made from
be carefully
the recipient.
The
for supplies in con
large proportion will be The difficulty will arise the forthcoming
must confess to a very inadequate knowledge of exchange,
whatever
comings
may
but
in these circumstances
in
a
period
of
it appears
crop and
the opera
to me that
of normal trade when in
is reason
to fear that the
a real shortage of funds
be the case and outgoings balance, there unrestricted sale of drafts by the Currency Commissioners under present conditions has served to bring about in circulation among the banks, which very seriously curtail facilities the Bank of Mauritius,
will
and
that
by
sale
if
it continues unchecked
for financing
at any
rate,
the coniing crop
is unable, owing
of sterling drafts.
to the
It is important
heavy adverse trade balance and consequent shortage of sterling to replenish its coffers therefore that the money released should not again become immobilized
by hurricane loan payments
12.
critical one.
the
139
It will be apparent from the foregoing that the additional funds provided from the Guaranteed loan will be far from sufficient to make up the deficit on the year's trading and the question of financing the 1932 crop in March and April is likely to be a The answer will I think depend on the outlook in sugar market at that time. If by reason of tariff arrangements or otherwise there is a prospect of an improvement in prices in the summer of 1932′ it will I hope be possible to finance the greater of estates, though, as pointed out in paragraph 6, there way then be a movement for the liquidation of prior liabilities which may result in a number of estates changing lands. If however there is no prospect of an improved market my impression is that the Colony will then have reached the end of its financial tether and that there may be a considerable reduction in cultivation with the consequences which this involves in an overcrowded and isolated
number
community.
C
in the circumstances
it
seems
to
me
in
the Treasury vaults and
that special measures of control
to
what
is essential for
are justified. Moreover the very heavy adverse balance of imports is in itself reason to restrict importations the economic life of the Colony. ing circumstances lies in
out
of
A further special reason in exist
No.
155
of the 16th [?10th]
the fear that without some measure of control funds paid out under the Hurricane Loan may find their way
the Colony. In your telegram December, the inquiry was made whether this danger could not be guarded against by regulations
estates.
I
very varied
as
to expenditure on cultivation of is practicable. Cultivation expenses are to cover remittances
be
held
do not think this
in their nature and must for essential supplies. Without detailed inspection the operations and books
be impossible
abroad
estates it
ternally
tion and
staff
easily regard
signs
would
even
I must
of
if practicable
say
frankly
of
an elaborate organization for
to establish effective control in- a highly expensivé organiza- not believe a reliable local
a great number of
it would
that
I do
at
be
the
point
of
as
in
that
exit
for this purpose could be obtained. Control
and adequately exercised
it as desirable on these grounds, as to the situation
there would
of
convinced
drawals.
Bank
ledge
as
panic
I
that
have
shown
there
drawals
at
in
might
the
little
doubt
be
10
of
grave
indeed
the
became
Bank
risk
that
paragraph be considerable k of
present
time.
a
if
can however be of funds and I
the event
of any
feel
of Mauritius I of considerable with-
the
matter
situation
of
of the
general know-
extensive attempted with-
* C 84581/31 [No. 85]: not printed.
down.
13. It is, of course, difficult at any time to speak with absolute Confidence on the financial position of private enterprise in Mauritius. Operations are kept secret and there is little confidence among independent observers as to the sincerity of many of the statements made by representative bodies. In fact this lack of trust and confidence is one of the marked features of business and official life here and in the case of some of the older officials has become something of an obsession, though I am not contending that there is not often considerable justification for it. At present, however, even those who were at first sceptical have changed their views, and I know of no one who does not now agree that the position is dangerously near a breakdown. The failure of one or two of the larger groups or firms would bring the whole structure At any rate it must be admitted that the statements furnished by the Chamber of Agriculture as to the probable extent of cyclone losses, which were at the time sceptically regarded by many as the usual cry of " wolf," have proved in fact to be not only moderate but distinctly conservative in character. Moreover the known facts as to the trade balance, the sharp decline in imports, and the confidential information which has been sub- mitted as to the Mauritius Bank render it, in my opinion, impossible to draw any other conclusion than that the position is really acute. The information supplied by the Bank would certainly not have been given except under the pressure of genuine anxiety. Too much stress must not be laid on the fact that there has as yet been no very marked outward change in the habits of of the well-to-do classes. There has been a gradual and increasing contraction of social activities which has continued now for several years and which has been sufficiently marked to attract notice during the period of my personal observation here. In any the large majority of Mauritians live in a much simpler standard than might be deduced by casual observers from outward
life
event
140