Committee Reports > List of Committees > Dáil > 1937 > Committee of Public Accounts > Report - Appropriation Accounts 1935 - 1936

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 18adh Mí na Samhna, 1937.

Thursday, 18th November, 1937.

The Committee sat at 11 a.m.

Mr. J. Maher (representing the Comptroller and Auditor-General) and Mr. J. L. Lynd and Mr. T. S. C. Dagg (An Roinn Airgid) called and examined.

Deputy Smith.—I move that Deputy Dillon be Chairman of this Committee.

Question agreed to.

Deputy Dillon took the Chair accordingly.

VOTE 52—AGRICULTURE.

Mr. Seán O Broin called and examined.

1108. Chairman.—I do not think that it is necessary to take up time by reading the Terms of Reference of the Committee. Any of our members who refers to the proceedings of former Committees will find short outlines of the nature of the duties arising out of our Terms of Reference there. We can, therefore, proceed immediately to the consideration of the accounts on the Agenda, the first of which is No. 52— the Vote for Agriculture. Mr. Twomey, the Accounting Officer, is being deputised for by Mr. O Broin, who will answer for the accounts of that Department. The usual procedure is to read the notes on the account by the Comptroller and Auditor-General. Then, any Deputy who wishes to put a question on the note is free to do so. We shall then go through the sub-heads one after another and any question arising on the sub-heads can be made the subject of discussion. The first note refers to sub-head H (grants to County Committees of Agriculture) and is as follows:—

The charge to this sub-head includes:—

Mr. Maher.—There are no observations on that note.

1109. Chairman.—The next note is on sub-head K (2) (Contribution to Irish Agricultural Organisation Society, Grant-in-Aid) and is as follows:—

“Provision of £186 was made in a Supplementary Estimate under this sub-head to regularise payment made to the Irish Agricultural Organisation Society in excess of the amount voted as Grant-in-Aid in 1933-34. The amount provided was surrendered to the Exchequer in March, 1936.”

Mr. Maher.—The object of that paragraph is to show that an overpayment of £186, which has already been before the Committee in a previous year’s account, has now been regularised by the bringing in of a Supplementary Estimate.

1110. Chairman.—The note on sub-head M.5 refers to the improvement of the Creamery Industry and is as follows:—

“Including the expenditure of £59,884 10s. 5d. in the current year, the total Vote expenditure to 31st March, 1936, from moneys provided for the improvement of the creamery industry amounts to £1,067,303 12s. 8d. Receipts amount to £162,478 13s. 1d., leaving a net charge on public funds of £904,824 19s. 7d.

The charge to the sub-head includes £371 13s 1d., being expenditure in excess of the amount recovered in respect of insurance, incurred, with Department of Finance sanction, on the rebuilding and re-equipment of a mill, attached to a creamery, which was destroyed by fire.

The expenditure also includes a sum of £1,000 paid, with the sanction of the Department of Finance, to a bank as a contribution towards the balance due by the guarantors of a co-operative society, to enable the society to be wound up and to effect a reorganisation of the creamery industry in the area covered by that society and surrounding areas.

A payment of £100 representing damages for breach of contract is charged in this account. The claim arose through the sale by the Dairy Disposal Co., Ltd., of a house, to which it was subsequently found that possession could not be given. I have asked that the covering sanction of the Department of Finance be sought for this expenditure.”

Has that sanction yet been received?

Mr. Maher.—Yes. It was received in February, 1937.

1111. Chairman.—When was the sum of £1,000 paid as a contribution towards the balance due by the guarantors of a co-operative society?

Mr. Maher.—I have not the exact date, but it was some time in the course of the financial year 1935-36

1112. Deputy Corry.—With reference to the sum of £371 13s. 1d. expended in excess of the amount recovered in respect of insurance, why were the premises not fully insured?

Mr. O Broin.—This paragraph relates to the operations of the Dairy Disposal Company. I understand that these premises had been taken over some time before by the Dairy Disposal Company from a co-operative society. They continued the insurance arrangements in operation when they took over the premises.

1113. Deputy Corry.—It was the Dairy Disposal Company property at this time? —Yes.

Deputy Corry.—One would think that the place would be fully covered by insurance.

1114. Chairman.—Is it a fact that after the Dairy Disposal Company acquired these premises from the co-operative society they carried out some reconditioning which increased the value of the premises?—I do not think so.

1115. What then is the meaning of the reference to the “rebuilding and re-equipment of the mill”?—That was in consequence of the fire that took place.

1116. In fact, it took £371 13s. 1d. more to restore the premises than was recovered from the insurance company?—Yes.

1117. Chairman.—Deputies will agree that it often happens that if you get an insurance for old premises and rebuild them so that you have a new mill in place of an old mill, you cannot always expect to get the full cost of rebuilding from the insurance company.

Deputy Corry.—I was always under the impression that property owned by the Department was fully covered by insurance. This place, apparently was not. The sum of £371 seems to be a large sum to be short in respect of one premises.

1118. Chairman.—Would it be true to say that even if you did insure the old premises, you could not in fact get a policy under which a payment would be made adequate to substitute the new premises for the old premises?—I think that is so.

1119. Deputy Heron.—Could the policy not be revised as soon as the new premises were acquired or the extension made?

Chairman.—I think that what happened here was that when the old premises were acquired, they went on fire and were burned. Then, the Department built new premises to take their place, and, of course, the new premises were more valuable than the old.

1120. The next note in the Report of the Comptroller and Auditor-General deals with sub-head M (6)—Scheme of Loans for the Purchase of Heifers—and is:—

“I mentioned in paragraph 35 of my report on the accounts for 1933-34 that loans under the scheme are financed by the Agricultural Credit Corporation. As noted in this account, the scheme ceased to operate from April, 1935. The expenditure charged to the sub-head includes £126 7s. 6d., expenses in connection with the purchase and sale of heifers, and payments of £1,209 19s. 10d. to the Agricultural Credit Corporation being £1,183 7s. 9d. as a contribution towards the cost of administration of the scheme and £26 12s. 1d. in respect of a loan, including interest, written off as irrecoverable.”

Is that the only loan that was written off as irrecoverable under the heifer purchase scheme?—yes.

1121. Is the scheme now wound up and all loans liquidated?—It is, but there are still moneys being collected.

1122. Is there a contingent liability on the Exchequer in respect of those loans?—Yes.

1123. The Exchequer guarantees all those loans?—Yes.

1124. Is there any date at which the Exchequer must be called upon by the Agricultural Credit Corporation to redeem outstanding parts of loans?—I do not think any date is specified, but there is a sum of £4,359 still outstanding.

1125. Deputy O Briain.—Could you give any idea of the total amount issued in loans? The scheme was in operation for three years?—Two years. The total amount would be something about £25,000.

1126. Deputy Corry.—They were based on a five year period?—Yes.

1127. Deputy Cole.—Outstanding from whom?—From the people who bought the heifers and who obtained the loans from the Agricultural Credit Corporation.

1128. Deputy Corry.—Their time is not up? There is a five years repayment period?—It depends on the amount.

1129. Deputy Cole.—Is it well secured? —The chattel itself was the security and, of course, the applicants were all people as to whose solvency inquiry was made by the Department before any loan was made.

1130. Deputy O Broin.—They had to have sureties?—Two sureties, who had also to be solvent persons.

1131. Deputy Beegan.—How, then, does this sum of £26 12s. 1d. come to be written off as irrecoverable?—That was a case of a loan given to a man who got into bad circumstances afterwards. He was a very honest man, but he met with bad luck and was unable to pay the loan. We took proceedings against him, and the sheriff made a nullo bona return. Notwithstanding that, the man is still trying to pay off and, as a matter of fact, since the loan was written off, we have got £10 from him. We expect to be able to recover the whole amount. The man is making a determined effort to repay.

1132. Chairman.—I take it that in that case the sureties were not sued?—No.

1133. Deputy Smith.—It seems to me that the amount written off is small. Have you any idea that any other amount would have to be written off of the amount still outstanding?—No.

1134. Chairman.—Did the Department of Finance assent to the writing off of this sum of £26 12s. 1d. before the sureties had been approached with a view to recovering it from them?—I am not quite sure of that. The usual procedure is to take proceedings against the borrower and the sureties combined. Apparently they must have been all persons who, at the time the proceedings were taken, were unable to repay.

1135. Can the Comptroller and Auditor-General tell us if the Department of Finance adverted to the fact that there were sureties in existence?

Mr. Maher.—I do not think so. The Comptroller and Auditor-General is only concerned in this case with seeing that the sanction of the Department of Finance was actually obtained. The circumstances which led up to that position would be a matter for the Department of Finance.

1136. Perhaps Finance could tell us whether they adverted to the fact that there were sureties in existence?

Mr. Dagg.—In the case submitted to us, it was stated that the person named as surety repudiated having given his consent to act as surety.

1137. And the other surety?—There was, I think, only one in this case.

1138. Deputy Cole.—Did you not get a signature for the security?

1139. Mr. O Broin.—There is a note on our file that one surety was not proceeded against as he resided out of the jurisdiction.

1140. Chairman.—And the other surety repudiated liability?—Yes.

1141. It would suggest that there was not a very satisfactory check on the nature of these securities if that of one man residing out of the jurisdiction and that of another man who in fact had not assented to act as surety at all was accepted?—At the time the sureties were accepted, I do not think either of them was residing outside the jurisdiction. I think that occurred later on.

1142. Deputy Smith.—Is it not a fact that a good deal of chance was taken in connection with this scheme and that in fact the scheme would have been unworkable if the same sort of conditions that would be insisted on by the Agricultural Credit Corporation or a bank had been insisted on?—I would not say a good deal of chance was taken, but things had to be done rather quickly. There was not a lot of time for making exhaustive inquiries and in the circumstances all reasonable inquiries that the Department could make were made to ensure that they were lending money to persons who would be in a position to repay.

1143. Chairman.— The matter of sureties was a matter for the Department or for the Agricultural Credit Corporation?—It was primarily a matter for the Department.

1144. Deputy Smith.—The Agricultural Credit Corporation was only the machinery through which the money was made available?—What happened was that these heifers were bought at sales arranged by the Department throughout the country. An officer of the Department attended and purchasers had to make a deposit with that officer who took charge of it. A list of the sales and of the amounts of money owing to the sellers was afterwards transmitted to the Agricultural Credit Corporation with the deposits, together with certain documents which the Department’s officer had had completed on the spot by the borrower.

1145. Chairman.—Would this development suggest to you that it would be expedient to examine the sureties in the other loans outstanding in order that the Department might satisfy itself that there was adequate security in respect of the contingent liability which remains undisposed of?—The fact that there is only one case rather suggests that, on the whole, the position has been satisfactorily covered.

1146. Deputy Corry.—I think that it is not a very bad sacrifice, seeing that the man against whom a decree of nulla bona was returned is paying it back?— He is paying £5 per annum so far and we hope to recover the full amount.

1147. Chairman.—The sum of £26 12s. 1d. is not a very material sum, but still it is a matter for concern that one surety should prove to be a forgery and the other a person not resident within the jurisdiction.

1148. Deputy Smith.—Having regard to the method adopted at the time and, as Mr. O Broin points out, the shortage of time at the disposal of the Department, I am amazed that the amount is not much larger than it is.

1149. Deputy O’Briain.—And in the second year of the scheme, the danger of any forgery was eliminated by the steps which the Department took, following the experience of the first year. That was my own personal experience in respect of these loans. I think the scheme was, on the whole, very successful and very valuable.

1150. Chairman.—The next note in the Report of the Comptroller and Auditor-General deals with sub-head O (9)—Agricultural Produce (Cereals) Acts, 1933-35— and is:—

“A provision of £300,000 was made in the Estimates for the payment, under Section 71 of the 1933 Act, of bounties on home-grown millable wheat during the year under review, but owing to the operation of the Agricultural Produce (Cereals) Act, 1935, the actual expenditure amounted to only £41,860 9s. 4d. Under Section 15 of the latter Act, no bounty was payable on home-grown millable wheat sold after 31st July, 1935, as Section 13 of the Act provided for the payment by millers, etc., of minimum prices for wheat sold after the date mentioned.

Including advances of £6,850 7s. 2d. during the year of account, the total advances to seed merchants to 31st March, 1936, under the scheme of credit for seed wheat amounted to £19,972 2s. 6d. and the amounts recovered to £16,440 13s. 3d. The balance of advances outstanding at 31st March, 1936, was therefore £3,531 9s. 3d.

The expenditure charged to the sub-head also includes £2,804 13s. 7d. for salaries, travelling and incidental expenses, etc.”

Chairman.—Has the Comptroller and Auditor-General any observations to make on that?

1151. Mr. Maher.—The object of the paragraph is to explain the big discrepancy between the provision in the estimate and the actual expenditure, and to show how that came about.

Chairman.—It will be observed that there was a discrepancy between the estimate and expenditure of £244,427 9s. 11d., and the note is designed to explain the reason for the discrepancy. What is the explanation about advances during the year to seed merchants. Will the £3,531 9s. 3d. come in later?

Mr. O Broin.—We expect it will. We have received considerable sums since this report was written.

1152. Can you say, approximately, what amount is now outstanding?—The amount outstanding at the end of March was £1,963. Of course we are still collecting.

1153. Chairman.—Paragraph 44 of the Report of the Comptroller and Auditor-General reads:—

Sub-head O (13)—Slaughter of Cattle and Sheep Acts, 1934 and 1935, etc..

The expenditure charged to this sub-head includes:—

Mr. Maher.—Paragraphs 45 to 47, inclusive, are explanations of these details and are given under one sub-head.

Paragraph 45.—Purchase of Beef for Distribution.

“The price payable for beef supplied under the Act, referred to in paragraph 33 of my last report, was reduced, by Order made by the Minister under Section 45 of the 1934 Act, from five pence to four pence per pound as from 15th April, 1935.

“Part IX of the 1934 Act was amended by Section 19 of the 1935 Act to the extent that purchase on a contributory basis was substituted for free distribution. Under this arrangement recipients purchased the beef at a price (2d. per pound) fixed by the Minister with the consent of the Minister for Finance (S.R.O. No. 602 of 1935) and the Department paid the balance of 2d. per lb. to the victuallers. This arrangement came into force on 30th September, 1935.

As noted in the appropriation account, a sum of £47 3s. 4d. was paid to a victualler, being half the amount claimed in respect of the supply of meat of a quality other than that prescribed by the regulations under the Act. In three other cases sums of £5 8s. 4d., £4 8s. 4d. and £2 1s. 8d., respectively, were paid with Department of Finance sanction to victuallers in respect of beef stated to have been supplied under the Act but for which no vouchers are available.”

1154. Chairman.—Was there, in fact, statutory authority for paying £47 3s. 4d. to a victualler, being half the amount claimed in respect of the supply of meat of a quality other than that prescribed by the regulations under the Act?— The payments in that connection were governed by an Order made by the Minister but, in this particular case, the payment was not strictly within the terms of the Order. As the man had actually supplied beef, though not of the quality prescribed, it was thought equitable that he should be paid something in respect of what was supplied. Consequently we paid half the amount.

1155. I think an important point arises here which it would be well to determine finally. If the Minister is bound by statute he could not make any ad misericordiam payment, but he frequently replies that he was bound by the statute and that he had no discretion. That situation frequently arises. If the Minister makes an Order under a statute can he go outside that Order ad misericordiam and give sums, such as this £47 3s. 4d., when beef other than the quality prescribed in the Order was supplied, without coming to Dáil Eireann to ask for a supplementary estimate?

Mr. Maher.—The view of the Audit Office is that it would be governed by the legal interpretation of the Order. If it was simply an enabling Order under the enabling Act, the view the Audit Office has taken is that it would be in order, if Finance sanctioned it, unless it was a payment of a very exceptional nature. On the other hand, if the statute was mandatory on the point, the view of the Audit Office would be that probably additional sanction in some form would be required.

1156. Chairman.—In the case of this Order was it a mandatory or a permissive one?

Mr. O Broin.—The Order was made pursuant to a section of the Act which enabled the Minister to prescribe the price at which meat should be sold.

1157. Did the Act prescribe the quality of the meat referred to in the Order?— No, the Minister prescribed that.

1158. Deputy Smith.—Was the meat supplied after the change in the regulations, demanding from recipients certain payments?—No, I think it was supplied in the earlier stages when the whole cost was paid by the Minister.

1159. Are these all the cases in which meat of the standard required by the Act was not supplied?—I think there may be other cases.

1160. There was a point up to which the meat was supplied free to recipients? —Yes.

1161. On a number of occasions the Department refused to pay, on the ground that the meat was not up to the standard required by the Act?—Yes.

1162. It seems to me that if you find it possible to make payments in two or three cases of half the amount, because value to that extent was given, payments should be made in all such cases?—There is only one case of that kind where the payment was £47 3s. 4d. The others mentioned here are cases where vouchers were lost. This occurred in the early stages of the administration of the Act, when it was represented on behalf of these people that they did not really appreciate what was required. At a later stage warnings were issued so that victuallers had no such excuse.

1163. Deputy Smith.—I came across several cases during that period where small victuallers in villages continued to supply meat not up to the standard prescribed. I would say that that was with the connivance of the inspectors, or that the inspectors were conscious of it, as they did not seem to make any remark about the meat not being up to the standard, and in these cases the Department refused to pay. I think if an exception is made in one case, no matter what arguments can be advanced, that other people could also advance arguments in their cases.

1164. Deputy Cole.—The Department decided not to pay?—That was under the first Order.

1165. Did you waive that afterwards?— I would not say that we waived it, but we discovered that certain victuallers were supplying meat not of the quality supplied in the Order, and we then took steps to warn all victuallers that it was necessary to comply with the terms of the Order.

1166. At what date?—I could not give that now.

1167. Chairman.—May I remind Deputies that we are entitled to inquire very closely from the Accounting Officer why a sum of money was paid, but we are not entitled to ask the Accounting Officer why a thousand and one other sums were not paid.

1168. Deputy Smith.—It has certain advantages for those who have come across this problem. While we may not be strictly in order in proceeding along that line, there is, at the same time, a very strong temptation to do so.

1169. Chairman.—I know that, but so experienced a member of the Committee as Deputy Smith will know that Mr. O Broin cannot come here prepared to deal with every possible inquiry of that kind.

1170. Deputy Smith.—At the same time, I would not think it unreasonable, if Mr. O Broin was able to tell us up to the point when payment was demanded from recipients, if there were any victuallers throughout the country to whom payment was refused because they failed to supply the meat prescribed in the Act. It would be interesting to get the number of victuallers to whom payment was refused on that ground.

1171. Chairman.—Would it be true to say that in fact this case represents one of the first applications that was made under this heading?—I should say that it would be.

1172. Having exercised discretion in cases of this kind, the Minister saw that a much more rigid attitude would have to be adopted if pandemonium was not to break out. In fact, very few cases of that kind occurred afterwards?—Generally that is the position. I think there were other cases where we paid in respect of cow beef. The attitude taken up by the Department really depended on the merits of a case. If a man genuinely supplied cow beef, in good faith, taking all the circumstances into account, the case was looked upon sympathetically. If it appeared that he acted in flagrant violation of the Order, and that he continued to supply cow beef when he should supply other beef the attitude of the Department was to refuse payment. Everything depended on the merits of the case. Each case was carefully gone into and the position dealt with on the merits.

1173. Deputy Linehan.—The attitude of the Department then was that they would consider bona fide cases?—Yes.

1174. That is not the case now?—No.

1175. Deputy Smith.—I do not accept that at all. There are some men who can make a good case, but others, having equally good cases, may be unable to make them.

1176. Chairman.—I do not think that is relevant to our business. Let us not spend our time replying to one another. We can do that at another time in another way.

1177. Deputy Smith.—It is important in this way, as it will enable us, if we are called upon, to make that case. That is why I am dealing with the point?—If there are any particular cases in which Deputies are interested, I am sure the Department will give every facility to go into them fully

1178. Deputy Cole.—I think that is an invitation.

1179. Chairman.—I would like to dispose of this point. Are we to understand that when the Minister makes an Order authorising victuallers to sell bullock or heifer meat to certain people, that that leaves in the Minister a discretion to accord other terms to someone who, in fact, supplied cow meat, without coming back to Dáil Eireann for a Supplementary Estimate to meet the expenses of that allowances?

1180. Deputy O Briain.—Since the Comptroller and Auditor-General has already dealt with the point, I do not think that we need pursue it further.

Mr. O Broin.—I do not think it would be necessary to go back to the Dáil. There is one way that the Minister might deal with the matter and that is by making an amending Order. The Act is permissive and gives a certain amount of latitude. If it were necessary to regularise such payments, for the purpose of complying strictly with the terms of a particular Order, it might be possible for the Minister to make an amending Order to cover a limited number of such cases.

1181. Chairman.—The view of the Comptroller and Auditor-General is, that in this case, at any rate, it was within the competence of the Minister to make the payments, subject to the sanction of the Minister for Finance.

Mr. Maher.—That is the position.

1182. Chairman.—We can now pass to paragraph 46—Loans to Companies and Compensation for Animals Slaughtered:—

“Under agreements entered into with a company formed for the purpose of operating a factory for the conversion of old and uneconomic cows into meat meal and kindred products, the Department undertook, under certain conditions—

(1)to advance £16,000 to be expended on buildings and equipment, the loan to be secured on approved debentures and to be repayable at the end of four years;

(2)to supply, free of cost to the company, for a period of four years, a number of cows varying from 500 per week in the initial weeks to 1,200 per week in the later periods.

The amount of £14,000 included in the analysis of expenditure, under the heading ‘Loans to Companies,’ represents the portion of the loan of £16,000 advanced in the year under review.

The cows transferred to the company are those acquired under the scheme for the elimination of old and uneconomic cows in respect of which expenditure amounting to £50,362 10s. 0d. is charged to this sub-head under the heading ‘Compensation for Animals slaughtered’.”

Deputies will observe that these matters are referred to in Sub-head 0 (13). This company seems to have had a pretty handsome deal. They received in that year money and goods to the value of £64,362, with a loan obligation remaining of £14,000. Have they, in fact, paid back the loan?

Mr. O Broin.—They are paying interest on the debentures issued in respect of the loan.

1183. Is the loan not repayable at a certain date?—It is repayable at the end of four years—in 1939.

1184. Are we to take it that the Department had no financial interest in this enterprise other than to get the interest on its loan, and to recover its loan at the end of the four years?—That is the extent of the Department’s financial interest.

1185. Is the Department represented on the board of this company?—No.

1186. Was the company to keep, as its own property, the meat meal that it made? —Yes.

1187. That was a very handsome return for its exertions?—It was entitled to do what it liked with the animals. It might make meat meal, or anything else that it could out of them.

1188. I find it a little hard to understand the transaction. Why we did not bury the cows, I do not know.

1189. Deputy O’Briain. — Is that a matter for this Committee or for the Dáil?

1190. Chairman.—I want to know from the Accounting Officer what exactly the arrangement was. It seems to me that if we buried the cows—

1191. Deputy Smith.—We would have to pay for the burying of them.

1192. Chairman.—Well, that would have helped to relieve current unemployment.

Deputy Smith.—As a member of a public body I am sure you are well aware, Mr. Chairman, that the local authority has to pay for the burying of dead animals found on the roadside.

1193. Chairman.—Can the Accounting Officer tell us how many cows the Department have sent to this factory?—I have not got the total figures with me, but I can get them for the Committee. We have been trying to supply them, during most of the year, with 800, 900 or 1,000 cows a week, but as a matter of fact we have not been able to do that continuously. At the present moment the supply is in the neighbourhood of 1,000 cows a week. During last summer, for example, the factory closed down for a month, and after it resumed operations I think we were not able to supply more than a few hundred a week.

Mr. Maher.—The £50,362 10s. 0d. in the accounts represents the purchase price of 20,145 cows—£2 10s. each.

1194. Chairman.—Did the Department pay the freight on those cows or did the factory pay, that is, from the owner’s place to the factory?

Mr. O Broin.—The factory paid the freight from the point of loading to the factory.

1195. Chairman.—They have got a loan of £14,000 which the Department may get back, and on the strength of that we disposed, in that financial year, of 20,000 cows. It would be a nice calculation to know whether it would not have been cheaper to dig a big hole and bury the whole lot.

Deputy O Briain.—It might for the State but not for the people who owned the cows. In the dairying districts, through the country, these cows are known as “silvers.” They got £2 10s. 0d. each for them, a sum that they never saw before for them.

Chairman.—But why not bury the old lady if you have to pay £2 10s. 0d. for her?

1196. Deputy O Briain.—I believe that there has been a fairly keen demand for the meat meal produced.

Mr. O Broin.—There is now, but at the beginning it was problematical what the demand would be. They were taking a big chance. They might have been faced with the position of having the factory full of stuff that they could not dispose of, but as it turned out they were able to dispose of most of the products of the factory.

1197. Chairman.—If you put the proposition to me that you are prepared to supply me with the necessary capital to establish a factory and with the raw material for it for nothing. I can tell you that I am prepared to undertake it at any time, and I further undertake to find 10,000 men prepared to take the same chance.

Mr. O Broin.—I ought to mention that the £16,000 does not represent the entire capital of the concern. The people running the factory had to subscribe a substantial sum of money by way of capital themselves.

1198. Deputy Cole.— If the Department guaranteed to supply the factory with a certain number of cows and failed to do that, was the factory then in the position that it had a claim against the Department?—There are agreements with the factory under which it is stipulated that, in certain conditions, the company would have a claim. If the Department failed completely to supply cattle to the factory, the company probably would have a claim.

1199. Chairman.—Can you give any idea of the contingent liability on the Exchequer in the event of the supply of old cows failing?—I have not the information here to enable me to answer that question.

There is no fixed agreement?— There are some very elaborate agreements drawn up between the Department and the company.

1200. Was no assessment made of the contingent liability that might arise in the event of the Department failing to make delivery of from 500 to 1,200 cows a week?—In the event of a total failure to supply cows the agreement with the company specifies a formula by reference to which compensation would be assessed. I am sorry that I have not got the agreements with me at the moment, and from recollection I cannot say what the formula is.

1201.* If it would not be too much trouble, I think the Committee would like to have a note from you of the contingent liability in those agreements. I think that is an important part of the accounts?— I will do that.

Deputy Heron.—Would the Accounting Officer say if there is a reasonable hope that the principal will be repaid at the end of the four-year period?—I think so.

1202. Deputy Linehan.—Are we to understand that the debentures are a first charge on the assets of the concern? —Yes.

1203. Chairman.—We now pass to paragraph 47—Purchase of Cattle for Export:

“Accounts for the purchase of cattle and their export to Germany and Belgium, required to be kept under Section 39 of the Act, have recently been transmitted to me in respect of the period to 31st March, 1935, and are now in course of audit. The accounts for the year ended 31st March, 1936, have not yet been rendered.”

Has the Comptroller and Auditor-General yet received the accounts up to the 31st March, 1936?

1204. Mr. Maher.—Yes, we have received and audited the accounts for the period ended 31st March, 1936, and these will be presented, pursuant to Section 39 of the Slaughter of Cattle and Sheep Act, 1934, in due course.

1205. Chairman.—To the Dáil or to this Committee?

Mr. Maher.—To the Dáil.

1206. Chairman.—Have the accounts for the period up to 31st March, 1935, yet been presented to the Dáil?

Mr. Maher.—No. They are being presented at the same time as the accounts for the subsequent year because the year up to the 31st March, 1935, was not a complete year.

1207. Chairman.—Can you advise the Committee, Mr. O’Toole, on the procedure with regard to certain accounts required by statute to be presented to the Dáil that have not yet been presented. Is it relevant for this Committee to inquire into those accounts before they have been presented to the Dáil?

Mr. O’Toole.—I should say not.

1208. Chairman.—We are advised that the procedure of the Committee is that we may not properly inquire into accounts which are in due course to be presented to the Dáil under statute. I suppose if we wish to inquire into them, our successors in the Public Accounts Committee can do so if the accounts are referred to them by the Dáil. Personally, I would like very much to inquire into them, but I am bound by the Rules of Order.

1209. Chairman.—We may now pass to paragraph 48—Purchase of Cattle for Canning:—

“I referred in my last report to expenditure incurred in connection with an experiment in the use of Kerry cattle for meat canning purposes. The Department subsequently entered into an agreement with the firm concerned under which the latter undertook to build a factory and to supply all the necessary working capital, etc., and the Department agreed to purchase suitable Kerry cattle and to supply them to the firm at a fixed price of 10/- per cwt. live weight. This scheme only operates during the winter months.

During the year under review 2,347 cattle were purchased under the agreement at a cost, including freight, etc., of £10,127 18s. 4d. A sum of £6,350 4s. 4d. is credited to appropriations-in-aid in respect of the sale of these cattle.

I understand that accounts of this business required to be rendered under Section 39 of the Act are in course of preparation.”

Have these accounts yet been received by the Comptroller and Auditor-General?

Mr. Maher.—No. We have recently been informed by the Department of Agriculture that the accounts are in course of preparation and will be submitted to the Minister for Finance for his approval in a few days. That reply is dated 3rd November, 1937.

1210. Chairman.—When did these transactions take place?

Mr. O Broin.—In the seasons 1935-6 and 1936-7.

1211. Is it the intention of the Department to render a separate account for each financial year?—It is.

1212. Can you explain why it is that the accounts for the financial year 1935-6 have not yet been completed?— There has been some misunderstanding as to the obligation of rendering these accounts under the Acts.

1213. Does it now appear that, under Section 39, they are to be rendered to Dáil Eireann?—Yes.

1214. To Dáil Eireann, or to the Public Accounts Committee?—Yes, to Dáil Eireann—the same as in the case of the Roscrea factory.

1215. Here, again, gentlemen, I think we must postpone inquiry until these accounts have been rendered to Dáil Eireann in accordance with the statute. However, gentlemen, I think we ought to detrmine the other matter first before we come to sub-head P. Is it relevant for us to ask the Accounting Officer to explain to the Committee why such accounts have not been rendered in due time? If they had been rendered, this Committee would have dealt with them, but I think that the fact that they have not been rendered leaves it out of our discretion. I feel that the financial accounts, 1935-36, should have been rendered before this, and I take it that, since they had not been rendered, it was taken for granted by the Accounting Officer that they need not be.

Mr. O Broin.—The explanation I have given refers to the Kerry cattle scheme, and it is not quite the explanation in the case of the other accounts relating to the exports to the Continent. There, there was a good deal of discussion with the Department of Finance as to the form of the accounts, and the inclusion in, or exclusion from, the accounts of certain items and the preparation of the accounts was delayed as a result.

1216. Chairman.—Yes. I think you have promised to give us a note on the Roscrea agreements in regard to their contingent liabilities, have you not?— Yes.

1217. Very well. Beyond commenting on the slowness of the Department in rendering the account, I think it is not relevant for us to go into that.

1218. Chairman.—Now we come to sub-head P, which reads as follows:—

“49. In the course of my examination of receipts in respect of licences, etc., under the Live Stock Breeding Act, 1925, I observed certain discrepancies in accounting for such receipts and I am in communication with the Accounting Officer on the matter.

I have asked for information regarding the circumstances in which fees prescribed under the Horse Breeding Act, 1934, were not collected in a number of cases, and also regarding the basis of assessment of fees pay able on pigs and pork carcases purchased by bacon curers.”

Mr. Maher.—With regard to the first part of the paragraph, the Accounting Officer has informed us that these receipts were, unfortunately, the subject of some misappropriation in the Department, which has not yet been fully inquired into by the Auditor.

1219. Chairman.—Are we to take it that, in regard to the first paragraph of your Note, inquiries are proceeding at the present time?—I have been informed by the Accounting Officer, in June last, that at that stage the matter had not been fully investigated. I do not know what the present position is.

Mr. O Broin.—Since then it has been ascertained that the discrepancies really reflected certain misappropriations of moneys by an officer—a rather senior officer—who, by a rather curious method of manipulating records, was able to—

1220. Chairman.—May I stop you there for a moment, in order to ask are any legal proceedings pending in this case?

Mr. O Broin.—The position is that the officer has been dismissed from the Service and that he has left the country and we do not know where he is at present, but that, if he were to return, the question of proceedings would have to be considered.

1221. Chairman.—Well, gentlemen, I feel that, once the Accounting Officer has told us that an officer of the Department has been dismissed and that there does arise the question of proceedings possibly being taken in that connection, it is inexpedient for us to discuss the matter. So far as we are concerned, disciplinary action has been taken by the Department, and for us to call the matter further in question would be to discuss matters which, possibly, are sub judice. However, omitting the question of the officer who has been dismissed, I should like to know if, in the circumstances here suggested, there has been any laxity in general in regard to these receipts?

Mr. O Broin.—No. The Department’s view is that this was an unfortunate lapse on the part of an officer who, himself, was the deputy Supervising Officer.

1222. Chairman.—Well, if you are satisfied that there has been no laxity in the supervision of these receipts, are you satisfied that the system governing these receipts was adequate to provide a proper check?—That question, as to whether there should be a change in the system, is a matter that is being considered at the moment.

1223. May we be satisfied that such steps as may be necessary to make the system proof against defalcations of this nature will be taken?—Yes, as far as it is feasible to do so.

1224. Have you any observation to make on the second paragraph in this Note?

Mr. Maher.—Not at this stage. If, on the accounts for the following year, we notice defects, that matter will be brought to attention in the Auditor’s report.

1225. Will the Department consult with the Comptroller’s office with a view to satisfying themselves that whatever new system they may evolve will be as nearly proof against such defalcations as have occurred here, so that they may be avoided?

Mr. O Broin.—We have been in close touch with the Department of Finance on the subject, and if it is desired that we should get in touch with the office of the Comptroller, we shall do so.

Mr. Maher.—The usual thing is for the Department of Agriculture to consult the Department of Finance.

1226. Chairman.—Well, I suppose we can take it that the Comptroller will be consulted on this?

Mr. O Broin.—Automatically, it will come before him.

1227. Chairman.—So long as you say so, I am sure that that will satisfy the Committee. I do not even ask the Comptroller to consult Finance, because I have no doubt that Finance will be clamouring at his door. Now, let us come to the second paragraph, referring to the collection of fees under the Horse Breeding Act, 1934—fees which were not collected in a number of cases—and also regarding the basis of assessment of fees payable on pigs and pork carcases purchased by bacon curers. Perhaps you could tell us something about that?

Mr. Maher.—It is pointed out there that information has been asked for as to the non-collection of fees. Since that paragraph was written the Accounting Officer has sent in an explanation showing why certain fees, under the Horse Breeding Act, 1934, have not been collected, and, in the opinion of the Audit Office, the explanation is satisfacfactory. In certain cases, the sanction of the Department was obtained. As regards the latter portion, dealing with the assessment of fees payable on pigs and pork carcases purchased by bacon curers, the Accounting Officer also has sent in a detailed explanation of the matters raised by the Comptroller and Auditor-General.

1228. And the Audit Office is now satisfied?—Yes.

1229. It is satisfied that all fees were collected?—No, but that the reason for their remission was satisfactory.

1230. Well, the Note refers to the basis of assessment of fees payable on pigs and pork carcases purchased by bacon curers, does it not?—Yes. It would appear that a levy was made by the bacon curers on the producers, but at the time the levy was made it was not quite in order to make such a levy, and it was subsequently adjusted, when a levy, under the Fresh Meat Act, was being taken from the bacon curers.

1231. And the bacon curers made this levy on the producers?—Yes, under the Act of 1935.

1232. And they had not statutory authority for making such a levy?

Mr. O Broin.—The position is that, in anticipation of the operation of Part II of the Act of 1935, the Pigs Marketing Board made a Price Order which included this levy, but it so happened that it was not possible to bring in Part II by the date the Price Order became operative, and the position of the Department was that they had received levies to which, on a strictly technical view of the law, they were not entitled, and they adjusted the matter by remitting certain payments payable by the bacon curers under the Fresh Meat Act.

1233. What was the amount of those levies?—I have here the number of pigs involved. It was about 40,000 pigs, at 5d. a pig.

1234. That would be about £1,000? —Yes.

1235. That money was levied by the bacon curers on the producers?—In conformity with the Price Order.

1236. Yes, and then the Government adjusted that by remitting to the curers certain payments the curers would otherwise have to make?—That the curers had to make under the Fresh Meat Act. As a matter of fact the balance is still very much on the side of the Department. The levy of 5d. per pig was under the Order of the Pigs Marketing Board, but the levy under the Fresh Meat Act would be something like 1½d.

1237. Deputy Linehan.—I should like to be clear on the details of this matter. From what has appeared, I take it that these payments were taken by the bacon curers from the producers, and that the position is that the producers were mulcted by the curers to that extent and that the producers have got nothing?

Mr. O Broin.—The charge, under the Fresh Meat Act, was one we were legally entitled to make, and we were not legally entitled to make the other charge. The regular position is practically the same as the method of adjustment followed—we charged levy at the rate of the difference between 5d. and 1½d.—that is, 3½d.

1238. Again, let us get down to the details. Let us suppose that a sum of 10/- was collected from the producers before this Act came into operation. That was deducted from his price, and the bacon curer subsequently got it back, but the producer never got it back. Is not that correct?—Not quite. The position really is, in this case, that action was taken in anticipation of the bringing into force of the provisions necessary to make it legal. As a matter of fact, there was nothing done which is different from what is done at present.

1239. Deputy Smith.—Where is the difference between the Department taking this money and sending it back to the curers to pocket it? Might not the Department just as well say, “We will stick to this instead of sending it back to the curers?—That is one view of the position.

1240. You sent it a certain distance on its way to those who should have it. Naturally, you could not expect the curers to give it back to those from whom they took it. It seems foolish, seeing that it could not get back to them?— The only explanation is that we wanted to bring the matter into conformity with what the position would have been had Part II of the Act been in operation and what the position is, in fact, now.

1241. Deputy Cole.—What about the 1½d. per pig?

Deputy Smith.—That was another levy. They were under a legal obligation to pay a certain sum to you in respect of the Fresh Meat Act?—Yes.

1242. Your attempt to straighten out that by altering that amount does not in any way take away from the fact that £1,000 was taken from the producers and you sent it back as far as the curers who collected it on the pigs, but the men to whom it was due never got it?—The sum of £1,000 mentioned was not legally due. We were getting something to which we were not legally entitled.

1243. Deputy Smith.—It was not legally due to the curers any more than to you? —No.

1244. Chairman.—The point made is that £1,000 was collected from the pig producers. The Department sought to remedy that injustice by sending part of the £1,000 to the curers. It does not appear that the curers ever suffered any loss and the Department sought to compensate the producers from whom the £1,000 had been collected by giving to the curers a smaller sum. That does not seem to be an equitable procedure?— The position is somewhat complicated, but I do not think that is the case. The levy of 5d. per pig which was made was, if one may say so, accidentally included in the Price Order but was not legally payable by the curers to the Department at all. The other levy was legally payable.

1245. Deputy Corry.—Was not 5d. per pig take?—It was.

1246. Any arrangement that was made by your Department with the curers did not cover the producers from whom the money was taken?

Mr. Leach (Accountant).—Might I try to explain?

1247. Deputy Lenihan.—Is the position this: certain levies were taken from the producers illegally which they have not got back?

Chairman.—We will ask Mr. Leech, the accountant, to say a word about this.

Mr. Leach.—The position is, as has been stated already, that the Price Order was made by the Pigs Marketing Board. After the appointed day that was intended to come into operation. In that event, there would have been a levy of 5d. made, and everything would be in order if that was so. The Pigs Marketing Board, if I might say so, were acting too efficiently. They did not quite wait for the appointed day. The Department was in this position, that the appointed day did not come about, and therefore they were not in a position to collect this levy really. However, it had been collected from the producers. In the Price Order it was stated that 5d. was the levy for the Minister. That is the position therefore. The curers could not properly retain that money. They collected it under the Order for the Minister and therefore they were obliged to pass it over to the Minister, They could, I suppose, have raised the point that there was no appointed day. In that case the position would be that they should, properly speaking, have returned the money to the producer. I do not know, but it seems to me that would be absolutely impossible; they could not have returned it to the producer, I think. We were in this position, that we had no legal authority to collect the 5d. Under the Fresh Meat Act we had authority to collect 1½d. and have collected 1½d. quite correctly under the Act. If under the Prices Order the appointed day had come in properly and the thing was in order, we would not have collected 5d. and 1½d.; we would have collected only 5d., less 1½d., in this case. I do not know what way you will look at it, but it is clear that the whole thing was irregular. The Department thought that the best thing to do was to collect the 5d., less 1½d.—that is what it amounts to. It was clearly not in order owing to the non-fixing of the appointed day.

1248. Chairman.—What has happened is that in carrying out very complicated legislation a mistake was made. I imagine all this matter could have been adjusted if legislation had been introduced to regularise the position. It does appear to me that there is no way in which the position can be properly regularised without legislation because the Department is in possession of money which was illegally collected and to which they have no right under any existing statute. Is not that so?

Mr. Maher.—That is so. We took the view that the curers were not entitled to retain the money. It would have cost more than 5d., I suppose, to return the money to the producer and the only equitable way seemed to be that the Department should take over responsibility for the money, which they have done.

1249. Chairman.—You can readily see that the difficulty of giving back 5d. per pig to the individual producer would have been formidable but, from the point of view of precedent, it seems to me highly undesirable that a Department of State should remain seized of money to which it has no conceivable claim in law without regularising the position. Perhaps the Department of Finance will give us the benefit of their views as to whether there is any precedent for such a situation.

Mr. Dagg.—In this particular case we have not been asked for an opinion. It is only recently that we were sent copies of the correspondence for our information.

1250. Chairman.—Do you feel free to say whether there is any precedent for a Department of State retaining money which, in fact, it had no statutory authority for collecting?

Mr. Dagg.—That is a question I would not care to answer.

1251. Deputy Cole.—Did they not give it back?

Chairman.—Only part. That was merely to bring the payment into line with the Fresh Meat Act.

Deputy Corry.—Have we any means of seeing that they do not send back any more of this? Since it cannot go to the man from whom it was taken originally, it does not matter to the producer who got it—it has gone from him, anyway. He cannot get it back, and if he cannot get it back, why give it to the curers who have enough already?

Chairman.—I think our remedy in this matter would be to make a note in our report suggesting that the position should be regularised by law. I am more concerned to do that for the sake of the precedent that would be created rather than for the sum of money at stake. But I cannot see money resting in the Treasury which has no legal right to be there at all.

Deputy Smith.—It seems more equitable that it should remain in the Treasury rather than go back to somebody who was not entitled to it.

Chairman.—I agree. I imagine that if the Minister came before the House with appropriate retrospective legislation to regularise the position, the House would sympathise with his difficulty, because it has to be borne in mind that this error has arisen, not as a result of the action of the Government or of a Department directly under the control of the Minister, but as a result of a mistake of the Pigs Marketing Board, as I understand it.

Deputy Lenihan.—Does it not lead to a very awkward position? If the sum was £100 is it not the position that if somebody was so advised he might sue the curers and the Pigs Marketing Board?

Chairman.—I think they might sue the individual curer for levies illegally collected.

Mr. Lenihan.—On the order of the Pigs Marketing Board.

Chairman.—It was made ultra vires.

Deputy Smith.—Then the curers would be entitled to sue the board. If the money was not legally due from the producers, and if they cannot get it back, the proper place for it to remain is in the Exchequer, rather than in the pockets of private individuals.

Chairman.—That would appear to be the present view of the Department of Agriculture. They have taken such steps as they were able to take so far to ensure that nothing would go to the bacon curers which ought to remain in the Treasury, if it could not be returned to the producers.

Deputy Corry—At the same time, from statements made here the Department have already paid over to the curers a certain portion of this money.

Chairman.—I think the Deputy is mistaken. If I understand Mr. O Broin what actually happened is this—strictly speaking, the Department would have been bound to give back the whole 5d. to the curers. They could not collect anything under the Pigs Marketing Board Order. When they were in a position to collect 1½d. under the Fresh Meat Act they kept all they could of the money. They refunded to the curers the 1½d.

Mr. O Broin.—They remitted it.

Chairman.—They retained 3½d. Why did they remit 1½d.?

Mr. Leach.—If the appointed day had been fixed prior to this, the amount that would have been taken from the curers would be 5d. under this levy and not 1½d.

1252. Deputy Smith.—You would have thought it would be 3½d. they would remit, not 1½d. I cannot see why they should decide to remit the 1½d. That amount was due under the Fresh Meat Act and it seems to me that if they had got 5d.—

Chairman.——I think there is an explanation of that, because the two Acts taken together provide that the Department cannot exact two levies, the fresh meat levy and the pig levy in respect of the same pig. Therefore, they had to elect as to whether they would take from the curers the 1½d. under the Fresh Meat Act or whether they would simply retain in the Exchequer the 3½d. which had been illegally collected. If they only kept 1½d. they would have to give back to the curer 3½d., and by keeping the 3½d. all they had to give back was 1½d.

Mr. Leach.—That is about the situation.

1253. Deputy Corry.—The 5d. was collected from the producer and it was the producer’s 5d. Now we find that, out of £1,000 illegally collected from the producer, £700 has been given back to the curers.

Chairman.—Not £700.

Mr. Leach.—It would not be more than £200.

1254. Deputy Corry.—Is there any intention of giving back any more?

Mr. O Broin.—No. That position has been regularised.

1255. Chairman.—If the Department had not given back the £200, which they elected to keep under the Fresh Meat Act, they would probably have had to give back £800 which was illegally collected, because they could not levy under the two Acts. I think the Committee will wish to make a note that, in our judgment, some legislative steps should be taken to regularise the position. Mr. Dagg, would it be too much trouble to ask the Department of Finance to advise us as to whether there is any precedent for dealing with moneys found to be in the Exchequer without statutory authority? Perhaps that question is of too wide a character to be answered properly. It would mean searching the Exchequer records for 100 years.

Deputy Smith.— And it would have no real relation to the matter before us because, you see, in this case you know the method by which the money was obtained. In this case you know where the money came from.

Chairman.—I think the only thing we can say is that between now and the time we draft our Report, we shall consider the matter and, if necessary, prepare a note and incorporate it in the Report.

Deputy Linehan.—Should not the suggestion be made that the greatest care should be taken by bodies, which are not under the control of the Minister, not to anticipate the Minister’s legislation or Orders?

Deputy Smith.—I think the members of the Committee have not so much fault to find with the actual mistake as it was a rather simple mistake.

Deputy Linehan.—I have fault to find with the mistake because I think no public body should be allowed to anticipate legislation or Orders of the Minister.

1256. Chairman.—We can postpone further discussion of the matter until we are drafting the Report.

1257. Chairman.—The next paragraph of the Report of the Comptroller and Auditor-General states:—

“The arrangement referred to in paragraph 34 of my last Report, under which the Department, acting as agent for the Newmarket Dairy Company, Limited, exported eggs to Germany, was continued in the year under review, and an account of the receipts and payments is appended to the Appropriation Account. The account includes considerable payments and receipts in respect of eggs purchased and consigned in the period ended 31st March, 1935. Thirty-two consignments were exported during the year. The payments in connection with these exports totalled £113,068 19s. 11d. and the receipts amounted to £115,856 6s. 3d. A provision of £100,000 is made in sub-head O (10) of the Vote for Agriculture for 1936-37 for the purchase, storage and sale of eggs for export, and the Newmarket Dairy Company, Limited, Deposit Account was, therefore, closed on 31st March, 1936. Payments outstanding on this date in respect of eggs exported in 1935-36 will be charged to the sub-head referred to and receipts will be credited to Appropriations-in-Aid.”

Mr. Maher.—That is a purely explanatory paragraph.

1258. Chairman.—Is there a trading account kept in respect of the sale of eggs?

Mr. O Broin.—There is. The accounts the Comptroller and Auditor-General has at present in hand in relation to cattle, which Mr. Maher mentioned some time ago, also contain particulars in regard to the eggs which were exported.

Mr. Maher.—That is so. The accounts are being audited and will be transmitted to the Department of Finance in the course of a few days.

1259. Chairman.—Is there a statutory obligation to lay these accounts on the Table of Dáil Eireann?—There is no obligation under our Acts, but they relate to part of the transactions referred to previously.

Mr. Maher.—These accounts will be presented to Dáil Eireann under Section 5 of the Exchequer and Audits Act, 1921, together with the Report of the Comptroller and Auditor-General in due course. They are not presented under any statute for which the Department of Agriculture is responsible. They are presented under the Exchequer and Audits Act, 1921.

1260. Chairman.—Under which all accounts are submitted?

Mr. Maher.—Only trading accounts.

1261. Chairman.—Can you tell me, Mr. O Broin, whether a profit or loss has been made on these transactions?—The returns are satisfactory, but I am just wondering whether it would be satisfactory to discuss the results of the trading without having the Accounts.

1262. Chairman.—We shall then apply the general rule and postpone consideration until the other Report has been made to the Dáil.

1263. Chairman.—The next paragraph of the Report of the Comptroller and Auditor-General reads:—

“The Dairy Produce (Price Stabilisation) Act, 1932, expired on 31st March, 1935, and payments of levies and bounties as from 1st April, 1935, are governed by the Dairy Produce (Price Stabilisation) Act, 1935, which became law on the 13th June, 1935. The later Act provided for the winding up of the Butter Fund, for the establishment of the Dairy Produce (Price Stabilisation) Fund and for the transfer thereto of any available balance remaining in the Butter Fund. Provision was also made for the collection of levies and the payment of bounties which had become due before the expiration of the earlier Act and for the inclusion of these items in the account of the Butter Fund.

I observe that bounty at less than the statutory rate was paid from the Dairy Produce (Price Stabilisation) Fund on certain exports of creamery butter to the Continent, and I have addressed an inquiry to the Accounting Officer on the matter.

A contribution of £1,633 1s. 0d., under Section 41 (6) of the Act, was made to the Butter Marketing Committee established for the purpose of regulating the export of butter to the United Kingdom.

Temporary advances made to the Price Stabilisation Fund from sub-head O 8 of the Vote for Agriculture amounted to £180,000 of which £170,000 was repaid during the year. The balance of £10,000 was repaid in May, 1936.”

Mr. Maher.—The first part of the paragraph deals with alterations which have taken place as a result of the Act of 1935. The second part relates to the export of butter abroad under which a bounty, not at the statutory rate, but at a lesser figure was paid to the exporting company. The Accounting Officer in reply to an inquiry from the Audit Office has informed us that if the statutory rate had been paid, the exporting company would have got a net return greater than the fixed home price.

1264. Chairman.—Was it in the discretion of the Minister to vary the amount of the bounty paid to a particular company?—It was.

1264a. So, in fact, the Minister had a right to give any bounty he thought fit on any particular export of butter?— He has, strictly speaking, but, of course, he generally acts in accordance with the scheme which he has laid down and which is widely understood.

1265. Chairman.—What I am concerned to do is to make this clear: if the Minister had an absolute discretion to give any bounty he liked on any particular consignment of butter, then the matter is one we should raise in the Dáil but if the Minister was governed by a statute which required him to give a certain bounty, you must answer for the fact that the bounty paid was less than the amount fixed.

Deputy O Briain—The position was that an arrangement was made by which a certain fixed price per month was returned to the creameries.

1266. Chairman.—I should like to get a clear answer to the other question: had the Minister a statutory obligation to pay a certain bounty on exports of butter or had he power to pay whatever bounty he thought right on any particular consignment?—There is no statutory obligation on the Minister to pay any particular rate of bounty. The bounty rates are fixed but they vary considerably from time to time. They are fixed from time to time by the Minister.

1267. By Order?—No, just by a minute.

1268. Deputy Smith.—The amount of the bounty is determined surely by the price received on the market on which the butter is sold?—The position is this: There is a fixed price specified for sales on the home market and the bounty which is given brings the price the creamery gets on the export market up to the fixed price on the home market. In this particular case, it went to the Continent and the ordinary rate of bounty would have brought the price received for the butter above the home market price.

1269. Chairman.—It is quite clear that this thing was done by minute and not by Order under the Act?—I think so.

1270. It was not by a statutory Order? —No.

1271. I should like to ask the Comptroller and Auditor-General if his attention were directed to a minute of the Minister fixing the rate of bounty at X shillings, and if he then found that in one case X plus Y shillings were paid, would he regard that as proper.

Mr. Maher.—I understand, Mr. Chairman, that the bounty is fixed by the Act or subsequent Orders and not by any minute.

Mr. O Broin.—That is the bounty paid out of the fund?

Mr. Maher.—The bounty on butter in this particular case. I think that is the position, because you say in the reply to the Audit office that if the full statutory bounty had been paid it would have given the dairy company a net return greater than the fixed home price.

Mr. O Broin.—I may be confusing the bounty payable out of the Price Stabilisation Fund with the bounty payable out of the Vote.

1272. Chairman.—The bounty payable out of the Vote may have been fixed by the Minister and the bounty payable out of the Price Stabilisation Fund may have been fixed by statutory Order. How can the Minister, once he has made a statutory Order, depart from that Order without making an amending Order?—It may probably be described as irregular.

1273. How does the Department come to pay a rate of bounty different from that prescribed in the Minister’s Order? —The company concerned here is really owned by the Department of Agriculture. It is the Newmarket Dairy Company.

1274. The question is a net question. How did the Department come to pay a rate of bounty other than that fixed by the statutory Order? Was that irregular?—I am sorry, Mr. Chairman. I have not got sufficient information to enable me to answer that point at the moment. If you wish, I shall send a note to the Committee.

1275. Chairman.—Perhaps Mr. Dagg, as representing the Ministry of Finance, would give us the view of the Department of Finance.

Mr. Dagg.—I am afraid the Minister for Finance has no function in this matter. It is one for the Minister for Agriculture.

1276. Chairman.—So the Department of Finance does not take cognizance of a payment that you know to be, prima facie, a violation of a statutory Order?

Deputy Heron.—Because the payment is less than the statutory amount. If it were greater, they probably would take cognizance of it.

1277. Chairman.—If an amount greater than that permitted by the statutory Order had been paid would the Department of Finance have had anything to say?

Mr. Dagg.—If we were told of it we would probably check up on it, but we have not been consulted in this matter at all.

Mr. O Broin.—We were influenced by the fact that the company concerned, the Newmarket Company, is in a different position to outside exporting creameries.

1288. Chairman.—In your judgment, Mr. O Broin, should the Department of Agriculture have consulted the Department of Finance before departing from the terms of a statutory Order in the disbursement of public money?

Mr. O Broin.—In this particular case I do not know that it would have been necessary, because it was paying out something which was less than the statutory amount, and which was probably all that the Newmarket Dairy Co. claimed.

1289. Chairman.—I am concerned really with the precedent here established, because I think you will agree, Mr. O Broin, that if it were permitted to pay sums other than those provided for in the statutory Order, that might be done hereafter on this precedent.

Deputy Smith.—If a sum less than the sum prescribed was paid, could the company not proceed to recover the statutory amount?

Mr. O Broin.—They probably could, but being a company owned by the Department, it is most unlikely that they would.

1290. Deputy O Briain.—The Department wanted to see that the Newmarket Dairy Co., and the suppliers of the Newmarket Dairy Co., were not put in a privileged position as compared with the other creameries in this country operating in the British market. Those were exports to the Continent, and the price available was greater than would be available on the British market. The bounty, in order to bring it up to the average home price, would not have to be so large. That was the position?—Yes.

1291. Deputy Smith.—Are we sure, Mr. Chairman, that there is a statutory obligation to pay a uniform rate of bounty?

Chairman.—So it appears.

Mr. O Broin.—I cannot recollect at the moment what are the precise terms of that statutory Order. I should like to have an opportunity of looking at the Order, and if necessary I can send a note to the Committee on the subject.

1292.* Chairman.—Gentlemen, it appears to me that the trouble is that this was largely an accounting transaction, inasmuch as the Newmarket Dairy Co. is virtually owned by the Government, and that the important element in this question is really not the payment but the net question as to whether the Department may depart from the terms of a statutory Order. We would be obliged if Mr. O Broin would let us have a note on the circumstances surrounding this case so that our view may go on record. Would it be relevant to ask the Department of Agriculture to consult the Department of Finance in this matter, so that we have the view of the Department of Finance on the propriety of the procedure adopted in this case?

Mr. Dagg.—I do not think the Minister for Finance has any function in the matter.

1293. Chairman.—I think it would help the Committee if, when Mr. O Broin is preparing his report, he will consult the Department of Finance and let us have a note from them as to their view on what would be the correct procedure.

Deputy Cole.—What was the difference between the price obtained on the Continent and the price in England? I do not know if the question is relevant, Mr. Chairman.

1294. Chairman.—I do not think there is any objection to the question. It is a question of detail which Mr. O Broin may or may not be able to answer.

Mr. O Broin.—I am afraid that is a detail which I have not got here.

1295. Chairman.—Perhaps Mr. O Broin will make a note of it for Deputy Cole’s information. The remaining two paragraphs, the Accountant tells me, are merely explanatory. Now, gentlemen, if you turn to the account on page 139, we will go through the sub-heads. I think we will find that most matters of substance have been touched upon, but every Deputy is perfectly free to raise any question he wishes on any sub-head.

1295a. In regard to sub-head E (2)—Veterinary Research-is the research conducted in the veterinary college or in the Department itself? —The Department have a veterinary research station at Thorndale, Drumcondra, where they conduct veterinary research. There is also a certain amount of research conducted at the veterinary college as part of the work of the college.

1296. What is the staff at Thorndale? —They are given in the 1935-6 Estimates under sub-head E (2). The director is Chief Veterinary Officer of the Department; there is a research officer, three veterinary inspectors, and a number of attendants and cleaners.

1297. Do they publish any report?—I think they publish reports from time to time on the results of special investigations. For example, if they have conducted an investigation into such a subject as abortion in cattle, the result of those inquiries, when they have reached a stage at which it is useful to publish them, are published.

1298. There is no annual report.-No. There is a reference to the research work in the Department’s annual report, but detailed reports of the results of the research would probably be more appropriately printed in the Department’s journal.

1299. Are they so printed?—I think they are printed from time to time as they become available.

1300. Are they available to private individuals in the form of pamphlets or anything like that?—I do not think they are in pamphlets. The result of the research would appeal to a very limited number of people.

1301. Are they available to the veterinary profession?—Yes

1302. How?—I should imagine that the journal would be the only means that the veterinary profession would have of referring to the results of those research inquiries.

1303. One would think it would be an advantage if, when those researches are completed, the results were issued in leaflet form and circulated to the veterinary profession of the country. Otherwise, the results are in danger of being lost sight of. Sub-head E (3) refers to subscriptions to International Research Organisations?—Yes.

1304. What are those organisations? —They are enumerated in the Estimates. They include the International Institute of Agriculture, the International Seed Testing Association, Copenhagen; the International Dairying Federation, the International Veterinary Bureau, the International Congress of Soil Science, the World’s Poultry Science Association, and so on.

1305. I notice that you stop there. The other organisations mentioned in the Estimates are: the Imperial Mycological Institute, the Imperial Institute of Entomology, the Imperial Bureau of Soil Science, the Imperial Bureau of Animal Nutrition, the Imperial Bureau of Animal Health, the Imperial Bureau of Genetics, the Imperial Bureau of Agricultural Parasitology, the Imperial Bureau of Plant Genetics, and the Imperial Bureau of Fruit Production. Our atmosphere becomes quite imperial when we finish the list.

Deputy .O Briain.—That ought to satisfy you, Mr. Chairman.

1306. Chairman.—In regard to sub-head F (3)-Veterinary College-no part of the money under sub-head E (2) is given to the veterinary college, Mr. O Broin?—No.

1307. Any money given to the College of Special Research would be included under sub-head F (3), I suppose?—Yes.

1308. Sub-head G (1) deals with the improvement of flax growing. I take it that the reason why there was no expenditure under that sub-head was that the scheme had not got under way in that financial year?—That is so.

1309. I am surprised that I do not hear a word from Deputy Cole in regard to sub-head I (2). It is in relation to North-west Cavan congested area.

1310. Sub—head J deals with the National Stud. It is a token sub—head. and there was no money spent on it?—There was no money spent. We really have no control over the National Stud.

1311. Why is there a sub-head for it at all, do you know?—If at any time the question of taking over the National Stud arose there might be some expenditure involved. I think that is the only reason for having it there.

1312. To whom are the fees referred to under sub—head M (2) paid?—Those fees for reports on agricultural conditions are paid to county instructors in agriculture in the various counties.

1313. Deputy Cole.— Are they not whole-time officers?—They are whole-time officers of the local authorities, but they do this job in addition for the Department of Agriculture.

1314. Deputy O Briain.—To what does sub-head M (5) refer? It deals with the improvement of the creamery industry? —That refers altogether to the operations of the Dairy Disposals Board.

1315. Is there any yearly balance sheet published in regard to the operations of the Dairy Disposals Board.

Chairman.—The Deputy will remember that that question was raised either last year or the year before, and I think pretty comprehensive accounts were then incorporated in the report.

Mr. Maher.—I think certain information was given to the Committee on the occasion on which the matter was under discussion.

1316. Deputy O Briain.—Will that practice be continued, Mr. Chairman?

Chairman.—We used to get the accounts of the Dairy Disposals Board every year. Is it the intention of the Department to give them to us this year?

Mr. O Broin.—Mr. Leach will probably be more conversant with that matter than I am.

1317.* Chairman.—If Mr. Leach has the interim and final reports of the Committee of Public accounts on the Appropriation Accounts for 1934-35, he will find the account for the creameries set out there.

Deputy O Briain.—I am satisfied, so long as the Committee will get the annual account.

Mr. Leach.—My recollection is that the Committee asked for the account in this form. I cannot recollect why it is not in this volume or whether it was asked for; but it can be got and given to you.

Chairman.—There was a standing order by agreement that the Department would furnish us with the account every year. Perhaps you will look into the matter and let us have it with Mr. O Broin’s other notes, which he has been good enough to promise us?

Mr. Leach.—That will be done.

1318. Chairman.—With regard to sub-head M (6), dealing with the scheme of loans for the purchase of heifers, we have discussed that very fully on the Report of the Comptroller and Auditor-General. Now, with regard to sub-head M (7), which refers to the Oats Purchase Scheme, may we take it there were no operations conducted under that scheme, Mr. O Broin?—There were no operations.

1319. Sub-head M (9) refers to the purchase and export of eggs. Does that sub-head relate to the same transactions as we have been discussing earlier in the day?—It does, the export of eggs to the Continent.

1320. But as there was a profit on the account, there is no charge made?—No charge has been made.

1321. Deputy Corry.—We had a profit?

Chairman.—Yes, and there was no charge made against the account.

1322. As regards sub-head O (4), referring to the Weeds and Agricultural Seeds (Ireland) Act, are you satisfied that the provisions of that Act are being carried into effect? That is not the offensive Weeds Act; that is the Act that provides that weed seeds will not be included in crop seeds?—Yes.

1323. That does not apply to the cutting of weeds on farms?—It does not.

1324. “Noxious weeds” is the term that covers that?—On that sub-head, I should like to say that the position now is somewhat different from what it was in 1935-36. There is a special Seeds Act which has been recently enacted and there is also a new Weeds Act recently enacted, known as the Noxious Weeds Act. The two things are separated now.

1325. At that time were the two things provided for under the one Act?—Yes, under the one Act, the Act mentioned here.

1326. Chairman.—On sub-head O (11), dealing with the Musk Rats Act, 1933, have the musk rats disappeared altogether?

Deputy Corry.—They have not.

Mr. O Broin.—We hope they have. It has been a very long time since any rat was caught.

The witness withdrew.

The Committee adjourned at 1.30 p.m. until Thursday, 25th November, at 11 a.m.

* See Appendix XIV.

* See Appendix XVI.

* See Appendix XVII.