5

8.—4

To both these propositions 1 had, for my own part, strong objections ; but, while it was evident that there was an important difference of opinion between the Agents and myself, I could not tell how far their scheme had been approved by the Government, and I hesitated for some time whether it would bo proper for mo to interpose views of my own in opposition to theirs, so long asv their authority was unrevoked. Nevertheless, I had decided, as you know, to let them know my own opinions, and was on the point of doing so, when I received your telegram notifying the revocation of their appointments; whereupon, as I said to you in my letter of 29th June, I thought the best way would be to lot the matter be till I should know your intentions on the general subject; and this was presently confirmed on finding that you had intimated to the Stock Agents that " further inscription of stock would bo unadvisable at the present time," and that you apparently confirmed this intimation in your letter to them of the 18th June. So I thought, upon getting that letter on the 2nd August, that the whole question was to be postponed. Now, when I got your telegram of the 3rd instant the other day I should, for my own part, have had no difficulty in answering it at once by a statement of my own views; but then you had desired me to consult Sir Penroso Julyan, and I could not tell whether he still held the views expressed in the three Agents' scheme of last year, though I supposed he did, because that scheme was confirmed by the letter they wrote to you, in response to my invitation, after our meeting' together. At any rate until Sir Penrose and I could meet it might have done more harm than good to say anything on my own account. You are aware of the reason for our not being able to meet till yesterday. lam now glad to say that the result of our consultation was to remove the disagreement of opinion which I had feared, for Sir Penrose told me that ho had (both last year and two months ago) rather yielded his own views to those of Sir Julius Vogel, and had been, in fact, inclined to the ones I held myself. I think this is a very satisfactory point to have gained at the beginning of the new consideration we have to give to the whole question, and it insures our views going out to you in harmony by the next Brindisi mail. In the meantime the concurrence of opinion between Sir Penrose and myself as to its being best to begin with the 5-30s may enable you to determine at once, in respect to these, the points which I advised you yesterday to settle; and, in case you should desire (as I think may be likely, on account of the session) to settle them without waiting for our letter by the next mail, I wish to point out that the elements of the question (as regards the 5-30s) are very simple. Given the market price of a £100 5-30 bond, and the net value of £100 4-per-oent. inscribed stock, what is theactuarial equivalent to the bondholder of the one compared with the other? Now, to-day the net value of £100 4-per-cent inscribed shows this equivalent to be a fraction over 105. But this exact equivalent will not afford that " inducement " to the "bondholder " which is wanted to produce the- " appreciable saving of interest" to the colony, that is only to be got if the bonds are brought in for inscription ; so that the point to be really decided is, how far you will allow the equivalent to be exceeded in your offer to the bondholder. We are preparing tables which will give you all the elements of the question at a glance, including the amount of saving in interest to be gained by alternative figures, so as to guide you in deciding upon the figures which we shall finally propose; but in the meantime this letter may perhaps direct your attention to what lies at the root of possible success, and so save your time when our proposal itself is befora you, with the cipher code by which you can telegraph your decision upon it. I have, &c, The Hon. the Premier, Wellington. F. D. Bell.

No. 4. The Agent-General to the Hon. the Peemiee. Sir, — 7, Westminster Chambers, London, S.W., 20th August, 1881. In continuation of my letter of the 11th instant, transmitting the letter I sent to the Bank of England notifying the revocation of the appointments of the late Stock Agents, I have now the honour to enclose the bank's reply, stating that the notification had been duly recorded. You will observe that in the last paragraph of their letter the bank assume that the appointments of Sir P. Julyan, Sir J. Vogel, and Mr. Ommanney as Loan Agents under " The Loan Act, 1879," are continued ; and I replied (copy also enclosed) that, though no revocation had been made of those appointments, the functions of the Loan Agents had, in fact, ceased upon the loan being issued. Perhaps, however, there may be some reason for the bank referring to the continuance of the appointments; and, in case there is, I would suggest the question of such continuance being considered by the Government. I have, &c, The Hon the Premier, Wellington. P. D. Bell.

Enclosure 1 in No. 4. The Bank of England to the Agent-Geneeal. Sib, — Bank of England, London, E.C., 13th August, 1881. I beg to acknowledge the receipt of your letter of the Ilth instant, enclosing copies of Orders in Council made at tEe Government House, in Wellington, on the 17th day of June, 1881, and notifying that-the appointment of Sir Penrose Goodchild Julyan, Sir Julius Vogel, and William Charles Sargeaunt, as Agents in England for the purposes of " The New Zealand Consolidated Stock Act, 1877," has been revoked, and to inform you that this notification has been duly recorded.