A.—l

6

4. In pursuance of the instructions so received, and of further communications which we had from Messrs. Linklater and Co., and from the committee of bondholders, we promoted for the committee the above Bill, which is now awaiting your Excellency's assent. _ 5. The Corporation of Oamaru did not promote the Bill, though, of course, they did all in their power to assist us, as the representatives of the bondholders, to insure its becoming law. 6. We are able to assure your Excellency that we are acting upon the direct instructions of more than nine-tenths of the bondholders, and that the interests of those who have not directly instructed us through Messrs. Linklater and Co. have been carefully protected; and that in our opinion the Bill is greatly to the advantage of the bondholders, and that, so far from being deprived of any security, their security has |been greatly improved by the rating-powers granted by this B iU- We have, &c, Bell, Gully, and Izakd.

2, Bond Court, Walbrook, London, E.C., 17th March, 1893. Dear Sies, — Oamaru Municipal Loans. We are concerned for a committee which has been appointed to represent the holders of the following loans of the Oamaru Municipal Corporation :—

You will observe that the two first loans are called general loans, being secured upon the general rate of the borough by virtue of the Otago Municipal Corporations Ordinances, 1865 and 1866, under which these loans were raised. By " The Municipal Corporations Act, 1876," section 149, loans theretofore authorised to be raised by any boroughs to which the provisions of the section applied (which included Oamaru) were to be deemed special loans. The loan of 1875, therefore, became special under this Act " The Municipal Corporations Act [New Zealand], 1886," section 193, contained a similiar provision as regarded loans raised prior to or under the Act of 1876. The loan of 1879 therefore became special under the Act of 1886. By sections 144 to 147 of the same Act, rates levied as security for loans are to be deemed special rates, and may be increased to an extent sufficient to meet the interest upon these special loans. Out of a total of £25,000 (Loan No. 1), £23,300 is held in this country, and the balance of £1,700 is held in New Zealand—by Mrs. Jane Murray, wife of Patrick S. Murray, of Woodville Hereford Street, Linwood, Christchurch (£1,200), and £500 by Mary Mills, Port Chalmers. The £5,000 (No. 2) loan is held, we understand, by the Government of New Zealand. The No. 3 or Gas Loan is also mainly held, we are informed, by the New Zealand Government (£8 800) and the balance of £1,000 is held here. ' '' The whole of the other loans, Nos. 4, 5, 6, and 7, are held by people on this side of the world The total holdings in this country amount in the aggregate to £158,300. The main objects of the agreement are as follows :— 1. To provide for the reduction of interest on certain of the loans, in order to enable the Corporation to carry on and pay its interest. The committee, after an exhaustive inquiry, are satisfied that the resources of the Corporation will be perfectly adequate to meet the interest permanently at the reduced rate. 2. To provide for the consolidation of the whole of the loans into one loan at 5 per cent, representing the entire bonded debt of the municipality, and to secure for the service of the consolidated loan a first charge over the whole present and future resources, from whatever source they may arise, of the Oamaru Corporation, including a consolidated special rate of 4s. in the pound of annual valuation, being the aggregate of the present special rates of Is 3d Is 3d Is., and 6d. In order to enable the Corporation to carry out the agreement to the satisfaction of the bondholders, it is necessary that a new Act of Parliament in New Zealand should be passed empowering the Corporation to issue debentures for the amount of the 5-per-cent. consolidated loan (£175,000), and to exchange them at par for those at present held by the different bondholders. The Government of New Zealand have, we are informed, consented to amalgamate the loans held by it and also to introduce the necessary Bill. Having regard to clause 6 of the agreement referring to the division of the sinking fund of the £25,000 loan, it would appear to be necessary that the Act should authorise the trustees to realise the securities and property constituting the sinking fund, or to hand them over to the Corporation

Bate of Interest. Amount of Loan. Date of First Default in Payment of Interest. 1. General Loan No. 1, 1875 ... 2. „ No. 2, 1879 3. Gas Loan, 1886 ... 4. Waterworks Loan No. 1, 1877 5. „ No. 2, 1880 6. „ No. 3, 1880 7. „ Extension, 1883 ... 7 per cent. 5 5 „ 7 7 „ 7 „ 6 „ £, 25,000 5,000 9,800 60,000 50,000 10,000 14,000 1st March, 1892. No default. No default. 1st February, 1892. 1st January, 1892. 1st May, 1892. 15th April, 1892. 173,800