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PUBLIC RECORD OFFICE

Reference :-

PELLI C.O. 885

1 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE

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rendered

in 1837, 1841 and 1843, necessary successive reductions of the duty on this product, and further reductions were every year advocated with greater earnestness by the local Government and the mercantile interest, as indispensable to the saving of the cinnamon trade from permanent extinction.

These circumstances rendered it obviously ne- cessary that a revision of the financial system of Ceylon should take place, as far back as 1845, and Lord Stanley had called the attention of the Governor Sir Colin Campbell to the subject in a despatch dated November 11th, 1845. This necessity was in fact rendered far more urgent by the additional expense thrown upon the revenue by an extensive alteration in the constitution of the civil service which Lord Stanley had in the same year directed to be carried into effect.

A more decided step was taken, with the same object of financial revision, by Mr. Gladstone in his despatch to Sir Colin Campbell, dated April 3, 1846, when with reference to the recently anew- expressed fears of the Governor regarding the stability of the cinnamon revenue, the Minister laid down in categorical terms the imperative necessity of a revision of the existing system of taxation, and called upon the Governor to furnish towards that end "a detailed and reasoned report upon the various existing branches of revenue, showing the manner in which they affect the trade and commerce of the colony, their actual produce, and the probable effect of their diminution or remission."

Sir E. Tennent's elaborate report (inclosed in Sir C. Campbell's despatch dated November 4, 1846,) containing a large scheme of revision, was produced by Mr. Gladstone's call. That report was received on January 5, 1847, and was refer- red by Lord Grey, who had now succeeded Mr. Gladstone, to the consideration of a Committee which met for the purpose at the Colonial Office. This Committee framed a report and a scheme of

Regarding this increase of expen- diture, vide note at p. 14 of this memorandum.

Printed Parliamentary Papers.

April 1848, pp. 38 to the end.

their own not altogether concurring with Sir E. Papers. April 1848, pp. 7 to 38.

Tennent's.

On examining the papers referred to them they found the necessity for a change of system even

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greater than had been previously supposed, though as it afterwards turned out from the defective in- formation transmitted to this country, the truth with regard to the state of the colonial finances was still more unfavourable than they had sup- posed

Papers. April 1848, pp. 5 to 7.

The Commissioners' Scheme, &c. bell,-

The Committee's scheme and report, without being absolutely adopted by Lord Grey, was com- municated by him in despatch dated June 18, 1847, to Lord Torrington, the new Governor of Ceylon just then appointed to succeed Sir Colin Camp- -was recommended to his favourable consider- ation, as being generally consonant to the views of Her Majesty's Government, but was

left to the Governor's own discretion to carry out or modify, as after consulting with his council he might think expedient. Lord Torrington in a series of despatches which may be said to com- Papers for Parliament, p. 33, &c. mence with the one dated December 13, 1847, informed Lord Grey of the plan which he and the Council were prepared to adopt, and were putting in train of adoption, in the discretion thus left to them. Lord Grey and the Treasury, though not in every particular agreeing in opinion with the local Government, resolved to support the thus announced measures as on the worthy of approval.

Lord Grey to Lord Torrington;

March 24, 1848. Papers. April 1848. p. 327, &c.

Papers. April 1848, p. 8, 9.

N.B. From this point to the bot- tom of page 16, the text is an extract from the Commissioners' Report, (pp. 8 and 9 Papers, April 1848,) with a very few al- terations.

whole

The different schemes which thus successively came under contemplation will be now described and explained in their proper order, and the course which was run by the one determined upon by Lord Torrington, will then be traced in its progress to actual accomplishment.

The different sources of revenue in Ceylon were in 1845 (the time the revision of the fiscal system of the colony was entered upon).

1. Sea customs, consisting of export and import duties.

2. An assessment on lands growing certain articles.

3. An excise duty on arrack.

4. The sale of salt.

5. The sale of crown lands.

6. Stamps.

7. Tolls.

8. Miscellaneous.

And the actual receipts