How the Debt was Increased.

The Premier said that of the increase to the public debt £1,330,000 was interest bearing. That was quite correct, £529,000 bad been loaned to public bodies, and was bearing interest at the rate of 5 per cent. For the purchase of the Cheviot estate £250,000 had been used, and for native lands purchase, lands for settlement, lands improvement and New Zealand consols £555,000 was absorbed. In addition £642,000 had to be paid as premiums to enable loans to be converted. One great incentive to the conversion of loan was to release sinking funds which could not under Vogel's Act of 1884, be touched in any other way. Possibly it was the best thing to do, for the Colony must carry on to enable it to do so and pay liabilities, otherwise one of three things had to be done, either increase the already heavy taxation, reduce expenditure, or go in for fresh loans.