7188,
PUBLIC RECORD OFFICE
Reference :-
C.O. 885
11 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
•
MY LORD,
No. 575.
(CANADA.)
LAW OFFICERS to COLONIAL OFFICE.
Temple, June 28, 1869.
Ws are honoured with your commands signified in Sir Frederic Rogers' letter of the 17th instant, stating,
1. That he was directed by your Lordship to request that we would favour your Lordship with our opinion upon the following case :—
2. That by the Imperial Act 30 & 31 Vict. c. 16., the Commissioners of Her Majesty's Treasury were empowered to guarantee payment of interest at a rate not exceeding 4 per cent. per annum on any principal money not exceeding three millions sterling to be raised by way of loan by the Government of Canada for the purpose of the construction of a railway connecting Quebec and Halifax.
3. That by the third section of the Act this guarantee was not to be given until certain provisions had been embodied in an Act of the Parliament of Canada, and that he was directed to call our attention to the first of these provisions which related to the appropriation " for the purpose of the construction of the railway of a loan not exceeding three million pounds sterling.
4. That an Act of Parliament of Canada was in due course passed 31 Vict. c. 13., and that a copy of it was annexed for reference.
5. That it would be seen that the Act was in operation, and that it might be assumed that that Act fulfilled the requirements of the Imperial Act, though it had not received as yet the formal sanction of Her Majesty.
6. That subsequently to the passing of that Act a loan was raised, and the substance of the terms and conditions upon which the loan was raised and the form of deben- tures would be seen from the letter of the 11th July 1868 from Mr. Rose, the financial Minister to the Treasury, and from the reply thereto of the 15th July, and that copies of those letters were annexed for reference.
7. That from a Minute of the Privy Council of Canada approved by the Governor- General on 27th August 1868, it appeared that the money raised under the Imperial guarantee for the construction of the railway was to be temporarily applied to the purpose of defraying certain debts of the Dominion bearing a high rate of interest, and that a copy of such Minute was annexed for reference.
That the Minute gave rise to an inquiry in the House of Commons whether such application was not in contravention of the Canada Railway Loan Act, 1867, and a full report from Mr. Rose, the financial minister, which was approved of by the Privy Council of the Dominion had lately been received in answer to such inquiry, and that a copy of such report was annexed for reference.
9. That under these circumstances our opinion was requested on the following questions:-
1. Whether this appropriation of the proceeds of the loan was in contravention of
the Canada Railway Loan Act, 1867, or
2. Whether in the absence of any special provision as to the custody or investment
of the proceeds of the loan until they were wanted for the purpose for which
they were raised, the Canadian Government were, or were not, within their legal rights in making this temporary use of the paid up instalments.
In obedience to your Lordship's commands we have considered the questions sub- mitted to us, and have the honour to
Report
That we regret to be unable to advise that the investment of the money under the Minute of the Privy Council of Canada in conformity with the Imperial Act of 30 & 31 Vict. c. 16.
We think that it was not the intention of the Imperial Legislature that the money should be invested at all. It was to be appropriated or set aside. The only sort of investment within the provisions of the Imperial Act would be we think an invest- ment (if any such exists or can be conceived, the value of which does not fluctuate, and which is convertible at any moment without loss. Paying off with the railway loan
16978-594. 25.-5/86.
2
Canadian Government debts bearing a high rate of interest may be perhaps a useful investment of the money raised, but does not seem to us to be an appropriation of it. And we think, therefore, that the spirit and intention of the Canads Railway Loan Act, 1867, has not been complied with.
We have, &c.
(Signed)
The Right Hon. the Earl Granville, K.G.,
&c.
&c.
í
R. P. COLLIER.
J. D. COLERIDGE.