PUBLIC RECORD OFFICE
سلسل
19
Reference :-
C.O. 882
22
Another very important question is that of Cost of and Loss on Re-investment. Re-invest- It is somewhat curious that throughout the debate only the first part of this subject ment. appears to have been referred to. Section 14 of the Ordinance, however, makes it quite clear that both have to be provided for, and the writers have been much exer- cised as to the magnitude of the claims which may possibly be put forward under the latter part. Counsel has already been consulted upon the point as to whether something could not now be done to minimise these as much as possible, but has deemed it advisable not to take any action. The subject, however, remains for con- sideration as to what evidence should be forthcoming to meet any such representa- tions. It will necessarily be a considerable time before the arrangements are com- pleted for the issue of the Government Inscribed Stock, and until the date for which that is announced, each shareholder in the Company will (by Section 22) become entitled to interest at the rate of 12 per cent. per annum on the amount of his shares in the issued ordinary share capital. Now, supposing the shareholders un- animously elect not to take Inscribed Stock at its low (though certain) rate of interest, will they not be entitled to say, that the payment of the 12 per cent. must be continued for some considerable further period, and if so, is it to be so continued to all alike, or is there distinction to be made, and what is that period to be? It is quite clear that it would be impossible to find immediate good investments in the Colony for such a large amount at the same time. Say, that $10,000,000 were thus suddenly thrown on the money market. The Banks for three months' deposit pay Oppor- from 24 per cent. to 3 per cent., and for 12 months not more than 4 per cent. a general rule, if these deposits are withdrawn before due date, the interest is for- local in- feited. The general form of local investment is that of mortgages or liens. In vestment. 1903 the mortgages registered in Singapore amounted to $11,838,000, and liens to $2,022,000, or $13,880,000 in all. Further figures will be forthcoming both from Singapore and from Penang but it is believed that this is about an average for Singapore. Penang would not be as much, and when it is remembered that these figures include the smallest mortgage loans, it is obvious that but a small proportion of this $10,000,000 would find a ready outlet in this fashion.
As
A large proportion of the Company's shares too is trust money although the shares are not trustees' securities, and the trustees might claim that the money could only be re-invested upon the authorised securities, the present form of investment notwithstanding.
Neither is it anticipated that as to those shares not held in trust it would be easy to find a safe and speedy re-investment for any considerable proportion. The local investment market is so different from a place like London where the choice of abso- lutely safe investments is so large and varied. The issue of two municipal loans in respect of an extended water supply is being arranged, and these will call, as to one, for a subscription of $1,000,000 and the other a sterling one of £900,000, but the investments will not be available much, if anything, before the end of the year.
Counsel is, therefore, particularly requested to advise as to what, if any, steps should be taken to minimise the importance of claims under this head.
tunities for
With reference to the suggestion, which has already been disapproved of, that suggested the Government should notify on the day of taking over the undertaking that it was preau- then and thereafter ready to advance cash $240 on each share deposited as security, tionary the idea was to use that offer as evidence before the Court that as to any amount measures. which could thus have been obtained and placed out in the interval nothing should be allowed for loss on re-investment. The suggestion was not made, as may possibly have been thought, with any idea of offering the inscribed stock in manner not pro- vided for by Section 22; nor with the intention of using it as evidence as to offer of value for the shares which might have prejudiced the question in arbitration. As to the latter, Counsel will have seen that that has already been done in the correspond ence between the Government and the Company early in the year (Appendix H.)
8
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
The position of the debenture holders is one which may require some consideration. Debenture
holders.
22693-
F1