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the same course has been taken in respect of the proceeds of the rents of such Govern ment buildings as are let for profit The policy which has been pursued for some time past of Imilding residences for Government servants and, as in the case of the opium and spirit farm premises and offices, of acquiring or building such premises. and letting them at a rental based on the cost of the land and houses, is an under- taking which can fairly be classed with other productive undertakings, and has now been so classed In this connection I would refer your Lordship to the correspond ence noted in the margin. Under The L'alonal thher despat 4, No 27, -1 26 Janu

Liquors Ordinance, 1906. it is provided ary, 1thw that a sum not exceeding three eighths of the sums payable by the liquor farmers as rent for their monopoly of collecting the duties shall, in the discretion of the Governor, be transferred to an Improvement Fund" for the execution of public works, and that such transfers shall not be assessable to the defence contribution The areant which it is estimated will be paid on account of the public debt in 1907 is $50,000, and I have, therefore, authorised the transfer of this sum to the fund.

Three eighths of the rent would amount to $506,250.

43. But there is another source of revenue which has hitherto been liable to the assessment, but which should not, I think, have paid the 20 per cent. contribution These collections are the produce of at all. I refer to the district collections. assessments levied on lands outside municipal limits for the upkeep of country roads, and for improvements in reclaiming swamp lands, building and maintaining bunds along rivers and streams liable to floods, and for irrigation works; and the Govern ment is legally bound, under Section 325 of the Municipal Ordinance, so to expend It is, therefore, contended that it them in the districts in which they are levied is contrary to law to expend any portion of them in payment of the military contributikan The cost of these works, moreover, is annually far in excess of the amounts collected, as is apparent from the return which is compiled every year I cannot understand why by the Treasury and laid before the Legislative Council. the collections were not excluded from the revenue liable to defence contribution when first that contribution was levied, on the same principle that caused the exclusion I would, therefore, urge that this question of the revenue derived from land sales. receive the consideration of His Majesty's Government with a view to the revenue from district collections being now excluded. In the course of time the revenue from this source may reach a considerable figure, but whatever that figure may be it will never exceed the cost of the works within the areas on which the rates are levied, and it appears to me that it would be just as fair to claim military contri- bution on the municipal rates of Singapore and Penang as on these country rates.

*

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4. [To War Office only. I am to take this opportunity of stating, for the information of the Army Council, that the military contribution of the Straits Settlements for the year 1907 is estimated to amount to $1,785,020, which includes a sum of $51,249 on account of estimated underpayment for 1906.]

11783

SIR,

No. 105

STRAITS SETTLEMENTS.

I am, &c.,

C. P. LUCAS.

TREASURY to COLONIAL OFFICE.

(Received April 3, 1907.)

Treasury Chambers, 2 April, 1907. I HAVE laid before the Lords Commissioners of His Majesty's Treasury Mr. Lucas's letter of the 22nd January last (47180 1906),* in which the Earl of Elgin supports the recommendation of the Governor of the Straits Settlements that revenue derived from District Collections" in the Colony should be exempt from assess- ment for the purpose of calculating the military contribution.

In reply I am to state that to exempt these collections on the ground urged by the Governor, that they are really of the nature of local revenues, would, in the opinion of this Board, constitute an innovation, and it must be remembered that in determining at the outset of the present arrangement what percentage of revenue would produce an adequate military contribution the yield of these collections was not excluded from the calculations, as were the proceeds of land sales.

Their Lordships understand from the War Office that the contribution paid by the Colony has always been less than the cost of the garrison, and that, while the disparity has decreased in recent years, the estimated contribution for the coming financial year is only £208,000 (including £6,000 estimated to have been underpaid in 1906-7) although the cost of the garrison (inclusive of expenditure under the Military Works Loan) may be put roughly at £250,000.

Under these circumstances my Lords regret to be unable to assent to the Earl of Elgin's proposal.

I have, &c.,

JOHN ANDERSON.

I am, &c.,

G. H. MURRAY.

47180

SIR,

No. 104

STRAITS SETTLEMENTS.

COLONIAL OFFICE to WAR OFFICE AND TREASURY.

[Ausmered by No. 105.]

Downing Street, 22 January, 1907.

I AM directed by the Earl of Elgin, to forward to you, for the consideration of the Army Council [the Lords Commissioners of the Treasury], the enclosed extract* from a despatch from the Governor of the Straits Settlements with regard to the military contribution payable by that Colony.

2. It appears to Lord Elgin that Sir J. Anderson is justified in his contention that the contribution should not be paid in respect of "District Collections," and his Lordship would be glad to learn that the Army Council [their Lordships] con- cur in this view.

3. A similar letter is being addressed to [the Treasury] [the War Office].

• No: 103 (paragraph 43).

11783

SIR,

(No. 106.)

No. 106.

STRAITS SETTLEMENTS.

THE SECRETARY OF STATE to THE GOVERNOR.

Downing Street, 8 April, 1907. WITH reference to the last paragraph of my despatch, No. 25, of January 22nd,† I have the honour to forward to you the enclosed copy of a letter from the Treasury, from which you will observe that the Lords Commissioners are not pre- pared to accept the proposal that the proceeds of the district collections should not be included in the revenue on which the military contribution of the Straits Settle- ments is assessed.

I have, &c.,

• No. 104.

47180 not printed,

‡ No. 105.

ELGIN.

PUBLIC RECORD OFFICE

Reference :--

TILLLC.O. 882

9

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

PUBLIC RECORD OFFICE, LONDON