Law to Under-Secretary of State

The Lords Commissoners of Her Majesty's Treasury have
had before them your letter of the 30 ulto, inclosing a
letter from the Crown Agents for the Colonies respecting
the mode of meeting the Dividend shortly falling due on the
British Columbia Debentures.

My Lords desire me to state that, under the circumstances
mentioned in Mr Sargeaunts letter of 21st ulto They consider
that there is practically no alternative to the course proposed
by the Secretary of State; and They accordingly request that
His Grace will direct the Crown Agents to retain the Funds now
in their hands to the credit of British Columbia, towards
meeting the Interest on the Debentures of that Colony falling
due in the course of next month; and to postpone all payments
to the Sinking Fund until fresh remittances have been received.

Their Lordships much regret that the representations already
made to the Colonial Government by the Secretary of State
should have proved so ineffectual.

His Grace will recollect that, in the Letter from this
Department of 18 May 1867, it was observed that "the
Governor should be directed to consider Liabilities in respect
of Loans to stand in the position of primary charges on the
Revenue, even before the Salaries of Public Officers."
Although this rule is, in effect, no other than that laid down
by the Colonial Acts No 5 of 1862 Sect 6; No 5 of 1863 Sect 6;
& No 7 of 1864 Sect 4, it is but too clear that it is not being
adhered to; and My Lords feel it necessary to add that its
non-observance implies serious culpability on the part of the
local Administration, and an indifference to the punctual
discharge of just liabilities which cannot fail to have a
most prejudicial effect as regards the future credit of this Colony.