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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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PUBLIC RECORD OFFICE, LONDON

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Lordship on the subject of the proceedings in the Council of Government on the 5th current, when the Unofficial Members, on the motion of Mr. Gaston Antelme, unanimously asked that a sum of £200,000 should be raised by loan for the purpose of making advances to owners of sugar estates and bailleurs de fonds, to assist them in carrying on the cultivation and working of the estates, and I now transmit an extract from the debates* containing the motion, together with the remarks which I made at the opening of the sitting in connection with a motion of Mr. Leclézio, as also therein set out.

2. Mr. Leclézio asked leave to postpone his motion for a month, and this was agreed to by the Council.

3. The extract also gives the remarks of Mr. Antelme and of Mr. G. A. Ritter, who seconded the motion, and my observations thereon; and in the four succeeding enclosures will be found copies of communications which I have received from the Manager of the Bank of Mauritius, the Directors of the Commercial Bank, and from the Chambers of Agriculture and Commerce supporting the application for the loan.

4. Although I am fully aware of the caution with which all such proposals should be approached, of the difficulties which may possibly be found in raising any Colonial Government loan in the existing condition of the London money market, and of the general objections which are held to the lending of money by the Govern- ment to a certain class of the community, except under very special circumstances, I have felt constrained in the present instance to give my personal support to the application, and to strongly recommend it to your favourable consideration.

5. After careful consideration in May of this year the sugar crop for the present season was estimated at 180,000 tons; there is now, however, little reason to hope that it will exceed 130,000 tons, and it is needless to enlarge on the effect which such a diminution of output will have on the industry, on the general trade of the Colony, and on the public revenue.

6. There can be no doubt that this shortage in the crop is due entirely to the unprecedented drought under which the Island has suffered for many months past, which, if further prolonged, may also affect the crap of 1908. Again, although the output of 1906 was above the average in quantity, the prices realised were below normal rates, and the planters are now feeling the results of these adverse condi- tions, and are apprehensive of difficulties in obtaining the necessary means to carry on the work of their estates during the coming entrecoupe; the views of those who are in the habit of supplying such means under usual conditions go to show that the difficulties are by no means imaginary, whilst a further factor in the position is the high prices ruling for rice, grain, and other food-stuffs of the people.

It is unnecessary to dwell at length on the inevitable results of the suspen- sion of operations on a number of estates, where employment and the means of subsistence are now afforded to a large section of the community. The labourers, whether indentured or otherwise, would cease to receive their food at the hands and cost of the proprietors, and the Government would be under the necessity of providing the means of living for them and their families.

8. But the difficulties and anxieties of the situation are not confined to those engaged in the sugar industry; any general interruption of work and wage-earning on the estates must inevitably react on the whole of the commercial element, and it is impossible to foresee a limit to the disasters which would occur amongst that portion of the community when once the tide of suspension of work, sequestration, or possible abandonment of sugar estates has set in. The Directors of the Banks and of the Commercial and Agricultural Chambers, amongst whom are the principal business men of the Colony, are united in their views of this side of the question, and I can find nothing to put forward which would dissipate their apprehensions or lead to the conclusion that their fears are exaggerated.

9. It may be reasonably held, therefore, that the assistance sought is not for the benefit of one class of the community. The staple industry is in a critical condition, and relief afforded to those engaged therein by providing them with the means of carrying on the cultivation and manufacture of their produce will mean also appreciable relief to those who are occupied in the general trade and commerce of the Colony.

10. With regard to the financial position of those who would avail themselves

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of the advances, and the security to be offered, I am of opinion that the Government could be safeguarded against loss under the provisions of a measure similar to the Ordinance of 1902 (No. 43); and no advances would be made without very careful examination, or unless repayment were secured by a first charge on the estate and crop. The planters of the Colony are, it is true, already indebted to the Government in the matter of the Hurricane and Mechanical Transport Loans, but it must not be forgotten that the instalments of the debt in both instances have been, and are being, regularly paid; that of the original amount of Rs. 5,868,450 advanced to planters, and of Rs. 700,500 advanced to house owners, under the first-named measure, there are now outstanding the sums of Rs. 3,132,645 and Rs. 54,805 respectively; whilst the balance of the latter stands at Rs. 1,761,421. Moreover, the advances in aid under the Loan Ordinance of 1902, which amounted to Rs. 2,949,181, were repaid in full by the end of July in last year.

11. In all the above circumstances I have felt not only that I am justified in my views of the security available, and of the prospects of repayment, but that it is my duty to ask your permission to introduce and pass the necessary Ordinance, and to recommend that steps may be taken, as a temporary measure, by the Crown Agents to obtain the necessary funds on the best terms, and as promptly as possible, should the state of the money market preclude, as I fear must be the case, an immediate issue of scrip or bonds.

I have, &c.,

Enclosure 2 in No. 15.

CAVENDISH BOYLE.

Acting Manager, Bank of Mauritius, to the Governor.

YOUR EXCELLENCY,

7 November, 1907,

I HAVE the honour, at the request of the members of my Board, to convey to Your Excellency the expression of their high appreciation of your promise to give your full support towards the carrying through of the loan of £200,000 to assist the sugar industry, the staple produce of the Colony. My Board is of opinion that the present position of the Colony is beyond doubt surrounded by increasing anxiety, and may shortly become very critical.

The heavy shortfall in the outturn of the present crop, which has been brought about by unprecedented drought, together with the low prices which the sugars have realised, will unquestionably combine to render the position of planters extremely difficult, if not impossible, for want of sufficient funds to carry them on until they can make arrangements in March or April with the banks for the reopen- ing of their credits for the following crop.

As Your Excellency is, no doubt, aware, the banks largely assist planters during the "entre-coupe" months by way of advances which are repayable from September to December, and further, give assistance to commerce and trade by means of discounts and exchange operations. Should estates be compelled to cease operations for want of sufficient funds to meet their monthly engagements for wages, provisions, &c., the result would prove disastrous not only to the sugar industry, but also to commerce generally, and to local traders from whom the planters obtain their supply of grain, ironmongery, manures, bags, &c., and my Board is of opinion that it is of paramount importance to the sugar industry and to commerce that a loan should be raised to relieve the present tension, and the pressing needs of the planters.

I have, &c.,

SIR,

Enclosure 3 in No. 15.

W. J. McIRVINE,

Acting Manager.

SECRETARY, Mauritius Commercial Bank, to Colonial SecrETARY.

6 November, 1907. THE passing of a resolution in the Council of Government yesterday, regard ing the raising of a loan of £200,000 for the purpose of assisting the planting com munity in advances to be made for the working of their estates for a period of four months from December to March, is a matter of general interest, to which the

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