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ment generously come to the rescue with a grant of £80,000, the sugar industry, upon which the island practically relied at that time, must have received such a check as to very seriously affect the administration of the affairs of the island, and it is difficult to see how the Government could have been carried on without extraneous aid. Your Lordship is aware that the £80,000 has been used under the provisions of "Plantations in Aid Acts," renewed yearly to form a specific fund to be applied to the repayment of moneys authorized to be borrowed under the Act, to the extent of £200,000.

6. Borrowers are obliged to account to Commissioners appointed under the Act for the proceeds of the crop of any plantation in respect of which a loan has been granted, and repayments, with interest, have to be made within a specified time.

7. The amounts lent to plantations under the different Acts, and repayments made, up to the 31st March, have been as follows:-

s. d. 96,041 12 3 82,673 15 2

Lent against 1903 crop Repaid

Balance

£

£13,367 17

1

£ s. d.

3

estates for eight years is £11 18s. 54d., or at the rate of 133 tons of canes to one ton of sugar," and that the "average cost of growing canes for the whole island is not less than 13s. a ton."

11. In addition to the ton of sugar produced, which, according to Sir Fredk Hodgson's figures, was then (1902) worth $1.20 per 100 pounds, or £5 128. Od. per ton, there was 100 gallons of molasses to be taken into consideration, the average price of which in 1902 was six pence a gallon, or £2 10s. Od. the 100 gallons, and also £1 4s. Od., the estimated value derived from the estate for provisions, live stock, &c., making a total of £9 6s. Od. a ton. If these figures are correct they would mean a loss of £2 12s. 5d. on every ton of sugar produced, and the condition of affairs were indeed grave, indicating as they would do a loss of £171,354 13s. 4d. on an estimated crop of 65,000 hogsheads, though Sir Frederick Hodgson estimates the loss at only £132,000.

12. It will be interesting to see from the table below, which has been care- fully prepared by Mr. J. R. Bovell, the average prices realized for sugar in this island from the years 1902 to 1906, inclusive.

Year.

Average price at which Sagar wold per 100 lbs.

Average price at which Molasses sold per gallon.

Value of 1 ton of Sugar and 100 gallons Molasses. including 5 dols. per hogshead, or 4 dola, per puncheon.

£ 8. d.

Lent against 1904 crop Repaid

Balance

Lent against 1905 crop Repaid

Balance

*

::

dola.

cents.

151,896 3 11

1902

1.31

11

8 10 2

151,559 5 7

1903

1.54

201

11 9 7

£246 18 4

1904

1.691

1905

2.30

21

131

15 2

10 13 2

£

s. d.

114,915 0 0

1906

1.42

141

9 14 5

114,450 9 10

Totals...

8.261

81

55 10 0

£460 10 2

Average

1.65

161

11 2 0

Lent against 1906 crop Repaid

Balance

£ s. d.

99,807 10 0

98,910 4 1

£897 5 11

8. The Acting Governor, in his despatch, Confidential, of the 9th July last year,* reported the balances outstanding at that time, and explained the terms upon which the loans became repayable; it will be observed from a reference to that despatch that the balance in all cases has been materially reduced, and there is but little doubt that by the year 1910 all the advances will be cleared off, though from the 1st May this year the work carried on under the Plantations in Aid Acts will be transferred to the Agricultural Bank Act, which, I learn by a recent telegram, has been assented to by His Majesty.

9. There can be no doubt that the operations of the Plantations in Aid Acts have been invaluable to the planters in Barbados, but although the sugar industry is in a manifestly improved situation to-day, as compared with the conditions which existed in 1902, I can see no prospect here of a complete rehabilitation of profitable cane culture so far as the large majority of estate owners in Barbados is concerned. 10. My predecessor estimated that the cost of production and manufacture of one ton of sugar amounted to £8 12s. 2d., but for purposes of comparison it will, I think, be more convenient to take the figures compiled early in 1899 by a very strong committee of planters and other representative men in this island, appointed to consider a scheme for the establishment of a central sugar factory, brought forward by Sir Cuthbert Quilter, and suggested unofficially by Mr. Joseph Chamberlain, then Secretary of State for the Colonies. This committee reported that: "The average cost of growing and manufacturing a ton of sugar on 42

• 28040.

13. If this is correct it will be obvious that, except in 1905, the planters must have suffered severe losses, and for the five years for which statistics are given the average loss per ton from sugar manufacture must have amounted to 16s. 51d.

14. It may

well be asked, in view of this result, Why do planters grow sugar cane in this island! and it must be admitted that it is difficult to give an adequate reply. In the first place, it is by no means easy in this island to get at the precise facts of the situation. I have not yet found one planter who is willing to admit that it would be wise to abandon the sugar cane as the staple product of Barbados, and the growers are still inspired with the hope that the Brussels Convention will be the means of bringing back a profitable status to the industry, and giving it a stability which could not exist under the system of bounties, which gave an unfair advantage to the European beet growers.

15. Although it is outside my province to advise as to the expediency or other- wise of renewing the Brussels Convention after its expiry in 1908, I hope I may be permitted to say that I believe the Convention has been of advantage to the West Indies, although, so far, at any rate, it has not realized the expectations of those who regarded it as a specific for the troubles of the West Indian cane grower. There have not, however, been those violent fluctuations in prices during the last five years which during the bounty and cartel systems made dealing in sugar so highly speculative and unsettled.

16. It will be observed from the table given under paragraph 12 of this despatch that there have been no marked differences in price since 1903, though prices, except in 1905, were low. I may here mention that the value of sugar this day in Barbados is $1.75 per hundred pounds, and this figure, with the added molasses, now worth eight pence a gallon, and the £1 4s. Od. for other resources besides sugar and molasses, bring the total up to £12 14s. Od., so that taking £11 18s. 5d. as the total cost of production and manufacture of one ton of sugar, there is a profit of 16s. 7d. per ton, not a very cheering prospect to contemplate, seeing that this would represent a gain of only £80 for an estate making 100 hogs- heads of sugar. I am convinced, however, that the planters in Barbados in recent

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