44389
25
No. 23.
THE SECRETARY OF STATE to THE GOVERNOR.
(Paraphrase.)
(Sent 11.30 a.m., 9 January, 1908.)
TELEGRAM
Your despatches, 400, 12 November, and 416, 23 November.* After full consideration I regret that I cannot find in the case as submitted to me sufficient justification for sanctioning the proposed loan to planters. I will explain my reasons by despatch as soon as possible, but it will doubtless be in the interests of the planters that they should be in possession of my decision at once.-ELGIN.
R286
No. 21.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 2.8 p.m., 20 January, 1908.)
(Paraphrase.)
TELEGRAM.
[Answered by Nos. 24 and 59.]
No. 1. 20 January. The Commercial Bank will, I have reason to believe, apply for the immediate assistance of Government in the shape of loan of certainly Rs. 1,000,000, and possibly Rs. 2,000,000 on the security of dock warrants for sugar not yet shipped amounting to Rs. 3,000,000.
I think security is fair as the value of sugar is 22 per cent. more than amount
of the warrants. As I am informed by the Directors position of bank is as
follows:-
Assets:-
In hand, Rs. 686,000, chiefly currency notes.
Bills of exchange discounted and short loans, Rs. 2,770,000.
Dock warrants, Rs. 3,000,000.
Liabilities
Capital, Rs. 2,000,000.
Depositors, Rs. 3,147,000.
Please refer to 1898 correspondence as to similar crisis and action taken; also Blue Book Report No. 279. † Unless assistance is given promptly a run on the bank is inevitable, with probable suspension, and disastrous effect on the whole Colony, which should be avoided if possible. I propose to lend Rs. 1,000,000 at once in currency notes against dock warrants and await result. It will not, I think, be necessary to suspend Currency Ordinance, because bills of exchange can be drawn on Bombay for silver as the sugar is shipped.
I am prepared to take responsibility of dealing with the matter, for which I hope I may be allowed full discretion. A reply is urgently required.-BOYLE.
2287
No. 22.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 1.37 p.m., 20 January, 1908.)
(Paraphrase.)
TELEGRAM.
[Answered by No. 24.]
No. 2. 20 January, Private and Confidential. Lloyd's Bank, London, should you consider it advisable to consult them, might be willing to furnish confidentially their opinion as to the Commercial Bank's position and stability.—-BOYLE.
(No. 18.)
SIR,
THE SECRETARY OF STATE to THE GOVERNOR.
*
[Answered by No. 35.]
Downing Street, 23 January, 1908. I HAVE given very careful consideration to your despatch, No. 400, of the 12th November last, in which you submitted a resolution, adopted by the Unofficial Members of the Council of Government, recommending that a loan of £200,000 should be raised by the Government of Mauritius for the purpose of making advances to planters.
2. Previous to the receipt of your despatch (on the 16th ultimo) the matter had been the subject of telegraphic correspondence which I need not set out here, as the substance of it has been made public by you in the Sessional Paper forming the first enclosure to your despatch, No. 416, of the 23rd November.t I need only observe with regard to these communications that on the 15th Novembert I informed you that, as at present advised, I could hold out no hope that I should be able to agree to the course proposed, but that I was prepared to await the full explanation for which I had asked, before giving, a final decision. On the 16th November you telegraphed that the financial position of intending borrowers would be fully investigated when applications were received for advances, but that it would not be practicable to obtain such information until power had been created to entertain the application; and that the purposes to which the loah would be applied were similar to those for which advances were made in 1902.
3. It therefore appeared that on the receipt of your two despatches above mentioned I had before me the full statement of the case on which the application for a loan has been based. I was anxious, in the interests of the planters, that they should be made acquainted with my decision at the earliest possible moment, and I therefore telegraphed to you on the 9th instant that after full consideration I regretted to be unable to find in the case, as submitted to me, sufficient justification for sanctioning the loan.
4. I propose, in the present despatch, to set out fully the reasons which led me to this conclusion.
5. I would observe, in the first place, that the application of funds for which a Government is responsible to enable a section of the community to carry on its ordinary business is so much opposed to the traditions of British administration that the presumption against the adoption of such a course on any particular occasion must be very strong. I do not suggest that this presumption cannot be destroyed: each case must be considered on its merits; and while it is impossible to lay down in advance the principles which would justify a departure from estab- lished policy, there are, in my opinion, certain conditions, all of which must be satisfied before such a proposal as that now before me could be entertained. These
(1) That the fortunes of the community are so bound up with those of the industry concerned that any collapse in the latter will vitally affect the former;
are:-
(2) That the position of the industry is so critical that in default of Govern-
ment assistance a general collapse is inevitable;
(3) That the industry is normally in a sound condition, and that the circum- stances adversely affecting it at the moment are so exceptional and transitory that there is reasonable ground for believing that the effect of granting the assistance asked for will be to replace it permanently on a satisfactory basis;
(4) That the whole, or practically the whole, of the persons engaged in the industry are equally affected by the adverse circumstances in question; (5) That definite information is available as to the solvency of intending applicants, the extent to which assistance will be required in each case, the purposes to which the advances will be applied, and the total amount likely to be so advanced;
(0) That the loans shall be granted direct by the Government to the persons in need of assistance, and shall not be made the occasion of securing profits to intermediaries.
• Nos. 15 and 18.
↑ te, Blue Book Report for 1898.
No. 15.
12317
* No. 18.
No. 10.
No. 11.
(No. 20.
D
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