CIVIL SERVICE FIDELITY SECURITIES.

D.—No. 21

4

feet, though it does not appear to have been extensively practised, on account of the difficulty occasionally met with in enforcing payment of the contributions duo. In applying this system to the Civil Service, this difficulty disappears. Every member of the Association will be in the receipt of a salary, and from this his contribution will be deducted. No contribution will be required until a defalcation has actually occurred, and then each member will contribute rateably according to the sum for which he is assured and the sum in default, or as much thereof as is covered by the guarantee of the defaulter, will at once be made good. The contribution for which each member is liable will be deducted from any sum payable to him, and the loss, except in the case where the contribution required is a very large one, will be made good to the Government within a month after demand made. It is proposed to require that each officer admitted to the Association shall have held office in the Public Service either of the General or of one of tho Provincial Governments for a period of twelve months immediately preceding. During this probationary period, the fidelity of an officer placed in a position of trust will require to be guaranteed by personal bond with the customary sureties, as required by some of the Banks. It appeared to the Board that the guarantee of'previous good conduct should be a condition of admission, and that the period of service suggested would afford an opportunity of testing the eligibility of the candidate. Under the present system, officers rarely perfect their securities in less than five or six months, and as a measure for protecting the Association against loss, it is believed that this stipulation will not be considered unreasonable. It is proposed to confine the scheme to officers serving in the Civil Departments of the Government, but to exclude from all participation therein persons holding the offices of Sheriff, Queen's Bailiff, Curator of Intestate Estates, or Official Agent under the Mining Companies Limited Liability Act, except in so far as those officers are Collectors of Revenue. These are officers whom it is believed no Society would guarantee. Their liabilities are almost unlimited, while the control of their transactions is imperfect, and is scarcely capable of being brought under satisfactory control. It is believed that the Government and the public will be more effectually protected from loss by a careful selection of the persons appointed to these offices than by any guarantee which the Board can suggest. It is further proposed to invest the governing body of the Association with power to decline the assurance of any officer without reason assigned, and to discontinue tho assurance of any officer on notice given. These are powers which it is considered the Association should possess, though it is believed it will be very rarely necessary to exercise them. As the proposed scheme will effect a considerable saving in labour in tho various Departments, the Board has felt justified in recommending that the clerical assistance needed for its working should be provided by the Government. With respect to those officers who are guaranteed by policies still current, it is recommended that they should be required to enrol themselves in the proposed Association at the commencement of the quarter within which their policies will expire. It is an essential feature in the proposed scheme that it should include all officers in the service, and that result will by the arrangement here proposed bo accomplished within the year. In concluding this Report, the Board desire to offer a remark as to the want of proportion which the amount of many of the securities now given bear to the value of tho trust, and to the salary of the officer. The value of the trust and the salary paid to the officer are invariably the subject of inquiry by a Guarantee Society, and are evidently considered as important elements in determining the eligibility of a candidate for assurance. The Board is aware of one instance in which the proposal to guarantee an officer was declined, on the ground that the salary paid was not in proportion to the trust reposed, and it is probable that inquiry would elicit other instances. The subject is one which demands consideration; and in proposing a scheme wherein the liability of each assurer is measured by the amount for which ho is himself guaranteed, the proportion which that guarantee bears to the fund from whence in case of a defalcation his contribution would be derived becomes a matter of direct and serious importance. Injustice to the proposed assurers, the Board has felt bound to call attention to the point; and it now respectfully submits this its Report and the accompanying proposals for the consideration of tho Government. J. Woodward, Wellington, 12th February, IS7O. Chairman.

Table A Statement showing the amount of Bonds now current; distinguishing that portion thereof which is covered by Private Securities, and the amount which is covered by Guarantee Policies. Amount of Private Securities ... ... .. £193,030 0 0 Amount of Guarantee Policies ... ... ... 57,698 0 0 Total amount of Bonds now current ... ... £250,728 0 0 Table B. Statement of Defalcation of Officers in the Civil Service, from the Ist July, 1864, to 30th June, 1869. 1863-64.—Michael Creagh, Registrar of Deeds, Dunedin ... £1,130 1 6 1864-65.—Nil. 1865-66.—Nil. 1866-67.— G. Ross, Telegraphist, Dunedin ... ... ... 217 010 ~ —F. W. Merriman, Crown Prosecutor, Auckland ... 110 0 0* „ —E. Lockhart, Postmaster, Alexandra ... v.. 42 18 7 „ ■ —J. Parrel], Clerk, Customs, Mongonui ... ... 52 14 6 1868-69— R. Curtis, Landing Waiter, Napier ... ... 78 0 0 „ —A. Sharpe, Collector of Customs, Hokianga... ... 291 4 0 Total ... ... ... ... £1,911 19 5 * This amount was an advance for which this officer had failed to account at the time of his death. C. T. Batkin.