Julyan to Rogers (Permanent Under-Secretary)
16 September 1863
I have the honor to report, for the information of His Grace the Duke of Newcastle, that the Crown Agents for the Colonies, acting under the authority conveyed to them in your letter of the 23rd of July last, offered to public competition on the 13th Ultimo, the Debentures authorized to be issued under the British Columbia Loan Act of 1863.
TheManuscript image
The tenders received at and above the minimum price (104) amounted in the aggregate to £41,200, from which must be deducted £6000 offered by two defaulters, leaving the Net amount sold £35,200.
The average premium produced on this amount was £5.0.9 per cent.
The balance, amounting to £14,800, has also been disposed of, on tenders subsequently received, at £4.0.6 1/2 premium, making the average premium on the whole Loan £4.16.2 per Cent.
The securities of Colonies placed in such close proximity to the Federal States of America, as British Columbia is, are by no means in favor with the English public just now, and the Crown Agents think themselves fortunate, under the circumstances, in having been abletoManuscript image to negotiate the whole of the Loan so promptly and on such excellent terms.
The details of the whole proceedings will be found in the enclosed Schedule.
It may not be inappropriate here to refer you to my letter of the 20th December last, relative to the negotiation, in the Colony, of a previous Loan for a similar amount, and to offer some few observations on the reply of Governor Douglas forwarded to the Crown Agents in your letter of 13th May following.
In my letter referred to an opinion was expressed that from 4 to 5 per cent more on that Loan would probably have been realized, had a certain course, therein pointed out, been adopted.
This opinion has been verified very closely, seeing that the actualdifferenceManuscript image difference is £4.16.2.
According to the statement which accompanies Governor Douglas' Despatch the Net proceeds of the Loan disposed of in the Colony was £49,162.3.1, while the Net proceeds of that disposed of in this Country, as shown by the enclosed Schedule is £52,153.19.0, being a difference in favor of the latter of £2991.15.11.
In the former case the Government only received payment for their Debentures at intervals extending from 20th August 1862 to 6th February 1863, whereas in the latter case the money was all available at once, and such portion of it as is not already drawn against will yield Interest until required; so that there will be a still further sum in favor of the last negotiation to be eventuallyaddedManuscript image added to the above £2991.15.11.
The Governor draws a comparison in his Despatch between the negotiation of the Vancouver Island Loan by the Crown Agents and the re-sale in London of the first British Columbia Loan by the Bank of British Columbia, from which he concludes that the terms realized for the former were not much better than those obtained by the Bank for the latter. At the time that conclusion was come to the transaction, so far as the Vancouver Loan was concerned, had only commenced: it is now concluded; and the result is—as shown by the detailed statement enclosed—the realization on the whole amount of an average premium of about £5.8.0 per cent; while the Bank have up to the present time, with their minimum of 103 1/2, been unable toplaceManuscript image place the whole of the 1st Loan on the market, and have still Debentures in hand representing the comparatively large sum of £17,600.
There is one other point in the Governor's Despatch calling for some observation.
It is stated in the last paragraph that the Drafts of the Agents General could 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 astheManuscript image the drafts upon Her Majesty's Paymaster General.
The Drafts referred to in my former letter, as likely to command a better price than those of a newly established Bank, were not the "Drafts of the Agents General" but the Drafts of the British Columbia Government drawn on the Agents of the Crown in London, any objection therefore to such Drafts can only refer to the "Drawee" in a minor degree, and is in reality throwing doubts on the solvency of the "Drawer", i.e. the Government of British Columbia.
The Bank Drafts in question were it appears purchased from the Government as follows:
By the Bank of British North America £22,594. 4.10
Wells, Fargo & Co 21.905.15. 2
Colonial Treasurer 500. 0. 0
Other persons 5,000. 0. 0
£50,000. 0. 0
ToManuscript image
To the Bank of British North America and to the Bank of British Columbia—indeed to all Banks having London Agencies—the Crown Agents are well known, and they have also had business transactions with Messrs Well, Fargo & Co. The latter could therefore have easily satisfied themselves as to whom the Crown Agents were, by enquiry at either of the local Banks.
It would appear however that they have now got over their scruples both as regards the "Drawer" and the "Drawee", as out of the £30,000 of Government Drafts already accepted against the Loan just disposed of, no less than £9500 are in favor of Wells, Fargo & Co, and the remainder appear to have been taken by the Local Banks, and by other persons who were purchasers of the Bank Bills receivedbyManuscript image by the Colony in payment for their first Loan.
I have the honor to be,
Your most obedient
Humble Servant
Penrose G. Julyan
Minutes by CO staff
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Sir F. Rogers
I do not know that it is essential to communicate this report to the Treasury; but there may be some convenience in doing so. If it be decided to send it there the Governor's desph of the 13 May last shd also be forwarded.
Copy, hereafter, at any rate, to the Governor for his infn.
It has been lately determined that the Colony, & not this Country should pay the sum of £10,704—on account of the Engineers: & we could avail ourselves of this oppy of a balance on hand to pay the Treasury the advance they have made to the above extent: but if we were to take that course we shd cripple the Governor in his all important road making schemes. I think that the inconvenience to the T-y of waiting a little for their money is a much less evil than it wd be to the Colony to have £10,000 raised specially & exclusively for the construction of roads, diverted from its purpose. Wd it be advisable to mention to the T-y that the Duke of Newcastle has instructed the Govr to pay the claim on acct of the Engineers: & that His Grace wd deprecate settling the acct out of thisManuscript image balance.
ABd 17 Sepr
Mr Fortescue
I would send copy of correspondence to the Try and also copy of this letter to the Govr as Mr Blackwood suggests.
But I trouble you with this in order that you may consider whether £10,704 of this shd be impounded or not (& if not whether a sentence shd be added to the letter to Try in the terms suggested by Mr Blackwood.)
FR 18/9
Duke of Newcastle
I have not the whole case sufficiently before me to give a confident opinion upon it. But I do not like the idea of impounding a portion of this Loan without notice to the Governor, which, as far as I am aware, has not been given. He might be instructed to endeavour to make suchManuscript image arrangements as would enable him to leave undrawn a portion of the proceeds of the loan sufficient to meet the charge for the R. Engineers—i.e.—(I suppose) £10,704.
CF 21
This sum should on no account be abstracted from the purposes for which the Loan was raised. Upon the early completion of the roads depends the prosperity of the Colony and the means of defraying this and other demands. The golden eggs will be surely forthcoming if we do not kill the goose.
N 25
I have ascertained at the Treasury that they have no wish or intention to repay themselves this sum of 10,704 out of the balance of the Loan: & therefore it will be unadvisable to say anything to them which wd make them suppose we imputed such an idea to them.
ABd 29/S
Other documents included in the file
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Draft reply, Newcastle to Douglas, No. 55, 2 October 1863.
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Rogers to G.A. Hamilton, Treasury, 8 October 1863, forwarding letter from Crown Agents and a "detailed statement of their negotiation of the loan of £50,000 authorized by the British Columbia Loan Act of 1863."
Documents enclosed with the main document (not transcribed)
Statement not in file.