CO882-6 — Page 78

PUBLIC RECORD OFFICE

Reference :--

C.O. 882

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PUBLIC RECORD OFFICE, LONDON

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

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Enclosure 2 in No. 7.

The RESIDENT-GENERAL, Federated Malay States, to the ACTING HIGH Commissioner for the Federated Malay States.

SIR,

(No. H.C. 1568/97.)

Resident-General's Office, Selangor, Malay Peninsula,

Kuala Lumpur, June 19, 1897. WITH reference to your paper covering the Secretary of State's despatch, No. 57, of the 12th May, sanctioning the immediate advancement of railway construction on the lines suggested by me, and approving the raising of a loan for this purpose, I have the honour to report as follows:-

2. The fine weather has apparently just begun, and in order to lose no time I telegrapher, on receipt of your paper (the 14th instant), to the Resident of Perak, informing him of the decision, and requesting him to get to work at once on the Taiping- Kuala Kangsar line; to complete as soon as possible the surveys of the Taiping-Kuala Prai (Province Wellesley) section; and to furnish Mr. D. Logan, Penang, lately Solicitor-General, with information as to the land that must be acquired in Province Wellesley for this extension.

3. Work has now commenced on the first five miles of the Taiping-Kuala Kangsar section (20 miles), and I understand that the Kinta-Kuala Kangsar section to meet it will be finished to the East (or Kinta) side of the Perak River by the end of this

year.

This last work was already provided for in the Estimates, as also the bridge foundations, and orders have already been sent to the Crown Agents for the iron superstructure.

4. The 20 miles intervening between Taiping and Kuala Kangsar is a comparatively easy section, with the exception of the Pass between the Larut-Perak River valleys, where some tunnelling is necessary.

5. On the Taiping-Kuala P'rai section (50 miles) the survey is in hand, and work can probably be commenced at once from the terminus of the existing line at Ula Sapetang,

6. The five assistant engineers asked for last October, and now being engaged in England, are required to supervise construction between Kuala Kangsar and the Krian border of the Perak territory in Krian. I will shortly address Your Excellency on the staff required to carry the construction through Province Wellesley to Kuala Prai.

7. The alignment has been roughly determined, and as soon as the centre-line has been finally determined and pegged out, the land required must be resumed, and Mr. D. Logan, than whom no one can so well assist us in this matter, has undertaken to secure the native-owned lands that are required. As regards the land owned by Europeans, I am in hopes that we shall, also with Mr. Logan's assistance, be able to secure what we want without payment. I trust that may also be the case with the land of the Chinese owner, Koh Bu Ann, in Krian. I enclose copy of a telegram I have just received from Mr. Logan on the subject. It is very satisfactory. I should also add that Mr. Vermont and the other owners of the Prai Estate, where we must acquire a large piece of valuable lund for the terminus on the Prai River, have met mny enquiries in a very public-spirited

manner.

8. I enclose a map, which will enable Your Excellency to more readily follow these proposals. What I have said provides generally for all the northern portion of the new construction, and while that should remain, at present, under the general supervision of Mr. Hunson, resident engineer for Perak railways, I propose to entrust Mr. Watkins, resident engineer for Selangor railways, with the construction of the two sections, Tapah to Tanjong Malim (50 miles) and Tanjong Malim to Kuala Kubu, the present terminus of the Selangor railway in this direction. That is all the construction work I

propose to undertake at present, leaving the final connection between Kajang (Selangor) and Seremban (Negri Sembilan) to be taken up later on.

9. The survey of the short section from Kuala Kubu to Tanjong Malim is already completed, and, as soon as it has been pegged out, construction can begin on the first 15 miles, and I propose to take that up at once, as there is an ample labour force (Chinese) just discharged from Kajang ready for this purpose. The surveys between Tanjong Malim and Tupah (now in hand) can be completed, and should be put in Mr. Watkins bands, and, when done, work can be carried on from both ends of this section. I will shortly submit a requisition for the staff required to supervise these two sections, Kuala Kubu to Tanjong Malim and Tanjong Malim to Tapa).

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10. Indents are being prepared for the construction plant required, and much will depend on the rapidity with which this can be supplied. It will also be necessary to send for permanent way nuaterial and some locomotives, but these cannot arrive, or be paid for, till 1898.

11. The financial position is briefly this: -Pahang is heavily in debt to Selangor, and that State has to supply $140,000 this year for purposes of Pahang's ordinary administration. The Negri Sembilan has a small debt, but pays its way. Perak bas exhausted its balances. Selangor, on 1st April last, had a balance, assets over liabilities, amounting to $2,761,922, but a large part of that amount is not realizable or available. There is, however, $350,000 on fixed deposits in Singapore banks, and $1,000,000 invested in Indian Government paper.

12. The sanctioned Estimates in Selangor provide for the expenditure of $175,000 in excess of the estimated--

Revenue, say

Pahang (for 1897 administration)

(arrears of Interest to Colony) Possible short receipts on Estimated Revenue Cost of Federal buildings (advanced by Selangor)

Total

$

175,000

140,000

81,000

250,000

200,000

846,000

296,000

Balance required

...

550,000

Estimated saving on sanctioned Expenditure

13. To meet this $550,000 the Indian investment must be realized at once, and in another letter I am sending the receipts to be forwarded to India for sale. The Indian investment when sold, and the money has been transferred to Singapore, will represent in dollars, say, $1,050,000, and deducting the above $550,000, we have $500,000 and $350,000 on fixed deposits in the banks; total, $850,000 for the immediate needs of railway construction.

14. The Perak new railway construction (under the scheme) will take $50,000 a month for seven months, i.e., $350,000 to the end of the year, while in Selangor they will be able to expend about $200,000; totul, $5.50,000, leaving $300,000 balance in hand, and I do not think it would be safe to reduce that amount.

15. A deposit note for $100,000 falls due this month, and the amount it represents will be sent to Perak to meet the expense of the new work for from, say, 15th June to 15th August, by which time we shall have received the Indian investment. The other bak deposit note can remain at interest, and any part of the Indian investment not required for six months can similarly be placed on deposit.

16. Satisfactory arrangements can thus be made for prosecuting the work to the end of the year, but money must be forthcoming then, or at any rate, by early in February at the latest. I calculate (very roughly, I can tell better when I have had an opportunity of consulting Mr. Hanson) that we must spend, from 1st January, 1898, two millon dellars for the equivalent) per annum, or rather over it. Of that amount, possibly $1,200,000 would be required here, and $800,000 (or £80,000) in London to pay for per- manent way, bridges, rolling stock, passages of officers, &c., &c. There should be no difficulty about spending $100,000 a month on the ground, and I would rather see a larger than a smaller sum devoted to that purpose. $1,200,000 a year for five years is $6,000,000 for local expenditure, and £80,000 a year for five years is £400,000; total, one million sterling. We are to set aside from current revenue the half of this amount. that is $1,000,000 a year, and it must be found by Perak and Selangor, in probably equal proportions. If as much as £400,000 is wanted in England, I imagine it is better to raise it there as required, and the Crown Agents could most easily arrange this, as the money would be devoted to the payment of their accounts. In that case only a million dollars loan would be required here, and I recommend that we make enquiries of the banks with the object of floating a local loan for $1,000,000, if possible at 34 per cent, for I understand we could, without difficulty, raise money in England at 3 per cent. If the whole loan could be raised locally in silver at 34 per cent. interest, I should be inclined to recommend this course to avoid a possible loss by fall in exchange. This can be ascertained by communicating with the banks, for if a bank would take up the loan it might be possible to arrange that the money should be supplied in instalments, and

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