THE ISSUE OFTREASURY BILLS

New Zealand Herald, Volume XXX, Issue 9308, 18 September 1893, Page 5

THE ISSUE OFTREASURY BILLS

STATEMENT BY THE TREASURER. BY TELEGKAPII— SPECIAL CORRESPONDENT.] Wellington, Sunday. rHK protracted and stubborn dispute )etween the Ministry and the leaders of (he Opposition, and more particularly jetween the Treasurer and Sir John Hall,

V to whether the £476,000 of Treasury ills authorised under the Public Revenues ill was an addition to the public debt or :herwise, has resulted in so much of doubt 1 the minds of many persons who desire to nclerstand the precise nature of this nancial transaction, that I thought ib well o ask the Colonial Treasurer to favour me ith a written statement for publication of ie precise character and effect of the opei.tion. To this he assented, and by his rWtesy I am enabled to transmit the follkving authenticated explanation :— r'The position of the £476,000 Imperial elaranteed debentures referred to in the Ptolic Revenues Bill is as follows :—They art held in London to the order of the Aant General and the Audit Office, and are\used from time to time to lodge as with the Bank of England to meet intetst payments upon loans two days before he respective due dates, in accordance with agreement with the Bank. As soon a? theinterest is paid they are immediately released, and are available to be used again for a sitiilar purpose. The connection betwem -.he Imperial guaranteed debentures md the Eublic Works Fund is as follows:— The loan moneys in the Public Works Fund! wen invested in these Imperial guaranteed debentures, and as the publio works expeiditure went on, and cash in the Public Works Fund was required.it became necessary to realise the investments of the fund. The Pualic Revenues Act, already on the ute-botk, provided for the Government creating Treasury bills to the extent of £430,000, and with the proceeds of such Treasury bills a like amount of the Imperial guaranteed debentures held by the Public Works Fund was redeemed. The effect has been that cash has passed from the Consolidated Fund to the Public Works Fund, and the realises guaranteed debentures to the same amount passed from the Public Works Fund to the Consolidated Fund. £356,000 of; the guaranteed debentures have been so dealt with, and £120,000. still remains ai the public works fund which have yet to be redeemed. It will be seen that the two amounts total £476,000, and it is id enable the extra £20,000 to be redeemer, that the amount in the present Public Revenues Bill is increased by £26,000, as some security for this £26,000 was necessary to lodge in exchange for Imperial guaranteed debentures to a like amount when the whole £476,000 was invested. The guaranteed debentures to that amount were quite free for the requirements of the colony and were available by the Agent-General to lodge as security. Though as a matter of bookkeeping they were an investment of the Public Wor.ks and Consolidated Funds, the diminution of the Public Works Fund rendered it necessary for the investment in the Imperial guaranteed debentures to be released. "