Sargeaunt to Elliot (Assistant Under-Secretary)
Offices of the Crown Agents for the Colonies,
Spring Gardens, London, S.W.
17th January 1867
Referring to previous correspondence relative to the want of funds to meet payments on account of interest and sinking funds of the British Columbia Loans I have to transmit, for the information of the Earl of Carnarvon, copy of a letter from the Acting Colonial Secretary of that Colony (received on the 12th inst) and of a correspondence between this Office and the Bank of British Columbia on the subject.
I have etc.
W.C. Sargeaunt
Minutes by CO staff
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Mr Elliot
You will see (12205) that on the last occasion payment of interest only was sanctioned. I presume that the same course will now be followed, but from what source are the funds to come? Perhaps we had better ascertain how the Crown Agents stand as to funds in general, before we make any appeal to the T-y for temporary assistance. On the 30 Oct. the Governor was instructed to supply the Agents with the means of meeting such demands as the present, & therefore, I think we may calculate on receiving funds from reimburse these inconvenient applications by the 1st of March, or soon after, if, that is to say, the Col: Treasury has the means of doing so.
ABd 10 Jany/67
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The practical questions are settled already. We have (on 12205) authorized the Crown Agents to pay the interest which fell due in the B. Columbia debentures on the 1st Instant. AndtheManuscript image the Governor was informed of it in a despatch of strong admonition.
What is new in the present letter is that the B. Columbia Govt has written a Letter to the Crown Agents to provide for the interest and sinking fund by drawing a Bill on that Government for the amount, and negotiating it with the B. Columbia Bank. This the B. Columbia Bank declines to do, at which one has no reason to feel suprised. I apprehend that it must be explained to the B. Columbia Govt that such an attempt as this is no proper or adequate provision for the imperative duty of providing funds to pay their obligations to their public creditors. But it would be desirable further to prescribe to them, since they seen so little informed in such matters, a more suitable mode of furnishing the money,andManuscript image and perhaps on this point we might ask the advice of the Treasury.
The Treasury have gone along with us in the previous steps and we might send them the present letter and say that we propose to point out to the B. Columbia Government that they ought not to rely on so unsatisfactory a resource as an attempt to induce a Bank in London to negotiate Bills upon them, but should make some correct and effectual provision to pay their obligations to their public creditors. We might then ask the Treasury whether it occurs to their Lordships that any particular method of remittance can be suggested to the B. Columbia Government as the most fitting one for placing the requisite funds in the hands of the Crown Agents at each half-yearly period.
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I have referred to the succesive Loan Acts. They all say that the Loans are "secured on the General Revenue," but not a word about making the interest a first charge. If the B. Columbia Government fails to provide the money for the next time, it will be very difficult to go on abstracting the amount from the floating balance on the other Colonies, or yet obtain it from the British Treasury, which last would be a fatal encouragement to other Colonies to make similar default. On the other hand if B. Columbia Bondholders should be left without their interest, it will tend to throw general discredit on Colonial Government Securities and seriously to impair their value to their holders.
TFE 8 Feby
CBA 9/2
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I have some hope that Mr Seymour may effect an improvement. From a private letter wh I have received from him he seems to be alive to the serious position of affairs. Proceed according to Mr Elliot's min.
C 10 Feby
Documents enclosed with the main document (not transcribed)
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H.M. Ball, Acting Colonial Secretary, to Crown Agents, 7 November 1866, requesting bill for £6250 be drawn on the government and discounted at the Bank of British Columbia for interest and sinking fund.
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Sargeaunt to Directors of Bank of British Columbia, 11 January 1867, asking whether the bank was prepared to discount the draft.
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H.E. Ransom, Manager, Bank of British Columbia, to Sargeaunt, 16 January 1867, refusing to discount the draft due to the large indebtedness of the colony.
Other documents included in the file
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Colonial Office to G.A. Hamilton, Treasury, 14 February 1867, forwarding copy of letter from Crown Agents and seeking advice as to methods of remittance to be suggested to the colonial government.