CO882-(8-9) — Page 289

་། ། ་། ། །

PUBLIC RECORD OFFICE

سلفست

19

Reference :----

C.O. 882

9 PUBLIC RECORD OFFICE, LONDON

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

88

of the 8th of June. inviting my attention to certain observations made by Mr. Leclézio at a meeting of the Chamber of Agriculture held on the 11th of March last, and calling for statements to show the variations in the deposits in the Com- mercial Bank during the latter half of January and the whole of the month of February.

2. In the first two pages of the papert supplied by the Directors of the bank, and transmitted herewith in the original, will be found the statement required, giv ing the amounts" Encaisse "the daily cash balance during the periods mentioned. In the succeeding pages information is furnished as to bills discounted and advances made between the 4th of February, when the sum of Rs. 1,000,000 was lent to the bank, and the 14th of May, when repayment of the loan was completed, and as to the transactions of the bank in bills bought and sold between the beginning of the year and the last named date, the introduction of specie during the month of March, April, May, and June, and the value of the dock warrants held by the bank when application was made for the loan on the 3rd of February last.

3. From these figures it will be seen that the sum of amounts furnished to the sequestrators of certain named estates, and of the advances to "habitants planters made during February and March was Rs. 156,614, and that from the 1st of April to the 14th of May further amounts, totalling Rs. 866,715, were so furnished and advanced; the ordinary discounts, as distinguished from the seques- tration moneys, amounting during the two periods to Rs. $78,500, and being, as stated, "principally renewals."

4. I have separated the periods before and after the 1st of April because the Directors had undertaken, and had given me their assurance that the usual advances to sugar estates for their "faisance-valoir" would not be made before that date, nor before the sums locked up in advances on dock warrants had begun to be released, and to become available as part of the liquid assets of the bank.

5. It will be further seen that between the 4th of February and the 14th of May the whole amount of the "escompte "-discounts-(in which are included the sequestration moneys, Rs. 144,830 and the "valeurs escomptées des habitants

bills discounted for planters Rs. 878,500 referred to above) was Rs. 2,456,324; that drafts and telegraphic transfers were sold to the amount of Rs. 3,262,718; that foreign drafts were brought for Rs. 940,931, making a total encashed of Rs. 4,203,649; and that Rs. 1,200,000 were imported by the bank in specie.

6. Looking at the account from another point of view, it will be seen that on the 4th of February the cash balance, including the sum advanced by my Govern- ment, stood at Rs. 1,357,576, and that during the month, and after the loan had been brought to account, the lowest cash balance was Rs. 715,022. The difference, therefore, between that last-mentioned amount and the loan, namely, Rs. 284,978, is the sum which may appear to have been applied by the bank to the assistance of planters from money borrowed from the Government.

7. The words " appear to have been applied" are used advisedly, for para- graph 3 above shows that between the 4th of February and the 1st of April only Rs. 166,514 were advanced to the owners or operators of sugar estates; and it should be added that during the same period, and in April and May, considerable sums were set free on the shipment of the produce held under dock warrants, either at the disposal of the bank, or pledged as security for the loan. A statement‡ showing the operations in the latter connexion will be found in the second enclosure herewith.

8. It may, moreover, be noted that the system of advancing for the "faisance- valoir" of estates neither contemplates, nor in practice results in, any repayment by the borrower during the "entre coupe," funds for such repayment only becoming available as the new crop is taken off, and the produce delivered from the factory; and that the earliest realisations are not possible before September in each year.

The Government loan, however, was repaid by instalments in March, April, and May; the dates and amounts of repayment being as under :--

9.

On the 20th of March

11

15th of April

27th

29th

"

13th of May

14th

TI

• No. 59.

19

Rs. 200,000

Rs. 300,000

Rs. 150,000

Rs. 195,000

Rs. 50,000

Rs. 105,000

↑ Not printed.

Not printed.

89

10. Whilst, therefore, the assistance afforded to the bank enabled it to continue as a going concern, and to render liquid a portion of its tied-up assets, I cannot believe that the sum obtained was borrowed to be lent to the planters, nor do I find evidence to show that it has been so applied.

11. With regard to the observations of Mr. Leclézio, I beg to state that they appeared to me to have been uttered under considerable excitement, and to have been prompted by a desire to sustain the credit of a financial institution with which he is intimately connected, for the conduct of which he is in part responsible, and which had been the subject of adverse criticism and attack. There was, moreover, much else in his speech with which I would not agree. I therefore purposely abstained from commenting on any portion of it, believing that it would be viewed elsewhere in the above light.

12. Referring now in detail to the words which have been quoted, I would state that I held it to be in the interests of the Colony as a whole to place a million of rupees at the disposal of the bank, and that I did not take that step in the interests of the bank alone, that I did not believe that the bank had no need of it -I believed that it had urgent need of it-that I did not make the loan in order that the money advanced might be re-lent to those engaged in agriculture and commerce; but that I made it with a view of averting a serious disaster likely to affect the whole Colony, and that I saw that the general business" mouvement "-of the Colony must be seriously impeded, and that as a consequence the sufferings of a large section of the community, already considerable, must be materially increased if the assistance required was refused.

K

11

13. Mr. Leclézio is at present absent from the Colony, having gone to the Island of Réunion in the middle of June, and I have had no opportunity of inviting his explanation of the words used by him. I can, therefore, only now submit my personal view of them, offering at the same time an explanation of regret if, by refraining from doing so at an earlier date, I have failed in my duty.

14. In recent despatches which I have had the honour of addressing to your Lordship the financial position of the Government has been detailed; and I would here state my belief that the disaster which must have attended the suspension of the bank would have largely added to the difficulties of administration, and would have tended to increase the deficiency in revenue collected during the past financial

year.

15. In assisting the bank my sole object was to avert a crisis which was imminent, and which must have led to deplorable and far-reaching results. That object, I venture to believe, has been attained; and it is with a sense of discourage- ment, and even of dismay, that I have learned the view of my action created by Mr. Leclézio's words, and that it has been thought possible for him, with his fellow Directors, to mislead me into becoming their agent for affording the Government assistance to planters which had been refused for insufficiency of justification by your Lordship's predecessor.

33965

(No. 232.) MY LORD,

No. 78.

I have, &c.,

CAVENDISH BOYLE.

THE GOVERNOR to THE SECRETARY OF STATE.

(Received 17 September, 1908.)

[Acknowledged 18 October, 1908. No. 194.]

Government House, Port Louis, 1 August, 1908. HAVING communicated to the Executive Council the letter and memorial which formed the enclosures in my despatch, No. 218, of the 22nd of July,* I have now the honour of submitting the following remarks on the latter document.

2. A copy of the "dissent" referred to in the third paragraph of the memorial will be found under cover of my despatch, No. 160, of the 24th May last.t

8. In their remarks, in the fourth paragraph, the memorialists have put forward conclusions which I do not think are deducible from what actually occurred. It is true that the Chamber of Agriculture, in their resolution of the 8th of April,

• No. 73.

↑ No. 60.

10917

M