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and free from taxation for military contribution, at least, all capital expenditure for ocial services required to maintain and promote the progress of the Colony

20 In freeing the special taxation for loan works and in claiming contribution only on the net return of reproductive works this principle has already been con ceded and we ask now that it may be extended to other works of even more vital importance to the welfare of the Settlements though they do not yield a direct return, and that His Majesty's Government may be pleased to allow is a rebate in the military contribution equal to 25 per cent of our special services budget

21 1 submit that by the maintenance of its volunteers, and also by being able to rely upon the Malay States Guides His Majesty's Government are saved the cost of maintaining a second Indian Regiment here, and that this circumstance of itself appears to er title the Colony to staypal treatment

Enclosure 1 in No 12×

RAIT SETTLEMENTS.

LEGISLATIVE COUNCH.

I have, &c.,

Friday, 1st November, 1907.

JOHN ANDERSON

EXTRACTS from the debate on the Supply Bill.

The COLONIAL SECRETARY moved the second reading of this Bill.

The TREAST RER seconded the motion.

Mr. BAKER Sir, it seems to me, on looking over the revenue and expenditure now laid before us in this budget, that this Colony is drifting into a veritable state of poverty.

We are unable to meet our obligations except by raising loans or increasing taxation Therefore, Sir, it is incumbent upon us to remember that our watchword must be Retrenchment," and we should look round to see in what direction retrench- ment should be made I cannot see, after studying these figures and going through them very carefully, any direction in which we can possibly retrench more justly. We simply, Sir, more equitably, than in the direction of military contribution. cannot continue to pay this Leavy tax, this heavy burden upon the revenue of this Colony, and I think it is only right that we should reopen communication with the authorities at home with a view of having the military contribution arrangement revised.

W

*

循

The two items that appear to me to call for special attention are, first of all, as I have already mentioned, military contribution, which stands here at the enormous figure of $1.755,000, and next to that we find the special public works, $1,608,000, or thereabouts I will deal with the military contribution a few minutes later, Sir. but, in the meantime, I would draw attention to the question of posts and telegraphs. I find that the revenue from postage is $615,000, whilst the expenditure on the departments of posts, telegraphs and telephones is $451,000. This leaves us with a revenue of $166,000. Now, it is startling, I think, when you realise that out of that *160 000 no less than $120,000 has to go to military contribution, and we are left with a beggarly $42,000, I think it is startling that all our revenue practically goes to military contribution. It is a gross and monstrous injustice.

Then I come next to the question of stamp duties--it is a small matter perhaps, but I believe it is the intention of the Government-in fact the first reading of the Bill has already taken place that our stamp duties shall be increased, and it is expected that the revenue in its increased form will amount to $800,000. Now, Sir. the revenue of 1907 is $498,000, so we practically get an increase of $100,000. Of that $100,000, $20,000 has to go, I understand, for military contribution, so that we shall really derive very little advantage from increasing our stamp duties.

Before reverting to the question of the military contribution, I should like to deal with the question of special services. If we raised a loan to pay for special public works, such, for instance, as the harbour works, and so forth, I understand that we should not pay any military contribution on the capital expenditure, and we have it from the Secretary of State, in a letter which he addressed to the Governor of this Colony on the 17th May, 1904, that "The Treasury and the War Office have greed to the principle that the Colony should not be placed at a disadvantage in Consequence of having defrayed the cost of constructing railways and telephones out

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of revenue instead of raising a loan for the purpose." Therefore, Sir, any revenue allocated to expenditure which can be called capital expenditure, which is used for special public works, that is to say, the revenue which is applied to those public works, ought not to be subject to military contribution according to what the letter of the Secretary of State States, otherwise we are at a distinct and a very serious disadvantage in paying for productive public works out of revenue instead of out of loan money,

Then, Sir, I come to the question of the military contribution. I find that in the year 1×96, the military force stationed in Singapore was 1,568 men; in the year 1906, it was 2,3-1, in round figures that is an increase of 50 per cent.

Whether it was necessary that the strength of the garrison should be increased without the approval of the Colony or not, I cannot say, but I imagine that the increase was quite unnecessary Still, the point is this, that in the year 1896, the total cost of the garrison was £8,000, and in 1904, which is the last year for which we have any definitive accounts from home, the total cost of the garrison was £246,655. Here, Sir, we see that the cost of the garrison has increased to 300 per cent of what it was in 1596, and as the strength of the garrison only increased by 50 per cent., that seems to me to be most unreasonable.

Now, reverting, Sir, to the question of this glaring deficit, how are we to make up for this half million dollars? I think that the proper way for us to make it up is that we should practically default on something, and I think that the proper direction for us to default is on the military contribution. We simply cannot pay that enormous sum, and I can only say. Sir, that that is the proper direction for us

to seek retrenchment.

Mr FORT

*

But, Sir, however we may look at these estimates, it is impossible to help having considerable anxiety for the future, because we are well aware that we have undertaken the vast work of the Telok Ayer Reclamation, and other works which must hang over us for some years, and for my part, looking at the future. I agree very much with the last speaker that we must ask for, and we must, if necessary, press for, some reduction of the military contribution. Sir, I am not one of those who approach the military contribution in any grudging spirit at all; so long as we are able to pay 1 think we should pay, and in the days of our prosperity, for my part, I never grudged that the money should go out of the Colony. But, Sir, it always has been part of the policy of the Home Government, as inter- preted by its actions, that ability to pay should be part of the consideration; that the amount that has to be paid by any Colony should be estimated according to the amount which that Colony is able to pay. And, Sir, when we have the Army estimates before us, we see how palpably that principle is adopted. For instance, there are imperial troops in Bermuda and Jamaica, but there is no contribution at all either from Bermuda or from Jamaica. Of the condition of Bermuda I do not pretend to know anything, but I do not think it will be contended that the troops in Jamaica are any more required for imperial purposes than the troops in the Straits Settlements. Then, Sir, if we look at Mauritius, we find that while Mauritius has a force of half the number of men stationed in Singapore, it pays no more than one-seventh of the amount which this Colony is made to pay. If we look at Ceylon we find a very strange condition of affairs; we find that they have fewer men than Mauritius, about half, I think it is, of what we have here, and Ceylon only pays slightly more than one-third of what we pay here. I may be mistaken, but I understand that Ceylon is a country which is at least as flourishing as this Colony is. I trust that it will not be supposed that because I have said this I wish for any further tax to be put upon Ceylon. I may show the proportions paid by the different Colonies in another way. For each man forming part of the garrison, Bermuda and Jamaica pay nothing: Mauritius pays £19 for each member of the garrison; Hongkong pays £35 for each member; they have a very much larger garrison than we have: Ceylon pays £59 for each man who forms part of the garrison; we pay £80 for each man who forms part of the garrison of the Straits Settlements. Well, Sir, I said that in the days when we were able to pay, I never grudged the money, and is quite fair when our finances are not able to afford as much contribution as they have been in the past, that the question should be reconsidered. I think the Imperial Government has always accepted ability to pay as one of the main principles on which the amount of the contribution is to be based. Then, Sir, it has always appeared to me that the system on which we pay is unjust. We pay 20 per cent. of what is called gross revenue, but from that gross revenue are

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