CO882-10 — Page 409

HI!

PUBLIC RECORD OFFICE

Reference :-

CO. 882/10

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH--NOT TO

PUBLIC RECORD OFFICE, LONDON

Countries.

United Kingdom. British possess-

ions

France Other foreign

Imports.

Rs

Exports.

K8

472251 27.5% 962951 50.1%

1095061 63,8% 313951 16.5% 111208 6.5% 599852 31.3% 36778 2.2% 42423 2.1%

Total.

R9.

1436202 39.5%

1409012 38.8% 711060 19.6% 79201 2.1%

50. Should the provision of a grant-in-aid be deemed inadvisable, it will be necessary to provide the money from local funds. The agricultural service of the Colony has always been starved, and in consequence knowledge and production are both inadequate, and the time has now arrived when provision must be made, even if it involves rigorous economy in other directions.

Financing agricultural operations.

51. Apart from Cooperative Credit Bocieties, which should form part of the regular operations of the Department of Agriculture, three matters concerning agricultural finance have given rise to discussion locally during the past year or two. These are the following:-

(a) relief of properties encumbered with debts

on which high interest is being paid,

(b) the possibility of obtaining funds for a Flanters'

Loan for developing unencumbered properties, (c) the possibility of providing for establishment

of a commercial bank.

The two first have usually been dealt with together, but have to be considered separately, as they involve problems of a somewhat different kind.

52. The total mortgages in the Colony amount to Rs.3,000,000. The interest is usually about 12 %, and in addition the debtors are practically forced to deal, for ordinary supplies, food, tools do., with their creditors at the prices fixed by the latter. This is quite ordinary and legitimate business, and deserves mention here only because it may be fairly claimed that part of these debta are attributable to the absence of a bank and to the very small degree of guidance afforded to planters in the past by the Government, and also because it is on a great enough scale to seriously affect the welfare of the Colony.

53. The Bank of Mauritius (now Mercantile Bank of India Ltd.) established a branch here a few years ago, but after four years withdrew. The reasons for its withdrawal I believ to have been the fact that properties in debt to local firms could not deal with the bank for fear of their creditors, and

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thus the volume of business, which is in any event not great in view of the low production of the Colony, was seriously reduced. In the absence of a bank, a local system of banking by the larger firms, chiefly Parsee, has grow up and is now entrenched fimly behind its various mortgages and debts: were this system reputable, there would be little to complain of, but there sems little doubt that it is exorbitant, and that its banking business is intertwined with its ordinary commercial operations to an extent that is harmful to the Colony.

54. A request has been forwarded by certain local planters and others to the Secretary of State, to the effect that the Goverment guarantes a loan of Rs.600,000 @ 6 $, raised from commercial interests in Mauritius, to be used for relieving local properties from debt, and also for advances to unem- cumbered properties for development work. A second suggestion which has not been definitely formulated, is that the Secretary of State be asked to provide this loan from the funds set aside for loans for development of Crown Colonies. In this connection it should be mentioned that it is a matter of common knowledge that the last planters' loan in this Colony was in many cases not used for agricultural development by the borrowers.

55. I find it extremely difficult to advise in these matters. My own view is that there can be very little hope of adequate development of local agriculture unless funds are available, from a raputable source and at a reasonable rate of interest, for financing ordinary planting operations. In addition it sees to me that it would be to the benefit of the Colony if some relief could be provided to those debtors who have unwisely assumed charges high enough to prevent them devoting adequate summa to the efficient handling of their plantations.

56. It does not appear that a Planters' Loan, whether for five or ten or twenty years, will entirely meet the case. It is necessary, but cannot replace the need, which must always be felt, for a bank with its daily conveniences and facilities.

57. The solution of the difficulty appears to lie in some scheme which will provide at once facilities for development loane and the foundations of an ordinary commercial bank, with perhaps come consideration for the relief of heavily mortgaged properties where the owners are more likely to

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