CO129-566-21 Military contributions 7-5-1938 - 31-1-1939 — Page 20

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Colonial Secretary:-

Sir, I am the bearer of a message from Your Excellency

Honourable Members,

In my address to this Council on the occasion

of the presentation of the estimates for 1939 on 13th October,

I stated that I had addressed the Secretary of State with a

proposal for a new method of assessment for the Military

Contribution paid by this Colony. I am now glad to be able to

inform you that the Secretary of State has conveyed to me the

approval of His Majesty's Government of the adoption for an

experimental period of 5 years of a system of fixed contribution.

The amount of this fixed contribution is to be $6,000,000 per

annum, the figure suggested by me after confidential consultat-

ion with the unofficial members of this Council. It has been

agreed that if, owing to exchange fluctuations, the sterling value of this contribution for any year, at the average rate of

exchange for the year, should fall below £350,000, or if there

should be a formal devaluation of the dollar reducing its value

below that figure, the amount of the contribution should be

immediately reviewed without waiting for the end of the

quinquennium. It has also been agreed that the fixed

contribution system should be regarded as an experiment subject to review at the end of the first quinquennium, with the proviso that if the experiment is found to be unsatisfactory either the Colonial Government or His Majesty's Government

may propose to revert to the former percentage basis at the end

of the first 5 year period or to adopt some other basis of

calculation.

2. It is intended that, if the fixed contribution system

is continued, future re-assessments of the amount should have

regard to the general economic position of the Colony, not only,

to the revenue position; but no exact method of re-assessment

has

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