[48] See General Dashwood's letter to The Times, December 18th, 1894.
[49] Rogers, p. 189.
[50] January 17th, 1895.
CHAPTER IX[ToC]
THE REID CONTRACT—GENERAL PROGRESS AND RECENT HISTORY
The next few years may be dismissed briefly, for they were years of unrelieved melancholy, from the point of view of the public financial policy and the political development of the colony. Nor did the disease admit of a readily applicable remedy. The experience of each decade had shown more and more clearly that the colony had nothing in reserve—no variety of pursuits to support the general balance of prosperity by alternations of success. Potentially its resources were almost incalculably great, but their development was impossible without capital or credit. The colony had neither. Under these circumstances took place the General Election of October, 1897. The assets of the colony were not before the electorate, and there was no reason to suppose that financial proposals of an extraordinary kind were in contemplation. The result of the election placed Sir James Winter in power. In six months the famous "Reid Contract" had been entered into—a contract which must be described at some length in these pages, partly because it throws a vivid light upon the constitutional relations between the Mother Country and a self-governing colony, partly because it appears to be incomparably the most important event in the recent history of Newfoundland.
On February 22nd, 1898, Mr Chamberlain received a telegram from the Governor, Sir Herbert Murray, advising him that a novel resolution had been submitted to the Houses of Legislature by his responsible advisers. A fuller telegram six days later, and a letter intervening, explained the proposals in detail. To put the matter as shortly as possible, the Government advised the sale to a well-known Canadian contractor, Mr R.G. Reid, of certain valuable colonial assets. In the first place, Mr Reid was to purchase all lines of railway from the Government for 1,000,000 dollars; this amount was the price of the ultimate reversion, the contractor undertaking to operate the lines for fifty years on agreed terms, and to re-ballast them. If he failed in this operation his reversionary rights became forfeit. For carrying the Government mails he was to receive an annual subsidy of 42,000 dollars. Minute covenants by the contractor were inserted in the draft contract, "in consideration whereof," it continued, "the Government hereby covenant and agree to and with the contractor, to grant to him in fee simple ... 5,000 acres of land for each one mile of main line or branch railway throughout the entire length of the lines to be operated: the expression 'in fee simple' to include with the land all mines, ores, precious metals, minerals, stones, and mineral oils of every kind." Besides these general concessions a particular grant of mineral land was made. The areas of land near Grand Lake, in which coal had been discovered, were transferred to Mr Reid, on condition that he should so work the coal mines as to produce not less than 50,000 tons of coal per annum.