No. 9
29th January 1870
My Lord,
I have the honor to forward to Your Lordship the Colonial Estimates for 1870 accompanied by a Report, from the Auditor General, and all the Returns which appear to be required by the Instructions contained in Your DespatchNoManuscript image No 86, of the 18th August last. I have been obliged to bestow much personal attention and pains upon the preparation of these papers. They would have been forwarded earlier but for the unfortunate accident which still confines me a Prisoner in my bed. They are now I hope nearly as accurate as it is practicable to make them in this Government; but the great distance from Victoria of some Districts prevents ReturnsfromManuscript image from them being received in time to be included and the Statements are therefore in some respects necessarily only approximate.
2. The Financial position of the Colony is not satisfactory to me. The Revenue appears to have been hitherto almost regularly overestimated for several years, while annual Votes have almost as regularly been exceeded. The result is a balance on the current Bank Account to the Debit of theColonyManuscript image Colony on the 31st December, amounting to $27,348, twenty seven thousand, three hundred and forty-eight dollars, bearing compound Interest at 12 per cent per annum; while there are Loans outstanding, for the most part overdue, and for the liquidation of which no provision has been made, amounting to $291,632, two hundred and ninety one thousand, six hundredandManuscript image and thirty two dollars more, and of which the greater part bears interest also at twelve per cent—making altogether the sum of $318,980—three hundred and eighteen thousand, nine hundred and eighty dollars, or £65,768, sixty five thousand, seven hundred and sixty eight pounds, which will be found in the Statement of Liabilities under the head of Temporary Loans. I annex a detailedStatementManuscript image Statement shewing the items of which the total is composed.
3. It is not right that this debt should remain without provision for its repayment. So long as they receive 12 per cent the holders of the Debentures and the Bank of British Columbia may not press for settlement; but they might do so at any time, and in that case the Colony is without the means of meeting its engagements.TheManuscript image The Colonial Securities Company hold more than one third of the Debentures. I have reason to believe that they would take up the whole of this debt at six per cent interest under new arrangements, guaranteeing the issue of the loan at not less than 85 per cent, and probably better terms may be obtained. But even at 85 per cent, if the Loan should be payable in thirty years, the annual provision for interest,sinkingManuscript image sinking fund, and expenses of the loan would not amount to ten per cent and such an arrangement would be far more advantageous to the Colony than the present state of the finances.
4. Under these circumstances I propose to introduce an Ordinance in the Legislative Council to authorize the consolidation of the floating debt. I believe it to be unlikely thatweManuscript image we could raise a loan on better terms by advertizing for Tenders in London just now, than may be obtained by private negociation with the Colonial Securities Company, while much time would be consumed by so doing, and the state of affairs on the Continent may tend to raise the price of money in a few months. Unless therefore Your Lordship should forbid my proceeding by Telegraph, IshallManuscript image shall assume your permission to make such arrangements as the Council may concur with me in regarding as desirable.
I have the honor to be,
My Lord,
Your most obedient
humble Servant
A. Musgrave
Minutes by CO staff
Manuscript image
Mr Herbert
I send this on to you without examination of the Returns &c because you may think it desirable to telegraph back at once to Govr Musgrave with reference to his intention of dealing with this temporary Debt—stated at £65,768. He might be told to do nothing til he receives Lord Granville's despatch of the 23 Feby (sent onManuscript image the 26th) sending the Crown Agents proposal for dealing with the whole Debt—1333. He ought to receive it about the 23d.
CC 10/3
Manuscript image
I think certainly telegraph as proposed. "Floating Debt Consolidation wait for Despatch sent twenty sixth February."
At once.
RGWH Mar 10/70
Manuscript image
Sent 5:15 P.M.
EB 10.3.70
Manuscript image
Done.
CC 10/3
Manuscript image
Mr Strachey
I circulate this despatch again. I conclude the enclosures are only sent for informationManuscript image as the Estimates have not yet been laid before the Council—& will reach us as passed with the usual Appropriation Ordinance. As to the floating Debt instructions have been sent to him by telegraph.
CC 12/3
Manuscript image
Mr Herbert
The Governor has in the main fulfilled in a satisfactory manner the Instructions given by Lord Granville's despatch No 86, Aug 18/69 (dft in 21/8153/67 B. Columbia, herewith) with respect to the form of submitting the annual Estimates, but he has, somewhat inaccurately, lost sight of the very first & most distinct of these Instructions: "I have to instruct you in the first place not to separateManuscript image in future the Appropriation Ordinances & the Estimates on which they are founded." Last year the Appropriation Ordinance was sent from the Colony on the 19 March, & the Estimates not till the 24th June. Now we receive the Estimates first, & there is as yet no Ordinance.
The Governor shd , I presume, be again informed that the annual Estimates & Appropriation Ordinance shd be sent together.
It is satisfactory to find that there was no foundation for Governor Seymour's off-hand dictum (see para: 2 of Ld Granville's despatch of Augt 18/69 already quoted) that the printed Instructions to the Straits, enclosed to him as a guide, 'were not applicable to B. Columbia.' They are now found to be applicable in almost every particular, & we here have a totally complete collection of the prescribed statements. 1. Estimates. 2. Assets & Liabilities for Jan 1/69 & Dec 31/69. 3. Cash Transactions for 1869 (Jany to 31 Decr). 4. TableManuscript image of Laws or Ordinances, constituting the authority for the Expenditure estimated (the number of the Appropriation Ordinance for 1870 is left blank, in the table sent—I suppose because it has not been passed). 5. Report of Auditor General on the financial arrangements.
It will, however, be advisable, I think, to point out that the following are defects which shd be remedied on future occasions.
(1) The returns here submitted of Assets & Liabilities, include the permanent Debts & sinking fund. This is erroneous. The floating or temporary debt shd no doubt appear among the liabilities, but permanent debt & in like manner Sinking fund shd be given in a separate statement, as pointed out towards the end of para: 2 of the printed despatch to the Straits (see the enclosure with dft desph of Augt 18/69 herewith).
(2) The detail in the EstimatesManuscript image does not extend (as far as I see) to the Expenditure for civil Establishments sanctioned by permanent Laws (Governor's & other salaries). Only the lump amounts under these Laws appear to be given in the Estimates. I think it shd be observed to the Governor, that the Estimates shd set out in detail the entire proposed Expenditure for the year, at the same time that they distinguish (as is of course proper,) what has been voted by permanent Law from what will rest on the annual Appropriation Ordinance.
In giving these suggested instructions to remedy defects, Lord Granville will I presume express much satisfaction with the very great improvement which Governor Musgrave has effected in the mode of submitting the finance arrangements for the year.Manuscript image (Last year we recd the Appropriation Ordinance & Estimates literally under envelopes, without a syllable of explanation). Looking at the extract of the Treasury letter of Feb 3/70, to this office, annexed to Agents/1333/70 (Jany 31/70), I conclude there is hardly any occasion to communicate these papers to the Treasury, or if this is necessary, I suppose it shd be done only by enclosing for Treasy information copies of the Governor's desph & enclosures, & of the proposed reply, when sent off, with a [hith?] Form.
I have had little to do with B. Columbia financial affairs beyond the question of forms of statement, & am therefore not a good judge of the merits of the Estimates, but I do not myself observe any ground for disapproving them. It will, however, be proper to observe, in writing to the Governor,Manuscript image to the effect above suggested—that Lord Granville postpones sanctioning the Estimates till he receives the Appropriation Ordinance, shewing that they have been adopted by the Legislve Council.
WS March 14
Manuscript image
I quite agree with Mr Strachey; & with reference to the point marked (2) at the bottom of the 3d page of his minute, I would tell the Govr that the best way of giving the information suggested as to money secured by permanent enactments & not subject to annual vote, is to print, preceding the detail of establishments, (page 5 of estimates) a tabular statement of the sums so secured.
RGWH Mar 18/70
WM 18/3
G 19/3
Manuscript image
Mr Strachey
Have you not overlooked theManuscript image fact that these Estimates are only copies of the Estimates as the Govr is going to lay them before the Legislative Council—& that they are only sent for information & not for sanction or otherwise. The Appropriation Ordinance has not even been introduced, so that any number in the table you refer to could not be inserted.
CC 21/3
Manuscript image
I was aware of this. I have, however, written the draft to Govr so as to shew that we have not overlooked the fact referred to by Mr Cox.
WS Mch 29
Manuscript image
See subsequent 30/4682 Mar 25—70.
Documents enclosed with the main document (not transcribed)
Colonial Estimates, British Columbia, 1870 (19 printed pages).
Other documents included in the file
Manuscript image
Draft reply, Herbert (for Granville) to Musgrave, No. 24, 10 March 1870.
Manuscript image
Draft reply, Granville to Musgrave, No. 35, 1 April 1870.
Minutes by CO staff
Manuscript image
Copies of 2543 B. Columbia & enclosures, & of this reply, when sent off, to go to Treasury for information with a [hith?] Form.
WS Mch 29
Manuscript image
? Not now.
CC 31/3
Musgrave, Anthony to Leveson-Gower, Granville George 29 January 1870, CO 60:38, no. 2543, 82. The Colonial Despatches of Vancouver Island and British Columbia 1846-1871, Edition 2.2, ed. James Hendrickson and the Colonial Despatches project. Victoria, B.C.: University of Victoria. https://bcgenesis.uvic.ca/B70009.html.

Last modified: 2020-12-02 13:40:34 -0800 (Wed, 02 Dec 2020) (SVN revision: 5008)