CO885-(11-12) — Page 615

535

FUTALIC

RECORD

OFFICE

Reference →→→

CO.882/12

–

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

150

XI. RECONSTITUTION OF THE RAILWAY ADMINISTRATION.

C. 82399/31 [No. 5].

No. 66.

FEDERATED MALAY STATES.

THE SECRETARY OF STATE to THE HIGH COMMISSIONER.

(Confidential.)

[Answered by No. 67.]

SIR,

Downing Street, 20th August, 1931. I HAVE the honour to refer to your Confidential despatch of the 23rd of September, 1930,* reporting that a Bill was being prepared to vest the Federated Malay States Railways in a Board. The matter was discussed at a meeting on the 11th of February at which you and Mr. Strachan were present. At that meeting it was pointed out by the Colonial Office representatives that the proposal to vest the railways in an Executive Board was directly contrary to the views expressed in para- graph 6 of the Secretary of State's despatch No. 468 of the 13th of August, 1927,† and it was stated that the Bill, together with arguments in support of its provisions, should be submitted to me for careful consideration before it was introduced into the Federal Council.

2. I have since received the original draft of the Bill, on which some marginal corrections have been inserted, but I have received no explanation in support of its provisions except a memorandum by Mr. Strachan dated 18th September, 1930, giving an account of a meeting at Government House, Singapore, on 16th September, 1930. Paragraph 2 of that memorandum sketches the constitution of the Railway Board between 1918 and the date of the meeting; paragraph 3 records a decision adverse to a proposed incorporated Railway Commission composed of the Chief Secretary to Government, the Financial Adviser, and the General Manager; and paragraph 4 records that it was decided that the Railway Advisory Board should be turned into a Railway Executive Board composed of 4 officials and 4 unofficials.

3. As there is no statement of the reasons which actuated the meeting in coming to that decision, I am still without any arguments in support of the proposal for an Executive Board. Moreover, I must point out that the General Manager'a memorandum contains no references to the correspondence which has passed between the Federated Malay States Government and this Office on the subject of the control of the Federated Malay States Railways. In the circumstances it is desirable to recapitulate briefly the history of this question.

4. In paragraph 282 of his report Mr. Spiller pointed out that the Straits Settlements and the Unfederated Malay States were vitally interested in the efficiency of the railway but had no voice in its administration or management, and in para- graph 283 he explained that in East Africa, where the Uganda Railway was of vital importance to two separate Governments, special arrangements had been made for the control and management of the Railway so that it may equally serve the interesta of both Governments. In his Confidential despatch of 1st November, 1926,‡ in which he forwarded copies of Mr. Spiller's Report, Sir L. Guillemard wrote :—

"I think there is no doubt that it is desirable to hand over the under- taking to a Board constituted on the lines of the Singapore and Penang Harbour Board. It would be independent, generally speaking, of Government, but the latter would retain a certain amount of general control as it does in the case of Harbour Boards and Municipalities."

5. In paragraphs 9, 10, and 11 of his Confidential despatch of 16th March, 1927, § my predecessor pointed out that Sir L. Guillemard had mistaken Mr. Spiller's recommendation, and went on to explain in detail the Kenya-Uganda Railway system. Sir William Peel replied in a Confidential despatch of 6th May, 1927, in which he urged reasons against the adoption of the Kenya-Uganda system and again recom- mended a Board on the lines of the Singapore Harbour Board. The Secretary of State in his reply, despatch No. 468 of the 12th of August, 1927,¶ wrote:-

"It is still my considered opinion that the General Manager should be responsible to, and report directly to the High Commissioner, and that the proposed Railway Board should be merely advisory."

* C. 72462/30 [No. 3]: not printed.

† C. 22171/26: not printed.

C. 29150/27 [No. 3]: not printed.

† C. 29160/27 [No. 6]: not printed.

§ C. 22171/26: not printed.

¶ C. 29150/27 [No. 6]; not printed.

151

6. Sir Hugh Clifford replied in a Confidential despatch dated 14th April, 1928.* In paragraphs 8, 9, and 10, he deprecated the proposal that the General Manager should communicate direct with the High Commissoner, and urged that the proposals would make the Railway an imperium in imperio and weaken the authority of the Chief Secretary in the Federal capital. He pointed out that the Federated Malay States Government supplied the money required for the Railways' working and administration, that the other Governments had no responsibility for railway expenditure and concluded that it was essential that the General Manager should remain directly responsible to the Chief Secretary.

7. These considerations were by no means a convincing answer to the proposal made by Mr. Spiller, and supported by the Secretary of State, for giving all the Malayan Governments, which were vitally interested in the efficiency of the Railway, a greater share in its control and management, but my predecessor felt that, in view of the opinions held by Sir Hugh Clifford and the General Manager, it was useless to pursue the matter further at that time, and in his Confidential despatch of 27th July, 1928,† he agreed to the present system of the control of the railways being continued. There the matter rested until the receipt of your Confidential despatch of the 23rd of Sep- tember, 1980, stating that a Bill was being prepared to give a Board complete control of the management of the Railway and its personnel.

8. The question of the form of control of the Federated Malay States Railways has been, to some extent, confused in the correspondence with the separate question of the removal of the Railway Budget from the Federated Malay States Government accounts. In his Confidential despatch of 14th April, 1928, to which I have already referred, Sir Hugh Clifford wrote:-

"I accept completely the two recommendations put forward in paragraph 4 of your despatch, that is, that the Railway budget should be separated completely from the budget of the Federated Malay States and that an adequate Depreciation Fund should be formed. Steps will be taken in the preparation of the 1929 budget to carry out these proposals."

I regret to note from this year's Federated Malay States Estimates, that it has not even yet been possible to carry out these proposals. Until the Federated Malay States Government is in a position to effect them, no new form of control can be introduced which would associate the other Malayan Governments with the management of the Railway. To make it clear that the separation of the Railway budget is an entirely distinct question from that of a new system of management, I need only refer to Nigeria and the Gold Coast where separation has been effected wthout any change in the management of the railways.

9. In view of the foregoing explanation any discussion of a new form of control for the Federated Malay States Railway appears to be somewhat premature, but in deference to your strongly expressed wishes I have caused the draft Railway Bill to be submitted to careful examination. In the first place I think it is desirable to recognize that there can be no real analogy between the position of the Malayan Railways and the Singapore Harbour Board. The fact that a Board incorporated by Colony legis- lation has proved a satisfactory machine for controlling the Colony's Harbour does not seem to me to be good ground for thinking that a Board incorporated by Federated Malay States legislation would be a satisfactory machine for controlling railways throughout Malaya. The circumstances of the Railway are essentially different from those of the Harbour since the business of the Harbour Board is much simpler, more concentrated, and comparatively free from competition. In order to give representa- tion to the various interests concerned the draft Bill proposes that the Railway Board should consist of ten persons, but even so the Unfederated States are not represented, unless possibly by a member of the Malayan Civil Service. It is not indeed clear why a Board composed of such various official and unofficial elements, hardly any members of which are likely to possess any previous experience of the business which they are to conduct, should be a suitable body to which to entrust executive functions. No similarly constituted Board controls and manages a Government railway in any British dependency, and it does not seem to me at all probable that a Board constituted in the manner proposed should carry on the business of the Railway successfully.

10. The purpose of the Board is to have the "control, working, and manage- ment "of the railway (Clause 4), and it is to have power to do all things necessary for the working and management of the railway" (Clause 46 (1)), and this purpose was consistently carried out in the draft as it was originally shown to me by making the

+ C. 52417/28 [No. 2]: not printed. C. 72462/30 [No. 3]: not printed.

* C. 52417/28 [No. 1]: not printed.

i

: