8.—16

2nd Liberty Loan The prospectus for the 2nd Liberty Loan was issued on the 12th October, 1942. Ten million pounds was invited for subscription, and the following Stocks were offered : 2|-per-cent. 1948 Stock; 3-per-cent. 1953-56 Stock. No issue of £1 Bonds was made. The loan closed on the 14th November, 1942, and was over-subscribed by £416,000, Subscriptions were as follows : — , Applications. Amount. 2|-per-cent. 1948 Stock .. .. .. 12,906 1,891,000 3-per-cent. 1953-56 Stock .. .. .. 12,119 8,525,000 25,025 £10,416,000 Advance subscriptions totalled £2,678,810, or over 25 per cent, of the total amount of the loan. The organzation set up to raise these loans was on a national basis, and War Loan Committees were formed throughout the country. The Board desires to place on record its appreciation of the excellent work performed by these Committees, by the National Savings Organization, and by the many organizations, the press, and individuals throughout New Zealand whose efforts played such a substantial part in the success achieved. Exchange Control The procedure of licensing of overseas trade during the year was not altered, but the operations of Lend-Lease and Reverse Lend-Lease have to be taken into account when considering the table shown below. The large quantities of Lend-Lease imports which have come into the country do not involve disbursements of overseas funds, and conversely, large quantities of goods which might normally have been exported have been made available under the Reverse Lend-Lease arrangement to the United States for their troops in the Pacific and New Zealand. The administration of the Finance Emergency Regulations 1940 (No. 2) has continued to operate smoothly. Owing to the presence in New Zealand of American troops, the Bank authorized suppliers of goods and services to accept United States dollar notes, and announced the rates of conversion into New Zealand currency. Although the majority of the public complied with the official rates, it became evident that some transactions were taking place at unofficial rates. The Bank therefore issued a warning that the official rates must be observed. Action has been taken with regard to subsequent breaches, and penalties incurred by the persons concerned. The, following table gives a classification of foreign exchange transactions for the years ended 31st March, 1941, 1942, and 1943 : —

Summary of Transactions

3

(£(N.Z.)000.) Year ended 31st March, Year ended 31st March, Receipts. Payments. 1941. 1942. 1943. 1941. 1942. 1943. In respect of — In respect of— Exports .. .. .. 173,302 72,774 80,885 Imports, excluding payments 42,015 39,623 33,103 Interest, dividends, legacies, 4,220 4,231 4,339 in respect of Government immigrants' funds, repatri- imports and in respect of ated capital, and private goods imported prior to debts due in New Zealand introduction of licensing Trade debts due in New Zea- 3,443 2,897 3,687 system land, including overseas earn- Interest, dividends, legacies, 3,935 3,782 3,643 ings of New Zealand firms emigrants' funds, repatriCommissions, royalties, and 120 166 252 ated capital, and private insurance debts due overseas Donations and allowances . . 382 431 290 Trade debts due overseas, 2,759 2,294 3,445 Travellers' expenses .. 280 268 493 including earnings in New Receipts on account of Ameri- .. .. 5,057 Zealand of overseas firms can Authorities and personnel and payments in respect of Receipts by High Commissioner . . .. 599* goods imported prior to in London introduction of licensing Unclassified .. .. 965 504 395 system Government debt and other 19,628 34,501 46,981 services, including payments in respect of imports Local-body-debt services .. 3,635 1,800 2,013 Commissions, royalties, and 538 549 922 insurance Donations and allowances .. 622 606 565 Kim hire and entertainments 343 226 794 Travellers' expenses .. 274 198 72 American Authorities and per- .. .. 1,832 sonnel Unclassified .. .. 15 82,712 81,271 95,997 73,764 83,579 93,370 * Previously included in " Unclassified."