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PUBLIC RECORD OFFICE

Reference :--

FTTER.C.O. 882

8 PUBLIC RECORD OFFICE, LONDON

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

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Motion of the Honourable H. Leclézio, C.M.G, :—

1st. That sub-item 1, item 33a "other charges," sub-items 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, item 330 "other charges," sub-item 43, item 8 "other charges," to- gether Rs. 399,000, be deleted from the draft estimates of expenditure 1904-05.

2nd. That the payment of the above sum be met by a loan.

3rd. That the payment of the sum of about Rs. 130,000; balance of Rs. 255,000, sub-item 46 to item 8" other charges," provided in the estimates of expenditure, 1903-04, be met by a loan:-

4th. That a loan be also made to refund to the Treasury the following sums which have been paid up to date.

For the Long Mountain Railway For the Bois Chéri Tramway

For the Town Tramway For the Dredger

Rs. 119,596.25

239,384.82

102,495.02 125,980.51

Rs. 587,456.60

Mr. LECLÉZIO: I shall begin by putting before the Council the policy which was adopted some years ago, which was carried on for a certain number of years and which obtained during the session before last, and after that I shall show in what position we stood at the time of that policy and in what position we stand

now.

The first policy of which I speak is that which was proposed and carried out by our late Governor, Sir Charles Bruce. That policy consisted in meeting deficits, brought about by extraordinary works, by means of the surplus balances. In the despatch which Sir Charles Bruce wrote to the Secretary of State on the 8th July, 1903, he says: "The estimates as passed fix the revenue at Rs. 10,251,176.51 and the expenditure at Rs. 10,459,506.37, leaving a deficit on the transactions of the year of Rs. 208,329.86."

The budget which Sir Charles presented to the Council was a budget which showed a deficit. How did he propose to meet that deficit? He said:

"In order to meet this deficit a sum of Rs. 500,000 from the Treasury reserve has been provided in the Appropriation Ordinance for the following services :-

Savanne District Railway Extensions

Town Railways

Railway Rolling Stock

Dredger (part payment of)

Rs. 80,000

80,000

85,000

255,000

A surplus of Rs. 201,670.14 will thus be available to meet contingencies." You may remember that when the estimates were being discussed a question was raised whether it was not proper to raise money by means of a loan at that time, in order to meet those extraordinary works. First of all Sir Charles did not agree with that proposition; he thought that the additional taxation might fill up the deficiency. But on reflection afterwards he saw that it was not possible to tax any further the population; to add to the existing taxes-and as there was a reserve in the Treasury which at that moment was pretty high, he proposed-and that was accepted by the Council--that a sum of Rs. 500,000 should be taken from the reserve and applied to those extraordinary works. What may be said as to that? I think that, after all, it was not a bad policy; I shall go the length of saying that I believe it was a good policy-to spend the money that had been set aside for emer- gencies instead of borrowing money-I think that was a good policy on his part.

But events have not turned out as Sir Charles anticipated at that moment. few days after the first despatch of the 8th July he wrote another despatch, and in that second despatch, which is of the 14th July, he said:

**

A

In my minute of the 22nd June addressed to the Council of Government, which formed an enclosure to my despatch of the 8th instant, I stated that the Treasury balances on the 30th of June were estimated at about Rs. 1,500,000. I regret to find that they are now estimated at a little less than Rs. 1,300,000, and I am bound to admit that on the present occasion, the forecast of my financial advisers has apparently been less accurate than in previous years."

And he adds:

"In the meantime the estimated reduction of our Treasury balances does not

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in any way effect the estimates for the year 1903-04, which shows an estimated surplus of nearly Rs. 300,000, and our reserve as now estimated is amply sufficient. to bear without inconvenience or apprehension the charges imposed on it by the Appropriation Ordinance."

He came to that figure of Rs. 300,000 as being an estimated surplus by intro- ducing into the revenue, or by appropriating from the Treasury, a sum of Rs. 500,000. I shall show you by and by that that sum of Rs. 1,300,000 which was thought by Sir Charles on the 30th June, 1903, to be the balance in the Treasury was not reached, the balance is under that sun.

Things went on, and some time before he left Sir Charles wrote a despatch, dated the 6th October, 1903, to the Secretary of State in which some information is to be gathered as to the state of the finances of the Colony. He said :-

The expenditure for the financial year 1902-03 was originally estimated at Rs. 9,630,620 and the revenue at Rs. 9,208,816, showing a deficit of Rs. 421,804. This deficit it was proposed to meet by an appropriation from Treasury balances.

The revised estimates, prepared in April last and shown in the annexed state- ments, did not materially differ from the original figures; the expenditure being estimated at Rs. 9,632,817 and the revenue at Rs. 9,244,423.

The actual expenditure is now found to have been Rs. 9,575,182 and the revenue Rs. 9,221,600, showing a deficit of Rs. 353,582."

and Sir Charles adds:-

"The proposed expenditure of Rs. 465,000 for the purchase of a new dredger for the Port and Marine Department was consequently postponed and the amount thus rendered available was appropriated to increased expenditure on railways and roads. The large expenditure of Rs. 1,670,900 provided for the railway service was exceeded by Rs. 212,583, and increased expenditure on roads and bridges to meet the exigencies of heavy traffic by means of traction engines was chiefly responsible for an excess of Rs. 126,571 on recurrent public works.'

That was the state of matters when Sir Charles left.

But in order to understand fully the position in which we stand now, we must compare our present expenditure with our former expenditure. Let us take, for instance, the budget of the year 1898, during which some additional taxation was put on and which was the first budget prepared by our late Governor. For the year 1898, the total expenditure foreseen in the estimates was Rs. 8,417,907.92. At that time it was nearly all a dead weight on the finances of the Colony, except the interest and sinking fund on the Hurricane Loan, which were met by the revenue of the Hurricane Loan for the greater portion-in fact in 1898 the expenditure for interest and sinking fund on the Hurricane Loan was put down in the budget at Rs. 384,000---so that the real expenditure of the Colony, that is the expenditure made without any means of recouping for the expenditure, that is, the dead weight on the Colony was Rs. 8,033,907.92. That was the expenditure which the Govern- ment asked the Council to vote for the year 1898.

What do we see in the present estimates, the estimates of expenditure for the next exercise? A total sum of Rs. 10,791,401.26. From that sum I think that we should properly deduct the sums which are to be paid by borrowers. We have in the estimates the following sums :-Interest and sinking fund on the Hurricane Loan--the amount chargeable to the loan fund is Rs. 300,000. The interest on the Planters Loan, Rs. 180,000. The interest and sinking fund on the Tramway Loan, Rs. 359,910-together Rs. 839,910-which leaves as a dead weight on the Colony Rs. 9,848,531.60. The difference between the budget of 1898 and the pro- posed budget of 1904-05 is an additional charge on the Colony-apart from the charge proceeding from the loans made in order to lend money--the charges bearing on the Colony have been increased by Rs. 1,804,000-according to the estimates the exact figure is Rs. 1,804,623.68.

Now, it may be said, you might reduce those estimates. That has been tried by the Committee and the Committee has, after all, in my opinion, done very good work; the Committee has been able to suggest reductions, which have been accepted by the Government, to the amount of more than Rs. 100,000. But there are things which cannot be reduced, at least for the present. There are expenses which must be made. There are the personal emoluments. We cannot cut down the personal