B.—No. 2.

24

FURTHER PAPERS RELATIVE TO A LOAN OF 3,000,000.

The time which Las elapsed since the receipt of your instructions, has been too short to admit of anything more than personal communications between the Imperial authorities and the Crown Agents ; but from all I could gather during a conversation I had on the subject with the Secretary of State for the Colonies, and with the Secretary of the Treasury, there did not appear to be any indisposition to entertain your proposal favorably. It is not stated distinctly in your letter at what rate or price the debentures are to be handed over to the Imperial Government, but I understand your intentions to be that £500,000 in debentures shall extinguish £500,000 of debt. This being so, the Treasury may not consider the offer a fair equivalent, seeing that your 8 per cent, debentures are selling in the Loudon market below par. The Crown Agents will, however, do all they can to bring about a favorable settlement of the matter, and will report the result to you by the June mail. I have, &c, The Hon. the Colonial Secretary, Wellington, New Zealand, Peneose G-. Jultait.

No. 42. The Cbown Agents to the Hon. the Colonial Secketaby. Offices of the Crown Agents for the Colonies, Sir,— Spring Gardens, London, S.W., 26th May, 1865. I have to acknowledge the receipt of your letter No. 43, of the 8th March last, with its enclosed warrant under the hand of His Excellency the Governor, appointing Mr. Julyan and myself trustees to receive and invest the sinking fund provided by " The New Zealand Loan Act of 1863." On reference to the warrant you will observe the trustees are to invest the sinking fund " in manner set forth in the said recited Act," whilst the Act provides that it shall be invested " in such manner as the Governor shall from time to time direct." Until we are informed in what securities the Governor directs the sinking fund to be invested, the £5,000 remitted in your letter of the 11th February last, will be retained for this special service, and deposited at interest with one of the large joint stock Banks. Most Colonial sinking funds have been invested in Imperial Government securities, which yield an interest of a fraction over 3 per cent, per annum. There is, however, nothing in the provisions of "The New Zealand Loan Act" to prevent the Governor selecting, should he see fit to do so, Indian or Colonial Government securities. The best Colonial Government securities may be purchased at a price to refund the premium given for them, and pay about 5 per cent, per annum ; and I may mention that amongst the best, or those to which the market at present give preference, are the debentures of Ceylon, Victoria, Mauritius, and Cape of Good Hope. I have, &c, The Hon. the Colonial Secretary, "Wellington. New Zealand. W. C. Sabgeaust.

No. 43. Messrs. Larkworthy, Porter, and Ghahame, to the Hon. the Colonial Treasurer, Wellington. Sir,— London, 26th May, 1865. We wrote you on 26th ultimo, and forwarded duplicate of the same, via Southampton, on 19th instant. On the 1st instant, in conformity with the terms of our last letter, we communicated with the unsuccessful tenderers for the loan, informing them that we were disposed to treat with them for the sale of those portions of the debentures still on hand; and on the 4th instant, our negotiation* resulted in the sale of the balance—viz., £105,100 of the 2c Series, and £129,000 of the 3c Series, at £100 13s. 4d. per cent., including accrued interest from 1st April. Terms of payment: — £5 per cent. ------- Cash. £45 per cent. ...... On the 15th instant. £50 13s. 4d. per cent. - - - • -On 30th instant. The last mail brought a considerable number of these debentures to this country, and they are now being offered at par, with coupon, due 1st July, attached. We enclose Account Current from the books of the Bank of New Zealand to this date, and by next mail, when the payments have been fully made, we will forward a detailed statement of receipts and disbursements on account of this loan. We have, &c, EOEEET PORTEE, The Hon. the Colonial Treasurer, Wellington. F. Larkwortht, Vm. S. Geahame.