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PUBLIC RECORD OFFICE

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TUTTICO 882

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PUBLIC RECORD OFFICE, LONDON

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

Appendix C C. Case, p. 16.

Appendix C.

Appendix D.

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give his decision, unless he shall require further information, which he shall be at liberty to call for, and that the delay and expense necessarily attending the production of witnesses and the arguments of counsel shall, if possible, be avoided.

This case is now prepared and handed to the Arbitrator on the part of the Colonial Office, in accordance with the above agreement.

It will be convenient at the outset to explain :-First, that the armaments and stores in arbitration are Ordnance stores, and consist chiefly of armaments and stores described by the India Office as "the guns constituting the armament on the fortifications, together with their equipments"; and, secondly, that the above words "liability of the Colony for the armaments and stores left by the Government of India, exclusive of those which have been taken over and paid for by the War Department on Imperial account," mean liability to pay for them if retained by the Colony. It is contended by the India Office that the Colony must either pay for these armaments and stores, or return them to the Indian Government.

It will be observed, therefore, that the India Office is making a claim upon the Colony in respect of property actually in the Colony, part of which appears, from the above description of it given by the India Office, to have been appropriated before the transfer to the use of the Colony. It is submitted that the India Office being thus the party making the elajm, is bound to establish the claim. Now the Colonial Office, representing and acting for the Colony, is placed in difficulty, because the grounds of the claim are nowhere to be found explicitly set out in the correspondence which has passed' between the two Offices, and hence, as by the terms of submission each party is to prepare a case, and the cases are to be exchanged between the two parties, the Colonial Office is compelled to answer the claim with an imperfect knowledge of the arguments by which it is to be supported. Under these circumstances the Colonial Office, while submitting that the burden of proving the alleged liability of the Colony lies upon the India Office, and asking that the claim put forward by that Office should be rejected if not clearly made out, will proceed to lay before the Arbitrator reasons derived from the relations of the Indian Government to the Straits Settlements previous to the transfer, from the circumstances of the transfer, and from the character of the armaments and stores in question, negativing the liability sought to be thrown on the Colony.

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With this view, it will be necessary in order to make the relations of the Indian Government to the Straits Settlements and the circumstances of the transfer clear, to go back to the negotiations between the Colonial Office, the India Office, the War Office, and the Lords of the Treasury, previous to the passing of the Act of 1866. Those negotiations will be found to contain the mutual considerations in respect of which the agreement for transfer was entered into, the Act of 1866 was obtained, and the transfer was actually made, and it is submitted that negotiations subsequent to the Act with a view to carrying out the transfer must be taken in connection with that original agreement, and that in case of any difference between the parties, as to their respective obligations upon the transfer, reference must be made to it as the basis of the whole transaction.

The case may, therefore, be divided into two parts; of which, the first embraces the negotiations relative to the transfer previous to the Act of 1866, and the second embraces the negotiations subsequent to the Act of 1866.

I-The Negotiations previous to the Act of 1866.

These negotiations are contained in two Parliamentary papers, the first of which is entitled "East India (Straits Settlements)," and was ordered by the House of Commons to be printed, 20th May, 1862; and the second is entitled "Correspondence respecting the Transfer of the Control of the Straits Settlements from the India Office to the Colonial Department," and was presented to Parliament by command of Her Majesty, on the 4th of June, 1866.

From these papers the following statements are derived.

The transfer was first proposed in 1858, soon after the territories previously under the Government of the East India Company became vested in the Crown.

On the 1st of March, 1859, Lord Stanley, then Secretary of State for India, addressed a despatch to the Indian Government calling for their opinion respecting the expediency of Appendix C, p. 9. the proposed transfer, in which he said—

"Her Majesty's Government having recently had under their consideration the position and circumstances of the Straits Settlements (in which term are included Singapore, Malacca, and Penang or Prince of Wales' Island), I an anxious to receive the opinion of your Lordship in Council, whether any good and sufficient reasons now exist for continuing the administration of these dependencies of the Crown on their present

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footing, or whether it might not be advantageous to the public interest, and to the Settle- ments themselves, to withdraw them from the control of the Indian Government, and transfer them to the Colonial Office.

3. In former times, when India was administered by the East India Company, and when a very intimate connection existed between India and China, it was both a con- venient and proper arrangement that the administration of the Straits Settlements should be annexed to the Government of India.

"4. But in later times, and more especially since the extinction of the trading privileges of the East India Company, this connection has gradually diminished, until at length it can scarcely be urged that there are any reasons, geographical, political; or otherwise, why the Straits Settlements should continue to be governed and controlled froin India.

"5. On the other hand, however, these settlements have, I believe, become more closely connected with China, and in particular with the British settlement at Hong Kong, a connection which is likely to become still more intimate under the operation of the Treaty recently negotiated by Lord Elgin.

6. Under this change of circumstances, I apprehend, also, that it will be exceedingly difficult for the Government of India, in future, to select in India persons well qualified, by their knowledge of the customs, manners,, and language of the Chinese, to administer the affairs of these settlements, but especially the most important of them, Singapore.

"7. It has therefore occurred to me that it may be desirable to treat these settle- ments as Colonial dependencies distinct from India, either separately or in connection with Hong Kong; the fundamental principle of their transfer to the Colonial Office being, that whilst, on the one hand, all the revenues and levies derived from them shall accompany transfer, India, on the other hand, should be relieved of all existing charges, whether civil, military, or miscellaneous.

the

"8. The only exception to this rule, would be the net expense of the convicts deported from India, credit being afforded to India for the profit derived from their labour. This charge may, I conceive, very fairly be continued on the revenues of India."

The Government of India was favourable to the transfer; and a Minute by Lord Canning, the Governor-General, addressed to the India Office, expressing their favourable opinion, was forwarded by Sir C. Wood, then Secretary of State for India, to the Duke of Newcastle, then Secretary of State for the Colonies, in a letter of the 7th of February, 1860, in which Sir C. Wood said that he entirely concurred in this opinion of the Govern- ment of India, and that he should be glad to learn that the views entertained by the Duke with respect to the expediency of the change, concurred with his own; and that in such case he was prepared to consider, without delay, the arrangements to be made for the transfer. He added:-

"6. With respect to the principles upon which the transfer should be based, the views of this Department of Her Majesty's Government are expressed in Lord Stanley's despatch of the 1st of March, 1859, to the Governor-General of India in Council, a copy of which is herewith forwarded for your Grace's information.

"7. Among the points to be settled between the two Departments are-

"I. That India be relieved from all expense on account of these Colonies, except such

as may arise from the custody and maintenance of convicts after credit is given for the profits of their labour,

"II. The adjustment between the two Governments of the terms on which, should the aid of the Indian local troops be required, it shall be furnished."

The attention of the Arbitrator is asked to these principles of the transfer as laid down by the India Office in proposing it. The Straits Settlements had been valuable to India in former times and under different circumstances; but at that time the circumstances had become changed.

Indian interests had been contracted within a narrower boundary, and,

in the words of Lord Canning's Minute, the outlying position of the Settlements removed them far from any Indian interests and placed them quite beyond the sphere of the Indian Government, as that Government had no longer concern with China. The Indian Government found difficulty in their administration. The Indian Department was to transfer the control of them to the Colonial Department, in consideration of that Depart- ment taking upon themselves that difficulty. There was no suggestion, when the original basis of negotiation was laid down, of any charge to be made by the India Department to the Settlements on their being withdrawn from the control of that Department, and being transferred to the Colonial Department. And the silence is the more expressive because express mention is made of charges from which the Indian Government was to be relieved and of future expenses in respect of which it was to have credit, namely, the credit to be given to it for the labour in the Colony of the convicts deported from India and the

Appendix C, pur. §.