Sessional_Paper_1885-1886 — Page 137

134

I have, however, to observe that a sale much below par has never been con- templated to provide against an unfavourable market. The Draft Ordinance autho- rises a rate of interest not exceeding 5 per cent. and, as in all other cases, the Crown Agents would use their discretion as to the moment of issuing the Loan.

Attention is rightly drawn to the loss on exchange on remittances to pay interest, but on the other hand the advantage of the reverse operation has been lost sight of; in the event of money being borrowed in this country, the Colonial Treasurer would draw on the Crown Agents, and in that case the low rate of ex- change would increase the number of Dollars at his disposal; nor should it be forgotten that the remittances for payment of interest would be insignificant in amount, as compared with the drafts against the capital.

With regard to commission and other attendant expenses, the rate of com mission is laid down in the Secretary of State's Circular Despatch of the 30th of December, 1863, at per cent.; and in Loans hitherto issued by the Crown Agents the attendant expenses viz:-printing, advertising, stamps, etc., have not hitherto amounted to another per cent.; so that the total charge for commission and atten- dant expenses would hardly amount to 1 per cent. a rate which cannot be compared with the ordinary charges made by bankers on this account.

3. For these reasons, while fully appreciating Mr. MARSH's desire to postpone the necessity of having recourse to a Loan, I consider that it will be most advan- tageous to the Colony,—

(1) that a Loan Ordinance should be passed at once, debentures not being issued under it, until it becomes necessary to provide for carrying on these works, the prosecution of which cannot be delayed; and (2) that if it is thought advisable to procure temporary advances, they should be obtained by the Crown Agents in the ordinary way, by hypothecation of debentures in anticipation of the Loan authorized by the Ordinance.

I have, &c.,

FRED. STANLEY.