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pay the whole cost of its land defence, the figures supplied by the War Office show how far the present contribution falls short of realising this though the cost of the garrison appears to be lower tow than it was in 1903-4.

This being the case my Lords are unable to admit the arguments adduced by Sir J Anderson in the despatch of the 21st November, 1907, which accompanied the letter under reply; and especially they must demur to the suggestion (paragraph 16 of the despatch) that revenue raised for the purpose of paying interest on loans for certain purposes would be exempt from assessment to military contribution. If in isolated cases my Lords have agreed to such exemption, they have never felt able to assent to any general departure from the principles which have, with the full agreement of the Colony, regulated the Colonial military contribution; and the Secretary of State is well aware that the rate at which the present contribution is payable was within the amount suggested by the Colony

While, however, the precise methods on which the contribution is assessed- methods which, as they were settled by mutual agreement, are capable also of re- adjustment. if necessary, by mutual agreement are perhaps subjects for considera tion, my Lords are unable to admit that any case has been made out for reducing its amount

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has not hitherto felt able to agree. In such an event, the matter of the Governor's salary can be considered in connection with some general scheme of reform.

3.

You suggested also, in your secret despatch of the 27th of April, that the military contribution at present paid by Mauritius should be suspended for two or three years. I have considered this suggestion, but I do not see my way to put it before the Lords Commissioners of the Treasury, having regard especially to the smallness of the contribution as compared with the cost of the garrison. Moreover, as I suggested in my telegram, the cessation or reduction of the contribution would be tantamount to the grant of an Imperial subsidy to Mauritius, and in that case it would be necessary to consider whether, as in the West Indies, the grant of aid from Imperial sources ought not to be coupled with more complete Imperial control over the finances of the Colony. This, again, is a question which might, and doubt- less would, be considered in a general survey of the affairs of the island but which need not be dealt with at present.

35506

I have, &c.,

CREWE

29011

SIR.

No. 141

STRAITS SETTLEMENTS

I am. &c.,

TL HEATH

Tar SECRETARY OF STATE to THE GOVERNOR

Confidential)

Downing Street, 21 August, 1908.

I HAVE the honour to acknowledge the receipt of your Confidential despatch of the 21st November last,* and to transmit to you, for your information, the enclosed copies of correspondencet with the Treasury and the War Office respecting the military contribution paid by the Straits Settlements.

I have, &c.,

27867

(Secret.)

SIR.

CREWE

SIR.

No. 143.

HONG KONG.

WAR OFFICE to COLONIAL OFFICE. (Received September 29, 1908.)

[Copy to fiovernor, June 25, 1909. No. 113.]

War Office, London, S. W., 28th September, 1908. I AM commanded by the Army Council to send you the enclosed copy of corres- pondence, in which the Colonial Secretary at Hong Kong asks the local military authorities for a statement of the Army expenditure in respect of that Colony in each year from 1864 to 1907.

While there is no objection to figures as to current local expenditure being furnished to the Colonial Government by the General Officer Commanding, I am to observe that the practice is for any figures as to the total annual expenditure in respect of a Colonial garrison to be furnished to the Colonial Government through your Department, and it is considered that, in order to prevent any possibility of confusion, this procedure is even more desirable in regard to requests of this nature for statements as to the expenditure in past years.

In this case I am to inform you that such figures as are available were furnished to you in War Office letter dated 31st March, 1908.* As stated in that letter, the Army Council will be in a position to comply with any similar requests from the Governor of Hong Kong in regard to expenditures subsequent to 1st April, 1907.

I am, &c.,

R. H BRADE.

PUBLIC RECORD OFFICE

Reference :-

TTILIC.O. 882

9

PUBLIC RECORD OFFICE, LONDON

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

No. 142.

MAURITIUS.

THE SECRETARY OF STATE to THE GOVERNOR.

Downing Street, 9 September, 1908.

I HAVE the honour to acknowledge the receipt of your telegram of the 21st of August.‡ in which you ask for a reply to your secret despatch of the 27th of April. § I have also to acknowledge the receipt of your secret despatch of the 29th of June, which was under my consideration when I received your telegram.

2. I despatched to you on the 4th of September the telegram of which a paraphrase is enclosed. You will have learnt from that telegram that I do not, as at present advised, consider that it is desirable to take advantage of your offer to forgo part of your salary. I fully appreciate the spirit in which this generous proposal was made, but I do not think that a reduction of the Governor's salary should be made as an isolated item of economy. The present situation gives cause for considerable anxiety, and, in a numbered despatch of even date,** I have expressed my desire that you will endeavour to impress upon the Heads of Departments the urgent need of exercising rigid economy.

I hope that in this manner it may be possible to avoid any serious deficit on the working of the current financial year, but, if not, it will be necessary to consider very carefully the situation as a whole and, perhaps, to press further the proposal for the appointment of a Royal Commission, to which the Council of Government

• No. 128.

↑ Nos. 130, 131, 133, and 140.

[ Not printed here : (No. 70 in Eastern No. 110).

** Not printed here : (No.

30594: not printed.

No. 134.

Not printed here: No. 74 in Eastern No. 110.)

75 in Eastern No. 110).

SIR,

Enclosure in No. 143.

Colonial Secretary's Office, Hong Kong, 18th July, 1908.

I AM directed to transmit to you the enclosed table which has been compiled from the sheets lettered" E " of the Colonial Blue Book.

2. I have been given to understand that these figures do not represent the total expenditure incurred by the Military Authorities in this Colony, but only sums paid locally and passed through the accounts of the District Paymaster. therefore, be much obliged if you will be good enough to supply me with corrected shall, figures giving the full totals. If these figures are not available locally, His Excel- lency the Governor will be obliged if they can be obtained from the War Office in London.

I am, &c.,

F. H. MAY,

Captain Hart-Synnot, D.S.O., General Staff.

• No. 132.

Colonial Secretary.