Colonial Despatches

I have had the honor to receive Your Lordship's Despatch No 19, of the 5th September referring to the Loan Ordinance, 1870, and forwarding a Letter from Mr Julyan in which he offers various observations on my proposals for the financial arrangement of some local debt.

2. I have read MrJulyan's Julyan's remarks with care but they fail to convince me that the plan which I proposed was not the better to be followed in the existing circumstances of the Colony. I do not follow him into arguments which may be adduced to shew the abstract advantages of a large Loan over a plurality of smaller liabilities. I only consider what is likely speedily and practically to relieve the present difficulties of the Colony. And I see no reason to doubt that what I proposed would have done so more rapidly and moreeffectually effectually than Mr Julyan's plan and at least at no greater eventual cost. I enclose a Memorandum from Mr Ker the Auditor General, and if it were not undesirable to occupy Your Lordship's time further upon this subject I could point out where I think Mr Julyan's judgment upon the advantages of the two schemes is erroneous.

3. But in my former Despatch No 71, of the 17th May, Paragraph 8, I intimated that it would not be any advantage to the Colony to consolidate the floating debt in the event of Union withCanada Canada being soon accomplished, and that I did not propose to take any action until I should have received the report of the Delegates then on their way to Ottawa. The terms which they have been able to agree upon with the Government of the Dominion are so well received by the Community and are likely from all appearances to be so favorably viewed by the Legislature at their next Session that Union is almost certain within the next Year. In this case the whole public debt will be assumed by the Dominion, and the Canadian Government can makewhat what readjustment they think proper. It is not now desirable to disturb the existing arrangements, and I no longer propose to take any steps to obtain a Loan.

4. It is proper that I should remark in conclusion upon the observations in the closing Paragraph of Mr Julyan's Report which were likely and probably were intended to convey the impression that the Account of this Colony was in arrear with his Office. The last account transmitted to me, to 31st July, shewed a Credit of Thirteen hundred and fiftyseven seven pounds, Fifteen shillings and seven-pence (£1357.15.7). It was not accurate to include October Dividends in liabilities stated to be due on the 26th August. I find that up to the 1st October Fourteen thousand, five hundred pounds (£14,500.0.0), had been remitted, of which only Seven thousand, five hundred pounds (£7,500.0.0), have been accounted for in the Statements received from the Crown Agents; and further remittances are on their way. The actual indebtedness of the Colony has not increased; and the balance against the Colony on Current Bank Accountis is very materially reduced.