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PUBLIC RECORD OFFICE

Reference :---

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

| ALLY WITHOUT PERMISSION OF THE

BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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Now it is hereby enacted by the Governor of the Straits Settlements with the advice and consent of the Legislative Council thereof as follows:-

Short Tille.

1. This Ordinance may be cited as The Contribution to Imperial Defence Ordinance, 1933.

Yearly Appropriation of $4,000,000.

2. From the 1st day of April, 1933, there shall be appropriated yearly to His Majesty's Government in the United Kingdom, as a contribution for the purpose of Imperial Defence, the sum of four million dollars.

Sum to be Contribution in Return for Cost of Defence of the Colony.

3. The said sum shall be deemed to be a fixed contribution payable by the Colony in full return for the cost of the defence of the Colony including the cost of all His Majesty's Naval Military and Air Forces but excluding the cost of any of the local forces raised and administered under an Ordinance of the Colony.

Contribution for any Year may be Commuted to 20 per cent of Revenue.

4. Notwithstanding anything contained in Section 2 it shall be lawful for the Legislative Council by resolution to limit the sum payable under this Ordinance in any particular year to a sum equivalent to twenty per centum of the revenue of the Colony computed as heretofore under Ordinance No. 64 (Defence Contribution).

Contribution to be Paid in Monthly Instalments.

5. One-twelfth part as nearly as may be of the sum payable under Section 2 or Section 4 as the case may be shall be paid monthly into the Imperial Treasury Chest in the Colony on account of His Majesty's Government in the United Kingdom at or about the end of each month in each year.

Limitation of Normal Expenditure on Local Forces.

6. During each year in which a contribution is paid under Section 2 or Section 4 expenditure shall not be incurred in respect of local forces raised and administered under an Ordinance of the Colony in excess of the sum of five hundred thousand dollars:

Provided nevertheless that the sum limited by this section shall not include such additional expenses as may be incurred by the mobilisation or calling out of all or any part of the local forces in the event of an emergency.

Repeal of Ordinance No. 64.

7. Ordinance No. 64 (Defence Contribution) is hereby repealed.

OBJECTS AND REASONS.

1. The object of this Bill is to put an end honourably, fairly and finally to the controversy which has now continued for many years between the Colony and His Majesty's Government concerning the question of the Defence Contribution.

2. The Defence Contribution payable by the Straits Settlements is at present fixed by Ordinance No. 64. Under it, the cost of the garrison stationed in the Straits Settlements or 20 per cent of the Colony's revenue, whichever is less, has to be paid yearly to His Majesty's Government "in full return for the annual cost of the Imperial garrison.” Nothing is paid by the Colony on account of the protection afforded by His Majesty's Navy and the Royal Air Force. The amount actually paid by the Colony from and including the year 1919 under Ordinance No. 64 is shown in the following Table, in which is also shown for comparison the amount of 20 per cent of the assessable revenue over the same years.

Notes:-

61

Assessable amount, i.e., 20o,

Year

Amount Paid

of Assessable Revenue

$

$

C.

1919

4,323,400 45

5,326,287 60

1920

3,099,492 00

6,294,024 47

1921

5,623,409 00

6,490,809 65

1922

3,827,145 00

6,282,735 71

1923

3,857,143 00

5,827,306 38

1924.

3,556,188 00

5,165,830 25

1925

3,279,881 25

10,243.437 16 (α)

1926

3,630,387 78 (b)

1927

5,303,210

59

6,836,126 50

1928

1929

1930

3,960,000 03 (d) 32 (c) 3,775,714 4,239,728 54 (g)

6,644,807 90

10,030,141 42 (f)

5,657,726 84

1931

1932

4,189,285 65 (4) 3,947,142 84

4,715,161 73

7,577,667 55 (i)

6,698,177 88

(a) Revenue swelled by a receipt of $20 millions from the Currency Guarantee Fund in 1925, Excluding this receipt, assessable amount was $6,243,437·16.

(b) A refund of $139,517.14 was received in 1928 in respect of this payment.

In addition, His (c) A refund of $454,397:14 was received in 1929 in respect of the payment. Majesty's Government has agreed to refund a sum of £87,320 ($748,457.15) in respect of a further overpayment in this year.

(d) A sum of £51,651 ($442,722.86) is due to His Majesty's Government in respect of an under- payment for this year.

(e) A sum of £46,508 ($398,640) is due to His Majesty's Government in respect of an under- payment for this year.

(/) Revenue increased by a receipt of $19 millions from the Currency Guarantee Fund. Excluding this receipt the assessable amount was $6,230,141.42.

(g) A sum of £21,741 ($186,351.43) is due to His Majesty's Government in respect of an under- payment for this year.

(h) A refund is due to the Straits Settlements Government from His Majesty's Government. The amount is still unsettled.

(1) Revenue increased by a receipt of $10 millions from the Currency Guarantee Fund. Excluding this receipt the assessable amount was $5,577,667.55.

3. In the year 1925 His Majesty's Government commenced the construction of a Naval Base in the Johore Strait and soon afterwards controversy arose between the Colony and His Majesty's Government as to whether any surns attributable to the construction of the Naval Base or its Defences or the Garrison of the Defences were being charged or were chargeable to the Colony under Ordinance No. 64. The contention of the Colony was that Ordinance No. 64 required payment for local defence only as hitherto understood and did not impose liability for any cost of or incidental to the Naval Base or its Defences which were an Imperial matter. His Majesty's Government did not entirely agree with this interpretation of the Ordinance and replied that, however the Ordinance might be interpreted, it was not possible to separate the cost of purely local Defences from what the Colony contended were Imperial Defences. To that difficulty the Unofficial Members of the Legislative Council proposed a solution in a letter addressed to His Excellency the Governor dated the 12th day of July, 1928, in which they suggested that the sum payable by the Colony under Ordinance No. 64 be a fixed sum of $3,600,000 (which was roughly the average payment made by the Colony over the previous five years) and that the fixed amount should be subject to revision quinquennially. In the same letter they fore- shadowed a voluntary contribution towards Imperial Defence in the following words:-

"We are ready to consider favourably a proposal that the Colony should bear a small proportion of the cost of the Naval defence of the Empire which we suggest might be apportioned throughout the Empire.'

4. The proposals contained in that letter were not accepted by His Majesty's Government.

5. In 1931 a Bill was introduced for the payment of a fixed sum of $5,000,000 per annum which sum purported to include a voluntary contribution. In the face of unanimous opposition from the Unofficial Members of the Legislative Council the Bill was withdrawn.

6. In 1932 discussions on the subject took place with Sir Samuel Wilson, Permanent Under-Secretary for the Colonies, on his visit to the Colony. Thereafter the Unofficial