CONVERSION OF £500,000 GUARANTEED DEBENTURES, DUE 1915 (RETURN RELATIVE TO).

Appendix to the Journals of the House of Representatives, 1910 Session I, B-06a

B.—6a

1910. NEW ZEALAND.

CONVERSION OF £500,000 GUARANTEED DEBENTURES, DUE 1915 (RETURN RELATIVE TO).

Laid on the Table by Leave of the House.

The net result of the conversion may be stated thus :— The public debt was increased, — £ 3J-per-cent. new inscribed stock ... ... ... 616,000 Guaranteed debentures converted ... ... ... 500,000 ■ 116,000 Less sinking-fund debentures redeemed ... ... ... 96,371 Net increase ... ... ... ... £19,629 Annual charge for interest lessened, — Original charge— £ 4 per cent, on £500,000 ... ... 20,000 4£ per cent, on £96,371 ... ... 4,337 24 ' 337 New charge— 3£per cent, on £616,000 ... ... ... 21,560 Decrease ... ... ... ... >## 2 777 Annual charge for management increased, — £500 per million on £616,000 ... ... ... 308 Less per cent, commission on payment of £20,000 interest ... ... ... ... 50 258 Net decrease... ... ... mas ... ... £2,519 Consequent upon the conversion, the accumulated sinking funds of the guaranteed £500 000 were released, the amount realized being as under :— 4 per cent, stock, £236,191 ss. 5d., sold for ... ... 247 413 7 li 3* per cent, stock, £10,052 12s. lid., sold for ... 9*700 4 0 Interest on securities received ... ... ... 2 95y 10 6 Amount realized ... ... ... zsw ... 260,073 2 5 Less applied to redemption of sinking-fund debentures "... 0 0 £163,702 2 5

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Practically this £163,702 represents a new loan for the Public Works Fund, and it may be assumed that there would have to be paid something like the following if it were necessary to go upon the London market for the money : — To provide £163,702 of cash plus expenses of raising, it would have been necessary to have created and sold— £ £ £173,000 stock at 96 ... ... ... ... 166,080 Interest at 34 per cent, on £173,000 ... ... ... 6,055 Management at £500 per million ... ... ... 86 Annual charge ... ... ... ... ... £6,141 This gives a saving of upwards of £2,700 of annual charge for interest; so that the difference between the conversion operation and obtaining a new loan may be set down as effecting a saving of £8,700 per annum. J. W. POYNTON, Secretary to the Treasury. R. B. Vincent, Accountant to the Treasury. The Treasury, Wellington, 23rd August, 1910.

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