'Aden' [‎37r] (3/6)

for n portion of u contribution towards tlic cost of the Indm Office iccomnieiidod b_\
the Welby Comniission, and consequently 72,000?. only of the total really relates
to Aden.)
Tn 1917, when military responsibility for Aden was taken over by the War O.lOe
and political responsibility by the Foreign Office, it was not found possible, in the
stress of war, to mark the change by any readjustment of financial responsibility.
The charge for internal administration was left on India, but subject to the under
standing that this was without prejudice to the complete transfer of Aden, charges
and all ^subsequently—India claiming that in the event of such transfer the new
arrangements as regards incidence of cost should have retrospective effect to 1917.
One effect of this arrangement, as interpreted in practice, has been that Indian
revenues have continued to bear (though only in the first instance, and subject
to the possibility of readjustment) charges arising out of political relations with
1 the Protectorate, although the Government of India have ceased to control these
relations.
During the war the cost of Aden greatly increased, owing both to actual military
operations and to the growth of military charges generally. The arrangement made
was that India should meet the cost of the pre-war strength of the garrison at current
rates—subject to the above contribution of 72,000?.—while the cost of any additional
forces maintained there (described loosely and not altogether accurately as the cost
of 41 Aden operations'') should be equally shared between India and His Majesty’s
Government.
Before describing the course of the recent discussions as to the future incidence
of expenditure, reference should perhaps be made to the proposals made by the
Government of India in 1903 and 1917. In the former year they offered, if Aden
were transferred, to contribute to Imperial revenues 77,000?. a year in respect of
Aden; but in 1917 they expressed the view that, if Aden were to be completely
severed from India, India could not thereafter equitably he called on to bear any share of
the cost. The question was taken up again on the Report of the Masterton-Smith
Committee (which did not itself make any proposal for the division of expenditure).
The Government of India, after considering the Committee’s recommendations,
telegraphed officially on the 1 Ith April 1921 that they were prepared to agree to the
transfer of Aden to the Imperial Government, and to make from Indian revenues a
contribution of 100,000?. annually, subject to the clear understanding that this should
be regarded as a final quittance, and that His Majesty’s Government would then be
responsible for all charges connected with Aden, whether military oi ci\il, including
subsidies to chiefs in the Aden Protectorate.
The question was further discussed in private correspondence between ^the
Secretary of State for the Colonies, the Secretary of State for India and the ViceToy.
Air. Churchill proposed ihat India should make to the Middle Fast Department an
annual contribution of a lump sum for a period of years to cover her share in the cost
of Aden and also the services which the new department would perform in
safeguarding Indian interests in Arabia generally, and originally suggested 500,000?.
Mr.'Montagu subsequently agreed to place a figure of Rs. 50 lakhs One lakh is equal to one hundred thousand rupees before the Viceroy
and the Indian Council. This figure corresponded roughly to the cost of Aden to the
Government of India in the then current year, and assumed broadly that, while some
reduction might be caused by economies in military expenditure, this saving would
be set off, so iar as India was concerned, by her assessment to some portion of the
liability in respect of the contemplated subsidies, Ac. The \ iceroy in private
correspondence expressed the view that he could not possibly propose to his Council
a higher contribution than 250,000?. a year. On the 15th September 1921 the
Colonial Office proposal that India should pay Rs. 50 lakhs One lakh is equal to one hundred thousand rupees a year was officially
telegraphed to the Government of India. It was explained that, in consideration of
this contribution, the Middle East Department would—
(a) bear the whole cost of Aden administration, military as w^ell as civil;
(?)) accept the whole responsibility for any subsidies found necessary ;
(c) relieve India, if desired, of the cost of the administrative establishments on
the Arabian littoral of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. ; ami
(d) undertake to do all that was possible to protect Indian interests in Arabia, as
well as to consult the Government of India on all important points of policy.
The amount of the contribution was to be open to reconsideration after five years.
On the 27th September the Government of India telegraphed that it was impossible
for them to assent to the Colonial Office proposal. Even if they were prepared