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In OTL many wanted a return of indepedence after the CoG expired, or its renewal. Smallwood was the force behind the Confederation option. It narrowly passed in a referendum. WI they voted against it. Would it be absorbed by Canada eventually because of economic reasons, and would Danny Williams become Premier/PM/President ?
Possible POD: When referendum passed, King thought the margin was too narrow, and Pickersgill told him that more voted for Confederation than voted for him except in 1940 in popular vote terms. WI King refused because of the margin? And not because Pick sassed the master...