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AbstractMounting costs and decreasing funds bring serious problems.

The new system of government inaugurated in Newfoundland on February 17, 1934—Government-by-Commission—is a constitutional experiment of the utmost importance to the people of the country, and, moreover, of profound interest to the student of political science. It possesses distinctive features which are unique in even the long and varied constitutional history of the British Commonwealth of Nations.The process of economic deterioration, which had been almost continuous in Newfoundland since 1920, culminated in an acute financial crisis in which the government of the Dominion found itself confronted with imminent bankruptcy. At this juncture, a Royal Commission was appointed on the advice of the governments of the United Kingdom, of Newfoundland, and of Canada, to investigate conditions in Newfoundland, and to issue a report on its financial situation. The Commission, under its chairman, Lord Amulree, examined hundreds of representative witnesses, and published, on October 3, 1933, an exhaustive, courageous, and admirably lucid Report.

Canadian federalism in recent years has been passing through the sharpest crisis in its history, a crisis which emerges out of its legal structure and the new financial strains to which it has been subjected in the decade of depression. The appointment in 1937 of a Royal Commission to investigate extensively federal and provincial relations was a tardy recognition by the government at Ottawa that the complex economic and constitutional problems of the Canadian state require thorough study, and informed treatment on the basis of such study. In an article necessarily brief, the background to the malady of the federal system can be sketched in only the broadest outlines.