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PUBLIC RECORD OFFICE
Reference :-
C.O. 882
PUBLIC RECORD OFFICE, LONDON
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23159.
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No. 4.
MR. CHAMBERLAIN to GOVERNOR SIR C. B. H. MITCHELL.
[Answered by No. 5.]
(Straits Settlements. No. 471.)
Downing Street, November 21, 1896.
I HAVE the honour to acknowledge the receipt of Mr. J. A. Swettenham's despatch. No. 483, of the 19th October, forwarding a proposal from the Resident-General that a sum of £500,000 should be borrowed by the Native States for the purpose of railway extension.
I had already given very careful consideration to the observations on this subject contained in your despatch, No. 288, of the 24th June,† and, while I still adhere to the views which I have expressed as to the importance of railway enterprise in the Malay Peninsula, and still look to its being vigorously prosecuted when circumstances permit. I have reluctantly come to the conclusion that the time has not arrived for the extensive scheme proposed by Mr. F. Swettenham. Until more is known of the prospects of the tin mining industry, and until further experience has been gained as to the probabilities of agricultural development, I am of opinion that it will be safer to adhere to the more cautious policy recommended by you of extending the railway system to such an extent only as may be possible by the appropriation of available surplus balances to that
I have, &c.,
purpose.
3335.
SCH,
No. 5.
J. CHAMBERLAIN.
GOVERNOR SI C. B. H. MITCHELL to MR. CHAMBERLAIN.
(Received February 15, 1897.)
[Answered by No. 6.]
(Federated Malay States. No. 15.)
Government House, Penang,
January 18, 1897.
REFERRING to your despatch No. 471 of the 21st November, 1896,† I have the honour to enclose, for your information, copy of a letter from the Resident-General making certain further representations on the subject of the proposed loan for Railway Construction in the Malay States.
2. Forcible as are the arguments put forward by Mr. Swettenham they do not afford me ground for departing from the conclusions detailed in my despatch No. 288 of the 24th June last.t
3. With reference to the last paragraph of this letter I would remark that the despatch No. 288 of the 24th Junef was read by the Resident-General before it was sent to you. He was therefore aware of the opinion I had formed and the arguments I had
used.
I have, &c..
(No. 1964/96.)
C. B. H. MITCHELL.
Enclosure in No. 5.
Resident-General to Sir C. B. H. MITCHELL,
Resident-General's Office, Perak.
January 7, 1897.
SIR,
I HAVE the honour to acknowledge the letter No. 75, of the 26th ultimo. enclosing copy of a letter from the Secretary of State, in Which Mr. Chamberlain May that. while adhering to the views he has already expressed as to the importance of railway
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↑ No. 3.
‡ No. 4.
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enterprise in the Malay Peninsula, and while he still looks to its being vigorously prosecuted when circumstances permit, he has reluctantly come to the conclusion that the time has not arrived for the extensive scheme proposed by me. The Secretary of State adds that until more is known of the prospects of tin mining, and until further experience has been gained as to the probabilities of agricultural development, it will be safer to adhere to the more cautious policy recommended by your Excellency, i.e., to only extend the railway system when there are surplus balances out of current revenue available for that purpose.
2. This is a decision which I deeply regret, and, before a question of such immense importance to the Malay States is finally set aside, it is my duty to point out, however briefly, some facts which may have been overlooked and some considerations which are new and result from the Federation of the Protected States.
3. Railway construction in Malaya was begun in 1882, when the Perak Government, opening a new port in Larut, was practically forced into the construction of eight miles of Railway to connect that port with the capital. The port, though the best available in the neighbourhood, was not a good one; it is difficult of approach; the line was a very expensive one to make and to upkeep, and yet it has paid a fair interest on the cost.
4. When I went to Selangor in 1882 the first thing I did was to obtain the consent of the then Governor to attempt the construction of a railway that has since proved one of the best paying lines in the world, if not the best.
5. By slow degrees extensions have been made in Perak and Selangor, and a private Company has constructed a line in Sungei Ujong that promises shortly to pay the guaranteed interest. In all there are now in the States of Perak, Selangor and Sungei Ujong about 175 miles of railway, in four different sections. It has taken 15 years to do. this, and the entire cost has been defrayed out of current revenue. I question whether a similar instance can be found of railways constructed without any loan whatever, and certainly there is none where money spent on this account has so benefited the country and given so large a return. The receipts of the Perak and Selangor Railways in 1897 are estimated to reach $1,327,000, a suin which will yield about 8 per cent. on the capital invested.
6. Hitherto the rate of construction has been extraordinarily slow; leaving out the private Company's line it has amounted to about 10 miles per annum for 15 years. Seeing the value of railways as an investment in this country, and recognising the enorious indirect benefits to be gained from them, I propose to join up the four isolated sections by the construction of about 200 miles of line, that would probably at first reduce the percentage of earnings, but would wake the business of management casier and cheaper, would open up valuable mining and agricultural lands, would substitute rapid and cheap means of intercommunication for the existing defective arrangements, and would put all the three Western States in direct Railway communication with Penang and ocean-going steamers. The value of the scheme has never been questioned,
7. In order to do this a sum of one million sterling would be necessary, an 1, as the work would probably take five years to complete, I suggested that we should raise a loan of £500,000 and find an equal sum out of current revenues-I do not think that was a very extravagant proposal and I was encouraged to make it by what I heard in England of the favourable rate at which we might reasonably expect to be able to raise the money. 8. By carrying out this scheme the Malay States would benefit, but the Colony, and specially Penang, would also be a large gainer without either risk or expenditure. 1 recently interviewed some of the large land owners in Province Wellesley, and, as I have already reported, I found them all ready to give their land, and deeply impressed with the public value of the proposal.
9. Now if we are to be confined for the future to the construction of railways out of urrent revenue only, I desire to point out that the simple joining of our isolated sections with the construction of the extension to Province Wellesley will probably take another twenty years, or longer.
10. The federation scheme, like everything designed to obtain a higher order of excellence, is in itself expensive, and will throw additional burdens on the exchequers of the Malay States. We are providing for a costly Regiment of Soldiers as a contribution to the defence of the neighbouring Colony; we have appointed a Judge and a Legal Adviser, and no doubt, as time goes on, the Bench will require turther strengthening. We have as yet done little for education, and in every direction there is room for improve iment, at, of course, an increased cost. But beyond all this the Colony, which had hitherto financed Pahang and the Negri Sembilan, and found the funds to meet their deficiencies,
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