CAB129-53 — Page 90

Page 90

CONFIDENTIAL

C. (52) 210

25th June, 1952

Printed for the Cabinet. June 1952

CABINET

Copy No. 62

ADMIRALTY AND WAR DEPARTMENT PROPERTY IN BERMUDA

MEMORANDUM BY THE SECRETARY OF STATE FOR THE COLONIES

The Admiralty and War Department property in Bermuda covers an area of about 830 acres. The land for the Dockyard was acquired in 1795 at £50 an acre; the War Department land was acquired in the 19th Century at prices between £50 and £100 an acre. This property is now surplus as the result of the closing down of the Dockyard and the withdrawal of the Garrison. I have been unable to reach agreement with the other Ministers concerned on the arrangements for its disposal.

2. The Bermuda Government wish to take over all this property. Their representatives have been over here, and the facts emerging from the negotiations are summarised in C. (52) 211.

3. There is no agreed valuation of this property, nor any possibility of obtaining one. The Bermuda representatives did not accept the original War Office valuation of £3 million or the later offer of £1,850,000, and they made it clear that their own offer of £650,000 represented the most which they considered the Bermuda Government could afford, or, indeed should be called upon to pay, on a reasonable valuation, taking into account only the commercial factors. It is true that Bermuda has reserve funds of about £1 million and practically no public debt, but its whole economy, based on the tourist traffic, is a precarious one. In any event, the dockyard is a doubtful commercial proposition. There would be heavy maintenance costs for two or three years, and it would thereafter be a continuing liability, unless some commercial use can be found for it. No such use has yet been found. The value of the military barracks is considerably affected by the obligation (which Bermuda would be very glad to accept) to maintain this property as barracks against the possibility of a return of the garrison.

4. In view of the gap between the two figures, there is little hope of a com- promise, and the possible courses of action seem to be:-

(a) acceptance of the Bermuda offer;

(b) piecemeal disposal of the properties by the War Office and Admiralty. 5. There are legislative restrictions on the sale of property in the Colony to non-Bermudians; thus the net return, if Her Majesty's Government attempt to dispose of the property piecemeal, would almost certainly be considerably less than the lowest price we have put on the property (£1,850,000), and might well prove to be no more than the Bermuda offer of £650,000. But the main arguments in favour of course (a) are political. The closing down of the dockyard and the withdrawal of the garrison, following the leasing in 1941 at His late Majesty's Government's request of approximately 1/15th of the total area of the Island to the United States for Air and Naval Bases, has aroused deep misgivings among the people of Bermuda about our interest in the Colony, and the maintenance of their links with this country. They will be embittered if Her Majesty's Government, having no further use for this property which was acquired under legislation for defence purposes, now ask Bermuda to pay a price based on development and present-day values as against that originally paid for the land. We were assured

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