-A.—No. 9c

4

CORRESPONDENCE KELATIYE TO

3. The Treasury shall not give any guarantee under this Act, unless and until provision has been made, either before or after the passing of this Act, by an Act of the Legislature of Now Zealand, or otherwise to the satisfaction of the Treasury, — (1.) For raising the said loan, and appropriating the same to the purposes mentioned in this Act: (2.) For charging the Consolidated Fund of New Zealand with the payment of the principal and interest of the said loan immediately after the charges on that fund existing at the time of the passing of this Act: (3.) For payment by the Government of New Zealand of a sinking fund at the rate of per centum per annum on the entire amount of the said loan, or so much as is raised for the time being, commencing at the date at which the whole of such loan is raised, or at the expiration of ten years from the passing of the Act (whichever date first happens), and for charging the Consolidated Fund of New Zealand with the payment of such sinking fund immediately after the principal and interest of the said loan : (4a.) For charging the Consolidated Fund of New Zealand with any sum issued out of the Consolidated Fund of the United Kingdom under this Act, with interest thereon at the rate of five per centum per annum, immediately after the sinking fund of the said loan: (5.) For rendering to the Governor, for transmission to the Treasury, an annual abstract of the accounts of the expenditure of the money raised by means of the said loan under such heads as the Treasury from time to time desire: (6.) For remitting to the Treasury tho annual sums for the sinking fund by equal half-yearly paymenls, and for the investment and accumulation thereof under their direction in the names of four trustees nominated from time to time, two by the Treasury and two by the Government of New Zealand. The Treasury shall not guarantee in any one year a larger sum than two hundred thousand pounds, and the Treasury, before guaranteeing any portion of the loan after the first, shall satisfy themselves that the portion of the loan already raised has been or is in the course of being spent for the purposes mentioned in this Act. 4. The said sinking fund may be invested in such securities as the Government of New Zealand and the Treasury from time to time agree upon, and shall, whether invested or not, be applied from time to time, under tho direction of the Treasury, in discharging the principal of the said loan, and the interest arising from such securities (including the interest on any part of the loau discharged by means of the sinking fund), and the resulting income thereof shall be invested and applied as part of such sinking fund. 5. Every Act passed by the Legislature of New Zealand which in any way impairs the priority of the charge upon the Consolidated Fund of New Zealand created by that Legislature of the said loan and the interest and sinking fund thereof, and the sums paid out of tho Consolidated Fund of the United Kingdom and the interest thereon, shall, so far only as it impairs such priority, be void, unless such Act contain a suspending clause providing that such Act shall not come into operation until Her Majesty's pleasure has been publicly signified in New Zealand. 6. The Treasury are hereby authorized to cause to be issued from time to time, out of the growing produce of the Consolidated Eund of the United Kingdom, such sums of money as may at any time be required to be paid to fulfil the guarantee under this Act in respect either of principal or interest. 7. The Treasury may, from time to time, certify to one of Her Majesty's Principal Secretaries of State the amount which has been paid out of the Consolidated Fund of the United Kingdom to fulfil the guarantee under this Act, and the date of such payment. Such certificate shall be communicated to the Governor of New Zealand, and shall be conclusive evidence of the amount having been so paid and of the time when the same was so paid. 8. The Treasury shall cause to be prepared and laid before both Houses of Parliament a statement of any guarantee given under this Act, and a copy of any accounts received by them respecting the expenditure of the said loan, and an account of all sums issued out of the Consolidated Fund of the United Kingdom for the purposes of this Act, within one month after the same are so given, received, or issued, if Parliament be then sitting, or if Parliament be not sitting, then within fourteen days after the then next meeting of Parliament.

Enclosure 2 in No. 1. The New Zealand Commissioners to the Hon. W. Fox. (Telegram.) London, 13th June, IS7O. Guaeantee Million Loan Bill not yet drafted. Our proposals are that the loan is not to bear more than 4 per cent, interest; not more than £200,000 to be raised in any one year; the sinking fund of 1 per cent, not to commence until after expiration of ten years, or until the whole million has been raised, whichever happens first; the whole to be expended on immigration, roads, bridges, and communications. We don't yet know whether these proposals are accepted by Treasury, but Cabinet really anxious to assist Colony. Let Assembly pass an Act authorizing loan of million to be expended on immigration, roads, bridges, and communications; such loan to be raised by New Zealand, and guaranteed by Imperial Government under such conditions as to interest, sinking fund, and otherwise, as may be agreed to by Commissioners Bell and Featherston. These conditions to be held incorporated in Assembly's Act; and the interest, sinking fund, and any other charges arising out of the loan being Imperially guaranteed to be first charge on Consolidated Bevenue after existing charges. The reply to your last Memorandum will be conciliatory. This cancels Saturday's telegram. F. D. Bell, To Premier Fox, Wellington, New Zealand. I. E. Featiieeston.