While the other territories of British North America had united into the Dominion of Canada over the period of 1867 to 1873, Newfoundlanders rejected confederation in 1869 and remained a self-governing colony. In the 1907 Imperial Conference in London Newfoundland was conferred with the status of Dominion, and so put on an equal footing with Canada, Australia, and New Zealand.
As a loyal member of the Empire, Newfoundland raised a national regiment for the Great War, the 1st Newfoundland Regiment. After having been initially sent into action in the disastrous Gallipoli campaign with the ANZAC dominion troops, the regiment was posted to the Western front where they were involved in the horror of the first day of the Somme. On that day the Newfoundlanders were effectively wiped out in a single failed advance through no-man’s land. As the war progressed additional reinforcements brought the regiment back on strength, and the reformed unit received the honour of being awarded the title of “Royal Newfoundland Regiment” in light of their further actions at Ypres and Cambrai.
After the War though, the war debt and pension liability imposed significant strain on the Newfoundland economy, further exacerbated by the mounting debt for the trans-island railway. Political corruption scandals and the economic collapse of the Great Depression crippled Newfoundland to the extent that in 1933 the Newfoundland government voted itself out of existence and petitioned King George V to temporarily suspend Newfoundland’s constitution and administer the country from Britain – thus surrendering her Dominion status to become again a British Dependant Territory. Controlled now by a non-elected Commission of Government, even with British aid little could be done to solve the basic economic problems of a small primary-produce country in a global recession. Regardless of the short-term change in administration Newfoundlander sentiment was split between 3 possible futures; a return to responsible self governance, union with Canada, or a union with the United States. While British consideration of Newfoundland’s future between independence and Canadian confederation was fairly neutral, the thought of Newfoundland entering into any formal union with the US was beyond contemplation.
With the US implementing the Monroe Line in 1941, Britain could see that the barrier to US troop deployments outside the Americas was not the only result, the counter-prohibition on the deployment of European forces into the western hemisphere was now a potential under the original Monroe Doctrine and the legal mechanisms of the Havana Conference. As a Dependant Territory and not an independent nation, a future call for union with the US from within Newfoundland was a potential touch paper for conflict between the US and Britain. In a bid to bolster local pro-British and pro-Canadian sentiment British aid and assistance now pivoted to increasing military and strategic investment.
With the support of the Newfoundland Commission of Government and the British Government, No.125 Squadron RAF was reformed as a maritime patrol squadron, and Newfoundlander serviceman and fresh recruits found themselves posted to the squadron. Advanced training was undertaken on the SARO Lerwicks, freshly withdrawn from frontline service.
The Lerwicks had been an unmitigated failure in RAF service, and proved themselves just as unsuitable for the training role, quickly removing any hope that the Newfoundlanders would be able to have any success in being able to salvage the reputation of the Lerwicks and use them operationally. Instead, 125 Squadron was soon equipped with the new Catalina Mk.I aircraft, ironically already purchased from the US when the Lerwick had originally been seen to be unfit for service. The unit was quickly transferred to Newfoundland control and became the founding unit of the newly created Royal Newfoundland Air Force.
While most of the Dominion air forces maintained the Imperial RAF roundel, to ensure the obvious separation between Britain and Newfoundland a new roundel based on the PWG native flag tricolour was adopted, while the Great Seal of Newfoundland graced the tail of Newfoundlander aircraft.