545. Having arrived at this point, we think it well, before examining the various forms in which assistance from the United Kingdom might be given, to recall the requirements which we, for our part, should regard as essential if the present situation in the Island is to be effectively remedied. Such requirements are twofold, financial and political. On the financial side, we have shown that in existing conditions it is wholly beyond the resources of the Island to support the present burden of its public indebtedness; an alleviation of the burden is therefore essential. Measures designed to alleviate this burden would not, however, in themselves provide a solution of the Island's difficulties; since, as we have indicated in Chapter V,* those difficulties are largely attributable 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 party ends, even when the Prime Minister of the day has struggled for honest and clean government. 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. We feel confident that, if measures of this twofold character were adopted, Newfoundland would be able, before many years have passed, not merely to enjoy a higher standard of material prosperity than she has yet experienced in the course of her history, but also to win free from the malign influences which, developing from a prolonged period of misgovernment, have demoralised the people and warped their outlook. In default of the adoption of such measures, there can be little doubt that, even if the immediate situation could be temporarily alleviated, the difficulties with which the Island would ultimately be confronted would be even more acute than those which now beset it.

  546. We propose to deal first with the political and constitutional aspect of the proposals which were put before us from time to time by witnesses desirous that the assistance of the United Kingdom should be invoked: the financial aspect of these proposals will be referred to later.

Political and Constitutional Aspect of Proposals submitted to the Commission.

  547. From the political and constitutional point of view, these proposals fall into three categories: those which postulate a continuance of the present system of government, with such modification as would be necessary to ensure the permanence of the form of control over expenditure which is now in force; those which postulate a continuance of the present system of government, with such alterations as might conduce to more efficient administration without necessitating a modification of the existing constitution; and those which are based on the assumption that only a radical change of system for a period of years can the Island be restored to health.

  548. The proposals which fall within the first category, if considered in the light of the requirements specified at the opening of this chapter, will be seen to be defective in two respects. In the first instance, as has been explained in Chapter IV,† the form of the "Treasury control" now in operation was designed for negative rather than positive purposes. Its primary object is to prevent excessive or extravagant expenditure by Departments; to ensure that the Estimates presented for Parliamentary approval are prepared on a basis of strict economy; and to make certain not only that no money is spent on unauthorized purposes, but that expenditure even on purposes authorised by the Legislature is kept to a minimum. For this negative purpose the system works admirably, but it will be understood that the Controller of the Treasury is the servant of the Newfoundland Government and bears no direct responsibility for the policy which the Government may think it necessary to adopt. He would not, indeed, have the time, even if it were his function, to enter, on his own initiative, the wider field of administrative policy and advise the Government in matters in which financial considerations were not primary or immediate. What is needed, however, if the country is to be put on its feet again, is something more than a strict control of expenditure, valuable as that control undoubtedly is, and it is essential, in our view, that some machinery should be devised which will ensure the execution of a constructive forward policy designed to improve the condition of the people, to promote efficient and impartial administration, to stimulate enterprise, to encourage the conservation and development of natural resources on sound lines and to provide new outlets for the growing population. This machinery could not be provided by proposals coming within the first category mentioned above.

  549. There is a second defect in these proposals since the assumption that it would be possible, by modification of the constitution, to ensure the permanence of the present or any other system of control over expenditure will not bear examination. For, apart altogether from considerations of constitutional propriety, it would be going beyond the bounds of reason to suggest that such provisions should be so enshrined in the constitution as to be liable to alteration in no circumstances whatever; the most that could reasonably be urged is that they should be made incapable of modification except by the adoption of some special and formal procedure. The attachment of such conditions might, it is true, act as a deterrent to a Government desiring a change, but ex hypothesi there would always remain a possibility that a change might be successfully initiated by any Government which chose to adopt the prescribed procedure. On this basis there could be no permanent safeguard.

  550. For these reasons, therefore, we consider that the proposals falling within the first category would be inadequate for the purpose which we have in view. We pass now to the proposals in the second category, viz., those which postulate the continuance of the present system of Government with such alterations as might conduce to more efficient administration without necessitating a modification of the existing constitution. These proposals again do not comply with the test which we have applied above. We need not repeat our view that what is required is machinery that will ensure the execution of a constructive forward policy: we are satisfied that such machinery could not be created without a modification of the existing constitution. The only improvements in the present system which could be effected within these narrow limits would be of such a minor character as would exercise no appreciable effect on the future of the country, and we could in no circumstances feel justified in putting forward recommendations designed to enlist the co-operation and assistance of Your Majesty's Government in the United Kingdom, if such assistance was to be directed solely to the financial relief of the Island while the fundamental causes of the present difficulties were to be neglected.

  * Chapter V, paragraphs 218-220 and 235-246.
  † Chapter IV, paragraphs 143-147.

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