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colonies. But we have to examine yet further and inquire what this loan capital has been used for. We find (Appendix B.) that 88 per cent., or nearly nine-tenths has been used for railways and other remunerative works; so that, for purposes of just comparison to the National Debt of the United Kingdom, must be added the capital expended on railways, and on some other public works. I have, indeed, sometimes thought that it would have been well if the colonial governments had earmarked some of their loans as colonial government railway stock," so that it should be quite clear to the investor that colonial stocks were not in the same financial category as the national debt of older countries. It is said that already the selling value of the government railways in the colonies exceeds their total public indebtedness: certain it is that the net earnings of the railways alone form a considerable revenue which in course of time may more than pay the total loan charges. It may here be mentioned that it is permitted to invest trust funds in certain of the municipal stock of the United Kingdom, and that the chief corporations with a population of 5,700,000, and a rateable value of 27 millions, have incurred a total indebtedness of 72 millions, of which, perhaps, 40 millions has been expended upon gas and water works and markets, for all of which good revenues are derived.

It must be remembered that our Colonies are communities of our fellow-countrymen, animated by the same traditions, history and religion, and upholding the same institutions and principles. The capital they have borrowed has been expended in promoting their growth and prosperity, more than nine-tenths having been directly expended upon reproductive public work and immigration. These colonies are possessed of very great natural resources in climate, mineral, agricultural and pastoral wealth, and are rapidly opening up rich harvests from the forest, the sea, the prairie and the mine. Such development is only to be stimulated by the application of capital, and the provision of railways, waterways, roads, bridges, harbours, telegraphs, and so forth. Even the great Canadian Dominion received much initial impetus by the loans and guarantees of the Imperial Government, for the purposes of constructing the great International Railway, and inaugurating the gigantic canal system, which has already done so much for Canada.

A word might be said as to some of the assets these colonies possess. In regard to land, the Governments hold in hand not less then 2,000 millions of acres as yet unalienated, some of which already have a selling value approaching £1 per acre; the deposits in the local banks have increased, in round numbers, to upwards of 100 millions during the last 15 years; there are 15 million head of cattle and horses, and 120 million of sheep on lands that were absolutely given up to wild animals before.

Of the colonial borrowings at the present moment, 40 million (or) carry interest at or above 4 per cent.; 160 millions (or ) at

from 4 to 4 per cent.; and 36 millions (or ) below 4 per cent. But the average interest paid has fallen steadily in the last 15 years from 6 to 4 per cent. It is also noteworthy that while the prices of all 4 per cent. colonial stocks are above par-in some cases as high as 116-the prices of the 4 per cent., 5 per cent., and even 5 per cent. stocks of the great European states do not reach par, except in the one case of the French 4 per cent. Rentes, which stand at 104.

Perhaps enough has now been said to show that both in public estimation and also in actual comparison with other stocks, in which trustees are already empowered to invest-Colonial Government Securities do offer very high class opportunities for safe investment.

I may pass, then, to the query, why is it that Colonial Securities do not as yet figure permanently on the official list? Those who have followed the subject are very well aware that while there has been much endeavour and wish to place these securities in the position due to them, two obstacles have hitherto blocked the way. The one obstacle has been the absence of means for holders to enforce claims for interest or repayment by means of the English courts. Even in the Colonial Stocks Act of 1877, proceedings are only authorized against the registrar of the stock, who becomes responsible, together with any moneys in the United Kingdom belonging to that particular government. The second obstacle was the plea that there is no limit to the issue of colonial loans: practically there is of course no Treasury or Local Government Board to supervise and restrict, as there is in the case of the local loans of the mother country. Both these obstacles have been put forward by the highest authorities, both were recognized as most serious in the very practical discussion which took place on the subject at the Colonial Conference in 1887.

The first of these obstacles is absolutely removed, because all the Colonies have expressed ready willingness to take any steps necessary to protect the stockholders' interests. This I was able to announce in the House of Commons, in June 1888, in the words, "Every Colonial Government has officially expressed its willingness to take such measures as will render its agent easily sueable in England, in respect of the interest or repayment of loans." But it appears to take years before the Government, or indeed the public, can properly grasp even the elements of such a situation. However, now the Departmental Committee has expressed its full, final, and complete approval of the means suggested for removing this first obstacle.

The second obstacle-the practical objection in regard to there being no limit of issue-has also been long ago taken up. It was shown, indeed, that such an objection existed in regard to all other stocks, while even conversion schemes nearer home have been known to reduce by one-sixth the incomes derived from Trust Funds. Future falls in value, due to new issues, and even the ultimate solvency of the colony, are elements which may differ in degree but not in kind from what may occur with "Consols" themselves. The trustee, it

A

must be remembered, is not to be forced to invest in these stocks, but merely empowered to do so if he sees fit. A practical remedy was soon seen to exist in some automatic rule, limiting such investments to such stocks as maintained a certain rank on the London Stock Exchange. The independent judgment of that arbiter of world-wide values, has to be closely regarded by all would-be borrowers. proposal was formulated and met with much approval, to allow investment in the inscribed stock of any colony where 4 per cent. Stock stood at or above par. I have already given in detail the somewhat similar but more detailed proposal, which was inserted in the Liability of Trustees' Bill, by Lord Herschell. And now the Departmental Committee reports decisively in favour of an automatic rule, that such investments may only be made in such colonial securities as do not, at purchase price, yield more than 1 per cent. per annum in dividend over the dividend yielded by Consols of similar amount at the time of investment. This new proposal has the great advantage of being automatic, simple, and general. It has the necessary advantage over older rules, in that the Court, or the Judge, is not entrusted with the invidious task of selecting particular stocks or colonies. Any such public selection of some one, of course, involved public condemnation of some other.

But my object in venturing to bring these various facts and arguments before this Parliament of finance is merely to induce a discussion among responsible and well qualified experts, a discussion which may be fraught with the most valuable consequences both to the mother-country and the colonies. We have in this country a great and increasing amount of capital under the control of trustees; the old avenues for the investment of such moneys are either being closed, or yielding less and less interest; that new openings are absolutely needed is not only obvious, but has been acknowledged to be the case by the action of the Judges as well as of Parliament. What I look for is that the best interests of the great and increasing class of beneficiaries under trust deeds, many of them in the comparatively helpless status of women or minors, may be served by opening out for trustees better channels of profitable and safe investment. Let me also add that the prosperity of our wide colonial empire will be assisted, to our own very great advantage, by placing the Government Securities of our colonies in the same rank as those of the mother-country. It is a great and necessary step in imperial policy, pointing toward the financial unity of the empire, and consolidating and unifying the credit of all portions of our empire. For all these reasons I, for one, earnestly hope that those interested in trusts, whether as beneficiaries or administrators; that those who have at heart the welfare of the mother-country; and that those who strive to promote prosperity and growth in our great empire, will, one and all, unite in a common effort to make possible and usual the investment of trust funds in Colonial Government Securities.

APPENDIX B.

PURPOSES FOR WHICH COLONIAL GOVERNMENT LOANS HAVE BEEN

EXPENDED.

Amount up to 1885 (in thousands) expended upon-

COLONIES.

TOTAL.

NOTE. The above amounts do not give the actual total expenditure on these purposes, because large and varying amounts are spent, in addition, out of current revenue.