C. 93921/32 [No. 30].
156
No. 51.
Telegram from the Secretary of State for the Colonies to the Governor of Mauritius.
No. 41.
(Sent 8.0 p.m., 20th February, 1932.)
[Answered by No. 52.]
Confidential. Your telegram No. 30. Please convey substance of the following to Unofficial Members, in such manner as you think best :-
Begins-As stated in my telegram No. 11 the establish ment of a balanced budget at the earliest possible date is an urgent necessity in view of the liabilities assumed by His Majesty's Government and the financial situation in this country, which precludes further borrowing beyond the Guaranteed Loan. The Financial Commission have made re- commendations to that end which involve drastia retrenchment and comprehensive reorganization of the whole machinery of Government in the Colony, as well as increased taxation." Certain of their proposals regarding e.g., the Revenue Depart- ments, Education Department, and Railways are already being put into force but the schemes of retrenchment and reorganization generally are not such as can be put completely into force at once, while even if they were, they would give little immediate financial relief owing to the payment of gratuities, etc., to retrenched officers. The detailed reorganiza- tion recommendations are being examined as rapidly as possible and proposals will be put before the Council of Government as soon as this necessarily lengthy examination is complete.
The Colonial Government has meanwhile to consider what steps are essential to avoid the complete dissipation in the current financial year of its remaining cash balances, and it has felt it necessary for this purpose to adopt forthwith, with some modifications, the proposals put forward by the Com- missioners for a levy on salaries and for fresh taxation. The taxation proposals put forward at this stage by the Government are appreciably less drastic than the Commissioners' proposals. It is essential for the Government to conserve its cash re- sources pending the carrying out of the reorganization proposals, but it will be ready to consider any alternative proposals which
† No. 41.
* C. 93921/32 [No. 24]: not printed.
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will achieve that object equally completely and rapidly and with equally fair distribution of the burden among all classes. If such alternative proposals cannot be framed the Govern- ment can only insist on the carrying out of its own proposals, since failure to prevent complete dissipation of remaining resources can only result in application to His Majesty's Government for grant-in-aid which would inevitably mean passing of direct financial control from the Mauritius Govern- ment to His Majesty's Government.
Unofficial Members must recognize that at the present time when His Majesty's Government have a special responsibility for the solvency of Mauritius, it would be impossible to enter- tain proposals for constitutional changes involving a diminution of their control over the administration of the Colony. While every consideration will be given to any suggestions made by the Unofficial Members for meeting the deficit in the finances of the Colony, the ultimate responsibility must remain with the Governor and the Secretary of State. It will no doubt be made clear to the public that the recommendations of the Financial Commissioners have been drawn up, after a close examination of all the circumstances, and have as one of their main objects a readjustment of taxation intended to relieve the poorer sections of the population of some part of the burden of taxation. Ends.
You may make public a summary of the Commissioners' recom- mendations as communicated to you before they left the Colony, adding that you understand that some modifications of detail have been made in their final Report which was completed after arrival in the United Kingdom and is not yet available in Mauritius.
I am not clear whether any formal reply is necessary to the Resolutions adopted at the public meeting, but if so, it will be sufficient to say that I have received and noted them. I endorse your action in not attempting to prevent the meeting and have no desire to interfere with free public discussion.
Your telegram No. 29.* As regards funds to meet deficit in the near future, I should not feel justified in asking the Crown Agents to make further advances from the Joint Colonial Fund. Recourse must be had as need may arise to the sale of Indian securities, of the Improvement and Development Fund and Scholarship Fund. I approve generally the Commission's recommendation for the wind- ing up of these funds and legislative sanction will clearly be needed ultimately for this and for the utilization of the existing balances in them. I leave it to your discretion, however, when and how to introduce such legislation. Legislation will also be necessary to sanction the utilization of the balance of the 1922 Loan Fund, the investments of which have already been nearly all sold.
•
C. 93984/32 [No. 6]: not printed
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