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PUBLIC RECORD OFFICE

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mmimamtfmC.O.882/11

PUBLIC RECORD OFFICE, LONDON

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system, but I took occasion to point out, inter alia, that it would not affect either European or Ceylonese pensions. I find that this statement was not correct, as pensions on sterling salaries, when paid in Ceylon, are paid at the rate of 15 rupees to the pound sterling. This is, I suppose, an inevitable result of an alteration in the rate of exchange during the currency of a sterling salary system, but it appears to me an amazing state of affairs that a retired Ceylonese (the same applying of course to a European who retires in Ceylon) should draw a pension the sterling value of which is 12 per cent. more than the pension drawn by a retired European of the samò status and length of service. I have no hesitation whatever in saying that the normal and reasonable expenses of a European who settles down in England after a life of service in the East are considerably higher than the normal and reasonable expenses of a Ceylonese public servant who retires and settles down in Ceylon. The effective difference in pensions in favour of the Ceylonese officer is therefore much greater than the 12 per cent. difference in actual sterling value.

3. This state of affairs affords a strong additional justification--if any such be needed for the immediate introduction of rupee salaries with overseas allowances.

I have, &c.,

C. 73230 /9/30 [No. 33].

B. H. BOURDILLON, Officer Administering the Government.

No. 23.

THE SECRETARY OF STATE to THE OFFICER ADMINISTERING

THE GOVERNMENT.

(Sent 7 p.m., 22nd August. 1930.)

TELEGRAM.

[Answered by No. 24.]

No. 105. Your despatch 23rd July, Confidential (2).* Salaries Commission. 1 agree that proposal to include provision for Salaries Commission in Order in Council must be abandoned. In the circumstances I am doubtful as to the advantages of Salaries Commission on the lines now proposed by you, and I consider that if any proposal for an investigation of salaries including the question of overseas allowance and terms of premature retirement is to be entertained at present it would be better that it should be associated with an inquiry into the possibility of retrenchment and reorganisation in connection with the introduction of the new Constitution, particularly if Legislative Council should ask for a Retrenchment Commission. I contemplate that proposals arising from such an inquiry would have to be submitted for consideration of Council prior to signification of my decision, and I do not think it would be practicable to require Council to accept or reject them without modification. Decision must await conclusion of budget proceedings. In the meantime, you will doubtless keep my views in mind during budget discussions.-PASSFIELD.

C. 73230/9/30 [No. 36].

No. 24.

THE OFFICER ADMINISTERING THE GOVERNMENT to THE SECRETARY OF STATE.

(Received 4.4 p.m., 27th August, 1930.) TELEGRAM.

No. 128. 27TH AUGUST. Your telegram of 22nd August No. 105.† Select Committee on Budget have not pressed demand for Retrenchment Commission. They have, however, passed resolution, with no dissentients, demanding immediate intro- duction of overseas allowance system on lines of Resolution of 30th March. This appears to me to make appointment of committee on lines suggested in my despatch of 23rd Julv✶ unavoidable. Final recommendation will be submitted after third read- ing of Budget which takes place on 16th September.

* No. 21.

† No. 23.

C. 73230/9/30 [No. 37].

67

No. 25.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 12.35 a.m., 11th September, 1930.)

TELEGRAM.

[Answered by No. 26.]

10TH SEPTEMBER. No. 140.

Confidential. Third reading of Budget begins on 16th September. Select Committee have proposed cuts totalling nearly 9 millions. Large majority of cuts merely involves postponement of new works to which, in view of general depression and need for strict economy, I am prepared to agree. Minor riders of 3 Official Members dissenting from the cut amount to just under 3 millions and subject to the consent of the Executive Council I propose to press for inclusion of all these items but not to use my reserve power except as indicated below.

2. First important cut is one of just over a million rupees involving the postpone- ment or abandonment of new salaries scheme for the officers not graded in the Civil List. I

propose to instruct official members to resist this strongly but I do not consider that I should be justified in using my reserve power to secure improvement in conditions of service even though such improvement has been approved by Legislative Council and the postponement or abandonment of scheme will be great disappointment to officers concerned.

3. Vote for passage allowances has been reduced by one-quarter. Object is not as last year's to eliminate leave passages altogether but to enforce recommenda- tions of Salaries Committee that passage should be granted once in 5 years instead of once in 1. I consider that passage chce in 4 years very desirable in the interests of efficiency and I am not prepared to accept this proposal unless it is recommended by independent Commission and approved by yourself. 1, therefore, propose if necessary to use my reserve power in this connexion.

1. Vote for holiday warrants (see my telegram of 28th August, 1929*), has been arbitrarily reduced from G lakhs to 24 lakhs. Committee is now examining the question of holiday warrants in pursuance of pledge given when new salaries scheme for non-Civil List Officers was approved. If that scheme is now thrown out I am not prepared to continue this examination. If scherne is put into effect I cannot accept arbitrary reduction in existing privileges until Committee has reported and Government has reached decision on its recommendation. I consider that this ent should also be resisted by use of the reserve power.

5. Select Committee have also resolved that house-rent allowance of officers drawing more than 100 rupees should be reduced by one-third and rent of Government Latter part of Resolution can be simply ignored but houses raised by one-third. former has been given expression by cuts in all votes involved. This is an arbitrary and ill-considered alteration of existing conditions of service for which I can see no justification and which I am not prepared to accept. In this case also I wish to use reserve power.

6. In none of these cases do I propose to resort to certification on the occasion of the third reading. I propose in regard to matter referred to in paragraphs 3, 4, and 5, Colonial Secretary should announce Government intends to carry out existing rules as regards passages, holiday warrants, and house-rent allowances, and if reduced provision should prove insufficient to ask for supplementary provision when this If you approve my policy I should be glad to receive your becomes necessary. assurance that you will approve eventual resort to certification should supplementary provision be refused when asked for

7. In view of resolution of Select Committee referred to in Bourdillon's telegram of 27th August,† and in order to show Council that Government is merely resisting arbitrary alteration of existing conditions of service, but do not wish to oppose proper examination of these conditions by impartial body, I propose that Colonial Secretary should state if Council so desire I am prepared to ask you to appoint impartial Com- mission to formulate scheme of Ceylonese salaries and of oversea allowances and to refer to this Commission question of passage allowances and of other privileges. Colonial Secretary would add that recommendations of this Commission would not be carried into effect without approval of Legislative Council or State Council as the case might be.

* C. 63393/29 [No. 1]: not printed.”

† No. 24.