21. In 1889 the Colonial Office agreed to the proposals of the Colonial Contributions Committee, one of which was that Colonial military Crown lands should be treated as part of a capital sum devoted to defence purposes, and that, when no longer required, their realized value when sold, or their estimated value when not sold, should be recorded with a view to possible future defence expenditure in the Colony. Not only was this principle accepted by the Colonial Office, but it enforced its practical application in the Mauritius by ordering the realized fee-simple value of certain land and buildings which had been sold to be expended on other similar property in another part of the Colony. (Appendix A and Appendix B, Nos. 1, 3 and 13, and enclosures).
22. At that time no question was raised by the Colonial Office as to the value of the right of user only being recorded, and the difference between that and the fee-simple value being made unavailable for future military Colonial expenditure.
23. In 1890 the Colonial Office wished to draw a distinction between Colonial military Crown lands occupied without formal title, and similar lands held under title from Colonial Governors, and to calculate their values on a different basis, the former being assessed at the value of the user only, the latter at a different and higher value. (Appendix B, No. 6.)
24. Later, in 1890, the Colonial Office issued a circular on the subject in complete accord with the Committee's report. (Appendix B, Nos. 8 and 9.)
25. In 1891 the Colonial Office apparently dropped the above distinctions as to tenure, and proposed that the right of user should be assessed, at about ¼ or ⅓ the fee-simple value, of all surrendered Colonial military Crown lands, but on the value of the properties when originally acquired, and not on their current value, the difference being freed from any lien for future defence expenditure. (Appendix B, Nos. 10 to 19,)
26. This, in the case of Hong Kong, would represent about ¼ of the prairie value, clearly a minus quantity, for when we took possession of Hong Kong its rocky lands were practically valueless.
27. The reason for this complete change of view on the part of the Colonial Office is apparently traceable in paragraph 2 of Colonial Office letter, Appendix B, No. 12. It is there stated, "Lord Knutsford considers that it would be better if the question of assessing the value of surrendered properties were kept separate from the liability of the Colony to provide all military lands and buildings."
28. The two questions cannot be separated unless the Colonial Office will undertake that all Colonies shall provide all lands and buildings required for their defence. In that event the whole question would drop, and there would be no object in assessing the value of surrendered properties. (Paragraph 60, Appendix A, and paragraph 7 enclosure to No. 9, Appendix B.)
29. One Colony has accepted this alternative. The records of Imperial expenditure prove, however, even if it were not otherwise well-known, that many Colonies cannot, or at any rate do not, provide all the lands and buildings required for their garrisons, in spite of the principle laid down by the Colonial Office that "it is the duty of Colonies to provide for their land defence to the extent that their means will admit." When such expenditure falls on revenue or involves taxation the Imperial Government has great difficulty in obtaining any aid from Colonies; and the whole object of the enquiry conducted by the Colonial Contributions Committee, on the subject of Colonial military lands and buildings, was to show how the service could be carried on with justice to the Colonies and to the Imperial Exchequer.
30. If the principle that Colonies shall bear the cost of their land defence, to the extent that they can afford, is to be maintained, and if it can be shown that by the sale of one military property others essential to the defence of the Colony can be provided without increasing the taxation of the Colony or touching its current expenditure, it is obviously equitable to require that the change of properties shall be effected on a basis that will secure this result.
31. The position the Government would find itself in if the Colonial Office views were adopted is clearly foreshadowed in paragraph 4 of Appendix B, No. 19. Colonies will there find an argument which they will not be slow to turn to advantage. They will contend that as the Secretary of State for War only possesses the right of user of Colonial military Crown lands, so long as they are required for defence purposes, the right of user ceases to be of any value the moment it ceases to be necessary, and that the Colony is then entitled to enter upon "the fee-simple freed from any obligation to the military authorities or to anybody else."
32. On the other hand, when supplying the military with other properties, Colonies will argue that such properties being subject to a, possibly, perpetual user, their provision must be taken as costing the Colony their full fee-simple value. Under such conditions the account of the "capital sum devoted to defensive purposes," referred to in paragraph 3 of this letter, would only contain entries to the debit of the Imperial Government; and the principle there quoted would receive an application certainly not contemplated by the Committee that recommended it, nor by the Government that approved it.
33. There are several statements in the Colonial Office case, and the documents accompanying it, which, if they were dealt with in full detail, it would be necessary to call in question. Only the following, however, call for remark at present. Paragraph 12 of the "Memorandum for Lord Ripon" speaks of the Secretary of State for War "thus obtaining, in aid of War Office Votes, the entire benefit of the rise in value of the sites since they were first occupied." Again, paragraph 22 quotes a despatch of the Duke of Newcastle of 1862 in which he states, amongst other things, that he "understands that the Ceylon reserves are not held by the military authorities with a view to profit;" and in paragraph 23 it is said that "the War Office does not admit this principle," contending they are entitled to receive the full market value of any part of the Reserves which the Colony wish to have, although it is admittedly unnecessary for military purposes."
34. These passages show a complete misapprehension of the effect of the approved recommendations of the Colonial Contributions Committee and of the views of this department on the subject. Mr. Campbell-Bannerman fully concurs in the Duke of Newcastle's statement that Colonial military Crown lands are not held by this department "with a view to profit." Under no circumstances will this department "obtain, in aid of War Office Votes, the entire benefit of the rise in value of the sites since they were first occupied," nor indeed any part of the value of such properties. This aspect of the question was explained in paragraphs 5 and 6 of Appendix B, No. 7, paragraph 8 of No. 11, paragraph 2 of No. 16, and paragraph 6 of No. 18. The object of recording the value of surrendered properties is not to secure a credit to the Imperial Exchequer, but to ensure that "the capital sum devoted to defensive purposes" by Colonies shall be made use of before the Imperial Exchequer is taxed for the provision of Colonial properties required for Colonial defence.
35. This may be illustrated as follows: In a given Colony, owing to an increase in its garrison, or to a necessity on sanitary grounds of removing barracks from densely inhabited quarters of a town, or to other similar causes, new barracks have to be provided at a cost of £50,000. At the same time old sites, no longer suitable to their purpose, to the value of £70,000, can be surrendered by the War Department. Then, under the principle that "Colonies shall provide for their land defence to the extent that their means permit," the expenditure of £50,000 would be provided out of the £70,000 realized by old sites, and the balance (£20,000) would remain in the possession of the Colony, ear-marked for
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