B.—ll

1882. NEW ZEALAND.

£1,000,000 GUARANTEED LOAN (CORRESPONDENCE RESPECTING SINKING FUND OF THE).

Presented to both Houses of the General Assembly by Command of Sis Excellency.

No. 1. The Earl of Kimbeelet to the Hon. Sir A. H. Gordon Sib,— Downing Street, 14th October, 1881. I have the honor to transmit to you, to be laid before your Government, a copy of a correspondence which has taken place between the Crown Agents, this department, and the Treasury, respecting the sinking fund which, under provisions of Acts 33 and 34 Viet., c. 40, and 36 Viet., c. 15, is to be created by the Government of New Zealand, for the repayment of the loan of one million, the interest on which was guaranteed by the Imperial Government. I request that you will move your Government to comply with the views expressed by the Lords Commissioners of the Treasury in their letter of the sth ultimo. I have, &c., Governor the Hon. Sir A. H. Gordon, G.C.M.G., &c. Kimbeelet.

Enclosures. The Crown Agents to the Colonial Office. Sib, — Downing Street, London, 24th June, 1881. Under the provisions of Acts 33 and 34 Viet., c. 40, and 36 Viet., c. 15, the Treasury guaranteed the repayment of principal and interest on £1,000,000 4 per cent, debentures, created by the Government of New Zealand under the provisions of the Act 33 and 34 Viet., No. LXXX., passed by the Legislature of that colony. 2. Of these debentures, £200,000 have been sold : of the balance, part has been hypothecated as security for temporary loans, and the balance is held in reserve, for sale or hypothecation, as the Colonial Government may direct. 3. For the repayment of the loan of one million, these Acts provide that there shall be a sinking fund at the rate of 2 per cent, per annum, paid by the Government of New Zealand, on the entire amount of the said loan, or so much as is raised for the time being, commencing at the date at which the whole of such loan is raised, or at the expiration of ten years from the passing of the Act, whichever date first happens. 4. There are four Trustees of this sinking fund: two appointed by the Lords Commissioners of the Treasury, viz., the permanent Under-Secretary of State for the Colonies and the Auditor of the Civil List for the time being ; and two appointed by the Government of New Zealand, viz.^Sir Penrose G. Julyan and myself. 5. The entire amount of the loan has not yet been raised, but ten years have expired from the passing of the Act, i.e., the Act of the Colonial Legislature, 33 and 34 Viet., No. LXXX. 6. In a letter to this department, dated the 6th November last, the Treasurer of New Zealand stated that, amongst other remittances, was one for £2,000, for the contribution on account of thia sinking fund, due on the Ist February, on the amount of the outstanding debentures of the Immigration and Public Works Loan of 1870, guaranteed by the Imperial Government. He added, that some doubt had been expressed whether the Imperial Act does not require that the sinking fund should be computed on the total amount of the loan guaranteed. 7. The Act of the Colonial Legislature is dated the 13th September, 1870. Consequently, it would appear that the first half-year's contribution should have been made on the 13th March last; and I must express my regret at the delay which has occurred in consequence of my inability, owing to illness, to investigate the matter. 8. It appears to me that the contribution by the Colonial Government should be on the whole million, or £10,000 every half-year: and I would here observe that, as the debentures issued and unissued are all repayable on the Ist June, 1907, the contributions to the sinking fund on the whole amount, it is obvious, should commence at one and the same time. Should the Lords Commissioners of the Treasury concur in this view, I would suggest that the Agent-General for New Zealand in this country might be requested to communicate with his Government, and obtain the necessary authority to pay to the Trustees the further sum of £8,000, in addition to the £2,000 now at their disposal.