Committee Reports > List of Committees > Dáil > 1938 > Committee of Public Accounts > Report - Appropriation Accounts 1936 - 1937

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 24adh Mí na Samhna, 1938.

Thursday, 24th November, 1938.

The Committee met at 11 a.m.

Messrs. Seóirse Mag Craith (Ard-Reachtaire Cunntas agus Ciste), C. S. Almond and T. S. C. Dagg (An Roinn Airgeadais), called and examined.

713. On the motion of Deputy Smith was agreed that Deputy McMenamin it should take the Chair at this meeting.

VOTE 57—INDUSTRY AND COMMERCE.

Mr. J. Leydon called and examined.

714. Chairman.—In regard to sub-head I.—Minerals Exploration—there is a note by the Comptroller and Auditor-General as follows:—

“The Estimate provides for expenditure on the investigation of the Arigna and Slieve Anierin and of the Slieveardagh areas.

“The exploration of the Arigna and Slieve Anierin area was concluded during the year, and a final payment of £4,496 19s. 7d. was made to the Company which had undertaken the investigation. The total cost of the exploration of this area was £7,753 8s. 8d.

“Payments during the year in respect of the investigation of the Slieveardagh area amounted to £6,306 17s. 8d., and covered fees and expenses of the mining consultants, salary of the resident Engineer, expenses of borings, etc. The total expenditure on this area to 31st March, 1937, was £9,297 18s. 3d. Sums amounting to £99 were received from the sale of coal raised during the operations, and are accounted for as Exchequer extra receipts.”

Deputy Smith.—What is the purpose of the note, Mr. McGrath?

Mr. McGrath.—Merely for information.

715. Deputy O Briain.—I would like to ask how those borings were carried out, how the firms are selected who do them.

Mr. Leydon.—In the ordinary course tenders are invited. The Arigna exploration was carried out first, and we gave the contract in that case to an Irish firm. I regret to say that the firm proved rather unsatisfactory, and in fact they were not able to complete the task of carrying out the exploration. In the case of Slievardagh a Scottish firm got the contract.

716. Deputy O Briain.—All the Irish firms were given an opportunity of tendering?—I could not say offhand, but there are only a few of them and I believe they were. I think there are only two altogether, and that they were both given an opportunity of tendering for the first contract.

717. There are only two firms?—I think there are only two firms capable of carrying out boring of that kind, and in fact the firm that got the Arigna contract was not able to complete it.

718. Chairman.—As distinct from this note, Mr. Leydon, has any coal been found, or is there any hope of coal being found?—In the case of Arigna the coal is there and is being worked. There is a seam there—in fact, there are three seams, but only one of any importance. The results of the investigation were placed in the Geological Survey Office, to be available to anybody who wishes to inspect them.

719. Deputy Smith.—Is a Department of State free to the same extent as a local authority not to accept the lowest or any tender in a case of this kind?—Oh, yes.

720. It need not accept the lowest tender?—It need not accept the lowest tender. Obviously the lowest tender might be from a contractor who was not able to do the job.

721. But it is very difficult to establish that in advance?—It is difficult to establish that in advance because you do not know what firms are going to tender but when you come to examine the tenders and have the names of the firms I do not think that, in practice, there is any great difficulty in arriving at a conclusion as to whether a particular firm would be capable of handling the job. That has to be done. It is a regular feature of the examination of tenders.

722. Chairman.—As a matter of interest, Mr. Leydon, can we take it that, so far as this country is concerned, the only substantial seam of coal is in Leitrim?—No, Sir, I did not intend to convey that by my reply. This account deals with the expenditure on two areas. The first one is Arigna. As regards the Slieveardagh area, the results are under consideration at the moment and I do not think it would be at all advisable to publish any information about it under present circumstances.

723. Chairman.—The note on sub-head J—Production of Industrial Alcohol —reads as follows:—

“Payments charged to this sub-head were made directly by the Department in the period 1st April to 31st December, 1936, and, from 1st January, 1937, mainly by the Managing Director of the undertaking, as Sub-Accountant, from imprests paid into a public bank account opened with the authority of the Department of Finance. I have not yet been furnished with the vouchers relating to payments amounting to £16,651 13s. 2d. including £15,124 5s. 2d. expended in the period subsequent to the 31st December, 1936. I am, therefore, unable to comment on this expenditure, or to certify that it is properly chargeable against the Vote.”

Mr. McGrath.—I may say that I have since got the vouchers and have found the amount mentioned—that is £16,651 13s. 2d.—properly vouched and chargeable. That has happened since I wrote this report.

724. Chairman.—That relates to the amount of money paid into the public bank account by the Managing Director as Sub-Accountant.

Mr. McGrath.—It relates to the Sub-Accountant’s account in the Bank of Ireland. I should mention that for a subsequent period there is further difficulty, but we are not concerned with that here. We are only concerned here with the 1936-1937 accounts, and, as far as they are concerned, the vouchers rendered to me are in order.

725. Chairman.—The note continues as follows:—

“The balance of the expenditure charged to the sub-head is made up as follows:—

With regard to this item of £5,500, Mr. Leydon, did we not buy up the patent for use in the Free State?

Mr. Leydon.—Yes. I answered that question last year.

726. Chairman.—Yes, I think so. Now, the next paragraphs read as follows:

“The amount of £90,000 shown above was paid during the year under contracts entered into for the erection of the distilleries, and for supplemental works. The building of the distilleries was not completed in the time specified in the relative contract, and I understand that the question of whether the delay in completion renders the contractor liable for penalties under the terms of the contract is under consideration.

“A claim for compensation was made by the company supervising the establishment and equipment of the distilleries and rectifying plant against the Minister for Industry and Commerce, in respect of loss stated to have been incurred owing to delay in placing the building contract. Negotiations with the company resulted in a settlement by which it was agreed to pay £1,000 forthwith and £5,500 in instalments over a period of three years. The payment of £1,000 is included in the amount of £1,959 7s. 9d. shown under the heading ‘Miscellaneous.’

“Bills of quantities for the buildings were originally prepared in accordance with Continental practice, and the small number of tenders received from Irish firms was considered to be due to difficulty in interpreting the bills. It was, therefore, decided to have fresh bills of quantities, conforming to Irish practice, prepared, and to invite tenders a second time. The fee paid, with Department of Finance sanction, for each set of bills, amounted to £430 4s. 0d.”

Here we have a claim for compensation by this supervising company, and the question for the Committee is concerned with theory and practice in these matters.

727. Deputy Linehan.—There would appear to be two questions here. First of all, there is the question of delay in completion of the contract itself for the building of the distilleries, and so on, and there may be a question of recovering from the contractor because of that delay. That, however, does not fit in with the second question, which is a claim for compensation made by the supervising company because there was a delay in placing the building contract. So that anything that would be recovered would not be in the company’s claim.

Mr. Leydon.—The contractor, of course, is not the company supervising the establishment of the distilleries.

728. Chairman.—Have any steps been taken, Mr. Leydon, to recover this amount from the contractor?—They are not in the same field. The contractor was not responsible for it. The £5,500 relates to the delay in placing the contract. The other claim, I think, relates to delay in completing the contract after it had been placed. Now, the delay in completing the contract gave rise to the question whether we had grounds for a claim for compensation against the contractor, and on that we had to abide by the decision of the architect, who said that by reason of bad weather, strikes, and so on, the contractor could not be held liable, and therefore we have had to abandon the claim. The other claim is from the supervising company, because they had to spend more time supervising the establishment of the enterprise and in giving their services generally than they would have had to do if the contract had been placed when they maintained it should have been placed.

729. Did they come into any expenditure until the contract was placed?—They did, to a certain extent. There was a certain outlay by reason of the fact that they had representatives over here, and so on, and they claim that they were giving a certain amount of time to the problems arising out of the establishment of the industry here. Perhaps it will help to shorten the discussion if I might add here that we argued this question at very great length and objected very strongly to making any payment if we could avoid it, but we had legal advice about the matter, and, as a result of the advice, this was a compromise arrived at, and the best compromise we could make.

730. Deputy Corry.—How did it arise that they could make you responsible in law in this country?—I could not answer that.

731. It appears to me to be a lot of money to pay a supervising company merely for a couple of months. There must be some very valuable supervisors knocking around.

Chairman.—It would appear that the Department did all this. This company were here and set up the machinery to supervise this thing immediately instructions were given. That is a legal liability and a legal duty, and apparently they have been legally advised that they were bound to pay by the terms of the contract.

732. Deputy Corry.—If it was a matter of even six months, one would think they would be more than repaid with £6,500. It seems a lot of money.

Mr. Leydon.—All these factors were before the Attorney-General before the settlement was made.

733. Chairman.—And the Attorney-General advised on this matter?—Yes.

Mr. McGrath.—Perhaps, Mr. Chairman, if I gave an explanation in this connection I might be able to ease the minds of the Deputies somewhat. As will be easily understood, a number of buildings had to be provided, say five in all, and the advising company made out certain estimates in connection with the cost of the buildings which would be required to start this industrial alcohol business. When the Minister accepted the proposals of this advising company he had certain figures before him, and in the beginning he advertised for tenders. When the Irish contractors came to consider what would be their price they were unable to follow the bills of quantities made out by the foreign firm—it was a Dutch firm that advised the Minister— and there was delay on that account. As a matter of fact the Minister had got no tenders whatever, or at least no tenders which he would accept or consider accepting. Then he was obliged to consult an Irish quantity surveyor, and he had to go into consultation with the architect of the advising company, that is the Dutch company. That was the cause of a big delay in the beginning. This advising company had their staff and I suppose a certain amount of paraphernalia in this country. They put in a claim that owing to the delay in placing the contract for the buildings and the consequent delay in placing the contract for the plant and machinery they were out of pocket to a certain extent. I can assure the Committee that the Department of Industry and Commerce did not accept that claim without a great deal of examination. As a matter of fact, they countered it to a great extent, but they had to accept the advice of the Attorney-General, and the result is what you see here in this paragraph.

734. Deputy Smith.—The one thing that is strange about this, and I think it applies to all Departments, is that exceptional circumstances operated to prevent the Department from recovering the amount that would be due because of failure by the contractor to complete the work inside the time specified. It never seems to apply in the case of the Department or institution giving the contract; I mean there are always exceptional circumstances which can be cited by the architects and by the lawyers to show that you have no power to recover damages.

Mr. Leydon.—I quite agree. In my experience, at any rate, it is always difficult to enforce penalties.

735. Deputy Smith.—If you go to court you will be run out of it; you will not be listened to.

Mr. McGrath.—I should add, Mr. Chairman and gentlemen, that the building contractor then failed to carry out his contract in the period which he had estimated. That has to do with the first paragraph.

Deputy Corry.—That is a separate case.

Chairman.—It is involved in the superintending company’s expenses.

736. Deputy O Briain.—I suggest, Mr. Chairman, that we hear Mr. McGrath to a finish before we discuss the matter.

Mr. McGrath.—I merely wanted to point out that the building contractor, having got the contract, failed to carry it out within the specified period. We found from the files of the Department that the company who were in charge— that is, this foreign company which was advising the Minister—had not carried out the agreement with the Department, that is, they should have had an agreement with the building contractor that if he failed to carry out his work within a certain period he would have to pay certain damages. We found afterwards that, as a matter of fact, the managing director of that foreign company had not made that agreement with the building company, and therefore the Department could not exact any damages.

737. Deputy Corry.—That should have been in the agreement.

Mr. McGrath.—My reading of it is that the Department had to leave the matter in the hands of this managing director, who was the representative of the foreign company.

738. Chairman.—Of course we have not all the information before us. The Auditor General has told us here that those documents were all put before the Attorney-General, and he advised the Department that they had to pay. We have only got a sketch of the matter before us.

Deputy Corry.—We know that a sum of £6,500 is involved, and it seems a great deal of money.

Mr. McGrath.—That is the amount we had to pay the foreign company for the delay.

739. Deputy Corry.—That is what I am trying to come to.

Mr. McGrath.—The Department has details as to how that is made up.

Chairman.—All that was before the Attorney-General.

Deputy Corry.—It is a very big sum of money. Some fellows get money easily.

740. Deputy Linehan.—Apparently the difficulty about the first question, that is the penalty for delay, arises entirely owing to the fact that somebody did not get the building contractor to enter into an agreement which would make him liable for penalties. I think if I, or anybody else, had been acting for a board of health and failed to put that into an agreement I would have been sacked.

Deputy Smith.—I understood from the Accounting Officer that such a provision was in fact inserted in the contract, but on the advice of the architect, because of exceptional circumstances which arose during the period specified, the Department could not recover damages.

Mr. Leydon.—We consulted the Board of Works about it, and also the architect on the job. I should like to have an opportunity of again showing the files on the matter to Mr. McGrath, because I think there may possibly to some misunderstanding about it. The fact is, at any rate, that we were not in a position to enforce whatever rights we had under the contract.

741. Deputy Smith.—But you seem to think that the contract did contain a provision that the contractor must complete the work inside a certain time? That is your recollection?—That is my recollection and it is the recollection of my colleagues who are here. I should like to have an opportunity of going into the matter further with Mr. McGrath.

Mr. McGrath.—I am not saying this in criticism of the Department, but the net result is that the clause, if it was there, was not legal in itself and could not be carried out.

742. Deputy Corry.—Who was responsible for the contract?

Mr. McGrath.—The manager of the foreign company was advising on this matter.

743. Deputy Corry.—Surely there was some legal person engaged by the Department of Industry and Commerce to prepare the contract?

Mr. Leydon.—I believe it was a standard Board of Works contract, but I do not believe you could ever enforce penalties against a contractor who failed to complete the work because of strikes and bad weather.

744. Deputy Corry.—I think the sooner they get some country solicitor into their Department, and sack the fellow who is there, the better.

Mr. Leydon.—If Deputy Corry knows a form of contract——

745. Deputy Corry.—The Department pays enough for legal advice, and if they cannot get legal advice which is watertight, well the sooner somebody is sacked the better.

Mr. Leydon.—Is your contention, may I ask, that the contractor should be held to a time clause even though his men were on strike from the first week until the time expired?

746. Deputy Corry.—I know very well that in the Board of Health when we are giving out contracts for labourers’ cottages we have legal advice from an ordinary country solicitor, and in every case up to the moment we have been able to recover from the contractor.

Mr. Leydon.—Perhaps you never had a strike or bad weather.

747. Deputy Corry.—If the Board of Works legal advisers cannot do what an ordinary country solicitor can do, they should not be there. They should be shifted down to us, and we will send up the other fellow.

Deputy Smith.—I can see that a contractor who is able to advance say a protracted strike as a reason for his failure to complete inside a certain time, may not be held to the provisions of the contract, but Mr. McGrath has pointed out here that the quantity surveyor, who is a foreigner, did not prepare the details of quantities so that our contractors here could understand them, and we then it seems decided to have those made out in a way which our contractors would understand in order to be able to tender. In regard to the payment of this sum of £6,500, could that not have been advanced by you as a reason why this foreign expert who was in charge should not get the amount? Could we not have contended that because of the failure of the foreign quantity surveyor to do this job in such a way that our contractors could understand it, we should not be asked to pay, just as in the case of the contractor who says that because there was a strike he could not complete the work within the specified period?

Mr. Leydon.—We made the most of that argument, and about a score of others, but I am afraid they all failed.

748. Deputy Corry.—I suggest that this matter be dealt with in our report.

Deputy Smith.—I can see that a Department of State always comes in for the thick end of the stick in a matter of this kind.

Mr. Leydon.—They are often at a disadvantage.

749. Chairman.—In regard to this matter, the Attorney-General said in his report that on the whole he thought the Minister ought to negotiate with the Company on the matter of compensation, and try to get as moderate terms as could be obtained, in other words a compromise. What could the Minister do on the face of that?

Deputy Corry.—I consider that in the whole matter, both in the placings of the contract and the supervision——

Chairman.—There are legal documents in regard to those contracts which we have not before us. To understand the matter fully you would want to have all the clauses before us. The Attorney-General had all that information.

Deputy Corry.—I am not worrying about the clauses in the contract. What I am worrying about is that there was an individual who should have been responsible for having in that contract a clause which would protect the State.

Mr. McGrath.—As this matter develops, my mind is getting clearer on it. I believe the real reason why we cannot enforce this clause for the failure to complete the contract within the period—this is from memory, and I may be wrong—is that it seems the managing director should have got the building contractor to enter into a bond, that is, he should have got him to take out a policy to cover the risk of not carrying out the contract within the period—and as a matter of fact no insurance policy was taken out. That is my recollection.

750. Deputy Corry.—Then we are to take it that the whole thing was on this basis: This managing director, a foreigner, came over here and was given a free hand to do whatever he liked, with no supervision or check upon him by anybody.

Mr. McGrath.—He could not do what he liked. Expert advice from a Continental firm was necessary in this particular matter. There was no experience in this country with regard to the manufacture of industrial alcohol. The Board had to depend on this managing director to a certain extent, but I can assure the Deputy that the individual concerned thought he was not getting half enough scope.

751. Deputy Corry.—Oh, I can quite understand that.

Mr. Leydon.—Would it help, Mr. Chairman, if I went into the matter again with the Comptroller and Auditor-General before you come to consider the terms of your report?

Mr. McGrath.—I should not like the Deputies to think that there is any disagreement between the Accounting Officer and myself in regard to this matter. Perhaps I should have a little more information on it than I have at my disposal this morning, but there is no disagreement between us. The payment was made on the advice of the law officers of the Department, and it could not have been avoided.

752. Deputy Corry.—What I am complaining about is that a mistake, which definitely proves laxity on the part of somebody, was what led up to this payment. £6,500 is a lot of money.

Deputy Smith.—I think we can go on from this matter——

Deputy Corry: I move that a note be taken that the matter be dealt with in our report.

Mr. McGrath.—I suggest that the Accounting Officer should send in a memorandum showing all that was done in connection with the making out of the contract by this building firm, and what was done in connection with the covering bond.

Mr. Leydon.—I will send in a comprehensive memorandum* explaining all that.

Chairman.—I think that would be only fair, because if we had not that before us we might say something in the report which might not be justified.

Deputy Smith.—I cannot see what we can do. In two years it should be clear to every Deputy.

Deputy Corry.—Too clear.

Deputy Smith.—I do not see what further information we could get.

753. Chairman.—We can deal with the matter in our report when we get the memorandum. The Comptroller and Auditor-General’s report continues:—

“The expenditure of £16,033 13s. 8d. in respect of supply and erection of plant and equipment was in accordance with the terms of the contract referred to in my last report. I stated last year that the acceptance of this contract would involve the payment of a fee for the use of a patented process in the manufacture of industrial alcohol. Under an agreement made with the company concerned, £5,500 was paid during the year.

“Premises in Dublin were purchased during the year for use as a head office for the undertaking. The expenditure of £2,872 2s. 4d. on premises and sites includes also the cost of two factory sites.

“The figure of £5,159 18s. 1d., cost of administration, includes salaries, etc., of officers of the Department on loan to the undertaking, payments to members of the Industrial Alcohol Advisory Board, salaries of the managing director and other employees, and travelling and subsistence expenses, etc.

“In addition to the payment of £1,000 to the supervising company, previously referred to, the expenditure of £1,959 7s. 9d. under the heading ‘Miscellaneous’ includes payments to trainees pending appointment (£108); cost of training of assistant managers (£630 8s. 0d.); Office of Works supplies (£160 9s. 9d.); cost of distillers’ licences (£50); and fee for preparation of an approximate estimate of cost of building the distilleries (£10 10s.).

“The Estimate for Exchequer extra receipts provided for receipts of £80,000 from the sale of alcohol and wash, but as the factories did not operate during the year, no sales were effected.”

Chairman.—Were any of the factories in operation this year?—No.

754. And there was no production?— None.

Chairman.—The report proceeds:—

“The total expenditure to 31st March, 1937, on this service amounted to £183,253 3s. 10d.”

755. The Department has got a rough sketch of the industry now. Could you tell us what is the relation between the estimated cost of production and the actual cost, per gallon?—I am very anxious to answer any questions that members of this Committee ask, but I wonder if that question is not going outside my responsibility as Accounting-Officer. I have no hesitation in saying that the actual cost up to the present has proved to be somewhat higher than that completed in the estimate.

756. Chairman.—I asked the question because, now that the service is working, you have got an estimate of the cost. Do you know the estimated cost and the actual cost per gallon?

Deputy O Briain.—Seeing that there was no production of industrial alcohol during the year under review, I do not think that question arises on the accounts this year.

Deputy Smith.—There is a tendency on our part to look for information that is outside the work we are supposed to do here. I know it is very tempting but, if we start to follow that line, we will be here for a long time.

Deputy O Briain.—Are all the factories in operation now?—Yes. They can scarcely be said to have passed the experimental stage yet.

Deputy Corry.—How much is being paid for potatoes?—The factories have not quite passed the experimental stage and cannot be said to be in normal operation.

757. Chairman.—The Comptroller and Auditor-General has the following note regarding the Turf Development Board:—

“69. With the consent of the Minister for Finance, issues to the Board amounting to £16,300 and £1,500 were made from the Grants-in-Aid (provided under sub-heads L.1 and L.2 respectively.)

Advances from sub-head L.3 totalling £1,508 3s. 1d. were made under repayment conditions approved by the Department of Finance.

Repayments by the Board amounted to £1,201 7s. 1d. which are credited to Appropriations-in-Aid. This sum is made up of £53 16s. 6d. interest on an advance of £2,000 repaid in 1935-36, and £1,147 10s. 7d. received under the arrangement referred to in previous reports by which a levy of 1s. 2d. a ton is made on each ton of turf sold with the object of recovering for the Exchequer the cost of sacks taken over in 1934-35. Difficulties which have arisen regarding the collection of this levy are, I understand, the subject of discussion between the Department and the Department of Finance.

“With the Department of Finance approval, amounts totalling £155 1s. 9d. due from approved turf distributors in respect of hireage charges for standard peat sacks during the season 1933-34, were written off.

“A Supplementary Estimate was taken for a Grant-in-Aid of £23,174 to the Turf Development Board, Ltd., for the development of Clonsast Bog, Leix-Offaly. It was stated in the Estimate that the amount issued will be repayable at such times and on such terms and conditions as the Minister for Finance, after consultation with the Minister for Industry and Commerce, may determine at the date of the issue or subsequently. Issues out of this Grant-in-Aid amounted to £7,500 during the year. The arrangements approved by the Department of Finance provide for the issues to be repaid by the Board to the Exchequer, with interest at 4¾ per cent. per annum over a period of 25 years, interest to accrue on every amount advanced as from the date of such advance, and repayment to commence when the bog comes into production.”

Deputy O Briain.—The bog is in production now?—Yes.

758. And this money will be repaid?— It will, eventually.

759. Deputy T. Linehan.—It is legally recoverable?—Yes.

760. Deputy Smith.—How did the difficulty arise in connection with the sacks? —The sacks were originally intended for use in connection with sales of hand-won turf. The Board has changed its policy since then and has gone over very much to machine-won turf. They did not sell a sufficient quantity of turf to cover by way of levy what we should have got for the sacks. The whole question is under discussion with the Department of Finance.

761. Deputy Cole.—What happened to the sacks?—Some were lost.

762. Deputy Smith.—They were distributed amongst the turf societies?—Yes.

763. And these societies were to pay for them over a period?—They were to pay ½ a ton on the amount of turf sold.

764. The sacks were sold to the societies?—I do not think they were confined to the societies.

765. Deputy O Briain.—Were they not distributed amongst traders and coal merchants in the various towns and villages? Were these people not appointed official distributors? I presume the paragraph which states that £155 1s. 9d. was written off refers to people of that kind? —I do not think it was intended to exclude societies. It includes all distributors.

766. Chairman.—Coming to the main items in the Vote, sub-head C (2) refers to the Census of Population. Is the full Census of Population report available?— It has not been completed yet.

What has the following note under sub-head H (1) reference to?—That is explained at the end of the account. It is due to the devaluation of the Swiss franc.

Mr. McGrath.—Sub-heads H (1) and H (2) dealing with Loss on Exchange and Contributions towards Expenses of the International Labour Organisation, should be taken together. As a matter of fact. there has been a saving under these two sub-heads owing to the improvement in the rate of exchange for our national currency during that period. Taking the Swiss franc and the loss on exchange as two separate items, the real result is that we save on the exchange in that period? —Yes.

767. Chairman.—Sub-head K (1) refers to the Prices Commission, salaries, wages and allowances.

768. Deputy Cole.—Are the members of this commission Irishmen?—Yes. The Chairman was part-time. The members of the staff were all civil servants, down to the temporary messenger and cleaner. There was a fairly considerable staff.

769. How many directors would be on it?—There was only one member of the Commission paid, as the others were all voluntary members. They were paid travelling expenses. The Chairman had to devote a great deal of time to the work. I assume that the Deputy is referring to the Commission to which this account refers.

770. Deputy Corry.—Sub-head L (4) refers to development of Clonsast Bog. I wonder why more progress was not made there.

Chairman.—I take it that what happened was that the Vote had to be taken before any expenditure was incurred.

Mr. McGrath.—The note at the end of the account says:—

“The Board did not proceed with the policy of providing storage enclosures as experiments in this direction did not prove sufficiently successful to warrant expenditure on the scale originally contemplated. There was also a saving on publicity.”

771. Chairman.—As to M (5)—Aids to Research Workers and Special Research Committees—that is with regard to industrial matters?—Generally in connection with research that is expected to benefit Irish industry or the utilisation of our raw materials. That is the general sort of criterion that is applied to it.

772. Deputy O Briain.—What investigations were proceeded with during the year? There was an investigation into the utilisation of sea-weed; is that still in progress?—I am afraid I have not a copy of the Research Council’s annual report with me. One of them, I remember, was peat-wax. Others were sea-weed and special stoves for burning turf.

773. Deputy Linehan.—The largest item under Industrial Research was M. (4)— Special Investigations. I am not clear as to the reference to special investigations. Are these investigations of new things that turn up, such as the one you mentioned—stoves for turf? If the Department decided that something was worth investigating they would take it up?— Yes.

774. Or something might turn up?— That is the position. We cannot usually foresee them.

775. Deputy O Briain.—As to the item, “Fees under the Transport Acts, 1932 and 1933,” are these the fees paid by lorry owners and so on?—Fees for the renewal of passenger licences and also merchandise licences by lorry owners and ’bus owners.

776. Are any new licenses for lorry owners available now?—No.

VOTE 58—TRANSPORT AND METEOROLOGICAL SERVICES.

Mr. J. Leydon further examined.

Paragraph 70, Comptroller and Auditor-General’s report.

Sub-head A—Payments in respect of Steamer Services.

“The charge to this sub-head represents the amount payable to the Galway Bay Steamboat Company, Ltd., for the year ended 31st December, 1936, under the terms of the draft agreement referred to in previous reports.

“The Aran Islands (Transport) Act, 1936, passed on 24th July, 1936, provides that the Minister for Industry and Commerce may, with the consent of the Minister for Finance, contract with any person for the carrying on by such person of a steamship service between Galway and the Aran Islands, and may, subject to the limitations imposed by the Act, pay a subsidy to the person maintaining the steamship service.

The draft agreement referred to above has not, I understand, yet been completed owing to certain difficulties which have arisen.

Paragraph 71, Comptroller and Auditor-General’s Report:—

Sub-heads C—Civil Airport, and D—Meteorological Services.

“As stated in the Supplementary Estimate providing for these services, expenditure on the actual construction of the airport is born on the Vote for Public Works and Buildings (No. 11), and expenditure on the provision of wireless services in connection with civil aviation and meteorological services is borne on the Vote for Posts and Telegraphs (No. 63).

“The charge of £440 13s. 9d. to sub-head D—Meteorological Services—relates to payments in respect of salaries, travelling expenses, telegrams and telephones.”

777. Deputy O’Briain.—That steamship service is a twice weekly service?—Yes.

VOTE 59—RAILWAY TRIBUNAL.

Mr. J. Leydon further examined

No question.

VOTE 60—MARINE SERVICE.

Mr. J. Leydon further examined.

No question.

VOTE 61—UNEMPLOYMENT INSURANCE AND UNEMPLOYMENT ASSISTANCE.

Mr. J. Leydon further examined.

778. Chairman.—Paragraph 72, Comptroller and Auditor-General’s Report:—

Sub-head J—Unemployment Assistance.

“A test examination of these payments has been carried out with satisfactory results.

“The test audit includes a verification of the correctness of a small proportion of payments by reference (1) to the relative forms U.A. 28 and U.A. 30 which contain a combined unemployed register and receipt, and are held in the Claims and Record Office of the Department of Industry and Commerce, and (2) to the relative forms of application for unemployment assistance (U.A. 27 and U.A. 29) obtained from employment exchanges and branch employment offices.

“A continuous audit of payments is carried out by the Claims and Record Office. This audit has not hitherto included an examination of forms of application for unemployment assistance, but I understand that it is intended ultimately to examine yearly a percentage of these applications.”

Mr. Leydon.—That is actually being done now.

Paragraph 73, Comptroller and Auditor-General’s Report:

Sub-head L—Appropriations-in-Aid.

“The receipts during the year from certain local authorities under Section 26 of the Unemployment Assistance Act, 1933, amounted to £197,282 0s. 8d. These receipts are based on the rateable value at the beginning of the immediately preceding financial year of each County Borough or Urban Area concerned. In paragraph 74 of my last report I stated that I had inquired as to the steps taken to verify that the amounts received were those properly payable under the terms of the section referred to. This inquiry was made, as I observed that the sums received from the local bodies were based on the valuations under the Valuation Acts, less certain deductions. In reply to my inquiry I was informed that the Attorney-General had advised that the deductions claimed could properly be made. Similar deductions have been made by various local bodies in assessing the amounts due to the Department in the year under review. “Recoveries in cash of unemployment assistance overpaid amounted to £2,172 8s. 7d. Included in this figure are sums recovered under Section 56 of the Widows’ and Orphans’ Pensions Act, 1935, from arrears of pension in cases where unemployment assistance had been paid to a person who, although entitled to a pension, was not at the time receiving payments on account thereof. The section provides that where the Minister for Industry and Commerce has, before the arrears of pension are paid to the recipient. certified to the Minister for Local Government and Public Health the amount of an excess payment of unemployment assistance, the Minister for Local Government and Public Health may reduce the arrears by an amount not exceeding the amount of the excess and shall in such case pay to the Minister for Industry and Commerce out of the Widows’ and Orphans’ Pensions Fund a sum equal to the amount by which the arrears are so reduced. In the course of my test examination, I observed a case in which payment of unemployment assistance had been made for a period following the date from which a pension was awarded, but no recovery was effected. In reply to my inquiry I was informed that arrears of pension had been paid by the Department of Local Government and Public Health before the certificate of the Minister for Industry and Commerce could be furnished, and also that the procedure has since been modified by extending the period during which arrears of pension are withheld and which is available for the issue of the certificate. I have further inquired as to the amounts charged to Vote in 1935-36 and 1936-37, respectively, in respect of unemployment assistance paid in cases where the recipients had been awarded pensions, but no recovery was effected from arrears of pension payable, and also whether, in view of the loss to public funds involved, the sanction of the Department of Finance for the write-off of these amounts has been obtained.”

779. Chairman.—This is a question of a distinction between the gross valuation of the areas and where the local authorities claim the right to make certain deductions.

Mr. McGrath.—The matter was gone into last year very exhaustively. Certain deductions are made in connection with new buildings and that sort of thing. The position at the moment is that Mr. Leydon’s Department and my Department are not in a position to verify the amount of the deductions. There are certain deductions made which are merely accepted, and that is not a very satisfactory position. There seems to be no finality about it—they may or may not be correct. Some are correct, and we are not in a position to check others. That is a very unsatisfactory position. I think the matter could be put in order if the Local Government Auditor when in the district would certify that certain items are properly deductible in connection with this matter. That is merely a suggestion on my part. There must be some finality, otherwise we will be repeating this pragraph year after year.

780. Chairman.—The only point is as to the equity of the position when one local authority fully discharges its obligations and a neighbouring authority begins to trim and deduct. It leaves the matter open to abuse?—There are many difficulties.

Mr. McGrath.—With reference to the paragraph dealing with recoveries in cash of unemployment assistance overpaid, the position is that a person is not entitled to draw unemployment assistance and a pension at the same time. When a person applies for a pension he has to wait for a certain period. He may be receiving unemployment assistance and a time arrives when the payment of unemployment assistance should be stopped. Sometimes, owing to lack of information on the part of the Department of Industry and Commerce, the unemployment assistance continues to be paid during the earlier stages of the pension. In that way there is overpayment. It must be remembered that overpayment of unemployment assistance must be recovered from the arrears of pension and not from the weekly pension. The matter is being cleared up gradually, and I think Deputies may leave the matter as it is.

Chairman.—This money can only be recovered from the arrears of pension. When a person has been payed unemployment assistance up to the date on which he is paid a pension, there is nothing to go back to the fund.

Deputy Smith.—Therefore, they should be slow in paying arrears.

Mr. McGrath.—That is the new arrangement.

781. Deputy O Briain.—With reference to sub-head A (Salaries, Wages and Allowances), there is, I think, a change in staffing, due to the conversion of branch offices into exchanges?—Are you thinking of a change from temporary staff to permanent staff?

782. Yes. In how many cases were branch offices converted into exchanges? —About 20. I cannot say that the whole of the 20 have been completed, but the scheme embraces 20.

783. Is it intended to carry out the scheme in all cases?—Yes, but not in a rush. It will take some time, because it will be necessary to get premises and staff. It may take a couple of years.

784. Deputy O’Loghlen.—These accounts do not deal with that situation at all?—There has scarcely been a year for some years past that we have not been considering this question in connection with one office or another, and it may very well be that some of them were converted in this year of account.

Deputy Corry.—I notice that, notwithstanding the statements made here, the receipts, under item 4 of Appropriations-in-Aid, from County Borough and Urban Area Councils under Section 26 of the Unemployment Assistance Act, 1933, were more than estimated.

VOTE 62—INDUSTRIAL AND COMMERCIAL PROPERTY REGISTRATION OFFICE.

Mr. J. Leydon further examined.

785. Deputy Smith.—Does the fact that the expenditure was less than the extra receipts payable to the Exchequer mean that this service is more than self-supporting?—It depends upon what you mean by a “self-supporting service.” In the case of salaries, you have to add 15 per cent. for pensions. You have also to take into account rent for premises, which is borne on the Board of Works Vote, and such items for example, as the cost of coal and light. I could not say offhand whether or not it is a self-supporting service.

VOTE 78—PEAT FUEL DEVELOPMENT.

Mr. J. Leydon further examined.

Report of Comptroller and Auditor-General, paragraph 106:—

“In accordance with the note to the Estimate, the Grant-in-Aid of £35,000 provided for Peat Fuel Development was paid over during the year to a deposit account which was opened in the books of the Paymaster-General. No advances from the deposit account were made to the Peat Fuel Company, Ltd., during the year.”

No question.

Mr. Leydon withdrew.

VOTE 68—STATIONERY AND PRINTING.

Mr. J. B. Whelehan called and examined.

786. Deputy Cole.—With reference to item F (2) (Oireachtas Debates), these used to be distributed free to Deputies.

Deputy Corry.—They are still distributed free.

Deputy Cole.—We used to get them bound years ago.

Deputy Corry.—You will still get them bound if you ask for them.

Deputy Cole.—It was customary to distribute the bound volumes to Deputies.

Deputy Smith.—So far as I understand, it was decided some time ago that written application should be made for them. I forget how long ago it is since I made application, but I have got the bound volumes since. At the time that this departure was made from the sending out of the volumes automatically, it was understood that any Deputy who wanted the volumes should make personal application.

787. Deputy O Briain.—Is the cost of printing these debates increasing yearly?

Mr. Whelehan.—Sometimes it is up and sometimes it is down. It largely depends on the eloquence of Deputies and Senators.

788. Deputy O Briain.—What are the texts referred to in F (4) (Editing, Printing, Paper and Binding of certain Irish Texts)?—These are special texts for scholars—texts which have a very limited sale. In the ordinary course, a publisher would not be inclined to publish any of them. Up to the present, I think, we have published about eight of these, and there are four more in hand. Quite a number are in preparation.

789. Is that in connection with the work of the Manuscripts Commission?— No. The Manuscripts Commission is not concerned with this. There are special editors appointed to carry out the work and we print it. Really, they are works which contain an amount of scholarship. University editors largely work on them. I might add, for the information of the Committee, that they are not Gúm publications. They are entirely distinct. They are higher Irish texts.

790. In regard to sub-head F (6)— production of a volume illustrating early Christian Art in Ireland—did you spend the £125 provided?—No. The editor was ill, unfortunately, during that year, and the work was held up. The expenditure was not made during the year.

791. Chairman.—Sub-head F (7) refers to the publication of an Irish translation of the New Testament. That is still held up?—The editor died, and a new editor was appointed, and he had to go over all the ground again. We cannot proceed to pay him until the work is completed, because the New Testament is a publication which will have to receive an imprimatur. I could not see why public money should be expended until the imprimatur is given. No payments, therefore, will be made until the matter is ripe for publication.

792. Deputy O Briain.—Has any progress been made with the printing?—Yes, considerable progress.

793. Deputy Cole.—Will the Old Testament be printed?—At the rate of progress the New Testament is making I fear the Old Testament may not see the light in our generation. No one seems anxious to undertake it.

794. Deputy Smith.—Arising out of sub-head G—Grants to Newspapers, Periodicals published in Irish or publishing current news in Irish—are there any weekly papers availing of this grant?— Yes, two groups—one in Sligo-Donegal and one in Galway. The “Connacht Tribune” is the Galway one.

795. What paper in Donegal is availing of this grant?—“The People’s Press.”

796. Chairman.—They have a weekly article by some Irish writer.

Deputy O Briain.—There is no paper in the South availing of it?—No paper in the South.

797. Chairman.—Some periodicals also get subsidies?—Yes.

798. Deputy O Briain.—These are all in Irish?—These are all in Irish. There has been an increase of one since the year under review, but it does not come into these accounts.

799. Chairman.—In regard to sub-head L—Books and Maps—do you do all the official map printing?—No, the Ordnance Survey prints them and we merely act as selling agents for the Ordnance Survey maps. The figures represent the purchase of books and maps for official use for the various Departments, and would include purchases made from the Ordnance Survey when these purchases were made for official purposes.

800. The Appropriations-in-Aid arise from the sale of various products, and the details will be found on the next page. I understand you are only a selling agent for the Ordnance Survey maps?—That is all.

801. Is there any profit arising for the Department in this way, or is it just a question of book-keeping?—The Sales Office gets the book-sellers’ profits. We do make a profit.

802. Of course, you have to pay your staff?—Certainly.

803. Deputy O Briain.—As regards item (a) in the Appropriations-in-Aid— Sales of Ordnance Survey Maps—does that deal with sales to the general public, or sales to other Departments?—That has reference to sales to the general public, as distinct from the Departments. We would not make profit on Ordnance Survey maps which we purchase for Government ment Departments, because supply to the Public Service is our proper function.

804. Chairman.—Do you do all Government work or is it at a contract price you do your work?—Is it printing you speak of?

805. Printing?—Our printing is done by printing firms throughout the whole of the State but, of course, we have certain standing contracts which will run for three or four years or perhaps even longer, if we find, as we do in the case of printing under the Representation of the People Act, that we can get reprints at beneficial rates.

VOTE 67—EXTERNAL AFFAIRS.

Mr. J. P. Walshe called and examined.

806. Chairman.—A question arises under this Vote in connection with Vote 11—Public Works and Buildings. That is referred to in paragraph 7 of the Report of the Comptroller and Auditor-General. Perhaps Mr. McGrath would explain the matter.

Mr. McGrath.—Paragraph 7 had reference to the Legation premises in Madrid. It states:

“The Legation premises in Madrid were vacated in August, 1936, and have not since been reoccupied. These premises are held under lease terminable at one month’s notice, at a monthly rent of 2,083.35 pesetas, which has been paid through a bank in Madrid since the premises were vacated. The necessary funds are transferred to the bank from time to time by the Department of External Affairs…. The sum of £469 14s. 9d. was expended during 1935-36 and 1936-37 in providing office and household equipment at Madrid. …”

The matter with which we are concerned this morning is the payment of rent for a period during which we were not in occupation of the premises. There is also the question of our furniture and our general property there and what developments have taken place since. I understand that our representative does not occupy these premises at the present time. I think the matter will be fully explained if the Accounting Officer would give the Committee the information he has at his disposal in regard to these premises and our liability in connection with them at present.

Chairman.—You understand the question that arose in regard to these premises at Madrid which were occupied by our representative formerly. Would you please explain the position in regard to them and in regard to the furniture there?

Deputy O Briain.—Was the Accounting Officer given notice that this question would be asked?

Chairman.—Yes.

Deputy Linehan.—It was raised last year on other Votes.

Mr. Walshe.—Do I understand that I am asked why the premises are still being retained? Is that the question?

807. Chairman.—Yes?—From the very beginning, as you know, the duration of the civil war was uncertain. It would have been very difficult for any State represented officially at Madrid to leave as if it had made up its mind that an early decision was about to be arrived at, in the civil war. It would have been a departure from the position which we had generally taken up with regard to non-intervention. The uncertainty of the civil war is the main factor. The State-owned property in the Legation was worth about £500. The personal property of the Minister was worth about £1,850 and then there was property of the landlady for which we have not got the precise value but it was pretty considerable. We had a certain responsibility for that property. All the property was likely to be secure because it was protected by our flag. We have no information that damage has been done at Legations or Embassies except by accident. They were in general protected by the party who have had control in Madrid since the beginning of the civil war. It would have been expensive to remove the property to a store, for instance, and a store would not have had the protection that is given to an official Legation. It would not have had the protection of the flag. In other words, we would not have had the benefit of that protection as regards safe-keeping for the Minister’s property, the State property or the landlady’s property. We were also looking forward to the time when Madrid would resume its normal role as capital of the Spanish State and the Minister would return without further formality to the existing Legation without having to seek fresh accommodation in a city which, at that time, would be full of difficulties, as far as seeking premises for a new Legation is concerned. In doing this, we think we are following the example of the other countries represented in Madrid at the present time.

808. Chairman.—There are two questions. Firstly have you any evidence that the premises are physically intact?—Our information is that they are at present.

809. Does that apply to the contents? —Our information is that the contents are still all right also.

810. Deputy Smith.—How do you hold these premises—is it on lease?—On lease.

811. What is the period of the letting? —We took it for a period first of six months, with the right of renewal. We maintain them by implicit agreement until we give a month’s notice. We are enabled to move at any time on a month’s notice. There is a further difficulty at the moment that the landlady is a prisoner in Barcelona.

Deputy Linehan.—It was I who raised the point last year and all I want to say is that any explanation the Department could give me of their reasons for keeping on to Madrid does not satisfy me. That, however, has nothing to do with the Accounting Officer—it is not his business.

812. Deputy O Briain.—Are there a number of other Governments in the same position?—Yes. Our information is that all Governments represented diplomatically in Madrid have continued to rent the premises occupied by the Embassies or Legations.

813. Chairman.—There is a note also on page 38:—

Paragraph 95—Report of Comptroller and Auditor-General.

“The charge to this sub-head includes £75 paid to a representative abroad in respect of loss of personal equipment in the country to which he was accredited. This payment was sanctioned by the Department of Finance on condition that the amount would be refunded should the loss be made good by the Government of the country concerned, or otherwise.”

Deputy O Briain.—Has the loss been made good?—I do not think so.

Mr. McGrath.—That is in connection with the same Legation.

Paragraph 96—Report of Comptroller and Auditor-General.

Exchequer Extra Receipts.

“Of the amount of £145 2s. 3d. repaid during the year on foot of repatriation expenditure, £138 16s. 3d. relates to recoveries of expenditure incurred in connection with repatriations from Spain. The total expenditure on repatriation from that country amounted, at 31st March, 1937, to £228 17s. 0d.

“Fees collected abroad for passport, visa and consular services are utilised, to the extent required, to recoup the value of stamps affixed, any surplus being accounted for as exchequer extra receipts under the heading ‘Profit on exchange of proceeds of stamps used.’ Owing to a temporary shortage of stamps held in the United States of America in June, 1936, fees amounting to £656, approximately, were collected, but stamps were not affixed to the relative documents. This sum is included in the amount shown in the account as exchequer extra receipts realised during the year. If stamps had been available, only £45, approximately, would have been credited as profit.

“I have asked for particulars of the local check imposed to secure the credit to public funds of all fees collected in the absence of the safeguard of the stamp system, and whether it is indicated on the face of documents on which fees are chargeable that they are invalid unless duly stamped.”

814. Deputy Linehan.—Could the Accounting Officer give any information whether that sum of £138 16s. 3d. was for the repatriation of Irish nationals in Spain who were not connected with the forces on either side, or of people who chose to go out and take part in the civil war on either side?—They were all non-combatants.

815. Deputy O Briain.—What about this question of the stamps?—The temporary shortage of stamps was due to changes in the rate of exchange which necessitated the use of a greater number of stamps of lower denomination. These lower stamps became exhausted earlier than anticipated because they were used in greater numbers. The fluctuations in the rate of exchange could not have been foreseen when the previous supply of stamps was being requisitioned. When the rate of exchange was over five dollars, two £1 stamps could be used for each visa, but when the rate fell below five dollars two stamps at 7/6 and one at 2/-had to be used. The supply of certain stamps became exhausted earlier than expected with the result that the Consul-General had to issue visas without stamps.

816. Chairman.—Were these documents issued to the persons applying without stamps?—They were.

817. Have they since been stamped?— No. The documents are not invalid because they are not stamped. The stamp is merely a receipt in that case.

818. Are they not invalid as evidence until they are stamped?

Deputy Linehan.—I think the point is that suppose you send a deed to the United States for execution and the Consular stamps are not available for affixing to it, what would the position be?— If it were actually for presentation in Court, it is quite sufficient to have a certificate by the Consul on the document saying that the fee has been paid. That is the legal position.

819. Deputy O Briain.—Have steps been taken now to remedy the matter so that the same position will not arise in future?—Yes.

Mr. McGrath.—I presume that the question of whether a document is valid with or without a stamp has been settled? —It has been settled.

820. There ought to be a notice placed in the Consulate so that the public will see that these are not valid without stamps or something to that effect. Can that be done?—Normally, there is no need for it because the public regard the stamp as an official receipt. It only occurred during a period of three months, when we were taken by surprise, and it is not likely to occur again.

821. What I mean is that there ought to be a notice put up, because I see that during this period money was received in connection with the passing of a number of legal documents and the authentication of these documents. According to my note, the number of documents on which stamps were cancelled was 53 and the number on which stamps were not cancelled was 11. The position of those 11 people might be very serious afterwards? —It would be if there were no indication at all on the face of the document that the fee had been paid.

822. Chairman.—There is an indication but the stamp is not there?—If the stamp is not there, there is something to substitute it—a certificate in the form of a rubber stamp or the signature of the officer concerned that the fee has been paid.

Mr. McGrath.—I think that all we can expect is that the Accounting Officer should give us some assurance that a notification of some sort would be put up in these offices intimating to the public that a stamp must be used on these documents in future?—We will do that.

823. Chairman.—In that connection, it is inherent in the document that it will not be issued until it is stamped.

Mr. McGrath.—It is not, I think, inherent in the document. These are visas and the authentication of legal documents. They pass through our Consul in New York. It might not affect their legality in our courts here but it might affect it elsewhere, and from our point of view stamps ought to be used. I can quite understand the reason why they were not used on this occasion, but we will probably be able to get over that by increasing our cash imprest on account of stamps?—I do not think there is any danger of it occurring again.

824. Chairman.—I understand that with regard to these documents, the stamp is actually placed on them. It is not an embossed stamp?—Normally, it is a revenue stamp.

825. They are, in fact, stamped?— Yes.

826. Your case is that this stamp legalises the document?—No, I do not say that.

827. With regard to the payment of the stamp duty?—The stamp was one means of indicating that the fee had been paid. We deal only with fees.

828. Deputy Linehan.—I think we are somewhat at cross-purposes. This is not a question of stamp duty that would invalidate a document. It is a question of paying for a job where they witness the signature of some person—an indication that payment has been made?—That might be quite right but, on the other hand, there is a certain legal aspect. For instance, a document might be regarded in court as of less value as evidence if there was no indication that it had gone through the Consulate at all, and one of the indications is either a revenue stamp cancelled by the officer, or something else in lieu.

VOTE 68—LEAGUE OF NATIONS.

Mr. J. P. Walshe called.

No question.

The Committee adjourned.

*See Appendix IX.