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Chapter 4

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Department
Economics
Course
ECON 2P19
Professor
Indra Hardeen
Semester
Fall

Description
Chapter 4 – The Atlantic Colonies Newfoundland • The introduction of the potato at this time provided a local substitute for imported flour and bread easing one of the perennial difficulties of the residentiary fishery • American Revolution and the subsequent exclusion of the 13 colonies from the British mercantile system had significant implications for Newfoundland’s economic development • Total production rose, and in keeping with historical patterns, the migratory trade rebounded • The Navigation Acts forbade the importation of food and other supplies from New England • Substitutes from British colonies were inadequate and more expensive, putting a squeeze on the residentiary fishery • Population which had risen to nearly 20,000 in the late 1780s, fell to fewer than 12,000 by 1797 • Total catch in the same year was only 375,000 quintals (1 quintal equals 112 pounds), or 40% of the 1788 level • The important Spanish market was closed from 1797 until 1809 • This lost left Gibraltar and Portugal as the main European markets, and in these countries, Newfoundland faces stiff competition from Norway and the United States • Fears of starvation led in 1803 to permission to import food from New England • In the late 1780s and early 1790s, residents accounted for about one-half of the total codfish catch, by 1815, virtually the entire catch was local • These regulations were suspended in stages, as the other British colonies proved unable to meet the needs of the island, and with the relaxation, the residentiary fishery regained its competitive edge • Newfound, which had always been a fishery based around an island, would finally become a colony based on fishery • The British government finally yielded, granting the island colonial status in 1924 • The economic fortunes of the new colony depended crucially on the level of activity in the two branches of the fishery: the bank fishery and the inshore fishery • They held a near monopoly on this trade in many of the Napoleonic War years • With the end of the war, the Newfoundland-British presence of the banks began to diminish, and by the 1840s, it had largely disappeared • French fishermen returned to the North Atlantic fishery after 1815, encouraged by a system of bounties introduced by their government • Like the French, the Americans benefited from generous government subsidies and from protected domestic markets • The American fleet was at least as large, Newfoundland was not represented in this count • The main changes were the opening of new fishing areas and the development of a new product • East Coast fishermen, particularly those from Conception Bay, had moved into the north shore areas during the Napoleonic Wars, practising their own brand of migratory fishing • When the French returned in 1815, the Newfoundland fishermen moved farther north to exploit the Labrador fishery • Some fishermen, called stationers, established themselves on shore, catching and curing the fish in one place • Others, called floaters, operated from on board their ships and moved from one fishing area to another • In 1827, there were 290 ships and 5418 men involved in the industry, by 1857, these figures peaked at 370 ships and 13600 men • The same individual who owned the boat and equipment also supplied the labour, usually assisted by family members • British ship-owners and captains from the West Country ports left caretakers on the island to look after their interests over the winter months • As the migratory fishery declined, these caretakers evolved into agents and clerks of the British firms, still located in the outports • They provided local fishermen with the necessary supplies in the spring, typically on credit • They received dried fish and cod oil in exchange, which the firms then marketed in Europe • Out of the proceeds, the merchants paid wages and other costs and advanced a winter supply to the planter • The Newfoundland fishery entered a long period of relative stagnation after 1815 • The international trade in dried cod was growing • Exports from the island to Portugal and Italy remained roughly constant in absolute terms, with competitor nations picking up most of the new demand in these countries • Exports from Newfoundland to Spain actually fell substantially, mainly to the benefit of Norway, which had emerged as a major competitor after the Napoleonic Wars • Newfoundland’s relative decline was unavoidable • Competitors such as Norway were certain to emerge in the 19 century as technology advanced and shipping costs fell • The Newfoundland economy relied heavily on shipping services to harvest the cod and seal, to carry these products to market, and to distribute supplies to the outports • At first, the ships and the shipping services were obtained from Europe, primarily Britain • They concentrated on the fishing and coastal trades, building schooners and other smaller craft • Newfoundlanders owned and operated larger ships as well, but these were typically purchased offshore, in part from other British North American colonies The Maritimes • Several hundred Ulster Irish arrived in the colony, some redirected from New England, and an advance guard of what was ultimately to be a large migration of Scots came in 1773 • With the defence motive gone, the colony possessed no real attraction beyond across to the fisheries and the availability of land for largely subsistence agriculture • Restrictions were placed on the export of coal from Cape Breton, and forests were reserved for the Royal Navy • The object was to make the colony self-financing by having the landlords sponsor settlement and pay rents to cover administrative expenses • The main problem, Nova Scotia’s economic endowments put it in direct competition with New England for a place in the British mercantile system, and Nova Scotia simply could not compete with its larger and more developed neighbour • Nova Scotia did not have the requisite timber and agricultural surpluses to send to the West Indies and lacked the expertise in shipping and shipbuilding to compete in the carrying trade • New England was able to produce cheaper and better-quality supplies of timber and agricultural supplies Nova Scotia might have been able to take up the role that natural competitive disadvantage had until then denied it • Three developments of particular importance stemmed from the American Revolution • Most immediately, the British navy turned to the pine forests of Nova Scotia for the masts that it had been securing from New England • The decision by the British in 1783 to end what had been an effective exemption of New England from the terms of Navigation Acts • The American Revolution caused a significant influx of population into the region • Several thousand loyalists had already come to the region during the war, many of them subsequently left • 25,000 to 30,000 that came after the war consisted mainly of farmers • Large number took up land in the river valleys on the western side of the Bay of Fundy • The loyalists had a dual effect on the local economy • In short term, they provided new markets for the produce of the population that was already there • In longer term, they added to the labour force, increasing the potential output of
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