till November, 1901, when a loan of £1,000,000 was floated at 3 per cent. The price of issue was £94 per £100, and the loan was underwritten at a fee of £1 per cent. No further particulars are yet available. Debentures and stocks have been sold locally, £500,000 being disposed of in 1900-1, bearing interest at 4 per cent., and £250,000 in 1901-2 at the same rate of interest. The amount of treasury bills outstanding on the 31st March, 1901, was £700,000; the issue during the ensuing twelve months amounted to £1,380,000, while bills representing £1,380,000 were paid off, leaving the amount outstanding on the 31st March, 1902, at £700,000. As, however, allowance is made for these at the end of the financial year when carrying forward the balance of the Revenue Account, the liability is practically wiped out. The particulars of the latest issues of the Funded Debts negotiated in London for which particulars are available are as follows: The treasury bills outstanding on the 30th June, 1902, were issued to cover deficiencies in revenue, with the exception of £3,006,500 in New South Wales, of which a sum of £6,500 is overdue, and £1,185,000 in Victoria. The expenses incurred in these issues were practically nil --except for the flotations by New South Wales in London, the usual charges being made for brokerage, commission, and stamp duty-as the bills were sold at par, or a very small discount, and in some cases even at a premium. Particulars of the cost of treasury bills negotiated prior to 1896 will be found in previous editions of this work. EXPENDITURE FROM LOANS. In the foregoing pages the chief points dwelt upon have been the amount of the public indebtedness and the credit enjoyed by each state as tested by the selling price of its loans. Before closing this chapter it would be well to consider for what purpose the debts were incurred. The services upon which the proceeds of the public loans were expended are various, but the bulk of the expenditure may be placed to the account of the construction of railways, water supply and sewerage, and electric telegraphs. In the early stages of Australasian borrowing the expenditure was moderate, loans being difficult to raise and interest high; but latterly, as the conditions under which loans could be contracted became favourable, especially since 1881, few of the states have set any bounds to their requirements. It was a repetition of the old experience the opportunity engendered the desire, and the open purses of the investors tempted the states to undue borrowing and lavish expenditure. What is termed a "vigorous public works policy" was the order of the day, and works were pressed forward which under other circumstances would either not have been undertaken, or have been held back until the growth of population warranted their construction. The plethora of money has been harmful in many ways, the most apparent being the construction of not a few branch railways, in outlying and sparsely-settled districts, which do not pay even their working expenses. But when every allowance is made for unwise or improvident expenditure, it will be found that by far the larger portion of the proceeds of loans has been well expended. In some instances it will be years, taking a most hopeful view of the situation, before many of the revenue producing works will yield a sum sufficient to pay working expenses and interest; nevertheless, a practical consideration of the conditions which surround Australasian settlement will demonstrate that in some instances the construction of these works was justifiable, for apart from the consideration that they will ultimately be self-supporting, they have already materially assisted in developing the country's resources, and have largely enhanced the value of the public estate. Whether their cost in all cases should have been charged against the loans account is a different matter, seeing that the rents obtained from public lands, and proceeds of sales, invariably go into the ordinary revenue of the states. The following statement gives, under a convenient classification, the loan expenditure of each state during 1901-2: The expenditure of the Commonwealth states during 1901-2 from funds derived from the proceeds of loans was £9,443,130. Of this amount, the sum of £5,847,342 was spent on services directly revenueproducing, and the remainder was chiefly devoted to works such as the construction of roads and bridges, the improvement of harbours and rivers, and the erection of lighthouses, schools, and public buildings, less obviously a proper charge against loan votes. The loan expenditure of the six Commonwealth states and New Zealand during 1901-2 was £12,728,062, of which amount £7,228,337 was spent on works directly revenue-producing. In most of the states the expenditure from loans was greatly reduced during the years 1893 to 1896. In some cases this was to be attributed to a settled policy of retrenchment; but in others, the difficulty of raising a loan in London affords a more probable explanation. The expenditure, however, since 1897-8, shows a tendency to increase, the figures for the last financial year being largely in excess of the previous five years in the states of New South Wales, Tasmania, and New Zealand. The expenditure was chiefly on account of revenueproducing works; and in the case of New Zealand and Queensland large advances from loans were also made to local bodies. The xpenditure of each state during the last five years is given in the ollowing table : : Australasia 1,428,502 5,601,096 6,274,435 7,141,202 9,443,130 3,284,932 7,437,959 8,326,334 9,387,423 12,728,062 The total expenditure of the proceeds of loans from the commencement of borrowing to the end of the financial year 1901-2 for the six Commonwealth states was £206,118,355, and for the whole of Australasia £257,702,272. Of these sums, £161,158,989, or over three-fourths, was spent by the Commonwealth states, and £181,278,705, or nearly three-fourths, by the six states of Australia and New Zealand in the construction of railways, water supply and sewerage works, and electric telegraphs; and the balance was expended on services which, though nonproductive, were claimed by their proposers as being necessary in the interests of national development. The expenditure on defence and the payments made to meet deficiency in revenue are the exceptions to the rule which has governed the expenditure of the proceeds of loan issues. The expenditure to cover deficiency in revenue has not been large, and is looked upon as but a temporary charge on the loan funds; while the expenditure on defence has been extremely small in all the states except New South Wales and New Zealand. The following table shows the total loan expenditure of each province up to the close of the last financial year: Commonwealth New Zealand.... Australasia 10,146,622 3,324,412 13,471,034 141,717 4,139,590 4,455,782 8,595,372 130,743,963 26,673,956 3,741,070 161,158,989 44,959,366 206,118,355 31 Mar., 1902 18,501,967 679,802 937,887 20,119,716 31,464,201 51,583,917 149,245,930 27,353,818 4,678,957 181,278,705 76,423,567 257,702,272 £ £ £ 57,074,408 15,206,341 72,280,749 46,318,045 | 4,202,843 50,520,888 23,985,584 11,469,930 | 35,455,514 19,494,740 6,300,058 25,794,798 In the New Zealand returns, old provincial debts contracted prior to 1876, amounting to £11,535,469, have been included under the head "Other works and services," as there is no available record of the services upon which the loans of the old Provincial Governments were expended, except where such was for the construction of railways. The figures given for New South Wales, South Australia, Western Australia, and Tasmania under the head of "Railways" include loan expenditure on State tramways, but, except in the case of the firstmentioned state, the amount thus expended is unimportant, as this service in the other states is generally in the hands of municipal authorities or private companies. The Governments of New South Wales and New Zealand have borrowed money for the purpose of making advances to settlers for the improvement of their holdings, such advances being interest bearing and repayable by instalments. The sums advanced by the respective Governments named were-New South Wales to the 30th June, 1902, £268,902, and New Zealand to 31st March, 1902, £3,073,685. In the preceding table a large sum has been placed under the head of "Other works and services"; in the following statement this amount has been subdivided and is shown under several heads. In regard to New Zealand, the sum under the heading of "Miscellaneous" also includes the provincial loans prior to 1876; but it is certain that a very large proportion of this miscellaneous expenditure was incurred for war purposes, the cost of suppressing the Maori risings between 1860 and 1870 being charged to loan votes :— |
