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All these funds are invested in the Common Fund of the Public Trust Office, which is admirably suited to their requirements. The contributions to the funds are paid at frequent regular intervals in small sums, and if it were necessary to obtain special investments in the ordinary course a good deal of income would be lost during the period moneys were being accumulated. Further, to meet possible claims it is essential that a comparatively large portion of the respective funds should be kept liquid. In the Common Fund interest accrues immediately on even the smallest contribution received, and the whole of the funds are liquid, available for payment at the shortest notice. No charge whatever is made for the administration of the funds, and payments from them are arranged at any place in New Zealand free of exchange. Insurance Companies' Deposits. 21. At the end of the financial year deposits were held by the Public Trustee under the Insurance Companies' Deposits Act, 1921-22, on behalf of thirty-four companies. The total value of the deposits was £968.400, including interest accrued but not disbursed, £5,900. During the year the sum of £35,000 was withdrawn by one company which had ceased to transact business of the nature in respect of which the deposit had been made. In terms of the Act the whole of these moneys are invested in the Common Fund of the Office. Municipal Corporations' Renewal Funds. 22. Under the Municipal Corporations Act of 1920 Municipal Corporations are authorized to make appropriations from the revenue of trading departments for the purpose of providing renewal funds in respect of those trading undertakings. By Order in Council published in the New Zealand Gazette authority is conferred for the investment of such renewal funds in the Common Fund of the Public Trust Office, a system of investment specially suited to the purpose. Several Municipal Corporations have already taken advantage of this authority, and no doubt many more will do so when appropriations are made in accordance with the provisions of the statute. Sinking Funds. 23. The popularity of the Common Fund for the investment of local bodies' sinking funds has been well maintained during the past year, 223 new funds having been accepted during that period. On the 31st March the number of funds for which the Public Trustee acted as Sinking Fund Commissioner was 1,598, a net increase of 196 for the year. The amount at credit of these funds was £1,260,504, as compared with £968,063 at the end of the previous year. These sinking funds are held in connection with loans amounting to £19,604,320. The Public Trustee is statutory Sinking Fund Commissioner for all Stateguaranteed loans, and for all loans granted by lending Departments of the Government of New Zealand. Local authorities may, however, appoint the Public Trustee as Commissioner for sinking funds in respect of loans obtained from outside sources, and during the year many local authorities have exercised this power an eloquent testimony to the many advantages of the Common Fund of the Public Trust Office as a medium for investment. Of these advantages the following have particular application to funds of this nature:--(1.) Both capital and interest are guaranteed by the State. There is thus no possibility of loss through depreciation of securities. (2.) Interest begins to run immediately an amount is received by the Public Trustee, no matter how small the amount may be. Thus no loss of interest is incurred as a result of the accumulation of funds to invest in a suitable security. (3.) Interest earned on moneys at credit of a sinking fund is capitalized yearly on the Ist April, and thus itself earns interest from that date. (4.) Interest is earned on the total amount at credit of a fund—no small " broken " amounts lie uninvested.

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