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2

Enclosure 2 in No. 1. Wu. F. Drummond Jebvois, Governor. ORDER IN COUNCIL. At the Government House, at Wellington, this nineteenth day of May, 1888. Present: His Excellency the Governor in Council. Whereas by the sixth section of " The New Zealand Loan Act, 1888 " (hereinafter called " the said Act "), it is enactod that, pending the raising of moneys authorised 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 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 " short-dated debentures "), as such Agents may deem expedient: And whereas by the seventh section it is also enactod 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 last-mentioned Agents shall prescribe : And by the eighth section it is also enacted that the interest and principal of every such shortdated 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 pistinguished 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 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. Forstee Goring, Clerk of the Executive Council.

No. 2. The Loan and Stock Agents to the Colonial Teeasubeb. Sic, — 7, Westminster Chambers, London, S.W., Ist June, 1888. Upon receiving your telegraphic intimation (on the 19th instant) of the new Loan Act having been passed, and the necessary powers having been sent to us, we proceeded with the necessary preparations for bringing out the loan of £2,000,000. After repeated consultations we were satisfied that no advantage would be gained in delaying the issue. Although money was easy, and there was not any immediate danger of political complications or financial trouble, the New Zealand Inscribed Stock had been put down to 96; and, although it revived to 96J and 97-J-, the market seemed quite determined to keep it down till the loan was out;, nor did there appear to be any prospect of such improvement as would justify us in running the risk of a postponement. We accordingly had a conference with the Governors of the Bank yesterday to fix the minimum and other particulars of the issue. These are stated in the enclosed copy of the prospectus, which appears in this morning's papers. We sent you yesterday a telegram (copy annexed) containing the main points in the prospectus. So far as we have the means of forming a judgment at the present moment, we see no reason to doubt that the loan will go off well, as upon its being announced in the market it was immediately quoted at 1 premium. We have, &c, P. G. Jultan, } T .' ' The Hon. the Colonial Treasurer, Wellington. F. D. Bell, j JjOan ASents-

Enclosure 1 in No 2. New Zealand Government Loan of £2,000,000. —(For the North Island Main Trunk Railway, £1,000,000; for Railways and other Purposes,] £1,000,000.) Op the £2,000,000 now to be raised, one million consists of the loan which was authorised in 18S2 for the construction of the Main Trunk Kailway through the centre of the North Island. Temporary debentures of that loan to the extent of £500,000 have been issued during the progress of constructing the line, which will be paid off out of the loan now to be raised. The other million is to be applied—one-half to railways, and about £420,000 to roads, purchase of Native lands, telegraph extension, and the completion of harbour defences, leaving about £80,000 to be allocated. After these two millions are raised, no further new loan will come upon the London market for three years from the 31st March, 1888. (1.) As to Revenue and Expenditure. In the last session of the New Zealand Parliament it was decided to make large retrenchments in the public expenditure, as well in the ordinary cost of government as in the outlay for railways and other public works. The savings to be made for a full year in the ordinary expenditure of administration were to amount in round numbers to £300,000. Subsidies hitherto granted to local governing bodies out of loan wore to be reduced in amount, and were in future to be borne by the revenue of the year. The Property-tax was raised to Id. in the pound. The tariff was to be revised, with the view of improvii|g the Customs revenue without undue interference with trade. The administration of the railways was placed under an independent Board as in Victoria, where that system has been attended with marked success and improvement in the net revenue. Maori lands, which had hitherto escaped taxation almost entirely, were made subject to rates and taxes as well as land owned by the European population. A new Land Act was passed, with the object of encouraging settlement and improving the land rovenue.