CO882-(6-8) — Page 288

PUBLIC RECORD OFFICE

Reference :-

11C.O. 882

8

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

188

the Executive Council on the 12th February that I had any reason to believe that the majority of the planters would not be able to meet their liabilities to the Government.

6. I may say that even now I have no means of ascertaining the precise position of the sugar planters. This could only be determined if the planters were to permit an inspection of their books, and I have no expectation that they will do this.

7. But I think the information which I now forward shows that in the opinion of gentlemen who have the best opportunities of ascertaining the facts, the position of the industry is critical.

8. Messrs. Leclézio, Edwards, Dickson and Hutiau all concur in stating that the remedy would be to postpone the payment of the instalment of the advances in aid loan which falls due on the 30th June. It is unnecessary to say that such a measure would require legislation, and a careful consideration of the financial con- ditions to be included in that legislation. Moreover, it would be necessary to consider how the Colony could meet the payments which the Crown Agents would have to make on behalf of the Colony, amounting to £101,200.

9. It has been assumed that these payments would be met by the instalments to be paid by the planters, and if these instalments are not paid, I do not at present see how the Government is to meet its liabilities.

10. But it seemed to me when the matter was mentioned in Executive Council that the first question to answer is whether if the payment of this year's instalment be postponed as proposed, it is possible to guarantee the payment of the instalment falling due next year

11. I put the question directly to Mr. Leclézio in Executive Council, and he replied that he could not give such a guarantee the answer depended on the price of

sugar.

12. The bank managers to whom I put the same question replied that they considered that the present depression must pass, and that in their opinion the Govern- ment would be safe.

13. You will not expect me to make any statements as to the future prospects of the sugar market. So far as my information goes the present depression is due to over production, and the production of Java and Cuba seems to be on the increase.

14. On the other hand the trade circulars are generally hopeful.

15. I am not sufficiently informed as to the facts to express an opinion on the hopes of the sugar merchants or the questions of the probable balance of production and consumption.

16. These are matters on which it is easier to obtain information at a large commercial centre than it is in Mauritius.

17. The point to which I desire to invite your attention is limited to the course the Mauritius Government is to pursue if we should receive a notification in the month of April that a large section of the sugar planters will not be able to meet their liabilities falling due on the 30th June next.

18. It will then be necessary to decide whether the Government will insist on its claims at all risks, or whether it will allow a postponement with no certainty that matters will be better next year than they are to-day.

19. The Government will, in fact, be confronted with a choice of evils, and for reasons which I propose to state in a separate despatch* I consider that postpone- ment will be the lesser of the two evils, but that it should only be granted under special conditions, and to such estates as may satisfy a special financial committee on the following points:-

1. That they are unable to pay this

year.

2. That there is reasonable prospect that they will be able to meet the pay- ments falling due next year. It will be a matter for consideration whether the committee should not have power to impound any pay- ments to planters that may be made under the re-afforestation loan. Such a measure would be fiercely opposed by the Creole community generally, but I see nothing inequitable in it.

20. The Government of Mauritius has for the time being undertaken the duties of an Agricultural Bank, and I see no reason why they should not be guided by

No. 141.

189

the ordinary commercial considerations which inspire the management of a com- mercial bank.

I have, &c.,

GRAHAM BOWER, Offiger Administering the Government,

P.S. Since writing the foregoing I have received from the Syndic of the Chamber of Brokers the enclosed statement of the average price of sugar for the last eight years.

This statement illustrates the fundamental cause of the threatened crisis.

(Mauritius. Confidential.)

Enclosure 1 in No. 143.

EXTRACT from the Minutes of the Proceedings of the Executive Council. Meeting held on the 12th February 1904.

The Honourable H. Leclézo, C.M.G., called attention to the probable inability of the planters and "bailleurs de fonds" to pay the instalment due on the 30th June next on the advances in aid made by the Government under Ordinance No. 43 of 1902,

He stated that on the 1st April next the Mauritius Commercial Bank would not renew its credit to the planters and "bailleurs de fonds," who had borrowed money and who are in the habit of borrowing money from the bank for the "entre coupe," unless they were sure that on the 30th June the Government was ready to postpone the instalment which falls due on that date. He thought that the first instalment should only be made payable in June, 1906.

The Honourable Dr, Edwards concurred with the views expressed by the Honour- able H. Leclézio.

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The Officer Administering the Government suggested that the two unofficial members should write a letter to him embodying the opinion expressed by them, and he would at once communicate with the Secretary of State, and transmit their advice in the matter,

(Confidential.)

Enclosure 2 in No. 143.

CONFIDENTIAL LETTER received from the Manager of the Bank of Mauritius, DEAR SIR GRAHAM,

I SEND you the return asked for, and have added a few notes which may be useful to you. You will readily understand that the Commercial Bank being the bank of the planters a great deal depends on the future action of the directors of that institution. They may restrict advances to those who pay off their instalment to Government, and I fancy few, if any, planters will be able to reach next crop without borrowing.

Great disappointment has been felt, not only here, but in England that the price of sugar has not increased since the abolition of the bounties; this is, no doubt, due to large surplus stocks, and the failure of the fruit crop last summer, but with Continental consumption increasing, I fancy an improvement in prices must come sooner or later. It would, therefore, be a pity if the Mauritius planters were forced under before then. If payment of the first instalment of the advances in aid loan could be postponed I think it would be a great advantage to the planters, and I don't think Government would lose anything by doing so.

Yours, &c.,

Mauritius,

February 17, 1904.

PLANTERS' ADVANCES IN AID LOAN.

GEO. DICKSON.

No..

Those who can pay.

No.

Those who will pay if pressure is used.

Thore who are

No.

unable to pay.

8

RA. 309,000

Rs.

Rs.

796,000

6

496,000

6

Total Rs. 1,601,000 or 50% of amount due.