CO129-368 - Acting Governor May - 1910 [8-9] — Page 540

Exchequer towards making good the loss of revenue directly resulting from the measures to be adopted under

the instructions of His Majesty's Government".

The Governor's despatches of the 15th of March and the

19th of April setting forth the steps which were being

taken to close opium divans and to obtain close control

over the farmer were sent to the Treasury in a letter

dated the 10th of June in order that they should have full

information of what was going on.

Jak

On the 4th of August the ordinance giving effect to the

decision of His Majesty's Government was received, and on the 19th of August a despatch reached the Colonial Office from Sir F. Lugard giving an account of the pro- ceedings in Legislative Council when the Bill was under

2nd and 3rd readings. The debate centred round the

question of the amount of the contribution by His

Majesty's Government,and Sir F. Lugard wrote:- "I venture

to hope that His Majesty's Government will place a liberal

interpretation upon the promise conveyed to me in your Lordship's despatch of the 8th of January, and I desire especially to draw your Lordship's attention to the fact

that the loss which will be incurred by this Government as the direct result of measures adopted under the in- structions of His Majesty's Government will be annually recurrent and will not affect next year's budget only.x I hope, therefore, that the contribution made by the Imperial Government will be payable annually during the currency

of the new Farm" (i.e. for three years from 1st March 1910).

On the 10th of September 1909 the despatch and its enclosures were sent to the Treasury with a long letter,

(21.442), WŁ.32,656–3. 0000. 2/10, A.&E.W.

(26.462).

.. 9058--28. 6000, 6/10

pointing

i.e. 1910.

the

only

'I'm int

536

pointing out that the time had now w{come for deciding

the amount of the substantial assistance promised by His Majesty's Government. The letter expressed the view that indirect losses could not be calculated and should therefore not be taken into account except as affording grounds for deciding in the Colony's favour any doubtful points which might arise. As to the direct loss, viz., the difference between the price paid for the existing farm and the price paid for the farm commencing in March 1910, it was argued that, setting aside the in- fluence of the anti-opium movement, the price paid by each opium consumer included a proportion of the total profit derived by the Government from the trade, and that the Government might therefore be expected to recoup itself for this portion of the loss by imposing fresh taxation on the classes of the population who consumed opium. The contribution by His Majesty's Government might therefore be fixed at the difference between the receipts from new taxation and the revenue lost by the reduction in the farm rent. It was pointed out, however,

great that practiced difficulties stood in the way, and it was finally proposed that the contribution should be fixed at one half of the loss caused by the reduction in the farm rent, leaving half to be made up by new taxation. This arrangement, it was suggested, should be in force for the term of the farm i.e. three years. But the Treasury were warned that no guarantee could be given That this proposal would be considered by the Colony adequately to meet the case and that it might be necessary to make further concessions. The Treasury replied on the 30th of September asking to be informed of the actual

reduction

3=764

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