Enclosure 1.
COPY:
Director of Colonial Audit.
3rd October, 1932.
age 10
10
Query 65/E 1932.
This query is submitted for guidance and decision
on two points.
2.
On 26th September,1931, when the market dollar S d
rate was 1/2. the Treasurer on behalf of the Government made
a forward contract at a fixed exchange rate with the Hong
Kong & Shanghai Bank for a total remittance of £200,000 to
s d England at 1/3, a preferential rate to Government is of
common occurrence.
3.
After the 26th September, however, the dollar
rose and when on 18th January,1932, the Treasurer began to
s d
make use of the contract it had reached 1/4.3/16 and the
£100,000 of this query was remitted at a "loss" of $213,718.42.
Similarly in February and April 1932, two further remittances
of £50,000 each were made when the dollar stood at a higher
rate than that of the original contract.
the £200,000 was $314,447.63.
The total 'loss' on
A.
4.
The first point I would submit is how far it is
in the province of audit to criticise the purchase of
remittances so far in advance of current requirements in
England. The contract seems to have been rather in the nature
of a speculation which did not come off.
5
My personal view is that if we were informed
of each contract directly it was made it would be pre-audit
to
age 10Page 11
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