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the validity of his technical plea that Government money which reached ALVES in the Treasury did not "reach the Treasury." But it is only fair to him to mention that when I offered him the acting appointment of Treasurer he asked to be allowed to decline it on the ground that he had never had any experience and had no know- ledge of Treasury work. No other arrangement being feasible in order to allow Mr. MITCHELL-INNES to go on leave, I pressed Mr. MAY to accept the appointment, and it was under these circumstances that he consented to act. Soon after he assumed the duties of the office he informed the Colonial Secretary confidentially, for my consideration, that three out of his four principal subordinates were either past their work, or wholly incompetent, and that it was impossible to get anything approaching a fair day's work out of any of them. The result of these representa- tions was that the three officers in question were compulsorily retired at the end of the year. He also worked very hard and with signal success in getting in arrears of revenue. Under these circumstances it is not, I think, to be wondered at that he failed to exercise such supervision in certain directions as was required to stop the system of misappropriation that had been going on unchecked for many years. may also mention that for four of the six months of his acting tenure he drew no salary as Acting Treasurer, and for only two months half salary. In view of these considerations I would beg leave to recommend that he be absolved from his pecu- niary responsibility, and that the amount misappropriated during the time that he was acting as Treasurer be written off.

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9. There remain the questions of Mr. MITCHELL-INNES' pecuniary responsibility for the amount misappropriated while he was in charge of the Treasury, and of the judgment to be formed of the manner in which he has discharged, what I conceive to be, his duties as Treasurer. The two questions are, of course, more or less con- nected, but they are distinct questions and require to be separately decided. For when Government money has been stolen in a Treasury, it may be the case that the Treasurer may deserve to be held pecuniarily responsible, and yet that he has not, either so generally, or so culpably neglected his duties as to render him unfit to be continued in his office. I therefore directed the Colonial Secretary to keep the two points distinct, and he accordingly wrote two letters to the Treasurer, the one requesting him to shew cause why he should not be held pecuniarily responsible, and the other inviting his explanation of the fact of his never, either by checking his books, or in any other way, having taken any steps to fulfil his primary duty of ensuring that the revenue which reached his Office was all placed to the credit of the Government. The second of these letters is, as Your Lordship will observe, written on the assumption that it is the first duty of the Treasurer to check receipts. If it is his duty to systematically check receipts and of the Local Auditor to check expenditure then, the Treasurer appears to have gravely failed in his duty. If on the other hand, as there appears reason to believe, the Treasurer is entitled to look to the Local Auditor for such systematic checking of receipts, concerning him- self more with the checking of expenditure, then Mr. MITCHELL-INNES' conduct does not appear to me so open to censure; but I shall deal more fully with these points later on.

10. In his reply to the first of these letters the Treasurer confines himself to explaining why he did not have the Rent Roll for 1890 balanced. His explanation is that 1891 was a very busy year, and that the Local Auditor only drew his attention once to the fact of the Rent Roll not being balanced. Mr. NICOLLE, in his evidence before the Commission, states that he called his attention on several occasions; he has subsequently been questioned on the point by the Colonial Secretary and he is very positive that he did call Mr. MITCHELL-INNES' attention on several occasions to the necessity of having the book balanced. The latter, however, denies this.

11. To the second letter of the Colonial Secretary the Treasurer replies in effect that the only neglect of duty with which he can properly be charged consists in his not having had the Rent Roll for 1890 balanced, that the checking of receipts has always been regarded as the duty of the Auditor, and that in his letter of March 22nd, 1892, (copy of which was duly forwarded to Lord Knutsford) he pointed out that the "systematic checking of receipts" could not be properly per- formed by the Treasurer with his existing Staff.

12. In the separate statement which he has asked me to submit to Your Lordship he repeats his contention that the duty of checking receipts is no part of the Treasurer's duties, but devolves solely on the Local Auditor, and he again refers to his letter of March 22nd, 1892. He expresses regret at not having had the Rent Roll balanced, and as regards the fact that ALVES habitually received