PUBLIC RECORD OFFICE
Reference -
C.O. 885
1 PUBLIC RECORD OFFICE, LONDON
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British treasury. The saving to Great Britain, by having withdrawn two regiments from this station, is estimated at £25,000 for the current year, much to the detriment of the industry, commerce, and revenue of the Ionian Islands, by the abstraction of so much of the demands upon its markets, and by the diminution of money spent in the place in the shape of pay and allowances. It is not surprising, therefore, that, in the reduced state of the revenue, a fixed contribution should now be considered a very improvident arrange- ment for these States to have made; and that evil-intentioned persons should endeavour to foment dissatisfaction, by representing it as a very ungenerous and illiberal exaction permanently imposed upon these islands, insinuating, at the same time, that it will last just as long as British connection continues, and no longer.
The contribution is considered, by all parties here, and very designedly denounced in certain foreign countries, as a direct tribute imposed upon these States, and paid to account of British Parliamentary estimates in aid of and appropriated by them; and that, in this respect, these Islands are treated with less liberality and favour than any of the other dependencies or possessions of Great Britain.
However incorrect these assertions may be, however sinister these insinuations, yet such being the reflections cast upon that arrangement by all who desire to see the con- nection between these Islands and Great Britain dissolved, every friend to that connection must wish to see it taken into reconsideration as a question of policy; and, to this effect, it becomes my duty to present fully to Her Majesty's Government my views upon this subject; and, in earnestly recommending a liberal, generous, and munificent line of conduct upon this affair, I may likewise express my conviction, that there is not a British functionary, in the service of the Ionian Government, that does not desire, for the credit, honour, and advantage of our country, that the burthens imposed upon these states for military protection and British management, be modified and "diminished, as well for the benefit of these people, as to defeat the very sinister attempts of the enemies of British connection and British interests, who endeavour to make this pecuniary arrangement the instrument of much detriment to England.
The principle of making the governed the creditors of the Government; that is, any thing which creates in them a vested interest in the stability of the Government, is a sound, sustaining maxim of state. Such an interest has the fundholder: and such (apart from the economical and provident objects of the institution) is the effect of the savings' banks. To reverse the principle, and make the governed the debtors of the Government, by direct impost or tribute, must tend to produce, on the contrary; subversive and destructive effects. Thus, for example, the project, which, by a representation to that effect, I defeated, of making emigration to British North America pay itself by imposing upon the Emigrant the obligation of paying a certain quit-rent to the crown, redeemable within a certain num- ber of years, to form a fund to defray the expence of transporting Emigrants to the Colonies, or to contribute in kind towards the subsistence of new settlers for the first periods of their establishment, by supplying certain quantities of grain, &c., for their subsistence, was manifestly subversive in principle.
Under any circumstances, such impost or tribute is hurtful and impolitic, but when it is made to affect, collectively and politically, a remote and important de facto possession. connected with us by ties less intimate than those of other dependencies, coveted and courted by rival Powers, the danger of such an exaction becomes still more manifest; it uperates as a premium to a change of allegiance; it acts as a wedge, and not as a tic.
The question I am treating is another instance of this. The very large portion of the revenue of these States, absorbed in the payment of the fixed contribution for military pro- tection and for the civil list expenses of the Lord High Commissioner, his residents in the islands, and other British functionaries, is, unquestionably, tending to subvert the union at present subsisting between Great Britain and these States, so true is this, that the agents and partizans of France, and particularly of Russia, do not fail to take advantage of every upportunity to insinuate that there are Powers, who would be glad, in certain events, to take these States under protection without being paid for it ** and the manifest insufficiency of the Tonian revenue to defray obligations to the amount imposed, and at the same time to provide for the manifuld wants of the State and the necessities of the country, give furce to such insinuations.
This disposition to create, and predisposition to feel, dissatisfaction with the exaction is greatly stimulated by the terms in which most travellers, some authors, and, universally all foreign visiters, speak of and deprecate this arrangement. I have heard it deeply la- I have already said that it is par mented by many enlightened men of our own country.
tieluarly so by all the British functionaries in these States, and by such of our countrymen as know the wretched state and great necessities of the people; and I have received many confidential representations from the first men in this country, made in the best spirit towards British protection, who deplore this arrangement, on account of its subversive tendency, and the mischievous uses which are made of it.
It is true that the VIth Article of the Treaty of Paris provides that a particular convention or settlement with these States shall regulate, according to their revenues, everything which may relate to the maintenance of the fortresses, the pay and subsistence
105.
"bservation of simole: tenor made in despatch to Lord Glenelg, No. 10, dated March
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of the British garrisons, and the number of troops of which they are to be composed. There is, therefore, no doubt of the right of Great Britain to exact this contribution; and this has been accordingly recognized and fixed in amount, by the alteration introduced into the constitutional Charter in 1835. But this is not the question which I am treating. I submit whether, in sound policy, we are right in accepting it.
An opinion founded upon good authority is entertained here, among the best friends of British connection, that Capodistria admitted the VIth Article into the Treaty of Paris,* foreseeing that, if acted upon, it would prove a perpetual source of dissatisfaction and contention; and am warranted in saying that Sir Thomas Maitland entertained this belief. Perceiving that this would be the tendency of such a permanent settlement, that distinguished person refrained from recommending or forcing such an arrangement as that now subsisting.
In Sir Thomas Maitland's address to the Primary Council, convoked by him to concert the basis of the constitutional compact to be entered into under the Treaty of Paris, upon the subject of finance, he states, "that although Great Britain might insist upon the fulfil- ment of the letter of the Treaty, by forcing on, at once, a convention for the payment of our troops; yet, looking at the actual situation of these Islands, the disordered state of their finances, and that, in truth, the whole financial system must be essentially changed before any correct notion of their disposable means can be arrived at; she (Great Britain) is disposed, in the meantime, simply to require that the expenditure is confined within proper limits, and the surplus thrown into the general Treasury, to be applied to the purposes of useful works, that may be positively necessary, or to the repair and mainte- nance of the fortresses of the country."
Now it cannot be said that either of the reserved conditions, expressed or understood in the preceding passage, have altogether been accomplished so as to admit, with due regard to the interests of these States, and to our national honour, of such a pecuniary arrangement as that now subsisting; for this country is still deficient † in almost all works and institutions of positive necessity, and the very bad system upon which the finance hangs, has not been essentially changed in principle, but maintained in full force; and the expenditure in the several islands, instead of being reduced within the nar- rowest possible limits, was by the Act of 1834 "for trying experimentally (sperementare) a system of municipal finance," most lavishly increased.
A few days after my assumption of the Government the Civil List was considerably increased, especially in the judicial branch, notwithstanding my recommendation to the Assembly, then and since, that it should be reduced. However objectionable I felt that measure at the time, I did not think I should have been justified, in the first week of my administration, in rejecting a Civil List which had obtained the sanction of both branches of the Legislature.
I have now brought that expenditure within proper limits, and I have effected other reductions by which the general Treasury may be enriched; and I am occupied in con- sidering how an essential change may be made in the revenue system, by a gradual transi- tion from the present system of taxation, namely excessive duties upon exportation, to moderate duties on articles of general consumption.
A surplus revenue cannot be said to exist, whilst public works and institutions, posi- tively necessary to the prosperity of the country, and to the happiness and well-being of the people, are either incomplete, or have never been commenced for want of the necessary
funds.
It is not, therefore, in my opinion, consistent with the fostering and paternal care. and that " peculiar solicitude" to which we are solemnly pledged to improve the condition of the country, that we should exact such excessive payments for the repairs and mainte- nance of the fortresses, and for other expenses of a military nature, until we shall have raised this country to a very different state in the scale of improvement, by draining marshes, executing public works, and founding institutions, all most urgently required, as the first steps to a better order of things.
Reverting, therefore, to the opinion entertained, that Capodistria introduced the Article above cited, foreseeing its consequences, I may observe, that whether he did or did not foresee these, and act accordingly, or whether Sir Thomas Maitland was influenced, as above by these apprehensions, I affirm, that the exaction of the contribution is made to operate in the manner which has been attributed to Capodistra's design; and that it is
Art. VI.-"His Britannic Majesty consents, that a particular Convention with the Govern- ment of the said United States shall regulate, according to the revenues of these States, everything which may relate to the maintenance of the fortresses alrendy existing, as well as to the subsistence and payment of the British garrisons, and to the number of men of which they shall be composed in time of peace."
The same Convention shall likewise fix the relations which are to exist between the said armed force and the fouian Government.”
These deficiencies reported in Despatches Home of—
6 June, 1835, No. 28.
29 July, 1835, No. 39.
Reports upon State and Condition of the Population. Address to Legislative Assembly, 7th March, 1837.
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