer of crown lands and mineral rights to the federal government; fourth, there would be a special subsidy of $35,000 bringing the total annual financial payments to Newfoundland to $395,000; fifth, the Canadian government would pay for the upkeep of judges, the governor, post office, customs houses, steamer service, fishery patrols, lighthouses, the geological survey and would provide better steamer connections to Canada and Great Britain; sixth, it was agreed that, to protect the Newfoundland fishery, no tax would be placed upon Newfoundland exports unless it was placed on similar exports from the rest of Canada; and seventh, Newfoundland would have eight members of the House of Commons and four senators in Parliament at Ottawa.

Opposition to Confederation came from Charles Fox Bennett and the rump of the Liberal Party which remained in political opposition after the 1865 election. Bennett had set forth his opposition to Confederation in numerous articles to the press between 1864 and 1869. He asserted that Confederation was of no financial benefit to Newfoundlanders, would transfer ownership of the colony's natural resources to Ottawa, and lead to higher taxes. For the Liberals, who had the support of most of Newfoundland's Roman Catholic population, they felt a strong attachment to responsible government, which they had been so instrumental in obtaining in the early 1850s. Details of the 1869 election, in which the Carter Confederates lost, can be found in Hiller's Confederation Defeated: The Newfoundland Election of 1869.

The victors in the 1869 election consisted of a mixed group of Protestant conservative politicians led by Premier Bennett, an Anglican and opponent of responsible government in the 1850s but now a champion of Newfoundland nationalism and self-government, and Roman Catholic Liberals. Bennett was personally elected in the Catholic district of Placentia-St. Mary's. As for the opposition, they were a combination of moderate Protestant and Roman Catholic politicians led by Frederick Carter, but excluding Shea who lost his seat in the election. Carter willingly accepted the outcome of the election and decided not to press the Confederation issue further if his party wished to regain political power at the next election. Since Bennett's government had the support of most of the Island's Roman Catholic population, Carter's strategy was to portray the Bennett government as a predominantly Roman Catholic administration and thus prey upon Protestant fears of Roman Catholic domination once more, a strategy in which moderate Roman Catholics within his party acquiesced for political expediency.

As for the Bennett government, Bennett sought to retain political support by continuing to label the opposition as confederates and by courting the Anglican vote which, combined with his Roman Catholic support, would assure him of a majority at the next election. He sought to firm up the Anglican vote through proposed legislation sub-dividing the protestant education grant, a goal Bishop Feild still much desired. When his Inspector of Protestant Schools in 1871 opposed the proposed legislation because it would severely affect the quality of education and result in the building of more schools that would be a "waste of expense and needless trouble...when the present ones are sufficient to accommodate the pupils" (W.D. MacWhirter, A Political History of Newfoundland, 1865­1874, M.A. thesis, Memorial University, 1963, 98), Bennett withdrew the bill.

The early years of the Bennett government were prosperous because of a succession of good fisheries since 1869. The new-found prosperity enabled the government to reduce taxation on food and clothing and to increase the annual votes for public services, including an improved coastal steam service and the inauguration of a direct steam service to England was established. With the withdrawal in 1870 of the Imperial garrison from the island, the following year the government organized its own police force-- the Terra Nova Constabulary--which was modelled along the lines of the Royal Irish Constabulary. Political success followed economic prosperity for Bennett; in 1871 he won three byelections, one of which came from the opposition.

In the 1873 general election in which he again campaigned on an anti-confederate theme, Bennett won re-election with a reduced majority of four seats. Carter had managed to increase his representation in the Assembly by playing the sectarian card of Protestant fears of Roman Catholic domination and by using the growing influence of the Orange Order, first established in 1863 in Newfoundland, as part of this strategy which included the dropping of any support for Confederation as well. Leading Orangemen such as the Grand Master, A.J.W. McNeilly, and William Whiteway, were members of the Carter opposition. For the most part, the Order was responsible for Carter winning four seats from the government.

Bennett's return to office, however, was short-lived for his government soon committed, what one historian--Ian Mcdonald--has termed "inadvertent suicide." With one seat vacant as a result of a retirement and expected to return a Conservative, Bennett's simply allowed his four-seat majority to disappear. First, one member defected to the opposition after he married Carter's daughter. Two more resigned after Bennett conceded to their wishes to be appointed magistrates in return for past services. They had informed Bennett that, since other members had planned to defect, he should permit their resignations and make the appointments because his government would collapse anyway. Although the rumoured three did not cross the floor, Bennett was left with a minority of one after appointing a Speaker from the government ranks. Bennett, however, chose to resign instead of meeting the Assembly.

Carter formed a new administration and remained in power for the 1874 session with the help of the Speaker's vote. Later in 1874 he won a majority victory in an election, whose outcome saw political parties returning, to their pre-1869 formation--with the opposition Liberals representing all the Roman Catholic seats and the Carter government all the Protestant seats. Yet, this religious division was no longer the basis for ideological differences between Liberals and Conservatives since both parties came to share in the 1870s similar views on economic development for the colony. The denominational compromise of the early 1860s had ensured that Roman Catholics would no longer have to worry over their rights on education and positions in the civil service. The political party lines by the early 1880s would become centered along class and economic rather than religious differences.

Source: Melvin Baker, "History 3120 Manual: Newfoundland History, 1815-1972", Division of Continuing Studies, Memorial University, 1994, revision of 1986 edition)