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No. 124.

MR. LYTTELTON to ACTING Governor SIR G. BOWER.

(Sent 6.10 p.m., February 4, 1904.)

TELEGRAM.

[Answered by Nos. 125.]

Your telegram of January 19.* I regret that I cannot sanction expenditure on further construction of railways without advice of consulting engineers. Refer to my predecessor's confidential despatch of July 6.†

You should send home plans, sections, specifications and estimates for each line, together with fullest possible reports showing anticipated traffic, gross earnings, working expenses and any other information respecting prospects of lines paying. Despatcht follows by mail.

Referring to your despatch, No. 494, § Crown Agents urgently require at least £25,000. Telegraph at once for how much they may draw upon Colony.

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No. 125.

ACTING-GOVERNOR SIR G. BOWER to MR. LYTTELTON.

(Received 4.17 p.m., February 6, 1904.)

TELEGRAM.

[Answered by No. 128.]

I communicated your telegram of 4th February || to the Executive Council, who resolved as follows:-

Begins: Executive Council are unanimously of opinion that unless the proposed branch railways are constructed before the next harvest consequences may be disastrous as surra has again broken out, and the prices realised for planters' canes scarcely pay cost of cutting and transporting by road. Executive Council advise that the work should be begun at once so as to be of service for next harvest. Ends.

In my despatch, No. 26, 23rd January, I sent you papers on the subject, but I may add that if I am to forward all the papers required by your confidential despatch of the 6th Julyt before any decision is reached, it will be impossible to complete the lines in time for this year's crop. I am fully sensible of the objections raised in the fourth paragraph of your confidential despatch of the 6th July, but whilst sharing your aversion to further borrowing, I cannot conceal my conviction that owing to the consideration stated by the Executive Council there is danger that the practical ruin of considerable areas, unless the lines are made in time. The present price is so low that it leaves but a small margin, and the growers cannot pay for manual traction of canes. The financial position causes me anxiety, and nothing but a belief that those anxieties will be increased by the absence of transport has induced me to recommend these branch railways. It is estimated that with the increased rates sanctioned by the Council of Government they will pay. I believe that Pitot and Coriolis are fully competent to construct them, as there are no engineering difficulties. May I suggest if you are unable to approve at once that I be authorised to pass the necessary Ordinance, and to reserve, it for assent.

• No. 121.

† No. 91.

‡ No. 126.

§ No. 123.

| No. 124.

↑ No. 129.

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No. 126.

MR. LYTTELTON to ACTING GOVERNOR SIR G. BOWER. (Confidential.)

SIR,

Downing Street, February 8, 1904. I HAVE given my careful consideration to the proposals contained in your telegram of the 19th ultimo,* for the expenditure of a further sum from loan of £113,000 for the construction of railways, and £17,000 for rolling stock.

2. As I have informed you in my telegram of the 4th instant,t I am unable to sanction expenditure on further construction of railways without the advice of the consulting engineers. The desirability of obtaining such advice was pointed out in my predecessor's confidential despatch of the 6th of July last, to which I have referred you in my telegram, and I have accordingly requested you to send home plans, sections and specifications for each line, with the fullest possible reports showing the anticipated traffic, estimated gross earnings, working expenses, and any other information respecting the prospects of the lines proving re- munerative.

3. My predecessor had considerable hesitation in sanctioning the lines pro- posed last year, without fuller information, especially as regarded the construction of the Black River Railway from loan funds, but in the crisis caused by the dearth of draught animals he accepted Sir C. Bruce's urgent recommendations for their construction. I do not, however, feel justified in sanctioning the borrowing of further large sums for railways without the fullest information, and the advice of the consulting engineers when such information is available. At present I have before me only the general report enclosed in Sir C. Bruce's Minute, No. 25 of 1903, which was forwarded to me without comment in Sir C. Bruce's despatch, No. 418, of the 30th of October, § and I do not appear to have received the special reports on each line referred to therein. Moreover, the lines recommended in your tele- gram differ materially from the proposals of Mr. de Coriolis.

4. I observe that Sir C. Bruce in his Minute, No. 25 of 1903, paragraph 4, points out the necessity of careful investigation as to whether the projected lines will be self-supporting. The need for care in this respect is emphasized by the unsatisfactory results in the case of some of the expenditure already undertaken. It appears from the newspapers published in the Colony that the tramway con- structed in Port Louis has been a partial failure, and Mr. Piggott in his report. enclosed in Sir C. Bruce's despatch, No. 425, of the 30th of October, mentions that a considerable number of horses and mules have been introduced into Mauritius, and that there is some doubt whether the tramway will be so profitable as was at first imagined. Again, on page 6 of the enclosure to Sir C. Bruce's Minute, No. 25 of 1903, Mr. de Coriolis mentions as a reason for the railway extensions the neces- sity of inducing planters to do away with their heavy traction engines and auto- mobiles, which have presumably been purchased out of the loans made to them by the Government from borrowed capital.

5. In addition to the above considerations the amount of the loans already raised or sanctioned is so large that the Government should not have recourse to further borrowing unless it is absolutely unavoidable especially in the very unfavourable state of the money market now prevailing. The financial position as described in your confidential despatch of the 23rd of December is not favour- able, and though your telegram states that the prospects have improved, further loan expenditure will not be justified without more definite assurances than can be afforded by the experience of less than a month.

6.

As regards the new rolling-stock required, I am of opinion that it should be met from revenue if possible. It appears to be only that required for the new lines already built, and I do not understand why provision for this was not included in the estimate of the capital cost of the lines. note that in the enclosure to your Minute, No. 34 of 1903, the General Manager states that the increase of traffic due to the new lines will not be very important in the first few years. This seems to show that there was not sufficient justification for building the lines. 7. A further consideration is the matter of the labour Mr. de Coriolis' remarks as to the scarcity of labour in the case of the Black River supply. Railway, page 3 of the enclosure in Minute 22 of 1903, indicates that his pledge (see page 6 of enclosure to Minute 25 of 1903) to open the projected new lines in

• No. 121. † No. 124. No. 91. § 43002: not printed. 43009: not printed.

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No. 122.

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time for the next crop is over sanguine. It is, moreover, questionable whether it is advisable to collect and employ all the labour necessary for pushing on these lines simultaneously, without the prospect of further employment on similar work subsequently.

7. I fully appreciate the necessity of doing all that is possible to assist the Indian planters, but I am unable, in view of the considerations above set forth, to sanction these proposals upon the information at present before me.

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No. 127.

I have, &c.,

ALFRED LYTTELTON.

ACTING-GOVERNOR SIR G. BOWER to MR. LYTTELTON.

(Confidential.)

SIR,

(Received February 13, 1904.)

[Answered by No. 128.]

Government House, Mauritius, January 12, 1904. IN my confidential despatch of the 23rd December,* I explained the reasons which led me to delay a decision in regard to the branch railways referred to in your despatch, No. 254, of the 3rd November last,t and I stated that I intended to postpone my report till the month of January, when I would be in a better position to form an opinion on the financial condition of the Island.

I pointed out that the sugar market had been steadily falling since the month of September, and that sales had actually been effected at a price which was not remunerative.

The all important question for the sugar industry was whether the fall in prices would continue, or whether a rise would take place after the new year.

I hoped that a rise would take place, but my hope was not based on sufficiently solid grounds to justify me in tendering definite advice on the subject, For, had the fall continued, the Government would have had to face a financial crisis amongst the sugar planters in the months of March and April of the current year. I am glad to be able to inform you that a slight rise has already taken place in the sugar market, and that the position and prospects of the sugar industry are now much brighter than they were last month.

It has become necessary for me, therefore, to fulfil the promise made by me to the Council of Government, and to come to a decision as to the advice which I am to tender to you, and to the Council of Government respecting the branch railways referred to.

After long and careful consideration I have decided to recommend to the Council of Government a modified scheme which will, I believe, meet the requirements of the industry, and will be at the same time within the limits of financial prudence.

I enclose a copy of a minute which I have addressed to the Council of Govern- ment on this subject, and I desire to explain briefly the reasons that have led me to tender the advice therein contained. The reasons are as follows:-

A large number of what are called planters' canes have remained uncut this year for lack of transport. If I were to refuse to sanction any railway extension, the cane fields owned by these small planters must go out of cultivation, and their owners would be ruined.

The direct financial loss to the revenue would be immediate, and there would probably be an indirect loss owing to increased claims for Poor Law Relief.

If the sugar industry of Mauritius is to compete in the markets of the world. the cost of production must be decreased, and the cost of transport is an important factor in the cost of production.

I believe that if the cost of production can be lowered the conditions of sugar growing in Mauritius are otherwise so favourable that the industry will be well able to hold its own against competition. The more favourable prospects of the market have given courage to the sugar planters, and I would not be justified in saying that these hopes are without foundation.

The risk caused by increasing the debt of the Colony is not so great as would be caused by a refusal to sanction these extensions.

• No. 122.

† No. 112.

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In the first case the risk is of a possible future general failure of the sugar estate owners, owing to a failure to meet their obligations. But even in such a case the Government would become the owners of many estates and sugar mills. They would be compelled if they became proprietors to parcel out the estates amongst the Indians, and it would be impossible to do this unless the means of transport were available.

It is evident, therefore, that taking the most gloomy view of a possible future failure the Government will be in a better position to face a crisis if the means of transport are available than if they are not available.

The extensions will, under the system of higher rates, which it is proposed to impose, pay the interest and sinking fund on the loan.

On the other hand a refusal to sanction any extension would have caused immedi- ate disaster to a section of the population, and would probably have embarrassed the finances of the Government to a greater extent than the decision to advocate the smaller loan now asked for. In this connection I may quote the following figures:—

Cost of original scheme Cost of present scheme

£217,000 128,000

I will telegraph the decision of the Council of Government so soon as it has been taken, and for the present content myself with saying that if anything is to be done that is to be of service to the planters in time for this year's harvest, which begins about the end of July, no time must be lost in commencing such work as you may approve.

(No. 49 of 1903-04.)

I have, &c.,

GRAHAM BOWER, Officer Administering the Government.

Enclosure in No. 127.

MINUTE BY THE ACTING-GOVERNOR.

Railway Extension Lines.

With reference to the various schemes for the construction of branch lines of railway now under consideration, the Officer Administering the Government has the honour to lay before the Council of Government a Memorandum drawn up by the Honourable the Surveyor-General and submitted to the Light Railway Board, in which he suggests that only those lines, or portions of lines, which can be completed in time for next crop, should be undertaken this year, together with the minutes of proceedings of the Meetings of the Light Railway Board at which the Surveyor- General's suggestions were considered.

The Surveyor-General recommends that the following branch lines be con- structed:-

On the North Line.

10. From Poudre d'Or to the Vale-about 10 miles...

20. From Mapou to Australia-about 7 miles

On the Midland Line.

30. From Mare d'Albert to Cent Gaulettes...

Total

Estimated Cost

£34,000 29,000

18,000

£81,000

The Mare d'Albert-Cent Gaulettes Extension has been recommended by the Light Railway Board, and their report was laid on the table of the Council on the 8th December last.

In addition to the cost of construction of these branch lines (Rs. 1,215,000) it is estimated that a sum of Rs. 444,000 will be required to meet the purchase price of the necessary rolling stock. An amended estimate by the Surveyor-General is annexed, which deals with this subject.

The Officer Administering the Government has given this matter his earnest attention, and after consulting the Executive Council he is prepared to ask the Secretary of State for the Colonies to sanction the raising of the necessary funds

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