The public debt has further been increased during the year by the conversion of L 4,476,000 5 per cent, debentures into L 5,371,200 4 pei- cents, under the option, expired on 10th March last, given to subscribers to the five million loan, 1879. This operation resulted in an increase of the debt by L 895,200 since March 31, 1880 The following debentures have been re deemed and cancelled :—Nelson Water Works Loan of 1804, L(i,200; North Otago District Public Works Loan of 1872, L 6,200. Then increase of debt during the year exclusive of the increase by conversion into inscribed stock was therefore L 847,700, but inclusive thereof it was Li,742,900, adding to the gross debt on 31st March, 1881, the balance of the guaranteed debentures L 500,000 and the Treasury Bills L 431,900 held by the Public Works Fund ; the total gross pub lic debt when these securities are disposed of will amount to L 30.097,411, or de ducting the sinking fund accrued to 31st March, 1831, L 2,037,241, the net debit will be L 28,040.170, in respect of which annual charges will amount to about LI ,543,000. I may add that by the con version of L 4,470,000 five percent de bentures into L 5,371,200 four per cents a saving of L 8952 interest per annum has been effected. Public Works Fund on 31st March, 1880:—The total ways and means available subject to lia bilities was L 3,778,173 this sum included cash in the colony and London L 802.410, advances in the hands of officers of the Government L 315,763; balance of five million loan L 751,000; guaranteed de bentures of the Immigration and Public Works loan of 1880, LSOO.OOO ; amount advanced temporarily at interest L 57,000, and advances to the consolidated fund upon treasury and deficiency bills L 992,000 ; during the past year special receipts and recoveries amounting to L 43,174 came to credit of the fund, mak ing with the balance of L 3,778,173 at the beginning of the year a total of L 3,821,347. The expenditure, a summary of which will be found in table No. 1, appendix, to this Statement amounted to L1,9G0,974, thus leaving an unexpended balance of L 1,860,373 at the close of the year. 