FINANCIAL EMBARRASSMENTS.

New Zealand Colonist and Port Nicholson Advertiser, Volume I, Issue 92, 16 June 1843, Page 2

FINANCIAL EMBARRASSMENTS.

Mr. Shorthand's Loan of £15,000 at 15 PER CENT. (From ike Southern -.Cross.) We are .at all times unwilling to interfere with any question which may have in itself a tendency to weaken the hands of the representatives of our Sovereign in this county, as far as the executive part of their duty is concerned:

but late events imperatively demand that every person who has interest ‘ in the credit of ’New Zealand should see that It sustains no injury even in this respect.. It is true, too true, that we cannot help ourselves; that we have no actual control of the expenditure of the money raised from our industryi We- are taxed like other British subjects, but unlike every other British subjects, our consent is neither obtained nor asked in .this matter, and after being taxed, our money is spent without our concurrence, and without the exercise of the-slightest control on our part; we are altogether an anomaly—a Colony of Englishinen without a single one of the privileges of British subjects, we are governed without a single representative; worse than all, we are mocked with the name of being possessed of a Legislative Council, although it consists of only three Government nominees. Where then'are the privileges which we ought to possess as Englishmen ? We look in vain for them —they do not exist—we have left them all behind us, with ,the exception of paying taxes—this alone remains to us. The feeling of our helplessness and of the cruel'injustice of the Home Government has been strongly and bitterly impressed upon our mind of late, and for some time back, in consequence of the fearful mismanagement of the revenue of the colony, and the extraordinary expedients fallen upon by the Local Government to obtain the means of meeting the current expenses. We had on 'a late occasion the disagreeable task of narrating the unhappy effects of the policy of this Government towards the natives, while recording the

details of the horrid massacre at Manganui, as well as of the quarrels between the Government and the natives of Wairoa. We have now to narrate, for the information of the Secretary of State for the Colonies, the history of a financial transaction between this Governrfient and a Mr. Boyd of Sydney; and if in the former we had to speak of matters which claimed the sympathy and pity of the humane towards the oppressed and deeply wronged natives, we have now to speak of matters which must astonish the man of business, and we doubt not, very riiiich displease the nobleman who presides over the genii who rule in colonies. But while the man of business will be astonished, and the Colonial Secretary offended at the tact displayed by. Mr. Shortland in the management of the financial department of the government, the colonists must, after all, considering the little experience he must necessarily have had in such matters, give Mr. Shortland some credit for the numerous shifts he has had recourse,:to in this the most perplexing and intricate of the branches of civil government; for our own part, and considering that he had every thing in the art of governing to learu since he came amongst us, we are not at all surprised at the frequent dilemmas into which he has fallen ; indeed, we are persuaded that he never thought, when he took office, 'that such a thing could as the revenue falling short of the current expenditure, until, upon a certain day, the Colonial Treasurer informed him that all the money raised from the sale of Auckland allotments, and other lands, was spent —that, in short, the treasury was empty! This was an awkward predicament for a man to be placed in certainly, and a thing calculated to perplex a person knowing so little about such matters, as the officer administering the government. To a person well acquainted with the routine of business, it might appear a very simple matter to draw upon such a sure and good firm as the treasury of Great Britain. Seriously speaking, Mr. Shorthand’s situation was any thing but pleasant; he had informed his superior that upwards of 25,000/. had been received on account of land sales, for the past year, and that a much greater ’sum might be relied upon as the produce of the next. The former sum was all spent, and the latter was a false calculation. Fear and shame, however, were finally and fully overcome, and it was determined to draw upon England. , The obvious plan of negociatsng the drafts through the local bank was deemed inexpedient, perhaps because it was thought better to give the benefit arising from such a transaction to one of the Sydney banks. At all events, the government would neither condescend to sell the drafts themselves, in such sums as the public required, (say, from 1001. upwards) which might' have readily been done upon the spot, nor would they permit the local bank to do so ; but sent them to an agent in Sydney. From their unhappy ignorance of business, however, this plan entirely failed. Because the agent was required by them to sell only at a certain premium, which might have easily been foreseen he could not accomplish, and because the drafts themselves were drawn for sums so large, as to render them even on this very account unsaleable. On account of this, and a variety of other blunders, the credit of this government was literally and so completely destroyed in Sydney, that their drafts could not eventually be disposed of on any terms.

In this emergency, the Collector of Customs, the oldest and the most experienced of the officers of Government, was forthwith despatched to Sydney, for the purpose of obtaining money in any possible manner. This gentleman entered into preliminary arrangements with Mr. Boyd, the manager of the Royal Bank of Australasia; and the contract was ratified by Mr. Shortland, the officer administering the government, on the return of Mr. Cooper to this colony.. The terms of this extraordinary contract being, that Mr. Boyd should negociate their drafts upon the Home Government, at the unheard of discount of 15 per cent. Stipulating at the same time, in addition to the payment of this discount, that he should receive for every sum paid by him, debentures upon the revenues of this colony to an equal amount. So that this government, in order to receive 15,000/. at 15 per cent, interest, actually agreed to make over to Mr.- Boyd a sum of 30,000/., for which amount this colony becomes indebted to the Home Government.

The impolicy of anticipating the revenues of .a colony by the issue of debentures is obvious, and has been severely reprehended in other cases by the Secretary for the colonies. In this case, besides being highly impolitic, it was also illegal, inasmuch as it was never sanctioned or approved of. by the Legislative Counqil, who 'alone could be presumed to have the right of adopting such an extreme measure. So well did Mr. Shortland himself seem to have been aware of the illegality of this contract, that, although the debentures had been executed, he nevertheless failed, when drawing for the sum of 2,000/., to forward Mr. Boyd the stipulated debentures, perhaps he was trying an experiment; and so far succeeded, Mr. Boyd, paying the 2,000/., but, intimating at the same time, tli»t he had done so for the honour of the local though in future, he unequivocally

gave Mr. Shortland to understand, that riot a shilling should be advanced without the stipulated debentures. The 2,000/. being very soCn expended, and necessity requiring that more money should be advanced, the government now applied to the local bank; With a view of negociating through it, drafts to the amount of 3,000/. upon Mr. Boyd. But, the Directors of the bank, before entertaining such a proposal, required, as a preliminary step, to be put in possession o'f ali the facts regarding the arrangements iriade by Mr. Boyd j and, with this view, two of their number were deputed to wait upon Mr. Shortland/ who satisfied them that the terms of the contract were fully complied with, and in particular, that debentures, equal to the amount to be drawn/Were duly executed) and would be forwarded to Sidney, along with the drafts. On the faith of this assurance, the bank discounted Mr. Shortlartd’s drafts on Mr. Boyd, to the full amount of (3,000/;) To the great surprise of the bank Directors, howevdr, the first opportunity from Sydney conveyed td them the astounding intelligence of the dishonour of Mr. Shortland’s drafts, because Of the extraordinary fact the debentures had not) according to promise and contract, been forwarded by Mr. Shortland to Mr. Boyd. Two versions of the history of the debentures are now current ; but we cannot say which is the correct one. The first is, that Mr. Shortland forwarded the debentures to Sydney, according to the arrangement made with the bank Directors, but, after so doing, that he despatched the government pinnance to the Bay of Islands, to forward by the same vessel, a letter countermanding the order to deliver them to Mr. Boyd. The second version is, that after the debentures had been executed, and left with the Colonial Treasurer to be forwarded to Sydney, Mr. Shortland, by his own written letter, commanded this gentleman not to forward them. It is at all events a fact, that the debentures were withheld, although the money was obtained at the bank under the pretence that they would be forwarded along with the drafts.

Such are the naked facts of this case; We forbear to give expression to the reflections which naturally arsie from the statement of them. We shall not dwell upon Mr. Shortland’s conduct in this transaction, neither shall we hazard any opinion as to the probable consequences, as far as he is concerned, we know what our own feelings would have been, as well as. what the consequences would be, were we to act by the bank in the way Mr. Shortland has done, but we are not expected to know any thing of his, or to speculate upon the consequences, as far as he is concerned, we leave other people to do this: but one thing we are certain of, that Mr. Shortland will, out of his own private funds, be required to defray the 150/. expenses on the returned bills; and we think it is more than likely the Home Government may charge him with the whole amount of the 15,000/., or, at all events, with the 15 per cent, interest paid for the same.

Looking upon the above transaction in a mere business point of view, we must say, that the arrangement with Mr. Boyd was not only the most injudicious but the most injurious to the interests of this colony that could be entered into. The colony is first of all brought into debt to pay the expenses of Mr. Shortland’s government to the amount of. 15,000/., for which fifteen per cent, is to be paid, but the most strangely unaccountable part of the transaction is the handing over to Mr. Boyd, independent of the drafts of the Home Government for these 15,000/., an additional sum of 15,000/. in the shape of debentures on the revenues of the colony, Did it ever occur to this government that a man engaged in business in New South Wales might fail even with all this assistance from Mr. Shortland ? What should become of the 15,000/. in such a case? it would take many flocks of sheep in New South Wales, at a shilling a head, to pay for the loss! But supposing there was no risk as far as Mr. Boyd is concerned, and we don’t. know that there is any, what a character does this transaction give to our colony, and to our government in particular ? Obliged to sell bills upon the British Treasury at a discount of 15 per cent., giving debentures upon the Colonial Revenue as security besides ! Was the British government ever before at such a discount in any other part of the world ? Mr. Shortland at least will deserve to be remembered as the person under whose administration such an extraordinary event occurred. We admire, Mr. Boyd’s tact in the managementof this business. Our readers will please to keep in view, that while he has received, and no ..doubt made use of, tbe government drafts for 15,000/., together with 15 per cent, for the same, that he still bolds the whole of the money; he has as yet paid nothing to Mr. Shortland excepting the 2,000/., for which ie should have by contract received debentures on this colony. The value of this money cannot in reality be less than 10 per cent, to Mr. Boyd at such a time as this, so that the government actually arranges to pay 25 per cent, for the mere pleasure of depositing, money with a private individual;, they must surely have been afraid that the touch of it would burn their fingers before they could gid rid of it on such terms. Had they at the time had any idea of

their future necessities, they surely would have risked the experiment of trying to keep the money themselves.

If any thing could prove the absurdity of attempting to rule a colony by, means of a government irresponsible to thepeople, thislamentable experiment at financing must be in itself sufficient to do so. We need scarcely assert that such a transaction as this could not have occurred, had We a Legislative Ceuncil to control the acts of the government. We therefore hope that the Home, Government will on this very account perceive the absolute necessity of granting the prayer of the Petition which has been some time ago forwarded to Her Majesty on this subject, and that we may soon expect to have the right and the power of electing our own representatives, who will be accountable to us for the manner in which the Revenue arising from-our industry shall be expended.