B.—No. 2.

£90,000, should be represented by Treasury Bills, to be paid off, in equal instalments, during 1872-73 and 1873-71. lam happy to state that the actual results of 1870-71 showed a deficiency, including the £60,000, of only £122,928 ss. 9d., or £13,981 os. 6d. less than I had anticipated. It is not necessary for me now to explain upon what items this reduction in the anticipated expenditure arose. In making provision to cover all outstanding liabilities and engagements, it is well to err on the side of safety; and I will only add, that the principal saving arose in connection with the Reserve Eund, which was larger than the payments to be made under it really required. LOANS. Since the last Session, a further amount of public loan has been negotiated. Under "The Wellington Debts Act," five per cent, debentures to the amount of £66,000 were sold in Sydney, at a clear net premium of two per cent., which is, I believe, the highest amount yet obtained by public negotiation for any of the Colony's debentures unguaranteed by the Imperial Government. In addition to the £66,000, a sum of £9,000 has been taken by the Trust Eund Commissioners, on account of the Wellington Savings Bank, the business of which has been transferred to the Post Office Savings Bank; so that the total amount raised under " The Wellington Debts Act" is £75,000. Of the Immigration and Public Works Loan, a further amount of £850,000 has been negotiated, and of the Defence and Other Purposes Loan, a further amount of £150,000, making together £1,000,000. That amount has been negotiated by the Agent-General and Mr. Julyan, at the highly satisfactory rate of Is. 2d. nett premium, after deducting accruing interest on instalments of purchase money. Honorable Members will like to know the exact position of the Defence and Other Purposes Loan, and the Immigration and Public Works Loan —the amounts raised, the amounts expended, and the balance remaining for expenditure. Of the sum of £1,000,000 authorized under the Defence and Other Purposes Loan Act, there has been raised £635,600; but of this sum £150,000 forms part of the million raised in London in April last. Inclusive of the £150,000 newly negotiated, £600,000 has been raised in London, and £35,600 in the Colony. Of the sum so raised there has been expended, under Schedule 11. of the Act, the sum of £163,136 12s. Id., as follows :— Auckland— £ s. d. £ s. d. For payment to James Busby ... ... 19,898 12 6 Eor debt to New Zealand Government, under Loan Allocation Act Repeal Act ... 27,873 5 0 £47,771 17 6 Eor Discount and Charges ... ... 2,228 2 6 50,000 0 0 Tabanaki — For debt to New Zealand Government, under Loan Allocation Act Repeal Act ... 5,7.32 12 6 For Discount and Charges ... ... 267 7 6 6,000 0 0 Wellington— For debt to New Zealand Government, under Loan Allocation Act Repeal Act ... 1,180 19 5 For erection of Wanganui Bridge ... 15,000 0 0 16,180 19 5 For Discount and Charges ... ... 819 0 7 , 17,000 0 0 Otago— For debt due by Southland to New Zealand Government ... ... ... 21,323 8 4 For other debts due by Southland ... 27, 500 0 0 For redemption of Otago Dock Bonds ... 38,010 0 0 £86,833 8 4 For Discount and Charges ... ... 3,603 4 0 90,436 12 4 Total ... ... ... ... £163,436 12 4

Proposed that £46,000 should he paid out of revenue ; balance by Treasury Bills, to be paid off in 1872-73 and 1873-74. But actual deficiency only £122,928 ss. 9d.j or £13,984 os. 6d. less than anticipated. Principal saving connected with Eeserve Fund.

£66,000 Wellington Debts Act Debentures sold at 2 per cent, clear premium. And £9,000 taken by Trust Fund.

Immigration and Public Works Loan, £850,000 negotiated. Defence and Other Purposes Loan, £150,000.

Exact position of the two Loans.

Defence and Other Purposes Loan : Amount raised, £635,000.

Expenditure under Schedule 11. of Act, £163,436 12s. 4d.

4

FINANCIAL STATEMENT.