NEW ZEALAND SPECTATOR, AND COOK'S STRAITS GUARDIAN. Saturday, July 5, 1845.

New Zealand Spectator and Cook's Strait Guardian, Volume I, Issue 39, 5 July 1845, Page 2

NEW ZEALAND SPECTATOR, AND COOK'S STRAITS GUARDIAN. Saturday, July 5, 1845.

Considerable interest has been excited in the public mind on the subject of the debentures, in consequence of the great number now in circulation,- and of the recent attempt of Captain Fitzroy to issue a new series alleged to be under Lord Stanley's 'despatch of the 27th October 1844. We publish the form of the new debentures, together with the extract from Lord Stanley's despatch, under the authority of which Captain Fitzroy has attempted to issue them, that our readers may judge how far his Excellency is borne out by his instructions from the Home Government in this effort to replenish his exhausted exchequer.

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'" You will withdraw these notes from circulation, by applying to their redemption, funds to be raised for that purpose at the next meeting of the Legislative Council, or if sufficient funds cannot be so raised, by substituting in the

place of the notes- which have 'been so iSsued, colonial debentures for not less than £50 each, bearing, if need be;- a somewhat higher- rate of interest than the -notes, and payable out of the colonial funds at any period, of which notice may at any time be given." — Lord Stanley's Despatch', No. 38, Oct. 27, 1844. The ordinance authorizing the Governor tq^ issue debentures and make them a legal tejvder, was passed in the Legislative Session of last year; and provided " that the amount of debentures which shall be outstanding at any one time, shall not exceed the sum of Fifteen" Thousand Pounds." As this ordinance has not been in any way altered, or repealed, it follows that any issue above £15,000 is illegal, and that such debentures above the sum authorized by law cannot be made a legal tender ; — that if Captain Fitzroy received peremptory instructions from the Home Government immediately to withdraw irom circulation the debentures issued under the ( ordinance, and obtained permission to draw Sn the Imperial Treasury to the extent of £15,000 for that purpose, the holders of debentures above the amount prescribed by the ordinance woul I be left without any remedy. As the debentures merely represent the confidence or faith of those who receive them in the credit of the Government, it was highly essential that -nothing should be done to weaken this faith, as any doubt or uncertainty must have the effect of depreciating their value. The public had a right -to expect some notice by authority, stating the highest number of each series or denomination of do bentures, altogether making the sum of £15,000, and that whenever a debenture became defaced or worn from circulation, the re-issue should bear the same number with the cancelled debenture. As far as we have been able to trace them, the highest number of each denomination of debentures in Wellington is as follows :—: —

I Making a -total of £28,315 in circulation in the I colony, so far as we have the means of ascert aining. It may be objected to this statement, that the same rule obtains with regard to debentures, which isobserved by bankersin the reissue of their notes namely, that when a debenture is so worn or defaced as to be unfit for circulation, the re-issue does not bear the same number as that which is cancelled, but the series is - continued. On this point nothing certain -can be advanced, since our rulers afford us no information on the subject ; but we have seen numi 1 bers sufficiently low in each series to warrant j us in the -conclusion, that admitting the rule, j from the short time they have been in circulation, the amount could not be materially affected.—But we can prove by other facts, that the amount of debentures now in circulation cannot be much less than £40,000. Captain Fitzroy, in the tlebate on the Property Rate Amendment Bill, stated the total amount of his Civil Expenditure for 1845-6, would be £26,565, and of this sum he expected £10,000 from England. Whether he will raise £16,000 by .indirect taxation is; very, problema-, ' tical ; if he does, nearly the whole amount will be supplied by the settlements in Cook's Straits, seeing that all the settlements to the North are broken up save Auckland, where the inhabitants are almost wholly supported at the expense of the Government. The principal source of revenue is expected to be derived from the Customs ; but this must for some months be unproductive. But in addition to his civil list, Captain Fitzroy has incurred other very heavy expenses, which are almost entirely defrayed by debentures. The militia in Wellington costs about £560 for twenty-eight days, or £7,000 per annum : the militia at Auckland three times that sum ; to this must be added the cost of the militia at Nelson ; the vessels now under charter by Government to convey troops to the seat of war are estimated to cost £1000 per month; — the* new barracks at Auckland will cost £7,000, and a variety of other expenses connected with his Excellency's warlike proceedings will cause his

expenditure -this year altogether *to amount "to about £75,000. And this amount must-be defrayed by debentures, deducting the assistance furnished by the Home Government; and Lord' Stanley reminds Captain Fitzroy that "the' Government of New Zealand has already been warned not to place any further reliance on large and undefined assistance from such a source." That Captain Fitzroy has got "reckless, -(to use the language of the Morning Chronicle) of money so easily coined, and depreciates them by issuing afresh batch after batch," is evident from the fact that ihis assiynats have almost superseded the -former convertible currency of this and the neighbouring settlements ; and that the currency of Auckland consists entirely of debentures. The chief cause of the immediate dissolution of the bank at Auckland is believed to be the apprehension of a sudden depreciation of the debentures, which, in the present state of the currency there, would have been productive of ruinous consequences. But we have yet a further proof of Captain Fitzroy's recklessness, in the resolution smuggled through the Council, and which we publish in this day's Spectator, a resolution to which he would give the force and authority of law, thereby superseding the former ordinances — and while it only authorizes him to extend the issue of debentures sufficiently to pay off the debts then due by the Government, — he, with unexampled prodigality, contracts fresh debts, and still farther. extends his issues, trusting to the credulity of -the colonists to ( force them into circulation. There are those who argue that we have nothing to fear : that theCustomsand payments toGovernment will absorb the amount of debentures in circulation in this settlement. We answer, if it were so, our present currency would not consist, as it now does, almost entirely of debentures. And that while oar circulating medium is inconvertible, it is always subject to sudden and great depreciation, when the loss must fall on the public at large. We are sorry to use strong language, but after carefully reading Lord Stanley's despatch, and the-debenture purporting to be issued under 'its authority (the period of its redemption being fixed at three months after Captain FitzFoy's convenience), -we can only characterize it as an impudent attempt 'to obtain money under false pretences ; and such appears to be the general opinion, since this new effort to raise the wind has proved a complete failure. As we have no desire in the above remarks unduly to depreciate the debentures by creating alarm, we have refrained from exposing, as we might have done, the practice of sinking the interest by dating a debenture issued in the place of a worn out or defaced one from the date of re-issue ; — we have not alluded to the books of debentures ready for circulation in everything but the date, in the hands of the Sub-Treasurer of this district ; but we wish to protest strongly against this extended issue on which the colonists have no check, and to warn the public -against the probable consequences of Captain Fitzroy's acts. The inevitable tendency of commercial operations is to make them the only tiirculating medium, and then they must become depreciated below their present value, to what extent it is impossible to say. The debentures present the monstrous anomaly, that while we are without a Crown tide to our lands, or as Captain Fitzroy has expressed it, still " tenants at will to the Maorics," the colonists are burthened with a very heavy debt, the interest of which forms a first charge on the colonial revenue, to pay which additional taxes will be levied, — and both principal and interest will perhaps eventually be discharged by the settlers of Cook's Straits, who receive the least benefit from the present expenditure. Should the British 'Government refuse to sanction this extended issue, And insist that funds for the redemption of the debentures shall be provided out of the Colonial revenue, it will not only " deeply affect the future growth and prosperity of the colony," but will be attended with results so disastrous as to cast the events of Kororarika in the shade. Since writing the above remarks a Public meeting of the -merchants and others engaged in business in this settlement has taken place, at which we were glad to find the opinions expressed by the different speakers in a great

measure coincided with those we have advanced. We wish to direct attention to the fact stated by Mr. M'Donald, that the Union Bank of Aus - tralia have discounted Captain Fitzroy's bills on the British Government to a considerable amount, and that they were prepared to discount his bills to any extent, if he could only shew his authority for drawing. It is therefore evident that the representations made by Captain Fitzroy to Lord Stanley, that he had been driven to the issue of debentures because he was " unable to raise money by the sale of bills on the Treasury without the risk of enormous loss, and unable also, to borrow from the colonial bank the sum required for his immediate exigencies," — are untrue. It is most important to note this, because Lord Stanley expressly declares that these are the only reasons which have induced her Majesty's Government ■"■to -make allowances for a course of proceeding, which under less urgent circumstances would have been indefensible." Mr. Heale's protest, which was read to the meeting, is important, as an additional testimony to the fact we have attempted to 'establish, of an over issue of debentures. o

A dinner was given, at Barrett's Hotel, yesterday evening to J. B. Williams, Esq., the Amerioan Consul, an account of which we shall furnish our readers with next week.

No. 16, £100 £1,600 100, 50 5,000 2,619, 5 13,095 5,282, 1 5,282 4,244, 10s. 2,122 4,864, ss. , 1,216 £28,315