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RETURN To an Order of the House for a Return showing the instructions under which the Conversion of the… British Columbia. Legislative Assembly 1896

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 59 Vict. Conversion of Loans of 1877 and 1887. 587
RETURN
To an Order of the House for a Return showing the instructions under which the
Conversion of the Loans of 1877 and 1887 is being proceeded with, and in what
manner the rate of conversion is arrived at.
J. H. TURNER,
Minister of Finance.
Treasury,
Victoria, 11th February, 1896.
Treasury, Victoria, 1st May, 1892.
Gentlemen,—I have the honour to acknowledge receipt of your letter of the 12th ult., re
Conversion of the Debenture Debt of the Province. Adverting to your former letter dated
6th January on the same subject, in which you appear to entertain some doubt as to the
intent of section 3 of the "Loan Act, 1891." I do not think there can be any technical
objection to the inference that the Act is being complied with by a direct issue of Inscribed
Stock in exchange for the Debentures of 1877 and 1887, without first disposing of the Inscribed
Stock for Cash, and passing the proceeds to the credit of the Government to be then used for
the purchase and redemption of Debentures.
There is in the clause a discretionary power implied, by which the Lieutenant-Governor
in Council may "authorize and direct."
The requisite Order in Council complying with sub-section (2) of section 7 of the "Inscribed
Stock Act, 1891," has been approved, authorising Messrs. Glyn, Mills, Currie & Co., to negotiate and complete the conversion on the best terms obtainable, but not to exceed in the
maximum :—
£155 of Inscribed Stock for £100 of Debentures, 1877.
£135 n ,i £100 „ 1887.
It is however, not expected that this extreme limit will be required. Of course a good
deal will depend upon the state of the money market at the date on which it is decided to
make the transfer, but at most, I do not anticipate that the discretionary power given in the
Order in Council need be fully exercised to consummate the scheme.
With regard to this, I would call your attention to the fact, that at the maximum herein
quoted, the total amount of Inscribed Stock required will exceed the £700,000 authorised by
the Act, viz.:—
Issue of Inscribed Stock for Cash £200,000
Proposed redemption required :—
£150,000 Debentures 1877 @ £155    232,500
£205,400 h 1887® £135    277,290
£709,790
It is therefore desirable, if possible, to keep within the limits of the Act, otherwise it may
require further Statutory enactment to legalize the inscription of any sum in excess thereof. Conversion of Loans of 1877 and 1887.
1896
The cost of advertising and printing may be limited to £500. Brokerage may be allowed
at \ per cent., and a commission of \ per cent, on the nominal value of Debentures redeemed.
1 may add that in this transaction it will be necessary for the information of the Government that a statement should be formulated shewing clearly the Premium paid on each
classification of Debenture redeemed, as well as the discount on the equivalent issue of
Inscribed Stock.
For instance, if £150 of Inscribed Stock be issued for the redemption of £100 Debenture
of 1877, the statement should show thus :—
Redemption Loan  1877, Inscribed Stock  1891.
Bonds Redeemed.
Premium.
Net Value.
Issue of Stock.
Discount.
Net Value.
No.        £100
£21
£120
£150 @ 86
£29
£121
Vouchers for all disbursements in connection with printing, advertising, etc., as well as
for brokerage and commission, are also required to be furnished.
I have, etc.,
(Signed)       J. H. Turner,
Messrs. Woolston & Beeton, Minister of Finance.
London.
Victoria, 6th May, 1892.
Gentlemen,—In confirmation of my letter of the 1st inst., I have the honour herewith
to enclose a copy of an Order in Council approved on the 4th inst., authorising Messrs. Glyn,
Mills, Currie & Co., to effect the Conversion of Debentures of 1877 and 1887 into Inscribed
Stock.
You will observe that the power granted in the Order in Council to Messrs. G., M., C &
Co., is discretionary, and subject to such arrangement as may frorn time to tinre be made by
you acting as Government Brokers, but not to exceed the limits therein quoted. The rate at
the time appointed for conversion is to be cabled to the Government here for ratification.
A communication has this day been forwarded to Messrs. Glyn, Mills, Currie & Co., a
copy of which is herewith enclosed.
I have, etc.,
(Signed)        J. H. Turner,
Messrs. Woolston & Beeton, Minister of Finance.
London.
Victoria, 6th May, 1892.
Gentlemen,—I have the honour herewith to enclose a copy of an Order in Council,
approved on the 4th inst., which conveys to you the authority required under the " Inscribed
Stock Act, 1891," for effecting the conversion of Debentures into Stock.
Although the Order in Council prescribes that the rates for the transfer shall not exceed
the following, namely : £155 of Inscribed Stock for £100 Debentures of 1887 ; £135 Inscribed Stock for £100 Debentures of 1887. Yet it is not expected that this extreme limit
will be required. 59 Vict. Conversion of Loans of 1877 and 1887. 589
The exercise of the authority granted in the Order in Council is discretionary, and subject to such arrangement as may from time to time be made by Messrs. Woolston & Beeton in
effecting the redemption.
You will, therefore, of course, confer with them in respect to the rate which may be
deemed most advisable to offer for the conversion, which rate at the time appointed for the
conversion, is, in accordance with arrangement made in former correspondence, to be cabled to
the Government here for ratification.
I have, etc.,
(Signed)        J. H. Turner,
Messrs. Glyn, Mills, Currie & Co., Minister of Finance.
Bankers,
London.
Treasury, 30th May, 1892.
Gentlemen,—I have the honour to acknowledge receipt of your letter of the 11th inst.
The Order in Council referred to in your cable message of the 11th was mailed to you on
the 6th inst.
On the 27th and 28th inst. your cablegrams were received as follows :
27th—" We propose 145 and 130 if you agree."
28th—"If it is possible telegraph immediately rate ratification."
In reply to these I cabled you on the 28th :
"Terms accepted as per your telegram 27th May."
I have, &c,
(Signed)       J. H. Turner,
Messrs.  Woolston <fc Beeton, Minister of Finance.
6a Austin Friars, London.
6a Austin Friars, London, 22nd October, 1892.
Dear Sir,—We wrote you last on 23rd ultimo, since when we have none of your favours
to acknowledge.
The additions to the Conversion Scheme have been insignificant of late, and with the
concurrence of Messrs. Glyn, Mills, Currie & Co., and the market, we propose issuing an
advertisement in December reducing the offer after 1st February to £140 stock in the case of
the 6% bonds, and £125 stock in the case of the ~\°/0 bonds.
We shall be obliged by your intimating your approval of this course at your early convenience.
The market in the new stock continues steady at 89, notwithstanding the growing dear-
ness of money, but for which the price would be considerably higher.
We have, &c,
(Signed)       Woolston & Beeton.
The Hon. Mr. J. II. Turner,
Minister Finance and Agriculture,
Victoria, B.C. 590 Convebsion of Loans OF 1877 AND 1887. 1896
Victoria, 14th November, 1892.
Dear Sirs, —-I have received your letter of 22nd ulc, in which you inform me that the
additions to the conversion scheme have been insignificant of late, and that, with the concurrence of Glyn, Mills, Currie & Co., you propose to issue an advertisement in December reducing the offer after February 1st to £l25 in the case of the -\°/a bonds, and £140 in the case
of the 6% bonds.
I am sorry to learn that conversion is not progressing so fast as we should like. Would
it not, therefore, be better, with a view to inducing the present holders of the old bonds to
convert, to keep to the first rate offered, viz., £130 and £145 respectively for the 4J% and 6%
bonds, instead of making a reduction?
No doubt you are in the best position to judge what effect this would have, and should
you, on carefully considering the matter, decide that in your opinion the reduction would not
tend to retard conversion, you have full authority to make it. Always keeping in mind that
the Government is very desirious to have this important business go on as quickly as possible.
As the Trustees of the Sinking Funds have been instructed to invest in B. C. threes at
not over 88, and the price of these securities is now 89 or over, a further Order in Council
has been passed directing the Trustees to invest in future in the 3% under advice from you,
at the market value at the time.    A copy of this Order will be sent you.
I have, &c,
(Signed)        J. H. Turner,
Messrs. Woolston & Beeton, Finance Minister.
6a Aitstin Friars, Bondon.
VICTORIA, B. C. :
Printed by Richakd Wolfkkden, Printer to the Queen' Most Excellent Majesty.
1896.

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