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PUBLIC RECORD

OFFICE

Reference :-

SPEC.O. 882

لسلاس

8

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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14. The Governor may from time to time issue to the Board such instructions as he shall see fit and the Board shall forthwith give effect to such instructions.

15. No member of the Board and no person employed by the Board shall be deemed to be a member of the Civil Service of the Colony by reason only of such employment.

16. All persons employed by the Board shall be appointed by the Board at such rates of salary or wages as the Board may determine and any such person may be dismissed by the Board with such notice or compensation in lieu of notice as is customary in each case.

17. In each half year the Board shall pay into the general revenue of the Colony at such times as the Governor shall direct a sum equal to five per cent. per annum of the total amount paid by the Government under the provisions of this Ordinance. (2) At the end of each half year the net revenue of the Board after providing for such payment and for a sufficient working balance shall be paid into an account to be called the Reserve Fund to be kept in the names of the Treasurer and of one or more members of the Board. The Reserve Fund shall be available from time to time with the sanction of the Governor and to such extent as he shall approve for any purpose connected with the business of the Board.

42707

No. 32.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON. (Received December 17, 1904.) TELEGRAM.

Tanjong Pagar Dock. Your telegram of December 10th.* The shares are now quoted at $205. I have reason to believe that they are being bought in London.

42403

SIR,

No. 33.

COLONIAL OFFICE to THE TANJONG PAGAR DOCK COMPANY, LIMITED.

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

Downing Street, December 19, 1904. I AM directed by Mr. Secretary Lyttelton to acknowledge the receipt of letter of the 15th instant, with regard to the expropriation of the Tanjong Pagar Dock Company.

2.

your

Mr. Lyttelton thinks that it will serve no useful purpose to discuss at length the opinions expressed in that letter, but, as regards the penultimate paragraph, I am to state that he has no reason to apprehend that the Board of Directors will not have sufficient opportunity of considering the provisions of the Ordinance by the time that it is passed.

I am, &c.,

44049

No. 34.

C. P. LUCAS.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON. (Received December 31, 1904.)

(Confidential.)

SIR,

Government House, Singapore, December 8, 1904. I HAVE the honour to acknowledge the receipt of your confidential despatch of the 4th of November ultimo, on the subject of the Tanjong Pagar Dock Company. 2. As I informed you in my telegram of the 26th ultimo,§ I see no difficulty

§ No. 21.

• No. 29.

† No. 30.

No. 19.

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in the way of working the arrangement you have outlined, but I confess that I have grave apprehensions as to the price at which the property of the Company can be acquired under any form of compulsory expropriation.

3. I am afraid that the statements in the late Chairman's speech at the General Meeting of the Company in March last, may have induced you to take an unduly pessimistic view of the actual value of the Company's property and business, and of the strength of its position as regards the future.

4. No doubt in ordinary circumstances 20 years' purchase would, in this Colony, be regarded as a very full price to pay, but in the case of the Company in question, there are many facts which could, and would, be urged in an arbitration in favour of better treatment.

In the first place I would call attention to the fact, shown by the last Report, that a Reserve Fund has been built up amounting to $2,000,000, by half-yearly contributions of $100,000 and $150,000, which has been invested in the business of the Company for expenditure in Capital Account. This is in addition to the large sums written off by way of depreciation on the Company's property, the valuation of which in the Company's balance sheet is absurdly low.

5. Land, for instance, appears a value of $2,100,000, though it is well known here that for a part of the small area between Jardine's Wharf and the Peninsular and Oriental Wharf, with a sea frontage of only 1,200 feet, the Hamburg-American Company recent offered $1,000,000, and would have to spend something approach- ing another million on reclamation.

6. You will see from paragraph 90, page 27, of Messrs. Coode and Matthews' Report, that the small area of 28 acres belonging to the Crown, between the Penin- sular and Oriental Wharf and the New Harbour Dock Company's property, now held by the Tanjong Pagar Dock Company, was valued at $2 per foot, or rather more than the value of the whole of the land held by the Company. Indeed, at that valuation, the land of the Company alone would be worth more than the amount of the share capital at $240 per share.

7. The valuation of the docks, wharves, &c., is also very low, and it will certainly be urged that the amount written off for depreciation has been excessive, and that, if the Company had divided up to the full, it might on this account alone have added, by writing off $114,000 in the half year instead of $151,000, another 1 per cent. to its half yearly dividend; while, if it had divided also the addition of $100,000 to the Reserve Fund by capital expenditure, it would have been able to make its half-yearly dividend at least 9 instead of 6 per cent.

8. Even at 20 years' purchase, therefore, the Company might urge that the price should be $370 per share, not $240 as you contemplate.

9.

The only competition which the Company has to fear, apart from Pulau Wai or Sepang, is that of the proposed harbour works here, which, though ocean- going steamers of over 20 feet draught could not be safely accommodated within the sheltered area, would, undoubtedly, facilitate the bunkering, as well as the lading and discharge, of such steamers in the Roads.

But though, if the present members of the Legislative Council were in office when the question comes up again, I should have no fear of carrying it, I cannot conceal my apprehensions that approaching changes in the personnel may lead to a different result, and the Company will certainly use all its enormous influence in that direction. 10. In any case, there can be no doubt that owing to the practical monopoly held by the Company, it could increase its revenue largely at the expense of the trade of the port, and that with the comparatively rapid growth of the trade and commerce of the Colony, its revenue is bound to increase in any event.

So far, therefore, from its position contrasting unfavourably with that of the London Water Companies, it appears to me to be much stronger, and the latter have, as you are aware, been awarded in some instances as much as 35 years' purchase.

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12. Such an award in this case would be nothing short of disastrous, and it would be far better to offer to the Company to turn its existing share capital into per cent, debentures, or even 6 per cent. preference stock, than to embark on an arbitration which might involve us in purchase at the rate of 30 or more years. Looking to the high rate of interest prevailing here, 23 years would be a not unfair price, and I had that in view when I recommended that you should go to that figure in negotiation, rather than go to arbitration.

13. It must not be forgotten that it is not only a purchase of valuable land, but of a large expanding business with a practical monopoly. definite terms of your despatch, I should have urged a continuance of the negotiations But for the very

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