12. Your petitioners humbly submit that His Excellency the Governor's said reply, while indicating the intention of the Government to alleviate the hardship in individual cases attendant on the operation of the Monopoly, does not in any way deal with your Petitioners' fundamental objection which they therein raised and which they humbly urge in this petition, namely, that the grant of such a monopoly under the circumstances mentioned constitutes a great injustice to Chinese Timber Merchants, and is contrary to the traditional equity
of British Administration.
14
13. A onsual perusal of the prospectus of the timber company will reveal the following facts:- namely, that the British North Borneo Company have the right of subscribing at par at any time up to 1st January 1927 for shares in the timber company up to a total of 100,000; that under the terms of the nonopoly the timber company will pay to the British North Borneo Company "a royalty of 3 farthings per cubic foot on all merchantable timber cut or collected and will also pay a sum equal to 10% of the net profits earned during each year after deduction of depreciation and 6% interest on capital employed in the busi-
the timber company "will ness;
pay no export duty, nor any rents, royalties or dues other than the royalty of 3 farthings per cubic foot abovementioned"; "ouly a small proportion of the "State-lands" in North Borneo bearing timber have been examined, but the Government Forestry Department has already located definite areas estimated to yield upwards of 150 millions cubic feet of merchant- able timber"; "the almost total suspension of many timber-using industries during the war has been followed by an enormous demand of timber, both for "the already existing sources of sup- reconstruction and further development;' ply are unequal to the demands made on them, and it is believed that for years to come, a ready market will await all the timber which the company can pro- duce;" the only non-chinese firm which can be said to have any pioneer-stand- ing, the China Borneo Co., Ltd., has been bought up by the timber company.
and will have a preferential right to subscribe for shares in the timber company
similar to that of the British North Borneo Company mentioned above, and all
the Chinese Timber Merchants are to be left severely in the cold”.
14. It is submitted that the prospectus in question, as shortly analysed
above, is in itself an overwhelming indictment of the injustice of the monopoly,
because:-
(a) The British North Borneo Company, as the authority exercising
21
sovereign and territorial rights over the whole state of North Borneo", by beerming a shareholder of or otherwise financially interested in the timber company, have put themselves in a position where their financial interest and their duty to Chinese Timber Merchants must necessarily conflict.
(b) It is abundantly obvious that the case in question is totally different from that where a monopoly is granted to a pioneer in order that an industry may be started or an undertaking created which, owing to its commercial unprofitableness or speculativeness, would, but for such monopoly, have never come into existence at all.
(c) The value of the concessions granted or to be granted to some of the Timber Merchants, as indicated by His Excellency's said reply abovementioned, is quite illusory, because in view of the fact that the timber company have to pay no export duties but only an all- round rate of 3 farthings per cubic foot, whereas the Chinese Meich. ants have to pay the heavy royalties specified below, it will be com- mercially impossible for the Chinese Merchants to compete with the Timber Company even during the short periods of their extended licences:-
ROYALTY
Per cubic foot Class No: 1. Round. Square.
Per cubic foot
Class No: 2. Round. Square.
Bintangor 4. cts:
5 cts:
Billian Mirabau
5 cts: 6.25 cts:
**
+1
Dungun
Penagah Rasak
++
Gereting
H
53
22
Kapor
JJ
Selangan Batu
"J
}
Keranji
1
Narah
21
F
Oba Sulu
22
"
Rengas
JJ
»
-
9
-
8.-
378
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