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PUBLIC RECORD OFFICE

Reference

TEITTICO. 882

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PUBLIC RECORD OFFICE, LONDON

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

Appendix D, pp. 10, 22.

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adjustment of terms for the aid, if required, of Indian troops. The only conclusion, it is submitted, which can reasonably be drawn from these premises is that the proposal of the India Office contemplated the transfer of the Settlement as, what would be called in mercantile language, a "going concern."

It is further submitted that the subsequent correspondence contained in these Parliamentary papers shows that the succeeding negotiations proceeded upon this basis: and it is contended that the fair conclusion to be drawn is that such was the understanding throughout of the Colonial Office and of the India Office as to the transfer.

In support of this position it is submitted that the correspondence establishes the following propositions :—

1. Down to the transfer the Indian Government had the complete management of the finances of the Settlements without the inhabitants themselves having any voice in the matter. That Government raised the revenues, and fixed the expenditure. The expendi- ture exceeded the revenue.

2. This excess, however, of the expenditure over the revenue was due to disburse- ments on account of the general Government of India, and especially to the military expenditure.

In each year from 1858, the year in which the Settlements became vested in the Crown as a part of India, down to 1866, these revenues produced a large surplus after defraying the expenses of local Government. How large the surplus was cannot be be stated exactly, because the India Office did not in their correspondence with the Appendix C, p. 34. Colonial Office, although asked to do so, give detailed and precise statements of the

accounts between the Indian Government and the Settlements. Appendix C, pp. 39, 40.

It appears, however, from these papers that the surplus amounted in 1858 to 52,6407, in 1859 to 48,650, in 1860 to 43,305., and in 1862 to 45,8031.

But even should these figures not be perfectly accurate, the fact of there being a considerable surplus is placed beyond dispute by the following extract from the letter of the 22nd March, 1861, written by the Under-Secretary of State for India to the Under- Secretary of State for the Colonies, in answer to a communication from the Duke of Appendix C, p. 35. Newcastle, asking for further information respecting the revenue and expenditure:-

"Sir Charles Wood is unable to answer the questions as to details of revenue and expenditure which are asked in your letter with any greater degree of precision than is afforded by the statements already communicated to your department.

"It appears that the revenue has of late years steadily increased, and there is every prospect of its continuing to do so. The expenditure, if that portion of it which is incurred for military defence be omitted, is considerably below the revenue.”

The surplus thus produced was thrown by the Indian Government into the fund

out of which the military expenditure in the Settlement was defrayed.

3. This military expenditure was determined with regard to what the Indian Govern- ment considered to be the interests of the Indian Empire, and not merely with regard to the particular wants of the Settlements.

In the Minute which Lord Dalhousie issued on the 28th of February, 1856, reviewing his administration in India to March 1856, his Lordship, in reference to the Settlements, stated-

"112. Complaints having frequently been made of the unprotected state of the harbour of Singapore, heavy batteries have been constructed to an extent which the military engineers have considered to be amply sufficient for the ordinary defence of the port."

In the spring of 1857 came the Indian Mutiny, which extended into 1858; and in 1857 the Chinese difficulties began which resulted in the Chinese War of 1858. In 1857 it was determined to fortify Singapore on a more extensive scale, and, accordingly, in 1858- and the following year, new fortifications and barracks were erected.

The fact is stated in an extract in these papers taken from the "Administration Report" of the Governor of the Settlements for 1958-59, in which he speaks of the "extensive military works in course of progress," and describes them as " the new scheme of covering the hills and shores of Singapore with batteries, redoubts, barracks, magazines, &c."

The correspondence between the different Departments does not enter into the policy of these measures, it being admitted, as will be seen later, that the fortifications were to be transferred free of charge; but the fact, it is conceived, may be taken as historically true that the fortifications were intended to convert the Settlements into a Military Station midway between India and China, and were erected for Indian interests as distinguished from Colonial interests. This is indeed assumed in a discussion between the Colonial Office and the India Office, to which attention will presently be called as to whether the barracks above mentioned were to be transferred free of charge.

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Thus upon the transfer, the Settlements inherited from the Indian Government fortifications and works which that Government had erected for objects of Indian adminis- tration, without reference to the wishes or wants of the Settlements, but towards the Appendix C, p. 66. erection of which it had employed the revenues of the Settlements.

4. The general principle was admitted that public buildings and properties were to be Appendix C, p. 38. made over on the transfer of the Settlements without charge.

5. To this general principle the India Office sought to establish an exception in favour of certain barracks commenced after 1858; and made a claim for payment for their

construction.

The Under-Secretary of State for India wrote to the Under-Secretary of State for the Colonies, on 9th May, 1861, as follows:-

"The case of these barracks stands on separate and special grounds, and is distinct from that of the public buildings and properties to be made over on the transfer.of the Settlements without charge upon the finances of the Empire."

This claim had been first made in a letter, already quoted, of 22nd March, 1861, Appendix C, p. 35. from the India Office to the Colonial Office, which stated that additional barracks were then in progress, and that their construction had been sanctioned in the full confidence that the expense so incurred would be repaid to the Indian Government in the event of the Straits Settlements being transferred to the Colonial Department.

To this letter an answer from the Colonial Office had been given on the 24th April, Appendix C, p. 37. 1861, from which the following extract is taken

"The Duke of Newcastle cannot consent to the payment which it is proposed to make to the Indian Government in respect of barracks wholly or in part constructed.

"In asking Parliament to sanction the transfer of the Straits Settlements to this Department, his Grace will be obliged to propose, that a large and indefinite aunuai payment, which at present forms a charge on the revenues of India, shall become a charge on the revenue of the United Kingdom. He could not further propose, that in addition to this prospective payment, the Imperial Treasury should be called upon to reimburse the Indian Government for expenses incurred by them while they administered the revenue of the Settlement-expenses which the Imperial Government had neither authorized nor controlled. If such a principle was admitted, it would be difficult to restrict its applica- tion, or to say to what extent it might be consistently applied."

The claim was again put forward in the India Office letter of 9th May, 1861, above quoted, and was supported by this argument—

"The construction of these barracks was considered indispensable, both in a military and political point of view, at the particular crisis in which they were commenced, with reference to the operations in China, and to other considerations connected with the state of affairs in the eastern seas of importance, more as regards the British Empire than only Her Majesty's Indian territories; and I am directed to add, that these works, the advantages of which will be reaped solely by the Imperial Government, would not have been sanctioned, as a charge against Indian revenue, except under the expectation of reimburse- ment from the Imperial exchequer."

The subject was again referred to later in a letter of 28th July, 1863, from the India Appendix D. Office to the Colonial Office, in these words :-

pp. 6, 7.

"On the subject of barracks and other military works, Sir Charles Wood observes, that the opinion which he expressed, on a former occasion, as to the just claim of the Indian Exchequer, in the event of the contemplated transfer, to receive compensation from the Imperial Government for public buildings not yet completed, was based upon the fact that the entire use and benefit derivable from them would be enjoyed by that Government. Sir Charles Wood has endeavoured to ascertain, from existing records in this Office, the amount which it will be necessary to expend upon the completion of the barracks, the further construction of which has been arrested by his orders. The information before him is not very precise; he can, therefore, offer only an approximate estimate of the cost of com- pleting the works, The artillery barracks appear to have been completed; the European infantry barracks are incomplete."

From this date the claim was dropped by the India Office.

The attention of the Arbitrator is, however, called to the principle on which the India Office endeavoured to found the claim, namely, that the barracks were public property, which had not been in use, and of which the entire benefit would accrue to the incoming Government.

6. With the exception of this claim for the barracks, no claim was made or suggested by the India Office or the Indian Government during the negotiations which had taken place up to the transfer for any payment to be made by the incoming Government to the

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