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No 133

STRAITS SETTLEMENTS

WAR OFFICE to COLONIAL OFFICE

(Received May 6. 190×)

War Office, London, SW, 5th May, 1908 With reference to your letter of the 25th March last. No. 43644 '07,* respect ing the military contrileition of the Straits Settlements. I am commanded by the Army Compell to forward a copy of a letter, dated 24th ultimo, which has been addressed to the Treasury on the subject

I am, &c..

E WD WARD

113

From the appended statement it will be seen that the cost of the garrison of this Colony has largely exceeded the sterling value of the contribution received in respect of the last five years for which the accounts have been completed.

The Secretary

to the Treasury.

STRAITS SET¡LEMENTS.

I have, &c.,

E. W. D. WARD.

Comparative statement of the cost of the garrison and the contribution received from the Colony in respect of the years 1902-03 to 1906-07 :--

Toperial Financial Yesr.

Cost.

Contribution.

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

9

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

SIR.

Enclosure in No 133

War Office. 24th April, 1908.

I AM commanded by the Army Council to ask you to lay before the Lords Commissioners of His Majesty's Treasury the following observations on a despatch addressed by the Governor of the Straits Settlements to the Colonial Office on 21st November, 1907, regarding the Colonial military contribution, a copy of which was sent to you by that Department on 25th ultimo,

Their Lordships will not fail to observe that the arguments advanced by the Governor strike at the root of the principle on which all military contributions paid hy the Eastern Colonies are at present assessed; and it is evident that they cannot be admitted without giving up the whole system of assessment both in the Straits and elsewhere.

1

The suggested exemption from assessment of a portion of the revenue equal to the expenditure on " Special Services must necessarily lead to a similar concession in all the other Colonies concerned; and, inoreover, seems designed to produce pro- longed correspondence on the question whether a particular service should or should not be classed as special."

"

It is worthy of notice that it was at the instance of the then Governor of the Straits, and in the interests of the Colony, that the system of a percentage on revenue was first introduced (see Sir C. BH Mitchell's despatch to Colonial Office, dated 29th December, 1894); and the percentage laid down for the Straits was actually less than that then suggested by the Governor. As pointed out by the present Governor in paragraph 17 of his despatch, the system was introduced at a time when the financial outlook was gloomy," and though he does not plead " immediate financial strain" (paragraph 19), it would appear that even if less prosperous condi tions return, the system of military contribution will be one that was expressly designed to meet such conditions

"

"As the question raised is that of the general principle of assessment, it is not necessary to enter into the various details dealt with in the course of the Governor's despatch, but one point deserves notice In paragraph 16 the Governor assumes that in all cases of works for which funds are provided by loan, the revenue raised for the purpose of paying the interest on the loan would he exempt from assessment to military contribution. As stated in War Office letter addressed to you on 19th March, 1907, on the subject of district collections at the Straits, the Army Council are not aware that such a wide principle has ever been admitted. Generally speak- ing, the instances in which revenue so appropriated has been exempt have been those of railways, telephones, and other special" productive " undertakings. It is true that in the particular case of a loan for certain river improvements at the Straits the Council agreed, at the instance of their Lordships, that the proceeds of the special taxation raised to provide for the interest and sinking fund should be exempt from assessment (Treasury letter of 22nd February, 1906); but they do not understand that it was their Lordships' intention to lay down any new general principle for future guidance.

No. 131.

18647

1902 03

1903 04

INO 05

1905 06

1906 07

(Secret.) (Extract.)

MY LORD,

*

ť

195,477

£ 127,504

285.111

140,250

261264

186,265

246,653

185.927

280,401

211,191 (estimate)

No. 134.

MAURITIUS.

THE GOVERNOR to THE SECRETARY OF STATE.

(Received May 23, 1908.)

[Answered by No. 142.]

Government House, Le Réduit, April 27, 1908.

*

*

17. There remains one other item of expenditure for consideration. A contri- bution of five and one-half per cent. of the general revenue is made towards Imperial military expenditure in the Colony. The amount varies between Rs. 400,000 and Rs. 450,000 per annum, and if the operation of Ordinance No. 33 of 1897 were suspended for, say, two or three years, I have no reason to doubt that the revenue would suffice to meet all ordinary requirements, as well as such extraordinary charges as may be entailed in providing adequate college accommodation; and in combating the spread of malaria; whilst there should be no difficulty in finding funds for the service of such a loan as it might be necessary to raise for the improvement and proper equipment of the railways.

18. The recuperative power of the Colony is undeniable; given good crops and fair prices the revenue ceases to be insufficient to meet and cover all the expenditure requisite under careful management. There is full evidence of these facts in the results of the periods affected by the crops and produce of 1904-1905, and 1905-1906. 19. I believe, therefore, that such temporary relief as I now propose would have the effect of placing the public finances of the Colony on a satisfactory basis, so that the general requirements of administration may be provided without having recourse to increased taxation or to any extravagant enlargement of the public debt. 20. I am aware that my suggestion amounts to a request that the Imperial Exchequer will forgo for two or three years an annual payment of £26,600 or £30,000; but in view of the recent reduction of the garrison without any concurrent diminution of the contribution claimed from the Colony, and having regard to the effect which the concession would have upon a somewhat susceptible community, struggling under circumstances of exceptional adversity and admittedly beyond their control, and feeling acutely their failure to obtain permission for raising any loan in aid of their staple industry, I beg to submit the request in the earnest hope

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