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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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Indian Government in regard to any property imnoveable or moveable which might be in- the Settlements at the date of the transfer.

The remarks already submitted respecting this silence when the basis of the negotia- tions was laid, apply with equal force to the subsequent negotiations.

7. And, lastly, this silence is the more remarkable because not only was the corre- spondence between the Colonial Office and the India Office directed to asking, on the one side, and giving, on the other, information as minute as possible as to the position of the Straits Settlements, so as to enable the Imperial Government to fix the military contribu- tion to be paid after the transfer by the Settlements; but, in fact, that military contribution Appendix 1), p. 45. was fixed at such an amount as provided 16,5007. to be paid to the War Office by the Settle- ments, for the cost, among other expenses, of barrack and hospital stores on the first taking possession of the military establishment by the War Department upon the transfer.

Appendix D, p. 47.

Appendix D, p. 48.

The Secretary of the Colonies, Mr. Cardwell, on the 21st April, 1866, after correspon- dence with the War Office, submitted to the Lords of the Treasury, as the results of that correspondence (1), the statement that the cost of the troops intended to be stationed in the Settlements for purposes of local security would be 46,2001. a-year; and (2) the proposal that within a limit of 50,000/. a-year the Settlements should be held liable for the actual cost of these troops, as estimated by the War Department from year to year; and (3) a further proposal that this arrangement should be subject to reconsideration after five years. Their Lordships replied, on the 12th May, 1866, that, if the above figures had sented the total expenditure, they would have had no difficulty in giving their assent to repre- the introduction into Parliament of the Bill for the transfer of the Settlements. But they understood that such was by no means the case; that it appeared, after communication with the War Department that, among other additional expenses, no allowance was made for the cost of stores and transport on first taking possession.

Their Lordships then set out certain figures received by them from the War Depart- ment on the subject of these additional expenses, and among them a sum of 18,0861. as Appendix D, p. 49. the first cost of stores and transport, and added: "It appears, however, from the above figures, that the cost of taking over the military protection of the Settlements will involve an expenditure from Imperial funds during the first year of about 72,000l., and that the annual cost will average 56,000l. a-year instead of 46,2001., as expected by Mr. Cardwell. It would, therefore, follow, that the proposition contained in your letter does not meet the case as now put forward; and as the estimated cost will, if spread over five years, exceed 296,0001, their Lordships would require an annual contribution of not less than 59,3001.”

Appendix D, p. 50.

With this reply their Lordships transmitted a copy of the estimate made by the War Office, from which the above figures were taken, and this estimate showed the two classes of stores entailing first coat, namely, barrack stores and hospital stores.

On the 25th of May, 1866, Mr. Cardwell assented to the proposal that, in order to cover the entire cost of the proposed garrison, an annual sum of 59,3001. should be paid as military contribution from the revenues of the Settlements instead of instead of 50,0001.

On the same day Mr. Cardwell communicated to the Secretary of State for India that, as a decision had been arrived at respecting the number and cost of the troops to be stationed in the Straits Settlements, he was ready to co-operate with him in introducing during the then session of Parliament, a Bill for the transfer of the Straits Settlements to the Colonial Department.

On the 2nd of June, 1866, the Lords of the Treasury decided that the contribution of 59,3001, payable by the Settlements should be adopted for five years, and, on that under. standing, assented to the introduction into Parliament of the Bill for the transfer of these Settlements to the Colonial Department. The Bill was introduced accordingly, and was passed as already stated on the 1st of August, 1866.

It will be observed, therefore, that the Lords of the Treasury, in fixing the con- tribution of 59,3001., have taken into consideration liability on the part of the Colony for certain stores on the new possession first being taken. Their Lordships pointed out that the first cost of stores, &c., on taking possession, would be, according to the estimate of the War Office, about 18,000l., and that the annual cost of the garrison would average 56,000, which for five years would amount to 280,000l.; and, accordingly, upon this estimate, they fixed the contribution at 59,3001., which for five years would amount to 296,5001, thus providing 16,5001., the difference between 296,5001, and 280,000., as the amount to be paid by the Colony in consideration of the first cost of stores, &c. They further indicated the stores in respect of which they imposed liability on the Colony, namely, barrack stores and hospital stores. It will be remembered, from the preceding remarks, that the barracks were incomplete, and it would follow, therefore, that there would not be a provision of stores in use in them to be transferred with them. These stores would have to be brought into the Settlements by the War Department. Hospital

stores belong essentially to the class of moveables; they are equally available everywhere, and are in no way annexed to any particular hospital. They also would have to be provided by the War Department, and form part of the first outlay.

Hence it appears that at the time when payment to be made by the Settlement in respect of certain stores was under discussion, no suggestion was made of any liability on their part, in respect of the arinaments and stores of the fortifications, and this, notwith- standing the fact that the fortifications had been repeatedly mentioned in the course of the negotiations.

Now it is submitted that, if the Indian Department had intended, on transferring the Settlements to the Imperial Government, to endeavour to fix upon their successors the liability now contended for in respect of these armaments and stores, it was the duty of that Department to have brought forward the claim, if not at an earlier period, at any rate then, before the pecuniary arrangements were finally settled, upon which the transfer suggested by that Department, and carried out in their interest and with their co-operation, depended; and that their silence then must be taken to indicate that no such intention was entertained. Another fact points in the same direction. Not only was the claim not made, but the India Office, in endeavouring to except the barracks from the properties to be transferred free of charge, laid down a principle inconsistent with the claim. The India Office sought to except the barracks because they were incomplete, and the entire use and benefit of them would accrue to the Imperial Government. On the other hand, the guns in question had been in situ upon the fortifications, and their equipments in use for the benefit of the Indian Government long before the transfer.

It is submitted, therefore, that according to the intention of the Indian Department at the time, the armaments and equipments were to be transferred free of any charge. It its further submitted that such was the view of the War Office as shown by the estimate inade by that Office, which included a liability to be imposed on the Colony in respect of barrack and hospital stores, but contained no mention of liability in respect of the guns and their equipments; and that such was also the view of the Lords of the Treasury, when they fixed the military contribution of the Settlements upon the basis of that estimate.

It is further submitted that this is the reasonable view. It will have been seen from the foregoing remarks that the Indian Government in administering the revenue of the Settle- ments, after paying out of it the expenses of the Civil Government mixed the remaining moneys with other moneys under their administration, and out of the fund created by this mixture, provided a military establishment regulated partly with a regard to Colonial interests, but mainly with regard to Indian interests. The legal effect of this mixture was, it is submitted, to give to the Settlement concurrent rights with the Indian Government in everything of every kind allocated to the military service, and put to the account of the fund so created.

In the negotiations above described no mention was made of any account to be taken of the value of these respective rights upon the separation of the Settlements from the rest of India. It would be disrespectful to the parties to these negotiations to suppose this omission to have been due to an oversight, and the supposition therefore may be put aside. It is more consistent with the character of the negotiations to suppose that the omission was intentional, and that the parties to the negotiations contemplated an apportionment of these concurrent rights to be equitably made with due regard to the respective positions and interests of the Indian Government and of the Settlements. And upon this principle of apportionment, it is submitted, the Settlements were intended to retain whatever was reasonably necessary to carry on the administrative arrangements which had been deter- mined

upon by the Indian Government and continued by that Government to the time of separation-administrative arrangements especially of a permanent kind and not suscep- tible of change at a moment's notice-administrative arrangements more especially affecting the use and enjoyment of the immoveable property of the Settlements-adminis trative arrangements, finally, which had been determined upon by the Indian Government more in the interests of the Indian Empire than of the Settlements. If this principle of apportionment is adopted as the principle to be gathered from the negotiations, it is sub- mitted that the armaments and stores necessary for the military policy adopted, and which may fairly be considered to have been incorporated with the military establishment, were intended to pass as part of the public property of the Settlements, and that, while this is true of all such armaments and stores, it is more especially true of the guns on the fortifications with their equipments, and that with the fortifications erected by the Indian Government and attached to, and made part of, the soil of the Settlements, the guns and equipments were intended to pass free of charge as necessary for the use and enjoyment of the fortifications and incident to them, or, to use a word afterwards employed in the <discussion, as their "accessories."