Colonial Despatches
The colonial despatches of Vancouver Island and British Columbia 1846-1871
Despatch to London
Douglas, James to Pelham-Clinton, Henry Pelham Fiennes 10 June 1862, CO 305:19, no. 7707, 202.
Abstract
Despatch to London.
Minutes (3), Enclosures (untranscribed) (1), Other documents (2).
Douglas forwards Newcastle
six copies of an Act authorising the Governor of Vancouver Island and its Dependencies to borrow money for temporary purposes.Colonial Office staff minute their concern at the colonial legislature's authorization of a high rate of interest for the loans.
No. 34, Legislative
10 June 1862
I have the honor of transmitting, herewith, for Her Majesty's
approval, six copies of an Act authorising the Governor of Vancouver Island and its Dependencies to borrow money for temporary purposes.
2.
2. The object of this Act is to enable the Governor to meet the
demands upon the Treasury pending the collection of the Public
Revenue by means of temporary loans, not exceeding altogether the sum
of Four thousand pounds sterling (£4000), to be raised by Debentures,
payable within sixty days, at a rate of interest not to exceed one
and a half per cent, per month ([1] 1/2 per cent per month), thatis
is
eighteen per cent per annum (18 per cent per annum).
is
eighteen per cent per annum (18 per cent per annum).
3. Your Grace will no doubt be surprised at the sanction of a public
loan at the high rate of interest above quoted, and may possibly be
disposed to think that, in this instance, the Legislature have not
been sufficiently influenced by considerations of prudenceand
and economy.
and economy.
4. Such is not however the case; the Legislature deeming that
temporary loans are indispensable in the present financial condition
of the Colony for carrying on the service of Government with order
and regularity, and knowing that it might be found impossible to
raise money at alower
lower rate of interest than is usually taken in
private transactions, have simply authorised the measure in such a
form as to make certain of the end proposed, and every effort will be
made by publicly inviting tenders to procure the money at a lower
interest than the maximum rate prescribed by theAct
Act.
lower rate of interest than is usually taken in
private transactions, have simply authorised the measure in such a
form as to make certain of the end proposed, and every effort will be
made by publicly inviting tenders to procure the money at a lower
interest than the maximum rate prescribed by theAct
Act.
5. The draft of this act was prepared by the Attorney General, whose
report will be forwarded when it comes to hand.
Minutes by CO staff
I would say that as their borrowing this money may have been
necessary—and as the act has been passed by a Representative Legre
[we can?]
not recommend its disallowance. But that it is
evident that a Govt cannot go on borrowing at that rate of interest
witht the most ruinous consequences and that [whatever]
is the ordinary rate of
interest, it is the duty of the Executive—which cannot be neglected
witht the gravest culpability—to take care that there is no
necessity for such a disastrous mode of proceeding.
Add that it is evident that nothing can justify any person in
borrowing at such interest but the opportunity of making
corresponding profit on the money borrowed: and that as Govt makes
no profit on its money nothing but an unforseen emergency can in any
case justify the Govt in so borrowing.
Duke of Newcastle.
I agree. Answer as above. This looks alarming.
I agree. Answer as above. This looks alarming.
Documents enclosed with the main document (not transcribed)
Not on microfilm.
Other documents included in the file
