The great bulk of the Ceylon pearls are silvery white in color, but occasionally yellowish, pinkish, and even “black” pearls are found, although the so-called “black” pearls are really brown or slate-colored. In some seasons these are relatively numerous, as in 1887, for instance.
Notwithstanding the large product at the fishery camp, it is difficult to purchase single pearls or small quantities there at a reasonable price, the merchants objecting to breaking a mudichchu, or the lot resulting from washing a definite number of oysters.
The shells obtained in the Ceylon fisheries do not possess sufficient thickness of lustrous nacre for use as mother-of-pearl, and are mostly used for camp-filling. A few are burned and converted into chunam, i.e.: prepared lime for building purposes, or to be used by natives for chewing with the betel-nut. Forty or fifty years ago, before the large receipts of mother-of-pearl from Australia and the southern Pacific, there was a good market for the shell for button manufacture and the like, but since 1875 only the choicest have been used for this purpose, and these are worth only about $25 per ton delivered in Europe.
It will be observed that up to the close of the season of 1906, the Ceylon fisheries were operated by the colonial government as a state monopoly. In 1904, proposals were made to the British colonial office by a London syndicate with a view to leasing the fisheries for a term of years. The original suggestion was that they should be leased for thirty years in consideration of an annual rental of £13,000 or Rs.195,000, together with a share of the net profits after payment of a reasonable rate of interest on the investment; and later it was suggested that the rental be Rs.100,000 a year and twenty per cent. of the profits after seven per cent. on capital had been paid to the shareholders. But the government preferred a definite money payment without any rights to share in the profits realized; and after lengthy negotiations this was fixed at Rs.310,000 annually, with certain preliminary payments. Accordingly, on November 30, 1905, a preliminary agreement was executed between the crown agents for the colonies, acting on behalf of the government of Ceylon, and representatives of the Ceylon Company of Pearl Fishers, Limited. On February 27, 1906, this agreement was confirmed and made effective by special ordinance[[156]] of the governor and legislative council of Ceylon, and the crown agents were authorized to execute the lease as of January 1, 1906.
The principal financial terms of this lease required the company to purchase the expensive Dixon pearl-washing machine at a cost of Rs.120,000, which was Rs.42,000 less than it cost the government during the preceding two years; to purchase at a cost of Rs.62,501 the steamship Violet, which the government had used in its experimental oyster-culture; to reimburse the government each year the amount spent in policing, sanitation and hospital services at the fishery camp, which had in some individual seasons amounted to more than Rs.200,000; to expend each year from Rs.50,000 to Rs.150,000 in the development of pearl-oyster culture; and to pay an annual rental of Rs.315,000, a rate based roughly on the average return of the preceding twenty years, including the record year of 1905.
The company was authorized to take up the pearl-oysters by means of divers, or by steam dredges, or by such other mechanical means as might appear most advantageous, and to carry on such experiments with the immature oysters as appeared most conducive to the profitable working of the fisheries, provided they do nothing to make the resources less valuable at the expiration of the lease.
One of the most interesting features of the lease is that relating to the power of the colonial government to grant an exclusive right of fishing on the banks outside the three-mile limit. The question of this exclusive right arose in 1890, but was not conclusively determined. Fearing lest this authority did not exist, the terms in which the right of fishing was conveyed were carefully chosen by the attorney general to protect the government from liability “should any international question arise”;[[157]] and the government leased to the company “all the right or privilege which the lessors have hereto exercised and enjoyed of fishing for and taking pearl-oysters on the coasts of Ceylon between Talaimannar and Dutch Bay Point, to the intent that the company so far as the lessors can secure the same may have the exclusive right, liberty and authority to fish for, take and carry away pearl-oysters within the said limits.... But nothing in this lease shall be taken to make the lessors answerable in damages if owing to any cause beyond the control of the lessors the company is prevented from fully exercising and enjoying such exclusive right and privilege.”[[158]]
In the meantime, while the negotiations were in progress, there occurred the very profitable fishery of 1905, from which the colonial government derived a revenue of Rs.2,510,727, or approximately eight times the proposed annual rental; and before the lease was finally concluded occurred the fishery of 1906, with its revenue of Rs.1,376,746. While it is true that a succession of barren seasons prevailed from 1892 to 1902, yet, as the revenue in 1903 was Rs.829,548, and in 1904 it was Rs.1,065,751, there was, in the four years ending in 1906, a revenue to the government of Rs.5,782,772, or nearly as much as the total amount to be derived from the lease during the twenty years it was to run. These figures seemed to furnish strong reasons for retaining such a valuable source of revenue, with its possibilities of still greater expansion under the supervision and direction of specialists in the employ of the government.
Many of the inhabitants of Ceylon saw in this a decided objection to the lease, and there was a general feeling of indignation in the colony, with public meetings in protest, and the like. In reply to a memorial prepared at one of these meetings held in Colombo, Lord Elgin, the British secretary of state for the colonies, wrote under date of May 9, 1906:
The memorialists have protested against the lease on the double ground that a lease on any terms is contrary to the best interests of Ceylon, and that the rent agreed upon is “under existing circumstances wholly inadequate.” There must always be in cases of this kind a difference of opinion as to whether a fixed annual sum, with immunity from all expense and sundry other advantages, is or is not preferable to continuing to face all the risks for the sake of all the profits. In the present instance the lease appears to me to have been drafted with a sincere desire to safeguard to the utmost the property and interests of the Colony.