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Dictatorship in Newfoundland
January 18, 2010 7:44 PM   Subscribe

In 1933 Newfoundland was a responsible, that is self governing, dominion on a par with Canada and Australia. To avoid a debt default the government suspended its constitution in favor of rule from the colonial office in London. After the second world war and a close referendum the the governments of the United Kingdom and Canada negotiated Newfoundland's ascension to Canada. The story boils down to a people losing their sovereignty due to a debt crisis. The Newfoundland Royal Commission report of 1933, the basis for the article and the actions it recounts is here. (The report is seeded with great-if-too-small pictures of Newfoundland from the 1930s and cool maps).

Obligatory Wikipedia Link.

All currency terms are in Canadian Dollars, adapted as the currency of Newfoundland in 1895. The Canadian dollar was at rough parity to the US dollar over this period.

Deep in tl;dr territory the article refers cryptically to editorials by the late Rudiger Dornbusch, which extracts seem to have gotten lost in bringing the article online. The editorial is almost certainly one of these 1 (pdf), 2 (pdf) in which he suggested in 2002 that a sort of foreign currency commission be imported to run the central bank for Argentina for five years or so.

Dramatic title because: Canadian economic history=not going to be the most widely read post ever.
posted by shothotbot (46 comments total) 26 users marked this as a favorite

 
What a strange story. Any lessons in here for Iceland? I haven't heard much about that island in the news recently. I know there are a lot of differences, but I wonder if anyone in Iceland has considered bargaining with Icelandic sovereignty for debt relief?
posted by Salvor Hardin at 7:47 PM on January 18, 2010


A very very good story, and one which I have never heard before despite living in Ontario. Amazing how fast memory vanishes. Lesson: never underestimate the ability of debt to undermine a country's sovereignty. Listening, America?
posted by unSane at 8:00 PM on January 18, 2010 [1 favorite]


I've always wondered why the people of Newfoundland decided not to get with the confederating when the confederating was good along with all the other colonies. That said the tale of how they finally did "get with the party" is pretty cool.

Just to be a pedantic jerk: That first article is wrong about Newfoundland becoming a "Dominion" in 1855, that wasn't until the early 20th century sometime (I'm pretty sure). Back in 1855 both the Province of Canada and Nova Scotia each had responsible gov't too (though achieved it earlier, I don't know about the other ones off-hand)
posted by selenized at 8:04 PM on January 18, 2010


Yes, Newfoundland became a fully self-governing Dominion in 1907. It was a colony of England from 1583–1707 then a colony of the Great Britain from 1707–1801, then a colony of the United Kingdom from 1801-1907.
posted by unSane at 8:12 PM on January 18, 2010


Fascinating. I wonder if this ties in with the fact that my mother (from Nova Scotia) said that the Newfies were the butt of Canadian jokes, and claimed that the SNL characters Bob and Doug MacKenzie weren't Canadians, but Newfies.
posted by Edward L at 8:23 PM on January 18, 2010


Bob and Doug where SCTV... did they do SNL as well?

and as a (transplanted) Newfie myself... smile when you say that.

Actually I think Newfoundlanders being the butt of Canadian jokes is more to do with wealth (lack thereof) then being late to the party... Americans make jokes all the time of Appalachians for roughly the same reason
posted by edgeways at 8:27 PM on January 18, 2010


oh and Bob and Doug definitely have/had a maritime accent... lotta SCTV skits did for that matter... (Billy... Billy boy...)
posted by edgeways at 8:30 PM on January 18, 2010


Bob and Doug are from Ontario. They don't sound anything like Newfoundlanders.
posted by Mitheral at 8:33 PM on January 18, 2010 [5 favorites]


So long, and thanks for all the cod!
posted by sneebler at 8:34 PM on January 18, 2010 [1 favorite]


I agree with Mitheral, I'm pretty sure Bob and Doug are supposed to be from Ontario somewhere.
posted by selenized at 8:36 PM on January 18, 2010


selenized: I've always wondered why the people of Newfoundland decided not to get with the confederating when the confederating was good along with all the other colonies.

Have a look through the N&L Heritage site's section on Confederation-related developments from 1864 to 1949 (check out the subsections in the sidebar) for the Newfoundland-based perspective.

Mitheral: Bob and Doug are from Ontario. They don't sound anything like Newfoundlanders.

Indeed. "How's it's goin', eh?" would be more like "How's she goin', b'y?" or just "Sayin'?"
posted by hangashore at 8:43 PM on January 18, 2010 [1 favorite]


The report is seeded with great-if-too-small pictures...

Most of the photos seem to be from the Centre for Newfoundland Studies Archives, which is part of the Memorial University's Digital Archives Initiative. Lots of high-resolution illustrations, photos, maps, books, and audio & video to be had. Note that there are sometimes links to super high-resolution images at the bottom of the page for each image, especially the maps.
posted by oulipian at 8:49 PM on January 18, 2010 [4 favorites]


I have a hard time imagining that Newfoundland would have continued as an independent Dominion even if they had remained solvent. I realize Newfoundlanders may think differently on the topic, but it seems inevitable.
posted by GuyZero at 8:53 PM on January 18, 2010


Also, yes, for the n'th time, Bob and Doug aren't Newfies. Lard tunderin' Jesus bay, they sure ain't. They're hosers.
posted by GuyZero at 8:54 PM on January 18, 2010 [4 favorites]


Bob and Doug are central Canadian hoser everymen, and if they come from anywhere, I'd say it's Hamilton. They are a direct response to SCTV's network masters at CBC asking for more Canadian content from the most Canadian of all comedy shows. I can't remember a single SCTV skit that had an eastern Canada accent in it...

Anyway, back to this great thread. If you can find it, Cathy Jones starred alongside the rest of the CODCO ensemble in a great little film about this point of Newfoundland history called "Secret Nation." It tackles the story from a political conspiracy angle that is, as I understand it, not far from plausible. Suffice to say, that Newfoundland joining Confederation was not a clear cut manner, and is a complex story on many levels.
posted by salishsea at 8:55 PM on January 18, 2010


I wonder if anyone in Iceland has considered bargaining with Icelandic sovereignty for debt relief?

Iceland has reversed longstanding policy and wants to join the EU^, largely to enter the Eurozone and for access to EU economic support. In a sense this is similar.

That first article is wrong about Newfoundland becoming a "Dominion" in 1855,

Yeah, the author is probably American. 1855 was when self-government came, but it was up to seven years after other parts of Canada -- so really it was last, not first. And its dominion status also lagged Canada's by forty years instead of preceding it by twelve.

Then there are the odd editing errors, perhaps intending to reference pullquotes.

The British parliament and the parliament of a self-governing dominion agreed that democracy should be subordinate to debt.

And of course this is wrong, too, because a paragraph earlier he states that confederation won (barely) in a ... democratic referendum. Then he goes on to say several times that they "gave up" democracy, except I hear they do have elections up there. What they gave up (democratically) was self-government.

Considering we're talking about (then) barely over a quarter million people, it was probably a wise move. If it were independent today, it would rank with Barbados and Luxembourg down in the 160s, respectably enough, but notably, its population density is lower than Mongolia. It would rank dead last among independent countries.
posted by dhartung at 9:00 PM on January 18, 2010


What a wonderful grand story.
posted by Bovine Love at 9:01 PM on January 18, 2010


I have a hard time imagining that Newfoundland would have continued as an independent Dominion even if they had remained solvent.

With a population of 500,000 today, probably not.
posted by shothotbot at 9:07 PM on January 18, 2010


I will reserve judgment until I've heard what Kate Beaton says regarding the matter.
posted by Parasite Unseen at 9:11 PM on January 18, 2010 [4 favorites]


75 years from now, my grandchild will probably be making this FPP on metafilter:

In 1933 Newfoundland2007 the United States was a responsible, that is self governing, dominion on a par with Canada and Australia. To avoid a debt default the government suspended its constitution in favor of rule from the colonial office in London banksters. After the second world Iraq war and a close referendum the the government of the United Kingdom and Canada States negotiated Newfoundland's America's ascension to Canada China. The story boils down to a people losing their sovereignty due to a debt crisis.

posted by 445supermag at 9:16 PM on January 18, 2010 [2 favorites]



Bob and Doug are central Canadian hoser everymen, and if they come from anywhere, I'd say it's Hamilton. They are a direct response to SCTV's network masters at CBC asking for more Canadian content from the most Canadian of all comedy shows. I can't remember a single SCTV skit that had an eastern Canada accent in it...


You don't remember Garth, Gord, Fiona and Alice?
posted by Old Man Wilson at 9:16 PM on January 18, 2010


A very very good story, and one which I have never heard before despite living in Ontario. Amazing how fast memory vanishes. Lesson: never underestimate the ability of debt to undermine a country's sovereignty. Listening, America?

I know comments like this are in good fun, but there sixty countries with higher debt-to-GDP ratios than the U.S. The list includes half the EU and, of course, Japan.
posted by aswego at 9:27 PM on January 18, 2010


IANAE, but I don't trust "debt to GDP" ratio as a measure of a nation's solvency. As far as I can tell, the financial industry contributes a huge chunk of the US' GDP, but ultimately it's all funded by debt, so I think it's masking the problem. Hopefully someone will put me straight on this.
posted by Popular Ethics at 10:01 PM on January 18, 2010


Canada would be happy to have 48 more provinces. Texas and Arizona can go their own way.
posted by philip-random at 10:21 PM on January 18, 2010


Bob and Doug are central Canadian hoser everymen, and if they come from anywhere, I'd say it's Hamilton.

Not a bad guess, and as I recall Strange Brew was set in a very Hamilton-like industrial burgh (can't remember if the city's ever actually named). The accent itself, though, sounds more northerly, less westerly and less urban to my North Bay-trained ears. Barrie, maybe Pembroke or Gravenhurst or Parry Sound, even Sudbury or the Sault.

Plus also if it was a Hamilton accent I have it on good authority they'd be honour-bound to use the phrase "goin' like the nine-oh" to refer to being in a hurry.
posted by gompa at 10:55 PM on January 18, 2010 [1 favorite]


IANAE, but I don't trust "debt to GDP" ratio as a measure of a nation's solvency.

The crucial thing to understand is that GDP is a measure of annual output. Debt is just debt -- in a government's case, it's usually bonds.

The US debt-to-GDP ratio is 62%. While it's not great, it is in line with most of Europe and far better than Japan's 170% ratio. If Japan, by some mechanism, could suck every dollar of 2010 GDP out of its economy and put it against its debt, it would still be worse off than the US and Europe.

The other thing to keep in mind is who owns the bonds. China only holds about $800B in US bonds; American institutions and individual investors hold the lion's share of American debt. Grand total, the world holds $3.5T in American debt, which is only a fraction of the US bond debt, a vast majority of which is held by American banks and investors.

And yes, China holds over $1T in dollars in currency reserves. But they really can't do much with them. If they dump the dollars, the US economy gets hit with inflation, but then the US immediately turns around and hands China $800B in now-inflated US dollars to cancel their debt, leaving China considerably poorer. And as the US economy is in this tailspin, they stop buying goods, damaging the Chinese economy even more. The Chinese and American economies are chained climbers now; if one falls, the either falls with them.

In summary, it's possible that China could pull a Newfoundland on the US, but it's highly unlikely and would require economic circumstances that could leave China incapable of being able to consummate such a deal. While China is propping up the US economy, it's doing so as an investor, and thus it can stand to lose considerably on their investments if things in the US go pear-shaped. The UK government didn't have a lot of money in Newfoundland, and given that Newfoundland in 1930 had a population less than 1/4 the size of Liverpool at the time, it wasn't like they were swallowing a financial peer.
posted by dw at 12:03 AM on January 19, 2010 [2 favorites]


On Iceland and the EU: The larger party of the ruling coalition has always been pro-EU, but most Icelanders are against joining. This matters because if Iceland's application to join the EU (submitted last July) is accepted, actual membership will depend on the results of a referendum. It is true, though, that economic reasons have been the driving force behind the rationale to join. On the con side, yes, "losing sovereignty" comes up a lot.

Great post, by the way.
posted by Marisa Stole the Precious Thing at 12:04 AM on January 19, 2010


Dave Thomas is from Hamilton, hence my guess...but as an old Peterborough guy, I'd peg the hoser accent squarely in the rural pastorale of south-central Ontario.

Basically, a 705 thing.
posted by salishsea at 12:05 AM on January 19, 2010


...also

You don't remember Garth, Gord, Fiona and Alice?

Ohmigosh, I had forgotten them! I stand corrected!
posted by salishsea at 12:10 AM on January 19, 2010


my mother (from Nova Scotia) said that the Newfies were the butt of Canadian jokes

Well there was that radio show...
posted by doctor_negative at 1:26 AM on January 19, 2010


If Bob and Doug were Newfies they would sound like this or this
posted by troll on a pony at 4:02 AM on January 19, 2010


I live in Hamilton, and I consider the Bob and Doug accent to be more of a northish Ontario accent.
posted by the dief at 4:15 AM on January 19, 2010


Fascinating story. Here's a version of the article that includes the Amulree and Dornbusch quotes.
posted by russilwvong at 4:56 AM on January 19, 2010 [1 favorite]


Actually, the end of Scottish sovereignty happened because of money as well. The Darien Scheme was a bid for a Scottish colony in the new world, it had almost a 5th of the total wealth of Scotland invested in it. After it failed, the Acts of Union which signaled the end of the Scottish Parliament (until the 21st century anyway) included a provision which granted Scotland a vast sum of money, much of which ended up with wealthy individual investors who had lost heavily in the Scheme.
It won't surprise you to hear that many of these investors were Scottish politicians who had voted in favour of the Act.
posted by atrazine at 4:58 AM on January 19, 2010


I don't trust "debt to GDP" ratio as a measure of a nation's solvency.
Well, you pretty much need to normalize debt by something if you want to make sense of it. If you were a Newfoundlander in 1934 they had not invented GDP yet so you would be interested in dividing debt by exports (especially relevant as almost all the debt was held overseas) or maybe government revenue (out of which the debt must be paid, plus you can calculate it).

As far as I can tell, the financial industry contributes a huge chunk of the US' GDP, but ultimately it's all funded by debt, so I think it's masking the problem.

Take a look at table 1.1.10 in the most recent gdp release (pdf) and you will see that residential investment is 2.5% of us GDP plus non-residential structures is another 3.2%. We do probably over-allocate to the financial sector, but I think the numbers are not as stark as your impression.
posted by shothotbot at 5:25 AM on January 19, 2010


I can't remember a single SCTV skit that had an eastern Canada accent in it...

Nearly all of them did - they had Ontario accents.
posted by Kurichina at 6:03 AM on January 19, 2010 [2 favorites]


My grandfather immigrated to Canada from Newfoundland not long before they joined. Immigration wasn't as much of a hassle as it would be these days, I imagine, but that's gotta be at least a little annoying.

"I just did all this paperwork and then you join Canada?"

I should find out what year he came over.
posted by ODiV at 8:02 AM on January 19, 2010 [1 favorite]


Everyone should note that in spite of being part of Canada for over 50 years now, they're still half an hour behind.
posted by GuyZero at 10:04 AM on January 19, 2010 [3 favorites]


Is that something I'd have to have a TV to understand?
posted by ODiV at 10:26 AM on January 19, 2010


dhartung: And of course this is wrong, too, because a paragraph earlier he states that confederation won (barely) in a ... democratic referendum. Then he goes on to say several times that they "gave up" democracy, except I hear they do have elections up there. What they gave up (democratically) was self-government.

I think he's referring to 1933, when Newfoundland voted its parliament out of existence and accepted the leadership of the British Commission of Government. Confederation with Canada didn't come until 1949, so there was no democracy between those dates.
posted by Kevin Street at 10:51 AM on January 19, 2010


Just a radio at 1 PM Eastern Standard Time, 1:30 PM Newfoundland.
posted by GuyZero at 10:51 AM on January 19, 2010


Everyone should note that in spite of being part of Canada for over 50 years now, they're still half an hour behind.

Aren't they half an hour ahead?
posted by JanetLand at 11:27 AM on January 19, 2010


That's what I tell my family on the east coast of the US - "I'm calling from 4 hours in the future!" They stopped laughing long ago, but I keep saying it.
posted by Marisa Stole the Precious Thing at 11:49 AM on January 19, 2010


"After the second world Iraq war and a close referendum the the government of the United Kingdom and Canada States negotiated Newfoundland's America's ascension to Canada China. The story boils down to a people losing their sovereignty due to a debt crisis."

If you all are having a fire sale we'll take Alaska.

"Canada would be happy to have 48 more provinces. Texas and Arizona can go their own way."

Like hell. We may be willing to go as much as the United States of Canada (+Alaska, the population is low enough we can shift the crazy with a little interprovincal immigration) depending on the price but that's about it.

"Everyone should note that in spite of being part of Canada for over 50 years now, they're still half an hour behind."

Uh, that's ahead.
posted by Mitheral at 12:51 PM on January 19, 2010


That map needs a green bump around where Alberta is.
posted by not_that_epiphanius at 6:15 PM on January 19, 2010


No, thank goodness. As crazy as my province may be sometimes, I don't think we'd fit in as part as Jesusland. We believe in things like Health Care and regulation as much as the average Canadian.

Now Newfoundland, they've always had that independent spirit, which you can see in things like their time zone and the rather unorthodox leadership of Premier Danny Williams.
posted by Kevin Street at 6:56 PM on January 19, 2010


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