Although the local bodies, from the time they had the money, started to pay the 1 per cent, sink ing fund, it was not applied specially. It went into the general revenue. It was in 1892 that the sinking fund was really com menced, and while 1 per cent, went into general revenue, 1A per cent, was taken out of the Consolidated' Fund and another A per cent, from the Assurance Fund under the Land Transfer Act, and by that means a sinking fund was really set up which would repay the loan in twenty-six years. That was in Mr Ballance’s time, and year by year he set aside money for the purpose of forming this sinking fund at the rate of £20,000 a year, which, being reinvested, augmented, and in the early part of the present financial year had accumulated to the amount of £85,000. It was discovered by the Treasurer, and the Government were advised by their law officers that they could take this money, and they did. But they would not state to the House that they had taken it until they were forced to do so, and he thought their reluctance seemed an indication of discredit attachable to the transaction. It might be necessary to explain that the particular £85,000 which was supposed to be in the public chest, or rather in one of the Public Trust Funds, had not been taken from that fund, but debentures had been issued against it, and the money obtained from trust funds on those debentures was used, and the whole amount had thus been drawn against and in effect taken, although it might be offered in explanation or quibble that the actual money itself had not been used. This money had not been taken, but bonds had been issued against it. There was one thing on which the electors needed to be warned. The Public Accounts Committeehad passed a resolution setting forth ; “It has been proved to the satis faction of the Committee that, owing to a new system inaugurated last year by the Treasurer of drawing bonds, there has been at least £IBO,OOO less available during the year for the use of the Government.” The meaning of that was a wish to convey to the public an impression that the Govern ment might have borrowed £IBO,OOO more than they did. 