CO882-(1-2) — Page 434

سلسيليسا

PUBLIC RECORD OFFICE

Reference :-

C.O.882

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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE |BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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the revenue of the year, under instructions given by the Duke of Newcastle in the course. of 1863, for a contribution of 30,000l. to the railway funds, in addition to the export duties (which by later instructions is to be increased to 35,000%), and also for a possible increase of 30,000l. in the military contribution, the question of actually requiring it remaining undecided to the present time.

10. Her Majesty's Government, as regards 1864, propose to adhere to the sum thus assumed by the Duke of Newcastle, but from the 1st January 1865 they think a higher rate of military contribution ought to commence. They are of opinion that they may fairly ask the Colony to divide the above shown and undoubted surplus of 70,0001. a year during the remaining period of railway construction somewhat equally between the military and railway objects, assigning therefore about 35,000l. a year to each, and after the railway is completed and in full operation to devote the second moiety also of this surplus to military expenditure, for which purpose the whole surplus will then be available, for it appears, on a moderate estimate of the traffic to be expected on the railway, that profits from this traffic may be relied on, sufficient when added to the annual export duties, without other aid from the revenue, not only to pay the annual interest on the debt, but to afford a fund for its early extinction, provided the debt is not allowed to exceed certain limits within which it appears that it may be confined without difficulty.

11. The continued surplus of revenue for the last three years has resulted in a large accumulation of cash balances, from which the Legislative Council have appropriated 250,000l. to the railway (by Ordinance No. 3 of 1864) as suggested by the Duke of Newcastle's Despatch No. 184, of the 10th November 1863. There appears to be little doubt, as shown in detail by the Colonial Office letter to the Treasury enclosed in that Despatch, that this contribution from balances, added to the accumulating export duties to the end of 1866, and above proposed rate of contribution from annual revenue, viz., 35,000%. a year for the three years of construction, 1864-5-6, will enable the Ceylon Govern. ment, after paying interest on debt during construction out of these funds, to limit the debt to 700,0001. or 800,0001. And it is further shown in the same Colonial Office letter that upon the most moderate of the traffic estimates submitted by the Ceylon Government, the railway receipts, after deducting interest at 6 per cent. on a debt thus limited, as well as that Government's estimate of annual working expenses, will yield an annual surplus sufficient for the liquidation of the debt in about 12 years from the date of opening the line. The scheme of railway debt and liquidation will thus be placed on a satisfactory footing, without looking to revenue for assistance during the construction beyond the contributions above mentioned, nor beyond the export duties after the line is in sufficiently developed operation to yield the estimated rate of receipts. (See p. 9.)

12. Her Majesty's Government propose on the above grounds that the addition to be made to the appropriations of Ceylon revenue for military purposes shall stand for the year 1864 at the sum of 30,000l.,-already named by the Duke of Newcastle, and at about 35,000, being a moiety of the assumed surplus revenue for the next two years 1865 and 1866, and that from the 1st January 1867, about which date the railway is expected to be wholly open, further additions shall be made of 10,000l. year by year, till the extent of the other moiety is reached. This gradual application of the second moiety will give time for the development of the railway traffic, and leave a margin to meet the demands on the Colonial Revenue which may possibly arise before such development takes place in consequence of the arrangement proposed by the Duke of Newcastle's Despatch already referred to, for guaranteeing a minimum Sinking Fund of 4 per cent. on the debt incurred. Her Majesty's Government are not without hope that this ultimate increase of contribution, accompanied or rather preceded, as they hope it may be, by a reduction of the present rate of Military Expenditure, will completely' provide for the whole of the military charges incurred on account of Ceylon on a peace establishment, with the exception of occasional charges for the construction of new works or buildings, which it is difficult to include in an annual estimate, and for which, according to the plan of Her Majesty's Government, special provision will be made from time to time.

13. Annexed to the present memorandum is a printed abstract received from the War Department, reviewing the information relating to the Ceylon military stations contained in the Report of the Royal Commission on the Sanitary State of the Indian Army. Without for the present expressing any opinion on the suggestions which will be found in this document, Her Majesty's Government, having before them the information which it em- bodies, following it may be observed other reports of the unsatisfactory condition of the Ceylon military buildings, think it necessary to be prepared for a general revision of sta- tions and reconstruction of barracks and hospitals in Ceylon, at an early period; and they believe that a thorough reform on this head will be conducive not only to the health and

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efficiency of the troops but to general economy in the military administration. They pro- pose that the Colony shall set aside for this purpose the sum of 30,000l. already reserved under the Duke of Newcastle's instructions from the revenue of 1864, but not formally appropriated, and they propose to take no other form of increased contribution for 1864, leaving the Colonial military appropriations, with this exception, at the same rate and on the same footing as heretofore. From the 1st January 1865 they propose that the increase of contribution shall be carried to annual expenditure in relief of the Exchequer. 14. The present establishment of troops for Ceylon consists, at the full complement, of about 1,000 Europeans, infantry and artillery together, exclusive of officers and exclusive also of depôts, and about 1,500 Malay or Indian troops of all ranks, Ceylon rifle regi- ment and gun lascars together. And the present rate of Military Expenditure for Ceylon upon this scale of establishment, assuming it complete, may be called generally about 200,000l. a year, in which the outlay included for new works and buildings may be called 5,000l., the total charge falling somewhat equally on the Imperial and Colonial Governments, or about 100,000l. a year on each. The total expenditure for Imperial services may be called 120,000l. a year, the whole of course voted by Parliament, about two-thirds of which sum is for Imperial pay and allowances of European and native infantry and European artillery, and of engineer and staff officers; and about one-third for arms and clothing of the same troops, military stores, medicines, and hospital dietary in Ceylon, sea transport, and expenses at home for recruiting, depôts, miscellaneous services, and European non-effective list; the total sum being reduced to a real charge to the Exchequer of somewhat under 100,000l., by the fixed contribution of 24,000%. a year. The precise expenditure by the Colony for military purposes in the year 1861 amounted, according to the return enclosed in Sir C. MacCarthy's Despatch, No. 234, dated the 29th November 1862, to a total sum of 101,5117, made up as follows:-24,000%. for fixed contribution; 8,879. for military works and buildings, chiefly for repairs; 41,0651. for services under the head of colonial pay and allowances, comprising colonial allowances of Imperial officers, allowances of Governor's aide-de-camp and mounted orderlies, pay of gun lascars, and salaries of colonial civil establishment of clerks, artificers, and servants attached to the force, travelling allowances to officers and others, and office and other contingencies-19,6857. for col ial commissariat services, comprising loss on issue of rations to European, and rice native troops, furniture, fuel and lighting, transport within the Colony, rent of hired buildings (less house rent received from military officers) and various minor services; 6,8107. for pensions to native troops (and gratuities on discharge); and lastly, 1,0721. for arms of volunteers. Some addition, not estimated in the return, ought, it appears, to be made to the above sum for such share of the colonial commissariat establishment, costing, it appears, about 4,0007. a year, as may be due to military purposes. Nor does there appear in the return any charge for the clothing of the gun lascars, which is provided by the Colony, and for which a small sum should therefore be added. In the similar return contained in the Ceylon Blue Book for 1862, the military expenditure by the Colony in that year is shown to have been 96,3817. (exclusive, as before, of commissariat establishment), consisting of 24,000l. for fixed con- tribution, 9,2921. for works and buildings, chiefly for repairs, as before; 40,037. for colonial pay and allowances; 16,3497. for colonial commissariat and miscellaneous services; and 6,6121. for native pensions. A present rate of colonial expenditure of 100,000%, a year would be brought by the successive augmentations of contribution above proposed to about 170,000l. a year, which, it is evident from the above statement of present charges, Imperial and Colonial, will only suffice for the desired purpose of covering the entire ordinary charge, in the event of considerable reductions being made.

15. There appears reason to believe, from a preliminary examination of the details of services which has been made by the Colonial Department, that a saving of as much as 25,0001. a year may be effected in the total rate of 200,0001. a year, by some reduction of native troops, and of their officers, and also of staff and engineers, and a further reduction which may be called 5,000l. a year would be due to the separate provision which would be made according to the plan of Her Majesty's Government for new works and buildings, relieving the annual account of that head of charge. It is thus expected by the Colonial Department that between reduction of expense, transfer of new works and buildings to special appropriation, and increase of contribution by 70,000 a year, the Imperial Government will find itself relieved, when the full increase is attained, of the entire military charge on account of Ceylon on a peace establishment. The proposed separate provision for new constructions will be made for the present, as above explained, by setting aside the fund of 30,000/., and when this fund is exhausted by whatever further appropriations may be required from time to time.

16. Without placing more reliance on the above estimates of present and reduced

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