PUBLIC RECORD OFFICE
Reference :--
C.O. 882
9
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
40
4 of Ordinance 2 of 1898] for deducting from the gross profits of railways built out of the proceeds of a loan, the interest and sinking fund charges, before the net profits of such undertakings are assessed for military contribution, whereas no similar deduction can be made in the case of railways built out of current revenue or balances
2.
I have consulted the Army Council and the Lords Commissioners of the Treasury on the subject, and it has been agreed that, as from the 1st of January last, a similar deduction may be made in respect of the capital cost of railways, the construction of which has been or shall be hereafter met from revenue and not from loan, and that the deduction should be at the rate of 4 per cent. on the capital expen- diture for a period of 50 years.
3 Any case in which it is doubtful whether the expenditure has been of a capital or a recurrent nature should be referred to the Secretary of State before any deduction is made.
4
I have accordingly to request that you will introduce the legislation neces- sary to give effect to this decision.
3.
In the meantime, I would ask you to furnish me with a revised estimate of the military contribution for the current year, calculated on this basis.
14248
SIR,
No. 40.
I have, &c.,
ALFRED LYTTELTON.
STRAITS SETTLEMENTS.
THE SECRETARY OF STATE to THE GOVERNOR.
(No 116.)
[Answered by Na, 63,]
Downing Street, 17 May, 1904. WITH reference to your predecessor's despatch, No. 417 of the 30th September last, I regret that I see no sufficient reason for reopening the general question of the basis on which the Straits Settlements Military Contribution is calculated.
2. I have the honour, however, to inform you that the Treasury and the War Office have agreed to the principle that the Colony should not be placed at a dis- advantage in consequence of having defrayed the cost of constructing railways and In the latter telephones out of revenue instead of raising a loan for the purpose. case the charges for interest and sinking fund would, under Ordinance 21 of 1899, have been deducted from the gross receipts for such undertakings, before the net profits are assessed for military contribution.
3. It has been agreed that a similar deduction may, as from 1st January last, be made in respect of the capital cost of railways, telephones, or other similar pro- ductive undertakings, the construction of which has been or shall be hereafter met from revenue and not from loan, and that the deduction shall be at the rate of 4 per cent. on the capital expenditure for a period of 50 years.
4. Any case in which it is doubtful whether the expenditure has been of a capital or of a recurrent nature should be referred to the Secretary of State before any deduction is made.
5.
I have now to request that you will at once introduce the amending legis- lation necessary to give effect to this decision.
6.
In the meantime, I would ask you to furnish me with a revised statement of the military contribution for 1904 in the form indicated in my despatch, No. 88 of the 8th of April.t
I have, &c.,
ALFRED LYTTELTON.
14248
SIR,
41
No. 41.
STRAITS SETTLEMENTS.
THE SECRETARY OF STATE to THE GOVERNOR.
(Confidential.)
Downing Street, 17 May, 1904.
WITH reference to Sir F. A. Swettenham's despatch, No. 417 of the 30th of September, 1903,* with regard to the military contribution paid by the Straits Settle- ments, I have informed you in my despatch, No. 116 of even date, that I regret that I do not see my way to reopen the question of the proportion of the Colonial revenue which should be paid on this account.
2.
It is true that during the South African War the cost of the depleted garrison fell to £152,000, but the estimated cost for the present year is in excess of the amount contributed by the Colony.
3.
As to the question of including charges for pensions, &c., in the cost of the garrison, I would refer you to the enclosed report of the Royal Commission on the administration of the expenditure of India ([Cd. 131], 1900), where the analogous Indian case is discussed (see especially paragraph 358).
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4. Sir F. A. Swettenham suggests in paragraph 6 that the military authorities might take advantage of the terms of the arrangement with regard to this contribu- tion to quarter in Singapore a number of troops greatly in excess of the real require- ments. As to this suggestion, I would observe that, in 1887, the garrison recom- mended for Singapore by the Colonial Defence Committee was 2,079 of all ranks, The including 500 Perak Sikhs and excluding "full development of Volunteers.' reasons for the Committee's recommendations were explained in their remarks, dated 1st February, 1889, on the first defence scheme of the Colony and the reasons for increasing the normal establishment of the regimental force to 2,759 of all ranks were given in the Committee's remarks (245 R.) on the Defence Scheme for 1899. A perusal of these remarks will satisfy you that the requirements of local defence, as governed by considerations of naval strategy and by recent developments in the Far East, alone have guided the recommendations of the Committee, which, I may say, includes the Permanent Under-Secretary for the Colonies, as well as the heads of the Naval and Military Intelligence Departments.
5. The Committee have not failed to take into account the increased numbers of Volunteers; and, in their remarks on the annual reports, as well as in separate recommendations addressed to the War Office, they have repeatedly laid special stress on the employment of the local forces to man the mobile armament for defence, with a view to reducing the numbers of Royal Garrison Artillery required. The develop- ment of the volunteer force has thus obviated the necessity of an increase of the Imperial garrison at a much greater cost.
6. The attitude which would be adopted by the Committee towards any such tendency as that suggested in the passage above referred to in the despatch under acknowledgment is indicated by the following extract from a memorandum, dated 15th January, 1902, relative to a proposal to organize part of the approved garrison of Hong Kong as a mountain battery :-" To organize any portion of the garrison and movable armament of the naval base for expeditionary purposes would not only involve expenditure for which no adequate return is likely to be obtained, but would lead to misconceptions as to the functions of the approved garrison and armament. These have been calculated at the minimum strength considered suffi- cient for the protection of the station, and if at any future time His Majesty's Government should consider it desirable to maintain a force in the Colony for opera- tions outside it, such force must be additional to and distinct from the approved garrison."
I have, &c.,
ALFRED LYTTELTON.
• No. 27.
+ No. 37.
• No. 27.
† No. 40.
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