The Newfoundland Dog is a valuable and faithful friend to man, and an implacable enemy to sheep. When born or reared from an early age under the roof of man, this dog is the most useful domestic animal in the island of which he is a native. He answers some of the essential purposes of a horse; is docile, capable of strong attachment, and easily pleased in the quality of his food;—he will live upon scraps of boiled fish, whether salted or fresh, and on boiled potatoes and cabbage; but, if hungry, he will not scruple to steal a piece of salmon or raw salt pork from the tub in which it has been left to steep. He is likewise fond of poultry of the larger kind; but he seems to prefer the blood of sheep to every thing else.
Both the Greenland and Newfoundland dogs, however, in a wild state, agree in the dispositions and habits of the wolf. They hunt in packs the animals of the country for the sake of prey; and this circumstance has led to the supposition, which by others is deemed groundless, of there being wolves in the island of Newfoundland (pg. 202).
I have encountered several nineteenth accounts of the water dogs from Newfoundland being impossible to keep near sheep.
Often, there is a suggestion that at least some fishermen let their dogs roam when they were not being used on ships or to assist in hauling or hunting. Any settlers who had sheep would likely suffer attacks from these hunting and working dogs.
To promote the grazing of sheep in Newfoundland, the colonial government passed The Sheep Protection Act of 1885, which allowed for local governments to ban dog ownership and charge hefty dog license fees. Many of the water dogs were killed, but several were exported to Great Britain. The smooth-coated retriever breeding program of the Dukes of Buccleuch was augmented with several smooth-coated water dog that were imported in the 1880′s and 1890′s. Those dogs would eventually form the basis for the modern Labrador retriever.