CO882-(6-8) — Page 525

PUBLIC RECORD OFFICE

Reference:

C.O. 882

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

8 PUBLIC RECORD OFFICE, LONDON

134

erecting suitable godowns and coaling sheds. For their own business alone, the necessary outlay for this purpose would not be justified, and I am aware that they have been in communication with the management of the Holt line with a view of sharing the expense of building and the use of the new wharf and godowns. If they succeed either with Holt's or with the North-German Lloyd line, with whom they are already in alliance as the principal members of the Shipping Conference, the consequences would be very serious to the finances of the new Board, and although Messrs. Romenij and von Rössing, the representatives of both firms here, are foreigners, who should not properly find a seat on such an institution, I think it will be prudent to retain them on the Board.

6. Messrs. Haffter and Somerville do not, I understand, add anything to the business capacity or influence of the Board, and I propose to replace them by Mr. John Anderson, of Messrs. Guthrie and Company, who was for many years Chairman of the Company, and by Mr. C. McArthur, the Managing Director of the Straits Trading Company, and also a Director of the Straits Steamship Com-

of which he was until recently also Chairman. pany,

As the ninth member I propose to select Mr. A. M. McNeil of Messrs. Syme and Company, who are Lloyds Agents here and also Agents for the Shell Transport Company, and have a large business with the Netherlands East Indies and Manilla. As omncial member, I propose to select Mr. Anthonisz, the acting Treasurer.

7. The whole of the existing staff in Singapore will be taken over, but I have agreed with the Directors that the Assistant Secretary, Mr. Rennie, should be lent to them temporarily to assist in preparing their case for the arbitration.

8. With regard to the staff of the London Office, I think that the Crown Agents should take over, if possible, one or two of the clerks who have been accustomed to deal with the indents and financial business of the Company, and that the rest should receive such compensation as may be awarded them by the Arbitrators or by agree- ment. I should be glad if some members of the staff of the Colonial Office and one of the Crown Agents would enquire into this and make such arrangements as they consider expedient for the taking over of the London work and papers, including copy of the special telegraph code.

9. In the conduct of the business in future, it will be necessary that the local management should have a large measure of freedom to send telegraphic indents direct to makers and manufacturers in connection with their ship repairing business, and the Managing Director has promised to furnish me with a memorandum on this subject, which I will forward as soon as possible.

10. In regard to an agreement for compensation, I have received from the Company a reply that they cannot accept my offer of 240 dollars per share, and claiming 700 dollars, or 600 dollars in 3 per cent. Stock of the Colony, with an allowance for compulsory purchase. I have replied that I see no use in pursuing the negotiation further at present, and, indeed, until the books and accounts of the Company have been examined by a skilled accountant and I have more information as to the real earning capacity of the undertaking, I do not think I should be justified in attempting further negotiation. The Company has just divided 20 dollars per share for the half-year ended 31st of December, 1904, and claim to have made full provision for maintenance and depreciation. Whether that is the case or not I cannot judge, but in any case in so important a matter, I would hesitate to act except on the best independent evidence.

11. I have, during the discussions in Council, repeatedly expressed the deter- mination of the Government that the undertaking is to be self-supporting, and I think that this course is beginning to impress itself on those who are responsible for the management of the Company here, and who are, at the same time, very largely interested as customers of the undertaking, and they begin to realise that exorbitant compensation must have serious results to their ordinary business.

12. I am not without hope, therefore, that an agreement as to price may yet be arrived at, and if that is impossible, at any rate an agreement as to a single arbitrator

so as to save expense.

13. The London shareholders have, I understand, been pressing that eminent counsel from London should be engaged to conduct their case before the arbitrators, and an additional clause has been proposed to the Bill to allow this to be done. I have in private deprecated this course most strongly as an entirely unnecessary expense, and that if it is done by the Company, I must do the same for the Govern- ment. The feeling here is against the proposal, and I do not think it will be pressed, and if it is, I shall have no hesitation in using the official majority to vote it down.

135

14. I trust that these arrangements will meet with your approval, and that when the appointed day arrives the business may be transferred without hitch.

15. I am anxious that the new works should be put in hand at the earliest possible date, and Mr. Warren has already commenced the checking of the surveys for the Wet Dock, and also for the proposed reclamation at Telok Blangah, where hope to find the area required by the Admiralty for storing coal and patent fuel.

I have, &c.,

JOHN ANDERSON.

13416

SIR,

No. 79.

GOVERNOR SIR J. ANDERSON to Mr. LYTTELTON. (Received April 22, 1905.)

(Confidential.)

Government House, Singapore, March 29, 1905. I HAVE received, in confidence, the accompanying statements as to the busi- ness of the Tanjong Pagar Dock Compar from one of the Directors. They were prepared for the Directors last year, when they were considering the question of financing the cost of the proposed improvements and extensions, and are, therefore, not liable to suspicion such as would attach to statements prepared after notice of expropriation had been given.

2. The most interesting of these statements are those marked IV. and V., the former setting forth the later finance scheme than that referred to in my despatch of the 15th of June,* and doubtless prepared in view of the probable negotiations with the Colonial Office, and the latter purporting to show the net earnings of the Company since 1900 and their allocation.

3. The finance scheme, of course, only provided for the cost of the works con- templated by Mr. Nicholson, and is at once vitiated by the fact that it estimates for the placing of 8,000 shares at $250 at a time when the issued shares were selling at or under that price in the open market. It also provides for the sale of land to the value of $3,200,000 in the space of three years, which in the circumstances would have been a hopeless task, and it would have been equally impossible in a small market like this to have placed four and three-quarter millions worth of 5 per cent. debentures within five years as contemplated.

In fact, the whole scheme appears to show, if it was put forward seriously, a hopeless ignorance of local conditions and could only have ended in failure.

4. The most interesting item in Statement V. is the second column, which purports to give the amounts written off half-yearly not shown in the published accounts. This is, I understand, provision for bad and doubtful debts, and they will contend that it has been more than sufficient and constitutes what they speak of as "secret" reserves.

I am not, of cou: se, aware whether in the case of a debt which was written down in one half-year, but paid in full next half-year, the full amount appeared in the accounts of the second half-year or only the written down amount, If the former

was the case, it is obviously on the same footing as the alleged excessive writing off for depreciation and, taken over a series of years, makes no real difference as regards the figures of net earning capacity. If the latter, and there is a real "secret" reserve, it can only be disclosed when the accounts are fully examined.

Similarly, with the reserve fund which is invested in the business, it is impossible, until the accounts have been scrutinized to say what proportion of the annual pay- ments to that account have been payments properly charged to capital account instead of against revenue. Of the amount added to reserve within the past two or three years, a considerable part has been expended on a railway and on an en- largement of the existing graving dock, but I have no information as to the propor- tion of the additions made to reserve represented by that expenditure.

5. The price claimed by the Company is so far in excess of the amount offered by me and of any sum which, with my present information, I should feel justified in offering, that I will defer any further discussion as to the price to be paid for the undertaking until the accounts have been overhauled by the accountant for whose services I have asked.

• No. 6.

I have, &c.,

JOHN ANDERSON.

}

Enclosures in No. 79.

1.

STATEMENT of Wharf Tonnages for the Years 1894 to 1903 inclusive, showing the Number of Vessels Berthed at the Wharf, their Tonnage and the General Cargo and Coals Discharged and Loaded, also showing Each Year's Total of General Cargo and Coals Inward and Outward at Tanjong Pagar and Jardine's Wharves.

Outward.

Inward.

Total Tonnage

Year.

Number

of

Vessels.

Register Tonnage.

Cosis,

General Cargo.

Opium in

Chests.

Treasure,

Total Tonnage Inward.

General

Cargo.

Opium in Chanta.

Treasure.

Coals.

Total Tonnage Outward.

of Inward and Outward.

136

1894

1895

T. Τ. 1,731 2,459,996 326,0721 1,825 2,585,037 341,3431

1896

1,883 2,803,071 325,037'

1897

2,020 3,057,081 422,777'

1898

1899

...

1900

1901

1902

1903

T. $ $ T. 497,057 15,905 10,922,758 823,129' 385,230"* 6,106 7,657,863 317,400"* 498,4391* 11,565 4,783,539 839,782"1 385,66015 3,954 6,254,095 294,606 563,996* 12,131 5,767,299 888,033* 464,005* 4,225 3,963,588 329,860** 793,866 513,53415 11,742 3,728,826 936,311" 496,4291o 2,878 7,563,904 386,15611 882,586' 1,993 3,372,430 388,999 630,448* 12,041 5,551,874 1,019,44710 478,874" 4,781 6,725,881 386,920* 865,795* 1,836 3,310,101 419,3671 620,383 11,057 3,595,440 1,039,750* 446,791* 4,150 4,095,867 411,761* 858,552* 1,930 3,836,160 535,951* 677,171" 14,418 5,568,316 1,213,1231 433,9801 4,959 4,283,385 503,671" 937,652* 1,891 3,800,547 534,733* 719,707* 12,541 3,314,371 1,254,440" 467,592* 5,138 4,414,740 480,318" 947,9101 1,952 3,875,30 461,684" 713,163" 11,059 5,218,961 1,174,848 446,174 3,510 3,635,913 459,8461 906,020, 1,976 4,058,002 465,201* 678,741 12,256 16,126,416 1,146,942" 421,114 6,564,496 443,887⚫ 865,001*

T.

T.

T. T. 702,631* 1,525,760* 680,2671 1,520,049"

1,681,899"

1,818,898*

1,885,242"

1,898,302"

2,150,775"

2,202,351*

2,080,868*

3,400

2,011,944