634.--(1) The requirements of the Island are two-fold, financial and political. Newfoundland is in extreme financial difficulties; the present burden of the public debt is wholly beyond the country's capacity and it is essential that it should be lightened if the Island is to be saved from the imminent peril of financial collapse. (As regards the financial position, see summary of conclusions in paragraph 195.)
  (2) On the other hand, measures designed to alleviate the present burden of public indebtedness would not, in themselves, provide a solution of the Island's difficulties, since those difficulties are largely due to the reckless waste and extravagance, and to the absence of constructive and efficient administration, engendered by a political system which for a generation has been abused and exploited for personal or party ends. A complementary requirement, therefore, to measures of financial relief is that the present form of government should be temporarily modified in such a way as would serve not merely to check the unfortunate tendencies to which the present system has given rise but also to promote the rehabilitation of the Island on sound principles (paragraph 545).
  (3) It is essential, if this object is to be achieved, that the country should be given a rest from party politics for a period of years, and we have no hesitation in saying that, in the circumstances now prevailing in Newfoundland, the proposal that a system of "Commission by Government" should be established for a limited period affords the best means of enabling the Island to make a speedy and effective recovery from its present difficulties (paragraph 557).
  (4) We therefore recommend that the Newfoundland Government, recognising that it is impossible for the Island to surmount unaided the unprecedented difficulties that now confront it, should make an immediate appeal for the sympathetic co-operation of Your Majesty's Government in the United Kingdom in the adoption and execution of a joint plan of reconstruction, of which the following would be the main features:--

  (a) The existing form of government would be suspended until such time as the Island may become self-supporting.
  (b) A special Commission of Government would be created which would be presided over by His Excellency the Governor, would be vested with full legislative and executive authority, and would take the place of the existing Legislature and Executive Council.
  (c) The Commission of Government would be composed of six members, exclusive of the Governor, three of whom would be drawn from Newfoundland and three from the United Kingdom.
  (d) The Government Departments in the Island would be divided into six groups. Each group would be placed in the charge of a Member of the Commission of Government, who would be responsible for the efficient working of the Departments in the group, and the Commission would be collectively responsible for the several Departments.
  (e) The proceedings of the Commission of Government would be subject to supervisory control by Your Majesty's Government in the United Kingdom, and the Governor-in-Commission would be responsible to the Secretary of State for Dominion Affairs in the United Kingdom for the good government of the Island.
  (f) Your Majesty's Government in the United Kingdom would, for their part, assume general responsibility for the finances of the Island until such time as it may become self-supporting again, and would, in particular, make such arrangements as may be deemed just and practicable with a view to securing to Newfoundland a reduction in the present burden of the public debt.
  (g) It would be understood that, as soon as the Island's difficulties are overcome and the country is again self-supporting, responsible government, on request from the people of Newfoundland, would be restored.
  (h) The appropriate procedure for bringing a joint plan of this character into operation would, we suggest, be the submission of an Address to Your Majesty by both Houses of the Newfoundland Parliament, followed by legislation in the United Kingdom.

  For details of our proposals, reference is invited to paragraphs 558-561.