§ CAPTAIN PRICE (Devonport)
I beg to ask the Under Secretary of State for the Colonies whether it is true that the Jamaica Government Railway, described officially as being in a flourishing condition, and which is now earning all the interest and expenses payable thereon, besides putting by I percent for a sinking fund, is to be sold to an American Syndicate for £800,000, of which £100,000 only is to be paid in cash, and £700,000 in second mortgage bonds, no interest on which is payable until 5 per cent has been paid upon £1,500,000 first mortgage bonds of the Company; is it the case that although the promoters pay £100,000 in cash, yet at the same time they are to receive back £100,000 in Ordinary Stock on the formation of the Company, besides a vast tract of land free of charges or taxation; is it the case that the £1,500,000 to be raised for the extension of said railway is virtually under the guarantee of the Government, as under the agreement for the sale, in the event of the contractors not fully carrying out their engagements, or failing to pay the interest on the bonds, the Government will have to take back the railway, thus saddling the country with a debt of £2,200,000, the interest of which is to be earned in the future, instead of a debt of £800,000, the interest of which is now being earned; and, if these are substantially the facts of the case, will the Secretary of State for the Colonies delay giving his sanction to the agreement until the matter has been submitted to the consideration of the constituencies, the recent elections having taken place before the agreement was made public?
§ * BARON H. DE WORMS
In order to secure the extensions, which were much needed, of the existing Jamaica Government Railway, an agreement has 896 been made on behalf of the Government of Jamaica, subject to confirmation by the Legislative Council, with an American Syndicate for the sale of the Government Railway to a company to be incorporated in Jamaica and for the construction of the required extensions of the railway. The railway is in a flourishing condition, and is earning sufficient to pay its working expenses and the interest and 1 per cent sinking fund on the railway loan. The Government is to receive from the company £100,000 cash and £700,000 second mortgage bonds, bearing 4 per cent interest payable after payment of 4 per cent interest on the first mortgage bonds to be issued to provide for the cost of the extensions, which will ultimately amount to £1,500,000. The promoters are to pay £100,000 for £100,000 second mortgage bonds. They are also, as part of the general arrangement, to receive the same amount of ordinary stock of the company and a square mile of land for every mile of the extension. In the event of the company failing to pay the interest on the mortgage bonds or to maintain and work the railway including the extensions, in accordance with the agreement, it may be wound up, and in that case the Government are to take over the railway and extensions and issue to the bondholders £100 3½ per cent Government stock in exchange of each £100 of first mortgage bonds. In that event the Government will have incurred an addition to the public debt of £1,500,000, and will have to look to the earnings of the railway and extensions to provide for the interest. The Secretary of State has not been officially informed of the confirmation of the agreement; but he learns from the colonial newspapers that it has been confirmed by the Legislative Council, subject to some modifications. He awaits the Governor's Report, and the law which will have to be enacted to give effect to the agreement; but, as at present advised, he does not think it necessary that the matter should be again submitted to the consideration of the constituencies.