8.—5

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ever mentioned at that interview. On the 18th we were all of opinion that we could get 90 from Messrs. Rothschild and Sons, and I proposed an authority to Sir P. G. Julyan to close at that price, on the understanding that he was to endeavour to get more. But the other Agents refused to allow Sir P .G. Julyan to accept less than 92, and it was agreed that he was to offer Messrs. Rothschild and Sons not less than £3,000,000 at 92 ; and failing their acceptance at that price, he was to ask Mr. Scrimgeour to get up a syndicate at the same rate, and for the same amount. On the following day, Sir P. G. Julyan wrote me that Messrs. Rothschild and Sons would not,give more than 88. This was the first time such a price was ever mooted to me. In the evening he came to me and told me the same, adding that he would have taken upon himself the responsibility of selling at 90, if Baron Rothschild would have given it. Sir P. G. Julyan further told me that he had written to Mr. Scrimgeour, authorizing him to obtain offers for the whole or any part of the loan. I quite agreed that 88 was inadmissible, and stated so emphatically ; but I asked Sir P. G. Julyan why he had not limited Mr. Scrimgeour to not less thau 92 for not less than £3,000,000, as agreed to on the previous day. He said he thought it was better not; and I expressed myself strongly that the absence of a limit might lead to the loan being hawked about at any price. Sir P. G. Julyan, however, explained that Mr. Scrimgeour was only to have until Monday, to try what he could do. Meanwhile, he told me he had instructed Mr. Scrimgeour, in accordance with a desire I expressed, to communicate with me direct. This was on the Friday evening, and Mr. Scrimgeour was to have until Monday. Before Monday, circumstances had come to my knowledge which convinced me that the negotiations with Messrs. Rothschild and Sons had fallen through on account of the manner in which Sir P. G. Julyan had conducted them. I saw Mr. de Rothschild, and learned from him that his father, driven to make an offer, had offered 88, but that he had advised we could do better, and had offered to sell the loan on commission. He believed that his father could procure quite a new circle of investors in colonial loans, and had no doubt that if they offered the loan it would go off. I learned enough to show me how Sir P. G. Julyan had managed the negotiation with Messrs. Rothschild and Sons. I sent for Mr. Peatherston, and, after telling him what I thought of the matter, called upon him to support me. We agreed that we were bound to give Mr. Scrimgeour until Monday evening, but no longer; and Mr. Featherston agreed to go into town on Monday, and give Mr. Scrimgeour to understand that he must let me know on Monday evening the result of his negotiations. On Monday evening Mr. Scrimgeour came, and told me that he had done nothing. He attributed his failure to Messrs. Rothschild and Sons refusing to deal with him, and their asserting that they still considered themselves in negotiation with us. Mr. Scrimgeour said he could not do anything unless we were finally off with Messrs. Rothschild and Sons, but he added that he did not ask us to do anything of the kind —we must use our own discretion. I said (I do not vouch for the exact words) : " I understand tnat if you are to continue to act, it will bo necessary to finally close with Messrs. Rothschild and Sons. What justification can you give me for so doing? Will you undertake to sell even £2,000,000? Will you make me any offer?" He said he was not able to do so. On the Tuesday the Agents met, with the exception of Sir P. G. Julyan, who was unable to be present. In the course of the meeting Mr. Sargeaunt showed Borne warmth, and asked me what I meant by saying that, if necessary, I would give directions to the Loan Agents. I explained to him that the Loan Act provided for different powers being given to the Agents —that it was not thought necessary to state this in the warrant —that it was supposed the Agents would recognise my position. I admitted that, the warrant not stating otherwise, as Agent I stood on an equality; but I added that I considered that if, as Colonial Treasurer, I gave directions, I should expect them to be complied with. Mr. Sargeaunt said, in that case he would be relieved of responsibility. I said of course the responsibility would be mine if I adopted that course, but I hoped it would not be necessary. I then proposed to take the negotiations with Messrs Rothschild and Sons into my own hands, and said I should try to get 91 net, free of all allowances : that was to say, the issue price to be 94, with 1 per cent, allowance to the public for accrued interest, and 2 per cent, commission to Messrs. Rothschild and Sons, they to guarantee the sale. I said I was willing to be bound by the limit of 91, and call the Agents together if I could not get it; or they could, if they liked, agree that I should take 90, failing my being able to sell for 91. Mr. Featherston at once said, he voted for my undertaking the negotiation at 91 net. Mr. Sargeaunt acquiesced. It was agreed he should, for form sake, consult Sir P. G. Julyan. I then turned to Mr. Featherston, and asked if he would come into the City, and hear all that passed with Messrs. Rothschild and Sons. Whilst we were with Messrs. Rothschild we received a note from Mr. Sargeaunt, saying that Sir P. G. Julyan agreed to 91 for £3,000,000, and would, if necessary, agree to take 90 for £4,000,000. 7. Now, these are the facts, and they rebut the assertion that I was willing to take 88. I may say that I expected to get 90, and knew that I could do so for £2,000,000. I felt quite certain, from the most reliable sources, that Mr. Scrimgeour could not have done better than 90, and that for £2,000,000 only; and then there would have been i per cent, to the Crown Agents, and i per cent, to Messrs. Scrimgeour, so that the price realised would not have been more that 89| net. 8. Throughout, I urged that Messrs. Rothschild and Sons would do what they have done —obtain new investors in colonial loans. Sir P. G. Julyan contemptuously snapped his fingers at this possibility, when he described to me that Messrs. Rothschild and Sons themselves told him they could do so. 9. You do not now support your former statement, that you could have sold £2,000,000 to the public. You narrow the issue to the statement that the £4,000,000 sale was a good one, but that you could have done better by selling in two parcels of £2,000,000 each. This statement is evidently made to prejudice me with distant readers. Any one in London, not concerned in keeping up the old monopoly, could contradict it, and would support me in recognizing how damaging and objectionable it would have been to make a sale of £2,000,000, with arrangements for borrowing on the security of the balance, with the risk of a forced sale in the case of a disturbance of the money market. When I reached Florence, I was told it was desirable to keep out of the market as long as possible—that the last sale of £1,500,000 had been managed with difficulty. When I reached London, I was told £1,000,000 was possible; and shortly it rose to the possibility of £2,000,000 at most. An excellent