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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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prejudice to the scheme of reform, and without detriment to the community concerned. I have no hesitation, however, in stating my emphatic opinion that the delegation of the power to license or to refuse to license taverns to any local bodies is a measure which, in the present state of this Colony, would be attended, not only by grave risks, but by the perpetuation of the very evils which the reforms are designed to check.

18 Referring to paragraph 5 of your despatch under reply, I can assure you that the necessity for the continuance of the arrack and toddy taverns now licensed will be watched by me and by my advisers with the utmost care and vigilance. The toddly taverns recently established, in so much as their number and distribution is concerned, are admittedly experimental. The records of the sales during the current year will supply us with useful data which will largely dictate the future action of Government in this matter, and I anticipate that it may be found possible to close some taverns, though it may also be found necessary to open others, as our practical experience accumulates. The new system, moreover, will give us a closer insight into the transactions of the arrack taverns than has hitherto been obtainable by Govern- ment; and this knowledge will also be utilised to reduce the number of such licensed places when and where it is shown that this can be done without giving rise to a The fact, however, must be surreptitious consumption with all its attendant evils. borne in mind that until Government has secured a complete control over the supply of country liquor throughout Ceylon, no really effective measures can be taken in the direction of limiting the consumption. When that much-to-be-desired end has been achieved. I anticipate that the reduction of consumption will be most effectually procured by raising the price of arrack and toddy, and concurrently the duty on imported wines and spirits, rather than by diminishing the number of licensed places where these liquors can be procured by those who create a demand for them.

19. Referring to paragraph 6 of your despatch, I am not clear whether the actual working of the contract supply system "has been adequately explained and understood. The system is briefly as follows:-The Colony will be divided into certain areas, each served by a central distillery. The right to manufacture a given quantity of arrack in this distillery for consumption within the area named will be leased for a longer or shorter period to a contractor, probably a person of the class already engaged in distilling arrack. The operations of the contractor will he carried on under strict excise supervision, the quantity and quality of the liquor The amount of arrack distilled will produced being carefully gauged and recorded.

be regulated by the proved demand within the area to be supplied. The liquor on the actual authorised output. produced will be excised at the still, duty being paid The tavern keepers within the area will be permitted to obtain their supply of arrack only from the licensed contractor, the price of the liquor being regulated by the The books kept by the tavern terms of the latter's contract with Government. keepers, giving their daily transactions throughout the year, will show with a fair The contractor approximation to accuracy the legitimato demand at each tavern. will only be allowed to produce for local consumption the quantity of arrack which is needed to meet this demand.

20.

With the greatest respect to the opinion expressed by you

in

your despatch,

I feel convinced that this system is better suited to local requirements, and is in itself more effective as a regulator, not only of the supply, but of the consumption, than that which is in force in the United Kingdom, where the distiller is not limited in the amount which he can manufacture, and can dispose of it as he likes when once the excise duty upon it has been paid.

21. The only reason why I anticipate that it may be necessary for Government to undertake the construction and maintenance of the distilleries, at any rate in the first instance, is that no contractor would be likely to embark capital in such ventures unless his contract were to run for a number of years which would be undesirable. If, however, persons can be found willing to bear the capital cost of constructing distilleries of an approved type, to be used by successive contract suppliers, in return for a guaranteed interest payable by Government upon their outlay, Government will welcome such a proposal, as we should thus be saved the inconvenience of having to In no event is it proposed that find large sums at any given time for this service. Government should engage in active distilling when the contract supply system has been started.

22. Referring to paragraph 7 of your despatch, I fully appreciate the point you raise, and the matter shall be carefully watched. The step you suggest would,

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however, have been impossible in the beginning, and must continue to be unworkable until we possess far more accurate and reliable data as to the actual demand for, and consumption of toddy throughout the Colony. Until we know, with a fair approxi- mation to certainty, what the demand actually is, sale by auction, instead of sale at a fixed figure to approved persons-for which I fully share your preference—will, I fear, have to be continued.

32489

SIR,

(No. 501.)

No. 5.

I have, &c.,

HENRY MCCALLUM,

Governor.

THE SECRETARY OF STATE to THE GOVERNOR.

Downing Street, 25th October, 1912.

I HAVE the honour to acknowledge the receipt of your despatch, No. 459, of the 21st August, in which you transmitted a memorial on the subject of the Excise Ordinance from the Plumbago Merchants' Union.

2. I should be glad if you would cause the memorialists to be informed that, after very careful consideration, I have accepted the proposals of the Government of Ceylon, as being likely to effect a material reduction in the use of intoxicants, and that, although experience will no doubt render it possible to effect improvements in the details of the new system, I am not prepared to reverse the policy which has now been adopted.

3. I should be glad if you would return a similar reply to the signatories of the memorial enclosed in your despatch, No. 414, of the 29th July,† and if you would add that it has now been decided that in the licensing of taverns local opinion shall be consulted by the establishment of Advisory Boards, the composition of which is at present under consideration.

32489

No. 6.

I have, &c.,

L. HARCOURT.

THE SECRETARY OF STATE to THE GOVERNOR. (Miscellaneous.)

Downing Street, 25th October, 1912.

SIR,

I HAVE the honour to acknowledge the receipt of your despatch, No. 466, of the 22nd August with regard to the appointment of local boards in connection with the licensing of taverns under the Excise Ordinance.

2. I have now had an opportunity of discussing the question with Sir H. Clifford and Mr. Bertram, and I have come to the conclusion that in the first instance I should be glad if you would the boards should possess merely advisory powers.

now consult the Executive Council with regard to the manner in which these boards should be constituted.

34833

No. 7.

I have, &c.,

L. HARCOURT.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 4 November, 1912.)

[Answered by No. 8.]

(No. 833. Miscellaneous.)

The Queen's House, Colombo, Ceylon,

SIR,

17th October, 1912.

+ No. 4.

I HAVE the honour to forward herewith copy of a statement addressed to you

28177: not printed.

+ No. 3.

#3187