5. 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.
6. 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 competition, which would tend to minimize the danger of leaving such services in the hands of private individuals.
7. Of the energy, 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 sublet it to any person or corporation without the consent of the Government, the risk of its passing into the hands of people less capable and possessing less interest in the development of the colony is by no means remote.
8. 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.
9. That they have acted thus in what they believe to be the best interests 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.
10. 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.
I have, etc.,
J. Chamberlain.
Some of the inferences set forth in the Colonial Secretary's lucid letter were questioned by the Newfoundland Government, but substantially his conclusions were not assailed. The decision of the Imperial Government by no means stayed the voice of local agitation, and the stream of petitions continued to grow. In a further letter to Governor Murray, dated December 5th, 1898, Mr Chamberlain laid down the great constitutional doctrine which is the Magna Charta of Greater Britain. Every student of colonial politics should be familiar with these passages:
"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 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 of the colonial debt is its general revenue and 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.