Julyan to Rogers (Permanent Under-Secretary)

I have the honor to report, for the information of His
Grace the Duke of Newcastle, that the Crown Agents for the
Colonies, acting under the authority conveyed to them in your
letter of the 23rd of July last, offered to public competition
on the 13th Ultimo, the Debentures authorized to be issued
under the British Columbia Loan Act of 1863.

The tenders received at and above the minimum price (104)
amounted in the aggregate to £41,200, from which must be
deducted £6000 offered by two defaulters, leaving the Net
amount sold £35,200.

The average premium produced on this amount was £5.0.9 per cent.

The balance, amounting to £14,800, has also been disposed
of, on tenders subsequently received, at £4.0.6 1/2 premium,
making the average premium on the whole Loan £4.16.2 per Cent.

The securities of Colonies placed in such close proximity
to the Federal States of America, as British Columbia is,
are by no means in favor with the English public just now,
and the Crown Agents think themselves fortunate, under the
circumstances, in having been able to negotiate the whole of
the Loan so promptly and on such excellent terms.

The details of the whole proceedings will be found in
the enclosed Schedule.

It may not be inappropriate here to refer you to my letter
of the 20th December last, relative to the negotiation, in the Colony, of a previous Loan for a similar amount, and
to offer some few observations on the reply of Governor Douglas forwarded
to the Crown Agents in your letter of 13th May following.

In my letter referred to an opinion was expressed that
from 4 to 5 per cent more on that Loan would probably have
been realized, had a certain course, therein pointed out, been adopted.

This opinion has been verified very closely, seeing that
the actual difference is £4.16.2.

According to the statement which accompanies Governor
Douglas' Despatch the Net proceeds of the Loan disposed of
in the Colony was £49,162.3.1, while the Net proceeds of
that disposed of in this Country, as shown by the enclosed
Schedule is £52,153.19.0, being a difference in favor of the
latter of £2991.15.11.

In the former case the Government only received payment
for their Debentures at intervals extending from 20th August 1862 to 6th February 1863, whereas in the latter case the money was all available at once, and such portion of it as
is not already drawn against will yield Interest until required;
so that there will be a still further sum in favor of the last
negotiation to be eventually added to the above £2991.15.11.

The Governor draws a comparison in his Despatch between
the negotiation of the Vancouver Island Loan by the Crown
Agents and the re-sale in London of the first British Columbia
Loan by the Bank of British Columbia, from which he concludes
that the terms realized for the former were not much better
than those obtained by the Bank for the latter. At the time
that conclusion was come to the transaction, so far as the
Vancouver Loan was concerned, had only commenced: it is now
concluded; and the result is—as shown by the detailed
statement enclosed—the realization on the whole amount of
an average premium of about £5.8.0 per cent; while the Bank
have up to the present time, with their minimum of 103 1/2,
been unable to place the whole of the 1st Loan on the
market, and have still Debentures in hand representing the
comparatively large sum of £17,600.

There is one other point in the Governor's Despatch calling
for some observation.

It is stated in the last paragraph that

the Drafts of the Agents General could not have been disposed of in
the Colony at any better rates than the Drafts of the Bank of British Columbia. We generally obtain the best rates for our Drafts
from the American House of Wells, Fargo & Co, the great Express
Agents. A Draft upon the Agents General recently offered to
them for Sale on Vancouver Island account was questioned, and,
I believe, objected to, as they had no knowledge of such paper.
The Drafts of the Bank of British Columbia are readily taken
by them, and command as high rates as the drafts upon Her
Majesty's Paymaster General.

The Drafts referred to in my former letter, as likely to
command a better price than those of a newly established Bank,
were not the "Drafts of the Agents General" but the Drafts of
the British Columbia Government drawn on the Agents of the Crown
in London, any objection therefore to such Drafts can only
refer to the "Drawee" in a minor degree, and is in reality
throwing doubts on the solvency of the "Drawer", i.e. the
Government of British Columbia.

The Bank Drafts in question were it appears purchased from
the Government as follows:

By the Bank of British North America £22,594. 4.10

Wells, Fargo & Co 21.905.15. 2

Colonial Treasurer 500. 0. 0

Other persons  5,000. 0. 0

£50,000. 0. 0

To the Bank of British North America and to the Bank of
British Columbia—indeed to all Banks having London Agencies—the
Crown Agents are well known, and they have also had
business transactions with Messrs Well, Fargo & Co. The latter
could therefore have easily satisfied themselves as to whom
the Crown Agents were, by enquiry at either of the local Banks.

It would appear however that they have now got over
their scruples both as regards the "Drawer" and the "Drawee",
as out of the £30,000 of Government Drafts already accepted
against the Loan just disposed of, no less than £9500 are
in favor of Wells, Fargo & Co, and the remainder appear to
have been taken by the Local Banks, and by other persons who
were purchasers of the Bank Bills received by the Colony in
payment for their first Loan.