CO882-(8-9) — Page 604

الم المراة

PUBLIC RECORD OFFICE

Reference :-

CO. 882

9PUBLIC RECORD OFFICE, LONDON

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*Wo enforce a contribution on certain small Crown Colomes because, practically, we have the power of doing *ses, and we retrain from attempting to enforce a contri. bution on the larger, richer, self-governing Colonies because we cannot enforce it. We are a stern Bobby' to the stall boy, and a Dogberry' to the big boy."

If we wish to preserve the contributions, we should now, having established or right after great controversy. ** exercise it with very great moeleration, and should meet the Colonies with every concession that is consistent with the preservation of the contributions. The growth of the revenues will in time give us the full amounts we ** can demand, and we can well afford to agree that in the ** case of new industrial undertakings, such as tramways, telegraphs. &.. the percentage shall be levied on the net

** revenue, when the undertaking is of sufficient importance

to justify it.”

It is to be regretted that the policy of the War Office Las not consistently followed the lines laid down by Lord Haliburton.

The War Office and the Treasury were disposed to agree. Had. Nos.

a principle with the Colonial Office proposal in the case 112 & 11.

of new undertakings which did not differ in character und productiveness from railways, but thought that each case as it arose should be considered on its merits by the three

Departments. They agreed definitely to the arrangement in the case of the Penang telephones."

14.

A proviso was accordingly drafted to be added to the third section of the Ordinance of 1899: it was of a general character, but, as the Secretary of State explained it. No. to the Treasury, it removed the inconvenience of having to pass a new amending ordinance in each case of the establishment of a new productive undertaking; it also would prevent discussions by the unofficial members on and the the general question of the contribution; Secretary of State promised to give instructions that no new undertaking was to be deemed to be of a similar character to railways or telephones without previous reference to him and to the other two Departments.

The Treasury and War Office accepted this proposal, and Treasury, the Governor was accordingly instructed by despatch of 21810/99. the 18th September to amend the law, and was also on

Treasury. informed that all new cases must be referred to the

21810/99. Secretary of State.

The amending ordinance which was duly passed on the Gov., 221,

*99/1900. 28th November, 1899, added the following proviso:-

Provided that the charges for working expenses and "maintenance of any railways telephones or other produc- “ tive undertakings of a similar character which may here- "after be established and for interest and sinking fund on any sums borrowed for the construction of such railways telephones or undertakings shall be deducted from the gross receipts of such ruilways telephones or under- takings respectively and the percentage struck on the "net receipts only if any in each case.'

+4

+

Further exceptions followed. In Decetnber, 1900, the A. 993, Secretary of State informed the War Office that the Acting No. 1. Governor of the Straits Settlements had suggested that the revenue of Christmas Island, which had been recently annexed to the Colony, should not be included in the assessable revenue. It was pointed out that the island lay 800 miles away from Singapore, that it had no garrison, and that the receipts would probably not exceed No. 3, En- The expenses of administration. On the 27th December closure.

Ibid.

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Vigs.

BROSE 03.

Despatch

oa W.O.,

14248 04. Gov.,

39041 03.

W.0..

14248.04.

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the Treasury concurred, on the understanding that the question was brought up for reconsideration in five years' time, and the War Office also agreed, in a letter of the 8th January, 1901,

The next step was taken by Sir F. Swettenham in September, 1903, when he addressed a despatch to the Secretary of State urging a revision of the existing arrangements with a view to fixing a maximum sum beyond which the Colony should not be liable to con. tribute towards the cost of the garrison: the maximum sum which he named was £150,000. He argued that the Colony had no control over the size of the garrison, or the framing of the bill of costs (which included such items as a proportion of pensions and proportion of transport of reliefs, ammunition, &c.) and that therefore it was very unlikely that the bill would sink to less than the estimated 20 per cent, of the revenue; that the Colony had largely increased its local forces-the cost of which had riseu from $14,216 to $81,392 during the years 1899 to 1902; and that the Colony made a larger contribution towards the cost of the garrison than any other colony in pro- portion to its size, population, and resources. Swettenham concluded his appeal with remarks that have a direct bearing on the situation at the present time :--

I submit that because the Colony is prosperous and

4

Sir F.

"has means, that is not a sufficient reason to compel it to pay an excessive military contribution for services which are at least as Imperial as they are local. The interests "of the Empire as a whole, and even of the British tax- payer, inny best be served by exacting from the Colony only a fair proportion of the cost of its garrison, while "still leaving it with ample funds for further development "and for the provision of those facilities for dealing "expeditiously with every kind of business which modern "trade and shipping require."

The Secretary of State was not prepared to reopen the whole question, but as some sort of relief to Colonial revenues he suggested to the War Office that, if a Colony constructed railways or similar productive undertakings from revenue instead of from loans, it would be only fair in computing the net revenue to make a deduction in respect of interest and sinking fund on the capital expenditure already incurred and on similar expenditure which might afterwards be incurred out of revenue, in the same way as if the expenditure had been incurred out of loans. The deduction might be at the rate of 4

per cent. for a period of 50 years, since a loan could not be raised at less than 3 per cent. plus 1 per cent. for sinking fund. Further he proposed that this arrangement should take effect from the 1st January 1904, and he trusted that there would be no objection to applying the samc principle in the case of the other Eastern Colonies.

The War Office and the Treasury concurred with the proviso (on the part of the latter) that reference should be made to that Department in any case in which it was hid. En- doubtful whether expenditure was of a capital or recurrent

closure 2. Ibid. Dos- patch

No. 116.

Ibit.

nature.

The new Governor (Sir J. Anderson) was informed that the Secretary of State saw no sufficient reason to reopen the general question, but that this principle had been approved, and he was instructed to introduce an amending ordinance. In a confidential despatch of the same date (17th May, 1904) the Secretary of State

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