CONSOLIDATION OE LOANS.

B.—No. 3

5

Enclosure 2 in No. 1. Memobaxtjuh. 1. The proposal to create registered stock was subsequently abandoned in consequence of doubts having been raised by counsel as to whether clause three of " The Consolidated Loan Act" would justify the creation of such stock, and although considerable advantage with regard to price might have been derived therefrom, it was thought better not to run the risk of having the authority for the issue called in question by persons who might, to serve their own interests, do much to create doubts in the public mind calculated to produce a prejudicial effect in the negotiation of the new loan. 2. Article 14 was not acted upon because Mr. Pitzherbert, after duly weighing the probable advantages and disadvantages attending the proposition, came to the conclusion that it was due to the lenders to place openly before them in a complete form the whole of the operations contemplated under " The Consolidated Loan Act, 1867." It was moreover considered that in the event of delaying for any considerable period the issue of the new securities, political complications might arise in Europe, calculated most seriously, to depreciate the value of such securities, if not to render them entirely unsaleable. P. Or. JvJLTAX. London, Ist June, 1868.