July1995 erof in Letto rus

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CHOCOLATE BARSANDRUBBERBOOTS:

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SMALLWOOD INDUS11UALIZATIONPLAN

by

DouglasM.Letto

Athesis submittedto the School of GraduateStudies in partial fulfilmentof the requirements for thedegreeof

MasterofArts

Departmentof PoliticalScience MemorialUniversity ofNe\\'foundland

July1995

StJohns Newfoundland

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ABSmACT

TbcCunlCtbationofNcwfotmdfandwithCanadain1949 wasamixedblessing. Onthe plusside, Canada'sarrayofsocialprogramsandits strongc:eooomygavenu::h-rlo=ded securitytoNewfoundlandaoditspeople.Ontheminussidehowever,Ne-.'lfoundland became,ovanight.,pertoftheCanadiancommonmarket.Thisnewrelationshipmeantthe end for manylocalmanufacturersandtheloss ofasubstantialnwnberof jobs.In addition.Coofeder.ttionbroughtdownimmigration barriersbetweenNewfoundlandand Canada, therebyprovidinga borderlessescaperoute forNewfoundlanders intenton finding improvedeconomicconditions.Stepped-upout-migration wasviewedas a serious problembythenewprovince'sfirst government.

This thesis tracesrheSmallwocd government'sfirstmajor response tothechallenges posedbyConfed...cratlon.Outofit cameanindustrializationpolicythatwould leadtothe establishmentofsixteen-sponsoredindustriesandtheexpenditurcoftwo-thirdsof thecash surplusaccumulateddwingtheCommissionof Goverrunentperiod.

'lheindustrializationprogramwaspoorlyplanned,bothintermsofthebusinesspartners it soughtand theindustriesitfunded.Inthe end. most ofthenewindustries failed, withouthavingreturnedapennyinprincipal01'interesttotheNewfomdlandgovanmcnt whichbankrolledtheprogramwithloan guarantees.

OtapterOneoutlinestheenvironmentinwhichSmallwoodcreatedthe industriaIizatim

P'~andinlroduceshis economicC2Dl'andcoofidant,~.AlfredValdmanis.

OmpterTwoattemptstocapturethedeal-makingandthepolhicalrhetocicthroughv.hich ,heprogramdeveloped IIrevealsthefirssignsofduplicity onthepanof the _ inits publicondprivarerrusingiabouttheprogram

Chapter ThreegetStotheheartof thecrisistheindustries foundthemselvesin.anddetails lheintemalmanagementofthecrisisbothfrominsidethecompaniesandinside govenunent

ChapterFourprovides abroaderperspectiveofthedevelopmentdilemmafacedbysmaIl ec onomies,byfocusingonthe case ofNovaScotia and its experiencewithIndustrial EstatesLimited.

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ChapterFiveplacesthefailureofthe Smallwoodprograminthecontextof livedistinct economicdevelopment effortsin the post-Confederation em.The mostrecenteffortwas unveiledin late1994bytheLiberalgovernmentof ClydeWells.

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TABLE OFCON11':NTS

Abstract. List of Tables Acknowledgements Introduction...

I.Confederation: The Beginnings of anIndustrialization

Policy .

2.ThePolicy TakesShape.• ...

3. Problems Aplenty:TheIndustries RunInto Trouble... 4. The CaseofNova Scotia'sIndustrial EstatesLimited 5.Smallwood endBeyond

Bibliography ..

iv

Page

vi

22 38 66 86 98

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UST OF TABLES

" i

^PrincipalandInterestOwingon Newfoundland Government-

Guaranteed WU'lS on March31,1958 Companies StartedUnderIndustrialization Plan,and

Status..

Page

62 63

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ACKNO'MLllGEMEN1S

Thisthesis wouldnothave beenpossiblewithoutthe helpofDr.DavidClose andDr.

PCILT130s'A'C1IfromtheDepartment of PoliticalScience.

BertRiggs W1d GailWeiroftheNewfoundlandStudiesArchiveswerehelpfuland uccemodating in mysearchfordocuments from the SmallwoodCollection.Bert volunteered, and [gratefullyaccepted,his offer toproofreadthe thesis.

'lhemistakes ofcourse,are mine.

vi

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Introduction

TheFebruary9.1950memo fromRichardson woods,aChicago consultant.to economist Stacey May ofNelsonRockerfeller'sInternationalBasic EconomyCommission's Technical Services Group, provided a snapshot of anlmputient JosephSmallwood Newfoundland'sfirstpremier.Woods' memonotedSmallwood's "greatsenseot'urgency abouteconomic development" andreported"he grudgeseveryweek that passeswithout constructiveaction".I

Inthefollowingmonths,Smallwood hadtheIBECTechnicalServicesGroopundertake a"survey" oftheprovince'seconomic prospects.A pressreleasefromthe!BEeGroup describedthesurveyas "a broodinvestigation of theeconomicresources oftheProvince.

withspecialattentionto worldmarketanalysis.,,2Smallwoodthough,wasalreadylooking beyondtheIBEereport,telling Newfoundlanders,

A mere hundred milliondollarsinvested in thedevelopment of our resources would absorbevery lastbit of our man-power (sic)and create a man-powershortage.'

But itwas manufacturing, not naturalresource development,to whichSmallwoodwould firstcommithimself.In the22 monthsbetweenJWlC1950 and March1952, Smallwood's

"great sense ofurgency" wouldtranslateitself intotheestablishment of, or comrnitrncnt to,16 new manufacturing industries,includinga cementplant,and chocolate, leather , gloveand textilefactories.

TheNewfoundlandGovernment launched these industries throughits Economic DevelopmentDepartment andtheDepartment'sDirectorGeneral,Dr.AlfredValdmanis.

valdmanis,afonnerLatvianfinanceminister,wasrecruitedbySmallwoodin Ottawa.A1i Newfoundland'seconomic czar,Valdmanis'rolewasto travel,(mostlyto EW'Ope) make contactandreachtentative agreementswith companies or individualsinterestedin establishingenterprisesinNewtoundland

I Memo, Richardson Woods to StaceyMayofInternational Basic Economy Conunission'sTechnical Services Group,February9.1950.J.R.SmallwoodCollection, Centre forNewtoundland Studies, MemorialUniversity.File3.08.336{Insubsequent citations,thiscollectionof materialwillbe referredtoas JRS Collection.]

2Ibid

,J.R. SmallwoodSpeech,1950 (undatedj.Pile7.02.00J.iRSCollection

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Theagreementsweresubjectto cabinet approval, anearautomatic assumptioninthose days.

Smallwood's public commentsexudednearmissionaryzealwhenit cametopromoting economic developmentinNewfoundland Inthe1950legislaturedebateon establishing theDepartmentofEconomicDevelopment, Smallwood utteredhisfamous "develop or perish" statement,and he relatedastory hetoldaTorontonewspaper reporterin1948, whilenegotiatingtheTennsof Union in Ottawa

Iused totellhimI'dbePremierofNewtoundland and that there'dbeno difficulty ofthat. And heusedtolaugh, andIusedto say,'don'tlaugh'.I said'whoeverisPremier of Newfoundland hastodoonething,hehas to developNt.."WfOlUldland or be bootedout.'

Smallwoodpromisedthatgovernmentpolicytowardindustrialization wouldbecalculated and orderly.HaroldHorwood,a Liberal backbencher in thefirst Assemblyafter Confcderntion,andacloseally ofSmallwood in theConfederationcampaign. wroteyears latertheplanwas to developtheindustriesoneat a time,sellthemtothe privatesector, and use the proceeds tostartother industries.'

appeared tobe onlyfor public movingquickly.Thiswas borneout in a nMay11,1951, on theeveof Valdmanis' departurefor Europe to negotiate six newindustries."

Theindustriesthemselveswerecapitalized with5WIagovernment financing throughan attractiveloonguaranteeprogram.The terms didnotrequirecash investmenton the part of theinvestors asa prerequisiteto qualifYfor theguarantees.The phraseintheloan regulations that allowedthis was the "inat..:.:or kind"clause. "Inkind"wasintendedto includeeverythingfrom"know-how,machinery,oranymeterial,engineering supervision,

4PeterNew]'.ThePoliticalEconomyofNewfQundlandJ92Q..t m.(Toronto:Copp Clark)1973.pp.194-195

,HaroldHorwood.ll!l:)!.(Toronto:McClellandandStewart)1990.p.171

6 Memo, Alfred Valdmanis to JR Smallwood, Departmenl. of Economic Development.File3.08.002.JRSCollection

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...erection,building.etc."andwouldbematch...-ddollarfordollarbytheNewfoundland Government inthe form of guaranteedbankloans.'

Soonaftergettingstarted mostofthe industriesbecamemooey losersIntheearly going.

mostofthemoneylosersweresustainedwith additionalgovernmentloansandgrants.In 1957,agovcrruncnt-eommissionedconsultant's report recommended someof the industriesbeclosedundproposedchangesin the wayothersWL'J'Cmanaged.'lhe gypswn and cementplants, basedon locally availableresources andgearedtowardtheloud constructionmarket,remainedgoingconcerns.Thoseindustrieshowever.havelongsince passedfromgovernment to private control.Indeed,afewshortyearsaftertheprogram started,the government itselfWlISde-emphasizing theindustrializationscheme and focusinginsteadonfisheries development!

This thesisisnot a studyonregionaldevelopment,ruther itis un examinationora specificinitiativeundertakenbythe Newfoundlandgovernment duringitsearly years us a province ofCanada.Thispolicy.whichentailedsignificantpublicinvestment,happened in theclimate of post-wareconomicthinking,whichbothinBritain andCanada. implied a vitalroleforgovernment in thearea.ofeconomic planning.Duringthisperiod,Britain developeda large nationalizedindustrialsectorandhadimplementedmajorsocialwelfare reform with theNationalHealthService,"InCanada,the1945While PDJX-"!'on Employmentand Incomepromotedthemaintenance of"highand stable levels of employmentandincome"to be "aprimary aimofgovernment policyin the postwar period.':"Thisfocus on generating highlevels of employmentwas seen as being influencedbydevelopmentsinBritain,and bythepovertyexperienced inCanada during the depression.Thesedevelopments ledinCanadato thestrengtheningofthc Department of Financeasaninstrumentoffinancial controland oftheDepartmentof Healthand Welfare in the ereaofsocial policy."

7Ibid,Fite 3.08.002

3Memo,GordonPushieto1.R. Smallwood,1957. File3.08.033.JRSCollection

9Shonfield,Andrew.ModemCapjlaHsm [TheChangingBalanceof Publicand PrivatePower] NewYork: OxfordUniversityPress.1976.pp,88-89

10Phidd,RichardW.andG.BruceDoem.ThePoliticsandMaaaperuQfCnnadian EconomicPolicy.Toronto:Macmillan.1978.p.159

IIIbid

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'Ibc lkvelopments alsoserved10legitimize a largerrolefOT!heSlateintheplanning of thel'COOOIlly.WhiletbeeislittledirectevidenceSmallwoodwasinfluencedbythese '-"'ICI'lIS,hehad tolooknofartbe-thanNe\\foundland'shigh unemplO)t1lerJtandlarge:

outmi ~ion ~toepprecieretheneedfor sometypeof intervention by his govcmmcm.Smallwood wasphilosphically inclined to engagelhetreasuryinthe p&SUit of industry toamelioratesuchconditions.lie underlined his resolveina speechto the legislatureinthefallof1949.

...we mighttake someofthesurplusandputitbehindsomemovement forthe developmentofthisprovinceThatistheonlypermanentsolution to the age-oldproblemthatbeganofficiallyin 1832 andhasneverceased exceptdwing theFirstGreatWarandduringtheSecondGreatWar.¹² This thesiswillfocus ontheindustrialization programwithaview to detailingthe activities oftheindustriesandproviding ananalysisofthewayinwhich itwasmanaged.

Asapreliminarypoint,theprogram, despiteanexpenditurethatamounted to two-thirds 01"thepre-Confederotionsurplus^ll,has beensllbjectedtolimitedstudy.Onepossible l'I:<lSOI\isthatkey documentsfromthaterahaveonlyrecentlybecomeavailable.Thisis especiallyso withrespecttothe SmallwoodCollectioninMemorialUniversity's Centre forNewfoundlandStudies.

Theindustrializationprogrem,thoughenthusiasticallysupportedbySmallwoodand o<has.waspoorlyplannedandtoohastilyenberkedupon.Thereappearedtobenoset of goalsandobjectivestoguidedevelopment:apartfromSmallwood'scredoof-develop or perish",\\1JilethefIrStthreeindu.strie;\\UCbasedon localresoercesandgeared towardthe localmarket,Smallwooddidnotofferafum expl<nltionMtyNem"oundland shouldbecomeinvolvedi-tindmtries based ontheimportofraweeteialsandgeared toward alreadycompetitiveexpertmarkets,especiallythoseinNorth AmericaThemain weaknessintheprogramhowever,wastheloan guaranteepogramthat providedand

12Proceedings,October17,1949.pAI3

IJProceedings,November30,1949.pp.846-848.Thepre-Confedearionsurplusrefers tothebalancebooksfortheNewfoundlandgovernmentatthetimtit joinedCanada.

ThL'Teare variousreferencesinprinttoasurplusrangingfromS40millionto $49million. Thisthesisusesthe figure$40,283,147.Thisnumberistakenfrom thefirstbudgetspeech oftheSmallwoodgovernmentonNovember30,1949.Inrecountingforthe House: the detailsofthenewprovince'sfinancialstanding,theMinisterofFinance, R W.Quinton notedthatthesurplusat Confederntionwas$47,676,482.,minusliabilitiee> of$7,393,335.

Theseliabilitiesincludedaccountspayable,trusteestock,saving'!certificates,andboth publicdebtnndsavings:cernflcareinterest.

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deliveredsubstantial financialhelpto industries, basednor: onrigorous studyandanalysis.

but ontheblessing and recommendationof thenewProvince'seconomic czar.Alfred Valdmanis.'[his cannotmerelybeseen35a technicalweakness.but ruther.as a political mistakewhichin sixshortyears,consumed $26million."

Thisthesiswillplacethe Newfoundlandindustrialization planinthecontextof whatW3S happening in Nova Scotiaat aroundthesame time.Thedecision to include theNova Scotia case centres around some ofthesimilaritiesit haswithNewfoundland. Like Newfoundland,Nova Scotiahaslaggedbehind thenationinImportantindicators of economicgrowth;itwasprimarily a resource-basedeconomy;itwasoutsidetheindustrial centreofCanadaandNorthAmerica.thoughnot as farremoved from the centreas Newfoundland;andNovaScotiaandNe\\1oundland,asprovincesofCanada.have identical constitutionalpowers.These similaritiesshouldnotbetakentomeanthat any givenbusinesswouldhave an equalchanceof survivinginboth provinces.Indeed. an argumentcouldbe madethatNovaScotiawouldhaveamajorlocationaladvantage over Newfoundlandintermsof gettingmanufacturedgoodsto market.However, itshouldbe notedtheNovaScotiacase alsoservestoillustratethat Newfoundlandwasnot the onty provinceengagedindirectingindustrialdevelopment.

To take thediscussiona step further,theCanadianexperience isconsistentwiththe globalexperience wherecountriesandregionsonthe peripheryoflargertradingpartners, have adopted similarmeasurestojump-startdevelopment, oftenwithcatastrophic consequences fortheir treasuries.

Thisthesis willrely on an assortmentof primary andsecondarymaterials.The chief primary materials are containedintheSmallwoodCollectioninthe Centrefor NewfoundlandStudiesatMemorialUniversity.TheseincludeDepartmentofEconomic Developmentdocwnents,includingmemorandatocabinetinsupportoflheestablishment ofthevariousindustries.Thedepartmentaldocuments alsocontaincorrespondence betweenAlfredVaJdmanisand the bankinghouses,correspondencebetweenVaidmanis andJ.RSmallwood,and internalmemoranda onthe operationand statusoftheVwlOUS industries establishedunderthegovernmentplan.

The Smallwood Collectionalsocontainsannual reportsof the IndustrialDevelopment LoanBoard,andreportsand memorandainvolvingthe International Basic Economy Commission

ProceedingsoftheHouseof Assemblycomprise animportantrecordof the'cutand thrust'ofdebate onindustrializationandotherpublic policyissues.

14This representsinexcessof$200million1995dollars.

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Therewassubstantial coverageof the Ncwfowtdland developmentprograminthe newspapers andjournalsoftheday:Thelocal papers.The EveningTelegramandThe DailyNewsgave extensive coverage of the new industries.TheBoardof TradeJownal providedabusiness perspectiveonthe increased competition at the timeof Confederation, withmuch of the space devoted to the transitionperiodfor Newfoundland-based manufacturers.ThiscoverageWDSinsharpcontrasttothatprovidedbytheToronto-based FinancialPost.The Postdetailedtheopportunities Confederationpresentedfor Canadian business.and later.as the industrializationprogram gotunderway,thepapergave considerable spaceto detailingthe prospects ofthenew industries.(ThePost'scoverage appeared tobebasedon Smallwood's accounts of howthenew industriesweredoing, however.ratherthan on anyindependentassessmentof thenewfirms.) Theinternationalexperienceisamplydocumentedinstudiesthatare a combination of theoreticalandanecdotal approaches to development. Dependencytheoryandtheoriesof underdevelopment are important for understanding the rationaleeven forwhatmaybe considered misguidedeconomicdevelopmentinplacessuch as Newfoundland.

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Confederntion:TheBeginningsofanIndustrialization Policy

In Newfoundland, the strokeof midnight,March 31, 1949is best knownasthe moment Britain'soldestcolonybecameCanada'stenthandyoungest province.Theunion brought Cunada'sarray ofsocialprograms~oldagepensions,war veterans pensions,family allowancesandunemploymentinsurance~tothe350,000peopleof NcMoundlandand Labrador.UnionwithCanadameantsomething elseas well.Itbrokedownthe customs andimmigrationbarrierbetweenNewfoundlandandCanadaSoonafter,Canadian manufacturers wouldbe successfullycompetingwithNewfoundlandmanufacturers who hadpreviou.sly enjoyed tariff protection.ForNewfoundlanders generally,union with Canadaremoved immigration barriersand easedmigration.Indeed,migrationto Canada wasa well-wornpathforNewfoundlanders looking forbetterfortunes.In1947 and1948, 4900NewfoundlandersmigratedtoCanada,'Themigration factorwasan ingredientin severalspeeches givenintheearly 1950'sbythe new Premier.Joseph Smallwood,and itappearedtogiveimpetustohis searchfor newindustry,Returning froma six-weektrip to Europeto attractbusinesstoNewfoundland, Smallwoodtolda Newfoundlandradio audience,

Wemustdevelopor perish.Wemust developor our peoplewillgoin the thousands to other parts of Canada. Wemust createnew jobs, orour young menespecially willgooff tootherplacesto get thejobstheycan't gethere.Develop,develop,develop- that'sbeenmysloganandthatwill remainmyslogan.2

Ina1951speechto the House, Smallwood againdetailedhis fearaboutout-migration, end how"confederation withCanada contained thedirethreatof acceleratingvastlyend spectacularly that outward flow ofpeople.'In the samespeech,he outlinedtheneedfor theindustrializationprogramhis governmenthadalreadyinitiated.

Somethinghadtobedone,anddonequickly.0Jrpeoplehadtobepersuadedthat Newfoundland itself,as a resultof Confederation,wasembarked upon anew

,Neary,p.185

'SpeechbyJosephR.Smallwood,October12,1952.File7.02.003.IRS Collection 1File7.02.004.IRS Collection.[Undated]

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course...Newfoundlandwouldgo ahead.Opportunitieswouldspring up inthis province.'

Smallwoodmayhavebeen merely echoing what businessleadersand thenewspapers werereporting.TheNewfoundlandBoardof Tradewasreportedtobesoconcernedabout

"almostwholesale migrationfromNewfoundland",thatitasked the governmentinMay 1950tocheckonthematter.'TheEveningTelegramwroteintheautumn.ofl9S0,that

"manyhundreds ofNewfoundlandershave moved outof the Province,ifreportsfrom railwaymcnandothersaretobebelieved","

Yetotherswerepromotingtheidea thatNewfoundlandwasoverpopulated.H.B.Mayo, a fonner Ncv.foundlanderthenteachingpolitical scienceatthe Universityof Alberta, suggestedin1951that 100,000peopleleave Newfoundland-that"it isbettertohavein Newfoundland250,000healthy and prosperous peoplethantwicethatnumber at near-subsistencelevel." Mayorecommendedconvertingmostof the island to a National Park,andhe was criticalofpeoplemistaking post-Ccnfederatiocadvancesfor real progress.

Ontheone hand. somepeopleseetheprovince growinginpopulation and prosperity,withall theimprovements inhealth,educationandother public services,thatprosperity can bring.It is a pleasantandrosypicture -but painted froma one-sidedview.From anotherviewpointmaybeseena futureinwhichthe populationis growingfaster thanjobscan 00found;

withthousands of fishermen under-employed and earning lessthana decentlivelihood,B

4Ibid

SBassler, GerhardP,"Develop or Perish: JosephR. SmallwoodandNewfoundland's QuestforGermanIndustry,1949-1953",Acadiensis.Volwne XV, No,2,Spring1986, 92- Ill.p.99

'Ibid, p.98

,H.B. Mayo."TheFutureof Newfoundland" Isthe IslandOverpopulated?",in AtlanticGuardian,Vol, VIII, No,3,14-19.~1951,p.19

~Ibid,p,14

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Mayds essay was rebutteda monthlaterin theAtlanticUu:Jrdbnbynoneotherthan Alfred Valdmanis.Valdmanis suggested afive-year nationalplanofconcessionsand freightrate reductionstoallow Newfoondland10"catchup-,He arguedmdersu:h circumstances.Ne\\foundlandcould~ydevelopits f:nning indu<;try on thewest coast;aI'Ie\Vpcpermillbased00timberfroml...abradcK;hyd'oprojeclScould bestarted;

and newminesopened⁹SocoofidentwasValdmanisofhisplOO,thathepredicted"cs fromthespringof 1952 on, therewon'tbefi.uther~O)m:rtinNewfoundland.-"

Manythousandsof Ne\\foundI3l\dershaddiscoveredforthemselvesthelockof opportunityatheme.While "thedrainwastemporarilyslopped"hetween1951and1956, an average ofJ,300Ne\\foundlanderslefttheprovinceyearlybetveen 1956and1961."

TheRoyalCommissionontheEconomic State and Prospectslamen tedin 1967, ...thoseleaving theProvinceinthepast appeartohave beenmostlythe highestskilledandmostdynamic, very people,in fact, who havethe training andenterprise to generateadditionalemploymentfor others. Furthamore,thoseleavingtheProvincehavetendedtobetheYOWlgtT membasoftheworkforce,whichadlhtotheproportionatenumberof youngandold....itohavetobecared forbytheremaininglaboorforce.¹² Unemploymen1wasnot anewphenomenontoNewfoundland.Thesituationin1949 howeverwas exacerbatedbyanumberof factors.Therewerelayoffsinthelogging indusny broughtaboutby •dcwnrumintheI"lpandpopetsector,ondlayolTs00the Americanbasesas the UnitedSlatescut backits defense spendinginNe\\foundland.Tbe fisherywasa nearfailurein1949;thedevaluation ofthr. Britishpoundin thesummerof thatyearhurtexportsof Belllsiandirooore totheUnitedKingdomI)Asif that\v.:JSnot enough to'1pSCltheNewfoondlandecooomy,loco!monufaetUring firmsfaced stilT competitionfromCanadian manufadl.led goods that oow enteredNewfoundlnnd tariff-free.

9AlfredValdmanisinAtlanticGuardian, April 1951. VoI.VIIl.No.4,Il~17.p.l6 10Ibid,pp.I6-17

IIReportof theRoyalCommission ontheEconomicStateandProspectsof NewfoundlandandLabrador,51.lobo's. 1967.p.ll

12Ibid,p.22

I)Bassler,p.49

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10 The Newfoundland JournalofCommerce - the newspaperof theNewfoundland Boardof Trade~describedthestiffcompctition rumswerefacing frommainlandcompaniesinthe post-ConfederationetaTheBoardreported"onemanufacturertold The Journalthat the joining ofNewfoundlandwith the mainlandhasgreatlyincreased competitionfor the clothingmanufacturershere from Montreal end Torontofirms." Thereportcontinued,

Since unionNewfoundlandhas been overrunattimesbyclothingagents whovisited allormost of thelarge settlements seekingbusinessand offeringgoodsatalittlelessthan thelocalprevailingprice."

Mainlandfinns broughtcompetitiontoothersectors as well.A month later,The Journal n..ported on the Drugand ToiletSectortrade.

Theyhavebeensolicitedbytravelling agentsfromvariouscomparntively unknownmainland firms.Likeotherbusinessmen, shortly beforeunionand since.theyhavebeenthetargetofintensified selling campaignsorganized bymainland firmswhichhave noconceptionofthelimitedscopeof the Newfoundland market.'!

Increasedcompetitionbeganto take atoll onNewfoundland manufac..turers.Whilesome bravelyvowed to "not desistintheir effortsto improvetheirplantsandtherebykeep abreastof eventhekeenest competition fromthemainland",therewas acknowledgement thatat least in !hefootwear trade,somecompanieswerehavinga tough time.

Onelocal manufacturer closedhisoperations a few weeks beforeunion wasconsummated.Theother,the Neo.vfoundlandBootandShoeCompany, Ltd.,in HarbourGrace,iscontinuingproduction."

Hugemainland firmsput onapush in the manufacture of foodstuffs such as biscuits, candyand margarine."Confederation gavethelocalbiscuit industryaseverewound",the Journal reportedinAugust 1955,adding"one plant,manufacturing Englishbiscuits,

I~NewfoundlandJournalof Commerce, Vol.XVI,NO.9. September1949.p. 19

"J"m wl.Vol. XVI,No.10.October1949.p.17

16Ibid,p. 19

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\I closeddown."IiThelocalcandytrade\V<iSdescribedasbeingvirtually"extinct"l.and mainlandmargarine firms"nrcadvertisingtheirproductquite:extensivelyhere,"'"

Theavailabilityof CanadiangoodsgaveNewfoundl3OdCOIlSllrTleISsomething theyhad raxpreviously experienced-choke.AccordingtotheJournal.lheavailabilityofnew productswas exertinga chnnge onconsumes, whowere now"shopping iflUld".]JJ Ircrecsedcompetitionfromthemainlerdfirmsaffectedmanufacturerstoo.The Jounot reportedinAugust1955."thebiscuitmanuf:lctlJrasrealizehowimportantitisto'dress up'theirprodec;'Dressingup'wasCItaminimumbeforeConfederation."2.

Themainland firmstheNewfoundland Board ofTradereportedon werefillingthe ](llIr118,I's pageswithadvertisements. Manymainland companies hadengaged Newfoundlandagents-10sell end distributetheirproducts,butmanymoreappearedtobe operatingoutof headoffice.From Montrealcompanies selling windowsto aHamilton finn marketingwater pumpstotheGreatWest FeltCo.inElmira,Ontariowith its eye-catchingmessage-"itisourresponsibilityandbusinessto warmyOW"feetwithGreat WestAllWoolFeltFOOlWe:a:",NewtoundlcndV«lSvirginterritoryforpeoplewhowanted tomakeadollar.

Itwas evidentth.atCanadianbusinessesviewedNewfoundlandas asubstantialmarketin whichto doadditiona.lbusiness.TheFinancial Postpublished severalarticles detailing the size oftheNe\\fowdlandmarketanditspotentialfernewbusiness."WeCanDouble Sales10Island"numpcterlthoPo>tinthedaysbeforeMardI31,1949,notingtheendof tariffsinNewfCllotdiandwould neenanadditiooal $30-$45millionworthofbusiness to Clnadianfirms,chieflyes aresult of displacing"onehalftoonethirdofthepurchac;ei whichNewfCJloJOOlandnowmakesinUnited States...zzThePost'sreederswerebeingtold thatmanyof Newfoundland's7Smanufacturing firmsandtheir3.500workers"maynow flrd themselvesat:a disadvantageagainstCanadiancompetition"giventhatthe NewfOtDldlandfirmswere smallandwere requiredtouselrrpcrted 'high-costraw

17Ibid,p.7

"Journal,Vol.XVI,No.5.May1950.p.21 19(bid, p.8

•Journal,Vol.XV,No.9.September 1949,p.19

"Journal,Vol. XXVI,No.8.August1955p.7 n FinancialPost.Mud>23,1949.p.13

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12 materials","Newfoundland wouldbean importantmarket for "foods,clothing,radios.

machinery,automobiles,washingmachines" onceConfederation removeddutiesthatwere as high as 60%."2~

Butv.hat of the impact on Newfoundland firms?Howwouldtheyadjustintheaftermath of the dismantlingof the tariffwalls?

Newfoundland firmswerepromisedspecialassistanceto helpin thetransition to provincehood.Aftermuchwrangling,thefederalgovernment agreed to apreferential premium ofIS-percenton contractstenderedby Newfoundlandfirms.ThiswoillJ ·be reduced toIO-pcrcent byMarch31,1951 andeliminatedbyMarch31,1952.~Some localfirmsdidgetfederalgovernment business,but the Post reported"it will take more thanthatto aid the firmawhicharebadlyhurtbymainland competition.,,26

The Conservative Oppositioninthelegislature attempted to exploitthe concernsome Newfoundlanders showedaboutcompetitionfrommainland Canadianfirms,Speakingon the unemploymentissueinOctober 1949,Conservative leaderJohnG. Higginsreferred to the competition Newfoundland firms weregettingfrom Canadian mail order companies.

Thereareclerksandshop-keepers.Willthemailorderbusinessputthese menoutof work? We know well enough that the mail order business contributesvery littleto this country;...17

In the samespeech, Higgins attacked thepracticeof~ing^producefromPrince EdwardIsland.

Nowat thepresentmoment,the markets arefloodedwithPrince Edward Islandproduce,andIbisproduce undersells ourlocal farmers...foryears, PrinceEdwardIslandhas been sendingstuff intothiscountryandhasnot

13Ibid,p.16

24Ibid,p.16

IIRaymond B. Blake.Canadjans atIast·CanadaIntept§ NewrQlIDdlandas a f1:m:1m:e.(Toronto: University of TorontoPress)1994.pp.l06-108

16Financial Post.July1949

11HouseofAssemblyProceedings,October 27,1949.P. 533

(24)

IJ boughtasingle thingfromus.Asfar3Swe are concernedPrince Edward IslandisuselesstollS••••!S

Smallwood was accustomed10hauling out the trainof benefitsis describinghow ConfederationhadmadeNewfoundland better off. Speakinginthe legislature onIIbill to establishthe Departmentof Economic Development,he talkedabout"thegreatsystem of socialsecuritydevelopedinCanada".including"familyallowances, oldagesecurity, pensionsfor the blind,uoemploymem insurance,improvedandincreasedbenefitsfor\V'Jt veterans,nationalhousing..."29

Anarrayof socialprograms thoughwasseen as a supplementto,not as a substitutelor jobs.In the samedebate,Smallwoodsaidthe socialprograms "at most...could blWltthe sharpedge ofextremepovertyincertainclassesof our population"andwhatwas needed was development of Newfoundland'snaturalresources "10yieldthe basicconditionsof a higherstandardofliving for ourpeople."JO

Despite that long-leongoal,Smallwoodwas wellawareof theimmediaterolesocial programsplayedinaugmenting people'sincome.Areporthis government commissioned in preparationfor its arguments on changingthe financialtermsof unionwithCanada, showed Newfoundlanders consistently earningless per capitathanother AtltUltic Canadiansandonlyslightly morethan halfoftheCanadian average."Thesame report showednearly twice as many Newfoundlandfamiliesinthe lowestincomecategories

UIbid, p.533

"Proceedings,July18,1949. p. 49

~Ibid, pp. 49-50

31Ii KarlGoldenberg. Interim ReportonCapacityto PayandComparativeTax;

BurdeninNewfmmd1aod and theMaritimeProvinces.PresentedtotheNewfoundland CommissionRevision of Financial Terms. 81.John's. January1956. pp.10-13.

[Goldenberg,an.economist and labourlawyer,waseconomic advisortotheGovernment of Newfoundland during theworkof this Commissionand duringSmallw<xxl'sown Commissionsetupthreeyearsearlierin1953.Inhis book IPoseCanadaSmallwood stated theNewfoundlandCommissionwasreally anefforttoprepare theprovince'scase forcontinuingthetrnnsitionalgrant,intendedat ConfederntiontoallowNewfoundland to providepublicservices at reasonable levels of taxation.Thisisnowreferredtoasthe Term29 award]

(25)

14 compared to theCanadianaverage."Newfoundlanderslaggedfarbehind otherCanadians

tooinlL'OTlSoreducationalattainment.andcreaturecomforts, suchas furnace-heated

homes.hot andcoidwater;flush toilets, bathsorshowersandtelephones,'»

Thatstandardof living,and moreparticularly,the employment situation, came sharply intofocusin thelirstautumn afterConfederation.SpeakingintheLegislature.Smallwood said "...unemployment,andindeeddestitution,have begun to show themselves againin Newfoundland,"Citinga near failureinthefisheryandproblemsinthe pulpandpaper industry that wouldincrease unemploymentamongloggers,Smallwoodpredicteditwould cost

.i.somewaere

between a millionanda millionand a halfdollarstopay welfare to able-bodiedNewfoWldlandersfromOctobertof\tfarch.^J4 Bythe timethenumbersweretalliedinthenext spring.able-bodiedreliefhadcost

$3.4-million,morethandoubleSmallwood'sestimate.

Theplightof Newfoundland'sjobless andthe prospectsfor bettertimes,increasingly became the centrepieceofSmallwood's speeches.Addressing thelegislature onthe necessityof spending some of the S4O-millionCommission of Government surplusto survey Newfoundland'sresourcepo'eraial,Smallwood implored the Oppositionto understandwhatwasatstakeforNewibundlanders.

A year ortwo fromnow,theOpposition maybeholding thisGovernment uptoridicule,andwe willhavetohang our heads forhavingflungaway endwasted$200,000ofthePublic'smoney,butweare goingto takea chcnceiftheHouseis willing.•..Peoplearenotgoingto waitforeverfor thisdevelopment;ifwedon'tgiveittothemtomorrow,theygetmoreand more outofjobs andpull uptheir stakes;you can't blamethem,andthey begorborrowmoney to getoutofNewfolHldlandandgowherejobs are, youcantblamethem. Ourjob isto back them;gorightout,bootsand all, make orbreak.Here,",hatI meanby"make orbreak".hereisgamble.³⁵

.12Ibid,p.14

llibid,p.22

34Proceedings,October19,1949.p. 411

" Proceedings,Mu1:h30,1950.p.489

(26)

15 TheOppositionaccusedSmallwoodof actinginbaste ashe1Mthroughlegislation to createtheDepartmentofEa:mm.icDeve1opn~.Ca~ativeleaderHigginscccned thelackof informationaboutthesete ofthenew (XUVince's fumccs.

Ido 001 thinkwecanlindrotwberewe an:;n:Jwhitherwe '"tending unless we knowexactlythefinancialpositionofthiscountry....l quite agreewithMajorCashin that nofurtherdiscussionsshouldbecarriedon inconned.ionwithBillsalready broughtbeforetheHoose.<nIthatno further Bills shouldbebroughthereunlessweknowexactlym..tthe financial positionis..16

Smallwood actually appeared10be pursuing development \Vilh some caution. Thiswas insharp contrasttohowhe would proceedlater.In announcinglegislationinthe: fall of 1949to establisha provinciallendingagency calledthelndtOOini DevelopmentLoon Boordtodealwit happlicationsfor"twentyorthirtyorfillythousanddollars, or maybe more",thegovernmentattemptedtocomforttheoppositionandthepublicbystipulating

"thattheseloans wouldof coursebeproperlysecured.HItwasclearaswellthoughthat thegovernmentenvisaged somerisk. astheloons would"dealwithatypeof eraerpeise

\\hicl1theordinarycherteedbonkdoesnoL.""

Atthesametime,thegovernmentwasgrapplingwithhowbesttousethesurplushanded toitbythe Commissionof Govemment atConfederntion.Sm.1Il\\QOlitoldthelegislature the govemmen1wasleaningtcwcrdsubdividingtwo-thirdsofthe8l'tXIlrt(heestimated oboutS25-million)for..d....'Vclopmenral purposes".3mOIlgvarious3rCI5of govanrnent, including schoolandbospitalconslr\lCliOO,"somuchforfisherydev1:1opmen~somuch, pahapsfor agriculturnl dc:velopment..."(Term 24oftheTenns ofUnioo between NewfoundlandandCanadarequiredtwo-thirdsofthe:surplusbe usedfor"the developmentof resources andfortheestablishment€X'extension of publicservices";the otheronethirdwasrequired10beplacedondeposit"theibIkofCanadatobespent oncum:nt accountso asto"facilitatethemaintenanceandirnpovemmtofNewfoundland publicsevices.y "Smallwoodsawitnecessaryto[I.11otthefiJncb"sothai: the surplus wouldnotbefritteredaway...")9Intime however.muchofthesurpluswouldbe

~Proceedings,July18, 1954.p.54

J7Proceedings.October23, 1949.p.451

»Proceedings,Mareh 31,1952.p.24

~Proceedings,October23,1949.p.450

(27)

16 exhausted, notonschool and hospital construction, orfisheriesandagricultural development,butona highlyquestionableindustrial developmentplan.

The government'sfirst vehicle tofundlocal industrial development,thelndustrial DevelopmentLoanBoard(lDLB) neverachieveditsobjectivestoprovidefundingfor

"haththe bigandthe littleman".Nearlyayear after itVi8Sestablished.theBoard reportedit hadnot disbursed anyloans.It seemedmostapplicants wantedloanstopay otf debtsor purchasepersonal itemssuchasmotorcars.Addingtotheproblems, many applicants didnot havelegaltitle tothepropertytheyofferedas collateral. The Board discoveredthatmanyoftheapplicantsdid nothaveequity capital,andas aresult,those eppticantsweredeniedassistance."

Subsequent reportsfrom theBoardrevealedfewpeopleapplyingforassistance at all- just six applicationsin1952-53,compared to52inthe first twoyearsoftheprogram.41

TheBoardreportedon"thesuccessionof approachesforassistancepertainingtopurposes outside theBoard'soperations...."⁴²Fiveyears into theprogram,just20 loam totalling

$147.550 dollars hadbeendisbursed.TheBoardnoted thatduring 1955,lendingactivity 'wasagain restricted" becauseof"the relativelylimitednumberofsound approaches whichqualified..,,(j

Furfrom meetingSmallwood'searlyobjectivesofprovidingfunding "fortllebigandlittle man".theIOLBserved to underline alackofcoounitmenton thepart ofthegovernment toencouragingNewfoundllUlders to beginbusinesses orexpandexistingones.Thiscan betheonlyconclusion giventherepetitionofthe factors whichbarredlocalapplicants fromsecuring assistance,andthecomparative easewithv.hichEuropeansobtained government loans underthegovernment'sindustrializationprogrnm.

.,SecondAnnualReport,Industrial DevelopmentleanBoard,Man:h31, 1952.p.

" Thin!AnnualReport,Industrial DevelopmentLoonBoard.Marcl13!,1953 421bid

"Thin!AnnualReport,March31,1950.p.5.

(28)

17 Smallwoodwac;determinedtoectagainstthiseadypost-Ccnfedeaion00ddr0pofthe slowp3CCof developmc:nt.

Inthespring of1950,herrodeoneofthe most sigtilicanlmovesofhisyOlllg governmentSmallwoodhired Alfred Valdmanis tobehisDirectorofEconomic Development A formerLatvi:.lFinanceMinister.VllldmJnischarmedSnulh...codwith bothhis mannerandhisvisicifor anindustriaJill:dNewfoundland.Priortohisarriwl inNewfoundland.Valdmanishad workedfortheNova Scotia ResearchFooodalion.

assessingthefeasibilityofest:Jblishinggypsumandcemenlinduslriesin lh:Jtprovince.401 WhilethoseprojectsdidnotgoaheadinNovaScotia,theybecene the firstinitiatives Vatdmanispursued inNewfoundland.Thegovernment approved diecementJXOjectfirst andthenthegypsum proposal. bothatComerBrook.

ValdmanischarmedSmallwoodwithhisdriveandhiscontaets,leadingSmallwood10say helovedValdmanis ashe could never lovea brotherorsister.

Valdmanis wasnotimpressedwiththeworkNelsonRockerfeller'sIBEChaddone10..

Smallwood.Heputhisfeelings onpapertoSmallwoodinDecember1950.justsix rnoothsafter beingnamedDirectorGeneral.ValdmanisclaimedIDEe scalculations lOr

~~~~~~I:

r

^daypapermillforBayD'EspoirwouldI<SlJIt ;n".

Vllidnmnis appeared10besettingtheIiJOU'IdworI<for establishingwithSmallwoodbls omlcredentialsastheeconomic czarofNe-wfoundland.Elaborolingonthe

I:fOPOSCd

third mill,muchwouldcoosumewoodloggedinLllir.ldor,VlIidmaIUs";d,

Imaybe abletobringintoNewfoundlandsucha millat,say.45 millioo dollcrs, andsuchamill should proveatremendoussuccess."

Valdmanispoured00:hisimpt:ssionsofhis perceivedsubstantialabilitiesinthesame notetoSmallwood.

Itissomethingmorewhichleadsmetothesealmostincrediblecontracts wehave alreadysignedormayhaveinpreparation,and this"something-is evenhardto

...Bassler.p.107

.sNote,containedinletterfromAlliedVatdmanistolR.Smallwood,December12.

1950. Note#1.File6.00.005.lRS Collection

"'Ibid

(29)

18 define.Thatis theknowledge, theskilledbrain,theskillto masterthe subjectplus

Ucommandingimpressionpluswideconnectionswiththe bestfinns in the world.

IthinkIhave allthis."

!I.yearafterthat, Smallwoodassuredthelegislaturehe wouldtake aprudent approach to dealingwiththeprovince's surplus.thegovernmentwasstillundecided about howtofund the industrialization driveto whichithadbecome committed. Notwithstandingthis indecision, the government had fullyfinanced the cement, gypsumandhardwood industries to the tuneof several milliondollars.

Itis evidentfromtheValdmanispapers.thatsomecabinetministers werecoolto theidea of govcmmentlinancingfor industry.Insomecases,Valdmanis felttherewasoutright hostility.Inaletter fromNewYork,herelatedto Smallwood aconversationwithcabinet ministerH.W.Quintonina corridor at ColonialBuilding followingValdmanis' submissionofa reportpromotingthedevelopmentof a100,000 toncement mill.He quotedQuintonas saying"Iam goingtoobjecttoanykindof government enterprise.

Surelyyoucanbuildtheplant, buthowareyougoingto getridof it'l"48Valdmanis noted that Smallwoodhad done everything he couldto helpwith economicdevelopment, but thecabinetdid not seem tobeas helpful.

"Promyou,yourself, my Premier,Ihavethehighest regard...theremaybe a fewmoreCabinetMinisterswhomaybementioned inthe samebreath. But the Cabinetas such??1donotdareto guess,I think indirectly,but clearly,ananswer hasbeengiventome.""

Thesewerethe earlydays of the SmallwoodlValdmanis partnership,andwhile Valdmaniswasunsureof the kindof supporthe wouldgetfromcabinet.he wascounting on Smallwoodto persuadethose same cabinetministers to vote him a substantial increaseinsalary.Ina seriesoffour notesundercoverof theDecember12, 1950letter, Valdmanis detailedhis plansforthe cement mill, the third paper millproject,"our proposedbig development corporation"and other industriesthat w-udcome after.

Valdmanisconcludedhis planwasthe "minimwnneeded"forthefuturedevelopment of the province.Includedin the samenote was a salaryrequest that would increase Valdmanis'payfrom a"try-out"level of "714dollarspermonth" to $2,080per month.

~1lbid 48Ibid. Note#1,p.1 .wIbid. Letter

(30)

Iq Furthetmore. Valdmanis madeamove to consolidatehis controloverthe'wvemmenl.'s economicdevelopment office.Heproposedhavingauthority10select. hire :md lire employees:putting allemployeesoncontroct.thereforetakingtbcmoutsideCivilService Regulerioos:tohavetheirsalaries del:erminedbyValdmunis:.andtoreturntothe

~~:~~~rlitgeneratedbytheindustries. thel,.'OStofrnnninglhc

Topushhispointfor a substantialsal.-y increaseandfortotalcontroloflt'cdcvcloprn.llI office,Valdmanisrelatedbeing"almostheart-broken",since"mypersonalOl'\.U"

combinedwithaveryadvantageousAmericanofferto me ($50.000ayear ucccedingto Valdmanis) makemyremainingwithyouinNewfoundlandalmost impossibtc,'?'.

Valdmanisnotedhe wouldbehappytostaywith theNewfoWldland government forhalf thatamount.Hehada positive responsefromSmallwoodwithinaweekand itimproved hisspirits considerably, aswas evident inasubsequentlener tothePremier.valdrnanis

~tn~~6~ ~!~~~:~ :~ ~ ;~~t~=tis~~::;~:~\~~~~

hehadanewfouryear contractcarryinganannualsalaryof$25.000.

Muchoftheintemalgcvemmemdebateduringthisperiodwas devotedtohowthenew industrieswouldbefunded.Whiletheflrstthreeindustries(cement,gypsum 3Ild hardwoods) werefundeddirectlyoutofthesurplus.thegovernmentwas attemptingto findanotherway offmancingthe balanceofits industrialiuuionscheme.AsccrtyasIn.:

senrrer of1951,Valdmaniswaswritingfmanciersandfloatingtheideaof raisingprivate capitaltofundthenew industries.^DHe similarlysuggested to a Swiss financierafew nxmthslater••...1wouldnotrejectwithoutcarefulconsideration,evenadirectklan10the Province(some20million dollars)...·SoIValdmaniscontinued thislineofinquiryintothe nextyear.Ina letterto aGermanbankerinMan:h1952,henoteditwas necessary 10

"coesolidaretheProvince'sfmancial position,andfiodsomegoodintematiooalbenk

'llibid,Note#1,p.4

"Ibid,Letter s21bid

S3Letter.AlfredValdmanis toWarburgand CompanyLimited, August 17,1951,File 6.00.012.JRS Collection

"Letter,A1fr1:dValdmanistoDr.PaulHagenbach,December1,1951,File6.00.012.

JRSCollection

(31)

20 throughwhichournewindustries....willbelinanced...."5SValdmaniswrotefurther hewas contemplating financing theEuropeanindustries "on thestrengthof aNewfoundland guaranteeand not througha direct cash advance fromtheNewfoWldlandtreasury".S6 Theseinquiriesmayhaveunderlined a basicconflictintheCabinet,promptedperhaps bya dwindling surplus as thefinancial commitment to new industries grew.Valdmanis acknowledgedasmuch inoneofhisletters,noting "Premier Smallwood..insists...the 19,000,000dollars,[surplusasofAugust 17.1951]except,perheps,for somesmall reserve,shouldbeusedfor buildingroads,schools and hospitalsimprovingthegeneral socialwelfare of thepeople,':"

NAW RAL RESOURCE PlANNING

WhilemuchofSmallwood'senergyduringthisperiodwasdevotedtotheindustrialization program,megovernment did not neglectthe potentialof naturalresourcedevelopment Labradorwasespeciallyseenas apromisingsource ofresource wealth.Smallwoodhad longviewedresourcedevelopmentas a keyto becoming "a self-supportingProvince.

independentandproud"saRecounting to the legislaturethe potentialof mineral developmentintheprovincein theearlydaysofConfederation, Smallwood remarked,

Whenyou lookat the iron minesof BellIsland.thefluorspar[sic)mines at51.Lawrence,andaboveall,at the fantastic ironminesinLabrador,you cannothelpwondering if theseare all, and whetherindeed,themineral wealth ofNewtoundlend, includingLabrador,may notyetbeenoughto

makeLL<;knownasthenewAlaskaofNorth America.S9

In late1950,Valdmanis recalledinanote toSmallwoodhowtheyhadearlierproposed creatinga resource development corporationfunded95%bytheNewfoundland govcmment and 5%byprivateinterestsinNew York.That schemecontemplated giving

$SLetter,AJfredValdmnnistoDr.W.Hinneberg, MarchS,1952, File 6.00.022.JRS Collection

56Ibid

'7

^Letter^,^Valdmani^sto WarburgandCompany,August17,1951

~Proceedings,July19.1949.p.50

$QIbid

(32)

21

"50010 orevenmore, of the coropanysprofits" 10 theNewYorkconcern."The planhad beenworkedoutbySmallwood andValdmnnis onatrainride fromSt.John'stoCorm..,.

Brook.Valdmanisclaimed inlate1950 the planhad nowbeen"improved".andthat"the discrepancybetweeninvestmentandtherighttoprofits iswipedOUt."MUnderthenew plan, he stated.thegovernment and theNew York people would "participate onequal

terms",meaningtheywould"sharetheprolits,ifany, in proportionto theshoresowned

andthatinany event, the Newfoundlandgovernment wouldown51%of theshares,f>2 Tiedin'Withthedevelopment corporation envisagedintheNew Yorkdlscussiorswere negotiations on financing thecementmill, whichwould laterbebuiltat.Corner Brook.

The NewYorknegotiations, whichhadkeptValdmanisin the UnitedStatesforatleast a month, were tohavebeenconcludedwithasigningby SmallwoodandAttorney GeneralLesCurtisaroundJanuary8,1951,Itwas clearhoweverfromaletter Valdmanis wroteto amend at the MIAGcompanyinGermany laterinJanuarythat negotiations were not going asexpectedThesigning was delayeduntiltheweekofFebruary6in 51.

John's.Thatintum,delayeda trip Valdmanishad planned to make toGermany.The investorsintheproposed Newfoundland and LabradorCorporation wouldbe"Wallstreet bankers, Canadian investmentbankersandtheNewfoundland Government itself.^6J

WLetter, Valdmanisto Smallwood, December 12,1950. Nole#2,p. I

61Ibid,p.2

62Ibid

6Jletter,Valdmanisto Smallwood,January 27,1951, File6.00.022.JRSCollection

(33)

ThePolicyTakes Shape

Whilepresenting a cautiousandprudentfacetothe public,the Smallwood cabinetmoved quickly to approvenew industries for Newfoundland The March 10,1952 cabinet meetingexemplifiesthis.In thatmeeting, RudolfHanhart andGustavCarlWeispresented their proposal for a new pressboard industryinNewfoundland. Immediately aftertheir presentation,the two industrialists,along with Edward Wyss. a director oftheSwiss People'sBankandNewfoundland's Director Generalof Economic Development,Alfred valdmanis,left the cabinetmeeting. Cabinetaccepted the proposal and instructed the Artomey-General,LesCurtistodraftan agreement. Thiswas followedinshortorderby a decisionto enablethePremier and Minister of Economic Development to completean agreementwithHanhartandAssociates"involvingassistanceby wayofagovernment loonand/orguarantee of bonds,to a valueof$575,000...."1

Laterthatmeeting,adraft agreementwaspreparedfor Smallwood's signatureand Newfoundland hadanotherindustry. Thiswastypicalofthebreak-neck speedwithwhich Smallwood and Valdmaniswereindustrializing Newfoundland.

Harold Horwood (Liberal MHA forLabrador,1949-51)writesinhis biog aphy of Smallwood. that while "manyofJoey's friends and closest associates disliked and distrustedDr.Valdmanisfromthe momenttheyfirst metrum",Smallwood himselfwas unaffectedbytheiropinion.'According to Horwood.withinmonthsofValdmanis'hiring in 1950.Smallwood and Valdmanishadbecome "the realrulersof Newfoundland."

SmallwoodandValdmanis were a dynamic pair, settingoff with either the Finance MinisterGregPowerorAttorney GeneralLesCurtisintow.Thetripswerenearlyalways to Europe,where Smallwoodwas fondof saying, he was "fishingintroubledwaters". Smallwood explained his strategyin a[951 speechto aBostonaudiencethat hewas courtingforcapitalinordertodevelopthe province's mineralwealth.timberstandsand waterpower.

'CertifiedCabinetMinutes.,March10,1952.Minutes251-'52;252-'52;and 253-'52.

File2.03.004. JRS Collection , Horwood,p.173 'Ibid,p,173

(34)

23 Youneedonly see oncethe fantasticdevastation ofHamburg. Cologne.

Dusseldorf: FrnnkfurtandMunichand ahundred other industrialcitiesIll' Germanytounderstand whyso manyindustrialistsonthecontinentofEurope arc anxiousto pulloutandestablish themselveson thisside ofthewater.Theyhave no dollars.it's true.but theNewfoundlandGovernmenthappenstohave some millionsof sparedollars,soIhavevisitedronny of theseindustrialistswithmy personal invitation to acceptloans fromtheNewfoundlandGovcmmentifthey willbringindustrial plantstoNewfoundland,'

Whileit maybetruethatSmallwoodhadavisionforthe developmentof'Ncwloundlend, he appearedto be withoutany kind of planor comprehensivestrategy.Apart fromthe obviousgoalof creatingjobs,therewas nounderlying philosophy.Thiswasevidentin Smallwood'sremarks whenheannouncedamachinery plantforOctagon,nearSt.John's inJuly1951.10 whatappeared tobeasimplistic rationale.hetoldthe crowd"developed countriesmanufacture machinery" and "anycountrywho [sic)docsthis isindustrial."

Priorto establishingthefirstindustries.Smallwoodreportedtothepressonatrip tothe industrial sectionofWestGermanyin which hecovered2200milesbyC:lI'."We arc workingenergeticallyonfivenewindustriesthatwillgiveabout4,000 full-timeandpert- time jobs" he said,addinghistargetwas10,000newjobs in thecomingtwoorthree years,"

A more ambitiousundertaking wasoutlinedayearlaterinOctober 1951,allcr Smallwood,Curtis and Valdmanis returned to Newfoundland froma six-weektrip to Europe. In a province-widebroadcast,Smallwooddescribedhiscommitment to economic developmentand thendisclosedhe had justcommittedthegovernmenttofillccnt1C.'W industriesforNewfoundland.

The 15 newindustries willgiveatleast 3,000new full-timejcbsbefore the end ofnext year,andanother 2,000beforethe endof twoyears from now.Thosefifteennewindustries,alongwith theeight new industrieswe

4Speech, given at Boston, Massachusetts,October15,1951. rile 7.02.004. JRS Collection

SEveningTelegram,July14,1951 {;EveningTelegram,October28,1950

(35)

24 had upto six weeksago,will give nearly6.000new full-timejobsby the end of next year,and about15,000 jobs beforetheend oftwoyears,"

'th ese 15 industries wouldcontinuethe prognunSmallwood had announcedthe year before,withtheestablishment of the cementandgypswnplantsat Comer Brookandthe hardwoodsplantatDonovan's,near St. John's.

The cement plantatComer Brookwasdesignedto produce100,000 Ions a year and expectedbythegovernment tocreatemorethanonemilliondollarsa year inprofit'The plantat ComerBrookhad a naturaladvantageoverfinns attemptingtoimport cement- ithad available,abundant localsuppliesof limestoneandshale,necessary ingredientsin themanufacture of portlandcement. In addition,Comer Brookhada raillink withthe rest of the island, an important considerationgiven the problems associatedwith transporting a commodity as heavyas cement.Thegovernment andthe plant'smanagers were also counting on beinginfonned aboutfederalhousing tendersinthe Maritime Region,sotheycouldbidon CentralMortgageandHousingcontracts.'It was evident earlyon however,thatthe cost estimatesforconstructingthecement plantwerebadlyout of line.Cabinet wasaskedbytheGermanconstructioncompany,MIAG,toadd an additional$523,180(US)to the contractto coverincreasedlabourandmaterialcosts

"which had increased in theperiodbetweenthe estimates and thedelivery ofthe equipment fortheCement Mill."mCabinethaditsownofficialsundertake an investigation of MlAG'sclaimand was advised10 settleit for half the amount,wbich itdid on December3,1951.¹¹Twelvedayslater,afulleraccountoftheunderestimationofthe cementplant costswasrevealed,whencabinet approved asupplementarycost of

7Smallwood SpeechbroadcastonOctober12,1951. File7.02.004.JRS Collection.

MLetter.AlfredValdmanis to Warburgand Company.London. August 17,1951.

ValdmanisMemoranda, "Banking Houses"File6.00.012.JRSCollection qMemo, AL Graudins, Nfld.Economic Development Departmentto Alfred Valdmanis,Director GeneralofEconomieDevelopment,October10,1952. File6.00.023. JRS Collection.

IIIMinuteinCouncil.December3,1951.CertifiedCabinetMinutes.File 2.03.003.

JRS Collection.

II Ibid

(36)

2S S820,000.bringingthefmalbill to $3.7oo.(0) .uThatthefinalCOSl "';)5signifiCMIly higherthentheoriginalestimate,shouldnothavecome as a surprise.atleast not10 Smallwood. VakbronishedwrittenthePremierfromGermany six. monthscaiic.T informing him"MlA Gwillsuffer anetloss ofatleast 112 milliondoIlars...^1}

tnthesameletter,Valdmanisreportedhehadmc:lwijhIknnoScbilde,thecontmetorrex- thegypsumplantatCanerBrook.Theytoowererunningoveron theircosts.VaJdmanis conveyedtoSmallwood"thoi:[BennoSdtilde's]grc;>lworries..."ben: theyoreafraidthey

are

goingtolose a considerableamountofmoney." ~(Three

years

later.Valdmanis would bechargedandconvicted of extortingbribesof$270,OOOfromMlAGand$200.000 from BennoSchilde.AbribeofthatmagnitudefromMlAGmaypartly explain their!:lrse claim againstthegovernmentforincreased costs associatedwith construction of the cement plantatComer Brook.)

like thecementplant,the gypsumplantatComer Brookwasalsointended10 take advantageof localnaturalresources (gypsumfromtheFlatBayarea)forthe manufocture ofplasterboardfor thelocal housingandbuilding industry.Theplantwootobefinanced outrightbythe goverrunentandsoldonceitwasin operation.Thecementandhardwoods plantswerealso financedinthisway.andwerepartofthegovernment'sstrategy"tobuild theplants using Newfoundland'ssurplus,sellthem,and thenbuildotherswith the proceedsof the previoussales,andso00adinfinitum1015ValdmanisWi5oftheview that thecementplantmightconstitutean exceptiontothegeneralpolicy.

As thecementmillisvitalto everyfutureindLsrialdevelopment planof

~k.Srrallwoods~hemaymakeanexcqxioninthiscase, and, indeviationfromhisstrictgenenlpolicyof stickingtoprivateenterprise, hemay decideto establishacrowncompanytokeepandoperatethe mill: '

11MinuteinCouncil,1072-'51,DepartmentofEconomicDevelopment31-'51and34-- '51,DecemberIS,19SI.File2.03.003.iRSCollection.

13Letter,Valdmaisto Smallwood,May16,1951.File6.00.006.JRSCollection. 14 Ibid

I'

Horwood,P.171

"Letter,Valdmanisto WarburgandCompany,London.August17,1951

(37)

26 The

cemenr

<lI'Idgypswn planlSwouldsupplemmr.jobsinthewestcoastpulpandpaper industry.Smallwoodpredicted lhc:cementpll»1t wouldcreeie200jobs"rulethegypsum plant wouldprovideemploymentfor 300people.

Jobswerealsoa signiflC3f\l.f:x:torin thethirdirxtuslrythatwaslaunchedin 1951•the hardwood'>(X"birchveneerandplywoodplantatDonovan's.Theplant,expectedtocost

$1.300.000. endedI4lcostingthegovanment S2million.250 peoplewere expectedto beemployedattheplantandhundreds moreinthewoods.

Theplan' wasdesigned

'0

produceproductsfromNcwfoondlondbirchondfromIrrq>orted woods.suchas mahoganyfromtheIvoryCoastUsmainproducts wouldbebirchveneer, doors.flooring andplywood."Thebuild-uptothe openingofthemillwnstypicalofthe approachwithalltheindustries Smallwoodstartedundertheindustrializationprogram.

Theprogramboasted jobs.implied afixed cost, foresaw noproblem;and predicted protitsfromoperation NewfOlmdland Hardwoodswashandedovertobusinessman ChesterDaweto operate.To secureawoodssupply,thecompany was givencontrolover allthebirchstandson CrownLards andwas extendedpermission to cutbirch on lands ownedbythe twopapercompanies.The moodsurrounding the establishmentofthe companywaseuphoric.TheFinancialPostconcludedinJune 1951:

Nodifficultyisanticipated insellingthe product. ratherthe expected troubleiskeepingupwithorders.^l•

Vnldmanispredictedthecompany\\WIdreturnahalfmilliondollarsayearinprofitto thegovemrnerx..^l•

Despiteallthe<:ISSl.IUnCtSof success forNewfoundlnndHardwoo&.,therewassufficient concern3bouttheC'.Of'l1JXUlY&ominsidegovernment in the firstyear ofoperation,forthe establishmentof a sub-committee ofcabinet(consistingofthePremier,theAttorney- General,ondthe Ministersof PublicWori<s, Healtb,

s.wty

endFInanco)"toexamine Into theadministrationof NewfoundlandHardwoods LimitedandreporttotheExecutive Council astowhat,if anymeasun:sshouldbe takento~etheefficiencyand

17FinancialPost,June 2,1951.Volwne 45, p.49

IRIbid

" Lett".

Valdmanis

'0

Wart.rgandCompany.August17.1951

(38)

27 economyof its opcr.uions::nTheplant gotofftoaninauspiciousstart,experiencinga strikein itsfirst)1:'aTandthercplccerrentof itstechnicalmar1a!;U.:l

Inlate l'w1ay 1952.three months afterthecabinetsub-conunitta:wasfurmt.'dtl-.:

government again tookIIspecial interestinNc\\fomd!:JndHardwoods. Thecabirll.'1.

authorizedtheactingMinister of EconomicI:A.-velopment(theMinister ofPublicWtds)

"toimplementanydecisionwithregard10t~fin:mcingrequin:dbyNewfomdland

I-furdwoodsLtd..²²

Duringtheperiodwhen cabinetappearedtobepreoccupiedwith !heproblemsat NewfoundlandHardwoods.itauthorizeda $575,000 loan for arelatedcompanyto manufacturepressboard.AtlanticHardboardIndustriesLir.:·:::dwould be builtodjact.-nt to theNewtoundlandHardwoods Plant at Donovan's, usingwastewoodfromthe birch plant.AtlanticHardboardcontemplated100 jobsinthemanufactureof awalland underlaypressboardcomprisedof woodshaving; and glue.

From its earliestdayshowever, theplanthadproblemswith thehighmoisturecontent of itswoodsupply,compellingtheBoardof Directorsinearly1955 to considerasking govenunentfor moremoneysoitcouldstockpilewoodTheonlyotheroptionwasto add moredrying capacitytotheplant Eitherdecisionwouldrequirecapital Atlantic Hardboarddidnothave.D

AtlanticHardboardis illusrat iveof thespeedwithmuchthe newinduslrieswere consideredandcommittedtoby thegovernmentInon August1951lettertoaLondon bonkinghouse,Valdmanis outlinedin detailthegovernment's plans[orfutureindusIriaI developmc:nl Therewasno mc:ntiooofthcpressboardplanl.ydfev.ath:Jnsevenmoolhs later,cabinethadgivenapprovaltoftnance theplatt.

ItisalsoapparentfromValdmanis' letter00thatoccasion,thatthegovernmentremained wcertainabouthowtomisefinkforthenew industries.Valdman.is pointedoutth:d:

whilegovernmentwould(XJlupSOOIoof the capitalrequiredforindustries afterthefll'St three (cement, gypsumandhardwoodsplants), therewas nodecisiononwhetherthis

20MinuteinCouncil 175·'52,February2,1952. File 2.03.004.JRS Collection. 21Memo,GraudinstoValdmanis,October 10, 1952

nMinutein Council541.'52,May31,1952.File2.03.004.JRS Collection.

2JMinutes,Boardof DirectorsMeetings, AtlanticHardboanhlndustril:SLimited, February9,1955.File3.08.139.IRS Collection.

(39)

28 shouldbeintheform of a guarantee or adirectcashloan franthegovernmcnt.^1ol Valdmanis wenton 10chartseveralotherindustriesthatwouldbe~inplaceO\'C.Tthe nextyear,including aleathertJnnery,a fineleathergoodscorrpeny,afurdressingand dyeingplonlaod00l1<J0mills.The furdressingonddyeingfactay<lidnotgetbuilt,but theothers did.ataninitial.costofabout$5 milliontothegovanmert.Betweenthem,the newplantswereexpectedtoresultinmorethan1000dinxtjobs.^lI

Theconstrudion oftheseindLL<itricsandtheAtltlnr.icHardboardplantrepresenteda departureinpolicyfromthenmnerinwhich thefirstthree industrieswerefananced.

Instead offinancing industriesoutright,thegovernment'spolicynowwastoflnancchalf thecapitalrequireme-ns ofnewindustry.\Vhilethegovernment'shalfwouldbeincash, privateinvestmentcouldbe intheformof "know-how, machinery,anyothermaterial, engineeringsupervision,erection,building.etC."26

Oneof thefirstplcntstobe builtunderthenew financingschemewasatameryat Corboncar.TheprivcteinvestorinvolvedinthisprojectwasWilhelmDom,a Czcchoslovkien-born,Germancitizen. whosefamilywentbackthree generationsinthe tannery business.TheinitialpromisewasforISOjobswithanincreaseto200.However, n=ly fouryearsafterthepi""opened,only21peoplewereemployedTheplcnt was tanningonly100hides a day,f~short ofitsobjectiveofISO.Animportant signalofthe problemsfocalby thecompanywasevidentin areportDomgavetheBoanIinFebruary 1956.HereportedanorderforMaxineFootwear Limited(thegovmuncnthadprovided

IIS58.,<:OOloaneight months earliertoacquirerawmaterialstofillthe order)was cancelled"duetodelaysindeliveryofboth rawrroteriaJsandthefinishedproduct,...v Thesummerof 1951 broughtoneofthebiggestcommitm:ntsyetofgovernmentcapita!

10theindustrial

d=I_

^program,^In^{July, Smal}^lwood"""""""la$5 millim moc!linefactory 10bekncwnesCanallianMdtinery ondIndustJy CoostnJction limited Thepion!wasconstructedat<XtagonbyMlAG,thesamelinnti1atbuiltthecementplant alComerBrook..TheEveningTelegram gaveanaceounc oftheannounc:cment.

24Letter, ValdmanistoWarburgand Company

asletter,Gordon Pushie,Department of EconomicDevelopment,toCanadian MachineryondMlunufaeturingNews,November 18,1952.File6.110.023.JRSColiection.

"lett er, Valdmanis10Smallwood, MayII,1951.File3.08.1104.JRSCollection vMinutes,Boordof DirectorsMeetingofNeMoundland Tanmies(Will.1Rn)Ltd., February15,1956.File3.08.1101,JRSCollection.

(40)

29 They will manufacture all kindsof machinery,..Plansare10proceedby severalstages.Theywillstart with theconstructionof a verysizeable manufacturingplant10beenlarged in severalsteps ina shortperiodof time...Milling. grinding, crushing and drillingmachines willbemade.As the factoryexpands,biggermachineswillbeincludedintheproduceof the factory."

The paperreported "initialemploymentfor thefactorywillbe500 men",withthe promiseof moretobeaddedasthefectorywasenlarged.Thegovernment was evenmore boastfulin theSpeech from the Throne in October1951,a month beforeSmallwood calledasnapelection. Thespeech bragged the machineryplent"seemslikely10become perhapsthe biggestlabour-givingenterpriseinNewfoundland,apartfromtheflsherics.'?"

ThepromiseinJuly1951oflots ofjobsfromthe machinery plantwas followed a month laterbyan announcementthatatextile plant - UnitedCotton~fills- wouldbebuiltutSt.

John's.Predictingwork for800people,Smallwood said the government wouldputupa

$2 million,to-yearloantowardthe$4milliondollarcost of the project.Theplanscalled for rawmaterialtobeimported fromTurkey, Iron,Haitiandthe United States, woven intocolton clothandthenmadeintoproducts suchas "skirts,dresses,tablecloths,service uniformsandsuch.,,)OSix yearslater,thepromiseof 800jobsseemedlike a crueljoke, usfewerthan 100peoplewereemployedat the textileplant."

Thegovernment's investmentin thenewindustrieswasnowover $13 million. greater thanhalfof the pre-Confederationsurplus thatwasavailablefor economic development, includingschoolendroadconstruction. DespiteSmallwood'spublicstatements from as earlyas March1951,thatthe govcmmentwouldno longerhelp finance new indastrics,"

the $4.5millioninvested inthemachineryplantandthe twotextilemills,wasproof the government-sponsored industrializationprogramwasstill in highgear.

28EveningTelegram,July14,1951p.3

~SpeechfromtheThrone,October25.1951.1'roc<eding;oftheHouseofAssembly.

p.55 .

30Evening Telegram, August 10,1951,p. 3

31MichaelF.Harrington,"New andOld IndustriesinWIOld Colony-A Reviewof Newfoundland'sIndustrial Revolution".AtlanticAdvocate. September1957,Vol. 48(1), p.19

J2EveningTelegram, March 10, 1951,"GoverrunentBacks $I,OOO,()IX) Plantto ManufacturePressboard"andLetter,Valdmanis to Warburg, August 17,1951.

(41)

30 Thereappears10havebeensomeconfusionduring thisperiodaboutthepotential forjobs as a resultof the newindustries. Smallwoodwaspredictinginlate 1951 the entire industrialdevelopmentprogramwould bring"15.000newjobsbeforethe endoftwo yean; from now.?"Asenior civilservant waswriting a year later,"the goalwiththis programis10,000new jobs.'?' (ThedifferencemaybeexplainedbySmallwood's inclusionof the promiseof5,OOOjobsatthemachineryplantatOctagon.)Clearly,neither thejobestimatesnorthe talked-aboutembargoongovernment fmancingof newindustries was particularly relevant.

Smallwood and Valdmaniswerean impressiverag-teem, travellingthroughoutEuropein an effortto diversify3J1economythatwasover-reliant ontheresource sector.Theywere neitherdeterredbycriticismfrom the floorof theHouse ofAssembly norby cdmonishmenrs from theeditorialpageofThe Evening Telegram,whichremindedthe government"the finances ofNewfoundlandarebynomeansinexhaustible"and"apart

:~:h~~~~~c~::iftr:;~:e=~t~;~~a~I=~:

considering thatmany of theindustries werepremisedon strongexportsales.But Smallwood wasunconccmcd about criticism and hismarchtoward industrialization see med unstoppable.

The latefallof 1951broughtageneraJelection and thefirst test forSmallwoodandhis government's policies.The EveningTelegram'seditormighthavefound fault,butvoters apparentlyfoundlittletoreprimandthegovernment about, returningSmallwoodwith twenty-threescatsto five for theConservatives.

During 1952,the government continuedto supportnewmanufactwing ventures.Itput

$325,000towardtheconstructionoftheHanning Electric LimitedbatteryplantatTopsail, promising100jobs in thebargain.By mid--1954,withsix monthsproduction under its belt,the batterypllll1lemployedonly17people. Although the companyexpectedthe payrollto soon climbto30, it anticipatedproblemsreachingpeak.production of 60,000 automobile batteries,giventhatNewfoundlandused only12,000batteriesayear.^J6The companyappearedto believethe problemreachingpeakbatteryproductionwas a long-

nEveningTelegram,October13,1951,p. 3

:uletter. Gordon Pushie, Economic Development Department toKentStrong, CanadianDow Jones limited.File6.00.023,JRSCollection.

J1EveningTelegramEditorial,"Give NewfOW1dlandtheFacts",October 16,1951 J6FinancialPost,July3,1954.Vol. 48.pp.20-26

(42)

31 termroe.indicming itpl:un.odtousesomeof itscapcciry10turnoutplasticproducts suchit';drinkingcupsandbrushcs.)7.

Onthedaythegovenunentconcludedtheagreementtobuildthebcnerypinitputup

$1millioo forconstructionofarobberp-oduL1srrancfacneingplJOlntHotyrocd Premisedonwhatwasbe:;('VCljtobeareadyrrorkctforrubberclothesandbootsinthe Newfoundlandfishingindustry,theplantwasexpect ed 10erploy 400people. Underccpitalized,andoperatingwithmachinery thatsomeclaimedwaspartof United Stalesaidto GermanyundertheMarshallPlan,SuperiorRubber.asthecompanywas known,lurchedfromcrisistocrisis.Inan obviousclampdoY.n ontheGcrmlnmanagers of the firm,thecompany'sBoorddecidedinlateSeptember1954that"...no monieswere tobe advancedforpaymentof salariesto~notresidentinNe\vfoundlnndandnot activelyengagedin the operationoftheplant.":lIA furtherclampdownwasimposedin May1955,whentheBoardorderedthat no onein the planthadauthority to hirestnll'or sign documentswithoutpriorboardapproval," In thesame meeting,alltheGerman employees at the pleat, includingthe manager,were fired.

ThreeyearsafterSt.John'sgotitsfirst textile plantundertheindustrialization program, itgotasecondone,TermNovaTextiles.Theannouncement wasrnaUt:volJuly19. 1954. This plnntwas toproducemainlyworkclothes,especiallycoveralls.Expectedtoemploy aboull20 people.thecompany wasoneofthefewbegununderthegovmm.nr.planto comeclosetomeetingitsemploymenttarget.

Moreinduslries weresoontomake anappearance. centredonthe north:.hareof ConceptimBay.AtlanticGlovesLimitedwasbuilt atCarbonc::ta'withtheassistanceof aS35O,OOOgovenur<nlloanandGold Sail LcolherGoodswasestablishedatHart>ou- Grace,Bothplantswen:examplesofdoonstreamprocessing,IfilizingI"""""

fXOduc<d

attheCerbooecrtnmayoperatedbyWilhelmDom.

Atlantic Glovesrepresented adeparture fromthe~t'sstandardpolicyof providing halfthestart-upcapitalforthenewindustriesintheformofagu;:rantcaJloon.

In~caseof AtlanticGloves, the govemnentputup nearly6S-percent.Smallwoodsaid that decisioncame aftertheownercouldnotcome up withhalfthe start-upcost.and rather thanlosetheindustry,thegovenunent "cameto the conclusionthallhisindll"try

J~Ibid

JIMinutes,Boardof DirectorsMeeting,SuperiorRubberCompanyLimited, September27,1954.File3.08.184..1R$Collection

~Mirnrtcs, SuperiorRubber,May12, 1955