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PUBLIC RECORD OFFICE

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C.O. 882

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PUBLIC RECORD OFFICE, LONDON

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at Tuipeng, and of such mines as remain in the neighbourhood, would be remunerative were it not burdened by the up-keep of the abortive line from Taipeng to Ulu-Sapetang, the construction of which was undertaken on the belief, which proved unfounded, that rich tin mines existed in Selama. From Ipoh to Teluk Anson the line is likely to remain for some time a dividend paying concern, and so will the line south-easterly, as long as it is continued in the direction of tin discoveries. The Selangor railway has followed the same rule, and has been, so far, a source of considerable revenue to the State. The Sungei-Ujong line has always been, and still is, a heavy burden to the revenues of the State, which guarantees the interest on the capital raised by a private company,,

7. The problem you put before me is, as to whether it is not desirable to push on the extension of all these lines to points of junction, and so to form one continuous line of railway communication from Prai in Province Wellesley to Port Dickson in the vicinity of Malacen, with the possibility of its ultimate extension to Singapore.

8. On paper this scheme appears very attractive, and if it be considered merely on the basis of administrative efficiency and general public convenience, I admit that there is little to be said against it. But when I regard the financial aspect of the subject-und this aspect is, to my mind, the all important one-I have grave misgivings as to the policy of hastening beyond the present system of expending all available balances in gradually extending the lines of railway in the direction indicated in Mr. Swettenham's

map.

9. I cannot lose sight of the fact that a network of waterways and a system of good rouds, combined with very cheap and available labour, and materials for utilising both, will sorely handicap a railway, as soon as the line of that railway leaves the points beyond which it will not be used for heavy traffic, which heavy traffic naturally finds its way by the cheapest line of communication to and from the port of shipment.

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10. Let me take the proposed additions seriatim from north to south. From Prai to Taipeng the proposed line has already formed the subject of correspondence,* as marked

in the margin. As a remunerative undertaking Governor, No. 91, of the 19th March, 1895. do not believe in this section, for the reasons

No. 230, of the 11th June, 1895. have already given, and I have not concealed this Colonial Office, No. 200, 24th June, 1895,

view from Mr. Kincaid, the civil engineer, who No. 417, 23rd Dec., 1895.

was entrusted by the syndicate with the task of reporting on its merits. If, however, failing construction by the concessionaires, the State of Perak undertakes to build this line gradually from its available resources, I do not see any great objection, but I should prefer, for administrative purposes, that the section from Taipeng to Chemor should be first constructed. This last-named section will, by reason of a heavy bridge that will cross the Perak River, and to some extent by its having to traverse hilly ground, be a rather expensive one, but that, sooner or later, it must be completed is certain. The goods traffic over this section will not, I think, be considerable, and its completion will tend to lower the general rate of profit on the State railway. This section would probably cost when equipped something over two million think that the richness of the dollars. In the extension south-east from Tapah Road, tin deposits, which are being discovered, will probably render this line, to near—and possibly up to the Selangor boundary, a highly remunerative one, and the small section that will then be required to join the Perak system to the present terminus of the Selangor railway at Kuala Kubu might easily be constructed by the latter State.

1. From Kuala Lumpor south-eastwards the line is at the present time progressing favourably, and is developing a rich tin country, but its continuation to join the Sungei Ujong railway at Seraniban over a difficult line of hilly country would require gruve consideration before it was carried into effect.

12. The result of the completion of this continuous line of railway is, of course. highly problematical, depending as it does on unknown factors, but, in my opinion, while immensely facilitating the administration of the Peninsula, and affording great conveniences for passenger traffic, it will not have the effect of increasing, to any great extent, the total amount of goods traffic. It will doubtless cause some diversion of the heavy traffic from Perak to Selangor, which State will, by the end of 1897, it is hoped, have a deep-water port at the end of its line of railway. This diversion, if State interests are to be regarded, will probably induce Perak to seek an available deep-water harbour terminus, such as Sumut in the Dindings, and the opening to Prai would, on the other hand, afford facilities which might attract trade to Penang.

* 6499, 11953, 9962 (craft), and 22058 (draft): not printed.

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13. The present system of metalled roads, which is being yearly extended into the districts believed to be suitable for agriculture, will, of course, help to feed the railway, but I question whether the carriage of agricultural produce will do much to swell the receipts, as the competition of the extraordinarily cheap cart traffic will, as in Natal, prevent remunerative rates being charged by the railway.

14. Three points adverted to in your despatch have yet to be discussed, namely, a line in Pahang between Raub and Punjom, the one already constructed in Johore, and the proposed one from the town of Singapore to the Straits dividing the island from Johore. Of the first of these I would say that it would be prudent to await the result of the completion of the metalled road, now under construction, at a cost of about $400,000, from Kuala Kubu to Kuala Lipis. This road is being pushed forward with all practical We shall then soon speed, and will, I hope, be completed throughout by the end of 1897. discover whether the resources of this district are as rich as has been supposed, and, if they are, the construction of a railway will be fully justified, and should then be undertaken.

15. The small section of line constructed and working from Kuala Muar in Johore southwards is the merest tram line, of slight construction, and 2-feet 6-inch gauge, and can in no way affect the question of through railway communication. The late Sultan had a scheme which, I believe, has proved impracticable, for the construction of a line passing through the centre of the State to Sigamat, at the head of the Rompin River. It was part of the proposal that this line should eventually branch to Malacca, but I do not think there is much prospect, in the present state of the Johore finances and credit, of this line being carried out, nor do I think that, if carried out, it would be remunerative.

16. As regards the Singapore-Johore rail or tramway, I have had for the past year two proposals before me for its construction. Statistics of traffic have been in course of collection during that time, and will soon be completed, and I shall then be better able to judge of the probability of it being a paying undertaking. All merchandise and produce will doubtless, as heretofore, be transferred by water between Singapore and Johore Bharu. No practical inconvenience is felt by the want of railway communication, as omnibuses and jinrikishas are plentiful on the very good and level road that connects the two places. 17. In your more recent despatch No. 203 of the 22nd May," you ask for my views as to the immediate raising of a loan for the purpose of constructing some of the sections of railway above proposed in the Protected Native States. I have strong objections, which, I think, I have already mentioned, to the raising of loans for either the Colony or the Protected States. They are at present in the happy and safe position of owing no money outside their own boundaries, and are helping one another as fortune favours each. The line of sea traffic to the East may be diverted; tin may soon-as it must eventually-give out; agricultural development may not be very successful; and the difficulties in which the States and Colony would, in either of the two first-mentioned events, find themselves involved, would be intensified to the verge of bankruptcy, if outside debts had been incurred. Moreover, the appetite for loans grows with the eating. Money easily acquired is easily consumed, and sinking funds are not always respected, but are often the victims of the first pressure of financial difficulty,

18. But, while holding these views, I think that if anything would justify incurring a debt it would be the construction of railways in the Federated States; therefore, while preferring the slow and steady system which has been hitherto pursued, I should offer no objection, if you should decide that my above-stated views are over cautious, to the raising of such a loan as Mr. Swettenham suggests, namely, £500,000, on the security of the Native States. I prefer that the loan should be raised on that security rather than on that of the Colony, as I think it very desirable that a clear line should be drawn between the responsibilities of each, and, moreover, that the recognition that would be given, by the raising of such a loan, to the fact that the Protected Malay States are now able to walk alone, would be very valuable to the new Federation.

I have, &c.,

• 8757: not printed.

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C. B. H. MITCHELL,

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