The Drummondville Agreement was a four-party treaty signed at Drummondville in Quebec on November 16, 1926 that ended the eight-year Canadian Civil War and provided for the establishment of the "Blue Canadian" government in St. John's, which was then the capital of the Newfoundland Free State. As per the terms of the agreement, the Blue Canadian government could be recognized by other nations as the legitimate government of Canada (in this case, primarily Germany and the United States) while Red Canada would have effective control over mainland Canada. The agreement was important as the Blue Canadians were running out of men and supplies while the Communists wanted to end the war and American involvement in it to rebuild Canadian industry and agriculture. Implicitly, the agreement endorsed the "Confederationist" idea that Newfoundland was part of Canada, despite the stated posture of the Free State government at the time that it was not. As a concession to the "Free Staters," the Agreement settled the Labrador boundary dispute in Newfoundland's favor.

The agreement was negotiated by United States Secretary of State Frank B. Kellogg, Blue Canadian Prime Minister Mackenzie King (who simultaneously held the portfolio for the Minister of External Affaris), Blue Canadian Minister of Defence George Perry Graham, General of the Red Canadian Army Bill Moriarty, General Secretary of the Canadian Worker's Party Tom Burpee, and Prime Minister of Newfoundland Walter Stanley Monroe. At the time, it was hailed as a major diplomatic coup, in particular for Kellogg, and it was hailed across the world as a potential sign that communism and free-market capitalism could coexist.

However, the Drummondville Agreement agreement became a source of tension between its member states, particularly after World War Two. The pro-Blue Smallwood government was defeated decisively by republicans led by Peter Cashin in the 1946 general election. The United Newfoundland Party opposed both the Drummondville Agreement as well as the alternative economic union with the United States proposed by Chesley Crosbie and Geoff Sterling, who eventually split with his party to form the Economic Union Party, although both formed what became known as the "Renegotiation Coalition." In a speech to the Newfoundland House of Commons on December 20, 1946, Cashin endorsed an independent Newfoundland, which nearly triggered a war with Canada.

Though Cashin was talked down by the United States, he nevertheless proposed a plebiscite in late 1948 to be held on July 1, 1949. After a walkout staged by pro-Blue Newfoundlanders and protests from the Blue Canadian Parliament down the street, Cashin called a snap election in May in which the republicans expanded their seats. In the ensuing Newfoundland Crisis, the independence vote was massively victorious in the referendum and Canada promptly invaded Newfoundland, leading to a near-war between the United States and Canada and becoming one of the first major flashpoints of the Cold War. With Newfoundland annexed the following winter, the Drummondville Agreement became effectively void and was officially repealed by the Proletarian Congress of Canada in 1954.

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