36

Radley, Abingdon, Berks, 18th August, 1857. Deak Sir, — As to the New Zealand Loan, I have to propose an arrangement, which, unless you can suggest anything better, should, in my opinion, be adopted. I have seen the Union Bank of Australia (our Bankers in New Zealand). Their Manager, whom I saw yesterday, will suggest to his Board on Friday to take the whole of our Loan at par, if the Treasury agree, finding the money from time to time, at such periods and in such amonnts as may be fixed on. We don't want the money at once: we want £200,000 to pay the New Zealand Company, on or before the Ist April, 1858 ; about £120,000 about October, 1858; and the remainder at various periods, which can only be settled in the Colony by the Government there. Now, it will be disadvantageoiis to borrow all the money at once, either keeping the money idle, or investing it at risk. (Indeed, there is no authority, of which lam aware, for the investment.) It will be far better to borrow only as we have need ; and the Union Bank of Australia, who will be our Bankers, can deal with us altogether upon the most favourable terms. Then, again, the Union Bank will make remittances to the Colony at par. This will, as I calculate, be an advantage to us. The exchange is no doubt at present against the Colony, and in favour of London; but if it come to so large a sum as £300,000, that would turn the exchange the other way. It answers the purpose of the Union Bank to make the arrangement with us, becanse it gets the command of the exchanges. The consideration which they ask for this is, that they should have debentures or bonds anti-dated four months; that is, giving them four months' interest or profit. It is equivalent to £l 6s. Bd. per cent, commission. I should try and get better terms; but, if I cannot, I think on the whole we shall do wisely to close with this offer. There is no speculation and no risk. We shall have money as we want it, with as little loss of interest as possible, because we shall arrange for taking up the money only as we require it. If this arrangement were made, the practical course, I suppose, will be for the Colonial Government to indicate to the Treasury their wishes. This I feel myself authorised to do, on behalf of the Government. Then the Treasury will issue the bonds (or debentures), and lodge them with the Bank of England, at such periods and for such amounts as shall be fixed on. The Union Bank will, from time to time, lodge the money in the Bank of England, taking the bond, &c, up. The money will of course be to the credit of the Commissioners of the Treasury; then the " Governor's request," under the terms of the Loan Act, will direct the Commissioners of the Treasury as to the disposal of the money ; except the money payable to the New Zealand Company, the whole will have to be re-transferred to the Union Bank of Australia for remittance to the Colony. If you think any better or more favourable arrangement for the Colony can be made, pray suggest it : if not, I shall write immediately to the Colony for the requisite directions. No money will be actually wanted until towards April, 1858; that may be as well for the money market here. We shall have to make further arrangements as to the form of Debenture, fthe period for which to run, —coupons, where payable,—remittance of interest, &c. ; as to all which I shall be happy to see you when convenient. I beg to remain, &c, (Signed) Henrt Seweix. Downing street, 28th August, 1857. Sir, — In reply to your letter of the 19th instant, I am directed by Mr. Secretary Labouchere to request that you will state to the L. C. of the Treasury, that so far as this department is concerned, he has no objections to offer to the arrangement proposed by Mr. Sewell in respect of the New Zealand Loan. I am, &c, (Signed) T. F. Elliot. J. Wilson, Esq., &c, &c, &c. Treasury Chambers, 16th December, 1857. Sir, — The Lords Commissioners of Her Majesty's Treasury having had under their consideration the correspondence which has passed between Mr. Sewell and the Union Bank of Australia on the subject of raising the Loan of £500,000 for the Colony of Nefc- Zealand under the guarantee of the British Government according to the Act of last session, and having considered the conditions upon which the Union Bank is willing to undertake such Loan, as conveyed in their Letter of the 6th November to Mr. .Sewell, and to which terms he is prepared on the part of the Colony to assent, I am directed by their Lordships to inform you, for the information of Mr. Secretary Labouchere, that they are pleased to sanction the same, as being, under present circumstances, very favourable to the Colony. I am, &c, (Signed) James Wilson. C. Fortescue, Esq., M.P. &c, &c, &c.