The demand for a Royal Commission had now become more clamant, but the objective was not general reform but a specific issue — the reorganisation of the University into four independent universities. Certainly the demand for this was not unanimous — Otago wanted reform but not disestablishment; but on the other hand Auckland had become so exasperated over the thwarting of its ambitions in regard to special schools that by 1924 it had reached the point of demanding autonomy for itself. The upshot was that in September of that year the Minister of Education announced that the Government would appoint a Royal Commission consisting of Sir Harry Reichel, Principal of the University College of North Wales, and Frank Tate, Director of Education in Victoria. In a lengthy report they criticised the undue emphasis on examinations, the external examination system, and its corollary, the detailed syllabus, and they were also scathing concerning the standard of university education implicit in the methods of obtaining degrees. Other specific aspects of the system calling for wholesale condemnation were understaffing in the colleges with consequent large classes and lack of specialisation, the low standard of matriculation, the cult of the exempt and the part-time student and the evening class, and the substitution of mere technical training for true university education. The six-subject degree, so long a matter of dispute between Senate and Board of Studies, was utterly condemned, and the nine-unit course was advocated. As to the reorganisation of the University itself, the Commission agreed that dissolution and the establishment of four independent universities was desirable and ultimately inevitable, but was persuaded by the opposition from Otago and from some of the special schools that the time was not yet. (It was still 36 years away.) A federal university was, therefore, the basis of the Commission's recommendations, with emphasis, however, on a central feature — namely, the appointment of an academic head or principal. Other recommendations included the setting up of an Academic Board charged with the duty of approving all curricula and all standards and methods of examination, of a Secondary Schools Board to look after entrance qualifications, and of a Council of Legal Education. Better financial provision for the universities generally, and in particular for libraries, was also recommended.

In outline, at least, most of these matters were covered in the New Zealand University Amendment Act, 1926, but no provision was made for better financial support of University or colleges, and the Canterbury Agricultural College and the newly established Agricultural College at Palmerston North were left out of the scheme of things. The Council, or reconstituted Senate, was to comprise a chancellor and a vice-chancellor, four members appointed by the Governor-General, two by each college council, five by Convocation, three professors by the Academic Board (which was also established and its powers defined by the Act), the Director of Education ex officio, and a co-opted member. A principal, who by virtue of his office should be vice-chancellor, was to be appointed by the Council, but there was no authority or other provision for payment of his salary. A University Entrance Board, whose members were derived in a variety of ways, was established. One short clause, 13, was included, the potential of which does not seem to have been realised for many years to come: that “It shall not be necessary that the courses of study or methods of examinations prescribed for any degree or diploma shall be the same for each of the constituent institutions.” Proxy voting was abolished. In 1927 the reconstituted University Council met, elected John Macmillan Brown chancellor, and, proceeding to consider the appointment of a principal, found it had no power to pay a salary to such a person. The Government, asked for amending legislation, came back with sundry proposals that if put into effect would bind the University in the chains of Government control. The Council recoiled, but on the advice of its chancellor decided that after all a principal was unnecessary, and probably a dangerous innovation, and that the chancellor, the vice-chancellor (at the time Professor Rankine Brown) and the Standing Committee could manage very well. Amending legislation, however, having been passed in 1928, a part-time position with a small honorarium was accepted by Professor Thomas Hunter (later Sir Thomas) who in 1929 began his long and efficient reign as chief executive; and if he was not able to exercise the influence over the University as a whole that the Reichel-Tate Commission had hoped for from a principal, it was because such duties as he undertook were superimposed on those of principal of his own college in Wellington.

The Government's next step in its plan of centralising control and of exercising economies was to direct two of its officers to report on university finances. The inquisitors discovered, among other things, that Government and local body contributions to universities in Britain amounted to £54 per student, in New South Wales to £32, in South Australia to £34, in Wales to £84, and in New Zealand only to £19 per student. Accordingly, they recommended more rather than less expenditure. It was obviously necessary to increase the grants to the colleges both for arts and science teaching and for certain special schools. But the amending Act which followed in 1928, though increasing the grants to the colleges, reduced that to the University and included a number of irritating restrictive clauses. The Council again became the Senate. At last in 1935 came the turn of the tide of financial recession, and with it the first Labour Government with firmly grounded views on the importance of education and with Peter Fraser as Minister. But from this point in time, with a period of legislative calm ahead, it is useful to look at domestic matters as they were unfolding.