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C.O.882/11

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has now been received from the Secretary of State intimating that he has appointed Sir Basil Blackett to undertake the inquiry. It is anticipated that Sir Basil Blackett will arrive in Malaya in November. He has very generously asked for no remuneration for himself. His secretary's salary and the travelling and incidental expenses of himself and his secretary will be met in the first instance by the F.M.S. Government, but I shall ask Sir Basil Blackett himself to advise how the small expenditure involved can be most fairly apportioned. The terms of reference to Sir Basil Blackett will be:--

To inquire and report whether and, if so, to what extent and under what conditions the Malay States, Federated and Unfederated, should participate in the profits and liabilities of the Currency Commission of the Straits Settlements. Next I turn to two agricultural subjects--rubber and pineapples. In view of unfounded rumours which frequently find their way into the Press concerning rubber restriction, which do the industry in this country nothing but harm, and which can be useful only to speculators, it is necessary that I should once again define very clearly the attitude of the Malayan Administrations on this most important matter. Sir Philip Cunliffe-Lister, the Secretary of State for the Colonies, stated at the World Economic Conference that it was" the unanimous desire of all delegates to encourage in every way arrangements between producers in different countries; but-

(1) arrangements must be comprehensive in the commodity it covered and must

include alternatives to that commodity:

(2) it must be comprehensive as regards all producers;

(3) the scheme must be fair to producing and consuming interests: and stability

of prices was essential;

(4) any scheme must be administratively practicable;

(5) it must be of lasting value;

(6) it must encourage efficiency."

The six principles thus enunciated are entirely applicable to the rubber problem and are those by which the-Malayan Administrations will be guided in considering the problem. The Malayan Administrations adhere to their determination not to initiate any We consider that the main crux is in native pro- proposals for rubber restriction. duction, and that the chief political and administrative difficulties are to be found in Netherlands India. Therefore, unless and until a solution can be found which is pronounced to be practicable by the Dutch Authorities, it would be premature for any action to be taken in Malaya. If, however, the Dutch Authorities formulate a scheme for rubber restriction, which is fair both to native producers and to estate owners, and if they guarantee to make such a scheme effective in Dutch territory, the Malayan Administrations will at once examine it with great sympathy and with every desire to be compre- co-operate. Even then, however, co-operation as regards rubber restriction between Dutch and British Authorities would not suffice. It is essential that, in accordance with the second of Sir Philip Cunliffe-Lister's principles, the scheme should hensive as regards all producers," and French and Belgian co-operation would be a sine qua non. 1 may add that a very large number of rubber restriction schemes have during the course of the last few years been submitted for the consideration of the Malayan Administrations, but that not one of them has in our opinion appeared to be practicable. We still believe that the ultimate solution of this problem can only be found in improvement of trade conditions throughout the world and in the invention of new uses for rubber.

I desire to refer now to the position of the pineapple industry, which has attracted It seems reasonably. a good deal of attention recently, This industry is a valuable one and, although its circumstances at the present time are far from reassuring, it possesses one inestimable asset, namely, an established demand and an established market. clear that the difficulties from which the industry is suffering at the present time, while no doubt in part attributable to the general economic depression, are also in part due to the organization or, perhaps I might venture to say, lack of organization which is one of its features. Much light has been thrown on the condition of the industry by the investigations of the Agricultural Department, both on the economic and on the agri- cultural sides. The change in agricultural methods, which must take place, if the industry is to evolve itself from the position of a catch crop to that of a main crop, have been demonstrated; but this evolution is rendered difficult by the present circumstances of the industry and the prices at which its produce is sold. In assisting to extend the market for pineapples the systematic advertising campaign carried on by the Malayan Information Agency has proved most successful and has enabled the increasing production to be absorbed without much difficulty.

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The Government is not only willing but anxious to assist in stabilizing the industry and placing it on a firmer basis. But official efforts can be of little avail, if they are not assisted by the collaboration of the pineapple industry itself. It would be a thousand pities if the goodwill that has been shown should be brought to nothing by dissension and lack of collaboration. For many months past legislation has been under considera- tion with the object of placing the industry on a firmer basis. I hope that in the near future a sufficient degree of agreement may be reached to enable an ordinance with this object in view to be placed before the Legislative Council. The industry is threatened with serious competition from outside sources, while lately I have received representations from the Secretary of State on certain of its aspects, which are regarded as unsatisfactory, I therefore suggest to the pineapple and which may in due course adversely affect sales. industry, not only in its own interests but in those of Malaya as a whole, that measures calculated to render the position of this valuable asset more assured are very desirable and should be taken without further delay.

The Unofficial Members of this Council have unanimously approached me with the request that the Opium Revenue Replacement Reserve Fund should revert to the general assets of the Colony, and that whatever control exists over it should be no greater than that appertaining to the other assets and investments of the Colony. Mr. Bagnall, in a letter addressed to the Straits Settlements Government on behalf of his unofficial colleagues, says that the question of the Opium Revenue Replacement Reserve Fund would have formed the subject of speeches by Unofficial Members at this Budget Meeting. but for the fact that, on consideration, they thought it desirable that action should be initiated earlier. I have forwarded the representations made by my honourable unofficial friends to the Secretary of State for the Colonies, and have given them my full support. I agree with them that the retention of the Opium Revenue Replacement Reserve Fund is not necessary; but I say this with the confident knowledge that my unofficial friends are as determined as is the Straits Government to rid this Colony of opium I know that this Council will, consumption as soon as it is practicable to do so. unswervingly, support His Majesty's Government in honouring the pledge that opium smoking should be suppressed in the Straits Settlements within a period of 15 years from the date, to be determined by a League of Nations Commission, when the smuggling from producing countries ceases to be a serious obstacle to the enforcement of restriction. But I agree with the view that there is no reason why the Malayan Administrations, alone among the Governments concerned, should on this account maintain an Opium Revenue Replacement Reserve Fund, nor does such a fund appear to be in any way necessary in this Colony for the purpose of implementing the policy of His Majesty's Government in respect of opium suppression.

An improved system of registration of smokers of Government chandu has already been brought into force, and this system will be further improved and tightened up gradually. Moreover, it has been decided to close the registers for smokers of Govern- ment chandu on the 31st December, 1934. The first steps are thus being taken towards the rationing of registered opium smokers, and this will be the beginning of the end of legalized opium smoking in Malaya.

In conclusion, permit me to congratulate this honourable Council upon the strength of the Colony's financial position. The Straits Settlements have made head against the as well as, and perhaps even better than, any other economic blizzard " world-wide part of the Malay Peninsula, while Malaya itself has weathered the storm better than most other countries. I feel that the worst is now over, so far as we are concerned, and I pray that we may soon be once more in smooth waters.

Enclosure 3 in No. 49.

SPEECH OF THE ACTING COLONIAL SECRETARY.

Sir, I move that the Contribution to Imperial Defence Bill be read a first time. Honourable Members of this Council will have fresh in their minds the initial part of Your Excellency's address delivered to-day in which Your Excellency recorded in some detail the recent history leading up to the framing of the Bill before us to-day. Your Excellency also made certain explanations regarding the Bill and gave certain assurances concerning it in the name of the Secretary of State. It is unnecessary for me therefore to go over the same ground again, but it is of great importance that the relevant part of Your Excellency's address be read as one with the speeches on the introduction of this Bill and I desire to state this clearly so that it may be on record in to-day's Proceedings of this Council.