8.—13b

8

Enclosure 2 in No. 28. HEW ZEALAND GOVEBNMENT £3-PEB-CENT. INSCBIBED STOCK. Issue op £1,500,000 Stock.—Minimum Peice, £90 Pcs Cent. To the Governor and Company of the Bank of England, London. Having paid to you the sum of £ , being a deposit of £5 per cent, on this application, hereby tender for £ , say pounds of the above stock, for every hundred pounds of which willing to give the sum of pounds shillings and pence (£ ); and hereby engage to pay the balance shall become due, on any allotment that may be made in respect of this tender, in accordance with the terms of the prospectus dated 27th April, 1895. Name in full: Address: Date : The deposit must accompany this application, but should not be enclosed therein. Cheques should be drawn in favour of "The Bank of England." Where several applications are made, one cheque only, for the total deposit, is necessary. Tenders, which should be sealed, must be for even hundreds of stock, and the prices must be multiples of sixpence. No tender will be received after two o'clock on Friday, 3rd May, 1895. NEW ZEALAND GOVEBNMENT LOAN OF £1,500,000. " Government Advances to Settlers Act, 1894." The proceeds of this loan will be applied towards providing funds for advances to bond fide settlers in New Zealand on the security of their landed property, such property to be free of all encumbrances, liens, and interests, other than leasehold interests. The granting of the advances is under the direct control of the non-political Board which has hitherto most successfully controlled the investment of the funds of the Government Insurance and Public Trust Departments. Under the Act no advance can be granted for an amount exceeding three-fifths of the value of the security, and provision is made for repayment of a portion of the principal in each year. With respect to the present issue, although charged on the consolidated revenue, and ranking as regards security pari passu with the colony's public liabilities, the money raised will not impose any actual additional burden on the revenue of the colony, as its annual interest charge will be provided for out of the interest received from those to whom the advances will be made. The colony, in adopting the mode of providing advances for settlers at a low rate of interest, stands between the investors in this country and those to whom the money is advanced, thus guaranteeing to the investors, without any risk or trouble on their part, the punctual payment of interest and principal. Financial Position of New Zealand. Opportunity is taken of presenting the following figures as regards the public finance of the colony : — The balances of revenue over expenditure for the last five years are as follow : 1890-91, £143,965 ; 1891-92, £195,573; 1892-93, £483,780; 1893-94, £550,458 ; 1894-95 (the financial year just ended), £430,000. In 1890-91, £78,600 of revenue was taken for the purpose of paying off the balance of the deficit at the 31st March, 1888. In 1891-92, £30,000 of revenue was applied in the construction of roads and bridges, and a further sum of £100,000, also out of revenue, was used towards paying off the deficits of previous years. In 1892-93, a further sum of £200,000 out of revenue was applied in the construction of roads and bridges and other works of a similar description. In 1893-94, a further sum of £250,000, and in 1894-95, the financial year just closed, another sum of £250,000 from the same source were contributed towards the same objects. Thus within four years the aggregate amount of upwards of three-quarters of a million out of revenue has been applied in the permanent improvement of the national landed estate. Public Debt. New Zealand has not raised any loan in this country (excepting those for conversion purposes) since 1888. The gross amount of the public debt on the 31st March, 1889, was £38,375,050, and the annual interest charges thereon amounted to £1,646,318, while on the 31st March, 1894, the gross amount was £39,826,415, with an annual interest charge of £1,603,467. Although, therefore, the nominal amount of the public debt has increased, the annual interest charge has been considerably reduced. The increase in the gross amount of the debt is due principally to the operations under which debenture loans have been converted into inscribed stock bearing a reduced rate of interest, the remainder of the increase being represented by loans to local bodies and purchase of Native and other lands for settlement, upon which direct returns more than equal to that which is paid out, are being paid into the Treasury. It is right also to state that included in the gross amount of the public debt as stated above, are £800,000 4-per-cent, debentures, guaranteed by the Imperial Government, which are still in possession of the Government, being deposited in London to the order of the Agent-General to meet any possible unexpected financial contingency. These debentures, if issued at the present time, would realise quite a million of money. New Zealand has always stood in an exceptionally strong financial position by the fact that these debentures are thus held. It should also be remembered that over £15,000,000 of the New Zealand public debt is represented by the Government railways of the country, which earn over 3 per cent, per annum on their cost, a fact which is often lost sight of when comparing the colony's public debt with those of the United Kingdom, and other countries, such as Canada. The capital represented by the railways of the United Kingdom is now approaching, if it does not already exceed, £1,000,000,000 of money ; add that amount to the national debt of this country, and the comparison between it and the New Zealand debt can then be made on more equal grounds. Conversions and Sinking Funds. It has been represented that the present New Zealand Government have adopted the policy of releasing the sinking fund of the public debt and applying the proceeds to ordinary revenue purposes. But such an assertion is entirely contrary to the facts of the case. The policy which provided for the release and disposal of the sinking funds was deliberately adopted by the New Zealand Legislature in 1884, and the mode in which any released sinking fund is applied is regulated by statute, and under such regulation no part of the sinking fund can possibly be used for ordinary revenue purposes. This, is a fact which ought to be understood by every one interested in the finance of the colony, and it has been more than once fully set forth in the official statements made by the representative of the New Zealand Government in London, and freely circulated in this country, notably in the statements issued by the late Agent-General (Sir F. D. Bell) in January, 1885, and again in May, 1888. The conversion of the public debt into stock bearing a lower rate of interest than that charged on the original debt has been successfully effected to a very considerable amount, and the result has been advantageous to the colony, inasmuch as it has largely reduced the amount of interest payable thereon. Progress of the Colony. It is only necessary, in order to produce satisfactory evidence of the progress of the colony, to call attention to the statistics given below. These statistics for the most part speak for themselves. Special attention is, however, called to those relating to the Postal Service of the colony, the very large increases in the number of letters and telegrams received and despatched, affording striking evidence of the commercial progress of the colony. It is also worthy of special remark, as regards the exports of the colony, that during the time when there has been a continuous fall in the prices of produce yet the value of the exports is still on the increase, showing that the increase