Dominion of Newfoundland - Second World War

Second World War

Given Newfoundland's strategic location in the Battle of the Atlantic, the Allies (especially the United States of America) built many military bases there. Large numbers of unskilled men gained the first paycheques they had seen in years by working on construction and in dockside crews. National income doubled overnight as an economic boom took place in the Avalon Peninsula and to a lesser degree in Gander, Botwood, and Stephenville. The United States became the main supplier, and American money and influence diffused rapidly from the military, naval, and air bases. Prosperity returned to the fishing industry by 1943. Government revenues, aided by inflation and new income, quadrupled, even though Newfoundland had tax rates much lower than those in Canada, Britain, or the United States. To the astonishment of all, Newfoundland started financing loans to London. Wartime prosperity ended the long depression and reopened the question of political status.

The American Bases Act became law in Newfoundland on 11 June 1941. As Earle (1998) finds, Newfoundland girls married American personnel by the thousands, "the Yanks' jaunty manner and easy social ways making an often stark contrast to the Canadian servicemen who at this time began to coin the epithet 'Newfie.'" The American connection worked so well that the Canadian government in Ottawa became alarmed. A new political party formed in Newfoundland to support closer ties with the U.S., the Economic Union Party, which Earle characterises as "a short-lived but lively movement for economic union with the United States". Advocates of union with Canada denounced the Economic Union Party as republican, disloyal and anti-British; Britain refused to allow the voting populace the option to choose union with the U.S., and the U.S. State Department, needing British and Canadian cooperation during the Second World War, decided not to interfere.