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4709. Well, this system which the Public Trustee has been practising seems to me to have been attended with vicious principles. In the event of a loan being made, say, on a mortgage of £1,000, that original £1,000 being made up by half-a-dozen different estates by contributing mortgagors in various sums, and supposing a loss is made upon the investment, how is that loss to be apportioned, presuming the estates have to bear the loss?—I do not see that the estates have got anything to do with it. 4710. Then, do you think the country has ? —No. What I mean is this : The whole of the money received, say, on fifty estates, is paid into the Public Trustee's Account, and stands in globo, and does not stand as debtor or creditor except in the books. He invests in globo. 4711. Supposing there is a loss, does he take the loss out in globo from the country's money?— No. Ido not know how that is worked out; but he would have to be responsible for the balance standing to the credit of each estate, without having reference to the investments made out of the Public Trustee's Account in globo. He would have to find the balance for each estate. They would not lose. 4712. The Public Trustee has told the Commissioners quite differently. He says that if he lent £300 from three different estates—say, £200 from one, and £50 each from two others—and there was a loss of £50 in realising the security, the loss would have to come out of those three estates. That is his interpretation of the Act ? —I was not aware that was done. All I was aware of was that certainly it was not done as long as I was on the Board. 4713. The law has been the same before and since you were on the Board. Perhaps it might have happened in your time that no number of estates were thrown into one mortgage ?—I do not recollect any number of estates being thrown into any mortgage. I should like to consult the Act carefully before giving an opinion on the subject. 4714. Will you, then, please be good enough to look up the point?— Yes; because I do not quite understand it. 4715. You are, of course, aware that there is a charge of a halfpenny in the pound ad valorem under the Land Transfer Act to form an assurance fund against claims that may be made against it ?—Yes. 4716. That is, to provide a guarantee fund for any claims hereafter ? —Yes. I forget at this moment whether that is in the Trust Office. It was formerly in the Trust funds. 4717. Are you aware what that fund has grown to ?—I do not recollect the figures ; but it is something considerable. 4718. More than £80,000 ?—Quite that. 4719. Perhaps at the same time, when thinking of other matters, you might run it through your mind as to the desirability, if alterations are to be made in the constitution of the Trust Office, of the country charging a small percentage—|th or J per cent, by way of a guarantee commission—for lending money on mortgage and the State absolutely assuming the responsibility ?—I will. 4720. Now, sir, I am not going to fatigue you by taking you through a lot of ledgers and other books, but I will show you one or two instances to my mind of careless book-keeping, and I will learn your opinion upon them ?—Yes, 1 shall be very happy to afford any information I can. 4721. Well, I will now bring under your notice "Estates in Office" Ledger No. 1, folio 1. You see there is a large account of Cockroft's. There are no totals there, nor no totals brought up from last page, and what I was trying to explain to you was this : that if I were one of your inspecting officers and wanted to check that balance I would require to take up those totals ?—Of course, that ought to be totalled. Where is it carried on to ? 4722. The ledger-keeper carries that daily balance on, £57 6s. 3d.?—l think that account is slovenly. Anybody would have to add up these pages. The balance may be right and these two columns wrong. I think it would be the duty of the auditor to add up the two columns to see if the balance was correct in that account. 4723. Then, do you know whether the auditor did that ? —I cannot say ; but I know this : I was once shown the books of an old nobleman in England who had been robbed to a large extent by his bailiff, and the robberies went on for years by adding up the columns wrong. 4724. This is what your inspecting officer says in his answer to Question 2171: " You would not be able to check the balance, from the fact of the summations being wanted?—No; I have nothing to do with the summations " ? —I think he ought to add up the columns unless he has some other mode of check. 4725. It is not for me to say what my opinion of the duty of the Audit is. You may look over page after page and you see the same thing. Ido not want, sir, to make it laborious for you in any way, but you will find that nothing can be made out of this account. If I were asked to check these books, to say whether the balances were right, I would have to begin from the beginning and write up books properly, with summations properly carried out from period to period? — When I used to inspect myself, which I did for several years, I used to add up the totals. 4726. When the inspecting auditor found a book in that state, was it not his duty to cail Mr. Hamerton's attention to it before he attempted an audit, and say, " Put your books in order "?—I quite agree that is his duty. 4727. And that is one great fault we find in going through the Public Trust Office books ?—I quite agree that the inspecting officer ought to have reported the state of those books to me. It is quite clear, I now see, that the books were written by a person who was not a competent accountant. 4728. Now, you will find this " Intestate Estates " Ledger No. 1, M to Z, in the same state, is it not ? —They are pretty well written, with the exception of the summations. 4729. And where it is ruled'off at a stated period, even there the summations are not filled in in ink. What is " usual," is to bring down the balance and carry the balance forward?— There is no doubt the account open before me is correct, because it has been all tested. 4730. And, in my opinion, where the auditor has made a grave mistake is in not having insisted