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BC Sessional Papers

RETURN To an Address of the Legislative Assembly for copies of all letters, correspondence, and documents… British Columbia. Legislative Assembly 1888

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 51  Vic. Correspondence—Loan of 1887. 321
To an Address of the Legislative Assembly for copies of all letters, correspondence,
and documents whatsoever, connected with or relating to the loan of $1,000,000—
" British Columbia Loan Act, 1887."
By Command.
Minister of Finance.
13th February, 1888.
Mr. Ward to the Minister of Finance.
The Bank of British Columbia,
Victoria, V. I., 26th April, 1887.
Sir,—With reference to the numerous interviews and negotiations which have recently
taken place between us in relation to the Provincial Government Loan of 1887, for $1,000,000,
I now beg to confirm the terms ultimately arrived at (after the many modifications and concessions insisted on by you on behalf of the Government), and now submit the offer based
thereon for your approval :—
Debentures to be issued for the full amount of loan, say £205,400, bearing interest at 4^
per cent, per annum from 1st July next.
The Bank to purchase the whole of the loan at the price of £98\ per cent, net, in London,
(the Bank bearing all expenses attendant on floating the loan in London), and the proceeds to
be available to the Government in Victoria on 1st July prox. The Bank to allow the Government interest at the rate of 4J per cent, on any surplus funds deposited at interest, for three
months certain, subject to ten days' notice of withdrawal, so long as they may desire it.
Subject to the following conditions the Bank agrees to above :—
The debentures to be prepared and issued in strict conformity with the provisions of the
Loan Act. Principal and interest to be made payable at the office of the Bank of British
Columbia in London, and interest payable half yearly, to commence 1st July prox. Said
debentures to be prepared, executed, and transmitted to the Bank in London, and duly
stamped according to English statutory requirements, at the Government's expense and risk.
The sinking fund investments to be realized under the Government's instructions, and invested in the present loan.
Allowance of interest on moneys deposited not to be understood, in any way, to extend to
the balance of the Government's current account with the Bank, in respect of which the usual
balance for current requirements to be maintained at credit. The trustees to be appointed
for the sinking fund service of the loan to be nominated by the Government, subject to the
Bank's acquiescence.
The proceeds of the loan to be available to the Government at Victoria on 1st July next,
provided that all debentures, in complete and satisfactory form, with coupons attached, shall
have been delivered to the Bank in London by that date. If not so received, then the Government shall not be entitled to draw for the said proceeds until after advice shall have been
received by the Bank at Victoria, that said debentures have been safely received by the Bank
in London. Proceeds to be drawn for by the Government on the Bank in London at the date
arranged, by draft at 60 d/st through the Bank in Victoria, at the current rate of exchange. 322 Correspondence—Loan of 1887 1888
All necessary confirmation and proper authority for carrying the above into effect, in
accordance with the provisions of Legislative enactment, to be given by order of the Lieutenant-Governor in Council, without delay ; and all such official information, statistics, and statements as may be required to facilitate the Bank's dealings with the loan to be furnished upon
application, and duly certified by the proper officers in due course.
In agreeing to the above terms, I would respectfully submit that they have been arrived
at only after a long and anxious correspondence with London, by cable and letter, and that
the Bank's Directors regard the offer as altogether an extreme one ; and I trust I may be permitted to congratulate the Government on the high character which the credit of theProvince
has attained, and the important saving of interest thereby accomplished.
In accepting the risk of placing the loan in London to advantage, at so extreme a price,
I venture to rely upon the co-operation and support of the Government, and to express a hope
that the efforts of the Bank to place the credit of the Province in the front rank may not fail
of cordial recognition.
I have, &c,
(Signed)        Wm. C.  Ward,
The Minister of Finance to Mr. Ward.
Treasury Department,
27th April, 1887.
Dear Sir,—I have the honour to acknowledge receipt of your letter of yesterday, containing final proposition re the $1,000,000 loan.
Your offer to negotiate the whole sum bearing 4| per cent, per annum, at 98J net, in
London, the Bank to bear all expenses, except the preparation of the debentures and the stamp
duty, according to English statutory requirements, is accepted. In accordance with this
arrangement, and the minor details as enumerated in your letter, the debentures will be prepared as soon as possible, and every facility afforded in order to place the Bank in a position to
make the amount available to the Government by the 1st July next.
I have, &c,
(Signed)        Jno. Robson,
Minister of Finance.
Received at Victoria, 25th April, 1887.
From London, to Lieutenant-Governor, B. C:
On what terms will Government give me whole new loans 1
(Signed)        Boscowitz,
Received at Victoria, 2nd May, 1887.
From London, to Lieutenant-Governor, B. C:
Can   I  get  whole  Government  Loan  at par, if not, what portion 1    Address answer,
Charlesworth, Lloyds, London.
(Signed)        Boscowitz.
Victoria, 7th May, 1887.
To Boscowitz, London :
What will you give for  whole Government Loan at four and a half interest net, in
London 1
(Signed)        Jno. Robson, 51 Vic. Correspondence—Loan of 1887. 323
Received at Victoria, 17th May, 1887.
From London, 17th May.
To John Robson :
Can get you one hundred and eighty-five thousand pounds net for whole loan, at four and
half, if accepted at once.
(Signed)       Boscowitz.
Victoria, 19th May, 1887.
(Signed)       Jno. Robson.
Received at Victoria, 19th May, 1887.
From London, 18th May.
To John Robson:
Mistake in yesterday cable.    Offer should be nine hundred thirty-one thousand dollars
net, four half interest.
(Signed)        Boscowitz.
To Boscowitz, London :
Cannot accept.    Matter closed.
Mr. Mason to the Minister of Finance.
British Columbia Land and Investment Agency, Limited,
Victoria, B. C, 20th May, 1887.
Sir,—I have the honour to inform you, on behalf of the above Company, that they are
prepared  to offer for the whole or a portion of the million dollars ($1,000,000) debentures
bearing interest at 5 per cent, at par, authorized to be issued under the " British Columbia
Loan Act, 1887."
I have, &c,
(Signed)       Henry S. Mason,
The Provincial Secretary to Mr. Mason.
Victoria, B. G, 20th May, 1887.
Sir,—In reply to your letter of this date, I have the honour to inform you that the
whole of the debentures to be issued under the authority of the " British Columbia Loan Act,
1887," have already been bargained for and disposed of.
I am, &c,
(Signed)       Jno. Robson,
Provincial Secretary.
Copy of a Report of a Committee of the Honourable the Executive Council, approved by His
Honour the Lieutenant-Governor on the 18th day of May, 1887.
On a memorandum from the Honourable the Minister of Finance, dated 16th day of
May, 1887, having reference to the provisions contained in Act passed during the last Session
of the Legislature, entitled "An Act to authorize the Loan of $1,000,000," the Minister
reports, and recommends— 324 Correspondence—Loan of 1887. 1888
That, having in view the present favourable condition of the London money market, it is
desirable to issue the full amount of the loan to bear interest at four and one-half (4J) per
cent, per annum, and that debentures be prepared accordingly for £205,400 sterling, the
equivalent in currency of $999,613, at the Dominion statutory value of a £ sterling.
That debentures be prepared and issued in accordance with the Form A set forth in the
Schedule of the Act aforesaid, for the sums following, viz. :—
200 debentures, numbered 1 to 200, for £500 each, aggregating £100,000 ;
1,054 debentures, numbered 201 to 1,254, for £100 each, aggregating £105,400 ;
the principal and interest to be payable at the office of the Bank of British  Columbia, London ; said  debentures  to be  signed  on  behalf of the Government of   British  Columbia by
Honourable John Robson, Minister of Finance, and to be entered in the Debenture Register
by J. McB. Smith, Auditor of the Province.
Interest coupons numbered from 1 to 60, in accordance with Form B in said Loan Act,
to be attached to each said debenture, and to be made payable at the office of the Bank of
British Columbia in London.
That the Minister, after much negotiation, having received an offer from the Bank of
British Columbia for the purchase of the whole amount of the loan, upon terms which recommend acceptance, as strengthening and consolidating the credit of the Province in the London
market, through their own bankers, advantageously surmounting the objection and difficulty
of placing only a portion of the loan as had been contemplated, recommends that the sale of
the whole of the above debentures be made accordingly to the said bank, upon the terms
following :—
The Bank to purchase the debentures at the rate of £98 10s. 0d., per centum, net, in
London, and to place proceeds at credit of the Government in London, accordingly, subject to
the drafts of the Government drawn at 60 days, on the 1st July proximo ; provided that the
said Debentures, duly stamped, according to English statutory requirements, shall have been
delivered to said Bank in London by that date ; and in case of non-delivery at that date, proceeds not to be available until such delivery in London shall have taken place. The cost of
said debentures and risk of delivery to be borne by the Government. The Bank to allow
interest at the rate of 4| per cent, per annum, on such surplus moneys as the Government
may place on deposit for three months certain, subject to ten days' notice of withdrawal, and
for so long as they may desire it.
The Committee advise approval.
T. Elwyn,
Deputy Clerk Executive Council.
VICTORIA: Printed by Richard Wolfenden, Government Printer,
at the Government Printing Office, James' Bay.


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