No. 150

With reference to my despatch of this date communicating Her
Majesty's approval of "The British Columbia Loan Act, 1862," I wish to
observe that by the arrangement which you have made for parting with the
debentures, for the creation of which that Act provides, privately and
at par to the Bank of British Columbia, not only has the Bank
practically become the Agency for the Loan but also the Colony has lost
the premiums which would probably have been offered on their public sale
in London by the Agents General for Crown Colonies.

By entrusting the Agents General with the disposal of the
debentures you might also have met any urgent demand for money by Bills
upon the Agents (which would have been equally negotiable with those of the Bank), at the same time authorizing them to reimburse themselves
out of the proceeds of the sale.

You would so have avoided the heavy interest of 12 per cent which is
now payable on advances made by the Bank until the debentures shall be
actually in its possession.

Although therefore, judging by the information before me, I cannot
consider the arrangement which you have made as a profitable one for the
Colony, yet the steps which have been taken for its fulfilment have left
me no alternative but to sanction it, and the Agents General accordingly
have been instructed to prepare the debentures and to place themselves
in communication with the Bank with a view to their delivery as soon as
possible.