CO882-(6-8) — Page 503

90

It would not be expedient to ask the Consulting Engineer of the Company, who will afterwards act for us in the same capacity, to value the property on our behalf.

I have no objection to the publication of my despatch of November 4th,* and its enclosures, with the omission in last sentence of the 20th paragraph of the words from "finally" to "stable basis."

As to the provisions which you propose to incorporate from the Water Act, I must leave the matter to your discretion, if you are definitely advised that their insertion is necessary, but please carefully consider the following observations. It should be recollected that the Water Act was framed so as to meet the special circum- stances of the Water Companies. Such special circumstances do not appear to exist in the present case. Clauses 24 and 25 seem sufficiently provided for by the ninth section of the Ordinance, and Clause 40, Sub-section (1) by the eighth section.

Clause 29 seems to be unnecessary and might have the effect of increasing the amount awarded as compensation if we force liquidation. Clauses 41 and 42 seem unnecessary. We take over the books as part of the undertaking, and it is only necessary to give the Company access to them if they so desire. Sub-section (c) of Clause 41 should not be inserted, and Sub-section 2 is not applicable.

As regards the suggestion contained in your telegram of January 8th † I do not consider Sir C. Smith to possess the technical qualifications required.

Before accepting or proposing anyone as sole arbitrator, you will, of course, consult me.

2259

No. 40.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON.

(Paraphrase.)

(Received 11 a.m. January 22, 1905.)

TELEGRAM.

[Answered by No. 46.]

Tanjong Pagar Dock. Have received your telegram of January 19th. First reading of Expropriation Bill passed on Friday. Second reading deferred till March 3rd at the request of the Company.

I stated in Council that, if the Company desired, the liquidation provision would be withdrawn.

I have consulted Colonial Secretary and Resident-General as to arbitrator, and would suggest Hyndman Jones as sole arbitrator. He is most highly respected as a Judge and is universally regarded as the ablest man on the bench here. No one else possible. Pending your reply, I will not approach the Company.

91

3. That is on the assumption that the value of the dollar does not further appreciate in the meantime, but there are several circumstances which point to the conclusion that within a short time a considerable rise in the value of the Straits dollar may take place. The tobacco crop in Sumatra is now being brought to market and, as the Dutch Government has prohibited the importation of British and Mexican dollars, payment for the crop will have to be made in Straits currency. The Chinese New Year, moreover, begins on the 4th of February, and there is always a large demand for currency at that time, as it is customary then for the Chinese to balance their accounts for the year.

4. It is not improbable, therefore, that the Straits dollar, which is now 1s. 114d., will touch a higher point even than 2s. by the month of March. With silver rising steadily, it would be imprudent to contemplate 2s. as the fixity of exchange at which we aim, and a rise of even 1d. in the gold value of the dollar will add £15,416 to the price to be paid to the Company, and though there will no doubt for some time be temporary and seasonal fluctuations in the exchange, there can be no doubt that its tendency will be steadily upwards.

5. As you are aware, the Colony and the Federated Malay States between them hold very considerable gold investments, and as the value of the dollar rises these investments, for the purpose of meet local payments, steadily decline in value.

6. In the circumstances, it is obvious that apart from the fact that the business of the Company must suffer under existing conditions, and that it is, in the ordinary course of business, daily entering into contracts and obligations which will fall on the Government, in part at least, to execute and implement, it is obviously in the interest of the Government that the transfer should take place at the earliest possible date, and that, in the meantime, the Crown Agents should be instructed to realise gradually the investments belonging to the Colony and the Federated Malay States.

7. I have not yet received your despatch enclosing the draft Expropriation Ordinance, but I would submit that the transfer should take place if possible on the 1st of April or, at any rate, not later than the 1st of July next.

8. In the meantime I hope that negotiations may be begun as soon as possible, in order that, if it should be found impossible to agree as to the price at which the Company is to be taken over, arrangements may be made for the appointment of an arbitrator and for the presentation and arguing of the case for the Government.

9. I hope it may be found possible to arrange for the payment in London of the London shareholders. Even the payment of the local shareholders in Singapore must lead to a considerable rise of exchange in such a restricted market.

I have, &c.,

JOHN ANDERSON,

2228

2443

No. 42.

PUBLIC RECORD OFFICE

Reference :-

EPFEE.C.O. 882

سسس

SIR,

(Secret.)

No. 41.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON.

(Received January 23, 1905.)

[Answered by No. 44.]

Penang, December 28, 1904.

As it has been definitely decided that the Tanjong Pagar Dock Company is to be expropriated, it becomes necessary to consider how the payment of the amount which may be fixed either by agreement or by arbitration may be met.

2. Even before the news of the intention of the Government was made public, the shares of the Company, the market in which is very limited, had risen to $270 per share, and now shares are unobtainable even at $300, and the latest quotation is "Buyers at $325." In the circumstances, it is improbable that we shall be able to buy out the shareholders at less than $300, and that the price to be paid, assuming that the debentures are not bought up, will be under a million sterling for the share capital alone.

TANJONG PAGAR DOCK COMPANY, LIMITED, to COLONIAL OFFICE. (Received January 25, 1905.) [Acknowledged by No. 45.]

SIR,

120, Fenchurch Street, London, E.C., January 25, 1905.

THE draft Ordinance providing for the acquisition by the Government of the Straits Settlements of the undertaking of the Tanjong Pagar Dock Company, Limited, has been under the consideration of the London Committee.

I am desired by the Committee to submit to you some amendments which the Committee are sending to Singapore, and which will be found set forth in red ink* in the copy of the Ordinance accompanying this letter.

The Committee have made these suggestions as such, as they think necessary in the event of the Government proceeding, and such amendments, so far as they refer only to matters of drafting, speak for themselves, and so far as they are of substance, include no amendment except such as have been recognized by His Majesty's Government when taking over other undertakings in this country.

• Shown here in italics and obliterated type.

• No. 19.

† No. 35.

No. 39.

20305

1

MA

8

PUBLIC RECORD OFFICE, LONDON

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