financial stability Colony." Mr. Chamberlain replied that he was not prepared, on general grounds, to advise reservation of the Bill sanctioning the contract, for which the Colonial Government's Legislature must be held responsible. He still felt grave doubts as to the policy of the measure, which seemed to transfer the future prospects and a great part of the present assets of the Colony to a private individual. "I must entirely disclaim responsibility for action of Colonial Legislature." The full text of the Bill and contract were despatched to the Colonial Office, and a memorial from the Opposition in the House of Assembly objecting to the enactment of the Bill on the following grounds :-"First.-Because it is an absolute conveyance in fee simple of all the railways, the dock, telegraph lines, mineral, timber, and agricultural lands of the Colony, and virtually disposes of all the assets, representing our funded debt of $17,000,000 for the compara. tively insignificant sum of about £280,000. Second.-Because the disposal of these assets places the Colony beyond the power to negotiate a loan in future, should such a course become necessary. Third.-Because in 1895 this Colony raised in London two million and a half dollars, and set out in the prospectus the railway, dock, telegraphs and Crown lands as the assets justifying that loan; and your Memorialists consider that the Bondholders, as creditors of the Colony, have an equitable, if not a legal, claim upon these assets as security for that loan. Fourth.-Because while the Bill conveys large and valuable mineral, agricultural, and timber areas, which, together with former concessions, amount to four million acres, it makes no provision for the development of those lands. Fifth.-Because while these lands are to be granted as consideration for the operation of the railway, there is no security for its continuous operation, and in case of failure on the part of Mr. Reid or his assigns to continuously operate, he will still hold these lands and minerals, no provision having been made in the Bill that they shall revert to the Crown. Sixth.-Because after Mr. Reid has received all the lands that he is entitled to under the Operating Contract of 1893, there will be no more land available along the line of railway; therefore the land to be taken under the now proposed conveyance will be along the seaboard. This will give Mr. Reid a virtual monopoly of the mineral wealth of the Colony. Seventh.Because the great need of the Colony is capital to develop its latent resources. During the past twelve months experts and agents of foreign capitalists have visited this Colony; and as a result syndicates are being formed in London and in New York for the prospecting and working of mines along the sea coast. Under the proposed conveyance all ungranted lands are subject to be reserved to Mr. Reid for selection for the next three years. Other capitalists will therefore be deterred from carrying out

their intentions, and the people of the Colony will thereby suffer great loss. Eighth.-Because it transfers to Mr. Reid and his assigns in fee simple the whole of the coal areas at Grand Lake, eleven square miles, and it is quite competent for him or his assigns to convey the property to a Coal Syndicate, whose interest it might be to lock up these coal-mines, in order to limit supply. The amount of coal that Mr. Reid is called upon to raise annually in order to hold the property will not be more than enough for the requirements of the railway and works in connection therewith. Ninth.-Because the conveyance embraces the whole Government telegraph system of the Colony; and your Memorialists believe that it is not in the interest of the public that any man or firm connected with the mining, lumbering, or trade of the Colony should have control of the telegraphs. The confidence of the public should be a primary consideration. To secure that confidence it is necessary that the lines remain the property of the Government, and be managed by men who have no interest in the import and export trade. Tenth.-Because the conveyance includes a monopoly for the next thirty years of the coastal carrying trade. No tenders were invited for this service, and it is impossible, therefore, to say whether or not the subsidies approved are the lowest for which it could be obtained. It will also be noticed that the contract contains no specifications of the class of the steamers to be employed. Eleventh.-Because the contract provides that one of the streets of this city shall be paved at a cost of one hundred and forty thousand dollars. This work was not placed out at tender, nor have any means been tried to ascertain whether the work could be performed for a lower sum. Further, the said sum of one hundred and forty thousand dollars is to be a charge upon the City of St. John's, which is under the control of a Municipal Council, and neither the citizens nor the said Council have been consulted in regard to the matter, the action of the Government, therefore, being an arbitrary interference with the rights of the citizens and of the said Council. Twelfth.-Because the proposal also includes the sale of the dry dock and the granting without consideration of valuable waterside property belonging to the municipality aforesaid, with respect to which property the Municipal Council have not been consulted, although the cost of the said property and the improvements thereto is part of the standing debt of the City. In conclusion, your Memorialists would state that if Her Majesty's Government are unable to concur in the views herein set forth, then your Memorialists would respectfully submit that the questions involved are of sufficient importance to warrant an appeal to the electorate, so that the people of the Colony may have an opportunity to pronounce on & measure so far-reaching in its consequences and affecting so vitally

the future welfare of the Colony." The Anglo-American Telegraph Company also memorialised against the Bill, on the ground that it would conflict with their rights. On March 23rd Mr. Chamberlain wrote that the question was essentially one of local finance, and as Her Majesty's Government had no responsibility for the finances of self-governing colonies it would be improper for them to interfere in such a case unless Imperial interests were directly involved. The Despatch continues :-"I do not propose to enter upon a discussion of the details of the contract, or of the various arguments for and against it, but I cannot refrain from expressing my views as to the serious consequences which may result from this extraordinary measure. Under this contract, and the earlier one of 1893 for the construction of the railway, practically all the Crown Lands of any value become, with full rights to all minerals, the freehold property of a single individual, the whole of the railways are transferred to him, the telegraphs, the postal service, and the local sea communications, as well as the property in the dock at St. John's. Such an abdication by a Government of some of its most important functions is without parallel. The Colony is divested for ever of any control over or power of influencing its own development, and of any direct interest in or direct benefit from that development. It will not even have the guarantee for efficiency and improvement afforded by com. petition, which would tend to minimize the danger of leaving such services in the hands of private individuals. Of the energy and capacity and character of Mr. Reid, in whose hands the future of the Colony is thus placed, both yourself and your predecessor have always spoken in the highest terms, and his interests in the Colony are already so enormous that he has every

motive to work for and to stimulate its development; but he is already, I believe, advanced in years, and though the contract requires that he shall not assign or sub-let it to any person or corporation without the consent of the Government, the risk of its passing into the hands of persons less capable and possessing less interest in the development of the Colony is by no means remote. All this has been fully pointed out to your Ministers and the Legislature, and I can only conclude that they have satisfied themselves that the danger and evils resulting from the corruption which, according to the statement of the Receiver-General, has attended the administration of these services by the Government, are more serious than any evils that can result from those services being transferred unreservedly to the hands of a private individual or corporation; and that, in fact, they consider that it is beyond the means and capacity of the Colony to provide for the honest and efficient maintenance of these services, and that they must therefore be got rid of at whatever cost. That they have acted thus in what they believe to be the best interests

the

of the Colony I have no reason to doubt, but whether or not it is the case, as they allege, that the intolerable burden of the public debt, and the position in which the Colony was left by the contract of 1893, rendered this sacrifice inevitable, the fact that the Colony, after more than forty years of self-government, should have to resort to such a step is greatly to be regretted. I have to request that in communicating this despatch to your Ministers you will inform them that it is my wish that it may be published in the Gazette." As for the rights of the Anglo-American Telegraph Company, Mr. Chamberlain thought they were sufficiently safeguarded by the Supplementary Act which had been passed. On March 25th the Committee of the House of Assembly adopted the following resolution:-"That it is the opinion of this House that it is desirable that the Government should open negotiations with Her Majesty's. Government on the basis of the proposals contained in a despatch from the Right Honourable the Secretary of State for the Colonies to his Excellency Sir Terence O'Brien, Governor, of the 9th February, 1891, and referred to by his Excellency the Governor in his speech at opening of the present Session, for the appointment by Her Majesty's Government, of a Commission to inquire into various subjects pertaining to the condition and affairs of the Colony, and more particularly set forth in the said despatch.' A Report of the debate on the above was also forwarded to Mr. Chamberlain, who replied (April 15th) as follows:-"It appears from the report of the debate on the introduction of the Resolutions that it is contemplated that the issue of the Commission will lead to the grant of substantial aid to Newfoundland from the Imperial Government. You will be good enough to point out to your Ministers that circumstances have greatly changed since 1890 and 1891. Then application was made for a guaranteed loan for the development of Newfoundland by building a railway or otherwise, and Her Majesty's Government were prepared to issue a Royal Commission with a view to such a loan if the report of the Commission were favourable. The Colonial Government of the day deliberately refrained from inviting the Legislature to apply for the Commission, and proceeded with the railway. Now, not only the railway so built, but also most of the other substantial assets of the Colony have been alienated, and there is no practical object to gain in issuing a Royal Commission such as the Receiver-General suggests. An application for a Commission at the present time is, therefore, only an application for financial assistance to enable the Colony to meet the obligations it has incurred, and which the Receiver-General declares it is unable to meet without aid. Such an application cannot for a moment be entertained, and I request that you will at once inform your Ministers that it is impossible for the Imperial Government to take any

responsibility, or accord any financial assistance, in the case of a self-governing Colony, which has had full control of its own finance, and is solely responsible for its mismanagement.'

A Royal Commission was, however, granted. Further correspondence passed, including the transmission to Mr. Chamberlain of the arguments by the Ministry, in reply to the memorial from the Opposition. On June 3rd Mr. Chamberlain wrote to Sir H. H. Murray that he had not found in these arguments any reason to alter his general opinion of the contract made with Mr. Reid, and Ministers had not quite accurately represented his comments:-"I observe that in paragraph 7 of their reply your Ministers substantially concur in the main conclusion at which I had arrived in regard to the contract, and which was expressed in the 8th paragraph of my despatch, and in these circumstances I do not consider that any useful purpose would be served by arguing the matter in detail; and if the contract should result in the benefits to the Colony which your Ministers anticipate, I need scarcely say that such a result will be most welcome to Her Majesty's Government." On January 22nd further correspondence was issued, consisting, for the most part, of petitions against the Reid Contract. On December 5th Mr. Chamberlain replied to the representations, which urged that the Act sanctioning the contract should be disallowed. In this Despatch he adheres to the decisions he laid down in previous communications:-"The step which I am urged to take is one for which there is no precedent in the history of Colonial administration. The measure the disallowance of which is sought is not only one of purely local concern, but one the provisions of which are almost exclusively of a financial and administrative character. The right to complete and unfettered control over financial policy and arrangements is essential to self-government, and has been invariably acknowledged and respected by Her Majesty's Government and jealously guarded by the Colonies. The Colonial Government and Legislature are solely responsible for the management of its finances to the people of the Colony, and unless imperial interests of grave importance were imperilled, the intervention of Her Majesty's Government in such matters would be an unwarrantable intrusion and a breach of the Charter of the Colony. It is nowhere alleged that the interests of any other part of the Empire are involved, or that the act is in any way repugnant to Imperial legislation. It is asserted, indeed, that the contract disposes of assets of the Colony over which its creditors in this country have an equitable, if not a legal, claim, but, apart from the fact that the assets in question are mainly potential, and that the security for the Colonial debt is its general revenue, not any particular property or assets, I cannot admit that the creditors of the Colony have any right to claim the interference of Her

Majesty's Government in this matter. It is on the faith of the Colonial Government and Legislature that they have advanced their money, and it is to them that they must appeal if they consider themselves damnified. No doubt, if it was seriously alleged that the Act involved a breach of faith or a confiscation of the rights of absent persons, Her Majesty's Government would have to examine it carefully, and consider whether the discredit which such action on the part of a Colony would entail on the rest of the Empire rendered it necessary for them to intervene. But no such charge is made, and if Her Majesty's Government were to intervene whenever the domestic legislation of a colony was alleged to affect the rights of non-residents, the right of self-government would be restricted to very narrow limits, and complications and confusion from the division of authority must arise. In so far as the demand for disallowance is based on criticism of the policy and details of the Act, I have already indicated that where no Imperial interests are involved, or unless the measure was so radically vicious as to reflect discredit on the Empire of which Newfoundland forms a part, it would be improper for Her Majesty's Government to intervene in what is essentially a matter of local finance, the policy of which is a matter for the Government and Legislature of the Colony., . . In the present circumstances of Newfoundland there are special reasons of the greatest importance which preclude Her Majesty's Government from taking such a departure from recognized constitutional principles and usage as the memorialists desire. You have stated in your Despatch of April 30 last that the language used by the responsible Finance Minister of the Colony, in the speech in support of the contract which he delivered from his place in the Assembly, implied clearly that if the measure was rejected the Colony would be unable to meet its immediate financial obligations. Neither in your Despatches nor in the memorials is this assertion challenged, and it is obvious that if Her Majesty's Government were to annul a measure seriously declared by the person who is in the best position to know to be essential to the continued solvency of the Colony, the creditors of Newfoundland would not fail to fasten on Her Majesty's Government responsibility for the consequences of their action. As I have already said, the debts of the Colony have been incurred solely on the credit of the Colony, and any step which would transfer responsibility for them in the slightest degree to the Imperial Government would entail consequences which would not be confined to Newfoundland, and which Her Majesty's Government would not under any circumstances be justified in contemplating."

NEW GUINEA (BRITISH) SYNDICATE. (See BRITISH NEW GUINEA.)

NICARAGUA CANAL.

or

Clayton-Bulwer Treaty. April 19th, 1850. -In view of the revival of interest in the Nicaragua Canal Scheme it will be useful to give the chief articles of the Clayton-Bulwer Convention. Article I.-"The Governments of Great Britain and the United States hereby declare, that neither the one nor the other, will ever obtain, or maintain, for itself any exclusive control over the said Ship-Canal; agreeing that neither will ever erect or maintain any fortifications commanding the same, or in the vicinity thereof; or occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America; nor will either make use of any protection which either affords, or may afford, or any alliance which either has, or may have, to, or with, any State or people, for the purpose of erecting, or maintaining, any such fortifications, or of occupying, fortifying, or colonizing, Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America, or of assuming or exercising dominion over the same. Nor will Great Britain or the United States take advantage of any intimacy, or use any alliance, connection, or influence, that either may possess with any State Government, through whose territory the said canal may pass, for the purpose of acquiring, or holding, directly or indirectly, for the subjects or citizens of the one, any rights or advantages in regard to commerce or navigation through the said canal, which shall not be offered, on the same terms, to the subjects or citizens of the other." Article II.-"Vessels of Great Britain or the United States traversing the said canal shall, in case of war between the Contracting Parties, be exempted from blockade, detention, or capture, by either of the belligerents; and this provision shall extend to such a distance from the two ends of the said canal as may hereafter be found expedient to establish." Article III.-" In order to secure the construction of the said canal, the Contracting Parties engage that if any such canal shall be undertaken upon fair and equitable terms by any parties having the authority of the Local Government or Governments, through whose territory the same may pass, then the persons employed in making the said canal, and their property used, or to be used, for that object, shall be protected, from the commencement of the said canal to its completion, by the Governments of Great Britain and the United States, from unjust detention, confiscation, seizure, or any violence whatsoever." Article V.

"The Contracting Parties further engage that, when the said canal shall have been completed, they will protect it from interruption, seizure, or unjust confiscation, and that they will guarantee the neutrality thereof, so that the said canal may for ever be open and free, and the capital invested therein secure. Nevertheless, the Govern

ments of Great Britain and the United States, in according their protection to the construction of the said canal, and guaranteeing its neutrality and security when completed, always understand that this protection and guarantee are granted conditionally, and may be withdrawn by both Governments, or either Government, if both Governments, or either Government, should deem that the persons or Company undertaking or managing the same, adopt or establish such regulations concerning the traffic thereupon as are contrary to the spirit and intention of this Convention; either by making unfair discriminations in favour of the commerce of one of the Contracting Parties over the commerce of the other, or by imposing oppressive exactions or unreasonable tolls upon passengers, vessels, goods, wares, merchandise, or other articles. Neither party, however, shall withdraw the aforesaid protection and guarantee without first giving six months' notice to the other." By Article VIII. the treaty is extended to any other practicable means of communication across the isthmus, whether by canal or railway.

NIGER CONVENTION. (See AFRICA.)

NIGER PROTECTORATE. (See AFRICA.)

NILE (Valley of). (See EGYPT.)

OLD AGE PENSIONS.

Report of Committee. Dated June 7th, 1898. The reference under which this Committee acted was in the following terms:-"To consider any schemes that may be submitted to them for encouraging the industrial population, by State aid or otherwise, to make provision for old age; and to report whether they can recommend the adoption of any proposals of the kind, either based upon, or independent of, such schemes; with special regard, in the case of any proposals of which they may approve, to their cost and probable financial results to the Exchequer and to local rates; their effect in promoting habits of thrift and selfreliance; their influence on the prosperity of the Friendly Societies; and the possibility of securing the co-operation of these institutions in their practical working." The members were Lord Rothschild (Chairman), Sir Francis Mowatt, Sir Courtenay Boyle, Sir Spencer Walpole, Mr. H. J. Finlaison, Mr. E. W. Brabrook, Mr. George King, Mr. H. W. Watson, and Mr. Alfred Chapman. The Committee report that they had made use of the evidence taken by Lord Aberdare's Commission on the Aged Poor, and that consideration of this had enabled them to restrict to certain special issues the evidence they themselves had taken. They quote the conclusion of

the Royal Commission with regard to pension schemes, in which the Commissioners regretted that in view of the financial and economic difficulties involved, they had been unable to recommend the adoption of any of the schemes as yet suggested, whether for endowment or for assisted assurance. But a minority of the Commission reported separately that the subject of old age pensions has been "inadequately considered." The Committee had to consider more than a hundred schemes, which they classified in the following groups :—" 1. Schemes involving compulsory contribution towards a pension fund, either by way of the German method of deduction by employers from wages paid by them, assisted by a contribution levied from the employers, or by way of an annual, or a lump, payment made by all young persons before a certain age, and accumulated at compound interest until the pension age. 2. Schemes providing a universal grant of pensions to all persons upon attaining a certain age, without requiring from them any direct contribution, or examining their merits or their needs. Various modifications were suggested, chiefly with the object of fixing the income above which there should be no grant. 3. Schemes providing special facilities and encouragement to voluntary insurance against old age, with material assistance from the State. 4. Schemes providing State aid towards old age pensions for members of friendly societies only. Some of these proposed that members of friendly societies, as such, should, on arriving at a certain age, receive pensions from the public funds. Others proposed that pensioners should receive part of their pension from their society, and the rest from public funds." They concluded that their terms of reference precluded them from considering any scheme based on compulsion, or confined to members of friendly or other societies as distinguished from the industrial classes generally; or requiring no provision by the pensioners. Schemes falling under Groups 1 and 2 were, therefore, excluded; the 3rd Group, aiming at the encouragement by State aid of voluntary assurance against old age, were within the scope of the reference; but, for various reasons, some special inquiry was made into some of the schemes of the 4th Group. The Parliamentary Committee Scheme.-This scheme is threefold. The first method provides for assurance for an annuity of 5s. a week from the age of 65, in return for a payment of £2 10s. at or before the age of 25, and a yearly payment of 10s. up to the age of 65, the State contribution being the credit of £10 in the depositor's pass-book at the same date as the deposit of £2 10s., and interest at 2 per cent. By the second method the deposits by the assurer would be doubled, the State aid raised to £15, and, in addition to a 5s. weekly pension, other benefits (chiefly provision for widows and children in the event of death before 65). The third method,

framed to secure the co-operation of the friendly societies, provided that any person after depositing 30s. if male, and 25s. if female, in the Post Office, and insuring in any society for an annuity of £6 10s. or £3 18s. respectively, should have the pension doubled by the State at the age of 65. The objections raised to this scheme in the report presented by the majority of the Aged Poor Commission may be summed up as follows:-1. Those who could avail themselves of the scheme are mainly confined to the higher strata of the working classes, and little benefit would accrue to the class in which a destitute old age is most common. 2. The scheme, save as modified by the temporary provisions, would have no direct effect until 40 years from its introduction, when the pensions would begin to be payable. 3. The cost to the State, if the scheme were at all successful, would be much higher than the £2,000,000 a year estimated by its authors. 4. It is undesirable that the State should become the holder of further great accumulations of money, regard being had to the difficulty already found in investing the money held by the Post Office. 5. The actuarial calculations upon which the scheme is based are liable to be gravely affected by any decline in the rate of interest. 6.-(a.) The State could not safely guarantee the solvency of friendly societies, and even if it were not legally liable in the case of the failure of a society, the insurers would "practically view the State as the predominant partner in the insurance, and look to the State for its complete fulfilment." (b.) If such scheme were adopted, increased State control of the affairs of the societies would be

necessary, and this would be strongly opposed by them. The Committee say :We have been particularly impressed with the gravity of the objections numbered 2, 4, 5, and 6. It seems to us to be improbable that public opinion would accept a scheme which confers no benefit on the present generation, and only comes into effective operation at a date so distant as to make it impossible to forecast the condition or needs of the classes who would then be affected by it. It would, moreover, in our opinion, be difficult to overestimate the objections to the creation and direct control by the State of so enormous a fund as would be required to meet the future liabilities of such a pension scheme, and to the establishment of relations between the State and the societies, increasing the labour and responsibility of the one, and fatal to the independence of the other." The schemes submitted by Mr. James Rankin, M.P., Sir Henry Burdett, and the Rev. J. Frome Wilkinson are analysed and subjected to destructive criticism. Coming to schemes for the preferential treatment of Friendly Societies (which, though outside the scope of the reference, it was thought worth while to examine), the Committee dealt with the scheme submitted by Mr. Lionel Holland, M.P. The essence of this scheme was