§ Before I pass away from the examination of last year, I must explain what we have done during the year in regard to the capital liabilities of the State. I endeavoured in my last year's Budget speech to make clear the distinction between what is popularly called the National Debt, the dead weight debt of the country, and the other capital liabilities which have been for the most part created during the last fifteen years for special purposes against specific assets, actual or potential, and each with a Sinking Fund of its own. I will deal with the two things separately. I take first the dead weight debt—the National Debt, popularly so-called, which consists of three items—the Funded Debt, the estimated capital liabilities in regard to terminable annuities, and the Unfunded or floating Debt. I will compare each of these items as they stood respectively on 1st April, 1906, and 31st. March, 1907. The Funded Debt on 1st April, 1906, was £634,048,000, and on 31st March it was £631,929,000, a reduction of £2,119,000. The estimated capital liabilities in regard to terminable annuities on 1st April, 1906, were £43,459,000, and on 31st March, 1907, £40,864,000, a reduction of £2,595,000. The Unfunded Debt on 1st April was £65,713,000—and I ought to add a word of caution before I read the next figure—and on 31st March, 1907, £51,713,000, or an apparent reduction of £14,000,000; but the actual reduction was not £14,000,000, but £9,000,000, £5,000,000 being due to the temporary dropping of the Treasury bills, of which I have given an explanation; but after allowance has been made for that, there was an actual realised reduction on the Unfunded Debt during the year of no less than £9,000,000 sterling. The permanent reduction, as the Committee will see, effected during 1184 the course of the year 1906–7 in the National Debt was £13,714,000. It is only fair and right to say that in making that large reduction we are indebted to the extent of £3,466,000 to the Old Sinking Fund left by the right hem. Gentleman the Member for Worcestershire, East.