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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

8 PUBLIC RECORD OFFICE, LONDON

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

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Supreme Court in this suit in his favour and that by such judgment the sum of dollars

was awarded to him with (or without) costs or that (here state the nature of any order or decree made) with (or without) costs (and that the costs

). have since been taxed as against the said Board at dollars

Dated the

14245

day of

19

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON.

(Confidential.)

No. 83.

(Received April 29, 1905.)

[Answered by No. 105.]

Registrar.

SIR,

Government House, Singapore, April 6, 1905. I HAVE the honour to transmit, for your consideration, a copy of a letter from Mr. L. M. Woodward, whom I have appointed Junior Counsel to assist in preparing the case of the Government in the arbitration with the Tanjong Pagar Dock Company.

2. Mr. Tomlinson, memoranda from whom are enclosed in Mr. Woodward's letter, has been selected as an expert valuer of lands and buildings to assist Mr. Woodward.

3. Mr. Tomlinson's suggestions appear to me to deserve consideration. The allowance for the cost of re-investment must undoubtedly be larger in the case of a Singapore investment than in the case of an English investment, and it is especially desirable to spread the payment of the compensation over as long a period as possible to avoid violent fluctuations of exchange.

4. Excluding the shares belonging to the Federated Malay States, the maxi- mum amount to be advanced would be $8,160,000. But I see no reason why any difference in regard to the rate of interest should be made between dollar advances and sterling advances, and think that both should be fixed at per cent. If share- holders are to have an obvious advantage in accepting advances, it is necessary to fix the rate as low as possible so long as no loss is sustained by Government. On fixed bank deposits the rate obtained by the Government here is 4 per cent. and an advance might be obtained from the Federated Malay States Government of any sums required at that rate, to be repaid when our loan is issued.

5. At the same time the effect of any such action on the case of the Govern- ment before the arbitrators has to be considered, as an advance up to $240 would imply that the Government regarded that figure as an absolute minimum.

It is true that before my arrival shares were bought, on behalf of the Federated Malay States Government, at as high a figure as $350, and, since my arrival, a con- siderable number have been bought at or about $240 and, as you are aware, I made a definite offer to the Company of $240 per share.

6. In these circumstances, the risk of injury to our case would not appear to be serious, while the other advantages are substantial and obvious, but it would probably be best to limit the advance to $200 per share.

If you agree, a notice might be issued to the shareholders immediately the Com- pany's undertaking is over, to the effect that Government would advance on any shares deposited within, say, six months, a sum of $200 a share at 4 per cent. interest, any balance of the amount of compensation per share ultimately agreed upon, or fixed by the arbitrators, being paid as and when required by the law. The balance of the $12 per share per annum fixed by the Ordinance would also, of course, con- tinue to be paid to the shareholders.

I have, &c.,

Enclosure in No. 83.

JOHN ANDERSON.

April 4, 1905.

Re the Expropriation of the Tanjong Pagar Dock Company.

MY DEAR SIR JOHN,

I SUBMIT herewith for your consideration copies of minutes I have received

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from Mr. Tomlinson. He is much impressed with the importance of our en- deavouring to eliminate as far as possible the additional compensation which the Court of Arbitration would be likely to grant for loss of interest pending re-invest- ment, and cost of re-investment.

Such compensation was granted to the water companies, though eventually nearly all the shareholders took water stock, and so received compensation for a loss which never occurred. No doubt the Court would be disposed to give a higher rate here, in view of the greater difficulty of re-investment in high-class securities. I certainly think that we should be warned by the example of what took place in the case of the water companies and should try and take steps to avoid payment of similar compensation here. Mr. Tomlinson's scheme provides for the gradual absorp- tion of the money seeking re-investment. It is difficult to say how many or whether any of the shareholders would avail themselves of it, but I take it that the Treasury could make arrangements for carrying it into effect, and the fact that such an oppor- tunity had been available, even though it had not been taken advantage of, would, I imagine, tend to diminish the amount of compensation (on this account) which the Court would be disposed to grant.

From S. Tomlinson, M.Inst.C.E.,

1, Raffles Quay, Singapore,

March 25, 1905.

I remain, &c.,

L. M. WOODWARD.

(Minute No. 5.)

EXPROPRIATION OF TANJONG PAGAR DOCK COMPANY, LIMITED. Section 13. Allowance for loss of interest and cost of re-investment. MINUTE. COUNSEL :

That portion of Section 13 which directs that the Court" may make such allow- ance as it thinks just for the recoupment of any loss of interest pending re-invest- ment as well as for the cost of re-investment" should, in the light of what appears to have happened in the case of the London Water Companies, have very early attention.

2. In the case of the water companies, the date at which the money would be paid was apparently uncertain, and in consequence the price at which equivalent securities would rule was uncertain and evidence of bankers and brokers was called to show that probably the price would be much higher than when the Court was sitting.

Eventually Water Stock, was, I understand, accepted by most of the shareholders, and there was no loss of interest, neither cost of re-investment, but it is not clear that the Court knew of this in time to give the Water Board credit for this event and it is believed the shareholders got an allowance which was entirely "found money to them.

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3. It appears to me that we should be able to say with certainty at the be- ginning of the arbitration that the shareholders may, if they so choose, have in- scribed stock of the Colony (see Section 10, as amended in Committee): that this stock (the date of interest on which will be declared) will be available without delay: therefore, there will be no loss of interest pending re-investment, nor any cost of re-investing in such inscribed stock of the Colony. There is no provision compelling shareholders to accept such inscribed stock in lieu of cash, but I think the Court would be less disposed to allow anything for loss of interest to those share- holders who demanded cash with the object of waiting for a chance of getting some- thing more remunerative, and also less disposed to allow them costs for re-investing in more, presumably, remunerative stock if the above arrangement were before the Court.

4. Section 21, as amended, allows the Government 12 months (from the date of the award) within which to complete the payment or to issue the stock. This leaves the shareholders uncertain as to the date on which they will receive their money, and the situation under the Metropolis Water Act will obtain. Under our Section 21 the shareholders will receive interest at 12 per cent. until the date of payment.

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