Background assignment
0. Choose a Topic
Choose a topic from the ones available on Brightspace, or consult the instructor to have a different topic approved.
Topic Chosen: ___Newfoundland`s Bait Acts of the 1800s
1. (Regular) Background
Write a short summary of the necessary background to understand the situation. Assume your target audience is an intelligent member of the general public who has never heard of your topic before.
Things to include:
· What industry or group of industries are you looking at?
· Do we need any extra historical, economic, cultural, scientific, geographic or political background to understand what’s going on? If so, include it.
· Introduce us to the main players (firms, consumers, other affected parties).
· Do the firms (and others) see themselves as collaborators, competitors, or something else? Why?
Write your background here (use as much space as needed):
Newfoundland`s Bait Acts of the 1800s
This background provides the history during the 1800’s of how “Bait” directly affected Newfoundland’s “Salt Cod” exports and how this led to the Bait Act of 1887. The fish were cured by drying and salting, then marketed mainly to Europe.
The Newfoundland salt-cod fishery was the lifeblood of Newfoundland and La
ador's economy during the nineteenth century. It consisted of three parts: an inshore fishery off the island's coast, a La
ador fishery, and an offshore bank fishery. Both cod and he
ing are cold water fish and were found abundantly in the northern Atlantic waters around Newfoundland. The prime fishing season was May to September, due to the migratory patterns of cod.
In 1816, the British returned the islands of the St. Pie
e and Miquelon to France. French fishermen returned and took up residence with the main purpose of exporting fish to European markets (Janzen, XXXXXXXXXXThereafter, the Newfoundland coast cod fishery was shared seasonally every summer by the English and French. Eventually, as a result of the wars of the early eighteenth century, France gave up its fishery on the south coast and received in return the right to fish on the west coast and Northern Peninsula. They retained this right until 1904, when, by mutual agreement, they relinquished it to the Newfoundland residents. Cod exports fluctuated throughout the 1800’s instead of continuing to increase. There was a decline in the value of Newfoundland cod exports and an especially large fall in the price of its La
ador cod. While the volume of fish exported remained stable, the poor prices meant difficult times for much of the fishing population and a severe reduction of profits for merchants. The merchants believed their difficulty was due to the increasing competition they faced in their area waters from the other producers, mainly Norway, France, Canada and America.
In 1854, the British government established Newfoundland's responsible government and from this point on Newfoundland considered itself to have jurisdiction over its resources, coastline and coastal water. This became a major struggle as the local government fought to extend its control outside of its own area to include the Northern Peninsula and West coast as the bays were being fished by the French, Norwegians, and the Americans. Overall, the Cod fishing industry developed a heavy dependence on Newfoundland for bait, consisting of he
ing, capelin and squid, which was bought in large quantities by all parties.
In the 1800's when the deepening export crisis required more government intervention, the development of a major bait fishery was implemented. Newfoundland bait, especially fresh he
ing, was becoming vastly important to the French and American fishing vessels. As the French fishing business continued to expand, the Newfoundland government attributed this to the government subsidies it was receiving and its ready access to Newfoundland bait. If one or the other could be cut off, then Newfoundland felt French competition could be limited. On the surface it appeared the Newfoundland government had a good case against the French. By the 1880s, the French subsidy to their fisherman allowed their fishermen to make a profit off their exports. On the other hand, Newfoundland fishermen were receiving less than a
eakeven price per quintal for their fish (Willmore, 2019, Econ321 lecture 3). It was decided that in order to improve their competitive position, measures directed against the French needed to be taken.
William Whiteway, Newfoundland’s premier at the time, was prepared to make a bargain with the French as he felt they had useful concessions to make in relation to his policy of progress. Negotiations between London and Paris went on for several years regarding the French shore fishing. The agreement was almost finalized when Newfoundland’s Premier William Whiteway was replaced by Robert Tho
urn, a British-born Newfoundland merchant and politician. Tho
urn viewed the convention differently. Whereas Whiteway was prepared to grant the French bait privileges in order to get concessions that would open up the west coast and assist his railway policy, Tho
urn’s reform party was primarily concerned with ho
ling French fishing competition by denying them bait.
Newfoundland was also looking for new markets and there were other efforts directed at the USA and Canada. There was the Washington Treaty from 1871 to 1886, where certain Newfoundland exports received free entry into the U.S. in return for American access to the inshore fisheries. Canada was included in this agreement as a result of pressure from the British government. The U.S. compensated both Newfoundland and Canada financially for the difference in value between the concessions granted to the U.S and those granted to Canada and Newfoundland (Hiller, XXXXXXXXXXAs the treaty’s expiry drew near, even though Newfoundland was not selling any significant amount of fish to the U.S., many businessmen were convinced that there was sizeable potential in the American market. Particularly, duty free access to New York also facilitated the use of cheap transshipment to the West Indies and South America.
By threatening to deny Americans access to bait around Newfoundland’s coast, they convinced the Americans to renew their reciprocity agreement. Finally in 1888, a new fisheries agreement was reached which gave American fishermen inshore privileges in the non-treaty waters of Canada and Newfoundland upon payment of a license fee of $1.50 per ship ton (Grath, 1906, p. 1135).
The new reformed government of Robert Tho
urn set 2 goals, both of which they hoped to accomplish through the control of the Newfoundland bait supply. The first was to cut off the French from fresh bait supply and thereby cripple the French bank fishery and its competitive influence in Newfoundland’s traditional markets. The second objective was to offer the U.S. free access to bait in Newfoundland waters in exchange for renewal of the Treaty of Washington. The colony felt bait was their only asset that could be used for bargaining and was vital for the prosperity of the colony. In spite of the opinions of Britain or Canada, they believed using bait as a lever was necessary and that by controlling the supply it would increase their profits, and give them an advantage in the European market.
The Newfoundland Assembly introduced the first Bait Act in 1886, making it illegal to sell bait to French fishermen, but Britain refused to give its required consent until the Act was modified in 1887. Accordingly, after an address to the imperial government indicating their influence in local affairs was unwa
anted, the Bait Act was changed. In 1887, the new Bait Act was passed and required that a Newfoundland government license be obtained for the purchase, sale or export of Newfoundland bait. The Act was only in place for a few years but it seriously curtailed the bait trade.
Cite the sources used in APA format:
Grath, P XXXXXXXXXXThe Newfoundland Fishery Dispute. The North American Review, 183(604), XXXXXXXXXXRetrieved September 21, 2020, from http:
www.jstor.org/stable/ XXXXXXXXXX
Hiller, J XXXXXXXXXXReciprocity with the United States of America. Heritage Newfoundland and La
ador. Retrieved from https:
www.heritage.nf.ca/articles/politics
eciprocity-newfoundland-united- states.php
Janzen, O XXXXXXXXXXThe Restoration to France XXXXXXXXXXHeritage Newfoundland and La
ador. Retrieved from https:
www.heritage.nf.ca/articles/exploration
estoration- france.php
2. (Regular) Market Definition
What market are you looking at? Use what we’ll cover in class to define the market using appropriate arguments based on one or a combination of elasticities, substitutes, hypothetical monopolist tests, critical loss analysis, etc.
Write your market definition here (use as much space as needed): Bait Market
The Bait Act of 1887 directly affected the market for “Bait” in the 1800’s. The French, Americans and Canadians fished Newfoundland waters but they were required to purchase a license to obtain bait. Controlling this however was difficult as the sea is a common-property resource to which it is difficult to restrict access (Gordon, 1954. P. 231).
In Newfoundland and La
ador cod fishing was done in the traditional style using a baited hook on a single line dropped over the side of a small dory row boat. To reach the offshore fishing bank, larger vessels were seasonally required. Cod fish followed their main food source of “capelin” in from the offshore Grand Banks and proceeded to feed on them until the squid/cuttle fish a
ive in August. The season is short and limited to 6-8 weeks ending in early September when the squid/cuttle-fish move on (Wilmore, 2019. P. 20). Once the Cod had eaten their fill, they would stop biting and the season was over (Bavington, 2014. p.1).
Fishermen prefe
ed to use fresh bait as it was much more successful in catching a larger volume of Cod fish. Capelin, he
ing and squid/cuttle-fish were the main source of fresh bait. Capelin could also be salted for use and He
ing could be salted or frozen. Jiggers were also used when bait supply was sparse. Jiggers were man-made lures with hooks used on fishing lines just like bait (Wilmore, 2019, p. 22). Again, this method was not as successful as using fresh bait.
It soon became clear that the Bait Act of 1887 was hard to control. Opportunity to smuggle fresh bait was easy because enforcing the Act over such a large body of water was not effective and quite costly.
He
ing plays an important role in the history of the great fishery of Newfoundland because of its importance as bait, and in the controversies between the French and Newfoundlanders concerning its capture. He
ing was also as a source of food and often sold frozen to the Americans for their consumption. This was considered legal, as the Bait Act only prohibited the purchase, export, or sale of fish intended to be used as bait. The Americans however, would often sell it back to the French for their use as bait during 1886 – 1887, when the Newfoundland government had implemented restrictions on their bait supply. Frozen bait was not as effective