Committee Reports > List of Committees > Dáil > 1935 > Committee of Public Accounts > Report - Appropriation Accounts 1933 - 1934

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 5adh Meitheamh, 1935.

Wednesday, 5th June, 1935.

The Committee sat at 11 a.m.

Mr. J. Maher (Comptroller and Auditor-General’s Department), Mr. T. S. C. Dagg (An Roinn Airgid) called and examined.

VOTE 70—EXPORT BOUNTIES AND SUBSIDIES.

Mr. D. Twomey called and examined.

450. Chairman.—I understand that this export bounties and subsidies vote is, strictly speaking, a Finance Department vote, but as the actual spending is done by Mr. Twomey he would be the proper accounting officer to appear before this Committee. There is a note from the Comptroller and Auditor-General on page xxx. It is as follows:—

“The estimate for this vote was taken on 15th July, 1933, to provide ‘the amount required in the year ending 31st March, 1934, for the payment of Export Bounties, Subsidies, etc.,’ but, as stated in paragraph 69 of my last report, the expenditure incurred under various heads from 1st April, 1933, to 14th July, 1933, was with the exception of sums amounting to £63.702 17s. 5d., charged against the Emergency Fund Grant-in-Aid. which was voted in the financial year 1932-33.”

The Committee may remember that that whole matter was up last year. In the previous year there had been a vote in Emergency Fund for the financial year ended 31st March, 1933, but the residue was not returned as we considered it should have been but was used from then until July, and actually there was no money spent out of this Vote until July.

Mr. Maher.—The Emergency Fund Vote of 1932 had been used for the purpose from 31st March, 1933, until July, 1933. Thereafter as far as Bounties and Subsidies were concerned they were entirely paid for from the Vote we are dealing with.

451. Chairman.—Have you any further comment on that paragraph, Mr. Maher? —No. I am taking the whole paragraph together.

452. Chairman.—The note goes on to say:—

“The total expenditure on Export Bounties and Subsidies, etc., during the year ended 31st March, 1934, was, therefore, £2,219,735 8s. 1d., made up as follows:—

“Bounties on exports of industrial products were administered by the Department of Industry and Commerce and responsibility for the expenditure and receipts arising out of the trial consignments of agricultural, etc., products to foreign markets was taken over from the Department of Agriculture by the Department of External Affairs in October, 1933. With these exceptions, the Department of Agriculture administered all the expenditure financed from Vote 70.”

Is that including what was spent out of the Emergency Fund?

Mr. Maher.—There was no Emergency Fund in that year.

453. Chairman.—I presume that we can only question Mr. Twomey about those things that were actually under the control of the Department of Agriculture. Some of them come under the Department of External Affairs and some under the Department of Industry and Commerce.

Mr. Maher.—That is so, but, of a total expenditure of over two millions, Mr. Twomey accounted for all except about £75,000. The great bulk of the expenditure relates to his Department.

Deputy McMenamin.—I want to ask a question about the third item in the tabular statement. Was the Butter Fund Act itself not passed then?

Chairman.—That will come on later.

454. Mr. Maher.—I should like to say that this particular Vote is only a continuation of the Emergency Fund Vote of the previous year, but certain items which were paid from the Emergency Fund did not come within the ambit of the new Vote and were dealt with otherwise. These were:—The scheme for the purchase and sale of butter, which comes under the Vote for Agriculture, the scheme for the loans for the purchase of heifers which also comes under agriculture, the administration of the bounties in respect of the purchase of seed wheat is also under agriculture, advances for land purchase which is dealt with in the Land Commission Vote, administrative charges which are borne by the respective Departments. These occurred in the Emergency Fund of the previous year but did not come in the ambit of the new Vote and are excluded from it. The second column of the statement in the paragraph which the Chairman has just read is repeated in the analysis on page 224. The statement in paragraph 82 of the Report has been prepared with the object of giving a comprehensive view of all the expenditure within that financial year under these particular headings.

455. Chairman.—If the Committee will turn to page 224 you will see that the actual Vote for these services was considerably in excess of the amount spent as set out in column 2 of the table 1 read, but that is very largely accounted for by the fact that quite a number of things were actually paid for out of the Vote for the previous year and which is extended to the year under review. Is there any further observation you have to make, Mr. Maher?—No, there is nothing further.

456. Then the Comptroller and Auditor-General’s note goes on as follows:—

“The observations in the following paragraphs are to be regarded as supplementary to those made under the relative headings of the Emergency Fund in my last report.

The bounties paid to exporters of live stock amounted to £647,546 15s. 9d., viz.:—

The rates of bounty authorised were:—Cattle—From 1st May, 1933, to 7th November, 1933:—

(a) 35s. per head on cattle two years old and upwards.

(b) 15s. per head on cattle 15 months old, but under two years.

From 8th November, 1933:—

(a) 35s. per head on cattle two years old and upwards.

(b) 20s. per head on cattle six months old but under two years.

Live Pigs—From 12th October, 1932, to 1st October, 1933:—

12½ per cent. ad valorem on all live pigs exported.

From 2nd October, 1933, to 25th October, 1933:—

12½ per cent. ad valorem on live pigs exported to Northern Ireland.

(b) 20 per cent. ad valorem on live pigs exported to places other than Northern Ireland.

From 26th October, 1933:—

(a) 12½ per cent. and valorem on live pigs exported to Northern Ireland.

(b) 25 per cent. ad valorem on live pigs exported through Saorstát ports.”

When we say ad valorem do we mean the price at the fair here?

Mr. Maher.—It is calculated on a basis that the Department have laid down. It does not always follow the value at the fair.

Deputy McMenamin.—I think this is the right time to deal with a matter that appears on page 224.

Chairman.—We will deal with that later.

Deputy McMenamin.—You are dealing now with the bounties on live stock, are you not? What about these trial consignments?

457. Chairman.—Later on we will come to the note of the Comptroller and Auditor-General on trial consignments. We will continue with the note on this matter:—

“Sheep and Lambs—From 1st May, 1933:—

3s. per head on all sheep and lambs exported.

Horses—From 8th November, 1933:—

10 per cent. of the value of the horses as assessed for British duty. Not more than £100 to be paid in respect of any one horse and no bounty to be paid on any horse valued at less than £10.”

If there is no comment to be made on that, we will now move on to the note on the bounties on exports of live stock products, etc. The note is:—

“The total amount paid in respect of bounties on exports of live stock products was £271,806 10s. 3d., made up as follows:—

The rates of bounty paid were:—

Chairman.—We will now move on to the Bounties on Exports of Butter, etc. The note is:—

“For the financial year 1933-34, payment to exporters of creamery butter of a subsidy not to exceed 31/- per cwt. was authorised. The actual rates paid were calculated monthly and represented the sum necessary, with the bounty payable under the Dairy Produce (Price Stabilisation) Act, 1932, to bring the average price realised by the exporter up to the home market price.

The rates in force up to and including the 22nd September, 1933, from which date the export of creamery butter, except under licence, was prohibited, were:—

United Kingdom Isle of Man.

Exports to countries other than the United Kingdom and the Isle of Man during the period ended 22nd Sept., 1933, were relatively small and the rates of subsidy paid were substantially lower than those payable on creamery butter exported to the United Kingdom.”

Why was the unfortunate Isle of Man treated like that?—

Mr. Twomey.—The rate of duty was only ten per cent. on exports going to the Isle of Man.

458. The note goes on:—

“Subsequent to 22nd September, 1933, exports of creamery butter were made under an official scheme operated by the Dairy Disposals Company. To meet the requirements of the home and continental markets during the winter and spring, the Company was authorised to acquire not more than 60,000 cwts. of suitable butter and, for the purpose of financing the scheme, to incur an overdraft not exceeding £400,000. The Company was also indemnified against any loss with might be incurred in carrying out the scheme. The total quantity of butter purchased was 32,732 cwts., of which 31,850½ cwts. were exported. The subsidy paid to the Dairy Disposal Company represented the difference between the purchase price and the net amount realised plus bounty payable from the Butter Fund. The subsidy averaged 29/6 per cwt. over the total quantity exported, the rates on individual claims varying between 22/2 and 57/7 per cwt. The latter rate was especially authorised by the Department of Finance and related to 9,676 cwts., exported mainly to the United Kingdom in March, 1934. In the case of consignments totalling 6,000 cwts. exported to Germany in November, 1933, no subsidy was payable in view of the net price obtained (130/11 per cwt.)”

What was the cause for the extraordinary difference between 22/2 and 57/7 which had to be paid for March. 1934?— During the winter of 1933-34, the Dairy Disposals Company was authorised to make purchases of butter here and hold them for sale at a later date. It was found, as the season advanced, that the production of butter was much higher than anticipated owing to the mild weather and the Dairy Disposals Company was holding far more butter than was needed for the home market and for such export markets as could be found at the time. At the same time the world price of butter fell to an extra-ordinary degree, from about 75/- to 46/-per cwt., and it was found in March that we had a quantity of butter, somewhere over 9,676 cwts. which would be surplus and which we would have on hands when our new butter would be coming in, and it would be overhanging the market. It was considered essential to get rid of it almost at any cost. The only place we could sell it was in the United Kingdom market, and in order to give the Dairy Disposals Company the net return it was necessary to give a subsidy of 57/7.

459. Deputy McMenamin. — That accounts for £3,353 worth of butter. It arises in respect of the bounty?—In respect of that transaction you sold 9,676 cwts. in the British market and the Dairy Disposals Company was fully recouped. The higher bounty of 57/7 kept them from suffering any loss in respect of that particular transaction. The loss of £3,353 arose from other causes and not from that transaction.

460. Deputy McMenamin.—It was distinct from it?—Yes.

461. It seems a lot of money to lose on that?—The total cost of the butter purchased was £219,060 and there was expenditure amounting to £21,713, giving a total of £240,773, and it was on that total transaction that the loss of £3,353 arose.

462. What was the explanation of that huge loss?—One of the reasons for it was a Belgian Customs Tax of £442 paid on butter exported to Belgium and which, at the end of the season, it was found not possible to sell in Belgium. It was found that the butter could not be sold in Belgium in March, 1934.

463. There was no market for it at all? —No. The price that would be obtained in Belgium at that time would be disastrous and it was re-exported from Belgium to the British market, but the Belgian Customs tax paid on the butter when it was going in could not be recovered.

464. Was it essential to pay the duty on it?—It had to be paid at the time of entry.

465. Could the butter not have been put in bond?—No. They had no arrangements for putting butter in bond.

466. Was it a Customs tax or a tariff? —It was a Customs duty. There was also a licence tax paid, but we got a refund of that.

467. Was this not known at the time the butter was exported?.

Chairman.—It was assumed that that butter would be sold in Belgium at a fair price.

468. Deputy McMenamin.—At the time the butter was exported were the conditions normal for selling it and was it subsequent to export that the new conditions arose?—It was. We could have sold it at the time of export and got 52/-per cwt., but in the month of March the best price was 36/5.

469. Was that unforeseen?—It was. It was due very largely to production in Belgium coming a month earlier than anyone anticipated.

470. Also due to a mild season?—Yes.

471. Chairman.—Our butter was known as chilled butter?—Yes, as a matter of fact, although our butter was in cold store it was sold at the fresh butter price because it was of exceedingly good quality.

472. Chairman.—We will read on the Comptroller and Auditor-General’s note:

“The total subsidy payable was £46,948 8s. 6d., but the sale of the butter not being completed on 31st March, 1934, only £43,628 of this amount is charged in this account.

The Company’s final claim in respect of the loss incurred in administering the scheme amounted to £3,353 3s. 1d., and this sum will, I understand, be charged to sub-head M 8 of the Vote for Agriculture for the year 1934-35.

On exports of non-creamery butter the payment of subsidy at the following rates was authorised:—

473. Deputy McMenamin.—With regard to the second column was there any tariff against Irish butter in the market? —Yes, the usual tariffs applied.

474. That were prevailing in those countries?—Yes.

475. Chairman.—The note goes on:—

“The above rates applied to exports of butter on which levy was paid under the Dairy Produce (Price Stabilisation) Act. In respect of butter acquired during the non-levy period from 1st December, 1933, to 31st March, 1934, payment of subsidies at the rates of 22/-per cwt. and 14/6 per cwt. was sanctioned on exports to and outside the United Kingdom respectively.

The increase of 18/4 per cwt. in the rates paid on butter acquired prior to 1st September, 1933, and exported on or after that date was necessitared by the reduction in levy and bounty rates referred to in my Report on the Butter Fund (paragraph 40).

Subsidy at various rates was paid on exports of bulk cream, tinned cream, cheese, and condensed, dried and powdered milk, the rates authorised being fixed on a basis of securing for producers a net return approximately equivalent to that which would have been obtained by them if the milk had been used for the production of butter.

The total expenditure under this heading amounted to £492,675 1s. 3d., viz.:—

476. Deputy McMenamin.—Is factory butter ordinary farmers’ butter that has been made and washed?—It is produced by the farmers but acquired by the factory owners and exported by them.

477. There is no creamery butter included in it?—No.

478. Chairman.—The note goes on to deal with the Bounties on Exports of Eggs and Poultry. It says:—

“The payments amounted to £311,533 19s. 2d., viz.:—

The rates of bounty authorised were:—

Eggs (in shell)—From 1st May, 1933:—

Eggs (not in shell)—From 1st May, 1933:—

Frozen liquid eggs or frozen liquid whites or yolks of eggs—12/6 per cwt.

As indicated in paragraph 73 of my last Report, the total—£311,553 19s. 2d.— includes expenditure amounting to £63,702 17s. 5d. incurred prior to the 15th July, 1933.”

Mr. Maher.—In addition to the note, I should add that the export of eggs is controlled by the Agriculture (Control of Exports) Acts, 1924-30. There is no specific authority with regard to poultry but the Fresh Meat Act gave departmental officers power of inspection.

479. Chairman.—That power of inspection is not existent in regard to dead poultry.

Mr. Twomey.—It is not existent in the case of dead poultry, but in this case the bounty was only paid in respect of dead poultry packed and exported in accordance with certain conditions laid down by the Department. Although we did not have statutory authority for insisting on these conditions, we were able to get them complied with by making the payment of the bounty contingent on that.

480. Deputy McMenamin.—It works out quite well then?—Almost as well as if we had the statutory authority.

481. Chairman.—The next note of the Comptroller and Auditor-General is relating to Bounties on Exports on Other Agricultural Products. It says:—

“The payments under this heading totalled £10,688 6s. 4d., viz.:—

The rates of bounty authorised on potatoes exported were:—

You distinguish between schedule and non-schedule districts. Is that under any Act?—Mr. Twomey—It refers to black scab areas.

482. Chairman.—The note continues:

“The expenditure relating to grass seeds included a payment to a firm of seed dealers of £197 3s. 6d., representing a subsidy at the rate of £2 per ton on uncleaned seed purchased in An Saorstát and subject to the provision that the cleaned produce of such seed sold in this country should have a germination of 80 per cent. or over, and that seed of a lower percentage germination should be exported. Payment to exporters of a bounty equivalent to the British Customs tariff of 10 per cent. ad valorem accounted for the remainder of the expenditure under this heading.”

483. Deputy McMenamin.—Was there no representation made as to the quality of the seed exported?—No.

484. Are you sure of that—that there are no conditions? Was there no guarantee given that it was not the seed of anything else? It was a case of there it is and take it if you want it?—That is so. Naturally the buyers bought on sample. They would obtain a sample before they would complete a purchase.

485. Were there any representations made?—There was no guarantee of quality given with it.

486. Was it sold as Irish seed?—That I could not be sure of. We could not be sure if it was sold as Irish seed or not.

487. Chairman.—I take it you did not expect a repeat order?—No.

488. Deputy McMenamin.—Were you not giving these bounties on it?—We were.

489. Chairman.—You gave the same bounty with a germination percentage of five per cent. as with a germination percentage of 75 per cent?—Yes. It was the buyers look out as to whether they would buy such seed at all.

490. Deputy McMenamin.—My point is with regard to these men that sold the seed; were they making representations that it was a better quality seed than what it was, and thus getting a higher price, plus the fact that they were also getting a bounty and damaging the reputation of the country?—As far as I know, they made no representations to indicate that the seed was better than it was and it would be futile for them to do so. Their customers buy on inspection or on sample.

491. Chairman.—The bounty provision was for grass seed. Suppose that a foreign firm was interested in some other seed, such as mustard or some seed like that. Suppose that they bought grass seed, which was 90 per cent. mustard seed, would they be entitled to get the bounty on that?—The buyer should have been buying it for some other reason than for use as grass seed.

Deputy Smith.—I do not think you would get cases of that kind. It is fairly far-fetched.

Chairman.—I agree. I just gave it as an example.

492. Mr. Twomey.—I think you can take it that the seed exported was genuine grass seed, but of second quality stock.

Mr. Maher.—I think the Department usually black list people who keep bad seed.

Mr. Twomey.—That is for the home market.

493. Deputy McMenamin.—With regard to the reputation of the country, I buy seed which I expect is going to grow and, even having bought it in the way you state, I expect it is going to grow on my land, and then when I find that it is a failure I curse the whole thing and the place it came from, and it ruins the whole trade.

Mr. Twomey.—Our anxiety was to prevent, if we could, this seed from being sown and used in this country, and we were anxious to get it out. One reason was that it was not suitable for sale in the country and another reason was that it would be overhanging the market and preventing the growers from getting a fair price for their good seed.

494. Chairman.—You did not look to this commodity for an export future?— No, we did not. As regards the foreign buyers, they got it in bulk and it must be assumed that they cleaned it and sold it under the conditions which obtained in their own country.

495. Deputy Smith.—They bought on sample and got no guarantee except their own judgment or the sample?—They bought either from sample or from inspection of bulk and they knew precisely what they were buying.

496. Chairman.—The next two paragraphs are not really in your Department.

Mr. Twomey.—I am not prepared to answer for them, Mr. Chairman.

497. Chairman. — When we have finished this Vote we will come back to them, and the members of the Committee if they wish to have the Accounting Officer here can have him. We will now turn to page 224. The grant was £2,450,000 and the expenditure was £1,793,172 2s. 3d., and the surplus was surrendered. Then there is the analysis of receipts and expenditure. We have had each of those items before us.

498. Deputy Smith.—How did the extra receipts become payable to the Exchequer?

Chairman.—Can you answer that, Mr. Twomey?

Mr. Twomey.—The Department of Finance will best be able to answer that question.

499. Deputy McMenamin.—With regard to the last item in the tabular statement on this page, I notice that there is a loss. How did that come in. Did it cost £5,642 16s. 11d. to send these trial consignments, and did we only get £2,298 18s. 5d.?—These figures represent the receipts and expenditure coming strictly within the financial year.

500. Chairman.—I think that these trial consignments were not carried out by Mr. Twomey’s Department, but by the Department of External Affairs.

Mr. Twomey.—It was carried out partly by each eDpartment, but I am prepared to answer in this case.

501. Deputy McMenamin.—We sent out £5,642 worth of goods and we only got £2,298. Is that correct?

Mr. Maher.—It is not quite correct, because all the receipts may not be brought to account in the financial year with which we are dealing.

502. Deputy McMenamin.—That £5,642 is what it cost, and that £2,298 is what we got and the difference is the loss. Is not that so?

Chairman.—In that year the £5,642 was expended in relation to those consigned goods, and those sold brought in £2,298, but it does not follow that they were all sold in that period. Some of them may have been sold in the next year.

Deputy Smith.—You would want to know what amount of them were sold in that year.

503. Mr. Maher.—If you turn to paragraph 89 of the Comptroller and Auditor-General’s report you will see a note on the matter. The total of the receipts realised in the year ended 31st March, 1934, was £6,123 1s. 4d. Of this sum, £3,824 2s. 11d. was accounted for under the Emergency Fund and £2,298 18s. 5d. under the Export Bounties and Subsidies Vote. That £2,298 18s. 5d. is the figure in the tabular statement on page 224.

504. Deputy McMenamin.—You recovered the expenditure?

Mr. Maher.—As far as possible.

505. You brought forward expenditure relating to this item?—We did not bring forward expenditure at all.

506. Chairman.—Have we any data to show what the cost to the State was in relation to those trial consignments of agricultural produce and what the receipts received were, and if there was any gain or loss, and. if there was, what was the gain or loss?

Mr. Twomey.—No. The figures we have deal only with expenditure from the Vote, and in that year there was also expenditure from the Emergency Fund.

Mr. Maher.—In the period under review there were 21 trial consignments dispatched and £5,591 18s. 4d. was the total expenditure. The receipts were £4,847 19s. 5d., and the difference, £743 18s. 11d., is the net loss on these consignments.

507. Chairman.—Does that clarify your point, Deputy McMenamin?

Mr. Maher.—Portion of that relates only to the year 1933-34.

508. Chairman.—What Deputy McMenamin wants to know is: Is there a sum of receipts of £2,298. He would like to know what those goods realised and the exact expenditure they cost the State.

Mr. Maher.—In that year 21 trial consignments were sent out and the loss was £743, accounted for under separate heads.

509. Chairman.—Have you any information with regard to the goods indicated in that receipts column of £2,298? Can you tell us what expenditure those goods cost the Government?

Mr. Maher.—I have not an expenditure figure that I could put against that £2,298.

510. Deputy McMenamin.—Would it not be a proper and a vital figure to have. Is not that figure material to this matter that we are discussing. Is it not a waste of public time to have us coming here when we cannot get these figures?

Mr. Twomey.—I could give you the figure for the whole of the year 1933-34 and the expenditure incurred from the Emergency Fund and put to the receipts.

511. Chairman.—The expenditure refers to the same items as the receipts refer to?—It would include these items.

512. Deputy McMenamin.—Is this not a very futile performance. We are simply sitting here and wasting our time.

513. Deputy Smith.—Could Mr. Twomey tell us the nature of the products that were responsible for the expenditure of £5,642 16s. 11d. and what amount of these products were still on hands at the end of the financial year after you had sold off £2,298 18s. 5d. worth of them.

Mr. Twomey.—I have not got that information with me and the thing is complicated by the fact that there was another Department dealing with it from October, 1933, to March, 1934.

514. Chairman.—Is there any way in which we could get a statement about these trial consignments so that we would know what they cost the State and what they realised?—I have those details as regards the work done by my own Department.

515. Deputy Smith.—Mr. Maher referred to 21 trial consignments. Do these 21 cover those referred to in this figure that we are now discussing?

Mr. Maher.—Yes, for the period under review. I think some one asked the nature of these consignments. They were sent to Spain, Morocco, France and Belgium. Turkeys and geese were sent to Belgium, turkeys to Belgium, potatoes and oats to Spain, Morocco and France, but until the following year’s accounts come in we are not in a position to say what the gain or loss on, transactions which extended over two financial years would be. It would be impossible to answer precisely Deputy McMenamin’s question at the moment.

Deputy McMenamin.—This is not a businesslike state of affairs.

Deputy Smith.—You cannot have that on a matter of trial consignments.

Deputy McMenamin.—If you are trying to run a huge business concern you must have proper business methods.

516. Chairman.—The Finance Accounting Officer is the Accounting Officer for this, seemingly. Shall we ask him so far as he is able to give us a statement co-relating expenditure and return for the financial year?

Mr. Twomey.—Before you decide finally on that, I should like to point out that the information in respect of these trial consignments would not give you a full picture. They might in respect of the period from September, 1932, to 31st October, 1934, but it would be difficult for us to segregate the items that were actually bought and paid for in any financial year. I can give you what would be complete figures for three years, which would be more informative, that is of the whole work done from September, 1931, to October, 1934. I have these figures of expenditure and receipts.

517. Chairman.—This covers really three financial years?—Yes.

518. If, taking two years together, they were level, and on the next year you had a profit or a loss, would you then say that on the whole there had been such a profit or such a loss? —I can give you the details for each of the three years involved and the gross total, and I feel it is better to do that now. In the year 1932-33 the expenditure was £4,342 14s. 4d., and the receipts for that year were £3,568 10s. 0d. For the year 1933-34 the expenditure was £9,895 4s. 4d., and the receipts for that year were £6,188 11s. 4d. In the year 1934-35, up to October, the expenditure was £16,376 19s. 3d., and the receipts were £19,037 12s. 3d., and the gross totals for the three years were—expenditure £30,614 17s. 11d., and the gross receipts—£28,794 13s. 7d., so that the net cost of the scheme was £1,820 4s. 4d.

519. That loss was sustained more in the earlier period than in the later?— Yes, in the later period there was a profit. In the beginning we were forcing our produce into markets where it was never known before, and on that account our goods had to be sold at prices under their value until they became known. We consider that on the whole the expenditure of £1,820 4s. 4d. has been well justified by the results.

Deputy Smith.—That is satisfactory.

520. Deputy McMenamin.—Have we trade representatives in these countries?— We have not had one in Spain until quite recently, nor in Morocco.

521. Would it be a good thing to get from these men a report as to the prices of articles you are exporting?—We get these reports constantly and I would like to explain that the purpose in sending trial consignments was to open up markets, and when my Department found that a market was profitable and that it was possible to send out consignments at a profit, we turned over the business to some outside commercial interest. We pass it on at the time when we could have made profits, and if we had remained in trade we could have shown very good profits from some of these items. It was the policy of the Government that Government Departments should not engage in trade except to open up markets. After that we are to get in touch with commercial interests and place our information at their disposal.

522. Deputy Smith.—It is a pity you do not carry on until you have recouped yourselves for any losses you may have? —When the market is beginning to make a profit we hand it over to the commercial interests. (See q. 582.)

VOTE NO. 54—FISHERIES AND GAELTACHT SERVICES.

Mr. D. Twomey and Mr. S. Moran called and examined.

523. Chairman.—The next Vote is Fisheries and Gaeltacht Services. You only deal with one portion of this, Mr. Twomey?

Mr. Twomey.—Yes. Mr. Moran deals with the remainder.

524. The Comptroller and Auditor-General's note is:—

“The arrears of fishery and industrial loans due but unpaid at 31st March, 1934, amounted to £63,295 9s. 9d., an increase of £913 9s. 8d. over the amount due at 31st March, 1933. With the consent of the Department of Finance, loans to the extent of £156 0s. 5d. were written off as irrecoverable. During the years 1931-32 and 1932-33 the amounts brought to credit of borrowers’ accounts in respect of boats and gear taken up by the Department were £12,928 7s. 8d. and £264 15s. 0d. respectively. Certain of the boats and gear taken up have been disposed of, the sums realised being in most cases very considerably less than the amounts credited to the borrowers.”

Mr. Maher.—The first part of the paragraph is a continuation from last year and gives the position of the loans outstanding. The bulk of the paragraph relates to fishery loans, only a small portion being arrears of industrial loans. As regards the last portion of the paragraph, on examination of the accounts relating to boats and gear taken from borrowers we notice considerable discrepancies between the amounts credited to borrowers and the amounts realised when the boats and gear are disposed of. There is a case here of a boat credited for £148 which was sold for £6. Of the total sum of £12,951 credited for boats and gear taken over during 1931-33 and sold subsequently, the total receipts were £2,069 or about one-sixth of the amount credited. The discrepancy seems rather marked.

Chairman.—It certainly does.

525. Deputy Smith.—What was the effect of that on the amount of loans outstanding?

Mr. Maher.—I think these are two separate matters.

526. Chairman.—When money is loaned to a man and he cannot pay in a given time, the Department takes over from him at a certain value. Then we have to realise on that.

Mr. Twomey.—Under the Fisheries (Revision of Loans) Act, 1931, the Minister for Lands and Fisheries was empowered, with the consent of the Minister for Finance, to remit the whole or any part of fishery loans, made before the passing of the Act; and fairly large sums were written off under the provisions of that Act. The writing off of these amounts naturally got about and made it more difficult to collect from the other borrowers the amounts due by them, and there were a number of expedients tried with a view to the recovery for the State of as much of the money as possible. Legal proceedings were taken in a number of cases, but it was found that very little could be got owing to the fact that the persons involved were not at the time good marks for the money. Where a person owed, say, £500 on the loan and he still had the boat in his possession, it was arranged that it be written down to the estimated present value of the boat, provided he would hand it over to the Sea Fisheries Association and then repurchase the boat under the scheme, defraying the cost by means of deductions from the earnings of the boat.

527. Chairman.—It seems that this. business of putting a value on the boat and taking it over was really much the same as Finance agreeing to the writing off of a portion of the debt and you adopted this method for a psychological reason?—Yes.

528. In the case of the first boat, I see you valued it at £200 and sold it at £1 10s. Was that so because it was all the boat was worth or because of any attitude of boycott. Was it felt that you had taken a poor fisherman’s boat?—That did not enter into it at all.

529. Deputy McMenamin.—These boats were lying around rotting and were not even painted, some of them.

Chairman.—In that case I should say that the Department wanted to write off a debt but did not want to do it formally as it might be a bad example for other people.

Mr. Twomey.—That value was placed on the boat a very considerable time before the boat was sold. Some times there was a lapse of eight to ten years and the boat deteriorated in the meantime. During that period there were efforts being made to sell the boat, but they were not successful, possibly because the Department were asking too high a price, but there was no case where there was anything in the nature of a boycott or an attempt to prevent the sale of the boat.

530. This advancing of money to fishers has always had a certain amount of loss? —Since the setting up of the Sea Fisheries Association in 1930 the original scheme of loans for the purchase of boats has been dropped and has been replaced by a system under which boats are supplied by the Association to the workers. The boat remains the property of the Association and is paid for by means of deductions from the value of the catches. Since that scheme was adopted I think the position is much better and I think the losses will be lower in the future.

Deputy McMenamin.—Under the old scheme you might get no money at all for the boat, but now they can take the value of it from the catches.

531. Chairman.—If the men are obtaining catches which do not give them a living is the Department still able to get its pound of flesh?—Where the catches are very small the Association does not demand payment. It does so only when the catches permit its being done.

532. It is only a matter of having a more efficient machine?—Yes.

533. These fishery loans have a very bad history. The next note in the Comptroller and Auditor-General’s Report is sub-head E—Sea Fisheries. The note is:—

“In the course of my audit I observed that a boat which had been taken over from a defaulting borrower has been in charge of a caretaker since August, 1932, that storage charges have been paid since September, 1932, in respect of the gear removed from the boat, and, I understand, that it is unlikely that any of this gear will be sold. I also observed that gear belonging to certain other boats has been in, storage since July, 1931, and it would appear that the charges already incurred for storage exceed the value of the gear stored. I have asked the Accounting Officer for his observations on these matters.”

Mr. Maher.—Since the date of the report a reply has been received from the Accounting Officer from which it appears that the caretaker’s charge of 2s. 6d. a week and the storage charge of 5s. a month continued during the financial year. The gear mentioned in the second section of the paragraph was disposed of for £4 17s. in December last. The storage charges tend to exceed the value of the gear and boat.

534. Deputy McMenamin.—Are these charges merely paper charges?

Mr. Twomey.—They are actual charges.

535. Are not these the Department’s stores?—No, they are stores privately owned. Although the cost of storing the gear may have been greater than its actual value, you had to keep the gear as long as you had any hope of disposing of the boat so as to sell them together.

536. Chairman.—When you take over a boat and gear you sell them at the best price you can get?—All the boats and gear referred to have been sold. We have not a single thing on hands now for which we are very thankful.

537. The next paragraph in the subhead is as follows:—

“The repair and reconditioning of motor boats was undertaken by the Department on a repayment basis, but the prices at which certain of the contracts were entered into did not appear to be sufficient to recoup the Department the cost of the work.”

Mr. Maher.—Since the date of the Report further information has been supplied showing that a charge of 12½ per cent. for overhead expenses was added to the total expenses in each case. We understand that this year this work has since been handed over to the Fisheries Association.

538. Chairman.—We now go on to the Sea Fisheries Association, sub-head G (3) —Advances for Boats and Gear. The Comptroller and Auditor-General’s note is:—

“During the year advances were made amounting to £18,500, being £3,500 in excess of the sum provided in the Estimates. The total sums advanced for boats and gear now amount to £39,000. I have enquired whether a final decision has yet been reached on the conditions under which repayment will be made by the Association.”

Mr. Maher.—We have since received information that the rate has been fixed at 5½ per cent. interest for money advanced to the Association, and certain conditions have been suggested as to the manner of repayment.

539. Chairman.—The next note is on rural industries. It is:—

“I have not yet been furnished with trading accounts in respect of these services, to the absence of which I have referred in previous reports.”

There is a report here on this matter from the Department of Finance, as follows:—

Roinn Airgid

(Department of Finance),

Sráid Mhuirbhtheann Uacht

(Upper Merrion Street),

Baile Atha Cliath

(Dublin).

S. 27/11/31.

Secretary,

Committee of Public Accounts.

With reference to the comments of your Committee in paragraph 1 of their Report on the Appropriation Accounts for 1932-33 relative to the preparation of trading accounts for the commercial enterprises controlled by the Department of Lands, I am directed by the Minister for Finance to forward, for the information of your Committee, the annexed copy of a direction issued to that Department pursuant to Section 5 of the Exchequer and Audit Departments Act, 1921.

(Sgd.) T. S. C. Dagg.

25 Abrán, 1935.

S. 27/11/31.

Runai,

Roinn Tailte

(Seirbhis na Gaeltachta).

With reference to Mr. Ua Moráin’s minute of the 28th ultimo (F. 9/40/33) and to previous correspondence relative to the preparation of trading accounts for the commercial enterprises administered by your Department, I am directed by the Minister for Finance to state that pursuant to Section 5 of the Exchequer and Audit Departments Act, 1921, he approves of the preparation of accounts and balance sheet for the Rural Industries, for transmission to the Comptroller and Auditor General and subsequent presentation to the Oireachtas, in the form of the draft Statement of Accounts enclosed with the minute under reference, subject to the following minor modifications:—

(1) Development and Marketing Account—

(a) Marketing and other expenses— “Services of other Departments as estimated”—wording to be amplified to indicate that heading deals only with expenditure by other Departments not already provided for in the account.

(b) Cash discount to be debited as a marketing charge and not as a deduction from sales.

(2) Balance Sheet—

(c) Provisions for bad debts, depreciation, discounts, and insurance to be set out separately.

(d) Item “Cash balances” ‘not to include other accounts.

The Minister agrees that, in view of the impracticable nature of the task, trading accounts need not be prepared for past financial years. Accounts in the form now approved should be kept for the current financial year, on the initial basis of a stocktaking which it is understood was carried out on the 31st March, 1935, at the Gaeltacht Industries Depôt and at the various Rural Industries centres.

The Minister will at a later stage be prepared to consider whether any further modifications in the trading accounts ‘now approved would be desirable in respect of the financial year 1936-37 and subsequent financial years.

With regard to the final paragraph of the minute under reference, I am to state that the approval of the draft trading accounts herein conveyed applies also to the Gaelic equivalent of the various English terms.

I am to request you to be good enough to submit at an early date draft forms of trading accounts for (a) hire purchase and loan transaction in connection with industries in the Gaeltacht, (b) the Kelp Development Scheme and (c) the Carrageen Development Scheme.

(Sgd.) T. S. C. Dagg.

25 Abrán, 1935.

Mr. Maher.—The approval of the Department of Finance for the form of the trading accounts has been received and we will receive the trading accounts for rural industries for the period from 1st April, 1935, onwards.

540. Chairman.—I understand from these reports that they have been asked not to go back on previous years, as it would be impossible to prepare the accounts. The Comptroller and Auditor-General’s note goes on:

“During the year the total expenditure on Rural Industries, as shown by sub-heads H (1) to H (7) amounted to £29,659 13s. 1d. including £17,917 for materials, and the net receipts credited to appropriations in aid in respect of sales of products of Rural Industries centres amounted to £10,679. This latter figure represents the balance of sums realised by sales of goods after deductions of the wages of operatives, commissions and other charges. In my last report I stated that I was in communication with the Accounting Officer regarding the payment of lodging allowances to certain teachers in rural industrial centres. I have been informed that cases in which it was found that teachers, while receiving such allowances, occupied official residences, have been notified to the Department of Finance.”

Mr. Maher.—We have not received any notification of the decision of the Department of Finance in that matter.

Mr. Moran.—The question is still under consideration between the two Departments.

541. Chairman.—The next note is sub-head H. (3)—Machines and Plants—and is as follows:

Included in the amount charged to this sub-head is expenditure on the purchase of sewing machines, knitting machines, and knitting machine tables. I have asked whether the sanction of the Department of Finance was obtained for these purchases.

Mr. Maher.—The amount involved here is roughly £113, and we have asked that the sanction of the Department of Finance be obtained, and we have not received any reply.

Mr. Moran.—I have asked for that sanction, but I have not yet got it.

Mr. Dagg.—We are prepared to give that sanction.

542. Chairman.—The next is sub-head I (3)—Kelp Development. The note is:

The expenditure under the above sub-head during the year amounted to £30,320 1s. 2d., while the receipts from the sale of kelp credited to appropriations in aid, amounted to £511. Included in the charge to the sub-head is £116 4s. 10d. premiums for Marine Insurance on transport of kelp and for Employers’ Liability Insurance in respect of labourers engaged in loading and unloading kelp. As it is the general practice not to effect insurance against the risk of any loss which, if it arose, would fall directly upon public funds, I have asked the Accounting Officer whether the authority of the Department of Finance was sought and obtained for the payment of these premiums.

Has that been cleared?

Mr. Moran.—Yes, that has been cleared. Authority has been received for that.

543. Chairman.—The note goes on:—

I referred in my last report to the payment of rent for storage of kelp. This charge against the Vote continues and during the year £182 9s. 8d. was paid for storage in London, and £323 8s. for storage in Galway.

That point was before us on the last occasion.

Mr. Moran.—The position in Galway and London still continues until we can find some suitable market for kelp. That does not mean that we have decided that there is no market.

544. Deputy McMenamin.—Have you any hope that you are going to find a market?—Yes, for the stock of kelp that is there.

545. Did you take any steps to find out if the artificial manure people would buy it?—That is one of the avenues we are exploring at the present time and is one of the most optimistic I have met.

546. Could you not have seen to that before now?—I have only been at it for two or three months.

547. Chairman.—Have you any prospect of disposing of your stock?—I think it will be disposed of.

548. Deputy McMenamin.—I understand that this stuff can be used for artificial manure.

Mr. Twomey.—It contains a certain percentage of potash and could be used for the manufacture of manures. My Department was consulted about that matter, and we would raise no objection to the kelp being used provided it did not cost the farmer any more than the imported potash manures. The return that those in charge would get from that source would be very small, and I think they hesitated before finally adopting that scheme to see if the kelp could be sold for the original purpose—the manufacture of iodine.

549. Chairman.—If it is going to be used for the manufacture of manure there is going to be a serious question as to whether it is worth while gathering it.

Mr. Moran.—There is a possibility of extracting the crude iodine first and the value of that plus the potash may give a reasonable sum for the kelp. You would not get anything like what you paid, but you might get a reasonable sum. I think you might take it for granted that it will be cleared off before the end of the year.

550. Chairman.—The note continues:—

“In 1930 kelp to the value of £4,943 8/- was sold to a foreign buyer, but only £4,000 was paid. The authority of the Department of Finance has now been sought to write off the balance due as irrecoverable.”

Was that buyer a defaulter?—

Mr. Moran.—Yes, that was a foreign transaction—a French transaction. There was a dispute and we sought the opinion of the Attorney-General. We were told that the costs would not justify us in taking proceedings. There was only £900 involved.

551. Chairman.—The next note is on sub-head I (4)—Carrageen development. It is:—

“I observed that bulk purchases of carrageen were made by the Department from persons who were not gatherers, and as it would appear that the provision made in the Vote only contemplated ‘payment to gatherers for carrageen,’ I have asked to be informed of the circumstances in which such purchases were made.”

We had a similar case before us last year.

Deputy O Briain.—It was with regard to bulk last year.

552. Chairman.—Is it the same bogus co-operative society?

Deputy O Briain.—It is not a bogus co-operative society.

Chairman.—I do not call it a co-operative society within the strict meaning of the word.

Mr. Moran.—The trouble about the carrageen is that we cannot collect enough to satisfy the market.

553. Chairman.—The price is down.

Mr. Moran.—I do not think so.

554. Deputy Smith.—That is a very legitimate excuse for purchasing outside the lists.

Mr. Moran.—We were not able to get it. We had to fulfil contracts and had to get it somewhere. We have amended the sub-head.

555. Chairman.—The Comptroller and Auditor-General’s note continues:—

“I have also asked that the covering sanction of the Department of Finance be obtained for the printing of two issues of carrigeen recipe booklets at a cost of £161 9/-.”

Mr. Moran.—The necessary authority has been received.

556. Chairman.—The next paragraph is:—

“Consignments of packaged carrageen were sent from Galway to Dublin by passenger train. As the freight charges by goods train would have been considerably less, I am in communication with the Accounting Officer regarding the circumstances in which it was necessary to dispatch the consignment by passenger train.”

Mr. Maher.—The passenger train rates are four times as high as the goods train rates and we requested the Department to bring the matter to the notice of the Department of Finance. I understand that Finance has not yet given sanction.

Mr. Dagg.—We asked for particulars and we have not got them yet.

Mr. Moran.—The reports went yesterday. It was a matter of three or four small urgent demands which had to be filled.

Chairman.—We will now turn to page 154 and go through the items.

557. Deputy McMenamin.—On sub-head E (1)—Vocational Instruction including boatbuilding. Is this a grant to the Sea Fisheries Association?

Mr. Twomey.—That is in respect of expenditure at the Meevagh yard in Donegal, which came to the Ministry of Lands and Fisheries from the old Congested Districts Board. The yard is used to give instruction in building to young men. That sub-head is to cover an expenditure for years back. It was intended to hand it over to the Sea Fisheries Association in October, and for one reason or another it was not found possible until 1st April, and the expenditure was much greater than anticipated.

558. Chairman.—The next item is sub-head E (3)—Sea Fisheries Protection— what was the difficulty in getting a satisfactory gun?

Mr. Twomey.—We have succeeded in getting one. I think everyone felt that if we could have avoided having a gun on the Muirchu it would be better, and no one was in any hurry to have it purchased until it became necessary to do so.

559. It is a good gun, I suppose?—I hope it is.

560. Deputy McMenamin.—Are they also armed with a Thompson gun?—They have got a three-pounder gun and small sidearms.

561. Deputy McMenamin.—F (1) deals with grants to boards of conservators and local authorities. Do these bodies do anything about hatcheries themselves out of these grants?—Grants are made under these sub-heads to a number of voluntary fishery associations which operate salmon and trout hatcheries. They have been encouraged by grants of money and ova, and the grants of money are to enable them to keep the hatcheries. So far as I am aware, we do not make grants to boards of conservators to keep hatcheries.

562. Is the Department satisfied that enough young fish is being produced to stock all the places that need stocking?— I do not think so. I think the Department would like to see a considerable extension in the number of small hatcheries throughout the country.

563. Is the Department satisfied with the operation of this scheme?

Chairman.—That is rather a matter of policy.

Mr. Twomey.—The Minister is considering the whole matter in connection with the report on inland fisheries at present before him.

564. Chairman.—I notice in sub-head G (4) that the erection by the Sea Fisheries Association of a plant for the purification of mussels was not gone on with. Why was not that mussel purification plant not gone on with?

Mr. Twomey.—When all the arrangements were made in connection with this matter we could not get an assurance that Public Health authorities in other countries would accept a certificate of purification from us and we felt that it would be foolish to incur that expenditure until we got that assurance.

565. Deputy McMenamin.—If you were satisfied that the thing was up-to-date and efficient, irrespective of what country took the mussels, would not it be better to have them purified from a public health point of view?—There is no country that would buy them unless with a certificate of purification that would be acceptable in that country. There is no home consumption for mussels and we could not export them unless we had an acceptable certificate of purification.

566. Chairman.—It is strange that you should have such a bad name that they would not accept your certificate?—I understand that the matter is exclusively in the hands of the medical officers and they are probably over particular with regard to their requirements. So far we have not been able generally to satisfy them as to their requirements. In the course of time we may, but we feel that the expenditure should not be incurred until we are assured that they will accept our certificates.

567. Deputy O Briain.—With regard to sub-head H (1) was it found that the centres in operation were not reproductive?

Mr. Moran.—Most of them were, but some of them were not.

568. Deputy McMenamin.—In the case of sub-head H (4) what was the cause of the difference?

Mr. Moran.—I think the scheme was dropped. It was a case of mistaken optimism. With regard to sub-heads H (1), H (2), and H (3), these explain the position that I spoke of. There has been a market for the last four months and we could not get the carrageen.

569. Deputy McMenamin.—What is the explanation of that? There are practically thousands of men there drawing unemployment money.

Chairman.—That is the idea.

570. Deputy McMenamin. — Is the Department taking any steps to counteract that?—The Department is doing its best.

571. Have they reported this matter to the Department of Industry and Commerce?—No.

572. Why not?—Because we do not think it is there. Our point of view is that all the carrageen there is collected at the moment.

Chairman.—I have been told that everybody in Connemara is drawing unemployment money, except one, and that he is due to get it.

Deputy Smith.—That question does not arise here. If the carrageen is not there the people in receipt of unemployment money cannot get it.

Mr. Moran.—Our information is that all the carrageen that the people can collect has been purchased.

573. Deputy McMenamin.—Is there or is there not carrageen there?

Mr. Moran.—I think it is not there.

574. Have you definite information on that?—I have not.

575. Deputy Smith.—Even suppose that it is there, is this a very important matter?—I know that the price of carrageen varies from 1/6 to 2/6 per stone.

576. How long would it take a man to collect a stone of carrageen?—I cannot say that.

Chairman.—How does this arise?

Deputy Smith.—All these questions have a very definite bearing on the matter raised by Deputy McMenamin.

577. Deputy McMenamin.—They are getting a small price this year.

Mr. Moran.—They are getting a good price.

Chairman.—Would you go collecting carrageen if you could get paid without it?

Deputy Smith.—I would try to do what would pay me best. It seems to me that if carrageen is available and there are people in that area drawing unemployment benefit, who could collect it, that the Department responsible for unemployment should be made aware of it.

Chairman.—The case is different from that of a man who has had regular employment and then loses it. There is a difficulty here.

Deputy Smith.—That is the reason I would like to get information as to what a man would earn in the week.

Mr. Moran.—I will make investigations.

Deputy McMenamin.—Is it or is it not there to be developed?

Chairman.—It would be much harder for the unemployment people to tell a man to go collect carrageen than to say that there is a job waiting for him. The police should report as to whether there is plenty of carrageen there or not.

Deputy McMenamin.—And the marine inspectors also.

Mr. Moran.—I think it is more of a woman’s job than a man’s job.

Deputy Smith.—If a woman can collect it so can a man.

578. Deputy O Briain.—In sub-head J (1) there is a reference to a less expansion of industries. Is it intended to go any further to establish further depots and industrial centres?

Mr. Moran.—Since this Vote was prepared certain centres have been closed and others opened where the orders permitted us to do so.

579. Deputy McMenamin.—Have you not closed down a large number of them? —We have, but we have opened one or two others.

580. Chairman.—With regard to sub-head M (2), what happened to these houses that were started and not proceeded with. It says here that provision was made for five residences, three of which could not be proceeded with. Were these three started on?—I do not think so.

581. Deputy Smith.—It says here that the title in one case was faulty?—I think you may take it that these were preliminary expenses only.

582. Chairman.—That finishes that Vote pretty thoroughly. We will now go back to paragraphs 88 and 89 of the Comptroller and Auditor-General’s report, which we left over. The first note is on bounties on exports of industrial products, and is as follows:

“As stated in paragraph 75 of my last report, payment of these bounties was sanctioned on the basis that exporters would receive the amount shown to have been paid in duty on certain products exported to the United Kingdom on or after 15th November, 1932, subject to the proviso that the amount to be refunded on exports of such commodities as were already liable to duty prior to 15th November, 1932, would be limited to the additional duty payable after that date.

The charge under this heading includes a sum of £92 1s. 6d. in respect of a subsidy of 6d. per ton which was paid, in addition to bounty, on all macadam and gravel exported from Saorstát quarries on or after the 31st July, 1933.

Trial Consignments, etc.

The Charge under this heading includes £25 12s. 9d. for a quantity of seed potatoes sent abroad, free of cost, for experimental sowing.

The receipts include £153 18s. 7d., remitted in January, 1934, in respect of a consignment of 500 cases of eggs shipped to Barcelona in June, 1933. A further sum of £28 0s. 6d., which had been deposited with the Spanish Custom authorities, was brought to credit in the year 1934-35. Expenditure in connection with the consignment, which was charged partly against the Emergency Fund Grant-in-Aid of last year, amounted to £579 10s. 10d., and it would appear that a proportion of the loss was due to the fact that it was found necessary to keep the eggs in cold storage until December, 1933.

I have inquired into certain cases in which claims under policies of insurance against loss or damage to consignments in transit remain outstanding.

The total of the receipts realised in the year ended 31st March, 1934, was £6,123 1s. 4d. Of this sum £3,824 2s. 11d. was accounted for under the Emergency Fund and £2,298 18s. 5d. under the Export Bounties and Subsidies Vote.”

I left these two paragraphs over because it might have been necessary to call the Accounting Officers from the Department of Industry and Commerce and possibly External Affairs, but if the Committee feels that there is no necessity to summon these men we can let it pass. To-morrow we will take the Post Office and the Army.

The Committee adjourned until 11 o’clock on 6th June.