<persName ref="prs:douglas_j"><surname>Douglas</surname>, <forename>James</forename></persName> to <persName ref="prs:newcastle"><surname>Pelham-Clinton</surname>, <forename>Henry</forename> <forename>Pelham</forename> <forename>Fiennes</forename></persName> 10 June 1862, CO 305:19, no. 7707, 202. Douglas addressee Newcastle

Published by Jim Hendrickson and the University of Victoria.

Douglas, James to Pelham-Clinton, Henry Pelham Fiennes 10 June 1862, CO 305:19, no. 7707, 202.The Colonial Despatches of Vancouver Island and British Columbia 1846-1871, Edition 2.6, ed. James Hendrickson and the Colonial Despatches project. Victoria, B.C.: University of Victoria. https://bcgenesis.uvic.ca/V62034.html. CO 305:19 CO 305 19 7707 202 34 Legislative V.I. 1862 received 4 August co_305_19_00202r.jpg Transcribed from microfilm archives, marked up in Waterloo Script, then transformed into TEI P5 XML.

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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.

Douglas, James Pelham-Clinton, Henry Pelham Fiennes Inserted revisionDesc. Added abstract.
No. 34, Legislative 7707, CO 305/19, p. 202; received 4 August 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).

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.

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.

5. The draft of this act was prepared by the Attorney General, whose report will be forwarded when it comes to hand.

I have the honor to be My Lord Duke Your Grace's most obedient and humble Servant James Douglas
Sir F. Rogers VJ 5 Aug
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 GovtGovernment 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 GovtGovernment makes no profit on its money nothing but an unforseen emergency can in any case justify the GovtGovernment in so borrowing.

FR
Duke of Newcastle. I agree. Answer as above. This looks alarming. CF 7 N 12
Not on microfilm.
Draft reply, Newcastle to Douglas, No. 115, 18 August 1862, warning that a government cannot go on borrowing at that rate of interest without the most ruinous consequences.
Newcastle to the Lord President, 19 September 1862, forwarding copy of the Act for submission to the Queen in Council and recommending that it be left to its operation.