CO885-(7-8)-2 — Page 390

1

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

8 PUBLIC RECORD OFFICE, LONDON

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

34

Dock Company the most enterprising and complete in every respect of the British possessions in the Eastern Seas. (Applause.)

The Hon. Tan Jiak Kim seconded the amendment of Mr. Anderson. He was not satisfied with the explanations of Mr. Stringer as to the actions of the London Committee. He hoped his motives would not be misunderstood by that Committee. He was strongly against that body in their procedure as to the non-issue of Mr. Nicholson's report, to which he thought all Shareholders were entitled. The possible expenditure of so large a sum as twelve million dollars made it absolutely necessary for Shareholders to be put in a position to judge for them. selves from the report.

Mr. Anderson claimed the right of reply.

Mr. Stringer rose to a point of order.

Mr. Anderson said he had proposed an amendment. Mr. Stringer had opposed it. Surely he was entitled to reply.

The Chairman ruled that Mr. Anderson had not that right.

WHAT DID THE AMENDMENTS IMPLY?

[(A) Amend the Some discussion then took place as to Mr. Anderson's amendments. Directors' report to include the issue of Mr. Nicholson's report; (B) reduce general charges and administration by $7.84; (c) reduce Directors' fees by $100; and (D) reduce London Committee's fees by $5,000.]

The Chairman pointed out that amendments (c) and (D) were out of order because the Directors' fees are according to the dividend, and the Committee's fees settled by the Articles of Association.

Mr. Anderson said his amendments moved the report and accounts back for amendment. The portion of the amendment which was in order was then put, and declared carried by aeventeen votes to sixteen.

Mr. Stringer demanded a poll.

After some discussion it was resolved to proceed with the other items on the agenda. The Chairman proposed and Mr. Friedrich seconded that a dividend of 6 per cent. be paid for the half year.-Carried.

Messrs. C. Sugden, D. K. Somerville, and W. P. Waddell were elected Directors of the Company.

Mr. Stringer proposed and Mr. Martin seconded that Mr. T. Cuthbertson be pro-elected

a member of the London Consulting Committee.--Carried by 17 votes to 10.

Mr. Waddell proposed and Mr. Allinson seconded that Mr. Gulland be elected a member

of the London Consulting Committee.-Carried by 17 votes to 10.

The auditors, Mr. T. S. Thomson and Messrs. Lyall and Evatt, were re-elected auditors of the Company

Most of the Shareholders were then leaving the room, when the question was raised of taking the poll on Mr. Anderson's amendments.

Friday next, at 2.30 p.m., was fixed for this purpose.

24453

No. 6.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON.

(Received July 11, 1904.)

(Confidential.)

[Answered by No. 19.]

SIR,

Government House, Singapore, June 15, 1904. In his confidential despatch of the 30th of March last, Mr. Taylor forwarded to you the proposals which had been submitted to the Government of the Federated Malay States by the late Chairman of the Tanjong Pagar Dock Company, for the loan from that Government to the Company of ten million dollars, to enable it to carry out the extension and improvement of its equipment and establishment required by the present circumstances of the trade of Singapore.

2. Of the inadequacy of the facilities at present provided there can be no question. The number of ships always to be seen, even at present, when shipping business is slack, lying in the roads waiting for access to the wharves is sufficient proof that extension is urgently required. If the rapid expansion of the shipping in recent years, both in numbers and in tonnage is considered, and the fact that it is necessary for every ship bound to and from the cast to call here for coal and supplies, it will be seen that delay in making adequate provision, not only for present requirements but for those of the immediate future, will be a serious injury not only to Singapore but to the enormous British shipping interests engaged in the eastern trade.

3. It is clear, from Mr. Anderson's speech, that if the unfettered management of the business of the Company had been in the hands of the Board in Singapore, the existing provision would have been more adequate and up to date than it is, and, as

• No. 5.

35

Mr. Taylor has stated in his despatch, there is a large and growing opinion in the Colony that the public interest imperatively demands that some arrangement should he made for securing that the welfare of the Colony, and of the great shipping industry with which it is bound up, shall not be subordinate to the immediate interests of a body of absent shareholders.

4. The appointment of two Government Directors on the Board here, which had been secured by the arrangement made with the Company by Mr. Taylor, would have done something towards this, as it would have enabled the Government to keep in touch with the proceedings of the Company, and to bring pressure to bear upon them from time to time by voicing the public opinion of the Colony to which those who control the Company cannot be permanently indifferent.

5. It is indeed possible that the parsimony in regard to equipment and improve- ment, which is alleged with considerable force against the Committee in London in recent years, may have been due to their expectation that the Government might find it necessary in the interests of the Colony to establish a Port Trust to take over their undertaking, and their desire, therefore, that the dividends on the basis of which, under such a scheme, their shares should be taken over should be as large as possible. Such a proposal, I regard as wholly impracticable and undesirable in the interests of the port even if it were practicable.

There can be no doubt that the existing management represents fairly the commercial and shipping interests of the port and, even if the administration of the whole directorate were in the hands of the Government, it is improbable that any great change would be made in it and, at any rate with the power which would have been available of nominating two directors, it would always be possible for the Government to strengthen the representation of any interest that may not be adequately protected.

6. The interest of the members of the present board, as partners in, and local representatives of, the leading commercial and shipping firms in the general business and shipping of the Colony, far transcends their interest in the dividends paid by the Tanjong Pagar Dock Company, and they have, therefore, every reason to look to the interests of the port quite as much, if not more than, to the interests of the shareholders in that concern where these interests may come into conflict.

The interest of the Government is to see that the facilities of the port are adequate and up to date, and that they are available at reasonable rates, and, in view of the possible rivalry of Sabang (which, though not formidable at present, may become so in the near future), it is desirable that they should be in a position to secure this object. There is the further consideration that a large expenditure of a million and a half sterling is in contemplation by this Government on the provision of an enclosed harbour and wharfage for the coasting trade, works complementary to the facilities afforded by the Tanjong Pagar Dock Company, gives the Government a more immediate and direct interest in the efficiency of the Company's business and

proper management and control.

its

7. The present necessity of the Company to obtain the large sums necessary for the re-construction and extension of their wharves, docks, &c., appears to afford an opportunity for effecting this on reasonable terms, which it would be a grave derelic- tion of duty on their part to neglect.

The present share capital of the Company is $3,700,000, in 37,000 one hundred dollar shares fully paid up, and its debenture debt amounts to $1,615,000, of which $250,000 bear interest at 6 per cent, and the remainder interest at 5 per cent., maturing on the dates shown in the last balance sheet,* copy of which is enclosed.

Of the value of its assets it is difficult to form any estimate, consisting as they do, apart from the docks, wharves, engineering and ship-building plant, ware- houses, &c., of extensive but as yet undeveloped estates, but, as very ample provision has always been made for depreciation in the balance sheets, it may be safely assumed that the value of its land, plant, stock in trade, warehouses, &c., largely exceeds the amount of its share and debenture capital, without any allowance for the value of the business as a going concern.

20303

• Not reprinted.

E 1

From 1865 to 1903,

Page 390Page 391

PUBLIC RECORD OFFICE

Reference :-

TILLIC.O. 882

8 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE

BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

36

8. With a gross earning capacity of $1,200,000 a year it is, therefore, in a very sound financial position and will, of course, effect large savings in expenditure on repairs and depreciation by replacing its present wooden wharfage by a permanent structure. But, in present conditions, it will obviously be difficult for it to obtain, on anything like reasonable terms on the open market, the large sums required to carry out the proposals submitted by the Managing Director, even if it should succeed in renewing the debentures which fall due in the present and four following years.

9. In these circumstances, therefore, the probabilities are either that the work will not be undertaken and the present makeshift policy continued, or they will be proceeded with and, to meet the enhanced burden, the rates for the services performed will be largely increased. In either case the result to the Colony must be serious, and I am satisfied that it is a case in which Government assistance on suitable condi- tions is not only desirable but even essential in the interests of the Colony and the Federated Malay States.

10. The conditions to be imposed and the extent and nature of the assistance to be given would, of course, have to be arranged by negotiation, which, as the real control of the affairs of the Company rests at present with the London Committee, would have to take place in London. But I think that, as regards the conditions, it should be stipulated first of all that any increase of the rates now charged to shipping or for the warehousing and handling of goods and the amount of any dividend to be declared should be subject to the approval of the Governor, who should also have a veto on the appointment of all directors and members of the London Committee, and the right to nominate at least two members of the Board and at least one member of the London Committee. The Articles of Association should also be modified by expunging the condition in Section 124, that the previous approval of the London Committee is required before any expenditure of $20,000 can be undertaken by the Board, and by removing the restriction on the voting power of the large shareholders and making the voting power exactly proportionate to the amount of the holding.

11. As regards the assistance to be given, I have received privately from the Managing Director the enclosed financial scheme which he has prepared for submission to the Committee in London.

It will be seen that the total contemplated expenditure is $12,078,153, and that it proposed to raise $4,500,000 of this by an issue of debentures and the remainder by the sale of the Company's land and by contributions from revenue and reserves. The amount that the Company estimate that they will have to raise from debentures and new shares is over eight million dollars, but it will probably be not less than the ten million suggested by the late Chairman, and, in view of the actual and prospective commitments both of the Colony and the Federated Malay States, I do not think it would be prudent to undertake to find the whole of that sum from revenue or balances.

12. I would suggest, therefore, that, on the condition of the Company accepting the restrictions suggested, and agreeing to issue to the Government at a certain price the 18,000 new shares which it is proposed to create, the Governments of the Colony and the Federated Malay States should guarantee an issue of 4 per cent. debentures by the Company to an amount not exceeding, say, eight million dollars, to pay off existing debentures and meet the expenditure on the new works; such debentures to be for a period of 50 years, but subject to be paid off at par at any time after 25 years and by annual drawings of 4 per cent. of the issue.

13. The 18,000 shares should be issued, at a price to be agreed upon, to the Governments of the Federated Malay States and the Colony-twelve thousand to the former and six thousand to the latter-with full voting power from the outset, to be paid for by instalments of 10 per cent. per annum, such instalments to bear interest at 4 per cent. until the whole of the agreed price shall have been paid up and there- after to receive dividend at the same rate as the other shares. If preferred by the Company, the instalments might be increased and the period of payment shortened.

14. The price to be paid for the shares will be a difficult matter to negotiate, but, looking to the fact that at the beginning of the present year the shares were selling at $300 each, and are at present quoted at $260, I do not think that $200 a share would be an excessive price.

15. I submit these figures and proposals only as suggestions, as, if you agree with me that negotiations should be entered upon with the Company, I would recom- mend that my predecessor, Sir F. A. Swettenham, should be asked to represent the

37

Governments of the Colony and the Federated Malay States. The community here have perfect confidence in him and would accept without question the details of any bargain he might make on their behalf.

I should add that the

If the arrangement proposed should succeed, he would also be the fittest person to represent the Governments on the London Committee. local holding of shares, including two thousand shares held by the Government of the Federated Malay States, amounts to some ten thousand, so that, with the 18,000 shares to be issued to the Government, the local holding would, unless the London shareholders were absolutely unanimous, command half the voting power.

16. The proposals which I have made are no doubt unusual, but so, I submit, are the circumstances. The destiny of Singapore rests at present in the hands of this Company, and it is too late for the Government to resume the absolute control of its harbour, which it ought never to have parted with. It is not too late, however, to obtain such control as will enable it to control the working of the Company in the interests of the Colony and the States, and I would earnestly urge that some arrangement such as I have indicated will secure this; the question of the price to be paid for the new shares should not be allowed to stand in the way.

I have, &c.,

JOHN ANDERSON.

Enclosure in No. 6.

Schedule C, May 17, 1904.

SCHEME OF FINANCE FOR PROPOSED NEW WORKS OF EXTENSION AND DEVELOPMENT.

Total with

New

Year.

Wharf.

Dock.

Lagoon Graving Extension. Dock.

Eastern

Total.

Interest

Reserves and Divi-

and dends 5 per Premium.

cent. and

New De- bentures.

New Shares.

Land,

12 per cent.

$

Int

***

2nd

***

$ 400,000 420,310

120,910 500,000

3rd

4th

400,000

400,00)

420,310 550,000 330,000

420,310 550,000 100,000

5th

420,910

441

6th

420,310

ith

420,310

-

100,000

320,00)

325,053

400,310 1,220,310 1,250,910

850,000

1,320,310 | 1,402,910 302,810 1,100,000

1,320,310 1,457,810 357,810 1,100,000

1,070,810 1,260,310 240,310 1,000,000

750,000 750,000 1,270,310 1,520,810

-

-

5th

420,310

9th

JEL

+20,810

futh

***

420,310

750,000 1,490,3L0 1,788,810 750,000

850,000 1,595,383 1,941,883 750,000

850,000 1,270,310 1,664,810

680,000 1,100,310 | 1,555,060

420,810 420,310

100,000 370,810

400,000

638,810

400,000

791,863

750,000

400,000 514,810

25511

-

550,000 450,000- 200,000 335,000

420,310

4,208,100 2,000,000 1,995,058 3,880,000 12,078,158 14,242,908 | 5,201,550 4,500,000 1,800,000 2,651,353

No. 7.

GOVERNOR SIR J. ANDERSON to MR. LYTTELTON.

(Confidential.)

(Received July 19, 1904.)

[Answered by No. 19.]

SIR,

Government House, Singapore, June 17, 1904. I HAVE the honour to acknowledge the receipt of your despatch, No. 99, of the 22nd of April last,* respecting the draft Ordinance empowering the Tanjong Pagar Dock Company to improve their wharfage, &c.

• No. +