Colonial Despatches

With reference to my despatch of this date communicating Her Majesty's approval of "The British Columbia Loan Act, 1862," I wish to observe that by the arrangement which you have made for parting with the debentures, for the creation of which that Act provides,privately privately and at par to the Bank of British Columbia, not only has the Bank practically become the Agency for the Loan but also the Colony has lost the premiums which would probably have been offered on their public sale in London by the Agents General for Crown Colonies.

By entrusting the Agents General with thedisposal disposal of the debentures you might also have met any urgent demand for money by Bills upon the Agents (which would have been equally negotiable with those of the Bank), at the same time authorizing them to reimburse themselves out of the proceeds of the sale.

You would so have avoided the heavy interestof of 12 per cent which is now payable on advances made by the Bank until the debentures shall be actually in its possession.

Although therefore, judging by the information before me, I cannot consider the arrangement which you have made as a profitable one for the Colony, yet the steps which have been taken for its fulfilmenthave have left me no alternative but to sanction it, and the Agents General accordingly have been instructed to prepare the debentures and to place themselves in communication with the Bank with a view to their delivery as soon as possible.