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measures in the Revenue Services regarded as the fad of experts ignorant of local conditions, it was not until the announcement of the contemplated taxation was made that the protest took active shape, but it followed immediately and quickly upon this announcement, and it may be observed was at once set in motion before the actual measures of taxation and the rates proposed had been known. I had purposely announced the proposal in general and very moderate terins as a test of feeling on the subject and the immediate response is an indication of the strength of that feeling. The form which the protest actually took has probably been governed by the considerations set out in paragraph 7 rather than by any preconceived plan among the representatives of property, but having been forced to this step, or at least allowed themselves to be led into it, they are now pledged to resist all attempts at taxation with a fervour to which their natural instincts will lend full sincerity. For the time being at any rate, I do not think this opposition can be overcome otherwise than by force.

10. Regrettable as the situation is it is not altogether unexpected. I explained in my despatch of the 26th October* that the pro- gramme of the Financial Commission's Report was so formidable that in my view an attempt to enforce its recommendations too rapidly was likely to lead to disturbance and disorder. I must admit that the combination of all interests against the Government proposals has been even more rapid than I anticipated, a circum- stance due in great part to the fear on the part of the representatives of the propertied classes that the Members for Port Louis might "steal their thunder" and assume the leadership of any movement of protest. Nevertheless the rooted objection to taxation which is characteristic of the Colony and possibly an inheritance from the national origin of the Mauritians played a predominant part in the attitude assumed. It is only fair to point out that they were joined in this attitude by representatives of British mercantile firme, and that the President of the Chamber of Agriculture, Captain H. G. Hitchcock, General Manager of the Anglo-Ceylon Company, occupied a place on the platform of the meeting. the moment there is unquestionably an united front against the Government proposals, though it is very doubtful whether the mass of the population have any appreciation of the real position.

At

11. It may well be asked how the more intelligent elements of the population propose that the situation of the public Treasury should be met but the answer is clearly given in the second of the resolutions moved at the meeting, viz., that the Budget can be balanced by retrenchment, notably by " a more extensive revision

of the salaries of Civil Servants." The fact that in 1919 the charge for personal emoluments was about Rs.2,900,000 (exclusive of the Railway) and that it is now over Rs.5,000,000 is ever present

* No. 37.

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in the public mind. I understand that a return showing a com- parison of a large number of Civil Service salaries in 1919 and 1931 was printed and circulated before the meeting. It must not be supposed that the comparison is altogether frivolous. Although there are many factors to be taken into consideration in comparing the two periods, it is a fact that very large increases were made in the salaries of public servants between 1919 and 1922, particularly in the subordinate ranks, and that these increases probably went considerably further as a permanent revision of pay than the circumstances have been found to justify. The point is fully com- mented upon in the Financial Commissioners' Report. Neverthe- less to balance the Budget entirely by revision of salaries would involve a reduction of something over Rs.2,000,000 or more than 40 per cent. in Civil Service emoluments as a whole and this does not appear to be a reasonable or feasible measure, at any rate as an immediate reduction. The Financial Commissioners have reported fully on this point. The increases voted at the time were carried without much opposition in the Council and the members cannot now reasonably repudiate all responsibility for them. It is true, however, that in the last few years of stringency some of them have repeatedly urged the advisability of Civil Service retrenchments, but without much effect. The plea however has seldom, if ever, been supported by concrete proposals. I cannot subscribe to the view that after what has happened in the past the whole burden of retrenchment should fall upon the Civil Service, though I agree that reductions might and probably should go further in some cases than has been so far approved. A general reduction of 10 per cent. as proposed in my telegram No. 12* would in my opinion have been justifiable and was in accord with the Financial Commission's pro- posals. I do not think a greater reduction than this reasonable or advisable.

I

12. This would not have precluded the necessity of taxation, the justification for which is fully discussed in the Commissioners' Report. That some further taxation is fully justifiable is, I think, adequately demonstrated by the Report but while this is so it must also be acknowledged that the form of tax proposed is not really satisfactory. I have already emphasized my view that the pro- posed assessment on house property was a very misleading criterion of capacity to pay (see my despatch of 4th November,+ para- graphs 7-10) and further inquiry has fully confirmed this view. am personally quite convinced that a considerable number of those affected would not at present be able to meet the tax, even at the reduced rates proposed by me, though the majority could probably do so.

Moreover an examination of the actual application of the tax has revealed numerous difficulties in detail to which reference is made in my telegram No. 33. I must confess, however, to * C. 93921/32 [No. 11]: not printed. ‡ No. 48.

↑ No. 39.

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