The Sun.
London, England, 1842-11-19 00:00:00

PORTUGUESE BONDS

PROPOSAL L-TRANSLATION.

" That the Government of her Most Faithful
Majesty engages to deposit at the Bank of
England the bonds they might receive from
Brazil, conformably to the terms of the Conven-
tion of the 22d July last, which bonds amount to
the nominal sum of 732,0001., and to apply the in-
terest thereon, at five per cent. per annum, to the
payment of the dividends of the provisional fund of
11836, and in like manner the balance of that interest,
and the sinking fund which Brazils is also to pay to
the redemption at par by contos, of the said fund of
1836, giving to the same the value of 10 per cent.
over the maximum of 90 per cent., fixed in the re-
spective contract as a compensation for the arrears
which on the Ist December next will amount to 21;;
per cent., and would thus come to be paid at the real
value of 50 per cent.
"That in default of payment by Brazils of the sink-
ing fund for the said redemption at par, the Govern-
ment of her Most Faithful Majesty engages to con-
tribute annually the sum of 17,500/., being the
amount of the half dividend they are now paying on
the 700,0001. of the fund of 1836; and that as soon
as by the progress of the redemption effected by
these means, an by the increasing amount of in-
terest on the bonds of
,Brazils, the deposit on these
securities will stand in- the proportion of 1211. ss. to
every 1001. bonds of 1836. The Government of her
Most Faithful Majesty engages further to make the
exchange of one kind of bonds for the other in the
said proportion, that is to say, to deliver 1211. ss.
Brazilian bonds deposited for every 1001. bonds of
1836, with the arrears accumulated thereto, which
brings their value to the same nominal amount of
121/. ss. on the Ist December of this year.
"That is the event of the Bondholders not agreeing
to this invirsion at that time, the Government of her
Most Fait:Teal Majesty will continue to contribute the
same stun of 17,5001. towards the redemption afore-
said, withdrawing, however, thenceforward and suc-
cessively from the deposit all the sums in the Bra-
zilian bonds that will exceed the stated proportion of
1251. ss. for every 1001. bonds of 1836, with the ar-
rears accumulated thereto.

" That the Government will withdraw the balance
of the deposit remaining as soon as the fund of 1836
is totally redeemed.
" Public Treasury, 31st October, 1842.
(Signed) "BARAO DO TOJAL.
"A true translation from the original.
" G.C. de BRITO, Sec. to the Agency."
PROPOSAL H.-TRANSLATION.

" Should the Bondholders of 1836 prefer to the de-
po.3it and manner of payment established by the Ist
proposal, the immediate application and appropriation
of the Brazilian bonds, the 'Government of her Most
Faithful Afajesty engages to deliver to them the said
bonds, for the same real value of 622,7021., for which
they are to be received from Brazils, considering as
redeemed with this sum, and the equivalent portion
of the principal of the fund of 1836, calculated at
the maximum price of 90 per cent.
"'Tat for the balance of the principal and for the
amount of the interest accumulated on the whole
700,0001. bonds, up to the Ist of December, 1842, the
Government of her Most Faithful Majesty binds itself
to issue in exchange thereof, an equal nominal amount
;n the New Inverted Bonds, authorised by the decree
of the 2d of November, 1840.
" Public Treasury, 31st October, 1842.
(Signed.) " PAR AO DO TOJAL.
" A true translation from the original.
" G. C. de BRITO, Sec. to the Agency."
He would then read the letter which was about to be
sent in answer :

" London, Nov. 18, 1842.
" Dear Sir,—l have the honour to acknowledge
he receipt of your letter of the 9th instant, inclosing
two propositions from the Portuguese Government,
for the liquidation of the debt due to the Bondholders
of the loan of 1836, contracted by me on the colla-
teral security of the debt due from Brazil to Por-
tugal, which propositions you request me to lay
before the Bondholders, and to inform you of their
resolution thereupon. '
" In conformity with this request, I have done my
best to ascertain the sentiments of the holders of as
large a proportion as possible of those securities ; and
I am now enabled to make to you the following ob-
servations as the result of the opinions ofholders of stock
of 183 C, equal in amount to between 550,000/. and
600,0001., out of 700,0001., the total amount cf stock
of that loan remaining in circulation.
" The Bondholders receive with satisfaction your
statement that the Government is actuated by a sin-
cere wish (which, indeed, the Bondholders have always
felt confident that it must entertain) to settle this
matter on the basis of its engagements. But they
think, and have no doubt that the following remarks
will show, that this desire on the part of the Govel a-
merit would not be carried into effect by either of the
proposals which it has directed you to submit for their
consideration.
"With regard to the first proposal, to deposit (namely)
in the Bank of England the bonds to be received from
Brazil, in order that the same may be applied in
the manner which you have specified, (and which
would occupy a considerable number of years)
in payment of the dividends and towards the
redemption of the Portuguese bonds of 1836, it is
to be observed that this delay is directly contrary
to the original contract, which directs that what is
received from Brazil shall be applied, as it is received
in redemption of the bonds in question, and also to
the letter explanatory- of. that contract, which was
signed by you and the Charge d'Affaires of Portugal
in June 1837, in consequence of my having made a
further advance of ninety-two thousand pounds for the
payment of the dividends on the Regency bonds, and
in which letter you engage on behalf of the Govern-
ment that all bond.s and securities which may he de-
livered by Brazil, in respect of its debt to Portugal,
shall, at the time of the same being delivered, be de.
posited in the Bank of England, in the joint names of
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to
which
s admit (about which there can, indeed, be no
difference of opinion) that there is now due to each
holder of a 100/. bond of 1836, 931. for principal,
and (allowing for a half dividend to be
paid next
month) 21/. ss. for arrears of interest. This amounts
to 111/. ss. on each 100/. bond, or to rather more than
778,0001. on the 700,000/. bonds. Now, the 732,0001.
stock to be delivered by Brazil (if estimated, not at
the fanciful price of 85 per cent. set upon it by the
Brazilian Government, but at the market price of
56 per cent., which similar Brazilian stock now bears)
is worth rather less than 410,0001. ; and as the con-
tract for the loan of 1836 obliges the Portuguese
Government to contribute any sum by which the
Brazilian debt may be, insufficient for redeeming
that loan, it follows that Portugal ought now to
pay for that purpose the difference between
778,0001.. and 410,0001., or about 368,000/. Now
what sum does your first proposal suggest
that Portugal should contribute in lieu of the sum

now really due of above 360,0001.? Is it suggested
that the contribution should be 300,0001. or 200,0004 ?

No, it is proposed that if Brazil should fulfil (as
it is to be presumed that it will) its obligation
respecting the sinking fund on the new Brazilian
bonds, Portugal should pay nothing either now or
at any future period; but that if Brazil should fail
in this obligation, Portugal should contribute fur
the redemption of the bonds in 1836, 17,5001. a-year,
until the amount of those bonds shall be so reduced as

to bear to the 732,000/. Brazilian I onus, the propor-
tion of 1001. to 121/. 55., or in other words till the

amount of bonds of 1336 shall he reduced to 620,0001.,
which would be accomplished in about five years. This
is all that in any event it is suggested that
Portugal should pay out of its own funds ; for
as the subsequent cc ntingent payment of 17,5C01.
a year is intended to entitle Portugal to withdraw a
corresponding proportion of Brazilian bonds depo-
sited, this sum would in fact be raised out of the
Brazilian bonds,_ and would not come out of the funds
of Portugal. Thus, then, we see that the effect of
the proposal under consideration is that a debt of
i 1
above 360,000/. is to be extinguished, in one event,

A Meeting of the Holders of Portuguese Bonds
was held yesterday at the George and Vulture Tavern,
Cornhill, for the purpose of hearing the proposition
made by -t& Portuguese Government to liquidate the
claims ofitn6 Bondholders, and the reply prepared by
parties i•eipteaenting a large portion of the loans.
Sir I. L. GOLDSMID took thci Chair, and said he had.
taken the liberty of calling them together in con-
sequence ofa communication which he had received from
the Portuguese Government in reply to his letter.
The last letter to them stated that he would be glad
la' have any communication the Government might
think proper to make, in order that he might submit
it to the Bondholders. He had received that commu-
nication, and he had taken considerable pains to ascer-
tain the sentiments of the Bondholders upon it, as
many of them could not attend, in order to determine
upon the line of conduct the Bondholders ought to
pursue. He then came forward to tell them
that he had heard those statements, and they
were satisfactory to him. The original loan was
700,b00/., and he had got the concurrence of the
holders of 600,0001. for the line of conduct which he
recommended. There still remained a number of
Bondholders who held from 100,0001. to 150,0001. of
bonds, and the present meeting was called for the
purpose of consulting their opinions. If they differed
from the line he proposed he should be most happy to
represent their interests to the best of his power to
the Portuguese Government.—(Hear, hear.) He
would take the liberty of reading the communication
which had been made to him by the Portuguese Go:
vernment, and also the answer which he haSprepared,
after which he would make a few observations upon
it. The first letter was signed Barao do Tojal, and
was as follows :