401
PUBLIC RECORD OFFICE
humil
Reference :-
C.O.882/11
PUBLIC RECORD OFFICE, LONDON
| ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
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Members of the Legislative Council put forward the following proposals to His Excellency the Governor:-
In consideration of the Government of the Straits Settlements agreeing to the following clauses:
(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., the Official Members will abstain from voting. (b) As regards the Imperial Government and for purposes of Clause 3 of the offer to the Imperial Government a majority similar to that in (a) above, shall determine whether the right shall be exercised.
(c) That the expenditure on local forces (land, sea and air) shall in no year
exceed $500,000.
the Unofficial Members of the Legislative Council agree to the following offer being made to the Imperial Government:-
(1) The Colony of the Straits Settlements offers the yearly sum of $4,000,000 for 5 years from the 1st April 1933 to the Imperial Government as a fixed contribution payable by the Colony for the said period of five years in full return for the annual cost of the Imperial garrison and all other Military, Naval and Air,charges whatsoever.
(2) 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 mutua! agreement shall not be increased or decreased.
(3) Provided always that the Colony shall have the right (not necessarily to be exercised) to limit the sum payable by the Colony in any particular year to a sum equivalent to 20 per centum of the Colonial Revenues computed in accordance with the provisions of Section 3 of Ordinance No. 64 (Defence Contribution).
(4) Payment to the Imperial Government shall be made by monthly instalments
in the same manner as hitherto.
(5) 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 particular in regard to the question whether or not interest or income arising from accumulated revenues of the Colony shall be included therein for the purpose of such computation.
(6) It is recorded here that these provisions are made on the assumption that there will be no material change in the working of the Currency Guarantee Fund of the Colony or in the disposal of the profits thereof or in the fiscal policy of the Colony, but this clause is not to be a condition of the agreement.
7. His Excellency the Governor approved of these proposals and they went to the Imperial Government as an offer by the Colony for the settlement of the controversy.
8. Although no offer of a voluntary contribution was linked to this offer as was the case with the offer made in 1928, such a contribution would be welcomed, if offered voluntarily by the Colony on the initiative of the Unofficial Members of the Legislative Council.
9. His Majesty's Government has approved of these proposals subject to the following points:
(a) That the amount of the contribution is based upon the present sterling value of the Straits Dollar and, if there should at any time be a substantial rise or fall in that value, it is understood that the amount of the contribution shall be discussed and may be reviewed.
(b) The settlement is in no way contingent upon what the Colony's fiscal policy is or may be nor is it dependent on the policy regarding the Currency Guarantee Fund.
(c) That the amount of $500,000 limited as the cost of local forces shall not include additional expenses incurred by mobilisation or calling out of the Volunteers in an emergency.
10. The Colony's proposals have thus proved acceptable and the reservations made by His Majesty's Government may well be accepted by the Colony.
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11. The conditions (a) and (b) set out in paragraph 6 above find their place in the Preamble to the Bill and are to be definite conditions of the settlement.
12. Paragraph 3 of the proposals set out in paragraph 6 above finds a place in the Preamble and in Clause 4 of the Bill. The clause is precautionary and it is under- stood that it will not necessarily be acted upon.
13. The sum proposed by this Bill will represent the total statutory contribution to be paid by the Colony to the Imperial Government towards the cost of the Colony's and Imperial defence generally.
14. The Government of the Colony undertakes that the expenditure on local forces will not exceed $500,000 per annum except in case of emergency when the local forces are called out. The special expense involved by the calling out of the local forces is not included in normal Colonial estimates.
15. His Majesty's Government does not intend to charge the Colony with any part of the additional defence expenditure due to the new Naval Base or Air Base; any over- payment on such account has been or will be adjusted.
16. If at any time the military garrison should be withdrawn from the Colony, the Legislative Council will be at liberty to reconsider the whole question of the contribution. In view, however, of the existing defence policy of His Majesty's Government, it is extremely unlikely that the military garrison will be removed from the Colony.
17. If a final settlement of the question of the Defence Contribution is offered by the Legislative Council in the spirit and terms of the Bill and its Preamble and these Objects and Reasons, His Majesty's Government will accept it.
Enclosure 2 in No. 49.
HONOURABLE MEMBERS OF THE LEGISLATIVE COUNCIL.
Once again, but I hope for the last time, it is my duty to address you on the subject of the defence contribution payable by this Colony to His Majesty's Government of the United Kingdom. For a whole generation or, to be precise, since my uncle Sir Cecil Clementi Smith was Governor of the Straits Settlements, there has been con- troversy over this contribution; but I trust that now, at long last, the dispute will be fairly and honourably ended.
You will remember that, when I was on leave of absence in England in 1931, I discussed the subject of the Colony's defence contribution very fully with Lord Passfield, then Secretary of State for the Colonies, as well as with permanent officials at the War Office and in the Treasury. What I then contended for was a settlement on the lines recommended by the Unofficial Members of this Council, namely, that our defence contribution should be a fixed sum, subject to revision after a period of five years; that part of this fixed sum should be deemed to be a voluntary contribution towards the cost of the Imperial Navy; but that His Majesty's Government should not charge the Colony with any proportion of the defence expenditure due to the construction of the new Naval Base in the Johore Strait.
The Council will also remember that the fixed sum proposed by my predecessor, Sir Hugh Clifford, to Lord Passfield in a letter, dated 9th June, 1929, was $5 million per annum, and this was the sum taken as the basis for my discussions in London. I returned to Singapore with a Bill, the draft of which had been prepared by the Colonial Office, and which was brought up in this Council for first reading on the 28th September, 1931. This Bill, when read a second time on the 7th December, 1931, met with the unanimous opposition of the Unofficial Members of this Council, mainly because the statutory and the voluntary contributions were amalgamated in the total sum of $5 millions; and, in view of the attitude of the Unofficial Members, I withdrew the Bill and referred the matter back to the Secretary of State for the Colonies.
No further action was taken until Brigadier-General Sir Samuel Wilson, the Permanent Under-Secretary of State for the Colonies, visited Malaya towards the end of last year. On the 5th and 28th December, 1932, conferences took place between him and the Unofficial Members of this Council at Singapore on the subject of the defence contri- bution; but on neither occasion was a definite settlement achieved. Finally, on the 30th December. 1932, the day on which Sir Samuel Wilson left Malaya for England, a