Part One
By Shammane Joseph
This article is the first of a two-part series that will look at the completion of the Mahaica-Blairmont railway line from 1899-1900. Part one analyzes the early problems which emerged from its commencement, including the laws passed in order to ensure the building of the railway line.
The Demerara Railway Company (D.R.C.) became overzealous – when the suggestion that the line be extended to Blairmont was made. From 1866 onward, letters and articles in the press that urged and discouraged the extension appeared with frequency. In 1889, an article written by J. E. Tinne in the Agricultural Society’s Journal also disproved of this venture.
Further, the Directors of the D.R.C., Colonial Government and others who had anything to do with the building of the line to Mahaica, were naturally in no hurry to embark on such another undertaking, and nothing definite was done until 28th March 1889, when a resolution was passed to create the railway from Mahaica to the Berbice River. The resolutions stated that the Court was prepared to pay a subsidy at the rate of $50,000 per annum for 20 years for a railway from Mahaica to the Blairmont Ferry, in Berbice, to be constructed within three years from the signing of the Contract, and maintained in such manner as the Governor and the Honourable Court of Policy may see fit, provided that the land required can be obtained from the present proprietors free of cost and that the work be begun and continued from both ends simultaneously. The payment of the subsidy to commence at the expiration of three years from the signing of the contract, provided that the railway is constructed within that period to the satisfaction of the Government, and to include such conditions as may be satisfactory to the Governor and the Court and Policy. This resolution was rescinded on the 4th March, 1890 and other resolutions were enforced by the Court. The new resolutions stated that the Government of the Colony would have entered into a contract with a “responsible person-firm” or Company, for the construction, equipment, maintenance and working of a railway from Mahaica in the County of Demerara to Blairmont Ferry in the County of Berbice. Further the Court guaranteed the payment of the contractor of interest at the rate of 4% per annum on a capital sum of $1,250,000 of 50 years. There were certain stipulations to which the contractor was subjected. These included:
– The payment of the guaranteed interest would have been subjected to the fulfilment by the contractor to the satisfaction of the Government of all such conditions of the contract as related to the construction, maintenance and working of the railway.
– The railway should be completed and opened for working within three years from the execution of the contract.
– The guaranteed interest shall take effect at the expiration of three years from the execution of the contract if the railway is then completed and opened for working.
– If in any year the earnings of the railway was over and above the expenses of maintenance and working computed in such manner as may be prescribed by the contract do not amount to 4% on the said capital sum, the difference between the said earnings and the said interest shall be paid to the said contract or from the public treasury.
– If in any year the earnings of the railway was over and above the expenses and maintenance and working amount to more than 4% on the said capital sum, one-half of such excess shall be paid by the contractor to the Government in discharge pro tanto of the money if any paid by the government to the contractor under the guarantee.
– If and so long as the government pays to the contractor any portion of the guaranteed interest the contractor shall convey public servants, mail, and goods, over the railway on account of the government free of charge, but otherwise the government, shall pay to the contractor for such service such sum as may be determined by the contract.
It was promised by the Court that these resolutions would have been published in newspapers locally, regionally and in the United Kingdom as long as the government saw it fit to do so. Even though these resolutions were passed, on the 7th March 1890 R.S. Drysdale (member of the Court) stated that it would have been in the interest of the Court that the ‘greatest care should be taken that these works should be undertaken after very careful consideration”. It was asked that a committee be appointed by the Governor to report at the next meeting of the Combined Court the most advantageous route the line Mahaica-Berbice should have taken, and also to enquire generally into the mode of construction, the rates of freight and passenger traffic, time tables and such regulations as the Committee may deem necessary. No report was submitted as a committee was never created. Nevertheless, the D.R.C. and the Governor continued to correspond about this venture.
All seemed to have been going well until, the 28th June 1892, when the Governor sent a letter to the Colonial Office in response to a dispatch dated 15th January, and to other correspondences on the subject of the construction of the railway between Mahaica and Blairmont. Both correspondences showed that the government and the D.R.C. wished to carefully guarantee themselves from any loss. This was sensible especially on the part of the government who were acting as trustees for the colony; however the complaints of the D.R.C. did not seem justifiable. The D.R.C. complained of this course of action on the part of the government when they also wanted to pursue the same course of action. It seemed that the D.R.C. had forgotten that in all industrial undertakings of that kind, the promoters ran the risk of loss at the beginning. It was interesting that George Chambers (a Director of the D.R.C.) in his letter to the Governor on 4th June 1891, asked that in addition to the guarantee of the 4% on their capital the government guarantee any losses the Demerara Railway Company would have incurred in the working of the line, up to an amount of £2,000 per annum.
In his report concerning the railway to be built the Colonial Civil Engineer stated that a compromise should be reached between the Government’s proposal and the D.R.C. His argument was that the capital proposed to be guaranteed by the government would have proven insufficient. However, what the Engineer did not realize was that the capital sum was suggested by the Manager of the D.R.C. Mason, in a letter dated 4th February, 1890, further it was due to his proposals that the resolutions placed before the Combined Court were issued. In this letter Mason not only stated that the proposed capital be ‘ample’ but he also expressed his belief that there would have been a surplus of $150,000, which would have been devoted to paying of the interest on capital before the guarantee came into force. Importantly, George Chambers, the Chairman of the D.R.C. in his letter had stated that the proposed capital was sufficient. It was not until Mason’s letter 21st August, 1891 to Charles Bruce (Secretary of the Colonies) that it was suggested that more capital should be raised. It can therefore be deduced, that this suggestion by Mason was an afterthought caused by the Governor’s refusal to adopt the proposals made at a conference with members of the D.R.C. June 1891 in London, and as a result of the Governor sending a report to Bruce. The members of the D.R.C. were not willing to embark on this project without a proper guarantee, so as to ensure that they did not risk losing one penny in undertaking this extension.
The Governor in his correspondence disagreed with Mason by letter dated 18th November, 1891 in which he stated that the guarantee was nominal. What the Government of the Colony did then was that they would usually guarantee that 4% be paid to holders of the capital so guaranteed, whether it was earned by them or not. Thus, it was no concern of the railway company whether the Government would have gained a better service at a lesser cost than they were paying, neither was it their concern that the government guarded the public purse from loss by transaction. Yet Mason in his letter dated February 6th 1890 stated that ‘the interest being guaranteed by the Colony, the capital could be raised not only without difficulty, but at a premium.’
It can then be reasoned that when the D.R.C. made their proposals through Mason in February 1890, they probably thought that other and more favourable tenders would have been made to the Government for the carrying out of the work – tenders which might have materially injured their existing railway. But finding that such was not likely to have occurred and knowing of the great advantage they had over other competitors, they thought that it was proper to have altered the terms which no doubt, had there been any competition they would have gladly agreed to.
If this was the reason behind the D.R.C.’s sudden change, then the Colonial Engineer was right when he stated in his report about the loss the Government would have incurred, were it to have undertaken the construction of the line and used the present line with ‘running powers’ over it, or purchase of it. Moreover, Section 129 of Ordinance 16 1846 (authorising the construction and maintenance of the existing railway) provided that the railway should not have been exempted from the provisions of an Act of Parliament, Order-in-Council or Ordinance related to the railways which would have in future been enforced in the Colony. This Ordinance also made it lawful for the Governor and Court of Policy to repeal, alter or amend any part of the Ordinance ‘without being responsible on that account to provide compensation or indemnity to the shareholders of the Company’.
The Governor was angry with the way the D.R.C. treated the offer of the Government based on their own proposals and the manner in which the Legislature of the Colony in their early years had advanced them large sums of the revenue to have enabled them to carry out the completion of the Georgetown-Mahaica link. As a result, the Governor stated that ‘should it have become necessary to obtain powers over the D.R.C. or purchase it, the Legislature would be quite justified in dealing with them with much leniency’.
By 1892, this was the state of the discussions between the Government and the D.R.C. additionally, the time for the creation of tenders was extended twice, and the deadlines were passed, therefore resolution no. 6 of the Combined Court, session 1890 became defunct. Therefore, the Governor had no choice but to offer to the D.R.C. certain concessions for the completion of the railway line from Mahaica-Blairmont. The concession indicated by the Governor was identical to the resolution no. 6 of the Combined Court, session 1890, simply explained, there was a deletion from sub-section “F” of clause 5, they altered clause 2, substituted after “contract” in line 2 “Demerara Railway Company and erased the other words down to “for” line 3, and deleted clause 6.
After these changes nothing seemed to have been done, and as a result a one man crusade was launched by a financial representative in the Combined Court, Neil Mc Kinnon for the continuation of this railway link. He gave notice of the following question in December 1892 “Do the government intend, when drafting the contract for the building of the railway from Mahaica to Blairmont, to insert a clause to the effect that the work shall be commenced at both ends simultaneously?” One week later Mc Kinnon asked that his notice be addressed by the Court but the Secretary of State announced that his suggestion would have been dealt with at the next sitting of the Court.
Mc Kinnon continued asking the Court of Policy several questions including (a) if any tenders were received for the construction of the Mahaica-Blairmont Railway (b) whether any negotiations were ongoing with the Demerara Railway Company and the Government with respect to the Mahaica-Blairmont Railway (c) did the government intend to modify the terms of their advertisement for tenders and thus to secure to the inhabitants of the Colony the establishment of the railway scheme – and carry out the resolution passed by the Court in 1890. He was not in agreement with the changes to the resolutions. These questions continued to be asked at every session in which Mc Kinnon attended, even though he was met with silence or promises.
