Controversial era of Reid Newfoundland Company operating railway
Posted on February 11, 2022 | By Alexander Chafe | 0 Comments
The Newfoundland Railway has a long history dating back to 1881, with several eras of ownership. One of its more controversial periods was while under the operation of Reid Newfoundland Company. Best known for their stake in the railway, the company also had hands in many industries and significant political influence. In 1911, Patrick Robert Reid wrote that the company was the largest employer in Newfoundland, surpassing the government.
The beginning of Reid Newfoundland Company dates back to 1890 when Robert G. Reid was contracted to build a new portion of the Newfoundland railway. A Scotsman with a reputation for finishing contracts, he took on the project for $15,600 per mile, working with his three sons. The contract was extended in 1893 and Reid agreed to operate the line for 10 years in exchange for 5,000 acres of land per mile.
When construction neared completion on the cusp of an election, the government proposed Reid build three additional lines. This led to the Railway Contract of 1898, a major point of controversy. The deal for Reid was significant. In addition to monetary compensation and land, it included ownership of a telecommunications line, drydock ownership, rights to build the first hydroelectric plant in Newfoundland and ownership of the railway after 50 years.
Concerns were later raised that the Reid family had too much power. When the Reid family pitched an opportunity for a pulp and paper plant to investors, the agreement made them wary. This led to the formation of Reid Newfoundland Company in 1901. The Railway Contract was revised, assigning rights and obligations to the incorporated company (as opposed to the Reid family), plus other modifications.
The Reid Newfoundland Company had significant political influence. For years, it was the largest landowner in Newfoundland, which was key in developing the forestry and pulp and paper industries. The Reids also operated an electrical railway for street cars in St. John’s, powered by the hydro plant they built in Petty Harbour.
Operation of the railway, however, was not as profitable for the Reid family as its construction. Over the years, the Reids made several offers to sell to the government, which were refused. After backing a political party that won the 1909 election, Reid Newfoundland Company was rewarded with construction contracts for five additional lines. However, when work was halted due to the war, the need to liquidate became more dire.
End of the Line
From 1915-1916 the company encouraged Newfoundland to join Canada, thinking the federal government would purchase the railway. With no solution by 1920, Reid Newfoundland Company received government assistance to cover losses and in 1922 took drastic measures, shutting down for a week. This got government attention and an agreement was drafted that ensured the family’s cooperation for the so-called Humber Deal (Reid land was critical to the opening of the Corner Brook pulp and paper mill). In 1923, the Railway Settlement Act closed, where the government assumed operation of the railway and paid Reid Newfoundland Company $2 million.
The 131-year-old history of Reid Newfoundland Company is a controversial tale.
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