2. In compliance with Your Grace's instructions, I forward herewith a Return exhibiting the various details of information required by Your Grace in respect to the manner in which the Loan was disposed of.

3. I have perused the remarks of Mr Julyan upon the course which was adopted with the view of immediately realizing of the proceeds of the Loan. I do not doubt that under ordinary circumstances the method suggested by Mr Julyan would have been foundmore more advantageous than that which was followed, but under the circumstances existing I conceive the arrangement entered into with the Bank of British Columbia was in every way advantageous. The pressure upon me for money was urgent, I had no positive certainty at the time the arrangement was made that the Act would be confirmed. I could not therefore without previous intimation have placed paper in the market that I was not satisfied would be met. The paper of the Bank of BritishColumbia Columbia on the other hand I had every reason to believe would be duly honored, and had the Loan Act not been confirmed or had it been delayed through error in form, the Bank would have become the creditors of the Government at a rate of interest of one third less than money could have been procured on the spot.

4. Mr Julyan is also mistaken in one or two of his assumptions. Subsequent events have proved this. The negociation of the Vancouver Island loan was not effected upon much better terms by the Agents General,than than the British Columbia Loan by the Bank of British Columbia. The minimum fixed by the Bank was 103 1/2. At the first allotment £6000 was disposed of at and above this price. The minimum fixed by the Agents General for the Vancouver Island Debentures was 103 3/4: and at the first allotment only £5900 were disposed of at and above that price. I believe that since, the two Debentures command about equal rates. I am inclined to think better rates would have been obtained for the British ColumbiaDebentures Debentures had the Agents General abstained from putting a notice in the Times, which I cannot but view as calculated to create a feeling of uncertainty respecting the Loan which would be prejudicial to it; and although so far as that Loan was concerned in a money point of view, it might not affect this Government, yet such a feeling with respect to the first Loan of the Colony could not but be detrimental to the credit of the Colony and likely to injure the negotiation of further Loans. The Drafts of the Agents General couldnot not have been disposed of in the Colony at any better rates than the Drafts of the Bank of British Columbia. We generally obtain the best rates for our Drafts from the American House of Wells Fargo & Co the great Express Agents. A draft upon the Agents General recently offered to them for sale on Vancouver Island Account was questioned, and I believe objected to as they had no knowledge of such paper. The drafts of the Bank of British Columbia are readily taken by them and command as high rates as the drafts upon HerMajesty's Majesty's Paymaster General. I merely mention those particulars to shew that, however justly Mr Julyan may judge of matters from his point of view in London, yet it is necessary to make allowance for local circumstances before a full appreciation of the case can be arrived at.