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 7 
 
 BRITISH SOUTH AFRICA COMPANY. 
 
 3 
 
 C()HliE:^PONDEN( P: 
 
 wnii 
 
 MR. C. J. RHODES 
 
 ItKI.ATlXi; Til Till-: 
 
 PKOPOSED EXTENSION OF THE 
 BECHT'ANALAND KAIL WAY- 
 
 iarpsmtfli to ioti) l^ouses of ^iarliamnit tij CTomtnanti of ?^rr IClaFfSjg. 
 
 May, 1899. 
 
 LONDON: 
 
 PRINTED FOR HER MAJESTY'S STATIONERY OFFICE, 
 
 By darling & SON, Ltd., 1-3. Gri:at St. Thomas Apostle. E.G. 
 
 And to be purchased, either directly or through any Bookseller, from 
 
 EYRE & SPOTTISWOODE, East Hardixi: Strkkt, Flket Street, E.G., and 
 
 82, Abingdon Street, Wesiminster, S.W. ; or 
 
 JOHN MENZIES & Co., 12, Hanover Street, Edinburgh, and 
 
 '.10, VVe.ST NibE street. GLA.SGOW ; or 
 
 HODGES, FIGGIS, & Co.. Li.mited. !()I. urafton Street, DriBi.rv. 
 
 [C— 9323.] 
 
 is;i'.). 
 Price H'i.
 
 CONTENTS. 
 
 Serial 
 No. 
 
 From or to whom. 
 
 Date. 
 
 Subject. 
 
 Page. 
 
 
 
 1898. 
 
 
 
 1 
 
 Mr. C. J. Rhodes ... 
 
 April 28 ... 
 
 Submits proposals for the extension of the 
 existing line of the Bechuanaland Railway 
 Company to Lake Tanganyika, and asks for 
 the co-operation of Her Majesty's Government. 
 
 3 
 
 2 
 
 To Mr. C.J. Rhodes 
 
 July 28 
 1899. 
 
 Requests further information before inviting 
 Parliament to give the scheme financial sup- 
 port. 
 
 G 
 
 3 
 
 Mr. C. J. Rhodes ... 
 
 January 17... 
 
 Replies to No. 2 
 
 8 
 
 i 
 
 Ditto 
 
 March 27 ... 
 
 Submits further proposals 
 
 17 
 
 5 
 
 To Mr. C. J. Rhodes 
 
 May 1 
 
 States that Her Majesty's Government are not 
 able to accept any of the proposals submitted to 
 them, and makes a counter-proposal. 
 
 18 
 
 6 
 
 Mr. C. J. Rhodes ... 
 
 May 9 
 
 States objections to the counter-proposal of Her 
 Majesty's Government. 
 
 20
 
 Cage 
 \ SRLF 
 
 CORRESPONDENCE 
 
 RELATING TO THE ♦ 
 
 PROPOSED EXTENSION OF THE BECHUANALAND EAILWAY. 
 
 No. 1. 
 
 Mh. C. J. RHODES to COLONIAL OFFICE. 
 
 (Received May 3, 1898.) 
 
 Burlmgton Hotel, Cork Street, W., 
 Sir, London, April 28, 1898. 
 
 I HAVE the honour to sjubinit for your consideration certain proposals in regard to 
 the contemplated immediate extension of the Bechuanaland Kaihvay to Lake Tanganyika, 
 and to invite the co-operation of Her ilajesty's Government in this important under- 
 taking. 
 
 The route proposed to be followed is indicated in the accompanying maps,* the total 
 distance to be traversed being between 700 and SOO miles. No survey has as yet been 
 made. Trustworthy information has, however, been obtained as to the character of the 
 country through which the line will pass, and it may be stated generally that the 
 conditions over the greater portion of the distance resemble those which are encountered 
 elsewhere upon the high central plateau of Southern Africa, and that the engineering 
 difficulties to be overcome are probably no greater than those which have already been 
 successfully surmounted between ^lafeking and Bulawavo. 
 
 I anticipate that the Colony of the Cape of Good Hope will be prepared t<> contribute 
 pi-actically towards the cost of the work, and, in confirmation of this opuiion, I transmit 
 herewith, for your information, copy of a letter, dated 1 6th ultimo, which I have received 
 fi-om Sir Gordon Sprigg, K.C.M.G., Premier of the Colony. Bearing in mind the 
 probabiUty of assistance being thus afforded, I estimate the net cost of construction of the 
 line at about £2,000,000, basing my estimate upon the fact that the average cost per mile 
 of the Bechuanaland Railway, to which no financial contribution has been made by the 
 Cape Government, has been approxuuately £3,000. 
 
 I shall recommend the Bechuanaland Railway Company, Limited, to undertake the 
 extension, and, with the sanction of Her Majesty's Government, to raise the necessary 
 funds by further issues of debentures which will be secured upon the whole of its assets 
 and undertaking, after proN-ision has been made for safeguarding the rights of holders ot 
 the present debenture issue of £2,000,000. Subject to the present debentures, the 
 security ofEered will, therefore, be that of the whole line of 579 miles fi-om Yryburg to 
 Bulawayo, of any further extensions, of the subsidies paid by the Imperial Government 
 and the British South Africa Company at present amounting to £30,000 pei- annum, and 
 of blocks of valual)le land in Bechuanalaml and the liechuanalaud Protectorate of an 
 aggregate area of 8,000 square miles. 
 
 In the event of my recommi-ndation being adopted, the British South Africa (V)mpaiiy 
 is prepared to guarantee the interest upon the whole of tlie further issues of debentures 
 required, and, with a view to the creation of these debentures upon more favourable terms 
 than would otherwise be possible, 1 would suggest that a collateral guarantee should be 
 given by Her Majesty's Government on the basis of interest either at the rate of oi per 
 cent, for a limited term of 30 years, or of 2)} per cent, in perpetuity. I would fiuther 
 suggest that the line should Ik; constructed in 200 mile sections ; that the funds retpiired 
 for each section should be raised se^jarately ; and that it should be open to Her Majesty's 
 Government to refuse to guarantee the interest upon the debentures to hv issued for 
 the construction of any section, unless satisfied both as to the conunercial prospects 
 of the proposed extension, and as to the nature of the contracts intended to be entered 
 into. 
 
 The first 2il0 mile section will tap tlie valual)le c<jal fields which have l)een discovered 
 in the Bubi, .Mafuiigabusi, Sengwu, ami Sanyati districts, and will also traverse the 
 promising gold districts of Bembesi, the Lower Sebakwe, and the Lower Umfuli. The 
 second section will pass through the Lo Maghunda district, which is covered with ancient 
 
 •Not reprortnced. 
 
 284r>r— 500— 6/9'.» Wt 3416 D t S T. A a
 
 workino;?. and in which many gold reefs that have been favourably reported upon by 
 competent engineers have ah-eady been exposed. Beyond the Zambesi the line will run 
 through an excellent cattle country, densely populated by natives, and will, for many 
 years to come, absorb the greater portion of the trade of the Upper Zambesi, the Upper 
 Cono-o and the western portions of German East Africa, in addition to that of Northern 
 Rhodesia. Over a great portion of this area, it is ])robable that an important industry 
 in rubber and other vegetable products will be developed. Large areas of Northern 
 Rhodesia have already been proved to be highly mineralised, and valuable deposits of 
 copper exist in the Congo State on the borders of the British South Africa Company's 
 territories. 
 
 There is further tlie (juestion of native labour. The enormous demand for labour 
 for the minps at Kimberley, Johannesburg, and in Rhodesia have caused the wages for 
 unskilled labour to reach an unduly high figure, and it has even been suggested that 
 the mining companies on the AVitwatersnind should assist financially in the work of 
 railway extension to the North, with the object of increasing, and thus of cheapening, the 
 labour supplv. At the De Beei-s Mine, wages at the rate of £l jier week are being ])ai(l 
 for labour ^\hich can be readily obtained north of tlie Zambesi for 2d. per diem. The 
 natives in these northern districts are anxious to obtain work, but, so far, the great 
 distances which they have had to cover on foot have prexented extensive employment 
 of their services. On the completion of the projected railway there is every probability 
 of large numbers of labourers being constantly carried to and from the mining districts, 
 of a highly remunerative traflic being thus established, and of a considerable benefit 
 being at the same time conferred upon the most important inchistry of South Africa. 
 
 In view of the above facts. I am convinced that each section of the proposed line will, 
 on completion, pay its way, and my conviction is strengthened by consideration of the 
 exceedinglv satisfactory results which have already been shown by the Mafeking- 
 Bulawayo line. This was completed to Bulawayo at the beginning of last No\-ember, 
 and the latest returns received show that dming the period of four months ending 
 28th February the average net earnings per month, after deduction of all working 
 exjjenses, have amounted to £12,922 Os. "(/.. licing at the rate of .€155,064 7."?. per 
 annum. During the whole of this period the line has been managed by the Cape Govern- 
 ment Railways Department under an agreement between the railway company and the 
 Cape Government. The accounts are made up monthly by the Department, and regular 
 remittances of net profits at the abo^-e rate are being received. 
 
 The gross amount required to meet the interest on the debentures ah-eady authorised 
 is £100,000 per annum ; but oi' this only £70,000 per annum has at present to l)e 
 provided by the railway company, as the subsidies paid by Her j\Iajesty's Government 
 and by the British South Afi-ica Company amount to £3f),000 per annum. On the basis 
 of present earnings, therefore, the lialance <if prtifit accruing to the railway company is at 
 the rate of £85,064 7*. per annum, or sufficient to pay the interest upon the whole of the 
 capital recjuired to extend the line to Lake Tanganyika. 
 
 There is. moreover, every probability of the jjresent rate of profit being more than 
 maintained. The above returns do not include any receipts for the carriage of permanent 
 way material. The rapid progress of Rhodesia will certainly induce a considerably 
 augmented traffic, which will be farther increased by extensions of the line to the north, 
 since all goods carried to and from the interior must necessarily pass over the present 
 line. On the other hand, substantial reductions in working expenses may confidently be 
 predicted. The efficiency and organisation of the line is being daily improved. The 
 opening up of the Zambesi coalfields will revolutionise present conditions, under which 
 all the coal consumed ujjon the line has to be brought at great cost from the Orange 
 Free State to the Cape Colony, and thence to Rhodesia. A supply of cheap fuel 
 will prove of the utmost benefit to the mining industry, and. whilst its carriage will 
 prove directly remunerative, its indirect effect ujjon traffic will probably be even more 
 important. 
 
 T accorchngly submit that the construction of the line to the north of Bulawayo 
 will for many reasons exercise an important and favouralile influence upon the future 
 profits of the Bechuanaland line, and I would point out that Her ^lajesty's Government 
 is directly interested in this desirable i-esult. Under Article 49 (b.) of the Agreement 
 entered into on ord August lcS94, between tiie Hi"h Commissioner of South Africa, 
 the British South Alrica Company, and the Bechuanaland .Railway Company, an interest 
 in the profits of the line is reserved to Her Majesty's Government, and the amount which 
 will eventually accrue to the Imperial revenues from this source will necessarily Ik,' 
 dependent upon the profit-earning capacity.
 
 The jHilitifal iind international oblii-ations of Her Majefsty's Government also point 
 to the desirability of support being given to the projected enterprise. Certain respon- 
 sibilities have been incurred through the exti'usion of tlie British sphere of influence 
 north of the Zambesi, both to the native inhal)itants of those regions ami to foreign 
 Powers, under the Brussels Act of 1870. Under Article III. of that Act, the obligation 
 lias been accepted " of jiroceeding gradually, as eircumstiinces jiermit, with the rei)ression 
 of the slave trade" within the territories "under ?>ritish direction, and whilst Article TA'. 
 expressly provides that a portion of the engagements assumed under Article III. may 
 be delegated tt) a chartered company, it ex[)licitly enacts that evei-y signatory Power 
 ■■ shall remain directly responsible for its engagements under rhe Act and shall guarantee 
 their execution." 
 
 In Article I. of the Act it is contemplated that mea>iire> for the suppression of the 
 slave trade shall, as far as possible, be taken in the places of origin, ami various means 
 whereby this sujipression can best be pi-omoted are enumerated. Amongst these means 
 the construction of railways is recognised hi Section o. It is, accordingly, submitted that 
 the duty of Her Alajesty's (lovernment, as well as its interest, lies in the furtheratice of 
 the proposed scheme, which, whilst promoting the development of valuable l!ritish Posses- 
 sions, will at the same tune serve on the completion of the railway to L ganda to close 
 entirely the slave routes to the East coast, and thus to deal a tinal blow to the slave traffic 
 throughout the greater portion of Central Africa. 
 
 Shoidd this desirable result be accomplished, the necessity for maintenance of a costly 
 blockade along the line of the East coast will in a great measure disappear, and it will be 
 possilile to exercise a far more effective supervision at a greatly reduced cost. The 
 unhealthy character of the greater portion of the coast line has caused the indirect 
 expenses of the blockade m die past to be very considerable. Ships and men whose 
 services ha\e been urgently required elsewhere have had to be detailed for this ser\'ice, 
 aiid there can be no (juestion Init that the removal of the necessity for its continuance will 
 l>e of matei'ial assistance to Her Alajestys Government, g^jj^' 
 
 The question of the future government of the vast native j)opulations within the 
 British sphere must also be considered. Experience has conclusively sho\™ that the 
 contact of European civilisation with barbarism will always result in native wars and dis- 
 turbances unless authority can be effectively exercised. The mortality amongst domestic 
 animals throughout large areas of Central Africa causes unusual difficulties, and, it may 
 generally be said, that in the absence of rail or water transport, the establishment of a 
 strong Administration is practically impossiljle. The late disturbances in ^latabeleland 
 furnish an excellent illusti-ation. Had the railwa}- been extended to Bulawayo in ISilo. 
 the rebellion of 1 SDfi could not have taken place." The recent outbreaks of the Angoni 
 point to the existence of a turbulent element in Xorthern Rhodesia and in the P>ritis!i 
 Central Africa Protectorate. Extensive knmigration to the north, either with or without 
 the sanction of the Administration, is now imminent. Transport by water is extremely 
 limited. It is, therefore, urgently necessary that application should be made of tin; 
 teachings of experience, that the railway should be innnediately extended, and that peace 
 and order should be secured m territories for «hose administration Her Majesty's 
 Government is ultimately responsible. 
 
 ■ In the consideration of this question the intei'ests of the British Central Africa 
 Protectorate caimot be neglected. Notwithstanding that water transport is available over 
 a great portion of the distance which separates it from the coast, the unsatisfactory 
 character of the mouths of the Zambesi, the frequent slioals along its course and along 
 that of the river Shire, the existence of rapids, the constant necessity for transhipmenr, 
 and the consetiuent irregularities in the delivery of supplies and merchandise, point to tlie 
 <lesii-al)iHty of provision in the future of more regular and efficient means of transport. 
 The ilistaiice 1)etween the proposed line and the western l)Oundary of the Protectorate will 
 not be considerable, and it is probable that the facilities which it will atlord will more 
 than counterbalance the disadvantages arising from the distance over which goods will 
 re<iuire to be hauled to the point of delivery, ami that exten>ive advantage will be takeir 
 of the new line both by tlu' .Vdministration and by the inhabitants of the Protectorate. 
 
 Ample precedent can be found for the ])resent ap])lication. and many cases can. if 
 nccessarv, be cited in which shnilar assistiuice has been given in British Possessions, fn 
 India especially it has been the consistent policy of the Government to encourage raiUxay 
 enterprise. an<t, as circumstances have re([uired. obligations in the form of subsidies and 
 D-narantees — for the due payment of which Her .Majesty's Gnvernment is finally 
 responsible — have been freely mcuiTed. In the case of India the inducements have been
 
 mainlv commercial. In the present instance other considerations can be urged with 
 equal LE not greater force, and the argument in favour of the desired support being given 
 is, therefore, proportionately stronger. 
 
 I would also point out that it ha.s been the practice ot the Bechuanalaud Railway 
 Companv to purchase the whole of its material, plant, and rolling-stock in England, and 
 that there will be no change in its policy in this respect. The construction of a line from 
 Bulawayo to Lake Tang-anyika will absorb — apart fi-om all rolling stock — at least 
 160.000 tons of material, and the realisation of the project will thus confer a substantial 
 benefit upon British trade. 
 
 In conclusion, I would submit that, whereas under the arrangements sanctioned by 
 the late Government an amount of ;^200,(i00 is to Ix' contril)uted out of Imperial funds 
 to the cost of the Mafeking- Bulawayo line, under the present scheme no application for a 
 direct contribution is made ; that the advantages which will accrue to Her Majesty's 
 Government in the fulfilment of its obligations and in the reduction of its expenditure 
 will be very con.siderable : that substantial benefits will be conferred upon British trade 
 and enterprise ; that the security offered in return for the desired guarantee is more than 
 ample ; that there is not the slightest probability of any payment being ever required to 
 be made under the guarantee out of Imperial funds, since this can only happen in the 
 contingency — which it is almost absurd to contemplate — of both the railway company and 
 the British South Africa Company failing to meet their obligations : and that the present 
 occasion furnishes a unique opportunity for the mutual co-operation of Her [Majesty's 
 Government, the Government of the Cape Colony, and the British South Africa Company, 
 hi an undertaking which will probably prove of far-reaching importance in its effect upon 
 the development and consolidation of British interests in Africa. 
 
 I have, &c., 
 
 C. J. RHODES. 
 
 Enclosure in Xo. 1. 
 
 Mv Dear Rhodes, Treasury. Cape Town, March IH, 1.S98. 
 
 As you are aware I hn\e always taken a great interest in your wtirk in tlie North, 
 and haA^e endeavoured in nw official position to aiil your enterprise, and the intimation 
 you made to me last week of vour scheme for pushing on the railway to Tanganyika has 
 stimulated my desire to assist in an undertaking which must materially promote British 
 supremacy in South Africa. 
 
 Should you be successful in obtaining the help and countenance you require frt)m 
 Her Majesty's Government I shall then be prepared to confer with my colleiigues in the 
 Cabinet with the view of ascertaining their readiness to co-operate by submitting definite 
 proposals to Parliament under which the Government of this Colony might practically 
 contribute towards the cost of the work. 
 
 Most heartily do I wish you success in your mission. 
 
 Yours truly. 
 
 J. Gordon Sprigg. 
 
 liO. 
 
 •) 
 
 COLONIAL OFFICE to Mu. C. J. RHODES. 
 
 SiK, Downing Street, July 28, 181)8. 
 
 I AM directed by Mr. Secretary Chamberlain to inform you that he has been in 
 communication with the Lords Commissioners of the Treasury on the subject of your 
 letter of the 28th of April.* in which you submit for his consideration certain proposals in 
 regard to the contemplated extension of the Bechuanalaud Railway to Lake Tanganyika, 
 and invite the co-operation of Her Majesty's Government in the enterprise. 
 
 Mr. Chamberlain understands your proposal to be that, in addition to a guarantee by 
 the British South Africa Company of interest on a further issue of Debentures by the 
 Bechuanalaud Railway Company for the purpose of providing funds for the construction 
 of the line fi'om ]>uluwayo onwards, a guarantee should be given by Her Majesty's 
 Government with a view to the issue of these Debentures upon more favourable terms 
 than would otherwi-se be possible. 
 
 • No. ].
 
 Mr. Chamberlain desires me to say that Her Majesty's (Ictveniment recognise that 
 your request tor their assistance is recommended by the consideration that the ultimate 
 responsibility for the p^ace, order, and good administration of the territory controlled by 
 the I'ritish South Africa Company rests with Her Majesty's (Tovernment, and that the 
 establishment of communications by means of a Railway is the most advantageous and 
 most economical means of securing these objects. It is also the f)nlv wavof develooin-r the 
 territories ot the Company tor trade and commerce, and of ultimately rendering them 
 sej f-supporting. 
 
 The scheme, therefore, is one the conception of which commends itself to Her Majesty's 
 Government. Before, however, they could invite Parliament to give it financial support 
 they must be furnished witli more definite inft)rmatit)n on certjiin points. 
 
 According to your own suggestion the line would be constructed in section.s of 
 200 miles for each of which funds would be separately raised, and any assistance given 
 by Her Majesty's Government to one section would not commit tliem to gTving assistance 
 to any other section. 
 
 Her Majesty's Government consider that any proposal ior assistance on their ])art, 
 should for the present be confined to the first section northward from Ruluwayo. which 
 you roughly estimate will cost £500.000 to construct, and which, to use your own words, 
 " will tap the valuable coal fields which have been discovered in the Bubi, Mafungabusi, 
 Sengwe and Sanyati Districts and will also traverse the ])romising gold districts of Bembesi, 
 the Lower Sebakwe and the Lower Umfuli." 
 
 Liformation as to the data u})ou which it is calculated that these districts will yield a 
 sufiicient amount of traffic to justify the extension of the line will no doubt be forthcoming 
 later on, so far as it can be supplied. But the first essential for a proper consideration of 
 the question is that an adequate survey of the section must be made on which a trustworthy 
 and fairly accurate estimate of the cost of its construction could be l)ased. 
 
 It will also be necessary that Her ^lajesty's Government should be satisfied on 
 certain points in regard to the existing line of the Bechuanaland Railway which will 
 form the iniin part of the sefurity for the Deb:'ntures to be issued for the construction of 
 the extension, and the profits of which, after jjayment of the interest on the present 
 debentures, you estimate, on the basis of present earnings, would be sufiicient to pay 
 interest on the Avhole of the capital required to extend the line to Tanganvika. 
 
 In the first place Her Majesty's Government desire to be assured that the present 
 capital of .£i.006,0;)0 in shares and debentures affords a sufficient margin for the 
 completion of the line to Buluwayo as a permanent work, and that this completion ■ndll 
 not form a charge in any substantial degree on cu^'rent and future receipts. In vour 
 statement to the Shareholders on the 6th of May you mentioned that tlie issue of 
 £2,000,000 covered not only the construction and rails, but also the completion of bridges 
 across the rivers. But it will be neciissarv to receive a spe:;ific assurance from a competent 
 authority that the ballasting and bridges can be fully and satisfactorily completed without 
 raising further capital or trenching on traffic receipts. 
 
 In the second place, it is necessary to ascertain with regard to the net earnings of the 
 present line to Buluwayo, which you sj)eak of as being at the rate of over £155, OUO per 
 annum, the details on which these eixrnings are calculated and what has been their 
 amount for e;xch month since the line was o])ened in order to judge how far. if at all. they 
 may be ascribed to accumulations of traffic precedent to the opening of the Ime or to 
 other exceptional circumstances, and therefore regarded as a not altogether trustworthy 
 index to the earnings of the line in future. The Bechuanaland Railway Company will, 
 doubtless, hi able to furnish Mr. Chamberlain with full uiformation on these points. 
 
 Further it will be needful that, as some guide to the value of the guarantee off^ered 
 by the British South Africa Company, tv report should be furnished of all tlie guarantees 
 already given by the Company on behalf of other Companies together with a certified 
 statement of the present assets and liabilities of the British South Africa Company. It 
 would also be desirable to know whether the Company would be prepared to deposit any 
 security for the fulfilment of its guarantee, e.'j. to pledge the land over or through which 
 the new line will run. 
 
 Unless some risk attended the scheme, the support of Her .Majesty's Government 
 would be unnecessary, and, in view of this risk Her ALijesty's Goverinnent would exj)ect 
 to receive, in return for their support, favourable terms for the transport of mails, troo[)s, 
 government officials and stores over the proposed railway, as in the case of the existing 
 railway, and in the event of the extension becoming a sourc<! of ailditional profit to the 
 railway company, a reasonable share in those profits.
 
 {• 
 
 Finally, I am to say that Mr. Chainberlaiii attaches great importance to substantial 
 co-operation on the part of the Cape Government, whose railways would be largely 
 benefited by the success of the scheme you ])ropose. ■ and he therefore considers that 
 evidence of such co-operation should Vie a first condition of any assistance to be rendered 
 by Her Majesty's Government. 
 
 I am, &€., 
 
 H. BERTRAM COX. 
 
 No. :i 
 Mr. C. J. RHODES to COLONIAL OFFICE. 
 (Received January 18, 1899.) 
 Sm, Burlington Hotel, Cork Street, W., London, January 17, 1899. 
 
 I HAVE the honour to acknowledge the receipt of your letter of the 28th July 
 last,* in reply to my letter of the 28th April last.t respecting the proposed extension of 
 the Bechuanaland Railway to Lake Tanganyika, and am pleased to learn that the 
 scheme is one the conception of which commends itself to Her Majesty's Government. 
 Before replying to your letter, I have been anxious to obtain as fuU information as 
 possible upon the points therein indicated. I have accordingly aw\aited the receipt of a 
 EnclosHtc report from Sir Charles Metcalfe, who has only just returned from a personal inspection 
 A. with of the route to the Zambesi. His report is enclosed herewith. 
 
 ™'*P-+ 2. I note that Her Majesty's Government considers that any proposal for assis- 
 
 tance on its part should, for the present, be confined to the first section northwards 
 from Bulawayo. It will be seen from Sir Charles Metcalfe's report that it is desirable 
 that the length of this section should be extended to 250 miles, to permit of its tapping 
 the extensi\e coal deposits in the Mafungabusi District. 
 
 3. Sir Charles Metcalfe further states that a detailed survey of the first 110 miles 
 to Gwelo has been completed imder his supervision ; that his parties are now at work 
 upon the detailed survey from Gwelo onwards; that he has satisfied himself that no 
 special engineering difficidties will be encountered ; and that he estimates the average 
 cost of construction per mile at an amount not exceeding £3,500. According to this 
 estimate, the total cost of construction of the 250 mile section will be £875,000, or in 
 round figiu:es £900,000. 
 
 4. I propose that the amount of £900,000 requii-ed shall be raised by an issue, at 
 ■par, of debentures, redeemable at par, bearing interest at 2^ per cent. ; that the interest 
 on the debentures, together with a further 1 per cent, for sinking fund, shall be 
 guaranteed by the British South Africa Company for a period of 50f years ; and that, 
 in addition, a guarantee of the 3^ per cent, required for interest and sinking fund shall 
 be given by Her Majesty's Government. Under this proposal, the whole of the deben- 
 tures will Idc redeemed by the operation of the sinking fund within the above period. 
 
 5. As stated in the fourth paragraph of my letter of the 28th April last.f the 
 security offered to the holders of the new debentures will be a charge upon the whole 
 of the assets and undertaking of the Bechuanaland Railway Company, after the rights 
 of holders of the present debenture issue of £2,000,000 have been safeguarded. Subject to 
 the present debentures, the security offered will, therefore, be that (a) of the whole line 
 of 587 miles from Vryburg to Bulawayo, (6) of the new section, {c) of the subsidies paid 
 by the Imperial Government and the British South Africa Company, at present amount- 
 ing to £30,000 per amium, and (c/) of blocks of valuable land in the Cape Colony of an 
 .aggregate area of approximately 8,000 square miles. 
 
 6. As an alternative proposal, I would suggest that the option of the Bechuana- 
 land Railway Company to redeem the whole of its present £2,000,000 issue of 5 per 
 cent, debentures at £105 per cent, should be exercised : that a fresh issue of £3,000,000 
 debentures bearing interest at the rate of 2^ per cent, should be made to provide (1) the 
 £900,000 required for the construction of the new section, and (2) the £2,100,000 
 required for the redemption of the present £2,000,000 issue at a premium of 5 per cent. ; 
 that a guarantee of interest at the rate of '2\ per cent, and of 1 per cent, for sinking fund 
 should be given by the British South Africa Company for a period of 50f years upon 
 
 • No. 2 t No. 1 + Not reproduced.
 
 the whole £3,000,000 issue of debentures ; and that, in addition, a guarantee of interest 
 and sinking fund to the same amoimt should be given by Her Majesty's Government. 
 Under this conversion scheme the security offered to the debenture-holders would be 
 identical with that described above in paragraph 5, but there would be only one class 
 of debentures instead of two. Consequently, all holders of debentures would be equally 
 secured. As in the preceding scheme, the whole of the new issue of debentures would 
 be redeemed by the operation of the sinking fund within the above period of 50J years. 
 Power could be taken in the debenture trust deed to make as required, with the ap- 
 proval of Her Majesty's Government, further issues of debentmres ranking equally 
 with the first issue. 
 
 7. Of the above schemes, I consider that the second is preferable to the first. 
 From a financial point of view it is undesirable that there should be different classes of 
 debentures. But my principal reason for commending it to the favourable consideration 
 of the Secretary of State is, that a large annual saving in interest can be effected by this 
 means. At present the annual hability of the Bechuanaland Railway Company for 
 interest at the rate of 5 per cent, on its £2,000,000 issue of debentures is £100,000. 
 Under the conversion scheme, the annual liability for interest at 2^ per cent, on the 
 w^hole £3,000,000 required would be only £75,000, or a clear saving to the Railway 
 Company, through the use of Imperial credit, of £25,000 per annum, with an addition 
 of 250 miles of new line to its system. 
 
 8. Should Her Majesty's Government be disposed to adopt the above conversion 
 scheme, I would further suggest that an addition of £250,000 should be made to the 
 amoimt of £3,000,000 to be raised, in order to enable the Bechuanaland Railway 
 Company to piu-chase its own rolling stock. The Company will be in a far stronger 
 position than at present, if it can employ its own plant without hiring from the Cape 
 Government. A substantial saving can be effected by this means in the cost of 
 working, and it is submitted that the present is a favomrable opportimity for making the 
 necessar\" financial arrangements. 
 
 9. I am in a position to state that the Bechuanaland Railway Company, Limited, 
 would be willing to concede to Her Majesty's Government, in return for its support, 
 similar terms for the transport of mails, troops. Government officials, and stores over the 
 proposed railway, as are given to it by the Railway Contract of the 3rd August, 1894; 
 and, in the event of the extension becoming a source of additional profit to the Railway 
 Company, to hand over to Her Majesty's Government such share of the additional 
 profits as may be deemed fair and reasonable. 
 
 10. With regard to the first point upon which Her Majesty's Government desires 
 to be assured, I attach a statement prepared from the Railway Company's books, show- 
 ing that the total cost of construction of the line from Vrybing to Bulawayo as a per- 
 manent work, wath stations, steel and masonry bridges throughout, telegraph lines, 
 workshops, and machinery, when certain small subsidiary contracts have been com- 
 pleted, will be £1,948,944 15s. 5d. This sum includes a bonus of £31,550 paid to the 
 contractors for expediting the work. A certain small amount of ballasting still remains 
 to be carried out, but Sir Charles Metcalfe certifies that when the whole of this work has 
 been completed, the total cost of construction will not exceed the present del)enture 
 debt of £2,000,000. The railway Company will have to meet certain liabilities, not 
 exceeding £120,000, which have been principally incurred for interest on debentures 
 during construction, and expenses of issue, and which will include the cost of completion 
 of all ballasting. To meet these liabilities it is not proposed to raise fresh capital by the 
 issue of shares or debentures, but the British South Africa Company is advancing the 
 smns required from time to time, and will allow the Railway Company to repay them 
 out of net profits, after provision for interest and sinking fund imder my proposals in 
 paragraphs 5 and 6 has been made. If so desired, the Com}Dany is prepared to give a 
 guarantee that no portion of the sum to be raised by the use of Imperial credit shall be 
 devoted to the redemption of these liabilities. 
 
 11. As to the second point upon which an assm-ance is desired, I append a state- 
 ment showing the monthly earnings, working expenses, and net profits of the railway 
 during the twelve months which have elapsed since the opening of the fine on 4th 
 November, 1897. I also append a further statement, showing that if Colonial produce 
 had been carried at the rate now to be enforced by agreement with the Cape Govern- 
 ment, an additional profit of £50,000 would have been earned, bringing ihe total profit 
 to £148,160. 
 
 EncloBure 
 B. 
 
 EncloBnre 
 C. 
 
 Enclosure 
 D. 
 
 2iio
 
 V" 
 
 Enclosure 
 E. Details 
 of output. 
 
 Enclosure 
 F. 
 
 10 
 
 12. Under the conversion scheme, assuming an amount of £3,250,000 to be raised, 
 the total sum annually requiied to pro\dde the 3^ per cent, for interest and sinking fund 
 will be £113,750. It will, therefore, be seen that, on the basis of the foregoing figures, 
 there is every reason to anticipate that the sum annually required will be paid without 
 difficulty out of the profits of the line, of which the earning capacity will be increased 
 by the addition of a further 250 miles, whilst the working expenses will be dmiinished 
 through the opening up of the Mafungabusi coalfields. 
 
 13. The recent rapid development of the gold mining industry in Rhodesia, which 
 has lately been established on a profit-earning basis, camiot fail to have a marked effect 
 upon the financial future of the Railway Company. The first output of gold from 
 Matabeleland was witnessed in September last, when the total production Avas 2,346 
 ounces. In December last the output was 6,258 omices. A number of other mines will 
 shortly reach the producing stage. As has been pointed out by Sir Charles Metcalfe in 
 his report, three out of the four principal mines now at work are situated close :o the 
 proposed route of the new section, which will also traverse several highly promising 
 gold districts. The opening up of the new coal beds camiot fail to have a marKcd effect 
 in cheapening mining costs, which will fiu'ther help to stimulate the minmg industry. 
 
 14. A certified copy of the British South Africa Company's Balance Sheet, show- 
 ing the assets and liabilities of the Company at the 31st March, 1897, is annexed. A 
 further issue of shares is now being made, and, on its completion, the available cash 
 assets of the Company will exceed £2,000,000. 
 
 15. With the exception of its guarantees of interest upon debentures issued by 
 the Bechuanaland Railway Company, Limited, and by the Mashonaland Railway 
 Company, Limited, no guarantees have been given by the British South Africa Com- 
 ,pany. Its liability under the Bechuanaland Railway guarantee is 5 per cent, on 
 £2,000,000 for 20 years from 1st November, 1895; under the Mashonaland Railway 
 guarantee its liability is 5 per cent, dn £2,500,000 for 22 years from 1st October, 1897, 
 but, at present, only £1,150,000 of this amount has been issued. 
 
 16. As fiurther security for the fulfilment of its guarantee of interest upon the 
 debentures proposed to be issued, the British South Africa Company would pledge, as 
 mentioned in your letter, such portion of the land over or through which the new line 
 will run as is not abeady granted to farmers and other settlers. But I would suggest 
 that such a course would be inadvisable, as tending to retard the development of the 
 coimtry by the locking up of large areas of land as security. 
 
 17. As to the concludmg paragraph of your letter, I am in a position to state that 
 the present Government of the Cape Colony has expressed its willingness not to charge 
 more for the carriage of construction material than actual cost. 
 
 18. The responsibilities of Her Majesty's Government in connection with the 
 whole of the territories traversed by the Bechuanaland Railway Company's line is 
 recognised in your letter under reply. Its extension may fairly claim to be considered 
 as essentially an Imperial undertaking. I would, therefore, commend the above pro- 
 posals to the most favourable consideration of Her Majesty's Government, and would 
 express the hope that the assistance for which I am asking wiU be given. 
 
 I have, &c. 
 
 C. J. RHODES. 
 
 Enclosure 1 in No. 3. 
 A. 
 
 28, Victoria Street, Westminster, London, S.W., 
 Gentlemen, January 16, 1899. 
 
 In accordance with instructions received, I proceeded to Bulawayo at the com- 
 mencement of August last, and organized a party to proceed from Gwelo to the Kariba 
 Gorge, on the Zambesi River, with a view to locating the route for the railway nortn- 
 wards, a detailed survey having been already started under my su25ervision from 
 Bulawayo to Gwelo. 
 
 I left Gwelo on August 23rd, and proceeded past Ingwenia and Sinnonombi in a 
 northerly direction. The altitude at Gwelo was 4,600 feet above the sea, and at a point
 
 11 
 
 120 miles north of Gwelo the altitude was stUl over 4,000 feet, makiag an extreme dif- 
 ference of altitude of oniv 600 feet in 120 miles. This shows the easy natm-e of the 
 route for the pm-poses of v^onstructing the line. There is, however, at that point a 
 sudden fall of 700 feet. I have, therefore, directed Mr. Mansergh, who is hx charge of 
 the detailed sinvey party, to keep slightly to the east of the route which I traversed, ia 
 order to avoid this sudden fall. This more easterly route keeps closer to the hne of 
 ancient workings, which are very large and very numerous all the way from Gwelo to 
 the Mafungabusi Peak, called by the natives " Sidoma." As far as that point the hne 
 would go through gold formation for the whole distance, there being only some five miles 
 of gramte formation up to that point. From that point northwards we enter on a sand- 
 stone area, many of the rivers ha\dng coal' outcrops in theh beds or banks. This coal 
 and sandstone area stretches for some 70 miles northwards and north-west. The coal 
 outcrop that I \asited personally was situated on the Boomay River and its tributaries, 
 and also on the Morawa River. Very httle work has been done ; the only shaft that 
 has been sunk is near Gorodema's Kraal. The shaft is 45 feet in depth, and struck a 
 2 ft. 6 in. seam of coal. Samples of this coal were forwarded to Mr. Milton for 
 analysis, and they were rather full of ash, but made very little cliuker, and were pro- 
 nounced to be workable coal. On the Marowa River I visited the coal outcrop in the 
 bed of the street, which IVIr. Afford had previously reported upon. I found it to be 
 seven feet in thickness, but soft, and mixed with a great deal of shale. I have, there- 
 fore, urged upon Mr. Milton to send a party to sink shafts at once close to the proposed 
 line of railway in this coal area. Mr. Henderson and other coal experts, who were at 
 work in the locality, are confident that we shall strike a good seam of locomotive coal by 
 going down probably only 100 feet, and, as the country is extremely level, any seam of 
 coal that has been deposited there villi be very even and unbroken, and easy to work 
 economically. 
 
 After having inspected the coal in the Marowa River, I proceeded onwards witi 
 carriers to the Kariba Gorge, and found I had to traverse some twenty miles of moun- 
 tain, reaching an altitude of 3,000 to 4,000 feet above the sea, and some twenty miles in 
 width. These moimtains were composed of innumerable quartz reefs and slate, but I 
 saw^ no old workings. Now that our party has cut the bush and opened up a waggon 
 track to this point, which is within 50 miles of the Zambesi River, numerous prospecting 
 parties, I understand, will proceed thither after the rains. 
 
 These mountains end on the left bank of the Sanyati River, and from that point to 
 the Kariba Gorge the level of the coimtry is about 1,800 feet above sea level. The 
 Sanyati River flows into the Zambesi just before the entrance to the Kariba Gorge. 
 At this point the Zambesi River is about 400 yards in width, but where it rushes through 
 the Kariba Gorge it is for at least a mile in length only 50 yards in width. A bridge 
 across the river at this pomt would, therefore, be cheap and easy to construct; but, on 
 the other hand, the line would be lengthened by having to avoid the mountains that we 
 traversed to the south of the Sanyati River, which extend some thirty miles in an easterly 
 direction ; and, further, after crossing the Kariba Gorge, the line would enter on a hilly 
 and difficult country alongside the Zambesi, and would then have to cross the Kafukwe, 
 a river that would necessitate a long and expensive bridge, probably a mile in length. 
 For these reasons I have dhected Mr. ]\Iansergh to continue his line northwards when 
 he comes to the Sanyati River, with a view to crossing the Zambesi m a more direct 
 line towards Lake Tanganyika, instead of de\aating towards the Kariba Gorge. 
 
 Mr. Tower, who surveyed the Bechuanaland Line from Mafeking to Bulawayo, 
 proceeded, according to instructions, from Lake Nyass'a, passed Mpesenis and the 
 Loangwa River, and came down to the Zambesi. He reports an excellent crossing over 
 the Zambesi River some 12 miles to the west of Zumbo, where a bridge would not have 
 to be more than 400 yards in length. 
 
 The length of the line from Bulawayo to Gwelo by the detailed survey is 112 miles. 
 For most of its length it lies on the vsatershed. The only stream of any size that it 
 crosses is the Shangani River, which will probably require a 200 foot ))iidge. The 
 earthworks are light, and the cost of construction, therefore, should not be more than 
 that of the hne to Bulawayo, except for the greater distance over which the permanent 
 way material has to be carried. The line for 150 miles north of GavcIo also traverses 
 an easy country. It has to cross a few streams, but none of any size. As I have staied 
 before, the country is fairly level, and the earthworks, therefore, will be of a light con- 
 struction. The permanent way material, however, for this section, having to be carried 
 284.T i« a
 
 12 
 
 an extra 112 miles from Bulawayo to Gwelo will cost some £90 per mile extra. The 
 chief cost, therefore, will be the cost of the permanent way material ; but I estimate 
 that the whole line from Bulawayo to a pomt 150 miles north of Gwelo, which should 
 tap the centre of the coal area, should be constructed at a cost not exceeding £3,500 
 per mile. 
 
 From what I could see, and from what I could gather from the natives, the line 
 beyond this point to within a few miles of the Zambesi will also traverse an easy country 
 for railway construction ; but I was imable, with the limited time at my disposal, to go 
 over it. 
 
 Should the Company decide to build the line via Gwelo to the Mafungabusi coal 
 area, a length of 250 miles in all at £3,500 per mile, it should cost not more than 
 £875,000, exclusive of rolling stock. This line would nm through gold-bearing forma- 
 tion for nearly 200 miles, and not only tap the Selukwe Gold Fields, where 80 stamps 
 are now at work, but also the Globe and Phoenix, Chicago-Gaika, and other mnaes which 
 will shortly have batteries at work on them. The line, therefore, being economically 
 constructed, should be easily able to earn the interest on cost. I need scarcely point 
 out how much the coal, being all carried as back freight, would cheapen the working 
 expenses of the line as far as'Vryburg, besides serving all the mines along the route. 
 
 I enclose a plan* of my route as far as Kariba Gorge, showing the various coal out- 
 crops, and also the line of railway as being staked out on the detailed survey by Mr. 
 Mansergh. 
 
 I am, &c., 
 
 C. Metcalfe. 
 
 The Directors, 
 
 The Bechuanaland Eailway Company, Lunited, 
 15, St. Swithin's Lane, E.G. 
 
 Enclosure 2 in No. o. 
 B. 
 The Bechuanaland Railway Company, Limited. 
 
 Cost of Construction of hue from Vrybiu"g to Bulawayo to October, 1898. 
 
 Construction of Line : Cost of earthworks, platelaying, ballasting, 
 masom-y, wells, cottages, stations, additional buildings &c., in- 
 cluding workshops and machinery ... ... ... ...£1,085,524 16 8 
 
 Permanent way ... ... ... ... ... ... ... ... 730,399 11 8 
 
 Engineer's expenses, survey, &c. ... ... ... ... ... 36,480 12 10 
 
 Telegraph construction ... ... ... ... ... ... 7,259 14 3 
 
 Compensation and bonus ... ... ... ... 31,550 
 
 (Note. — This sum represents the amounts paid to the Contrac- 
 tors for pushing on the line with greater speed than they 
 were obliged to do under their contract.) 
 
 Estimated Liabilities : — 
 
 Construction of Line, cost of earthworks, &c 
 
 Construction 
 
 Balance of Contracts 
 
 Carriage of material 
 
 Refreshment rooms ... 
 
 Contingencies 
 
 £16,095 
 
 25,818 
 
 8,537 
 
 1,400 
 
 5,880 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^1 7*^0 n 
 
 
 
 
 
 £1,948,944 15 5 
 
 London, January 16, 1899. 
 
 Not reproduced.
 
 13 
 
 Enclosure 3 in No. 3. 
 
 c. 
 
 The Bechuanaland Railway Co:\n'ANY, Limited. 
 
 Month. 
 
 Total Earnings. 
 
 Working Expenditure. 
 
 Net Earnings. 
 
 1897. 
 
 £ s. 0. 
 
 £ .9. (7. 
 
 £ s. d. 
 
 November ... 
 
 45,81;-) 12 1 
 
 26,648 7 6 
 
 19,167 4 7 
 
 December 
 
 26,:$S8 9 4 . 
 
 27,107 9 5 
 
 Deficit 
 
 1898. 
 
 
 
 
 January 
 
 .51,442 ,5 .5 
 
 28,750 10 6 
 
 22,691 14 11 
 
 February 
 
 
 
 
 41,474 14 ;$ 
 
 2.S,169 6 9 
 
 13,305 7 6 
 
 March 
 
 
 
 .. 
 
 38,101 15 3 
 
 28,843 2 
 
 9,258 15 1 
 
 April 
 
 
 
 
 32,852 2 2 
 
 26,168 15 9 
 
 6,683 6 5 
 
 May... 
 
 
 
 
 30.43;'. 8 5 
 
 22,259 5 6 
 
 8,174 2 11 
 
 June 
 
 
 
 
 28,407 11 G 
 
 22,626 19 7 
 
 5,830 11 9 
 
 July 
 
 
 
 
 31,088 4 3 
 
 26.104 10 2 
 
 4,983 14 1 
 
 August 
 
 
 
 
 26,582 9 ]0 
 
 26,057 6 10 
 
 525 3 
 
 September 
 
 
 
 
 25,195 12 8 
 
 21,824 5 9 
 
 3,371 6 11 
 
 October 
 
 
 
 
 27,099 14 8 
 
 22,8] 1 8 4 
 
 4,888 6 4 
 
 
 98,879 13 6 
 
 Deduct deficit for December, 1897 
 
 
 
 719 1 
 
 
 
 Averag 
 
 e, i 
 
 e8,180 l.s\ 1(/. per month 
 
 £98,160 13 5 
 
 Cable advice has just been received stating that the net earnings for November were 
 £6,708. 
 
 Enclosure 4 in No. 3. 
 
 D. 
 
 For the twelve months from 1st November, 1897, to 31 st October, 1898, the 
 following South African Produce was carried by the Bechuanaland Railway Company 
 at irf. per ton per mile : — 
 
 Station. 
 
 Maribogo 
 
 Mafeking 
 
 Lobatsi 
 
 Gaberones 
 
 Mochudi 
 
 Palapye 
 
 Francistown 
 
 Bulawayo 
 
 Total 
 
 
 Weight. 
 
 Amount. 
 
 
 
 £ .s. d. 
 
 
 363 Ito) 
 
 IS 126 18 8 
 
 
 7,376 , 
 
 2.954 1 11 
 
 
 830 , 
 
 273 14 8 
 
 
 270 , 
 
 117 10 10 
 
 
 342 , 
 
 181 14 10 
 
 
 844 , 
 
 572 12 4 
 
 
 i,:'.02 , 
 
 1,008 6 '.) 
 
 
 9,272 , 
 
 11,357 7 7 
 
 
 20,599 to 
 
 us £16,592 7 7 
 
 Notice has, however, been issued that the rate for South .Vfrioan Produce will be raised 
 to 2d. per ton. If this rate had been in force during the past hnancial year the receipts 
 from this source would have been increased by approximately £50,000, and the net profits 
 of the line would have been increased by that amount.
 
 14 
 
 Enclosure 5 in No. 3. 
 
 E. 
 
 The following Returns have been issued by the Rhodesia Chamber of Mines : — 
 
 Mouth. 
 
 Geelong. 
 
 Selukwe. 
 
 Dunraven. 
 
 Bousor. 
 
 Other 
 sources. 
 
 Total. 
 
 September 
 
 October 
 
 November 
 December 
 
 Ozs. 
 1,417 
 1,010 
 1,101 
 1,112 
 
 Ozs. 
 
 400 
 1,258 
 l,277i 
 1,273' 
 
 Ozs. 
 
 1,175 
 1,180 
 
 1,187 
 
 Ozs. 
 
 1,670 
 1,825 
 
 Ozs. 
 
 529 
 
 3371 
 861 
 
 Ozs. 
 2,346 
 3,443 
 5,566 
 6,258 
 
 
 4,640 
 
 4,208i 
 
 3,542 
 
 3,495 
 
 l,727i 
 
 17,613 
 
 Dr. 
 
 Enclosure 6 in No. 3. 
 
 F. 
 
 THE BRITISH SOUTH AFRICA COMPANY, 
 
 Incorporated by Royal Charter, dated ^^th October, 1889. 
 Balance Sheet, 31st March, 1897. 
 
 To Capital — 
 3,500,000 Shares of £1 each 
 
 Authorised. 
 
 £ s. d. 
 
 ...3,500,000 
 
 s. d. 
 
 Issued. 
 1,098,200 Shares issued as fully paid either in payment or in part 
 payment for Concessions, and in exchange for Shares in 
 
 other Companies 1,098,200 
 
 901,710 Shares fully paid, as per Balance Sheet 31st March, 1895... 901,710 
 497,658 Shares fully jiaid (1895 Issue) Allotted and Registered to 
 
 31st March, 1897 497,658 
 
 491,583 Shares fully paid (1896 Issue) 491,583 
 
 437,778 Shares fully paid (1897 Issue) 437,778 
 
 3,426,929 
 
 3,426,929 
 
 To Amount Received in respect of 1,695 Shares (1 895 Issue) allotted 
 but not registered at 31st March, 1897, pending the return of the 
 Bankers' Receipts and the adjustment of fractional interests 
 
 1,695 
 
 To Premium on Shares — 
 
 On the 1895 Issue at £2 10s. per Share, less Stamp Duty, Under- 
 writing Commission and Compensation for waiving Rights ... 1,133,997 
 
 •3,428,624 
 
 On the 1896 and 1897 Issues at £1 per Share, less Stamp Duty 
 
 To 6 PER CENT. Mortgage Debentures and Debenture Stock 
 chai-ged on the Commercial Undertaking of the Company (as defined 
 by the Debenture Trust Deed), repayable 1st February, 1896, but 
 not claimed at 31st March, 1897 
 
 To 5 PER CENT. Mortgage Debentures charged on the Commercial 
 Undertaking of the Company (as defined by the Debenture Trust 
 Deed) redeemable by the Company, 1st August, 1920, at 5 percent, 
 premium, or at any earlier date by giving six months notice 
 
 To Creditors — 
 London — 
 
 Open Accounts 
 
 South Africa — 
 
 Bank over-drafts £30,101 
 
 Creditors (including £8,000 secured by Mort- 
 gage on the Cape Town Offices) 69,237 
 
 928,361 
 
 
 
 
 •2,062,358 4 
 
 8,396 14 2 
 
 1,250,000 
 
 7 7 
 
 8 1 
 
 59,704 19 2 
 
 99,338 15 8 
 
 To Amount Received in respect of sale of Shares (part of the Com- 
 pany's interest) in a Company formed under the Mining Regulations 
 of the Company, as per Balance Sheet, 31st March, 1896 
 
 Note. — There are Current Liabilities under sundry Concessions and Agreements. 
 
 159,043 14 10 
 
 3,750 
 
 £6,912,172 13
 
 15 
 
 Balance Sheet, 31st March, 1897 — continued. Or. 
 
 £ s. d. £ s. d. 
 By Cash, at Bankers on deposit and current accounts, in transit and in hand : — 
 
 London 575,230 13 8 
 
 South Africa (including the balances of accounts of the Civil Com- 
 missioners, Commissioner of Public Works, Postmasters-General, 
 Survej-or-General, Chief and District Paymasters and other 
 Officials of the Company) 21,852 17 
 
 By Shares and Debentures in Companies of the nominal value of 
 £395,578 12s. Id. balance of cost :— 
 London — 25,000 African Lakes Corporation, Limited, 
 
 Shares £25,000 
 
 £314,057 12s. Id. Bechuanaland Railway Company, 
 
 Limited, Debentures ... .. ...311,889 17 1 
 
 £4:3,240 Beira Railway Company, Limited, ] 
 
 Debentures. ( 1 7 911 1 " 
 
 2,090 Beira Railway Company, Limited, j "■ '" 
 Shares. ) 
 
 500 De Beers Consolidated Mines, Limited, 
 
 Shares 13,467 13 6 
 
 9,305 Shashi and Macloutsie Exploration and 
 
 Mining Companj", Limited, Shares ... 5,787 16 5 
 Other Shares and Debentures ... ... 318 7 
 
 597,083 10 8 
 
 373,675 9 
 South Africa 359 11 5 
 
 374,035 5 
 
 By Shares in Companies, the value of which cannot at present be 
 estimated : — 
 Nominal value of Shares (representing the Company's interest) in 
 Companies formed to develop gold claims in Rhodesia, under the 
 Mining Regulations of the Company — 
 Loudon ... 
 
 Nominal Value of Shares in the Bechuanaland Railway Company, 
 Limited — 
 London ... 
 
 By Debtors (estimated to realise about £235,000) : — 
 
 London 
 
 South Africa ... 
 
 282,800 9 
 By Bechuanaland Railway Company Limited, Loan Account... 329,li8 5 
 
 By Stocks op Stores, Buildings, Roads and Public Works and 
 Expenditure in connection therewith, and other Assets, 
 including Equipment, Live and Rolling Stock, and the 
 S.S. " Countess of Carnarvon " : — 
 South Africa 447,077 16 
 
 By Purchase of Cape Town Office Premises, and Lease of London 
 
 Office Premises, Alterations and Expenses in connection therewith. 
 
 Expenses of Removal and Office Furniture and Fittings : — 
 
 London 22,612 6 7 
 
 South Africa 10,381 11 9 
 
 £895,327 
 
 
 
 £1,996 
 
 
 
 177,317 9 
 105,482 11 
 
 4 
 5 
 
 32,993 18 4 
 
 By Concessions and Expenditure in connection therewith : — 
 
 As per last Account, 31st March, 1896 1,223,360 8 1 
 
 Further Expenditure in South Africa during the year : — 
 
 Barotse Concessions £1,06(1 
 
 Bechuanaland Concessions 1,051 15 3 
 
 Secheleland Concessions 4.50 4 6 
 
 2,561 19 9 
 
 -1,225,922 7 V» 
 
 By M.\tabele War Expenditure, 1893 : — 
 
 As per last Account, 3lst March, 1896 117,722 18 4 
 
 Further Claims adjusted in South Africa during the year 1,562 16 6 
 
 Further expenditure on Medals during the year 354 1 3 
 
 119,639 16 1 
 
 By Rhodesia Defence Expenditure : — 
 
 As per last Account, 31st March, 1896 1,099 17 10 
 
 Further expenditure in South Africa during the year, including 
 
 Compensation ... ... ... ... ... ••. ••• ...2,265,876 6 3 
 
 2,266,976 4 1 
 
 Carried forward ... 5,675,676 14 7
 
 16 
 
 Balance Sheet, 31st March, 1897 — continued. 
 
 Cr. 
 
 s. d. 
 
 £ 
 
 i". d. 
 
 Brought forward 
 
 By Suspense Account, being Stores and Expenditure on Rhodesia 
 Horse Volunteers ... 
 
 (Kept in suspense pending receipt of information from South 
 Africa, to enable it to be ascertained whether any and what 
 proportion is recoverable.) 
 
 By General Expenditure : — 
 
 Balance as per last Account, 3 Lst March, 1896 
 
 Further Expenditure for the year ending 
 31st March, 1897 :— 
 
 Rhodesia Expenditure : — 
 Administration Expenses in respect 
 of the following departments : — Ad- 
 ministrator, Resident Magistrates, 
 Law, Secretary, Accountant, Mine, 
 Survey, Civil and Native Commis- 
 sioners, and Northern Rhodesia ... 98,302 11 9 
 
 Postal Service 12,501 17 
 
 Telegraph Department 16,079 5 5 
 
 Hospitals 8,619 11 3 
 
 Travelling Expenses ... 161 8 6 
 
 Telegraph Construction 19,498 8 8 
 
 Interest and Discount 600 
 
 Donations ^ 1,510 18 11 
 
 Expenses on Goods 1,952 9 7 
 
 Maintenance — Buildings and Public 
 
 Works 1,028 2 3 
 
 Rinderpest Charges , ... 30,674 9 4 
 
 Agi-iculti;re 659 19 11 
 
 Removal Umtali Township 47,962 2 5 
 
 Sundry Expenses, including Cables, 
 Telegrams and Postages 
 
 s. d. £ s. d. 
 5,675,676 14 7 
 
 91,290 12 9 
 
 964,255 12 
 
 9,218 9 2 
 
 Salaries, Rent, Cables, Office, and Sundry Expenses — 
 Head Office (Receipts, see next page) 
 
 Cape Town Office 
 
 Law Charges. Auditors' Fee and Expenses of obtaining 
 
 Stock Exchange Quotation 
 
 Directors' Fees 
 
 Interest on Debentures and on Special Advances 
 Stamp Duty on 5 per cent. Mortgage Debentures 
 Fees of Trustees for the Holders of the 5 per cent. 
 
 Mortgage Debentures ... 
 Underwriting Commission on issue of 5 per cent. 
 
 Mortgage Debentures ... 
 Discount on 5 per cent. Mortgage Debentures 
 
 Deduct — 
 
 251,829 14 2 
 
 26,911 
 5,105 
 
 3,420 
 
 4,500 
 
 37,062 
 
 6,146 
 
 
 
 4 
 
 
 
 
 
 18 
 
 12 
 
 2 
 
 1 
 
 
 
 o 
 
 315 
 
 5,825 
 31,250 
 
 Rhodesia Revenue for the year 
 
 
 
 ending 31st March, 1897— 
 
 
 
 
 Land Fund 
 
 4,737 10 
 
 
 
 
 Stand Sales, Umtali, 1897 
 
 1,448 15 
 
 
 
 
 Postal and Revenue Stamps 
 
 
 
 
 and Licenses 
 
 42,297 10 
 
 1 
 
 
 Telegraph Revenue 
 
 29,470 17 
 
 5 
 
 
 Postal Revenue 
 
 8,928 3 
 
 4 
 
 
 Quit Rent 
 
 3,880 11 
 
 9 
 
 
 Transfer and other Duty... 
 
 18,696 4 
 
 6 
 
 
 Mines Revenue 
 
 1,226 9 
 
 
 
 
 Hut Tux 
 
 4,736 9 
 
 10 
 
 
 Matabeleland Stock Farm 
 
 4,089 
 
 6 
 
 
 Judicial Fines 
 
 3,127 15 
 
 6 
 
 
 Occupation Fees, Registra- 
 
 
 
 
 tion of Natives and 
 
 
 
 
 Sundries. 
 
 1,790 1 
 
 5 
 
 
 
 
 1 01 i9Q 
 
 8 4 
 
 
 
 J iC^^^^V 
 
 Less Survey Government Lands ... 
 
 ... 1,887 
 
 11 
 
 
 
 122,542 
 
 7 5 
 
 Carried forward 122,542 7 5 372,365 13 10 964,255 12 5,766,967 7 4
 
 17 
 
 Balance Sheet, 31st March, 1897 — continued. Cr. 
 
 £ s. d. £ s. d. £ s. d. £ s. d. 
 
 Bronght forward 122,542 7 5 372,365 13 10 964,255 12 5,766,967 7 4 
 
 By General Expenditure (coniinued). 
 
 Further Expenditure for the year ending 31st March, 
 1897 {cuntinued). 
 
 Head Office Receipts (Expenses, sei' 
 previous page) : — 
 Registration Fees, Interest, Dividends, 
 Profit on Sale of Consols and Shares and 
 Sale of Stamps, and Sundrv Credits... 68.873 12 9 
 
 191,416 2 
 
 180,949 13 8 
 
 1,145,205 5 8 
 
 Note. — The Company has agreed to pay to the Bechuanaland 
 Railway Company, Limited, an annual subsidy of £5,00(1 
 for 10 years from the date of opening the Railway for 
 traffic to Gaberones, and a further annual subsidy of 
 £5,000 for 10 years from the date of opening for traffic 
 to Palapye. As security the Company has given a first 
 charge on all its revenu.es derived from taxes, imposts, and 
 duties. 
 The Company has guaranteed the interest on the Bechuana- 
 land Railway Company, Limited, 5 per cent. First 
 Mortgage Debentures and Debenture Stock for 20 years, 
 from the 1st November, 1895. 
 
 £6,912,172 13 
 
 GREY ) „. , 
 
 GEORGE CAWSTON ) ^' >'«'='■<»'«■ 
 
 We have to report that we have examined the above Balance Sheet, with the Books and Accounts of the 
 Company in London, and with a Statement of Account received from South Africa. The Balance 
 Sheet is. in our oj)inion, full and fair, and exhibits a true view of the state of the Company's 
 affairs. The Statement of Account is signed by the Company's Chief Accountant in South Africa, 
 but is not accompanied by full details nor by vouchers for payments. We have verified the 
 Cash and Bank balances and the Shares and Debentures in London. Certificates or documents of 
 title in respect of the Cash and other Assets in South Africa have not been available for 
 
 production to us in London. 
 London, 12^^ April 1898. 
 
 OPER BROTHERS & Co., \ , ... 
 Chaffered Areountants. \ ''^ "««"''«• 
 
 No. 4. 
 
 Mr. C. J. RHODES to COLONIAL OFFICE. 
 
 (Received March 27, 1899.) 
 
 Sm, Biu^lington Hotel, Cork Street, W., March 27, 1899. 
 
 I HAVE the honoiu' to refer to my letter of the 17th January last,* respecting the 
 proposed extension to the North of the Bechuanaland Railway Company's present line, 
 and to previous correspondence upon the same subject. 
 
 In the above letter, I sulimitted for the consideration of Her Majesty's Government 
 alternative proposals based upon the principle that a guarantee of interest upon the 
 capital required for the extension of the line should be given by Her Majesty's Govern- 
 ment. As, however, the adoption of either of my previous proposals would appear to 
 present certain difficulties, and, as Her Majesty's Government have already expressed 
 themselves as generally favourable to the suggestion that Imperial assistance should 
 be given to the undertaking, I venture to make the foUowng further proposal : — 
 
 I would suggest that the Railway Company's present debenture issue of £2,000,000, 
 bearing interest at 5 per cent, per annum, should be paid off; that a new issue, at par, 
 of debentures to the same amount, redeemable at par, bearing- interest at the rate of 2^ 
 per cent, per annum, should be made upon the same security; and that, in lieu of a 
 
 • No. 3. 
 
 2»45
 
 18 
 
 guarantee of interest upon the capital to be raised for the extension Her Majesty's 
 -Government should guarantee the interest upon the above amount, and, in addition, 
 a sinking fund charge at the rate of ^ per cent. The total liability to be undertaken 
 would thus be 3 per cent, on £2,000,000, or £60,000 per annum. Under these conditions 
 the British South Africa Company would give a similar guarantee of interest 
 and sinking fund charge to which the guarantee to be given by Her 
 Majesty's Government would be additional, and is fiu-ther prepared to deposit, for a 
 term of years to be agreed upon, the smn of £300,000 in Consols as an insurance against 
 any possible shortfall in the receipts of the line. 
 
 In consideration of the above, I wiH undertake, on behalf of the Bechuanaland 
 Railway Company, Limited, to construct immediately, at its own risk, and ^vithout 
 asking for any further guarantee in connection wdth the undertaking, at a cost of aj>- 
 proximately £875,000, the first section of the extension to the North, in regard to which 
 full details were furnished with my letter of the 17th January last,* the total length of 
 the section to be at least 250 miles. 
 
 In support of this proposal, I would point out that the line upon which the de- 
 bentures to be guaranteed would be secured is in full working order; that the net 
 receipts for the year ending 31st October, 1898, after paying all working expenses — 
 excluding the subsidies paid by Her Majest}^s Government, and by the British South 
 Africa Company — amoimted to £98,160 13s. 5d. ; that all the probabilities, now that 
 the commercial future of Rhodesia is assured, point to a progressive traffic, to which the 
 further extension of the line will necessarily contribute ; and that the risk is therefore 
 exceedingly slight of either the British South Africa Company or of Her Majesty's 
 Government being ever called upon to fulfil their guarantees. I would fiuther point 
 out that the liae in connection with which the guarantee would be given traverses 
 territory imder direct Imperial Administration for almost its entire length ; and that, 
 if the Bechuanaland Railway Company had not undertaken its construction, Her 
 Majesty's Government would themselves have been compelled to provide for the whole 
 cost of the railway, in order to promote the development of their own territories. 
 
 I have, &c., 
 
 C. J. RHODES. 
 
 N"o. 5. 
 
 COLONIAL OFFICE to Mr. C. J. RHODES. 
 
 Sir, Downing Street, May 1, 1899. 
 
 I am directed by Mr. Secretary Chamberlain to inform you that Her Majesty's 
 Government have had under their consideration vour letters of the 17th of January and 
 of the 27th of March last,* submitting tiiree proposals in regard to the extension north- 
 wards of the Bechuanaland Railway, to which Her Majesty's Government are invited to 
 lend their assistance. 
 
 The first proposal is that the sum of £900,000, which it is estimated will be 
 required for the construction of the first section of tlie extension (250 miles at an 
 average cost of £3,500 per mile) shall be raised by an issue at par of debentures 
 redeemable at par bearing interest at 2i per cent. ; that the interest on the debentures 
 together with a further 1 per cent, for sinking fund shall be guaranteed by the British 
 South Africa Company for a period of 50| years, and that, in addition, a guarantee of the 
 o^ per cent, required for interest and sinking fund shall be given by Her Majesty's 
 Government. 
 
 Tlie second proposal is that the Bechuanaland Railway Company should exercise its 
 option to redeem at 5 per cent, premium its present issue of £2,000,000 debentures 
 which bear interest at 5 per cent., that a fresh issue of £3,000,000 debentures be;iring 
 2i per cent, interest should be made to provide (L) the £900,000 required for the new 
 section, and (2) the £2,100,000 required for the redemption of the present £2,000.000 
 issue ; that a guarantee of interest at the rate of 24 per cent., and of 1 per cent, for 
 sinking fund should be given by the British South Africa Company for a period of 
 501 years upon tlie whole £3,000.000 issue of debentures, and that in addition a guarantee 
 of interest and sinking fund to the same amount should be given by Her Majesty's 
 Government. 
 
 ' Nos. 3 and 4.
 
 19 
 
 The third proposal is that, in lieu of a guarantee of interest upon the capital to be 
 raised for the extension, Her Majesty's Government shouM guarantee interest at 2}, per 
 cent, and sinking fund charge at i per cent. uj)on a new issue of debentures which would 
 be made by the Railway Company to pay otf the present debenture issue of .£2,000,000, 
 the guarantee of Her ]\Iajesty's Government to be additional to a similar guarantee on the 
 part of the British South Atr-ica Company, which would deposit £300,000 in consols as 
 insurance against any shortfall in the receipts of the line. The Railway Company to 
 undertake to construct innnediately, at its own risk, the first section of the extension to 
 the Xorth of a total length of at least 250 miles. 
 
 Mr. Chamberlain desires me to inform you that Her Majesty's Government are not 
 ■able to accept any one of these proposals. 
 
 Their main objections are as follows : — 
 
 In the first place I am to say, without entering into financial details, that Her 
 Majesty's Government consider that while thev would incur a certain risk, no ade(|uate 
 financial advantage would accrue to them under any of the proposals. The line of 
 Railway M'hich is the subject of the proposed guarantee in each case would in the end 
 belong exclusively to the original shareholders of the Bechuanaland Railway Company, 
 who subscribed a total capital of £6,000. 
 
 In the second place, there is no provision that the Cape Government should 
 participate in the guarantee, though that Government is greatly interested in the matter, 
 looking to the direct practical advantages which may be expected to accrue to the Colony 
 fi'om the traffic which will flow between the Xorth and the sea over its railway system. 
 I am to remind you that in the letter from this Department of the 28th of July 
 last* you were informed that ]\Ir. Chamberlain considered that evidence of substantial 
 co-operation on the part of the Cape Government should be a first condition of any 
 assistance to be rendered by Her Majesty's (jovernment. 
 
 On the other hand, as already stated in the letter just referred to, Her Majesty's 
 Government recognise that the request for their assistance is recommended by the 
 consideration that the ultimate responsibility for the pe;^ce, order, and good administration 
 of the territories to the Xorth and Xorth-West of the Bechuanaland Protectorate rests 
 with them, and that the establishment of communications by means of a railway is the 
 most advantageous and most economical means of securing these objects, as well as the 
 only way of developing these territories for trade and commerce, and of ultimately 
 rendering them self supporting. 
 
 In these circumstances, Mr. Chamberlain desires me to say that Her Majesty's 
 Government are prepared to make a provisional proposal in the following terms : — 
 
 1. Her Majesty's Government to lend to the Bechuanaland Railway Company 
 £2,100,000 for the redemption, at a premium of 5 per cent., of the existing issue of 
 £2,000,000 5 per cent, debentures. Such loan to be subject to information as to the 
 amount of the debentures issued, and to evidence that any debt of the Bechuanaland 
 Railway Company to the British South Africa Company is only a second charge. 
 
 2. Interest to be fixed at 2^ per cent., and sinking fund at | per cent. 
 
 3. Interest and sinking fund to be a first charge on the profits of the existing 
 railway fi-om Vrvburg to Buluwayo, such profits including net earnings and the 
 subsidies receivable from the Protectorate Government and the British South Africa 
 Company under the Railway Contract of 3rd August, 1894. 
 
 4. Xo guarantee will be required ffom the British South Africa Company. 
 
 5. The above arrangement to be conditional on a guarantee by the Cape Government 
 to pay, for the period of the currency of the loan, one-third of any deficiency which may 
 at any time exist in the annual ])ayment of interest and sinking fund. 
 
 6. The ordinary shareholders of the Bechuanaland Railway Company to contract 
 that, at the expiry oi the ])eriod of repayment, the railway from Vryburg to Buluwayo 
 shall become the joint property of Her Majesty's (iovernment and the Cape Government, 
 in the proportion of two-thirds and one-third, on payment to the shareholders of the sum 
 of £100.000 by the respective (iovernnients in the same proportions. 
 
 7. Provided that, if a federation of South African Colonies should be established rt 
 any time during the currency of this arrangement, sui'h federation shall have the option 
 of takino- over this agreement on payment to Her Majesty's (iovernment of any expenses 
 incurred by them, and of any part of the jjrincipal sum then outstanding, with 
 
 • No. 2
 
 \ 
 
 20 
 
 any airears of intere.st, and on releasing the Cape Grovernment from its guarantee, and 
 repaying to them any sums which may have been exjiended by them in connexion with 
 their guarantee. 
 
 8. If the profits of the line should exceed the sum payable for interest and instalments 
 on the loan from Her Majesty's Government, and for interest on further debentures 
 issued for the proposed extension to the Zambesi, such excess shall be expended or 
 reserved for extensions of the line or for increase of its rolling stock and equipment. 
 
 9. The Bechuanaland Railway Company to agree to make the proposed extension to 
 the Zambesi, and to deposit ,€300,000 in consols until the extension is completed, as a 
 guarantee for the fulfilment of this condition. 
 
 If these preliminary conditions are agreed to by the Bechuanaland Railway Company, 
 there will remain some questions of detail to be determined by subsequent discussion. 
 
 I am to add that it must be clearly understood that in thus ofi'ering to undertake 
 responsibility in connexion with a line which lies mainly within tenitory under their 
 direct administration, Her Majesty's Government are in no way committed to supporting 
 further extensions of the railway. 
 
 I am, &c., 
 
 FRED. GRAHAM. 
 
 No. 6. 
 Mr. C. J. RHODES to COLONIAL OFFICE. 
 
 (Received May 11, 1899.) 
 
 Burlington Hotel, Cork Street, 
 SlE, London, W., 9th May, 1899. 
 
 I HAVE the honour to acknowledge receipt of your letter of the 1st instant,* 
 intimating that Her Majesty's Government are not able to accept any one of the three 
 proposals submitted in my letters of the 17th January and of the 27th March last, in 
 regard to the extension northwards of the Bechuanaland Railway to which Her Majesty's 
 Government were invited to lend their assistance. 
 
 I regret that Her Majesty's Government do not now see their way to support any one 
 of these proposals. I was led to expect by the terms of your letter of iiSth July, 1898, "j" 
 that Her Majesty's Government would be prepared to consider favourably a scheme 
 previously submitted in ray letter of the 28th April, 1898, J which was practically 
 identical in its main outlines with the proposal contained in the fourth paragraph of my 
 letter of 17th January last.§ In the year that has elapsed since my original proposal of 
 28th April, 1898, J and your favourable reply of 28th July, 1898,f the payability of the 
 line to Bulawayo has been demonstrated, the gold prospects of Rhodesia have become 
 assured, and the finances of the British South Africa Comj^any have been immensely 
 strengthened. The fullest information has been supplied. From a financial standj^oint 
 I would submit that the bulk of the objections which formerly, perhaps, might have been 
 fairly raised to the granting of my request, can no longer be urged, and I finci it hard to 
 reconcile the present decision with the previous attitude of Her Majesty's Government. 
 
 In regard to the provisional counter-proposal which is set forth in your letter under 
 reply, I am in a position to state that the Directors of the British South Africa Company, 
 whilst recognising that in the e^'ent of the federation the railway might ultimately be 
 vested in the Federal Government of South Africa, and, whilst prepared to agree that in 
 case federation should not be established the reversion of the line mio-ht belono- on certain 
 conditions, to Her Majesty's Government and Rhodesia, are not disposed to accept the 
 substitution of the Cape Colony for Rhodesia as the ultimate part-owner of the line. 
 They also think that, in view of the present position of the British South Africa Company, 
 its guarantee should be aniple, and that there is no necessity to ask for a partial guarantee 
 from the Cape Colony. The Company has now in hand for administrative and other 
 purposes a sum of £2,000,000. It has also raised during the last month for railway 
 development a further sum of £3,000,000, and, in addition, the money for the extension 
 of the line to Tanganyika is also now practically assured. Independently of the Company 
 the sum of about £2,000,000 has been raised lately by various Mining Com])anies for 
 expenditure in Rhodesia, afi'oi-dmg striking proof of the confidence jf investors in 
 its future. 
 
 • No. 5. t No. 2. I No. 1. § No. 3.
 
 21 
 
 I think that, with these facts before them, the guarantee of the British South Africa 
 Company should have been considered ample by Her Majesty's Government, without 
 resort to the Cape Colony. I do not think that Rhodesia should j)lace itself under an 
 obligation to the Cape Colony by asking tor a guarantee, with the risk of a refusal which 
 would place it and Her Majesty's Government in an absolutely false position. Further, 
 I am convinced that the participation of the Cape Colony in the undertaking would lead 
 to many complications in the future, should federation of the various Stiites of South 
 Aft'ica not be accomplished. The future is at present uncertain, and it must be remem- 
 bered that the question of the destination of the railway would only arise after (50 years, 
 when the sinking fund would have redeemed the loan. 
 
 I am further in a position to state that the financial objectit)ns to the scheme from 
 the point of view of the Bechuanaland Railway Company, Limited, are also vital. The 
 Board of that Company points uut that, under Clause 8 of the proposal, all the jJi'ofits of 
 the line are to be devoted to its extension or improvement ; that for 60 years the share- 
 holders are to get no profits ; and that, after that time, the whole of their rights are to be 
 purchased for £100,000. As shares representing one-thirtl of the share capital are in the 
 hands of independent shareholders, at a present market value of £120,000, they are 
 unable to understand cjn what grounds Her Majesty's Government expect the shareholders 
 to consent to hand over their whole property after 60 years for £100,000, and to receive 
 no profits in the meantime. 
 
 I have, &c.. 
 
 C. J. RHODES. 
 
 2816 
 
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