CORRESPONDENCE RELATIVE TO PROVINCIAL LOAN.

Hawke's Bay Herald, Volume 11, Issue 855, 2 July 1867, Page 3

CORRESPONDENCE RELATIVE TO PROVINCIAL LOAN.

April 6, 1867. Being anxious to raise £25,000, or £30,000, on the security of the Hawke's Bay loan of £60,000, which has not yet been disposed of, I should be glad to get tllO HOII. J. C. Eifllllllolid's 1 opinion as to whether the Ministry propose to pass an Act during the next session of tho General Assembly to consolidate provincial loans and render them more negotiable in the English market-. 1 have heard that such a measure is in contemplation, but I should be glad to have Mr. Richmond's opinion as to what the Ministry propose doing in the matter, as it may aileot the terms on which I can raise the aforesaid sum of £25,000 or £30,000. (Signed) Donald M'Lean. To the Hon. J. C. Richmond, April 6, 1867. _ I cannot toll tho precise state of this question, but I know that the Colonial Treasurer has the subject before him as his main topic of consideration, and I hope and think that action will be taken by the" Government next session. (Signed) J. C. Richmond. May 6, 1867. It is an essential point in the proposed financial policy of the Government to consolidate all Provincial loans. W. FITZIIEBBEET. Wellington, May 4, 1867. Stk, — Finding it necessary to enter into negotiations to raise money on the security of the Hawke's Bay loan of £60,001), I would feel much obliged if you would inform me if the Government contemplate bringing in a measure during the next session of the General Assembly that will place provincial loans on a better footing in the English market.

I should feel obliged if I could be faI vorcd generally' with the views of the Government on tJiis subject, as it might very much facilitate and improve the terms upon, which I can raise temporary advances" on the security of the lonn, until it can be more advantageously realised in the London market. I have &c, Donald M' Least. The Hon. bhe Colonial Secretary, ' ' Wellington. Colonial Secretary's Office, Wellington, May 7, 1867, Siu, — I have to acknowledge the receipt of Your Honor's letter of the 4th inst., on the subject of negotiating the Provincial Hawke's Bay Loan of sixty thousand pounds. In reply, I have to state that the. Government is most anxious that all loans authorized to be raised for public purposes in New Zealand, should be negotiated at such prices as will prevent any sacrifice of the public interests ; and, with a view of promoting that object, it is an essential part of its proposed financial policy to submit to the General Assembly next session a measure for converting the Provincial Loans into colonial stock. I have &c, E. W. Stajtokd, His Honor the Superintendent, Hawke's Bay. Auckland, May 14, 1867. Gentlemen, — I have the honor to enclose for your information copies of correspondence with the general government respecting the Hawke's Bay loan of £60,000. I am anxious to obtain from your bank an advance on account of the loan to the extent of £20,000, and, on behalf of the Provincial Government of Hawko's Bay, I will cause debentures for £60,000 to be handed over to you for disposal on such terms as may be mutually agreed upon. The requirements of the Provincial Government would be met by advances to the amount of £5,000 a month for the next three months, there being already an overdraft of between £5,000 and' £6,ooo due to your bank. ' You will gather from the correspondence herewith that the present government fully intend to submit a measure to the General Assembly for the consolidation of Provincial Loans, and it may be ■ fairly expected that considerable support will be accorded to any measure calculated to give increased value to Provincial securities hi the English market. I shall be glad at any time to confer with you in reference to the loan, and, hoping you will take this application into your favorable consideration, I have &c, Donald M'Lean. To the directors of the Bank of New Zealand, Auckland. Inspector's Office, Bank of JN T ew Zealand, Auckland, May 14, 1867. Sir: — In reply to your letter of this date, addressed to the Board of Directors, I have the honor to state that the directors will only at present partially entertain your application for advances in anticipation of the sale of your £60,000 Provincial Loan. They will authorize advances including the present overdraft to the amount of ten thousand pounds on the following conditions. Ist. That the bank be employed to negotiate the loan on terms to be hereafter agreed- on. 2nd. That in the event of no measure to consolidate Provincial Loans being passed in the appi'oaening Assembly, that a new issue of debentures in lieu of those already prepared will be made, with such corrections as are considered necessary by. the . bank, the interest being eight per cent, and the bank will be authorized to remit the same, at the risk of the Province, to London, for negotiation at the best obtainable price. 3rd. That, while the balance at debit of the Government exceeds £5000, the rate of interest on the whole advance will be 10 per cent. I have &c, D. M. Murdook, Inspector. His Honor the Superintendent, Napier. Auckland, May 16, 1867. Sib, — I have the honour to acknowledge the receipt of your letter of the 14th instant, in reply to mine of the same date, respecting advances on account of the Hawke's Bay loan of £60,000. I feel much obliged to your directors for the advance of £10,000, including the present overdraft, but I must frankly state that this amount will not be sufficient to meet the more pressing and urgent engagements of the Provincial Government, and I feel that the credit of the Province and the disposal of the loan, in England might be injuriously affected if the more pressing ana urgent liabilities of the Provincial Government are not now discharged. I would therefore submit that a further advance of £5,000 should be made to the Provincial Government in about a month's time from the first advance — say in July next. With this amount, in excess of what is now authorised, the Government would be able to carry on and meet all its most pressing engagements. Your directors aro fully aware of the largo resources of the Province of Hawke's Bay ; the fact that it has contracted no debt of its own, or raised any previous loan ; tliat the present scarcity of money has arisen in a great measure from having invested about £30,000 in the purchase of valuable blocks of land from the natives, thus adding largely to the Provincial estate and contributing to the progress of agricultural settlement. Irrespective of other sources of revenue, the waste lands, at the present selling price, would yield £99,000 or £100,000. Under these circumstances, and considering the security which the Province can afford, I trust your directors will grant the additional £5000 I now apply for, to liquidate such claims against the Province as will not admit of postponement. I am prepared generally to accept the conditions referred to in your letter of the 14th inst., feeling nssured that the bank will afford sufficient time after receipt of debentures, for advertising the loan in England, and will otherwise use every exertion to float it to the best advantage in the London market. I have &c, Donald M'Lean. The Inspector of the Bank of ]N T ew Zealand, Auckland. Inspector's Office, Bank of New Zealand, Auckland, May 17, 1867. Sin,— l .have the honour to acknowledge receipt of youv letter of yesterday's date, requesting that the directors would extend the advances authorised by my letter of 14th instant, from £10,000 to £15,000, to enable you to meet the more pressing and urgent engagements of the Provincial Council, the extra £5,000 being required in July. The directors having given full consider-

atioii to your request, regret that they cannot at present commit the Bank -to any j more extended advances than those al- { ready authorise!. They arc however i'ulljf .aJivelo the 1 generally favorable -position oi the resources of your Province ami to the comparatively small amount of its liabilities, and while unwilling to lead you to reckon on further assistance, will give due weight to the stsvttmiMits Matto 5» jour [letter in. reconsidering your application I prior to the Ist July. I have &c, D. M; Mubdock, Inspector. To Honor the Superintendent of Hawke's Bay.