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PUBLIC RECORD OFFICE

Reference :-

PEPEC.O. 882

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8 PUBLIC RECORD OFFICE, LONDON

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

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by the Chairman against the London Committee of having forced the hand of the directors here in the direction of maintaining the dividends. He said distinctly on two occasions the rates were raised, in 1894 and in 1902. In both cases they came from London. Then the secretary says, we have not been allowed to proceed with this scheme unless we can show that this 12 per cent. is not to be touched by any unholy hand. Now, gentlemen, I say, add these reasons to the reasons I have already stated and I think they are sufficient justification for the action of the Government. It has been said it is high-handed. That is an epithet of abuse and I do not think it is much of an argument to say that it is high-handed. I fail to see that it could have been done in any other way; we had to do it in the ordinary way by bringing in a Bill. The Bill would be equally high-handed if brought in six months hence. It is not more high-handed now than it would be six months hence. The justification for it is that the Company charged with what is a great public trust have declared that they would not carry out that trust except upon conditions which would seriously inconvenience the public-in fact, imperil the efficient discharge of their trust; and that is the reason the Government now come and say, "We will relieve you of your trust; you have shown you cannot or will not-perhaps both discharge it; therefore we will take it from you and put it into other hands." It has been said that other 8,000 shares would have given Government sufficient control with the other 2,000 odd they carry on the Federated Malay States. The whole case has been that we want the control of this great Singapore interest to rest in Singapore. Would giving us 8,000 shares have done that? It would not. The control would still have remained in London. That is the whole case. In the interests of Singapore the control of this great interest must rest in Singapore and the measure before you was intended to secure that. The directors' scheme of finance, to which reference has been made, we have not been furnished with the particulars of, but I presume it was a scheme subject in accordance with instructions from London to the maintenance of the 12 per cent.; and it was not stated whether it was the scheme of 12 million dollars recommended by Mr. Nicholson or the amended one of 15 or 16 millions recommended by himself and Mr. Matthews. Both these points are matters upon which we should like some information when the matter is further discussed. I do not know that it is necessary for me to go into any of the other points that will come up for discussion_in_Committee. There is the question of the 15 per cent. for compulsory expropriation; but I think if hon. members will look at the Bill they will find that a good many of the expenses to which that 15 per cent, has gone to gather are specifically provided for. If the 15 per cent. is added, who has to pay it? Why ought the Government to pay it? They pay the whole value of the shares, recoup the shareholders for every investment and then give them 16 per cent! We should have to get the money out of the pockets of the shipping interests of Singapore. We give them everything they can possibly claim, compensate them for every possible claim and put them as far as it can be done in the same position they are now in so far as their investments are concerned, and then give them 15 per cent. more! I can hardly find words to describe such a thought. Simply because it is the Government! But the Government has no funds of its own. It is only the trustee for the people. And if they got this money, it would only come out of the pockets of the taxpayer and of the shipping. By all means give them a fair price-recoup the Company in full but to add to that fair price 15 per cent.-monstrous! I think I have said enough to you about the London Committee, but regarding the difference of opinion as between the Hon. Mr. Shelford and the late Chairman of the Company as to where the responsibility should be laid in regard to the delay in the improvements and extensions whether in London or Singapore so long ago as 1889 the directors in Singapore passed a resolution that the wharves ought to be replaced by a permanent wharfage as early as possible, and they made a small appropriation for it, and it continued in the shape of a reserve fund for several years when it was finally swallowed up when the Company doubled its stock without adding anything to its effective capital. The doubling of its stock converted each share into two shares, so that its capital, which was then $1,500,000, was turned by a stroke of the pen into $3,000,000. That was done, I presume, by the London Committee, and it was the answer of London to the recom- mendation of the Singapore directors that the wharves, which were then, as now, wooden, should be changed into wharves of permanent character. Most of the other points can be discussed in Committee, but I was rather surprised to hear my hon. friend discover that this proposal of the Government is a naval contribution. I really must give him credit for a brilliant imagina- tion. I must say the idea is a flight which I certainly could not have risen to that this scheme of the Imperial Government at home is to get a naval contribution out of this poor Colony, I do not know what grounds he could possibly have to justify it. With regard to what he said about Government having great difficulties in strengthening the wharves I must I

Bay can not admit that at all. The delay that has so fur occurred was between the Singapore directors and the Board here. Having seen the file of letters recently I must say the statement that Govern- ment put difficulties in the way is most unjustifiable. On the contrary the Government met the Company in every possible way. The hon. member has drawn a lurid picture of extra- ordinary difficulties the Government would have to face if shipping should increase, and, on the other hand, he said, "Why don't you leave us alone?" and he pictured the elasticity and expansion of the business. I really fail to follow the argument that the Board which is to be nominated from among the best merchants in Singapore are going to spoil the trade by raising the charges. Of course, I quite admit that if the Company were to get this 15 per cent, and a vast compensation to which they are not entitled it would be very difficult for the Government indeed to carry out the programme of new works which has been laid down; they would have to cast about for other sources of revenue. I have no reason to believe that the arbiters will ' not be fair-minded men who will take into consideration not only the future of the Company but its present conduct, that as a fact the shares for which the Company are asking a very high price now could have been got a month or two ago for a less sum than the Government have offered; and further that the late Chairman of the Company had declared that the shares could not maintain a 12 per cent, dividend unless Government had come to their assistance and given them the money for the works at a very low rate of interest, in fact, at a lower rate of interest than it could borrow itself. We are asked how we are working this undertaking. That is a matter for the new Board when it is constituted to say. I should not dare to give an opinion

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upon the question until the Board has got to work and is able to bring before me this or that part of the undertaking. I shall not certainly commit myself in any way until I have the advice of those who will have the administration of the Board. If justification were required for the action of the Government it is that this control be secured with the money required for these absolutely necessary extensions according to the report of the experts called for by the Company, according to their own statement at the meeting last year and according to everybody's opinion. The Government will place its credit at the disposal of the new Board for the purpose of raising the funds for these works and I say that that will mean interest on the money having to be borrowed at 6 per cent. I think we will borrow it at a very much lower rate-the benefit of which will accrue to the trade of the port. With regard to the 5 per cent., I would only say that 5 per cent. has been mentioned by the Secretary of State in the draft, and I think it would have been very unsafe to put it at a lower rate. Every Colonial loan has to have a sinking fund which will redeem it within a few generations and as the sinking fund has got to be provided for I do not think 5 per cent.will leave such a very wide margin as you suppose, or that it can be reduced. If it can be reduced I have no doubt I can persuade the Government to do so, but it is absolutely essential that from the first the undertaking of this new harbour should be self- supporting. When the new Board comes into working they will no longer, it is true, have to satisfy the shareholders in London, but they themselves will be the principal customers of the concern. They will be men anxious to keep rates down in every possible way. If they found they were not compelled to cut their coat according to their cloth, that they could call upon the taxpayer, they would be impelled to cut down rates and not insist upon keeping down expenses, and it is absolutely necessary in the interests of good management, as is the case in Bombay and on the Mersey, that the Board shouldnderstand that they have to pay their own way. The Government will back them with its cre Beyond that they will have to pay their own

way. (Applause.)

On a division the second reading was carried by 10 votes to 2, the minority being Messrs. Waddell and Shelford.

The Colonial Secretary said the Bill would be taken in Committee on the 17th instant. The Council adjourned till next Friday.

10949

No. 73.

MESSRS. SUTTON, OMMANNEY, AND RENDALL to COLONIAL OFFICE. (Received April 5, 1905.)

SIR,

3 and 4, Great Winchester Street, London, E.C., April 4, 1906. Straits Settlements.-Tanjong Pagar Dock Company, Limited. REFERRING to our letter to you of the 31st ultimo,* we have now to inform you that we have ascertained that Mr. Balfour Browne is prepared to accept our brief in these arbitration proceedings. We will call upon you in the course of Thursday next to confer with you with reference to the fee to be paid Mr. Balfour Browne, and also to inspect the documents in your possession relative to this matter, which will doubtless give us useful information as to the possible scope of these pro- ceedings.

10949

SIR,

(Secret.)

We have, &c.,

SUTTON, ÓMMANNEY, AND RENDALL.

No. 74.

MR. LYTTELTON to GOVERNOR SIR J. ANDERSON.

WITH reference to previous correspondence respecting the proposed arbitra-

Downing Street, April 13, 1905. tion with the Tanjong Pagar Dock Company, I have the honour to inform you that the Solicitors to the Crown Agents, acting on my instructions, have lodged a re- tainer for the Colonial Government with Mr. Balfour Browne, K.C. I understand that Mr. Browne is prepared to accept the brief, and I shall inform you in due course of the arrangements which may be made.

I have, &c.,

ALFRED LYTTELTON.

20505

• No. 70.

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