The Story of Newfoundland

by Earl of Frederick Edwin Smith Birkenhead

"No doubt, if it was seriously alleged that the Act involved a breach of faith or a confiscation of the rights of absent persons, Her Majesty's Government would have to consider it carefully, and consider whether the discredit which such action on the part of a colony would entail on the rest of the Empire rendered it necessary for them to intervene. But no such charge is made, and if Her Majesty's Government were to intervene whenever the domestic legislation of a colony was alleged to affect the rights of residents, the right of self-government would be restricted to very narrow limits....

"The fact that the constituencies were not consulted on a measure of such importance might have furnished a reason for its rejection by the Upper Chamber, but would scarcely justify the Secretary of State in advising its disallowance even if it were admitted as a general principle of constitutional government in Newfoundland that the Legislature has no right to entertain any measure of first importance without an immediate mandate from the electors."

The passing of the particular Bill by no means brought the Reid controversy to an end. In fact, the General Election in Newfoundland, of which the result was announced in November 1900, was fought entirely upon this absorbing question. The issue arose in the following way. The contract contained a clause providing that Mr Reid should not assign his rights over the railway without the consent of the Government. Mr Reid applied to the Government of Sir James Winter for such consent, but when that Government was defeated in February 1900, no answer had been received. Mr Reid wished to turn all his holdings in the colony over to a corporation capitalized at 25,000,000 dollars, he and his three sons forming the company. On the properties included he proposed to raise 5,000,000 dollars by debenture bonds, this sum to be expended in development.[51]

A Liberal Ministry under Mr Bond, who had consistently opposed the Reid arrangements, displaced Sir James Winter. Finding himself unable to hold his own in the Assembly, Mr Bond formed a coalition with Mr Morris, the leader of a section of Liberals who had not associated themselves with the party opposition to the contract. The terms of accommodation were simple: "The contract was to be treated as a fait accompli, but no voluntary concessions were to be made to Mr Reid except for a consideration." Consistently with this view, Mr Reid was informed by the Government that the permission he requested would be given upon the following terms:

(1) He should agree to resign his proprietary rights in the railway.

(2) He should restore the telegraphs to the ownership of the Government.

(3) He should consent to various modifications of his land grants in the interest of squatters able to establish their de facto possession.

To these terms the contractor was not prepared to accede. It is difficult not to feel sympathy with his refusal. I had the advantage of hearing the contention on this point of a well-known Newfoundland Liberal, who brought forward intelligible, but not, I think, convincing arguments. The clause against assignment without the consent of Government ought surely to be qualified by the implied condition that such consent must not be unreasonably withheld. In the private law of England equity has long since grafted this implication upon prohibitions against assignment. If, however, the Government had been content with a blunt non possumus, a case could no doubt have been made out for insisting upon their pound of flesh. They chose, however, to do the one thing which was neither dignified nor defensible: they offered to assent to an assignment on condition that Mr Reid surrendered his most valuable privileges. It is no answer to say, as many Newfoundland Liberals did say: We opposed the contract from the start, and it is therefore impossible for us to assent to any extension of the contractor's privileges. In fact, such an argument seems to betray an inability to understand the ground principle on which party government depends. That principle, of course, is the loyal acceptance by each party on entering office of the completed legislation of its predecessors. To borrow a metaphor from the Roman lawyers, the hereditas may be damnosa, but the party succeeds thereto as a hæres necessarius. Any other rule would substitute anarchy for order, and an endless process of reversing the past for a salutary attention to the present.

It must, on the other hand, be admitted that Mr Reid's conduct was not very well chosen to reassure his critics. He threw himself heart and soul into the General Election which became imminent, and displayed little judiciousness in his selection of nominees to fight seats in his interests. It is hard to suppose that independent men were not discoverable to lay stress on the immediate relief to the colony which the contract secured, and the inexorable necessity of which it might plausibly be represented to be the outcome. Mr Morine was Mr Reid's solicitor. He was a prominent Conservative and Minister of Finance, and his influence in the Assembly (where his connection with Mr Reid was apparently unknown) had been exerted in favour of the contract. When challenged on the point, Mr Morine asserted that he advised Mr Reid only on private matters, in which his interests would not come into conflict with those of the colony. Compelled to resign, however, by Governor Murray on account of the apparently incompatible duality of his position, he was reinstated (April, 1899) by Governor M'Callum, on an undertaking that his connection with Mr Reid should be suspended during office. Mr Morine became leader of the Conservative party on the retirement of Sir James Winter, reassuming at the same time his business relations with Mr Reid. In concert with the latter he began a political campaign in opposition to the Liberal party. His partner, Mr Gibbs, fought another seat in the same interest. The Times correspondent above referred to gives an amusing account of other candidates:

"One of Mr Reid's sons has been accompanying him through his constituency, and is mooted as a candidate. Two captains of Reid's bay steamers are running for other seats. The clothier who supplies the uniforms for Reid's officials is another, and a shipmaster, who until recently was ship's husband for the Reid steamers, is another. His successor, who is a member of the Upper House, has issued a letter warmly endorsing Mr Morine's policy, and it is now said that one of Reid's surveying staff will be nominated for another constituency."