This paper is to be considered as a prelude to the trip which the writer plans to make to the Labrador in July and August of this year (1953), with the help of the Fisheries Board and other friends. The trip is a continuation of one made around the coast of Newfoundland in 1952, including visits to Corner Brook, Grand Falls, and Buchans.

The unusual stresses and strains of the depression during the last four years have drawn attention more definitely to certain weaknesses in the financial structure of the Canadian federation. The province of Nova Scotia has performed a very valuable service in initiating an economic inquiry into Dominion-provincial relations as affecting that province. An inquiry such as this removes the problem from the realm of speculation and political expediency and relates it to the actual facts of the situation. It would be of great value if similar investigations were made by the other provinces into their own peculiar problems, followed by an examination of the whole question by an impartial body from the point of view of the Dominion as a whole. Investigations along this line have been carried out in the Commonwealth of Australia and a Commission appointed which has reported on the applications made by the states of South Australia, Western Australia, and Tasmania for financial assistance from the Commonwealth, based on certain disabilities affecting these states as a result of Commonwealth policy.

The financial arrangements made between the Dominion and the provinces at the time of Confederation were essentially in the nature of a compromise and designed to meet the situation as it then existed. This appears to have been more or less the situation in the original financial arrangements of practically all existing federations. Apparently, however, it was considered at the time of the Canadian Confederation that these arrangements would be of a somewhat permanent character. This optimistic view was early shown to be wrong when within two years it was necessary to make adjustments. Further, it was not anticipated at that time that there would be any change in the accepted functions of government. The prevailing idea was that the fewer functions surrendered by the individual to the government, the better. John Stuart Mill was still the authority, and his ideas with regard to the limitation of government marked the general line of thought. While there were those who took a wider view of the functions of government and who anticipated the collectivist movement of the last quarter of the century, the echo of this was at that time scarcely heard in Canada. There was no thought that many of the services now rendered to the community by governments would become necessary. Consequently, the division of authority, both political and financial, in the British North America Act, was based on a form of society and an idea of government which no longer exists.

According to the principle of acceleration, net induced investment is proportional to the rate of increase in national product. The principle is usually qualified by a statement to the effect that if the economy's production is at a rate lower than some previous peak, the proportionality may not hold. Once, however, capacity is reached, increases in the rate of production will induce investment.

This paper derives its relevance from the current attempts to construct a set of dynamic input-output equations which will generate demand for additional stocks of capital facilities on the basis of a set of capital coefficients and measures of capacity for the “industries” of the system. The basic arguments set forth are applicable also to tests for the feasibility of solutions of static input-output systems with respect to existing stocks of capital, but most attention will be directed to the dynamic formulation.

Professor Leontief's dynamic input-output equations are of the form:

Xi represents the rate of output of the ith industry, Yi is the amount of this output taken by the autonomous final demand sector and aik is the now familiar coefficient of production, the amount of the ith industry's product which the kth industry purchases per unit of output of the kth industry. This much of the equation set is identical to the static input-output system. The dynamic addition is in the bik capital coefficients, which measure the amount of stock of the ith industry's product held by the kth industry per unit of annual output, and in the values, which are the first derivatives of the annual rates of output of the various industries with respect to time. The capital coefficients are accelerator values for each industry with respect to all other industries. The summated value,

is the instantaneous annual rate of induced investment for the economy at any given moment of time.

The question of training for administrative posts in the Public Service gives rise to certain questions regarding administration in general, and public administration in particular. What do we mean by administration? Does public administration differ from private administration? What qualities are necessary to make a good public administrator? Can training aid in the development of these qualities? If so, what form should it take? And how can it best be given?

“Administration” has been defined as “the performance of the executive duties of an institute or business”; and “public administration” as “the activities of the executive departments in the conduct of government.” “Executive duties” as related to public administration have again been defined as “pertaining to the execution of the country's laws,” and for the purpose of this discussion, we can perhaps agree that the public administration which we have in mind consists of the carrying out of the law in the various departments of government.

Are there fundamental differences between this form of administration and that which prevails in private business? There are at least certain distinctive elements in each. In industry the profit motive is a much more important factor than it is in government. Similarly the question of remuneration bulks more largely in private industry than it does in public administration. While the old conception of a post in the Public Service as “a job for life and a pension afterward” may have passed away, the financial rewards at present attached to administrative positions in the Public Service are not such as to render the public administrator subject to what Seneca speaks of as the most fertile source of human sorrow, namely, great possessions. A public servant, on the other hand, must be much more responsive to public opinion than his counterpart in industry. He must not only carry out a policy but must sense whether or not that policy meets with public approval. He is subject at all times to public criticism and to investigations as to his acts, and this factor has a determining effect upon his methods of administration to a greater degree than exists in industry.

In the recent English literature of international trade theory, one element in the adjustment of the balance of international payments has been brought once more into prominence, especially with regard to unilateral payments. It is described by various writers as the transfer of “purchasing power”, or of “buying power”, or of “means of payment”, or as a “shift in demand schedules”, which induces the receiving country to buy more goods and services and the paying country to buy less goods and services “in the absence of price changes”. This factor in the adjustment of the balance of payments was implied by Adam Smith, Ricardo, and Wheatley. Longfield referred to it explicitly. Bastable mentioned it in a journal article and Nicholson placed considerable emphasis on it. Mill, however, omitted it from his analysis. After 1900 it dropped from sight until 1918 when it cropped up again in a controversy in which Taussig, Wicksell, and Hollander took part. It was noticed in Viner's Canada's Balance and by 1931 had been developed considerably by Wilson, Ohlin, and Robertson. Since that time it has appeared in the published works of a large number of economists.

Many of the earlier proponents of the theory denied that unilateral transfers could change the terms of trade. To them it seemed obvious that the payment would by itself increase the purchases of the receivers and diminish the purchases of the payers by the amount of the payment. Thus the commodity balance would become unfavourable to the receiving country by the amount of the payment without price changes. Mill, on the other hand, and those who accepted his analysis in its entirety, claimed that the familiar specie-flow-price mechanism would necessarily lead to a change in the terms of trade in a direction favourable to the receiving country.

Prior to 1930 discussion of public investment was conducted largely on the basis of an assumption of full employment within a closed economy. Consequently it centred around the productiveness of public investment as opposed to that undertaken in the privately-operated sector of the economy, the appropriate methods of financing the projects undertaken, and the legitimate spheres of operation of public bodies. The usefulness of public investment projects was believed, in the main, to be confined to their long term contribution to the productiveness of the economy. In practice, even well into the nineteen-thirties, governments, with exceptions, undertook public projects when finances were buoyant and borrowing relatively easy, and curtailed them, in attempts to balance budgets, when depression became serious.

After 1930 both in the thought and practices of some central governments and in economic writing the pendulum swung the other way. Main emphasis was laid on the current employment and income giving effects of public investment. This change in emphasis received additional impetus after the advent of The General Theory of Employment, Interest and Money when economic discussion became much more concerned with the level of employment than the distribution of the factors of production among alternative uses.

The transfer of attention from the long term aspects of public projects to their effect on current employment and income maintenance was accompanied by the shortcomings of practice and thought which are inevitable in an undeveloped field. While a good deal was written and spoken about the desirability of well thought out and well planned investment, insufficient attention was given to its attainment and in practice resort was had to many undertakings whose value, from either a short or long term viewpoint, was dubious. The shortcomings were largely associated with failure to cope adequately with the institutional and administrative problem involved. Further, there was a penchant for fastening on single devices to meet the overall employment problem.

In this paper it is proposed to discuss the post-war economic problems of New Zealand, not so much because of their intrinsic importance, as because they raise questions of some general interest and fairly widespread application. It is not intended to pursue an elaborate statistical enquiry and as far as possible the facts selected will be confined to those having a direct bearing on problems and policies.

As elsewhere, the nature of these problems will be determined by the “fundamental” characteristics of the economy, the changes which have occurred during the war, and the nature and intensity of the forces which impinge on it from the world at large. The nature of the response to those forces will be greatly influenced, of course, by the prevailing political attitudes and the sort of administrative machinery and techniques to which the country has been accustomed.

Production and Trade. Since New Zealand is a small country with a population of less than 1,700,000 people, and with a comparatively simple economic organization, its problems tend to be sharp in outline, and readily amenable to analysis. Production is highly specialized. On the average of the ten years prior to the war somewhat over 60 per cent of the value of physical production was provided by farm products (when processed). About 53 per cent of the value of all production consisted of grass land products, in respect of which New Zealand has enjoyed unique comparative advantages.

The subject of this paper is the economic analysis of the alienation of natural resources, by which is meant not only the disposal of a resource by outright sale but also the disposal of rights, perhaps for a limited period, to exploit, perhaps in a limited fashion, one or more of the natural resources of a specified area. In order to illustrate current procedures and their trends, I begin by describing very briefly the methods by which enterprises obtain rights from the province of British Columbia to exploit resources. (Readers interested only in analysis may wish to skip this first section.) In the next sections I discuss the contribution economic theory can make to an appraisal of methods of alienation; then, in the light of this discussion, I suggest a few desiderata in policy.

Since provinces are fairly free to make their own policies on alienation, procedures differ from region to region. Before the procedures followed in British Columbia are outlined, it should be emphasized that the more complete and absolute alienation to private ownership, the more the rights of the province shrink to the regulation of industry, collection of taxes, and other general powers enumerated in the British North America Act. It should also be kept in mind that the administration of natural gas and petroleum carried across provincial boundaries, of fisheries, and of rivers that cross the international boundary may be affected by both federal and American regulations and laws.

Agricultural land. Some land is alienated by pre-emption but in most cases it is sold on a first-come-first-served basis after survey and some development work by the government. On alienation, the land generally passes into private ownership, though mineral and water rights are reserved.

Fisheries. Anyone may fish, on conditions imposed mainly by the federal government.

By sociology Pareto means a synthesis of all the particular researches and disciplines dealing with human society—law, economics, political history, the history of religion, and so on—in a search for the relationships between social facts (1, 2). Sociology is to provide a framework into which will fit the results of these specialized studies; it is to be a comprehensive study which aims at discovering the principles underlying the form and changes of society in general.

Such is Pareto's own formulation. It is apparent that he believes both that there are general principles underlying the form and changes of society, and that these can be discovered by a new discipline, sociology, working on the results of the specialized studies. The primary concern of the new discipline must therefore be methodology, and Pareto devotes much more attention to the problem of method in the social sciences than he does to the construction of his own theory of society. His justification for this is his belief that the methods of all previous sociologists have been basically faulty and can lead only to invalid conclusions. In this paper it is proposed to follow Pareto's emphasis, and to deal with his analysis of social facts and his general theory of society primarily with a view to bringing out those aspects which raise the problem of method in the social sciences.

The purpose of this paper is to examine the effects of international movements of labour and capital upon the commodity terms of trade. The development of the modern theory of international trade, initiated by E. Heckscher and B. Ohlin has enabled us to relax the classical assumption of complete immobility of factors among different countries, and to analyse the international movements of goods and factors within the same theoretical framework. Thus, both Heckscher and Ohlin emphasized the substitutive relationship between international trade and factor movements. But the effects of international factor movements upon the international terms of trade seem to have attracted comparatively less attention. Although the question known as the “transfer problem” was subject to detailed investigation, it is not concerned with the movement of factors of production per se.

Professors J. E. Meade and H. G. Johnson independently considered international factor movements from the long-run point of view, and presented rigorous analyses of their effects upon the commodity terms of trade. Meade dealt with the international migration of labour in order to give a theoretical basis to the regulation of migration, whereas Johnson made an ingenious use of Rybczynski's theorem to analyse the effects of international transmissions of productive power upon the terms of trade. The present paper attempts to push their analyses a little further by developing a general formulation of the problem within a neo-Heckscher-Ohlin trade model.

Political scientists have approached the study of administrative organizations with widely divergent purposes and modes of analysis. The early studies in this field were suffused with a desire to improve administrative institutions. Attention was centred on the “problems” of administrative accountability, red tape and inertia, administrative efficiency, and the public's low estimation of government service. Emphasis in these early studies was placed on the description of formal institutions and arrangements, since these arrangements, rather than informal behavioural patterns, were amenable to reform. This approach still characterizes the great body of literature on “public administration” in all western countries.

In the 1930s and 1940s some American political scientists began to focus their analysis on the “leadership” or “political” behaviour of top-level administrators. Rejecting the notion that public administration could be studied or taught apart from the general concerns of political science, this approach viewed administration as simply one phase in the political process. Emphasis was shifted from the internal aspects of administrative organizations to the environmental or “political” problems of these organizations. Emphasis was shifted from reform to value-free, neutral analysis. This “administrative politics” approach developed at the same time as the “behavioural revolution” in American political science and applied many aspects of that revolution to the study of public administration.

Canadian constitutional lore is full of the most amazing paradoxes. The Dominion has a written constitution; but, if the function of a written constitution is to introduce certainty and finality into a polity, this is precisely what Canada's written constitution fails to accomplish. Preposterous as it may seem, no one knows where the constitution begins or ends. The usual answer to a question about the “document” is that the constitution consists of the British North America Act of 1867 and its amendments. The superficiality of this answer is immediately revealed when one asks, Which amendments? The Rowell-Sirois Commission, which made elaborate studies of the background and functioning of the constitutional system, accepts and prints six amendments, the last one of which is dated 1916. Yet this is patently mistaken, for the Statute of Westminster, 1931, placed by the Commission immediately after its “last” amendment, definitely implies at least one later change by its citation of the “British North America Acts, 1867 to 1930.” There is little doubt, too, that the British North America Acts referred to in the Statute of Westminster did not include two of the amendments printed by the Commission (those of 1907 and 1916) and possibly even a third (that of 1875). After meditating on the apparent inaccuracy of the Royal Commission, no one should be surprised to recall that in 1930 the Premier of Ontario (Mr. Ferguson) advanced the view that the number of constitutional “modifications” at that date totalled thirty-three instead of the three about which there is evidently no doubt. Indeed, even the Mother of Parliaments has been misled by one of her Daughter-Parliaments into an erroneous citation of these Acts in her most solemn constitutional enactment, the Statute of Westminster. This is clearly revealed by the belated and surreptitious attempt made in the constitutional amendment of 1940 to tack on one of the earlier amendments omitted from the British North America Acts as defined in the Statute.

It would be presumptuous for a Canadian to comment critically on the affairs, of Newfoundland—particularly as a native of a country which has done its share of bullying a small neighbour and of a country which can scarcely point the finger of scorn on grounds of bad government. Charges of corruption heard in Newfoundland fall on attuned Canadian ears—and it would probably not be difficult to find specific instances of scandal in the history of government in Canada which would match those of Newfoundland.

Nevertheless a student of the economic history of both countries may be forgiven for reflections suggested by comparisons and contrasts. In common with other maritime regions, Newfoundland throughout her history has faced the sea, and she has been the last to feel the effects of the pull of the North American continent. The railroad from St. John's to Port aux Basques brought her in direct touch with North America viá Sydney. Canadian bankers assumed control in the island after the crash in 1894. With the turn of the century the steel mills of Nova Scotia began to draw on the iron mines of Wabana. While British industrialism penetrated Newfoundland in the construction of paper mills, it was significant that Cornerbrook on the west coast was sold to International. Industrialism, particularly as evident in transportation, linked Newfoundland more closely to the continent, to mention only the demands for coal and oil.

The problem reviewed in this article is restricted to organized compulsory systems for ensuring the regular distribution of specified quantities of commodities or groups of commodities to consumers. Systems of rationing goods to producers or traders or of determining priorities or allocations to them are not considered, even though they result in shortages to consumers. Nor is attention directed to voluntary schemes of rationing introduced to meet shortages by retailers who may decide to sell the commodities concerned only to their regular customers or to allow each customer only a small amount of the commodity. Voluntary methods may be adequate for dealing with shortages of less essential goods or with temporary shortages of necessaries, but are not effective for meeting continuing shortages of necessaries. Such systems are distinct from that of consumer rationing, and would require separate review, which in dealing with Great Britain would be concerned with Limitation of Supplies Orders by which traders receive only a fraction of their peace-time supplies, and with the consequences of such Orders.

Consumer rationing has its greatest value where supplies of necessaries are short and are yet available in sufficient quantity to give each consumer a reasonable amount if supplies are equitably distributed. Until rationing is introduced shortages result in rush to buy supplies so that the shortage is aggravated. Some purchasers who have time and money go round from shop to shop buying such quantities as they can obtain to build up a private stock, and thus deprive others of their fair share of the limited supply. Queues are formed outside the shops and much annoyance and uneasiness results. These and other difficulties are avoided when rationing is introduced, and the psychology of the public towards the shortage is improved.

It is one of the truisms of Canadian politics that stable federal power cannot be achieved without support from the province of Quebec. Until 1896 the dominant political party, the Conservatives, was the one which held Quebec. Since that period, Liberal ascendancy has been based on solid strength in French Canada. The problem of creating sufficient inter-cultural agreement to make possible the formulation of federal policy has been the most important single factor in determining the character of national party competition. This difficulty has set a premium on those skills of negotiation and conciliation which have in fact distinguished most successful Canadian statesmen, and has, more than anything else, inhibited the formation of national parties with consistent principles and policies.

Political parties, as a condition of national success, have had to unite French and English elements; but thus far they have done so only on the most tenuous basis. For many purposes, a minimal consensus was sufficient, but it seems to have been inadequate to achieve the full measure of power and influence which the Fathers of Confederation envisaged for central government. Although judicial decisions, and economic and geographic forces, may have accentuated the trend to a decentralization far greater than that contemplated in 1867, the basic reason for this development has been the impossibility of creating national parties which would unite both French and English Canadians behind alternative programmes. In the words of a French-Canadian historian: “Les principaux auteurs de la Confédération n'avaient pas caché leur intention d'organiser un gouvernement central très puissant.” It must be concluded that they either seriously overestimated the range of shared assumptions between the two cultures, or badly underestimated the degree of unity on fundamentals which was necessary to run the centralized state they had tried to create. The only type of national political party which Canada has been able to construct successfully has not proved capable of fulfilling their intentions.