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| PUBLIC RECORD OFFICE

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1-19 C.O. 882

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PUBLIC RECORD OFFICE, LONDON

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

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probably fail to result in a complete and accurate disclosure of the real position of the sugar industry. The appointment of a Royal Commission, with power to overhaul the affairs of the estates, the "bailleurs de fouds" and the financial agencies of the Colony would no doubt lead to a reliable conclusion, but such an undertaking, disturb- ing, as it would, the business and credit of the Colony, is not to be lightly decided on. The moment is not, in my opinion, opportune for such a measure, though circum- stances may hereafter justify it.

8. My recommendation in favour of granting a postponement of the payment of the instalments due under the Ordinance is subject to two conditions, which I consider absolutely essential :-

(1) The Governor must have the same absolute power to refuse a postponement in any particular case that he had to refuse an original loan under the Sugar Estates (Advances in Aid) Ordinance and the Tramways Ordinance. It will probably be found convenient, indeed, to adopt in the case of applications for postponement the procedure adopted in the case of applications for advances.

(2) In the case of estates having forest lands offered for sale, or which may possibly be required for reafforestation, no postponement should be allowed unless the proprietor consents to make the repayment of the advance a first charge on the proceeds of all sales for reafforestation purposes. I have no copy of the Sugar Estates (Advances in Aid) Ordinance to consult, but presumably the forest lands are included in the security held by the Government on the corpus of the estates. Be this as it may, the precaution I advise is, in my opinion, essential, and its observance should be required by Ordinance. It is true that such a measure is, practically, what Sir Graham Bower refers to as "impound- ing any payments to planters that may be made under the reafforestation loan," and he declares that it would be fiercely opposed by the Creole community generally. I hope Sir Graham Bower is mistaken, but, in any case, I repeat that I consider it an absolutely essential precaution.

9. Subject to the conditions I have suggested, I advise the Secretary of State to agree to the planters' application to be allowed to postpone for one year payment of the instalments due under Ordinance No. 43 of 1902; so that the first instalment shall be made payable on 30th June, 1905, and the second on 30th June, 1906.

10. As regards the measures which may be necessary to meet the payments to be made to the Crown Agents on or before the 1st of August, you will no doubt refer to the Crown Agents.

11. I have read with much interest Mr. Piggott's proposal to combine a conver- sion of the Advance-in-Aid instalments with a loan for improvement of machinery. Even if it were approved by the Secretary of State it could not be carried out in time to meet the immediate emergency, and it would only apply to estates of which the owners are willing and able to find the necessary security. But before any proposal for a loan to introduce improved machinery is authorised, I strongly advise a careful study of the question of the establishment of central usines. The experi- ence of the last crop shows how urgent is the need of such a system in the interest of the small proprietors, upon whose activity the fortunes of the sugar industry in Mauritius largely and every year more largely depend.

The Directors of the Mauritius Bank have requested me to inform them, at the carliest opportunity, of the decision arrived at by the Secretary of State on the subject on which I consulted them. I shall be much obliged if you will be good enough to enable me to meet their wishes, the matter being one in which they are deeply interested.

I am, &c.,

SIR,

Enclosure in No. 159.

CHAS. BRUCE.

The Bank of Mauritius, Limited, 10, George Yard, Lombard Street,

London, E.C., April 30, 1904.

In accordance with your request, have much pleasure in putting in writing

a resumé of the views orally expressed by the Directors of the Bank of Mauritius at our interview yesterday.

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You informed them that application to the Colonial Office had been made on behalf of the planters of Mauritius for the postponement of payment of the instalment of the "loan in aid" falling due on 30th June next, and you invited them to state what reply, in their opinion, it would be advisable to make to this application.

You pointed out that there are, as it appears to you, four courses open to the Government in this matter:-

(i.) To allow the arrangement to take its course, and to exact payment at due

date.

(ii) To exact payment of one half only of the instalment due on 30th June next, and the other half on the 30th June, 1905; and to allow the balance of the debt due in June, 1905, to stand over till June, 1906. (iii.) To appoint a Commission to enquire into each case on its merits, with a view to insisting on payment where payment appears practicable, and to allow a delay of a year in cases where it seems unavoidable to do so. (iv.) To agree to the planters' application to postpone for one year payment of the instalments due under the Ordinance, i.e., to allow the first to be made payable on 30th June, 1905, and the second 30th June, 1906. Having carefully considered the matter from every point of view, the Directors are unanimous advising the adoption of the last of these courses in the case of all planters who state that they are unable to pay; and in expressing this opinion they are actuated by the following considerations.

The grant in aid loan was given in order to help the Colony to tide over a period of very great difficulty. When planters borrowed the money they were justified in anticipating (as was in most quarters anticipated) that better prices would result from the Brussels Conference, and that better times generally for the sugar industry were at hand. Their expectation, therefore, that the loan might be repaid by instal- ments beginning in June, 1904, did not at the time appear too optimistic.

These anticipations have not been realised, the period of difficulty has been prolonged, and the object of the loan has not as yet been fully secured.

At the same time, it is the opinion of the Directors that the sugar industry is now on a more assured basis, and that the prospects of the Colony are steadily improving. This being so, and seeing that the planters have on their part done all in their power towards meeting their liability, it appears not unreasonable that they should be allowed a respite of a year for its discharge. From the point of view of the Govern- ment it should be remembered that the security held by them, which at the date of the Ordinance was considered more than ample, has since been largely enhanced in value by the introduction of mechanical transport on a considerable scale in the island, whereby both the material value and the productive capability of the estates has been increased. Delay will place the Government in a better rather than in a worse position, and they can therefore well afford to carry out the intention of the loan by allowing the desired postponement.

There can be no doubt that the appeal of the planters has been made bona fide, and under stress of necessity. To follow course No. (i.) would therefore involve harsh measures on the part of the Government, which would probably render it necessary for them to take over the working of estates seized in satisfaction of the debt; for the sale of such estates in present circumstances would be very difficult The Govern- ment would thus suffer loss and inconvenience which would be avoided by waiting

a year, while at the same time the whole object of the loan would be defeated, many would be ruined, and the whole business and credit of the island would be disorganized. The same objections apply to heading No. (ii.), for payment of half the instalment would in many cases be as impossible at this moment as would be the payment of the whole.

The Commission of Enquiry suggested under heading No. (iii.) would, in the opinion of the directors, be almost equally objectionable, and its procedure would be almost as disturbing to the credit and business of the Colony.

It would, moreover, be found extremely difficult to conduct it in such a manner as to ensure correct statements of position. At the best the Government would obtain immediate payment only from those who are in so good a position that there could be no uneasiness as to their ability to pay a year hence; while they would be obliged to allow to those who are in a worse position the delay which might better have been accorded without the troublesome procedure suggested.