B.—6,

14

1926 PUBLIC WORKS LONDON LOAN. At the end of May, London advised that, the general strike having been called off, a resumption of the lending market was at hand, though the position was, in view of the continuance of the coal strike, still reported to be somewhat uncertain as to terms obtainable. It was, however, decided to proceed, and a loan of £6,000,000 under the following authorities was underwritten : — £ Finance Act, 1925 (public works) .'. . . .. 4,000,000 Electric-power Works Loan Act, 1919 (electric supply) 1,100,000 Railways Improvement Authorization Act, 1914 (railways improvement) .. .. .. 900,000 £6,000,000 It was issued to the public on the 31st May at £98 10s. ; interest 5 per cent., maturing on the Ist January, 1946 ; the yield to investors being £5 2s. 6d. The result was in all the circumstances somewhat surprising as the application list was closed in two hours, the sum of £119,600,000 from 24,059 applicants having been offered, while the loan subsequently went to a premium. FUNDED DEBT. Payments amounting to £1,651,930 were made in 1925-26 in respect of £27,532,164, loans advanced by the Imperial Government, and funded in terms of the agreement dated 6th September, 1922. The half-yearly payments represent both principal and interest, and the following table shows how this debt has been reduced to £26,257,022 :■ —

Public Works Loan, 1926.

Funded debt.

New Zealand has the right, on giving three months' notice, to repay at par any part of the principal. PUBLIC DEBT COMMISSION. The Public Debt Commission, constituted under the Repayment of the Public Debt Act, passed last session, held its first meeting early in March of this year for the purpose of formulating the policy to be adopted in the matter of debt-repayment and to set in motion the machinery provided under the statute. The amount available for debt-repayment for the financial year ended 31st March last was £872,734, and the Commission applied this in discharging from the debt securities purchased from time to time at a discount, together with further suitable securities held by Treasury Investment Accounts. Securities of a total nominal value of £889,733 were accordingly cancelled and redeemed. As opportunity offers for purchase of securities on favourable terms, it is the intention of the Commission to apply its resources to the reduction of deadweight and overseas debt. .Details of the transactions affecting the debt coming under the provisions of the Act will be available to honourable members in the statement and account of the proceedings of the Commission to be laid on the table of the House.

Public Debt Commission.

r l i t> ■ ■ 1 Balance of Debt Instalment paid. Interest. Principal. outstanding £ £ £ 1st December, 1922 .. 684,794 141,171 27,390,993 1st June, 1923 681,282 144,683 27,246,310 1st December, 1923 .. .. .. .. 677,684 148,281 27,098,029 1st June, 1924 .. .. .. .. 673,996 151,969 26,946,060 1st December, 1924 .. .. .. .. 670,216 355,749 26,590,311 1st June, 1925 .. .. .. .. 661,367 164,598 26,425,713 1st December, 1925 .. 657,274 168,691 26,257,022