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Government 33,000 new shares at $200, carrying full voting power, one vote for each share under the recently amended Articles of Association, from the outset, but for 15 years to receive, instead of the full dividend, 4 per cent. on the amount paid up. The Government also to provide at 4 per cent. against debentures any balance of capital required for new works or the redemption of existing 5 per cent. and 6 per cent. debentures. This, with our present holding of shares, would give a clear majority of voting power and effective control. Other conditions might be as suggested in my confidential despatch of June 15th. This would be in the nature of a final proposal.

I am writing by next mail, but I should be glad if you would inform me by telegraph whether you approve my making, without prejudice, the proposal above suggested.

40706

No. 28.

COLONIAL OFFICE to THE TANJONG PAGAR DOCK COMPANY,

LIMITED.

[Answered by No. 30.]

SIR,

Downing Street, December 9, 1904. WITH reference to the letter from this Department of the 7th ultimo, I am directed by Mr. Secretary Lyttelton to inform you that he has carefully considered, in concert with the Government of the Straits Settlements, your communication of the 14th October, ‡ and that he is now in a position to state the conclusions at which he has arrived,

2. The proposals made in your letter as to the conditions on which the Colonial Government should provide the Tanjong Pagar Dock Company with the large sums requisite for the contemplated improvements are not such as can be approved, as regards either the financial terms suggested or the amount of control which would be secured to the Government; and your Committee are aware, from the preliminary conference which was held at this office on the 1st October, of the importance which is attached by the Government to this latter condition.

3. In view of the peculiar position occupied by the Company, it is considered essential that this control should be complete on all points in which the public in- terests are involved, and it is plain from the terms of your lettert that there is no likelihood of any agreement on this matter being arrived at as the result of further correspondence. It would not, in Mr. Lyttelton's opinion, be fair to the Company to provide for such control by legislation, while leaving the status of the Company otherwise unaltered, and he has therefore come to the decision that the Company should be expropriated and its assets vested in the Colonial Government a course which, he has reason to believe, has already presented itself to the minds of the Committee as a possible solution.

4. Mr. Lyttelton has instructed the Governor to prepare and introduce an Ordi- nance for this purpose which will provide for settlement of the terms of expropriation by agreement, or, failing agreement, by arbitration, and he will be prepared to re- ceive and consider any proposals which the Board or the London Committee may wish to make, with a view of obviating recourse to the latter alternative.

5. The successful administration of the Company's undertaking is a matter which vitally affects the interests of the commercial community in the Straits Settle- ments, and the Secretary of State is happy to believe that a ready response will be given to any appeal which the Government of the Colony may make for the future co- operation of present members of the Board and their staff.

The Chairman of the London Consulting Committee of the

Tanjong Pagar Dock Company, Limited.

• No. 6.

† No. 20.

I am, &c.,

C. P. LUCAS.

‡ No. 16.

41291

81

No. 29.

MR. LYTTELTON to GOVERNOR SIR J. ANDERSON,

(Paraphrase.)

(Sent 11.43 a.m., December 10, 1904.)

TELEGRAM.

[Answered by No. 32.]

In reply to your telegrams of the 3rd and 6th instant, you had better not make any further purchases of shares. I have no reason to suppose that the Company would accept the offer which you propose, and in any case such an arrangement would not give us the kind of control which I regard as necessary.

A letter was sent last night to the London Committee, giving notice of the intention to expropriate. You should consider the advisability of making a.con- fidential communication to the Board, outlining future policy and hinting at intention to make use of them and of their staff in the management of the business, though without committing yourself to retainin he whole of the present Board.

I will send by next mailt the dra of an Ordinance for expropriation and management. A copy was sent to you last night privately.

42403

No. 30.

THE TANJONG PAGAR DOCK COMPANY, LIMITED, to COLONIAL OFFICE.

SIR,

(Received December 15, 1904.)

[Copy to Governor, December 21, 1904. Confidential. L.F.]

[Answered by No. 33.]

120, Fenchurch Street, London, E.C., December 15, 1904. I TAKE leave to acknowledge the receipt of your letter of the 9th instant addressed to the Chairman of the Consulting Committee of the Tanjong Pagar Dock Company, Limited, in which you intimate that Mr. Secretary Lyttelton has come to the decision that the Company should be expropriated and its assets vested in the Colonial Government, and that he has instructed the Governor to prepare and introduce an Ordinance for this purpose.

This communication, so important and so unexpected, I am directed to state will be communicated at once by the London Committee to the Board of the Company, and until the views of the Board are made known the London Consulting Committee of the Company cannot adequately reply to your letter.

The course proposed to be taken by Mr. Secretary Lyttelton must be of the gravest importance to the shareholders of the Tanjong Pagar Dock Company, Limited, and the successful administration of the Company's undertaking is, as you justly observe, a matter which vitally affects the interests of the commercial community in the Straits Settlements.

Whether these interests will be promoted by the work of the Dock Company being undertaken by the Government of the Colony may well be doubted.

The forced acquisition by the Government of the undertaking and deprivation of the Company of its future potentiality is a very different matter from the cordial co-operation of the Government with the Company which had been the object of the recent negotiations.

I am desired, and that without delay, to point out to you that in the corre- spondence and in the interviews which have taken place, nothing was intended on the part of the Committee to lead the Secretary of State for the Colonics or the Executive Government to the opinion that any such proceeding as that now proposed would be acceptable to the Company, or that there was any difficulty in this Company raising whatever funds might be found necessary for ensuring the efficiency of the Company and its power of adequately meeting the requirements of the commercial community, or any other difficulty calling for such extraordinary action on the part of the Government, which it is felt must be due to an entire misapprehension.

• Nos. 26 and 27.

20505

† See No. 31.

‡ No. 28.

PUBLIC RECORD OFFICE

Reference :-

TELEC.O. 882

8 PUBLIC RECORD OFFICE, LONDON

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