CO882-(6-8) — Page 216

PUBLIC RECORD OFFICE

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T།། 「 | cO. 882

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PUBLIC RECORD OFFICE, LONDON

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At first sight this statement seems satisfactory, for the mortgage debt is shown as about one-third of the total estimated value of the property.

But this proportion is not quite so satisfactory as it appears. It must be under- stood that it is a rule with all mortgage creditors not to lend in a greater proportion than half the estimated value of the land.

In Mauritius. this rule is of even stronger application than elsewhere. For the value of land in Mauritius is dependent on its power of growing sugar profitably. If sugar is high in price the land necessary to its production will also be high in price. If, on the other hand, sugar should be low in price, the land will

fall in value.

Nor is this all-land to be of value requires careful nursing. If, for instance, an estate has been neglected. If the soil has not been fed with proper manures and is worked out, then the land falls in value enormously, for it will require time, labour and money to place the land in its former fertile condition.

Again, the value of an estate often depends on its sugar mill and machinery which, if not renewed, or if it does not keep pace with modern inventions or im- provements, becomes out of date, causing a depreciation of value on the estate.

It follows, therefore, that the margin of safety for the mortgage creditor ought to be at least half the estimated value of the estate, and might with advantage be

more.

I think, therefore, it is safe to say that whilst some properties in Mauritius are not mortgaged up to their full mortgage value, the bulk of the estates would find it impossible to raise more funds on second or third mortgages.

But the mortgage creditor is not the only person with charges on an estate. The crop

is, in fact, produced by borrowed money-borrowed from the bailleur de fonds on what is known as the faisance valoir, that is, by means of loans on the crop.

The result of sugar growing in Mauritius for the last five years is shown in the following statement:—

In this statement the profit and loss to the sugar planter after paying his mortgage debt and his bailleur de fonds is shown. The statement is for the industry as a whole, and I must explain that for last year, whilst the whole industry shows a loss, it is estimated that about 75 per cent. of the estates showed a loss, and about 25 per cent. a profit.

So far as the loss is concerned that has, in most cases, been adjusted by amicable arrangements with the bailleur de fonds, and remains a debt on the estate.

I now come to the question of the crop for the current year.

The first and most prominent fact is that whilst the crop will be smaller it will cost more to produce, and the price is one rupee per hundred pounds less than it was last year. Moreover the price is falling.

The loss in draught animals through "Surra cannot be accurately given. I have endeavoured to obtain exact figures through the Medical Department and the Immigration Office, but have hithe. to been unsuccessful.

I am, therefore, dependent on estimates given me by a veterinary surgeon during the course of Dr. Edington's enquiry. That estimate is that 30 per cent. of the cattle have died, and 70 per cent. of the mules.

This means, approximately, a loss of three million rupees to the sugar planters. Nor is that all. In many cases human traction has had to be substituted for animal traction, and that costs about Rs. 1.50 per diem.

It is not possible to estimate with any accuracy the cost of the faisance valoir of the present crop, but a few facts are significant of the financial position.

It must be understood that the planters, besides the money borrowed from the bailleur de fonds, incur book debts with chemists, engineers, rice merchants, vacoa bag sellers, manure companies, &c.

I am informed by chemists and others who own these book debts that they cannot get paid. The accumulated amount of these debts is very large, being about half the faisance valoir. I learn, too, that the financial institutions of the Colony have practically exhausted their powers of lending. The Credit Foncier is expect- ing from India the equivalent of £15,000 borrowed there, or, say. Rs. 225,000. The arrival of this sum is looked forward to by expectant borrowers. But at present money is practically locked up. As a further illustration, I may say that I am informed on reliable authority that the Bank of Mauritius refused to advance Rs. 30,000 on sugar valued at Rs. 100,000. The transaction was a perfectly safe

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and proper transaction, besides being profitable. The security was more than three times the advance required, and the time was short. Nevertheless, owing to the general tightness of money, the bank refused the transaction.

Now it is difficult to see how it is possible for things to go on unless some altera- tion for the better takes place in the position of the sugar industry.

On this point there is the usual difference between optimists and pessimists— between bulls and bears. The optimists allege that a telegram has been received from Messrs. Ralli, of Bombay, urging the brokers to ship, and holding out hopes of an advance in price.

On the other hand, the pessimists point to the following facts:-

1st. That the price of sugar is a rupee lower than last year;

2nd. That the European market is already over stocked with a million and

three-quarter tons of sugar, which has to be absorbed;

3rd. That the Sugar Convention comes into force on the 1st September next, and that previous to that date every continental exporter will throw all his sugar on the market, so as to take all the advantage possible from the bounty system so long as it lasts.

I do not profess to adjudicate between the optimists and pessimists, the bulls and the bears. But there are certain facts which are already apparent.

1st. Owing to the dearth of draught animals the present crop will not be harvested before February next. This means that some of the repousses or ratoons of next year's crop will lose three months of their growth.

2nd. That owing to the late harvest there will be late realization and, conse- quently, late payment of the crop charges, which means increased charges for interest at 9 per cent. or more.

These considerations lead up to the following question., Assuming, a rash assumption, that a crisis does not arrive before next year, how are the funds for next year's crop to be provided by the bailleur de fonds?

It is admitted that the bailleur de fonds made a loss on last year's crop, which

he has been content to leave as a debt on the estate. It is almost certain that the loss this year will be much heavier than last year.

How, then, is he to provide for the faisance valoir, a practically constant quantity, on the security of a crop which will be short by between two and three months' growth, having already a lien on that crop for the balance overdue during the previous two years?

This is a question I am unable to answer, and so far as I can foresee, it is unanswerable.

But the estate owner is not the only sugar grower in Mauritius.

The following statement, which is marked Statement 3, shows the number and the extent of the small holdings in the possession of Indians, who may be described as peasant proprietors, and who sell the canes grown by them to the various sugar mills.

The most important part of the statement is contained in the last line and in the footnote. This footnote requires explanation. It is, and has been, the custom for some years past to parcel out estates amongst Indians on a five-year system. This system is described as morcellement, and it means that the interest and sinking fund of the purchase money is paid to the vendor in five annual instal- ments. Until the payment is complete the purchaser receives no title, and if he fails in any of his annual instalments, then the vendor has the right to resume possession of the land, and to sell it at the Bar of the Supreme Court for the balance of the amount remaining due.

It is to this position that I would particularly call attention. For it means life or death to many poor Indians.

The estimated cost of production of canes by small cultivators is between four and five rupees per thousand pounds of cane. The actual price now being paid by the mills is four rupees per thousand pounds, and at the present price of sugar they cannot afford to pay more.

That is to say, that the Indian's crop will barely pay the cost of production and nothing more. So far as the question concerns the Indians who are in full and unfettered possession of their lands I have no fear. The energy and self-reliance and industry of the people may be counted on to surmount any difficulties caused by low prices and unremunerative labour.

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