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That recommendation has now been embodied in compensation for loss of career. Article 88 of the Ceylon (State Council) Order in Council, 1931, which came into operation on 15th April this year. Since my arrival in Ceylon on 11th April, I have given very careful and anxious consideration to the subject of Your Lordship's despatch. Having regard to the importance of the subject, I have felt obliged to review the position with great care, and the need which admittedly exists for an early settlement of the terms which officers are to receive on premature retirement has not been allowed to override the more insistent requirement that the settlement should be on right lines. The issues under consideration are gravely important not only in their bearing on those officers who may elect to retire, but also in their bearing on the future administration of the Island. I do not refer here exclusively or even mainly to financial consequences. I have principally in mind the serious administrative problems which under any scheme of compensation for premature retirement must inevitably arise, but which might be greatly aggravated if the scheme finally adopted was framed without due reference to them. In making this observation I do not wish to convey that from fear of anticipated difficulties the terms offered to the services should be less than just or adequate. I accept for what such a general observation is worth the contention urged in the Memorial of the Civil Service Association forwarded to you with Sir Herbert Stanley's Confidential despatch of the 15th November, 1930,* that justice to the officers concerned should be the governing consideration." General principles are, however, of little help; the problem is essentially a practical one, and it is in the practical application of general principles that differences of opinion appear. For what I would regard as an unexceptionable statement of the general principles which should be kept in view, I would refer to the following pronouncement of the Government of India in its resolution of the 8th November, 1927, quoted by the Civil Service Association in the memorandum which accompanied Sir Herbert Stanley's despatch of the 14th October last† :-

"In framing these terms, the object aimed at has been to secure as just a mean as can be devised between an offer which is open to the criticism that few of those in whose interest it is made can afford to avail themselves of it, and one so liberal as to seem unfair by those who were willing to remain and play their part in the new order; and while duly recognizing the claims of loyal and meritorious service which might have continued both to the public advantage and to the increasing credit of the officer himself, to avoid unjustifiable addition to the non-effective charges which have to be met from Indian revenues."

2. It is, I think, advisable for me to summarize the position as I found it on my arrival, and to set out at some length the developments which have since taken place. Your Lordship's despatch now under reference was a reply to Sir Herbert Stanley's despatch of the 14th October, 1930. Sir Herbert Stanley had in that despatch submitted two schemes for consideration, one which provided in effect that officers retiring under the Order in Council should be awarded pension as though they had been retired under Section 7 of the Pension Minute on abolition of office, and an alternative scheme intended to provide slightly more generous terms for younger officers. Sir Herbert Stanley, having regard in particular to present financial circum- stances, recommended the adoption of the former scheme. In reply Your Lordship expressed the opinion that there is considerable force in the view that the ordinary abolition" terms do not meet the case, especially as they afford comparatively little benefit to the officer with short service; and an objection was raised to the alternative scheme prepared by Mr. Phillipson on the ground that it introduced discrimination according to age. Your Lordship then outlined two further schemes for the con- sideration of this Government. Both these schemes provide for a basic pension of 1/600th part of an officer's salary for each completed month of pensionable service, but under the first scheme the compensatory addition for premature retirement would be 50 per cent., subject to a limit of 100/600ths, while under the second scheme the addition could be 33 per cent. with a limit of 72/600ths. The second scheme was expressly stated to be a more economical version of the first, devised in deference to financial considerations. The Treasurer, to whom a copy of the despatch had been sent for report, advised against the adoption of either of these two schemes, drawing attention in particular to what he regarded as the excessively liberal terms which they would offer to officers who had already almost completed their career's; and he concluded by stating that his own view remained unshaken that it was the duty

* C. 73272/30 (No. 9]: not printed.

† No. 4.

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any of this Government to resist the imposition on the revenue of the Island of in excess of that which would be created by the adoption of the

abolition" already proposed by Sir Herbert Stanley. At the same time the Treasurer forwarded a report on the scheme proposed by the Public Services' Association in the Memorial which was sent to you under cover of Mr. Bourdillon's Confidential despatch of the 4th April last.* As this Memorial has in effect been superseded by a later representa- tion from the Public Services' Association, to which reference is made later, neither the Memorial itself (except in so far as it illustrates the points in which the professional and technical officers are peculiarly interested) nor the Treasurer's report thereon has any important practical bearing on the matters now in issue.

3. Such was the position when I began to take an active interest in the problem. On the material before me I was not in a position to advise with complete confidence the adoption of any of the alternative courses suggested. I felt unable to accept the Treasurer's opinion that "abolition " terms represented a completely adequate settlement. Apart from the important fact that Your Lordship had expressly recognized that there was considerable force in the view that these terms do not alto- gether meet the case, it was clear to me that the officers affected would feel unjustly treated if nothing better than these terms were granted. In the course of the interview which Sir Herbert Stanley gave on 28th October, 1930, to a deputation from the Civil Service Association, the Colonial Secretary stated that in considering the amount of the compensation to be granted, Government could not be guided only by the con- sideration of what was fairly and reasonably due to public servants, but must consider what the Colony could afford to pay in view of the present state of its finances. (I quote from the Memorial of the Civil Service Association dated 12th November, 1930, which was forwarded under cover of Sir Herbert Stanley's despatch of the 15th November.) It is not unlikely that the Civil Service Association was also aware that a positive recommendation in favour of "abolition " terms had already gone forward, supported by arguments deriving their force from the present difficult financial position. In these circumstances the impression gained currency among the officers affected that their just claims were to be sacrificed to financial exigencies, and there is no doubt that if it were decided to give no more than abolition" terms they would feel that their claims had been in fact so sacrificed. I particularly desire that in the new con- ditions under which they will have to serve, which will make increased demands on their loyalty and zeal, there should be no such feeling. I am most anxious that, when the time comes to publish whatever terms may be finally approved, the Services should feel that they have received a full hearing and just treatment. That does not, of course. mean that the Service Associations should be regarded as completely reliable judges of what is justly due to their members. There is clearly no danger of their point of view being overlooked; there is in fact more danger of its receiving an amount of attention disproportionate to other relevant and important considerations; for I am constrained to remember that one of the interested partics-I refer to the people of Ceylon, who will have to find the money-must necessarily be unrepresented in this discussion by those whom they would regard as suitable advocates of their interests. It is necesary for me to endeavour to advise Your Lordship with a full sense of the obligations of the Government both to its servants and to the people of Ceylon

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4. After receiving the Treasurer's report referred to in paragraph 2 above, I decided that it would be both helpful to me (as enabling me to gain a correct view of the position) and to the Service Associations (as allaying any apprehensions they might feel that Government was not giving their views due weight) if I gave their Presidents a direct hearing. For this purpose I summoned Mr. de Glanville, Principal Collector of Customs and Chairman, Civil Service Association, and Mr. Lees, Director of Public Works and President, Public Services Association, to a Conference which was held at Nuwara Eliya on the 24th April last under my presidency, and at which, in addition to the two officers named, the Colonial Secretary (Mr. Bourdillon), the Controller of Revenue (Mr. Tyrrell), and the Colonial Treasurer (Sir Wilfrid Woods) were present. I had realized before the Conference that it would fail in its purpose if the two repre- sentatives of the Services were not acquainted with the actual position. I therefore decided to take them into full confidence by allowing them to see the Government papers on this subject including your despatch under reference. They were informed that it was my wish that the contents of the despatch and of the other Government papers should not be communicated to anyone other than the members of their

* C. 83299/31 [No. 1]: not printed.

PUBLIC RECORD OFFICE

Reference :-

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C.O.882/11

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