Debentures 1869

The Advocate
The Argus in the following article exposes a blunder on the part of the Government, by which the country will certainly lose several thousand pounds, and through which it is not improbable it will suffer still greater loss than can now be calculated:—”On the day of the departure of the November mail we gave currency to a rumour which has since proved to be true—that the debentures would not be transmitted by that mail, on account of the Act not providing for their issue before the 1st of the present month. We pointed out that, assuming the rumour to be correct, considerable delay would take place in the sale of the debentures, and the colony would be exposed to the risk of a rise in the value of money. The rumour, and our remarks upon it, were denounced by the apologists of the Ministry as false and unfounded, and it was stated, as if with authority, that tenders for the purchase of the debentures would be called for by advertisement in December, and the loan placed between the 15th and 20th of January (the present month). Our telegram of December 22, it will be seen, announces that the Victorian loan has been deferred on the reason of this postponement we can at present, only speculate. If a telegram were sent from here by the November mail informing the contracting banks of the defect in the act, it would have reached London about the 11th of December—a week after the departure of the mail which has just arrived.

Can it be that while the organs of the Ministry were strenuously denying that there was any flaw in the act, or that there would be any delay in placing the loan on the London market, a telegram was actually on its way toLondon to cause the loan to be postponed.

Or have the London agents of the banks taken the view which we have all along insisted they would take, viz., that they could not fix a day for receiving tenders until the debentures were in their hands? Whichever of these WAS the immediate cause of the delay, it is now certain that we have to run the risk of a rise in the money market for at least another two months. Already a rise of one per cent, in the bank rate of discount has occurred, and a still further rise is extremely probable. Every rise of one per cent, will make rather more than £20.000 difference to the Victorian Treasury. Had the act been drawn so as to sanction the immediate issue of the debentures, and had they been promptly forwarded, the cost of this rise in the money market might have been avoided.

As it is, the colony will pretty certainly have to pay £20,000, and may have to pay much more, for the bungling manner in which the Government have managed this business.”


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