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not at the disposal of the Government in the same
way as are such cash deposits as, for example,
securities which are lodged by public officers for the performance of official duties and which are at Government's disposal. The money is simply deposited
with a bank and the Government does no more than hold
the deposit receipt or a safe custody receipt as
evidence that the deposit exists and as security that
it cannot be disposed of without Government consent. Government securities and mortgages are of course in
exactly the same position, that is, Government holds
the documents as evidence of the existence of the assets
but is not concerned with the income derived from them
•
and has no right to dispose of them.
2.
There appears, therefore, to be no valid
distinction between these various kinds of security,
and if the fixed deposits are to be included in the
balance sheet it would seem reasonable that the others
should be included also. The inclusion of investments
and mortgages would, however, be highly inconvenient
since their value naturally fluctuates year by year,
and it would be necessary, for the purpose of showing
them in the balance sheet, to make a more exact valuation
than is now necessary merely for the purpose of verifying
that the value is in excess of the fixed sum required
by the local insurance law. It can, I think, be argued
with considerable force that none of these assets are
funds in the custody of the Government any more than
are the securities deposited by the note-issuing banks
(which are referred to by the Auditor in paragraph 4 of
his report) and that therefore Colonial Regulation No.314
does not apply.
3.
I shall be glad of your directions, in the