Bcr-21

1890. NEW ZEALAND.

MEMORANDUM BY THE HON. THE COLONIAL TREASURER (SIR H. A. ATKINSON), RELATING TO CERTAIN CHARGES AGAINST THE GOVERNMENT.

Laid on the Table by the Hon. Mr. Hislop, with the Leave of the House.

The Government has, amongst other charges, been accused of having, during the period between the Bth October, 1887, and the 31st March, 1888, issued some £840,000 of deficiency bills to put the proceeds into the Bank of New Zealand for its private benefit, and not for the purpose of meeting the requirements of the colony; and also of having kept at various times unusually large balances, arising principally from the North Island Main Trunk Bailway loan, in the same bank not bearing interest, to the serious loss of the colony. In this memorandum I propose to deal only with these two main charges, and I shall show their absolute untruth by giving a history of the financial transactions of the Government from the Bth October, 1887, to the 31st October, 1888, when the whole of the proceeds of the two one-million loans had passed out of the Public Account, and by affording some other information which will throw light upon the subject. With a view, however, not to adverse criticism of the administration of the previous Government, with which I find no fault, but to a proper understanding of the whole matter, it is necessary that I should first state what was the financial position in which the present Government found the Treasury on coming into office on the Bth October, 1887. For reasons which need not be gone into here the North Island Main Trunk Eailway loan of one million had not then been floated. The late Colonial Treasurer Sir Julius Vogel had apparently relied on it to provide the cash for meeting temporarily the heavy engagements of the colony in London during October, 1887, as almost at the last moment he found himself compelled, through the postponement in raising the loan, to make special arrangements to meet those engagements. The cash at the disposal of the Agent-General on the 30th September, 1887, was only £3,906, while the payment to be made for interest and other charges in October was, in round numbers, £593,000. The advances which had been obtained by the late Government upon Imperial-guaranteed debentures,* amounting to £680,000, had all been expended, and it appears to have been more than doubtful whether it would have been prudent to ask for further advances in London on the remaining .£120,000. The late Colonial Treasurer, therefore, in the last days of September, 1887, entered into an agreement with the Bank of New Zealand for an advance of £600,000, repayable at the end of six months— the collateral security given being short-dated debentures of the North Island Main Trunk Eailway loan for £500,000, and deficiency bills for £100,000. The amount advanced was placed to credit of the Government account in London on the following dates : Ist October, £75,000 ; 10th October, .£75,000 ; 15th October,: ,£450,000. On the 31st October, after withdrawals during the month to the amount of .£592,942, nearly all of which was for interest and sinking fund, the balance left was .£32,419. * The state of the Consolidated Fund at the same time was also very discouraging; a large deficiency had . already accrued. Parliamentary;

Charges: two main ones only ( necessary to be ' dealt with.

Necessary to fitst state financial position on present Government coming into office, Bth October, 1887.

In September^ 1887, late Colonial Treasurer arranged for advance of £000,000 from Bank of New Zealand for six months.

State of Consolidated Fund discouraging, Btlt October, 1887.

* "Imperial-guaranteed debentures " are part of the £1,000,000 debentures guaranteed for the colony by the Imperial Government. £200,000 worth were sold, and the remainder—£Boo,ooo —have been retained by the colony, and from time to time money borrowed on them, and repaid as the financial position of the colony made it convenient:

I—B. 21.