Colonial Despatches
The colonial despatches of Vancouver Island and British Columbia 1846-1871
Public Offices document
Peel, Frederick to Elliot, Thomas Frederick 8 November 1862, CO 60:14, no. 10905, 308.
Abstract
Public Offices document.
Minutes (3), Other documents (3), Marginalia (1).
Peel writes Elliot on behalf of the Treasury to inform
Newcastle that the Treasury has approved Douglas's
British Columbia Loan Act 1862which allows him to raise a loan of £50,000, but disapproves of Douglas's decision to award the entire loan to the Bank of British Columbia, which the Treasury believes will increase the cost of the loan to the colony.
Peel to Elliot (Assistant Under-Secretary)
Treasury Chambers
8 November 1862
In reply to your letter of the 31st Ult, I am directed
by The Lords Commissoners of Her Majesty's Treasury to acquaint
you, for the information of the Duke of Newcastle that the British
Columbia Loan Act 1862 appears to contain the necessary provisions
for the raising and repayment of the Loan of £50,000 and Their
Lordships will not objectto
to its confirmation.
to its confirmation.
They do not think however that the Governor has made a prudent
arrangement with the Bank of British Columbia. The Bank becomes
practically the Agent for the Loan. The Colonial Government does not
get the Premium which would have accrued on the public sale of its
Debentures in London by the Agents General and it has to pay Interest
at the rate of 12 per cent upon Billsat
at 30 or 60 days sight received
in payment of its Debentures. Whereas if the case was so very
urgent the Governor might have drawn against the Debentures by Bill
upon the Agents General, at the same time authorizing them to dispose
of the Debentures, and as such Bills would have been at least
equally saleable in the Colony with those of the Chartered Banks,
he would if he had pursued this course have saved the charge of so
heavy a Rate of Interest as 12 per cent.The
The arrangement therefore
which the Governor has entered into cannot be considered as a
profitable one for the Colony, but it is now too late to interfere with
it, and My Lords therefore have no alternative but to allow it to stand.
at 30 or 60 days sight received
in payment of its Debentures. Whereas if the case was so very
urgent the Governor might have drawn against the Debentures by Bill
upon the Agents General, at the same time authorizing them to dispose
of the Debentures, and as such Bills would have been at least
equally saleable in the Colony with those of the Chartered Banks,
he would if he had pursued this course have saved the charge of so
heavy a Rate of Interest as 12 per cent.The
The arrangement therefore
which the Governor has entered into cannot be considered as a
profitable one for the Colony, but it is now too late to interfere with
it, and My Lords therefore have no alternative but to allow it to stand.
As soon as the Act has received confirmation by Her Majesty The
Agents General should be instructed to prepare the Debentures, and
to put themselves in communication with the London Office of the
CharteredBank
Bank of British Columbia with a view to the delivery of
the Debentures according to the arrangement made by the Governor.
Bank of British Columbia with a view to the delivery of
the Debentures according to the arrangement made by the Governor.
Minutes by CO staff
Sir F. Rogers
By the last sentence the Treasury appear to consider that the first step must be the confirmation of the Act. I therefore pass this letter through your hands. All are agreed that the Act should be confirmed.
By the last sentence the Treasury appear to consider that the first step must be the confirmation of the Act. I therefore pass this letter through your hands. All are agreed that the Act should be confirmed.
The Colonial Agents General should then have a copy of
as much as is necessary of the Governor's communications,
and should be instructed without delay to prepare the debentures and to
proceed as described in the concluding words of the Treasury letter.
as much as is necessary of the Governor's communications,
And his last despatch will be enough, I think.
TFE
11/11
I am told that this is very urgent as the Colony is
paying for the money at the rate of 12 per cent until the
debentures shall be issued at the rate of 6 per cent.
The Governor should be informed of what is done, and his
attention should be drawn to the unfavorable nature of his
bargain as explained in the Treasury letter. It seems to
have thrown undue advantages into the hands of this new bank.
TFE
10 Novr
Other documents included in the file
Draft reply, Newcastle to Douglas, No. 150, 12 November 1862,
outlining the Treasury's criticism of Douglas's awarding the entire loan to the
Bank of British Columbia.
Draft, Elliot to Crown Agents, 13 November 1862, forwarding copy of governor's despatch and instructing them to prepare the necessary
debentures.