8.—16.

Dairy Industry Account. With the co-operation of the Primary Products Marketing Department, the trading banks in the Dominion, and the Bank of England in London the machinery of financing the dairy-produce acquired under the terms of the Primary Products Marketing Act has worked quite smoothly. The details of the operations on the Dairy Industry Account up to the 31st March, 1937, were as follows :—

Management of the Public Debt. On the Ist October, 1936, the management of the public debt was transferred from the Treasury to the Reserve Bank in accordance with the provisions of section 22 of the Reserve Bank of New Zealand Act, 1933. The Bank thus assumed the responsibility for another service which is generally regarded as one of the normal functions of a central bank. The first major operation undertaken by the Bank in this connection was the issue on the 15th October last of the prospectus of the Government loan for a total of £13,930,000 in the form of either 3|-per-cent. stock or debentures, repayable 1953-57, or 3-per-cent. stock or debentures, repayable 1939-41. This loan was offered at par either for payment in cash or in exchange for holdings of New Zealand Government 4-per-cent. stock or debentures, 1937-40, amounting to £12,426,875 6s. lid., public notice of the redemption of which on the 15th January, 1937, had been given in terms of'section 15 (I) of the New Zealand Debt Conversion Act, 1932-33. The result of the issue was as follows :— (а) Conversions — _ £ £ Into 3|-per-cent. 1953-57 loan .. •• •• •• 6,634,545 Into 3-per-cent. 1939-41 loan .. .. •• •• 2,027,855 8,662,400 (б) Cash subscriptions — To 3|-per-cent. 1953-57 loan . . .. • • ■ • 730,300 To 3-per-cent. 1939-41 loan .. .. • • • ■ 2,046,650 F 2,776,950 Total of cash and conversion applications .. •• 11,439,350 Amount offered for subscription .. •• ■■ •• 13,930,000 Balance not taken up .. •• •• £2,490,650 The amount by which the total of the cash and conversion applications fell short of the total amou for which applications were invited is accounted for as follows : — (i) Balance required to complete the repayment of the 4-per-cent. £ £ 1937-40 loan 987,525 Less cash provision for redemption .. .. ..26,875 960,650 (ii) Amount intended to be used for redemption of short-dated securities issued in connection with the repayment of the Southland Electric-power Board loans in London . • ■ • • • • • • • • • 1 > 530,000 £2,490,650

3

(000 omitted.) Repayments. Balance of Amounts ■ Advance advanced. | outstanding at Sterling. New Zealand. [In New Zealand. Total. End of Month. [ I 1936. £ £ £ £ £ £ August .. 70 .. • • 5 5 65 September . . 1,408 • • • • 9 9 ' ' October .. 2,571 198 245 24 269 3,766 November .. 1,494 666 826 39 865 4,395 December .. 3,270 1,292 1,602 29 1,631 6,034 1937. January .. 2,445 2,091 2,593 47 2,640 5,839 February .. 2,439 1,394 1,728 48 1,776 6,502 March .. 2,522 2,221 2,754 44 2,798 6,226