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PUBLIC RECORD OFFICE

Reference :--

THILLC.O. 882

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PUBLIC RECORD OFFICE,

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LONDON

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127.

My Lords," on the 6th of June, 1898, “recognise the id, great advantage of commuting military charges for a Exel percentage of revenue so far as regards convenience, "avoidance of delay and friction, and saving of corres- pondence. On the other hand the having to recover the "cost of new works from the Colonial Government has *heen a powerful check on expenditure, and has led to the postponement of much important outlay. When the charge has been commuted the Colonial Government, *instead of opposing expenditure, will be inclined to press

for its being incurred.

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Notwithstanding this risk of increased charge however, My Lords cannot oppose the proposed arrangement in principle if the War Office and Colonial Office combine "in recommending it

The increase of contri-

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bution should not affect the liability of the Colony to provide, free of charge, any available colonial and military land required for sites for military works."

128 to 131.

Correspondence then followed between the three depart- bul, Nos. ments as to the point whether the new arrangement should be made retrospective, the Colonial Office arguing that to bring it into force from any date other than the 1st of January, 1895, would be unfair, inasmuch as the Ibid.. expenditure for military purposes incurred by the Colony No. 129. luring the years 1895-1897 had been of an altogether abnormal character, amounting to a much larger sum than would have been paid if the 20 per cent. proposal · had

been accepted from the 1st January, 1895.

No. 134.

The Treasury and War Office finally concurred, any bid, sums due to the Colony on readjustment of the accounts being deducted from the contribution in the three years 1898-1900.

No. 135. Ibid., En-

The Governor was informed of the clecision and instructed Ibid., En- to amend the Defence Contribution Ordinance and the law closure in was passed on the 25th April, 1899, after considerable discussion. One of the unofficial members proposed two closure in amendments to the draft, one in the preamble and one in No. 137. Section 5. The effect of the first amendment was to Gov.. emphasise the view that the contribution was paid for 8833/99. local and not for Imperial purposes; and the second amendment, if passed, would have made the section read as follows:-

"The said percentage shall be deemed to be a fixed "contribution

in full return for the annual cost "of the defence of the Colony being such a propor- "tion of the cost incurred by the Imperial Government "as can be deerned necessary for the purposes of the "Colony only, exclusive of such cost as is incurred by "the Imperial Government having created or hereafter "creating or using Singapore as an Imperial Coaling *Station or as an Imperial Navy Docking Station or as a "base of operations of the Imperial Navy

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The amendments were only defeated by the Governor's Ibid., vote, who thought it advisable to grant au adjournment for para. 6. six weeks at the request of the unofficial members, so that

the Secretary of State should be placed in possession of

their views. The Governor's despatch reporting the Ibid. matter (dated the 26th of March, 1899) enclosed the report

of the debates on the second reading and in committee; Ibid., En-

they consisted chiefly of speeches on subtle legal points closure 3.

by one of the unofficials but the feeling of them all is shown by the protest which they signed when the Bill was passed.

The Secretary of State had refused by telegram of the Gov 24th and despatch of the 28th of April to accept the 8833/99.

tink.

1307020

Padd

No. 119,

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amendments, pointing out that acceptance would lead to a continual discussion as to the distinction between Colonial and Imperial purposes, a distinction which it was impossible to define exactly; and the Governor in reporting the passing of the Bill forwarded a protest which said :—-

"We protest against this Bill being passed without a "clear definition therein that the payment of 20 per cent. "of the Colony's revenue is to be for such defences as are "from time to time necessary for the purposes of the Colony only; and not for such as are necessitated by the Imperial Government having created or hereafter creating or using Singapore as an Imperial Coaling Station or an Imperial Navy docking or repairing station "or a base of operations of the Imperial Navy."

*

Shortly before the enactment of the contribution, on the 8th of April, 1899, the Governor telegraphed that the Enclosure. Government proposed to establish a public telephone system in Penang but that an essential condition was that net, instead of gross, local receipts should be liable to contribution. On receipt of the telegram the Secretary of State addressed the War Office and Treasury in a letter of the 2nd of May, 1899, enclosing a copy of the telegram and saying

Thad, No. 130.

Ibid. No. 140. Enclosure.

Ibid.

No. 141.

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"Mr. Chamberlain considers that this is a convenient opportunity to raise the question of the manner in which "the receipts of new undertakings of a commercial "character established by the Colonial Government are to "be assessed for the purposes of the Military Contribution. "At the time when the percentage was originally fixed **the revenue of the Colony included, among other sources, "postal and harbour receipts which were taken in gross, "and Mr. Chamberlain does not propose to reopen the "question in regard to those old undertakings; but it "seems clear to him that if the Colony desires to under- "take in the future railways, tramways, gas or electric lighting or other productive works, a demand for a "similar assessment will seriously hinder the develop. "ment of such undertakings." He suggested, therefore, that the principle which had been admitted in the case of railways should be extended to cases such as those cited.

The despatch confirming the Governor's telegram showed that the gross revenue from the telephone system would be $4,400 as against expenditure of $4,175, so that a military contribution of 20 per cent. on the gross revenue would turn the small net revenue of $225 into a loss of $655.

"

It appears that Lord Haliburton, who as Sir A. Hali- burton had been Chairman of the Inter-Departmental Com- mittee, was asked by the Secretary of State for War to give his views.

In a memorandum dated 8th June, 1899, he explained that the Committee had thought it as well to begin with the broad general rule of a small percentage on the gross revenue and to make exceptions if the Colonies urged and justified such exceptions; it was not intended to exclude industrial undertakings from the arrangement arrived at as to railways if it were desirable from the Colonial point of view that the net revenue alone should be considered.

I cannot forbear to quote his concluding remarks, since they show the view held by a pronounced partisan on the question of Colonial contributions. "I venture," he said, to add a few words as to the course we ought to adopt "in dealing with these cases. Our position in the matter "of these contributions is a very weak one."

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