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PUBLIC RECORD OFFICE

Reference :-

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

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7. The postponement of the announcement of Your Lordship's decision in regard to a Salaries Commission gives me a welcome opportunity to forward a memorandum which I received from Sir Wilfrid Woods on the same day as I received Your Lordship ́s by Sir telegram announcing that decision. In view of the weight which Sir Herbert Stanley and 1, and, I believe, Your Lordship attach to any expression of opinion Wilfrid, 1 regret that this clear and forceful statement of his views was not before me when I wrote my despatch of 11th June. The points now urged by Sir Wilfrid had, however, been considered by me, and considered carefully, before I wrote that despatch, although I had not had the advantage of discussing them with Sir Wilfrid hiniself. The main arguments with which Sir Wilfrid supports his contention that the appointment of a Salaries Commission at this stage would be a serious tactical mistake are as follows:-

(1) That the appointment will be received with intense hostility by Cey- lonese politicians who will take it for granted that the real object is to increase the salaries of the European element in the services. I propose to consider, at a later stage in this despatch, how this danger can be minimised.

(2) That it will, owing to the present financial situation, be universally disapproved in the unofficial world. In so far as Sir Wilfrid refers to the immediate present, I have already expressed a measure of agreement with him. I believe, however, that, once the budget is passed, it will be possible to frame the announcement of the appointment of a Commission so as to avoid the universal disapprobation which he anticipates. Sir Wilfrid does not, however, refer to the immediate present only, and I will endeavour to show later how, in my opinion, the announcement can be so worded as fully to justify the appointment of a Commission at the present time of financial stress.

(3) That to reject the report of the Salaries Committee without giving the Legislative Council an opportunity to express its opinion thereon would evoke justifiable resentment. That there may be resentment is possible, but I do not consider that it would be justifiable. The many riders to the report indicate considerable differences of opinion among the members of the Committee. The report itself is definitely unacceptable because it fails to deal adequately with the large majority of the departments involved. The result of the labours of the Committee is such as to confirm the emphatic opinion of the Donoughmore Commission that a Committee composed of members of the Legislature is not a suitable body for the purpose of reviewing the salaries of public officers, and that to ask members of Council to undertake such a duty is unfair both to them and to the services. The decision to introduce an overseas allowance system, and to appoint a Commission to work out the details of such a system affords an excellent opportunity for considering de novo the question of the salaries of officers graded in the Civil List. The Commission will have the advantage of being able to study the report of the Salaries Committee and the material upon which that report was based.

(4) That the European element in the British Services will be even more dissatisfied after the result of the Salaries Commission Report is announced than they are now. Here I fear I must disagree with Sir Wilfrid. The present dissatisfaction is due to uncertainty and to the unsatisfactory nature of the report of the Salaries Committee. If a Salaries Commission be appointed the European element in the services will at any rate feel sure of a fair hearing, and I believe that they will loyally accept any decision which Your Lordship may reach as the result of the recommendations of an impartial Commission which has heard their side of the case.

(5) That the ranks of those who are now dissatisfied with the Donoughmore Commission will be swollen as soon as the exact character of the control over the services given to unofficials is realized from a perusal of the Order in Council, and that the agitation caused by the appointment of a Salaries Commission will further add to the numbers of the opponents of the new Constitution. In my covering despatch on the draft Order in Council, which I hope to submit to Your Lordship by next mail, I propose to deal at some length with the question of the control to be exercised over the services by Executive Committees. This question is one of great difficulty. The, to them, unsatisfactory nature of the recommendations of the Donoughmore Commission in this regard has often been stressed by the opponents of the new Constitution, and I have no doubt that they will return to the attack when they see their recommendations translated into concrete and detailed proposals. But I do not believe that they will swell

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their numbers by a single recruit from among the acceptors of the new Con- stitution. Nor do I believe, subject to certain remarks which I shall make later in this despatch in connexion with a memorandum by the Attorney-General, that the appointment of a Salaries Commission will have any repercussion whatsoever upon the general attitude to the new Constitution.

(6) That in any case but small advantages can accrue from the appointment of a Commission. I do not propose to add to what I have already said in this regard in my despatch of 11th June.

(7) That later on Ceylonese Ministers might be more generous in the matter of overseas allowances than the present Government and Your Lordship could permit themselves to be. I regard such a result of postponement of the intro- duction of an overseas allowance scheme as neither likely nor desirable. We are concerned (as Sir Wilfrid would, I feel sure, agree) not to secure the minimum possible salaries for Ceylonese and the maximum possible for Europeans, but to ascertain a just and reasonable proportion in the light of the unavoidable expenses of two classes respectively. I can see no reason for supposing that Ceylonese Ministers will at any time be in favour of a more equitable solution than one which this Government and Your Lordship could approve at the present time.

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to

The arguments set forth in Sir Wilfrid Woods' memorandum have left me entirely unshaken in my conviction that, subject to two modifications which I am about to propose, the course of action advocated in Sir Herbert Stanley's despatch of 7th April and my despatch of 11th June is the right one. I have, however, dealt with those arguments at some length because I conceived it to be my duty to give Your Lordship the opportunity of considering them. 8. In his despatch of 7th April Sir Herbert Stanley asked Your Lordship appoint a Salaries Commission without further delay, and to cause provision to be made in the Order in Council for the carrying out, with effect from 1st October, 1931, of the decision of Your Lordship upon the recommendations of that Commission." I enclose herewith a copy of a memorandum from the Attorney-General in which Mr. Jackson has exhaustively discussed that request. Mr. Jackson's main point is that in Sir Herbert Stanley's despatch of 2nd June, 1929, the appointment of a Salaries Commission is referred to as a condition of the grant of the new Constitution. Although therefore, as indicated in Sir Herbert Stanley's despatch of 7th April, 1930, conditions have so far altered (since he wrote his despatch of 2nd June, 1920) as amply to justify the appointment of a Salaries Commission, we are precluded from making provision for its appointment in the Order in Council except as a condition of the grant of the new Constitution. Clearly we cannot now go back on the offer of the new Constitution and repeat that offer subject to a fresh condition. The only way in which we could, without breaking faith with the Council, include provision for a Salaries Commission in the Order in Council, would be by obtaining the prior consent of the Legislative Council. This they would of course refuse, unless we were to offer them some substantial quid pro quo, which we are not in a position to do. I am forced, albeit with reluctance, to the conclusion that it is impracticable to include in the Order in Council any provision for enforcing the recommendations of a Salaries Commission as approved by Your Lordship. The acceptors of the new Con- stitution would at once he taunted by their opponents with having fallen into a trap, and the whole of the Unofficial portion of the Council would have good ground for accusing us of a breach of faith.

9. In these circumstances I have to consider what measures can be taken to make the Salaries Commission an effective instrument. The nature of such measure must depend upon the terms of reference to the Commission and the form of their recommendations, and more upon the latter than upon the former, though the terms of reference, with which I propose to deal later, are of great importance in view of the necessity for securing as favourable a reception as possible of the announcement of the appointment of a Commission. The less hostile the atmosphere at the outset, I the greater the prospect of a dispassionate consideration of the final discussion. am myself convinced, particularly in view of the fact that a gradual decrease in the proportion of Europeans in the Ceylon service is inevitable, that Your Lordship's final decision upon the recommendation of the Commission will be such as to effect ulti- mately a not inconsiderable economy, and that therefore the present Council would be unlikely to feel justified in rejecting it as a whole, however strongly they might I think that the proper course to take is to present oppose certain individual items. the final scheme to the present Council as a measure which they must either accept or reject without amendment. Two methods of following this course are possiblė.

* Cmd. No. 3419.