"AID TO PUBLIC WORKS AND LAND SETTLEMENT ACT, 1903" (CORRESPONDENCE RELATIVE TO PAYMENT OF INTEREST ON DEBENTURES UNDER).

Appendix to the Journals of the House of Representatives, 1905 Session I, B-22

I—B. 22.

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1905 NEW ZEALAND.

"AID TO PUBLIC WORKS AND LAND SETTLEMENT ACT, 1903" (CORRESPONDENCE RELATIVE TO PAYMENT OF INTEREST ON DEBENTURES UNDER).

Laid on the, Table by leave.

The Controller and Auditor-General to the Hon. the Speaker of the House of Representatives. Audit Office, 30th June, 1905. The Hon. the Speaker of the House of Representatives. The Controller and Auditor-General has the honour most respectfully to inform the House of Representatives that interest on New Zealand loan debentures of denominations not exceeding £100, issued without coupons, has been passed by the Audit Office as paid on the certificates of the paying officers unsupported by receipted vouchers ; and to submit a copy of the correspondence on the subject. J. K. Warburton, Controller and Auditor-General.

No. 1. [Form of debenture proposed to be issued without coupons. —See No. 22.] The Audit Office.—Submitted.— J as. B. Heywood. 3 Feb., 04. The Audit Office raises no objection. It is, however, suggested that the direction in italics to the paying officer would be more conspicuous to him if placed on the back under the heading " Half-yearly Instalments of Interest paid," and that there should be sent to the debenture-holder in respect of each half-yearly instalment payable a timely notice to be presented and signed by him as his receipt for the amount, and the paying officer's voucher for the payment. J. K. Warburton, C. & A.-General. 4 Feb., 1904.

No. 2. The Hon.'the Colonial Treasurer,— Audit Office, sth February, 1904. Adverting to the Audit Office minute of yesterday in which it is stated that the Audit Office raises no objection to the form submitted by the Minister in which he proposes to issue, under " The Aid to Public Works and Land Settlement Act, 1903," the debentures on which the interest would be payable through the agency of Postmasters, it ought to have been observed that the form of debenture is not considered to be satisfactory unless the holder is to give to the paying Postmaster a receipt to be sent in by him as his voucher for the payment. Coupons would be better. If the holder of a debenture should not be known to the Treasury, it would be impracticable for the Treasury to send to him, as suggested by the Audit Office, such timely notice of the interest becoming payable as would serve for his receipt to the Postmaster. J. K. Warburton, C. & A.-General.

No. 3. The Hon. the Colonial Treasurer. Audit Office, 20th May, 1904. Narrations of Debentures of second Issue under " The Aid to Public Works and Land Settlement Act, 1903." Iγ for the interest paid on such of the debentures comprised in these narrations as are without coupons, there is to be nothing taken from the debenture-holders that would prove payment to them of such

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interest, and the only evidence of each payment is the paying officer's own entry on the debenture which is given back to the holder, the Controller and Auditor-General would repeat the remark made in his memorandum to the Minister of the sth February last —namely, that the form is not considered by the Audit Office to be satisfactory. The question must arise whether the interest-payments could be passed. There would not be the vouchers which are required by sections 52 and 54 of the Public Revenues Act, and without which credit could not be given for the payments. J. K. Warburton, C. & A.-General.

No. 4. The Treasury, New Zealand, Wellington, 23rd May, 1904. Memorandum for the Controller and Auditor-General. I regret your letter of the sth February has been overlooked. In reply to that communication and to your further letter of the 20th instant, I am to inform you that vouchers per form attached will be supplied by the Postmasters and bank officials, who make the payments of interest, and that such form of voucher has been accepted by the Audit Office for some years past without demur, in respect of the payment of interest on New Zealand Consols certificates which do not carry coupons. In the case of the payment of coupons the holder of such coupons is not asked to give a receipt upon payment of their value, and it is therefore not deemed advisable to require a receipt from the investor in the case of payment of interest not represented by coupons but by indorsement on the debenture itself. I hope this explanation will be deemed satisfactory. Jas. B. Heywood, Secretary.

No. 5. New Zealand Debentures. Under " The Aid to Public Works and Land Settlement Act, 1903." Interest Certificate. To the Paymaster-General, Treasury, Wellington. I hereby certify that the understated amounts have this day been paid by me, in respect of interest due upon New Zealand debentures presented at this office, and that I have duly indorsed upon the said debentures the several amounts so paid, as under : —

No. 6. The Hon. the Colonial Treasurer. Audit Office, 25th May, 1904. It is submitted that the form in which the Treasury proposes that Postmasters and bank officials shall enter and report their payments of the interest on the debentures is not a form of voucher required by the Public Revenues Act. It is the form of a statement which is not, it is understood, to be supported by anything from the debenture-holder that could be accepted as a receipt. The Audit Office, though it may not have expressed to the Treasury any objection to the want of vouchers for the payments that are made of interest on the few Consols certificates issued without coupons, has long regarded such want as unsatisfactory ; and when the Minister referred to the Audit Office his proposal to issue, for moneys raised under the Aid to Public Works and Land Settlement Act, debentures without coupons, occasion arose and was taken to point out that the officers authorised to pay the interest on the debentures should take, as vouchers for their payments, receipts from the debenture-holders, and that, as it might be impracticable for the Treasury to issue to the paying officers, for payment of the interest, warrants on which receipts could be taken, coupons would be better. A coupon being a part of the paper of the relative debenture, is better evidence of payment to the deben-ture-holder than the receipt on the warrant would be, and consequently the better voucher. As it does not appear that the Audit Office would be justified in passing, without the vouchers prescribed by the Public Revenues Act, any credits for the payments of the interest, the Controller and Auditor-General would now respectfully suggest that the debentures issued without coupons should be cancelled, and debentures with coupons substituted. J. K. Warburton, C. & A.-General.

No. 7. The Treasury, New Zealand, Wellington, 30th May, 1904. Memorandum for the Audit Office.- '■■ • < I regret there has been a misunderstanding over the matter of the issue of a series of debentures without coupons under " The Aid to Public Works and Settlements Act, 1903." I did not read your memorandum of sth February last to mean that you would refuse to allow credit to be given when the

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No. of Debenture. Face Value of Debentures. Due Date of Half-year's Interest -r, ,. , r> • <. ■ m Interest. Paid. Foll ° of Re S lsfcer ln Treasury. Total interest paid £ £ b. a. [Office date-stamp.] , Postmaster.

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interest came to be paid. I understood from your memorandum that while you would have preferred coupons, you did 'not object to the proposed issue and in consequence of this misunderstanding a large number of debentures have been issued to investors all over the colony. In these circumstances, I hope the Audit Office will feel itself justified in giving credit. If it is desired that in future a receipt from the payee be procured in addition to the certificate of the officers making payment, the Treasury will take steps to have this done. As you are aware, the sole object of the Treasury in adopting the non-coupon system was to meet the convenience of small investors who are not familiar with the use of coupons. Jas. B. Heywood, Secretary.

No. 8. The Hon. the Colonial Treasurer. Audit Office, 31st May, 1904. Debentures without Interest Coupons and Treasury Memorandum of 30th May, 1904. The Controller and Auditor-General begs leave to explain the position. The Audit Office, in its minute of the 4th February, while raising no objection to the form of debenture, suggested that there should be sent to the debenture-holder, in respect of each half-yearly instalment of interest, a timely notice to be presented and signed by him as his receipt for the amount and the paying officer's voucher, and added in the memorandum to the Minister of the day following, the sth February, that " it ought to have been observed that the form of debenture is not considered to be satisfactory unless the holder is to give to the paying Postmaster a receipt to be sent in by him as his voucher for the payment. Coupons would be better. If the holder of a debenture should not be known to the Treasury, it would be impracticable for the Treasury to send to him, as suggested by the Audit Office, such timely notice of the interest becoming payable, as would serve for his receipt to the Postmaster." When, on the 20th May, the debentures without coupons were submitted by the Minister for countersignature, he had not acknowledged and made no reference to the Audit Office representations ; and the debentures were countersigned on the presumption that the payments of the interest would be supported by vouchers in accordance with the requirements of the Public Revenues Act. The Audit Office, however, in countersigning the debentures, took the precaution of referring the Minister to its representations, and of remarking that credit could not be given for the interest-payments not so supported. The debentures now issued without coupons to investors all over the colony would thus have been issued after the Minister had been so notified. In these circumstances it is respectfully submitted that the Audit Office could not well be justified in allowing credit for the interest-payments unsupported by the vouchers. J- K. Warburton, C. & A.-General.

No. 9. The Treasury, New Zealand, Wellington, 4th June, 1904. Memorandum for the Audit Office. In reply to your memorandum of the 31st ultimo, and with which you returned a small parcel of debentures uncountersigned, the Treasury desires to mention that these debentures are part of a large parcel which have been printed off and are nearly all ready for the Audit Office's countersignature. Moreover, nearly four hundred of the same issue have been already countersigned by the Audit Office and issued to the public. In these circumstances the Treasury hopes the Audit Office will countersign these debentures for which purpose they are now returned. The matter is one of urgency as the investors reside in Melbourne, and it is desired they should be sent by to-day's mail. With reference to the sufficiency of the paying officer's certificate as a receipt for interest paid, the Treasury would point out that it is the same as that which the Audit Office has always accepted in the case of the New Zealand Consols to " bearer," and the Treasury submits that what is good in the one case may reasonably be treated as good in the other. The Audit Office suggestion of a receipt from the debenture-holder is impracticable in itself, as it is impossible to tell who the debenture-holder might be, and, moreover, there would be no possible means of connecting the receipt of any specified person— e.g., John Brown, with any specified debenture in cases where as here the debentures are to " bearer." For these reasons the Treasury hopes that the Audit Office will accept in the case of these debentures the certificate which it has always accepted in the corresponding case of New- Zealand Consols, and will allow credit accordingly. Of course, if the Audit Office desires receipts from the payees, the Treasury \vill have forms prepared and sent out for use in future cases, although for the reasons indicated above it seems to the Treasury they cannot carry the matter much further. Jas. B. Heywood, Secretary.

No. 10. The Hon. The Colonial Treasurer. The Controller and Auditor-General would respectfully refer the Minister to his (the Controller and Auditor-General's) former minutes, and express his regret that he should be asked to countersign the debentures except on the condition that the vouchers are to be taken for the payments of interest. The coupons appear to be the only satisfactory method of obtaining vouchers for payments of interest to debenture-holders not known to the Administration. The requirements of the Public Revenues Act are not observed where the interest on a few Consols certificates is paid without vouchers in the form either of receipts or of coupons. J. K. Warburton, C. & A.-General. 4th June, 1904.

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No. 11. The Treasury, New Zealand, Wellington, 6th June, 1904. The Controller and Auditor-General, Wellington. You do not slate whether you will countersign the accompanying debentures or not. The question of providing a suitable voucher for the payment of the interest it is submitted may be dealt with separately. Under these circumstances it is hoped the Controller and Auditor-General will see his way to countersign the debentures again submitted. Jas. B. Heywood, Secretary.

No. 12. The Hon. The Colonial Treasurer. Treasury Memorandum of 6th June. The Controller and Auditor-General did not understand the Minister's intention to be that the persons who should hold the debentures submitted for countersignature would be required to deliver to the officers who would make the interest-payments documents to be sent in as vouchers in support of such payments, and it was, in the circumstances, considered to be due to the Minister that he should not have any ground for inferring that the Audit Office could allow credit for the payments not supported by satisfactory vouchers. In the memorandum of the sth February last it was explained to the Minister, as the reason for the Audit Office observation that " coupons would be better " than the receipts, that if the debenture-holders should not be known to the Treasury it would be impracticable to issue to them the interest-warrants which would provide for the receipts. If, therefore, the Minister has, as he appears to have, concluded that receipts from the debenture-holders are impracticable and unsatisfactory, it is respectfully submitted that the debentures should be furnished with coupons to be delivered up in acknowledgment of the interest-payments, or that provision should be made for some equally satisfactory voucher, for the Audit Office will be unable to pass the debenture-interest payments not supported by coupons or by vouchers equally satisfactory. With these remarks the Controller and AuditorGeneral will countersign the debentures submitted if the Minister still desires it. J. K. Warburton, C. & A.-General. 6th June, 1904.

No. 13. I shall be glad if the Controller and Auditor-General will sign the debentures submitted. The question of a sufficient voucher for payment of interest will be subsequently considered. Albert Pitt, For Colonial Treasurer. 7/6/04. Debentures countersigned. — J. K. Warburton, C. & A.-General. 8/6/4.

No. 14. Sir,— The Treasury, New Zealand, Wellington, 20th May, 1904. I have the honour by direction of the Colonial Treasurer to inform you that debentures of the face value of £25, £50, and £100, which are now being issued under " The Aid to Public Works and Land Settlement Act, 1903," do not carry interest coupons, but the half-yearly payments to be made will require to be indorsed on the debentures, and when made are to be authenticated by the signature of the officer making them and stamped with the official stamp. In order to provide your office with a voucher for such payments, I am to forward the accompanying forms of " Interest Certificates " upon which the particulars of the interest-payments are to be entered, and at the same time to request you to forward a supply to each of your money-order offices with suitable instructions. Further supplies of forms can be obtained when required. I have, &c, Jas. B. Heywood, The Secretary, General Post Office, Wellington. Secretary to the Treasury.

No. 15. The Secretary, General Post Office, Wellington. General Post Office, 7/7/1904. In accordance with the request preferred by the Secretary to the Treasury in his communication No. 845, dated 20th May last, it was arranged that interest upon debentures of the face value of £25, £50, and £100, issued under " The Aid to Public Works and Land Settlement Act, 1903 " (which do not carry interest coupons) should be paid by Postmasters; each half-yearly instalment when paid to be indorsed on the debentures, and authenticated by the officer making the payment. It was also arranged that the claim for credit for payments so made should be supported by the certificate of the paying Postmaster, signified in a form supplied by the Treasury. To this arrangement the Controller and Auditor-General takes exception, and has intimated that he will refuse to allow credit for any paymTtit made through the Post Office unless the claim therefor is supported by a voucher , in the shape of a coupon or the receipt of the person to whom payment is made. Will you please advise me as to the action to be taken. W. R. Morris, F. Acct.

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No. 16. The Secretary to the Treasury. Instructions have been issued in keeping with your request of the 20th ultimo. Will you now place the Post Office in the position of being able to obtain credit for any payments made on your behalf. W." Gray. 8/7/04.

No. 17. The Audit Office. It was found necessary some time ago to discontinue issuing £100 debentures without coupons, because such debentures so often formed part of a larger investment represented by debentures of higher denominations. The number of debentures of the values of £25 and £50 are respectively small which have so far been issued (thirty-one and fifty-four), and are not likely jto increase to any large extent. The reason for issuing these debentures without coupons has been already explained toj you, and I trust you will see your way under the circumstances to accept the voucher which the bank and the Post Office will supply to support the interest paid. Jas. B. Hbywood. 11 Jy., '04.

No. 18. The Hon. the Colonial Treasurer, Audit Office, 14th July, 1904. Treasury Minute of 11th Jvly, 1904, respecting Voucher for Payment of Interest on Debentures issued without Coupons. The Minister is respectfully referred to his correspondence w.ith the Audit Office on the subject. The Controller and Auditor-General informed the Minister on the 6th June that " the Audit Office will be unable to pass the debenture-interest payments not supported by coupons or by vouchers equally satisfactory." And the Minister replied on the 7th, " I shall be glad if the Controller and AuditorGeneral will sign the debentures submitted. The question of a sufficient voucher for payment of interest will be subsequently considered." What the bank and the Post Office are to supply is, it is submitted, not a sufficient voucher. It is not what section 54 of the Public Revenues Act requires, a voucher " duly receipted by, or by the written authority of, the person entitled to receive such money." It is merely the account or certificate of the paying agent unsupported by such voucher. J. K. Waeburton, C. and A.-General.

No. 19. Post Office Claim of the 15th August, 1904, unsupported by Vouchers, to credit for Payments of Interest on Debentures (see Claim for £18 19s. 9d.). With reference to the last two items, ss. 10d. and Bs. Id., for which receipts are required from the payees, attention is called to the correspondence in which the requirement of the Audit Office in the case of such payments is set forth. J. C. Gavin, A. C. & A. 20 Aug., '04. Referred to the Secretary to the Treasury. The payments were made at the instance of the Treasury. W. Gray. 22/8/04.

No. 20. The Treasury. Audit Office, 11th February, 1905. Payments not vouched by Receipts of Interest on Debentures issued without Coupons under the Aid to Public Works and Land Settlement Act. The Audit Office requires for each of these imprest payments for which the Treasury Cashier is claiming credit, the sufficient voucher of which the question was to be considered by the Colonial Treasurer, and would refer the Administration to the correspondence on the subject—particularly to the Colonial Treasurer's minute of the 7th June, 1904, and to the Audit Office memorandum to the Colonial Treasurer of the 14th July. J. K. Warburton, C. &. A.-General.

No. 21. Right Hon. Colonial Treasurer. Papers attached for your information. I submit that the proper time to revive the discussion will be when the Audit Office is asked to give credit for the payments of interest made by the Post Office, the Bank of New Zealand, or the Treasury. Jas. B. Heywood. 18 Jy., '04. Have carefully perused papers and concur that when Audit Office asked to credit payments of interest. Meantime, see no necessity for continuing the controversy.—R.J.S. 10/12/04. The Asst. Secretary. —Attach a blank form of debenture and also form to be filled up by the bank or Postmaster.— J. B.H. 13 Dec, '04. Forms herewith.—R.J.C. 14/12/04.

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No. 22. Issued under Authority of The Aid to Public Works and Land Settlement Act, 1003." The Principal and Interest are a charge upon the Public Revenues of New Zealand. "SKpOtt l^Ve&entatlOXX of this Debenture at the f veaxuvp, at i&teCCmgfon, ■gten? Zealand, on the ist day of January. 1909, the "Reaver will be entitled to payment of the sum of TWENTY-FIVE POUNDS STERLING, together with such interest, computed at the rate of Four pounds sterling per centum per annum, as may be found to be unpaid on that date, in accordance with the endorsements of interest-payments made hereon. Qtttexe&t as endorsed hereon, at the rate of Four pounds sterling per centum per annum, is payable half-yearly on the ist January and ist July in each year during the currency of this Debenture at the Treasury, Wellington, or at any New Zealand Post-office Money-order Office, or any Branch of the Bank of New Zealand in New Zealand. At any time during the currency of this Debenture (and on application in that behalf at the Treasury, at Wellington, at least one month before the due date of the then next ensuing payment of interest) the holder shall have the right to have the Debenture enfaced payable both as to principal and interest at any specified Branch of the Bank of New Zealand in Australia. If the option is exercised and the Debenture enfaced, the altered place of payment of interest shall be endorsed on the back hereof. The enfacement shall be authenticated by the signature of the Secretary to the Treasury. On payment of interest as endorsed the officer making the payment must sign his name and affix his office date-stamp, as indicated. Dated at the Treasury Office, Wellington, New Zealand, this day oL , 1904. Countersigned :

Colonial Treasurer.

Controller and Auditor-General.

Secretary to the Treasury.

For payment of interest see back hereof.

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HALF-YEARLY INSTALMENTS OF INTEREST PAIDThe date of payment and amount paid being, in the case of each instalment, authenticated by the office date-stamp and signature of the officer making the payment.

Due. I Amount. s. d. Office Date-stamp to be affixed. Signature of Postmaster or Bank Official. st July, 1904 st January, 1905 O IO o st July, 1905 O IO o st January, 1906 o IO o st July, 1906 o IO o st January, 1907 o IO o st July, 1907 o IO o st January, 1908 o IO o st July, 1908 o IO o st January, 1909 o ro o

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No. 28. Treasury No. New Zealand Debentures. UNDER "THE AID TO PUBLIC WORKS AND LAND SETTLEMENT ACT, 18O3." INTEREST OERTIRIOATE. TO THE PAYMASTER-GENERAL, TREASURY, WELLINGTON. fyCTC&'V CCVftfP that under the under-stated amounts have this day been paid by me, in respect of interest due upon New Zealand Debentures presented at this office, and that I have duly indorsed upon the said Debentures the several amounts so paid, as under: —

No. of Debenture. Face Value of Debenture. Due Date of Interest. Half-year's Folio of Registei in interest paid Treasury. £ £ £ s. (i. I \ Total interest paid tf pate- s> I Postmaster.

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No. 24. Right Hon. Colonial Treasurer. The Audit Office has refused to pass for credit payments which have been made by the Post Office as interest on debentures issued without coupons. I recommend the matter be referred to the AttorneyGeneral for his opinion. Jas. B. Heywood. 14 Dec, '04. The Solicitor General.—Please advise hereon. The Attorney-General is absent.—R.J.S. 22/12/04.

No. 25. It appears from the corrsepondence that the objection of the Audit Office is based on section 54 of the Public Revenues Act of 1891, which requires vouchers to be duly receipted by or by the written authority of the person entitled to receive the money, and directs the Audit Office " to surcharge every sum for which such properly receipted voucher is wanting, against the officer whose duty it was to obtain such receipt." In my opinion this section applies only to cases where the person entitled is specified and ascertained—as for example a contractor for work done—and does not extend to debentures which are invariably issued to bearer. Where a debenture if paid off, the holder signs nothing —he merely surrenders his debenture. So also in the case of an interest coupon—-he merely surrenders the coupon. The surrendered debenture or coupon is itself the only voucher. And the reason is obvious, for the debenture or coupon being payable to bearer, a voucher signed by any specified person would be no evidence that he was the person entitled to receive the money. The Audit Office recognises this, in suggesting that in the present case, the debentures should be issued with coupons. But the answer is that the Act under which they were issued ("The Aid to Public Works and Land Settlement Act, 1903 ") expressly provides for the issue without coupons (section 3), and the Colonial Treasurer was, therefore, entitled to adopt that course if, in his opinion, the public convenience required it. For these reasons I am of opinion that the mere fact that signed vouchers for the interest are not procured is no objection in law to the payments being passed by the Audit Office. The sole question is whether there is reasonable evidence that the payments have been duly made, and in considereng this and the paying officer's certificate it may reasonably be assumed that the holder of a debenture will look for his interest when dve —and make himself heard if he does not get it. Fred. Fitchett, Sol.-Genl. 22/2/05. The Audit Office. I trust that the above opinion of the Solicitor-General will satisfy you as to the sufficiency of the certificates in connection with the payment of interest (without coupons), and will enable you to allow credit for the payment of same. Jas. B. Heywood, Secy. 21 Mch, '05.

No. 26. . The Hon. the Colonial Treasurer. Audit Office, 22nd March, 1905. Vouchers wanting for Debenture-interest Payments, and Treasury Minute of 2lst March, 1905. The paying officer's own certificate that he pays the interest affords no satisfactory check upon him. It is not a voucher for the payment. On the 30th May the Minister stated that if desired, receipts would be taken from the payees. On the 6th June the Audit Office informed the Minister that it would be unable to pass the debenture-interest payments not supported by coupons or by vouchers equally satisfactory; and the Minister, on the 7th June, in asking the Controller and Auditor-General to sign the debentures, assured him that " the question of a sufficient voucher for the payment of the interest will be subsequently considered." Now the Minister asks the Audit Office to do what it has stated its inability to do, to pass the payments without coupons or any other vouchers. For the payment of interest to debenture-holders, who may not be known to the Administration, there is no more satisfactory voucher than the coupon which, issued to such holder as the title to payment, is given up and sent in as conclusive evidence of payment by the paying officer to the person entitled to payment. It is the substitute for the ordinary receipted voucher. J. K. Warbueton, C. & A.-General.

No. 27. Hon. Colonial Treasurer. As the Audit Office still persists in refusing to allow credit for interest paid upon debentures issued without coupons it remains to refer the matter to the Hon. the Attorney-General, and if he concurs with the opinion given by the Solicitor-General then the Governor in Council will determine the question in dispute. j AS . B. Heywood. Approved.—C. H. M. 25/3/5. 25th Mch., '05. The Hon. the Attorney-General, For your opinion, in order that the same may be submitted to H. E. the Governor, if you concur with the Solicitor-General. J. B. Heywood. 25 Mch., 05.

No. 28. Opinion. I have read and considered the opinion given herein by the Solicitor-General on the 22nd February, 1905, and in that opinion I concur. Section 54 of " The Public Revenues Act, 1891," requires that

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" all vouchers " for the payment of which money is issued shall be returned to the Audit Office by the Paymaster-General, duly receipted by, or by the written authority of, the person entitled to receive such money. In my opinion the words " all vouchers " in that section refer only to vouchers issued in favour of a particular person or payee, and not where the money is payable to an indefinite payee, such as to bearer. In the case of interest on a debenture no voucher is issued at all, the bearer for the time being of the debenture being the person entitled to receive the interest payable thereon, and when the debenture itself becomes payable it is merely surrendered upon payment of the face-value. No receipt is given either for principal or interest. The Auditor-General in his memorandum to the Colonial Treasurer of the 22nd March, 1905, says that the coupon "is the substitute for the ordinary receipted voucher." Still it is not the " receipted " voucher referred to in section 54 ; and if a coupon can be substituted for a receipt, I see no reason why the certificate of the paying officer should not be regarded as an equally satisfactory substitute. The legal authority to issue debentures without coupons is sufficiently referred to in the opinion of the Solicitor-General in this matter. I am of opinion that the certified payments for interest in question should be passed by the Audit Office. Albert Pitt, Attorney-General. Wellington, 14th April, 1905. The Audit Office. Please see. You will notice that the Hon. the Attorney-General concurs in the opinion of the Solicitor-General, and with these opinions before you it is possible you may now see your way to pass the amounts for credit as desired. Jas. B. Heywood. 1 May, '05.

No. 29. The Hon. the Colonial Treasurer. Audit Office, 3rd May, 1905. Debenture-interest Payments without Vouchers, and Colonial Treasurer's Reference to Audit Office of Attorney-General's opinion of the Hth April, 1905. A voucher is " a receipt for cash paid ; any documentary or other satisfactory evidence of the accuracy of accounts " ; and the Controller and Auditor-General regrets that he cannot pass as a substitute for a voucher of the accuracy of the paying officer's account of the payment of the interest the certificate of such paying officer. Where the Loan Act provides for the issue of the debentures with or without coupons, and the coupons are so issued, the coupon is the statutory voucher —the substitute authorised by the Loan Act for the properly receipted voucher required by section 54 of the Public Revenues Act. If coupons are not so issued, and the Loan Act authorises no other voucher, then the properly receipted voucher is the statutory requirement. The Loan Acts authorising the issue, without coupons, of the debentures on which the interest in question is purported to have been paid, contain no such provisions as those of section 27 of " The New Zealand Consols Act, 1894." The indorsement of the payment of interest on such debentures is not required, nor made conclusive evidence of payment. And even the payments of interest on bearer certificates issued under the Consols Act would be more satisfactory, as well to the paying officers as to the Audit Office, if vouchers were furnished in support of the accounts of such payments ; for the certificate on which a payment should be indorsed is retained by the holder, and if an indorsement is inadvertently omitted and the holder of the certificate repudiates the payment accounted for, the paying officer's position is an embarrassing one. What is required is a voucher affording satisfactory evidence of the accuracy of the paying officer's accounts. The coupon issued with the debenture, as the means of distributing the interest, is, on being delivered up to the paying officer, not only the authorised substitute for the ordinary receipted voucher, but is more satisfactory. The certificate of the paying officer himself that he has made the payment for which he accounts affords no more evidence of the accuracy than his account itself without the voucher. But if, instead of the paying officer's certificate, there were a certificate isssued by the Treasury with the debenture, as a coupon is issued, then the certificate would only want authority of law to make it an equally satisfactory substitute for either the coupon or the properly receipted voucher. The matter does not appear to be one which there is authority to determine by Order of the Governor in Council. But the Controller and Auditor-General would raise no objection to passing the payments without vouchers on the understanding that he should lay before Parliament a copy of the correspondence on the subject. J. K. Warburton, C. & A.-General. No objection to the course suggested. —R. J. Seddon. 9/5/05. The Audit Office. Please see Right Hon. Colonial Treasurer's minute of 9th instant. Will you please deal with the credits accompanying this. Jas. B. Heywood. 18 May, '05. Passed.— J. K. Warburton, C. & A.-General. 23/5/5.

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