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

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
1836, 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 211
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 17,5001., 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, and 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 100/. 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
1211. ss. on the Ist December of this year.
this
"That
inversionthe event
that aotf
time, the
Bondholders
Government of her
not agreeing
to
Most Faithful Majesty will continue to contribute the
same sum 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.
(Signed) "BARAO
" Public Treasury, 31st October, 1842.
TOJAL.
”.true. translation from the IL
" G. C. de BRITO, Soc. to the Agency."

PROPOSAL IL- TRANSLATION.
" Should the Bondholders of 1836 prefer to the de-
posit and manner of payment established by the Ist
proposal, the immediate application and appropriation
of the Brazilian bonds, the Government of her Most
Faithful Majesty 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.
" That 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
in the New Inverted Bonds, authorised by the decree
of the 2d of November, 1840.

" Public Treasury, 3lst October, 1842.
(Signed.) " BARAO 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
the 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-
terala security of the debt due from Brazil to Por-
tugal, which propositions you request me to lay
to inform
you
clone of their
resolution thereupon.
before
~
In the
eonformity Bondholders,
‘Nith this request, I have
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 1836, equal in amount to between 550,000/. and
600,0001., out of 700,0001., the total amount of 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 Govern-
ment 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 proposai, 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 Regenc_,
~) bonds, and
in which letter you engage on behalf of the Govern-
ment that all bonds and securities which may be 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
myself and the agents of the Gnvernment in order
that the same may be immediately applied in accord-
ance with the original contract for the loan of 1836.
~ But this is by no means the only objection to
which your first proposal is liable. Both your pro-
ositions admit (about which there
Can, indeed, be no
difference of opinion) that there •is now due to each
holder of a 1001. bond of 1836, 901. for principal,
and (allowing for a half dividend to be paid next
month) 21/. is. for arrears of interest. This amounts
to 111/. ss. on each WO/. bond, or to rather more than
778,000/. on the 700,000/. bonds! ow, the 732,0001.
stock to be delivered by Brazil (if N
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 410,000/. ; 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
778,000/. and 410,0001•, or about 368,0001. 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 300,000/. or 200,000/. ?
No, it is proposed that if Brazil should` fulfil (as
it is to be presumed thaV it will) its obligation
respecting the sinking fund on the new Brazilian
bonds, Portugal should pay nothing either now or