No. 28, Financial
13 May 1863
I have the honour to acknowledge the receipt of your Despatch of the 5th January 1863 No 3, transmitting for my information copy of a letter from one of the Agents General for Crown Colonies in respect to the Loan of £50,000, recently contracted by this Government.
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2. In compliance with Your Grace's instructions, I forward herewith a Return exhibiting the various details of information required by Your Grace in respect to the manner in which the Loan was disposed of.
3. I have perused the remarks of Mr Julyan upon the course which was adopted with the view of immediately realizing of the proceeds of the Loan. I do not doubt that under ordinary circumstances the method suggested by Mr Julyan would have been foundmoreManuscript image more advantageous than that which was followed, but under the circumstances existing I conceive the arrangement entered into with the Bank of British Columbia was in every way advantageous. The pressure upon me for money was urgent, I had no positive certainty at the time the arrangement was made that the Act would be confirmed. I could not therefore without previous intimation have placed paper in the market that I was not satisfied would be met. The paper of the Bank of BritishColumbiaManuscript image Columbia on the other hand I had every reason to believe would be duly honored, and had the Loan Act not been confirmed or had it been delayed through error in form, the Bank would have become the creditors of the Government at a rate of interest of one third less than money could have been procured on the spot.
4. Mr Julyan is also mistaken in one or two of his assumptions. Subsequent events have proved this. The negociation of the Vancouver Island loan was not effected upon much better terms by the Agents General,thanManuscript image than the British Columbia Loan by the Bank of British Columbia. The minimum fixed by the Bank was 103 1/2. At the first allotment £6000 was disposed of at and above this price. The minimum fixed by the Agents General for the Vancouver Island Debentures was 103 3/4: and at the first allotment only £5900 were disposed of at and above that price. I believe that since, the two Debentures command about equal rates. I am inclined to think better rates would have been obtained for the British ColumbiaDebenturesManuscript image Debentures had the Agents General abstained from putting a notice in the Times, which I cannot but view as calculated to create a feeling of uncertainty respecting the Loan which would be prejudicial to it; and although so far as that Loan was concerned in a money point of view, it might not affect this Government, yet such a feeling with respect to the first Loan of the Colony could not but be detrimental to the credit of the Colony and likely to injure the negotiation of further Loans. The Drafts of the Agents General couldnotManuscript image not have been disposed of in the Colony at any better rates than the Drafts of the Bank of British Columbia. We generally obtain the best rates for our Drafts from the American House of Wells Fargo & Co the great Express Agents. A draft upon the Agents General recently offered to them for sale on Vancouver Island Account was questioned, and I believe objected to as they had no knowledge of such paper. The drafts of the Bank of British Columbia are readily taken by them and command as high rates as the drafts upon HerMajesty'sManuscript image Majesty's Paymaster General. I merely mention those particulars to shew that, however justly Mr Julyan may judge of matters from his point of view in London, yet it is necessary to make allowance for local circumstances before a full appreciation of the case can be arrived at.
I have the honor to be
My Lord Duke
Your Grace's most obedient
and humble Servant
James Douglas
Minutes by CO staff
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Mr Elliot
Copy to the Agents General, with reference to their Letter of the 20 Decr last & enquiring if they have any observations to offer on the subject in debate. I think we shall have to communicate hereafter with the T-y.
ABd 29/6
Mr Blackwood
I agree with you. To the Agents General first, forManuscript image any observations which they may have to offer and afterwards we shall send both to the Treasury and invite their opinion.
One great reason why I have wished to get the next loan into our own hands is in order to afford the means of paying off any of the most objectionable of Mr Douglas's debts to the Depts at home.
TFE 30 June
Other documents included in the file
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Elliot to Crown Agents, 3 July 1863, forwarding copy of the despatch for observations and suggestions.
Documents enclosed with the main document (not transcribed)
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"Statement of Bills received from Bank of British Columbia on account of the £50,000 Loan," signed by W.A.G. Young, Acting Auditor General, 20 March 1863.
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"Statement of sums realized by sale of £50,000 bills received from the Bank of British Columbia on account of Loan," signed by Young.
Douglas, James to Pelham-Clinton, Henry Pelham Fiennes 13 May 1863, CO 60:15, no. 6334, 278. The Colonial Despatches of Vancouver Island and British Columbia 1846-1871, Edition 2.2, ed. James Hendrickson and the Colonial Despatches project. Victoria, B.C.: University of Victoria. https://bcgenesis.uvic.ca/B63028.html.

Last modified: 2020-12-02 13:40:34 -0800 (Wed, 02 Dec 2020) (SVN revision: 5008)