FURTHER CORRESPONDENCE FROM THE NEW ZEALAND COMMISSIONERS, FORWARDING THE DRAFT OF "A BILL FOR AUTHORIZING A GUARANTEE OF A LOAN TO BE RAISED BY THE GOVERNMENT OF NEW ZEALAND FOR THE CONSTRUCTION OF ROADS, BRIDGES, AND COMMUNICATIONS IN THAT COUNTRY, AND FOR THE INTRODUCTION OF SETTLERS INTO THAT COUNTRY."

Appendix to the Journals of the House of Representatives, 1870 Session I, A-09c

A.—No. 9c.

FURTHER CORRESPONDENCE FROM THE NEW ZEALAND COMMISSIONERS, FORWARDING THE DRAFT OF "A BILL FOR AUTHORIZING A GUARANTEE OF A LOAN TO BE RAISED BY THE GOVERNMENT OF NEW ZEALAND FOR THE CONSTRUCTION OF ROADS, BRIDGES, AND COMMUNICATIONS IN THAT COUNTRY, AND FOR THE INTRODUCTION OF SETTLERS INTO THAT COUNTRY."

PRESENTED TO THE HOUSE OE REPRESENTATIVES, BY COMMAND OE HIS EXCELLENCY.

WELLINGTON.

1870.

A.—No. 9c

CORRESPONDENCE RELATIVE TO NEW ZEALAND (ROADS, ETC.) LOAN ACT.

No. 1. The New Zealand Commissionees to the Hon. W. Gisboene. Sic, — London, 11th June, 1870. We have the honor to transmit herewith a copy of the draft Bill which has been prepared by the Treasury for giving the guarantee of the Imperial Government to the loan of one million for immigration and public works. We have reason to believe that this Bill will be immediately introduced, and passed without any difficulty. The telegram which we sent you a few days ago, and of which we enclose a formal copy, together with the unofficial communications which were made to you by us last mail, will have informed you of the proposals we made to Her Majesty's Government on the subject of the terms of the guarantee, and you will see that those proposals have in the main been given effect to in the Bill. On one point only the Government has not yet decided whether it will agree to our proposal, namely, the rate of the sinking fund. The Treasury has expressed itself in favour of the sinking fund being 2 per cent., and has informed us that unless this rate were fixed there might be serious opposition in the House of Commons to the measure. But we have so strongly urged our request for the lower rate of 1 per cent., and the Government have so freely stated their desire to accomplish the object in as handsome a manner as possible, that we still hope the point will be determined in our favour. In any case, however, we think you will agree with us that the advantage most wanted has been secured by the provision deferring the commencement of the sinking fund, as the present relief of annual payment is of greater consequence than the rate of a sinking fund to commence at tho end of a term of years. With regard to the conditions as to the amount to be raised in any one year, the presentation of an abstract account to Parliament and the satisfaction of the Treasury as to the expenditure on the purposes of the Act of each amount as it is raised, we presume that no objection will be made to these provisions of tho Bill: and it has been the desire of the Imperial Government to express these in a form satisfactory to the Assembly, and to avoid even the appearance of distrust. But it was obviously necessary that when a guarantee was given in order to accomplish certain objects some formal steps should be taken to record the facts of their accomplishment. You will notice that the sinking fund is to be invested in such securities as the New Zealand Government and tho Treasury shall agree upon, and shall be held in the names of four trustees to be nominated, two by the Treasury and two by the Now Zealand Government. We do not think there is any occasion for us to give an official account of the negotiations which have been thus brought to an issue. The repeated refusals of successive Ministries to entertain the question of a guarantee are the best evidence of the difficulties with which we had ourselves to contend. We can but hope that tho concession now made by Her Majesty's Government will be as well received as it is well intended; and we should not be doing right if we omitted officially to record our firm belief that nothing but the most sincere desire on Lord Granville's part to give the settlers assistance of a substantial kind could have overcome the objections of the Cabinet to a grant of any guarantee whatever. Nor ought we to omit to say how cordially we were assisted in the matter by the Under Secretary of State, Mr. Monsell, and how willing wo found Mr. Stansfeld of the Treasury to put the matter in the form that might be most satisfactory to the General Assembly. We have, &c, F. D. Bell, \ n The Hon. W. Gisborne, &c. I. E. Featheeston, j Commissioners. Enclosure 1 in No. 1. Deaft of a Bill for authorizing a Guarantee of a Loan to be raised by the Government of New Zealand for the Construction of Boads, Bridges, and Communications in that Country, and for the introduction of Settlers into that Country. Wheeeas the Government of New Zealand propose to raise by way of loan a sum not exceeding one million pounds for the purposes of the construction of roads, bridges, and communications iv that country, and of the introduction of settlers into that country, and it is expedient to authorize the Commissioners of Her Majesty's Treasury, in this Act referred to as " the Treasury," to guarantee such loan : Be it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Barliament assembled, and by the authority of the same, as follows : — 1. This Act may be cited as " The New Zealand (Boads &c.) Loan Act, 1870." 2. The Treasury may guarantee, in such manner and form as they think fit, payment of the principal of all or any part of any loan not exceeding one million pounds raised by the Government of New Zealand for the purposes of the construction of roads, bridges, and communications in that country, and of the introduction of settlers into that country, and payment of the interest of any such loan at a rate not exceeding four per cent.

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CORRESPONDENCE KELATIYE TO

3. The Treasury shall not give any guarantee under this Act, unless and until provision has been made, either before or after the passing of this Act, by an Act of the Legislature of Now Zealand, or otherwise to the satisfaction of the Treasury, — (1.) For raising the said loan, and appropriating the same to the purposes mentioned in this Act: (2.) For charging the Consolidated Fund of New Zealand with the payment of the principal and interest of the said loan immediately after the charges on that fund existing at the time of the passing of this Act: (3.) For payment by the Government of New Zealand of a sinking fund at the rate of per centum per annum on the entire amount of the said loan, or so much as is raised for the time being, commencing at the date at which the whole of such loan is raised, or at the expiration of ten years from the passing of the Act (whichever date first happens), and for charging the Consolidated Fund of New Zealand with the payment of such sinking fund immediately after the principal and interest of the said loan : (4a.) For charging the Consolidated Fund of New Zealand with any sum issued out of the Consolidated Fund of the United Kingdom under this Act, with interest thereon at the rate of five per centum per annum, immediately after the sinking fund of the said loan: (5.) For rendering to the Governor, for transmission to the Treasury, an annual abstract of the accounts of the expenditure of the money raised by means of the said loan under such heads as the Treasury from time to time desire: (6.) For remitting to the Treasury tho annual sums for the sinking fund by equal half-yearly paymenls, and for the investment and accumulation thereof under their direction in the names of four trustees nominated from time to time, two by the Treasury and two by the Government of New Zealand. The Treasury shall not guarantee in any one year a larger sum than two hundred thousand pounds, and the Treasury, before guaranteeing any portion of the loan after the first, shall satisfy themselves that the portion of the loan already raised has been or is in the course of being spent for the purposes mentioned in this Act. 4. The said sinking fund may be invested in such securities as the Government of New Zealand and the Treasury from time to time agree upon, and shall, whether invested or not, be applied from time to time, under tho direction of the Treasury, in discharging the principal of the said loan, and the interest arising from such securities (including the interest on any part of the loau discharged by means of the sinking fund), and the resulting income thereof shall be invested and applied as part of such sinking fund. 5. Every Act passed by the Legislature of New Zealand which in any way impairs the priority of the charge upon the Consolidated Fund of New Zealand created by that Legislature of the said loan and the interest and sinking fund thereof, and the sums paid out of tho Consolidated Fund of the United Kingdom and the interest thereon, shall, so far only as it impairs such priority, be void, unless such Act contain a suspending clause providing that such Act shall not come into operation until Her Majesty's pleasure has been publicly signified in New Zealand. 6. The Treasury are hereby authorized to cause to be issued from time to time, out of the growing produce of the Consolidated Eund of the United Kingdom, such sums of money as may at any time be required to be paid to fulfil the guarantee under this Act in respect either of principal or interest. 7. The Treasury may, from time to time, certify to one of Her Majesty's Principal Secretaries of State the amount which has been paid out of the Consolidated Fund of the United Kingdom to fulfil the guarantee under this Act, and the date of such payment. Such certificate shall be communicated to the Governor of New Zealand, and shall be conclusive evidence of the amount having been so paid and of the time when the same was so paid. 8. The Treasury shall cause to be prepared and laid before both Houses of Parliament a statement of any guarantee given under this Act, and a copy of any accounts received by them respecting the expenditure of the said loan, and an account of all sums issued out of the Consolidated Fund of the United Kingdom for the purposes of this Act, within one month after the same are so given, received, or issued, if Parliament be then sitting, or if Parliament be not sitting, then within fourteen days after the then next meeting of Parliament.

Enclosure 2 in No. 1. The New Zealand Commissioners to the Hon. W. Fox. (Telegram.) London, 13th June, IS7O. Guaeantee Million Loan Bill not yet drafted. Our proposals are that the loan is not to bear more than 4 per cent, interest; not more than £200,000 to be raised in any one year; the sinking fund of 1 per cent, not to commence until after expiration of ten years, or until the whole million has been raised, whichever happens first; the whole to be expended on immigration, roads, bridges, and communications. We don't yet know whether these proposals are accepted by Treasury, but Cabinet really anxious to assist Colony. Let Assembly pass an Act authorizing loan of million to be expended on immigration, roads, bridges, and communications; such loan to be raised by New Zealand, and guaranteed by Imperial Government under such conditions as to interest, sinking fund, and otherwise, as may be agreed to by Commissioners Bell and Featherston. These conditions to be held incorporated in Assembly's Act; and the interest, sinking fund, and any other charges arising out of the loan being Imperially guaranteed to be first charge on Consolidated Bevenue after existing charges. The reply to your last Memorandum will be conciliatory. This cancels Saturday's telegram. F. D. Bell, To Premier Fox, Wellington, New Zealand. I. E. Featiieeston.

NEW ZEALAND (ROADS, ETC.) LOAN ACT.

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No. 2. The New Zealand Commissionees to the Hon. W. Gisboene. Sib, — London, 17th June, 1870. Adverting to our letter of the 14th instant, No. 28, in which we expressed the hope that the sinking kind of the loan about to be guaranteed by the Imperial Government on behalf of New Zealand would be fixed at 1 per cent., we have now to inform you that we have since been apprised by the Eight Honorable Mr. Stansfeld that our wishes in this respect cannot be acceded to. In reply to an unofficial communication on the subject which we made to the Treasury, Mr. Stansfeld has informed us to-day that the decision of the Government is that, considering the delay of ten years granted before the sinking fund will come into operation, they cannot undertake to propose to the House of Onmmons a lower rate than 2 per cent. We have, &c, I. E. Featheeston, 7 n • ■ The Hon. W. Gisborne, Ac. F. D. Bell, j Commissioners.