THE DELAGOA BAT DIFFICULTY.

New Zealand Mail, Issue 915, 13 September 1889, Page 20

THE DELAGOA BAT DIFFICULTY.

The financial and commercial articles of The World are always more or less trustworthy, and we therefore think that its article on the Delagoa Bay Railway difficulty (South Africa) is worth attention and may be relied on. In connection with the matter The World say 3 The recent rabid attack by the whole press on Portugal for what they were pleased to call the “ confiscation ” of the Delagoa Bay Railway was unbecoming and positively indecent, and was rendered more contemptible by the evidentdesire to make political capital out of a question which manifestly should be fought out on the purely commercial lines of penalties and agreements. With the appearance of j Portugal’s temperate and almost dignified version of the affair, however, the attack of journalistic “ Rule Britannia ” fever has considerably abated, and the various editors, headed by him of The Times, now evidence a decided disposition to “go back on;’ themselves, and to doubt whether it was really worth their while to so recklessly and inconsiderately champion the cause of a railway Company whose history is steeped in broken promises, petitions for leniency, and procrastination, the details of which, may be gathered from the translation of the Portuguese decree rescinding the contract published iu The Times of the 2nd instant. By the original terms of tho concession in 1883 the railway was to be completed and opened in three years and two hundred days—say, by June, 1887 ; but on 30th March, 1886, when a prospectus of the .“ Bourenqo Marques and Transvaal Railway Company ” was issued here, offering 8425,000 of 6 per cent first mortgage bonds for subscription, the lino had not been commenced, and the prospectus was withdrawn, presumably for lack of applicants for the bonds. On the 7th March, 1887, the scheme was advertised under a new name “ The Delagoa Bay and East African Railway,” and subscriptions were sought. and apparently obtained, for E 400,000, of seven per cent debentures at par, and subsequently, in 1888, another LIOO,OOO of-these debentures were issued at 98 per cent. By means of these debentures, then, the new company was floated, and 8117,500 cash, together with E 500,000 in fully-paid shares (the whole share capital of the company), was given to Colonel McMurdo as payment for the concession. Now, will it be believed that at the time of the formation of this English company of which Bord Castletown, Alexander Matheson, Dillwyn Parrish, Herbert Magniac, Colonel George Arbuthnot, and C. R. Markham figure as directors —a decree had been drawn up rescinding the concession, for remarkably good and sufficient reasons ; and that on the very day the company was registered (the 3rd March, 1887) the chairman of the board wrote to the Portuguese Government praying that the forfeiture might be suspended for fifteen days, and another chance be given to the company—a petition which the Government, in a weak moment, appears to have granted ? The company subsequently took over, at a valuation, the large portion of the line which, tired of obstructive delays and granting favours, the Portuguese State had built with its own money, but have since, it appears, added very little to it. More delays, more quibbling, and renewed, “ fencing ” brought matters to a climax, and when the company asked for a final fifteen days’ grace for the completion of the line, tile Portuguese Government accorded them eight months ; but the line was not completed at the expiration of that time, and the concession has been justly forfeited. Any other Government would have forfeited it years ago ; and Portugal can seemingly only be blamed for the amiable weakness she has displayed. As to the tariff dispute, we can only say that it looks suspiciously like a plausible attempt to blackmail the Transvaal Government for the benefit of the concessionaire. The following extract ifrom 10a of the of association of •the f?eiagoa Bay Railway will interest and startle our .readers, inasmuch. as it fi&eds a -fierce .light ,yp the inner formation (Company - . “ It being the intention fihat tfie yhole| of the shares of the original capital are to| be issued and allotted to Oolonei Edward| McMurdo as fully paid up in part pay-1 pamt of the purchase money .... ancßi&esjaid E. McMurdo having agreed to transfer some of these shares, of the nominal -vain© of 8200,000, to and amongst the cKraofqrre, or some of them, as and by way of a present.to them, and tfie said E. McMurdo having &so agreed to transfer some of the shares and soipe of t tbe cash payable to him under* the said conteqet to certain persons, _ as and by .way of cesppiission, for placing debentures issued by fihv company, and the directors, or some of them, will receive some portion of the said com,Kijs.sion. Every director to whom any shares shall be .so transferred, or who now-has or shall hereafter.receive pny of the cash so petid or to be paid, : @bail be entitled to hold and retain the same i°, v own benefit,” e;e. Such, then. the Company, who a cause The Times, enable to distinguish between “confiscation” and forfeiture, rushes in to champion, and whose balancesheet to August 31st, 1888, duelos a, so far as it can be understood, a state of insolvency and internal litigation. It is, t® our mind, a fortunate th’ng for the

debenture-holders that the concession has been forfeited, for, thanks alone to the praiseworthy determination of Portugal to put an end to the concession scandal, they will receive back at least a considerable portion of the money they invested.