Julyan to Rogers (Permanent Under-Secretary)
Offices of the Crown Agents for the Colonies
Spring Gardens, London, S.W.
8th December 1868
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
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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 the1stManuscript image 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 theInterestManuscript image 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 ofBritishManuscript image 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.
UnderManuscript image
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£Manuscript image £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 immediatelybeManuscript image 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—comparativelyManuscript imagecomparatively 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 measuresasManuscript image 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,andManuscript image 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 towardManuscript image 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 suchdeficitManuscript image deficit, in order to injure the Colony.
I have the honor to be,
Your most obedient Servant
P.G. Julyan
Minutes by CO staff
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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.
CC 10/12
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Mr Monsell
British Columbia has been imprudent but hardly treated.
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 withtManuscript image 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 paymentsManuscript image 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 makeManuscript image 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.
WM 12/12
G 12/12
Documents enclosed with the main document (not transcribed)
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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
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Rogers to G.A. Hamilton, Treasury, 14 December 1868, forwarding copy of letter and adding Granville's suggestions, with extensive revisions, subsequently cancelled.
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Rogers to Hamilton, 14 December 1868, a redraft of the above, also cancelled.