No. 1

I have the honor to transmit to you the copy of a Letter from the
Crown Agents stating the liabilities of the Colony of British Columbia
in respect of the Interest and Sinking Fund due on account of its
Debentures and enquiring from what funds these charges should be
defrayed.

I also annex a copy of the reply which I caused to be returned to
that letter, authorizing them to pay out of other funds the Interest due
on these Debentures, but instructing them to postpone for the present,
payments on account of the Sinking Funds of these Loans.

I have to convey to you my instructions that you forthwith remit to
this Country the full amount thus overpaid by the Agents, or remaining
due to the Sinking Fund, with such further amounts as will enable the
Crown Agents for the future to meet punctually the engagements of the
Colony under your Government.

I need hardly repeat the expression of my extreme dissatisfaction
at the mode of management which has led to these results. It is
necessary that the local Government should understand that it is
discreditable in the highest degree to any Country to neglect to remit
punctually the interest due to its public Creditors. No expectation
must be entertained that any default will be made good from other funds
or that this Department would consent to let the Crown Agents negotiate
further loans for any Colony if it should evince a persistent disregard
for punctuality in performing this class of obligations. Your proper
course for the future will be to remit the requisite funds for Interest
and Sinking Fund so that they may arrive some moderate time before they
are due.