CO129-466 - Individuals - 1920 — Page 538

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To: The Under Secretary of State.

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would, undoubtedly, have demanded and explanation from the Government as to the circumstances in which it was held to be unacceptable, but refraind in view of the Promoters' request to that effect. The Promoters can only conclud e that the Colonial Government failed to realise that the fruition of the scheme was jeopardized by their rejection of the National Electric Construction Company. It is an axiom, and a well established one, in the City of London that once a business proposal has been in the hands of a firm and then dropped with or without explanation future negotiations with other parties are rendered exceedingly difficult in view of the suspicion created by the firm's decision, Very great delay is necessarily involved (particularly in this instance owing to the distance of Hong Kong from England and the present delay by post as compared with the normal arrangements when the Siberian route is open) with the exhaustive enquiries any new group of financiere of necessity require to make zaż in order to Batisfy themselves concerning the scheme, and to remove the suspicions created and thoroughly examine the scheme in the light of the refusal of the first firm to proceed with it.

The Promoters are entirely unable to comprehend the circumstances in which the Colonial Government declared the National Electrio Construction Company to be unacceptable, it being understood from the earlier correspon- dence, that they once they were able to satisfy the Government as to their financial position, the Agreement would be automatically signed. The National Electric Construction

the complete Company agreed to find the necessary capital, construction and equippment of the tramway at a price of 12 on the actual cost. This 12% included the establishment charges and profit, and was a lower figure than any other quotation received. The National Electric Construction Company enjoyed the almost unique advantage of being independent of manufacturers, and could, therefore, buy in open market competition and the best market, a matter of great importance

It was provided when economy of construction is considered. that this Company should have the whole of the capital required for the completion of the tramway before application was made to the Colonial Government for the formal signature of the Agreement. The National Electric Construction Company having constructed, equipped, and financed the Torquay Tramways, the following extract taken from the City Editors Column of the "Daily Mail" 26/4/20 is of interest.-

"Tramway investments have not enjoyed much favour in

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