CO882-(6-8) — Page 521

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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

8 PUBLIC RECORD OFFICE, LONDON

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Committee; and he had taken some pains to ascertain the origin of the idea. It appeared to him, however, to be somewhat unfair for a one-sided statement or account of an informal inter- view to be published. He did not say it wilfully did, but certainly it did misrepresent the views of the other side. The interview was of an informal character, no reporters were present, and it was held not with a view to discussing expropriation but with the intention of clearing the ground before the reply of the London Committee to the Secretary of State's letter to them should be sent in. That reply distinctly stated that if it was at all possible it was the Company's intention to complete the proposed works within 10 years from April next. What was apparently stated at the meeting was that they were able from revenue alone to do the work in 30 years; it was universally admitted that they had to be done quicker and hence the necessity for raising capital now. This placed a different complexion altogether on the attitude of the Company. So much for the reasons that had converted the Government so rapidly to this scheme of expropriation. He must confess they appeared to him insufficient and based upon a mis- apprehension of the Company's intention and ability to raise the capital they required. They exhibited signs of haste and a want of consideration of the real condition of affairs. Nor could he see any indication of the demand for Government interference on the part of those interests that used the port; and surely as this step had been taken very largely for the benefit of those people their views should carry weight. Coming to the scheme itself, he admitted they got on to more satisfactory ground-when they contemplated the spirit and intention of the Govern- ment. He was not, however, able to convince himself as to their practicability. He was glad to see that economy was to be the aim of the Government though he could not see how it was going to be obtained by that Bill. It was a compliment to the commercial community that The principles of sound commerce were to be applied, but he did not understand how Govern- ment could compete with private firms as the present Company did and as the new Board would do according to the Bill and the covering despatch. The intention of the Government not to interfere in the direction of the Company and the suggestion that the Government members should not attend Board meetings regularly was unsound. How did His Excellency expect to be properly advised as to the policy expedient for the Board if his advisers were not in close touch with its business and its views. They would be as badly off as ever and at loggerheads with the Government for want of a proper understanding. Who was to judge of the necessity of putting up rates or the advisability of putting them down unless they were familiar with the routine of the business of the Board. He imagined that what they would have to complain of would not be too little interference but too much. It was that they had to consider. The Bill practically put the whole concern into the hands of the Governor. He might, of course, not be familiar with matters of business requirements, but he took leave to doubt if the transfer of the final voice from Fenchurch Street to Downing Street would be for the good of the port. Indeed, it appeared almost necessary to retain some office in the City of London within reach of the insurance and shipping offices and accessible to such complaints as they must always expect. He sincerely trusted the new Board would be free from the Crown Agents in the purchase of material and the recruitment of the staff. Matters connected with a Dock Company were little understood either in Downing Street or Whitehall Gardens. An instance of this would be found in paragraph 20 of the despatch; it read, and therein the certainty that this very important business will be henceforth conducted in the best interests of the Peninsula." Of the Peninsula! He was so taken aback by this statement that he had referred to the figures. He found that in 1904, of the 705,000 tons of cargo received at the wharves, only 65 tons had come from the Native States. Of the 448,000 tons shipped from the wharves only 14,800 tons or 3 per cent. had gone to the Native States. This was not the trade of Tanjong Pagar. Their trade was the large ocean-borne trade, which had made Singapore. The foundation of that trade was freedom which enabled all and sundry to come and barter without let or hindrance, to sell their produce and buy their necessities. Cheapness was essential, and whatever might be said of the wharfage rates at Tanjong Pagar they were certainly not expensive. But Govern- ment was bound to be expensive, and they would not have the advantage of a small capital as the present Company had. No one-on the other side of the water at any rate-supposed for a minute that the offer of $240 per share represented the real value, and yet if Clause 30 was passed the Government would withdraw more than $12 per share from the annual profits of the concern. Five per cent. on $240 was the equivalent of the 12 per cent. dividend the present shareholders were receiving. It was obvious that if the Government were to take 5 per cent. on a larger share value than $240 there would be so much the less to provide interest on these new works. Was the Government prepared to provide interest on these new works? If not where was the money to come from? The works could not be productive at once for they did not propose to carry out the works as demanded but in anticipation of the future. The Admiralty Dock would commercially be a bad speculation for many years. The new inner dock would double the length of the present berthage so that the rebuilding of the main wharf could not pay itself for many years to come. They were hoping to carry out a Government project on a commercial basis and financially it was not likely to pay unless they made it pay by port dues and excessive charges and that would be a vital blow to the trade of the port. With regard to coaling somewhere between 150,000 and 200,000 tons of coal were held at Tanjong Pagar and the monthly deliveries were something like 50,000 tons. On either side they had Sabang, Labuan and Hong Kong keenly competing with them. If they raised the rates they would drive that trade away. If the present charges were driving the Chinese away from the wharves the new charges would still further drive them away. It had been suggested that this clause had been introduced with a view to limit the purchase price to the arbiters by imposing this tax upon the income of the future Board. It was a most important clause of the Bill and must operate with undue severity on either the present proprietors or upon the future trade of the port. Reference had been made to Clause 13 under which the usual 15 per cent. com- pensation was not allowed for the compulsory acquisition of lands. He would like to point out that many of the shareholders had only recently acquired their shares and had had no reason

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to suppose that this matter would be treated in any other but the ordinary way. No reasons had been given for this treatment. Then how did the Government propose to work the docks and machine shops? Was it intended to allow private firms to enter the premises and seek for business along the wharves and execute repairs on board the various vessels? Would the new Board under the Government seck for business, tender for it, employ agents and so forth? Was the credit of the Government to be pledged in such transactions? Yet, if they cut this out they would lose the most lucrative portion of the business they were buying. Supposing they lost half the profits at present made out of the docks and machine shops they deducted 330 per cent. from their total net profits, leaving $875,000 per annum, to meet the interest on the purchase of, it might be, 25 millions, which at 33, per cent. was $870,000. The figures were, of course, hypothetical, but had Government considered that point? How was the deficiency to be made good. If they worked the docks and machine shops on the hire system their charges must be low for if they added the profits of the hirers to a heavy hire charge they would drive the trade away. If they hoped to make good the deficiency out of the wharf they would drive that trade away too, and expropriation must be a serious disaster to the port. It was a problem in which the public was gravely concerned. The fact was there was no need for Government interference. If it could only put aside its distrust and foar of the Company and place some confidence in it there was nothing to fear. The Company must in its own interests undertake large extensions. It was well able to, financially, and to continue earnings on a profitable basis for still further extension. Look at the growth of its trade. In 1886, 1,444 vessels went to its wharves and landed 774,000 tons of coal and cargo; in 1904, 2,356 vessels and 2,250,000 tons of coal and cargo. The Company had been able to keep pace with that enormous increase. It was recognised the the Company in its present condition could not cope with a continued increase satisfactorily, but their policy of doing everything out of revenue had been altered, and the raising of fresh capital to meet extensions more rapidly was assured. How were these proposals going to affect the proposals for a boat harbour? He trusted they were not going to be abandoned, for though the Chamber of Commerce and the community generally were alarmed at the extravagant proposals of Mr. Matthews, there was little doubt that a modified form providing shelter and quays at Teluk Ayer would meet with universal approval. The Chamber of Commerce first moved in the matter seven years ago, and it was earnestly to be hoped that the congestion of the river was not going to be overlooked. We had waited long and it would be little short of disaster if nothing at all was to be done. These additional proposals of Government were, however, extravagant. They bade fair to render this port expensive. They would lead almost certainly to the establishment of port dues.

His Excellency: I am afraid you are travelling from the subject under discussion. Mr. Shelford thought he was not going beside the question in discussing what would happen to the boat harbour if they took up these large new proposals, which were expensive and extra- vagant, and were based on a misapprehension of what the Company was prepared to do. They were not likely to improve the administration of the docks and wharves, and they were going to burden the trade and shipping with the cost of an Admiralty Dock. On these grounds he agreed with His Excellency's original judgment that expropriation was totally impracticable and, even if practicable, undesirable in the interests of the port, and he opposed the second roading. (Applause.)

MR. G. S. MURRAY.

Mr. G. S. Murray remarked that he had never seen anything in reading the Bill to indicate that it was an indictment of the directorate and nothing that had fallen from His Excellency could be taken to mean such a thing. He was glad to hear that the Company had spent such very large sums in improvements and to hear about the efficiency of the Company. That was no doubt very satisfactory to them, but the Committee had admitted to the Secretary of State what the Hon. Mr. Shalford had admitted just now, that they had not been able to keep pace with the times. Therefore it was no disparagement to the management but an unfortunate Occurrence that the business progress of the port had been such that they had been unable to overtake it. From what he read in the Secretary of State's despatch he was sure that the dock business of this port should go into the hands of the Government. The Chairman of the Company the other day stated that the Company had spent in repairs in 1901 $129,000, and in 1904 $313,000. There had been a steady increase from year to year, and it gave food for thought to road those figures and imagine that the cost of repairs had arisen in the four years something like 160 per cent., and that there has been a steady increase ever since 1901. Was that increase owing to the early management of the Company? He simply put it forward as a thought that had passed through his mind. It might be due to money actually expended on new works and improvements. It might be that in previous years to that very large sume had been expended and that additional sums had to be spent in maintenance and repairs. Hon. Mr. Shelford had referred most persistently to the Government managing the new dock for the purposes of the Trust. Now, he had quite confidence enough in the Government to believe in His Excellency's statement that there would be as little interference as possible; and he had absolute confidence in the commonsense of the merchants of the place, that when this Trust was constituted they would put their best foot forward and do all in their power not only to nurture the trade and commerce of the place but come forward in a reasonable way to the Government and give their reasons why there should be an increase or a decrease in any charges at the docks. Comment had been made further on the charge of 5 per cent, which had to be paid by the Trust to the Government towards the money that would have to be borrowed for the purpose of acquisition. He admitted that 5 per cent. appeared an enormous amount, and in view of the fact that Government could borrow on cheaper terms even with the one per rent. to be provided for a sinking fund he thought the time would come when the Government would consider it advisable that a reduction should be made. But as a tentative basis he thought it quite right that 6 per cent. should be inserted. He had enough confidence in the Government to think that the Government was acquiring this business from the Company with a view to further the best interests of the port, and that they were going to spend on the harbour some