THE CONVERSION OF STOCK.

Globe, Volume XXII, Issue 2010, 3 August 1880, Page 3

THE CONVERSION OF STOCK.

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[fhom cue own oobebbpondhnt.] WELLINGTON, August 2. A further paper relating to the Inscription of stock was presented to-day. It consists of a letter from the loan agents to the Premier, dated June 16th, as follows :—“ Sir, —We have the honour to acknowledge the receipt of your letter of the 21st April, 1880, in which you state that you demur to the proposal submitted by us in our telegram of the 19th April last, respecting the charges to be made for loan conversion. We should be content to leave the communications we have addressed to you since the dispatch of the telegram in question to serve solely as an answer to your present letter, but for the passage in which you speak of the liberal remuneration already received by two of the loan agents. We cannot fail to see that this expression implies that the proposal we telegraphed to you was unreasonable, having regard to the payment already made. Wo cannot admit the correctness of such an imputation, because, as a matter of fact, the charges which have been made for the work done and responsibilities undertaken were altogether ; inadequate, according to the rates which rule in this country for similar services. It is necessary in our own justification to make this clear to you. We will not enter into the question of the remuneration of the Agent-General, as you place this in a separate category. Regarding the other two agents, we would remind you that their services were partly rendered as Crown agents, partly individually and separately, and that the total charge made for all these services was a quarter per cent. The services rendered by the three agents cannot be disassociated from those incidental to their several positions. One of the agents

was throughout a Crown agent, another was for a considerable part of the time a Crown agent, and the third continued throughout Agent-General. In their aggregate, several, and collective capacities they had to exercise the responsibility of financing for you to the extent of some millions. They bad to all intents and purposes to devise the plan to be adopted to obtain money for immediate requirements, whilst for part of the time and part of the amount they had little beyond their own personal security upon which to raise the money. They had to accept bills to the amount of £425,000 in groat measure uncovered by security. They had to issue short date debentures, and finally to negotiate the main loan. In the terms of that loan they thought it prudent to insert an undertaking to convert inscribed stock, but there was no machinery existent for making the conversion beyond an agreement with the Bank of England that it would act in the matter. When at your invitation we telegraphed to you the terms on which we were willing to act, wo considered all the circumstances with the view to deal as lightly as possible with the Government. The usual charges for the acceptance of tho unsecured bills and the issue of the short dated debentures would alone have amounted to more than double the whole charge made for the ncgociation of tho loan. All considerations wore disregarded but the one of dealing liberally with the Government, and no charge was made for any services but for the negociation of the loan, and for that tho lowest rate was charged that ever had been paid. It was necessary, however, to set some limit to the date covered by the payment, and it seemed to us best to adopt the limit which saw an end to the loan negociations. The remuneration which you term liberal in no sense covered any charge far conversion. It was, as we have said, at the rate of the lowest paid for simple negociation. It comprised no payment for tho very exceptional and anxious special services to which we have referred, and it included the inscription up to the let of May of over a million of stock. The whole machinery for carrying the inscription into effect had to bo constructed quite apart from tho loan negociation, and the agents were not even the same. We, however, did not consider strict rights, and looked more to the convenience of the thing. After May Ist the conversion might proceed more or less vigorously, and at any timo other loans beside tho five million might be introduced. To have placed on different footings conversions after the Ist of May would, we thought, entail inconvenience and confusion, and the amount at stake was a mere bagatelle compared with tho vast amount to which it related. Payments mode for financial operations are not regulated by tho time they occupy or the physical labor they entail. They depend rather on the influence, judgment, experience, and knowledge which are required to bring them to a successful conclusion. You will doubtless think it fair to us to place this letter before your Parliament if, as you state, the one of which it is a reply has been similarly treated. We may add that the machinery for inscription is getting into working order. Most of the details are now arranged, and wo are providing for the proper canoelment and removal from the register of debentures converted. This will have to be done carefully, to avoid not only fraud but provisions for the double paymeuts of interest. We have an office placed at our disposal by the Crown agents, who have also given us the services of a secretary. For the present we think meetings once a week will suffice, but we are so arranging that special meetings can be called. We have, &c., “ P. G. July an, " Julius Voqei., “ W. O. Sabgkant, “ Stock Agents. “ The Hon. the Premier, Wellington, New Zealand.”