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Paragraphs 34- 36 or No. 69. Finance.

Paragraphs 37 and 38 of 69. Land and buildings.

Paragraph 39 of No. 69. Staff.

Paragraph 42 of No. 69. External contol.

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and for the settlement of other problems (e.g. the Council's authority in financial matters) the Governor makes the admirably practical suggestion that such matters should be referred to a specially appointed Commission which would include representatives of both Government and Council. We should, I think, agree with his view, that for this reason there is merit in deferring the appointment of the Commission until the Council has been constituted. Moreover, since it is suggested that preparatory work can usefully be undertaken once the Secretary of State has given his approval in principal to the transfer of the proposed services, there is unlikely to be any loss of time in the long run by delaying the appointment of the Commission until the necessary steps have been taken to bring the Council into being.

20. On the question of finance the Governor clearly takes the view expressed in Mr. Caine's minute of 27.9.45 that the proposed Municipal Council should have full control over the collection and expenditure of such revenue as is necessary to meet its responsibilities. Details would be worked out by the suggested Commission but the Governor makes the practical suggestion that, during the transitional period, and perhaps afterwards, the rates might still be paid into the Colonial Treasury and credited to a Municipal fund from which disbursement would be made by the Municipal Council. Finance Department will no doubt comment on this section and will perhaps also advise on the question asked in paragraph 36 as to whether the Municipal accounts should be subject to audit by the Colonial Audit Department or whether professional audit should be allowed.

21.

The Governor suggests that the Crown Lands and buildings which would be required by the Municipality should be leased to the Council for a period of 75 years at a nominal rental on the condition that they should not be disposed of by the Municipality without the consent of the Governor and should revert to the Crown if, in the opinion of the Governor, they ceased to be needed for suitable purposes. It might be considered by the Council that they should have absolute control over land within the area of the Municipality but any question of the transfer of the freehold could, if necessary, be considered in the future and meanwhile

Merg a 75 year lease would seem to be satisfactory. (I have not yet been able to find out the conditions, if any, on which land is held by other municipalities, e.g., Singapore and Colombo

22. The Governor believes that during the transitional stages secondment rather than transfer will be preferred, and may perhaps be fairer, in regard to those Government officers recruited from the United Kingdom who will come under the authority of the Municipal Council. Eventually the Council will be solely responsible for the engagement, discharge and superannuation of the staff it requires. In the meanwhile the proposed. Commission would make detailed recommendations on these matters.

23.

On the important question of whether there should be any external control of the Municipality, the

/Governor

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