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1885. NEW ZEALAND.
LOANS AND CONVERSION OF DEBENTURES INTO INSCRIBED STOCK (PAPERS IN CONNECTION WITH THE NEGOTIATION OF THE).
Presented to both Houses of the General Assembly by command of His Excellency.
No. 1. The Agent-General to the Peemiee. Beceived 21/6/84. Conveesion. Bank rate, 2. Can arrange with Bank of England. Operation 5-per-cent. 5-30 debentures, rate 102^, first offering option until August, then applying force. Bank of England engaging pay off any outstanding. Please instruct whether proceed. London, June 20;
No. 2. The Stock Agents to the Colonial Treasueee. Sib, — 7, Westminster Chambers, London, S.W., 3rd May, 1884. We have the honour to transmit herewith copy of the Stock Agents' conversion account to the 30th April, which we have received from the Bank of England. The figures up to the end of February were sent to you in the Agent-General's letter of the 22nd February, No. 106, but they are now repeated in this account. We have, &c, P. G. Julyan, E. D. Bell, The Hon. the Colonial Treasurer, Wellington. Stock Agents.
Enclosure in No. 2. The Goveenor and Company of the Bank of Eng-land in Account with the New Zealand Stock Agent's " Conversion Account." 1884. Dr. £ s. d. 1884. Cr. £ a. d. Jan. 5. To cash advanced by the bank 12,000 0 0 Jan. 5. By cash paid for commission al- „ 11. Ditto .. .. .. 2,000 0 0 lowed to brokers, &c. .. 7,000 00 Feb. 21. Ditto .. .. .. 3,000 0 0 „ 16. By cash paid to Bank of New March 11. Ditto .. .. .. 1,000 0 0 Zealand .. .. .. 2,000 0 0 April 4. Ditto .. .. .. 1,000 0 0 ~ ~ By cash for advertisements .. 532 15 0 „ 30. Ditto .. .. .. 7,000 0 0 Feb. 7. By cash to Receiver-General of Inland Revenue .. .. 1,963 15 0 ~ 19. By cash for stamping scrip .. 52 5 0 „ 21. By cash to Bank of England for management .. .. 3,238 14 10 ~ ~ By cash for commission to brokers, &c. .. .. .. 2,088 15 0 March 10. By cash to Receiver-General of Inland Revenue .. .. 693 15 0 April 5. By cash to Receiver-General of Inland Revenue .. .. 930 0 0 „ 30. By cash to Bank of England for interest on sundry advances to Agent-General of New Zealand, from 18th October, 1883, to 30th April, 1884. .. 4,900 5 3 By balance.. .. 2,599 14 11 £26,000 0 0 £26,000 0 0 May 1. To balance .. .. .. 2,599 14 11 Bank of England, Ist May, 1884. E. May, Chief Cashier. I—B. 11.
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No. 3. The Agent-Geneeae to the Premier. [Extract from Telegram.] Beceived 2/7/84. . . . . My telegram of 20th anxious have reply, because unless notice issued immediate, shall lose our chance. London, 1.
No. 4. The Premier to the Agent-Geneeae. Agent-General, London. Wellington, 3rd July, 1884. Conveesion. Telegram June 20th. Fully authorize proceed according your discretion.
No. 5. The Agent-General to the Premier. Beceived 12th July, 1884. Conversion. Following agreement with Bank of England : will provide here for amount required to pay off 5-per-cent. 5-30 debentures 15th January, the Agents for inscribed stock giving the Bank of England inscribed stock at 102-J-. Notices Gazette to-night. London, 11.
No. 6. The Peemier to the Agent-General. Agent-General, London. Wellington, 15th July, 1884. nscription. Thanks, action approved.
No. 7. The Colonial Teeasueee to the Stock Agents. Gentlemen, — Wellington, 19th July, 1884. I have the honour to acknowledge the receipt of your letter of the 3rd May last, No. 241, enclosing a copy of the Stock Agents' Conversion Account at the Bank of England to the 30th April, showing that advances to the amount of £26,000 had been received from the bank, of which £23,400 ss. Id. had been expended, leaving a balance of £2,599 14s. lid. in hand. I shall be glad to receive from you at your earliest convenience, if not already forwarded, complete accounts of your expenditure in connection with the recent conversions, so that the final entries may be made in the accounts of the colony. I have, &c. B. Oliver, The New Zealand Stock Agents, London. For the Colonial Treasurer.
No. 8. The Agent-General to the Colonial Treasurer. Sir, — 7, Westminster Chambers, London, S.W., 4th July, 1884. It will be in your recollection that in my letter of the sth December last, No. 361, reporting the completion of the conversion of the 5-30 debentures, I said that the Stock Agents would probably take early steps for submitting a proposal to you for calling in the outstanding 5-per-cent. 5-30 debentures, which had not been then sent in, amounting to £746,300. Several circumstances, however, connected with the condition of the money market and the issue of the second million of the loan, made it inadvisable to go on with the operation at that time; and I thought it best to wait, especially as a reduction of the bank rate to 2 per cent, was (according to the best judges) likely to take place before long. In the meanwhile, however, I made preliminary arrangements with the Bank of England so as to be ready for making the operation at any moment. The terms I offered to the bank were these : The requisite notices being issued on the 15th July to pay off the bonds in January, the bank was to provide the necessary money, supplying it from time to time as the bonds were presented for payment; and for every £100 of cash so provided, the bank was to take inscribed stock to the amount of £102 10s. I had several interviews with the Governors and the chief bank officials, and practically the matter had been settled by the middle of June. Comparing an arrangement of this kind with the offer made to the bondholders last September, the advantage to the Government is obvious. We were ready at that time to give £103 10s. of stock to any holder of a £100 5-per-cent. 5-30 bond, besides paying "initial charge" to the bank for the conversion and commission to bankers, brokers, and agents. By my arrangement with the bank the colony saved 1 per cent, of stock, and also these expenses. I was willing to give the bank the option either of taking the £102 10s. of stock " firm," or of lending us the money for a time to be agreed at 4 per cent, on the security of the stock. My object in this was, of course, to prevent any harm to the third million of the loan. If the market happened to be strong in January, and the third million went off well, there would then be no difficulty in placing the additional quantity of stock issued for paying off the 5-30s, and the bank would
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naturally take to the £102 10s. of stock; if, on the contrary, the market happened to be weak, it would be better for us to have the money on loan to pay off the 5-30s, and take a twelvemonth, at any rate, to " get out" of the stock ourselves. There was no disadvantage in giving the option to the bank, because, while it was a good operation for us if the bank took the whole of the stock firm, it might even be a better one for us to have the money ; for (except under circumstances not likely to happen) we probably should be able to get rather more than £100 in cash for £102 10s. of stock if we had to be sellers of it ourselves. At the same time, I preferred that the transaction should be closed at once by the bank taking the £746,000 of stock firm. A further safeguard for the third million existed in the circumstance that inasmuch as there was a broken period between the 15th January (when the notice must be given to holders), and the Ist May (which is the dividend day on the stock), the bank was willing to take scrip for £102 10s., with coupon attached for interest between those dates, and to wait for actual inscription until the Ist May, agreeing privately not to place any of the scrip on the market before it was inscribed. This would leave a period of nearly four months after the third million was brought out, in which subscribers to the loan would be able to " get out " before any of the bank's stock came in competition with theirs. These preliminary arrangements having been completed, everything was in readiness for the matter to be carried out by the Stock Agents if Sir Penrose Julyan concurred. Immediately upon the bank rate being reduced to 2 per cent, on June 19th, I sent you a telegram asking your consent to the operation. I had at that time an idea of making another offer to the bondholders; but this will probably be abandoned, because it seems that they are not likely to be tempted by an offer of £101 of stock for a £100 bond, and it will not be worth while to offer them any more; besides, as they refused the fair offer we made them last year, they have no further claim upon the Government, and a sharp notice to pay them off will have a useful effect in helping any operation hereafter with the 4-J- per cents. I was glad to receive yesterday your telegram conveying plenary authority to carry the operation into effect. The Stock Agents will now place themselves in formal communication with the Bank of England, and the result will be communicated to you in due course by the Stock Agents. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 9. The Stock Agents to the Colonial Treasueee. Sir,' — 7, Westminster Chambers, London, S.W., 14th July, 1884. You were duly informed by our reports at the time of the recent conversion of 5-30 and other bonds, last November, that there remained outstanding at that time a number of 5-per-cent. 5-30 bonds, to the amount of £746,300, the holders of which had not accepted the offer made to them by the Government; and you have also been aware, from various despatches addressed to you by the Agent-General, that it was our intention, if a favourable opportunity occurred, to proceed (subject to your sanction) with the operation of paying off these outstanding bonds. 2. Giving full consideration to the present state of the market, and to all other surrounding circumstances, it appeared to us that the time had arrived when a safe and profitable operation might be counted upon ; and the Agent-General accordingly telegraphed for your sanction, upon receipt of which we determined at once to take steps to bring our convictions to a practical test. The debenture-holders had already had the opportunity of converting on favourable terms, so that we were not called upon to offer them any further consideration ; and the uncertainty as to the effect that might be produced on prices in January next, when a new loan will have to be dealt with, if an exchange of stock for debentures were simultaneously taking place, rendered it desirable, in our opinion, to carry out the operation in a manner calculated to remove all doubt as to the result, and at the same time to insure you against influences prejudicial to the floating of the third million in January. These objects we believe we have fully effected by arrangements made by us with the Bank of England, by which they have agreed to take 4-per-cent. stock to the extent of £764,957 10s., and to pay us for the same at the rate of £100 in cash for every 102J of stock; and this will yield the required £746,300. 3. In consequence of there being a broken period between the 15th January, when the money is to be provided, and the Ist May, when the stock itself can be inscribed, we have agreed to give the bank scrip certificates to tide over this interval. The money is to be placed by them on the 15th January to the credit of a special account to be opened with the Stock Agents, and will be made use of by the latter as required. The scrip certificates will bear interest at 4 per cent, from the 15th January (the date from which the debentures cease to bear interest), and will have coupons attached for the broken period to 30th April; and on the Ist May, 1885, the bank will become the inscribed owners of consolidated stock for an amount corresponding with that represented by the scrip. It has been arranged that this stock shall not come into the market until after the Ist May, so that it will not prejudice the new loan in January next. 4. We beg to enclose copies of the correspondence which has passed with the bank embodying this agreement. 5. In accordance with the terms of the bonds, we have given the requisite notices in the London Gazette and the Times of the intention of the Government to pay off the bonds; and we beg to enclose herewith a copy of those newspapers for record in your department. 6. As the rate of stock is 1 per cent, less than we offered last year, our agreement with the bank effects a saving to that extent, besides commission to bankers, brokers, and agents,
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7. The result of the operation, after deducting all expenses, will be a saving to the Government of about £6,000 per annum. We have, &c, F. D. Bell, P. G. Julyan, The Hon. the Colonial Treasurer, Wellington. Stock Agents.
Enclosure 1 in No. 9. The Stock Agents to the Goveenor and Company, Bank of England. Gentlemen, — 7, Westminster Chambers, London, S.W., 12th July, 1884. Beferring to our interviews of the 10th and 11th instant, on the subject of raising a sum of money for paying off certain 5-per-cent. 5-30 debentures of the Government of New Zealand, in the middle of January next, we understand the arrangement arrived at between us to be as follows:— We, as Stock Agents, are to make over to the Bank of England scrip certificates representing £764,957 10s., in exchange for £746,300 in money, to be placed by the bink to the credit of the Stock Agents' account, to be drawn against by them as they may require, being at the rate of 102^ of scrip for every £100 in money. The scrip certificates to bear interest at 4 per cent, from the 15th January, 1885, and to have attached thereto coupons for the broken period between that date and the 30th April following. On the Ist May, 1885, the bank, or their nominees, to become the inscribed proprietors of 4-per-cent. stock, representing £764,957 10s., identical in all respects with the New Zealand Consolidated Stock already inscribed in the books of the bank. The scrip to be delivered by us not later than the 12th, and the money to be placed to our credit not later than the 15th January, 1885. We have to request the confirmation of this understanding. We have, &c, F. D. Bell, P. G. Julyan, Stock and Conversion Agents of the Government of New Zealand. The Governor and Company of the Bank of England.
Enclosure 2 in No. 9. The Chief Cashiee, Bank of England, to the Stock Agents. Gentlemen, — Bank of England, London, E.C., 14th July, 1884. I am directed to acknowledge the receipt of your letter of the 12th instant, in which you state in writing the arrangement which was arrived at between yourselves and the Governors in the personal interviews which took place at the bank on the 10th and 11th instant. In answer, I am to say that the Governors concur in the arrangement as stated by you— namely, that, in order to provide the sum required to pay off the 5-30 debentures of the Government of New Zealand on the 15th January next, the Governors undertake to place to the credit of the Stock Agents' account on that day £746,300, for which the Stock Agents undertake to deliver to the Bank of England scrip certificates for New Zealand 4-per-cent. stock for £764,957 10s., being at the rate of £102 10s scrip for every £100 in money. The scrip certificates to bear interest at 4 per cent, from the 15th January, 1885, and to have attached thereto coupons for the broken period between that date and the 30th April following. On the Ist May, 1885, the bank, or their nominees, to become the inscribed proprietors of 4-per-cent. stock, representing £764,957 10s., identical in all respects with the New Zealand Consolidated Stock already inscribed in the books of the bank. I am, &c., Sir F. D. Bell, K.C.M.G., and Sir Penrose G. Julyan, F. May, K.C.M.G., Stock and Conversion Agents of the Chief Cashier. New Zealand Government.
Enclosure 3 in No. 9. New Zealand. To the holders of New Zealand Government 5-per-eent. 5-30 debentures issued under Acts of the General Assembly of New Zealand, intituled respectively " The Defence and other Purposes Loan Act, 1870;" "The Immigration and Public Works Loan Act, 1873," and "The General Purposes Loan Act, 1873." The Government of New Zealand hereby give notice that the outstanding 5-per-cent. 5-30 debentures issued under the above Acts, will be paid off at par on the 15th day of January, 1885, at the offices of the Crown Agents for the Colonies, in Downing Street, London, after which date interest will cease. The debentures must be left at the offices aforesaid three clear days for examination prior to payment. For the Government of New Zealand : F. D. Bell. Penrose G. Julyan, Stock and Conversion Agents of the said Government, 7, Westminster Chambers, London, 10th July, 1884,
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No. 10. The Colonial Teeasueer to the Loan Agents. Gentlemen, — Wellington, 13th September, 1884. I have the honour to inform you, of that which you will already probably have learned by cable, that I have assumed the office of Colonial Treasurer. Permit me to express the hope that the relations between us will be of a cordial nature. I recognize how much I shall be indebted to your good offices and assistance. I have not time now to write to you at any length; and indeed the Financial Statement, which will be the basis of our financial policy, will not be delivered for two or three days after the mail leaves. I may, however, inform you that the funds at the disposal of the Public Works were exhausted, and that in order to meet liabilities accruing until the last million loan could be negotiated very considerable aid would be required. I have, in consequence, arranged with the bank for an advance from time to time of half a million of money, to be secured by bills drawn upon the Loan Agents, not to mature in less than six months. I have also agreed to give, as collateral security, short-dated debentures in anticipation of the third million loan, such debentures not to be hypothecated or used until after the Ist January proximo. I shall write to you more fully on this subject again. It is not determined what amount it will be necessary to borrow for the wants of the coming year. Looking at the liabilities current, and the large amount which has been diverted from the purposes for which the loan was authorized, and also taking into regard the importance of not discontinuing the works, I am afraid that it will be necessary to authorize an additional million or million and a half; but, in that case, we should not propose to negotiate the million put apart for the North Island Trunk Bailway for some months after the other loans. Possibly, therefore, I may have to ask you early in the year to negotiate from two to two and a half millions; but please to consider this quite confidential at present, as nothing is finally determined. I shall also write to you at an early opportunity with regard to the progress of the conversion. I am anxious, before the annual drawing in March next for the New Zealand Consolidated Debenture Loan, that an opportunity should be afforded to the bondholders to exchange their debentures for inscribed stock. As to the terms of the exchange, you will be a better judge of what is necessary than I can be. It appears to me, however, seeing the onerous nature of the increasing sinking fund and the high rate of interest on the loan, that it will pay us to give in inscribed stock more than sufficient to cover the market value of the converted bonds. The operation to us would be very important, whilst to the bondholders it will be a release from the gambling liability under which they labour of their bonds being paid off at par, although they command a premium in the market. I am of opinion that a very brief period should be given to exchange, as I think in operations of this kind the shorter the time the more likely they are to be effective. Notice might be given some weeks in advance, but the period during which the exchange should be allowed might be made very short. In these matters the instructions I may give to you will be subject to your using your discretion, as I recognize that you must be better able to judge of details than I am. On the other hand I should like you to receive my instructions with the desire to follow them literally, unless you see good reason to depart from them. I shall be glad if you will say if you think this is a satisfactory footing on which to put instructions, because I am desirous not to allow any feature of this most important subject to assume an aspect which will be distasteful to you. The difficulty with regard to the consolidated debentures, as to the technical liability of having to continue to pay interest and to draw bonds, is one which is more seeming than real. We shall, of course, whilst any bonds remain outstanding, continue literally to fulfil our obligations, but the theory of averages will operate so that we shall derive a corresponding advantage from whatever proportion of bonds we may convert. Concerning the 1856 loan, about which we have exchanged telegrams, I will write you on a future occasion. You will excuse me not writing to you more fully this mail. I have, &c, Julius Vogel.
No. 11. The Colonial Treasurer to the Manager, Bank of New Zealand, Wellington. Sib,— Wellington, 13th September, 1884. Beferring to our conversation respecting an advance of £500,000 applied for to your bank by the Government, the following are the terms on which it is understood the bank is prepared to lend the money :—■ 1. The amount is to be advanced by instalments; say, £150,000 in the current month, and £350,000 in October, November, and December next; the whole to be repaid in London at any time the Government is prepared to make the repayment, not exceeding six months hence. 2. Interest on the sums so advanced is to be at the rate of 5 per cent, per annum from the date of each advance to the date of its repayment. 3. The security to be drafts of the Colonial Treasurer on the Loan Agents, at such a currency from the date of the respective advances as will cover their repayment within the limit of six months mentioned in paragraph No. 1, with collateral security, in the form of debentures to be issued by the Agents for raising the third instalment of the loan of three millions, of an amount corresponding with each sum advanced,
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4. The Loan Agents will from time to time be instructed by the Government, either by post or cablegram, as may be found most suitable for giving effect to the understanding between the bank and the Government, to hand over to the Managing Director of the bank in London short-dated debentures of the New Zealand loan of 1882 corresponding in amount with the sums advanced. 5. The debentures issued in respect of each advance and the relative drafts on the Loan Agents to be surrendered by the bank on repayment of the respective advances. 6. It is understood the bank is not to be at liberty to hypothecate or use the debentures until after the Ist January, 1885, and then only should it not be making use of the bills. I have, &c, The Manager, Bank of New Zealand, Wellington. Julius Vogel.
No. 12. The Manages, Bank of New Zealand, Wellington, to the Colonial Treasurer. Sir, — Bank of New Zealand, Wellington, 15th September, 1884. I have the honour to acknowledge receipt of your letter of the 13th instant, No. 776, detailing the conditions under which the bank has agreed to make advances aggregating £500,000. I have, &c, George E. Tolhuest, The Hon. the Colonial Treasurer. Manager.
No. 13. The Agent-Geneeal to the Colonial Treasurer. Sir, — 7, Westminster Chambers, London, S.W., 29th July, 1884. Adverting to the Stock Agents' letter of the 14th instant, No. 327, reporting the arrangements made with the Bank of England for paying off the outstanding 5-per-cent. 5-30 debentures, I beg to request your attention to the correction of £700 made in the enclosed correspondence of the amount involved in those arrangements. The cash to be provided by the bank for paying off the bonds will now be only £745,600, instead of £746,300, and the stock issued to the bank in exchange will be £764,240, instead of £764,957 10s. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Enclosure 1 in No. 13. The Agent-Geneeal to the Chief Cashiee, Bank of England. Sic, — 7, Westminster Chambers, London, S.W., 24th July, 1884. Adverting to the letters which recently passed between the bank and the Stock Agents on the subject of paying off the 5-per-cent. 5-30 debentures which were not sent in for conversion, I find that we inadvertently stated £503,700 as the amount sent in, leaving £746,300 outstanding. But on examining the lists sent in to us by the bank on the 24th April last, I find that I had not counted in £700 of bonds held by trustees, and that the actual amount of the 5-per-cent. bonds converted is really £504,400, leaving only £745,600 to be paid off. The cash, therefore, to be provided, by the bank next January will be £745,600 instead of £746,300, and the amount of stock to be given by the Stock Agents will be £764,240, instead of £764,957 10s. I have, &c, The Chief Cashier, Bank of England. E. D. Bell.
Enclosure 2 in No. 13. The Chief Cashier, Bank of England, to the Agent-Geneeae. Sib,— Bank of England, London, E.G., 25th July, 1884. I beg to acknowledge the receipt of your letter of yesterday's date correcting the sum required to pay off the outstanding New Zealand 5-30 debentures in January next to £745,600, and the amount of stock to be given in consideration for that sum £764,240. I have, &c, E. May, Sir Francis Dillon Bell, K.C.M.G., 7, Westminster Chambers, S.W. Chief Cashier.
hlbii—■■■! lIWWHIIIII lIIIIIWIII^MIIIIII 111 IMIII I HIIHI' ' No. 14. The Colonial Treasurer to the Loan Agents. Wellington, 29th September, 1884. Would like immediate conversion consolidated loan. How much inscribed stock should be offered to secure holders bringing in their debentures freely ? Am favourable giving only short option. Propose authorizing new loan million and half. Could you negotiate before Christmas ? Probably not necessary then float third million till late next year; or would it be better float two and half millions January? Fear waiting, other colonies borrowing so largely. Beply, advise all points,
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No. 15. The Colonial Treasurer to the Loan Agents. Wellington, 29th September, 1884. Addition to-day's message. To save competing with unplaced inscribed stock am disposed convert consolidated loan into three and half stock. Also issue new loan with option convert into three and half. Advise. Address all telegrams concerning finance, "Treasurer, New Zealand."
No. 16. The Loan Agents to the Colonial Teeasueee. (Beceived Ist October, 1884.) Your financial proposals. Firstly, as to converting Consolidated Loan, 1867. Beuter having announced that you propose to raise further loan, feel sure any operation Consolidated Loan, 1867, before you offer loan, extremely hazardous. Cannot possibly say what price would induce holders come in freely, but, anyhow, addition beyond actuarial equivalent of rate of interest must, even at four per cent., be highly injurious to new loan. As to converting into three and half, we have no hesitation saying would certainly fail, on any terms you could afford to give. We therefore strongly advise deferring any conversion until new loans placed. Secondly, as to loans. We believe that, provided you did not come upon market again with further new loans within twelve months, we might place whole two millions and a half. We consider most desirable not make separate operations, but bring out whole January. Thirdly, as to option to exchange into three and half. Are convinced that any attempt borrow at that rate of interest would prove disastrous. Not only are large amounts of inscribed stock still in speculators' hands, but you would be competing with three strongest colonies, which will probably come for thrice five millions at three and half between now and January. Now, while these issues are strongly against your attempting three and half, they are favourable to your four per cent. London, 30th.
No. 17. The Agent-Geneeae to the Colonial Teeasueee. (Beceived sth October, 1884.) Loan Agents' message. My impression success Sydney three half will create buoyancy all round, which case market become bare inscribed stock change aspect before January. London, 4th.
No. 18. The Colonial Treasures to the Loan Agents. Loan Agents, London. Wellington, 7th October, 1884. Unless you act on cable authority new loan powers only reach you December. If only new loan floated would require additional million July. Perhaps, therefore, better float two millions and a half January. Have arranged wants till then, but regrettable lose good market. Beconsider expediency immediate conversion Consolidated Loan, 1867. Must base conversion on market, not actuarial equivalent. If conversion effected market bound support new loan. Advise all points, will accept your judgment.
No. 19. The Loan Agents to the Colonial Treasures. (Beceived 10th October, 1884.) Conversion of Consolidated Loan, 1867. Benewed reflection only confirms our opinion. It is true that any conversion must be based upon market, but equivalent must be starting point for estimating necessary inducement. Beal point, however, is that—counting, firstly, £200,000 due Bank of England; secondly, £745,000 under agreement with Bank of England, for paying 5 per cent. 5-30s; thirdly, £50,000 for expenses of recent conversion; fourthly, third million ; fifthly, new million and a half; there will be three millions and a half of new inscribed stock to place during next year. Now, any prior conversion of Consolidated Loan, 1867, by adding to volume of inscribed stock, and multiplying daily operations market, would further compete against new loans; and no saving you could make in sinking fund meanwhile would be worth setting against that danger. We therefore feel convinced still that should not attempt any conversion until new loan safe. Lastly, respecting cable authority, would be useless, because Inland Bevenue would not enrol deeds creating new inscribed Btock without seeing Act and warrants. ______^_______ m ___ m London, 9th.
No. 20. The Colonial Treasurer to the Loan and Stock Agents. Gentlemen, — Wellington, 11th October, 1884. Beferring to my letter of the 13th ultimo, in. which you were informed that I had arranged with the Bank of New Zealand for an advance of half a million of money, to be secured by bills drawn on the Loan Agents, not to mature in less than six months, with a collateral security of
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short-dated debentures of the third instalment of the loan of three millions, I have now the honour to enclose for your information a copy of my letter to the bank setting forth the terms upon which it has undertaken to advance the money. I have, in accordance with that arrangement, drawn upon you, at ninety days' sight, for £225,000, the bills for which will be despatched to London by the mail which conveys this letter, and I have to request that you will be so good as to protect these drafts. The Order in Council authorizing the raising of the third million and appointing you Agents, together with an order authorizing the issue of short-dated debentures in anticipation of the loan, is being forwarded to you in a separate letter by the present opportunity. I have, &c, Sir P. G. Julyan, K.C.M.G., C.8., Julius Vogel. Sir F. D. Bell, K.C.M.G., Agents for New Zealand Loans and Stock, London.
No. 21. The Colonial Treasurer to the Loan Agents. Gentlemen, — Wellington, 11th October, 1884. I have the honour to forward to you herewith an Order in Council, under the hand of His Excellency the Governor, authorizing the raising of one million pounds sterling under " The New Zealand Loan Act, 1882 " (being the third and last instalment of the loan), and appointing you Agents for that purpose. I also forward a separate Order in Council empowering you to raise one million pounds, by the issue of short-dated debentures, pending the raising of the loan. I have, &c, Sir P. G. Julyan, K.C.M.G., C.8., Julius Vogel. Sir F. D. Bell, K.C.M.G., Agents under "The New Zealand Loan Act, 1882."
Enclosure 1 in No. 21. Wm. F. Drummond Jervois, Governor. ORDER IN COUNCIL. At the Government House, at Wellington, this 9th day of October, 1884. Present: His Excellency the Governor in Council. Whereas by " The New Zealand Loan Act, 1882 " (hereinafter called " the said Act "), it is enacted that it shall be lawful for the Governor in Council to appoint any two or more persons he may think fit to be Agents, for the purpose of raising and managing the loan authorized to be raised under the said Act, and in their appointments to define the relative powers of such Agents, and that such Agents shall have full power and authority to borrow and raise, in Great Britain or elsewhere, by bonds, debentures, scrip, or otherwise, such sum or sums, not exceeding three million pounds sterling in the whole, as the Governor in Council may from time to time or at any time direct or determine, for all and any of the purposes expressed in the Schedule thereto, or the payment or repurchase of short-dated debentures issued under the said Act, or any other purposes authorized by the said Act, provided that no greater sum than one million pounds sterling of the said three million pounds sterling shall be raised in any one year, commencing with the year one thousand eight hundred and eighty-three : And that such Agents shall have full power and authority to prescribe the mode and conditions of repayment of such loan, and the time of such repayment, and the rate of interest thereon, and the time and place or places when and where such principal and interest shall be made payable : And that no bond, debenture, or other security issued under the said Act shall be sold at a price which will yield to the purchaser thereof a higher rate of interest by the year than five pounds for every hundred pounds of the purchase-money given for such bond, debenture, or other security : And that all the powers which may be vested in any Agents appointed under the said Act may, by such Agents, be wholly or partly delegated to any two or more other Agents, subject to such conditions as the Agents delegating such powers shall think fit: And whereas under and by virtue of certain Orders in Council issued under the said Act on the third day of October, one thousand eight hundred and eighty-two, and the fifth day of October, one thousand eight nundred and eighty-three respectively, the sum of two million pounds sterling of the the said three million pounds sterling has been raised, and it has been deemed expedient that the remaining portion of the said loan so authorized to be raised should be raised under the said Act for the purposes therein mentioned, and that Agents should be appointed for the purpose, as hereinafter provided: Now, therefore, I, Sir William Francis Drummond Jervois, the Governor of the Colony of New Zealand, in exercise and pursuance of the powers and authorities vested in me by the said in part recited Act, and by and with the advice and consent of the Executive Council of the said colony, do hereby direct and determine that the sum of one million pounds sterling (being the remaining portion of the said loan of three million pounds sterling authorized to be raised under the said Act) shall be borrowed and raised under the provisions of the said Act; and in further exercise and pursuance of the powers and authorities aforesaid, and with the like advice and consent as aforesaid, I do hereby appoint Sir Penrose Goodchild Julyan, a. Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, late one of the Crown Agents for the colonies; and Sir Francis Dillon Bell, a Knight Cora-
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mander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, to be Agents for the purpose of raising and managing the portion of the said loan hereby ordered and determined to be raised, with full power and authority to such Agents, in and during the year one thousand eight hundred and eighty-five, to borrow and raise by bonds, debentures, scrip, or otherwise, the said sum of one million pounds sterling as aforesaid, and with full power and authority to such Agents to prescribe the mode and conditions of the repayment of such sum, and the time of such repayment, and, subject to the provisions of the said Act, the rate of interest thereon, and the time and place or places when and where such principal and interest shall be made payable, and with full power and authority to such Agents to agree, as often as occasion may require, that debentures issued by them shall be converted into stock created or issued under " The New Zealand Consolidated Stock Act, 1877," and either to specify the terms of such conversion, or arrange that such terms shall be subsequently agreed upon, and also with full power and authority to such Agents to delegate wholly or partly to any two or more other Agents the powers hereby and by the said Act vested in the said Agents, subject, however, to such conditions as the Agents delegating such powers shall think fit, and generally to have, hold, and exercise all such powers and authorities as by the said Act may be had, held, and exercised by the Agents appointed thereunder in respect of the moneys hereby authorized to be borrowed and raised. Forsteb Goring, Clerk of the Executive Council.
Enclosure 2 in No. 21. Wm. F. Drummond Jervois, Governor. ORDER IN COUNCIL. At the Government House, at Wellington, this 9th day of October, 1884. Present: His Excellency the Governor in Council. Whereas by the sixth section of "The New Zealand Loan Act, 1882" (hereinafter called "the said Act"), it is enacted that, pending the raising of moneys thereinbefore authorized to be raised under the said Act, it shall be lawful for the Governor in Council to appoint any two or more persons he may think fit to be Agents, and in their appointments to define the relative powers of such Agents, who shall have full power and authority, from time to time, to borrow and raise, or obtain as an advance, such sum or sums of money as the Governor in Council may from time to time direct and determine, and to take up the same sum or sums of money from time to time, by the sale, hypothecation, or mortgage of debentures (thereinafter and hereinafter referred to as shortdated debentures) as such Agents may deem expedient: And whereas by the seventh section it is also enacted that every such short-dated debenture shall bear interest after such rate, and be for such sum and in such form, and with or without coupons attached, and subject to the said Act, shall be signed on behalf of the colony, and be transferable and negotiable in such manner as such Agents shall prescribe: And by the eighth section it is also enacted that the interest and principal of every such short-dated debenture shall be payable at such times and places as such Agents shall prescribe, provided that the principal moneys secured by any such debenture shall not be made payable at a later period than seven years after the date of issue thereof: Now, therefore I, Sir William Francis Drummond Jervois, the Governor of the Colony of New Zealand, in exercise and pursuance of the power conferred upon me by the sixth section of the said Act, and with the advice and consent of the Executive Council of the said colony, do hereby appoint Sir Penrose Goodchild Julyan, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, a Companion of the Most Honourable Order of the Bath, late one of the Crown Agents for the colonies ; and Sir Francis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, to be Agents, with full power and authority for them, in and during the year one thousand eight hundred and eighty-five to' borrow and raise, or obtain as an advance, the sum of one million pounds sterling, and to take up the same sum in short-dated debentures from time to time, either by the sale, hypothecation, or mortgage of such short-dated debentures as the said Agents shall deem expedient, and with all the powers and authorities conferred on or vested in such Agents by the said Act for the purposes aforesaid, so far as respects the said sum of one million pounds sterling; and with the like advice and consent as aforesaid do hereby direct and determine that the sum of one million pounds sterling shall be borrowed and raised, or obtained as an advance, under the sixth section of the said Act. Forster Goeing, Clerk of the Executive Council.
No. 22. The Colonial Treasueer to the Loan and Stock Agents. Gentlemen, — The Treasury, Wellington, 11th October, 1884. I have the honour to enclose you a copy of the Financial Statement. A long discussion took place upon it, and a hostile resolution was moved on going into Committee of Supply; only 4 members voted for it, whilst 51 voted for the Government. Beferring to the telegrams which have passed between us, copies of which have been sent to you under separate cover I now confirm them, and in accordance with your opinions will agree to the new loan, together with the third million, being brought out as early as possible after the new year, and not attempt the conversion of the consolidated this year except to the extent hereinafter left to your discretion. 2—B. 11.
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I may, however, impress upon you the importance of proceeding with the conversion as early as advisable next year, though I recognize the force of your arguments with regard to the large amounts of inscribed stock remaining for sale. It was to avoid this that I suggested the three and one-half per cents ; indeed, it seems to me that, in view of the fact that the four per cent, inscribed stock will in future probably remain at a premium, there is less room for profit on conversion into four per cent, stock than into three and one-half per cent. I, however, merely suggested the point to your judgment, and it is possible that you may yet see reason to reconsider it before we resume active operations in the way of conversion next year. I should hardly think it would be necessary to wait until the Bank of England shall have cleared off its stock, and hope you will be able to see your way to begin soon after the new loan has been launched. I shall be glad to know whether you agree with me as to the policy of making the operation, whenever it takes place, a sharp and short one. lam inclined to think that we should offer something more than the market equivalent but nothing approaching the actuarial equivalent, and leave it open to the acceptance of the holders for a limited time. It might be advisable to arrange with a syndicate for the conversion of a considerable amount, as you arranged with one lately for the sale of the converted short-dated debentures. If you could start with the certainty of converting a million, you might trust to a great deal more being converted in the open market. I think it very important for conversions to take place before the Ist March—-the date of the annual drawings—as it must year after year come more home to the holders of these debentures how great is the risk they run of their debentures being drawn, and paid off at par. As I have said, we cannot give anything like the actuarial equivalent, but we can give an improvement on the market equivalent : for example, as I am informed now, there is scarcely a margin of two or three per cent., if so much, between the respective values of the consolidated and the four per cent, inscribed stock, so that, if you gave 104 to 106 of four per cent, for 100 of five per cent., you would give on the market basis very good terms. You might, instead of a syndicate, and with a view to immediate operations, arrange with the Bank of England to find the money to buy up, before the announcement of terms is made public, all the consolidated stock that could be obtained within the margin that you will afterwards be prepared to give—say, two or three per cent, over the market, not actuarial, equivalent. You would thus, before you made the terms public next year, start with a good supply of stock. If you are enabled by the bank to purchase up a large quantity, there would be no necessity for a syndicate, and of course we should prefer the operation through the bank, as it would be likely to prove more economical. If you thought well of this, the bank might begin to buy at once in quantities that would not raise the price to the prejudice of the operation on a larger scale when you are prepared to make it public. I shall be glad to have your views on the subject as early as possible. Meanwhile, allow me to thank you for the promptness with which you have replied to my telegrams. I have, &c, Julius Vogel. Sir Penrose G. Julyan, K.C.M.G., C.8., Sir F. Dillon Bell, K.C.M.G., Loan Agents and Stock Agents for New Zealand, London.
Copies of Telegrams enclosed in No. 22. The Colonial Teeasueee to the Loan Agents. Wellington, 29th September, 1884. Would like immediate conversion consolidated loan. How much inscribed stock should be offered to secure holders bringing in their debentures freely ? Am favourable giving only short option. Propose authorizing new loan million and half. Could you negotiate before Christmas ? Probably not necessary then float third million till late next year; or would it be better float two and half millions January ? Fear waiting, other colonies borrowing so largely. Beply, advise all points.
The Colonial Treasurer to the Loan Agents. Wellington, 29th September, 1884. Addition to-day's message. To save competing with unplaced inscribed stock am disposed convert consolidated loan into three and half stock. Also issue new loan with option convert into three and half. Advise. Address all telegrams concerning finance, "Treasurer, New Zealand."
The Loan Agents to the Colonial Teeasueee. (Beceived Ist October, 1884.) Youe financial proposals. Firstly, as to converting Consolidated Loan, 1867. Beuter having announced that you propose to raise further loan, feel sure any operation Consolidated Loan, 1867, before you offer loan, extremely hazardous. Cannot possibly say what price would induce holders come in freely, but, anyhow, addition beyond actuarial equivalent of rate of interest must, even at four per cent., be highly injurious to new loan. As to converting into three and half, we have no hesitation saying would certainly fail, on any terms you could afford to give. We therefore strongly advise deferring any conversion until new loans placed. Secondly, as to loans. We believe that, provided you did not come upon market again with further new loans within twelve months, we might place whole two millions and a half. We consider most desirable not make separate operations, but bring out whole January. Thirdly, as to option to exchange into three and half. Are convinced that any attempt borrow at that rate of interest would prove disastrous. Not only are large amounts of inscribed stock still in speculators' hands, but you would be
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competing with three strongest colonies, which will probably come for thrice five millions at three and half between now and January. Now, while these issues are strongly against your attempting three and half, they are favourable to your four per cent. London, 30th.
The Colonial Treasurer to the Loan Agents. Loan Agents, London. Wellington, 7th October, 1884. Unless you act on cable authority new loan powers only reach you December. If only new loan floated would require additional million July. Perhaps, therefore, better float two millions and a half January. Have arranged wants till then, but regrettable lose good market. Beconsider expediency immediate conversion Consolidated Loan, 1867. Must base conversion on market, not actuarial equivalent. If conversion effected market bound support new loan. Advise all points, will accept your judgment.
The Loan Agents to the Colonial Teeasurer. (Beceived 10th October, 1884.) Conversion of Consolidated Loan, 1867. Benewed reflection only confirms our opinion. It is true that any conversion must be based upon market, but equivalent must be starting point for estimating necessary inducement. Beal point, however, is that—counting, firstly, £200,000 due Bank of England ; secondly, £745,000 under agreement with Bank of England, for paying 5 per cent. 5-30s ; thirdly, £50,000 for expenses of recent conversion ; fourthly, third million ; fifthly, new million and a half; there will be three millions and a half of new inscribed stock to place during next year. Now, any prior conversion of Consolidated Loan, 1867, by adding to volume of inscribed stock, and multiplying daily operations market, would further compete against new loans ; and no saving you could make in sinking fund meanwhile would be worth setting against that danger. We therefore feel convinced still that should not attempt any conversion until new loan safe. Lastly, respecting cable authority, would be useless, because Inland Bevenue would not enrol deeds creating new inscribed stock without seeing Act and warrants. London, 9th.
No. 23. The Agent-General to the Peemiee. Sib, — 7, Westminster Chambers, London S.W., 6th September, 1884. The approaching expiration of the arrangement I made in 1881 with Sir Penrose Julyan makes it necessary that his future position should be settled. You are aware that he has been acting as Loan Agent, Stock Agent, Trustee of the Sinking Fund, Agent under the Bevenues Act for guaranteed debentures, and Commissioner of the Public Account. In all these capacities it is obviously necessary there should be a second name ; and the great skill, judgment, and sagacity which Sir Penrose has shown, together with his long services to the colony, lead me to assume that the Government will, as a matter of course, desire to continue his employment. If I am correct in this, I should be glad to receive a telegram at once, as you will remember that the existing arrangement with Sir Penrose ends in November ; and it will be necessary, at the same time, for the Government either to settle his remuneration themselves or to give me the power (as before) to arrange it with him here. It will be in your recollection that the scale of remuneration settled by Sir John Hall for the Stock Agents, before I came to England, was a commission of T \- per cent, on all conversion operations, provided that no Agent should receive more than £2,000 in any one year. This I reduced, first, to a maximum payment of £5,000 for the three Stock Agents, and then (on the revocation of their warrants) to £2,000 for Sir P. Julyan. A commission of T 3^ per cent, would have involved payment of the following amount for the conversions recently effected, viz. : — On the £1,832,000 of Treasury bills ... ... ... £4,579 10 0 On the £3,558,300 of 4J- and 5-per-cent. 5-30s (main operation) 8,895 15 0 On the £745,600 of 5-per-cent. 5-30s (last operation) ... 1,864 0 0 Total £6,135,900 £15,339 5 0 But, under Sir J. Hall's limitation to £2,000 for each Agent, the total amount paid would have been £6,000 last year and £1,864 this year, or, together, £7,864. Under my arrangement with Sir P. Julyan these conversions, and the two millions of loan raised besides, have together only cost £2,000, which is at the rate of a fraction under -^ per cent, on the total amount of £8,135,900 covered by all the operations. I have, &c, The Hon. the Premier, Wellington. F. D. Bell.
No. 24. The Agent-Geneeal to the Premier. Sib, — 7, Westminster Chambers, London, S.W., 11th September, 1884. After writing to you on the 6th about the position of Sir Penrose Julyan, I thought it would be as well for him to let me know his own views in time for this mail respecting remunera-
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tion, if his services were to be retained. I accordingly asked him to state them, and I have just received the letter, copy of which is enclosed herewith. I have only one remark to make on it, which is that, while Sir Penrose is quite correct in saying, what indeed is familiar to the Government, the £2,000 I arranged he should receive was only fixed in relation to conversion operations; I have never understood that he had any other claim upon the Government with respect to past transactions. I have, &c, The Hon. the Premier, Wellington. F. D. Bell.
Enclosure in No. 24. Sir P. G. Julyan to the Agent-Geneeae. Dear Sic Francis Bell, — Cornwall House, Brompton Crescent, S.W., 10th September, 1884. In a recent conversation you reminded me that the period for which it was arranged that I should act, jointly with yourself, as Agent for the conversion of the public debts of New Zealand in stock would shortly expire, and you expressed a wish that I should name the terms upon which I might be willing to continue my services to your Government for a further period. In compliance with that wish permit me to remind you that, although the arrangement which you invite me to renew was exclusively confined to operations in stock, I have long been acting in several other capacities : (1) As Stock or Conversion Agent, (2) as Agent for raising new loans, (3) as one of the Sinking Fund Trustees, (4) as Commissioner of the Public Account, and (5) as Agent for dealing with debentures guaranteed by the Imperial Government. In the first of these capacities I have, as you are aware, received during the last three years, an honorarium of £2,000, equal to £666 13s. 4d. per annum. Throughout the same period I have not received anything for fulfilling the responsible duties devolving upon me in respect of the other offices. The uncertainty as to the possible extent of future borrowings renders it difficult to name a fixed amount for new loans, unless it be done in the shape of a percentage on the sums borrowed. This is the usual way of dealing with such operations; but, bearing in mind the various capacities in which I am called upon to act for your Government, and the difficulty in apportioning to each its proper share of responsibility and value, I think it would be preferable to include everything in one fixed annual sum, in the shape of a retaining fee ; and I venture to name £800 per annum as a reasonable fee to cover all the foregoing services. I would further propose that such arrangement should be considered as extinguishing all claims in respect of the past, and that it should continue in force for four years from the termination of the present one. No one knows better than yourself how much the success of great financial operations, such as we have had to conduct, depends on the judgment and experience of your financial adviser; how great the responsibility involved, and how comparatively insignificant is the amount of the retaining fee compared with the advantages that sound advice in such matters is calculated to insure. Believe me, &c, P. G. Julyan.
No. 25. The Colonial Tbeasueeb to the Agent-Geneeal. Agent-General, London. Wellington, 3rd November, 1884. Ask Julyan reply following: Do you consider you have acted merely as adviser to Agent-General, or that you have had equal power and responsibility. We notice you have only signed some letters. In arrangement you now propose, are you willing exercise equal power, judgment, responsibility, and burden correspondence in all matters connected with loan conversion and negotiation ?
No. 26. Sir Penrose Julyan to the Colonial Treasures. Treasurer, New Zealand. (Beceived 7th November, 1884.) Have not acted merely as adviser. Have had equal power and responsibility as my colleague in loans and conversions. Am not aware that have omitted to sign any letters on these subjects. In proposed arrangement am willing to take equal share in responsibility, &c, appertaining to loans conversion and negotiation. Julyan, , mmm _______ London, 6. No. 27. The Colonial Teeasueee to the Loan Agents. Gentlemen,— Wellington, Bth November, 1884. Adverting to my letter No. 5 of the 11th ultimo, advising you that I had drawn upon you at 90 days' sight for £225,000 through the Bank of New Zealand, being part of a sum of £500,000 which the bank had agreed to advance to the Government, I have now the honour to inform you
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that I have this day drawn upon you at 75 days' sight for the further sum of £100,000, in two drafts for £50,000 each, and to request that you will be so good as to protect these drafts also. I have, &c, The Loan Agents, London. Julius Vogel.
No. 28. The Agent-General to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 23rd September, 1884. I occasionally receive applications from holders of 10-40 bonds, bonds of the still outstanding provincial loans, and other bonds of the public debt, asking on what terms they could convert them into 4 per cent, inscribed stock. It seems to me that it would be very advisable to take advantage of subsection (4) of section 4 of the Stock Act, and let conversions of the kind I am referring to be " effected by arrangement with the holders of existing securities." If you concur in this view, as the warrants of the sth November, 1881, appointing the present Stock Agents contain sufficient power for such conversions, and they might be quietly made on advantageons terms, I should be very glad to receive a cablegram giving your assent for our guidance. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 29. The Agent-Geneeal to the Colonial Teeasueee. Sir, — 7, Westminster Chambers, London, S.W., 9th October, 1884. I transmit to you herewith the Stock Agents' Conversion Account in connection with the conversion of the 5-30 and short-dated debentures up to 30th September. There are still several payments to be made, and I hardly expect now that the account can he finally closed before the end of the year. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 30. The Colonial Treasurer to the Stock Agents. Gentlemen, — Treasury, Wellington, 21st November, 1884. I have the honour to call your attention to a letter of Sir F. D. Bell's, dated the 23rd September last, No. 418, a copy of which I enclose. As it seems to me desirable that the subject should be brought within the range of the correspondence of the Stock Agents, I am replying to it to the agents jointly. The suggestion made by Sir F. D. Bell is a very important one, and I was at first inclined to immediately telegraph my approval. But, on further consideration, it seemed to me better to write to you to bring to your notice certain points —not with the view of interposing obstacles in the way of carrying out Sir E. D. Bell's suggestion, but with the purpose of surmounting them as far as might be thought desirable. The first consideration seems to me to be the source from which these miscellaneous conversions will be made. You cannot give inscribed stock for debentures brought in at odd times without making previous arrangements to create it; because necessarily the stock which is given will require to be notified to the Stock Exchange with .a view to its quotation. This difficulty might be got over by a reserve being created for the express purpose of meeting miscellaneous conversions; or it might be surmounted by using the power contained in the Consolidated Stock Act just passed (as to which I am writing you separately), by which interim short-dated debentures can be created. Indeed, my object in inserting that power into the Act was chiefly to meet the case of anticipating large conversion operations. It might, for example, have been found convenient to give the Bank of England short-dated debentures for the advances that institution is temporarily making for redeeming the 5 per cent. 5-30 loan. The other obstacle which suggests itself to my mind is, that if a continuous conversion is proceeded with in the way proposed by Sir F. D. Bell, would it not interfere with the larger operations which might from time to time be undertaken ? Such larger operations would probably be much more important than continuous ones ; but persons knowing that continuous operations were proceeding might not attach sufficient importance to the larger ones. As regards stocks, concerning which large operations were contemplated, I have already, in a previous letter, suggested the possibility of making arrangements for purchasing, some little time in advance, parcels not too large to raise the market price, but which would help when the scheme of conversion was announced. I should like you to well consider the whole subject; and, if you still see your way to carry it out, it will have my cordial approval. lam sure, however, you will not come to a conclusion without considering the arguments in both directions. I have, &c, The Stock Agents for New Zealand, London. Julius Vogel.
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No. 31. The Agent-Geneeal to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 9th October, 1884. It is most essential, having regard to the issue of 2-J- millions of new stock instead of only one million in January, that the "statement" with which I shall have to accompany the Bank of England prospectus should contain the very latest particulars as to the state of the revenue, and especially as to the yield of the railways, during the calendar year 1884. I shall, therefore, be very glad if you will cause these particulars to be telegraphed to me as fully as possible in the last days of December : in a matter of such great importance the number of words in a telegram is immaterial, compared with the effect which the character of the statement accompanying the prospectus may have upon the market. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 32. The Loan Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 4th October, 1884. We had the honour to receive, on the 29th and 30th September, your two telegrams explaining your wishes respecting the conversion of the outstanding debentures of the consolidated loan of 1867, and the issue of a new loan of £1,500,000. Our attention had already been drawn to both these questions by the publication here, some time before, of a Beuter telegram containing a summary of your financial statement in the House of Bepresentatives on the 16th September; so that we had an opportunity of giving much consideration to the proposals, in anticipation of the explanation we presumed we should soon receive from you, and were thus enabled to answer, without delay, the questions which you put to us in your telegrams. We thought it desirable to make our answer very full, and, having done so, it hardly seems necessary to supplement it by further explanations in a letter now, especially as whatever decision you may have come to will have been made long before such explanations could be in your hands. Copies of the telegrams are hereto annexed. We have, Sec., P. G. Julyan,) t . , The Hon. the Colonial Treasurer, Wellington. F. D. Bell, J Jjoan ABents-
Copies of Telegrams enclosed in No. 32. The Colonial Treasurer to the Loan Agents. Wellington, 29th September, 1884. Would like immediate conversion consolidated loan. How much inscribed stock should be offered to secure holders bringing in their debentures freely ? Am favourable giving only short option. Propose authorizing new loan million and half. Could you negotiate before Christmas ? Probably not necessary then float third million. till late next year; or would it be better float two and half millions January ? Fear waiting, other colonies borrowing so largely. Beply, advise all points.
The Colonial Treasurer to the Loan Agents. Wellington, 29th September, 1884. Addition to-day's message. To save competing with unplaced inscribed stock am disposed convert consolidated loan into three and half stock. Also issue new loan with option convert into three and half. Advise. Address all telegrams concerning finance, "Treasurer, New Zealand."
The Loan Agents to the Colonial Teeasueee. (Beceived Ist October, 1884.) Youe financial proposals. Firstly, as to converting Consolidated Loan, 1867. Beuter having announced that you propose to raise further loan, feel sure any operation Consolidated Loan, 1867, before you offer loan, extremely hazardous. Cannot possibly say what price would induce holders come in freely, but, anyhow, addition beyond actuarial equivalent of rate of interest must, even at four per cent., be highly injurious to new loan. As to converting into three and half, we have no hesitation saying would certainly fail, on any terms you could afford to give. We therefore strongly advise deferring any conversion until new loans placed. Secondly, as to loans. We believe that, provided you did not come upon market again with further new loans within twelve months, we might place whole two millions and a half. We consider most desirable not make separate operations, but bring out whole January. Thirdly, as to option to exchange into three and half. Are convinced that any attempt borrow at that rate of interest would prove disastrous. Not only are large amounts of inscribed stock still in speculators' hands, but you would be competing with three strongest colonies, which will probably come for thrice five millions at three and half between now and January. Now, while these issues are strongly against your attempting three and half, they are favourable to your four per cent. London, 30th,
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No. 33. The Loan Agents to the Colonial Teeasueee. Sib, — 7, Westminster Chambers, London, S.W., 9th October, 1884. Since writing to you on the 4th, we have received your further telegram, desiring us to reconsider the expediency of immediately converting the consols. We have accordingly gone again with great care into the matter, with every desire to meet your wishes if we could see our way to do so without danger ; but, after repeated consultation,, we are still firmly persuaded that until the new money is raised it would not be safe to attempt any conversion, and we are now sending you a message to that effect. Copies of the telegrams are annexed. We have, &c, P. G. Julyan,) t » , The Hon. the Colonial Treasurer, Wellington. F. D. Bell, | ljoan AS ente-
Copies of Telegrams enclosed in No. 33. The Colonial Teeasueee to the Loan Agents. Loan Agents, London. Wellington, 7th October, 1884. Unless you act on cable authority new loan powers only reach you December. If only new loan floated would require additional million July. Perhaps, therefore, better float two millions and a half January. Have arranged wants till then, but regrettable lose good market. Beconsider expediency immediate conversion Consolidated Loan, 1867. Must base conversion on market, not actuarial equivalent. If conversion effected market bound support new loan. Advise all points, will accept your judgment.
The Loan Agents to the Colonial Teeasueee. (Beceived 10th October, 1884.) Conveesion of Consolidated Loan, 1867. Benewed reflection only confirms our opinion. It is true that any conversion must be based upon market, but equivalent must be starting point for estimating necessary inducement. Beal point, however, is that—counting, firstly, £200,000 due Bank of England ; secondly, £745,000 under agreement with Bank of England, for paying 5 per cent. 5-30s ; thirdly, £50,000 for expenses of recent conversion ; fourthly, third million ; fifthly, new million and a half—there will be three millions and a half of new inscribed stock to place during next year. Now, any prior conversion of Consolidated Loan, 1867, by adding to volume of inscribed stock, and multiplying daily operations market, would further compete against new loans ; and no saving you could make in sinking fund meanwhile would be worth setting against that danger. We therefore feel convinced still that should not attempt any conversion until new loan safe. Lastly, respecting cable authority, would be useless, because Inland Bevenue would not enrol deeds creating new _ inscribed stock without seeing Act and warrants. London, 9th.
No. 34. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 21st November, 1884. Aeeange with Julyan continue act under conditions recent telegrams. Payment cover all services.
No. 35. The Colonial Teeasueee to the Loan Agents. Gentlemen, — Treasury, New Zealand, Wellington, 22nd November, 1884. I attach at foot copy of telegram to the Agent-General, and of Sir Penrose Julyan's reply thereto. The reason the information was sought from Sir Penrose Julyan was because in some of the letters of the Agent-General he has been referred to as the " adviser," &c.; and because there are a great many letters of the Agent-General on the subjects of conversion and loan negotiation without Sir Penrose Julyan's signature. In some of these reference has been made to the opinions jointly held by the Loan or Stock Agents, but it has not been quite clear if the joint opinion was merely comprised in the particular passage or extended to the whole of the letter. On the other hand there have been passages in some of the letters which, from previous knowledge of Sir Penrose Julyan's opinions, I could scarcely suppose altogether represented his views. There was thus an element of doubt as to whether Sir Penrose considered he was acting with full joint powers or that he was merely called in to advise when his advice was desired. The answer of Sir Penrose Julyan sets the matter at rest, and shows that the letters to which I have referred were not meant to be a joint production; indeed if Sir Penrose's telegram is to be judged literally he has not seen them. In thus referring to the past, however, I beg you to observe that I do not desire to raise any controversy concerning it. My reference to it is simply to explain the views of the Government— to whom this letter has been submitted—as to the future ; and also to explain the telegrams at foot. Equally, you must be good enough to understand, lam not making any reflection on the Agent-General's letters, nor do I wish it to be understood that there is any objection whatever to either of the Agents addressing the Government separately when he deems it desirable to do so. But
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what I do wish to impress on you is that there should be no room for doubt concerning the character of any letter addressed to the Government. It should be clearly apparent from the letter whether or not it is a joint production and meant to represent joint views. You will, I hope, see that this is reasonable. Parliament, the late Government, and you yourselves, have concurred in the opinion that the Government should exercise a considerable amount of control over the financial operations at Home. The present Government adopts the same view ; and obviously, therefore, it is of great importance to it to know to what extent it is to consider that the opinions it receives are those of the Agents jointly or severally. Whilst I have to ask you, therefore, to let there be no doubt on the matter in future, I am far from wishing to subject you to any irksome restraint. I can understand that having settled the terms of a letter, there may be a physical difficulty in getting it copied and obtaining the signature of each Agent in time for a mail. Again, a letter may be merely a cover to a routine enclosure ; but these obstacles have been always overcome under former Agencies. The signature can be for " Self and Co-Agent," or, in the body of the letter, it can be explained why only one Agent signs. In short, Ido not think there will be any difficulty in future in making it clear that letters are or are not from the Agents jointly; and I hope you will consider that what lam asking is reasonable. I should like you to inform me if you think it would be convenient for the Agents to write in their double capacity of Stock Agents and Loan Agents. The functions are so often intermixed that at times there must be difficulty in keeping them separate. I have, &c, Julius Vogel.
Copies of Telegrams referred to in No. 35. The Colonial Treasurer to the Agent-Geneeal. Agent-General, London. Wellington, 3rd November, 1884. Ask Julyan reply following : Do you consider you have acted merely as adviser to Agent-General, or that you have had equal power and responsibility. We notice you have only signed some letters. In arrangement you now propose, are you willing exercise equal power, judgment, responsibility, and burden correspondence in all matters connected with loan conversion and negotiation ? Sir Peneose Julyan to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 7th November, 1884.) Have not acted merely as adviser. Have had equal power and responsibility as my colleague in loans and conversions. Am not aware that have omitted to sign any letters on these subjects. In proposed arrangement am willing to take equal share in responsibility, &c, appertaining to loans conversion and negotiation. Julyan, London, 6.
No. 36. The Colonial Teeasueee to the Agent-General. Sib, — Treasury, New Zealand, Wellington, 22nd November, 1884. With regard to your letters, 391, dated the 6th September, and 407 of the 11th idem, I have cabled you, " Arrange with Julyan continue act under conditions recent telegrams. Payment cover all services." The Government have not thought it necessary to specify terms, inasmuch as those proposed by Sir Penrose Julyan do not seem excessive. I attach copy of telegram to you, and Sir Penrose Julyan's answer. These will explain to you the wording of the above telegram. I will in separate letter addressed to the Loan Agents explain the object of the telegram. I have, &c, The Agent-General for New Zealand, London. Julius Vogel.
Copies of Telegrams referred to in No. 36. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 3rd November, 1884. Ask Julyan reply following : Do you consider you have acted merely as adviser to Agent-General, or that you have had equal power and responsibility. We notice you have only signed some letters. In arrangement you now propose, are you willing exercise equal power, judgment, responsibility, and burden correspondence in all matters connected with loan conversion and negotiation ?
Sir Peneose Julyan to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 7th November, 1884.) Have not acted merely as adviser. Have had equal power and responsibility as my colleague in loans and conversions. Am not aware that have omitted to sign any letters on these subjects. In proposed arrangement am willing to take equal share in responsibility, &c, appertaining to loans conversion and negotiation. Julyan, London, 6.
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No. 37. The Colonial Teeasueee to the Loan Agents. Gentlemen, — 22nd November, 1884. I have the honour to transmit herewith two Orders in Council, made under the provisions of "The New Zealand Loan Act, 1884," espy enclosed: one authorizing the raising of the full amount of the loan, £1,500,000, and appointing yourselves to be Agents for the purpose; the other is an authority for you to raise the loan by short-dated debentures. Sir P. G. Julyan and Sir F. D. Bell, Julius Vogel. Agents for New Zealand Loans, London.
Enclosure 1 in No. 37. Wm. F. Deummond Jeevois, Governor. OBDEB IN COUNCIL. At the Government Buildings at Wellington, this 21st day of November, 1884. Present: The Hon. the Peemiee peesiding in Council. Wheeeas by "The New Zealand Loan Act, 1884" (hereinafter called " the said Act "), it is, among other things, enacted that it shall be lawful for the Governor in Council to appoint any two or more persons he may think fit to be Agents for the purpose of raising and managing the loan authorized to be raised under the said Act, and in their appointments to define the relative powers of such Agents, and that such Agents shall have full power and authority to borrow and raise, in Great Britain or elsewhere, by bonds, debentures, scrip, or otherwise, such sum or sums, not exceeding one million five hundred thousand pounds sterling in the whole, as the Governor in Council may from time to time or at any time, direct or determine, for all and any of the purposes expressed in the Schedule thereto, or the payment or repurchase of short-dated debentures issued under the said Act, or any other purposes authorized by the said Act: And whereas it is expedient that the said loan so authorized to be raised should be raised under the said Act for the purposes therein mentioned, and that Agents should be appointed for the purpose, as hereinafter provided: Now, therefore, His Excellency the Governor of the Colony of New Zealand, in exercise and pursuance of the powers and authorities vested in him by the said in part recited Act, and by and with the advice and consent of the Executive Council of the said colony, doth hereby direct and determine that the sum of one million five hundred thousand pounds sterling shall be borrowed and raised under the provisions of the said Act : And in further exercise and pursuance of the powers and authorities aforesaid, and with the like advice and consent as aforesaid, His said Excellency doth hereby appoint Sir Penrose Goodchild Julyan, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, late one of the Crown Agents for the Colonies, and Sir Francis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, to be Agents for the purpose of raising and managing the said loan hereby ordered and determined to be raised, with full power and authority to such Agents to borrow and raise, by bonds, debentures, scrip, or otherwise, the said sum of one million five hundred thousand pounds sterling as aforesaid, and with full power and authority to such Agents to prescribe the mode and conditions of the repayment of such sum, and the time of such repayment, and, subject to the provisions of the said Act, the rate of interest thereon, and the time and place or places when and where such principal and interest shall be made payable, and with full power and authority to such Agents to agree, as often as occasion may require, that debentures issued by them shall be converted into stock created or issued under " The New Zealand Consolidated Stock Act, 1877," and any Act amending the same, and either to specify the terms of such conversion or arrange that such terms shall be subsequently agreed upon, and also with full power and authority to such Agents to delegate wholly or partly to any two or more other Agents the powers hereby and by the said Act vested in the said Agents, subject, however, to such conditions as the Agents hereby appointed shall think fit, and generally to have, hold, and exercise all such powers and authorities as by the said Act may be had, held, and exercised by the Agents appointed thereunder in respect of the moneys hereby authorized to be borrowed and raised. FOESTEE GOEING, Clerk of the Executive Council.
Enclosure 2 in No. 37. Wm. F. Deummond Jeevois, Governor. OBDEB IN COUNCIL. At the Government Buildings, at Wellington, this 21st day of November, 1884. Present: The Hon. the Peemiee peesiding in Council. Wheeeas by the sixth section of "The New Zealand Loan Act, 1884" (hereinafter called "the said Act"), it is enacted that, pending the raising of moneys thereinbefore authorized to be raised under the said Act, it shall be lawful for the Governor in Council to appoint any two or more persons he may think fit to be Agents, and in their appointments to define the relative powers of such Agents, who shall have full power and authority from time to time to borrow and raise, or obtain as an advance, such sum or sums of money as the Governor in Council may from time to time direct and determine, and to take up the same sum-or sums of money from time to time by the sale, hypothecation, or mortgage of debentures (thereinafter and hereinafter referred to as short3—B. 11.
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dated debentures) as such Agents may deem expedient: And whereas by the seventh section it is also enacted that every such short-dated debenture shall bear interest after such rate, and be for such sum and in such form, and with or without coupons attached, and, subject to the said Act, shall be signed on behalf of the colony, and be transferable and negotiable in such manner as such Agents shall prescribe ; and by the eighth section it is also enacted that the interest and principal of every such short-dated debenture shall be payable at such times and places as such Agents shall prescribe, provided that the principal moneys secured by any such debenture shall not be made payable at a later period than seven years after the date of issue thereof: Now, therefore, His Excellency the Governor of the Colony of New Zealand, in exercise and pursuance of the power conferred upon him by the sixth section of the said Act, and by and with the advice and consent of the Executive Council of the said colony, doth hereby appoint Sir Penrose Goodchild Julyan, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, late one of the Crown Agents for the Colonies, and Sir Francis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, to be Agents, with full power and authority for them to borrow and raise, or obtain as an advance, the sum of one million five hundred thousand pounds sterling, and to take up the same sum in short-dated debentures from time to time, either by the sale, hypothecation, or mortgage of such short-dated debentures, as the said Agents shall deem expedient, and with all the powers and authorities conferred on or vested in such Agents by the said Act for the purposes aforesaid; and, with the like advice and consent as aforesaid, doth hereby direct and determine that the sum of one million five hundred thousand pounds sterling shall be borrowed and raised, or obtained as an advance, under the sixth section of the said Act. Foesteb Goeing, Clerk of the Executive Council.
No. 38. The Colonial Teeasueee to the Loan Agents. Gentlemen, — Wellington, 24th November, 1884. I have the honour to draw your attention to the enclosed two Acts: one to authorize a loan of a million and a half; the other to extend the operation of " The New Zealand Consolidated Stock Act, 1877." As regards the first, separate authorities will be sent to you to negotiate the loan, and the correspondence which has already taken place between us shows that the Government and yourselves agree that it would be desirable that the loan should be floated early in January. I beg you to observe that this loan is not the outcome of any new policy. Obligations of various kinds already existing must have made it imperative on any Government to have proposed a new loan, and Ido not believe that any Government would have proposed one of smaller amount. The Three-Million Loan will be practically exhausted before the end of the present financial year; whilst numberless liabilities of all kinds require to be satisfied and extended, unless the money hitherto expended is to be wasted. I wish to impress upon you, in case of any adverse criticism, what I have stated, that the loan is not to be regarded as a new departure, but rather as a fulfilment of obligations already entered into. " The Consolidated Stock Act, 1884," is meant to make provision for further converting the loans of the colony, and especially to enable the revenue to be materially relieved by restoring to it the annual increase of the sinking funds. Broadly stated, the intention of the Act is, that the indebtedness of the colony on the 31st March last should be taken as the standard indebtedness, and that any increase of the sinking fund, from whatever cause it may arise, should be deemed to represent part of the loan to which it belongs. Thus, if the sinking fund from all sources were to increase during the present year to the extent of £250,000, the Colonial Treasurer is authorized to issue securities to that amount to be redeemed or converted whenever the loans are converted and the sinking funds set free. You will see, therefore, that the public indebtedness will practically remain the same as it was on the 31st March last. The increase will be exactly covered by the increase of the sinking funds ; but when the sinking funds are set free the amounts will be available for paying off the increased liabilities. You will observe that the normal action of the sinking fund is in no way interfered with, and it is further provided that no sinking fund shall be set free until the whole of a loan is converted or paid off; or, in the event of a loan being only partially paid off or converted, no sinking fund will be available for use, except what there may be in excess of the whole balance of the loan outstanding. So that it is impossible to say that the Act proposes to interfere in any way with the obligations of the colony, or the rights of the holders of debentures. You will observe the clause which enables us to make a moderate amount of addition to the capital in the case of converting guaranteed debentures. This meets the difficulty pointed out by you in the event of its being decided to convert guaranteed debentures. You are, however, not to suppose that I intend at present to carry out the proposal to redeem the 1856 debentures and use the sinking fund, which you have advised against. I will defer to your advice for the present; but you will easily recognize that, later on, when the debentures are nearing maturity, it may then be an open question as to whether to renew or convert the whole or part of the outstanding debentures, or to allow the proceeds of the sinking fund to take them up. This matter can stand over until the loan is nearing maturity, or until some of the holders come in and ask us to make a conversion. It was thought desirable, however, to put the power into the Bill. As regards the general question of using the accrued sinking funds, this is not a matter calling for early decision. Apart from the guaranteed loans we should determine, as opportunity serves, to convert the loans bearing sinking funds ; and whether we do so to the full amount outstanding, or
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to such an amount less the sinking fund which has accrued up to the 31st March last, would be a matter as to which you can from time to time advise. If a loan were now maturing, and the question of converting it or paying it off by accrued sinking fund were to arise, I think you would agree with me that it would be much less likely to disturb the market to offer to convert the loan outright than to throw upon the market for sale the accrued sinking fund to provide the funds. We may, however, leave this question for further consideration, as it will be very much regulated by the various conditions prevailing for the time being. As I have already written, I should like you as early as possible to provide for the conversion of the consolidated debentures. I suggested in a former letter that, before you made your proposed operation public, you might make arrangements for privately buying up parcels of debentures as they are offered in the market, without unduly increasing the market rate and making large operations more difficult. This, of course, must depend upon your own judgment. I recognize it will require very nice care and discretion to decide as to whether or not to carry out such operations. Singularly enough, my letter is crossed by one from Sir F. D. Bell, in which he suggests something of the same kind, in the way of converting any debentures offered for conversion. I have replied to that in a separate letter, pointing out my fear that such continuous operations might interfere with the large operations from time to time, and asking you to advise me further on the subject. It may, however, be in the direction of Sir F. D. Bell's suggestion, not exactly to convert debentures coming in, but to buy them up ; providing those debentures were of the kind which it was proposed shortly to include in a conversion operation. I do not propose to offer for sale any of the debentures you will create this year on account of the increase of the sinking fund. We will take them up in the colony unless the Sinking Fund Commissioners are able to take up any part of them, in which case they can have what they require. But it would be better for the Sinking Fund Commissioners to take up the inscribed stock belonging to the Trust Funds which you have for sale, leaving the Trust Funds here free to make investments in the colony with the amounts placed at their disposal by the sale you make. I have, &c, The Agents for New Zealand Loans and Stock, London. Julius Vogel. P.S.—I hope it will not be necessary for you to give any assurances regarding the future when you negotiate the two and a half millions. You will be, of course, aware that the million for the North Island Trunk Bailway still remains unnegotiated. We are proceeding with that railway, and would probably require the loan to be negotiated about July next. But if you find it absolutely necessary to give any pledge not to come in the market again during 1885, I suppose there would be no difficulty in obtaining temporary advances on the North Island Trunk Bailway Loan in anticipation of its negotiation in 1886.— J.V.
No. 39. The Colonial Teeasueee to the Loan Agents. Gentlemen, — 24th November, 1884. I have the honour to acknowledge the receipt of your letters of the 4th and 9th ultimo, Nos. 426 and 435. Other correspondence which has taken place renders it unnecessary to further reply to these letters. I may, however, observe that the cablegram received from the Agent-General (a copy of which I attach) after the receipt of your cablegram of the 30th September leads me to think you were inclined to modify your views. Hence my asking you to do so in my cablegram of the 7th October. The Agent-General's message you will observe was headed "Loan Agents' Message." It came between the two of which you send copies, but you sent no copy of it, and evidently overlooked it, or you would have understood my pressing you to reconsider the question in consequence of the more hopeful views expressed in the cablegram. I have, &c, The Agents for New Zealand Loans and Stock, London. Julius Vogel.
Copies of Telegrams enclosed in No. 39. The Agent-Geneeal to the Colonial Teeasueee. (Beceived sth October, 1884.) Loan Agents' message. My impression success Sydney three half will create buoyancy all round, which case market become bare inscribed stock change aspect before January. London, 4th.
The Colonial Teeasueee to the Loan Agents. Loan Agents, London. Wellington, 7th October, 1884. Unless you act on cable authority new loan powers only reach you December. If only new loan floated would require additional million July. Perhaps, therefore, better float two millions and a half January. Have arranged wants till then, but regretable lose good market. Beconsider expediency immediate conversion Consolidated Loan, 1867. Must base conversion on market, not actuarial equivalent. If conversion effected market bound support, new loan. Advise all points, will accept your judgment.
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No. 40. The Loan Agents to the Colonial Teeasueee. (Beceived 27th November, 1884.) Aftee carefully studying despatch 11th October, we think necessary represent our views without delay. Firstly, having regard to extent new loan January, cannot hold out any hope conversion Consolidated Loan, 1867, possible before March, nor probably long afterwards. Inscribed stock now about par, but fall upon approach new loan. Secondly, must not think conversion possible at figures given or anything like them unless market vastly alters. Thirdly, profitable present purchases Consolidated Loan, 1867, not possible any appreciable extent. London, 26th.
No. 41. The Colonial Teeasueee to the Loan Agents. Wellington, 29th November, 1884. New loan primary importance. Necessary documents on way Home "Buapehu." You must judge suitable time conversion.
No. 42. Statement of the estimated Amounts to be added to the Sinking Fund of the understated Loans during 1884-85. (Section sof "The Consolidated Stock Act, 1884.") Sinking Funds invested in London— £ s. d. Loan of 1856 ... ... ... 17,865 9 7 Loan of 1863 ... ... ... 42,696 911 Consols ... ... ... ... 148,509 0 3 ImmigrationandPublicWorksLoanAct,lB7o... 23,131 11 10 £232,202 11 7 Sinking Funds invested in the Colony — Loan of 1860 ... ... ... 5,885 12 9 Auckland Loan Act, 1863 ... ... 1,305 14 5 Wellington Loan Act, 1866 ... ... 701 9 5 Lyttelton - Christchurch Bailway Loan Ordinance, 1860 ... ... ... 3,813 9 8 Canterbury Loan Ordinance, 1862 ... 395 15 4 Otago Loan Ordinance, 1862 ... ... 3,398 1 5 15,500 3 0 Total ... ... ... £247,702 14 7 Beferred to the Audit Office for examination —James C. Gavin, 21st November, 1884. Examined and found correct. —James Edwaed FitzGerald, Controller and Auditor-General, 26th November, 1884.
No. 43. Wm. F. Deummond Jeevois, Governor. ORDER IN COUNCIL. At the official residence of the Honourable the Colonial Treasurer, at Wellington, this twenty-eighth day of November, 1884. Present: The Honourable the Premier peesiding in Council. Wheeeas by an Act passed by the General Assembly of the Colony of New Zealand, the short title whereof is "The Consolidated Stock Act, 1884," it is among other things enacted that the said Act shall be incorporated with, and read as, a part of "The New Zealand Consolidated Stock Act, 1877," and that the Agents mentioned in the now reciting Act shall be the Agents from time to time appointed under " The New Zealand Consolidated Stock Act, 1877 :" And by the now reciting Act it is also enacted that in respect of the loans having sinking funds mentioned in the schedule to such Act, the Colonial Treasurer shall, within each financial year ending on the thirty-first day of March, compute the amount which, from all sources, whether from contributions to the sinking fund or from the produce of accrued investments of the same, including the interest on drawn bonds, will accrue to increase the sinking fund of each loan within each year; and, upon such computation being approved by the Controller and Auditor-General, such amount shall be held to be the amount of increase for the year in respect of each loan for the purposes of this Act. The first computation shall be made for the year ending on the thirty-first day of March, one thousand eight hundred and eighty-five. Any error in the said computation for any year shall be adjusted in the year in which such error is ascertained, and shall be included in the computation for such last-mentioned year. And also, that the Governor in Council may authorize the creation of stock to the amount of the annual increases of sinking fund, computed as therein provided : And whereas of the loans mentioned in the schedule to the said in part recited Act, those hereinafter set forth have sinking funds, and the Colonial Treasurer has, for the financial year ending on the thirty-first day of March, one thousand eight hundred and eighty-five, computed the amount which, from all sources, as mentioned in the said Act, will accrue to increase the sinking fund of each loan for such year, as follows, that is to say :—
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-- , T Amount of Annual Increase of Name of Loan. Sinking Fund on each Loan. £ s. a. " The New Zealand Loan Act, 1856" ... ... ... 17,865 9 7 " The New Zealand Loan Act, 1860" ... ... ... 5,885 12 9 •'The New Zealand Loan Act, 1863 " ... ... ... 42,696 9 1.1 " The Consolidated Loan Act, 1867" ... ... ... 148,509 0 3 " The Immigration and Public Works Loan Act, 1870 " ... 23,131 11 10 " The Auckland Loan Act, 1863" ... ... ... 1,305 14 5 " The Wellington Loan Act, 1866" ... ... ... 701 9 5 "The Lyttelton and Christchurch Bailway Loan Ordinance, 1868" ... ... ... ... ... 3,813 9 8 "The Canterbury Loan Ordinance, 1862" ... ... 395 15 4 " The Otago Loan Ordinance, 1862" ... ... ... 3,398 1 5 Total ... ... ... £247,702 14 7 And whereas the computation so made as aforesaid was, on the twenty-sixth day of November instant, approved by the Controller and Auditor-General as required by the said Act: And whereas it is expedient that the creation of stock should be authorized as hereinafter mentioned: Now, therefore, His Excellency the Governor of the Colony of New Zealand, in pursuance and exercise of the power and authority vested in him by the said in part recited Act, and by and with the advice and consent of the Executive Council of the said colony, doth hereby authorize the creation of stock to the amount of two hundred and forty-seven thousand seven hundred and two pounds fourteen shillings and seven pence ; such amount being the total annual increase of sinking fund upon the loans hereinbefore mentioned for the year ending the thirty-first day of March, one thousand eight hundred and eighty-five, computed in accordance with the said Act as aforesaid. Foestee Goeing, Clerk to the Executive Council.
No. 44. Wm. F. Deummond Jeevois, Governor. ORDER IN COUNCIL. At the official residence of the Honourable the Colonial Treasurer, at Wellington, this twenty-eighth day of November, 1884. Present: The Honoueable the Peemiee peesiding in Council. Wheeeas by an Act of the General Assembly of the Colony of New Zealand, the short title whereof is "The Consolidated Stock Act, 1884" (hereinafter referred to as "the said Act"), it is among other things enacted that so much of all the loans set forth in the schedule as were outstanding on the thirty-first day of March last (together with the amount of twenty thousand nine hundred pounds of the General Purposes Loan, which fell due on the fifteenth day of October last), should be and are thereby declared to be convertible into stock : And also that, pending the operations for converting loans and creating the stock authorized to be created under the provisions of the said Act and " The New Zealand Consolidated Stock Act, 1877," the Colonial Treasurer may, when so authorized by an Order in Council in that behalf, create debentures to an amount not exceeding in the whole the amount of such stock; and may borrow and raise moneys from time to time by the sale, hypothecation, or mortgage of such debentures, or may exchange the sam for securities convertible under the said Act, as the Colonial Treasurer thinks fit; and that every such debenture shall bear interest at such rate not exceeding five pounds per centum per annum, and shall be in such form, and shall have a currency not exceeding seven years, as the Colonial Treasurer directs : And whereas by an Order in Council made and issued under the sixth section of the said Act on the date hereof the creation of stock was authorized to the amount of two hundred and forty-seven thousand seven' hundred and two pounds fourteen shillings and seven pence, such amount being the total annual increases of sinking fund upon the loans therein mentioned for the year ending the thirty-first day of March, one thousand eight hundred and eighty-five, computed, under the said Act as aforesaid : And whereas it is expedient that the power to authorize the creation of debentures under the said Act should be exercised in the manner hereinafter set forth, and that such debentures should be issued to an amount not exceeding the amount of stock authorized to be created as hereinbefore mentioned, and of certain other stock to be created under the hereinbefore-recited provisions of the said Act: And whereas the amount for which it is proposed to create such debentures does not exceed in the whole the amount of stock authorized to be created under the said Act and " The New Zealand Consolidated Stock Act, 1877." Now, therefore, His Excellency the Governor of the Colony of New Zealand, in pursuance and exercise of the power and authority vested in him by the hereinbefore in part recited Act, and by and with the advice and consent of the Executive Council of the said colony, doth hereby authorize the Colonial Treasurer to create debentures to the amount of three hundred and fifty-nine thousand five hundred and two pounds fourteen shilling's and seven pence, for the purposes, in the manner, with the powers, and upon and subject to the terms and conditions in the hereinbefore in part recited Act particularly mentioned. Forster Goring, Clerk of the Executive Council.
No. 45. The Colonial Teeasueee to the Loan Agents. Gentlemen, —■ The Treasury, Wellington, 6th December, 1884. I have the honour to advise you that, in pursuance of arrangements expressed in my letter
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to you dated 13th September last, No. 4, I have this day drawn upon you for the sum of £175,000, in four drafts, three for £50,000 each and one for £25,000, at fifty days' sight, in favour of the Bank of New Zealand ; and I will thank you to protect them on presentation. I have, &c, The Agents for New Zealand Loans, &c, London. Julius Vogel.
No. 46. [The Agent-Geneeae to the Colonial Teeasueee. Sic, — 7, Westminister Chambers, London, S.W., 21st October, 1884. I am very glad to be able to transmit to you herewith an extract from to-day's city article of the Times, announcing that the Stock Exchange Committee have at last granted the quotation for the stock issued in the recent conversion of your 5-30 and short-dated debentures. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 47. The Agent-Geneeal to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 24th October, 1884. I transmit to you herewith copy of letter from the Bank of England, with their halfyearly account for the management of the inscribed stock up to the 31st October, amounting to £3,804 2s. lOd. I was at one time under the impression that it was the intention of the agreement of 1875 that when the total amount of inscribed stock exceeded ten millions, the charge for management would be £550 per million over the whole sum. The bank, however, read the agreement as fixing the charge at £600 per million up to ten millions, the lower charge of £550 per million only applying to any excess over the ten millions. On looking at the wording of Sir Julius Vogel's letter of 16th November, 1875, and the bank's reply of 17th November, which constitute the agreement, I do not think the bank's claim can be contested. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Enclosure in No. 47. The Chief Cashiee, Bank of England, to the Agent-Geneeal. Sic,— Bank of England, 11th October, 1884. I beg to forward herewith the usual half-yearly statement of the charge for the management of New Zealand consolidated stock and of the stamped warrants used, amounting to £3,804 2s. 10d., for which sum I shall be obliged by your forwarding me a cheque. I have, &c, The Agent-General for New Zealand, F. May, 7, Westminster Chambers. Chief Cashier.
Sub-Enclosure in No. 47. New Zealand Consolidated Stock £4-pee-cent. Charge for management of £10,000,000 from the Ist May to the £ s. d. 31st October, 1884, at £600 per million per annum ... 3,000 0 0 Charge for management of £1,870,771 from the Ist May to the 31st October, 1884, at £550 per million per annum ... 514 9 2 Charge for management of £1,000,000 from the 6th May to the 31st October, 1884, being 179 days at £550 per million per annum ... ... ... ... ... 269 14 6 Stamped Warrants used. May, 1884 ... ... ... ... £4,770 Postal New Claims, from Ist April to 30th September, 1884 ' ... ... ... 20 £4,790 19 19 2 £3,804 2 10 S. O. Geay^ Bank of England, 10th October, 1884. —A. G. Snellgrove. Chief Accountant.
No. 48. The Agent-Geneeae to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 6th November, 1884. I duly received your telegram desiring me to place certain questions before Sir Penrose Julyan, in reference to his proposal for future remuneration. I forwarded your message at once to Sir Penrose, and have, this morning, received his reply, which I have sent to you through the cable. Copies of the telegrams are annexed. As your message does not invite any opinion of mine, I do not feel called upon to offer any observation on the subject. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
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Copies of Telegrams referred to in No. 48. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 3rd November, 1884. Ask Julyan reply following : Do you consider you have acted merely as adviser to Agent-General, or that you have had equal power and responsibility. We notice you have only signed some letters. In arrangement you now propose, are you willing exercise equal power, judgment, responsibility, and burden correspondence in all matters connected with loan conversion and negotiation ?
Sir Peneose Julyan to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 7th November, 1884.) Have not acted merely as adviser. Have had equal power and responsibility as my colleague in loans and conversions. Am not aware that have omitted to sign any letters on these subjects. In proposed arrangement am willing to take equal share in responsibility, &c, appertaining to loans conversion and negotiation. Julyan, London, 6.
No. 49. The Agent-Geneeal to the Colonial Treasurer. Sib, — 7, Westminster Chambers, London, S.W,, Ist November, 1884. It appeared to me necessary, in view of the Government deciding to proceed with a conversion of the Consolidated Loan of 1867, that the " actuarial equivalent" referred to in the telegrams which recently passed between yourself and the Stock Agents, should be determined. I accordingly consulted with Mr. Bailey and Mr. Hardy as to the form in which this equivalent should be shown, within a certain range of prices for consols and inscribed stock respectively, in stock at 4 per cent., and stock at 3| per cent., and I now transmit copy of a letter I have received from those Actuaries, with the tables they constructed for that purpose. You will observe that the table for the 3J-per-cent. stock is constructed for a stock supposed to have a currency of fifty years. If the conversion should take place into a stock to be paid off, like the present 4-per-cent. stock, in 1929 (or only forty-five years from now), the figures would of course have to be somewhat changed. It should, I think, be one of the points to be determined by the Government when further conversions are made, whether all the stock for such conversions should rank pari passu with the present issues, or whether, having regard to the magnitude of the amount for which provision will have to be made in 1929, a later date should not be fixed for the maturing of new conversion stock. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell,
Enclosure in No. 49. Messrs. Bailey and Haedy to the Agent-Geneeal. Sic, — London, Ist November, 1884. We send herewith the tables which we have prepared in conformity with your request, showing, for different prices of New Zealand 5-per-cent. consols, the equivalent amounts for each £100 of this stock, if converted into the 4-per-cent. inscribed stock or into a new 3-|-per-cent. stock, redeemable at par fifty years hence. The rates of interest yielded on investments in the 4-per-cent. inscribed stock, at the different prices, have been the basis of calculation for the equivalent amounts of the proposed new 3-J-per-cent. stock. We are, &c, Sir Francis Dillon Bell, K.C.M.G., A. H. Bailey, Agent-General for New Zealand. Balph P. Haedy. i
Sub-Enclosure in No. 49. NEW ZEALAND DEBT. Table I.
. Example: Thus :If the prices are—4-per-cent. Inscribed Stock .. .. £102. 5-per-cent. Consols .. .. £107. Then £104 18s. 4-per-cent. Inscribed Stock would be the equivalent for £100 5-per-cent. Consols. A. H. Bailby. Ralph P. Haedx.
Amount of 4-pi sr-cent. Inscrih Consols id Stock equivalent to £100 Si at the undershown Prices of thi rack of the pres< 3 latter. >nt 5-per-cent, 'rice of the 4-per-cent. Inscribed Stock. 105. 106. 107. 108. 109. 110. £ 99 .00 .01 .02 .03 .04 .05 .06 £ s. d. 106 1 3 105 0 0 103 19 2 £ s. d. £ s. d. £ s. d. £ s. d. £ s. d 106 0 0 104 19 0 103 18 5 105 18 10 104 18 0 103 17 8 105 17 8 104 17 1 103 16 11 105 16 6 104 16 2 103 16 2 105 15 5 104 15 3 103 15 6
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TABLE II.
Example : — Thus : If the prices are— Eour-per-Cent. Inscribed Stock .. .. £102. Pive-per-Cent. Consols £107. Then £117 Bs. 2d. Three-and-a-Half-per-Cent. Stock (repayable at par fifty years hence) would be the equivalent for £100 Pive-per-Cent. Consols Stock. Note.—In all these calculations fractions of a penny have been omitted in the results, and it has been assumed that Interest is payable half-yearly. A. H. Bailey, Ralph P. Habdt.
Four-per-Cent. Inscribed Stock {repayable at par forty-four years hence). Price of Three-and-a-Half-per-Cent. Stock (repayable at par Amount of such Three-and-a-Half-per-Cent. Stock equivalent to £100 Stock of the present Five-per-Cent. Consols, at the undershown prices of the latter. Price. Bate of Interest yielded. fifty years hence), to yield the rate of Interest shown in Column (2). 105 (4) 106 (5) 107 (6)_ 108 109 no (9) 111 (10) 112 113 114 115 (1) (2) (3) (7) (8) •(11) (12) 1(13) (14) £ s. d. 100 10 0 101 0 0 101 10 0 102 0 0 102 10 0 103 0 0 103 10 0 104 0 0 104 10 0 105 0 0 105 10 0 106 0 0 106 10 0 107 0 0 107 10 0 108 0 0 108 10 0 109 0 0 109 10 0 110 0 0 £ s. d. 3 19 6 3 19 0 3 18 7 3 18 1 3 17 7 3 17 2 3 16 8 3 16 3 3 15 9 3 15 4 3 14 11 3 14 5 3 14 0 3 13 7 3 13 1 3 12 8 3 12 3 3 11 10 3 11 5 3 11 0 £ s. d.| 89 14 1 90 3 7 90 13 2 91 2 9 91 12 5 92 2 0 92 11 6 93 1 2 93 10 10 94 0 5 94 10 1 94 19 8 95 9 4 95 18 11 96 8 7 96 18 3 97 8 0 97 17 8 98 7 4 98 17 1 £ s. d. 117 1 0 116 8 8 115 IS 5 115 4 3 114 12 1 114 0 2 113 8 5 112 16 8 112 5 0 111 18 6 111 2 2 110 10 11 109 19 8 109 8 8 108 17 9 108 6 11 107 16 1 107 5 5 106 14 10 106 4 5 £ s. d. 118 3 4 117 10 11 116 18 5 116 6 2 115 13 11 115 1 11 114 10 0 113 18 2 113 6 5 112 14 9 112 3 4 111 12 0 111 0 8 110 9 7 109 18 6 109 7 6 108 16 7 108 5 10 107 15 2 107 4 7 £ s. d. 119 5 7 118 13 1 118 0 6 117 8 2 116 15 9 116 3 7 115 11 7 114 19 8 114 7 9 113 16 1 113 4 6 112 13 0 112 1 7 111 10 5 110 19 3 110 8 2 109 17 2 109 6 3 108 15 6 108 4 10 £ s. d. 120 7 11 119 15 3 119 2 7 118 10 1 117 17 7 117 5 4 116 13 2 116 1 1 115 9 2 114 17 4 114 5 8 113 14 1 113 2 6 112 11 3 112 0 0 111 8 10 110 17 8 110 6 8 109 15 10 109 5 1 £ s. d. 121 10 2 120 17 5 120 4 8 119 12 0 118 19 5 118 7 1 117 14 10 117 2 7 116 10 7 115 18 7 115 6 10 114 15 2 114 3 6 113 12 1 113 0 8 112 9 5 111 18 2 111 7 1 110 16 2 110 5 4 £ s. d. 122 12 6 121 19 7 121 6 8 120 14 0 120 1 3 119 8 9 118 16 5 118 4 1 117 11 11 116 19 11 116 8 0 115 16 2 115 4 5 114 12 11 114 1 5 113 10 1 112 18 9 112 7 7 111 16 5 111 5 6 £ s. d. 123 14 10 123 1 9 122 8 9 121 15 11 121 3 1 120 10 6 119 18 0 119 5 7 118 13 4 118 1 2 117 9 2 116 17 3 116 5 5 115 13 9 115 2 2 114 10 9 113 19 3 113 8 0 112 16 10 112 5 9 £ s. d. 124 17 1 124 3 11 123 10 10 122 17 10 122 4 11 121 12 2 120 19 8 120 7 1 119 14 8 119 2 5 118 10 4 117 18 4 117 6 4 116 14 7 116 2 11 115 11 4 114 19 10 114 8 5 113 17 2 113 6 0 £ s. d. 125 19 5 125 6 1 124 12 11 123 19 10 123 6 9 122 13 11 122 1 3 121 8 7 120 16 1 120 3 8 119 11 5 118 19 4 118 7 3 117 15 5 117 3 8 116 12 0 116 0 4 115 8 10 114 17 6 114 6 3 £ s. d. 127 1 8 126 8 4 125 14 11 125 1 9 124 8 7 123 15 7 123 2 10 122 10 1 121 17 6 121 5 0 120 12 8 120 0 5 119 8 3 118 16 4 118 4 5 117 12 8 117 0 11 116 9 3 115 17 10 115 6 6 £ s. d. 128 4 0 127 10 6 126 17 0 126 3 8 125 10 5 124 17 4 124 4 5 123 11 7 122 18 10 122 6 3 121 13 10 121 1 5 120 9 2 119 17 2 119 5 2 118 13 3 118 1 5 117 9 9 116 18 2 116 6 8
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No : 50. The Colonial Teeasueee to the Agent-Geneeal. Sir, — Treasury, Wellington, New Zealand, 19th December, 1884. I have the honour to acknowledge the receipt of your letter of the Ist November, No. 480, forwarding tables constructed by Messrs. Bailey and Hardy, showing for different prices of New Zealand 5-per-cent. consols, the equivalent amounts for each £100 of this stock if converted into 4-per-cent. inscribed stock, or into a new 3|-per-cent. stock, redeemable at par fifty years hence. The tables are interesting and important, as showing the different meaning you attached to the term " actuarial equivalent "to that which I understood it to convey. I thought, when you spoke of the actuarial equivalent for 5 per cent, in 4-per-cent. stock, you meant what would be the amount of the 4 per cents, you would have to give for the 5 per cents, to yield the same amount of interest with provision for redeeming the difference in capital value. On this basis you have determined the amount of 3|-per-cent. stock to be exchanged for the 4 per cents.; but, as between the 4 and 5 per cents, you have made the calculation on the basis of what I was inclined to suppose was expressed by the term " market equivalent;" in other words, you fix the value of the 3-J- per cents, by a strict actuarial calculation as compared with the 4-per-cents., allowing nothing for predilection of the market; but, as regards the 4-per-cent. equivalent, you fix it by a comparison of the respective market values of the 4 per cents, and 5 per cents. There would be no object in adopting 3J per cent, in preference to 4 per cent, if it represented no additional market value. It would be well to bring the subject before the Loan Agents, so that they might determine if we attach the same meaning to the terms " market equivalent " and " actuarial equivalent." The first table seems to me to deal with the market equivalent strictly; and very striking it is, since it shows that under certain market conditions you may change 5 per cent, for 4-per-cent. stock at a premium of less than £4 for every £100 exchanged. The point you raise of fixing different due dates for the 4-per-cent. stock occasions me surprise. It would mean a new stock with a new market value and separate quotation, and would increase your difficulty in effecting a conversion—at least, so it seems to me ; otherwise, it has advantages. Will you consult with your colleague and let me know if you jointly think we might create a new stock without placing in your way great difficulties ? I have, &c, The Agent-General for New Zealand, London. Julius Vogel.
No. 51. The Agent-Geneeal to the Colonial Treasures. g IE) 7, Westminster Chambers, London, S.W., 6th November, 1884. An illustration of the difficulty to which both the Loan Agents and Stock Agents are always liable, from the uncertainty of the money market, is afforded by what has happened in the last month. When I sent you my telegram of the 4th October, stating my impression that the success of the New South Wales loan was likely to create a buoyancy all round, in which case the market would, of course, soon become bare of our inscribed stock, the Bank of England rate was 2 per cent; on the 9th October it was raised to 3, on the 31st to 4, and at the Court to-day it was further put up to 5. It will probably appear to you fortunate that the Stock Agents were not at this moment engaged in a conversion operation; the Loan Agents will have quite enough on their hands, if the rate keeps up at its present point, when they have to bring out the new loan in January. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 52. The Loan Agents to the Colonial Teeasueee. g m , 7, Westminster Chambers, London, S.W., 30th October, 1884. We had the honour to receive on the 24th instant your letter of the 13th September, containin°' the intimation of your wishes respecting the proposed new loans, and the conversion of the Consolidated Loan of 1867. We entirely reciprocate your wishes for the existence of cordial relations between us, and beg to assure you that for our parts we shall at all times do whatever we can to contribute to that end. We learn with regret that it will be necessary to provide so much more money by loan, but shall wait for the arrival of the Financial Statement which you delivered soon after the date of your letter, and also for your further promised letter for our guidance. We think it right, however, to express at once the hope that you will not have found it necessary to insert the date of Ist January in the short-dated debentures which you propose to hand to the Bank of New Zealand as collateral security for the advance of half a million. If any hypothecation is to be made of them here, we would suggest that the date should not be earlier than the Ist February, by which time the first instalments of the new loans will have been got in. With regard both to the issue of the new loans and the steps to be taken in any new conversion the cablegrams which have recently passed between us seem to render unnecessary any further remarks on our own part at this moment. We gather that you will probably have decided not to proceed with the proposed conversion of the consols until after the new loans have been raised. Having regard, however, to what you now state on the subject of the North Island Bailway Loan of £1,000,000, authorised by the Act of 1882, it may perhaps be as well to note that the items making up the total of £3,500,000, named in our cablegram of 9th instant, as the amount of new 4—B. 11.
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stock to be placed during 1885, were exclusive of that particular loan ; and that if the money for the North Island Trunk Bailway has also to be raised next year, the total must be placed at £4,500,000. We cannot conceal from the Government our view of the gravity of such a position; nor should we be doing our duty if we did not frankly say that nothing but an exceptionably favourable state of the market can prevent so large an operation in one year being attended with very serious difficulties. We shall do our best to overcome these if we are obliged, but we must prepare you for having to submit to considerable sacrifices in price, which were happily avoided in the case of the first and second instalments of the Three-Million Loan. With regard to converting the debentures of the Consolidated Loan of 1867, we do not feel quite sure that we apprehend your view, that it would pay the colony to give the holders "more than sufficient to cover the market value of the converted bonds." Of course, the colony will, in any case, have to give more ; the question is, how much more ; and it has to be remembered that while on the one hand the market price of consols is not high because the loan is a drawing one, where every holder runs a risk of his bond being paid off, that price does not, on the other hand, express anything like the inducement which would bring in the same holder whenever (even subject to that risk) he was asked to give up 5 per cent, interest for 4. We think, at the same time, that the colony could well afford to give a high price to the holder ; and although that price will be prejudicially affected, and the chance of a successful operation be materially lessened, by placing four and a-half or even three and a-half millions of new stock on the market just before the terms of conversion are made known; yet we see no reason, at the present moment, to suppose that an effort of the kind, made at the right time, would prove unsuccessful. But we should have serious misgivings as to its success if attempted between the issue of the new loan in January and the drawings for redemption of consols in March next, when the market cannot be otherwise than flooded by new 4-per-cent. stock. We entirely agree with you that whenever the operation comes to be made the notice to holders should limit the period within which applications for conversion should be allowed to the shortest possible time. We have some difficulty in giving a precise answer to that part of your letter in which you invite us to say whether we think the footing you propose is a satisfactory one for the relations between the Government and ourselves as Loan and Conversion Agents. We are very sensible of the courtesy and consideration with which you are pleased to express your views, and we will endeavour to state ours with perfect frankness. It seems to us that one of two things must happen : either the instructions which we shall receive will give us that kind of discretionary power which you yourself seem to contemplate as a simply inevitable necessity in a case where action at a particular moment must absolutely depend on conditions changing from day to day, or those instructions will be so definite and precise as to exclude discretion. In either case you may be quite sure that, knowing as we do, your own familiarity with the whole question of conversion, we should do our best to give effect to the views and wishes of the Government. It is for the Government, and not for us, to determine the financial measures necessary to be taken in the interest of the colony : and, while we are quite assured of the perfect freedom with which they will always allow us to offer our advice, they are entitled, when they have made their decision, to an equally loyal co-operation in it from ourselves. In what we have stated in this letter respecting loans and conversion, we have been largely influenced by the conviction that both operations cannot be simultaneously carried out with success : that the raising of new money is far more important to you just now than conversion; and that, while delay in carrying out the latter may be undesirable, the postponement of the former for any considerable period is practically impossible. We have, &c, P. G. Julyan, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 53. The Colonial Teeasueee to the Loan and Stock Agents. Gentlemen, —■ The Treasury, Wellington, New Zealand, 20th December, 1884. There is so little in what you say in your letter of the 30th October last, No. 475, that has not been cleared up by previous correspondence, and I agree generally so nearly with your remarks, that it is unnecessary for me to do more than acknowledge the kindly spirit of your letter. I shall endeavour to keep the North Island Trunk Bailway Loan off the market as long as possible. In recognition of the vast liabilities here and at Home which devolved on the Government when they took office, they abstained to the utmost extent possible from creating fresh liabilities, and confined themselves to providing the means to clear up existing complications. I have, &c, The Agents for New Zealand Loans and Stock, London. - Julius Vogel.
No. 54. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 26th December, 1884.) New loan. Bank of England having required full explanation respecting your financial proposals, prolonged conference took place to-day, when Governors gave their decision. Firstly, Bank of England feel they are in honour bound not to bring out more than remaining million of three millions in January, and therefore decline being parties to larger issue now; secondly, provided guarantee be given that no more than million and a half new loan be borrowed within your next financial year, Bank of England would undertake to bring out that amount later in
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eighty-five; thirdly, such guarantee would not prevent bond fide conversion, but would prevent any creation for appropriating sinking funds; fourthly, necessary therefore instruct whether shall give guarantee required. Our opinion is, inevitable. See our telegram September thirty. Our own opinion therein given remains unaltered, that it would have been better raise whole two millions and a half now ; but Bank of England will not yield, therefore no alternative. Loan Agents, London, 24.
No. 55. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 27th December, 1884. Loan Agents. Bank of England's dictation novel, amazing. Fancy they desire protect advance paying off five-per-cent. five-thirties; if so, can you arrange indemnify them ? Unaware pledge concerning issue January. If existent, can we bring out two and a half millions February? If safe, wait. Concur desirable float whole amount, besides million insufficient. I understand guarantee asked is not to publicly emit further loan until March, eighty-six; but not prevent our borrowing security North Island Bailway Loan. Begarding sinking fund, that it means no operations at Home, but not interfere with creations here, kept here ; not prevent guarantee West Coast Harbour debentures quarter of a million. I should require you sell the £500,000 Trust Fund scrip soon as possible. Please understand third million virtually spent, and we contracted not increase expenditure.
No. 56. Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 30th December, 1884.) New loan. Firstly, Bank of England's objection has nothing to do with agreement with Bank of England about five-per-cent. five-thirties, as we offered to indemnify or release ; but they interpret Loan Act, coupled with first prospectus, as precluding issue more than million until expiration financial year March next; and although we strongly urged them to bring out two million and a half in January, they decidedly objected on ground that would be breach faith toward public and compromise Bank of England; but were willing offer million and a half later in year. Secondly, guarantee asked applies exclusively to placing additional securities of any kind directly or indirectly upon English market between issue of two millions and a half and April, eighty-six, and would not debar you from obtaining temporary advances on North Island Bailway securities other than inscribed stock, nor from guaranteeing West Coast Harbour debentures. Thirdly, we hold only about £85,000 Post-Office scrip, and cannot understand message proposed sale £500,000. Loan Agents, London, 29.
No. 57. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 30th December, 1884. I undeestand guarantee asked by Bank of England would not prevent West Coast Harbour Boards' offering for sale in London debentures the Government guarantee. £500,000 scrip referred to is £220,000 held against advance by Bank of England £200,000 by Bank of New Zealand, besides your holding. Can you sell these with reasonable dispatch—Sinking Fund Trustees and otherwise ? Can you obtain advances against Million-and-a-Half Loan pending sale if required, and later, say early eighty-six, if required against North Island Trunk Loan? Vogel.
No. 58. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived Ist January, 1885.) New loan. Further conference Bank of England to-day. Firstly, Bank of England objects to engage beforehand make temporary advances against Million and a Half ; but supposing neither war nor monetary crisis, we think could be obtained. Depends entirely upon state political financial affairs at time. Secondly, quite impossible any bank undertake now for temporary advances to be made twelvemonth hence. Thirdly, guarantee asked would not prevent Harbour Board offering debentures extent of quarter of million in London. Fourthly, cannot say what prospect selling scrip until third million placed ; no demand at present. Sinking Fund Trustees could only absorb trifle. Fifthly, supposing Government authorize agents to give guarantee required, we should bring out third million Saturday; therefore please telegraph instruct whether shall accept Bank of England's conditions. Loan Agents, London, 31.
No. 59. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 2nd January, 1885. We accept conditions, and give guarantee as indicated by cablegrams. Third million, you are authorized offer loan at once.
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No. 60. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 3rd January, 1885.) Third million announced upon receiving your message to-day. Minimum, ninety-seven half. Tenders, ninth instant. Loan Agents, London, 2.
No. 61. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 10th January, 1885.) Loan taken above ninety-nine. Details presently. Loan Agents, London, 9.
No. 62. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 10th January, 1885.) Total amount applied for, £3,980,000. Tenders at £99 6s. 6d. receive 30 per cent. Seven hundred tenders. . Loan Agents, London, 9.
No. 63. The Colonial Treasurer to the Agent-Geneeae. Agent-General, London. Waiwera, 10th January, 1885. Loan Agents. Warm congratulations, and thanks. Vogel.
No. 64. The Loan Agents to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 11th January, 1885.) Yours many thanks. Corrected totals. Amount tendered, £4,130,000. Tenders at £96 6s. 6d. Beceive sixty-five per cent. Average price, £99 10s. Id. Loan Agents, London, 10.
No. 65. The Loan Agents to the Colonial Treasures. Treasurer, New Zealand. (Beceived 10th January, 1885.) Have sold quarter of a million scrip to-night. Instruct whether shall sell Bank of New Zealand's £200,000 also. Loan Agents, London, 9.
No. 66. The Colonial Treasurer to the Agent-General. Agent-General, London. Waiwera, 10th January, 1885. Sell Bank of New Zealand's £200,000. Vogel.
No. 67. The Agent-General to the Colonial Treasurer. Sir, — 7, Westminster Chambers, London, S.W., 21st November, 1884. The San Francisco Mail of October brought your several letters addressed to the Loan Agents, which will be duly acknowledged by them; but this cannot be done to-day, as Sir Penrose Julyan is away from London. I have to acknowledge the receipt, just now, of your telegram of to-day, directing me to arrange with Sir Penrose to continue to act under the conditions of the recent telegrams between yourself and him. I have, &c, The Hon. the Treasurer, Wellington. F. D. Bell.
Copy of Telegram enclosed in No. 67. The Colonial Teeasueee to the Agent-General. Agent-General, London. Wellington, 21st November, 1884. Arrange with Julyan continue act under conditions recent telegrams. Payment cover all services,
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No. 68. The Colonial Teeasueee to the Loan Agents. Gentlemen, — The Treasury, New Zealand, Wellington, 6th January, 1885. I have the honour to inform you that copies of the telegrams which have passed between us in relation to the loan negotiations will be sent to you under separate cover. I will now refer to those up to the date of your announcing the advertised issue of the loan. I have to thank you for the promptitude with which you furnished me the necessary information. I was relying, when I received your first telegram, upon the negotiation of the two and a half millions early in January, as previously recommended by you and agreed to by me, and I thought that the negotiation would take place after your receipt of the authorities relating to the Million-and-a-Half Loan, which would reach you about this date; I was therefore much surprised, as doubtless you were, to find that the Bank of England held that there was any guarantee of a nature to interfere with the double issue. lam still unable to find on what the bank relies for its objection to the issue of the second loan until after the 31st March. I take it you were quite unaware of any such objection or you would have advised me of it, and the Treasury officers were equally unaware of it. It seemed to me, after receiving the objection, that the danger of these implied guarantees was such that it would be well in the present case to have everything very clearly stated; therefore it was that I continued to dwell upon the different points, so that there should be no doubt upon the matter before agreeing to the guarantee. For example, after you told me that there would be no objection to our guaranteeing the Harbour debentures, I thought that it would be well to have it also clearly understood that they could be sold in England. Similarly in regard to the questions of borrowing in anticipation of the North Island Trunk Bailway Loan, I thought it desirable there should be no doubt in the matter. I did not expect any larger assurance respecting such borrowings from you than you have been able to give me, as I was aware that it would be impossible for you to promise a financial operation, independent of the chances of war and of the state of the money market. But I thought it well that I should place distinctly before you the contingency of our having to ask you to raise money in anticipation of the negotiation of these loans, so that it could not be possibly said afterwards that there was any bar to such operations implied in the guarantee which I was asked to give. Unless affairs in England take a very unfavourable turn it seems to me we shall be able to negotiate the Million-and-a-Half Loan sometime during the year, and meanwhile, if necessary, will be able to obtain advances in anticipation of the same. We should have no difficulty also later on, if necessary, in borrowing in anticipation of the North Island Trunk Bailway Loan. In the meantime we shall be able to find funds for the prosecution of this railway, to which the Government attach the greatest importance, out of the other loans. I have also to explain to you that a cablegram explanatory of the latest financial position of the colony was to have been sent to you at the end of the first week in January, which was the date at which the authorities sent Home for the Million-and-a-Half Loan were due in London. Your cablegram announcing your wish to bring out the loan on Saturday, the 3rd January, only reached me on Friday, the 2nd. I had to reply to it immediately, and with so short an interval to arrange it, it seemed to me useless to cable you any information, the more especially as there was no information of importance to cable. I will not trouble you with further remarks upon the subject up to the date of the loan being advertised beyond again expressing to you my acknowledgements for your services. I have, &c, The Agents for New Zealand Loans, London. Julius Vogel.
Copies of Telegrams referred to in No. 68. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 26th December, 1884.) New loan. Bank of England having required full explanation respecting your financial proposals, prolonged conference took place to-day, when Governors gave their decision. Firstly, Bank of England feel they are in honour bound not to bring out more than remaining million of three millions in January, and therefore decline being parties to larger issue now ; secondly, provided guarantee be given that no more than million and a half new loan be borrowed within your next financial year, Bank of England would undertake to bring out that amount later in eighty-five ; thirdly, such guarantee would not prevent bond fide conversion, but would prevent any creation for appropriating sinking funds ; fourthly, necessary therefore instruct whether shall give guarantee required. Our opinion is, inevitable. See our telegram September thirty. Our own opinion therein given remains unaltered, that it would have been better raise whole two millions and a half now; but Bank of England will not yield, therefore no alternative. Loan Agents, London, 24.
The Colonial Teeasureb to the Agent-Geneeal. Agent-General, London. Wellington, 27th December, 1884. Loan Agents. Bank of England's dictation novel, amazing. Fancy they desire protect advance paying off five-per-cent. five-thirties; if so, can you arrange indemnify them ? Unaware pledge concerning issue January. If existent, can we bring out two and a half millions February ?
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If safe, wait. Concur desirable float whole amount, besides million insufficient. I understand guarantee asked is not to publicly emit further loan until March, eighty-six; but not prevent our borrowing security North Island Bailway Loan. Begarding sinking fund, that it means no operations at Home, but not interfere with creations here, kept here; not prevent guarantee West Coast Harbour debentures quarter of a million. I should require you sell the £500,000 Trust Fund scrip soon as possible. Please understand third million virtually spent, and we contracted not increase expenditure.
Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 30th December, 1884.) New loan. Firstly, Bank of England's objection has nothing to do with agreement with Bank of England about five-per-cent. five-thirties, as we offered to indemnify or release; but they interpret Loan Act, coupled with first prospectus, as precluding issue more than million until expiration financial year March next; and although we strongly urged them to bring out two million and a half in January, they decidedly objected on ground that would be breach faith toward public and compromise Bank of England ; but were willing offer million and a half later in year. Secondly, guarantee asked applies exclusively to placing additional securities of any kind directly or indirectly upon English market between issue of two millions and a half and April, eighty-six, and would not debar you from obtaining temporary advances on North Island Bailway securities other than inscribed stock, nor from guaranteeing West Coast Harbour debentures. Thirdly, we hold only about £85,000 Post-Office scrip, and cannot understand message proposed sale £500,000. Loan Agents, London, 29.
The Colonial Treasurer to the Agent-Geneeal. Agent-General, London. Wellington, 30th December, 1884. I undeestand guarantee asked by Bank of England would not prevent West Coast Harbour Boards' offering for sale in London debentures the Government guarantee. £500,000 scrip referred to is £220,000 held against advance by Bank of England £200,000 by Bank of New Zealand, besides your holding. Can you sell these with reasonable dispatch?— Sinking Fund Trustees and otherwise. Can you obtain advances against Million-and-a-Half Loan pending sale if required, and later, say early eighty-six, if required against North Island Trunk Loan ? Vogel.
The Loan Agents to the Colonial Treasurer. Treasurer, New Zealand. (Beceived Ist January, 1885.) New loan. Further conference Bank of England to-day. Firstly, Bank of England objects to engage beforehand make temporary advances against Million and a Half; but supposing neither war nor monetary crisis, we think could be obtained. Depends entirely upon state political financial affairs at time. Secondly, quite impossible any bank undertake now for temporary advances to be made twelvemonth hence. Thirdly, guarantee asked would not prevent Harbour Board offering debentures extent of quarter of million in London. Fourthly, cannot say what prospect selling scrip until third million placed ; no demand at present. Sinking Fund Trustees could only absorb trifle. Fifthly, supposing Government authorize agents to give guarantee required, we should bring out third million Saturday ; therefore please telegraph instruct whether shall accept Bank of England's conditions. Loan Agents, London, 31.
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 2nd January, 1885. We accept conditions, and give guarantee as indicated by cablegrams. Third million, you are authorized offer loan at once.
The Loan Agents to the Colonial Teeasueee. Treasuier, New Zealand. (Beceived 3rd January, 1885.) Thied million announced upon receiving your message to-day. Minimum, ninety-seven half. Tenders, ninth instant. Loan Agents. London, 2.
No. 69. The Loan Agents to the Colonial Teeasueee. Sic,— 7, Westminister Chambers, London, S.W., Ist December, 1884. We have the honour to acknowledge receipt of your letter of the 11th October last, No. 5, in which, with reference to the arrangement you had made with the Bank of New Zealand respecting the sum of £500,000 mentioned in your letter, you inform us that you had drawn upon us at ninety days' sight for the sum of £225,000, and directing us to take measures to protect those drafts.
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The bills in question were presented to us on the 20th November, and were duly accepted by us. They will accordingly mature on the 21st February next. We have, &c, P. G. Julyan, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 70. The Loan Agents to the Colonial Treasurer. Sic, — 7, Westminster Chambers, London, S.W., Ist December, 1884. We have the honour to acknowledge receipt of your letter of the 11th October, No. 6, transmitting an Order in Council authorising the raising of £1,000,000, under the New Zealand Loan Act of 1882, being the third and last instalment of the loan, and appointing us Agents for that purpose ; also transmitting a separate Order in Council empowering us to raise £1,000,000 by the issue of short-dated debentures pending the raising of the loan. We have, &c, P. G. Julyan, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 71. The Loan and Stock Agents to the Colonial Teeasueer. Sir, — 7, Westminster Chambers, London, S.W., Ist December, 1884. We have the honour to acknowledge the receipt of your letter of the 11th October last, forwarding copy of the Financial Statement; referring to certain telegrams which had passed between us relative to loans and conversions; and concurring in our recommendation that the new loan, together with the final instalment of the last loan, should be brought out as early as possible after the new year, leaving the conversion of consols to be subsequently dealt with. We have already, in our letter of the 30th October, No. 475, explained why we think that conversion should be deferred, and why we consider the creation of 3J-per-cent. stock inadvisable ; and we see no reason to alter the views we then expressed. We fully recognize the importance of the operation, and so soon as we see a fair prospect of carrying it out successfully, we will lose no time in submitting to you by telegraph the terms we think should be offered to the present bondholders. We are not unmindful of the difficulties we shall have to contend with. The nett price of the stock is now slightly below par, with an over-supplied market, and but few transactions taking place, as will be evident on reference to the official share lists of the Stock Exchange, while 5-per-cent, consols may be taken at 105f, but offering in quantities insufficient to make a market. Irrespective of our obligations to the Bank of England with regard to the stock they have already taken from us, there will be the fresh issue of two and a-half millions in January further to flood the market, as well as the knowledge that yet another million is authorized to be raised, and may be forthcoming ere long, for the construction of the North Island Trunk Bailway. These obstacles combined, cannot fail very considerably to lessen the price of the next issue, and in all probability will, for some time, have the effect of widening the margin of price which now exists in the market between stock and debentures, to the disadvantage of conversion. At all events, we are strongly inclined to think that nothing approaching the favourable terms you name would induce the holders of consols, to any appreciable extent and with no external pressure beyond the risk of having their bonds drawn for payment, to exchange their securities for 4-per-cent, stock, unless in the meantime the market should undergo some great revolution. We are not sure that we clearly understand your reference to the " market equivalent " and the " actuarial equivalent." You state that in a conversion of consols we " should offer something more than the market equivalent, but nothing approaching the actuarial equivalent;" and, again, that we "cannot give anything like the actuarial equivalent;" and you add that "if we gave 104 to 106 of 4 per cent, for £100 of 5 per cent., we should give, on the market basis, very good terms." From this we are led to suppose that you thought these figures (104 to 106) were much less than the actuarial equivalent. But, according to the Actuaries' table, lately sent to you by the AgentGeneral, supposing the relative market prices to be what they were on the day the table was compiled—namely, 102 for inscribed stock, and 107 for consols—the actuaries only make the equivalent £104 18s. of 4-per-cent. inscribed stock for £100 consols. Of course you will understand that the calculations are theirs and not ours, and that we do not make ourselves responsible for them. Your estimate was evidently based on an exceptional and inflated state of the market for inscribed stocks, produced by the acts of the Chancellor of the Exchequer, but which under no circumstances could be of an enduring character; and, in the case of New Zealand, an excessive supply of stock, present and prospective, has already more than neutralized the rise thus momentarily produced. It will be well, to a certain extent, to regard any proposed conversion scheme from the standpoint of the bondholder, bearing in mind that he cannot be forced into conversion; that there is a strong tendency not to disturb investments long held, and that the majority of debenture-holders find nothing sufficiently attractive in inscribed stock to compensate for a reduction of income such as an exchange, profitable to the borrower, generally involves. A preference for stock will no doubt in many cases influence new purchasers, but it is quite a different matter when you invite the old investor in a 5-per-cent. security, of possibly long currency,
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to sacrifice \ or f per cent, per annum for the sake of holding stock, when, though relatively of somewhat greater market value, he had bought that security to hold, and not to sell. Let us suppose an exchange offered at 110 of stock, having forty-eight years to run—which is far above your estimate—for £100 consols of twenty-four years currency. By this process £2,000 of the latter would become £2,200 of the former. In twenty-four years the 5-per-cent. consols would yield £2,400, and the 4-per-cent. stock, in the same period, £2,112, leaving a difference at the end of the twenty-four years of £288 (plus compound interest on the difference between the two rates throughout the whole period) in favour of consols. It is true that, at the end of fortyeight years the stockholders' capital will have increased by £200, and he would be secure of an investment paying £4 Bs. per cent, during the last half of that period ; but who can say that money may not be worth more twenty-four years hence than it is now ? If so, his £110 of stock will perhaps not realize £100 in cash. At any rate, these remote contingencies are commonly discounted for very little, and will not generally be recognized by bond fide investors as outweighing the certain advantage of additional income to be derived from holding consols, the risk of being drawn and paid off notwithstanding. Having regard, however, to the great importance you attach to being relieved from further contributions to the sinking fund, your Government may perhaps consider it worth while to offer more liberal terms. In that case we shall be glad to have a limit fixed, beyond which we shall not be at liberty to convert. There is another mode of proceeding by which you might possibly attain your object without converting the consols into stock at all, and that is, to offer a five- per-cent. security of a fixed but shorter currency, at par, in exchange for consols, thus doing away with the drawing element, and being content to recompense yourselves by abbreviating the period for which you would be liable to pay interest at 5 per cent., and by getting rid of the sinking fund obligations altogether. Or an alternative offer might be made to the consol-holders, to give them in exchange either 4-per-cent. stock, at a rate to be named, or, at their option, 5-per-cent. debentures at par, redeemable at a fixed date. We suggest this alternative with some reluctance, because it is a departure from the principle which the Government has laid down, and which is in itself so advantageous, of bringing all New Zealand securities as far as possible into one line of stock bearing interest at a reduced if not uniform rate; and from a desire to abstain from doing anything calculated to arouse the susceptibilities of the market with regard to the financial capabilities of the colony. We think it right, however, to invite your attention to this point, assuming that your first and greatest object is the extinction of the sinking fund, which may possibly be accomplished in this manner if it should not be found more advantageous to do it in the other. To purchase consols at present by way of assisting conversion hereafter, either through the medium of the bank or of a syndicate, would in our opinion be premature, seeing that the large new issues to be made in January are calculated to lower prices all round, and that then, if advisable, purchases may be made more favourably. We need scarcely add that the employment of syndicates, though sometimes a necessity, is always an expensive mode of operating. After careful consultation over your letter, it seemed to us essential that you should know as soon as possible the general impression it had produced upon us; and we therefore sent you the telegram of which a copy is annexed. We also annex a copy of your message in reply, which we were glad to receive. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Copies of Telegrams referred to in No. 71. The Loan Agents to the Colonial Teeasueee. (Beceived 27th November, 1884.) Aftee carefully studying despatch 11th October, we think necessary represent our views without delay. Firstly, having regard to extent new loan January, cannot hold out any hope conversion Consolidated Loan, 1867, possible before March, nor probably long afterwards. Inscribed stock now about par, but fall upon approach new loan. Secondly, must not think conversion possible at figures given or anything like them unless market vastly alters. Thirdly, profitable present purchases, Consolidated Loan, 1867, not possible any appreciable extent. London, 26th.
The Colonial Teeasueee to the Loan Agents. Wellington, 29th November, 1884. New loan primary importance. Necessary documents on way Home " Buapehu." You must judge suitable time conversion.
No. 72. The Agent-General to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., Ist December, 1884. In accordance with the instructions conveyed by your telegram of the 21st ultimo, I have
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communicated to Sir Penrose Jr.lyan your acceptance of the proposals contained in his letter transmitted to you in mine of the 11th September last, No. 407 ; and I beg to enclose copies of the letters that have passed between us. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Enclosure 1 in No. 72. The Agent-Geneeal to Sir P. G. Julyan. Sis, — 7, Westminster Chambers, 25th November, 1884. I have received instructions from the New Zealand Government to acquaint you that they have had under their consideration the letter you were good enough to address to me on the 10th September last, containing your proposals for a new arrangement for the continuance of your services to the colony in the various financial capacities which you have fulfilled during so many years. The Government requested you, by telegram on the 3rd instant, to supply them with information on certain points, and upon receiving your reply they have decided to accept your proposal. They accordingly sanction the payment to you of the sum of £800 a year for four years, in accordance with your proposal as explained by the telegrams in question, such payment to cover all services to be rendered by you to the Government. The arrangement will date from the termination of the one we made in 1881, which expired on the sth November. Permit to take this opportunity of recording, once more, how great a satisfaction it is to me to have been 'associated with you in so many important financial operations, and to remember that we have been able to execute them together, without exception, in the most absolute concert and harmony. I have, &c, Sir Penrose G. Julyan, K.C.M.G., C.8., &c. F. D. Bell.
Enclosure 2 in No. 72. Sir P. J. Julyan to the Agent-Geneeal. Sic, — Imperial Hotel, Torquay, 27th November, 1884. I have the honour to acknowledge the receipt of your letter of the 25th instant, in which you [inform me that the Government of New Zealand had been pleased to accept the proposals made by me, in compliance with your request, on the 10th September last, for the continuance of my services in the various financial capacities in which I have for many years acted on their behalf. In confirming this arrangement, I beg you will be good enough to express to the Government my deep sense of the honour conferred by this renewed evidence of their confidence. The pleasure with which I receive the intelligence is greatly enhanced by the knowledge that I am still to be associated, in all the important operations in prospect, with one so able and so earnest in the advancement of the true interests of the colony as yourself. I have, &c, Sir Francis Dillon Bell, K.C.M.G., Agent-General. P. G. Julyan.
No. 73. The Colonial Teeasueee to the Loan Agents. Gentlemen, — The Treasury, Wellington, 17th January, 1885. In continuation of my letter of the 6th January, I have the honour to state that a copy of the further telegrams in relation to the loan subsequent to those referred to in my letter above, will be sent you separately. There is no occasion to remark upon them beyond reiterating the thanks I conveyed to you by cablegram for your exertions, and the ability you displayed in conducting the negotiations, and congratulating you on the success of the loan. I have, &c, The Loan Agents, London. Julius Vogel.
No. 74. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. [(Received 17th January, 1885.) Have sold further quarter of a million scrip. Only trifle remains. Loan Agents, London, 16.
s—B. 11.
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No. 75. The Colonial Teeasueer to the Agent-General. Agent-General, London. Waiwera, 20th January, 1885. Cable how proposed repay bank advances, including Bank of New Zealand. Unaware when cash payable for loan and sales. Vogel.
No. 76. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 21st January, 1885.) Finance. Firstly, as time must elapse presenting 5-per-cent. 5-30s for payment, repaid Bank of England £200,000 yesterday from 5-per-cent. 5-30s money. Secondly, repay Bank of New Zealand £200,000 to-morrow from proceeds loan. Thirdly, scrip sales payable follows : £300,000 ten days, £100,000 end February, £100,000 end March. Fourthly, latest instalment loan 30th March, £375,000 received already. Loan Agents, London, 20.
No. 77. The Colonial Teeasueee to the Loan Agents. Gentlemen, — Waiwera, New Zealand, Ist February, 1885. I have the honour to acknowledge the receipt of your letter of Ist December. A great deal of it refers to questions which are already, to a large extent, disposed of. Thus, our intention to issue the two and a half millions in one amount has been frustrated by the opinion of the Bank of England that we were precluded from issuing more than one million up to the 31st March. I take it that all that you have said regarding the question of conversion before the two and a half millions were negotiated will now apply until the remaining million and a half are disposed of. Shortly after that time, when the market is comparatively clear of stock, I hope the occasion will arise for profitably converting the consolidated drawing loans. I notice that you do not speak hopefully as regards the prospects of converting the consolidated loans on terms whicji, to me, seem favourable. You appear to think that the owners of consolidated stock would require something like stock yielding them the same rate of interest, and that the chief advantage to us of conversion would be saving the payment of the sinking fund. I may point out to you that the Agent-General telegraphed so long ago as the 29th September to the Hon. Major Atkinson—and the telegram was placed before Parliament —in the following terms: " Regarding consols, would not advise operating until after third million ; but you could make grand operation then, unless unforeseen events spoil market." I merely refer to this to show you —first, that expectation has been aroused on the subject; and second, that one of you at least, a few months ago, entertained a more favourable opinion of the prospects of this matter. I am myself inclined to agree with what the Agent-General telegraphed in September, that a grand operation is possible with consols, but that it will have to be well timed. I think the alternative you propose of issuing stock at 5 per cent., without a sinking fund, is one that should not be adopted until we are quite sure other measures would fail. I may, however, observe that the machinery of the Act passed last year would enable us to first exchange the consols into short-dated debentures, and at a convenient time thereafter to convert the latter into inscribed stock. If you thought we could exchange a large mass of consolidated debentures for short-dated ones, bearing 5 per cent, interest, with a currency of five years, I should be inclined to entertain such a proposal, especially if you still remain of opinion that a more profitable operation could not be arranged. In regard to what you say generally about conversions, I must point out that all conversions are made for the sake of the profit they give, and that that profit is made by a reduced annual charge. Obviously, therefore, if the Government pay less, the holders of the debentures will receive less. But the inducement to holders is that, whilst they may receive for the bond they hold one which will yield them less money as an investment, they will be able to sell the latter for a better price if they wish to dispose of it. In other words, they receive either a more saleable bond or one commanding in the market a higher money value. Of course, to persons whose sole idea is an investment, the attraction thus offered is not sufficient. A large number of persons who invest, and who even propose to continue to hold the investment, still like to know that their money is not locked up, and that, if they wish to sell, they can demand a good market rate. Bespecting the consolidated drawing loans, now that the drawings are assuming large dimensions, there is the further inconvenience to holders of having a small portion of their holding disturbed by drawings, and of having to reinvest the sum paid off. You raise the question about the exact meaning to attach respectively to market and actuarial equivalents. I think (I have not the papers by me) that the terms were first used by you, and it is singular that in the letter which has crossed yours, in which I wrote about the actuarial tables sent out by the Agent-General, I drew attention to the fact that it was desirable that we should understand what was meant by these two terms. I have not that letter by me, but I think I explained sufficiently that what I understood by the market equivalent was the amount exchangeable [of one bond for an-
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other on the basis of the market rate of each. That the calculations should be made by an actuary would not, in the sense I meant, constitute it an actuarial equivalent. As regards an actuarial equivalent, I think I quite explained that in my understanding it meant a bond of equal intrinsic value irrespective of market caprice. In the one case, in fact, the actuarial equivalent would mean that a bond, of precisely an equal value should be substituted for the other, whilst, in the other case, the market equivalent would mean that a bond of equal value in the market should be substituted, having regard to the possibly higher market value of a bond of one denomination over that of another. If my memory serves me rightly, in the letter to which I refer, I expressly pointed out that the tables sent me by the Agent-General dealt partly with market and partly with actuarial equivalents. I shall be glad to know that our understanding is the same upon this subject, as these terms may from time to time have to be usefully employed. I have &c, The Agents for New Zealand Loans, London. Julius Vogel.
No. 78. The Loan Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 19th December, 1884. We have the honour to acknowledge the receipt of your letter of the Bth November, No. 8, and to inform you that the drafts for £100,000, referred to therein, were duly presented to-day and accepted. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan Agents.
No. 79. The Loan Agents to the Colonial Teeasurer. Treasurer, New Zealand, (Beceived 6th February, 1885.) Youe letter of 24th November received. Please reply to proposal contained in our letter December first respecting exchange Consolidated Loan 1867 for five-per-cent. debentures ; it has important bearing on questions raised by Stock Act eighty four, and we still think our proposal would be preferable to provisions that Act so far as concerns Consolidated Loan 1867. Loan Agents, London, 5.
No. 0 . The Colonial Teeasurer to the Agent-General. Agent-General, London. Waiwera, 6th February, 1885. Loan Agents. Important not allow conversion interfere with negotiation million and a half which desire immediately we think market favourable after end of March. Act eighty-four aids proposal letter December first by enabling creation short-dated debentures. Agree five-per-cent. debentures not desirable ; still, if great quantity Consolidated Loan 1867 obtainable, willing exchange par five-per-cent. debentures make period of currency five years with option convert during first four years into inscribed stock at following rates: 105 per 100, or immediate exchange debentures for stock at following rates : 109 inscribed stock per 100 Consolidated Loan 1867. Beply.
No. 81. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 9th February, 1885.) Conveesion. Yours to-day. Firstly, we think our proposal would not materially affect million and a-half; that issue must be deferred some months. Secondly, must postpone answer few days respecting exchangeable quantities. Thirdly, we did not regard Act as antagonistic to proposal. Loan Agents, London, 7.
No. 82. The Loan Agents to the Colonial Treasures. Sib, — 7, Westminster Chambers, London, S.W., 30th December, 1884. We duly received your letter of the Bth November, No. 7, informing us that you were unable to write by the mail then leaving, as the session was closing that day.
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You will have learnt from the Agent-General's letter of the 19th instant, No. 577, what passed between the Governors of the Bank of England and himself in reference to their inquiries respecting the financial proposals of your Government, when it was arranged to have a conference with us a little later on. Accordingly, the conference took place at the bank on the 24th instant. We found that the Governors had, in the interval, made up their minds not to bring out more than the last million of the Three-Million Loan until after the expiration of your financial year 1884-85 (that is to say, not till after the 31st March next), on the ground that "The Loan Act, 1882," had declared that " no greater sum than £1,000,000 of the £3,000,000 should be raised in any one year, commencing with the year 1883 ;" and, coupling this enactment with the first prospectus of the loan issued by the bank, they considered themselves in honour bound not to bring out more now; they therefore declined being parties to a larger issue at once, but expressed their willingness, provided we would give a guarantee that no more than a million and a half of new loans should be placed upon the market within your next financial year (1885-86), to bring out that amount later on in the year 1885. . We combated this interpretation of the Loan Act, pointing out that, if the objection existed at all, it was one which must be held to apply not to your financial year 1884-85, but to the whole of the year 1885 ; and we also strongly urged that, as a financial operation, there were greater advantages in bringing out the two and a half millions at once. We found, however, that (acting on the advice of their brokers) the Governors would not yield the point, being of opinion that to raise more than the million now would be a breach of faith on the part of the bank towards the public, and compromise the bank accordingly. With regard to the guarantee asked for, we felt sure you would have been prepared for it long ago by our telegram of the 30th September, in which we informed you that we thought we should be able to raise the two and a half millions you required in January, provided you did not come upon the market again for another year. The bank, as you are aware, had themselves a large interest in the question of how much stock would come upon the market early in 1885, on account of the £764,240 of new stock they had agreed to take in order to pay off the 5-per-cent. five-thirties ; it being obvious that the issue of so much as two and a half millions in January would, to a certain extent, be adverse to a disposal of the bank stock. We, therefore, thought it necessary to prevent this question influencing the Governors in their present decision by intimating our readiness either to indemnify the bank from any possible loss on the transaction, or to release them entirely from the agreement to take the stock. The Governors, however, behaved handsomely in the matter, saying they did not think it necessary to make any change in the existing arrangement. Their objection, therefore, had nothing to do with the stock they had to receive to pay off the five-thirties. We explained to the Governors in general terms the method you proposed to adopt for converting the various loans which bear sinking funds; but, unfortunately, we had no copy of the Consolidated Stock Act of last session with us, having only a copy of the Bill as originally brought in by you, which had reached the Agent-General from a private source. We do not doubt that the prospect of further issues of new stock or debentures under that Act being placed upon the market in connection with the sinking funds weighed with the bank in requiring the guarantee. It was, however, quite understood at the conference that the guarantee asked would not in any way prevent the issue of stock for actual conversion of debentures of the loans in question. At the termination of the conference we sent you a telegram acquainting you with the substance of what had passed. Copies of that message, and of the subsequent messages that have passed between us, are appended; and, as the subject is still under yQur consideration, and will be settled within the next few days, we defer making any further statement on our own part until your final decision has been made, when we shall be better able to make that statement complete. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan Agents.
Copies of Telegrams referred to in No. 82. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 26th December, 1884.) New loan. Bank of England having required full explanation respecting your financial proposals, prolonged conference took place to-day, when Governors gave their decision. Firstly, Bank of England feel they are in honour bound not to bring out more than remaining million of three millions in January, and therefore decline being parties to larger issue now; secondly, provided guarantee be given that no more than million and a half new loan be borrowed within your next financial year, Bank of England would undertake to bring out that amount later in eighty-five; thirdly, such guarantee would not prevent bond fide conversion, but would prevent any creation for appropriating sinking funds ; fourthly, necessary therefore instruct whether shall give guarantee required. Our opinion is, inevitable. See our telegram September thirty. Our own opinion therein given remains unaltered, that it would have been better raise whole two millions and a half now; but Bank of England will not yield, therefore no alternative. Loan Agents, London, 24.
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 27th December, 1884. Loan Agents. Bank of England's dictation novel, amazing. Fancy they desire protect advance
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paying off five-per-cent. five-thirties; if so, can you arrange indemnify them ? Unaware pledge concerning issue January. If existent, can we bring out two and a half millions February? If safe, wait. Concur desirable float whole amount, besides million insufficient. I understand guarantee asked is not to publicly emit further loan until March, eighty-six; but not prevent our borrowing security North Island Bailway Loan. Begarding sinking fund, that it means no operations at Home, but not interfere with creations here, kept here; not prevent guarantee West Coast Harbour debentures quarter of a million. I should require you sell the £500,000 Trust Fund scrip soon as possible. Please understand third million virtually spent, and we contracted not increase expenditure.
Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Received 30th December, 1884.) New loan. Firstly, Bank of England's objection has nothing to do with agreement with Bank of England about five-per-cent. five-thirties, as we offered to indemnify or release; but they interpret Loan Act, coupled with first prospectus, as precluding issue more than million until expiration financial year March next; and although we strongly urged them to bring out two million and a half in January, they decidedly objected on ground that would be breach faith toward public and compromise Bank of England; but were willing offer million and a half later in year. Secondly, guarantee asked applies exclusively to placing additional securities of any kind directly or indirectly upon English market between issue of two millions and a half and April, eighty-six, and would not debar you from obtaining temporary advances on North Island Bailway securities other than inscribed stock, nor from guaranteeing West Coast Harbour debentures. Thirdly, we hold only about £85,000 Post-Office scrip, and cannot understand message proposed sale £500,000. Loan Agents, London, 29.
No. 83. The Loan Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 2nd January, 1885. We were glad to receive your telegram of to-day in answer to ours of 31st December, accepting the conditions asked by the bank, and giving the guarantee they desired. Immediately upon this, we took the necessary steps to bring out the last instalment of the Three-Million Loan, and we enclose herewith a proof of the bank prospectus, which will be published in to-morrow's papers. We also annex copy of your telegram received this morning, and of one we are sending you to-night announcing the issue. In the present state of the money market, and with the bank rate at 5 per cent., there is no rpom for speculation, and we have been obliged to reduced the minimum 1 per cent, below that of the two first millions. The minimum of ;the present issue, is accordingly fixed at £97 10s. instead of £98 10s. We have reason to believe, however, that the loan will go well. Tenders are to be received on the 9th instant, and the instalments are all to be paid up by 30th March next. I have, &c, (For the Loan Agents) The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Copies of Telegrams referred to in No. 83. The Colonial Teeasueee to the Agent-Geneeae. Agent-General, London. Wellington, 2nd January, 1885. We accept conditions, and give guarantee as indicated by cablegrams. Third million, you are authorized offer loan at once.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 3rd January, 1885.) Thied million announced upon receiving your message to-day. Minimum, ninety-seven half. Tenders, ninth instant. Loan Agents, London, 2.
Enclosure in No. 83. New Zealand Goveenment £4-pee-cent. Consolidated Stock.—lssue of £1,000,000. — Minimum price of issue, £97 10s. per cent. First dividend, being six months' interest, payable Ist May, 1885. Authorized by " The New Zealand Loan Act, 1882," for Public Works, and Immigration, and other purposes. The Governor and Company of the Bank of England give notice that, on behalf of the Agents appointed for raising and managing the loan under the above Act (Sir Penrose Goodchild Julyan, K.C.M.G., C.8., and Sir Francis Dillon Bell, K.C.M.G.)-, they are authorized to receive tenders for £1,000,000 New Zealand Government £4-per-cent. Consolidated Stock, repayable at par on the Ist November, 1929.
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This stock will bo in addition to, and will rank pari passu with, the New Zealand £4-per-cent. Consolidated Stock previously created and issued. The interest will be payable half-yearly at the Bank of England, on the Ist May and Ist November in each year, and six months' interest, calculated upon the nominal amount of stock, will be payable on the Ist May next. The books of the stock are kept at the Bank of England, where all assignments and transfers are made; and holders of the stock are able, on payment of the usual fees, to take out stock certificates to bearer, with coupons attached, which certificates may be reinscribed into stock at the will of the holder. All transfers and stock certificates are free of stamp duty. Dividend warrants are transmitted by post if desired. The loan is secured on the Consolidated Fund of the Colony of New Zealand, which includes the revenue derived from the railways, and from the sales and leases of public lands. By the Act 40 and 41 Vict. c. 59, the revenues of the Colony of New Zealand alone will be liable in respect of the stock and the dividends thereon, and the Consolidated Fund of the United Kingdom and the Commissioners of Her Majesty's Treasury will not be directly or indirectly liable or responsible for the payment of the stock or of the dividends thereon, or for any matter relating thereto. Tenders may be for the whole or any part of the stock, and must state what amount of money will be given for every £100 of the stock. Tenders for other than even hundreds of stock, or at a price including fractions of a shilling other than sixpence, will not be accepted. Tenders are to be delivered at the Chief Cashier's office, Bank of England, before two o'clock on Friday, 9th January, 1885. Tenders at different prices must be on separate forms. The amount of stock applied for must be written on the outside of the tender. The minimum price, below which no tender will be accepted, has been fixed at £97 10s. for every £100 of stock. A deposit of 5 per cent, on the amount of stock tendered for must be paid at the same office at the time of delivery of the tender, and the deposit must not be enclosed in the tender. Where no allotment is made the deposit will be returned, and in case of partial allotment the balance of the deposit will be applied towards the first instalment. In the event of the receipt of tenders for a larger amount of stock than that proposed to be issued at or above the minimum price, the tenders at the lowest price accepted will be subject to a pro rata diminution. The dates at which the further payments on account of the said loan will be required are as follow : On Monday, the 19th January, 1885, so much of the amount tendered and accepted as, when added to the deposit, will leave £75 (sterling) to be paid for each hundred pounds of stock; on Monday, the 2nd February, 1885, £25 per cent.; on Monday, the 2nd March, 1885, £25 per cent.; on Monday, the 30th March, 1885, £25 per cent. The instalments may be paid in full on or after the 19th January, 1885, under discount at the rate of 4 per cent, per annum. In case of default in the payment of any instalment at its proper date, the deposits and instalments previously paid will be liable to forfeiture. Scrip certificates to bearer will be issued in exchange for the provisional receipts. The stock will be inscribed in the bank books on or after the 30th March, 1885, but scrip paid up in full, in anticipation, may be inscribed forthwith. Applications must be upon the printed forms which, together with a statement showing the condition and prospects of the colony, may be obtained at the Chief Cashier's Office, Bank of England; of Messrs. Mullens, Marshall and Co., 4, Lombard Street; of Messrs. J. and A. Scrimgeour, 18, Old Broad Street; and at the Office of the Agent-General of New Zealand, 7, Westminster Chambers, S.W., where also copies of the Act authorizing the loan may be seen. 2nd January, 1885.
No. 84. The Colonial Treasueee to the Agent-Geneeae. Agent-General, London. Waiwera, 18th February, 1885. Loan Agents. When do you think negotiate million and a half ? War rumours make desirable effect soon as possible.
No. 85. The Loan Agents to the Colonial Teeasurer. Treasurer, New Zealand. (Beceived 20th February, 1885.) Million and a half. Cannot encourage any hope placing before midsummer. War rumours not such warrant hurried issue. Loan Agents, London, 19.
No. 86. The Colonial Teeasueee to the Agent-Geneeae. Agent-General, London. Auckland, 21st February, 1885. Loan Agents. Million and a half. Midsummer satisfactory. Try manage before London empties. Beply shortly about conversion.
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No. 87. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 20th February, 1885.) Consolidated Loan 1867. After fullest reflection, we advise following: Firstly, your proposed exchangeable quantities would not be accepted; secondly, we think any operation which caused present issue new inscribed stock in large quantities would injure million and a half; therefore, we advise not making any offer involving immediate exchange inscribed stock for Consolidated Loan 1867 debentures; thirdly, on other hand, we think desirable operate before next drawing by taking advantage of new Act, provided could offer terms likely to insure success; fourthly, actuaries calculate average life of Consolidated Loan 1867 bond after next drawing at nearly thirteen years—therefore new 5-per-cent. bond, having only five years' currency, would be inadequate, especially as Consolidated Loan so largely held by financial bodies which are governed by annual chance of drawings; fifthly, therefore we advise you authorize us to offer seven years 5-per-cent. bond convertible at end currency into 106, or even 107, of inscribed stock; sixthly, we are inclined to think this would succeed unless war or serious complications suddenly intervene, which, however, we do not apprehend. Please instruct. Loan Agents. London, 19.
No. 88. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Auckland, 23rd February, 1885. Cable estimated cost about proposed conversion. Meaning of message uncertain between sixthly immediate. Bepeat interim words.
No. 89. The Agent-Geneeal to the Colonial Teeasueer. Treasurer, New Zealand. (Beceived 24th February, 1885.) Perplexed which words should repeat. Instruct whether you wish me explain Loan Agents' object more clearly. London, 23.
No. 90. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Auckland, 24th February, 1885. Loan Agents. What probable cost of proposed conversion. Bepeat next five words following sixthly.
No. 91. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 25th February, 1885.) Conveesion. Cost may be estimated about one and half per cent, upon amount converted. Following five words after sixthly : We are inclined to think. Loan Agents, London, 24.
No. 92. The Colonial Treasueee to the Agent-Geneeal. Agent-General, London. Wellington, 2nd March, 1885. Loan Agents. Approve proposed conversion on not worse terms than described in your telegram 19th February if you still think will not materially affect million and a half.
No. 93. Memobandum by the Seceetaey to the Teeasury. Treasury, Wellington, 2nd March, 1885. Conversion. Aft er seven years the annual charge will be — £ Interest at 4 per cent, on £106 +£1-5 for expenses = 107-5 ... 4-3 Sinking fund to produce £7 10s. in forty-four years ... ... '065 4365 5 Saving ... ... ... ... .635
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£ Interest at 4 per cent, on £107 4- £1-5 = 108-5 ... ... 4-34 Sinking fund ... ... ... ... ... -074 4-414 5 Saving ... ... ... ... .586 During the seven years currency of the new 5-per-cent. bonds the annual charge will be very slightly increased by interest on the expenses attending the first part of the operation. The sinking fund in respect of consols was estimated for the current year at £148,509. The drawn bonds at date of last drawing amounted to £1,510,600; and as the loan was £7,283,100, the amount outstanding is now £5,772,500, reducible this month by, say, £148,500. James C. Gavin.
No. 94. The Loan and Stock Agents to the Colonial Teeasueee. Sir, — 7, Westminster Chambers, London, S.W., 9th January, 1885. We have the honour to inform you that we have duly executed and enrolled the deeds creating the inscribed stock for £764,240 to be given to the Bank of England for paying off the 5-per-cent. 5-30 debentures. We transmit herewith two copies of the deeds, together with copies of the instructions we have given the bank for paying in moneys from time to time to the Crown Agents' account as the debentures are presented for payment. We have, &c, P. G. Julyan, E. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Enclosure 1 in No. 94. Sic, — 7, Westminster Chambers, 9th January, 1885. It will be in your recollection that our arrangement with the bank last July for the amount to be provided for paying off the New Zealand 5-per-cent. 5-30 debentures was that, upon receiving from us the scrip for £764,240 on the 12th instant, the Bank should place to our credit the sum of £745,600 on the 15th. As the debentures in question have to bo paid off by the Crown Agents, it is necessary to place that department in funds for the purpose; and we have accordingly to request that the hank will feed their account from time to time, as may be required, paying to their order round sums of money, and charging these sums against the £745,600 to be placed to our credit. As the debentures have to be sent in to the Crown Agents three clear days before payment, you will always receive the requisition in good time for the sum they want to be passed to'their credit. We have, &c, F. D. Bell, P. G. JWLYAN, The Chief Cashier, Bank of England. Stock Agents.
Enclosure 2 in No. 94. Deed-Pole. To all whom these presents shall come, We, Sir Feancis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, and Sir Peneose Goodchild Julyan, a Knight Commander of the said Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, send greeting: Wheeeas by an Act of the Legislature of New Zealand, intituled " The New Zealand Consolidated Stock Act, 1877," it was, among other things, enacted that, for the purpose of raising any sum or sums of money under the authority of any Act that might be passed by the said General Assembly in any future session of the General Assembly authorizing the Governor in Council to raise by way of loan any sum of money for the public service of the colony, it should be lawful for the Governor in Council to create capital stock, to be called " New Zealand Consolidated Stock," such stock to be issued in such amounts and manner, at such price and times, on such terms and subject to such conditions, with such dividends, and redeemable at par at such times and on such conditions as the Governor in Council might before the creation thereof from time to time determine; and by the said Act it was further enacted that the Governor in Council might from time to time declare all or any of the New Zealand loans, whether existing in the form of stock or not, to be convertible inio stock of such denominations, with such conditions, and with such dividends, and redeemable at par at such times and on such conditions as he might before the creation thereof from time to time determine ; and might authorize the creation and issue of such an amount of such stock in exchange for the securities held for such loans as might be necessary, and might authorize the creation and sale of any of such stock for the purpose of raising money for redeeming any outstanding stock or securities,
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and of paying any expenses in the creation of stock, and otherwise carrying out the provisions of the said Act on such conditions as he might determine, and any conversion so authorized might be effected either by arrangement with the holders of the existing securities, or by purchase thereof out of moneys raised by a sale of the new stock, or partly in one way and partly in the other; and by the said Act it was further enacted that the Governor in Council might from time to time appoint three or more persons in England to be Agents for the purposes of the said Act, and might empower such Agents, or any three or more of them, to exercise all or any of the powers by the said Act exercisable by the Governor in Council; and further, that the said Act should not come into operation, nor be of any force and effect whatever, until it should be declared to be so in operation by a Proclamation issued by the Governor in Council, and published in the New Zealand Gazette : And whereas, by a Proclamation made and issued by the Governor in Council on the 9th day of February, 1878, and published in a supplement to the New Zealand Gazette of the same date, the Governor, with the advice and consent of the Executive Council of the said colony, did proclaim and declare that " The New Zealand Consolidated Stock Act, 1877," should be and come into operation on and after the 9th day of February, 1878 : And whereas, by a deed-poll bearing date the Ist day of December, 1879, under the hands and seals of me, the said Sir Penrose Goodchild Julyan, and of Sir Julius Vogel, a Knight Commander of the said Most Distinguished Order of St. Michael and St. Geroge, and of Montagu Frederic Ommanney, Esquire, who had been duly appointed Agents in England for the purposes of the said Act, and had been duly empowered to exercise all the powers by the said Act exercisable by the Governor in Council, it was declared that a capital stock of not exceeding £6,000,000, to be called "The New Zealand Consolidated Stock," had been created, and that it had been determined that the same should be issued on the terms and conditions, and within the times in such deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly, at the Bank of England, on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, and that on the said Ist day of November, 1929, the capital should be repaid at par at the same place: And whereas, in accordance with the terms and conditions in the said deed-poll mentioned, New Zealand Consolidated Stock was issued to the amount only of £5,371,200, and the same was duly inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And whereas, by another Act of the said Legislature, intituled " The New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," it was enacted that, notwithstanding anything in "The New Zealand Consolidated Stock Act, 1877," contained, the Governor in Council might appoint only two persons to be the Agents for the purposes of such Act, who should have, exercise, and perform all the powers, authorities, or duties by such Act given to, vested in, or imposed upon the Agents appointed under such Act, and that throughout such Act the words " the Agents " should be deemed to refer to and include the two persons by the now reciting Act authorized to be appointed to be the Agents for the purposes of " The New Zealand Consolidated Stock Act, 1877 " : And whereas, in pursuance of the power and authority vested in him by the said Acts (all previous appointments of Agents having been revoked), the Governor of New Zealand did, by an Order in Council bearing date the sth day of November, 1881, appoint us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, to be Agents in England for the purposes of the said Acts of 1877 and 1881, with full power and authority to us as such Agents to exercise all the powers by such Acts exercisable by the Governor in Council: And whereas, by a deed-poll bearing date the Ist day of January, 1883, under the hands and seals of us, the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, acting as such Agents, and duly empowered as aforesaid, we declared that we had created a further amount of one million pounds sterling of capital stock, to be called " The New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £5,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, and had determined that such further amount of stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England, on the Ist day of May and Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And whereas, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of one million pounds, and the sum of £6,371,200 of New Zealand Consolidated Stock, and no more, then became inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And whereas, by a deed-poll bearing date the 30th day of October, 1883, under the hands and seals of us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, after reciting that, acting on instructions from the Governor of New Zealand in Council, we had determined to invite holders of debentures, forming part of certain New Zealand loans in the same deed-poll mentioned and described, to bring in their debentures to the Bank of England within the times thereinafter mentioned for conversion into New Zealand Consolidated Stock, and that we had made arrangements with the Bank of England that, in exchange for such of the same debentures as should be lodged as in the now reciting deedpoll mentioned for conversion into stock, the Bank of England should issue to the respective holders of such debentures, and in exchange for the same, a scrip certificate, stating the amount of New Zealand Consolidated Stock to which the holder of such certificate would, upon surrendering the same, be entitled. We declared that we had created a further amount of not exceeding £9,400,000 of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid; and had determined that so much of such capital stock aa 6—B. 11.
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it should be necessary to issue to the holders of the said scrip certificates should be issued to them in exchange for such scrip certificates, and that so much of the residue of the said stock as it should be necessary to sell for the purpose of raising money for the payment of such expenses as in the said deed-poll mentioned should be sold and issued to the purchasers thereof or their respective nominees, and that the same further amount of stock so issued should bear interest at the rate of £4 per centum per annum, payable half-yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And whereas, in accordance with the terms and conditions in the said lastly recited deed-poll mentioned, a large proportion of the amount of New Zealand Consolidated Stock thereby created has been issued: And whereas, by a deed-poll bearing date the Ist day of January, 1884, under the hands and seals of us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, we declared that we had created a further amount of £1,000,000 sterling of capital stock, to be called " The New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid; as also with such further amount of New Zealand Consolidated Stock as should be issued in pursuance of or as mentioned in the said deed-poll of the 30th day of October, 1883, and had determined that such further amount of stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per centum per annum, payable half-yearly at the Bank of England, on the Ist day of May and Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And whereas, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000: And whereas there are now outstanding debentures representing the sum of £745,600, known as " The New Zealand Government Five-per-cent. Five-thirty Debentures," issued under the authority of the Acts of the said Legislature, intituled respectively " The Defence and other Purposes Loan Act, 1870," " The Immigration and Public Works Loan Act, 1873," and " The General Purposes Loan Act, 1873," and due notice has been given on behalf of the Government of New Zealand that the same debentures will be paid off at par on the 15th day of January, 1885 ; and for the purpose of raising the necessary moneys to redeem the same, it has been deemed expedient to create a further amount of New Zealand Consolidated Stock. And we, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents and so empowered as aforesaid, have determined to create and issue a further amount of £764,240 sterling of New Zealand Consolidated Stock, to be in addition to, and to rank pari passu with, the New Zealand Consolidated Stock created and already issued or which may be issued as aforesaid : And whereas we have further determined that such further amount of stock shall be created, issued, and inscribed under the said " New Zealand Consolidated Stock Act, 1877," and we have also determined the amount, manner, price, time, terms, and conditions on, at, and subject to which such stock shall be issued and inscribed, and the dividends thereon be payable, and the principal thereof be redeemable, such amount, manner, price, time, terms, dividends, and conditions being those hereinafter mentioned: And whereas we deem it expedient that our determination to create such additional amount of £764,240 of New Zealand Consolidated Stock to be so issued and redeemable shall be declared and manifested under our hands and seals : Now, therefore, these presents witness, and we, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, in exercise and in pursuance of the powers by the said Orders in Council, or either of them, vested in us, do by these presents declare that we have created a further amount of seven hundred and sixty-four thousand two hundred and forty pounds sterling of capital stock, to be called " The New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the amount of New Zealand Consolidated Stock heretofore created as aforesaid, and which has been or may be hereafter issued; and we have determined that the same capital stock shall on and after the first day of May next be issued at the rate of one hundred and two pounds ten shillings of stock for every one hundred pounds sterling which shall be subscribed for the purpose of redeeming the said debentures for £745,600, and be represented by a scrip certificate ; and that the interest or dividend to be paid on the said further amount of seven hundred and sixty-four thousand two hundred and forty pounds sterling of stock so created by us as last aforesaid, shall be at the rate of four pounds per centum per annum, and shall be payable half-yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, and that the first half of a year's interest or dividend shall be payable on the Ist day of November, 1885 ; and further, that on the said Ist day of November, 1929, the capital shall be repaid at par at the same place. And lastly we do further declare that the revenues of the Colony of New Zealand alone are liable in respect of the stock hereinbefore described and the dividends thereon, and that the Consolidated Fund of the United Kingdom, and the Commissioners of Her Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the stock or of the dividends thereon, or for any matter relating thereto. In witness whereof we have hereunto set our hands and seals this 30th day of December, 1884. (e.s.) E. D. Bell, Signed, sealed, and delivered by the above-named Sir Francis (e.s.) P. G. Julyan, Dillon Bell and Sir Penrose Goodchild Julyan, in the presence of—Leonaed J. Maton, Solicitor,, 21, Cannon Street, London.
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Enclosure 3 in No. 94. Declaeation. It is hereby declared that, by "The New Zealand Consolidated Stock Act, 1877," being Act 41 Vict., No. 33, of the Legislature of the Colony of New Zealand, provision is made in the terms following, that is to say : — Section 2. Whenever in any Act heretofore passed by the General Assembly, or that may be passed in the present or any future session of the General Assembly, authority is given to the Governor, or to the Governor in Council, to raise by way of loan any sum of money for the public service of the colony, then unless there be some provision to the contrary in the Act by which such authority is given, such sum may be raised in the manner hereinafter provided: Section 3. For the purpose of raising such sum or sums of money under the authority of any such Act as aforesaid, it shall be lawful for the Governor in Council to create capital stock, to be called " The New Zealand Consolidated Stock " (hereinafter referred to as " stock "), subject to the provisions of this Act, to be issued in such amounts and manner, at such price and times, on such terms, and subject to such conditions, with such dividends, and redeemable at par at such times and on such conditions as the Governor in Council may before the creation thereof from time to time determine : Section 4. The Governor in Council shall have and may exercise the following powers and authorities, or any of them : — (1.) He may from time to time declare all or any of the New Zealand loans, whether existing in the form of stock or not, to be convertible into stock of such denominations, with such conditions and with such dividends, and redeemable at par at such times and on such conditions, as he may before the creation thereof from time to time determine : (2.) He may authorize the creation and issue of such an amount of such stock in exchange for the securities held for such loans as may be necessary : (3.) He may authorize the creation and sale of any such stock for the purpose of raising money for redeeming any outstanding stock or securities and of paying any expenses in the creation of stock and otherwise carrying out the provisions of this Act on such conditions as he may determine : (4.) Any conversion so authorized may be effected either by arrangement with the holders of existing securities or by purchase thereof out of moneys raised by a sale of new stock, or partly in one way and partly in the other : Section 7. The Governor in Council may from time to time enter into any such agreement with the Bank of England as to the Governor in Council seems fit, providing for all or any of the following things (inter alia) : — (1.) For inscribing in the books of the bank any stock : (2.) For managing the creation, inscription, and issue of stock : (3.) For effecting the conversion of loans into stock and managing transfers of stock : (5.) For issuing stock certificates to bearer, and as often as occasion shall require reissuing or reinscribing stock and reissuing stock certificates: (10.) Generally conducting all business connected with stock or loans. For the purposes of this Act the expression "Bank of England" means the Governor and Company of j the Bank of England, and includes their successors : Section 8. Every agreement made with the Bank of England in pursuance of this Act shall be as valid and effectual as if the terms thereof had been set forth in and. enacted by this Act: Section 9. The Governor in Council shall have the powers and duties, and may do the following things (inter alia) for the purposes of this Act: (1.) He may from time to time appoint three or more persons in England to be Agents for the purposes of this Act (which Agents for the time being are in this Act referred to as " the Agents "), and may empower such Agents or any three or more of them to exercise all or any of the powers by this Act exercisable by the Governor in Council: Section 14. This Act shall not come into operation nor be of any force or effect whatever until it shall be declared to be so in operation by a Proclamation issued by the Governor in Council and published in the New Zealand Government Gazette : And it is hereby further declared that by a Proclamation made and issued by the Governor in Council on the 9th day of February, 1878, and published in a supplement to the New Zealand Government Gazette of the same date, it was declared that the said Act should be and come into operation on and after the said 9th day of February, 1878 : And it is hereby further declared that Sir Penrose Goodchild Julyan, K.C.M.G., C.8., Sir Julius Vogel, K.C.M.G., and Montagu Frederic Ommanney, who were then the Agents duly appointed by the Governor in Council under the provisions of the said Act, did by a deed-poll under their hands and seals bearing date the Ist December, 1879, declare that a capital stock, called "The New Zealand Consolidated Stock," had been by them created, and that they had determined that an amount not exceeding £6,000,000 of such stock should be issued on the terms and conditions, and within the times in such deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929; and that on the said Ist day of November, 1929, the capital should be repaid at par at the same place : And it is hereby further declared that the said Sir Penrose Goodchild Julyan, Sir Julius Vogel, and Montagu Frederic Ommanney entered into an agreement with the Governor and Company of the Bank of England, providing among other things for the inscription in a register kept in England by the said bank of the said stock : And it is hereby further declared that, in accordance with the terms and conditions in the said deed-poll mentioned, New Zealand Consolidated Stock was issued to the amount of £5,371,200, and
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was duly inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And it is hereby further declared that by "The New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," being Act 45 Vict., No. 44, of the said Legislature, it was enacted that, notwithstanding anything in "The New Zealand Consolidated Stock Act, 1877," contained, the Governor in Council might appoint only two persons to be the Agents for the purposes of such Act, who should have, exercise, and perform all the powers, authorities, or duties by such Act given to, vested in, or imposed upon the Agents appointed under the ninth section of such Act; and that throughout such Act the words "the Agents" should be deemed to refer to and include the two persons authorized by the Act now in recital to be appointed to be the Agents for the purpose of *' The New Zealand Consolidated Stock Act, 1877 " : And it is hereby further declared that, in pursuance of the power and authority vested in him by the said Acts (all previous appointments of Agents having been revoked), the Governor of New Zealand did, by an Order in Council bearing date the sth day of November, 1881, appoint Sir Francis Dillon Bell, of No. 7, Westminster Chambers, Victoria Street, Westminster, K.C.M.G., the Agent-General for the Colony of New Zealand, and the said Sir Penrose Goodchild Julyan, to be Agents in England for the purposes of the said Acts of 1877 and 1881, with full power and authority to them as such Agents to exercise all the powers by such Acts exercisable by the Governor in Council: And it is hereby further declared that the Governor of New Zealand did, by another Order in Council also bearing date the sth day of November, 1881, and issued under the seal of the said colony, empower the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan as and to be the Agents to make the declaration required by the provisions of " The Colonial Stock Act, 1877," and in and about such declaration, and. the leaving and record thereof with the Commissioners of Inland Revenue, to do all such necessary acts as might or could have been done by or on behalf of the Government of the said colony to give effect to the provisions of the last-mentioned Act : And it is hereby further declared that, by a deed-poll bearing date the Ist day of January, 1883, under the hands and seals of the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, acting as such Agents and so empowered as aforesaid, they declared that they had created a further amount of £1,000,000 sterling of capital stock, to be called " The New Zealand Consolidated Stock," in addition to, and. to rank pari passu with, the said amount of £5,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, and had determined that such further amount of stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And it is hereby further declared that, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000, and the sum of £6,371,200 of New Zealand Consolidated Stock, and no more, then became inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And it is hereby further declared that, by a deed-poll bearing date the 30th day of October, 1883, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, after reciting that acting on instructions from the Governor of New Zealand in Council they had determined to invite holders of debentures forming part of certain New Zealand loans in the same deed-poll mentioned and described to bring in their debentures to the Bank of England within the times thereinafter mentioned, for conversion into New Zealand Consolidated Stock; and that they had made arrangements with the Bank of England that in exchange for such of the same debentures as should be lodged with them on or before or up to noon of the 30th day of November then next, or which might by arrangement between the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan and the holders thereof be so lodged on or before the 30th day of September then next, for conversion into stock, the Bank of England should issue to the respective holders of such debentures, and in exchange for the same, a scrip certificate stating the amount of New Zealand Consolidated Stock to which the holder of such certificate would, upon surrendering the same, be entitled on and after the Ist day of May then next, they declared that they had created a further amount of not exceeding £9,400,000 of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, and had determined that so much of such capital stock as it should be necessary to issue to the holders of the said scrip certificates should, on and after the Ist day of May, 1884, be issued to the holders of such scrip certificates in exchange for the same, at the rates and according to the amounts of such stock in such scrip certificates respectively mentioned; and that so much of the residue of the said stock as it should be necessary to sell for the purpose of raising money for the payment of such expenses as, in the said deed-poll mentioned, should he sold and issued to the purchasers thereof, or their respective nominees; and that the same further amount of stock so issued should bear interest at the rate of 4 per centum per annum, payable half yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And it is hereby further declared that, in accordance with the terms and conditions in the lastly recited deed-poll mentioned, a large proportion of the New Zealand Consolidated Stock thereby created has been issued : And it is hereby further declared that, by a deed-poll bearing date the Ist day of January, 1884, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, declared that they had created a.
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further amount of one million pounds sterling of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, as also to and with such further amount of New Zealand Consolidated Stock as should be issued in pursuance of, or as mentioned in the said deed-poll of the 30th day of October, 1883; and had determined that such further amount of stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And it is hereby further declared that, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000 : And it is hereby further declared that, by a deed-poll bearing date the 30th day of December, 1884, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, after reciting to the effect hereinbefore recited, they, acting as such Agents and so empowered, as aforesaid, declared that, for the purpose of raising moneys to redeem the outstanding debentures therein mentioned, they had created a further amount of seven hundred and sixty-four thousand two hundred and forty pounds sterling of capital stock, to bo called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the amounts of New Zealand Consolidated Stock theretofore created as aforesaid, and which had been, or might be, thereafter issued, and had determined that the same capital stock should, on and after the Ist day of May then next, be issued at the rate of £102 10s. of stock for every £100 sterling which should be subscribed for the purpose of redeeming the said debentures for £745,600, and be represented by a scrip certificate; and that the interest or dividend to be paid on the said further amount of seven hundred and sixty-four thousand two hundred and forty pounds sterling of stock so created by them as last aforesaid, should be at the rate of £4 per centum per annum, and should be payable half-yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929; and further, that on the said Ist day of November, 1929, the capital should be repaid at par at the same place : And it is hereby further declared that, in farther pursuance of the said " New Zealand Consolidated Stock Act, 1877," and "New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," and of the said Order in Council of sth November, 1881, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan have entered into an agreement with the Governor and Company of the Bank of England, providing (among other things) for the inscription, in a register kept in England by the said bank, of the said stock mentioned in the said last-mentioned deed-poll to have been created, and for the transfer of such stock : And it is hereby further declared that the stock to be inscribed and transferred, in conformity with such provision, is the " New Zealand Consolidated Stock " mentioned in the said last-men-tioned deed-poll: And it is hereby further declared that the revenues of the Colony of New Zealand alone are liable in respect of the stock hereinbefore described, and the dividends thereon, and that the Consolidated Fund of the United Kingdom and the Commissioners of Her Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the stock, or of the dividends thereon, or for any matter relating thereto. In witness whereof the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan have hereunto set their hands this 31st day of December, 1884. F. D. Bell, Witness—Leonaed J. Maton, Solicitor, 21, Cannon Street, London. P. G. Julyan.
No. 95. The Loan and Stock Agents to the Colonial Treasurer. Sib, — 7, Westminster Chambers, London, S.W., 10th January, 1885. We have the honour to acknowledge the receipt of your letter of the 22nd November, No. 10, containing the Orders in Council under the provisions of " The Loan Act, 1884," authorizing the raising of the loan of £1,500,000, and appointing us to be Agents for the purpose; and also authorizing us to anticipate the issue by short-dated debentures if necessary. We have, &c, P. G. Julyan, F. D. Bell, The Honourable the Colonial Treasurer, Wellington. Loan and Stock Agents.
No. 96. The Loan and Stock Agents to the Colonial Teeasueee. Sir, — 7, Westminster Chambers, London, S.W., 10th January, 1885. We have the honour to acknowledge the receipt of your letter of the 24th November, No. 11, enclosing copies of "The Loan Act, 1884," and "The Consolidated Stock Act, 1884." We beg to thank you for the explanations you have given us on the subject of the new loan of £1,500,000, and we quite understand that the issue of that loan was deemed necessary in consequence of obligations of various kinds already in existence. With regard to the Consolidated Stock Act, we have also to thank you for the explanations which you give ; and, as soon as the business connected with the raising of the last instalment of the Three-Million Loan is off our hands, we shall devote ourselves to the consideration of the important matters which you have brought before
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US, especially in connection with the conversion of the consolidated debentures. We hear with pleasure that it is not your intention to offer for sale any of the debentures which you will create this year on account of the increase of the sinking fund. We have, unfortunately, not been able to refrain from giving the market an assurance as to the amount of loans to be raised during your financial year 1885-86; but we need not refer to the matter further now, as it has already been fully dealt with in the letters and telegrams which passed between us at the end of last and the beginning of the present year. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
No. 97. The Loan and Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 10th January, 1885. We have the honour to acknowledge the receipt of your letter of the 21st November, No. 5, relating to a suggestion which was made by the Agent-General in his letter of the 23rd September for allowing conversions on a small scale to be effected by arrangement with the holders of New Zealand securities, a matter which we have often had under our consideration. We think that your suggestion for the creation of a " Beserve Stock," for the express purpose of meeting miscellaneous conversions of the kind, would most nearly meet the necessity of the case, in the event of such conversions being hereafter determined upon by you. The main question to be considered is, as you point out, whether, supposing conversions of that kind to be allowed, it would interfere with the larger operations now in contemplation by the Government ; but it is difficult at this moment to express any reliable opinion on that point. If such a stock had been in existence at the time we effected the exchange of securities with the Trustees of the Sinking Funds of 1856 and 1863, it would have enabled us, immediately on obtaining possession of their debentures from the Trustees, to convert them into inscribed stock, instead of reissuing them upon the market by the sales which we made. You would, it is true, have lost the profit arising out of the difference between the par price at which we exchanged with the Trustees and the market price at which we sold the debentures; but, in comparison with this, it would have been a better operation for the colony to have extinguished so much of the consolidated debt. There are a large number of points to be considered in connection with the subject, and these shall have our careful attention. We have, &c, P. G. Julyan. F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
No. 98. The Loan Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 12th January, 1885. In our telegram of the 2nd instant, we reported to you that the loan of £1,000,000, being the last instalment of the Three-Million Loan of 1882, had been announced, and that tenders would be received at the Bank of England on the 9th instant. The number of tenders received was about 740, at prices ranging from the minimum up to £100. The total amount applied for was £4,129,000. Tenders at £99 6s. 6d. receive about 65 per cent, of their applications, and those above receive allotments in full. The average price of the loan is £99 10s. Id. This satisfactory result is due to the circumstance that at the time we brought out the loan there was an absence of all competition from colonial loans, and abundance of money seeking investment. We enclose herewith copy of a letter we have received from the Bank of England, transmitting statement of the allotments which were made. We also transmit herewith copies of two papers prepared by the Agent-General to accompany the Bank prospectus. You will probably come to the conclusion, from the result attending the bringing out of the present loan, that we were not mistaken in our judgment that we might have raised the whole two and a half millions at the present time if the Bank of England had not interposed their objection. We gave the guarantee you authorized, that not more than £1,500,000 in addition to the present million would be raised during the financial year 1885-86. We annex copies of the telegrams which have passed between us, and beg to thank you for your congratulations on the result. We have, &c. P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan Agents.
Copies of Telegrams referred to in No. 98. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Received 10th January, 1885). Loan taken above ninety-nine. Details presently. Loan Agents, London, 9
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The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 18th January, 1885.) Total amount applied for, £3,980,000. Tenders at £99 63. 6d. receive 30 per cent. Seven hundred tenders. Loan Agents, London, 9.
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Waiwera, 10th January, 1885. Loan Agents. Warm congratulations, and thanks. Vogel.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 11th January, 1885.) Youes many thanks. Corrected totals. Amount tendered, £4,130,000. Tenders at £96 6s. 6d. Receive sixty-five per cent. Average price, £99 10s. Id. Loan Agents, London, 10.
Enclosure 1 in No. 98. The Bank of England to the Loan Agents. Gentlemen, — Bank of England, London, E.C., 10th January, 1885. I am directed to inform you that, in accordance with the terms of the advertisement dated 2nd January, 1885, tenders were received yesterday at the Bank of England for the further issue of £1,000,000 New Zealand Government 4-per-cent. Consolidated Stock. The applications amounted to £4,129,700, at prices varying from £100 to £97 10s. Tenders at £99 6s. 6d. receive about 65 per cent, of the amount applied for, those above that price being allotted in full. I forward herein a statement of the amounts allotted at the various prices. It is proposed to reopen the account in the names of the " Loan Agents for the Government of New Zealand," to the credit of which the subscriptions to the loan shall be paid from time to time; and, if this meets with your approval, the deposit of 5 per cent., viz., £50,000, shall be at once transferred to this account. I have, &c, Sir F. D. Bell, K.C.M.G., and Sir P. G. Julyan, F. May, K.C.M.G., C.8., Agents under "The New Chief Cashier. Zealand Loan Act, 1882," 7. Westminster Chambers, London, S.W.
Sub-Enclosure in No. 98. New Zealand Goveenment 4-pee-cent. Consolidated Stock.—lssue of 1885.—Statement of the amounts allotted at the various prices. Amount p . Amount to be allotted. rrloe- paid. £ £ s. d. £ s. d. 3,300 ... ... ... 100 0 0 ... 3,300 0 0 11,000 ... ... ... 99 18 6 ... 10,991 15 0 3,100 ... ... ... 99 16 0 ... 3,093 16 0 2,500 ... ... ... 99 15 6 ... 2,494 7 6 100 ... ... ... 99 15 0 ... 99 15 0 55,000 ... ... ... 99 14 6 ... 54,848 15 0 100 ... ... ... 99 14 0 ... 99 14 0 26,000 ... 99 13 6 ... 25,915 10 0 118,800 ... ... ... 99 13 0 ... 118,384 4 0 40,000 ... ... ... 99 12 6 ... 39,850 0 0 19,100 ... ... ... 99 12 0 ... 19,023 12 0 21,500 ... ... ... 99 11 6 ... 21,408 12 6 35,100 ... ... ... 99 11 0 ... 34,942 1 0 115,200 ... ... ... 99 10 6 ... 114,652 16 0 46,600 ... ... ... 99 10 0 ... 46,367 0 0 23,500 ... ... ... 99 9 6 ... 23,376 12 6 51,100 ... ... ... 99 9 0 ... 50,818 19 0 127,200 ... ... ... 99 8 6 ... 126,468 12 0 121,700 ... ... ... 99 8 0 ... 120,969 16 0 103,309 ... ... ... 99 7 6 ... 102,674 7 6 28,500 ... ... ... 99 7 0 ... 28,314 15 0 47,300 ... ... ... 99 6 6 ... 46,980 14 6 1,000,000 995,055 14 6 Average price obtained, £99 10s. Id. F. May, Bank of England, 10th Januray, 1885. Chief Cashier.
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Enclosure 2 in No. 98. The Loan Agents to the Chief Cashiee, Bank of England. Sic,- — 7, Westminster Chambers, London, S.W., 12th January, 1885. We have to acknowledge the receipt of your letter of the 10th instant, acquainting us with the result of the tenders for the further issue of £1,000,000 of New Zealand 4-per-cent. Consolidated Stock, and transmitting a statement of the amounts allotted. We shall be glad if you will be good enough, as proposed, to reopen the Loan Agents' Account and place to the credit of that account the deposit of £50,000 which the bank has already received. We have, &c, P. G. Julyan, F. D. Bell, The Chief Cashier, Bank of England. Loan Agents.
Enclosure 3 in No. 98. New Zealand Goveenment 4-pee-cent. Loan of £1,000,000. The following statement is made for the information of investors and capitalists who are disposed to subscribe for this issue of £1,000,000 4-per-cent. stock, to be inscribed at the Bank of England, being the last issue of the Three-Million Loan of 1882. The information here given is entirely taken from the Financial Statements made by Ministers of the Crown in the New Zealand Parliament during the session of 1884. The Public Debt. In the Treasurer's Financial Statement on the 16th September, 1884, the debt is described as follows : The public debt of the colony on the 31st March, 1884, after deducting the sinking funds accrued, amounted to £29,574,902. This debt was exclusive of the deficiency bills, amounting to £398,000 issued in aid of revenue, and remaining outstanding at the close of the year, as also of £400,000 of deficiency bills issued to facilitate remittances, which were a contingent though remote liability. To meet these deficiency bills of £398,000, there was cash £203,447, and imprest advances £42,441; leaving a debit balance of £152,112. The ordinary revenue of the financial year ending the 31st March, 1884, exclusive of land sales, amounted to £3,493,659. The year had begun with a surplus of £35,549, and it ended with a deficiency of £152,112, as above stated. The revenue from land sales was £232,545. The net revenue from the railways was £305,000. The ordinary revenue, exclusive of land sales, has risen as follows since 1871 : For the financial year 1871, it was £936,000 ; 1874, £1,420,000 ; 1878, £2,328,000; and 1884, £3,493,000. The present loan of one million is the last issue of the Three-Million Loan authorized by the Loan Act of 1882. The New Zealand Parliament has also authorized, however, in the same session of 1882, a further special loan of one million for the construction of the Main Trunk Railway through the North Island, connecting the lines already running northwards from the seat of Government at Wellington, with those running south from Auckland. This loan was not to be raised until the line of the proposed railway should have been approved by the Legislature ; but during the session just held (1884) the line was finally settled, and the work will be shortly commenced. In the same session of 1884, the Parliament passed an Act authorizing a further loan of £1,500,000 for the extension of the railway system, and for other public works and immigration. The total amount of new loans, therefore, which have been authorized under the Acts in question, is £2,500,000 ; but the New Zealand Government have authorized the Loan Agents to give an assurance that only £1,500,000 of this total shall be raised during the New Zealand financial year 1885-86. In addition, therefore, to the last million of the Three-Million Loan, for which subscriptions are now invited, no more than £1,500,000 of new loans will be placed upon the market until after the 31st March 1886. Following up the conversion of the 5-per-cent. and 4|-per-cent. five-thirties, which was effected in September, 1883, the New Zealand Government gave due notice to the holders of the 5-per-cent. series who had not converted their bonds, that the same would be paid off on the 15th January instant. In pursuance of this arrangement, 4-per-cent. inscribed stock will be issued to the Bank of England for the amount required to pay off the bonds. It is the intention of the New Zealand Government to proceed, as favourable opportunity occurs, with the conversion of the loans which have sinking funds attached to them; and a special Act for authorizing these operations was passed in the session of 1884. In the Financial Statement of 16th September, 1884, above referred to, the Treasurer explained the burdensome character of these sinking funds. On a total net indebtedness of £29,574,902, the annual charge for interest and sinking fund amounted to £1,578,799. The conversion of the loans bearing sinking fund into 4-per-cent. stock would effect a saving to the colony of over £300,000 a year. In one of the loans, now approaching its extinction by accrued sinking fund, the colony is paying annually at the rate of more than 86 per cent, upon the net indebtedness; in another, 52 per cent.; in another, nearly 11 per cent.; in another, 13 per cent. ; in another, 27 per cent. ; in another, 17 per cent. ; in another, 8 per cent.; in another, 10 per cent. In the Consolidated Loan of 1867 (known in this market as the Consols), upon a net indebtedness of £5,807,000, the annual charge is within a fraction of £437,000, equal to 7-52 per cent. The sinking funds contributed by the colony during the current financial year, 1884-85, will amount to £244,000. But this charge increases progressively, so that during the next ten years the accrued sinking funds would be
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increased by more than £3,000,000. The burden of these sinking funds is more and more severe each year, and the inexpediency must be admitted of paying off piecemeal portions of the public debt with one hand while the colony is raising new loans with the other. The New Zealand Government, therefore, will proceed as expeditiously as may be convenient, with the conversion of the loans bearing these sinking funds. It is needless to state that this will in no way whatever affect the punctual performance of every obligation of the Government in the meanwhile. These obligations will continue to be strictly fulfilled to the letter. But the advantage is plain that would be gained by bringing as far as possible the New Zealand securities into one denomination; and the process of converting loans bearing a high rate of interest into inscribed stock bearing a lower, will be admitted to be one which must tend to strengthen the credit of the colony, and therefore to improve and not impair the marketable value of all its securities. F. D. Bell, 7, Westminster Chambers, 2nd January, 1885. Agent-General.
Enclosure 4 in No. 98. New Zealand Loan of £1,000,000, Issued January, 1885. The following statistical information will be found of interest: — (i.) Population. The population of New Zealand (exclusive of Maoris) was, on the 30th June, 1884, 552,000. Counting the Maoris, who numbered 44,000 at the census of 1880, and adding emigrants who have gone out since June, the total present population is about 600,000. (ii.) Railways. The total length of Government railways open for traffic on the 31st March, 1884, was 1,39 miles, of which 468 miles were in the North Island, and 928 miles in the Middle Island. There were about 42 miles of private lines worked by the Bailway Department, bringing up the total to 1,438 miles of railway open for traffic. In addition to this, 234 miles were in course of construction. The total cost of construction of the railways has been £12,163,000. The following is a comparison of the traffic, revenue, and working expenditure of the railways in 1880 and 1884 :— Year. Miles. Revenue. ExPendi" Passengers. Tonnage. Par oela' Ca*'le and ture- to Revenue. &c- <=heep. £ £ 1880 1,172 762,573 580,030 76-06 2,967,090 1,108,109 180,331 285,209 1884 1,396 961,304 655,990 68-24 3,272,644 1,700,040 359,896 686,287 Increase 224 198,731 75,960 305,554 591,932 179,565 401,078 Decrease... •■• ••• 7-82 • ... Twenty thousand tons more wool were carried in 1884 than in 1880 ; 34,000 tons more timber ; 192,000 tons more grain; 253,000 tons more minerals ; and 401,000 more sheep and cattle ; while the total tonnage carried was 591,000 tons more than in 1880 and 305,000 more passengers. (iii.) Frozen Meat. This trade has assumed dimensions which only two years ago were certainly not foreseen. In 1882, not 9,000 sheep were sent from New Zealand; in 1883, 120,000 ; in 1884, 409,000. (iv.) Direct Steam Service. A fortnightly service is now thoroughly established, and a contract has been entered into with the New Zealand. Shipping Company for a fortnightly mail service to and from the colony, alternating with the San Francisco line. The first steamers of this new service left London and New Zealand on the 20th December. (v.) Trade. For the twelve months ending 30th June, 1884, the imports were £7,477,000, and the exports £6,863,000. Among the exports were 5,000 tons of flour and 5,126,000 bushels of grain, valued at £821,000; 77,174,0001b5. of wool, valued at £3,137,000; and 227,725 ounces of gold valued, at £911,500. (vi.) Agricultural. The Registrar-General's returns of May, 1884, gave a total of more than 28,000 holdings, of which 19,400 were entirely freehold. The area of land under grain crop was 756,000 acres; in green crop, 397,000 acres, in artificial grasses, 4,808,000 acres. The total area of land under all crops, including sown grasses, and of land broken up but not under crop, was 6,147,000 acres. The increase in acreage broken up since the returns of February, 1883, was 631,000 acres ; and in land laid down to artificial grasses, 487,000 acres. 7—B. 11.
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(vii.) Pastoral Industry. The colony contained, at the time of the latest official statistics being published, about 13,000,000 sheep, 700,000 cattle, and 162,000 horses. F. D. Bell, 7, Westminster Chambers, 2nd January, 1885. Agent-General.
. No. 99. The Loan and Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 16th January, 1885. Immediately after the announcement of the tenders for the third million of the loan of 1882 we were able to place £300,000, of stock with a syndicate, allowing them to stand in on the same terms as those who had received allotments of the loan at £99 6s. 6d. Deducting discount for prompt payment, this price came to a little under £99; and we sold the £300,000 at £99 (subject to the usual brokerage) for the account on the 14th, giving permission to defer completion to the end of the month. When we sent you the telegram of which copy is annexed, the bargain was only for £250,000, but it was afterwards extended to £300,000. We arranged that if the payment for the whole or any part was carried over to the end of the month, we would allow the stock to be exchanged for other securities of equal value in the meantime in order that delivery of the stock might be made to the purchasers. Accordingly, in lieu of £200,000 of stock certificates received from the Bank of New Zealand and £18,000 of conversion scrip received from the Agent-General, New South Wales scrip to the market value of £220,000 has been handed to the Bank of New Zealand on our account, and we retain the remaining £62,000 of conversion scrip for delivery at the end of the month. We have now made a further sale of £200,000 of stock at the same price of 99, payable half at the end of next month and half at the end of March. This disposes of all the remaining scrip and stock except a small amount of £3,400 of scrip still in our hands. The sales are therefore as follows : £300,000 payable end of January ; £100,000 payable end of February ; and £100,000 payable end of March. We annex copies of the telegrams that have passed between us on the subject. We have, &c, P. G. Julyan, F. D. Bell. The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Copies of Telegrams referred to in No. 99. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 10th January, 1885.) Have sold quarter of a million scrip to-night. Instruct whether shall sell Bank of New Zealand's £200,000 also. Loan Agents, London, 9.
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Waiwera, 10th January, 1885. Sell Bank of New Zealand's £200,000. Vogel.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Received 17th January, 1885.) Have sold further quarter of a million scrip. Only trifle remains. Loan Agents, London, 16.
No. 100. The Colonial Teeasueee to the Loan Agents. Gentlemen, — Treasury, N.Z., Wellington, 4th March, 1885. I have the honour to acknowledge with thanks the receipt of your letters of the 30th and 31st December, in which you tell me more in detail than supplied by the telegrams the nature of your communications with the Bank of England. They confirm my previous impression that you did all that you could to combat the objections of the Bank to the issue of the two and a half million loan. I have again to express my high sense of the ability you displayed in the negotiation of the million loan. When you found that the Bank was determined to maintain its objection to the negotiation of the whole amount, it appears to me you exercised excellent judgment in making the best of the situation. I have the honour to set forth at foot copies of a number of telegrams that have passed between us on the subject of the conversion of the consolidated debentures. I need not trouble you with more than a brief explanation concerning them. Begarding the several telegrams which passed with the view of obtaining a correction to your telegram of the 19th February, I may explain to you that Mr. Gavin, with great difficulty, discovered that the sheets had been misplaced in order :
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hence the words you sent in explanation did not convey to us the information we required. They, however, afforded a clue to what was found out to be the real position; and, after a great deal of trouble, Mr. Gavin succeeded in so transposing the telegram as to leave no doubt as to what was its intended and original order. The copies at foot will give you the telegram as received, and as worked out subsequently. With regard to the nature of your propositions, I may say that I did not feel warranted in accepting the proposals without referring the question to Cabinet; hence there was a delay of two or three days. I may say I had an objection to postpone the reduction of the rate of interest to so long a period as seven years, and even now I hope you will be able to do with a less period. As the arrangement stands now, on the basis of your expectations, it will amount to this : that there will be, for seven years, no reduction of interest, but a cessation of payment of sinking fund. After seven years we shall save something over -| per cent, on the amount of the annual payments, taking into account the amount required to replace the extra principal sum at the end of the loan. This is no doubt a very good result. Another reason why I hesitated was because I was not able to convince myself that we did not run some risk in going on with the operation before the million and a half loan was negotiated. It is true the debentures will be of a separate denomination ; but the fact that a considerable quantity of them may be in the market cannot, I think, but have some effect in the way of reducing the price we shall obtain for the million and a half loan. You on the spot, however, are much better able to judge of the subject than I am; and, as you expressed the opinion that the conversion would not materially affect the negotiation of the million and a half, we telegraphed to you approving the proposals, subject to your still being of the same opinion that they would not materially affect the negotiation of the loan. I must thank you for the readiness with which you replied to my telegrams, and express the gratification I feel at our being able to work in concert, notwithstanding the great distance that separates us. I have, &c, The Agents for New Zealand Loans, London. Julius Vogel.
Copies of Telegrams referred to in No. 100. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand, (Beceived 6th February, 1885.) Youe letter of 24th November received. Please reply to proposal contained in our letter December first respecting exchange Consolidated Loan 1867 for five-per-cent. debentures ; it has important bearing on questions raised by Stock Act eighty four, and we still think our proposal would be preferable to provisions that Act so far as concerns Consolidated Loan 1867. Loan Agents, London, 5.
The Colonial Treasueee to the Agent-Geneeal. Agent-General, London. Waiwera, 6th February, 1885. Loan Agents. Important not allow conversion interfere with negotiation million and a half which desire immediately we think market favourable after end of March. Act eighty-four aids proposal letter December first by enabling creation short-dated debentures. Agree five-per-cent. debentures not desirable ; still, if great quantity Consolidated Loan 1867 obtainable, willing exchange par five-per-cent. debentures make period of currency five years with option convert during first four years into inscribed stock at following rates: 105 per 100, or immediate exchange debentures for stock at following rates : 109 inscribed stock per 100 Consolidated Loan 1867. Beply.
The Loan Agents to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 9th February, 1885.) Conversion. Yours to-day. Firstly, we think our proposal would not materially affect million and a-half; that issue must be deferred some months. Secondly, must postpone answer few days respecting exchangeable quantities. Thirdly, we did not regard Act as antagonistic to proposal. Loan Agents, London, 7.
The Colonial Treasueee to the Agent-Geneeal. Agent-General, London. Waiwera, 18th February, 1885. Loan Agents. When do you think negotiate million and a half ? War rumours make desirable effect soon as possible.
The Loan Agents to the Colonial Treasures. Treasurer, New Zealand. (Beceived 20th February, 1885.) Million and a half. Cannot encourage any hope placing before midsummer. War rumours not such warrant hurried issue. Loan Agents, London, 19.
• The Colonial Teeasurer to the Agent-General. Agent-General, London. Auckland, 21st February, 1885. Loan Agents. Million and a half. Midsummer satisfactory. Try manage before London empties. Reply shortly about conversion.
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The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 20th February, 1885.) Consolidated Loan 1867. After fullest reflection, we advise following: Firstly, your proposed exchangeable quantities would not be accepted ; secondly, we think any operation which caused present issue new inscribed stock in large quantities would injure million and a half; therefore, we advise not making any offer involving immediate exchange inscribed stock for Consolidated Loan 1867 debentures ; thirdly, on other hand, we think desirable operate before next drawing by taking advantage of new Act, provided could offer terms likely to insure success; fourthly, actuaries calculate average life of Consolidated Loan 1867 bond after next drawing at nearly thirteen years —therefore new 5-per-cent. bond, having only five years' currency, would be inadequate, especially as Consolidated Loan so largely held by financial bodies which are governed by annual chance of drawings ; fifthly, therefore we advise you authorize us to offer seven years 5-per-cent. bond convertible at end currency into 106, or even 107, of inscribed stock; sixthly, we are inclined to think this would succeed unless war or serious complications suddenly intervene, which, however, we do not apprehend. Please instruct. Loan Agents. London, 19
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Auckland, 23rd February, 1885. Cable estimated cost about proposed conversion. Meaning of message uncertain between sixthly immediate. Bepeat interim words.
The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Received 24th February, 1885.) Peeplexed which words should repeat. Instruct whether you wish me explain Loan Agents' object more clearly. London, 23.
The Colonial Teeasueee to the Agent-General. Agent-General, London. Auckland, 24th February, 1885. Loan Agents. What probable cost of proposed conversion. Bepeat next five words following sixthly.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Received 25th February, 1885.) Conveesion. Cost may be estimated about one and half per cent, upon amount converted. Following five words after sixthly : We are inclined to think. Loan Agents, London, 24.
The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 2nd March, 1885. Loan Agents. Approve proposed conversion on not worse terms than described in your telegram 19th February if you still think will not materially affect million and a half.
No. 101. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Received, 6th March, 1885.) Consolidated Loan, 1867. Conversion. Following terms settled: Seven years five-per-cent debentures, then inscribed stock hundred and seven. Loan Agents, London, 5.
No. 102. The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived, 7th March, 1885.) Consolidated Loan, 1867. Conversion. Bank of England announces to-night. Please remember necessary issue Order Council immediately under section ten, new Act; also instruct under sections 12, 16. Please telegraph substance and dates of Orders. London, 6.
No. 103. Wm. F. Deummond Jeevois, Governor, by his Deputy, James Peendeegast. ORDER IN COUNCIL. At the Government House, at Wellington, this ninth day of March, 1885. Present: His Excellency the Deputy-Goveenoe in Council. Wheeeas by an Act of the General Assembly of the Colony of New Zealand, the Short Title whereof is " The Consolidated Stock Act, 1884 " (hereinafter referred to as " the said Act"), it is
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among other things enacted that so much of all the loans set forth in the Schedule to the said Act as were outstanding on the thirty-first day of March, one thousand eight hundred and eighty-four, should be and are thereby declared to be convertible into stock: And also, that, pending the operations for converting loans and creating the stock authorized to be created under the provisions of the said Act and " The New Zealand Consolidated Stock Act, 1877," the Colonial Treasurer may, when so authorized by an Order in Council in that behalf, create debentures to an amount not exceeding in the whole the amount of such stock; and may borrow and raise moneys from time to time by the sale, hypothecation, or mortgage of such debentures, or may exchange the same for securities convertible under the said Act, as the Colonial Treasurer thinks fit; and that every such debenture shall bear interest at such rate not exceeding five pounds per centum per annum, and shall be in such form, and shall have a currency not exceeding seven years, as the Colonial Treasurer directs : And whereas it is expedient that the debentures outstanding issued under "The Consolidated Loan Act, 1867," should be converted into inscribed stock under the provisions of " The New Zealand Consolidated Stock Act, 1877," and the said Act; and that debentures, having currency not exceeding seven years, and bearing interest at a rate not exceeding five pounds centum per annum, should, pending such conversion, be issued under the provisions of the said Act. Now, therefore, His Excellency the Governor of the Colony of New Zealand, in pursuance and exercise of the power and authority vested in him by the hereinbefore in part recited Act, and by and with the advice and consent of the Executive Council of the said colony, doth hereby authorize the Colonial Treasurer to create debentures to an amount equal to the amount of the debentures issued under " The Consolidated Loan Act, 1867," which may be brought in and converted as aforesaid, together with an amount to provide for the costs and charges of the said conversion not exceeding two pounds per centum upon the amount of debentures so converted, for the purposes, in the manner, with the powers, and upon and subject to the terms and conditions in the said Act particularly mentioned. Foesteb Goeing, Clerk of the Executive Council. MP—————asp mm iiii.»iM«ja-gM-«waß-B---ni»ia—-n-a
No. 104. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 9th March, 1885. Loan Agents. Governor in Council has authorized Colonial Treasurer, under tenth section Consolidated Stock Act, eighty-four, issue 5-per-cent. debentures, to exchange at par for equal amounts of Consolidated Loan debentures, also 2 per cent, additional for expenses. Colonial Treasurer, under sixteenth section same Act, has authorized the Agents exercise all powers contained in said Order in Council, and powers contained in eleventh, twelfth, and fourteenth sections. Controller and Auditor-General, under twelfth section, appoints audit officer. Order and Treasurer's authority dated this day.
No. 105. The Loan Agents to the Colonial Treasueee. Treasurer, New Zealand. (Beceived, 10th March, 1885.) Consolidated Loan, 1867. Firstly, thanks prompt Orders. Secondly, conversion closes 30th April, drawing fixed 30th March. Thirdly, debentures deposited before drawing not affected. Fourthly, holders not converting before drawing may have new bonds exchange drawn debentures upon paying four pounds per cent. cash. Loan Agents, London, 9.
No. 106. The Loan Agents to the Colonial Teeasueee. Sic,— 7, Westminster Chambers, London, S.W., 20th January, 1885. We have the honour to acknowledge the receipt of your letter (No. 15), of the 6th December last, and, in reference thereto, we have to inform you that the drafts for £175,000 were, on presentation, duly accepted, their due date being 9th March next. We have, &c, P. G. Julyan, P. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
No. 107. The Agent-General to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 29th January, 1885. I transmit herewith copies of the Deed Poll executed by Sir Penrose Julyan and myself, creating the £1,000,000 of stock for the recent loan, and of the declaration made by us under the Imperial Stock Act, and duly lodged with the Commissioners of Inland Bevenue. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell,
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Enclosure 1 in No. 107. Deed Poll. To all to whom these presents shall come, we, Sir Feancis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, the Agent-General for the Colony of New Zealand, and Sir Peneose Goodchild Julyan, a Knight Commander of the said Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, send greeting : Wheeeas, by an Act of the Legislature of New Zealand intituled " The New Zealand Consolidated Stock Act, 1877," it was among other things enacted that, for the purpose of raising any sum or sums of money under the authority of any Act that might be passed by the said General Assembly in any future session of the General Assembly authorizing the Governor in Council to raise by way of loan any sum of money for the public service of the colony, it should be lawful for the Governor in Council to create capital stock, to be called " New Zealand Consolidated Stock," such stock to be issued in such amounts and manner, at such price and times, on such terms and subject to such conditions with such dividends, and redeemable at par at such times and on such conditions, as the Governor in Council might before the creation thereof from time to time determine : And by the said Act it was further enacted that the Governor in Council might from time to time declare all or any of the New Zealand loans, whether existing in the form of stock or not, to be convertible into stock of such denominations with such conditions and with such dividends and redeemable at par at such times and on such conditions as he might before the creation thereof from time to time determine, and might authorize the creation and issue of such an amount of such stock in exchange for the securities held for such loans as might be necessary, and might authorize the creation and sale of any of such stock for the purpose of paying any expenses in the creation of stock and otherwise carrying out the provisions of the said Act on such conditions as he might determine, and any conversion so authorized might be effected either by arrangement with the holders of the existing securities, or by purchase thereof out of moneys raised by a sale of the new stock, or partly in one way and partly in the other. And by the said Act it was further enacted that the Governor in Council might from time to time appoint three or more persons in England to be Agents for the purposes of the said Act, and might empower such Agents or any three or more of them to exercise all or any of the powers by the said Act exercisable by the Governor in Council; and further, that the said Act should not come into operation nor be of any force and effect whatever until it should be declared to so in operation by a Proclamation issued by the Governor in Council and published in the New Zealand Gazette : And whereas, by a Proclamation made and issued by the Governor in Council on the 9th day of February 1878, and published in a supplement to the New Zealand Gazette of the same date, the Governor, with the advice and consent of the Executive Council of the said colony, did proclaim and declare that " The New Zealand Consolidated Stock Act, 1877," should be and come into operation on and after the 9th day of February, 1878 : And whereas, by a deed-poll bearing date the Ist day of December, 1879, under the hands and seals of me, the said Sir Penrose Goodchild Julyan, and of Sir Julius Vogel, a Knight Commander of the said Most Distinguished Order of St. Michael and St. George, and of Montagu Frederic Ommanney, Esquire, who had been duly appointed Agents in England for the purposes of the said Act, and had been duly empowered to exercise all the powers by the said Act exercisable by the Governor in Council, it was declared that a capital stock of not exceeding £6,000,000 to be called " The New Zealand Consolidated Stock," had been created, and that it had been determined that the same should be issued on the terms and conditions and within the times in such deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable halfyearly at the Bank of England on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, and that on the said Ist day of November, 1929, the capital should be repaid at par at the same place : And whereas, in accordance with the terms and conditions in the said deed-poll mentioned, New Zealand Consolidated Stock was issued to the amount only of £5,371,200, and the same was duly inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And whereas, by another Act of the said Legislature, intituled " The New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," it was enacted that notwithstanding anything in " The New Zealand Consolidated Stock Act, 1877," contained, the Governor in Council might appoint only two persons to be the Agents for the purposes of such Act, who should have, exercise, and perform all the powers, authorities, or duties by such Act given to, vested in, or imposed upon the Agents appointed under such Act, and that throughout such Act the words "the Agents" should be deemed to refer to and include the two persons by the now-reciting Act authorized to be appointed to be the Agents for the purposes of " The New Zealand Consolidated Stock Act, 1877" : And whereas, in pursuance of the power and authority vested in him by the said Acts (all previous appointments of Agents having been revoked), the Governor of New Zealand did, by an Order in Council bearing date the sth day of November, 1881, appoint us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, to be Agents in England for the purposes of the said Acts of 1877 and 1881, with full power and authority to us, as such Agents, to exercise all the powers by such Acts exercisable by the Governor in Council: And whereas, by a deed-poll bearing date the Ist day of January, 1883, under the hands and seals of us, the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, acting as such Agents, and duly empowered as aforesaid, we declared that we had created a further amount of one million pounds sterling of capital stock to be called "The New Zealand Consolidated Stock," in addition to and to rank pari passu with the said amount of £5,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, and had determined that such further amount of
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stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of four pounds per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and Ist day of November, in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And whereas, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of one million pounds, and the sum of £6,371,200 of New Zealand Consolidated Stock, and no more, then became inscribed in the books of the Governor and Company of the Bank of England, in the names of the several persons respectively entitled thereto: And whereas, by a deed-poll bearing date the 30th day of October, 1883, under the hands and seals of us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, after reciting that, acting on instructions from the Governor of New Zealand in Council, we had determined to invite holders of debentures forming part of certain New Zealand loans in the same deed-poll mentioned and described, to bring in their debentures to the Bank of England, within the times thereinafter mentioned, for conversion into New Zealand Consolidated Stock, and that we had made arrangements with the Bank of England that, in exchange for such of the same debentures as should be lodged as in the now reciting deed-poll mentioned for conversion into stock, the Bank of England should issue to the respective holders of such debentures, and in exchange for the same, a scrip certificate stating the amount of New Zealand Consolidated Stock to which the holder of such certficate would, upon surrendering the same, be entitled, we declared that we had created a further amount of not exceeding £9,400,000 of capital stock, to be called " New Zealand Consolidated Stock," in addition to and to rank pari passu with the said amount of £6,371,200 of New Zealand Consolidated Stock, theretofore created and issued as aforesaid, and had determined that so much of such capital stock as it should be necessary to issue to the holders of the said scrip certificates should be issued to them in exchange for such scrip certificates, and that so much of the residue of the said stock as it should be necessary to sell for the purpose of raising money for the payment of such expenses as in the said deed-poll mentioned, should be sold and issued to the purchasers thereof, or their respective nominees, and that the same further amount of stock so issued should bear interest at the rate of four pounds per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November, in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And whereas, in accordance with the terms and conditions in the lastly-recited deed-poll mentioned, a large proportion of the " New Zealand Consolidated Stock " thereby created has been issued: And whereas, by a deed-poll bearing date the Ist day of January, 1884, under the hands and seals of us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, we, acting as such Agents, and so empowered as aforesaid, declared that we had created a further amount of one million pounds sterling of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, as also to and with such further amount of New Zealand Consolidated Stock as should be issued in pursuance of, or as mentioned in, the said deed-poll of the 30th day of October, 1883, and had determined that such further amount of stock should be issued on the terms and conditions in the now-reciting deed-poll mentioned, and should bear interest at the rate of four pounds per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place. And whereas, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000: And whereas by a deed-poll bearing date the 30th day of December, 1884, under the hands and seals of us, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, after reciting to the effect hereinbefore recited, and with a view to the raising moneys to redeem the outstanding debentures therein mentioned, we, acting as such Agents and so empowered as aforesaid, declared that we had created a further amount of £764,240 sterling of capital stock to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the amount of New Zealand Consolidated Stock theretofore created as aforesaid, and which had been, or might be, thereafter issued, and had determined that the same capital stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of £4 per centum per annum, and should be payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And whereas by another Act of the said Legislature, intituled " The New Zealand Loan Act, 1882 " (herinafter called " The Loan Act of 1882 "), it was enacted that it should be lawful for the Governor in Council to appoint any two or more persons, as he might think fit, to be Agents for the purpose of raising and managing the loan authorized to be raised under such Act, with all such powers as might be necessary to carry into effect the purposes of such Act, and in their appointments to define the relative powers of such Agents, and that such Agents should have full power and authority to borrow and raise, in Great Britain or elsewhere, by bonds, debentures, scrip, or otherwise, such sum or sums, not exceeding £3,000,000 sterling in the whole, as the Governor in Council might from time to time or at any time direct or determine, for all and any of the purposes expressed in the schedule to such Act, or any other purposes thereby authorized; and that such Agents should have full power and authority to prescribe the mode and conditions of repayment of such loan, and the time of such repayment, and the rate of interest thereon, and the time and place or places when and where such principal and interest should be made payable ; but it was enacted that the annual charge to be imposed on the consolidated revenue of New Zealand under the
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provisions of the Loan Act of 1882 should not exceed for interest the sum of five pounds for every £100 expressed to be borrowed : And whereas Sir William Francis Drummond Jervois, a Knight Commander of the said Order of St. Michael and St. George, the Governor of the said colony, by an Order in Council made and issued on the 9th day of October, 1884, after reciting inter aUa that under and by virtue of the Loan Act of 1882, sums amounting together to the sum of £2,000,000 had been raised, did in exercise and in pursuance of the powers and authorities vested in him by such Act, and by and with the advice and consent of the Executive Council of the said colony, direct and determine that the sum of £1,000,000 sterling (being the remaining portion of the said loan of £3,000,000 authorized to be raised under such Act) should be borrowed and raised under the provisions of that Act, and in further exercise and pursuance of the powers and authorities aforesaid, and with the like advice and consent as aforesaid, he did thereby appoint us, the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, to be the Agents for the purpose of raising and managing the portion of the said loan thereby ordered and determined to be raised, with full power and authority to us as such Agents in and during the year 1885 to borrow and raise by bonds, debentures, scrip, or otherwise, the said sum of £1,000,000 sterling as aforesaid, and with full power and authority to us as such Agents to prescribe the mode and conditions of the repayment of such sum, and the terms of such repayment, and, subject to the provisions of the same Act, the rate of interest thereon, and the time and place or places when and where such principal and interest should be made payable, and generally to have, hold, and exercise all such powers and authorities as by the same Act might be had, held, and exercised by the Agents appointed thereunder in respect of the moneys authorized by the Order in Council now in recital to be borrowed and raised : And whereas we, the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, intend and are about, under and in pursuance of the power and authority in that behalf conferred on us by the said Order in Council of the 9th October, 1884, to borrow and raise in Great Britain, for the purposes expressed in the Schedule to the Loan Act of 1882 or some of them, a sum or sums of money, by the creation and issue of a further amount of not exceeding £1,000,000 sterling of New Zealand Consolidated Stock, to be in addition to, and to rank pari passu with, the New Zealand Consolidated Stock which has been already issued and which may be issued as hereinbefore mentioned: And whereas we have further determined that such further issue of stock shall be created, issued, and inscribed under the said " New Zealand Consolidated Stock Act, 1877," and we have also determined the amount, manner, price, time, terms, and conditions on, at, and subject to which such stock shall be issued and inscribed, and the dividends thereon be payable, and the principal thereof be redeemable, such amount, manner, price, time, terms, dividends, and conditions being those hereinafter mentioned: And whereas we deem it expedient that our determination to create such additional amount of £1,000,000 of New Zealand Consolidated Stock, to be so issued and redeemable, shall be declared and manifested under, our hands and seals : Now therefore these presents witness, and we, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, in exercise and in pursuance of the powers by the said Orders in Council or either of them vested in us, do by these presents declare that we have created a further amount of one million pounds sterling of capital stock, to be called " The New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said New Zealand Consolidated Stock heretofore issued as aforesaid., as also to and with such further amount of New Zealand Consolidated Stock as shall be issued in pursuance of or as mentioned in the said deeds poll of the 30th day of October, 1883, and the 30th day of December, 1884, respectively : And we have determined that the same capital stock shall be issued at the rate of £100 of stock for every nominal amount of £100 which shall be represented by the scrip certificates or letters of allotment respectively to be issued to subscribers for any part of the said sum or sums intended to be and about to be borrowed and raised by us the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell as aforesaid, when the instalments payable thereon shall have been fully paid : And that the interest or dividend to be paid on the said further amount of one million pounds sterling of stock so created by us as last aforesaid, or any lesser amount which shall be issued, shall be at the rate of four pounds per centum per annum, and shall be payable half-yearly at the Bank of England, on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, and that the first half of a year's interest or dividend shall be payable on the Ist day of May, 1885 ; and further that on the said Ist day of November, 1929, the capital shall be repaid at par at the same place. And lastly, we do further declare that the revenues of the Golony of New Zealand alone are liable in respect of the stock hereinbefore described and the dividends thereon, and that the Consolidated Fund of the United Kingdom and the Commissioners of Her Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the stock or of the dividends thereon, or for any matter relating thereto. In witness whereof we have hereunto set our hands and seals this Ist day of January, 1885. (1.5.) F. D. Bell, (1.5.) P. G. Julyan. Signed, sealed, and delivered by the above-named Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan in the presence of—Jno. Mackeeel, Clapham Common, Surrey.
Enclosure 2 in No. 107. Declabation. It is hereby declared that, by " The New Zealand Consolidated Stock Act, 1877," being Act 41
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Vict., No. 33, of the Legislature c: the Colony of New Zealand, provision is made in the terms following, that is to say : — Section 2. Whenever in any Act heretofore passed by the General Assembly, or that may be passed in the present or any future session of the General Assembly, authority is given to the Governor, or to the Governor in Council, to raise by way of loan any sum of money for the public service of the colony, then, unless there be some provision to the contrary in the Act by which such authority is given, such sum may be raised in the manner hereinafter provided : Section 3. For the purpose of raising such sum or sums of money under the authority of any such Act as aforesaid, it shall be lawful for the Governor in Council to create capital stock, to be called " The New Zealand Consolidated Stock " (hereinafter referred to as " Stock"), subject to the provisions of this Act, to be issued in such amounts and manner, at such price and times, on such terms, and subject to such conditions, with such dividends, and redeemable at par at such times and on such conditions as the Governor in Council may before the creation thereof from time to time determine : Section 4. The Governor in Council shall have and may exercise the following powers and authorities, or any of them :• — (1.) He may from time to time declare all or any of the New Zealand loans, whether existing in the form of stock or not, to be convertible into stock, of such denominations, with such conditions and with such dividends, and redeemable at par at such times and on such conditions, as he may before the creation thereof from time to time determine : (2.) He may authorize the creation and issue of such an amount of such stock in exchange for the securities held for such loans as may be necessary : (3.) He may authorize the creation and sale of any such stock for the purpose of raising money for redeeming any outstanding stock or securities and of paying any expenses in the creation of stock and otherwise carrying out the provisions of this Act on such conditions as he may determine : (4.) Any conversion so authorized may be effected either by arrangement with the holders of existing securities or by purchase thereof out of moneys raised by a sale of new stock, or partly in one way and partly in the other : Section 7. The Governor in Council may from time to time enter into any such agreement with the Bank of England as to the Governor in Council seems fit, providing for all or any of the following things (inter alia): (1.) For inscribing in the books of the bank any stock : (2.) For managing the creation, inscription, and issue of stock : (3.) For effecting the conversion of loans into stock and managing transfers of stock : (5.) For issuing stock certificates to bearer, and as often as occasion shall require reissuing or reinscribing stock and reissuing stock certificates : (10.) Generally conducting all business connected with stock or loans: For the purposes of this Act the expression "Bank of England" means the Governor and Company of the Bank of England, and includes their successors: Section 8. Every agreement made with the Bank of England in pursuance of this Act shall be as valid and effectual as if the terms thereof had been set forth in and enacted by this Act: Section 9. The Governor in Council shall have the powers and duties, and may do the following things (inter alia) for the purposes of this Act: —■ (1.) He may from time to time appoint three or more persons in England to be Agents for the purposes of this Act (which Agents for the time being are in this Act referred to as " the Agents "), and may empower such Agents or any three or more of them to exercise all or any of the powers by this Act exercisable by the Governor in Council: Section 14. This Act shall not come into operation nor be of any force or effect whatever until it shall be declared to be so in operation by a Proclamation issued by the Governor in Council and published in the New Zealand Government Gazette : And it is hereby further declared that by a Proclamation made and issued by the Governor in Council on the 9th day of February, 1878, and published in a supplement to the New Zealand Government Gazette of the same date, it was declared that the said Act should be and come into operation on and after the said 9th day of February, 1878 : And it is hereby further declared that Sir Penrose Goodchild Julyan, K.C.M.G., C.8., Sir Julius Vogel, K.C.M.G., and Montagu Frederic Ommanney, who were then the Agents duly appointed by the Governor in Council under the provisions of the said Act, did by a deed-poll under their hands and seals, bearing date the Ist December, 1879, declare that a capital stock, called " The New Zealand Consolidated Stock," had been by them created, and that they had determined that an amount not exceeding £6,000,000 of such stock should be issued on the terms and conditions and within the times in such deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, and that on the said Ist day of November, 1929, the capital should be repaid at par at the same place : And it is hereby further declared, that the said Sir Penrose Goodchild Julyan, Sir Julius Vogel, and Montagu Frederic Ommanney, entered into an agreement with the Governor and Company of the Bank of England providing among other things for the inscription in a register kept in England by the said bank of the said stock : And it is hereby further declared that, in accordance with the terms and conditions in the said deed-poll mentioned, New Zealand Consolidated Stock was issued to the amount of £5,371,200, and was duly inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And it is hereby further declared that, by " The New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," being Act 45 Vict., No. 44, of the said Legislature, it was enacted that, B—B. 11.
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notwithstanding anything in "The New Zealand Consolidated Stock Act, 1877," contained, the Governor in Council might appoint only two persons to be the Agents for the purposes of such Act, who should have, exercise, and perform all the powers, authorities, or duties by such Act given to, vested in, or imposed upon, the Agents appointed under the 9th section of such Act; and that throughout such Act the words '' the Agents " should be deemed to refer to and include the two persons authorized by the Act now in recital to be appointed to be the Agents for the purpose of " The New Zealand Consolidated Stock Act, 1877." And it is hereby further declared that, in pursuance of the power and authority vested in him by the said Acts (all previous appointments of Agents having been revoked), the Governor of New Zealand did, by an Order in Council bearing date the sth day of November, 1881, appoint Sir Francis Dillon Bell, of No. 7, Westminister Chambers, Victoria Street, Westminister, K.C.M.G., the Agent-General for the Colony of New Zealand, and the said Sir Penrose Goodchild Julyan, to be Agents in England for the purposes of the said Acts of 1877 and 1881, with full power and authority to them as such Agents to exercise all the powers by such Acts exercisable by the Governor in Council: And it is hereby further declared that the Governor of New Zealand did, by another Order in Council also bearing date the sth day of November, 1881, and issued under the seal of the said colony, empower the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan as and to be the Agents to make the declaration required by the provisions of " The Colonial Stock Act, 1877," and in and about such declaration, and the leaving and record thereof with the Commissioners of Inland Bevenue, to do all such necessary acts as might or could have been done by or on behalf of the Government of the said colony to give effect to the provisions of the last-mentioned Act: And it is hereby further declared that, by a deed-poll bearing date the Ist day of January, 1883, under the hands and seals of the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell, acting as such Agents and so empowered as aforesaid, they declared that they had created a further amount of £1,000,000 sterling of capital stock to be called " The New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £5,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, and had determined that such further amount of stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and Ist day of November in each year until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And it is hereby further declared that, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000, and the sum of £6,371,200 of New Zealand Consolidated Stock, and no more, then became inscribed in the books of the Governor and Company of the Bank of England in the names of the several persons respectively entitled thereto : And it is hereby further declared that, by a deed-poll bearing date the 30th day of October, 1883, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, after reciting that, acting on instructions from the Governor of New Zealand in Council, they had determined to invite holders of debentures forming part of certain New Zealand loans in the same deed-poll mentioned and described, to bring in their debentures to the Bank of England, within the times thereinafter mentioned, for conversion into New Zealand Consolidated Stock ; and that they had made arrangements with the Bank of England that in exchange for such of the same debentures as should be lodged as in the now reciting deed-poll mentioned for conversion into stock, the Bank of England should issue to the respective holders of such debentures, and in exchange for the same, a scrip certificate stating the amount of New Zealand Consolidated Stock to which the holder of such certificate would upon surrendering the same be entitled, they declared that they had created a further amount of not exceeding £9,400,000 of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid; and had determind that so much of such capital stock as it should be necessary to issue to the holders of the said scrip certificates should be issued to them in exchange for such certificate; and that so much of the residue of the said stock as it should be necessary to sell for the purpose of raising money for the payment of such expenses as in the said deed-poll mentioned should be sold and issued to the purchasers thereof or their respective nominees; and that the same further amount of stock so issued should bear interest at the rate of 4 per centum per annum, payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place : And it is hereby further declared that, in accordance with the terms and conditions in the lastly-recited deed-poll mentioned, a large proportion of the New Zealand Consolidated Stock thereby created has been issued : And it is hereby further declared that, by a deed-poll bearing date the Ist day of January, 1884, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, acting as such Agents, and so empowered as aforesaid, they declared that they had created a further amount of £1,000,000 sterling of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the said amount of £6,371,200 of New Zealand Consolidated Stock theretofore created and issued as aforesaid, as also to and with such further amount of New Zealand Consolidated Stock as should be issued in pursuance of or as mentioned in the said deedpoll of the 30th day of October, 1883; and had determined that such further amount of stock should be issued, .on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of 4 per cent, per annum, payable half-yearly at the Bank of England on the Ist day of May and Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place:
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And it is hereby further declared that, in accordance with the terms and conditions in the same deed-poll mentioned, New Zealand Consolidated Stock was issued to the further amount of £1,000,000: And it is hereby further declared that, by a deed-poll bearing date the 30th day of December, 1884, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, after reciting to the effect hereinbefore recited, and with a view to the raising moneys to redeem the outstanding debentures therein mentioned, they, acting as such Agents and so empowered as aforesaid, declared that they had created a further amount of £764,240 sterling of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the amount of New Zealand Consolidated Stock theretofore created as aforesaid, and which had been or might be thereafter issued; and had determined that the same capital stock should be issued on the terms and conditions in the now reciting deed-poll mentioned, and should bear interest at the rate of £4 per centum per annum, and should be payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year, until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And it is hereby further declared that, by " The New Zealand Loan Act, 1882," being Act 46 Vict., N0.,7, of the said Legislature (hereinafter called "The Loan Act of 1882 "), it was enacted that it should be lawful for the Governor in Council to appoint any two or more persons as he might think fit to be Agents, for the purpose of raising and managing the loan authorized to be raised under such Act, with all such powers as might be necessary to carry into effect the purposes of such Act; and that such Agents should have full power and authority to borrow and raise in Great Britain or elsewhere, by bonds, debentures, scrip, or otherwise, such sum or sums, not exceeding £3,000,000 sterling in the whole, as the Governor in Council might from time to time or at any time direct or determine, for all and any of the purposes expressed in the Schedule to such Act, or any other purposes thereby authorized : And it is hereby' further declared that Sir William Francis Drummond Jervois, a Knight Commander of the said Order of Saint Michael and Saint George, the Governor of the said colony, by an Order in Council made and issued on the 9th day of October, 1884, after reciting inter alia that, under and by virtue of the Loan Act of 1882, sums amounting together to £2,000,000 had been raised, did, in exercise and pursuance of the powers and authorities vested in him by such Act, and by and with the advice and consent of the Executive Council of the said colony, direct and determine that the sum of £1,000,000 (being the remaining portion of the said loan of £3,000,000 authorized to be raised under such Act) should be raised under the provisions of such Act, and did appoint the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell to be the Agents for the purpose of raising and managing the same : And it is hereby further declared that, by a deep-poll bearing date the Ist day of January, 1885, under the hands and seals of the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan, after reciting to the effect hereinbefore mentioned, and that in exercise and in pursuance of the power and authority in that behalf conferred on them, they were about to borrow a sum of money by the creation and issue of a further amount not exceeding £1,000,000 sterling of New Zealand Consolidated Stock, they, in exercise and pursuance of the powers by the said Orders in Council, or either of them, vested in them, did, by the same deed-poll, declare that they had created a further amount of one million pounds sterling of capital stock, to be called " New Zealand Consolidated Stock," in addition to, and to rank pari passu with, the amounts of New Zealand Consolidated Stock theretofore created as aforesaid, and which had been or might be thereafter issued; and had determined that the same capital stock should be issued at the rate of £100 of stock for every nominal amount of £100 which should be represented by the scrip certificates or letters of allotment respectively to be issued to subscribers for any part of the said sum or sums about to be borrowed and raised by them as aforesaid, when the instalments payable thereon should have been fully paid; and that the interest or dividend to be paid on the said further amount of £1,000,000 sterling of stock so created by them as last aforesaid, or any lesser amount which should be issued, should be at the rate of £4 per centum per annum, and should be payable half-yearly at the Bank of England on the Ist day of May and the Ist day of November in each year until the Ist day of November, 1929, on which day the capital should be repaid at par at the same place: And it is hereby further declared that the said Sir Penrose Goodchild Julyan and Sir Francis Dillon Bell have, in pursuance of the Loan Act of 1882, and of the said Order in Council of the 9th day of October, 1884, borrowed and raised for the purposes mentioned in the Schedule to such Act, or some of them, a sum or sums of money (being the sum or sums recited in the said last-mentioned deed-poll as intended and about to be borrowed), by issuing or agreeing to issue scrip certificates or letters of allotment for the total amount of £1,000,000 sterling, by the same Act and the said Orders in Council respectively authorized and directed to be borrowed and raised, such scrip certificates or letters of allotment respectively to be converted into New Zealand Consolidated Stock at the rate of £100 of such stock for every nominal amount of £100 represented by a scrip certificate or letter of allotment: And it is hereby further declared that, in further pursuance of the said "New Zealand Consolidated Stock Act, 1877," and " New Zealand Consolidated Stock Act 1877 Amendment Act, 1881," and of the said Order in Council of sth November, 1881, the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan have entered into an agreement with the Governor and Company of the Bank of England, providing (among other things) for the inscription in a register kept in England by the said bank of the said stock mentioned in the said last-mentioned deed-poll to have been created, and for the transfer of such stock : And it is hereby further declared that the stock to be inscribed and transferred in conformity with such provision is the New Zealand Consolidated Stock mentioned in the last-mentioned deedpoll:
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And it is hereby further declared that the revenues of the Colony of New Zealand alone are liable in respect of the stock hereinbefore described, and the dividends thereon, and that the Consolidated Fund of the United Kingdom and the Commissioners of Her Majesty's Treasury are not directly or indirectly liable or responsible for the payment of the stock or of the dividends thereon, or for any matter relating thereto. In witness whereof the said Sir Francis Dillon Bell and Sir Penrose Goodchild Julyan have hereunto set their hands this 10th day of January, 1885. F. D. Bell. Witness —Jno. Mackeell, Clapham Common, Surrey. P. G. Julyan.
No. 108. The Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 27th January, 1885. We have the honour to acknowledge the receipt of your letter of the 22nd November last, No. 9, in which you are pleased to intimate to us your reasons for having sought from Sir Penrose Julyan the information called for in your telegram of the 3rd of that month. We could not give a full answer to that letter without explanations which have long passed out of the stage where they could be of any practical use. While Sir Penrose Julyan must disclaim joint responsibility for letters which are not jointly signed, we have always acted together in the most perfect harmony, as well as in concert of opinion in essentials; and although we sometimes took different views of the same subject, as was very natural, there was no occasion in which, after reasonable discussion, we did not find it easy to bring those views into accord, and thoroughly to agree (as the Government were entitled to demand that their Agents should agree) upon every actual step we have had to take in operations which have now extended over not far from ten millions. The only thing, therefore, which is of any importance now is to make sure that there should be no chance of any misunderstanding in the future. We entirely concur in your opinion that there should be no room for doubt concerning the character of any letter addressed to the Government, and we readily adopt your suggestion that we should in future write all letters upon financial subjects in our double capacities of Stock Agents and Loan Agents. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Copy of Telegram referred to in No. 108. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 3rd November, 1884. Ask Julyan reply following : Do you consider you have acted merely as adviser to Agent-General, or that you have had equal power and responsibility. We notice you have only signed some letters. In arrangement you now propose, are you willing exercise equal power, judgment, responsibility, and burden correspondence in all matters connected with loan conversion and negotiation ?
No. 109. The Colonial Teeasueee to the Loan and Stock Agents. Gentlemen,— The Treasury, Wellington, 13th March, 1885. I have the honour to acknowledge the receipt of your letter dated 10th January (No. 45), on the subject of gradual conversion of debentures by arrangement with holders, and shall be glad to have your further opinion when you have more maturely considered the matter. I have, &c, W. J. M. Laenach, The Loan and Stock Agents, London. (for the Colonial Treasurer.)
No. 110. The Colonial Teeasueee to the Loan and Stock Agents. Gentlemen, — The Treasury, Wellington, 13th March, 1885. I have the honour to acknowledge the receipt of your letter of the 12th January (No. 46), giving particulars of the negotiation of the One-Million Loan, with its enclosures. I concur with you in considering that the result shows the two and a half millions could have been successfully negotiated if the Bank of England had not objected. I should be glad of some additional copies of the Paper by the Agent-General issued with the prospectus of the loan, if still in type, and also of the prospectus itself. I have, &c, W. J. M. Larnach, The Loan and Stock Agents, London. (for the Colonial Treasurer.)
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. No. 111. The Colonial Treasurer to the Stock Agents. Gentlemen, — Treasury, Wellington, 13th March, 1885. Beferring to the telegram (copy enclosed) despatched to you on the 9th instant, informing you that you had been authorized by the Colonial Treasurer to exercise the powers contained in sections 11, 12, and 14 of " The Consolidated Stock Act, 1884," for the purposes of an Order in Council, made the same day, authorizing the Colonial Treasurer to issue debentures under the 10th section of the Act, I have now the honour to transmit to you the enclosed instrument, under the hand of the Colonial Treasurer, authorizing you to exercise the powers referred to. I have, &c, W. J. M. Larnach, The Loan and Stock Agents, London. For the Colonial Treasurer.
Enclosure in No. 111. In exercise of the power conferred by " The Consolidated Stock Act, 1884 " (hereinafter termed "the said Act "), I, Julius Vogel, Colonial Treasurer for the Colony of New Zealand, do hereby authorize and empower Sir Penrose Goodchild Julyan, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, and a Companion of the Most Honourable Order of the Bath, and Sir Francis Dillon Bell, a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George, both of London, the Agents appointed under " The New Zealand Consolidated Stock Act, 1877," to exercise all the powers conferred upon me by an Order in Council issued under the provisions of the said Act, and bearing even date herewith (a copy of which said Order is hereto attached, marked A), and also all powers and authorities mentioned and contained in sections numbered eleven, twelve, and fourteen of the said Act respectively, which may be necessary to exercise for the purposes of the said Order in Council: Provided always that the powers and authorities hereby conferred upon the said Agents shall continue for the space of six calendar months as from the ninth day of March instant, and no longer. As witness my hand this ninth day of March, one thousand eight hundred and eighty-five. Julius Vogel. Witness to signature—J. P. Kennedy, Private Secretary, Wellington.
No. 112. The Colonial Treasurer to the Loan Agents. Gentlemen. — Treasury, Wellington, 28th March, 1885. I have the honour to advise having drawn upon you for the sum of £100,000 on the 24th instant by five sets of drafts in triplicate, Nos. A/306 to 310, at thirty days after sight, for £20,000 each in favour of the Bank of New Zealand, London ; and I have to request you to be good enough to accept the drafts on presentation by the bank. Bank order payable on or after 6th June, enclosed. I have, &c, Sir Penrose G. Julyan, K.C.M.G., C.8., Jos. A. Tole, Sir F. Dillon Bell, K.C.M.G., For the Colonial Treasurer. New Zealand Loan Agents, London.
80. 113. The Colonial Treasurer to the Stock Agents. Gentlemen, — Treasury, Wellington, 26th March, 1885. I- have the honour to enclose herewith duplicate of the instrument authorizing you to exercise the power vested in the Colonial Treasurer, to create debentures under " The Consolidated Stock Act, 1884," by Order in Council dated 9th instant, together with press copy of Treasury letter, No. 8, dated 13th instant, forwarding the original instrument. I have, &c, Jos. A. Tole, The New Zealand Loan and Stock Agents, London. For the Colonial Treasurer.
No. 114. The Colonial Teeasueee to the Agent-General. Agent-General, London. Dunedin, 28th March, 1885(?). Is war likely; and, if so, what are prospects obtaining money—negotiating loan or temporary advances? Vogel.
No. 115. The Agent-Geneeal to the Colonial Teeasurer. Treasurer, New Zealand. (Beceived 29th March, 1885.) General anxiety certainly increasing. Lord Granville declared last night England would not flinch. Loan Agents' conference yesterday. Supposing war.break out, great financial stringency certain, and neither new loan nor temporary advances might be possible ; but cannot say definitely yet. London 28th.
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No. 116. . The Agent-Geneeae to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 3rd February, 1885. I thought there might be a chance of the Commissioners of Inland Bevenue making an allowance under section 53 of " The Inland Bevenue Act, 1880," for the cancelled debentures of the 5-per-cent.-5-30 series when paid off; but they declined to make such allowance on the ground that the provisions of that section had been authoritatively interpreted to extend only to bonds exchanged for stock, and not to bonds paid off from the proceeds of an issue of stock. They require composition stamp duty to be paid, at the rate of 12s. 6d. per £100, and the Stock Agents have given the necessary instructions to the Bank of England accordingly. I have,,&c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 117. The Loan and Stock Agents to the Colonial Teeasueee. Sic, —■ 7, Westminster Chambers, London, S.W., 12th February, 1885. In our letter of the 10th January, No. 44, acknowledging receipt of " The Consolidated Stock Act, 1884," we promised to give our early attention to the important subjects mentioned in your letter of 24th November. On the sth instant, having meanwhile thought over your plans very carefully, and having seen how important a bearing the Act had on our proposal of Ist December, which had crossed yours on the way, we telegraphed to you asking what you thought of those proposals. We were glad to receive your reply of the 7th, extending the amount of stock we might offer to the holders of consols, and pointing out that, while we were to take care that a conversion did not interfere with the issue of the £1,500,000 new loan, the Act was really a help to what we had suggested. We at once answered that our proposals would not interfere with the new loan, and that we had quite recognised the fact of the new Act not being antagonistic to them; on the contrary, •it had seemed to us all along that it could well be used to advantage, simultaneously, in England and the colony. Immediately upon receiving your telegram, we desired the Actuaries (Messrs. Bailey and Hardy) to calculate the "average life" of a consols bond upon which must really depend the exchangeable quantities we ought to suggest to you; these calculations cannot be completed in time to let us write by this mail, but we shall soon be able to telegraph our exact proposals to you, and we shall send you a full statement by the San Francisco Mail. We annex copies of the telegrams above mentioned. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents
Copy of Telegrams referred to in No. 117. The Loan Agents to the Colonial Teeasurer. Treasurer, New Zealand, (Beceived 6th February, 1885.) Your letter of 24th November received. Please reply to proposal contained in our letter December first respecting exchange Consolidated Loan 1867 for five-per-cent. debentures ; it has important bearing on questions raised by Stock Act eighty four, and we still think our proposal would be preferable to provisions that Act so far as concerns Consolidated Loan 1867. Loan Agents, London, 5.
The Colonial Treasurer to the Agent-Geneeal. Agent-General, London. Waiwera, 6th February, 1885. Loan Agents. Important not allow conversion interfere with negotiation million and a half which desire immediately we think market favourable after end of March. Act eighty-four aids proposal letter December first by enabling creation short-dated debentures. Agree five-per-cent. debentures not desirable ; still, if great quantity Consolidated Loan 1867 obtainable, willing exchange par five-per-cent. debentures make period of currency five years with option convert during first four years into inscribed stock at following rates: 105 per 100, or immediate exchange debentures for stock at following rates : 109 inscribed stock per 100 Consolidated Loan 1867. Beply.
The Loan Agents to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 9th February, 1885.) Conversion. Yours to-day. Firstly, we think our proposal would not materially affect million and a-half; that issue must be deferred some months. Secondly, must postpone answer few days respecting exchangeable quantities. Thirdly, we did not regard Act as antagonistic to proposal. Loan Agents, London, 7.
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No. 118. The Loan Agents to the Colonial Teeasueee. . Treasurer, New Zealand. (Beceived 2nd April, 1885.) Consolidated Loan 1867 conversion. Amount sent in hitherto £2,480,000. Loan Agents, London, Ist.
No. 119. The Colonial Teeasueee to the Agent-Geneeae. Agent-General, London. 3rd April, 1885. Loan Agents. Conversion. Congratulate you.
No. 120. Memoeandum from the Agent-Geneeal to the Colonial Teeasueee. 7, Westminster Chamber, London, S.W., 22nd February, 1885. Befeeeing to your letter, No. 30, of the 22nd November last, I have to state that, at the request of Sir Penrose G. Julyan, I have arranged that he shall receive his retaining fee of £800 per annum by quarterly payments. I have accordingly made the first payment for the quarter ending the 4th instant. F. D. Bell.
No. 121. The Loan and Stock Agents to the Colonial Teeasueee. Sir, — 7, Westminster Chambers, London, S.W., 26th February, 1885. Since writing to you on the 12th February, No. 162, we have received to-day your letter of the 6th January, and we beg leave to express our acknowledgments for the explanations which it contains. We had hoped that we should have been able ere this to make a full explanation of our views on the important questions you brought before us in your letter of the 24th November last, No. 11. We beg permission, however, to give the following explanation of the delay : — That letter reached us on the sth January. We had not then received the Hansards containing the debates upon the Bill in its passage through the Legislature. The first of these Hansards, No. 22, containing your speech on moving the second reading, came to us on the 15th January ; the other, No. 23, containing the conclusion of the debate in the House of Bepresentatives, and the debates in the Legislative Council, only arrived on the 31st of that month. It was not until we had studied these debates, that we were able to see very clearly the method by which you proposed to give effect to the Act; nor could we even then feel perfectly sure that we understood all the processes by which the Act might be brought into operation in England as well as in the colony. Immediately upon reading these debates, however, we perceived that an opportunity existed for adding, to the several operations which we supposed to have been in the contemplation both of yourself and of the Legislature, another one in the direction of the proposal which we had made in our letter of the Ist December last, No. 555. We, therefore, decided to communicate with you by telegraph without delay, to ascertain whether we were at liberty to consider such an operation as well as the others. Upon receiving your telegram of the 7th instant, indicating the terms upon which the Government would sanction such an operation as we had proposed, we devoted ourselves to ascertaining how far your terms were likely to be accepted. The first thing necessary was to have an actuarial calculation of the remaining " life" of a consols bond ; and we now enclose you a copy of the correspondence between the Agent-General and the Actuaries, showing this "life" for every year after 1884. Simultaneously, we made inquiries in a confidential way as to the terms likely to succeed, the great object, of course, being to take advantage of the Act before the next drawing of consols in March. We could not see our way clear enough about exchangeable quantities until the 19th instant, when we sent you a full telegram of the terms we thought it would be necessary to offer in order to make the operation a success. We received in due course your telegram of the 23rd instant, telling us that the meaning of our message of the 19th was uncertain ; but this was cleared up by your further telegram of next day, to which we immediately replied with the information you required. As soon as we hear definitely from you whether we are to go on with the operation, we shall not fail to explain our proposals fully. Copies of the telegrams that have passed between us on the subject are annexed. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
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Copy of Telegrams referred to in No. 121. The Loan Agents to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 20th February, 1885.) Consolidated Loan 1867. After fullest reflection, we advise following: Firstly, your proposed exchangeable quantities would not be accepted; secondly, we think any operation which caused present issue new inscribed stock in large quantities would injure million and a half; therefore, we advise not making any offer involving immediate exchange inscribed stock for Consolidated Loan 1867 debentures ; thirdly, on other hand, we think desirable operate before next drawing by taking advantage of new Act, provided could offer terms likely to insure success; fourthly, actuaries calculate average life of Consolidated Loan 1867 bond after next drawing at nearly thirteen years—therefore new 5-per-cent. bond, having only five years' currency, would be inadequate, especially as Consolidated Loan so largely held by financial bodies which are governed by annual chance of drawings; fifthly, therefore we advise you authorize us to offer seven years 5-per-cent. bond convertible at end currency into 106, or even 107, of inscribed stock; sixthly, we are inclined to think this would succeed unless war or serious complications suddenly intervene, which, however, we do not apprehend. Please instruct. Loan Agents. London, 19
The Colonial Treasurer to the Agent-General. Agent-General, London. Auckland, 23rd February, 1885. Cable estimated cost about proposed conversion. Meaning of message uncertain between sixthly immediate. Bepeat interim words.
The Agent-General to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 24th February, 1885.) Perplexed which words should repeat. Instruct whether you wish me explain Loan Agents' object more clearly. London, 23.
The Colonial Treasurer to the Agent-General. Agent-General, London. Auckland, 24th February, 1885. Loan Agents. What probable cost of proposed conversion. Bepeat next five words following sixthly.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 25th February, 1885.) Conveesion. Cost may be estimated about one and half per cent, upon amount converted. Following five words after sixthly : We are inclined to think. Loan Agents, London, 24
Enclosure in No. 121. New Zealand Consols. No. 1. The Agent-Geneeal to the Actuaeies. Deab Sies, — 7, Westminster Chambers, 11th February, 1885. I explained to you, at the conference between us relating to the New Zealand Consolidated Loan of 1867 (known in this market as " New Zealand Consols ") ; that the calculation desired was one showing the average " life " of the bonds now remaining undrawn. The operation of the annual drawings of this loan was described at the time of issue as follows : " The new 5-per-cents. are to be paid off at par by a 1-per-cent. Cumulative Sinking Fund, applied by annual drawings to the liquidation of the debt. By a " cumulative sinking fund' it is to be understood that the total annual charge will remain at £ , paid quarterly throughout the whole period, and that after paying therefrom the interest on the bonds in circulation, the growing balance will be applied to the annual drawings. In this manner the whole of the debt will be extinguished in thirty-six and a half years." I enclose herewith two tables, showing the accretions and appropriation of the sinking fund from 1869 to 1884, and the drawings in each year for the same period. Your calculation should show the average remaining " life " of a bond at the date of the last drawing on the 15th April, 1884, and for each subsequent year. I am, &c, F. D. Bbll.
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Enclosure 1. Statement of the Sinking Fund Accretions and Appropriations from 1869 to 1884.
£ Total debentures issued ... ... 7,283,100 Total debentures drawn ... ... 1,510,600 Outstanding 1884 ... ... £5,772,500
Enclosure 2. Drawings of the New Zealand Consols Loan.
Numbers and Denominations of the Bonds Issued and Drawn respectively.
Year ended lprill5. Debentures issued. Sin: Interest on Drawn Bonds. :ing Fund. Total Amount of Sinking Fund (less Amount of Expenses during the first Three Years). Debentures drawn, paid off, and cancelled. One per cent, per Annum. Interest on Deposits. 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 4,191,000 4,191,000 4,421,000 5,653,100 6,653,100 7,153,100 7,153,100 7,233,100 7,283,100 7,283,100 7,283,100 7,283,100 7,283,100 7,283,100 7,283,100 7,283,100 £ s. 39,828 10 41,910 0 43,970 0 56,531 0 66,531 0 70,281 0 71,531 0 73,052 5 72,831 0 72,831 0 72,831 0 72,831 0 72,831 0 72,831 0 72,831 0 72,831 0 d. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 £ 1,990 4,190 6,600 9,820 13,685 17,930 22,455 27,255 32,285 37,585 43,165 48,990 55,145 61,605 68,405 £ s. d. 253 2 2 341 4 7 325 4 5 1,327 17 8 962 15 3 949 5 0 966 12 6 934 13 6 380 19 8 825 12 10 1,185 18 10 702 15 0 875 11 1 1,522 14 10 1,465 19 6 1,167 8 9 £ s. d. 39,825 15 3 43,990 18 1 48,215 15 0 64,458 17 8 77,309 1 5 84,905 5 0 90,427 12 6 96,441 18 6 100,466 19 8 105,941 12 10 111,601 18 10 116,698 15 0 122,696 11 6 129,498 14 10 135,896 2 9 142,403 8 9 £ 39,800 44,000 48,200 64,400 77,300 84,900 90,500 96,000 100,600 106,000 111,600 116,500 123,100 129,200 136,000 142,500 1,046,282 15 0 I Less balance o 451,105 jried for 14,187 15 ard... 7 1,510,779 179 7 7 7 7 1,510,600 £1,510,600 0 0
Bonds drawn in respective Seriei Year of Drawing. Total Amount. £1,000. £500. £200. £100. 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 8 9 11 17 23 26 27 29 30 33 34 35 38 40 42 44 26 29 32 45 53 58 62 65 71 73 76 79 86 90 95 100 44 '45 49 58 65 70 75 76 80 84 88 97 98 104 109 114 100 115 114 133 148 159 175 193 191 197 220 226 225 234 247 257 £ 39,800 44,000 48,200 64,400 77,300 84,900 90,500 96,000 100,600 106,000 111,600 116,500 123,100 129,200 136,000 142,500 446 1,040 1,256 2,934 1,510,600
Bonds of £1,000. Bonds of £5C0. Bonds of £200. Bonds of £100. Amounts. Issued Drawn 2,333 446 5,103 1,040 5,630 1,256 12,726 2,934 £ 7,283,100 1,510,600 Outstanding in 1884 1,887 4,063 4,374 9,792 5,772,500
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No. 2. The Actuaeies to the Agent-Geneeal. Dear Sir Francis, — London, 18th February, 1885. According to your request, we send herewith a table which we have prepared in reference to New Zealand 5-per-cent. consols, showing, for each year during the currency of the loan, what will be the average duration of a bond; what, when applied to human mortality, is sometimes called the " expectation of life." For example, immediately after the last drawing this average duration was 13-52, or nearly 13J years. Seven years later it will be 8-98, or nearly 9 years. The basis upon which the table has been calculated has been, that after the drawing in 1884 the amount of the bonds outstanding was £5,772,500 ; and that £436,986 is to be applied annually, (1) in payment of interest on the debt at the rate of 5 per cent, per annum, and (2) the balance in reduction of the capital. From the papers which you have sent to us, we observe that the annual payment is slightly increased by amounts received for interest on deposits. It has not been practicable to include this in the calculation, because the amounts are variable and uncertain. The effect therefore is that the average duration given in the table is slightly overstated; but the amount of this interest is relatively so small, that the use of the table for any practical purpose cannot, we think, be affected thereby. We think it right to add, for your guidance, that the equivalent average term of years for which a bond should be allowed to run at 5 per cent, interest as a fixed investment, would be, at ths present time, about one year less than the period shown in the table. Thus, if you granted, say, 12-85 years of a fixed investment at 5 per cent., with redemption at par at the end of that term, the bondholder would get the advantage of an additional year's favourable investment over and above the true equated value. This turn in his favour abates each year, and the two terms gradually approximate. We are, &c, A. H. Bailey, Sir Francis Dillon Bell, K.C.M.G. Balph P. Hardy.
Enclosure. New Zealand 5-per-cent. Consols Table showing, for 15th April in each year during the currency of this Loan and immediately after the March drawing and the ensuing redemption, the average after-duration, or mean subsequent lifetime, of a Bond.
Note. —The capital of the unredeemed debt on 15th April, 1884, has been taken at £5,772,500. The annual sum of £436,986 has been taken as applicable to the service of the debt and sinking fund, which sum will meet the interest on the bonds still in the hands of the public, and effect the gradual redemption over 22-14 years. No allowance has been made for any extraneous aid to the fund, such as interest on deposits, &c. A. H. Bailey, 18th February, 1885. Balph P. Haedy.
No. 3. The Agent-General to the Actuaries. Dear Sirs, — 7, Westminster Chambers, 21st February, 1885. I think it necessary that you should know exactly the process pursued at the drawings. At the time of the original issue of the loan, tickets were put into separate bags for each series of bonds (£l,OOO, £500, £200, and £100) having numbers the same as those of the bonds themselves. These bags were then sealed up. Every year, at the drawing, the bags are unsealed in the presence of the Crown Agents and the Notary, who keep separate keys of the boxes holding the bags. When the Crown Agents have made up the amount of the bonds to be drawn in that year, they divide that amount proportionately (so far as practicable) among the various series; so many debentures of £1,000, so many of £500, and so on. Then, suppose (as actually happened) 44 bonds of £1,000 to be the number drawn in 1884, the clerk puts his hand in the bag containing the £1,000 tickets, and draws 44 of them successively, doing the same with the other bags containing the tickets of the other series, until the whole number required out of the four series are drawn. Then the bags are newly sealed up again till the next drawing. Please to say whether this would make any difference in your calculations. I am, &c, F. D. Bell.
.0. Date. Average afterduration, or mean subsequent lifetime, of a Bond. No. Date. Average afterduration, or mean subsequent lifetime, of a Bond. No. Date. Average afterduration, or mean subsequent lifetime, of a Bond. 1 2 3 4 5 6 7 8 April 15,1884 1885 1886 „ 1887 1888 1889 1890 1891 Years. 13-52 12-85 12-19 11-53 10-88 10-24 9-61 8-98 9 10 11 12 13 14 15 16 April 15,1892 1893 1894 1895 1896 1897 1898 1899 Years. 8-37 7-76 7-16 6-56 5-98 5-40 4-83 4-26 17 18 19 20 21 22 23 April 15,1900 1901 1902 1903 1904 1905 1906 Years. 3-71 3-16 2-62 2-09 1-56 1-02 0-14
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No. 4. The Actuaeies to the Agent-Geneeae. Deae Sic Feancis, — London, 24th February, 1885. We have considered the process of drawing the bonds, which you have explained in detail, and are satisfied that there is no difference worth taking into account in the average subsequent lifetime of the different classes of bonds, so long as care is taken, at each drawing, to divide the whole amount proportionately, so far as practicable, among the different series of £1,000, £500, &c. We are, &c, A. H. Bailey. Balph P. Haedy.
No. 122. The Loan and Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 26th February, 1885. The Agent-General referred to us your letter of the 19th December last, No. 37, which is still under our consideration. In the meantime, with regard to the meaning of the term "actuarial equivalent," we enclose a copy of a letter from the Actuaries to the Agent-General, explaining the difference there was between finding the equivalent for 5-per-cent. consols in a 4-per-cent. stock already in existence and the equivalent in a 3-|~per-cent. stock yet to be created. We hope their explanation will clear up the point that was in your mind. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Enclosure in No. 122. The Actuaeies to the Agent-Geneeal. Deae Sic Feancis, — London, 18th February, 1885. From the extract of the despatch from New Zealand which you have sent to us, there seems to have been some misunderstanding of the phrase " actuarial equivalent." We were asked to find equivalents to the 5-per-cent. consols in a 4-per-cent. stock, and also in a 3-J- stock. The 4-per-cent, stock was already in existence ; the price, therefore, was determined by the market, and the equivalent must be given according to the market prices of the two stocks. What has to be noticed is that the price of the 5-per-cent. stock must not be judged merely by the income it produces, because the capital will shortly be repaid, and cannot be reinvested on the same terms. No 3-|-per-cent. stock being in existence we had to determine from the market price of 4-per-cent, stock, taking into account the duration of the loan, the rate of interest yielded on New Zealand Government securities : a somewhat intricate calculation. Having arrived at this, we were enabled to prepare our table of equivalent amounts of 3|-per-cent. stock. These may be called " actuarial equivalents " as distinguished from market equivalents, there being no such stock in the market. We hope that this is quite intelligible. Yours very truly, A. H. Bailey, Ralph P. Haedy.
No. 123. The Loan and Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 26th February, 1885. We received in due course your telegram of the 18th instant, inquiring when we expected to be able to issue the £1,500,000 loan, to which we replied that we could not encourage any hope of being able to place it before midsummer ; and we were glad to receive your reply stating that this time would be satisfactory. Copies of the telegrams are annexed. We have, &c, For the Stock and Loan Agents, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Copies of Telegrams referred to in No. 123. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Waiwera, 18th February, 1885. Loan Agents. When do you think negotiate million and a half ? War rumours make desirable effect soon as possible. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 20th February, 1885.) Million and a half. Cannot encourage any hope placing before midsummer. War rumours not such warrant hurried issue. Loan Agents, London, 19.
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The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Auckland, 21st February, 1885. Loan Agents. Million and a half. Midsummer satisfactory. Try manage before London empties. Reply shortly about conversion.
No. 124. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 13th April, 1885. What probability concerning war or peace and obtaining money as required ?
No. 125. The Colonial Teeasueee to the Loan Agents. Loan Agents, London. Wellington, 16th April, 1885. If possible, make interest on new 5-per-cent. debentures payable half-yearly first June, December, and not month in advance, as in case inscribed stock.
No. 126. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 18th April, 1885.) Cannot alter now, terms conversion prospectus respecting quarterly payments interest. . . . Loan Agents, London, 17th.
No. 127. The Colonial Teeasueee to the Loan Agents. Gentlemen, — 25th April, 1885. I have the honour to inform you that on the 22nd instant I drew upon you for the sum of £200,000 by ten drafts, Nos. A/311 to A/320, for £20,000 each, in triplicate sets, at sixty days' sight, in favour of the Bank of New Zealand, and I have to request you to be good enough to protect the drafts on presentation. I have, &c, The Agents for New Zealand Loans, London. Julius Vogel.
No. 128. The Colonial Teeasueee to the Agent-Geneeal. The Agent-General, London. Wellington, 28th April, 1885. . . . . Loan Agents. Arrange to meet drafts for £200,000, at sixty days, remitted by last mail 'Frisco.
No. 129. The Colonial Teeasueee to the Loan and Stock Agents. Gentlemen, — Treasury, Wellington, 13th April, 1885. I have the honour to acknowledge the receipt of your letter of the 26th February last, No. 233, and to thank you for the copy of the correspondence with the actuaries it contained, and for the valuable result of their investigation as to the average life of the outstanding debentures issued under " The Consolidated Loan Act, 1867." I have, &c, The New Zealand Loan and Stock Agents, London. Julius Vogel.
No. 130. The Loan and Stock Agents to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 12th March, 1855. At the date of our last letter (26th February, No. 233) on the subject of the consols conversion, we were awaiting your decision upon the proposals we had telegraphed to you on the 19th February. Immediately upon receiving that decision, we had a prolonged conference at the Bank of England, to settle finally the terms on which the conversion should be announced. It had, of course, been necessary for us to consider with great care every point which seemed necessary to be borne in mind, long before we asked you for authority to offer a seven years' 5-per-cent, debenture, convertible into 107 of inscribed stock, in exchange for the consol bonds. We had been very desirous not to exceed 106, and our calculations had been based on that figure; but, having regard to many circumstances that came to our knowledge, we had thought it necessary to prepare you for having to give 107 ; especially as we had come to the conclusion not to concede any option to the holders, but to make the conversion of the new debentures obligatory on them at the expiry of the seven years. The discussion at the Bank was mainly directed to this point. The Bank broker pressed very strongly for 108, and it was only after a long argument that 107 was agreed to by us. Although 107
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may perhaps have appeared to you at first sight to be high, it will not seem so when we inform you that it is considerably below the true or actuarial equivalent. We cannot send you until next mail the calculations of the actuaries, but we may say at once that they find this equivalent to be, under the conditions of the conversion, really £111 os. 6d., so that if the operation succeeds at 107, it will be a very advantageous one for the colony. As we only received your authority on the 2nd instant, we had to airange with the Crown Agents to put off the annual drawing of consols from the usual date until the 31st of this month, so as to afford the longest possible time for holders to make up their minds. But it was obvious that we could not close the conversion then, and that we must allow holders a reasonable time further on : we accordingly fixed the 30th April as the last day for receiving applications. As the drawing would thus have to take place on the 31st March, it was necessary to make special provision for the holders of both drawn and undrawn debentures. We accordingly arranged that holders bringing in their bonds for conversion before the 31st March should have the benefit of the conversion without being affected by the drawing; and that with regard to holders not deciding before the 31st March, as their drawn bonds would, of course, be nonexistent after that date, they should be allowed, instead of receiving cash for their drawn bonds, to have a new bond in all respects similar to the others, upon payment of £4 per cent. This sum, we estimated, would place them on about the same level as holders whose bonds had not been drawn, while it would leave a stimulus to all holders to declare themselves before the 31st March, and yet encourage those who did not so declare, to come in up to the 30th April. Immediately upon the terms being finally settled, the Bank prospectus was prepared ; of which we send you copies herewith. The Agent-General telegraphed to you asking that the necessary Orders in Council and other authorities under "The Consolidated Stock Act, 1884," might be issued at once, and we were much obliged by the promptitude with which this was done by you. The scheme has been very well received by the market, as is evinced by the fact that a rise of 1 per cent, in the price of consols took place immediately the bank advertisement appeared ; and we think there is good reason to expect a success. It will, at any rate, afford a good idea as to what it may be expedient to offer hereafter to holders who do not come in now. We are preparing a complete review of the operation, its objects, and its probable results, which we shall send you in due course. Copies of all the telegrams which have passed since our letter of the 26th February are annexed. We have, &c, P. G. Julyan, F. D. Bell, The Hon. the Colonial Treasurer, Wellington. Loan and Stock Agents.
Copies of Telegrams referred to in No. 130. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 2nd March, 1885. Loan Agents. Approve proposed conversion on not worse terms than described in your telegram 19th February, if you still think will not materially affect million and a half.
The Loan Agents to the Colonial Treasueee. Treasurer, New Zealand. (Beceived 6th March, 1885.) Consolidated Loan, 1867. Conversion. Following terms settled: seven years five-per-cent. debentures; then inscribed stock hundred and seven. Loan Agents. London, sth.
The Agent-General to the Colonial Treasurer. Treasurer, New Zealand. (Beceived 7th March, 1885.) Consolidated Loan, 1867. Conversion. Bank of England announces to-night. Please remember necessary issue Order Council immediately under section ten new Act; also instruct under sections twelve, sixteen. Please telegraph substance and dates of Orders. London, 6th.
The Colonial Teeasueer to the Agent-General. Agent-General, London. Wellington, 9th March, 1885. . Loan Agents. Governor in Council has authorized Colonial Treasurer under tenth section Consolidated Stock Act eighty-four, issue five-per-cent. debentures to exchange at par for equal amounts of Consolidated Loan debentures, also two per cent, additional for expenses. Colonial Treasurer, under sixteenth section same Act, has authorized the Agents exercise all powers contained in said Order in Council and powers contained in eleventh, twelfth, and fourteenth sections. Controller and Auditor-General, under twelfth section, appoints Audit officer. Order and Treasurer's authority dated this day.
The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. . (Beceived 10th March, 1885.) Consolidated Loan, 1867. Firstly, thanks prompt orders. Secondly, conversion closes thirtieth April. Drawing fixed thirtieth March. Thirdly, debentures deposited before drawing not affected. Fourthly, holders not converting before drawing may have new bonds exchange drawn debentures upon paying four pounds per cent. cash. Loan Agents. London, 9th.
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Enclosure in No. 130. Public Debt of New Zealand. Conversion of £5,772,500 New Zealand Government 5-per-cent. Consols. The Governor and Company of the Bank of England give notice that, on behalf of the Agents appointed by the Governor of New Zealand in Council, under " The New Zealand Consolidated Stock Act, 1877," the Amendment Act, 1881, and " The Consolidated Stock Act, 1884 " (Sir Francis Dillon Bell, K.C.M.G., and Sir Penrose Goodchild Julyan, K.C.M.G., C.8.), they are authorized to invite holders of the debentures of the above loan to bring in their debentures for conversion on the following terms, viz. :— For every £100 of such debentures a new debenture will be issued for the same amount, bearing interest at the rate of 5 per cent, per annum for seven years, from the 15th April, 1885, to the 15th April, 1892, when it will be converted into £107 New Zealand 4-per-cent. consolidated stock inscribed at the Bank of England, which will rank pari passu with the 4-per-cent. consolidated stock already created and issued, and redeemable at par on the Ist November, 1929. Applications for conversion will be received up to the 30th April next, inclusive. The interest upon the new debentures will be payable by coupons in the same manner as upon the consol debentures—viz., 15th January, 15th April, 15th July, and 15th October, at the Bank of England, the first coupon being for the dividend due 15th July next. Consol debentures, from which the coupon due 15th April next must be detached, may be deposited at the Chief Cashier's Office, Bank of England, for exchange on or after Wednesday next, the 11th instant. They must bear all coupons subsequent to that due 15th April next, and must be left three clear days for examination. Receipts will be given for the debentures deposited, and the new debentures will be issued in exchange as soon after as possible. The usual annual drawing for redemption of the consols will take place on Tuesday, 31st March next; debentures deposited before that date will not be affected by the drawing. Holders of consol debentures drawn for redemption, in respect of which no application for conversion has been made, will be allowed to receive, in exchange for each drawn debenture, a new debenture as above, upon payment of the sum of £4 per cent., provided application be made before the 15th April next. By the Act 40 and 41 Vict., c. 59, the revenues of the Colony of New Zealand alone will be liable in respect of the stock and the dividends thereon, and the Consolidated Fund of the United Kingdom and the Commissioners of Her Majesty's Treasury will not be directly or indirectly liable or responsible for the payment of the stock or of the dividends thereon, or for any matter relating thereto. Bank of England, 6th March, 1885.
No. 131. The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived Ist May, 1885.) Consolidated Loan, 1867. Conversion. Total amount converted, £3,642,100. London, 30th.
No. 132. The Colonial Teeasueee to the Agent-Geneeae. Agent-General, London. Wellington, 2nd May, 1885. Conveesion very satisfactory.
No. 133. The Agent-Geneeal to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 22nd March, 1885. I received in due course your telegram of the 17th instant, inquiring what the prospects were of the consols conversion, and whether war was probable. I replied that the conversion proposals had been well received by the market and by bankers, and that, so far as I could judge, the prospects of the conversion were good; also, that an opinion seemed to be gaining ground that war with Bussia would be averted. Copies of these telegrams are annexed. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Copies of Telegrams referred to in No. 133. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Christchurch, 17th March, 1885. Is conversion likely succeed ? Is war probable ? . . . .
The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 18th March, 1885.) Conveesion well received market bankers. Prospects good. Opinion gaining ground war averted. . . . . New loan, five per cent., five-thirty, interest £28,877 15s. London, 17th.
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No. 134. The Agent-Geneeal to the Colonial Teeasueee. Sro, — 7, Westminster Chambers, London, S.W., 26th March, 1885. I transmit to you herewith a specimen bond of the new 5-per-cent. debenture to be issued in the conversion of consols. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
No. 135. The Agent-Geneeal to the Colonial Teeasueee. Sic, — 7, Westminster Chambers, London, S.W., 26th March, 1885. Adverting to the Loan and Stock Agents' letter of the 12th instant, I transmit herewith the correspondence that has taken place with the actuaries respecting the equivalent of inscribed Stock which should be offered to bondholders in a conversion of the consols. I have, &c, The Hon. the Colonial Treasurer, Wellington. F. D. Bell.
Enclosure in No. 135. New Zealand Consols Conveesion. No. 1. The Agent-Geneeal to the Actuaeies. Deae Sies, — 7, Westminster Chambers, 2nd March, 1885. In addition to the computations you lately made of the " average life " of a consols bond, I have now to request that you will make the following calculations, on the supposition that all the bonds come in for conversion:— 1. Assuming the price of consols to be 105, what is the net interest received by the holder on his £100 bond, after allowing for the amount necessary to extinguish the premium ? 2. Supposing the consols holders to be offered a new 5-per-cent. bond at par, with a currency of seven years, to be converted at the end of the seven years into 4-per-cent. inscribed stock, how much Stock would it be necessary to give in order to compensate them for the exchange ? 3. Please to state what would be the financial results to the colony, at 106, 106f, and 107, in (a) augmentation of debt after the seven years, including the expenses of the conversion ; (p) annual charge for the augmented debt; (c) annual reduction in charge after the seven years ; (d) total reduction in annual charge; (c) annual sum required to be set apart for extinguishing the augmentation of debt. It will be in your recollection that in the table you prepared for me a little time ago you showed that at the market prices of that time—namely, inscribed stock, 102 ; and consols, 107— £104 18s. in inscribed stock was the equivalent for £100 consols. The equation lam now asking you for in the proposed conversion will rest, of course, upon an entirely different basis of calculation ; but I should be obliged if you would make a concise explanation of the difference. I am, &c, A. H. Bailey, Esq., and Balph P. Hardy, Esq. F. D. Bell.
No. 2. The Actuaeies to the Agent-General. Dear Sir Francis, — London, sth March, 1885. We have made a number of calculations with the view of testing what would be the financial results to the colony if the proposed conversion of the New Zealand Five-per-Cent. Consols Loan be carried into effect. We now send you such a selection of our results as, we trust, will supply the information desired, without troubling you with a mass of figures. If we may, first, regard the matter from the point of view of the bondholder, the results would be as follows: (1.) At the market price (after the approaching drawing), assumed to be 105, the Consols Loan, taken in the aggregate, would yield interest at the rate of £4 9s. 2d. per cent, per annum for the remainder of the term on the amount outstanding at the beginning of each year after the drawing has taken place. (2.) If the consols (subsequent to the drawing) be now exchanged for new bonds at par, bearing 5 per cent, interest for seven years, such bonds at the end of that term being converted into 4-per-cent. inscribed stock, the holders should then receive £111 os. 6d. of such stock for every £100 of consols, to compensate them for the exchange. If the conversion be made at 106, 106J, or 107, provision being made by the issue of additional 4-per-cent. stock at par for the following attendant expenses—viz., Bank of England, initial charge, £600 per £1,000,000 of stock; stamp duty, at the rate of 12s. 6d. per cent.; brokerage, at the rate of ss. per cent.; incidental expenses, say, £5,000 —then the financial results to the colony would be as follows:—
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It must be clearly understood that, to a considerable extent, the reduction in the annual charge is not to be regarded as a saving, but that it is due to the cessation of the sinking fund, which, by the existing arrangements, is applied to liquidate the capital of the debt. The object of the table which we prepared for you some months ago was to show the terms on which the consols could be exchanged for 4-per-cent. inscribed stock by buying and selling at the prices then prevailing in the market. The object of the present calculations is to arrive at the arithmetical equivalent of the exchange of an annual payment of £436,986 for the term of about twenty-two years (which, according to our calculations, is the duration of the present consols), for the new bonds now proposed. In this, as in other cases, it will be found that there is a material difference between market prices and arithmetical equivalents. The reason for this is readily intelligible. The nominal rate of interest upon the consols (viz., 5 per cent.) is above the market rate for New Zealand securities; and hence this stock stands at a premium. But, in order that the same rate of interest should be yielded by the consols as could be realized by an investment in the 4-per-cent. inscribed stock, the premium should be higher than is actually the case. The difference in value is due to the conditions attaching to the consols, the liability to repayment at par, as the result of the annual drawings, rendering the stock an unsuitable channel of investment for trustees and others, so that the market for the security is contracted; whereas no such objections apply to the 4-per-cent. inscribed stock. We trust that the whole of the foregoing figures, as well as this last explanation, will put the several questions clearly before you. We are, &c, Sir F. D. Bell, K.C.M.G., A. H. Bailey, Agent-General for New Zealand. Balph P. Haedy.
No. 136. The Colonial Treasueee to the Loan and Stock Agents. Gentlemen,— Treasury, Wellington, 11th May, 1885. I have the honour to acknowledge the receipt of your letter, No. 265, dated 12th March last, and to thank you for the particulars therein given of your proceedings in regard to the conversion of debentures of the Consolidated Loan, 1867. I shall be glad to learn what are the terms of the arrangement made by you with the Bank of England for carrying out the operation. I have, &c, The Loan and Stock Agents for New Zealand, London. Julius Vogel.
No. 137. The Colonial Teeasurer to the Agent-General. Agent-General, London. Wellington, 13th May, 1885. Loan Agents. Could you not offer Million-and-a-Half Loan at once after Queensland, if successful ?
Assume id Bate of Co: LVorsion. 106. 106J. 107. £ £ £ (a.) Capital of the Debt: . .... ...... Immediate augmentation (4-per-cent. stock created to meet expenses) Additional augmentation at the end of seven years (premium upon conversion) Total augmentation after seven years (b.) Annual Charge: For the first seven years (5 per cent, interest on consols debt and 4 per cent^. upon the additional stock) Eighth and subsequent years (4 per cent, upon eventual debt) (c.) Annual Reduction in Charge : For the first seven years Eighth and subsequent years (d.) Total Reduction in Annual Charge : For the remaining years of the currency of the consols (sinking fund as below not allowed for) (e) Liquidation of Increase in Debt : Annual sinking fund (4 per cent, interest) for 44J years (ending 1st November, 1929) for retirement of increase in debt as in (a) above ... 61,361 337,488 398,849 297,161 240,920 61,580 365,569 427,149 298,293 242,052 61,845 393,690 455,535 299,428 243,187 139,825 196,066 138,693 194,934 137,558 193,799 3,751,154 3,727,222 3,703,228 3,376 3,615. 3,856
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No. 138. The Colonial Teeasueee to the Agent-Geneeal. Agent-General, London. Wellington, 15th May, 1885. How much debentures brought in for conversion were drawn 31st March ? What amount have Crown Agents paid us on account thereof ? Year's transactions—surplus, £20,000. . . .
No. 139. The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived, 16th May, 1885.) Youes 13th. Victoria Queensland loans succeeded. Soon as reasonable portion these loans absorbed shall offer million and a half. London, 15th. No. 140. The Agent-Geneeal to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 17th May, 1885.) Consolidated Loan 1867 : drawn bonds converted £71,400. Bank of England preparing certified lists, whereupon Crown Agents repay amount. . . . London, 16th.
No. 141. The Loan Agents to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived 29th May, 1885.) New loan announced to-night, minimum ninety-seven half, prospects good. Loan Agents, London, 28th.
No. 142. The Agent-General to the Colonial Teeasueee. Treasurer, New Zealand. (Beceived sth June, 1885.) New loan. About seven hundred tenders. Amount tendered nearly seven millions. Tenders at hundred three six receive thirty-two per cent., rest in full. London, 4th.
No. 143. The Colonial Teeasueee to the Agent-General. Agent-General, London. Wellington, sth June, 1885. Loan Agents. Hearty thanks, congratulations.
No. 144. The Agent-General to the Colonial Treasueee. Treasurer, New Zealand. (Beceived 6th June, 1885.) _ New loan. Average price hundred six three. Amount tendered at and above par five millions five hundred and fifty-five thousand (£5,555,000). London, sth.
By Authority : Gboeqe Didsbuby, Government Printer, Wellington.—lBBs.
Permanent link to this item
https://paperspast.natlib.govt.nz/parliamentary/AJHR1885-I.2.1.3.14
Bibliographic details
LOANS AND CONVERSION OF DEBENTURES INTO INSCRIBED STOCK (PAPERS IN CONNECTION WITH THE NEGOTIATION OF THE)., Appendix to the Journals of the House of Representatives, 1885 Session I, B-11
Word Count
58,641LOANS AND CONVERSION OF DEBENTURES INTO INSCRIBED STOCK (PAPERS IN CONNECTION WITH THE NEGOTIATION OF THE). Appendix to the Journals of the House of Representatives, 1885 Session I, B-11
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