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PUBLIC PECORD OFFICE

Reference -

C.O.882/19

ચર

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

stand out. No further action can be taken until the Colony's Committee has reported I will send a copy of its report to you as soon as it is in my hands.

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Con- 5. As regards the Railway Board, I have addressed you separately in fidential despatch of the 20th August, 1931,* and I await your reply before taking further action.

6. In my despatch, Federated Malay States No. 766 of the 17th December, 1931,† I have forwarded to you the report of the Committee which recommended that a Postal Board should be set up, together with a draft agreement between the Colony and the Federated Malay States for constituting such a Board. I await your reply before taking further action.

7. As regards the establishment of Malayan Departments, a matter in which Lord Passfield authorised me to make a beginning forthwith, I have so far only dealt with those departments in which the scheme for decentralization could be combined with necessary retrenchments forced upon Malaya by slump conditions. The Medical and Health Departments (Straits Settlements and Federated Malay States), the Public Works Department (Straits Settlements and Federated Malay States), the Audit Department (Straits Settlements and Federated Malay States), the Inspectorate of Prisons (Straits Settlements and Federated Malay States), and the Drainage and Irrigation Department (Straits Settlements and Federated Malay States) have each been placed since the 1st January, 1932, under a single head. I have reported the details of this reorganization in separate despatches.

8. The scheme for reconstituting the State Councils in the Federated Malay States was reported to you in my despatch Confidential (2) of the 17th December, 1931.‡ Quite apart from the decentralization policy, it is very necessary to strengthen and reorganize these State Councils, in order that they may deal not less efficiently with State affairs than do the State Councils in the Unfederated Malay States. It was also necessary to draw the State Councils of Perak, Selangor, Negri Sembilan, and Pahang The Rulers have cordially co- into much closer liaison with the Federal Council. operated and so have the Unofficial Members of Federal Council, who, on the invitation of the Rulers, have joined the State Councils of the respective States in which they live. I hope to see these Councils nursed back before long into efficiency and usefulness. They will be representative of all the principal races which have made Malaya their home, and I propose in future to adopt the rule that no person should be a member of the Federal Council unless he is already a member of a State Council.

9. I fully agree with you that the task of framing a suitable financial scheme for a true federation will prove to be one of the pivotal points in the decentralization policy. With a view to framing such a financial scheme I have appointed a small committee of officers, in whom I have confidence, and who have had wide financial experience in Malaya, namely, (1) Mr. H. G. R. Leonard, now British Resident of Pahang, and formerly Federal Treasurer from 1927 to 1930; (2) Mr. G. P. Bradney, now Auditor of Malaya, and acting Federal Treasurer in 1930 and 1931; and (3) Mr. M. Rex, now acting as Federal Treasurer. Both Mr. Leonard and Mr. Rex have served in Johore as well as in the Federated Malay States. This Committee has not yet reported; but it is likely that it will recommend for adoption here the system in vogue in other federa- tions, whereby revenue derived from a definitely common source, such as customs duties, will be appropriated to meet federal disbursements. I will send you a copy of the Committee's report as soon as it reaches me.

10. You say in paragraph 9 of your despatch under reply that you propose to keep an open mind as to the eventual revision of the treaties and the abolition of the post of Chief Secretary, as you are satisfied that the time for their consideration will come only if and when the general policy has received approval. I fully agree that the revision of treaties must stand over and that it should be the last step in the policy of decentralization. The various parts of that process will have to be dealt with, one by one, by drafting legislation which will come before the Federal Council for enactment. Only after considerable progress has been made along this road, should an attempt be made to draft the necessary treaties. But as regards the abolition of the post of Chief Secretary it is not, in my judgment, possible to keep an open mind except as to the date when such abolition should take place. It is essential to the decentralization policy that the post of Chief Secretary should eventually be abolished. Nothing else would satisfy the Rulers of the Federated Malay States concerning the bona fides of that policy and there is not the faintest hope that the Rulers of the Unfederated Malay States would join the pan-Malayan federation, if it meant the interposition of a Chief Secretary between them and the High Commissioner, to whom at present they have direct access.

↑ No. 36.

* C. 82395/31 (No. 12]: not printed.

+ No. 45.

I am, however, anxious to retain Mr. Caldecott, as acting Chief Secretary, throughout the period of transition which will eventually bring about decentralization. His help in that work is invaluable to me.

11. At the Sri Menanti Durbar on the 18th August, 1931, I said of the Rulers that, subject to certain reservations, I intended to ask the Federal Council to restore to the State Councils, beginning with the Budget of 1933, control of the following services: agricultural co-operation, educational, electrical, forestry, medical, mining, public works, and veterinary. You inform me that it appears to you to be premature to con- sider what services should be restored to the State Councils until the purpose aimed at in decentralization is settled and the general policy has received approval. But, so far as I am aware, the purpose aimed at in decentralization has never been in doubt. It is to convert the bureaucratic amalgamation of the Federated Malay States into a true federation and within such federation to place the States of Perak, Selangor, Negri Sembilan, and Pahang on much the same constitutional basis as the neighbouring States of Johore, Kedah, Kelantan, Trengganu, and Perlis, with a view to increased under- standing between all nine States in matters of common interest and eventual pan- Malayan federation. As regards the special services which I mentioned at Sri Menanti you will notice that at the Colonial Office Conference of the 16th March, 1931,* none of them were proposed to be reserved to the Federal Government and it was then agreed that residuary powers should be vested in the State. Obviously, if decentralization is not to be a sham, it is necessary to transfer from the Federal Council to the State Councils some of the powers now vested in the former, and the services proposed to be transferred in 1933 are those which have for years been controlled satisfactorily by State Council in the Unfederated Malay States. Decentralization as regards the public works and medical departments actually took place on the first day of this year and is working smoothly and satisfactorily. As regards the other services it is proposed that a scheme for each should be worked out in connexion with the 1933 Budget; and, of course, if cations appear necessary, when the matter is put to the test of experience, they will be modifi- effected. I am most anxious to proceed with caution and without haste and to be sure of my foothold before I take each step. But it is not possible to stand still or merely to mark time," unless the impression is to be given to the Rulers and their people that we are not really in earnest in our intention to discharge the debt of honour administration to insure that the federation of the Malay States should be a true federa- upon British tion. Profound political discontent will be caused in the Malay Peninsula if we do not acquit ourselves honourably of this obligation.

any

12. I send this despatch by air mail. The duplicate will follow by ocean mail.

C. 92300/32 (No. 28].

No. 21.

I have, &c.,

C. CLEMENTI,

High Commissioner.

MALAY STATES.

THE HIGH COMMISSIONER to THE SECRETARY OF STATE. (Received 10.2 a.m., 7th March, 1932.)

(Paraphrase.)

TELEGRAM.

[Answered by No. 22.]

7TH MARCH. Your cypher telegram No. 38 of 4th March. My departmental proposals (apart from those concerning audit which have been already approved by you and which provide independent and effective financial control) are set out in following documents: (a) Medical Department-Confidential despatches 29th of October 31st of October, § 18th of November, and 2nd of January. (b) Public Works Department-Confidential despatch (2) 29th of October.** (c) Prison Depart- ment-Despatch 555 27th of October.tt (d) Irrigation Department--Confidential

§ No. 30 in Miscellaneous No. 420. ** No. 57.

†† No. 55.

* No. 3.

† No. 19:

‡ No. 69. 1 No. 13.

No. 70.

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