Colonial Despatches
The colonial despatches of Vancouver Island and British Columbia 1846-1871
Public Offices document
Julyan, Penrose Goodchild to Rogers, Frederic 8 December 1868, CO 60:34, no. 13558, 97.
Abstract
Public Offices document.
Minutes (2), Enclosures (untranscribed) (1), Other documents (2).
Julyan
describes the state of British Columbia’s finances regarding payment of loans and the interest on the
Sinking Fund.Julyan discusses the impacts of British Columbia’s inability to pay its debts, and the associated interest on those debts, on British Columbia and the United Kingdom financially. Cox’s minute discusses short term solutions to British Columbia’s inability to pay its debts. Rogers’s minute discusses the financial hardships British Columbia has faced and proposes that the Crown Agents loan British Columbia money from the general funds to pay off debt due at the end of 1868. Included documents discuss the impacts of British Columbia’s debts on the colony’s population.
Julyan to Rogers (Permanent Under-Secretary)
It is a matter of regret to the Crown Agents to be again under
the necessity of bringing under the notice of the Secretary of
State for the Colonies, the state of the British Columbia
account with this Office.
At the present moment the available assets are as follows:
| Cash balance | £ 110:0:0 |
| Acceptance of the Bank of British Columbia, maturing 12th December | 1000:0:0 |
| Total | £1110:0:0 |
Liabilities
| Due to the Sinking Fund on the 1st July 1868 | £1000:0:0 |
| Due to the Sinking Fund on the 1st October 1868 | 1125:0:0 |
| Ditto (Vancouver) 1st Jany/69 | 800:0:0 |
| Ditto do Interest 1st Jany/69 | 1200:0:0 |
| Ditto (British Columbia) Interest 1st Jany/69 | 3000:0:0 |
| Ditto do do Sinking Fund | 3250:0:0 |
| Total liabilities | £10375:0:0 |
| Deduct assets | 1110:0:0 |
| Deficit | £ 9265:0:0 |
Of the liabilities, £1000 have been due since 1st July last,
and £1125 since the1st
1st of October, and we are now only three
weeks from the time when the whole amount should be forthcoming.
1st of October, and we are now only three
weeks from the time when the whole amount should be forthcoming.
I would observe that all this money is in respect of Public
Loans—the Colony having ceased to supply any of their general
wants through the Crown Agents—and although to save the credit
of the Colonial Government the sums long past due have been
borne as deficits on the Sinking Fund, in preference to allowing
theInterest
Interest to go unpaid, yet it now becomes a matter of
serious consideration whether the Trustees would be justified
before the public in quietly acquiescing in the continuation of
this state of things.
Interest to go unpaid, yet it now becomes a matter of
serious consideration whether the Trustees would be justified
before the public in quietly acquiescing in the continuation of
this state of things.
Judging from the Minute dated 13th July last, which formed an
enclosure to Governor Seymour's despatch of the 5th August
following, it is evident that the gravity of the position in
which the Government ofBritish
British Columbia is placed with respect
to its financial affairs is but very imperfectly understood by
the Secretary of the Colony.
British Columbia is placed with respect
to its financial affairs is but very imperfectly understood by
the Secretary of the Colony.
Without going into details it is sufficient to say that
notwithstanding Mr Young therein endeavours to make it appear
that sufficient remittances had been made to the Crown Agents, yet
up to the present moment
there has not been sufficient money received to discharge the
debt which ought to have been paid twelve days before he penned
that Memorandum.
Under
Under these circumstances the Crown Agents can do no more than
submit the matter to the consideration of the Secretary of State
for the Colonies, and to request to be informed whether they are
to pay the £1000 which will come into their possesion on the
12th instant to the Trustees of the Sinking Fund, or whether
they are to reserve it towards paying interest on the 1st
proximo. They will be glad to be informed from whence they are
to derive the further sum of£
£9265 which will be due on the same
date—
.us£4200
of which, including the above named sum, will be for interest.
£9265 which will be due on the same
date—
.us£4200
of which, including the above named sum, will be for interest.
The question of keeping faith in this matter is not one which
concerns either the Government, or the creditors of British
Columbia only. Once let it be known that British Columbia is
unable to pay the interest on its loans contracted in this
Country, and the prejudicial effects will immediatelybe
be felt by
every borrowing Colony under the dominion of the Crown. And not
only that, but a vast concourse of people in the United Kingdom,
among whom something like seventy millions sterling of Colonial
Debentures are held, will find their securities seriously
depreciated in value.
be felt by
every borrowing Colony under the dominion of the Crown. And not
only that, but a vast concourse of people in the United Kingdom,
among whom something like seventy millions sterling of Colonial
Debentures are held, will find their securities seriously
depreciated in value.
It is scarcely necessary to state therefore that the maintenance
of the credit of a borrowing Colony—comparatively
comparatively insignificant
though its debts may be—is a matter of very great concern to
some millions of people whose interests are thereby affected,
and the Crown Agents feel that they would be wanting in their
duty to the many Colonial Governments whose financial
representatives in London they are, if they failed to urge upon
the Secretary of State the adoption of such measuresas
as will
ensure the punctual discharge of the liabilities, which British
Columbia has contracted in this Country, under their several
Loan Ordinances.
comparatively insignificant
though its debts may be—is a matter of very great concern to
some millions of people whose interests are thereby affected,
and the Crown Agents feel that they would be wanting in their
duty to the many Colonial Governments whose financial
representatives in London they are, if they failed to urge upon
the Secretary of State the adoption of such measuresas
as will
ensure the punctual discharge of the liabilities, which British
Columbia has contracted in this Country, under their several
Loan Ordinances.
These representations are not made in any spirit of complaint,
and the Crown Agents would much regret that Governor Seymour
should look upon them in that light. They most sincerely
sympathize with him in the financial difficulties in which he
finds himself placed,and
and would not willingly do anything to
aggravate them. Still without intending the slightest
discourtesy towards him, they may perhaps be allowed to add
that the deplorable condition in which the public highways of
New Westminster and Victoria are represented to be would have little
effect in mitigating the disappointment of the Debenture holders
if their interest should not be forthcoming at the appointed
time; nor would such facts tend in ever so slight a degree toward
ward off the blow which the credit of the Colonial Government
would sustain by such a calamity.
and would not willingly do anything to
aggravate them. Still without intending the slightest
discourtesy towards him, they may perhaps be allowed to add
that the deplorable condition in which the public highways of
New Westminster and Victoria are represented to be would have little
effect in mitigating the disappointment of the Debenture holders
if their interest should not be forthcoming at the appointed
time; nor would such facts tend in ever so slight a degree toward
ward off the blow which the credit of the Colonial Government
would sustain by such a calamity.
The enquiries made from time to time as to the state of the
Sinking Fund, tend to produce a belief that a deficit is at least
suspected, and the feeling exhibited in the tone of the enclosed
paragraph—cut from one of the daily London papers—shows that
there is no lack of ill disposed persons who would readily avail
themselves of the knowledge of suchdeficit
deficit, in order to injure
the Colony.
deficit, in order to injure
the Colony.
Minutes by CO staff
Sir F. Rogers
This is a serious matter & requires attention as it will on the 1st Jan involve a question of breach of faith. There is already due for Sinking Fund £2125. But with only £1110 in hand (on the 12th) there will on the 1st Jany be £7450 due for interest which must be paid on that day. Where is this money to come from. The Treasury have refused a Loan or to advance monies to pay interest. I suppose we can only fall back on [the] questionable expedient of borrowing from the Sinking Fund. But I pass this on at once as it may be thought desirable to instruct the Agents to retain the £1110 in their hands until they receive further instructions.
This is a serious matter & requires attention as it will on the 1st Jan involve a question of breach of faith. There is already due for Sinking Fund £2125. But with only £1110 in hand (on the 12th) there will on the 1st Jany be £7450 due for interest which must be paid on that day. Where is this money to come from. The Treasury have refused a Loan or to advance monies to pay interest. I suppose we can only fall back on [the] questionable expedient of borrowing from the Sinking Fund. But I pass this on at once as it may be thought desirable to instruct the Agents to retain the £1110 in their hands until they receive further instructions.
CC
10/12
It was founded with a great profession that it shd cost the
British Treasury nothing. The expenditure was extremely
profuse—& more was borrowed on a very large scale to open up
the country. Of course everthing went swimmingly
while this money was in course of expenditure. But just as the
borrowing power was near exhaustion the annexation of Vancouvers Island
with B. Columbia was forced upon B.C. by the British Govt.
The effect, (in consequence of Parlt not
adverting to the peculiar state of customs duties in the two
Colonies) was to enable a large number of speculators to
introduce a large amount of goods into the United Colony witht
payment of duty, and thus to bring down the Revenue for the year
of Union, it is said, some 30,000£ or 40,000£
(vide printed paper annexed). This broke the horse's back.
Establishments had to be reduced—to the ruin of deserving and
undeserving public officers—salaries are in
arrear—contributions to the Sinking Fund.
payment of duty, and thus to bring down the Revenue for the year
of Union, it is said, some 30,000£ or 40,000£
(vide printed paper annexed). This broke the horse's back.
Establishments had to be reduced—to the ruin of deserving and
undeserving public officers—salaries are in
arrear—contributions to the Sinking Fund.
Now the Colonial Agents have not money to meet even the
Interest on the Loans much less the payments to the Sinking Fund.
But it is their habit to allow Colonies to overdraw their
accounts, charging 4% on their advances. This practice as a
practice has the sanction of the Treasury
& is known to all the Colonies who have money in the Agents' hands.
I would therefore propose to meet the present difficulty thus.
There is no money to make payments to the Sinking Fund, and no
reason why the Imperial Treasury should make payments
or authorise any irregularity for that purpose.
or authorise any irregularity for that purpose.
But I think the Agents may be authorised to advance so much
money out of general moneys in their hands as is required, with
the 1100£ now in hand [to] pay the interest now accruing. The
advance will be only 3200£. This I wd propose to the Treasury
stating that Ld G. would write to the Governor telling him
that the Agents have been unable to make the stipulated payments
to the Sinking Fund and have been obliged to make
advances of
3000£ odd to meet the interest on the B.C. Loans—that steps
must be immediately taken to place the Agents in funds—& if on
occasion of the next half yearly payment they are not in funds
the Colony must be prepared to find that, at whatever cost to
the credit of the Colony, the claims of the debre holders will
not be satisfied, as the S. of S. cannot allow these irregular
advances to become a habit.
advances of
3000£ odd to meet the interest on the B.C. Loans—that steps
must be immediately taken to place the Agents in funds—& if on
occasion of the next half yearly payment they are not in funds
the Colony must be prepared to find that, at whatever cost to
the credit of the Colony, the claims of the debre holders will
not be satisfied, as the S. of S. cannot allow these irregular
advances to become a habit.
Documents enclosed with the main document (not transcribed)
Newspaper clipping, unnamed, no date, reading, "British
Columbian and Vancouver Island Bondholders are requested to
Inquire into the Misgovernment and petty despotism which has
depopulated these colonies. The inhabitants are few and
uninfluential and have no advocate in Parliament, and their
voice is unheeded in the Colonial Office."
Other documents included in the file
Rogers to G.A. Hamilton, Treasury, 14 December 1868, forwarding
copy of letter and adding Granville's suggestions, with extensive
revisions, subsequently cancelled.
