COMMONWEALTH SECURITIES PROPOSED REGISTRATION OF TREASURY BILLS BY AUDITOR-GENERAL IN LONDON: WHETHER SUCH REGISTRATION IS PERMISSIBLE OR NECESSARY
AUDIT ACT 1901, ss. 11, 63: TREASURY BILLS ACT 1914, s. 4: LOANS SECURITIES ACT 1919, s. 3: WAR LOAN ACT 1920, s. 2
The Secretary to the Treasury has forwarded me the following minute for advice:
In connection with a loan which is shortly to be raised in London, the following letter was addressed to the Auditor-General on 25 May:
I have to advise that the Treasurer has approved the issue in London of Treasury Bills for £2,000,000. The Bills will have a currency of six months, and will be issued under the authority of Act No. 18 of 1920, for the purposes of repatriation and other expenses arising out of the war.
The Official Secretary in Great Britain has been instructed to arrange the issue of these Treasury Bills in consultation with the Manager of the Commonwealth Bank in London.
The Official Secretary now advises that after consultation with Messrs Collin, Campion and Nivison, arrangements have been made to issue the Treasury Bills on 8 June. The rate of interest has not yet been definitely fixed, as it is hoped that conditions will be more favourable next week than at present.
As you are aware, the Treasury Bills Act (section 4 of Treasury Bills Act of 1914) provides that each Treasury Bill shall be registered in the office of the Auditor-General, and I desire now to ask whether you will be good enough to make arrangements for the registration of the Bills about to be issued in London.
The Official Secretary in Great Britain has suggested that the Auditor-General might appoint an official of the Commonwealth Bank in London to register the documents on his behalf.
The matter is very urgent, and I would therefore be very pleased if the Auditor-General could arrange by cable for the registration of the Bills.
As soon as the terms of the Bills are definitely known, the Treasurer proposes to seek the authority of the Governor-General to the borrowing of the moneys in accordance with section 3 of the Loans Securities Act 1919.
(2) The Auditor-General replied to the above letter in the following terms:
Referring to your memorandum of this day's date with respect to the proposed issue of Treasury Bills in London for £2,000,000, and paragraph (6) of your memorandum in which it is desired that I shall arrange, by cable, for the registration of the Bills in London, I do not see how the provisions of the Treasury Bills Act requiring the Bills to be registered in the office of the Auditor-General can be complied with in London, seeing that I have no office there.
The provisions of section 11 of the Audit Act empower me to appoint any person to audit, among other things, any accounts which are required to be examined by the Audit Act. I am not quite satisfied that it is permissible to me to use the powers under this section in order to give effect to your desire. However, if an opinion be given by the Law Department that the issue of such an authority by me will be sufficient for the purpose, I should be glad to cable, say, to the Official Secretary to the High Commissioner, and follow the cable by an authority, in writing, for him to act in the matter on my behalf.
(3) In view of the doubt expressed by the Auditor-General, I shall be glad if you will kindly furnish me with an opinion on the following questions, viz:
- Is registration by the Auditor-General necessary in respect of Treasury Bills issued under the authority of section 3 of the Loans Securities Act 19191
- If such registration is necessary, can the Auditor-General utilise the powers conferred by section 11 of the Audit Act 1901-1920 for the purpose of registering such Bills?
- If the Auditor-General cannot effect the registration, as suggested in (b), can the difficulty be overcome by passing a Regulation under section 63 of the Audit Act 1901-1920, authorising the Auditor-General to appoint any person in London to carry out the registration of Treasury Bills as required by the Treasury Bills Act 1914-19151
(4) You will notice that the loan is to be floated on 8 June next, and in view of the short time available for making the necessary arrangements, I shall be glad if you will kindly treat this matter as one of extreme urgency.
The authority for the loan is the War Loan Act 1920, section 2 of which provides that the Treasurer may from time to time under the provisions of the Commonwealth Inscribed Stock Act 1911-1918, or under the provisions of any Act authorising the issue of Treasury Bills, borrow moneys not exceeding in the whole the sum of £20,000,000.
The loan is proposed to be raised by the issue of Treasury Bills. The Treasury Bills Act 1914 provides (section 4) that each Treasury Bill shall (inter alia) be registered in the office of the Auditor-General.
Section 3 of the Loans Securities Act 1919 provides that:
When under any Act the Treasurer has authority to borrow moneys ... in accordance with the provisions of any Act authorizing the issue of Treasury Bills, the Governor-General may, notwithstanding the provisions of those Acts, authorize the Treasurer to borrow the moneys in such amounts and manner and at such prices and on such terms and conditions and issue such securities in such form as the Governor-General approves.
In my opinion the terms of this section are sufficiently wide as to cover any authority by the Governor-General approving of the borrowing of money by the issue of Treasury Bills not registered as required by section 4 of the Treasury Bills Act 1914.
The answer to the first question is: No, assuming the Governor-General gives the appropriate authority under section 3 of the Loans Securities Act 1919.
As the necessity for registration in the office of the Auditor-General can be obviated it is not necessary for the Auditor-General to act under section 11 of the Audit Act to provide for registration in London. In any case I do not think section 11 can be relied upon as authorising such action.
With regard to the third question I am of opinion that section 63 of the Audit Act does not apply to arrangements in connection with the issue of Treasury Bills.
The appropriate method of providing for such registration as is desired appears to be by inclusion of provision therefor in the authority of the Governor-General under section 3 of the Loans Securities Act 1919.