The Press. TUESDAY, FEBRUARY 5, 1895. A COLONY IN COLLAPSE.

Press, Volume LII, Issue 9020, 5 February 1895, Page 4

The Press. TUESDAY, FEBRUARY 5, 1895. A COLONY IN COLLAPSE.

Nothing equalling the complete financial collapse in Newfoundland has, so far as we know, ever been recorded of any other British colony. It came about in a curious manner. The whole credit of the place seems to have rested on fish, and the death of a single partner in a fish-exporting firm gave a shock to the financial fabric which sent it toppling into ruins. As explained by The Times it appears that the Newfoundland fishing industry is pursued under a system lof advances for vessels and equipment made by the merchants to the fishermen, who give the catch at the end of the season in exchange. The merchants receive large advances from the only two Banks doing business at St. John's, the Union Bank of Newfoundland and the Commercial Bank.- By backing each other's bills the Banks were enabled to carry on operations, and then at the close of the year, when the produce of the fisheries was realised, they were able to settle their overdrafts. Things went on in this way until early in December last, when Mr. Ball, a partner in the firm of Messrs. Peowse, Hall and Mobbis, the London agents of the firms exporting fish to European markets, died. On his death the firm declined, to meetfurtherexchanges until an investigation of their affairshadbeen made. The bills were protested, and the Banks made demands on the Commercial Bank of St. John's, which was the drawer pf the bills, and which, being unable to meet the demands made upon it, fell back upon its mercantile customers. These could not respond, and the Banks had \o suspend operations. The customers were compelled to make assignments, and nearly every business house in the colony was crippled, so Mterwoven were the affairs of one establishment with those of another. There are accusations, moreover, of wrong doing on the part of some of the bankers. Three of the firms which suspended payment, it was stated, were allowed by the Commercial Bank to overdraw more than the actual capital of that institution, and the shareholders threatened the Directors with an indictment for misfeasance.

It car* easily be imagined what a deplorable state of things followed upon such a complete cnunpling-up of credit. Employers found it impossible to pay wages, many mechanics and labourers were.dismissed by their employers. She ordinary shop

trade was at a standstill owing to the want of the circulating medium. Soon there were starving crowds parading the streets, threatening -to take food by violence if work and the means of sustenance were not found for them. At one time a large force of blue jackets from a British warship were i sent to patrol the streets in heavy marching order, with Gatling and field guns, to over-awe those who were disposed to acts of violence. An appeal was made to the Imperial Government for help, but the latter declined to interfere until an examination of the finances of the colony had been made by a Royal Commission. Thrown back upon their own resources, the people of Newfoundland first tried a change of Government. Then a Bill was passed through Parliament guaranteeing the notes of the Commercial and Union Banks. The opposition' to the Bill guaranteeing the Commercial Bank's notes was so strong that it was only carried through the Upper House on the casting vote of the Chairman. A Bill was also passed to allow steamers to make a second trip to the seal fisheries that season, which it was thought would largely help to relieve the general distress. Meanwhile private charity, both in England and America, as well as locally, did much to alleviate the general- destitution. Soup kitchens were opened, and other relief given to families, who but for this assistance would certainly have starved. Altogether this unfortunate colony-has undergone a terrible experience, from the effects of which it must suffer for many years. It is not improbable that one result will be to induce Newfoundland to abandon its policy of isolation, and enter the Canadian federation. It is generally agreed that the calamity which has befallen it would either have been averted altogether or descended much more lightly had the colony not been so entirely dependant on its own resources./