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amounting from Rs. 320,000 to Rs. 500,000; and the further loss on land revenue under the new Grain Ordinance may be put down probably at Rs. 80,000 a year. In other words, the Colony has to provide in 1883 against a deficit of Rs. 500,000, and it has to meet further charges amounting in 1884 to Rs. 320,600, in 1885 to Rs. 500,000, with further sinking fund in 1888 amounting to Rs. 34,000 on the loans required to complete works in progress, and there will probably be a loss on land revenue in the next few years of Rs. 80,000, making in all a sum of over Rs. 1,000,000 to provide immediately by taxation and reduction of expenditure merely to balance the accounts."

The anticipated deficit of the next few years is therefore as follows:-

REVENUE of Ceylon, 1882 to 1885.

HEAD OF REVENUE.

1882.

1883.

1884.

1885.

Rs.

Arrears of revenue Customs

424,601 2,750,458

Bo. 410,828 2,754,697

Rs. 812,840

Rs. *292,979

2,800,270

2,867,048

·

In 1883. Deficit as given in report of Sub-

Committee

Rs.

In 1885.

Rs.

Port and harbour dues Land sales

159,788

456,048

458,197

482,089

•

271,250

264,885

424,889

848,085

Land revenue

822,003

950,841

988,79") *1,043,438

Deficit of 1884

860,600

Renta exclusive of Lands

883,284

840,343

368,082

395,861

·

500,000

New charges for interest and

sinking fund

Licenses

1,547,672

1,588,000

1,404,288

1,436,560

·

175,400

Stamps

797,418

742,025

741,708

1,050,593

Taxes

81,808

85,676

35,088

87,698

Loss on Grain Revenue

20,000

Postal

241,915

244,580

241,001

18,764

Fines and forfeitures

70,838

46,620

43,812

56,514

Total

Rs. 1,056,000

Government vessels

54,669

59,485

54,454

44,709

Sale of Government property

994,469

1,032,803

1,080,781

1,001,849

Reimbursements

842,240

In 1884.

Rs.

In 1888.

Rs.

Electric telegraph

54,438

379,947 39,287

469,960

448,974

55,677

55,664

Deficit as above

New charges for interest

Loss on Grain Revenue

500,000

Deficit of 1885

1,056,000

Miscellaneous receipts

355,881

893,428

189,024

851,542

Interest

320,600

40,000

Loss on Grain Revenue Sinking fund

20,000

Pearl fishery

34,000

Special receipts

Railway receipts

213,426 630 6,950 2,638,493

227,619 440 6,470 2,473,508

162,950

145,395

83,658

a 440

8,835

10,828

2,543,166

2,617,928

Total

Rs. 860,600

Total

-

Rs. 1,110,000

Total revenue

12,161,570

12,396,577

12,402,865

12,650,863

"Nevertheless there is nothing alarming in the financial position of the Colony; its soundness is seen in the small effect of the present depression on sources of revenue not immediately affected by the coffee enterprise, and in the steadiness of the revenue in the provinces unaffected by the coffee enterprise."

There was nothing alarming in this; there certainly was no ground for " exaggerated alarm." I proceeded to show how, in my opinion, the financial difficulty could best be met. How far the suggestions then made were of assistance in preventing a deficit may be seen from the Earl of Derby's Despatch, No. 357, of 1st November 1883,* and from the financial measures adopted by Sir A. Gordon thereon. Though Sir A. Gordon did not fail to have recourse to me for information from his first nomination to the Government of Ceylon, even before he assumed it, up to March 1885, and though he did not fail to use my services to carry through the Legislative Council of Ceylon the necessary measures to meet the financial difficulty, this is the first time I have heard of any "exaggerated alarm," or any question as to the soundness of the data on which he was proceeding.

3. The statements made in the second part of paragraph 12 above quoted from Sir A. Gordon's despatch, supply part of the materials necessary for a reply to the suggestion of exaggeration contained in the first part of that paragraph. As compared with 1882, a deficit in 1885 of about Rs. 1,000,000 was shown to be the inevitable result, if proper financial measures both to reduce expenditure and to find fresh sources of revenue were not adopted. They were adopted. Nothing is said by Sir A. Gordon of additional taxation, but he says that a reduction of expenditure to the extent of Rs. 900,000 was effected, and that the balance of revenue over expenditure in 1885 was only Rs. 39,656. It is true that Sir A. Gordon goes on to say that the revenue of 1885 exceeded that of 1882 by Rs. 500,000, and, during the year 1885, several works "of importance were undertaken, forming no part of ordinary administrative expenditure

But this is not the whole case,

at a total cost of at least Rs. 500,000."

་་

4. The whole case can best be seen from an examination of the receipts and expenditure of Ceylon for the years 1882 to 1885, given below:-

* No. 2 in Eastern No. 41.

• The decrease under arrears and the increase under land revenue are, in great measure, accounted for by more punctual and careful collections of the land revenue.

EXPENDITURE of CEYLON, 1882 to 1885.

HEAD OF EXPENDITURE,

1882.

1888.

Eatablishments

Pensions and retired allowances Revenue services

Rent

Transport

.

Works and buildings

R..

1884.

1885.

4,585,707

B... 4,445,969

R..

4,415,634

Rs. 4,405,679

504,087

559,706

608,402

473,211

457,450

600,496

646,103 605,962

Administration of justice

210,501

197,448

186,239

181,779

Ecclesiastical

8,199

8,146

8,170

8,120

Charitable allowances

46,183

46,579

40,568

61,369

Education

272,515

255,875

963,356

287,887

Hospitals and sanitation -

827,885

412,023

422,188

462,785

Police services

128,016

119,182

105,904

104,467

Prison services

857,027

882,175

389,849

426,064

2,897

2,822

2,799

3,705

90,947

98,149

Conveyance of mails

252,631

265,844

96,113 258,986

91,876 291,607

126,600

97,415

114,616

1,474,035

1,368,106

1,865,821

247,564 1,323,889

201,354

168,449

159,025

279,602

Interest .

211,516

869,194

624,558

609,584

Colonial store

80,877

84,721

84,782

27,794

Contribution towards military expenditure

1,267,620

1,269,078

1,035,844

681,946

Government vessels

49,920

86,594

60,725

92,658

Refund of duties, drawbacks, &c.

52,778

40,752

49,892

63,522

15,825

8,320

2,514

5,600

Immigration

93,202

Railway services

1,629,585

Telegraph services

Exchange

111,740 80,418

80,181 1,488,654 26,162 48,465

Total expenditure -

12,494,664

12,222,234

75,450 1,607,788

41,518

12,818,218

80,299

1,740,048

108,876

12,611,307

Roads, streets, and bridges

Miscellaneous

Lands taken for Government purposes

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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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PUBLIC RECORD OFFICE, LONDON,