Committee Reports > List of Committees > Dáil > 1936 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1934 - 1935

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 17adh Meitheamh, 1936.

Wednesday, 17th June, 1936.

The Committee sat at 11 a.m.

DEPUTY McENAMIN in the Chair.

Mr. S. Mag Craith (Ard-Sgrúdóir); Mr. T. S. C. Dagg, and Mr. J. L. Lynd (Roinn Airgid) called and examined.

VOTE 52—AGRICULTURE.

Mr. D. Twomey, called and examined.

938. Paragraph 30 in the Report of the Comptroller and Auditor-General was read:—Sub-head M.5—Improvement of the Creamery Industry:

“Including the expenditure of £62,701 14s. 6d. in the current year, the total Vote expenditure to date from moneys provided for the improvement of the creamery industry amounts to £1,007,419 2s. 3d. Receipts to 31st March, 1935; total, £142,384 11s. 5d., and, as appears from Account No. XXVI of the Finance Accounts for the year, the Capital value of the assets held for the Exchequer on that date was £531,000. Provision of £112,000 was made from the Vote for the year 1932-33 to cover trading losses incurred by the Dairy Disposal Company, Limited, and amounts totalling £195,454 have been sanctioned by the Department of Finance for subsidies to cover losses incurred on the realisation of creameries. I have asked for further information in order finally to reconcile the Exchequer asset with the net Vote expenditure.”

939. Mr. McGrath.—I received yesterday a statement showing how the Exchequer asset, stated in that note as being value for £541,000, is made up.

940. Chairman.—Is there any member of the Committee who wants to hear the explanation read?

Deputy Goulding.—I do not think it is necessary to read it.

941. Deputy Keyes.—Is the Comptroller and Auditor-General satisfied with the explanation he has received?

Mr. McGrath.—Yes. We merely asked for information, which we have got. It explains the difference.

942. Chairman.—The second portion of paragraph 30 in the Comptroller and Auditor-General’s report reads:

“A sum of £300 was paid with the sanction of the Minister for Finance to a bank as a contribution towards the balance due by the guarantors of a co-operative society which had gone into liquidation and whose premises had been purchased by the Dairy Disposal Company, Limited.”

Paragraph 31 reads:—Sub-head 0.9— Agricultural Produce (Cereals) Acts, 1933 and 1934:

“Payments of bounty amounting in all to £103,950 17s. 11d., in respect of the second, third and fourth sale (wheat) seasons accrued due and were paid during the year, the rates of bounty being: For the season ended 15th April, 1934, 8/6 per barrel; for the season ended 31st July, 1934, 8/5 per barrel; for the season ended 15th December, 1934, 6/4 per barrel. The scheme of credit for seed wheat, to which reference was made in paragraph 37 of my last report, was continued during the year, and the amount charged to the sub-head in respect of advances to seed merchants was £10,334 5s. 11d.”

Owing to weather and climatic conditions, you had some difficulty about the sowing of winter wheat. How did you get over that difficulty ultimately? Had you sufficient spring wheat for those who had not been able to sow winter wheat?—There was a shortage of spring seed wheat. If there had been more seed available at the end of the season there would have been a greater acreage sown.

943. There were some farmers, I think, who had purchased winter wheat and had the ground ready for sowing, but owing to the weather conditions they were not able to sow it?—That is so. They had bought the winter seed wheat and had it ready to sow, but could not get suitable weather conditions.

944. Did they then sow the ground with spring wheat, or what happened to the winter seed wheat?—They used the latter for feeding or sold it again to the millers, but as far as they could get spring seed wheat they sowed it. Such seed became very scarce and dear, especially towards the end of March.

945. Was it possible to get spring seed wheat of good quality?—So far as supplies could be got the seed was good, but the price was high.

946. Report of the Comptroller and Auditor-General, Paragraph 32: Sub-head O (10)—Agricultural Products (Regulation of Export) Act, 1933 (No. 26 of 1933):—

“The charge to this sub-head includes payments, totalling £5,839 15s. 7d. made to bacon curers on foot of guarantees against loss arising from the cold storage of bacon during the winter months. The scheme provided for refunds of storage, freight, and rehandling charges, and for allowances in respect of shrinkage. The total quantity stored under guarantees was 25,000 cwts. approximately.”

947. Deputy Smith.—This was a contribution to help to deal with the surplus of pigs that we had that winter?—That is so. There was a considerable surplus in the closing months of 1933—very much greater than the export market and the home market could absorb.

948. How was this figure of £5,839 15s. 7d. arrived at?—They were paid certain cold storage charges, freight and cartage charges, and given an allowance for shrinkage at a definite rate per cwt. The amount that was put into cold storage was controlled by the Minister. The arrangements for cold storage were carried out by a temporary Bacon Marketing Board appointed by the Bacon Curers’ Association.

949. And they have no obligation to the Department in respect of this sum at all. This was a free contribution to the bacon curers to handle the surplus of pigs at the time?—Yes. In effect it was to compensate them for the cost they would incur in cold storing this surplus bacon and holding it over until February and March when we felt there would be a demand for it, and, in fact, the loss on cold storage was very much less than we anticipated.

950. They still got that amount of £5,839?—Yes.

951. Irrespective of whether the calculation was accurate in advance or not?— No. It was fixed afterwards in relation to the selling price.

952. Deputy Goulding.— Did they actually lose on the sale of the bacon?— Yes, owing to the cold storage charges, shrinkage and cartage charges in and out to the cold stores. The bacon factories do not have cold stores on their premises other than those needed for curing operations.

953. They had to pay that excess charge for storage?—Yes, it had to be sent to public cold stores.

954. Chairman.—How many cold stores are there in the country?—There are four or five big public cold stores, apart from those attached to the bacon factories and the creameries, which are only adequate for the current business of these concerns.

955. The sending of this bacon involved freight charges?—Yes.

956. Has your Department done anything with regard to coming to terms with the railway companies about the transport of agricultural products as to which, of course, additional transport charges would mean increased cost to the consumers?— We make representations to the Department of Industry and Commerce, which is the Department that deals directly with the railways. If we feel that under the new arrangement, whereby the railways have got a virtual monopoly, there is anything prejudicial to farming interests we make representations to the Department of Industry and Commerce, who, in turn, make representation to the railway companies, and in a good many cases adjustments have been secured in freight charges by that means.

957. Has it occurred to you that, with all this internal organisation of agriculture in which your Department is now involved, it is time that some co-ordinated steps should be taken so that you could say to the railway company, “On a certain date we will give you a load, irrespective of any other business you are doing, of 1,000 tons, say, what will you take it at?” Do you see what I am getting at?—Yes.

958. If the railway company call at Waterford, say, for a small quantity, you are not going to get any accommodation at all. You will have to pay the full rates for a small quantity, and ultimately you increase the price to the consumer. My point is that, in reference to wheat and beet and the other things which follow from them, it is time that you were doing something to organise this thing on the part of the farmers and be able to say to the railway company: “At a particular point so many tons of stuff will be waiting on a particular day for which you can send a special goods train; what will you take it for?”—Wherever we can foresee that a big volume of traffic will arise in that way we do make special arrangements with the railway companies and we have got considerable concessions in freight in regard to such things as the carriage of beet, the cows being sent to Roscrea factory, Kerry cattle to the Waterford factory, and potatoes for export. In such cases the railway companies met us and arranged for reasonable freights.

959. Does the same thing apply to the transport of wheat?—No. We make no arrangements in regard to the transport of wheat.

960. Do you not think that, on behalf of the community, you should take this in hands? You know what takes place in other countries such as America and Canada with regard to these things. We have no hopper trucks at all in this country?—Not the kind of special wheat trucks they have in the United States and Canada.

961. Deputy Smith.—Why was there such reluctance on the part of the bacon curers, having regard to the guarantee that they got, to take the surplus pigs at that particular period?—Subsequent to getting that guarantee with regard to cold storage they did, in fact, clear the markets of pigs for the most part and cold stored the bacon. It was part of the arrangement that they would clear the pig markets and that bacon they could not sell on the home or export market would go into cold storage.

962. You asked certain curers to take supplies in certain areas to which they had objection because of the type of pig the people were producing there. That was the position as far as I know at that time. Having regard to the fact that there was a guarantee against loss, I find it difficult to understand why they were hostile to doing that?—The point they made at that time was that the bacon produced from that unsuitable type of pig would not be suitable for their trade at any time, even though they had a guarantee in regard to loss—that the particular areas in the home market and export market they were supplying would not take the class of bacon produced from, say, the Ulster type of pig.

963. Deputy Goulding.—There was a danger that it might injure their trade?— They felt that.

964. Deputy Smith.—Suppose the price had gone up between the time the cured bacon was put in cold storage and the time it was disposed of, by 3d. or 4d. per lb., were the curers, who were taking no risk at all going to benefit by that?—No. If bacon had gone up considerably, they would have been paid no subsidy in respect of cold storage.

965. Deputy Goulding.—This was only for actual losses incurred?—Yes. We took into account the price at which the bacon was sold out of the cold storage.

Chairman.—It was done at your request?—Yes.

966. Deputy Goulding.—There was no chance of profiteering?—No. In the end they got an amount representing the actual loss incurred.

967. Chairman.—The Comptroller and Auditor-General says this involved a cost of a halfpenny per lb. on all the bacon handled. Is that so?—Yes. Our guarantee really was that we would pay the costs and losses, not exceeding 10/-per cwt. That was the limit of our guarantee. The accounts in respect of each item of cold storage by each curer were examined in due course when the bacon passed out of the cold storage and, on the average, the payments only amounted to something less than 5/- per cwt. It was not quite the same for each curer. Sometimes the curer, for example, found he was able to sell out the bacon he had stored in the month of January, and his cold storage charges were less than the curer who held it until February.

968. Deputy Goulding.—Separate accounts were kept for these?—Yes, separate accounts were kept, the form of which was prescribed by us. These were produced and examined in detail.

969. Chairman.—To return to the question of transport, have you tables showing the rates of charges in other countries for the transport of agricultural produce, like wheat, on a large scale?—I am afraid we have not got such particulars.

970. Are you satisfied that you are getting good terms with regard to the transport of these from the railway companies? —The rates in force in respect of all merchandise are subject to review by the Department of Industry and Commerce.

Chairman.—I am not going to encroach on general merchandise. I am only dealing with the transport of beet and wheat at seasonal periods and, say, pork, which at a certain time might have to be transported from one part of the country to another for cold storage. Take the Northern counties, where we have no cold storage. These pigs are transported from certain markets to Dublin, or wherever they are being sent to. Are they going to charge the Cavan, Monaghan and Donegal farmers the ordinary merchandise rates for bacon transported to cold storage? If they are, it is going to add enormously to the cost.

971. Deputy Keyes.—Are not the rates for all types of traffic subject to the Railway Tribunal?—Yes.

972. Apart from that, anything they are doing is by way of a concession to the Department in respect of this large volume of traffic?—That is so. Where we can foresee that there will be a particularly large amount of traffic routed in a particular way, we approach the railways with a view to getting special rates, but, apart from that, the ordinary rates in force are charged.

973. Chairman.—Could some arrangement not be come to by which they would take these goods at a fixed price and avoid the necessity for chopping and changing? You have each harvest of wheat and beet, and these are definite things. Within three weeks, you have all your wheat, and, roughly within a month, you have all your beet ready for transport. Could you not say “What are you going to charge us for the transport of this?”—That is done particularly in regard to beet, where we know that it has been grown in certain areas and that it is being routed to certain factories. In regard to wheat, it would be very much more difficult because any miller or any registered dealer may buy wheat and we do not know, for example, that the wheat grown in County Kildare or County Monaghan will be routed to Dublin. It might be bought by local millers and would involve no transport on railways at all. We would not then be in a position to tell the railway company “There is a certain acreage of wheat grown in the countrv and you are going to handle all this; it is going to be sent over your system” and ask for special rates for it. We have no idea where the wheat may in fact be sold, because the policy of the Government has resulted in wheat being milled now at numerous inland points at which it was not previously milled. In a great many counties, the wheat can be sold to local mills without being sent any distance over the railways.

974. That does not fully meet my question, for the reason that you know before-hand what quantity each particular mill is going to mill from your quota system? —Yes.

975. Deputy Smith.—But, in the past, they could distribute that to smaller mills through the country and have it milled by them. The North City Milling Company, for instance, could distribute its quota amongst smaller mills which have no quota at all and pay them for milling it?—Yes, contract milling.

Deputy Smith.—So that that matter would not arise at all.

Chairman.—It could be side-tracked in that way.

976. Deputy Goulding.—The freight would depend on the volume of traffic?—It would, and the getting of a special concession from a carrying company depends on whether you can say “A certain volume of traffic is going to be routed over your system on a certain date or within certain dates.” You can always then press for concessions. We did that in the case of Kerry cattle being sent to Waterford factory for canning, old cows being sent to Roscrea for conversion into meat meal and beet from Cooley area going down to Carlow, and with regard to beet generally. The latter was not arranged by us, but by the Sugar Beet Company.

977. Report of Comptroller and Auditor-General (Paragraph 33): Sub-head O (13) —Slaughter of Cattle and Sheep Act, 1934:—

“The charge to this sub-head includes £173,480 18s. 5d., being expenditure incurred in respect of beef distributed to recipients of unemployment assistance and of outdoor relief or home assistance, in accordance with the provisions of the Act. It was not found practicable to make contracts under Part IX of the Act for the free supply of beef to recipients in any area and, accordingly, the country was divided into four “appointed” areas by Orders made by the Minister under Section 45 of the Act. By the same Orders the price to be paid for beef supplied was fixed at 5d. per pound. I have asked for information on certain points arising out of my examination of the payments.”

Mr. McGrath.—We attempted to vouch the beef supplied to individuals under the Act and we wrote to the Department asking for certain information. The Department informed the Audit Office that the Beef Voucher Regulations, 1934, provide that the voucher is to be signed by the person receiving the beef. The reason the Audit Office wrote in connection with this matter was that we could not reconcile certain signatures with the name of the individual entitled to the beef. We went to the trouble of going to the Department of Industry and Commerce to associate the vouchers with the unemployment assistance records and we found that in certain instances the names were spelled wrongly. The Audit Office recognise that in a system like this there must be a certain number of discrepancies, but we notice in connection with the individuals who are returned under the unemployment assistance scheme as not signing their names, a very large number of individuals did actually sign their names for beef, so that the impression in the Audit Office is that the butchers are signing the vouchers.

978. Deputy Smith.—There could be another explanation of that. Take the man with a family who was a recipient of unemployed assistance. Any member of the family might sign the voucher. I could sympathise with anyone trying to check that up.

Chairman.—And many of these people are illiterate.

Mr. McGrath.—The Audit Office is merely bringing before the Committee the difficulties in connection with the matter. We are not at all blaming the Department. We merely thought that we would exchange notes on it and see if any improvement could be made in the system.

Deputy Smith.—The meat is often distributed by bread distributors who pass through a rural area and take the meat and the vouchers with them.

Chairman.—We people who live in the country know what takes place. Suppose there is a man with three sons, all of whom have beef vouchers. They may have to go seven or eight miles, as is the case in my own constituency and in my own parish. They have to travel six or seven miles by train and you could not expect each one to pay train fare over that distance. One collects the whole lot.

979. Deputy Smith.—I am sure the butcher signs in many cases, but it would be impossible to keep that in order.

Mr. McGrath.—I presume that we must recognise that the only real check will be the issue of the vouchers.

Chairman.— The Department has also a check. There is a return of the number of cattle slaughtered and the weight can be fixed approximately. The cattle killed can be checked with the pounds of beef supplied, and in that way they can have a rough check.

Deputy Keyes.—There was very little abuse in that respect, and there was a considerable saying, if anything, on the vouchers, because, in any instance where a man was suspended from payment, he never got any back vouchers. He got his money, but he never got a beef voucher except for the current week. I can say from personal experience that we have been very careful about that, and I can say that many people have been defrauded in this matter. Instead of laxity operating, they were too vigilant.

980. Report of Comptroller and Auditor-General (Par. 33, continued.):

“Section 46 (3) of the Act provides, inter alia, that every beef voucher shall state ‘the contractor or registered proprietor from whom and the place at which beef can be so obtained,’ but the vouchers were prepared in the form prescribed by the Beef Voucher Regulations, 1934, S.R.O. 1934, No. 351, which authorised the presentation of vouchers to any registered proprietor of victualling premises, and the names were entered by the victuallers themselves.

“The amounts credited to appropriations-in-aid include £54,288 19s. 2d., being levies collected under the Slaughter of Cattle and Sheep (Registration and Levy) Regulations, 1934, S.R.O. 1934, No. 324, on cattle and sheep slaughtered in registered slaughtering premises, for human consumption in Saorstát Eireann. The total amount of levy payable for the period to 31st March, 1935, was £98,185 11s. 0d., of which amount £6,587 0s. 11d. was still outstanding at 31st December, 1935.”

981. Chairman.—That is the sum of the levies not paid by victuallers?—That is right. The arrears are being gradually collected, and that sum of £6,587 is still further reduced. The proportion of it outstanding at the moment is small.

982. Deputy Smith.—Might I ask a general question with regard to the position of butchers from whom moneys have been withheld as a result of their failure to supply the sort of meat stipulated in the regulations?—Each of these cases is dealt with individually, and a partial payment is being made. In some cases, cow beef was supplied instead of heifer and bullock beef, and, properly speaking, no payment whatever should be made to the butcher in that case. Legally, we could make no payment, but, with the approval of the Department of Finance, we are making partial payments, related as closely as possible to the value of the beef supplied in comparison with the beef that should have been supplied.

983. Mr. McGrath.—That is being done in all cases?—Each case is being considered individually. It is not being done generally.

Chairman.—My experience is that the Department dealt fairly with these people.

983a. Report of Comptroller and Auditor-General (Paragraph 33 continued):—

“The charge to the sub-head also includes £13,279 16s. 11d. in respect of cattle shipped to Belgium for sale, and receipts from sales amounting to £7,768 0s. 1d. are credited to the Appropriations-in-Aid. I understand that the gross cost of consignments shipped to 31st March, 1935, was £19,429 3s. 3d. and that the total receipts will amount to £17,375 5s. 6d.”

984. Chairman.—There was a loss on these?—Yes, on cattle sent to Belgium.

985. This sum of £19,429 3s. 3d. is the gross cost?—Yes, including buying costs on this side.

986. Report of Comptroller and Auditor-General (Paragraph 33 continued):—

“Expenditure amounting to £38,961 18s. 6d. was also incurred in respect of cattle shipped to Germany under a trade agreement with the German Government, and receipts from sales, amounting to £30,515 14s. 0d. are credited to Appropriations-in-Aid. I understand that the gross cost of the consignments shipped to 31st March, 1935, was £43,960 11s. 5d. and that the receipts will amount to £48,504 5s. 6d.”

987. Chairman.—We made a profit on these?—Yes, generally speaking, there is a loss on shipments of cattle to Belgium, which, is covered by the profit made on the shipment of cattle to Germany. That is broadly the position with regard to the Continental cattle trade.

988. Taking the two together, you still made a slight profit?—Yes, they balance out taking the two together.

989. Deputy Goulding.—How is that accounted for? Are the prices lower in Belgium?—Yes, and the import duties are heavy.

990. A different class of cattle?—For the most part, we are sending bulls and cows to Belgium. If we were to send to Belgium the high quality cattle we send to Germany, there would be a big loss, but by sending fat cows and bulls, we are able to keep the loss down to a small amount.

991. Report of Comptroller and Auditor-General (Paragraph 33, continued):

“It is provided by Section 39 of the Act that accounts in respect of every business carried on by the Minister for Agriculture, under Part VIII of the Act, shall be kept in such form as shall be approved by the Minister for Finance, and shall be submitted for audit at the end of every accounting year for such business. I am in communication with the Accounting Officer regarding the preparation of these accounts.”

Mr. McGrath.—I have not received them yet?—The accounts have been prepared and we have sent them to the Department of Finance for their approval of the precise form in which they are to be presented. As soon as we get that approval we will send them to the Comptroller and Auditor-General.

992. Report of Comptroller and Auditor-General (Paragraph 33, continued):

“Expenditure amounting to £1,172 13s. 8d. was incurred in connection with an experiment in the use of Kerry cattle for meat-canning purposes. The cattle purchased under the scheme were sold to a meat-canning firm for £801 10s. 10d. Statistical details relating to the experiment were supplied by the firm during the various stages of production.”

Deputy Goulding.—These were cattle sent to Waterford?—To the Waterford factory for canning.

993. How is it there was such a loss on that transaction?—Cattle for canning purposes have only a certain value, and that particular value would give the producers a very poor return. It was decided, with a view to clearing surplus cattle from the Kerry cattle area, where black Kerry cattle are kept, to buy at prices ranging from 15/- to 16/- per cwt. live weight.

994. That was slightly above the market value?—It would be above the ordinary market value even in the fairs. On going into the matter very closely we found that the. canning company could not pay more than 10/- or 11/- per cwt. for these cattle, clear the cost of canning and have a very small profit. Eventually, we supplied cattle at 10/- to the canning factory belonging to the Waterford Co-operative Meat Co., Ltd.

995. Deputy Keyes.—Is the experiment being persisted in?—Yes.

996. Is it likely to continue to be a loss?—It is likely to continue so, because if we are to pay an economic price to producers in Kerry we will have to supply cattle at a lower price for canning purposes.

997. Deputy Goulding.—It is only for three or four months?—From July to December inclusive.

998. Chairman.—Does the canning company not pay more than that for any cattle they buy? Is 10/- or 11/- the top price?—Normally they would be canning cows and would have got them at the time at a very low price.

999. Deputy Smith.—If you give them a free hand, of course, they would not confine themselves to that area. If they could look for the raw material they would make the area wider than the Kerry black cattle area?—They would probably have taken the cattle from the counties adjoining Waterford.

1000. Report of Comptroller and Auditor-General. Paragraph 34:—

“Newmarket Dairy Company, Ltd., Deposit Account.

Pursuant to the agreement reached with the German Government, referred to in the previous paragraph, arrangements were made by which the Department, acting as agent for the Newmarket Dairy Company, Ltd., exported eggs to Germany, and an account of receipts and payments in connection with the trading to 31st March, 1935, is appended to the Appropriation Account. The eggs were purchased from funds placed at the disposal of the Department by the Company, the Company being indemnified against loss. Any profit arising from the trading will be credited to the Exchequer.”

Chairman.—What is the explanation of that? Could not the Company buy eggs themselves?

1001. Deputy Goulding.—Is it that you endeavoured to open up a special trade? —The Government set up a Market Exports Committee and it was handling exports to Germany, Spain and Belgium at the time. It was thought advisable that the Committee should do the buying and not the Newmarket Dairy Company.

1002. Chairman.—Having the machinery, it was decided that they should take over the control of buying and disposing?—Yes. The Newmarket Dairy Company did not have an organisation for buying and selling eggs.

1003. Had they not?—They did not engage in that trade.

1004. It was not a branch of their business?—No.

1005. Report of Comptroller and Auditor-General. Paragraph 34 continued:—

“Sixteen shipments were made in the period to 31st March, 1935, and, as appears from the account, the cash receipts and payments to that date were £58,995 14s. 10d. and £44,396 4s. 9d. respectively. I understand that the total cost of these shipments was £73,414 9s. 0d. and the amount realised on sale was £73,697 19s. 9d.”

1006. Chairman.—That is as the result of this German deal in eggs there was a small profit?—A small profit.

1007. And that is returned to the Exchequer?—Yes.

1007a. Report of Comptroller and Auditor-General. Paragraph 35:—

“Dairy Produce (Price Stabilisation) ’Art, 1932—Butter Fund.

The Account of the Butter Fund. furnished under Section 44 of the Dairy Produce (Price Stabilisation) Act, 1932, and which is appended to the Appropriation Account, has been examined with satisfactory results.

It will be seen that while the creamery butter account and the factory butter account disclose deficiencies of £1,370 4s. 9d. and £11,628 1s. 1d. respectively, the miscellaneous butter account shows a surplus of £14,626 8s. 4d., and that the excess of receipts over expenditure in the general account of the fund is therefore £1,628 2s. 6d.”

1008. Chairman.—Between the odds and ends the net position is that you had a credit of £1,628 2s. 6d.?—Which is carried forward to the next year.

1009. Deputy Goulding.—What is the miscellaneous item?—That refers to farmers’ butter.

1010. Apart from factory butter?—Yes.

1011. I thought farmers’ butter was marketed to the factories?—It includes firkin butter and farmers’ butter received and sold again as such.

1012. Chairman.—The explanation in the main is that on farmers’ butter as far as you can enforce it, you get a levy and pay no bounty?—Yes, because it was mainly consumed in this country. It was not exported.

1013. Deputy Goulding.—So this is a profit?—Yes. £14,626 was the surplus arising as between the levy and the bounty on farmers’ butter.

1014. Deputy Keyes.—And I suppose that is so mainly because we pay more than consumers outside pay for butter?— The price of creamery butter was fixed and naturally that raised the price of farmers’ butter as well.

1015. Report of Comptroller and Auditor-General. Paragraph 35 continued.

“In paragraph 40 of my last report I mentioned that it had been found impracticable to collect levy, under Section 14 of the Act, on farm butter acquired by non-registered butter traders, and that to avoid discrimination against registered factory owners, the rate of levy on non-creamery butter was reduced from 18/8 to 3d. per cwt. on and from 1st September, 1933. It was subsequently found possible, however, to make the necessary administrative arrangements, and on and from 2nd July, 1934, levy on this class of butter was increased from the nominal rate of 3d. per cwt. to 18/8 per cwt. and the rate of bounty was fixed at 32/8 per cwt.

The temporary advances made to the Butter Fund from sub-head o (8) of the Vote for agriculture, amounting to £100,000 were repaid during the year.”

1016. Chairman.—They were entirely liquidated?—Yes.

1017. Deputy Keyes.—Sub-head F (2) —Grants to private agricultural schools— What are the nature of these private schools and are there many of them?— There are 15 in the country and they are mainly schools run by communities, such as the Salesian Fathers at Pallaskenry; the school at Mountbellew run by the Franciscan Brothers. The rural domestic economy schools are conducted by convents.

1018. Chairman.—You recognise the examinations held in these schools?—Yes, and they get capitation grants in respect of pupils taken in, as well as a refund of certain teachers’ salaries.

1019. Sub-head F (4)—Scholarships in Agriculture—Are these scholarships given directly by the Department or by the committees of agriculture?—They are given directly by the Department.

1020. Deputy Goulding.—Sub-head I— Special Agricultural Schemes in Congested Districts—What schemes are these?— These are schemes under which a number of assistant agricultural overseers are placed in the congested districts with a view to giving advice and supervising schemes such as the location of bulls, boars and sires, the distribution of seed potatoes, the laying down of demonstration plots, insuring that spraying is carried out, etc.

Deputy Smith.—Deputy Goulding is lucky that he does not know a little more about this matter.

1021. Deputy Keyes.—Sub-head K (2) —Contribution to Irish Agricultural Organisation Society (Grant-in-Aid)— What is the nature of the return given by this society?—They carry out the general work of supervising the work of co-operative societies throughout the country and organise new co-operative societies for creamery or other purposes in districts where they are needed.

1022. These are the ordinary charges? —Including the salaries of their officers and items of that description. They also get contributions from the societies and the grant is based to some extent on the amount of voluntary contributions they receive on a £ for £ basis.

1023. Chairman.—Sub-head M (6)— Scheme of Loans for the Purchase of Heifers. Is that extensively availed of? —It was, in the first couple of years, but in the final year in which it was in operation it was made a condition that the recipients of loans should have paid their rates and annuities up to date. The number of applications was considerably reduced because of that condition.

1024. Do you supply the heifers at market value?—They were bought at auctions. Special auctions were arranged at which these heifers were bought and at which officers from the Department attended. They were present when the animals were bought.

1025. I suppose you are satisfied that the heifers were purchased at market prices?—Yes. In the first place, they were selected by the agricultural inspectors of the Department and branded. Applicants for loans could only buy selected heifers. They were purchased, more or less, at the current market rates.

1026. In regard to sub-head M (10)— Grant in respect of Additional Sugar Beet grown in the Cooley District—was this by way of bounty?—It was a grant given because of the high cost of carriage from Cooley to Carlow. It was given to assist in reducing that cost.

1027. Sub-head 0 (9) — Agricultural Produce Cereals Acts, 1933 and 1934— relates, I take it, to the period during which you paid a bounty?—Exactly. The bounty was then paid direct by the State.

1028. In regard to sub-head 0 (11)— Musk Rats Act, 1933—have you succeeded in killing all these rats yet?—They have practically disappeared. None have been trapped in the last 18 months, but as a precaution we have still one man examining the districts where the rats were found.

VOTE 53—FISHERIES.

Mr. D. Twomey further examined.

1029. Report of the Comptroller and Auditor-General. Paragraph 36:—

“Advances made to the Sea Fisheries Association between October, 1931, the date of the first advance, and 31st March, 1935, amount to £54,173 12s. 6d. Of this sum, £54,000 was advanced for boats and gear and the remainder for general development. The Department of Finance has approved of the arrangement whereby such advances should be deemed to be repayable, with interest at the rate of 5½ per cent. per annum, over a period of 20 years from the dates of the advances, in equal half-yearly instalments. The Association is to remit to the Department of Agriculture the amounts collected each half year from the members in respect of hire-purchase transactions, such remittances to be set against the half-yearly instalments due by the Association and brought to credit as Appropriations-in-Aid.”

1030. Chairman.—What is the status of this Association? Is it a committee of management for the members of the Sea Fisheries Association?—The Sea Fisheries Association is set up under statutory authority. It is a partly elected and a partly nominated body. Certain grants are made to that body for carrying out the work assigned to them.

1031. Have you the accounts before you?—You mean the detailed accounts?

1032. Take for example last year and this year. Have you made any considerable advances for the purchase of gear and boats?—The Association makes the loans and we make the advances to the Association for the purpose.

1033. Could you state the amount of the advances for the past 12 months?— You mean the 12 months just closed in 1936?

1034. Yes?—I have not that figure with me.

1035. Would the amount be considerable?—I have not got the figure.

1036. Deputy Goulding. — These advances are made by way of loan?—They are loans made by the Association which are repayable by instalments.

1037. Deputy Smith.—When you make a loan to the Association, what obligation is there on the Association to collect the instalments from the people to whom the money is given?—The Association makes advances to fishermen on the hire purchase system, and they have an arrangement with them under which a proportion of the receipts from the catches in each week or month will be used to repay the loan to the Association.

1038. If that arrangement breaks down, how is that settled between the Association and the Department?—In any event the Association owe the Department the money advanced to them, no matter how they collect the instalments from their members. They have to make their own arrangements for collecting the loans they advance to their members.

1039. Deputy Beegan.—They can take over the gear?—Yes. In some cases where the loans have not been paid they take over the boats and the gear. The Association is responsible to us, and we do not deal directly with the fishermen.

1040. Chairman. — For the period 1935-36 I understand advances were made amounting to some £15,000. What is worrying me is, what hope is there under the conditions existing of the Department getting back this money or of these men being able to pay it? My suggestion to you is that under present conditions there should be a moral obligation on the Committee of Management of the Association before advancing this money to fishermen to point out to them that the prospects are so poor that they should not undertake this financial liability.

1041. Deputy O Briain.—Are all these applications for loans considered by the Association on their merits?—Yes, by the Association.

1042. Would the Association not reject any application from a person who, they considered, had not a chance of making good or being able to make repayment? —They examine all the circumstances connected with an application and they endeavour to assure themselves that there is a reasonable prospect that the applicant will repay the loan. The rate of repayment would be dependent on whether the fishing was good or bad. It is based on a sort of “pay-as-you-earn” arrangement. That is, if the catches are good the loan is repaid in a short time, whereas if the fishing is bad the repayments asked are small and they run over a longer period of years.

1043. Chairman.—It is dependent on the amount of money earned by the people who get the boats and the gear? —Yes.

Is there any collateral security asked for in these cases?

Deputy Goulding.—The boat and gear would be security.

1044. Chairman.—Over and above that, is there any collateral security?—The Association does not get collateral security.

1045. The arrangement is self con-contained?—Yes.

Chairman.—That is not so bad, because a lot of foolish men in the past secured these fishermen for loans.

Deputy Smith.—It is not so good, either.

Chairman.—Well, if I am known to be a man who will pay back the loan if I can, I may get somebody to go security for me. Then, through no fault of my own, I may find myself in a position in which I am unable to make any repayment and the person who went security for me is stuck. Some poor men in Donegal have been very badly harassed in that respect.

1046. Deputy Goulding.—These loans are made entirely to inshore fishermen?— Yes, they are for small sized boats.

1047. The Association have given up the idea of deep-sea fishing?—They are doing a little with boats owned by the Association.

1048. But not under a loan system?— No, not by loans.

1049. Report of the Comptroller and Auditor-General. (Paragraph 36—continued):—

“The first repayment was made by the Sea Fisheries Association in September, 1934, and represented the sums collected to 31st March, 1934. As stated in the explanatory note appended to the account, the amounts collected were reissued to members by the Sea Fisheries Association and the charge to sub-head G (3) includes an advance to enable the Association to make repayment to the Department.

At 31st March, 1935, the arrears of instalments due amounted to £3,344 12s. 4d. I noticed that the arrangements made do not appear to provide for charging interest on the instalments of the annuities in arrear.”

1050. Deputy Goulding.—Who is going to meet the interest, then?—It has never been the practice to charge interest on instalments of annuities in arrears in the case of these fishermen but, arising out of the Report of the Comptroller and Auditor-General, we are examining the matter again to see whether an arrangement can be made—I doubt if it can be made —for getting interest as well as the actual instalments where they are in arrear. It has never been the practice, so far, to collect interest on instalments in arrear.

1051. Deputy Smith.—I am sure the Chairman will not be sorry if you do not succeed in that attempt?—I doubt if we shall.

1052. Chairman.—I look upon the matter in a practical way. If we cannot get the principal and interest on current instalments, how are we going to get the principal and interest on arrears?

Paragraph 37 of the Report of the Comptroller and Auditor-General states:

“Under the Fisheries (Revision of Loans) Act, 1931, the Minister for Agriculture has, with the consent of the Minister for Finance, made conditional remissions amounting in the aggregate to £5,341 18s. 1d.”

Is that for the year under review?

Mr. McGrath.—These are old loans.

1053. Chairman.—Are these remissions for the year under review?

Mr. McGrath.—Yes.

1054. Chairman.—The report goes on: “——and has written off as irrecoverable amounts aggregating to £217 19s. 1d.”

Is that also for the year under review?— Yes; they were long overdue and it was eventually decided to write them off as irrecoverable.

1055. Deputy O Briain.—At the end of the paragraph it is stated:—

“In addition a sum of £3,693 10s. 6d. was written off in accordance with the terms of the Supplementary Estimate, leaving at 31st March, 1935, £47,209 10s. 10d. as arrears of fishery and industrial loans due, but unpaid.”

Is that £47,000 being repaid?—We are collecting it, but the repayments are small. That refers to old loans, some of which have a currency of over 20 years.

Chairman.—Some of these boats were purchased by the old Congested Districts Board and they were handed over to the Sea Fisheries Association. That largely explains the matter. Of course these boats were left lying around without any use being made of them. There are about two or three dozen of them lying around in a place called Fanny’s Bay in Donegal.

1056. Deputy Goulding.—You will have to write off a lot of the instalments due on them?—I am afraid so, eventually, but at the moment we are pressing for collection of the arrears. In the last financial year we collected £1,500, and in this financial year £500, but that is done after considerable pressure.

1057. Chairman.—These are relics from the old Congested Districts Board?—Yes. That figure of £3,693 10s. 6d., written off, was a balance of loans advanced in the years 1911-12 by the Congested Districts Board to the Galway Bay Steamship Company in connection with the running of a transport service between Galway City and Aran Island. In the financial year, with which you are now dealing, a new arrangement was made between the Department of Industry and Commerce and the company. In connection with that arrangement it was agreed between the Department of Finance, the Department of Industry and Commerce and the Department of Agriculture that the old balance should be written off. It was part and parcel of the new arrangement that Industry and Commerce were making with the company for the carrying on of the transport service between the mainland and Aran Islands.

1058. Deputy Smith.—It looks as if you would have to wipe out, in the new year the £47,209 still due?—Yes, but there are some people who can pay, and so far as we can we will make these persons pay. There are other people owing sums included in that amount who will never be able to pay. At the moment we are not regarding the bulk of that sum as irrecoverable. We are pressing for payment so far as we can.

1059. The equipment in respect of which that money was advanced would not be in existence at all now?—Some of the boats are gone completely.

1060. Deputy Goulding.—Are not these boats covered by insurance?—Yes, in connection with the loans they have to be insured, but in some cases the boats have disappeared altogether. In the bad years they were pulled up on the leaches and rotted away.

1061. Chairman.—Is this sum of £3,344 12s. 4d. referred to in the first paragraph at the top of page 17, due by members of the Association?—That money is still due to the Department, and is in turn due by members of the Association.

1062. Chairman.—The note in the Estimates on Item G (2) says that some of the schemes of the Sea Fisheries Association did not develop to the extent necessary to utilise the full provision. They got a grant for administration, and a grant for development over and above the sums advanced to the members?—That is so.

1063. Chairman.—With regard to item G (4)—Advances for General Development —there is an item for the erection of a purification plant for mussels. That was not used?—No. The sum was granted in connection with the setting up of a mussel purification plant.

1064. Has anything been done since?— Yes. The great difficulty is that in order to justify the expenditure in setting up this purification plant for mussels we would have to be sure that these mussels would be admitted into centres in Great Britain. The British Government would raise no difficulty but the medical officers attached to the local Public Health Authorities in Great Britain have power to exclude from their own areas.

1065. Chairman.—They have power over the local areas?—Yes, and until we can be sure that there is a reasonable prospect that the purified mussels would be admitted into various centres in Great Britain we do not care to undertake the expenditure.

1066. The local medical officers are very jealous and very suspicious in these matters?—Yes, but we think the matter is coming to a close now and we hope to be able to satisfy the English local authorities and the British Ministry also in regard to the efficiency of our arrangements.

1067. Deputy O Briain.—With regard to the letting of sporting rights and sales of fish, does your Department sell fish?—No. The Department manages certain salmon fishery properties in the West of Ireland and in Donegal.

Chairman.—These rivers were in congested estates that were taken over by the Land Commission.

1068. Deputy O Briain.—Are you able to let those sporting rights to advantage?—Yes, they are let to advantage. There was a time when we had difficulty in letting them, but we are getting better rents this season than in previous years.

1069. Deputy Goulding.—Do you sell the produce of your hatcheries—salmon fry and all that?—Yes, they are supplied to fishing associations and clubs.

1070. How many hatcheries have you? —I think we only actually own one hatchery, but there are two or three over which we have virtual control.

VOTE 70—EXPORT BOUNTIES AND SUBSIDIES.

Mr. D. Twomey further examined.

1071. Chairman.—I notice from the figure set out in paragraph 88 of the Report of the Comptroller and Auditor-General (page xxxvi) that there was a restriction in the rates of bounty in respect of live pigs exported through Saorstát ports without quota certificates?—The pigs that were being exported with quota certificates were being used for conversion into bacon in British factories. We had a certain quota for that purpose, which formed part of our total bacon quota. It was important that we should fill that quota. For that reason, we gave a higher rate of bounty for pigs exported with quota certificates than for pigs exported without quota certificates to ensure that dealers exporting pigs would utilise their certificates and fill that quota, at all events.

1072. And at all costs?—It was very important that we should take up our whole quota, because our quota in future years might depend on filling up the quota in the current year.

1073. The Comptroller and Auditor-General has the following paragraph in respect of cattle bounties:—

“The disbursements on account of cattle bounties included ex gratia payments amounting to £246 10s. 6d. in settlement of the claims of certain exporters in respect of cattle which, but for shipping traffic dislocation on 9th November, 1932, would have been entitled to bounty at the special double rates operating in connection with animals exported on the 8th and 9th November, 1932.”

That occurred in the case of cattle which would normally have got out but which were held up at the quays?—That was so. The British Customs duty was raised from 20 per cent. to 40 per cent. ad valorem on cattle exported on or after 8th November and the notice given was very short. A number of exporters had bought cattle which they assumed would be subject to only 20 per cent. duty. These cattle were in transit and it was arranged to pay double the rate of bounty on cattle exported on 8th and 9th November. One shipment, consisting of 506 head of cattle, which should have left Dublin in the normal way on the evening of the 9th, did not, in fact, leave until 2.30 a.m. on the 10th owing to dislocation of traffic. After a time it was decided to pay the bounty at the double rate on this shipment. The additional amount involved was paid as to one-third by the shipping company, one-third by the Department of Agriculture, and one-third by the Exporters’ Association.

1074. You met their net loss under the increased tariff?—Yes.

1075. Am I to take it from the figures set out in paragraph 91 of the Report of the Comptroller and Auditor-General in respect of bounties on exports of dairy produce that the consumption of butter internally showed a reduction?—No. The quantity bought by the Dairy Disposals Company, under that arrangement, was bought to ensure that we would have adequate supplies for filling whatever quota we would get in continental countries, and also to ensure that, in the winter months, there would be an adequate supply of butter available for the home market.

1076. Deputy Goulding.—You are referring to creamery butter?—Yes.

Chairman.—These figures do not include farmers’ butter?—No.

1077. Deputy O Briain.—The position in previous years was that butter was imported in the winter months from Australia and New Zealand?—Yes.

1078. With regard to the rates of subsidy set out by the Comptroller and Auditor-General, I take it that the amount of subsidy increased according as the price on the British market decreased?—Yes. The object in that particular year was to secure to the creameries a net f.o.r. price of 101/-.

1079. When the bounty was 40s. 4d. in October, what was the price on the British market?—The gross price, delivered on the British market, was 68s. 9d. Taking off the cost of transit and the British duties, the return to a creamery would have been only 46s. 1d. In fact, in that particular month, we did not bring the price up to 101/-. All the creamery got, with that high subsidy, was 96s. 11d.

1080. Chairman.—You fixed the bounty according to the rate imposed by Great Britain?—That is so.

1081. Deputy Crowley.—Are there any exports of cheese?—Yes, and they are increasing.

1082. Chairman.—The Comptroller and Auditor-General has the following note regarding rates of bounties on eggs, not in shell:—

“From 1st May, 1933:—Frozen liquid eggs or frozen liquid whites or yolks of eggs—12s. 6d. per cwt.”

“During the year, bounty at the rates indicated was paid on all exports, including exports under bond. I understand, however, that as from 8th April, 1935, reduced rates have been prescribed for dead poultry and eggs (in shell) exported under bond. in respect of which satisfactory evidence of payment of British Customs duty is not forthcoming, and also for eggs (in shell) exported to the Isle of Man, where the import duty is 10 per cent., as compared with 40 per cent, on imports into Great Britain and Northern Ireland.”

Mr. McGrath.—That paragraph should be read in conjunction with paragraph 90 in which I state: “The export of bacon to the United Kingdom was also subject to the quota restrictions and regulations referred to in the previous paragraph. I am in communication with the Accounting Officer as to the circumstances in which bounty at full rates was paid on exports of bacon consigned under bond.” These paragraphs have reference to exports which are placed in bond or, in other words, exports for ships’ stores. These ships’ stores do not pay the British duty and the Audit Office, in checking these matters, naturally took it that the reason for paying the subsidy on this side was the existence of the British duty on the other side. It was found that, in connection with these stores, no British tariff was charged. We thought it well to draw the attention of the Accounting Officer to the matter. In certain cases, where British ships’ stores were concerned, the full subsidy was paid, although there was no levy on the other side. We are not attempting to criticise the administration but we thought that, if the attention of the Accounting Officer were drawn to the matter, he might alter his outlook.

1083. Chairman.—Are these contracts for ships’ stores made directly with the Free State?

Mr. Twomey.—These contracts for ships’ stores are made between the bacon-curing firms here and the shipping companies. The goods are sent mainly to Liverpool and placed in bond there. They are not subject to British duty. They are issued from bond directly to the ships, as required.

1084. They are, therefore, not entitled to the bounty?—If the bounty were merely intended to offset British duty, no; but our object in arranging the rates of bounty is to endeavour to ensure that, no matter for what purpose the bacon is sold or what the destination is, the exporter here will get about the same return whether he sells to traders in Britain or as ships’ stores. In the case of ships’ stores the competition is very keen and, with a view to securing the bulk of the trade, the Danish Government gives a subsidy on Danish bacon which is sold into bond for ships’ stores. To place our exporters here in a position to compete and to retain some of the ships’ stores trade, it was essential to allow them the same rate of bounty as they are paid on exports which are subject to duty going into Britain. The position in regard to bacon, in particular, is that, during most months of the year, we have production over and above what the British market and the home market will absorb. It is very important, therefore, to have alternative outlets. Ships’ stores are an important outlet and, if we did not give the bounty at the same rate as for exports to Great Britain subject to duty, it would mean that our curers would lose that trade, and we should have so much surplus bacon in this country.

1085. You can see the point of the Comptroller and Auditor-General. Strictly speaking, if the bounty were to be given for this purpose—to facilitate competition—it should not come under this head because, under the law, the bounty should be given on account of the tariff imposed?—Not entirely.

1086. The subsidy covers you?—Yes, that is right.

Deputy Keyes.—It is perfectly justifiable from the point of view of the Department. We do not want to lose that trade. It would be very serious for the country if we lost it.

1087. Mr. McGrath.— In connection with creamery butter, only half the bounty is paid. Naturally, we are only following precedents. We are not at all attempting to criticise the administration. All we wanted to do was to draw the Accounting Officer’s attention to the matter so that he would deal with the whole question.

Chairman.—Yes, or give an explanation.

1088. Deputy O Briain.—Does Mr. McGrath say that only half the bounty is given on creamery butter?

Mr. Twomey.—Yes, the butter in question is exported in bond and it goes to Liverpool for the Isle of Man or may be shipped direct. We found it was possible for the creameries to send butter to the Isle of Man with a reduced bounty and get the same return they would have got by sending it to Great Britain—with full bounty. We are satisfied that the creamery sending butter to the Isle of Man gets only the same net return as the creamery sending it to Great Britain.

1089. Deputy Keyes.—They do not get the full remission?—No. If we paid the full bounty on the exports intended for the Isle of Man it would mean that a creamery sending it to the Isle of Man would have an advantage over one sending it to Great Britain.

1090. Chairman.—I notice here a statement from the Auditor-General on the bounties on poultry and eggs.

Mr. McGrath.—Reduced rates have been prescribed for dead poultry and eggs in shell exported under bond as from the 8th April, 1935. There is a note to that effect at the top of page xli.

Mr. Twomey.—That is largely an Isle of Man trade?—Very little of it is for ships’ stores. Some of it is, but it is very largely an Isle of Man trade.

1091. Chairman.—Paragraph 96 reads: Trial Consignments, etc.:—

“The expenditure under this heading includes £16,320 2s. 8d., being the total charges relating to 12 consignments of eggs to Spain during the year; £292 10s. paid to exporters of cattle to Morocco and representing (a) contributions towards the freight charges incurred, and (b) an ex-gratia grant of 5/- per head in compensation for the reduction of the rate of bounty from 35/- to 30/- per head on 1st April, 1934; and £28 3s. 5d. in discharge of outstanding liabilities in connection with consignments forwarded in 1933-34.”

Mr. McGrath.—Mr. Twomey cannot give us any information on that paragraph. These consignments were under the control of the Department of External Affairs.

Mr. Twomey.—Yes, in these particular cases they were.

1092. Chairman.—The second paragraph of paragraph 96 reads:—

“Of the receipts £2,663 17s. 5d. relates to consignments forwarded in 1933-34 and £16,373 14s. 10d. to receipts in respect of consignments of eggs to Spain in the year under review. The sum of £16,373 14s. 10d. with the addition of a further amount of £1 14s. 10d. received and brought to account in the year 1935-36, and represents the total receipts on foot of the consignments referred to.

Mr. Twomey.—There was no loss on that.

1093. Deputy Keyes.—Is there any improvement in respect of payments in these cases from the people in Spain?— There is; there were very large sums owing on the 1st April, sums amounting to £30,000 in respect of eggs sent to Spain. That money has all been paid now.

1094. Chairman.—There are general complaints by all countries against Spain in the matter of their payment for goods.

Mr. Twomey.—The traders in Spain had paid the money into the Spanish banks but the difficulty was that the traders could not get from the Spanish Government currency certificates to enable them to bring the money out of that country. The Spanish Government has considerably relaxed in that matter and now they have given these currency certificates and the money is being transferred to our banks here.

1095. Deputy Crowley.—You are still negotiating with them?—Yes, we are still negotiating with them.

Chairman.—There is nothing further we have to ask Mr. Twomey.

1096. Deputy O Briain.—Is the Department of External Affairs dealing with these items any longer?—No, they are dealt with now by the Department of Agriculture.

The witness withdrew.

VOTE 4—COMPTROLLER AND AUDITOR-GENERAL.

1097. Chairman.—There is no comment on this Vote and I may take it that no Deputy has any question to ask on it. We are finished now. This concludes our work for this year, or at least the main part of it is concluded. I understand that each year a sub-committee is appointed to draw up the report. Each Party has a representative on that sub-committee. The Chairman is not here to-day and so we cannot for certain say whether he will act on this committee.

The Committee adjourned at 1 p.m.