21272.
No. 40.
(BRITISH GUIANA.)
PUBLIC RECORD OFFICE
ول
།། །། །། །
Reference :-
mwimmimC.O. 885
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
1
SIR,
LAW OFFICERS to COLONIAL OFFICE.
Royal Courts of Justice, July 4, 1900. WE were honoured with your commands signified in Mr. Lucas's letter of the 18th ultimo, stating that he was directed to transmit to us copies of (1) a Contract entered into on the 31st January, 1896, between the "Crown Agents for the Colonies on behalf of the Government of British Guiana and the Demerara Railway Company; (2) Ordinance 8 of 1896, passed by the Legislature of British Guiana on the 22nd July, 1896, to confirm the before-mentioned Contract; and (3) a letter dated the 8th June last from the Secretary of the Company to the Under Secretary of State for the Colonies.
That in the Contract the Company bound themselves to make two extensions of their existing line, respectively on the East Coast and on the West Coast of the Demerara River, and the Government of British Guiana was bound on each of these extensions, as soon as it should be formally declared open for traffic, to pay to the Company half-yearly for fifty years certain sums which were described as subsidies in both Contract and Ordinance. That this Contract was confirmed by the above-mentioned Ordinance.
That incidentally it might be mentioned that there had been considerable delay in the completion of the extensions, and that the time allowed to the Company for com- pletion had been more than once extended by Ordinances which did not, however, affect the question which Mr. Lucas was directed to put to us. That it was now hoped that the extensions would be almost immediately completed, provided that certain controversies which had arisen between the Company and the Government could be amicably settled and that in that case the pecuniary contribution of the Government to the Company would become at once effective.
That at this stage the Board of Directors had been suddenly completely changed; and the new members had raised a question as to the interpretation of the Clauses in the Contract, and in the confirming Ordinance which defined the pecuniary liability of the Government.
That the pertinent Clauses in the Contract were numbered 28 and 29, the former of which enjoined that the Government should pay "a subsidy for each half year of such a sum as with the net revenue (if any) of the Berbice Railway in respect of such half year shall make up a sum equal to interest at the rate of 4 per cent. per annum on the sum of $1,250,000 for such half year."
That the Berbice Railway was the East Coast extension. That Clause 29 imposed a similar liability on the Government in respect of the West Coast extension, the capital expenditure on which interest was to be made up being in that case, however, only $250,000. That the meaning to be attached to the term "net revenue" in connection with the Colonial Government's liability for subsidy was defined in Clause 34 of the Contract.
per
That in the Ordinance the Clause on which the Directors relied was 3 (a) and (6), which enacted that the requisite capital might be raised either in Preference, in Ordinary, or in Deferred Shares, and that "the holders of such Preference Shares shall be respectively entitled to a cumulative preferential dividend at the rate of 4 per cent. annum on the amount for the time being paid up on the said Preference Shares; that the said preferential dividend shall be and the same is hereby charged by way of first charge upon and made payable out of (1) the net revenue of the Company arising from the new railways, and (2) each of the subsidies for the time being payable by the Government under the said Contract, und accordingly the said preferential dividend shall in respect of the said revenue and subsidies have priority over the dividends for the time being payable on the existing Preference Stock, and over all other payments whatsoever, but the dividends on the existing Preference Stock shall as regards such revenue as aforesaid have priority over the dividends on the said Ordinary Stock."
That at a personal interview at the Colonial Office on the 8th June last, and subsequently in a letter of the same date (a copy of which was enclosed by Mr. Lucas), the new Directors expressed an opinion that under those Clauses of the Contract and Ordinance taken together the holders of the Cumulative Preference Shares were entitled to receive their 4 per cent. dividend even though the working accounts of the year might
6318-25-7/1900 Wt 324 D & B—5
;
2