One of the enclosures in question is a copy of a Bill introduced into the Senate of Canada, last Session, containing a comprehensive scheme for the revision of the law of the Dominion with regard to Merchant Shipping.

This Bill is principally based upon the existing Imperial Legislation on the subject, the revision and consolidation of which, as Earl Granville is aware, it is proposed to deal with during the present session.

It is proposed in the Imperial Act to provide for some of the inconveniences which the Canadian Bill seeks to remedy, and in other points it is proposed to modify existing enactments which are in the Canadian Bill reproduced from the Imperial Statutes as they stand.

Therefore, and it being at present uncertain what modifications the Bill may pass through before it becomes law, and having regard to the importance that any new law passed by the Canadian Legislature should be, as far as possible, in accordance with the law of the United Kingdom, the Board of Trade think that it would be premature at the present moment to discuss the general provisions of the Canadian Bill, and would suggest that legislation on the subject should be postponed until the Imperial Law is consolidated and revised.

With regard, however, to legislation on the more special subject of the memorandum by the Minister of Marine and Fisheries, viz., the establishment in Canada of examinations for officers in the Mercantile Marine, with a view to the granting of certificates which may be recognized by Her Majesty's Government under the provisions of the "Merchant Shipping (Colonial) Act, 1869," there appears to be no such reason for delay.

The Board of Trade approve generally of Sections 6 to 17 of the Canadian Bill which deal with this question, and think that it would be advisable that they should be embodied in a short separate Act to be introduced, and, if possible, passed during the present Session of the Parliament of the Dominion.

With regard to Section 10, relating to the grant of certificates of service, I am to point out that the Imperial Act makes no provision for the recognition by Her Majesty's Government of Colonial certificates of service.

The Board of Trade, however, quite recognizes the necessity of making some such provision in the Canadian Act.

With regard also to Section 11, which exempts ships of less than 150 tons from the obligation to carry certificated officers, it should be borne in mind, that although this provision may be advisable and necessary from local considerations, the Imperial Law has no such limitation with regard to foreign-going vessels, and that Canadian ships under 150 tons will not be able to clear from ports in the United Kingdom without a certificated master and mate or mates.

As the Government of Canada do not propose to ask Her Majesty's Government to recognize certificates granted to officers of vessels lading in the inland waters of Canada, or to engineers, there is no occasion to advert to these points; but the Board of Trade approves of the intention expressed in the memorandum of the Minister of Marine to insert on the face of the former a distinct notice that they are not applicable to the sea-going trade.

They also concur in the Minister's opinion that the forms to be used in granting certificates to masters and mates should be as nearly as practicable similar to those in use in the United Kingdom, and as to the class of persons who should be entrusted with the examination of the candidates.

I have, &c.,

(Signed,)

C. CECIL TREVOR.

The Under Secretary of State, Colonial Office.

RETURN

To an Address of the HOUSE OF COMMONS, dated 7th March, 1870; For a Statement shewing in detail the Defalcations in the Financial Department of the Government, so far as brought to light; also Copies of any Regulations adopted during the past year for the auditing of the Public Accounts.

By command,

DEPARTMENT OF THE SECRETARY OF STATE,

OTTAWA, 22nd March, 1870.

J. C. AIKINS,

Secretary of State.

AUDIT OFFICE, March 22nd, 1870.

SIR, I have the honor to enclose a statement of the fraudulent payments on account of the Municipalities Fund; also a copy of the Revised Rules of the Board of Audit, as sanctioned by Order in Council of August, 1869.

I have the honor to be,

Your obedient servant,

JOHN LANGTON, Auditor.

The Hon. J. C. Aikins, Secretary of State.

STATEMENT of the Duplicate Cheques issued on account of the Municipalities Fund Upper Canada.

STATEMENT of the Duplicate Cheques issued on account of the Municipalities Fund, Upper Canada.-(Continued.)

COPY of a Report of a Committee of the Honorable the Privy Council, approved by His Excellency the Governor General in Council, August, 1869.

The Committee of Council, on the recommendation of the Honorable the Minister of Finance, dated the 14th August, 1869, respectfully submit for the approval of Your Excellency, the annexed Rules and Regulations framed by the Board of Audit, in accordance with the provisions of the 31st section of the Act 31st Victoria, Chapter 5.

RULES AND REGULATIONS OF THE BOARD OF AUDIT, APPROVED

IN COUNCIL, AUGUST, 1869.

I. MEETINGS OF THE BOARD.

(1.) The Board shall meet monthly, on the third Monday of each month, at three o'clock, p.m.

(2.) Extraordinary meetings shall be called by the Auditor, upon the requisition of any member.

(3.) The order of proceeding shall be

(a) Reading Minutes of last meeting.

(b) Receiving Reports from members of Board.

(c) References from the Minister of Finance, and action thereon.

(d) Business lying over from last meeting.

(e) New business.

(4.) In the absence of the Auditor the members present shall elect a Chairman pro tempore.

(5.) Five members shall constitute a quorum.

(6.) When a question has been put to the vote, any member may record his reasons for dissent on the Minutes.

(7.) The Minutes of each meeting shall be submitted to the Minister of Finance for his approval.

II. DUTIES OF INDIVIDUAL MEMBERS.

(1.) The Commissioner of Customs shall be primarily responsible for auditing the receipts and expenditure of Customs, and for Canal Tolls, and of all such other receipts as are collected for other Departments by Collectors of Customs, as Emigration Tax, Sick Mariners' Fund, &c., and he shall render an account monthly, to the several Departments having charge of those services, of the amounts so collected. All the moneys collected shall be deposited to the credit of the Receiver General, and all expenditure for seizures, re-fund or remission of duties, shall be made by warrant. He shall render an account to the Audit Office quarterly, of all expenditure under his Department, with vouchers, together with a statement under the head of the several ports, or other collection divisions, of all the duties or other revenues accrued, of the amounts deposited, and the balance due by Collectors. He shall also make a report to the Board, at each of its monthly meetings, of all collectors in arrear with their last month's returns and deposits.

(2.) The Commissioner of Inland Revenue shall be primarily responsible for auditing the receipts and expenditure of Excise, Slide Dues, Culler's Office and Bill Stamps, and of any other branch of Revenue which may be placed under his charge. All moneys collected shall be deposited to the credit of the Receiver General, and all expenditure for seizures, re-fund or remission of duties, shall be made by warrant. He shall render an account quarterly to the Audit Office of all expenditure under his Department, with vouchers, together with a statement under the head of the several revenue divisions of all duties or other revenues accrued, of the amounts deposited, and of the stamps not accounted for by distributors, and the balance due by collectors. He shall also make a Report to the Board, at each of its monthly meetings, of all collectors in arrear with their last month's Returns and deposits.

N. B. The rules laid down in the two preceding sections are contingent upon the book-keeping of the Customs and Excise being transferred to those Departments from the Finance Department, as recommended by the Civil Service Commission.

(3.) The Deputy of the Minister of Public Works shall be primarily responsible for auditing the receipts and expenditure under charge of his Department. He shall render

an account quarterly to the Audit Office, with vouchers, of all his expenditure, together with a statement showing the amounts accrued for railway revenues, hydraulic rents, or other collections in charge of his Department, of the amounts collected and deposited, and of any balance due by the collectors or any other persons. He shall also make a Report to the Board, at each of its monthly meetings, of all paymasters, collectors, or other persons entrusted with the collection of Revenue or distribution of expenditure, who have not rendered their accounts for the past month.

(4.) The Deputy of the Minister of Militia and Defence shall be primarily responsible for auditing the receipts and expenditure in charge of his Department. He shall render an account monthly to the Audit Office, with vouchers, of all his expenditure, including the Militia Pensions, and of all receipts under his charge. He shall make a Report to the Board, at each of its monthly meetings, of all paymasters or other sub-accountants who have not made the Returns required of them for the past month.

(5.) The Deputy Postmaster General shall be primarily responsible for auditing the receipts and expenditure of his Department, including the Money Order Office and the Post Office Savings Bank, and also of the distribution of Bill Stamps committed to his charge. He shall render an account quarterly, with vouchers, to the Audit Office, of all expenditure under his charge, together with a statement of all Revenue accrued, of the amount deposited, and of any balance due by Postmasters or others. He shall also make a Report to the Board, at each monthly meeting, of all Postmasters and others who are in arrear with their Returns for the preceding month.

N. B. In consequence of the exceptional position of the Post Office Department with fully 3,000 sub-accountants under it, it is not proposed at once to bring it under the same system as to the issue of warrants and the deposit of receipts as all other Departments; but when any changes are made in existing arrangements it is desirable to keep constantly in view the expediency of assimilating its practice in those respects with that of all other Departments.

(6.) The Deputy of the Minister of Marine and Fisheries shall be primarily responsible for auditing the receipts and expenditure of Light Houses, Fisheries, Dominion Steamers, River Police, Sick Mariners, and such other services as are placed under his charge. He shall render an account, at least quarterly, to the Audit Office, of all expenditure under the different heads, with vouchers, with a statement of all revenues accrued, the amount deposited, and any balance due by collectors and others. In all cases where there are sub-accountants, who render their accounts to him monthly, he shall transmit such accounts, with vouchers, after examination, to the Audit Office, without waiting for the expiration of the quarter. He shall also report to the Board, at each of its monthly meetings, any of his sub-accountants or others under his control, who have not sent in the Returns required of them for the past month.

(7.) After the accounts of any of the above-named Departments have been examined in the Audit Office, should any errors be discovered in them, or any sums charged under wrong heads, or any other subject of remark arise, the Auditor shall confer with the Deputy in charge, and should there be any difference of opinion between them upon such points, the matter shall be referred to the whole Board.

(8.) The Deputy Receiver General shall primarily examine and check the Agents accounts, and the accounts of the several Banks, he shall keep the Debenture, Stock and Dominion Note Books, and shall check the issue and redemption of debentures, stock and Dominion notes, and the interest payable upon them. He shall also primarily check all accounts payable for charges of management of the public debt, and for premium, discount