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PUBLIC RECORD OFFICE

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C.O. 882

PUBLIC RECORD OFFICE, LONDON

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No. 211

STRAITS SETTLEMENTS

TREASURY to COLONIAL OFFICE

Received 15 January, 1912.

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Treasury Chamber-, 13th January, 1912 Fine Lords Commissioners of His Majesty » Treasury having had before them Sir Gi Fiddes's letter of the 5th August last (014 1911),* further respecting the military contribution payable by the Straits Settlements, direct me to transmit to you herewith a copy of a letter dated the 1st ultimo from the Army Council, with whom they have been in communication on the subject

My Lords now desire me to state that they find themselves in full agreement with the views expressed in Mr. Brade's letter, and they regret to be unable to alter their devision on the general question of changing the existing basis of the contribu

Their Lordships' views tion or of submitting the matter to enquiry by a Committee

on the subject have been stated at length in previous correspondence, and they fail to find in Sir G. Fiddes's letter any adequate reply to their arguments on the larger

question

The various matters of detail raised in the letter under reply are fully discussed in the War Office letter, and my Lords will defer the expression of any opinion upon them pending the receipt of the further information asked for by the Army Council

SIR.

Enclosure in No 211

I am, &c.,

ROBERT CHALMERS

War Office, London, S.W, 1st December, 1911

Is reply to your letter of 12th August, I am commanded by the Army Council to ask you to lay before the Lords Commissioners of His Majesty's Treasury the following remarks on Colonial Office letter dated 5th August, on the subject of the military contribution paid by the Straits Settlements.

2 Paragraph 3. The statement that the Colonial Office had already under taken to request the Governor to include in the revenue assessable to contribution the gross receipts from rents of Government buildings let for profit is in accord with the information furnished to you semi officially by this office in February last, but their Lordships will see from the enclosed copy of Colonial Office letter of 15th November, 1910, that the Colonial Office, when asked to carry out its undertaking, preferred to postpone action, with the result that the decision, so far as this Department is aware, has not yet been communicated to the Governor.

3. Paragraphs 4-7 --As regards the " Improvement Fund," I am to explain that when, in the examination of the contributions for the years 1907 and 1908, it was observed that under an Ordinance (No. 19 of 1906, Section 113) of which the Army Council had no knowledge, a proportion of the liquors revenue had been paid to an "Improvement Fund " and deducted from assessable revenue, this Department failed to identify the deductions with those proposed in the Governor's telegram dated 18th February, 1906, and approved in Treasury letter of 22nd February, 1906: and full information was accordingly asked for. The Colonial Office, apparently also failing to identify the deductions, promised to make enquiries of the Governor, of the letter but this Department heard nothing further until the receipt of copy addressed to the Treasury on 26th May, 1910, in paragraph 11 of which Lord Crewe undertook (under certain conditions as to an Imperial subsidy) to request the Governor to repeal Section 86 (2) of Ordinance No. 22 of 1909 (re-affirming Section 113 of Ordinance No 19 of 1906), which, it was stated, had reference to the Governor's proposals regarding the change in the opium and liquors policy- a subject wholly unconnected with the harbour and river improvements dealt with in the Governor's telegram of 19th February. 1906, to which, as now appears, Section 88 (2)

• No. 196.

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really referred Any such confusion will be avoided in future, if, as suggested in paragraph 10 of War Oflice letter of 18th January, 1911, copies of all Ordinances affecting the principles on which the contribution is assessed are referred to this Department before promulgation.

4. It follows, of course, that the item “Liquors revenue paid to Improvement Fund (1907-1911). £34,882," in the statement of amounts incorrectly deducted (enclosure of your letter of 11th March, 1911) needs correction. The Colonial Office suggest in paragraph 7 (and enclosure) of letter of 5th August that the amount over- deducted from the revenue on this account is $20,786, and that the underpayment of contribution is accordingly 20 per cent. of this sum, or $4,157. But the "amounts to be deducted from assessable revenue," as given in the Colonial Office statement, appear to be taken from the Estimates of the several years, and naturally differ from the actual amounts deducted as shown in the returns of assessable revenue furnished annually to this Department by the Straits Government through the Colonial Office. The actual deductions, as shown in these returns, are as follows :-

1907 1908

1909 1910

$

177,024.69

308,006.51

215,833.00

103,666.75

The Army Council are unable to verify the correctness of these deductions without a statement showing for each year :—

(a) The total amount required for the service of the loan raised for the harbour and river improvements referred to in the Governor's telegram of 18th February, 1906.

(b) The amount produced by the property rate of 1 per cent. on the annual

value of property on the river bank referred to in the same telegram. (c) The proceeds of the increase made in the spirit duties for the purpose of the harbour and river improvements put in the telegram at two-fifths of the total receipts from the spirit duties, but ultimately fixed in the Ordinance at " not exceeding three-eighths."

The amount of the spirit revenue properly excluded from assessment is the excess of (a) over (b), but in no case exceeding (c). The Council trust that the Colonial Office will be prepared to furnish a statement giving these particulars as from the year 1907.

Incidentally, I am to remark that these somewhat formidable requirements afford a strong testimony to the wisdom of the system of assessment on gross revenue, with out exemptions and refinements.

5.

With regard to (a) above, the Council's attention has been drawn to the fact that the loan raised under Ordinance No. 4 of 1907 (a copy of which has recently been obtained from the Colonial Office) to provide for the river and harbour improve- ments referred to in the Governor's telegram of 18th February, 1906, provides also for the municipal waterworks of Singapore ($523,187) and for the improvement of the water supply and other municipal works at Penang ($170,000) The Army Council do not trace that their concurrence or that of the Treasury has been obtained for treating these two items in the same exceptional manner as the expenditure on harbour and river improvements, and they presume that the revenue required for the service of such portion of the loan as relates to these two items will not be deducted from the total revenue assessable to contribution. The Council would be glad of information on this point.

6. Paragraphs 8-10.-It is presumed that the suggestion that " so far as these details are concerned

a settlement has been arrived at " refers only to the two items dealt with in paragraphs 3-7 of the Colonial Office letter, viz., Rents of Government buildings and Liquor revenue paid to the Improvement Fund. The above remarks show what progress has been made towards a settlement of these two items; while as regards the other outstanding items, viz., the assessment to contri- bution of the opium and spirit revenue, hospital charges, school fees, and education rates the Army Council do not find in the Colonial Office letter any reply to the points raised in the War Office letter of 18th January, 1911. On these matters the Council are in entire agreement with the position taken up in Treasury letter of 11th March,

1911.