8.—13

2

I herewith transmit copy of the correspondence which has taken place in respect to the matter with the Bank, Messrs. Mackrell, and the Inland Eevenue Office. I may add that it is proposed to defer the sale of the 4-per-cent. stock which it will be necessary to create and realise for the purpose of paying the stamp duty, until after the Ist proximo, when the stock will be quoted ex dividend. I have, &c, The Hon. the Premier, Wellington. W. B. Perceval.

Enclosure 1 in No. 3. Sir,— Bank of England, London, E.C, 15th February, 1892. With reference to my letter of the 6th instant, informing you that the Inland Revenue Department had under consideration the question of the allowance formerly made when composition for stamp duty was paid upon stock inscribed from bonds on account of the duty that had been paid upon the latter, I now beg to send you herewith a copy of a letter I have received from that department. I am, &c, The Agent-General for New Zealand. H. J. Bowen, Chief Accountant.

Enclosure 2 in No. 3. Sir, — Inland Revenue, Somerset House, 12th February, 1892. In returning the debenture forwarded with your letter of the sth instant, I am directed by the Board of Inlana Revenue to acquaint you that they are aavisea that no allowance can be made in respect of the stamp duty borne by the debentures of the New Zealand Government 5-per-cent. bonds when exchanged for inscribed stock. Section 53, subsection (3), of " The Inland Revenue Act, 1880," under which the allowance in the analogous cases of municipal loans was formerly made, has been repealed by the Stamp Act of 1891, and therefore there is no analogy to support the continuance of the Treasury authority for a similar concession to debentures in a colonial loan cancelled and represented by stock inscribed at the Bank of Englana. I am, &c, The Chief Accountant, Bank of Englana. W. H. Cousins, Secretary.

Enclosure 3 in No. 3. Dear Sirs,— 13, Victoria Street, 17th February, 1892. In 1885 ana 1886 a number of the then existing New Zealand Government aebentures were convertea into short-datea aebentures (six ana seven years), which in their turn were convertible in this year into 4-per cent, consoliaatea stock (inscribed at the Bank of England). I enclose the prospectus (2) giving the conditions under which these conversions were carried out. In 1885 you were in communication with the Inland Revenue Office with respect to the amount of stamp duty on these short-dated debentures, and your letter of the 2nd May, 1885, addressed to Sir F. D. Bell, reported the result. The question has now arisen as to what amount of stamp duty is chargeable on the stock into which these shortdated debentures are convertible, and in a letter (copy enclosed) addressed to the Bank of England by the Inland Revenue Office it is stated that no allowance can be maae. The Agent-General will be glaa, therefore, if you will be good enough to advise him in this matter. I may add, for your information, that in the recent conversion of New Zealand debentures into 3J-per-cent. inscribed stock an allowance has been made by the Inland Revenue of 2s. 63. per cent, off the 12s. 6a. per cent. auty. I am, &c, Messrs. Mackrell, Maton, ana Goalee. Walter Kennaway.

Enclosure 4 in No. 3. 21, Cannon Street, Lonaon, E.C, 18th February, 1892. Dear Sir, —■ Composition of Stamp Duties. We are in receipt of your letter of the 17tb instant on this subject, ana we think that the following statement as to the course of legislation will enable you to appreciate the position which the authorities now take up. By " The Colonial Stock Act, 1877," sections 2 ana 3, provision was maae to enable a Colonial Government to compound for the stamp duty payable on the transfer of " inscribed stock " by a payment of 7s. 6d. per cent. By " The Inland Revenue Act, 1880," section 53, provision was made to enable Municipal Corporations to compound for the stamp duty payable on the transfer of stocks, &c, issued by them by a payment of 12s. 6d., 155., or 17s. 6d. per cent., according to the period for which the loan was to be current. The Act by -the same section, subsection (3) enacted that "where any such [Municipal Corporation] stock is issuea in lieu of mortgages or debentures on the issue of which stamp duty has been paid, it should bo lawful for the Commissioners of Her Majesty's Treasury to reduce the amount of composition payable by Municipal Corporations by the amount of the stamp duty so paid or any part thereof." The Act (section 54) then proceeds to apply this higher scale of composition to any future composition effected (amongst others) on stock issued under " The Colonial Stcck Act, 1877." In 1887 these provisions as to composition were made to cease as to any future issue of municipal stocks, and new duty substituted, but the provisions as to colonial stock remained unaltered. The Stamp Act of 1891, which came into operation on the Ist January, 1892, is in the main a consolidation Act, and has repealed all the previously-existing clauses bearing on the scamping of colonial and municipal stock, including, of course, subsection (3) of section 53 of the Act of 1880 which we quoted above ; and this subsection is not re-enacted, although the provisions enabling a Colonial Government to compound on paying 12s. 6d., 155., or 17s. 6d. per cent, as the case may be, and also those enabling a Municipal Corporation to compound on paying a half-yearly duty of 6d. per cent., are re-enacted. It thus follows that the provision in the Act of 1880 enabling the Treasury to make an allowance to Municipal Corporations for stamp duty already paid, and which the Treasury had, by a liberal construction, extended to colonial stock, is gone, as the authorities point out in their letter. Under these circumstances the only argument which it appears to us might be used on behalf of your Government is that the arrangement under which this stock is now to be issued was, in fact, made in 1885 and 1886, when section 53, subsection (3) was in force, and that therefore your Government may properly claim the benefit of that subsection at the present time when the contract of 18S5 is being carried into effect. We shall be pleased to see the authorities at Somerset House on the subject, as we have done on previous occasions, if you so desire ana will let us know. We have, &c, The Agent-General for New Zealana. Mackrell, Maton, and Godlee.

Enclosure 5 in No. 3. 13, Victoria Street, S.W., 22na February, 1892. Dear Sirs, — Composition of Stamps. Referring to yours of the 18th instant, I am directed by the Agent-General to request you to see the authorities at Somerset HouSs on the subject. As the Inland Revenue Office has been in communication with the Chief Accountant at the Bank of England in respect to the matter, I am to suggest that it would be as well for you to see the Chief Accountant ana inform him that you are communicating with Somerset House. I am, &c, Messrs. Mackrell, Maton, ana Godlee. Walter Kennaway.