CO882-(1-2) — Page 436

PUBLIC RECORD OFFICE

Reference :-

UTILNIC.O.882

2 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

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that the sum to be paid by the Colony on this head shall not exceed by more than 5,000%. in each year a computed sum at the rate of 901. for each man of European rank and file, infantry or artillery; 501, for each man of rank and file of the Ceylon rifle regiment; and 107. for each man of rank and file in the gun lascar corps, present in the Colony during the year on the average of the monthly muster rolls. If a less sum than 100,0001. were due from the Colony in the year upon these rates, the less sum only would be required, and the same arrangement would apply, subject to the results of the proposed enquiry, to the future augmented rates of contribution.

25. It is assumed in the preceding proposal that about 5,000l. a year may be con- sidered a fixed charge for repairs of military buildings to be necessarily incurred, irrespec- tive of fluctuations in the strength of the force, and that the present strength and cost of the force, which compared with each other for each class of troops would give consider- ably higher capitation rates than the above, may be revised and reduced so as to admit of the rates named covering the reduced charge of the collective services to be commuted, with the exception of works and buildings. The present cost of these services, including repairs but not new constructions, may be estimated at about 160,0007. a year, so that about 25,000/, a year of reductions would be necessary to make the future contribution of 135,000l. a year sufficient to cover the charge. The preliminary enquiries of the Colonial Department, already referred to, afford grounds for assuming that the proposed revision of establishment and expenditure will result in a total reduction of expenditure to that extent, and exhibit capitation rates not exceeding those named.

26. It will be observed that the arrangement here sketched out will at all events pro- visionally relieve the local Government of almost the whole of the unpleasant controversies with the military authorities, which of late have become so frequent, much to the regret of Her Majesty's Government, on details of Ceylon military allowances and other expen. diture. It will be impossible, however, to escape from the discussion of these colonial allowances and other controverted points in connexion with the proposed enquiry, as such details must necessarily be elements in fixing the capitation rates or other forin of charge to be ultimately assessed against the Colony as the limit of its liability.

27. The subject now brought to what may be termed the constitutional question of the mode of making the requisite appropriations for military purposes. It appears that out of the total expenditure of 100,000l. a year, or thereabouts, which at present falls on the Colony, the payment of from 60,000l. to 65,000l. a year, consisting of the fixed contribution of 24,000l. a year, the pay and salaries of the gun lascars and civil establishment attached to the force, and the greater part of the colonial allowances to Imperial officers, rests on the simple order of the Secretary of State. The remainder of the expenditure is voted by the Legislative Council mostly in the annual appropriation Ordinances. The Legislative Council in their earlier address to the Crown maintain that this double system of appropriation is irregular, and that no portion of the colonial revenue can be properly assigned to military purposes without their consent, Earl Grey having informed them, in his Despatch, dated the 19th May 1848, that "the power of the "Legislative Council extends over all the public expenditure of the Colony," and they consequently complain of the increase of colonial military allowances in 1859 (which un- doubtedly was very large, amounting perhaps to 15,000l. or 20,000l. a year), as a proceeding "at variance with their privileges." They say that reduction in the Military Expenditure is practicable (which is probably true), they claim to share the benefit of such reduction (which by no means follows), and they make the request already referred to that the whole expenditure shall be submitted to their revision, with a view to such reduction and the settlement of some fixed proportion or amount of Military Expenditure to be paid in future by the Colony.

28. This question of the privileges of the Legislative Council really stands as followB :— By the capitulation of 1796 when the maritime provinces fell to the British arms, and again in 1815, when the Kandyan country was acquired by the convention of that year with the Kandyan Chiefs, the Crown was left entirely free to dispose of the local revenues as it might think fit. In 1833, when the Legislative Council was established in its present form, no financial functions were at first assigned to it by the Crown, but after a time the Governor was directed, or at all events it became the practice to take votes of the Council, which were embodied in annual appropriation Ordinances, for Contingent Expenditure," the regular annual payments from the Colonial Treasury,

• Earl Grey whether for civil or military establishments, continuing to rest upon the simple order of to Viscount the Secretary of State, who, according to constitutional practice, usually consulted the Torrington, Lords Commissioners of the Treasury before giving such orders. On the 18th May 1848, Lord Grey, under the impression that a different state of things existed, wrote the passage quoted by the Council, which was merely a mistake upon a matter of fact. In a

No. 216, 18th May 1848.

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Torrington,

Despatch of the 17th July 1848, he corrected this mistake, but he added, that what he⚫ Earl Grey had erroneously supposed to be the practice, viz., that all expenditure whatever should to Viscount rest on Ordinance of the Legislative Council, though not as yet adopted as the Ceylon No. 252, practice, ought to be so; and he said that he was willing to introduce this practice on 17th July certain conditions, which as regarded the civil establishments he explained in the same 1848. Despatch, but which as regarded the military establishments he reserved for a separate Despatch, which however was never written. Lord Grey's conditions as regards the civil establishments were fulfilled in 1858-9 by the passing of permanent Ordinances authorizing the annual payment of the charges, by schedule, of the various civil establishments. About the time of these Ordinances, which made a large increase to civil salaries amounting perhaps to 30,0001. or 35,000l. a year, there was also made by the then Governor, Sir H. Ward, with the concurrence of the Home Government, but without consulting the Legislative Council, the large increase already mentioned to the Colonial pay and allowances of military officers, amounting to 15,000l. or 20,000l. a year. Sir H. Ward took the opportunity of these revisions, the one civil with the consent of the Council, the other military without that consent, to call the attention of Her Majesty's Government (in the Despatch No. 90 of the 8th November, 1859, to which Sir C. MacCarthy refers the Duke of Newcastle in transmitting the Legislative Council's address) to what he termed Lord Grey's "pledge" of May 1848, observing that Lord Grey "withdrew by a subsequent Despatch the pledge given by the first."

This was of

course incorrect, for Lord Grey gave and withdrew no pledge, but merely made and corrected a mistake of fact. So matters now stand, the question of Military Expenditure having remained unsettled to the present time for the reasons stated at the beginning of the present Memorandum.

29. It is obvious from the above statement that there was no breach of the Council's privileges in the proceeding of 1859. It was merely the same course as was adopted in 1837, when the then Secretary of State, Lord Glenelg, without any reference to the a general military Legislative Council, ordered the payment of 24,0001. a year as contribution, which has continued ever since. Lord Grey it is clear conferred no privilege, but merely laid down a principle, to which effect was to be given on conditions which, far from being fulfilled by the Legislative Council, have not yet even been stated by Lord Grey or any other Minister. In the same way therefore as was done in 1837 and 1859, and as might have been done at any time since the Crown Government began, Her Majesty's Government, as far as precedent or legal authority goes, may now order the further appropriations above contemplated at the rate of from 30,000% to 35,000%. a year in the first instance, and at the rate of 35,0001. more hereafter, without any reference to the Legislative Council. Her Majesty's Government acknowledge however that it will be a much more satisfactory proceeding if these, or whatever appropriations may be requisite to place the Military Expenditure on a proper footing, are made by Ordinance of the Local Legislature.

The principle laid down by Lord Grey, that appropriation should in every case, without exception, rest upon a Legislative enactment, in no case upon simple instruction from the Secretary of State, is unquestionably a sound and just one; indeed it may be called one of the cardinal points and first conditions of any sound and regular system of finance, and Her Majesty's Government have now decided to give effect to this principle in the case of Ceylon, provided appropriations, present and prospective, to the extent contemplated by the present Memorandum are permanently made by Ordinance for military services, and provided also due steps are taken by Ordinance to carry out the views of Her Majesty's Government with respect to railway appropriations, the military measure being dependent in some degree, as above shown, on what may be done in reference to the contributions from revenue to the railway.

30. As regards the Railway Appropriation Ordinance, it is sufficient to refer to the Duke of Newcastle's instructions of the 10th November 1863, to which, as will have been already perceived, Her Majesty's Government in framing the present measure, entirely adhere, and which have as yet only been executed so far as relates to the contribution to the railway funds from balances; the annual appropriation to the same funds of 35,0001. from revenue and other Ordinance provisions called for by the Duke of Newcastle, remaining to be enacted.

As regards the military question, the best course in the opinion of Her Majesty's Government will be to pass, in the first instance, an Ordinance to give effect to the provisional and somewhat rough settlement above sketched out, leaving for future consideration, after the proposed enquiries into all the details of the subject have been completed, the question of the form in which a subsequent Ordinance might be passed of a more definitive character, founded on the results of those enquiries.

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