360
>
PUBLIC RECORD OFFICE
Reference :--
TEEL C.O. 882/11
PUBLIC RECORD OFFICE, LONDON
| ALLY WITHOUT PERMISSION OF THE
BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
94
.
unnecessary embitterment of future relations. They will not be invited to undertake a pilgrimage to Canossa. There may be no formal gesture of reconciliation, but hostile solidarity has already begun to yield to the solvent of internal dissension.
In the earlier stages of the proceedings on the Budget some semblance of Unofficial solidarity was maintained. The object in view presumably was to demonstrate that there was no need of a loan involving an early increase of taxation for its service, and that my imposition of a surcharge on import duties had been, therefore, un- necessary and unjustifiable. The contention, which experience was soon to disprove, that this surcharge would cause serious hardship to the poor was allowed gradually to lapse into the background and to become an instrument serviceable only for occasional purposes of rhetoric. Before the debate on the Second Reading of the Supply Bill was opened, the Unofficial Members had met in private conclave and had appointed a small Sub-Committee to scrutinise the Estimates and recommend reduc- tions by means of which financial equilibrium might be attainable. This Sub-Committee amounting in all to approximately Rs. 7.000.000. recommended a number of "cuts
To many of these proposed cuts there was no grave objection, subject to the assumption that the Unofficial Members were prepared to accept or demand, a change of policy in respect of the provision of certain works and services, or of the rate of progress and scale of such provision. A few of the proposed cuts were quite inadmissible, but as the Sub-Committee had not sought departmental advice, it was not to be expected that all the facts would be correctly apprehended. I gathered that, when the Sub- Committee was appointed, all the Unofficial Members had pledged themselves to vote solidly in support of such of its recommendations as a majority of them might eventually decide to adopt and press.
8. It was obvious that a reduction of Rs. 7,000,000 in the Estimates of Expendi- ture would not suffice by itself to produce a balanced Budget. Rumours were current that the Government was to be asked to increase quite arbitrarily the Estimates of Revenue by several millions of rupees, to use up for the requirements of 1929-30 the whole of the surplus balances (including the proposed reserve fund of Rs. 10,000,000), and to substitute an increase of the export duty on tea from 3 cents to 4 cents per pound for the surcharge on imports. This last suggestion was under- stood to have originated in the obiter dicta of the European Urban Member; but, however that may be, at a later stage he expressed himself in the Council as opposed to an increase in the export duty on tea. It is very doubtful whether in the present condition of the market the lower-grade qualities of tea (especially the tea grown on mid-country estates) could hear an increase of the export duty, and in any event the Government was not prepared to take the risk involved in such haphazard
discrimination.
9. It seemed to me desirable that. before the Unofficial Members committed themselves publicly to proposals which could not form a basis of agreement, they should be afforded an opportunity of discussing the whole situation with me and of exploring the possibilities of accommodation. I sent word to them orally, through the Acting Colonial Secretary, that if they, or any Committee or delegation of them, would care to talk things over informally. I should he very ready to see them at Queen's House. I received no definite reply, but I gathered that they did not think the time had come for such a discussion, and that they would prefer not to give an answer until after they had made their speeches on the Second Reading of the Supply Bill. I took this to mean that they were concerned to avoid anything which might restrain their freedom of argument and diction in commenting upon the use which I had made of At that time your attitude towards their protest against my my reserve powers. action was still unknown. Your telegram* in which you intimated that you were not contemplating intervention arrived a few days later and was duly communicated to the signatories of the protest, but was not published, although there was the usual immediate leakage of its purport into the Press.
report of it has been forwarded to Your Lordship. The Government signified its willingness to co-operate, so far as possible, with the Unofficial Members in the Select Committee on the Estimates, with a view to exploring all avenues to agreement upon reductions of expenditure. The second Reading was passed without a division.
10. The Second Reading debate took its course. The "Hansard
11. In the Select Committee the attitude of most of the Unofficial Members was far from accommodating. The supreme consideration appeared to be their desire to postpone at almost any risk the need for an increase of taxation. Practically all the new works proposed in the Estimates were deleted, and in respect of the large
• No. 62.
95
number of continuation votes for works previously sanctioned it was only after prolonged discussion that the Government was able to avert a refusal to allow work to proceed where expenditure had already been incurred or commitments undertaken. cut its A suggestion had been seriously put forward that the tiovernment should fosses by repudiating contracts actually made for sanctioned works.
12.
As Your Lordship is aware. I had instructed Heads of Departments, in framing their Estimates, to keep their demands as low as possible within the scheme of previously approved policy. In the course of the proceedings in the Select Com- mittee, the Heads of the large spending Departments (Railways and Public Works) were authorised to offer further large reductions where they considered such reduc- tions feasible without actual loss, in order to meet the Unofficial demand that expendi- ture should be curtailed to the utmost in the coming year. The Unofficial majority, however, went beyond this, and in the case of Railway Loan Works deleted further items, which in the opinion of the General Manager were necessary for the efficient and safe working of the railway. Productive expenditure on works of development fared badly. The provision for the improvement and extension of the telephone system was cut down from Rs. 1,400,000 to Rs. 400,000. The Forest Department vote for cutting and removing timber, an immediately remunerative item. was curtailed, as also was the vote for sowing and planting, on which the Forest revenue of future years depends. No new irrigation works were sanctioned.
13. The usual tendency to introduce racial, communal, and personal issues was observable, but I do not wish to dilate on this, as the attempts to give practical effect to such bias were defeated, in one or two instances in the Select Committee, and in other instances at the Third Reading stage in open Council.
14. The customary process of leakage had kept the Press and the country fairly well informed of the proceedings of the Select Committee, and grave apprehensions appeared to be aroused, especially among the urban labouring classes, or at any rate among their leaders, as to the effect which such a drastic policy of retrenchment would produce on employment. A deputation from the Labour Party and subsequently a I have forwarded deputation from the Unionist Party made representations to me.
Another factor which
to you full reports of all that was said at these interviews.
may have perturbed the Unofficial Members was the anxiety of the lower grades of the Public Service (most of whose members are qualified even for the present franchise) in regard to the acceptance of the recommendations of the Salaries Committee. The Select Committee on the Estimates had declined to insert the necessary financial
pro- vision on the plea that the matter was one for decision in open Council. A Resolution was thereupon moved by the Government in open Council and was met by the adop- tion of an inconclusive, dilatory amendment.
16.
When the draft of the Select Committee's Report came up for consideration
by the Committee, the Government appealed to the Unofficial Members to agree to the restoration of items amounting to approximately Rs. 2,500,000, of which a list was furnished to them. This included, in addition to items which the Government deemed indispensable for the requirements of administration and particularly for the mitigation of the incidence of unemployment, provision for the continuance of the passage allowance, holiday warrants, and concession fares of public servants on the previous basis and scale. The Committee was informed confidentially though the usual leakage followed--of your intimation that the proposed reduction, without inquiry and without warning, of these votes should, if necessary, be resisted by the use of my reserve powers. There was a comparatively small attendance of members, and the Committee declined to vary any of its former decisions. and left further con- sideration, if any, to the whole Council.
16. The Report of the Select Committee, with the riders attached to it by several of the Unofficial Members and the note of dissent of the three Official Members, is in Your Lordship's possession. The Report was to be brought up for consideration by the whole Council on the 19th September. It seemed to me desirable that certain misapprehensions should be removed, and the attitude of the Government clearly defined, and I therefore wrote a Message which was to have been delivered to the Council on that date. In the meanwhile, however, I gathered from two of the Un- official Members of the Executive Council that some, if not all, of their colleagues in I the Legislature would be glad of an opportunity of informal discussion with me. said that I did not propose to summon them formally to a Conference, but that my original invitation, which had been left unanswered, remained open, and that if any of them wished to see me, I should be happy to receive them. I left the choice of a day to them and they expressed a preference for the 18th September. Two of the Members, Mr. E. W. Perera and Mr. C. W. Kannangara, who may both he
t
96