CO882-(8-9) — Page 607

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

9

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH--NOT TO

36

and imunsliare return, we have to pay the full tax of

25 per cent. on the amount so ex pencil.

If instead of finding the funds for such works out of Book, **reventle, we borrowed for the purpose we shoubi pira 16.

pay to

tax either on the capital expenditure o

on the revenue raises] for payment of interest,

He urged that all capital expenditure for special services – Pam. 13. required to maintain and promote the progress of the Colony should be free from taxation for military contri- bution.

25th

The Secretary of State sent a copy of the despatch to hid the War Office and Treasury, who refused to accept the latters of suggestion. The former remarked that the Governor's March, D.

on which all w. o.. arguments struck at the root of the principle military contributions in the Eastern Colonies were based; 160820s, they refused to accept the principle advanced by the Governor that in all cases of works provided for by loan. the revenue raised to pay loan charges should be exempt, although they acknowledged that the particular case had been agreed to in the Straits instance of the harbour and river improvements, The Treasury cordially concurred Treasury,

with the War Office and added :—

"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 consideration. My Lords are unable to admit that any case has been made out for reducing its amount." This is interesting, in view of the determined efforts which they made to avoid a new Committee.

2011 08.

INGATOR.

Gov..

In April, 1908, the Governor of Mauritius advocated Gov. the suspension for two or three years of the contribution, in view of the financial condition of the Colony, but the Secretary of State, in September, decided that he could not 27867 08. ask the Treasury to agree.

Meanwhile the Governor of Ceylon had been meditating

on the War Office demand for a contribution equivalent

Gov..

to the full cost of the garrison, and on the 23rd and 24th Gov.. May, 1908, he wrote two despatches on the subject. In 18908. the first despatch he said that any attempt to upset 21531 08. the existing arrangement would meet with unanimous opposition from the whole community and would give a rude shock to public confidence, as the principal reason which had induced the unofficial members of Council to agree to the existing system was the belief that it was the final settlement of a troublesome question. He argued that Trincomalee had been abandoned as a matter of Imperial strategy without consulting the Colony, because Colombo had been substituted as the principal naval base in those waters; that as Trincomalee had been defended, ut least to some extent, on Imperial grounds, the transfer of the Imperial naval base to Colombo was logically a reason for reducing the contribution—not for increasing it; that the proposal could only be carried by the vote of the officials, who would vote against their convictions; and that the War Office proposal should be resisted. In the despatch of the 24th May he insisted on the point that Colomb. had succeeded Trincomalee as the principal Imperial naval base in East Indian watera.

21531.08.

These despatches were sent to the War Office in Gov., August, the Secretary of State observing that the Governor appeared to give strong reasons for adhering to the existing arrangement, and that the proposal could hardly

Gar 447408.

57

fail to be regarded as a breach of faith (since the Colony had never been publicly informed of the reasons for fixing the maximum contribution at three-quarters of the cost of the garrison), and would probably result in a renewal of the agitation against the existing contribution. Crewe hoped that the War Office would not press their proposal.

Lord

In December, 1908, the unofficial members of the Mauritius Council of Government unanimously resolved that the Colony ought to be exempted for three years from the contribution. This, as the Acting 2082 08 09. Governor pointed out in his confirmatory despatch, was tantamount to acceptance of the proposal to appoint a Royal Commission to enquire into the finances of the

Gov..

red 5185], Colony. As regards this question the Royal Commission of 1909 reported,-" The existing contribution is, how-

pra

252-3

W.O.. 17224 09.

Ibid., Letter of 8th June.

Gov., 20703/09.

closure.

แ

ever, so moderate in proportion not only to the cost of

"the garrison but to the total revenue of the Colony, that

we do not feel able to recommend a reduction of the con- "tribution.

We have pleasure in stating that a "large number of unofficial witnesses frankly acknow- "ledged that the military contribution, as at present There the matter has rested, "fixed, is very moderate." so far as Mauritius is concerned.

Friction with the War Office was increased in May, 1909, when the Army Council drew attention to the fact that only the net receipts from Government buildings let for profit had been assessed for the contribution. They also took exception, to the deduction from assessable revenue of a portion of the liquor farm rents carried to the Improvement Fund. The Secretary of State explained that the buildings were a productive undertaking and therefore the deduction was properly made; and as the facts as to the Improvement Fund had been forgotten in the Colonial Office, he promised to make enquiry on the point.

Meanwhile, in May, 1909, the Governor of the Straits Settlements sent home the report of a Committee which had been appointed in view of the unofficial members' opinion that the Government should consider the necessity of creating a Board for the management of all education Ibid. En- in the Colony. The Committee recommended the con- stitution of a Board which should receive all fees charged in Government schools and disburse them, and also any other moneys voted for educational purposes. As Sir John Anderson pointed out, this meant that the defence contribution would be somewhat reduced (or rather, that there would be a diminution in the gross revenue assessable to contribution, since education fees had hitherto formed part of general revenue). The Secretary of State approved the proposal and informed the War Office.

Ibid. Des- patch and letter of

13th July W.O.. 23601/09.

W.0.. 25602/09.

Gov.. 24088/09.

The War Office refused to agree to the assessment of net receipts from Government buildings for the purposes of the contribution, on the ground that the principle of net assessment of the receipts from commercial under- takings referred exclusively to sources of revenue not in existence in 1895; and in July they refused to accept the proposal as to education fees on the same ground, adding that "The Army Council strongly deprecates the "marked tendency, which has been recently exhibited, to depart from the broad rule on which the percentage system of contribution is based,'

"

While this correspondence was in progress Sir John Anderson raised an even thornier question in a confidential

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