The Sun.
London, England, 1840-06-01 00:00:00

PORTUGUESE BONDS.

Old Swan, May 27,1840.
leave to offer to your Lordship,
My Loon —I be;;
on my own part, its wall as on that of the other holders
our most sincere thanks for
of Portuguese Bonds,
transmitting through her Majesty's Minister at Lisbon,
to the Finance Minister of her Most Faithful Majesty,
my letter of the 20th of March last. I entertain no
doubt that the effect which that letter has produced, is
to be attribuni, in a great measure, to your Lordship's
prompt interposition in our favour ; and under the hope
that you will be pleased to continue your exertions in
our behalf, I now take the liberty to request that you
wI forward the enclosed communication, addressed to
M. 'Ferraz, through Lord Howard de Walden, accom-
pao•tea by such further instructions as your Lordship
nu* deem expedient upon this subject.
11 has afforded me the greatest satisfaction to leun
that the Marquis do Saldanha has arrived in London
charged with a special mission for the amicable arrange-
ment of certain claims which your Lordship has urged
upon the particular attention of his Goverment. As it
is possible that in the negotiation for the final settle-
ment of those claims, a question may arise as to the
sources from which the funds necessary for that purpose
are to he derived, I feel it incumbent upon me to ap-
prize your Lordship that the capital represented by
the Portuguese Bonds, of which I am a large holder,
as well as the interest and sinking fund thereon, are
strictly and sacredly secured " on all the revenues of
Portugal, the Azores, and all other dominions of her
Most Faithful Majesty."
I submit, therefore, with the greatest deference to
your Lordship, that no negotiation should be entered
into for the payment out of any portion of those reve-
nues of those claims in question, without reference being
made to the prior rights of the holders of the said
Bonds. It would not be just that—at all events with-
out, their consent—the security which has been pledged
to them should be in any respect impaired, or that any
new claims should be discharged, while so large ea ar-
rear of dividends (amounting at least to 1,500,0001.)
should remain unpaid.
Your Lordship will, however, perceive from my en-
closed letter to M. Ferraz, that I am disposed to o'ffer
every possible accommodation to the Portuguese Gove.m-
ment which may assist them in effectually improving
their financial resources, and I am disposed to believe
that my fellow bondholders are actuated with respect to
this matter by the same friendly sentiments which I
myself feel towards the Portuguese people.
If, therefore, the Marquis de Saldanha's mission can,
in your Lordship's opinion, be in any manner facilitated
by the co-operation of the bondholders, I think I may
take upon me to say that that co-operation will not be
withheld, provided it be required upon such conditions
as your Lordship may deem equitable to all parties;
those conditions to be embodied in a treaty between the'
two countries.

Your Lordship would, I am confident, think it most
unjust that the security already pledged to the bond-
holders should be in the slightest degree infringed upon
by any arrangement which should demand a sacrifice
from thew, unless they were made parties to that pro-
ceeding, and presented with some advantage equivalent
to the loss which they might otherwise sustain.
Again thanking 3 our Lordship for the benefits which
your intervention has already conferred upon a very
numerous class of foreign creditors of Portugal, myself
amongst the number,
I have the honour to remain, with the greatest re-
spect, your Lordship's most obedient humble servant,
RICHARD THORNTON.
To the Right Hon. Lord Viscount Palmerston, &c.

London, May 27,1840.
Ste,—l have the honour to acknowledge the receipt,
through the department of her Majesty's Principal
Secretary of State for Foreign Affairs, of your Excel-
leney's despatch of the 25th ultimo, in reply to my letter
of tle 26th March last, relative to that part of your
Financial Report to the late Cortes which chiefly con-
nersed the British holders of Portuguese Bonds. Your
Fesexillency's letter of the 11th instant, addressed to me
through her Most Faithful Majesty's Finance Agency
in Landon, has also reached my hands, directing my
attention to the Royal Decree of the 9th ins-., which has
been officially announced to the bondholders through
our journals.
I forbear for the present from offering any remarks
upon your Excellency's despatch of the 25th ultimo.
You would probably have observed from the market
• prices of the Portuguese securities, that the general im-
pression which it produced in this country was by no
means of a favourable character. For the kind and
flittering terms in which you have been pl used to speak
in your letter of the 11th inst., of my personal services
to your nation, I most sincerely thank you. I can
very truly assure your Excellency that I am still, as I
always have been, most anxious to promote, by all the
means in ray power, the best interests of Portugsl. It
was the ardent desire of preserving and strengthening
the connexion that has so long subsisted between
;her
sons and Englishmen, to see your liberties re-established
upon a score basis, and your beloved Sovereign re-
stored to the possession of her undoubted rights, which
prompted me and many others of my countrymen to
furnish those pecuniary subsidies which unhappily form
the subject of the present correspondence.
With respect to her Most Faithful Majesty's Decree
of the 9th instant, I have not failed to perceive that, iF-
su !d as it has been between the periods of the dissolu-
tion of the late Cortes and the commencement of the
LOW Session, it manifests a del•iation from the
r soul rule, with a view, I should hope, of
repairing to sonic extent the deep disappointmeet
caused to the external creditors of Portugal by your late
Financial Report. So far I am happy to find that tletre-
monstrances against that Report, eonveyed in my ire
of the :26th March, have not been altogether ineffectual.
It is not my intention to offer any opposition to the ar-
ra ;gement proposed in the decree for the effective pay-
ment of half a dividend, which payment is to commence
on the Ist December and lit January next ; neither

shall I object to the conversion of Coupons belonging to
the present half year into debentures similar to those
previously issued ; nor to the renewal of all the previous
debentures, which according to the original plan ought
to be withdrawn from circulation. I assume of course
that the interest on all these debentures shall remain un-
varied and shall be punctually paid when due, leaving for
the present unsettled the conditions upon which the
said debentures are eventually to be withdrawn from
circulation. I must, however, decidedly protest against
the conversion into any form of " Deferred Debt" the
remaining half of the dividend which ought to be paid
in December and January next, and the other Coupons
now in arrear, for which no debentures are offered.
With respect to the said half dividend and arrears of
Coupons, I am prepared to receive Local Five per Cent.
Stock at 80 per cent., or for 801. of Coupons 1001. stock,
and nothing short of this arrangement will be accepted
by me, or, I am confident, by any portion of my fellow-
bondholders. Your Excellency will be pleased clearly
to understand, that it is only upon the condition that
the half dividend and arrears of Coupons in question be
provided for in the manner here pointed out. I am wil-
ling to comply with the other arrangements set forth in
the Decree, and in thus foregoing my just right to instant
payment of the whole of my overdue dividend, I am
sure your Excellency will see that I am making a very
liberal concession to her Most Faithful Majesty's Go-
vernment. This concession, however, lam disposed to
yield, actuated by my friendly feelings towards her
Most Faithful Majesty and her loyal and generous people,
under the hope that it may enable them to improve
their resource to the required extent, for the re-
sumption, at no remote period, of the regular
payment of the dividends in full. It is in-
cumbent upon me further to apprize your Ex-
cellency that while I thus exhibit every desire to meet
the wishes of your Government, I do not mean to
waive, or in any degree to lessen, the covenant contained
in the Bonds, which engages " that the Capital repre-
sented by those Bonds, Interest thereon, and the
Sinking fund thereof, are strictly charged and secured
on all the Revenues of Portugal, the Azores, and all
other dominions of her Most Faithful Majesty." I
must also take the liberty to call your Excellency's at-
tention to "the Report of the Commissioners appointed
by the Crown to inquire into the External Debt, and
the means to be devised for satisfying the same," and
of the emphatic terms in which the said debt is recog-
nized as " most sacred." If I do not now cite the still
stronger language used in favour of the bondholders
in that judicious and admirable document, I neverthe-
-1 reserve my right to appeal to its recommendations
whenever I may deem such an appeal expedient. The
Report I advert to is dated Lisbon, May 10, 1839.
I beg leave to recapitulate the terms to which I am
willing to accede, in order that there should be no
misunderstanding on the subject ; but your Excellency
will be pleased to understand (although several of my
brother bondholders agree with me) that I speak only
in my individual capacity as a large bondholder. ( The
amount of Portuguese Bonds I hold is 750,0001. and I
mention this as an incontrovertible proof of the great
confidence 1 have reposed in the honor and good faith
of the Portuguese nation,) But, I am of opinion that
the other bondholders will interpose no difficulty as to
the arrangements I have mentioned, at least, I shall en-
deavour to induce them to coincide with me iu the
views I have now explained, and the terms which I here

repeat.
Ist. 1 will accept the effective payment o: half the
half-yearly dividends, or 50 per cent., to be continued
and progressively increased, as the revenues and means
of the Portuguese nation increase or may admit of, the
said payment to commence and be made the Ist De-
cember and ist January next.
2d. I will accept Internal Five per Cent. Stock, at
80 per cent. (or 1001. Stock for 801. Coupons), for the
other half of that dividend, and also for the unconverted
overdue Coupons.
3d. And I will consider as renewed the debentures
which, according to former arrangements, ought to
have been withdrawn from circulation, it being clearly
understood that the interest upon these debentures is
to remain unaltered from its present rate, and to be
punctually paid as it falls due, until the same be finally
and satisfactorily withdrawn.
These terms arc in every respect so reasonable, that
I entertain no doubt her Most Faithful Majesty will not
hesitate to direct your Excellency to propose them at
once to the Cortcs, nor do I at all doubt but that they
will be received by the Legislature in the most favour-
able mariner. I have the honour to be personally ac-
quainted with several Members of both Chambers, and
such I am sure is their sensitiveness to the honour of
their country, that they will hasten to carry into effect
the propositions here suggested, even though they
should be thereby placed under the necessity of making
some reductions in the estimated domestic expenditure
of the kingdom. It is only by this just and honourable
line of conduct being adopted, that Portugal can be
effectually restored to that elevated station which it had
so long maintained ; and if adopted, 1 hope, nay, doubt
not, but that it will perfectly recover a position, in
point of credit, fully equal to that of any other country
in Europe.
I avail myself, finally, of this opportunity to thank
your Excellency for your continued friendly disposition
and assurances with reference to my claims, arising from
my services in private loan transactions, and also to as-
sure your Excellency of the very high respect I enter-
tain for yourself personally, with which I remain,
Your Excellency's
Obliged and most obedient servant,
RICHARD THORNTON.
Hia Excellency Senor Florido Roiz Pereira Ferraz,
Finance Minister, &c., &c., &c., of her Most Faithful
M j esty