THE CANTERBURY LOAN.

Otago Witness, Issue 664, 20 August 1864, Page 19

THE CANTERBURY LOAN.

* (From the Press )

The following letters and memorandum relative to the measures to be taken for the negotiation of the Canterbury Loan, have been placed at our disposal for publication : - IHTIER PROM THB SUPERINTENDENT OP CANIBB-

BURY TO THE COLONIAL BKCRITARY.

Superintendent's Office, Christchurch, 9th July, 1864. Sir— The difficulty which is experienced in the negotiation of debentures issued by the Provincial Governments of New Zealand, is one which is likely at the present time to be very prejudicial to the interests of Canterbury. The bridging of our large rivers, the extension of the railway, and other large works which are necessary to the development of the resources of the Province, could not be advpntageous-ly proceeded with till that difficulty is removed. I am led to believe that the refusal of the Coinmittes of the Stock Exchange to allow debenture* issued by Provincial Governments to appear in their offic'al list, is an objection to their negotiation which even in a more favorable condition of monetary aff lira in England, will crove detrimental to the interests of the provinces of New Zealand.

After careful consideration I have thought it well to request Mr Hall, who is a member of my Executive Coun'-il, to proceed to Auckland to represent my views to the Government on the matter, and to request them to adopt such measures as will place our debentures in a more favorable position, and remove the objection which appears to exist to them from the want of a guarantee oi the General Government of the ■colony. Mr 'Hall will- bs able at the same time to explain more fufly'than I could byjetter the present ■financial position of the Province, and the necessity of the works which I wish to see carried out.

I have to request that you will give him an opportunity of laying before the Government my views, and those of nsy Executive C mnciJ, on a matter of such importance to the Province. I have the honor to be, Sir, Your obedient servant, (Signed) S. Bbhej, Superintendent. The Hon the Colonial Secretary. MEMORANDUM SUBMITTED TO THB COLONIAL Secretary by Mr J. Hall. ■The following memorandum on the existing financial condition of the Province of Canterbury, and the works proposed to be undertaken by the Government of that Province, is submitted in accordance with the request of his Excellency's Ministers. X.— EXISTING PROVINCIAL DEBX3.

These consist of four :•— 1. The original debt of the Canterbury Association. Thia has be-m all but pai-1 off

2. A loan of L 30.000. contracted for the purpose of immigration several years since, at an interest of eight per cent., and sinking fund of four per.cent. This has been expended, L 5400 lias already been invested on account of the sinking fund, aad LI2OO has been invested annually

9 A loan of L3(J0,000, for the construction of the Lyttelton and Christchurch Railway, bearing interest at six p r cent., with a sinking fund of two per cent. Of this loan L 50.000 worth of debentures were taken up nut of Provincial revenues and cancelled. LIO.OOO worth of de bentureß have been placed in the hands of the Union Bank of Australia for negotiation, on ■which a sam of L 50,000 has been advanced by the Bank. According to t!ie latest advices from London only L30,G00 of these debentures have been sold, 4. A loan of £500,003, sanctioned in 1862, bearing six per cent, interest, and one per cent, sinking fund. «*f this loan £50,00 d was sold fn Canterbury last year. No further portion has been placed in the market. The above figures are taken from a statement ■of accounts made vp to the first April Jast, which has b°en materially modified Bince that time. The indebtedness of the province may therefore be said to sta*id as follows :—: — Total amount of loans sanctioned exclusive of Canterbury Association deoenture f 830,000 Total amount actually rahed £130,000 Cancelled out of provincial revenuea £50,000 ' £180,000 Amount which may still be • raised under existing Oroinances , £650,000 The total present debt of the province is therefore £124 000 asrainst which it hal on Ist April last spent £212,000 on the Lyttelton Railway. A portirn of this railway is in operation, an:l is let for three years at rates increasing from 6 to 10 per cent on the cost of construction. ll.— TERRITORIAL REVEHUB. The land revenue of Canterbury for the past two years has averaged L 200.000 There are six million acres let under pasturage licenses, of which it is considered in Canterbury an under •estimate to assume that 750,000 acres will be sold within the next 10 years at L 2 per acre. This will give an average income from the sale of rural land of £150,000 The proceeds of town lands may be - taken at ... 10,000 The pasturage renta amount to 17,000 £177,000 After consideration of the necessary charges of this revenue for expenses of management, surveys, roads, building 3, &c. f the Superintendent and Provincial Council have BOt apart, by an ordinance called "The Railway and Harbor Works Fund Ordiaance," two-fifths of the territorial revenue towards the railways and harbor ■works. This appropriation, so fixed by law, may be estimated to yield at least L 70.000 per annum Into this fund must be paid the profits from the Lyttelton and Christcburch Railway which, on the completion of the tunnel, ia less than two years, will be considerable. III.— INTENDED WORKS. It has, in the opinion of the Government of the province of Canterbury, become necessary to the development of the resources of that province, and to ita material progress, that improved means of internal communication of an extensive character should be entered upon. Two obvious reasons for thi3 are— 1. That the cost of transporting agricultural produce to a port of shipment by ordinary land

carriage is rendering it difficult, if not impracticable, to farm land to a profit at a greater distance from the port than that to which cultivation at present extends.

2. That the fines); half of the province is rendered difficult of access by two large and difficult river?, the Kakahia and Ransntata, which can only be bridged at a large cost. There are other reasons not now necessary to be entered upon which afford good ground for believing that unless iaorks of 'the above character are undei taken without delay, the profitable occupation of the soil will be checked, and the sales of land will fall off.

The works which are contemplated, and have received the general appro 7al of the Provincial Council are —

1. A railway from the present terminus in Christchurch to Timaru, a distance of 100 miles, and including bridges over the Eakaia and Raugitata.

2. A railway from the same terminus, northward to the Kowai, the northern boundary of the Canterbury plain, a distance of about 25 miles.

3. Important harbor works in L}tfcelton and Timaru, for remedying the delay and expanse which at present attend the landing and shipment of goods at those places.

The land required for the railways has been reserved from sale, excepting for a distance of about six miles on the southern, and 18 on the northern line.

Acting upon the advice of Mr W. T. Doyne, nn engineer ot considerable eminence, the Canterbury Government estimates the cost oi the ruilways at aa average of £8000 per mile for the southern line, and £10,000 for the northern liae.

The total expenditure on the whole of the above works, and on the completion of the Lyttelton Railway, is tsiimated at £1,400,000, such expenditure would be spread over a period of at least six years ; no considerable sum would be required for six mouths from the present time.

Assuming that a capital of £1,400,000 is raised at a charge of six per cent, interest and one per cent, waking fund, the annual charges, when the whole sum lias been expended will be £98,000. Of course ihe whole of thia sum will not have to be provided for until the works are completed. IV.— RKTURN3 FROM THE RATLWATS AHD

HARBOR WORKS.

1. The returns from the harbor works will consist of dock and wharfage charges. It is hardly practicable to form any accurate estimate of their exact amount.

2. The returns from the railways, though le3s uncertain, must also to a great extent be conectured only. One source of incjme, however can be arrived at with tolerable cevtaintv, viz , theproiuce to be cmveyed from, and supplied to, the sheep and cattle stations. Tiie value of wool exported from Canterbury in 1861 was L 195 000 In i 863 it had increased to L 340.000. The number of bales shipped last season was 18,3b"3. In thrfr» from this time they will be at least 30 000. On in-: completion of the railways, the whole of the wool of the Province will be conveyed by it, and at a very large reduction on the present rates of carriage will yield L 23 000. The return loads to tha s.ations throughout the year are generally taken at an equal amount, but in the present estimate they are assumed to yield only L 17,000, making a total for station traffic of L 40.000. By the time the railways are completed, and the whole amount of interest and sinking fund has become payable, the whole expert will largely exceed that above stated. There i« provided therefore— By two fifth i of lani revenue £70.000 „ returns for station traffic 40,000 £110,000 To meet a charge for interest and sinking fuud of £98.003 This will leave the whole of the passenger I trufik, and the conveyance of stock, agricultural produce, and other goods, — in fact, the whole of the goods traffic of the province excepting tlut from the stations, as well ag the returns from the ha'bor works, to be charge 1 merely with the woiking expenses. It seems almost beyond question that were the cost of the whole contemplated works charged agunst fie traffic which I will exist in ihree years, the provisions proposed to be made for their co>t would be more than sufficient. It is assumed that the traffic of the proviuce ten years h^uce will make the contemplated works entirely self-supporting. It should be borne in mind that the Canterbury railways will he constructed under circumstances most favorable to profit. 1. Theco3t of acquiring land will be almost nominal.

£110,000

2. The cost of construction, owing to the perfoctly level character of the country to be traversed, will be small.

3. Owing to the same circumstances the cost of working will be low. The engines to be employed will be very light, and consequently the wear and t'~ar of the line will be very small. 4. Lyttletou being the shipping port for Canterbury, and for a considerable portion of Nelson, the whole of the exportable produce of that tract of country, and nearly tiie whole of its imports, must piss over the railway. 5. The most profitable pavt of the lines, viz , that within 25 miles on each side of Christahurch, will be undertaken first. V.— THE PRESENT APPLICATION OF THE PROVINCIAL OOVERNMEST OP CANTERBURY. Notwithstanding the evident advantages to b°. derivei from the works above mentioned, and the great necessity which exist 3 for them, the Provincial Government finds itself unable to undertake them, because its debentures, in common with those of other Provinces of New Zealand, have become next to unsaleable in the London j market. The concurrent testimony of the Agent of the Province, and other friends in London, and I of information received from time to time through | the various Banks, proves that this circumstance i is owing not so much to a temporary scarcity of ! money as to the unsatisfactory nature of the security which alone tho New Zealand Provinces can afford to their creditors, and to the refusal of the Committee of the Stock Exchange to allow Provincial loans to be quoted there. I

In the case of the Lyttelton and Christchurch Railway Loan, two-thirds of which undertaking may be said to be completed, the Union Bwk of Australia has been unable to sell any debenture* in the market, out of Ll00,00') worth entrusted to i|i, aud has got rid of only L 30.000, to persons connected or conversant with the colony."' At the same time that this loan would not sell, a loan for the colony of Queensland was disposed of by the same Bank, without any difficulty, and on very favorable terms. Unless, therefore, the

General Government f-els itself justified in assisting the Provincial Government to undertake, by anticipation of its revenue, such important public works as can only be executed by that means, and have now become indispensable to the development of the provincial resources, there seems little doubt that the colonization and the progress of the Province will receive a serious and lamentable check.

_ The Provincial Government suggests that assistance may be given either — 1. By a guarantee on the part of the General Assemtly, of the Provincial loans already authorised, and of such further loans as may complete the sum of Ll,50q,000; or 2. By loans being raised on the credit of the colony to such amount as may appear justifiable for the execution of specific public works within the Province.

Jn either case, all necessary conditions being imposed for the proper application of the amounts raised, and for the punctual payment of the interest and sinking fund out of the Provincial revenue.

The second alternative appears the more desirable one, because it is probable that under any circumstances a Colonial Joan would sell on better terms than a Provincial loan j and also, because under this plan it might probably be practicable to make arrangements under which the Province would draw from the Colonial Treasury from time to time, sut'h sums only as it actually required. A-thhd alternative has been suggested, viz., for tbe General Assembly to transfer by law to the several Provinces the control of their territorial revenue*, subject to existing charges. The Provincial Government does not recommend this proposal for adoption.

Tiie request of the Provincial Government of Canterbury is, that his Excellences Ministers I will undertake topiopose to the General Assembly at its next sitting, as a Government measure, a Bill for giving effect to one of the two proposals first above mentioned. (Signed) John Hall, Secretary for Public Works. ! Canterbury. 26th July, 18G4, Letter prom the Colonial Secretary to his Honor the Superintendent of CANTERBURY. Colonial Secretary's Office, Auckland, 27th July, 1864. Sir— l have the honor to acknowledge the receipt of your letter of the 9th met., on the subject of the Canterbury loans, in which your Honor introduces Mr Hall. I have received also from Mr Hall a memorandum " On the existing financial condition of the Province of Canterbury, and tho works proposed to be undertaken by the Government of that province," in which he points out that the debentures issued under the Ordinances of the Provincial Legislature have become next to unsaleable in the London market ; a fact which upon die authority of the agent of the province, and other persons in London, aud of information received through the Banks, he attributes ' ' not bo much to a temporary scarcity of money, as to the unsatisfactory nature of the 'ecurity, and to the refusal of the Committee of the Stock Exchange to allow Provincial loans to be quoted there."

Mr rial! states that " the Provincial Government suggests that assistance may be given either—

1. By the guarantee on the part of the General Assembly of the Provincial loans already authorised, and of such further loans 83 may Complete the sum of LI, 500,000 ; or 2. By loans being raised on the credit of the colony to such an amount as may appear justifiable for the execution of specific public works within the Province."

" The request of the Provincial Government of Canterbury is, that his Excellency's Ministers will undertake to propose to the General Assembly at its next sitting, as a Government measure, a Bill far giving eifecfc to one of the proposals above mentioned."

The General Government havo for some time past felt it necessary to give special attention to the subject of Provincial loans ; and the present application of tbe Provincial Government of Canterbury, and one of a similar nature from the Superintendent of Otago, hive rendered it necessity that pome course of action should be determine'l on by this Government.

ft is obvions that in making any provision fir the future, the position of creditor* who hav^ advanced the money already raised in the different Provinces must not be overlooked. The question as tT how far the Government of the Coio.iy is liable legally, equitably, or morally, on the security to creditors for money borrowed by the New Zealand Provinces, has often been discussed, anl durine the lust se«sioia of the Assembly a select committee of the Hou«e of Representative's was appointed, to whom the subject of Provincial loans generally was referred. No satisfactory result was attained hy this committee, which made no report upon the general question referred to ■them, but amongst other points which they considered, tiiey appear to have given especial attention to the question of liability above referred to. The pi-oeeedinsjs of this committee, with other established facts, strongly impressed the Government that it had become necessary for the Assembly to deal with the question in a comprehensive manner at an early period, and although too late in the session when the committee_ hai concluded its labors for any further steps. it_ was_ obvious that some legislation would be required in the following session ; subsequent events have entirely confirmed this view.

It appears to this Government that .whatever may be the actual liability of the colony in respect of provincial loans, a very strong feeling exist.3 especially in England that at least it is the 'luty of the General Government to see that the money b >rrowed with its sanction under Acts or Ordinances assented to by the Governor is repaid, and the engagements as respects interest and sinking fund, fulfilled. I do not propose to discuss the question as to how far creditors, having regard to the security they have accepted, can reasonably entertain expectations that the revenues of the colony, in no way pledg»d to them, should be considered liable for the engagements contracted with them, but I must admit the fact that many of them, in com mon with a considerable portion of the publh at large, do entertain such expectation. It is therefore, a question, setting nside other considerations, whether the General Assembly should not as a matter of policy take entirely under its own control the raising of loans on the security of the public revenues and property, and thjre can be no doubt that it is of importance to the credit of the colony generally that the credit of the Provinces should not be damaged in their money borrowing transactions.

This Government is also ready freely to acknowledge that having regard to the liabilities which the Southern Provinces are readily inourring for objects more particularly affecting the Northern Island, they estibiish* a substantial claim to any ass'stance which can be prudently renlered by affording them the use of the credit of the colony, to laise money for great public objects, which could not be otherwise obtained only at a seriously enhanced cost. The impossibility of negotiating the Provinci J loans which have been authorised by the Provincial Leglß. latures of Canterbury and Otago, of <xmrse presses thin portion of th° subject strongly on the consiJeration of the General Government. In short, this Government is clearly of opinion that it is the interest, both of the colony at large and of the Provinces, that the power to borrow money should be confined to the General Assembly, or at all events that no borrowing should be permitted without its consent, and that the credit of the colony should be pledged for such money as the General Assembly consent should be laised for the use of the several Provinces, bo as to enable them to obtain it at a lower cost. For the purpose of giving effect to these views, the Government will be prepared to propose a Bill in the next General Assembly. 1. To guarantee on behalf of the colony the loans which have already been authorised by Act or Ordinance of the Provincial Legislature, aasented to by the General Government. 2. To prevent Provincial Legislatures from passing Loan Acts for the future, so that money to be raised on the credit of the public revenue aud propeity shall only be borrowed urn er the sanction of an Act of tbe General Assembly. This arra-gemenfc will give to the several provinces the benefit of the colonial credit for raising the greater part of the money already authorised by Ac f s heretofore passed. With regard to Canterbury it appears from Mr Hall's statement thtt the total amount actually raised by loan in that province to the Ist of April last, is only one hundred and thirty thousand pounds, leavinsr a large sum already authorised to be raised on the credit of the colony, if the General Assembly coincides in the views ot the Government and grants the proposed guarantee. With regard to any further sums wliich it may be found prudent and desirable to raise in order to carry out the, works contemplated ' by the Province of Canterbury, and detailed in Mr Hall's memorandum, that will be a question for the General Assembly j but I will only add, oa the part of this Government, that although it cannot concur in every thing that Mr Hall adj vancea, it is ready to admit that a strong case is made out in favour of further assistance. I have the honor to be, Sir, Your most obedient servant, (Signed) William Fox. His Honor the Superintendent, Christchurch.

The Natal Engagement off Heliogland.—A seaman on board the Aurora, writing on the 9th May, sends home the following interesting particulars of the engagement between the Danes and Austrians on the coast of Heliogland :— "On Saturday last we sighted two Austrian frigates (Scwarzenberp and Itadetzki) ; these, supposing us to be Danes, gave chase to us ; bufc when they found out their mistake, they hauled off and were soon lost to view. On Sunday morning three large ships were reported in sight ; these turned out to be three Danes on the look out for the Austrians, whom they knew to be somewhere about. We lost sigh tof these in the evenj ing. This morning (May 9), at four bells A.M., ships were seen in two opposite directions, one windward, and the other leownrd. The party to windward turned out to be the three Danes, and those to leeward the two Austrian?. They sighted each other, and at once steamed towards one another. At two p.m., the Danes wer •to windward of the Austrians, and within punshot. The Austrians were now suppor'ed by three Prussian guuboati. The Austrians fired the first shot, but as we were at the time five mile 3 away, I could not see whether it took effect or not. The Danes formed into line, and gave three distinct broadsides, one fr m each ship. You will understand it was a nice fine day, and a sharp wind blowing 1 . The Danes being to windward, had the advantage, as their smoke was all carried away as soon as made. The Austrians carried on a very brisk fire, and were supported by the three Prussian gunboats, who shelled away at the Danes in good style. Well, at it they went, hammer and tongs, for an hour and a half, the Danes firm* regular broadsides, without any seeming advantage, 'till a quarter to four, when the Austrian ship Schwarzenberg caught fire in her foremost rigging, and the other was very much disabled, when they sheered off towards the neutral water of the English ssle of Heliogland, and the Danes fired away at them till they were in safe water, and then steamed away to windward. They are now in sight, watching the movements of the Austrians and Prussians, who are now anchored for the night » few hundred yards off us. Tiie foretop and topmast were burnt clean out of the Austrian ship Schwarzenberg. It is not yet quite put out. Her bowsprit, jib, and flying jib were shot away, and, indeed, she is totally disabled. The number of men killed is not known, as we are not near enough to the Danes to find out, and the Austrians and Prussians have not yet had time to muster the live ones ; but, from what can be seen, I should think the slaughter must be dreadful."

One day a Parisian banker waited upon Talleyaand to ascertain the trath of a rumour of the death of George the Third, which was expected to affect the price of the stocks. The banker, of course, anxiously apologised to the minister for the intrusion, and for the extraordiuaiy nature of his request. 'Oh !' exclaimed Talleyrand, with the iinperturable gravity peculiar to him, ' there is no harm — no inpiscretion whatever. I shall be delighted it the information I have to give is of any use to you.' The banker was profuse in his acknowledgments. ' Well, now I must tell you,* continued Talleyrand, with an air of mysterious confidence, ' some say the king is dead ; others that he is not dead; for my own part, \ believe neither the one nor the other. Mind now, I tell you this in confidence, and for heaven's sake don't commit me.'— On another occasion the Spanish ambassador complained to Talleyrand that one of his despatches had been unsealed. • Sir,' returned the minister, who Ijad listened with an air of profound gravity, * I will wag-er I can guess how the thing happened. 1*"1 *" lam convinced that your despatch has been opened by some one who desired to know what was inside.' Very satisfactory, no doubt. «&, Mock Turtje.— -Calling- a huairaa' 'my dear' in public, and ' you brute ' in private.