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2 PUBLIC RECORD OFFICE, LONDON

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I have referred these letters to Governor Bulwer, but I have also thought it right to give you an opportunity of making any observations upon them you may wish.

Sir,

I have, &c. (Signed)

KIMBERLEY.

No. 18.

Mr. Meade to Mr. Lindsay.

Downing Street, September 3, 1872.

I AM directed by the Earl of Kimberley to state that he has carefully considered your letter of the 27th of July,* in which you urge that the Oriental Coal Company should be allowed to postpone payment of the amount due by them for the rent of the coal-mines in Labuan, amounting on the 24th of June last, to 1,500/.

Lord Kimberley has read with regret your account of the difficulties in which the Company are placed.

There is no desire on the part of the Secretary of State to deal harshly with the Company, or to refuse them a fair opportunity to retrieve their position; and I am now directed by his Lordship to inform you that he is willing, notwithstanding the serious financial embarrassment it may cause in the Colony, to suspend, until the 24th June, 1874, payment of the rent due under the lease, the Company paying instead a royalty at 6d. a ton on all coal raised from the 24th June, 1870, to the 24th June, 1874. This suspension is to be clearly understood as intended to afford a temporary relief to the Company, but not as implying an abandonment or remission of the amount now due, or to become due, on account of rent. The arrears of rent will, therefore, become payable on the 24th June, 1874, the amount received in the meantime as royalty being allowed as a set-off, it being left open to the Company to resume paying rent at an earlier period, if they desire it. It is not proposed to make the Company any charge on account of interest during the period that the payment of rent will remain in abeyance. On and after the 24th of June, 1874, the rent will again be payable at the times fixed in the lease.

Lord Kimberley trusts that this arrangement will enable the Company to prosecute those works vigorously, the completion of which they state will render their property a remunerative investiment. I am to add that, if the Company fail to duly pay their rent in 1874, according to the "conditions of their lease, no further extension of time for its payment can be granted, and it will become necessary to consider what steps should be taken to protect the Colonial property. I am to request that you will inform me whether the Company accept the arrangement now proposed.

On the several other points to which you call attention, Lord Kimberley must postpone any answer until he shall receive a report from Governor Bulwer, to whom a copy of your letter will be transmitted,

(No. 48.) Bir,

I

am, &c.

(Signed)

R. H. MEADE.

No. 19.

The Earl of Kimberley to Governor Bulwer.

Downing Street, September 3, 1872.

I POSTPONED any answer to your despatch No. 15 of the 28th March last,† because, at the time I received it, I was in correspondence with the Oriental Coal Company on the subject of the payment of the rent due from them up to the 31st December last.

I now transmit to you copies of two letters received subsequent to an interview I had with the Directors, setting forth the reasons why the Company should not be pressed for immediate payment.

From the inclosed copy of the letter addressed to the Company, by my desire, in reply,§ you will find the conditions under which, after full consideration, I have consented to allow, until the 24th June, 1874, a postponement of payment of the rent now due, and that which will become due previous to that time.

I have been most reluctant to allow the Company this indulgence, knowing that, whilst you are using your best endeavours to meet your financial difficulties, the loss

Nos. 14 and 15.

§ No. 18,

• No. 14.

+ No. 12.

17

of this rent might seriously affect your calculation of your ways and means, and lead to the postponement of some works that were urgently needed.

I felt, however, on the other hand, that, in the circumstances of pecuniary difficulty in which the Company are placed, to insist upon immediate payment would, very probably, result in their abandonment of their lease, a step which at this present time might cause more embarrassment to the Colony than the non-payment of their rent; and I therefore came to the conclusion that, upon the whole, the most advantageous course for the Colony was to make a temporary arrangement by which the Company might be enabled to proceed with the works from which they expect a remunerative return.

I request that you will report to me on the other matters referred to în Mr. Lindsay's letter.

I have, &c. (Signed) KIMBERLEY.

*

No. 20.

Governor Bulwer to the Earl of Kimberley.—(Received September 24.)

Government House, Labuan, June 29, 1872.

(No. 56.) My Lord,

IN reply to the inquiry conveyed in your Lordship's despatch No. 14 of the 9th February, as to the possibility of reducing the amount now charged to the Oriental Coal Company for Police supervision and for convict labour, I have to report to your Lordship that the contribution towards Police expenses made of late years by this and the preceding Company, originated in an affray that occurred at Coal Point in September 1864 between Chinese and Malay coolies engaged in the mines.

2. Governor Callaghan, in order to prevent the serious consequences that might arise from future disturbances of a similar kind, proposed that a military detachment of twenty men should be stationed at Coal Point; but he added that, as these men could not be spared from the force then doing duty in the Island, it would become necessary to increase it by that number. The Secretary of State, however, considered it would be better to increase the Police force of the Colony, and entered into communication with the Directors of the China Steam-ship and Labuan Coal Company, with the view of ascertaining how far they would be disposed to provide for the expense of a certain number.

3. The Directors agreeing to the proposal, it was decided to increase the police force by twelve men and two officers, and that half the expenses of the new force should be borne by the Company and half the force be stationed at Coal Point.

4. Accordingly, in October 1866, the additional force having been raised at Singa- pore, six men and one duffedar were sent to Coal Point, augmenting the total force stationed there to eleven men aud two duffedars.

5. No contribution on this account was paid by the Company till the year 1868, when, on the liquidation of the Company's local affairs, which took place in the island in that year, amongst other claims brought against the Company was one by the Labuan Government for 3211. 15s. 14d. for police expenses, according to the agreement abovo referred to, from 30th August, 1866–the time when the new force was raised—to 15th May, 1868.

6. The amount in question was then received and paid into the Treasury.

7. The next payment made was in 1870, when the Government received from the Oriental Coal Company 2221. 48. Id. in respect of the years 1888 (from 16th May to 31st December) and 1869, and 2091. 28. in respect of the year 1870, making a total of 4311. 68. Id., received on this account in that year.

8. When the Labuan armed police was in course of organization, a question was raised as to what should be the amount of contribution to be made by the Company, but eventually an arrangement appears to have been come to between my predecessor and Mr. Lumsden, the Company's manager, by which the latter undertook to pay half the expenses of whatever force should be actually stationed at Coal Point. (See despatches noted in margin.)†

9. It was upon this arrangement that Governor Hennessy estimated the charge for 1871 at 2621. 108., though, owing to some reduction of the force stationed at Coal Point, the amount actually contributed was 2801. 12s. 10fd., and, acting upon the understood

• No. 8.

† Governor Hennessy, No. 18, April 25, 1870; Earl of Kimberley, No. 3, July 27, 1870; Governor Hennessy, No. 63; November 3, 1870; Governor Hennessy, para. 48 and 49, letter of January 1872, No. 7.

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