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10. Adjoining the inundation area the Company has acquired 14 isolated lots with an area of about 40 acres, held under permanent titles.

11.

The Malim Nawar steam station site with an area of about 20 acres is held by the Company under two permanent titles which were bought by the Company by private treaty.

..

12. There appear to be five sub-station sites covering nine pieces of land having a total area of 16 acres. Four leases have been issued to the Company and leases for the remaining land are in course of preparation.

13. The transmission lines affect the three districts of Kuala Kangsar, Kinta, and Batang Padang and the total length of lines is about 100 miles. The policy of the Company in regard to the form of title which they required for transmission lines seems to have been distinctly vacillating. As the result of long discussion in 1926 and 1927 the Company apparently came to the conclusion that under the then existing Electricity Enactment their powers to take their lines over alienated lands were inadequate and that acquisition of the necessary land and subsequent issue of leases was desirable. Acquisition proceedings were started in the various districts and in some cases acquisition was completed, in others it was not. In the middle of 1929 however the Company notified the District Officers that where possible compulsory acquisition should be dispensed with and that they would exercise their statutory powers of way-leaves under the Electricity Enactment, 1925 (since repealed and re-enacted as the Electricity Enactment, 1931).

14 As a result while the compulsory acquisition of considerable areas was completed, in a probably larger number of cases it was abandoned. In the latter cases the Company made their own arrangements with the owners concerned and erected their lines under private agreements to which the Government was not a party. The policy of the Company now appears to be only to require leases in case where the compulsory acquisition of land was actually complete prior to the middle

of the year 1929.

15. The new policy of the Company appears to be dictated entirely by financial considerations. The excision of a strip of land two or three chains wide involves survey and in view of the very large number of lots involved the cost of survey would have been very high.

16. In the districts of Kinta where the total length of transmission lines is some 70 miles, some 10 miles of line have actually been surveyed. In the other two districts no surveys have been completed. This is to a large extent explained by the fact that there was in Kinta a sum of $12,000/- deposited by the Company for survey fees while no similar deposit seems to have been made in other districts. In regard to the surveyed areas in Kinta it should be possible to issue leases at an early date if the Company so desire. A number of such leases have already been issued.

17. I am of opinion that the policy of the Company in regard to way-leaves over transmission lines areas should be brought to the notice of the Treasury and of the trustees for the various classes of Debenture-holders. The area of the land con- cerned must be in the neighbourhood of a 2,000 acres and the capital expenditure involved in the transmission lines is very large. The agreements in regard to the way- leaves are made between the Company and the landowners concerned and might possibly not enure for the benefit of any assignee of the Company (if its undertaking had to be assigned). In this matter not only the Debenture-holders but also the Perak and Federated Malay States Governments as grantors of the Concession and as third chargees are concerned.

18. It will be noted that the titles now or in the immediate future which will

be available to be charged are:-

(a) the leases to be issued for the Chenderoh dam site,

(b) certain permanent titles of no great value for land adjoining the inundated

area,

(c) two permanent titles for the Malim Nawar steam station site.

(A) certain leases issued or to be issued for various sub-station sites,

(e) leases which have been and will be issued for a limited portion of the trans-

mission lines area.

The number of leases actually issued is 12, covering an area of 105 acres.

Kuala Lumpur,

3rd November, 1932.

W. S. GIBSON,

Legal Adviser, Federated Malay States.

C. 92302/32 [No. 60].

No. 25.

THE HIGH COMMISSIONER to THE SECRETARY OF STATE.

(Received 6.38 a.m., 10th December, 1932.)

(Paraphrase.)

TELEGRAM.

[Answered by No. 28.]

I do not question

10TH DECEMBER. Your telegram No. 199 of 1st December.' that the proposed purchase of Malayan Dredging Station would in itself be a sound business proposition if it could be viewed apart from other aspect of situation. This I consider to be impossible. The Company is understood to be faced at the present time by the following annual charges (1) working expenses £66,000, (2) interest on guaranteed debenture stock £62,500, (3) Sinking Fund contribution thereon £35,000, (4) interest on Prior Lien Debentures £20,000, total £183,500. Against this it is believed that present income is about £110,000 and extra revenue after proposed pur. chase might be £20,000. Total £130,000 This leaves a deficit of £53,500. The Moratorium ends 1934 and I consider it imprudent to estimate increases in revenue at more than 15 per cent. for the year beginning 1st August, 1933, and a further 30 per cent. for the year beginning 1st August, 1934. The proposed purchase is only sound if the Company can continue to operate without a further issue of Prior Lien Deben- tures in excess of £400,000 until time when income is sufficient to meet all debentures and loans interest. Would Treasury be willing to grant moratorium in respect of interest and Sinking Fund on guaranteed debentures if funds of Company should prove inade- quate? If you are satisfied that the Company will be able to carry on without raising Prior Lien Debentures beyond the present authorized limit I withdraw my opposition but I am not in a position to accept any responsibility in this matter Mecause it is clear to me that the assurance given in (a) of Mr. Balfour's letter to the Treasury of the 17th Junet which formed an enclosure to your Confidential despatch‡ is incapable of fulfil- ment and the Company must rely on the scheme mentioned in paragraph (b) of the same letter regarding which no information has been given me. Paragraphs 5 and 7 of my Confidential despatch of 21st October§ refer.

C. 92302/1/32 [No. 8].

GENTLEMEN,

No. 26.

COLONIAL OFFICE to MESSRS, BURCHELLS.

[Answered by No. 30.]

Downing Street, 21st December, 1935. WITH reference to your letter to the Crown Agents dated the 14th January, 1930,|| on the above subject, I am directed by Secretary Sir Philip Cunliffe-Lister to transmit to you copies of the correspondence specified in the accompanying schedule.

2. It will be seen that the High Commissioner for the Federated Malay States in his despatch of the 3rd November¶ (paragraphs 3 and 4) requests that you may be asked to advise on certain questions raised in the memoranda prepared by the Legal Adviser, Federated Malay States, which form enclosures to his despatch, and I am to request that you will be good enough to meet the wishes of the High Commissioner' in this matter.

* C. 92302/32 [No. 57]; not printed.

I am, &c.,

H. R. COWELL.

† Enclosure in C. 92302/32 [No. 18]: not printed. § No. 23. || C. 72367/30 [No. 1]: not printed.

† C. 92302/32 [No. 23]: not printed.

¶ No. 24.

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