GOODFELLOW, JAMES, businessman and politician; b. 10 Jan. 1828 in Tranent, Scotland, son of William Goodfellow and Margaret Dodds; m. 18 March 1858 Rosina Whiteford in St John’s; d. there 25 Jan. 1898.
James Goodfellow came out to Newfoundland in 1850 to work as a clerk for the firm of McBride and Kerr, the Newfoundland branch of Greenock-based Kerr and McBride, whose partners in the 1850s were James and Peter McBride, Robert Kerr, and Gustav Ehlers. Established in Newfoundland since 1821, McBride and Kerr was one of the island’s largest firms supplying the fishery, and it owned several sealing, coasting, and shipping vessels. It imported dry goods and fishing supplies from Greenock through its parent company, which also provided much of the island’s nets and twines, acquired from a firm in Dorset. Through the Hamburg connections of Ehlers, a native of that city and the St John’s manager of McBride and Kerr, the firm imported hard bread (ship biscuit), butter, bricks, and boots. In 1864 Ehlers withdrew from the two companies and Goodfellow replaced him as the St John’s managing partner. Goodfellow also represented the company on the directorate of the Commercial Bank of Newfoundland, one of the island’s two privately owned banks. The Commercial had been established in 1857 to provide capital for the fish trade, and McBride and Kerr was a large shareholder.
On 20 Feb. 1865 the McBride brothers and Kerr dissolved their companies and sold the assets for £35,000 to a joint partnership formed by James’s son, Robert Kerr McBride, and James Goodfellow. As a result of this sale Kerr and McBride became Robert Kerr McBride and Company of Greenock, and McBride and Kerr became McBride and Company of St John’s. Goodfellow continued as the managing partner in Newfoundland. McBride was the only partner to invest money in the two companies, putting up £10,000, capital provided by his father. Under the terms of their copartnership, McBride was to receive two-thirds of the profits and be liable for two-thirds of the losses. This business arrangement lasted until 6 July 1869, when Goodfellow purchased the assets of McBride and Company following the dissolution of the two companies.
Operating under the name of Goodfellow and Company, on 18 June the following year he accepted Moses Monroe as a junior partner in his general import and dry-goods business. Monroe was a 28-year-old accountant who had come to Newfoundland in 1860 to work as a clerk for McBride and Kerr. In December 1872 Goodfellow had a major disagreement with his partner. He claimed that Monroe had falsified the prices on goods sold by the company, causing him financial losses. Rejecting overtures from Presbyterian clergyman Moses Harvey* to mediate the dispute, on 31 December Goodfellow dissolved the partnership and subsequently operated under his own name. In 1881 he took Alexander McDougall as his new partner. Goodfellow and Monroe would eventually settle their differences, and during the 1880s they became friends in various business and political endeavours.
An active joint venturer in mining speculation in the interior of the island – speculation fuelled in the 1870s by the optimistic reports of government geologist James Patrick Howley* – Goodfellow also invested in secondary industries established after 1870 in St John’s. They included the Newfoundland Consolidated Foundry Company, the Newfoundland Boot and Shoe Manufacturing Company, the St John’s Nail Manufacturing Company, the St John’s Floating Dry Dock Company, and the St John’s Steam Tug Company. He was also a shareholder in the Terra Nova Curling and Skating Club Limited and a trustee in 1880 for the recently formed St John’s branch of the Young Men’s Christian Association. In the latter capacity he helped to provide the financial guarantee that enabled the association to lease property for its headquarters. Goodfellow also played an active role in the Presbyterian Church and served as an elder from 1870 to his death in 1898. For many years he sat on the governing committee of the Newfoundland Auxiliary Bible Society and on various educational boards affiliated with the Presbyterian Church. He was one of the directors of the Fishermen and Sailors’ Home established in 1886.
Any political influence Goodfellow exerted in the community before 1888 was through his positions as a director of the Commercial Bank and the secretary, from 1867, of the St John’s Chamber of Commerce. In the 1882 general election he had been an unsuccessful candidate in the Port de Grave district for the mercantile New party, led by James J. Rogerson*, against the incumbent government of Sir William Vallance Whiteway*. He entered more directly into the political life of the colony on 21 Aug. 1888, when he was appointed by the tory government of Sir Robert Thorburn* as chairman of the St John’s municipal council, created by the legislature earlier in the year. The council consisted of two government appointees and five councillors elected on a ward basis. No doubt his political loyalty to the Thorburn government as well as his experience in running a large business were reasons for his selection. Another was his knowledge of the General Water Company, of which he had been chairman from 1886 to 1888, when the council bought out its shareholders, one of the largest apparently being the Commercial Bank.
Although the government had been motivated to incorporate St John’s by its strong desire to provide badly needed municipal services for the town, Goodfellow and his fellow merchants saw in the move a great opportunity to provide new capital for the fish trade because of the approximately $400,000 that would be needed to buy out the water company’s shareholders. Formed in 1859 by the town’s merchants and banks and greatly assisted by government loan guarantees, the company by 1888 functioned as a department of government, responsible for water supply and fire protection. Its affairs were subject to close scrutiny by the governor in council and the legislature, and its three directors could be removed at any time by the government. As the municipal council’s first chairman from 1888 to 1890, Goodfellow oversaw the integration of the company’s staff and services, along with the road and sewer services provided directly by the government, into one municipal operation. Such an integration, however, did not occur without problems of staff discipline, inefficiency, and duplication, which naturally exposed the council and its chairman to considerable public criticism.
In addition to having limited revenue to meet the public’s expectations of increased services, the nascent council also suffered from having been created amidst much partisan controversy. In its first months in office it was subject to criticism that the councillors had hired their own friends and relatives for municipal positions. There was, no doubt, some truth in such claims; indeed, Goodfellow’s nephew, Isaac Robert McNeilly, received the position of council solicitor, and Moses Monroe, the councillor for ward 3, had his nephew appointed city engineer. What really politicized the council was the strong presence of Monroe, who, it seems, dominated its proceedings and had his way on matters of concern to himself.
Although not themselves candidates in the 1889 general election, Monroe, Goodfellow, and other tory councillors tried to use the influence and patronage of council to help tory candidates in the two St John’s districts, who were nevertheless unsuccessful. Having won the election, the Liberals, led by Whiteway, in 1890 exacted their price for Goodfellow’s active support of their opponents the previous year. Portraying him as having been once an “honourable” man, who had always been “weak” and had “of late fallen under the influence of the most unscrupulous councillor [Monroe],” the Liberal press strongly criticized Goodfellow for not having “in good taste” resigned as council chairman following the tory defeat. The Evening Telegram declared that he was now a representative neither of the people nor of the government. On 22 April the Whiteway government removed him from office and appointed a more pliable, Liberal nominee to the council. A week later it established a legislative inquiry into the council’s financial affairs since 1888. The inquiry’s report on 5 June showed that the council’s accounting procedures were sloppy and that Goodfellow’s directions had been such as to leave the council open to Liberal suggestions of the “boodling” of funds for political purposes by the former chairman and Monroe. Although Goodfellow had been publicly discredited by his Liberal foes because of his alleged mismanagement of municipal affairs, no action was taken against him by the government, and he escaped the charged partisan atmosphere with his reputation intact. Two years later Goodfellow triumphantly returned to council as the elected representative for the heavily mercantile ward 3, after Monroe had decided for business reasons not to run again.
Goodfellow’s four-year tenure on council from 1892 to 1896 was, for the most part, overshadowed by personal business and legal problems that eventually led to his decision not to seek re-election. In the 1892 fire that destroyed much of St John’s, he lost his premises but quickly recovered from this set-back with the help of insurance payments and the easy availability of credit from the Commercial Bank, of which he was now the senior director. Indeed, it was through loans from the bank that Goodfellow had expanded his company into the fish export trade by the late 1880s. In December 1886 Goodfellow was indebted to the bank to the amount of approximately $30,000; four years later this figure had more than doubled to $79,410.03. For the next five years the size of his debt would increase annually until in 1894 it reached $169,325.59.
By the early 1890s such credit had become essential to the fish trade as it was then conducted. Given the long delay between the time the merchant purchased the fish and when it was sold, the credit was necessary for him to be able to carry large stocks of dry goods, provisions, and fishing supplies in his stores. The bank loans made to the merchants were secured on the sale of the fish. What was particularly alarming about this banking practice, however, was the fact that the directors of the two private banks, in making loans both to themselves and to other fish merchants, not only overextended the lines of credit but also drew upon deposits made by the government and private citizens. In 1894 the practice would lead to the banks’ financial ruin.
The immediate cause of the collapse of the Commercial Bank on 10 Dec. 1894 – “black Monday” — was its failure to meet demands from trustees of the estate of a major Newfoundland fish agent in England, who had died four days earlier. When the Commercial was unable to get its mercantile customers to repay their debts to the bank immediately, it suspended business, a move that the Union Bank of Newfoundland quickly followed to prevent a run on its own reserves. On 17 December the legislature appointed a joint select committee to consider the financial crisis. In its report ten days later the committee estimated that the realized assets of the bankrupt Union and Commercial banks would be worth only 80 and 20 per cent of their respective liabilities. It was severely critical of the two banks for permitting large overdrafts of credit to their customers, the directors themselves having been among the largest debtors. The Commercial had liabilities on 10 December of $3,500,000, of which $1,750,000 was the obligation of its directors.
On 28 December the Supreme Court sat to decide whether Goodfellow and Company should be declared insolvent. In an affidavit filed with the court, Goodfellow and McDougall stated that their firm was solvent and that they could meet the demands of their creditors despite the debt owing to the Commercial Bank. Consequently, on the 31st the court ordered that no action be taken against the company. However, in May 1895 Goodfellow and Company failed and was placed in the insolvency court. On 18 July the Supreme Court ordered the company to pay off its debt to the Commercial Bank on an instalment basis of 65 cents in the dollar. By September of that year the company was again back in business, but at a much reduced level of activity. It continued to experience financial difficulties and in October 1897 once more faced the prospect of insolvency following a petition from a creditor that the Supreme Court order the appointment of a trustee to examine its financial affairs. The court postponed any action on this order, but did appoint a trustee to control Goodfellow’s property interests until a decision was reached. On 12 Jan. 1898 Goodfellow once again successfully avoided insolvency when he reached an amicable settlement with his creditor.
In addition to his financial problems, from December 1894 to December 1897 Goodfellow faced the prospect of criminal prosecution for his role in the bankruptcy of the Commercial Bank. If he were to be found guilty by the courts, he could be sentenced to jail for up to five years, a prospect that he and his fellow directors, when they were arrested on 26 Dec. 1894, found terribly surprising given their previous prominence in the colony. One of the directors, Augustus Frederick Goodridge, for instance, was a former premier of Newfoundland. As bail was being set that day at two sureties of $18,000 for each of the directors, “the prisoners,” the Evening Telegram observed, “looked downcast and dejected, and were evidently more than surprised at the suddenness of the proceedings.”
In February 1895 proceedings before magistrate James Gervé Conroy* began with two charges against the directors. They were accused first of publishing fraudulent statements concerning the bank’s finances, and secondly of conspiring to defraud the bank’s shareholders by leaving the impression that its affairs were in a “prosperous and sound condition” when, in fact, large overdrafts and unsecured loans had been given, particularly to themselves. In their defence, the directors claimed that they had understood the bank to be solvent when they presented a statement of its finances to shareholders in July 1894 and that the subsequent collapse in December had been simply the result of the death of the English fish agent, a “wholly unforeseen and unexpected calamity.” As for Goodfellow, he seemed to have had complete confidence in the financial strength of the Commercial up to the crash and had bought stock in the bank just before its bankruptcy.
After more than two months of testimony, Conroy decided that there was a prima facie case against the defendants and referred the case to the Supreme Court. In April 1896 the Commercial directors were tried in the higher court, but the grand jury failed to find a true bill against them. The reason was simple: six of the jurors were either relatives or employees of the defendants, and the others were their friends. In December that year the defendants once again avoided prosecution before the court when the three judges refused to preside over the case, two of them, Sir Frederic Bowker Terrington Carter and Joseph Ignatius Little*, because they had been shareholders in the bankrupt bank. The third had been involved as a lawyer in earlier proceedings against the directors. Consequently, Premier Whiteway asked the Colonial Office for a judge from outside Newfoundland, an appointment requiring an amendment to the judicature act, and Sir David Patrick Chalmers, formerly chief justice of British Guiana (Guyana), was chosen to hear the case in December 1897.
The hearing lasted over two weeks and resulted in a verdict of not guilty against Goodfellow and his fellow directors. Because of the difficulty the prosecution had faced in proving criminal intent on the part of the defendants, Chalmers had had no choice but to instruct the jury to acquit them. In a dispatch to the Colonial Office, he observed that the behaviour of the Commercial directors had warranted a civil action against them, but that “moral considerations are not . . . enough in dealing with questions of criminal delinquency.” As some of the directors of the Union and the Commercial banks had re-established themselves in business after 1894 and were still large employers of labour, no new charges were laid against the Commercial directors and the criminal charges pending against those of the Union were dropped.
For Goodfellow the three years in which he was constantly before the public on criminal charges associated with the bank crash proved to be traumatic. The strain on his health of the December 1897 trial, in particular, was very great. This worry, in addition to concern that the Supreme Court would declare his company insolvent, led to his sudden death of heart failure on 25 Jan. 1898. Despite the considerable losses in business Goodfellow had suffered during the previous four years, when his will was probated on 26 February, his estate, composed of various commercial property interests in St John’s and a number of business investments, was valued at just under $30,000. A sympathetic contemporary observed that he had been a man of “sterling worth” who had stood up “against the trials and tribulations which for many months beset him; comforted and sustained by a sense of his own integrity and by the cordial sympathy of troops of warm-hearted friends” and that in the face of “fierce persecution his character and reputation were triumphantly vindicated.” As a participant in the Newfoundland fish trade, Goodfellow had been an experienced investor in a high-risk economic activity where losses had tragic consequences for the people of Newfoundland and where life, even at the best of times, was lived at the margin by both merchant and fisherman.
GRO (Edinburgh), Tranent, reg. of births and baptisms, 3 Feb. 1828. PANL, GN 5/2/A/l, 1894–98; GN 9/1, 1888–98; P5/4; P7/B/16, box 4, minute-book, 1889–95. Supreme Court of Newfoundland (St John’s), Registry, 6: 424 (will of James Goodfellow). The crown vs. the directors and manager of the Commercial Bank of Newfoundland; evidence and exhibits, taken and produced at the preliminary investigation before His Honour Judge Conroy . . . ([St John’s, 1894]). Nfld., House of Assembly, Journal, app., 1850–99. Daily News (St John’s), 1894–98. Evening Herald (St John’s), 1890–98. Evening Telegram (St John’s), 1879–98. Newfoundland Colonist (St John’s), 1886–92. Newfoundlander, 1850–80. Newfoundland Express (St John’s), 1851–66, afterwards Express, 1866–72. Patriot and Terra-Nova Herald, 1850–84. Public Ledger, 1850–82. Royal Gazette and Newfoundland Advertiser, 1850–98. Nfld. directory, 1871. Nfld. year book and almanac, 1892. Melvin Baker, “The government of St. John’s, Newfoundland, 1800–1921” (phd thesis, Univ. of Western Ont., London, 1981). Hiller, “Hist. of Nfld.” Keith Matthews, Profiles of Water Street merchants (mimeograph, [St John’s], 1980). C. F. Rowe et al., The currency and medals of Newfoundland (Toronto, 1983).