CO129-625-1 Trading Reserve Fund 1-5-1950 - 31-10-1951 — Page 14

54466/1/51

Your Ref: 2/2161/47

TONG KONG

NO:

62

CONFIDENT IAL

4

14

COLONIAL OFFICE,

The Church House,

Great Smith Street,

London, S.7.1.

9

March, 1951.

Sir,

I have the honour to refer to your despatch No: 8 Confidential or the 27th January, 1951, in which you seek my approval:-

(a) of the adoption of the Statement of Accounts

of the Department of Supplies and Distribution from 1st May, 1946, to 31st March, 1950, as presented by Messrs. Lowe, Bingham and Matthews;

(b) in principle, to the setting up of a

(c)

Development Fund and an Essential Commodities Equalisation Fund;

to the charging of interest on advances to the Trading Suspense Account.

2. With regard to the first of your proposals I note from page 17 of Enclosure 2 to your despatch under reply that the Auditors were the first to admit that

in the preparation of the accounts

11

•

we (adopted) a number of unorthodox short cuts as we did not believe we were justified in spending an unpredictable and unreasonable amount of time and labour in further

I note .............. research of doubtful items". also that the Auditors are highly critical of certain of the arrangements for the financial control of the Department during the period covered by the accounts. However, in view of your assurance in paragraph 4 of your despatch, that you are satisfied that the Auditors' enquiries have not brought to light further irregularities which merit investigation, (b) in view of the fact that the cause of past irregularities lies in the almost chaotic disorder that followed the re-establismment of Civil Administration, and (c) in view of Lord Listowel's agreement, expressed in his despatch No: 226 of the 27th September, 1949, hat the certificate of Messrs Lowe, Bingham and atthews might be accepted as an adequate account, I am not now disposed to withold my approval of the adoption of the Statement of Account.

3. I note your commendation of the officers of the Supplies and Distribution Department expressed in paragraph 4 of your despatch, and I am confident that you will ensure that the improvements, referred to in the same paragraph, will not merely be maintained but will be developed further by the new arrangements described in paragraph 6 of your despatch.

GOVERNOR

SIR ALEXANDER GRANTHAM, K.C.M.C.,

etc.,

etc.,

etc.