THE PUBLIC DEBT

Poverty Bay Herald, Volume LXI, Issue 18484, 24 August 1934, Page 8

THE PUBLIC DEBT

INCREASE DURING YEAR j CONVERSION RESULTS REDEMPTION OPERATIONS (Parliamentary Reporter.) WELLINGTON, this day. Public debt operations I during the past financial year were reviewed by the Minister of Finance, the, Rt, Hon. J. G. Coaies, in the Budget, Apart from the operations affecting the floating debt, there was a net increase in the amount- of the public debt during the year of £1,2177,394, £491,254 being due to premiums arising under tho conversion operations and £786,140 to operations during the yenr. The successful conversion of £5.000,000 5 per cent, debt into 3£ per cent, securities at 97 in October last, was, the only debt operation undertaken, in London during! the'financial yenr. In ,the Dominion additional long-term debt to the amount- of £4,522,766 was raised for tho following purposes:— ; Capital expenditure — £ £ Public works (ineluding , hydroelectric supply) 1,062,690 Land for settlements ... 198,000 Main highways ... 203,000 State 1 forests ... Redemptions of debt ... 2,384,075

£4,522,765 Of this £4,522,765 raised in New Zealand, £1,906,090 was obtained from the public at 3“ per cent., while the balance of £2,616,675 was derived from departmental investments. Redemptions of long-term debt during the financial year amounted to £3,736,625. the funds for the purpose being derived from the following sources: — For debt repayment— £ £ Repayment ot Public Debt Act, 1925 596,270 Reparations and war credits ... 650 Separate accounts 754,040 -—— 1,350,960 From issues in redemption ... 2,385,865 £3,736,625 Thus the additional debt incurred exceeded repayments by £786,140. Ot the redemptions effected, £104,560 was held in Australia and 1 the balance in New Zealand. Thanks to the generosity of Great. Britain in extending the moratorium on New Zealand’s funded war debt and certain other debts due to the British _Government, ■no payments were made in respect of this portion of the debt during last financial year. The debt operations for last financial year may be summarised as follows: — ! . .. £ Debt as at March 31, 1933 282,622,958 Plus net increase in floating

debt (mostly temporary) as previously mentioned 18,891,644 £301.514,602 Plus net increase in long term debt — (a) Duo to loan conversion ... 491,254 (b) Due to operations during vear 786,140 - £1,277,394

Public debt as at March 31, 1934 ... £302,791,996 The domicile of the debt as a whole on March 31, 1934, was as follows: — £ London 160,908,105 Australia ... 2,908,150 New Zealand ... 138,975,741 ■ ’ £302,791,996 LOAN CONVERSION Mention was made in last year’s Financial Statement of the only other loan over which the Dominion had the immediate right to exercise an option of repayment, and this loan lias now been dealt with on very satisfactory terms The loan carried interest at 4 per cent and of the original £4,000,000 the amount of £3,989,100, being the balance of the loan held in London, was recently offered for conversion into 31 per cent, stock at par maturing 1955-60. Cash subscriptions were invited from the public to meet redemptions of any unconverted holdings, and advices to hand indicate that the new issue was favorably received. Holders of the loan were given the right to convert into the new issue, apd applications to the extent of £2,501, 265 were received under this category. Cash applications, from the proceeds of which the unconverted balance will be paid off. amounted to £1,522,000, the net result showing an oversubscription of £34,165. The comment of London financial authorities was to the effect that the transaction from the Dominion’s viewpoint was very satisfactory, this being evident from the favorable terms on •which, "the new issue had been placed. The result, also indicated the proximity to current market values of the price of issue emphasising the successful gauging of the London market conditions.