AGREEMENT FOR FUNDING CERTAIN ADVANCES MADE BY THE IMPERIAL GOVERNMENT DURING THE WAR.

Appendix to the Journals of the House of Representatives, 1923 Session I-II, B-19

8.—19

Session 11. 1923. NEW ZEALAND.

AGREEMENT FOR FUNDING CERTAIN ADVANCES MADE BY THE IMPERIAL GOVERNMENT DURING THE WAR.

Laid on the Table of the House of Representatives by Leave.

(New Zealand, No. 217.) My Lord,— Downing Street, 20th October, 1922. With reference to my despatch, No. 146, of the sth August, I have the honour to transmit to Your Excellency, for the information of your Ministers, the accompanying copy of a Treasury minute of the 4th October, covering an agreement dated the 6th September on the subject of the funding of certain war indebtedness. I have, &c, Winston Churchill. Governor-General His Excellency the Right Hon: Viscount Jellicoe, G.C 8., 0.M., G.C.V.0., <fee.

Treasury Minute dated 4th October, 1922. The Chancellor of. the Exchequer states to the Board that the Hon. Sir James Allen, X.C.8., High Commissioner in London for the Dominion of New Zealand, having been appointed to represent the Dominion, and Mr. 0. E. Niemeyer, C.8., having been appointed to represent His Majesty's Treasury, have arrived at an agreement, dated the 6th September, 1922 (of which a copy is attached to this minute) on the subject of the funding of certain war indebtedness of the Dominion to the Imperial Government. The Chancellor of the Exchequer recommends that this agreement be approved. My Lords concur. Memorandum oi Agreement made this 6th day of September, 1922, between 0. E. Niemeyer, Esq., C.8., acting for and on behalf of the Government of the United Kingdom (in this agreement referred to as " the Imperial Government "), but not so as to incur any personal liability, of the one part, and the Hon. Sir James Allen, X.C.8., acting for and on behalf of the Dominion of New Zealand (hereinafter referred to as " the Dominion "), but not so as to incur any personal liability, of the other part. Whereas the Dominion is indebted to the Imperial Government in respect of certain moneys lent by the Imperial Government to the Dominion during the war: And whereas it is expedient that an agreement be made between the Imperial Government and the Dominion as to the manner and time of repayment of the said indebtedness to the extent set out in the First Schedule hereto, and the rate and time of the payment of interest thereon : And whereas it is expedient that the agreement shall not apply to the debt set out in the Second Schedule hereto :

8.—19

2

Now, therefore, it is mutually agreed as follows : — 1. In respect of the total principal of the debt set out in the First Schedule (£27,532,163 17s. 10d.), or so much thereof as from time to time remains unpaid, the Dominion shall pay the Imperial Government interest at the rate of £4 19s. 5-88 d. per centum per annum. 2. Interest due by the Dominion to the Imperial Government in pursuance of paragraph 1 of this agreement shall be payable half-yearly on the first day of June and first day of December, the first of such payments to be made on the first day of December, one thousand nine hundred and twenty-two. 3. In addition to the interest payable by the Dominion in pursuance of paragraphs 1 and 2, it is further agreed that the Dominion shall pay to the Imperial Government half-yearly on the said first day of June and the first day of December, in reduction of the principal, such sums as will when added to the interest so paid make a total annual payment of £1,651,929 16s. Bd., which is equivalent to the sum of £6 per centum per annum upon the total principal of the debt set out in Schedule I. This total annual payment shall continue to be made until the principal is wholly repaid. 4. While interest is paid by the Dominion as provided above the Imperial Treasury shall not be entitled to payment of the coupons attached to the debentures included in Schedule I, and they shall, as and when the coupons fall due, cause the same to be cancelled and returned to the Treasurer of the Dominion. Likewise, when the total principal has been repaid the Imperial Treasury shall cause the bonds to be cancelled and returned to the Treasurer of the Dominion. 5. Notwithstanding anything contained in this agreement, the Dominion shall have the right at any time, on giving three months' notice, to repay to the Imperial Government at par any part of the debt set out in Schedule I, but any such repayment shall not affect the amount of the total annual payment as provided in paragraph 3, which shall continue unchanged until the whole of the principal is repaid. 0. E. NIEMEYKK, Witness—N. Egerton Young. Deputy Controller of Finance, H.M. Treasury. J. Allen, Witness—C. Knowles. High Commissioner in London for the Dominion of New Zealand.

Schedule I. £ s. d. 4|-per-cent. debentures, 1925-45 .. .. .. .. 5,323,232 6 4 5-per-cent. debentures, 1929-47 .. .. 11,100,000 0 0 3-i-per-cent. debentures, 1925-28 .. .. .. .. 1,000,000 0 0 s|-per-cent. debentures .. .. .. .. .. 9,900,000 0 0 3J-per-cent. book debt .. .. .. .. .. 168,421 1 0 5-per-cent. book debt .. .. .. .. .. 40,510 10 6 £27,532,163 17 10 The total interest payable on the above debts at the respective rates of interest shown amounts to £1,369,590 14s. 4d. per annum, and this is equivalent to interest at the rate of £4 19s. 5-88 d. per cent. on the total of the debts—viz., £27,532,163 17s. lOd. Schedule 11. £ s . d. 4|-per-cent. debentures .. .. .. .. .. 2,090,909 1 9

NOTE. Extract from report by New Zealand Government Actuary : — " On the basis set out in the agreement of the 6th September, 1922, the total funded debt will be repaid in a little under thirty-six years, counting from the Ist June, 1922. This means that the seventysecond instalment, payable at the end of thirty-six years, will be slightly less in amount than the preceding instalments."

Approximate Cost of Paper. —Preparation, not given ; printing (470 copies), £2,

Authority : W. A. G. Skinner, Government Printer, Wellington.—l 923.

Price 3d.]