514 



NEWFOUNDLAND. 



Government was carried on successfully until a 

 sufficient number of the Whiteway party were 

 unseated, as the trials progressed, to give the 

 Government a majority in the House of Assem- 

 bly, and the Legislature was then summoned to 

 meet " for the dispatch of business " on Aug 3. 

 The session was short, and legislation proceeded 

 with unexampled rapidity. The revenue and all 

 the other money bills were passed ; also a bill 

 authorizing the raising of a loan on the credit of 

 the colony, of $1,400.000 to pay off the floating 

 debt, together with a bill of indemnity to pre- 

 vent any litigation in consequence of the un- 

 usual mode "of collecting the revenue. The 

 Legislature was prorogued on Aug. 9. 



A series of by-elections had been held to fill 

 the vacancies caused by the unseating of so many 

 members, and in several of these the Uoodridge 

 Government was successful, but when the tug 

 of war came in November, 1894, when the re- 

 mainder of the by-elections took place, that 

 Government once more found itself in a minor- 

 ity, and its resignation became only a question 

 of time. None of the unseated members of the 

 Whiteway party were eligible for re-election ; so 

 that it was necessary to put forward new and in- 

 experienced men. 



A Financial Crisis. The Goodridge Gov- 

 ernment intended to hold office, after the result 

 of the by-elections was known, till the close of 

 the year in order to have all accounts closed and 

 everything put in order ; but on Dec. 10, hence- 

 forth to be known as " the Black Monday " of 

 Newfoundland, came a commercial crash which 

 in magnitude and calamitous results was alto- 

 gether unprecedented in the annals of the colo- 

 ny and entailed widespread suffering. On the 

 morning of that day the Commercial Bank, 

 which had been founded in 1858, suspended pay- 

 ment. At once a panic set in, a run on the 

 Union Bank (founded in 1854) began, and, as it 

 had but a moderate supply of specie on hand, 

 this was soon compelled to close its doors and 

 discontinue business. A run on the savings bank 

 also began, but as its deposits are absolutely 

 safe, being guaranteed by the colony, the panic 

 subsided in a short time and the run did not 

 reach very large dimensions. The effect of the 

 suspension of the only two banks of issue in the 

 colony was most serious. Their notes, which 

 constituted almost the entire circulating medi- 

 um, at once became valueless and were refused 

 acceptance in trade. The number of these notes 

 in circulation was very large, amounting to 

 $1,300,000. Few persons had more than a very 

 small supply of specie in their possession. Trade- 

 was at once" paralyzed ; buying and selling ceased 

 from want of a currency; shops were open, but 

 there were no customers except such as had 

 credit, and, owing to the general panic, this was 

 given to but a limited extent. Soon employers 

 of labor, finding that they could get no money 

 to pay wages, had to dismiss their employees 

 and close their establishment*. 



The general gloom was deepened when the 

 condition of the banks was ascertained. The 

 state of the Commercial Bank was found to be 

 most discreditable owing to the system pursued 

 for years of permitting accounts to be over- 

 drawn without security, in some instances to an 

 enormous extent, the total amount being more 



than twice the paid-up capital of the bank. It 

 was pronounced hopelessly insolvent, and ar- 

 rangements were made for winding it up. Its 

 shareholders are liable for twice the amount of 

 their shares. This is also the case with the 

 Union Bank, and in both the shareholders will 

 lose all. The Union Bank was in a somewhat 

 better condition, but the same ruinous system of 

 overdrawn accounts had been followed. It also 

 is insolvent, and will be wound up, its deficit 

 amounting to nearly $500,000. Its creditors will 

 receive about 70 cents on the dollar. The share- 

 holders were mostly middle-class people, whose 

 provision for families or old age was invested in 

 what they believed to be good securities. 



Soon after the collapse of the banks 7 of the 

 large mercantile establishments suspended pay- 

 ment. Most of their employees were discharged. 

 These firms had been engaged in supplying for 

 the fisheries and exporting their products. 



The resignation of the Goodridge Government 

 was hastened by the financial crisis. They ten- 

 dered their resignation on Dec. 13, and Mr. J. 

 Green, Q. C., was called on to form a govern- 

 ment. He assumed office on Dec. 14, and a new 

 session of the Legislature was opened on Dec. 

 15 by a speech from the throne, in which it was 

 announced that provision had been made for the 

 payment of interest on a portion of the public 

 debt which fell due in London Jan. 1, 1895. At 

 a later date a loan was obtained from the Bank 

 of Montreal which enabled the Government to 

 pay the interest on debentures held in the colo- 

 ny on Jan. 1. The colony was thus saved from 

 being proclaimed a defaulter, and the salaries of 

 officials and the expenditures connected with the 

 public services were met. 



The great desideratum was a currency in order 

 to make the wheels of commerce once more re- 

 volve. The Hon. A. W. Harvey, representing 

 the Government in the Legislative Council, in- 

 troduced a bill for guaranteeing a certain per- 

 centage of the face value of the notes of the sus- 

 pended banks that were now in circulation. Aft- 

 er an inquiry into the condition of both banks 

 ii was considered safe to guarantee 80 cents on 

 the dollar in the Union Bank notes afloat, and 

 '-30 cents on the dollar in Commercial Bank notes. 

 The notes were to be stamped and registered, 

 and redeemed at the end of two years. The bill 

 was passed in both Chambers, and a certain 

 amount of relief was obtained by the renex 

 circulation of the guaranteed notes. A stil 

 further relief was experienced by the establisl 

 ment in St. John's of branches of the Bank 

 Montreal and the Bank of Nova Scotia. 



The Legislature, in the meantime, passed 

 act that amended the existing currency 

 making the English sovereign a legal tender ; 

 $4.8(). as in Canada, and American gold at it 

 face value. 



Another act was passed removing the disabili- 

 ties of the unseated and disqualified menil 

 and enabling them to stand at once as candi- 

 dates for seats in the House of Assembly. But 

 the Governor declined to give his assent to this 

 act, and reserved it for the decision of the Im- 

 perial Government, so that as yet it has not 

 become law. 



The only other acts passed were those for 

 winding up the two .suspended banks. After 



