No. 9.

Supplementary Report on the Province of the Transvaal by W. C. Sargeaunt, C.M.G.

Downing Street, London,

Sir, September 1878. In continuation of my Report on the Transvaal, transmitted to you with my letter dated the 15th ultimo, I wish to bring under your consideration the following further observations with reference to the Delagoa Bay Railway project and other matters which came under my notice when in that province.

2. Claims had been advanced by certain gentlemen as Directors of the Lebombo Railway Company, and Mr. P. J. Marais had applied for the payment of the amount he considered due to him on that account; he had attended some six or eight meetings; his claim amounted to 2371. 68. 8d., and he threatened "further action which, however unwillingly, he might be obliged to institute." There were similar claims of other Directors, which amounted in all to 1,355l. 17s.

3. I declined to accede to Mr. Marais' request for payment, and I was induced to do so, because, even if the Company had been constituted in accordance with local law, the proceedings of the Directors, when voting themselves salaries, had been conducted quite regardless of the provisions of the Articles of Agreement, and it appeared to me that Mr. Marais could not possibly succeed in any proceedings he might take in the Law Courts for the recovery of the amount, seeing that the Articles of Agreement were tainted by his own wrongful act. I allude to his false declaration.

4. Mr. G. P. Moodie, by his attorney, also made application for the payment of 2,000l., with interest and charges, being a claim on account of four bills of 500l. each, drawn by the late President; he has in this country put forward further claims, amounting in all to 17,000l.

5. For the transfer of the concession of the Government of Portugal to the Lebombo Railway Company, the late Government paid Mr. Moodie 3,000l., as well as 612l. 16s. for travelling expenses, and the late President gave him certain bills referred to in the preceding paragraph.

6. This claim of Mr. Moodie's I also resisted; a reference to the proceedings in the High Court will show the grounds

7. It appeared to me that neither Mr. Moodie nor the Directors, generally, had any equitable claims on the Government, and I had no hesitation in declining to accede to their applications; and it is satisfactory that Mr. Marais, whose case I looked on as a representative one, has, notwithstanding his threat, taken no further action in the matter, whilst Mr. Moodie failed in his suit.

8. In another matter Mr. Moodie's conduct appeared to me very far from satisfactory; towards the end of the year 1876 ships laden with railway materials were arriving at Delagoa Bay; but neither the late Government nor the Lebombo Company had the funds necessary to pay for the landing expenses, and Mr. Moodie was empowered to borrow the sum of 2,000l. to pay the freight and landing expenses in question.

9. Armed with the necessary authority, Mr. Moodie proceeded to Natal, and there borrowed from his mother that amount on the security of a notarial bond over a portion of the railway material of 2,000l., with interest. This loan, which was for six months, was to carry interest at the rate of 12 per cent. per annum, besides which, according to an account current subsequently rendered by him, he paid a commission of 150l. equal to 15 per cent. more; the amount, then, he thus borrowed from his mother he agreed to pay for at the rate of 27 per cent. per annum.

This is not all; the loan was authorized for a specified purpose; viz., the payment of freight, &c., on the railway materials then arriving at Delagoa Bay; yet it appears by his account current that he appropriated more than half the amount he had thus borrowed in paying his own salary and travelling expenses.

Messrs. Insinger & Co.

42. In a despatch to Sir T. Shepstone, dated the 17th October last, Lord Carnarvon requested that I would furnish a Report on a claim which had been advanced by the above firm to a commission on the whole amount of the loan authorized by the Volksraad, viz., 300,000l., whereas something less than 100,000l. had been borrowed.

43. Messrs. Insinger and Co. stated that the commission was not granted to them so much for the actual trouble of effecting the sales as for the greater service of introducing the loan in the market under their auspices and even with their co-signature. There is no need to discuss what the

intention might have been, as the bargain between Mr. Burgers and Messrs. Insinger and Co. was distinctly set forth in the correspondence which passed between them.

44. In a letter written at Amsterdam, and dated the 12th January, 1876, with the avowed object of arranging certain points regarding the issue of the loan, Mr. Burgers

wrote:

"As verbally agreed between us, the cost of the issues will be borne by you, namely, cost of printing, advertisements, brokers' charges, and charges of agents and other intervening persons, as also the expense of preparing the debentures, and for the Netherland stamps. To meet these expenses, and in recompense for your agency, you are allowed 24 per cent. on the normal value of the debentures sold and issued by you. . . . You may charge the State for these repurchases and resales brokerage up to per cent. at the most."

45. In a letter dated the 18th of the same month Messrs. Insinger replied :

"We declare ourselves fully satisfied with the directions, as regards the several points mentioned, as the same are stated in the said letters."

46. It appears to me that the Firm has no claim to the commission on the whole loan. They are entiled to 24 per cent. on the 1,126 debentures, representing 1,126,000 florins (say 93,8331. 6s. 8d.), sold and issued, and a commission not exceeding per cent. on the debentures repurchased and resold, amounting together to 70,000 florins.

47. Messrs. Insinger and Co. added that they have paid all the expenses (with the exception of brokerage) on the whole amount of the loan, and that their disbursements came up very nearly to the whole of the commission they had earned. They stated that it seemed but just they should be paid the compensating commission on the unissued bonds which they had been prevented from selling by the acts of the Transvaal Government.

48. It would appear then, by their own statement, that they had already received more than sufficient to cover their outlay, and yet they claimed as compensation a further amount of upwards of 5,000l., which they would be willing to reduce to 4,1227.

49. Messrs. Insinger disposed of less than one-third of the amount they advertized, notwithstanding the most

of about twelve months, they sold to themselves, or to some of their friends, a few additional debentures at a discount of 45 per cent. It appears to me that they are not in a position to assert that they have been prevented selling by the acts of the Transvaal Government, and I think on reflection they will regret having ever put forward such a plea.

50. I cannot recommend that Messrs. Insinger and Co. should be allowed anything beyond the stipulated commission of 21 per cent. on the debentures "sold and issued,' and per cent. on the amount of debentures repurchased and resold. The surrounding circumstances of these operations are not such as, in my opinion, call for any special liberality on the part of the Colonial Government.

51. Messrs. Insinger and Co. have been already overpaid, or rather have overpaid themselves to the extent of 1581. 178., with respect to their commission on this loan, as will be seen by the annexed statement (marked I).

*

*

I have, &c.

*

W. C. SARGEAUNT.

ANNEX 6.

Papers relating to the Annexation of Upper Burmah.

No. 1.

Proclamation of the Governor-General of India, notifying that the Territories formerly governed by King Theebaw (Burmah), have become part of the Queen's Dominions. -January 1, 1886.

By command of the Queen-Empress it is hereby notified that the territories formerly governed by King Theebaw will no longer be under his rule, but have become part of Her Majesty's dominions, and will during Her Majesty's pleasure be administered by such officers as the Viceroy and Governor-General of India may from time to time. appoint.

DUFFERIN.

No. 2.

Copy of Letter from the Government of India to The Right Honourable Viscount Cross, G.C.B., Her Majesty's Secretary of State for India, No. 177 of 1886, dated Simla, October 4, 1886.

My Lord,

We have the honor to forward, for the orders of Her Majesty's Government, the correspondence noted in the accompanying Abstract of Contents regarding the claims of certain Burmese, of other British subjects, and of foreigners, European and American, against the late Avan Government.

2. The nature of the claims is fully described in Sir Charles Bernard's letters of the 30th May and the 8th and 20th June last, which form enclosures to this despatch. Before stating the guiding principles by which in our opinion these claims should be determined we would premise that it may be taken as settled law that not one of the claims can be enforced in a Court of Justice. This clearly follows from the judgment delivered in connection with the claims arising out of the annexation of Oudh in the case of Doss versus the Secretary of State for India in Council (L. R. 19 Eq, 509). Such obligation as there may