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.