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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

8

PUBLIC RECORD OFFICE, LONDON ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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carried forward to the following year. The advances made by the "bailleurs de fonds are secured by a privilege on the crop. The faisance valoir"

appears to constitute an average amount of about Rs. 20,000,000, as shown in Statement 2 of Sir Graham Bower's Minute. In addition to the "faisance valoir," the estates have, of course, to meet various expenses, partly depending on the personal expendi- ture of the owner, and unsatisfied claims on account of these expenses rank as unsecured liabilities.

7. The proceeds of the crop have, therefore, to theet the mortgage claims, privileged claims and unsecured liabilities. Statement 2 of Sir Graham Bower's Minute shows that in very prosperous years the profits of the crop leave a sufficient margin over the mortgage and privilege claims to cover unsecured liabilities; while in other years the profits are inadequate to meet even the mortgage and privilege claims, leaving nothing to pay off unsecured liabilities.

8. To illustrate the present position of the estates collectively, so far as I am able to establish it. I estimate that their gross revenue for the current year will amount to Rs. 21,000,000, being the value of an estimated crop of 300,000,000 lbs. at an average price of Rs. 7 per 100 lbs. If the cost of production, averaging generally Rs. 20,000,000, is increased to Rs. 21,000,000, it is evident that there will be nothing left to meet mortgage claims which amount, as I have shown, to about Rs. 1,467,000, and the debit balance resulting from the loss on the last crop alone, which is estimated at Rs. 3,111,000. It is to be feared that the present liabilities of many estates are far in excess of the debit balance of a single year's transactions.

PLANTERS' CANES.

9. I now pass on to deal with the small proprietors, and for my present pur- I will confine myself to the population of Indian origin. The operations of pose the other small growers I have referred to have no appreciable effect on the general sugar industry of the Colony.

10. The Indian planters may be divided into two classes:

1. Those who combine the occupation of carriers with that of planters;

2. Those who live by planting or who supplement their planting by occupa-

tions not requiring the possession of horses, mules or cattle.

The general position of this part of the Indian community is shown in State- ment 3 attached to Sir Graham Bower's Minute. In ordinary years about one-third

of the total sugar crop is the produce of planters' canes.

11. These classes have been affected by Surra in two ways. The first has suffered direct loss from the mortality among their animals. Both have suffered by reason of the increased cost of carrying their canes to mill. It is now probable that much of the planters' cane crop will not be realised during the present season, from the difficulty and cost of carrying it to the mills.

12. I give, under all reserve, an estimate which has been made of the losses by Surra among the different classes of the population :-

Estates

Planters

General population

Rs. 2,000,000

Rs. 600,000

Rs. 600,000

Rs. 3,200,000

The price paid for planters' canes by estate owners seems to have been Rs. 4 to Rs. 4.50 per 1,000 lbs., and has generally been paid in cash. I am informed, how- ever, that the price is now falling, and that they are sometimes now paid by some form of LOU. payable when the sugar is marketed.

13. I am informed that the property of the planters, when fully paid for, is seldom mortgaged, and that there are practically no mortgage claims on it. The cost of the legal formalitics in connection with mortgages is out of all proportion to the value of small holdings.

14. I must point out that the fortunes of the planters are very largely dependent on the fortunes of the large estates provided with mills. The estates mills are the only market available for the planter; and it seems to be the custom for the owners of mills to make small advances to planters for the "faisance valoir,” including the purchase of animals, on the undertaking that the canes will be taken to the mill of the owner who makes the advance. These debts and obligations are

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always honourably discharged by the Indian community. It will easily be under- stood that in the present crisis the fortunes of the planter are seriously imperilled.

15. I do not know that pages of writing would enable me to place before you more clearly the position of the sugar industry in this Colony. From what I have said you will, I think, clearly understand that the present financial crisis is brought on directly as a consequence of the losses inflicted by the mortality among animals following the epidemic of surra. Indirectly, it is to be attributed to the system of working large estates entirely by the aid of borrowed money resulting, as I have described, in the accumulation of enormous unsecured liabilities. These unsecured liabilities, which the estates owners are absolutely unable to meet, have practically paralysed every trade in the Colony, including grain and provision merchants, machinists and hardware dealers, the manure companies and chemists.

16. After the most anxious consideration therefore, I decided to advocate a loan to enable advances to be made on what I consider to be absolutely safe security. It is to be feared that some of the large estates, now in difficulties, may be unable to find such security as I ask, either directly or through "bailleurs de fonds." I do not think it possible for Government to assist them. They are the victims of a system which worked successfully when the profits of sugar growing gave an ample and constant margin, but which can no longer be continued without risk, not only to individuals but to the general fortunes of the Colony, I mean the system of carry- ing on estates practically without working capital by the aid of money borrowed at high rates of interest.

17. The assistance I propose may be summed up very briefly :

1st. Assistance to owners of estates directly in accordance with the principles

of Ordinance 2 of 1898 slightly modified in its terms; 2nd. Assistance through the agency of "bailleurs de fonds to whom loans may be made on the perfectly safe security of a first mortgage, to enable them in turn to make advances, either to large estates or to planters (in the sense defined in this despatch); the purposes for which the loan is asked from Government to be approved by the Governor on the recommendation of the Loan Board, but the "bailleur de fonds" to be left free to make his own arrangements with his clients.

I have, &c.,

CHAS. BRUCE,

(Confidential.)

Enclosure in No. 33,

THE COLONIAL SECRETARY to THE GOVERNOR.

Governor.

In view of various reports which have reached me as to the financial position in Mauritius, I have deemed it my duty to make an enquiry into the financial posi tion of the sugar industry, and I now present to Your Excellency the results of that enquiry. The figures given are as accurate as circumstances permit me to obtain, but I cannot guarantee absolute accuracy. The percentage of possible error is, however, small, and for all practical purposes I think the statement may be taken as substantially accurate.

The first statement that I present to Your Excellency is a statement of the mortgage debt on the sugar estates of the Colony.

Total Estimated Value of Land and Buildings (Sugar Estates),

Rs. 54,270,927

STATEMENT No. 1.

General Mortgage Debt (as per Mortgage Office) as shown by inscriptions taken within last ten years.

RA. *21,584,558

Amount of Amortization received for last ten years.

Amount of

Actual Mortgage Debt.

Rs. †3,239,808

Rs. 18,344,750

* This is the figure as shown by Inscriptions of Mortgages in the books of the Mortgage Óflos; they give the origina! amount of loans. The reduction by means of payment of amortization is not shown in these books, hence the necessity of figures in column III,, which must be deducted from those in column II. in order to have, as socurately as possible, the actual mortgage debt.

† Out of which Rs 1,932,516, approximately, are taken as received by the Credit Foncier, and Rs. 1,807,292, exactly sa received by the Loan Office.

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