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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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feel it my duty to lay stress upon this point. It would be a mistake to regard the position of the Colony on the organization of its Govern- ment as due merely to want of foresight and extravagance of method. There may be ground for much justifiable criticism on this score but it should not be lost sight of that the primary cause of the present situation is a world-wide economic collapse in the staple industry of Mauritius, the severity and duration of which neither the Colony nor any other body of sugar growers foresaw or could reasonably have been expected to foresee. It seems to me that every possible effort should be made to ease the strain of reorganization especially as there may be reasonable hope of a recovery in economic conditions within the period over which in my view the reorganization should be extended.

27. I must apologize for the somewhat disconnected character of these observations and for their incomplete form. I have not been able in the very short time at my disposal to check the estimates furnished or to obtain detailed confirmation of the state- ments made. But I think it is necessary that I should place before you, with the least possible delay after the arrival of the Commission in England, my personal impressions of the feasibility of their proposals. The information kindly given me by the Commissioners has been treated as strictly confidential and I have accordingly not been able to consult other opinion except in a very guarded fashion. An exception to this has been the case of the Railway which I have been obliged to discuss freely with the General Manager. The Commissioners however had already consulted Mr. Austen on their proposals which were fairly fully known to him. I trust that the observations submitted may at any rate furnish a sufficient basis for telegraphic consultation.

YOUR EXCELLENCY,

I have, &c.,

W. E. F. JACKSON,

Governor.

Enclosure 1 in No. 39.

25th October, 1931.

We have had the honour to submit for your information advance copies of those chapters of our report which deal with the major departments and also of our more general proposals for reducing the cost of the Civil Service, and for increasing revenue by additional taxation. In putting our Teport into its final form we shall find it necessary to revise these chapters and to make both verbal and

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arithmetical corrections, but we do not contemplate any substantial alterations in our general scheme. It remains for us, before we leave Mauritus, to summarize the financial effect of our proposals.

2. The budget deficit for 1931-32 is :--

Excess expenditure over revenue Supplementary expenditure

Rs. 934,040

51,000

Total

985,040

750,000

235,000

Deduct new revenue (customs and tobacco)

Net deficit

3. It is impossible for us, in the fourth month of the financial year, to calculate whether the estimated revenue will or will not be realized; the tobacco figures, with the new rates of duty, are favourable; but the customs surcharge may do little more than keep import duties at last year's figures; and there can be little hope that the loss on rum will be entirely checked by new measures against illicit distillation; there may be windfalls from succession duties, but some decline in postal revenue is to be feared, and it is certain that Rs.250,000, which the estimate for a full year, will not to be obtained from the quays and granary. We can only antici- pate that the year will close with a larger budget deficit than Rs.235,000.

4. The special sugar duty of Rs.720,000 on account of the sugar loans was remitted last year, and it is generally agreed that as the position of the industry has not materially altered the case for remission is equally strong in the present year. We concur, but in recommending the refund of the duty which has been collected this year we make the following condition. Many sugar estates are in debt to the Government for large sums on account of ordinary services rendered; in particular there are debts amounting to nearly Rs.600,000 to the railway for carriage of goods and siding charges. When the railway is in a most embarrassed position for ways and means we see no reason why the Government should refund money to the debtors. We recommend that in refunding the sugar export duty the Government should deduct any amounts due from the There has been no sugar estates for railway and other debts. difficulty in the past in distributing loans through the factories to the sugar industry; the same process should be followed now in the case of debts, a net refund of duty less debts being made by the Government and these net sums being passed on to the planters through the factories. The net amount lost to the Government by the moratorium this year may be estimated at Rs.200,000. We have recommended the refund of so much of the export duty of Rs.40,000 for destruction of phytalus as has not been covered by expenditure.

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