No. 45, Financial
26th June 1866
In the state of uncertainty which exists as to what the Legislative Assembly of this Colony will or will not do in reference to the finances I deem it my duty to keep you informed by placing the following Address from the Assembly and my replytheretoManuscript image thereto before you.
You will observe that on the 21st May the Legislative Assembly called for a Return of all moneys borrowed from the banks in 1865-6, and also "A Return showing the authority under which the Governor negotiated such loans respectively."
My reply dated 26th May 1866 fully answers both these questions.
The Bank of British North America taking alarm I presume at the doubts thrown upon thelegalityManuscript image legality of my proceedings by the Assembly addressed the letter (herewith) dated 31st May 1866 to the Colonial Secretary stopping all further credit.
I enclosed a copy of this letter in my confidential Message dated 1st June 1866. I have not received any reply to either of my communications to the Assembly. The necessary consequence has been a stoppage of payment at the Treasury since the first of June a fact of which the Assembly are quiteawareManuscript image aware.
I observe from newspaper reports (being the only information on the subject which has reached me,) that a Bill authorizing a loan of $90,000 has passed a Second Reading, but when it will become law I am unable to anticipate.
This Bill if it become law will cover the debt to the Bank and leave a margin to carry on the public service till the Real Estate and other taxesareManuscript image are received, the machinery for assessing and collecting which is radically faulty and requiring amendment by law.
You will see from my Message dated May 26th that I have kept the Assembly fully informed of the financial condition of the Colony, and I may add that I have in every step acted with the advice and concurrence of my Executive Council.
The Assembly has been inSessionManuscript image Session since last November and up to the present time has failed to propose or pass any rational measure for providing ways and means for carrying on the Government of the Colony. There is the less excuse for this state of things inasmuch as the audit of the accounts for 1865 shows that the total amount voted by the Assembly for the service of the year amounted to $313,558 while the expenditure reached$Manuscript image $267,294 being $46,264 less than the sum voted.
I have the honor to be,
Your most obedient Servant
A.E. Kennedy
Minutes by CO staff
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Sir F. Rogers
Acke and refer to the Act of Parlt by means of which future financial difficulties will, it is believed, be avoided.
ABd 8 Augt
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So proceed.
FR 9/8
CBA 10/8
C 13 Aug
Documents enclosed with the main document (not transcribed)
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Resolution passed by Legislative Assembly, 21 May 1866, asking the governor to forward certain financial returns to the house, signed by R.W. Torrens, Clerk of the House.
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Kennedy to Legislative Assembly, unnamed newspaper clipping, 26 May 1866, providing details of the money currently owed to the Bank of British North America and describing his various communications to the house which failed to result in any relief of the outstanding financial difficulties of the colony.
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Kennedy to Speaker of the Legislative Assembly, 1 June 1866, forwarding a letter from the manager of the Bank of British North America and declining to take any further responsibility for carrying on the public service "without the distinctly expressed authority of the Legislature."
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J.B. Shepherd, Manager, to W.A.G. Young, Colonial Secretary, 31 May 1866, calling attention to the government's large overdraft and advising that the bank could not allow the present amount outstanding to be increased.
Other documents included in the file
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Draft reply, Carnarvon to Kennedy, No. 6, 21 August 1866.