B.—No. 2.

10

FURTHER PAPERS RELATIVE TO

No. 13. The Inspector, Bank of New Zealand, to the Hon. the Colonial Treasueer. Sir, — Melbourne, 31st January, 18(55. I have the honor to report that in reply to advertisements inserted in the newspapers both here and in Sydney from 10th to 23rd instant, calling for tenders for £200,000 of 8 per cent, debentures of the General Government of New Zealand, I have received tenders for £31,300 only— £19,050 of which were at and over par, and £12,250 below par. Of the £19,050 which I have accepted, there were tenders for £10,050 from Sydney, and £9,000 from Melbourne. I enclose specifications of the various tenders, with particulars of the numbers of the debentures prepared for issue to the various parties. I have negotiations for a further sum of £10,000 now pending, but beyond this I have little expectation of effecting sales of any considerable portion of the loan. Besides the tightness of money prevailing in these colonies, and the high rates of interest offered by the Banks for money at call (as high as 7 per cent, being given), I find there is a very general distrust in the public; mind of all New Zealand securities, and this feeling, I regret to add, is carefully fostered by interested parties. Since 23rd instant I have advertised the unsold portion of the loan as open for sale by private negotiation, and if there should be no satisfactory result during.this week, I. will endeavour to arrange a loan by hypothecation of the debentures. This will be reported to you by an early mail. The five thousand debenture forms required by the Government are forwarded by the "Albion " uteamer, to the manager of the Bank of New Zealand, Dunedin, whence they will be despatched to you by first opportunity. I have, &c, The Hon. the Colonial Treasurer, Wellington. D. L. Murdoch. No. 14. The Hon. the Colonial Secretary to the Crown Aoents. Gentlemen, — Colonial Secretary's Office, Wellington, 11th February, 1865. I am directed by Mr. Weld to transmit to you the accompanying Bank draft for £5000, being half-year's sinking fund on one million issued of the Three Million Loan of 18G3. At the same time I am directed to inform you that owing to the absence of His Excellency the Governor from the Seat of Government, the necessary steps for appointment of trustees in whose names the sinking fund is to be invested, cannot be taken by this mail. But that by the next mail the necessary appointments will be made, and in the meantime you will be good enough to retain the amount transmitted to you for this special service. I have, &c, Messrs. .Tulyan and Sargeaunt, W. Gishorne, Crown Agents for the Colonies, 6, Adelphi Terrace, Strand, London. Under Secretary. No. 15. The Agent for the New Zealand Government to the Hon. the Colonial Treasurer. Sir, — Bank of Now Zealand, Auckland, 24th February, 1885. On 31st ultimo I had the honor to advise you from Melbourne of the unsuccessful result of my mission to Australia. The only further sale of debentures effected subsequent to that date was £1000 (at par, with three years currency, principal and interest payable in London,) to Mr. B. A. Ferard, on 10th instant, to whom I issued debentures Nos. 217 to 226, for £100 each. I waited on every private capitalist of importance, and saw the managers of the various Banks likely to be purchasers, and was invariably met by doubts as to the security of New Zealand debentures. Finding it impracticable to make further sales, I then exhausted every probable source from which a loan on security of the debentures might be expected, and regret to say that the same distrust which prevented the sale operated fatally against the negotiation of a loan on the security of the debentures. The Savings' Banks and some of the local Insurance Companies are prohibited by their Act of Incorporation from investing their funds in other than the securities of the Colony in which they are incorporated; the Banks from which the money must be withdrawn for purchase of a loan on debentures reported adversely of the security of the debentures ; the rate of interest allowed by Banks for money even at call is as high as 7 per cent; the mode of issuing debentures by an agent was altogether new in the Australian Colonies. These, with the general tightness of money, were causes which militated much against the success of the negotiation. The chief causes of failure, however, were —the general ignorance which prevails as to New Zealand affairs, and the impression that the Colony is involving itself in debt.-!, the redemption of which will be problematical. No mere verbal evidence adduced by one so personally interested as I in removing such an impression, could be expected to be received by capitalists as sufiicient justification for investment of their money when such investment; was disapproved by their own bankers. As a last resource, I applied to the F'ank of Victoria for a loan on the debentures guaranteed by the Bank of New Zealand, and succeeded in this way in getting £40,000 to be repaid in six months, or if not then required, on receiving three months;' notice, and to bear interest at 10 per cent, per annum. The debentures lodged for this loan were Nos. 117 to 156, for £1000 each, with three years currency, principal and interest payable in London, which I authorised the manager to sell till further advised at par, with accrued interest added, and agreed to pay him J per cent, on any sales so effected. The following debentures were left by me with the Oriental Bank, to bo delivered to purchasers as applied for on the same terms as above, viz. : — Nos. 167 to 216—50 of £100 each, representing ... ... £5,000 267 to 316—50 of £500 each „ ... ... ... 25,000 367 to 416—50 of £1,000 each „ ... ... ... 50,000 In all ... £80,000