SCHEME for the Conversion of the Debenture Debts of the General and Provincial Governments of New Zealand into a Consolidated 5 per Cent. Stock, to be extinguished by Annual Drawings.

Increase in Amount of Debt, £395,500. Decrease in Amount of Annual Charge, £45,270. General Government. —The difference, or saving, between the present and the proposed charges In one or two of the smaller Provincial issues it will be found that the aggregate of the several would be £13,200 a year for twenty-nine years, which, if invested annually at compound interest at 5 annual payments, according to the proposed scheme, is, by reason of the longer periods over which those per cent., would, at the end of that period, amount to £822,643. payments are extended, somewhat in excess of the total amounts which would be payable under existing Provincial Governments. —The difference between the present and the proposed charges on the arrangements. It must be borne in mind, however, that the differences between the old and new rates Provincial debt would be £32,070 a year, which, invested in like manner, would, in twenty-nine years, of annual charge (over the shorter periods) would, if capitalized, represent considerable portions of such amount to £1,998,663. excess, and should it bo found necessary to deal separately with each Province in this respect, there General and Provincial. —The total difference between the present and the proposed charge is would probably be no difficulty in finding an easy and satisfactory solution, as the benefits derivable from £45,270 a year for twenty-nine years. This annuity, capitalized at compound interest at 5 per cent., an opposite state of things, in the majority of the Provincial loans, far outweigh the comparatively small would, at the end of that period, amount to £2,821,300; and this sum, with its accretions, applied to amounts referred to. the remaining payments of £304,230 a year for seven and a half years, would extinguish the whole of By a "cumulative" sinking fund it is to be understood that the total annual charge would remain the debt at the end of thirty-six and a half years, and leave a surplus of £1,378,000; or the £2,821,300 at £304,230 throughout the whole period, and that after paying therefrom the interest on the outaccumulated at the end of twenty-nine years might, at that time, be applied to paying off the then standing portion of the debt, the growing balance would bo applied to the annual drawings, outstanding portion of the debt, and still leave a surplus of £900,000. Several of the smaller Provincial loans have been excluded from this statement because the current The present sinking fund contribution of £74,500 a year, with compound interest at 5 per cent., is market prices on -which the conversion is based cannot be ascertained in this country. This defect can calculated to extinguish the already authorized debt of £4,675,000 in little more than twenty-nine perhaps be remedied in the Colony, but whether or not, there is no reason why they may not be embraced years. in one general scheme, and their coming into it will heighten the general advantages, while their very The proposed cumulative sinking fund of 1 per cent., applied by annual drawings, will extinguish obscurity will be the strongest possible incentive to consolidation on the part of all concerned, the proposed debt of £5,070,500 in somewhat less than thirty-six and a half years. In addition to the saving of £45,270 a year on the annual charge, there will be the present All calculations are based upon the total amounts already authorized to be raised by Acts of the accumulations in the seyeral sinking funds, amounting, it is believed, to about £100,000; but as it is Legislature (as shown in Table 36 of Statistics for 1865), upon the presumption that those amounts will probable that some few of the holders may not immediately come into the conversion scheme, it will be either be raised before the consolidation can take place, or in the new 5 per cents, shortly afterwards. necessary, in order to keep faith with them, to retain out of that amount a sum proportioned to the In the latter case the advantage to the borrower would be still greater than the within figures indicate. non-consolidated securities, and to continue the present sinking funds, in that proportion, at the existing The loans guaranteed by the Imperial Grovernment have been excluded for reasons too obvious to rates. The balance, after defraying therefrom the expenses attending the operation, might very properly need explanation. return to the general exchequer, or be divided pro rata among the Provinces. The 8 per cents. (Treasury Bills) have not been taken into account, as they will either be redeemed P. Gr. Jultas, before the new scheme can come into operation, or will afterwards be displaced by the issue of the London, 30th March, 1867. Crown Agent for the Colonies, consolidated securities,

B.—No. 4.

15

ME. PITZHERBEET'S MISSION TO ENGLAND.

Present Authorized Debt. Proposed Consolidated Debt. Eate per Cent. Annual Charge. Annual Cbarge. AUTHOEITT. Sinking Fond. Present Market Price, x. d. Sinking Fund. Total Annual Charge. When Eedeemable. Total Amount to be Converted. Eate of Conversion Amount when Converted. Interest, Five per Cent. Sinking Fund, One per Cent. £ 1,800 10,000 10,200 7,800 Total Annual Cbarge. Date of Extinction Interest. Interest. Oeneeal Government. Loan Act, 1860 Loan Act, 1863 ... ... ... ] Still unissued (. 6 5 6 6 2 1 2 2 100 84 100 100 £ 9,000 50,000 51,000 39,000 £ 3,000 10,000 17,000 13,000 £ 12,000 60,000 68,000 52,000 1891 1914 1891 1891 £ 150,000 1,000,000 850,000 650,000 120 100 120 120 £ 180,000 1,000,000 1,020,000 780,000 £ 9,000 50,000 51,000 39,000 10,800 60,000 61,200 46,800 I J- 1903 Total ... 149,000 43,000 192,000 ... 2,650,000 2,980,000 149,000 29,800 178,800 Provincial Gtoveenmbnts. Auckland Loan Act, 1863 Wellington Loan Acts, 6 and 9 of Session I. and II. Wellington Loan Acts, Jfo. 11 of Session I. Canterbury Eailway Loan Ordinance, 1860 Canterbury'Loan Ordinance, 1862 ... Otago, Three Loan Ordinances, 1861-2 ... "... Otago Loan Ordinances, 1862 6 8 8 6 6 8 6 2 4 2 1 3 1 84 102 108 92 88 100 84 30,000 4,000 2,000 18,000 30,000 12,000 30,000 10,000 1,000 6,000 5,000 4,500 5,000 40,000 4,000 3,000 24,000 35,000 16,500 35,000 157,500 33 years 12 mo. notice 1877 1893-95 50 years 1873-75 1898 500,000 50,000 25,000 300,000 500,000 150,000 500,000 100 120 130 106 100 120 100 500,000 60,000 32,500 318,000 500,000 180,000 500,000 25,000 3,000 1,625 15,900 25,000 9,000 25,000 5,000 600 325 3,180 5,000 1,800 5,000 30,000 3,600 1,950 19,080 30,000 10,800 30,000 J- 1903 Total ... , I t I I l . 2,025,000 2,090,500 5,070,500 104,525 253,525 125,430 I 126,000 31,500 20,905 G-eneeae Total ... I i 1 12 0 average I 275,000 74,500 349,500 4,675,000 . 50,705 304,230 ... ...