Justice and

Increase $596,087, the greater part of which was Department of required for necessary improvements in the educational Public system.

Instruction.

amount of Department of

Internal

Increase $390,387, which included an $147,922 in respect of the Geographical Exploration Development. Commission, $85,825 for the Geodetic Commission, and smaller amounts for various other Commissions and Institutes of a scientific character.

Communications

Works.

Increase $345,881, for repairs to the National Palace, Department of construction of the National Theatre and other public and Public buildings, and the extension of means of communication outside the Federal District.

Finance and

Increase $844,897, of which the Administrative Section Department of required $152,397 for fees, salaries, etc., and the expenses Public Debt. of remitting cash for payments not connected with the Public Debt.

The balance of $692,500 was required for the service of the $12,500,000 Gold Treasury Four-and-a-half per Cent. Bonds issued in June, 1903, to pay for the Railway Stock purchased by the Government and the Port Works in course of construction.

War and Marine.

Increase of $675,604, required for equipments, etc., in Department of the Army and the Navy, and for the establishment of centres of military organisation in various parts of the Republic.

CUSTOMS RECEIPTS.

The amounts collected in each month of the financial year 1903-4, in respect of the Import and Export Duties, Port Dues, etc., are shown below:

In the following Tables are shown the values of the Imports and Exports in the financial years 1901-2 and 1902-3

It was mentioned in the Council's last Report that there was reason to believe that the New Zealand Government proposed after all to pay the £150,000 to the Debentureholders in cash instead of in 34 per cent. Debentures. This proved, however, to be not entirely correct, as it was found that the Government intended to raise the cash by the sale of Bonds to be created for that purpose. The Committee were also informed that a considerable delay might arise before the cash was actually handed over by the Government. Fresh negotiations then ensued and various proposals and counter-proposals were exchanged by telegram, the Government insisting on conditions or reservations which were in some way or other inacceptable or objectionable. At length it was agreed that the

There is a question whether the whole of these Debentures will be entitled to participate in the distribution mentioned below. The matter is now before the Court.

£150,000 should be paid in Debentures of two years' currency, bearing 3 per cent. interest.

Further difficulties then arose owing to the New Zealand Government requiring a receipt stating that the Colony had treated the Debenture-holders in a generous and equitable manner and that none of the matters referred to in the Debenture-holders' Petition should be raised against the Colony in the future. To this, of course, the Committee could not agree, and it was not until February, 1904, that a compromise on this point was arrived at. The £150,000 of 3 per cent. Debentures were at last handed over, and were sold by the Receiver of the Railway at 981, realising £147,375, the proceeds being paid into Court.

It was then hoped that a prompt distribution of the available balance would be made to the Debenture-holders, but it appeared that there were still outstanding claims that required to be adjusted and certain lands to be disposed of before the accounts could be finally settled.

In these circumstances the Council urged that application should be made to the Court to sanction an interim payment on account. This was done, and on the 16th June an order was made for the payment of £7. 10s. per £100 Debentures.

It is understood from the Solicitors who now have charge of the matter (Mr. Alexander Young having been discharged of his Receivership) that a further distribution will be made as soon as all accounts are settled.

As some misapprehension exists on the subject, it may be well to point out that the Debenture-holders' Committee had no power whatever to intervene in the distribution of the money. The matter has been in the hands of the