UK, Treasury Memorandum (13 December 1862)

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Date: 1862-12-13
By: UK (Government)
Citation: Treasury Memorandum (13 December 1862) 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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IT is proposed,—

1. That Bills shall be immediately submitted to the Legislatures of Canada, Nova Scotia, and New Brunswick, authorising the respective Governments to borrow 3,000,000 l., under the guarantee of the British Government, in the following proportions:—5-twelfths, Canada; 3 1/2 twelfths, Nova Scotia; 3 1/2 twelfths, New Brunswick.

2. But no such loan to be contracted on behalf of any one Colony until corresponding powers have been given to the Governments of the other two Colonies concerned, nor unless the Imperial Government shall guarantee payment of interest on such loan until repaid.

3. The money to be applied to the completion of a Railway connecting Halifax with Quebec, on a line to be approved by the Imperial Government.

4. The interest to be a first-charge on the Consolidated Revenue Funds of the different Provinces, after the Civil List and the interest of existing debts, and as regards Canada after the rest of the six charges enumerated in the 5 & 6 Vict. c. 118 and 3 & 4 Vict. c. 35 (Act of Union).

5. The Debentures to be in series as follows, viz.

£. 250,000 to be payable 10 years after contracting loan.
£. 500,000       “          20 years           “          “
£. 1,000,000    “          30 years           “          “
£. 1,250,000    “          40 years           “          “

In the event of these debentures, or any of them, not being redeemed by the Colonies at the period when they fall due, the amount unpaid shall become a charge on their respective revenues, next after the loan, until paid. The principal to be repaid as follows:

First decade (say 1863 to 1872 inclusive), 250,000 redemption of the first series, at or before the close of the first decade from the contracting of the loan.

Second decade (say 1873 to 1882 inclusive), a sinking fund of 40,000 l. to be remitted annually, being an amount adequate, if invested at five per cent. compound interest, to provide 500,000 l. at the end of the decade; the sum to be remitted annually to be invested, in the names of trustees, in Colonial securities of any of the three Provinces prior to or forming part of the loan now to be raised, or in such other Colonial securities as Her Majesty’s Government shall direct and the then Colonial Governments approve.

Third decade (say 1883 to 1892 inclusive), a sinking fund of 80,000 l. to be remitted annually, being an amount adequate, if invested at five per cent. compound interest, to provide 1,000,000 l. at the end of the decade; the amount when remitted to be invested as in the case of the sinking fund for the preceding decade.

Fourth decade (say 1893 to 1902 inclusive), a sinking fund of 100,000 l. to be remitted annually, being an amount adequate, if invested at five per cent. compound interest, to provide 1,250,000 l., being the balance of the loan at the end of the decade. This amount, when remitted, to be invested as in the preceding decade.

Should the sinking fund of any decade produce a surplus, it will go to the credit of the next decade; and in the last decade the sinking fund will be remitted or reduced accordingly.

It is of course understood that the assent of the Treasury to these arrangements presupposes adequate proof of the sufficiency of the Colonial revenues to meet the charges intended to be imposed upon them.

6. The construction of the Railway to be conducted by five Commissioners, two to be appointed by Canada, one by Nova Scotia, and one by New Brunswick; these four to choose the remaining Commissioner.

7. The preliminary surveys to be effected, at the expense of the (Colonies, by three engineers and other officers nominated, two by the Commissioners, and one by the Home Government.

8. Fitting provision to be made for carriage of troops, &c.

9. Parliament not to be asked for this guarantee until the line and surveys shall have been submitted to and approved of by Her Majesty’s Government, and until it shall have been shown, to the satisfaction of Her Majesty’s Government, that the line can. be constructed without further application for an Imperial guarantee.

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