B—9

entitled to a return of the deposits which they had made with the Public Trustee to comply with the terms of the Insurance Companies' Deposits Act, 1921-22, and its amendments. After the necessary steps had been taken to satisfy the Public Trustee that the interests of insured persons would not be prejudiced by the release of the deposits, the sums of £493,000 in cash and £34,500 in securities were returned to the companies concerned. Deposits in respect of certain other classes of insurance are still required to be made with the Public Trustee by all insurance companies (other than those incorporated under the Mutual Fire Insurance Act, 1908) carrying on business in New Zealand, the maximum amount of such deposit varying in accordance with the nature of the business undertaken. On 31st March, 1950, the capital amount of deposits held under this Act on behalf of sixty companies was £1,179,660. Deposits Under Life Insurance Act, 1908.—The provisions of the Life Insurance Act, 1908, require every company carrying on life insurance business in New Zealand to deposit with the Public Trustee cash or approved securities commensurate with the total amount insured by its policies, but with a maximum of £50,000. The amount of cash and securities held by the Public Trustee on the 31st March, 1950, in accordance with this Act was £747,390 on behalf of sixteen companies. Local Bodies' Sinking Funds.—Although the substantial sum of £3,450,122 was held at 31st March, 1950, in the Common Fund as sinking funds for the repayment in due course of local bodies' loans for which the Public Trustee had been appointed Sinking Fund Commissioner, this type of fund shows a decreasing tendency. Many of the localbody loans raised in recent years have been repayable by annual instalments, whereas those raised earlier were on terms similar to a flat mortgage. Consequently the necessity to create a sinking fund for the repayment of the loan on maturity date is unnecessary in such cases, the annual appropriation by the local body being applied almost immediately in repayment of an instalment debenture. In addition, the time has now arrived when a number of the loans raised many years ago are maturing, thus resulting in large calls being made on the accumulated sinking funds. During the year under review several substantial sums were applied in redemption of matured loans, the effect of which was to deplete the total sinking funds held by £185,000, compared with the corresponding figure at 31st March, 1949. Safe Deposit Lockers.—The leasing of safe deposit lockers to the public for the safe custody of securities and other valuables is a service which is obviously appreciated by the lessees who now number nearly 1,200. These lockers are installed in vaults or strongrooms at the Head Office and at various branches throughout the Dominion, and are designed to afford both protection against theft or fire and privacy as to their contents. Annual Accounts.—As a result of the continued inflow of new business and of the buoyant economic conditions throughout the Dominion, the Office revenue for the year under review increased by more than £9,000 to £548,290. That increase, however, would not have been sufficient to meet the increased operating expenses had not substantial savings been effected by reductions in staff and other economies. The combined effect of the increased revenue and of the economies mentioned has been a net profit for the year, after providing £17,113 for depreciation on premises, plant, &c., of £7,016, which has been transferred to the Assurance and Reserve Fund. In this connection attention was drawn in last year's report to the provisions of section 24, Finance Act, 1929, which directed that when the Office made a profit for any year one-half thereof was to be paid to the Consolidated Fund, but if a loss was sustained the whole amount thereof was to be charged to the Office Assurance and Reserve Fund. I am pleased to record that amending legislation was passed in the 1949 session authorizing the Public Trustee, before paying to the Consolidated Fund one-half of the profits for the year ended 31st March, 1950, or for any subsequent year, to offset the losses which had been incurred since the year 1946-47 and which were charged wholly to the Office Reserves.

6