6699/S
PUBLIC RECORD OFFICE
Reference -
C.O.885
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
16 PUBLIC RECORD OFFICE, LONDON
MY LORD,
No. 110.
(SOUTH AFRICA.)
LAW OFFICERS to COLONIAL OFFICE.
[Rhodesia Railways; draft Order in Council.]
Royal Courts of Justice,
19th February, 1909. We were honoured with your Lordship's commands signified to us in Sir Francis Hopwood's letter of the 7th January last, stating that he was directed by your Lordship to inform us that the draft Rhodesia Railways Order in Council approved in our report of the 11th November* had been transmitted to Mr. B. F. Hawksley, the Solicitor to the British South Africa Company, for his observations. That his letter in reply, and the Memorandum which accompanied it, together with a copy of the British South Africa Company's Charter were enclosed for our informa- tion with copies of our reports for facility of reference.
That Sir Francis Hopwood was to observe that the most important points appeared to be those raised in paragraphs 3 and 14 of the Memorandum.
That as to the first point, it would seem that Mr. Hawksley was right in assert- ing that nothing in the proposed Order in Council as drafted would prevent a good title, in the event of liquidation, being given to a foreign purchaser. That the possibility of foreign control which was frequently exercised in different parts of the world by subsidiary companies which held the majority of the shares and controlled the Board, could not perhaps be avoided in any case except by actual expropriation, but that it might be observed that Mr. Hawksley's alternative draft was itself open to the same objection. That the second point related to the vested rights of existing debenture holders, and that Mr. Hawksley suggested that it would be necessary to obtain their concurrence if the Order was to be retrospective. That Sir Francis Hopwood was to observe in that connection that His Majesty's Government, when dealing with the Netherlands and other railway companies after the South African War, were careful to respect the rights and position of the deben- ture holders as being third parties not involved in the proceedings of the company. That the proposed Order might be represented as appreciably affecting the value of the debenture holders' security if it in any way interfered with freedom the debenture holders in that of alienation, but some curtailment of the rights case may be inevitable, if the objects for which the proposed Order in Council was designed were to be attained.
That Sir Francis Hopwood was to add that it was clear from our report of the 28th Julyt that either before or after the establishment of a foreign control His Majesty's Government would have full power of obtaining control of the railways by expropriation, and that it was a question whether the extra cost which would undoubtedly be incurred by expropriation after the establishment of a foreign control might not be more than counterbalanced by reductions in other directions.
That Sir Francis Hopwood was to request that we would favour your Lordship with our opinion upon the validity of the considerations contained in his letter and its enclosures.
We have taken the matter into our consideration, and, in obedience to your Lordship's commands, have the honour to
Report-
That we do not agree with the suggestion that the Order, as drafted, would not prevent a good title being given by one of the existing railway companies to a foreign purchaser. The draft provides that the conditions set forth in Article 6 of the Letters Patent shall be applied to the railway companies, and they could not on insolvency or liquidation give a title to any purchaser relieved of those conditions.
However, instead of incorporating Article 6 merely by reference, we have How recited it in the Order, and have drafted the operative words of the Order so as to follow the Article closely, and thereby leave no room for the doubt expressed
• No. 107.
(12566-2.) Wt 96-332, 25, 409. D x 8.
↑ No. 99.