CO885-(15-16) — Page 86

R

4591.

།།། ། ། །

PUBLIC RECORD OFFICE

ستسلا

Reference:→→

C.O. 885

15 PUBLIC RECORD OFFICE. LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

SIB,

No. 69.

(SOUTH AFRICA.)

ATTORNEY-GENERAL TO COLONIAL OFFICE.

Royal Courts of Justice,

4th February, 1901.

I was honoured with your commands signified in Mr. H. Bertram Cox's letter of the 18th ultimo, stating that he was directed by you to transmit to me the accompanying copy of an Ordinance to regulate Banking, and to secure and regulate the circulation of bank notes, which had been passed by the Legislative Council of Southern Rhodesia, and submitted to the High Commissioner for South Africa in accordance with the provisions of clause 36 of the Southern Rhodesia Order in Council, but to which the High Commissioner has not given his assent.

That Mr. Bertram Cox was to invite my attention in particular to clause 14 of the Ordinance which provided, inter alia, that every Rank desirous of issuing bank notes within Southern Rhodesia should deposit with, and hypothecate to, the Administrator, securities in the form of First Mortgage Debentures of the British South Africa Company to the extent of two-thirds of the intended issue, together with a deposit of gold coin to the extent of the remaining third.

That, as would be seen from the correspondence which had taken place between the Colonial Office, the High Commissioner, the Treasury, and the British South Africa Company, that clause was not now in the form in which the Company originally proposed that it should be drawn. That by the Cape Act No. 6 of 1891, Section 30, it was enacted that every Bank desirous of issuing notes in Cape Colony should be obliged to deposit Government (ie., Cape Government) securities to the extent of the intended issue with the Treasurer of the Colony.

That following that precedent the Company originally proposed to require Banks issuing notes in Southern Rhodesia to deposit British South Africa Company's debentures to the full extent of the note issue. That the Treasury took exception to that proposal, but subsequently in their letter of the 30th November, 1898, suggested that two-thirds of the note guarantee fund of the Banks issuing notes in Southern Rhodesia should consist of British South Africa Company's debentures, and the remaining third of gold coin. That it was, however, a condition of their acceptance of the scheme, that only existing debentures should be accepted, and that some arrangement should be made by which, in case of a subsequent issue, they would remain a preferential charge. That at that time neither you nor the Lords Commissioners of the Treasury had had before them the Trust Deed under which the Company's then existing debentures were issued.

That it was

That a copy of the Deed was obtained from the Company, and that after examining it the Lords Commissioners came to the conclusion that, as stated in the Treasury letter of the 29th April, 1899, "The existing debentures of the Chartered Company were a first charge, but not an exclusive first charge upon its commercial undertaking." however understood that the Company proposed to call in the existing debentures and issue new ones, which would form the security to be given by the Banks under the proposed Ordinance. That it was therefore considered unnecessary to inquire more fully into the nature of the security afforded by those debentures, but that the Company were informed in the letter from your department of 29th May, 1899, that it was observed that the debentures were a first charge, but not an exclusive first charge, on their commercial undertaking; and that, in order to justify the acceptance of the Company's debentures as part security for a note issue, such debentures should be an exclusive first charge on the Company's undertaking. That it was intimated that, subject to that condition, there would be no objection on the part of the Treasury to accepting the deposit of the Company's debentures to the extent of two-thirds, and of gold to the extent of one-third of the note issue, as security for notes issued in Southern Rhodesia by the Bunks under the contemplated Ordinance,

That, thereupon, the Banking Ordinance in its present form was passed by the Legislative Council of Southern Rhodesia, and submitted to the High Commissioner, who, That the Company acting on instructions from you, withheld his assent to the measure. had not, however, carried out their intentions with regard to calling in their debentures

7920-25-2/1901 Wt 824 D & S

$