Colonial Despatches
The colonial despatches of Vancouver Island and British Columbia 1846-1871
Public Offices document
Julyan, Penrose Goodchild to Elliot, Thomas Frederick 11 August 1865, CO 60:23, no. 7633, 58.
Abstract
Julyan, Penrose Goodchild to Elliot, Thomas Frederick 11 August 1865, CO 60:23, no. 7633, 58.
Public Offices document.
Minutes (5), Enclosures (untranscribed) (2), Other documents (2).
Julyan to Elliot (Assistant Under-Secretary)
I have the honor to acknowledge the receipt of your letter
of the 18th ultimo, forwarding copy of a despatch received
by Mr Secretary Cardwell from the Governor of British
Columbia, and informing the Crown Agents for the Colonies that
Mr Cardwell will be glad to receive any information or
remarks which they may have to offer on the subject.
2. In reply I beg to state that the Bills for £30,000,
reported by the Governor as having been drawn by him prior
to the receipt of the CrownAgents'
Agents' letter to the Colonial
Secretary dated 16th February last, were accepted at this
Office on the 18th May, and became due on the 20th
ultimo. It was hoped that funds to meet the payments would
have been obtained before the Bills matured, by the sale of
some of the Debentures, but this expectation was not realized.
The Crown Agents, were, however, enabled to make arrangements
with the holders for deferring the payment for a further
period of two months, the bills to bear interest in the
meantime at the rate of 6 per cent per annum.
Agents' letter to the Colonial
Secretary dated 16th February last, were accepted at this
Office on the 18th May, and became due on the 20th
ultimo. It was hoped that funds to meet the payments would
have been obtained before the Bills matured, by the sale of
some of the Debentures, but this expectation was not realized.
The Crown Agents, were, however, enabled to make arrangements
with the holders for deferring the payment for a further
period of two months, the bills to bear interest in the
meantime at the rate of 6 per cent per annum.
3. These terms are favorableto
to the Colony, and the time
thus gained may enable the Crown Agents to dispose of
sufficient debentures to take up the bills without making
so great a sacrifice as a forced sale would at that time
have involved. In fact, since this arrangement was entered
into, debentures representing £8300 have been sold at 95, which is fully
4 per cent higher than any previous offer that had been made.
to the Colony, and the time
thus gained may enable the Crown Agents to dispose of
sufficient debentures to take up the bills without making
so great a sacrifice as a forced sale would at that time
have involved. In fact, since this arrangement was entered
into, debentures representing £8300 have been sold at 95, which is fully
4 per cent higher than any previous offer that had been made.
4. The unsold portion of the loan has been again
offered by advertisement to the public at that price, being
it is believed the most likely way of obtaining the money
by the timeit
it is wanted.
it is wanted.
5. There is I believe but one other point in Governor
Seymour's despatch which calls for any particular notice.
6. It is stated in the fifth paragraph that "had
we been permitted to make our own arrangements locally with the Bank
of British Columbia the whole of the Loan would, I understand, have
been disposed of here, on terms not unfavorable to the Colony."
7. This opinion is so entirely opposed to all precedent,
and tothe
the principles which govern financial operations of this
kind, that the Crown Agents cannot refrain from sup[p]ressing
a belief that, unless the expression "not unfavorable to the
Colony" is to be interpreted as meaning a price far below
that which they would feel justified in accepting for the
Debentures here, there must be some misapprehension in the matter.
the principles which govern financial operations of this
kind, that the Crown Agents cannot refrain from sup[p]ressing
a belief that, unless the expression "not unfavorable to the
Colony" is to be interpreted as meaning a price far below
that which they would feel justified in accepting for the
Debentures here, there must be some misapprehension in the matter.
8. The ruling rates of interest in the Colony are, I
am informed on undoubted authority, from 12 to 18 per cent—and
it is believed that the Government are now paying the Bank
of British Columbia 12 per cent for money borrowed. The prevailing rates
here duringthe
the same period have been as low as 3 per cent.
the same period have been as low as 3 per cent.
9. If the Government find it necessary to pay this
high rate for short periods, on what principle can it be
expected they are to float debentures, having 30 years to
run, on terms which will compare favorably with our
negotiations here, which have, so far, placed the money
at the disposal of the Government at 6 1/16 per cent?
Whilst the exchanges have at the same time been in favor of the drawers.
10. Again it appears that the very Bank which was
expectedto
to realize the more favorable terms in the Colony,
are still the unwilling holders of a considerable portion
of the loan taken by them in 1862, and they expressed a
hope some few months ago, when the 1864 Loan was first
advertized, that the Crown Agents would, if they had a
superfluity of applications, enable the Bank to find
customers for their unsold balance. Surely if the
debentures could be dealt with favorably in the Colony this
Bank would not fail to send them there, and to do for
itself what Governor Seymour has been led to expect it
could do for the Government.
to realize the more favorable terms in the Colony,
are still the unwilling holders of a considerable portion
of the loan taken by them in 1862, and they expressed a
hope some few months ago, when the 1864 Loan was first
advertized, that the Crown Agents would, if they had a
superfluity of applications, enable the Bank to find
customers for their unsold balance. Surely if the
debentures could be dealt with favorably in the Colony this
Bank would not fail to send them there, and to do for
itself what Governor Seymour has been led to expect it
could do for the Government.
11. To remove all doubtin
in the matter however the
Crown Agents Addressed a letter—copy of which is enclosed—to
the Directors of the Bank here, and their reply—copy of
which is also enclosed—leaves no room to doubt that some
misapprehension exists in the Colony on the subject.
in the matter however the
Crown Agents Addressed a letter—copy of which is enclosed—to
the Directors of the Bank here, and their reply—copy of
which is also enclosed—leaves no room to doubt that some
misapprehension exists in the Colony on the subject.
12. It would be satisfactory to the Crown Agents—who
spare no exertion in endeavouring to effect satisfactory
sales—and it might tend to place the money at the disposal
of the Colony with less delay—if the Governor were on all
occasions to name theminimum
minimum price at which he would be
satisfied for debentures to be disposed of in this Country.
minimum price at which he would be
satisfied for debentures to be disposed of in this Country.
Minutes by CO staff
Sir F. Rogers
In February last the Crown Agents represented to the Govr the inexpediency of attempting to sell, at that time, the Debentures in their hands issued under the Loan Ordinance—they informed him of the Measures they had taken for meeting the bills then drawn upon them & impressed upon him how desirable it was that no further bills should be drawn till some portion of the Debentures had been disposed of (see enclosure in 6405).
In February last the Crown Agents represented to the Govr the inexpediency of attempting to sell, at that time, the Debentures in their hands issued under the Loan Ordinance—they informed him of the Measures they had taken for meeting the bills then drawn upon them & impressed upon him how desirable it was that no further bills should be drawn till some portion of the Debentures had been disposed of (see enclosure in 6405).
But before this letter reached him the Governor had
drawn bills against the loan for a further sum of
£30,000 which the Agents were authorized to accept if
it was clear that they would be able to raise upon the
securities in their hands sufficient to meet them. The
Agents in their present
letter explain the arrangement
they have made with the Bank of B.C. for deferring the
payment of these bills for two months, & thus give
time for disposing of sufficient debentures to meet them.
It has now to be decided what instructions should be
given to the Govr as to drawing any further
bills, see Minutes on 6405. I annex Mr Cardwell's
Desp: to which Govr Seymour refers in 6405.
letter explain the arrangement
they have made with the Bank of B.C. for deferring the
payment of these bills for two months, & thus give
time for disposing of sufficient debentures to meet them.
It has now to be decided what instructions should be
given to the Govr as to drawing any further
bills, see Minutes on 6405. I annex Mr Cardwell's
Desp: to which Govr Seymour refers in 6405.
VJ
11 Augt
Mr Cardwell
It looks to me very much as if the Governor had been somewhat unjust to the Crown Agents in this matter. The Colonial Govt are anxious to get hold of cash on the spot and perhaps have not been
sorry to oblige
a powerful local Bank by letting them gain the
extravagant terms obtainable in new Countries for a
loan, but it is obvious that there was not the least
substantial foundation for implying that it would
have been better for the Colony to get the money on
the spot than in this Country.
It looks to me very much as if the Governor had been somewhat unjust to the Crown Agents in this matter. The Colonial Govt are anxious to get hold of cash on the spot and perhaps have not been
sorry to oblige
a powerful local Bank by letting them gain the
extravagant terms obtainable in new Countries for a
loan, but it is obvious that there was not the least
substantial foundation for implying that it would
have been better for the Colony to get the money on
the spot than in this Country.
I should acknowledge the Governor's despatch. I
should say that having called upon the Crown Agents for a report
Mr Cardwell has received one of which a copy is enclosed.
I should say that it is quite obvious that better
terms must be procurable in the money market of England
than in a new Country where Capital is scarce and
interest very high, and that Mr Cardwell does not
think that it would be justifiable
to expose the Colony
to the much higher charges which it must bear if it's
public loans are raised on the spot. (I think it very
material to insert this sentence in order to discharge
our duty of making a stand against money jobbing, to
which a disposition has appeared on former occasions in this Colony.)
to expose the Colony
to the much higher charges which it must bear if it's
public loans are raised on the spot. (I think it very
material to insert this sentence in order to discharge
our duty of making a stand against money jobbing, to
which a disposition has appeared on former occasions in this Colony.)
I should say that Governor Seymour must, however,
be aware that even in this Country interest has of
late been high and that the raising of Colonial loans
has become more difficult, and I should state that
Mr Cardwell does not think it proper that he should
draw any further Bills upon the Crown Agents until after
they shall have been able to raise and put to the credit
of the
Colony the funds by which those Bills are to be met.
Colony the funds by which those Bills are to be met.
Documents enclosed with the main document (not transcribed)
Julyan to Henry Ransom, Manager, Bank of British Columbia,
3 August 1865, concerning the possibility of disposing of the
debentures in the colony.
Other documents included in the file
Elliot to Crown Agents, 12 September 1865, forwarding copy of
despatch as noted above for information.