393
46
(ii) at the end of the first or any succeeding quinquennial period the said yearly sum of $4,000,000 may be increased or decreased by mutual agreement between the Imperial Government and the Colony, but except by such mutual agreement shall not be increased or decreased:
(iii) provided always that the Colony shall have the right (not necessarily to be exercised) to liinit the sum payable by the Colony in any particular year to a sum equivalent to 20 per cent. of the Colonial revenues computed in accordance with the Provisions of Section 3 of Ordinance No. 64 (Defence Contribution);
(iv) payment to the Imperial Government shall be made by monthly instalments
in the same manner as hitherto;
(v) it is agreed that the revenues of the Colony on which the above-mentioned 20 per cent. shall be computed shall be the subject of discussion; in par- ticular in regard to the question whether or not interest or income arising from accumulated revenues of the Colony shall be included therein for the purposes of such contribution.
Provided that:-
(a) as regards the Imperial Government and for the purposes of Clause 2 of the offer to the Imperial Government, agreement on the part of the Colony means a resolution passed by a majority of the Unofficial Members of the Legislative Council, i.e.. Official Members will abstain from voting;
(b) as regards the Imperial Government and for the purposes of Clause (iii) of the offer to the Imperial Government, a majority similar to that in (a) above shall determine whether the right shall be exercised; and
(c) that the expenditure on local forces (land, sea, and air) shall in no year exceed
$500,000.
My Lords further observe that the Government of the Straits Settlements is willing to agree to conditions (a), (b), and (c) subject to a proviso being added in regard to condition (c) permitting the sum of $500,000 to be increased after five years if a majority of the Unofficial Members agree.
As the Army Council point out, the effect of the conditions associated with the offer will result in future negotiations regarding the military contribution being conducted with the Unofficial Members of the Legislative Council and not with the Colonial Govern- ment, but as the constitutional position is apparently accepted by the Secretary of State for the Colonies and the size of the contribution is protected by Clause (ii) of the offer, the Army Council do not desire to raise objection to these conditions.
My Lords concur in this view.
My Lords agree that the proviso quoted should be added to conditions (c) and that it must be made clear that the limitation to $500,000 for the next five years will enable the requirements of the local forces, including the contingent of the Royal Naval Volunteer Reserve, which, it is understood, is to be raised during the current year, to be met.
As regards the size of the contribution My Lords note that at the present rate of exchange it amounts to £467,000 as compared with £440,000-£450,000 for the main- tenance cost of the existing garrison (which is all the Colony holds it should pay), or with £520,000-£530,000, the roughly estimated cost of the garrison including maintenance and manning of the new defence (First Stage) of the Singapore Base when complete in 1937.
My Lords further observe that the contribution is payable in dollars, and They feel that at this stage it would be difficult to press for payment in sterling. On the other hand They consider that there should be an understanding that the rate of contribution will be subject to review in the event of any material change in the sterling value of the dollar.
Having regard to all the circumstances My Lords consider that the offer of the Unofficial Members of the Legislative Council represents a reasonable compromise, and I am to request you to inform the Army Council that They authorize its acceptance, subject to the observations set out above.
My Lords concur in the assumption that if the flat rate payment is to apply as from 1st April, 1933, the account for the year 1932 will be settled upon the existing basis, advances being adjusted accordingly if necessary.
A copy of this letter has been sent to the Colonial Office, the Admiralty, and the Air Ministry.
13060/33 [No. 1f.
SIR,
+7
No. 30. ADMIRALTY
to
TREASURY.
(Copy received in Colonial Office 8th May, 1933.)
Admiralty, S.W.1, 2nd May, 1933.
1 am commanded by My Lords Commissioners of the Admiralty to refer to your letter of the 21st April, No. S.3486/3, and enclosures, containing proposals for the fixing of the military contribution of the Straits Settlements for the next five years, subject to certain conditions.
As the Lords Commissioners of His Majesty's Treasury are aware, the aspect of this matter which touches the Admiralty most closely is the provision to be made for the formation and development of a local Royal Naval Volunteer Reserve force, to the early institution of which My Lords attach the greatest importance. The estimated expenditure for this service, forwarded by the Governor of the Straits Settlements, includes a capital outlay of $35,100 and an annual expenditure rising from $27,315 in the first year (1933) to approximately $45,000 in the fourth and subsequent years.
According to information contained in a semi-official letter from Mr. Ryan to Mr. Barnes of 7th April, the Colonial Office and Colonial Government are satisfied that economy in the administration of existing volunteer forces will enable the requisite financial provision for the R.N.V.R. to be made, without exceeding the contemplated maximum annual provision for local forces of $500,000. Subject to the fulfilment of this condition, My Lords have no objection to the settlement for the next five years of the military contribution of the Straits Settlements on the lines proposed in the enclosures to your letter under reply, but they assume that at the end of this period it will be possible for the matter to be reconsidered should the development of the Malayan R.N.V.R. make reconsideration desirable.
My Lords fully concur in the proposal contained in paragraph 3 of the letter from the Colonial Office to the War Office of the 28th February last*.
13060/33 [No. 3].
No. 31.
WAR OFFICE
to
COLONIAL OFFICE.
I am, &c.,
S. H. PHILLIPS.
The War Office, 23rd May, 1933. SIR,
I am commanded by the Army Council to refer to your letter of 28th February, 1933*, regarding the assessment of the military contribution of the Straits Settlements, and to Treasury letter No. S. 3486/3 dated 4th May, 1933†, a copy of which has been sent to your Department.
I am accordingly to say that the Army Council are pleased to agree to a settlement of the Colony's Military Contribution on the basis laid down in the Treasury letter referred to above. The Council, in addition, suggest that it is necessary to provide that the limitation of annual expenditure on the local forces to $500,000 should not apply if the local forces are mobilized during emergency, since the understanding is that in default of any special arrangement to the contrary the Colony will continue to pay for the local forces when mobilized.
I am to add that as the fixed contribution is to apply as from the 1st April, 1933, it is assumed that the contribution for the Army financial year ended 31st March, 1933, will be settled on the existing basis, advances being adjusted as necessary, and that the balance of the arrears, amounting to £10,654, in respect of the five years ended 31st March, 1932 (see War Office letter dated 18th February, 1938‡), will be paid in the ordinary
I am, &c.,
course.
A. E. WIDDOWS.
I am, &c.,
E. J. STROHMENGER.
• No. 27.
↑ No. 29.
13053/38 [No. 1]: not printed.
.PUBLIC RECORD OFFICE
Reference :-
PEPTIC.O.882/11
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO