To carry out the scheme, Maxwell appointed the Financial Adviser to head a second committee of three to consider the transfer of financial
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control over the departments concerned to the States. This was only carried through because of the determined stand of the Chief Secretary on the
question. For the committee at once ran into powerful opposition from the technocrats who indirectly had the sympathy of the Financial Adviser. Always a figure of prudence, the latter contended that central financial control was essential in view of the Sterling Loan and of the prevailing austerity
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drive. Only the Agriculture Department welcomed the change which was 53
considered 'fool-proof* by A.S. Haynes, its pro-decentralisation Secretary, who was significantly an MCS officer. The Survey-General, the Principal Medical Officer, the Conservator of Forests and, to some extent, the
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Commissioner of Police opposed the decentralisation scheme in general and the budgetry transfer in particular. In their opinion, technical departments should be under the unitary control of technical heads and should not be
affected by political considerations. They warned that decentralisation would only inject dual control into their departments with all the attendant
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confusion and serious loss of efficiency. Despite this protest financial control over four of the above federal departments was transferred to the states late in 1923. Only the Surveyor-General managed to block the main proposal concerning survey officers, and only minor financial items in his department were to be transferred to State control in 1926. It should be noted, however, that the Federal Heads of the five departments involved still retained financial control over the headquarters staff, the senior officers,
and certain essentially federal provisions.
In August 1925 Maxwell proposed to call another committee to recommend 56
a second instalment of decentralisation. Possibly he aimed to undercut the new decentralisation policy Guillemard was then known to be discussing with the Colonial Office. The proposal was not acceptable to the Acting High Commissioner, Hose, who instead instructed that the working of the 1923
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Scheme be reviewed. The review showed that the scheme worked effectively 58
and smoothly in the Police and Agriculture Departments. The Surveyor- General reported that it was too early to comment on its results, but managed to persuade the government to remove the formal control over survey officers which was invested in the Residents in 1923. The Conservator of Forests
complained that the scheme obscured his relations with the Chief Secretary and the Residents, and caused delay and difficulties in budgetting for the
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department. He suggested that the whole Forest budget be placed under
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federal control.
The most violent attack on the scheme, however, came from the Galloway Committee, a committee of medical men appointed to report on the Medical Department. For some time already the Medical Department had been in a state of disarray, chiefly because of conflicts within the department and between the Principal Medical Officer and the Chief Secret a r y . ^ Decentralisation aggravated the situation to some extent, as it introduced an element of dual control into the department. The Committee, however, seized upon
decentralisation as the scape-goat, declaring that the most disturbing aspect of the 1923 scheme was ’the splitting up of the Medical Department
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into smaller units, each unit working under lay control'. Despite its excesses, the Galloway Report convinced the government that the
decentralisation scheme needed some adjustments. In 1926 the government restored those officers placed under the state authorities three years ago
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of the scheme as applied to the Medical Department.
We have hitherto examined what may be called the British side^of decentralisation in the sense that power was transferred from one group of
British officials to another. The Residents were the protagonists partly
because they were the main beneficiaries of the limited degree of power devolved to the states. There is however the ’Malay side’ of
decentralisation which involved training the Rulers and the State Councils in the exercise of executive power. To understand this fully, it is necessary first to examine briefly Advisory rule in the UMS. Britain's treaty
relationship in the UMS was similar to that in the FMS, But the UMS were already functioning states with a stable administration and a viable Malay ruling class at the time of their takeover by the British. The treaties signed by them were genuine contracts giving rights to each side. As discussed in greater detail in Chapter Five, the Ruler and the Malay elite remained executive officers running the administration of the state.
Legislative, financial and executive powers were in the hands of the Ruler- in-Council, while the state administration was directed by the Malay
Secretariat headed by a Malay officer. Under this system the British
Adviser was a real adviser without executive power. But as already discussed earlier, the Resident became the actual ruler of a federated state subject to
control by the Chief Secretary and the High Commissioner. The Ruler and the
Malay aristocrats in effect were his advisers operating almost wholly outside
the administrative machinery. It should be noted, however, that British
control was as effectively, albeit more subtly, exercised in the UMS as in the FMS.
It was Maxwell's intention to bring the Rulers and the State Councils into the Administration of the states. Viewing the whole movement in its perspective, he declared:
The problem of "Decentralisation" is really only one aspect of the problem of the restoration to the Rulers of powers which
they have lost, partly owing to the "Resident" system, and partly owing to the "Federation" system; and the Government is
beginning to realise its importance, because of the unfavourable opinions of the existing system among the Rulers and State
Councils both in the Federated and the Unfederated States, and because of the effect of this feeling upon the future of the British Malaya, ^
According to him, decentralisation should seek to transform the FMS
administration into a half-way house between the existing system and that in 65
the UMS. Under this scheme, the Residents should assume to a significant extent the role of Advisers in the UMS, advising the Rulers and the State Councils how to run the states. Since the intention was to place the two groups of states on more or less the same footing, this policy implied a tightening of British control in the UMS. This aspect of decentralisation had the implicit support of the Colonial Office.
In September 1922 Maxwell, supported by Guillemard, recommended a moderate measure of financial devolution to the State Councils. Firstly, Maxwell proposed to confer certain financial items under the headings of
"Rulers and chiefs", "Residents", "District Officers", and "Sanitary Board" from the control of the Federal Council to that of the State Councils. To make the proposal workable, the Federal Council would be required to vote
annual lump sums for the transferred subjects, and these sums would be allocated by the state legislatures.^ Secondly, he recommended that the State Councils be empowered to sanction expenditure for mosques and other matters concerning Islam and for political pensions, compassionate
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allowances, gratuities and rewards. The first proposal would not have freed state finance from federal control. The other would have conferred only a very limited power on the State Councils, which could be stringently regulated by the Residents.
Yet this largely nominal measure of devolution to the State Councils was rejected mainly because of the opposition of the Financial Adviser, This official felt that the State Councils should not be made sanctioning
authorities at a time of financial stringencies. He also opposed the lump-sum procedure on the ground that sound financial principles required that the voting and allocation of expenditure be under unitary c o n t r o l . ^ The Residents of all states except Perak rallied to his support, and the matter came before the acting Chief Secretary, Hose, when Maxwell was on leave. Hose ruled against it, adding that any far-reaching changes must await the reorganisation of the financial machinery then under way. This outcome indicated how little commitment there was on the part of the government to the ’Malay side’ of the decentralisation movement.
However, as proposed by Maxwell, the State Councils were permitted some formal say in financial matters. In 1923 the councils were empowered to comment and even alter new items in the approved budgets within the limits of the agreed sum total. To give a semblance of state individuality, the Annual Supply Bill was divided into five major headings, one for the
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Federation and the others for the various states. But the most important reform was the tabling of the State Estimates before the State Councils for information and comment in December 1925. In that year the State Councils were also authorised to deal with all special concessions concerning, for instance, paper, matches, china-clay, wood-distillation, and all
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