90
ERIK
PECORD OFFICE
Reference
C.O.882/12
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
PUBLIC RECORD OFFICE. LONDON
COPYRIGHT PHOTOGRAPH-NOT TO
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3. It will be noted that the revenue receipts for the first six months of the year have fallen below half the estimated total for the financial year by no less than Rs.1,221,699 (apart from land sales), while they are Rs.845,000 below the expenditure for the same period. In these circumstances there is, I fear, no prospect that the deficit in revenue will be recouped during the latter part of the financial year. It was for this reason that the Acting Receiver-General had proposed in the telegram to the Crown Agents of the 15th November to sell securities on account of surplus balances to the value of £75,000 (say, Rs.1,000,000) in order to put the Treasury in funds.
4. It must be recollected, however, that it was agreed in June last and sanctioned by Your Lordship's telegram No. 19 of the 7th June that the sugar export duty of 30 cents per 100 kilos and the amounts payable under the 1926-29 loans of 36 cents per 100 kilos should be remitted for the current year. The total loss of export duty under these two heads as compared with the approved esti- mates for the current year is 1,570,900 rupees. An endeavour was 'made to make good the loss due to remission of the export duty by an increase in the succession duties provided for by Ordinance No. 21 of 1930, and by various increases in Customs import duties which came into effect on the 26th August and are covered by Ordinance No. 34 of 1930. The increase in succession duties has not yet had time to make its effect fully apparent, and the collec- tions of import duties have not so far shown any increase over last year. Receipts from Import Duties for the period July-December, 1929, amounted to Rs.2,156,000, while the total Customs receipts for July-December, 1930, are put at Rs.2,140,108, practically all of which sum represents import duties. It is an open question whether, in view of the general depression, further attempts to increase these duties would not result in reduction of imports, particularly in luxury articles, which would more than counter- balance the increase in rates of duty. Present experience appears to indicate that this would be the effect.
5. There has been also a marked falling off in receipts from excise duty on rum, which for the period July to November have fallen below last year's receipts by about 170,000 rupees, the total for these months in 1930 being only Rs.806,000 against Rs.976,000 in 1929. This decrease has been due in part to the economic de- pression but also to a marked increase in illicit distillation, the causes of which are somewhat obscure. An endeavour is being made to tighten the control on the distillation of rum. 'There have also been decreases in collection under licences and registration fees, due to depressed conditions. I fear, therefore, that there is no prospect of the Treasury deficit during the first half of the year being made good by revenue collections in the second half and that
*No. 16 in Eastern No. 157.
39
it will be necessary to cover the temporary advances made by the Crown Agents by the sale of securities as originally proposed in the telegram to the Crown Agents of the 15th November last.
6. The statement of Assets and Liabilities as at the 31st De- cember which is enclosed shows investments against surplus balances of Rs.2,600,000, which represents the invested portion of the nominal surplus of Rs.7,045,000 shown on the Liabilities side. There are no securities in the Balance Sheet specifically assigned Curatelle " deposits of Rs.375,000 or the against either the Widows' and Orphans' Fund liability of Rs.4,370,000. These deposits, liabilities are assumed to be covered by the general assets of the
Curatelle " Colony. The rate of interest payable on the viz.. 2 per cent. per annum, is laid down by Section 54 of Ordi- nance No. 9 of 1890, but it may be noted that by Section 55 of the same Ordinance a commission of 5 per cent. is payable to Govern- ment upon all sums received in the course of administration of estates.
7. The manner of dealing with the Widows' and Orphans' Fund is laid down in Section 7 of Ordinance No. 2 of 1886, which decrees invested with the that all moneys belonging to the Fund shall be
Government" of the Colony and shall bear interest at the rate of six (now eight) per cent. on the mean monthly balance standing in the hands of the Receiver-General to the credit of the Fund. The amount to the credit of the Fund is shown as a liability in- creasing year by year, but no corresponding investments are specifically assigned to the Fund. The transactions of the Fund since 1925, the year after the adjustment in interest rates was put into effect, have been as follows:-
Contributions by
Members. Payments of pen-
Bions.
Interest paid by Government.
1926.
Rs.
1927.
Rs.
1928.
Rs.
1929.
Rs.
1925. Rs. 169,479-94 168,554.29 178,579-88 183,746-20 182,892-42
194,161.35 179,984-17 190,977.50 196,742.67 212,360-69
231,199.81 245,838-12 264,502-19 284,795:81 306,851.02 Annual Total 2,889,997-67 3,072,976-59 3,306,277-34 3,559,947-70 3,835,637.81
Capital on which interest
calculated.
I understand this method is also in force in Ceylon and that the position of that fund is dealt with in the Ceylon Balance Sheet on similar lines. The method appears to me an unsatisfactory one, as the security for the Fund is no better than in the case of the where no liability appears in the Balance more usual " Schemes Sheet of the Colony while the theoretical burden on the Colony appears to be greater and constantly increasing. The arrangement appears to possess neither the advantages of a separate Fund nor