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promotions in the Public Service other than in the Civil Service itself, as it was now an established practice to refer such matters to the appropriate Executive Committee for its recommendation, before decision by the Public Services Commission.

5. In all these circumstances the Association felt that the safeguards with refer- ence to salaries had broken down, and could not be relied upon in future, and that the Public Service in Ceylon no longer offered a career for Europeans. The Association, therefore, suggested, with the full support of their Ceylonese members, that the follow- ing steps were now necessary:—

6.

(1) There should be no further general recruitment of Europeans, who should be confined to special posts with special terms. He referred to the very difficult position of the European Civil Servant, particularly in the early years of his service, and said that the Association had considered communi- cating some sort of warning to Public Schools and Universities in this country.

(2) There should be a clear statement of policy as regards public servants

generally.

(3) In view of the virtual closing of the Ceylon Public Service to Europeans, adequate compensation for loss of career should be offered to members of that service. This should be simple and straightforward, e.g., the grant of a number of years' salary, and should apply to officers who had already retired on the terms at present laid down.

Mr. de Glanville ended by emphasizing that the cause of the present trouble was the compulsory retention of Europeans in the Civil Service, and referred to the responsibility of the Secretary of State for officers appointed by him and the effect of action taken in Ceylon on the Colonial Service as a whole.

7. In reply, I explained that it was somewhat unusual for me to receive a deputa- tion of this sort, but that I had done so at your request. The deputation had purported to produce instances in which the safe-guards of the Constitution had not proved. and could not prove, effective; and they had put forward entirely new proposals. The special instance in which it was alleged that the safe-guards had failed was the levy on salaries. I said that my own and my predecessor's decisions on this had not been affected by popular clamour, and that I was prepared to resist demands for deduction of Civil Servants' salaries where I thought it just to do so, and was in fact resisting such a demand in another Colony. In Ceylon, however, I was satisfied that a reduction was necessary on financial grounds, and should have authorized such a reduction even if Ceylon had been a Crown Colony under complete official control. It was no argument to say that if taxation were put high enough a reduction in Civil Servants' salaries could have been avoided. In the financial crisis which had affected the whole world, all-round sacrifices had been essential, such as had been imposed in this country and in other Dependencies. I was unable to agree that the action taken in connexion with the reduction of salaries implied any relaxation of the constitutional safe-guards, or imposed on Civil Servants in Ceylon a sacrifice greater than the circumstances warranted.

8. As regards the specific proposals put forward by the Association I said that recruitment in the future must be governed by considerations of efficiency and public advantage, and it was impossible to lay down for all time which positions should be held by Europeans and which by Ceylonese. The essence of the proposals put forward was the improvement of the terms of retirement. The terms at present laid down were on the lines recommended by the Special Commission and embodied in the Order in Council. They were to the effect that officers should be allowed to retire on the not less favour- able terms than they would have received if their offices had been abolished. These terms had been settled after the fullest consideration by yourself, and after detailed discussion in the Colonial Office. I said that I was advised that in no case had the regulations fallen short of the standard thus laid down, and that in some cases they were more favourable to the officer. Ceylon public servants appointed prior to the changes in the Constitution had been given an entirely new and unconditional right of retirement at any age, and this right could be exercised at any time. In other analogous cases the right had not been a continuing option but had to be exercised within a limited time. I said that it was impossible, at a time when many men elsewhere in the Colonial Services were being dismissed and were losing their careers with little or no compensation, and even more in commercial life were suffering loss of employment with no compensation I pointed at all, to propose more generous terms than these for Ceylon public servants. out that the new proposal put forward by the deputation asked in effect that a premium

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should be given to the man who left the Service as compared with the man who remained at his post, and that I should not be prepared to sanction such a proposal, even if I were free to do so for other reasons.

9. I ended by saying that I realized the difficulties of the Constitution, but felt that public servants had a duty to try to make it work. Safe-guards for their protec- tion were laid down in the Constitution, and would be maintained as an integral part of it. I was sure that they were satisfied that you had at heart the interests of those who served you, and I myself would not fail to protect those for whom I was responsible.

10. Mr. de Glanville then thanked me for receiving the deputation. I gave per- mission for the communication of the substance of my remarks to the members of the Association; and in view of this, I have felt it desirable to furnish you without delay with a full record of the proceedings.

C. 91732/2/32 [No. 2].

No. 2.

I have, &c.,

P. OUNLIFFE-LISTER.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 16th May, 1932.)

(Confidential (3).)

SIR,

Ceylon, 26th April, 1932. 1 HAVE the honour to invite a reference to Lord Passfield's Circular despatch (2) dated 2nd April, 1931,* regarding officers engaged on agreement, In the light of the first few months' experience of the working of the new Constitution 1 have reluctantly come to the conclusion that it will be impossible in the future for me to be guided in all cases by the principles laid down in the third paragraph of that despatch I consider it essential therefore that any officers who may be engaged on agreement for a post in Ceylon which either is pensionable or appears likely to be permanently required should be given clearly to understand that satisfactory service during the period of their agreement will not, of itself, ensure their admission to the permanent establishment at the close of that period.

2. That the principles enumerated in the third paragraph of the despatch under reference are unexceptionable, I readily admit. There are, however, two factors which, quite apart from the change in the Constitution, might have made it difficult to give full effect to those principles in this country. I refer in the first place to the overwhelming necessity for reducing by every reasonable means the excessive establishment charges with which a depleted exchequer is faced, and secondly to the accepted policy of Ceylonizing all the public services of the Island at as rapid a rate as is compatible with the maintenance of a reasonable standard of efficiency. first of these factors must obviously, on occasions, render it desirable either to suppress altogether, or to reduce the pay of, a pensionable post, or a post hitherto regarded as likely to be permanently required. The second must equally obviously produce a reluctance to confirm a European in a pensionable post for which a qualified Ceylonese has become available, or is likely to become available in the course of a few years,

The

3. It is obvious that these factors operate in varying degrees in other Colonies as well as in Ceylon, and that they must have been taken into consideration when the despatch under reference was written. Had it been in my power to do so I should have felt it my duty, as regards the second factor, namely the accepted policy of rapid Ceylonization, to subordinate this policy to the consideration of the equitable rather than the strictly legal claims of the officers concerned. As regards the first factor, namely, the pressing need for retrenchment, the position has deteriorated so considerably throughout most of the Colonial Empire since Lord Passfield's despatch was written, that it has become necessary, in many Colonies, to inflict considerable hardships upon public servants with even greater claims to consideration than those who form the subject of that despatch. The exercise of a measure of reasonable generosity must be conditioned by the capacity to pay, and a rapidly decreasing revenue would in any case have made it impossible in Ceylon (as I apprehend it must have proved impossible elsewhere) strictly to adhere to the principles laid down in the third paragraph of Lord Passfield's despatch. Nevertheless there have been cases

*Not reprinted.

SUBLIC

PECORD OFFICE

Reference

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