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clusion, if the value of the New Zealand guaranteed debentures now in your hands were measured by the price of the Canadian debentures, rather than by the current price of Consols or of similar Imperial Funds. Even then, however, it appears to me, and 1 would strongly urge the Bank authorities to give this their careful consideration, there are circumstances which would justify the directors dealing with the matter in a special and more favourable manner as regards the colony, than by strictly adhering to this mode of arriving at the price at which you would be willing to meet my Government in their desire to resume possession of these debentures. In my previous letter I adverted to the circumstances under which these debentures were transferred to the Bank of England in 18G6, circumstances which, as I pointed out, led my Government at the time to protest against the mode of sale which was then adopted, and it is therefore unnecessary for me in this letter to refer any further to that operation. As you are aware, my Government have been engaged for some years in converting the loans of the colony into stock which is domiciled at your bank, and it is in pursuance of this policy that it is now desired to resume possession of these debentures, in order that they may be converted into stock, domiciled at the Bank of England. I would point out that one result of this financial policy has been to transfer to the Bank's management almost the whole of the loans of the colony, and that, in a few years, whatever still remains outstanding will most probably be placed in a similar position. That the result of this policy has been advantageous to the interests of the colony I freely admit; at the same time I consider that I am justified in referring to the fact that the result to the Bank has been that it is receiving from the colony an annual present payment of over £18,000, which, when the conversion of the loans into stock is completed, will probably bo increased to over £20,000. Taking, therefore, the relations which thus exist between the Bank and the colony into consideration, I feel confident that you will concur with me in thinking that they constitute a strong reason why, in dealing with the subject of this letter, tho Bank should regard the colony in a more favourable light than if these relations were nonexistent. I trust, therefore, that these considerations, which I have briefly indicated, and to which I consider it my duty to refer, will have their due weight with you when deciding upon the course which you will advise the Court of Directors to adopt. With the view of facilitating the settlement of this matter, I beg permission, in closing this letter, to state that, if the Bank could see their way to fix the price of these debentures at 115, cum dividend of the Ist May next, I should consider it my duty to recommend the acceptance of that valuation to the favourable consideration of my Government. I have, &c., The Governor and Company of the Bank of England. W. B. Pebceval.

Enclosure 2 in No. 28. Sir,— Bank of England, London, E.C., 3rd February, 1893. I am directed to acknowledge the receipt of your letter of yesterday, in continuation of the correspondence which has taken place between yourself and the Bank on the subject of £500,000 New Zealand 4-per-eent. guaranteed debentures, now held by the Bank, which your Government are desirous to redeem. The Governors have given their best consideration to the soveral points urged by you. They are advised that the actuarial valuation of these debentures is considerably in excess of 120 per cent., but, bearing in mind the relations which exist between the Bank and the colony, and with a view to assist your Government as far as possible in the matter, I am to say that if you will make an offer of £117 per cent.—representing somewhat a medium price—they would be prepared to recommend the Court of Directors to accept the same. I am,&c, W. B. Perceval, Esq., Agent-General for New Zealand. F. May, Chief Cashier.

Enclosure 3 in No. 28. Gentlemen, — Westminster Chambers, 13, Victoria Street, S.W., 7th February, 1893. I beg to acknowledge the receipt of Mr. May's letter of the 3rd instant, and I desire to thank you for the prompt consideration which you have given to the subject of my communication to which it is a reply. Previous to my Government deciding to make a definite offer to purchase the £500,000 guaranteed debentures, it will be desirable to arrange the terms on which payment of tho purchase-money can be made, and with this object in view I beg leave to submit for your consideration the following proposals, and I shall be glad to know whether they are such as the Bank would be ready to accept. The proposals I have to make are as follows, namely : — 1. On the dolivery of the debentures, the New Zealand Government to transfer to the Bank £200,000 4-per-eent. New Zealand Consolidated Stock, already inscribed at the Bank, and the £610,000 3£-per-cent Consolidated Stock into which the guaranteed debentures will be converted. 2. The Bank to hold these two parcels of stock as security for the payment of the purchase-money, charging interest at, say, Bank rate varying, on tho whole or such portion as remains unpaid. 3. The sale of the two parcels of stock to be proceeded with simultaneously, and the proceeds of the sales to be paid over to the Bank from time to time in payment of the purchase-money. 4. As soon as the proceeds of the sales are sufficient to provide for the payment of the whole of the purchasemoney, the balance remaining of tho two parcels of stock to be re-transferred to the New Zealand Government. I am, &c, The Governor and Company of the Bank of England. W. B. Perceval.

Enclosure 4 in No. 28. Sic, — Bank of England, London, E.C., Bth February, 1893. I am directed to acknowledge the receipt of your letter of yesterday, with reference to the terms in which payment of the purchase-money can be made, in tho event of your Government deciding to make a definite offer for the purchase from the Bank, for the purposes of redemption, of the New Zealand guaranteed debentures for £500,000, as to which some correspondence between yourself and the Bank has already taken placo. In reply, I am directed by the Governors to say that they would be willing to acquiesce in the proposals set forth in your letter, provided that interest on the purchase-money until it be paid be at the Bank rate varying, with a minimum rate of 3 per cent. The Governors would be glad if the last instalment of the purchase-money could be paid not later than the Ist May next. I am, &c, W. B. Perceval, Esq., Agent-General for New Zealand. F. May, Chief Cashier.

Enclosure 5 in No. 28. Gentlemen, — Westminster Chambers, 13, Victoria Street, S.W.,l4th February, 1893. Referring to Mr. May's letter of tho 3rd instant, I beg to inform you that I am authorised by my Government to offer 117 per cent, for the £500,000 New Zealand 4-per-cent. guaranteed debentures now in your hands, the terms of payment to be as specified in my letter of the 7th instant, and in your reply thereto of the Bth instant. As it will take some time before the necessary arrangements can be completed for the creation of the 3£-peL-.cent. Stock which the Bank will hold as security, I would propose that the interest ou the unpaid portion of the purchasemoney shall commence, say from the 14th March, that being the earliest account day for which I shall be in a position to sell the newly-created stock. I have, &c, The Governor and Company, Bank of England. W. B. Pebceval.