CO882-(8-9) — Page 260

PUBLIC RECORD OFFICE

Reference :-

TLC.O. 882

لنسانيسيا

9

PUBLIC RECORD OFFICE, LONDON

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

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of course take steps to prevent starvation, but will not repair of damage give a good Reserve Fund amounts to about £12,500, deal of employment to working classes! but overdraft on General Account of Colonial Government is £84,000, of which about £52,500 is on account of bills drawn on Bombay. How much of overdraft is due to advance to Commercial Bank and what is actual position of Treasury? I am reluctant to approve sale of Reserve Fund securities unless absolutely necessary.— ELGIN.

7639

No. 31.

THE SECRETARY OF STATE to THE GOVERNOR.

(Sent 8.30 p.m., 4 March, 1908.)

TELEGRAM

[Answered by No. 33]

(Paraphrase.) Confidential. In view of probability that planters will endeavour to base on it renewal of applications for loan from Government, you will of course take steps to check statements of damage done. ELGIN.

793U

(Secret.)

MY LORD,

No. 32.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 5 March, 1908.)

Governor, No. 1, 20 January; No. 2, 20

January.

Government House, Le Réduit, 5th February, 1908. WITH reference to the telegraphic correspondence* noted in the margin, time does not permit my addressing you at length by the outgoing mail of to-day on the subject of the assistance applied for and rendered to the Commercial Bank of Mauritius; and I am compelled to post- pone making a full report on the action taken and on the causes which have led to it until a later opportunity.

Secretary of State, 25 January.

Governor, 2 February; 3 February.

Secretary of State, 3 February.

Governor, 5 February, 1908.

2. In confirming my code message of the 3rd and my cypher message of to-day's date, and in acknowledging the receipt, on the 4th, of your Lordship's cypher message despatched on the previous day, I have the honour to state that on the forenoon of Friday, the 31st ultimo, the position of the bank was reported to me as being sufficiently secure to warrant the Directors from refraining from making any application for assistance from the Government. A run seems to have taken place, however, on the afternoon of that day and during the early hours of Saturday, due, in part at least, to the insolvency of Messrs. Regnard, to which I have already referred, and on Sunday morning, the 2nd current, I was informed that the situation was grave; that the cash balance had been reduced to about Rs. 540,000, and that a further reduction would take place on the following day.

3. This proved to be the case, and when the Directors approached me with their formal application for an immediate loan of Rs. 1,000,000, to be increased if necessary by a like sum later on, the available cash balance in the bank was less than Rs. 300,000. It was evident that unless the withdrawals ceased the bank must suspend payment during the early hours of Tuesday, the 4th, and as I was fully convinced that intervention was necessary in order to prevent a serious and general catastrophe in the Colony, I promised that one million of rupees in currency notes should be lodged with the bank, on loan, upon the opening of its doors at 10 o'clock on that morning, and I reported the action which I had felt it to be my duty to take, even in anticipation of your Lordship's reply to my message of Sunday,

the 2nd current.

4: On the morning of the 4th I had the honour of receiving your telegramt despatoned on the previous day. I at once sent for the President and Vice-President

† No. 27.

• Nos. 21, 23, and 24 to 28.

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of the Board of Directors of the bank, and, in the presence of the Colonial Secretary and Procureur-General, I explained to them the terms and conditions of the loan. I asked the President, Mr. H. G. Ducray, whether he had full power to bind the Corporation to such conditions, and both he and Mr. H. Leclézio, the Vice President, assured me that he had such power. I thereupon obtained the signature of the President to a letter a copy of which I enclose.

5. This letter is now embodied in a formal agreement which has been com- pleted and signed by the whole Board on behalf of the Corporation of the bank, and by the Colonial Secretary on the part of the Government; and which, in addition, secures the legal transfer of the dock warrants to the Government, and the necessary powers to deal with them, and dispose of them at the discretion of the Government. 6. It will be observed that the value of this "cover" is more than 50 per cent. over the amount advanced; and the security would seem to be full and sufficient. Interest at the rate of 10 per cent. has been agreed to, and the loan is repayable on demand.

7. The effect of the promise of assistance and of the advance has been marked, and I am assured that the panic has been stayed.

8. As indicated in my telegram of to-day's date* I propose to summon the Council of Government to a special session on Friday next, the 7th current, for the purpose of passing a measure containing a clause somewhat similar to Article 2 of Ordinance No. 1 of 1898, and a further clause validating the action already taken. The first clause will leave power to the Governor in Council to take further similar action in case of necessity, but I sincerely hope that this necessity (namely, for a further advance to the extent of one million rupees) may not arise; and no such action will be taken without further reference to your Lordship.

9. In the absence of directions to the contrary, I propose to assent to the Bill foreshadowed above, and the enactment will, of course, be repealed on the conclu- sion of the arrangements referred to herein.

10.

A copy of the Agreement to which I have referred above will be trans- mitted by the next earliest opportunity.

SIR,

CAVENDISH BOYLE.

I have, &c.,

Enclosure in No. 32.

Port Louis, 4th February, 1908. IN continuation of the interview which the Directors of the Commercial Bank, as represented by Mr. H. Leclézio, Mr. G. Ritter, and myself had with Your Excellency yesterday, the 3rd current, at which, on account of our representations to the effect that the bank must inevitably suspend payment unless assistance were rendered by the Government, you promised that you would, for your Government, lend the sum of one million rupees to the bank this morning against the security of dock warrants representing sugar to the value of one million five hundred thousand rupees, to be transferred to the Receiver-General; the said sum of one million rupees to be repaid on the demand of the Governor of this Colony, I hereby under- take in the name of the Directors of the Commercial Bank and of that Corporation, and hereby bind myself and such Directors in the name of the Corporation, to repay the said sum of one million rupees when so demanded by the said Governor of the Colony, and to pay also interest thereon at the rate of ten per cent. per annum, such interest to be payable at such times as the Governor may hereafter decide; and I undertake to deliver and transfer to the Receiver-General the dock warrants to the amount aforesaid immediately upon the receipt of the said sum of one million rupees, such dock warrants to be dealt with and disposed of as the Governor of the Colony may decide and direct.

His Excellency

I have, &c..

HENEI G. Ducray, President of the Mauritius Commercial Bank. Sir Cavendish Boyle, K.C.M.G.,

Governor and Commander-in-Chief,

Mauritius.

miabour yait

• No. 28.