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First election on party basis
The second State Council had a spell of eleven years from 1936 till 1947. This was mainly due to the intervention of World War II (1939-1945) when constitutional reforms took backstage. However, the Board of Ministers agitated for complete internal self-government through constitutional amendments.

A memorandum submitted by them in March 1937 for the restriction of the Governor's powers and the abolition of the Officers of State (Chief Secretary who was also Chairman of the Board of Ministers, Financial Secretary & Legal Secretary - they were all British bureaucrats), and a demand for Cabinet government was rejected. In 1941 the British Government declared that after the war, a commission would examine the constitution. While this was greeted with utmost dissatisfaction, a resolution was passed unanimously by the State Council in 1942 demanding Dominion Status.

In May 1943 following a declaration by the British Government, the Ministers submitted a draft constitution based on the system of Cabinet Government. Though the Ministers completed a draft constitution by February 1944, it was later withdrawn owing to a difference of opinion with the British Government, which appointed a Commission under the chairmanship of Lord Soulbury (with Frederick Rees & Frederick Burrows as members) in 1945 to examine the question of constitutional reform. Its Report was published on October 8, 1945.

Meanwhile, several changes had been seen among the personalities in the State Council. The two leftist stalwarts Dr. N.M. Perera and Philip Gunawardena vacated their seats in July 1942 for absence from sittings for a continuous period of three months. They were among other Sama Samajists who had been detained on an order by Governor Sir Andrew Caldecott under the Defence Regulations and had been granted leave. No leave application was made on their behalf when they escaped to India.

Two ministers resigned following their appointments abroad - Sir D.B. Jayatilaka as Resident Representative in India (November 1942) and G.C.S. Corea (later Sir Claude) as the Government Representative in the United Kingdom (September 1946).

Several members were unseated on election petitions, one had been expelled on a resolution passed by the Council, and six resigned in May 1943 following the findings of the L.M.D. de Silva Commission on bribery.

The Soulbury Commission recommended a Parliamentary system of government. The State Council was replaced by a Parliament consisting of a House of Representatives (Lower House with 101 members - 95 elected by the people and 6 nominated by the Governor-General to represent minorities or unrepresented interests) and a Senate (Upper House with 30 members - 15 to be nominated by the Governor-General and the balance to be elected by the Lower House).

Elections to the first Parliament were held in August 1947. For the first time, elections were being held on a party basis. Nine parties put forward candidates with the United National Party (UNP) fielding the largest number (98). The UNP had been formed in September 1946 under the leadership of D.S. Senanayake who had risen to the position of Leader of the State Council and Vice Chairman of the Board of Ministers succeeding Sir Baron Jayatilaka when the latter went as envoy to India in November 1942. (Sir Baron died on May 31, 1944 while flying from India where he had fallen ill). The Sinhala Maha Sabha which had been formed by S.W.R.D. Bandaranaike also joined the UNP maintaining its identity within the latter. UNP was described by Mr. Bandaranaike as "a coalition party formed for government purposes."

The three Marxist parties - the Lanka Sama Samaja Party (LSSP), Bolshevik Leninist Party (BLP) and Communist Party (CP) - as well as the All-Ceylon Tamil Congress (TC) and the Ceylon Indian Congress (CIC) opposed the UNP. Three other parties - Labour Party, United Lanka Congress and Swaraj Party - too fielded candidates. The largest number (181) contested as Independents.

Unlike in the previous elections where at each polling booth there was a separate box for each candidate denoting his colour, the 1947 General Election saw candidates being allotted symbols approved by the Commissioner of Parliamentary Elections. Each individual party was not given a specific symbol with the result that members of the same party got different symbols in different constituencies. Thus there wasn't a common symbol for a party. The voter had to mark against the name and the symbol on the ballot paper. The symbol helped the illiterate voters to identify the candidate of his or her choice. Twenty-four approved symbols were used for the General Election.

Out of the 89 constituencies, four were multi-member ones - Colombo Central returning three members and Ambalangoda-Balapitiya, Badulla, Balangoda and Kadugannawa two each thereby totalling 95 elected members. On Nomination day - July 26, 1947 - one candidate, H.S. Ismail (Ind.) was returned uncontested to the Puttalam seat. In all, 361 candidates handed in their nominations. Ninety-eight of them were from the UNP. There were instances when members of the same party contested the same seat. In Polonnaruwa, for example, five of the six candidates were from the UNP.

All except five elected members of the State Council sought election to the House of Representatives. One State Councillor Dr. A.P. de Zoysa (Colombo South) handed in his nomination papers for two seats - Colombo North and Wellawatta-Galkissa. He lost both. Among the contestants were three females - Florence Senanayake (LSSP-Kiriella), Ayesha Rauf (Independent-Colombo Central) and Srimathie Abeygoonewardena (CP-Ambalangoda/Balapitiya). Among the professionals contesting was one member of the medical profession - Dr. A. Ratnapala contesting Wellawatte/Galkissa.

The elections stretched for 19 days between August 2 and September 20. Ten constituencies polled on the first day. Among the winners was the UNP leader, D.S. Senanayake (Mirigama) who polled 26,762 votes against LSSP's Edmund Samarakkody (10,673). In Jaffna it was a tussle between Home Affairs Minister A. Mahadeva (UNP) and Tamil Congress leader G.G. Ponnambalam. Jaffna decided on Ponnambalam. In Galle W. Dahanayake (BLP) who was to be a colourful personality in several Parliaments later, beat H.W. Amarasuriya (UNP) and at Matugama, Independent candidate Wilmot A. Perera beat Education Minister C.W.W. Kannangara.

The most interesting contest was in Colombo Central which went to the polls on the last day with the other electorates in Colombo. There were 55,994 voters in this three-member constituency. Fifteen contestants were in the fray. The election was on a Saturday and after a whole day's counting, the results were announced on Monday. A.E. Goonasinha (Labour - 23,470 votes), T.B. Jayah (UNP-18,439) and Pieter Keuneman (CP-15,435) were elected. There were 3,489 spoilt votes.

In all, 131 candidates forfeited their deposits having failed to poll the required 1/8 of the votes cast. All three candidates of the Lanka Swaraj Party lost their deposits. The United Lanka Congress contested two seats and failed to gain either.

At the end of the elections, the Party position is as shown in the box below. While the largest majority (26,854) was obtained by S.W.R.D. Bandaranaike (UNP-Attanagalla) in a straight contest with Chandra Gunasekera (LSSP), the smallest majority (22) was by K. Don Sugathadasa (Ind-Welimada) in a three cornered contest. Stephen Seneviratne (UNP-Polonnaruwa) polled the least number of votes (45). Of the three women candidates, only one, Florence Senanayake (LSSP-Kiriella) was elected.

Governor-General Sir Henry Monk Mason Moore called upon the leader of the party with the largest number of seats, UNP's D.S. Senanayake to form the government. With the six nominated MPs and the support of some Tamil Independent MPs, he formed the Government with a Cabinet of 14 ministers. While PM Senanayake also held the portfolios of Defence and External Affairs, S.W.R.D. Bandaranaike was appointed Leader of the House in addition to being Minister of Health & Local Government. Dr. N.M. Perera became the Leader of the Opposition.

At the first meeting of the House of Representatives on October 14, 1947, A.F. (later Sir Francis) Molamure was elected Speaker with a majority vote 58-41 (with two members declining to vote) against the Opposition candidate H. Sri Nissanka. R.A. de Mel became Deputy Speaker defeating Wilmot A. Perera 52-47. Appointed MP, J.A. Martensz was unanimously elected Deputy Chairman of Committees.

In the months that followed, there were several changes due to the unseating of MPs following election petitions, resignations and deaths. The death of Speaker Molamure in January 1951 saw Albert F. Peries (Nattandiya) becoming Speaker.

In the Senate, Sir Gerard Wijeyekoon was elected President in a contest with C. Coomaraswamy 14-13. Peri Sunderam was elected Deputy President, also with a majority vote of one, against C.A. Gardiner.

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