I.—7b.

How can I determine what a stranger would assume ? If you asked me what anybody reading this table would judge to be the amount of interest paid, I should say it was very clearly stated. 88. What I wish to know is this : There is nothing in the Year-book to show that the reason why our interest appears less is because we have adopted a new system ?—There is nothing to show that on the slip referred to. 89. In order to obtain accurate information, should there not have appeared in the Year-book some statement that our payments of interest appear less because of our different system of paying interest in dealing with drawing loans ?—lt would have been, perhaps, as well to have stated that; but it.is possible that it is already there. 90. Mr. Montgomery.] Do I understand from the previous questions, which were somewhat lengthy, that, if the usual system—the old system—had been continued, the interest, instead of showing a decrease of £103,083, would have shown an increase of £22,685 ?—Yes ; apparently so from these tables, which have been compiled for the purpose of showing the result of payments under the old system. 91. Then, it is the change in the system that makes it appear as though there had been a decrease instead of an increase ? —That is so. 92. Hon. Mr. Ward.] Is the present system in connection with the drawn bonds a better system than the former one ? —ln my opinion, a very much better system. 93. In your opinion, would it not have been better if the system had been adopted some years previously ? —Yes ; I think so, decidedly. 94. Approximately, what was the total amount of interest paid during the last financial year on the extra amounts of moneys used that year as against the preceding year?—l do not think I could tell you that without referring to the Budget. There was a very large increase in the debt last year—over £400,000 was advanced for loans to local bodies, for lands improvement, for Native lands purchase, and for lands for settlement, and these loans increased the amount of interest payable during the year. 95. Can you tell me what was the total increase for all these purposes for which interest has been paid as against the year 1893-94 ?—I could tell you that on making it up ; but I have not got it at hand. The debt was increased by £560,549 —that is the net result. 96. The net result was an increase of the debt by £560,549 ? —Yes; of which amount £411,000 was for the loans which I mentioned. 97. What was the average rate of interest per annum on the extra debt ? —lt was 4 per cent. 98. So that upon the actual increase of indebtedness, chiefly made up by contributions to local bodies, there has been an increase of £22,600 per annum ?—Yes. 99. Consequently, independently of the fact that the system now of dealing with the drawn bonds is in the interest of the country, and is a better method than that which formerly existed, had it not been adopted the old system would have shown an increase of interest of £22,000 per annum, represented by the extra loans incurred in advances to local bodies and advances of a similar nature ?—Yes. 100. So that, independently of the change of system and stripped of all the surrounding benefits accruing from grants to local bodies of moneys which have been raised principally for that purpose, and which are repaying interest to the country at an average of over 1 per cent, more than we are paying for the money, the actual net increase would, assuming that the old system was in existence, represent the interest we are paying for these new loans?— That is so. 101. I understand Sir R. Stout to state that there was a discrepancy between the amounts shown in this slip of the Year-book, and those in your statement, in consequence of the altered amount under the new drawn bond system not been shown there, and that the omission in the Year-book to refer to the alteration of the system would be misleading to the uninitiated stranger. What was the date of the compilation of this Year-book ?—Quite recently ; I do not know the date. 102. The ordinary guide, I take it, for those desiring to become conversant with the financial position of the country, is either the Budget or the Treasury statements in the blue-book?— Quite so. 103. In this slip, with regard to what the Hon. Sir R. Stout states as to the absence of information to the uninitiated stranger, it distinctly states that this compilation is exclusive of the interest on Treasury bills ?—Yes ; on that reference to the internal portion of the book. 104. The figures given in the last column of the table, on page 151, are the annual charges on the amount of stock and debentures of the public debt (exclusive of Treasury bills) outstanding at the end of each year, and not the moneys actually paid for interest and sinking fund ?—That is so. 105. Treasury bills, being fluctuating items so far as finance is concerned, in the ordinary course are never included in the ordinary debt ?—No ; they are not as a rule included. 106. Consequently, the compiler of this Year-book is quite justified in not including interest on Treasury bills in the tables of this last column ? —Yes ; he is quite right. 107. So that the apparent discrepancy between this slip of the Year-book and the amount of interest stated by the Treasury is no discrepancy, inasmuch as it is admitted in all countries that the inclusion of Treasury bills as permanent items of the indebtedness is never given. Is that so ? —That is the general rule. 108. Then, the Hon. Sir R. Stout, in his assumption that there is a discrepancy between the figures of the slip which was produced from the Year-book by you at Sir Robert's request and the Treasury figures, is incorrect ? —That is so. 109. I want to ask a question about this £103,083, referred to in the Treasury statement, and which has exercised some attention. Was the proposed change of system respecting the drawn bonds referred to in the Financial Statement of 1894 ?—Yes. 110. Was an indication given in the Financial Statement that it was intended next year to adopt that system ? —Yes.

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