PUBLIC RECORD OFFICE
Reference :-
LEC.O. 882
82
In fact, my Committee are confident that the Company can meet all requirements necessary or desirable for their undertaking in the Straits Settlements, both present and future, without difficulty. The Company have, in fact, always met the expanding trade of the Colony by adequate enlargements of their works.
In reference to the concluding paragraph of your letter my Committee are unable to pledge the present members of the Board or their staff, or to give any assurance as to the co-operation of the Board and their staff in the Colony or in London until they are more adequately informed of the nature of the Ordinance and the proposals of the Government.
This Committee, whilst desiring always to maintain the cordial relations which have hitherto existed between them and the Government, reserve entire liberty of conduct on the part of the Company with respect to the present proposals, of which they are advising the Board, and they submit that no Ordinance should be introduced or other steps taken until the Company should have had full opportunity of considering the proposals of the Government in detail.
I also desire to observe that the published balance sheets of the Company by no means represent the true values of the properties or their revenue-earning powers.
I am, &c.,
41291
No. 31.
L. FRASER,
Secretary.
MR. LYTTELTON to GOVERNOR SIR J. ANDERSON. [Answered by Nos. 35, 36, and 48.]
(Confidential.)
SIR,
Downing Street, December 16, 1904. ON learning from your telegram of the 26th ultimo* that you concurred in the proposals contained in my confidential despatch of the 4th ultimo,† I caused a letterf (of which I enclose a copy) to be addressed to the Chairman of the London Committee of the Tanjong Pagar Dock Company, Limited, giving notice of the intention of the Government of the Straits Settlements to expropriate the Company.
I considered it advisable to take this step without delay, for although the letter is not in itself a legal notice of expropriation, it will, in my opinion, having regard to the position of the Straits Settlements as a Crown Colony, and the power of the Crown to carry its legislation therein-be sufficient to safeguard the interests of the Colony in case the Company should take any action, subsequent to the receipt of the letter and before the passing of the requisite legislation, which might otherwise enhance the price payable for the undertaking.
It will be necessary to pass an Ordinance for the expropriation of the Company and the subsequent management of its affairs, and I enclose, for your consideration, the outline of a measure which appears to me to be sufficient for these purposes.
The Ordinance incorporates, as is usual, the Lands Clauses Acts, with certain exceptions thereto, as provided in the most recent case of Legislative expropriation, viz., the Metropolis Water Act, 1902. Should it become necessary to have recourse to a Court of Arbitration, it would save considerable expense if the two parties could agree upon a single arbitrator, but I have inserted the necessary provision in case this procedure should not be found practicable.
In Sections 8 and 11 the 10th December has been chosen as being the date on which the letter referred to in the first paragraph of this despatch was received by the Company; and the rate of 12 per cent. per annum mentioned in Section 11 has been selected as being the amount of the last yearly dividend.
Sections 12 to 17 deal with the future management of the Company's business. The Ordinance has been drafted in accordance with the policy set out in my despatch of the 4th ultimo,† so as to secure complete control to the Governor while avoiding, so far as possible, Government interference in the actual conduct of the business. I have left it to the Governor to fix the number of the members of the Board other than the official members, and it will, of course, be convenient that this number
‡ No. 28.
• No. 21.
↑ No. 19.
83
should be a multiple of the number of years for which the members will be appointed. I have also left to your discretion the question of remunerating the official members, but I would observe that I do not propose that they should be so remunerated unless and until experience shows that their service on the Board has added appreciably to the work which the Government has a right to expect from them.
I consider it of importance that the Ordinance should define the status of employees of the Board and should make it clear from the outset that they are not pensionable officers of the Crown. Provision is made for these points in Sections 15 and 16.
Section 17 deals with the allocation of the net revenues of the Board. It is, of course, necessary that these revenues should provide interest and sinking fund on the loan raised to buy out the Company and to improve the docks, as well as for any sums that the Colony may provide for the same purpose from revenue. But it is impossible to say what these amounts will be or what amount of stock they will represent. It therefore seemed simpler to provide for the payment of 5 per cent. per annum on the total amount advanced by the Colonial Government. In all prob- ability this rate will slightly exceed that of the interest and sinking fund on the Colonial loan, and to this extent the Co will benefit; but the point is not of great importance as the docks will be the property of the Government and the revenues of the Board will easily bear the charge if the undertaking is managed with any measure of success.
It seems essential to the proper administration of the Board's business as a com- mercial undertaking that its surplus revenues should not be merged in the general revenue of the Colony. Questions of maintenance, depreciation, and improvement will come up from time to time, and it would inevitably lead to delay and friction if the amounts required had to be settled by correspondence between the Board and the Colonial Treasury, and if provision had to be made for them in the Annual Estimates. I have, therefore, proposed to earmark these revenues by placing them to the credit of a Reserve Fund, from which such sums can be drawn, with the Governor's sanction, from time to time as may be required for these and other similar purposes. It is reasonable to expect that the fund will in time accumulate to an extent greater than what experience may show to be a proper provision for these objects, and in that case it will be possible hereafter to devote a portion of the fund to some project of general utility. But, of course, great caution will be necessary in so dealing with the fund, and from this point of view it will be of advantage that such action can, as the draft Ordinance now stands, only be taken after an Amending Ordinance has received the assent of His Majesty.
You
I shall be glad to receive your observations on the draft Ordinance. The provi- sions in Sections 1 to 11 have been carefully considered by me, and I should require strong arguments to induce me to modify the principles embodied in them. will, of course, consult your Attorney-General on the Ordinance generally, and you should specially call his attention to the possibility (1) that certain further sections, consequential on the present sections, may be needed, and (2) that other persons or companies may be affected by the Ordinance for whom provision should be made.
It is obviously desirable that the measure should become law as soon as practic- able. In my letter to the London Committee I have expressed the confident anticipa tion that the present Board will readily respond to any request that you may make for their co-operation in the future, and I have no doubt that in your arrangements for the transfer of their undertaking you will show every consideration for their wishes compatible with the interests of the Colony. It would give me much satis- faction to learn that you and the Directors had been able by friendly negotiation to come to an agreement as to the purchase price without finding it necessary to have recourse to arbitration.
It is worth observing that reasonable liberality towards dispossessed officials and directors, or arrangements for their continued employment without loss, often secures speed and smoothness in the conduct of negotiations and the saving of heavy law
costs.
20505
I have, &c.,
ALFRED LYTTELTON.
L2
8
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO