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PECORD OFFICE
Peference-
LANCO.882/12
| PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
مسم
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3. The Colonial Secretary has intentionally not discussed the proposed financial operations of the Bank in great detail as this would appear to be a matter more nearly concerning the proposed Managing Director. I would suggest that the latter might well be a Chartered Accountant; in any case he should have a considerable experience of financial matters and in the raising, distributing, and repayment of loans.
. 4. As these proposals involve the disposal of Imperial Funds it appears to me that the Board of Directors should be composed exclusively of officials, and I am satisfied that such representation would be warmly welcomed locally.
SIR FRANCIS Watts,
I have, &c.,
H. J. READ,
Governor.
Enclosure 1 in No. 3.
You have asked me for my views regarding the proposed establishment of an Agricultural Bank in Mauritius.
2. With twenty years' experience of Mauritian affairs I cannot be otherwise than opposed to the establishment of a Bank on the lines proposed in the enclosure to the Secretary of State's Confidential despatch of the 6th July, 1929.* Any scheme for which Government would be financially responsible without complete control would in my opinion be disastrous for Government.
3. I am, however, of the opinion that a Government Agricultural Bank estab- lished for the purposes mentioned and administered in the manner suggested in Annexure A" is necessary.
"
Annexure "A" reproduces in great measure the provisions of Trinidad and Tobago Ordinance, Chapter 132. ›
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4. I consider that the establishment of such a Bank would not only relieve the existing financial stringency but would control interest charges and materially assist in the abolition of unnecessary brokerage charges.
5. It is probable that the proposal in (d) of Annexure "A" would be accepted by local financiers, particularly if it were made clear that the Bank's funds would be made available for the redemption, where considered financially sound, of existing long term mortgages, but I think it almost a certainty that the proposal in (e) of the annexure would, for the reasons stated in the preceding paragraph, be strongly opposed by the Banks and their financial allies the Brokers.
6. But if I am correct in assuming that high rates of interest and unnecessary brokerage charges increase the cost of production I do not see how the sugar producers could decline to make use of comparatively cheap money placed at their disposal by the Bank and continue to talk of increased preference at a rate sufficient to make both ends meet.
7. As it is probable that local financial influence would be sufficiently strong to obstruct the raising of local loans for the establishment of the Bank for the purposes stated, I suggest the introduction of British capital in the first instance.
8. A loan of £300,000 from the Colonial Development Fund, repayable in 30 or 40 years and to be free of interest for 10 years would, I consider (i) establish the Bank on a firm basis, (ii) emphasize the Imperial Government's approval of the Bank, (iii) stimulate British and local contributions to further proposed loans, and (iv) prove to the sugar producers the interest taken by the Imperial Government in their affairs. Further, such a loan and the proposed Board of Administration provided for in Annexure "A" would inspire confidence and completely put an end to all local opposition.
9. Having regard to the fact that, owing to the low prices now obtained for sugar, sterling is insufficient to meet the cost of imports, I suggest that the further immediate capital requirements of the Bank be raised in London.
10. I estimate the administration charges of the Bank at about £5,000 per annum, of which a salary of £1,800 or £2,000 per annum would, I think, have to be paid to a capable Managing Director from home.
4th November, 1929.
* C. 64560/29 [No. 14]: not printed.
ALLAN GRANNUM,
Colonial Secretary.
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Annexure
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A."
GOVERNMENT AGRICULTURAL BANK: PROPOSED ESTABLISHMENT OF.
Object of the Bank.
Fostering and encouraging agriculture in the Colony and aiding in the develop- ment, maintenance, and improvement of agricultural lands and for such other purposes as may be prescribed.
Capital of the Bank.
(a) £300,000. Loan from Colonial Development Fund repayable in 30 or 40 years and to be free of interest for 10 years.
(b) Loans to be raised by Government from time to time on terms and conditions to be prescribed. The Governor to be empowered pending the raising of such loans to authorize the Treasurer to make advances to the Bank in such sums and on such terms and conditions. as he may think fit.
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Administration of the Bank.
The Bank to be administered by a Board of Directors consisting of three members to be appointed by the Governor and a salaried managing director to be appointed by the Secretary of State of whom one to be a Chairman appointed by the Governor. The members appointed by the Governor to hold Office during the Governor's pleasure and to receive such remuneration as the Governor may direct.
Powers of Board.
The Board to be empowered :—
(a) To appoint and employ, at such remuneration and on such terms and con- ditions as the Governor may determine, such officers, valuators, inspectors, and servants as may be deemed necessary for the efficjent administration of the Bank, and to require any officer, valuator, or servant so appointed to give such security as may be considered proper for the due execution of his duties.
(b) To require those to whom loans or advances may be made (i) to keep such accounts and in such manner as may be directed, (ii) to submit such accounts for audit when requested to do so, and (iii) from time to time to furnish such statements and information as may be required.
(c) With the approval of the Governor—
(i) out of the funds of the Bank purchase or otherwise acquire or
take on lease or on rent any land or building; or
(ii) sell, lease, or rent any land or building vested in the Board.
(d) To make loans for the development, maintenance, or improvement of lands and the discharge of liabilities incurred in respect of such developments, maintenance, and improvements and for such other purposes as may be prescribed.
Provided-
(i) That every loan shall be made within such limit as may be pre- scribed and shall be secured by first mortgage on the lands in respect of which it is made.
(ii) That every such loan shall bear interest at such rate per annum
as may be prescribed.
(iii) That every such loan, together with interest thereon at the pre- scribed rate, shall be repayable by equal annual or semi-annual instalments over such period of years as may be prescribed.
(e) To make temporary advances for the development, maintenance, and improvement of lands, including the payment of labour and the purchase of supplies required to plant, cultivate, and manure such lands and to read and make merchantable the crop and produce thereof and for such other purposes as may be prescribed.
Provided-
(i) That every such advance shall be within such limit as may be prescribed, and shall be secured by first mortgage on the lands in respect of which it is made and upon the crop and produce grown or to be grown thercon, when reaped or gathered there- from, and on the product or article to be cured, made, or manu- factured from such crops and produce upon severance from the
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