6.

[46] See chap. ix.

[47] December 14th, 1894.

[48] See General Dashwood's letter to _The Times_, December 18th,
1894.

[49] Rogers, p. 189.

[50] January 17th, 1895.

CHAPTER IX

THE REID CONTRACT--GENERAL PROGRESS AND RECENT HISTORY

The next few years may be dismissed briefly, for they were years of
unrelieved melancholy, from the point of view of the public financial
policy and the political development of the colony. Nor did the
disease admit of a readily applicable remedy. The experience of each
decade had shown more and more clearly that the colony had nothing in
reserve--no variety of pursuits to support the general balance of
prosperity by alternations of success. Potentially its resources were
almost incalculably great, but their development was impossible
without capital or credit. The colony had neither. Under these
circumstances took place the General Election of October, 1897. The
assets of the colony were not before the electorate, and there was no
reason to suppose that financial proposals of an extraordinary kind
were in contemplation. The result of the election placed Sir James
Winter in power. In six months the famous "Reid Contract" had been
entered into--a contract which must be described at some length in
these pages, partly because it throws a vivid light upon the
constitutional relations between the Mother Country and a
self-governing colony, partly because it appears to be incomparably
the most important event in the recent history of Newfoundland.

On February 22nd, 1898, Mr Chamberlain received a telegram from the
Governor, Sir Herbert Murray, advising him that a novel resolution had
been submitted to the Houses of Legislature by his responsible
advisers. A fuller telegram six days later, and a letter intervening,
explained the proposals in detail. To put the matter as shortly as
possible, the Government advised the sale to a well-known Canadian
contractor, Mr R.G. Reid, of certain valuable colonial assets. In the
first place, Mr Reid was to purchase all lines of railway from the
Government for 1,000,000 dollars; this amount was the price of the
ultimate reversion, the contractor undertaking to operate the lines
for fifty years on agreed terms, and to re-ballast them. If he failed
in this operation his reversionary rights became forfeit. For carrying
the Government mails he was to receive an annual subsidy of 42,000
dollars. Minute covenants by the contractor were inse