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of the people. There have now been two serious floods in Pahang during the last six years, and we pray that no such disaster may again visit the State.

We are still in the trough of world-wide trade depression, and especially do we suffer in Malaya from the mistake of having placed undue reliance on two products only, namely, rubber and tin. The present cloud will, however, not be without a silver lining, if we learn from the slump the necessity of economy in all classes of society, high and low, if a reduction in the cost of living is effected, if luxury and extravagance are eliminated, and if, when prosperity returns to us, we find that we are more self-support- ing in the output of food supplies, and particularly in the matter of rice. I do not myself fear that any permanent injury will be inflicted upon this country by our present troubles, provided that we meet them in a spirit of self-sacrifice and reconstructive courage and with a firm determination to adjust our ways to our means. The distress will then have been only a passing phase, and from it we shall, I hope, emerge economic- ally stronger, if financially poorer, than we have been in the past, and more than ever resolved both to co-operate with each other in surmounting all difficulties and hardships and to achieve a true and active brotherhood of the Malay nations that inhabit this Peninsula.

0 92300/32 [No. 57].

No. 33.

FEDERATED MALAY STATES.

THE SECRETARY OF STATE to THE HIGH COMMISSIONER. (Secret.)

SIR,

Downing Street, 22nd June, 1932. I HAVE the honour to acknowledge the receipt of your Federated Malay States Secret despatch of the 3rd of May,* on the subject of decentralization in Malaya.

2. You comment in your despatch on the statement made by me in the House of Commons on the 23rd of April, and report that at the Durbar at Pekan you did not communicate to the Rulers the contents of my telegram of 22nd April,† as you considered that a most unfortunate impression would have been created by an announcement to the effect that His Majesty's Government was entirely uncommitted to the policy of decentralization.

3. While I do not question the discretion that you saw fit to exercise at the Durbar, I cannot but regret that it has not been found practicable to convey to the Rulers of the Federated States what is in fact (and has always been) the position of His Majesty's Government in regard to this important question. I appreciate the difficulties to which you refer; but I feel bound to add that, in my opinion, they need not have assumed their present proportions if a stricter regard had been paid to the limitations laid down in Lord Passfield's Confidential despatch of the 5th of June, 1931.‡

4. I do not propose to pursue this question further through the medium of official correspondence. I have always regretted the difference of opinion that has arisen between us on the subject, and I trust that, as a result of your discussions with Sir Samuel Wilson during his forthcoming visit to Malaya, it will be possible to arrive at a satisfactory solution of the problem. Meanwhile, as you will not need to be reminded, no action should be taken, or language held, that could be inter- preted as involving His Majesty's Government in any further commitment.

5. With reference to paragraph 7 of your despatch, I am far from desiring that the departmental reports, for which I asked in my telegram of the 22nd April, should be prepared with undue haste. But I think it essential that they should be available for consideration here before Sir Samuel Wilson leaves for Malaya in the

I have, &c.,

autumn

P. CUNLIFFE-LISTER.

* No. 32.

† No. 28.

‡ No. 5.

C. 92300/32 [No. 70].

75

No. 34.

MINUTE BY SIR J. S. SHUCKBURGH COMMENTING ON AN INTERVIEW WITH MR. H. B. TALALLA. Eastern Department.

I SAW Mr. Talalla on the 29th of November at the Private Secretary's request. He was extremely loquacious and held forth to me with great fluency on a variety of subjects. As regards the Federated Malay States, his point was that tralization

decen- is quite unnecessary and uncalled for; that the existing form of Govern- ment is much the best for all practical purposes; and that there is no need to introduce any changes whatever. He certainly would not give increased powers to the Rulers of the Federated Malay States, and he declared that they carried no weight with their people and were quite unfitted to take any serious part in the administration. The country, he declared, should be ruled by the British Civil Servants. He was all against abolishing the post of Chief Secretary, though he thought it might be wise to alter the title, e.g., to Resident-General. Generally speaking, he urged that our policy all over the East (and more particularly in India) ought to be to seek the friendship of the peasants and to do all we possibly could for them, ignoring the Rajahs, politicians, and lawyers. If we adopted that policy, he thought our rule would last for ever.

I could express no opinion as to how far Mr. Talalla was sincere in all this. He has not got a very sincere manner; in fact, he talked to me, as Queen Victoria said of Mr. Gladstone, as if I were a public meeting." I did little more than listen patiently and offer cigarettes at intervals.

No further action of any kind seems to be required.

29th November, 1932.

J. E. S.

P.S.-Mr. Talalla begged that his remarks might be treated as directly confidential.

He returns to Malaya by air to-morrow.

II. RECOMMENDATIONS OF THE FINANCE COMMITTEE.

C. 92300/1/32 [No. 1).

SIR,

No. 35.

FEDERATED MALAY STATES.

THE HIGH COMMISSIONER to THE SECRETARY OF STATE. (Received 11th April, 1932.)

(Confidential (2).)

J. E. S.

King's House, Kuala Lumpur, 18th March, 1932.

I HAVE the honour to forward herewith 12 advance copies of the Report* of the Committee appointed by me to make recommendations as to the financial changes necessary to give effect to the policy of decentralization for the Federated Malay States.

2. In my address to Their Highnesses the Rulers at the Sri Menanti Durbar last year I said that these changes would require very careful thought, and a perusal of the Report will show that the Committee has fully appreciated the importance of safeguarding the financial solidarity of the Federation. paragraph 29 of the Report,

To use their own words, in political devolution cannot be purchased at the price

of financial dissolution, and present conditions make it imperative to feel our way forward with the utmost caution."

3. The Report did not leave the printer's hands in time for it to be laid on the table of the Federated Council at its recent session on 14th March; but proof copies of it have already been sent to the Unofficial Members, and copies of it are being struck off for despatch to the Official Members and to all Heads of Departments. The comments of all these are being invited, and the British Residents are being instructed to explain the contents of the Report as fully as possible to the Rulers, in order that any points of doubt or interrogation on the part of Their Highnesses may be discussed at the Durbar which is to be held at Pekan on the 28th April. I do not, however, anticipate that the natural aspirations of the Rulers towards the * Not reprinted.

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