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Board of Ministers but in the course of the Debate strong opposition developed to absence of provision enabling the State Council to discuss principle(s) and details of cuts. View was expressed that it is unfair to ask the State Council to co-operate in giving the Governor any powers without allowing them to express opinion as to what he proposes to do in exercise of those powers. Opposition is really based on determination to secure greater control over Public Service than that given by the Constitution. Ministers have now withdrawn their support of the Bill in the present form and have requested me to approve of amendment providing that the Governor's Orders under the Bill shall be laid before the State Council with resolution as in the case of subsidiary legislation, that it be not disapproved. They contend that ultimate certification of Order by me would have less disastrous political effect than certification of the Bill in present form. I am extremely doubtful about this and in any case proposal is open to fatal objection that it would involve submission to the State Council for their approval of the Governor's executive orders affecting public servants already approved by the Secretary of State. Public services have already been told that the terms of the cut will be solely within the discretion of the Governor and the Secretary of State and to permit discussion in the State Council would be regarded by them as surrender to political pressure. As the Bill has now been introduced Ministers agree that it is impracticable to consider giving the Governor necessary I therefore consider it necessary to proceed with powers by Order in Council. the Bill in the present form in spite of withdrawal of support of Ministers. Debate on the Bill has been postponed at the request of the Leader of the State Council. I do not propose to withdraw the Bill and in the event of its being rejected or amended unacceptably I propose to use my reserve power to the extent required to secure In this enactment of the Bill in substantially the present form. Do you concur? connexion please see my despatch of the 12th December [? January] No. 6.*

C. 92994/32 [No. 1].

SIR,

(No. 6.)

No. 14.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 1st February, 1932.)

[Answered by No. 15.]

On Tour, Ceylon, 12th January, 1932. WITH reference to the proposal to impose a levy on the salaries of public servants employed under this Government. I have the honour to forward herewith for your approval an order designed to give effect to this decision. The order has been prepared for issue under Section 2 (1) of the Temporary Levy on Salaries of Public Servants (Enabling) Ordinance, 1931, which of course has not yet been placed before the State Council, though it has already been published as a draft Bill. The intention is to introduce it as soon as the State Council has disposed of the Income Tax Bill which should pass its Third Reading about the middle of this month. I enclose for your information a copy of the draft Bill.†

2. I assume for the purpose of this despatch that the State Council will pass the enabling Bill. Probably they will do so, but I am by no means confident that the Bill will have a smooth passage. There is little doubt that a determined effort will be made by an influential and possibly preponderant section of the Council to secure for the Council the powers which the Bill confers on the Governor. These members will be reluctant to support a measure which implicitly affirms the Governor's responsibility under the Constitution in the matter of the salaries and allowances of public servants and it may be that they will refuse to support the Bill unless their prior approval of the Order defining the terms of the levy is first obtained. There can of course be no question of obtaining the approval of the State Council for the actual terms of the levy : to do so would represent in effect a surrender of the safeguards provided by the Order in Council and would accentuate the already acute dissatisfaction prevailing among public officers largely as a result of the consistently unsympathetic attitude which many members of the State Council display in matters affecting the interests of the public services. If the State Council should reject the Bill which has been assented to by the Board of Ministers or pass it in an unacceptable form, I propose with your concurrence

† Not reprinted here.

* No. 14.

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to certify it. I do not regard these eventualities as probable, but they are not beyond the bounds of possibility.

3. As regards the Order now submitted for your approval, explanatory notes have been interpolated in the draft and it is thus unnecessary to explain at length the provisions of the Order in this despatch. The Order provides for a graduated scale of levy ranging from 10 per cent. on salaries of Rs. 4,800 per annum and over to 24 per cent. on salaries below Rs. 450 per annum, and it embraces within its scope all classes of employees (other than officers on formal agreement), including daily and hourly paid workmen.

4. After careful consideration I have decided not to include in the Order any provision such as that which appears in the Indian Pay Temporary Abatements Act by which any person may be wholly or partially exempted from the abatement on the ground of exceptional hardship. In Ceylon it would be an extremely delicate and invidious task to deal with the numerous claims for exemption which would be preferred under such a provision. It will be recalled that the Select Committee on the Salaries and Allowances of Public Servants appointed in 1926, whose principal reports appeared as Sessional Paper 48-1928 (non-Civil List Officers) and Sessional Paper 1-1930 (Civil List Officers) recommended, as regards the middle and subordinate grades, an all- round improvement in salaries; that in some instances, e.g., subordinate clerks, apothecaries, minor employees, &c., the increases proposed were very liberal in character; and that in a number of cases, notably that of the Service of Medical Officers, improvements in the emolumes of Officers of the higher services were proposed. It will also be recalled that in 190 there was every probability that effect would be given to the revised Scheme of Salaries for non-Civil List Officers and that it was not until 1930, when the economic conditions had become extremely discouraging, that the late Legislative Council finally shelved the scheme. The fact is therefore that for some two years the great majority of the officers constituting the public services of Ceylon had very good reasons for anticipating the adoption of a scheme of salaries which would have appreciably and in some cases greatly improved their conditions and prospects of service. Theoretically those grades which stood to benefit from the improved salaries have a good case for exemption from a levy which will be imposed on their unimproved salaries, but exemptions on such a wide scale would all but nullify the effect of the scheme. It is not in my opinion practicable to provide in a measure of this kind for adjustments to meet individual circumstances, whether these adjustments take the form of rebates operative under the order or of exemptions on special grounds; the former class of adjustment would unduly complicate what should be a simple adminis- trative measure while the latter would throw on Government a heavy and invidious responsibility of an inquisitorial character.

5. I may add that I have requested the Minister of Education to consider, in consultation with his Executive Committee and the Director of Education, measures which will result in making the levy applicable to teachers in assisted Schools who are remunerated either wholly or partially from Government grants.

6. It will be observed that the Order is to become operative as from the 1st February. This Government has by announcements in the State Council definitely committed itself to that date and a postponement, which would be regarded as a breach of faith, is out of the question. It is thus important that the Order should be issued and the necessary instructions conveyed to departments by about the middle of next month (February). For this reason I would request that if you approve of the Order, you will authorize its issue by telegraph.

I have, &c.,

GRAEME THOMSON,

Enclosure 1 in No. 14.

Governor.

THE

ORDER ISSUED BY HIS EXCELLENCY THE GOVERNOR WITH THE APPROVAL OF

Secretary of State for the Colonies under Section 2 (1) of the TEMPORARY LEVY ON SALARIES OF PUBLIC SERVANTS (ENABLing) Ordinance, 1931.

In this order, unless the context otherwise requires:

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Public servant means all persons in the employment of the Ceylon Govern- ment, whether rated on monthly, daily, or hourly pay, exclusive of employees whose