THE FOUR MILLION LOAN.

Nelson Evening Mail, Volume X, Issue 339, 21 December 1875, Page 2

THE FOUR MILLION LOAN.

(fr. Z Times,) The following important despatches in reference fro the £4,000,000 loan have, been placed at our. disposal : .— r Sir J. Yogel to the Hon. D. Pollen. : „ Westminster Chambers, "Westminster^ S.W., a- "" October 21, 1875. > Sir, — I have the honor to forward to yoa ax copjtof . correspondence, with Mr Mackrell, solicitor, and with Sir ;P. Gr. Julyan, Mr Featherston, and Mr Sargeaunt. „ . 2*. Xdiii^iit Either from these documents that the letter No. 10, dated London,. l3th May,, 1875 (B,— No. 5) 8 . in the printed paper, " Correspondence relative to the Negotiation of the Four Million Loan," and headed " The Loan ..Agents to the Hon. the Colonial -Secretary," had not been, by me until I saw it in that paper ; and that I had also not previously seen the enclosed case for counsel aad counsel's opinion. You will further see that I impuga the correctness of paragraph 6 of that letter. 3. I feel certain you would not have published the letter and the enclosures named, without first •'• giving me an opportunity to remark upon them, had you not supposed they had previously been submitted to me. 4. I am;of opinion that the conduct of the three agents, and especially of Mr Featherston, the Agent-General, m sending to the Government . such a letter and enclosures, without allowing me to see them, 13 most unbecoming, and detrimental to the interests of the public service ; and I have the honor formally to make complaint upon the subject. ': : ! ; r ';.• ■■/■■[■■ ■: .* 5t Information I have received from the colony, leads me to suppose that, . owing to the letter in question, and particularly its sisth paragraph, a widespread misunderstanding exists as, to my action in. London. That inforina-tion-causes me fco conclude fchafc the impression prevails in - New Zealand that it was my personal action that led to the proceeds of the four, million loan being deposited with the Bank of. New Zealand, and that the arrangement with the bank for increasing the rate of interest determined the deposit of the money with the hank. 6. I believe that safiicient importance has sot been given to paragraph 2 of my letter to you dated 4th May as

follow: — "I may observe that it was not until I had informed the Agent General of the terms I had made with tbe bank, that any intimation was given to me of its being deemed desirable to remove part of the account." 7. Tba determination to deposit the morey with the Bank of New Zealand was arrived at by tbe agents at tbe type of negotiation with Messrs Rothschild and Koop, Sir P, F. Julyan was absent; but tbe other three agents agreed upon the point* There was some dicussion between us as to whether or not the money should be first paid into the London and Westminster Bank and afterwnrds be transferred to the Bank of New Zealand, as had been done on previous occasions. I objected to this course, because it would involve loss of interest between the dates of receiving and paying over the money, and that no possible object could be gained by first paying tbe money into one bank and then handing it over to another. It was then determined tbat if tbe Bank of New Zealand were willing to sign for the deposits and to hand over the scrip, the payments should be made to that bank. Of course, without the consent of the bank to perform the duties mentioned, its name could not be inserted in the contract as that of the bank to receive payments ; aud I was asked to merely see Mi- Russell and obtain the consent of the baok.. 8. No intimation of a desire to change tbe account having -been made to me, and the money having been, by agreement, deposited with the Bauk of New Zealand, I felt it to be my duty to obtain the largest intetest possible for tbe balances. You will have observed tbat the opinion of counsel obtained by the other agents fully bears out my action.. I am not at all now dealing with the question what course I might have adopted if, at the time of tbe negotiation of tbe loan, the other agents ha J objected to payment into tbe Bank of New Zealand. There cannot, I think, be any doubt that that bank is, by our agreement (which cannot be broken without six months' notice), the bank of the Government. At the same time tbe management has always shown readiness to consider modifications of the agreement rendered necessary by peculiar circumstances; and, had it baen desired by the other agents to limit tbe amount to be deposited with the bank, I feel sure there would not have been the slightest difficulty in arranging it. so far as the bank was concerned. I consider at the time — and I cannot now see any reason for coming to another conclusion — that tbe i3ea of interfering with the account only occurred to the other agents after I had arranged with the bank for a better rate of iatereat, and bad informed tbe Agent General of tbe fact 9. I am of opinion that, should it be desired, in future, to limit the amount deposited with tbe Government bank, it would be advisable tbe balance should be invented in Consols, which are always saleable, and tbe fluctuations in tbe price of which are not large, and would, except very rarely, be covered by accretions of interest. In the absence of disturbing causes, Consols could be sold at tbe price at which ibey had been purchased, and there would be the interest that had accrued between purchase and sale. 10. As so much publicity bas been given to previous correspondence on tbis subject, I have tbe honor to suggest that this letter and the enclosures should also be published. — I have, &c, Julius Vogrl. Hon. D. Pollen, Welliugton. The Hon. J. Vogfl to Mr. Mack* HELL. 7, Westminster Chambers, Victoria-st., Westminster, S.W., Oct. 11, 1875. Dear Sir,— ln a letter written by Sir P. G. Julyan, Dr. Featberstoo, and Mr Strgeaunft to tbe Colonial Secretary of New Zealand, and dated 13 1 h May, 1875, the following passage occurs: — •* We should here explain tbat, in order to carry out an arrangement which, bs we have since been informed by Ihe solicitor employed on the occasion, Mr Yogel had entered into with Mr Russell, provision has been made in the contract with Messrs Rothschild that the money should all be paid into the Bank of New Zealand." I should be glad to be informed if this passage correctly states that you gave such information. T rosy add that if you did so, such information was not correct. At the requeefof uiy co-agents, I asked Mr Russell if tha bank would consent to receive and sign for (he deposits. The consent was necessary bo/ore it could be stated in the contract with Messrs Rothschild and Sons time tbe bank would perform those duties. Tbe arrangement about increasing the rate of interest was quite distinct, and waa not even mooted until some lime subsequently. — I have, &c, Julius Yogel. John Mackrell, Esq , &c, &c. Mb J. Mackrell to the Hon. Sib J. Yogel, 21, Cannon-street, London, E C., 13th October, 1875. Dear Sir Julius. — I have the honor to acknowledge your letter under date of the lltb instant, inquiring if tbe following statement, contained in a letter written by Sir P. G. July an, Dr. Featherston, and Mr Sargeaunt to tbe Colonial Secretary of New Zaataod, 1 3th May, 1375* is correct s—

" We Bbould here explain that, in order to carry out an arrangement which, ai we have since been mfc raied by the solicitor employed on the occasion, Mr Yogel had entered into with Mr Russell, provision had been made in the contract with Messrs Rothschild that tbe money should all be paid into the Bank of New Zealand." In reply, I beg to state that I am at a lors to understand how tbe information I gave Sir P. G. Julyan (who was net a party to tbe contraot with Messrs Rothschild) respecting the terms thereof could have been so misunderstood, as I was not aware of any arrangement having been entered into between you and Mr Russell except simply that the New Zealand Bank should undertake the' receipt of tbe various instalments and sign tbe scrip certificate?. When the contract .was being prepared, I explained to you, Dr. Feaiherston, and Mr Sargeaunt, that it was necessary to stipulate therein to whom tbe money should be paid; and it was arranged between you that you should see Mr Russell and ascertain whether the New Zaaland Bank would receive it, and undertake the trouble of signing the scrip certificates on payment of the various instalments. This you did, and tbe name of the bank was inserted in the blank which had been left in draft contract for tbe purpose, and the contract was then submitted by Dr. Featherston and Mr Sargeaunt to Messrs Rothschild for approval. — I have, &c, John Mackbell. Tbe Hon. Sir J. Yogel, K.C.M.G. i_ Sir J. Yogel to thb Loan Agents. 7, Westminster Chamber?, Victoria-st., Westminster, S.W.. Oct. 15, 4875. Gentlemen — I observe in the "Correspondence relative to the negotiation of £4 000,000 loan," published in New Zealand, a letter of yours, dated 13tb May, addressed to the Hon. the Colonial Secretary. 2. Until the printed paper reached me, I bad not seen a copy of that letter, nor of the enclosed case for counsel, and counsel's opinion. 3. I now write in order that you may make any explanation you may think proper, for I am unable to disguise my opinion that it was an unjustifiable proceeding to send to the Government such a letter and such enclosures without supplying me with a copy. It ia true that I had previously written to the Colonial Secretary, enclosing copy of correspondence with you, without showing you my covering letter ; but there is a wide difference between my sending my colleagues a letter which they might have decided to treat as confidential, and your sanding such a letter without showing it to me — the member of tbe Government to whom belonged the charge of matters to which your letter specially referred. Your withholding from me the important .legal opinion you bad obtained relative to the Bank of New Zealand seems to me entirely without justification. 4 I take the opportunity of adding that paragraph 6 of your letter is incorrect. The arrangement with the bank wes not contemplated at tbe time of tbe arrangement with Messrs Rothechild and Sons. It was an entirely distinct matter, and was proposed some time subsequently. The agents for the negotiation of the loan were parties to the deposit of tbe money with the bauk. It was at the wish of tbe other agents (youiselvee, with the exception of Sir P. G. Julyan,. wbo was absent) that I asked Mr Bassell whether he would consent to the bank's name being inserted in the contract with Messrs Rothschild and Sons, the consent of the bank being necessary before it could be stated that it would perform the duties of signing for the deposits and handing over the scrip. 5 When Mr Featherston and Mr Sargeaunt discussed with me the question relative to tbe Bank of New Zealand, there was not, so far as I am aware, any doubt as to tbe propriety of the deposits being left with the bank. There was a question whether payments shouid first be made to the London and Westminster Bank, and tbe money afterwards handed over to the Bank of New Z aland; but, 83 I pointed out, that would have involved loss of interest during the intervals between payauntaud transfer; and it was then agreed that all moneys should be paid to tbe Bank of New Zealand, if that bauk was willing to receive the deposits, and to sign and deliver the scrip. 6. I was not aware that Baron Rothschild drew yonr attention to "the serious responsibility that leaving euch a large sum with one bank would necessarily entail." 7. I will only add that lam strongly of opinion that my colleagues supposed you had supplied me with a copy of your letter of the 13th May, and of the enclosures to which I have referred, or they would not have printed the letter and presented it to the Assembly, without first giving me an ooportunity of commenting upon it. 8. I enclose you a copy of correspondence with Mr Mackrell. 9. As I am leaving England shortly I shall feel indebted to you for as early a reply to this letter as you can conveniently make. — I have, &c, Julius Yogel. Sir P. G. Julyan, X.C M.G. . I. E. Feafcberstoo, Esq. W. C. Sargeaunt, Esq., C.M.G. [Copy letter Sir Julius Yogel to Mr Mackrell, 11th October, and of Mr Maokrell'e reply, enclosed.]

The Loan Agbnts to Sib J. V<m£ei s London, Oct. 16, 1875. Sis— We have the honor to acknowledge the receipt of year letter, of the 15th iost. respecting & coQuoanieatioa addressed to the Government of Nssr Zealand, ia May last, by. thWftgeatS for managing - tba public .account of fibs coloi y in this country. As one ot these agaafta (Mr S»rgeaunt), who took ao active part in the matters referred to, is out of towr, and ia not expected io refarn for some days, we regret that it will not be ia our power to comply with your request for an early answer, but should, you have taken your departure before we are enabled to confer with our eolleagufl, a reply shall be addrasaad to you by the first following mail.*— We have, &c, I. E. Feathsbstoh. .. F. G. Jultan. Sir Julius Yogel, K.C.M.G. 7, Westminster Chambers.