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Date: 1863-01-17
By: Duke of Newcastle
Citation: Despatch from the Duke of Newcastle to Viscount Monck (17 January 1863) in UK, HC, Return to an Address of the Honourable The House of Commons, dated 30 June 1864; for Copy of Correspondence between any of the North American Provinces and the Imperial Government, relating to their Application for Assistance in raising a Loan for an International Railway (1864).
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Downing-street, 17 January 1863.

My Lord,

You will no doubt have received from Messrs. Sicotte and Howland, the copy of a Memorandum which they have addressed to me respecting the proposed loan for the construction of the Intercolonial Railway.

My first impression derived from the language end general character of that document, was that it amounted to a final though indirect rejection on the part of Canada, of the terms offered by Her Majesty’s Government, and thus required no present notice from me. As, however, the Act of the Canadian delegates is not necessary to be taken as that of the Government, and as, therefore, the question will probably be further agitated in the Colony, I have thought it best to inform you generally of the circumstances under which this Memorandum was sent to me.

The whole question of the loan was very fully canvassed at this office in repeated interviews between the four delegates and myself; and I was certainly under the impression that, with a single exception, the very numerous objections interposed by Mr. Sicotte had been successively removed by explanation or concession: the exception related to the mode of securing repayment of the principal sum borrowed, but I collected that, even on this head, the substantial objection to a sinking fund was admitted to have been removed by providing that the payments to that fund might be employed in extinguishing the debt or invest it in other Colonial securities.

At this period of the negotiation the Canadian delegates left London for Paris, where, I presume, they received a copy of the memorandum embodying the terns, as altered after discussion, which Her Majesty’s Government were prepared to sanction, and which the delegates of Nova Scotia and New Brunswick have signified their readiness to accept. On their return to England, Messrs.: Sicotte and Howland sought no further communication with, or explanation from, this department, but on the day on which they embarked for Canada, left this statement, repudiating the terms which had been accepted by their colleagues, and which I had been led to suppose contained little that was unacceptable to themselves.

Some of the grounds alleged for that repudiation would, I think, hardly have been advanced had the objectors thought it advisable to ascertain, by further conference, the intentions of Her Majesty’s Government. I will myself only observe upon them, first, that the repudiation by Messrs. Sicotte and Howland of any fixed arrangement for securing payment of the principal borrowed does not appear wholly consistent with the sixth article of their own counter-proposal; and next, that the British Treasury, in proposing 4% as the rate of interest, can hardly be supposed to insist on that rate being offered, if it should appear that the money could be obtained at par on more advantageous terms.

I shall, of course, wish to be informed whether the views set forth in the delegates’ paper are adopted by the Canadian Government, and whether I am to understand that the offer of Her Majesty’s Government is finally rejected.

I have, &c.

(signed)           Newcastle.