37
1
PUBLIC RECORD OFFICE
Reference :-
minimmilu
THILLC.O. 882
36
telephones for any interest on the capital expenditure, as originally contemplated in the report referred to above.
4. The Government of the Straits Settlements has, as a matter of fact, raised no loans for the above purposes, but has constructed the l'enang Telephone Exchange, and a railway across the island of Singapore, and is proposing to construct a railway across Malacca, out of revenue.
ე. Mr. Lyttelton submits, for the consideration of the Army Council, that it would be only fair, in computing the net revenue from telephones, railways, &c. to make a deduction in respect of interest and sinking fund on the capital expendi- ture already incurred, and on similar expenditure which may hereafter be incurred, out of revenue, in the same way as if the expenditure had been incurred out of loans. The deduction might be at the rate of 4 per cent. on the capital expenditure for a period of, say, fifty years, as a loan could not be raised at less than 3 per cent., to which should be added 1 per cent. for sinking fund.
6.
If, as Mr. Lyttelton would suggest, this arrangement were to take effect from the 1st January last, the immediate financial result would be approximately as follows (the exact figures cannot be obtained without further reference to the Colony).
7. The capital expenditure on the Penang Telephone Exchange was about $50,000, and 4 per cent. on this amount will reduce the estimated net telephone revenue for 1904 from $5,148 to $3,148. The capital expenditure on the Singapore Railway has been about $2,000,000, and 4 per cent. on this amount exceeds the balance of estimated railway receipts over railway maintenance charges, viz., $68,737. The statement of revenue for purposes of military contribution for the current year which was enclosed in the letter from this Department of the 4th November last* should, therefore, be corrected somewhat as follows:-
Estimated revenue. 1904*
Less Land sales
Penang Telephone Exchange receipts
Singapore Railway receipts
Currency Note reimbursements
Christmas Island revenue
Add:
Net railway receipts
10638
SIR.
No. 35.
STRAITS SETTLEMENTS.
WAR OFFICE to COLONIAL OFFICE.
(Received March 25, 1904.)
[Answered by No. 36.]
War Office, London, S.W., 23rd March, 1904. WITH reference to Mr. Lucas' letter, No. 1885/03-4, of the 29th January last,* respecting the method of treating the expenses of the Currency Note issue in assessing the revenue of the Straits Settlements for the purpose of the military contribution, I am commanded by the Army Council to point out that the effect of the course adopted by the Colony in its "Statement of Revenue" is that any loss which may be incurred in connexion with such issue is deducted from the revenue in order to arrive at the amount assessable to contribution.
In the opinion of the Army Council the preferable procedure would be for the cost of this note issue to be kept in a separate account (to which the expenses of the issue would be charged and the revenue of the investment portion of the "Note Guarantee Fund" would be credited), any profit on this account being transferred This would be to treat the to general revenue and liable to military contribution. receipts from the note issue on the same lines as the receipts from railways, tele- phones, or any other Government undertaking of a commercial character.
There is nothing to show whether the expenses of the note issue during the years 1889-1901 exceeded or fell short of the revenue from the investment portion of the guarantee
(Amounting to $139,656.)
fund, which revenue has, it is presumed, been merged in the general revenue and assessed to contribution during that period; but the Council consider that the deduction of the whole sum of $139,656 from the assessable revenue for 1902 would only be justifiable on the assumption that the proceeds of the investment fund credited to general revenue in the three previous years exceeded that sum.
I am to enquire whether Mr. Secretary Lyttelton sees any objection to a re- statement on these lines of the revenue of the Colony since 1899 being furnished, the proceeds of the investment fund on the one hand and the expenses of the note issue on the other for each year being separately shown out.
$
$ 11,928,742
222,000
12,000
185,000
118,000
53,960
590,980
11,337,782
Nil
3,148
10638
I am, &c.,
GUY FLEETWOOD WILSON.
6
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
Net telephone receipts
Military contribution for 1904-20
per
cent.
11,340,930
2,268,186
8. Mr. Lyttelton trusts that the Army Council will agree to the above proposal, and, if so, that they will obtain the consent of the Lords Commissioners of the Treasury to its adoption from the 1st January last.
If this
9. I am to add that Mr. Lyttelton trusts that there will be no objection to applying the same principle to the military contribution of the other Eastern Colonies, e.g., Ceylon, where in the years 1900-1902 the capital expenditure on rail- way extensions, amounting to Rs. 7,745,104, has been charged to revenue. expenditure be dealt with in the manner proposed above the figures of revenue assess- able to military contribution for 1904 enclosed in the letter from this Department of 30th November last‡ should be reduced by about Rs. 310,000, involving a reduction in the military contribution of about Rs. 30,000.
• No. 29.
I am, &c.,
C. P. LUCAS.
↑ As to this item see Colonial Office letter of 29 January, 1904 (No. 32).
‡ 42467 : not printed.
SIR,
No. 36.
STRAITS SETTLEMENTS. COLONIAL OFFICE to WAR OFFICE.
Downing Street, 8 April, 1904.
I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of your letter of the 23rd of March,† relative to the method of treating the expenses of the Currency Note Issue of the Straits Settlements in assessing the military contribution payable by that Colony.
2. In reply I am to request you to inform the Army Council that, during the years 1899-1901, the cost of the Note Issue was met by an advance, but that no deduction on this account was made from the revenue assessable to military con- tribution during those years. In 1902 the profits on investments were first brought to account and the whole of them were paid to general revenue, but a deduction was made from the revenue assessable to military contribution of an amount equi valent to the expenses of the Note Issue previously met from an advance and then reimbursed from profits.
3. In future the Governor will be asked to present the return of revenue assessable to military contribution (similar to that enclosed in the letter from this
24838
• No. 32.
↑ No. 35.
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