In order to counteract so far as possible the serious consequences of a simultaneous set-back in two of the three main industries in Newfoundland, namely, fish and newsprint, special steps were taken by the Commission of Government to ensure a guaranteed price to the producer in the fishing industry and to relieve unemployment by a short-term programme of road and public works. These efforts were successful in so far as they helped to maintain the volume of employment in the fishing industry and to prevent further deterioration in conditions generally. It was not possible, however, by Government action to offset in full the shortage of employment in the newsprint and logging industries, and there has, I regret to say, been an increase in the number of persons in receipt of public relief during the winter as compared with the winter of 1937–38.

There has recently been some improvement in conditions in the newsprint industry, and, therefore, in prospects for the resumption of logging operations on a larger scale. Further impetus will be given to logging activities by the recent agreement with Messrs. Bowater Lloyd, providing for the utilisation of important forest areas hitherto unexploited. In addition to the revival of the fish trade with Spain which, it is hoped, will follow the end of the civil war, negotiations with an important United States company interested in taking fresh and processed fish and other food products are taking place. The mining industry, I am glad to say, is continuing to work at full capacity. The revenue of the island has so far kept up with the Budget estimate.

The draft Newfoundland Estimates for 1939–40 are now being prepared, and I am in consultation with the Commission in regard both to short-term measures and also to their long-term programme, covering rural reconstruction and the expansion of the social services. The grant-maid to Newfoundland which Parliament is to be asked to vote for 1939–40 has been fixed at £1,000,000, an increase of £680,000 on that provided in 1938–39.