Committee Reports > List of Committees > Dáil > 1940 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1939 - 1940

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 27adh Meitheamh, 1940.

Thursday, 27th June, 1940.

The Committee met at 11 a.m.

DEPUTY DILLON in the Chair.

Seoirse Mag Craith (Ard-Reachtaire Cunntas agus Ciste), Mr. T. S. C. Dagg, and Mr. G. P. S. Hogan (Roinn Airgeadais) called and examined.

VOTE 54—LANDS.

Mr. M. Deegan called and examined.

1160. Chairman.—In his report the Comptroller and Auditor-General has the following note concerning this vote:—

Repayable Exchequer Advance.

“51. In paragraph 59 of my last report I referred to the outstanding balance of the advance of £200,000 made in March, 1925, for the purpose of financing payments in lieu of rent by the Land Commission. I have been informed that a further repayment to the Exchequer, amounting to £14,000 has been made on account of the outstanding balance and that the possibility of winding up this account at an early date is under consideration.”

I understand that the position is that the Exchequer has received £84,000 odd, and that £41,000 odd was funded and £72,000 odd remitted?—We have the approval of the Department of Finance for writing off those old arrears, and since then we have repaid an additional £1,000.

1161. I was inquiring about the balance outstanding of the original £200,000 the disposal of which is essential before the account can be finally closed?—The actual balance of the £200,000 outstanding on March 31st, 1940, was £1,968 5s. 9d. (in addition to arrears of £441 9s. 9d. to be funded or remitted when the holdings become vested in the Land Commission). We have since repaid £1,000, in addition to the £14,000 mentioned in the paragraph.

1162. When will the account be closed? —Not for a considerable time.

1163. Deputy Brasier.—What would be the effect on the Guarantee Fund and the rates?—I do not know that this would have any effect whatever on the Guarantee Fund.

1164. Chairman.—I understand Deputy Brasier is raising a point in regard to a sum of £72,496 18s. 9d. rents remitted. Was any contribution made to the Exchequer of the original £200,000 from the Guarantee Fund?—After the passing of the Land Act of 1933 three years of these arrears, amounting to £41,000 were funded, and £72,500 odd arrears were remitted. This was part of the three years arrears completely remitted by the Act, and naturally that amount fell on the Guarantee Fund. It may be taken that by subsequent Vote of the Oireachtas the deficiency was made good. I have not the particulars with me.

1165. Deputy Hughes.—And the fund was relieved of that amount?

1166. Chairman.—Yes. I am surprised to hear you say, Mr. Deegan, that you anticipate it will be many years before this account, consisting originally of £200,000 that was made available under the 1923 Land Act, is wound up. There seems to be only a very small sum outstanding?—It is a very small sum, but it takes a considerable time to recover. For instance, there are a couple of hundred pounds to be recovered from landlords. We may get the amount gradually, but it will take a long time. We get it little by little, and year after year.

1167. Deputy Hughes.—They got £1,000 this year?—That is the £1,000 we paid to the Exchequer. That was repayment of an advance made by the Exchequer.

1168. Does that mean that you collected that amount?—I would not say that we collected it during the year. It was a cash balance collected in the past out of which we have gradually been repaying the Exchequer. We had what looked like a heavy balance against us. but with the sanction of the Department of Finance for the writing off of arrears, funded or remitted, the account is now smaller and looks more reasonable.

1169. Chairman.—You are aware of the general view of the Committee that when accounts reach very small proportions it is better that they should be wound up one way or another?—We are all agreed upon that.

1170. Are you of the opinion that no short cutting operation can be introduced to close this account, that it must remain open until these small sums have been recovered?—I think it must remain open until we have done our utmost to collect the last penny. There is not very much in it.

1171. There is a Note by the Comptroller and Auditor-General as follows:—

Subhead I—Improvement of Estates, etc.

“52. I observed that in several cases contractors for the erection of dwelling houses and out-offices defaulted in the execution of the contracts, and that it became necessary to have the work carried out either by another contractor or by direct labour. In reply to an inquiry as to the steps it is proposed to take to recover the additional cost to the State consequent on the default of the contractors in question, I was informed that the defaulting contractors have been advised that they will be required to pay such sums as may under the terms of the contracts be found due and payable by them in consequence of their default.”

I take it that that matter is being pursued with the individual contractors?—As each contract comes to an end, we have to see whether the defaulting contractor can be made pay.

1172. Deputy Hughes.—Have they sureties in all cases?—There are sureties in some cases, guarantees in other cases, and neither in some cases. We do not look for sureties in every case.

1173. There is always a considerable margin withheld for payment?—Yes.

1174. Chairman.—If the contractor fails, I take it that he is entitled to a quantum meruit for the amount done and that quantum meruit is liable for any damage that may be sustained as a result of having to employ another contractor?— We never pay a man in full for the amount of work he has done. A proportion is held until six months after the contract has been completed, with a view to seeing whether there are any defects; so we always have in hands a certain proportion of the value of the work done.

1175. Which is liable for any damage the Department may sustain?—Yes.

1176. Note 52 by the Comptroller and Auditor-General continues:—

“In connection with the scheme whereby certain lands in Co. Meath, available for the relief of congestion, were reserved for allottees from the Gaeltacht, expenditure of £9,768 0s. 1d. incurred in providing the necessary roads, drains and water supply, the erection of dwelling houses and out-offices, and for free grants for stock and implements, is charged to this subhead. The total expenditure borne on the Vote for Lands in connection with the scheme from its inception in 1934-35 to 31st March, 1939, amounts to £108,520 2s. 1d. In addition, expenditure amounting to £2,050 9s. 10d., which was subsequently recouped to the Land Commission by the Office of Public Works, was incurred in the erection of a schoolhouse.”

In connection with these schemes, do the Gaeltacht allottees receive their holdings for one half of the annuity?—Yes.

1177. So that in addition to this heavy expenditure under the improvement Vote and analogous grants, the allottees only pay one half of the cash value of the land? —We are bound by law to allot all land at half price. That is the law, and the Gaeltacht allottees are treated like everybody else.

1178. Have any further allotments been made since March, 1939?—I think that, since I was here last, we have established one additional colony at Allenstown. There are 23 migrants there. There is a total of 122 Gaeltacht migrants now in the different colonies.

1179. Is that scheme temporarily suspended during the present crisis?—There are no new Gaeltacht migrants.

1180. Deputy Brasier.—These would be in different parts of the country?—They are all quite close to each other. The stretch from Athboy to Gibbstown.

1181. Chairman.—I understand they are situated at Rathcarran, Gibbstown, Clongill, Kilbride and Allenstown?— Clongill and Gibbstown might be regarded as the same colony. Rathcarran and Kilbride are also the same. There are really only three colonies.

1182. Deputy Hughes.—How does the average cost per tenant work out on the last colony compared to the first?—Our assistance to them is less in the case of the Allenstown people—the last colony. We were able to do it more cheaply than the previous ones. The special assistance in the case of Allenstown amounts to about £212 per family. In dealing with the Gaeltacht migrants, the Committee would probably be more interested in the special assistance they get than in any other aspect. The special assistance in the case of Allenstown was £212. In the case of previous colonies it was something over £300.

1183. What does that cover?—That would be the stock, implements and so on.

1184. Chairman.—Is that repayable or is it a free grant?—It is a free grant.

1185. Deputy Hughes.—What is the total cost, including farm, dwelling house, out-offices and all?

Chairman.—Let us distinguish exactly what we wish Mr. Deegan to deal with. Is it the total grant and special aid and the expenditure under the improvement grant?

Deputy Hughes.—The total all-in cost of the scheme.

Chairman.—Do we want to find out the total all-in cost, including the part repayable by the tenant, or the cost of the special grant and moneys expended under the improvement grant not repayable?

Deputy Hughes.—I should like to know the total all-in cost and then the amount that is repayable.

Mr. Deegan.—I can give you those figures now. The cost of the land, per holding, is as follows:—Rathcarran, £431; Gibbstown, £347; Clongill, £305; Kilbride, £317; Allenstown, £463. The holdings at Allenstown are larger than the others. The other costs, exclusive of land, are as follows:—Rathcarran, £1,006 Gibbstown, £796; Clongill, £894; Kilbride, £863; Allenstown, £719.

1186. Deputy Hughes.—What portion of that is repayable?—Half the cost of the land is repayable and, in the case of one of the colonies, there is an average additional £42 recovered by advances on resale.

1187. What about the dwelling house and out-offices?—They are free grants, but in the case of the last colony, at Allenstown, £50 of the cost is repayable.

1188. Chairman.—So that, in regard to Rathcarran, where the total expenditure on land and improvements of every description, and on equipment, amounted to £1,437 per holding, the tenant is, in fact required to repay by instalments a sum of £215 10s. 0d.?—Quite right.

1188a. On these holdings there is a net loss to the State of £1,200 per holding?— You have selected the most expensive of the colonies. Rathcarran was the first. The buildings there cost more than in other cases and it really was an experimental one. We have since been able to reduce the cost considerably.

1189. Taking the Gibbstown instance, where the average cost is £1,143, the tenant there, I gather, is required to repay by instalments of £173 10s.?—Yes.

1190. And do you say there is £42 added to that?—Yes, in the case of the Gibbstown people.

1191. Their repayments amount to £215 10s., in instalments?—Yes.

1192. In regard to Clongill, did you say the cost of the land was £305?—Yes, £305.

1193. There the average cost per holding was £1,199, and the tenants were required to repay £152 10/-?—Yes.

1194. Is there no addition of £42 in that case?—Not in that case.

1195. At Kilbride the average cost per holding was £1,180?—Yes.

1196. And the tenants were required to repay £158 10s. At Allenstown the average cost per holding was £1,182 and the tenants were required to repay £231 10s.?—I am almost certain that there is a repayable advance of £50 on each Allenstown holding in respect of buildings. I will check that and make it right, but I think you may take it that that is so.

1197. In which event you may add the sum of £50 in that case?—Yes. An advance of £50 in respect of buildings is repayable in full on the 23 holdings at Allenstown.

1198. We may take it that in respect to each of these holdings one may estimate there is approximately a capital charge of £900 per holding on the Exchequer for each migrant settled?—You may, but there is one aspect of the matter to which I should like to draw your attention. If we had used this land for landless men the cost in each case, instead of being £900, would have been from £200 to £300 less. In the case of the first four colonies it would have been about £300 less. The Gaeltacht migration in the case of the first four colonies cost £300 per holding more than if the land were used for landless men. In the case of Allenstown, we brought our special costs down to the extent that we were able to put in a Gaeltacht family for £212 more than if we had given the holding to a landless man.

1199. I note that you make a distinction between a Gaeltacht migrant and a landless man?—Yes.

1200. Am I correct in assuming that if we made the comparison between a Gaeltacht migrant and a congest migrant, who would be removed from a congested area and would take his own stock and implements, the difference would be wider and the expense to the State of installing a congest as opposed to a Gaeltacht migrant would be substantially less?— This year it is £70 less. We are bringing up small migrants from the West at an extra cost to the State of £140 as compared with the extra cost of £212 of bringing a Gaeltacht migrant to Allenstown. In addition, there are quite a number of local migrants who get nothing, who move from one small holding to the better one we give them. Take the case of a migrant from a congested part of County Meath going to a place like this. We would give him no special assistance. He would move with his stock, implements and everything else.

1201. It costs more to bring a congest migrant from the West of Ireland than to bring a congest from congested areas in County Meath?—It is costing about £140 this year. The actual cost is working out at a little over £125 per family migrated.

1202. Of course there is the advantage in moving migrants from the West of Ireland that the removal facilitates the arrangement of rundale holdings and such other systems of tenure as exist there?— Every congest taken from the West of Ireland means relieving two, three, four and perhaps five families around his old holding.

1203. And it means the removal, possibly, of sources of dispute and perhaps civil disturbance which may arise from the rundale tenure?—Most certainly.

1204. Deputy Hughes.—When you say the extra cost is £300, does that mean that you are taking credit for the original holding of the congest?—Yes.

1205. Deputy O’Loghlen.—In the figures you have given, do you show credit for the farm the migrant surrenders? I do not think you do?—Do you mean the old holding in the West?

1206. As soon as you take a migrant from Mayo or Connemara and bring him to Rathcarran, he surrenders a small holding. Do you show credit for that small holding?—No. I have given you the actual cost of the Meath land. But the migrant from the West is entitled to some allowance for his own land, something in respect of the occupation value of the old holding he surrenders. He is given a reduction in the price of the land in the East and the “occupation in-interest” is added to the resale price of his old holding and collected from the new allottees there. That is an understood part of the procedure. That does not affect the cost of the land in the East to the State. If you ask me what the land in the East costs, I give you the actual price we paid. These are the actual prices.

1207. Deputy Hughes.—The migrant does not get credit for his old holding?— The migrant gets credit for what we regard as his occupation interest in his old holding. It may be £10 or £20 or more.

1208. Chairman.—Take the Rathcarran migrant. The value of the land allotted was £431. Let us assume the migrant came from a holding in the West, the Land Commission valuation of which was £100. Was the land charged to the incoming tenant at Rathcarran at £431 less £100 in respect to the holding which he had surrendered to the Land Commission?—Quite so—that is the method.

1209. In that event he would be charged as his annuity a sum sufficient to redeem £331 on his Rathcarran holding?— Exactly.

1210. Deputy O’Loghlen.—But the State collects £100 from the man in possession of the holding the migrant left, so that the loss to the State is not exactly the figure shown?—The only comment I should like to make is that I would not take a figure of £100 as representing the occupation interest. The average would be nearer to £20 in these small cases.

1211. Deputy Hughes.—Suppose a man has a holding with a surrender value of £100 and his neighbour has a holding with a value of £50, if the new holdings are approximately the same size and value, do they pay the same rent?—No. Each man gets credit for the occupation interest of the old holding and it would be quite unfair to charge each man the same.

1212. But they are getting £800 or £900 in the way of assistance from the State?—Yes, the State assists each migrant.

1213. Chairman.—I think we understand the position. The man is credited with the occupational value and he pays the appropriate rent of the holding he enters?—That is the practice.

Deputy O’Loghlen.—According to the figures given originally, the loss would appear to be really more than what it actually is.

Chairman.—There would be a difference between the figure we have and the true figure of £4 or £5.

1214. Deputy O’Loghlen.—It would be more than that. I remember a case where the value of the surrendered holding went to £200?—That would be an exceptional case. The average in the case of a Gaeltacht migrant would be nearer to £20 or £30.

1215. Chairman.—Note 52 of the Report of Comptroller and Auditor-General continues:—

“The Land Commission have also taken steps to provide holdings in certain counties in Leinster for migrants from districts where acute congestion prevails. The scheme provides that the holdings are to be situated in groups of from two to fifteen adjoining each other. The expenditure apart from the cost of General Improvements (roads, drains, etc.), borne on the Vote for Lands in connection with the scheme, from its inception in 1937-38 to 31st March, 1939, was £12,608 16s. 4d., made up as follows:—

I am informed that until the scheme is completed it is not possible to apportion the expenditure on General Improvements incurred in respect of the migrants’ holdings on the Estates.”

Chairman.—I think our general discussion has covered all these points, Mr. Deegan?—Yes. These are the people we are bringing up at an extra cost of £140 this year.

1216. Deputy Hughes.—Do the figures given to us include development costs, such as roads—all-in costs?—Yes, all-in costs.

1217. Chairman.—Deputy Hughes will note that at the conclusion of the portion of the Comptroller and Auditor-General’s Report that I have read it is indicated that until the scheme is completed it is not possible to apportion the expenditure on general improvements incurred in respect of the migrants’ holdings on the estates. I take it, Mr. Deegan, that some of the people put on these estates are migrants and others are not migrants?—That some are migrants and other are not?

1218. So I infer from the last portion of that paragraph?—These group migrants—we refer to them in that way, because we bring them in small groups of two, three, four, five or six—are given portions of estates which we have left over after local needs have been satisfied. We build houses there and lay out the small holdings and in due course we bring up Western migrants.

1219. It is true, is it not, that one must distinguish, when reviewing these cases, the difference between them and an earlier system whereunder we removed large landholders from Gaeltacht areas to the Counties of Dublin. Meath and Kildare, and then divided the large holdings amongst the congests in situ?—This is a very different thing. The Land Commission are still prepared to seal with the large migrant if they can get him in the West. They would far rather deal with him than with the small man, because his land is more valuable locally.

1220. The Maam Valley scheme was typical, I suppose, of the large migrant type?—Yes, a very large migrant came from that area.

1221. The Comptroller and Auditor-General has the following note in paragraph 53—Rent and Interest Account:—

“In a number of cases Receivable Orders issued for the recovery of the proportionate part of the rates payable by allottees and others in respect of land occupied were outstanding at the date of my audit. I have addressed an inquiry to the Accounting Officer on this matter.”

Have you received an answer to your inquiries, Mr. McGrath?

Mr. McGrath.—Yes, I have a reply from the Accounting Officer dated 16th March, 1940, in which he states that every effort is being made to collect these and similar cases. The Accounting Officer informs the Audit Office that it would appear that payment cannot be enforced in the case of failure to pay. I think I quite understand the Accounting Officer’s point on that matter. These amounts are made up of rates that accrue between the vesting date and the next 31st March. The Land Commission pay the rates and then apply to the new occupiers——

Mr. Deegan.—For what we regard as his share.

Mr. McGrath.—The Land Commission have not any legal way of recovering their portion of the rates?

Mr. Deegan.—No, but as a matter of fact I should say the allottees do pay in from 80 to 90 per cent. of the cases.

1222. Chairman.—I take it that, in fact, the sums involved are very small?— They are all small.

1223. How long do you allow the claim for rates to remain outstanding before you dispose of it by writing it off?—We have no particular period. We put no limit to it. If we see a chance of collecting it we hold on.

1224. May I suggest that, for the purpose of accounting, and in view of the fact that these sums are all very small sums, and because there is, in fact, no statutory obligation on you to collect them, some date should be fixed: that, if they have not been collected say within three or four years, they should be written off? Otherwise, we would have these surviving like the old fishery loans, some of which have been outstanding since before the world war?—I do not think that we would care to wait longer than five years.

1225. I appreciate that the matter has not yet been viewed from that aspect?— When I say that we hold on as long as we see any prospect of collecting, I do not mean to say that we would hold on for longer than five years.

1226. I think that some date should be fixed for the reasons I have indicated?—I will have that considered.

1227. The Comptroller and Auditor-General has the following note in paragraph 54—Special Suspense Account:—

“Expenditure of £1,283 was sanctioned for the repair of certain embankments of which £368 was spent in 1937-38, and £440 in the year under audit. Pending the determination of the question as to how much of this sum should be borne on the Vote for Posts and Telegraphs, the entire expenditure has been, by direction of the Department of Finance, charged to a special suspense account.”

Has any decision yet been taken which would enable you to close that suspense account?—We have decided that, when the work is completed, we will call on the Department of Posts and Telegraphs to bear all the expense. The work is not yet fully completed. We spent in the first month of this financial year £57.

1228. In view of that it may be as well to leave the matter over until the work is completed, and the discussions between the various departments concluded?—We cannot send in the bill until we finish the job.

1229. Chairman.—I take it that is agreeable to you, Mr. McGrath?

Mr. McGrath.—Yes.

1230. Chairman.—We will now turn to the subheads of the Vote. With regard to subhead M—Loss on Unoccupied Holdings—I see that a number of losses were written off with the consent of the Department of Finance. Did these losses arise as a result of the Land Commission being unable to divide these holdings as quickly as they would have wished?—I think that the charges to that subhead are all in respect of rates, caretakers’ wages and so on, paid by the Land Commission while we were in possession of these defaulters’ holdings.

1231. And were there any rents coming in?—Yes, in a number of cases.

1232. To meet these charges?—Wherever we could make any revenue out of these holdings, we made it by letting the land for grazing and so on. These losses represent the difference between whatever income we were able to make out of the holdings and the amount of rates, caretakers’ wages and so on that we had to meet.

1233. I take it, therefore, that most of these holdings are, or have been, divided since these losses were made?—When you speak of dividing, we find that in very few of these cases could we do that; we could, perhaps, in one or two in the year. We usually succeed in selling defaulters’ holdings as they stand.

1234. These are holdings that have been resumed?—They are unoccupied holdings of which we have had to take possession. We do not succeed in dividing some of them, but in practice it is very seldom that we can divide them.

1235. What do you do with them—We try to auction them and, if that fails, we sell them by private treaty. I should say that we are doing better in that way this year than we did in past years.

1236. If, after disposing of holdings of this kind either by auction or by private treaty, the Land Commission realises a sum substantially in excess of the sum due, and in respect of which the holding was resumed, does the tenant get the benefit of the difference?—I do not think the Land Commission has been lucky enough to meet with many such cases, certainly not in my experience. It is the other way round generally—that we have to sell a place for less than what it owes us. That happens in practically every case. In very rare cases indeed do we succeed in getting what is due to us.

1237. On page 175 there appears a list of the losses resulting on the sale of several of these holdings?—These are the arrears of annuity—at the end of that page. Several of these relate to cases which are also covered by subhead M. You have there the arrears of annuities which we are trying to collect, and under subhead M you have the poor rates, caretakers’ wages, and so on.

Chairman.—I think we may now turn to the Forestry Vote.

VOTE 55—FORESTRY.

Mr. M. Deegan called and further examined.

1238. Chairman.—The Comptroller and Auditor-General has the following note in paragraph 55 to this Vote:—

Excess of Expenditure over Grant.

“The gross expenditure on this account has exceeded the Estimate by £10,638 5s. 0d.; in addition there is a deficiency of appropriations in aid realised of £427 19s. 2d. The total deficit, therefore, amounts to £11,066 4s. 2d.

The excess is explained by the Accounting Officer as due to increased cost of materials and increased cost of labour.”

Do you care to elaborate that explanation of the Excess Vote which will be necessary here, Mr. Deegan?—I should say that wages were increased as from May, 1938. Another reason is that it was a year in which we had 53 weeks instead of 52. In addition, we had very good weather in the closing part of the year. It was most unusual for February and March, with the result that the staff were able to get on with an amount of planting and other work that ordinarily would not have been undertaken until April or May. Our expenditure went up from £11,000 in January to £20,000 in March. I think that supplies the real reason for the excess you have, £9,000, of the £11,000 there. To be quite frank, I should say that if we had noticed the position in time we would have come forward with a Supplementary Estimate, but we were just a few days late.

1239. So that, in fact, the excess is mainly explained by the unexpectedly good weather, and the 11 per cent. increase in wages by the Minister’s order?—Yes.

1240. With the consent of my colleagues, we shall make an interim report* accordingly?—Thank you.

We can now turn to the subheads of the Vote.

1241. Deputy Brasier.—What does subhead C 3—timber conversion—mean?— Work in the saw mills.

1242. Chairman.—Does it also comprise the sale of timber?—You get particulars of the sales of timber under subhead H— Appropriations-in-Aid.

1243. Under subhead D 2—Arbor Day— are you doing as much work as used to be done?—Not quite. I think the scheme is petering out. The schools have probably used up all the land that they could readily lay hands on for planting. We supply them with the trees, but they have to find the land on which to plant them. The Committee might like to have some particulars of this. In 1935 we had 1,524 schools taking advantage of it; in 1936, 900; in 1937, 690; in 1938, 599; and in 1939, 572.

1244. Were most of the trees supplied under this scheme deciduous trees or conifers?—There was a fair proportion of conifers. The schools were able to get from half a dozen up to 100 trees according to their applications, and the nature and area of the ground that they had to plant. We were able to give them a large number, mostly conifers, at an annual cost of about 15/-, to which we had to add the cost of freight.

1245. I suggest that if the scheme continues, even in an attenuated form, emphasis should be laid on deciduous trees in view of the fact that the Department’s own planting is mostly of conifers?—We have dropped the scheme for this year, but I should say that we did leave a certain amount of discretion to the teachers when asking for trees. Wherever the teacher knew the nature of the land that it was proposed to plant, he would be able to give some idea of the trees that could be most usefully planted.

1246. In regard to the Appropriations-in-Aid, I understand that the sale of timber by your head forester is principally done by auction of considerable parcels of timber in each lot?—Large lots are to be sold by public auction.

1247. Is there any provision whereby a local saw-miller who is not in a position to buy large lots of timber can buy a tree, or a couple of trees, where such are for disposal?

Mr. Deegan.—Oh, yes. Small sales under, say, about £20 are dealt with at the discretion of the local forester in charge of the wood. If the sale is for something over £20 we look for public competition.

1248. The local forester is authorised to sell a tree to a suitable saw miller in the district at his own valuation?—Yes, in case of a small lot of trees.

1249. Why I ask the question is, I have a case in mind of local saw millers in Monaghan who are asking foresters from time to time to sell them a tree or two and they were told that the difficulty was that the law required that these trees should be sold by auction and there was the danger that exception might be taken by the Department to the selling of a tree or two?—Well, everything depends on the circumstances. You may have a forest with a large proportion of trees ready for sale. We have to be careful not to allow the forester to sell two or three trees constantly, say, every second week, to local men, when in reality it may be a case where the whole wood should be put up for sale. All the trees may be equally mature and ready for selling and it is our duty to sell the lot by public tender. But in general foresters are entitled to deal with small sales. We do not question small sales up to £20.

1250. Where a local man wants a good tree or two there should be a way of dealing with the matter so as to encourage these local saw millers?—It is the policy of the Department in every possible way to encourage the local saw millers. Anything else would be wrong.

VOTE 56—GAELTACHT SERVICES.

Mr. M. Deegan further examined.

1251. Chairman.—There is a note here by the Comptroller and Auditor-General, which reads as follows:—

Subhead D 1—Salaries, Wages and Allowances (Rural Industries).

“In the course of my audit I observed that at one of the Industrial Centres, the opening of which had been sanctioned by the Department of Finance for so long as sufficient orders were available, the Manageress reported that there was very little work done during the summer months, and that orders for the centre in question were brought to another centre for execution. The centre had been closed during the summer of 1937, and I have asked to be informed of the circumstances in which it was decided to keep it open during the summer of 1938.”

Did you, Mr. McGrath, receive any reply to that inquiry?

Mr. McGrath.—Yes, I received a reply dated the 12th February, 1940. The Accounting Officer seemed to think that that particular manageress was employed during the summer months, that it was a necessity to have her there.

Mr. Deegan.—Yes, we were satisfied of that.

Mr. McGrath.—The reason I put that note in was that the file disclosed doubts as to whether the manageress was in attendance during the summer months. It was, however, disclosed that it was almost impossible to carry out operations, but the Accounting Officer satisfied me that there was a necessity for this particular manageress to attend at that place. The extra expense is only 10/- a visit, and visits were at the rate of two per week. When I saw there was any doubt as to her attendance there I drew attention to the matter. This paragraph was written in January last, and the reply came some days after it had been printed.

Mr. Deegan.—It would have been a serious matter to close that centre in the summer of 1938, when we had a number of girls in training. We did close it in the previous summer. But if we had closed it in 1938 the advantages of their training would have been lost to the girls. The Department kept the place open, and the manageress visited it as often as necessary, and superintended the work of the girls, and saw that their training was continued.

1252. Chairman.—It was perhaps that the attendance sheets submitted by the manageress at this centre were not as regularly submitted as is customary?— That is probably correct, because the attendance sheets were not needed for the purpose of national health and insurance cards. They were only needed as proof that the girls had attended the centre, and there was not the same need for the Department to insist on complete and entire records as in the other cases.

1253. I think you will agree that in cases of that kind where the attendance of the manageress at the centre is the criterion whereby remuneration is determined, it was necessary to have these attendance sheets?—We have no doubt about the attendance of the manageress there. She did attend there beyond any manner of doubt.

1254. Chairman.—Under subhead D 8— Toy Industry—there is this note, which reads:—

“57. I observed that certain accounts which would appear to have come in course of payment during the year under review were not paid until the following year, and I am in communication with the Accounting Officer on the matter.”

Mr. McGrath.—The Accounting Officer is under the impression that there was a delay caused by the unusual circumstances in connection with these things and I drew attention to the fact that out of a total Vote of £93,000 there was only, I think, about £93 to surrender. That, of course, made the Audit Office rather sharp in looking at the payments during the close of the year 1938-39. We found that during the month of March very few payments were made and we had to take a note to watch out for the first payments made in the beginning of the subsequent year. We found payments made in the beginning of the subsequent year that looked very much like payments that should have been made in the previous year.

1255. Chairman.—Have you anything, Mr. Deegan, to tell us in respect of these payments?—My information goes to show that there was delay, and that the delay was attributable to the fact that our toy factory at Elly Bay was burned out in November, 1938, and the records of the factory were destroyed. It took a considerable time to reconstruct things. I am sure that delays did occur in making payments as a result of the burning. I do not know that there were any delays connected with work other than in the case of the toy factory.

Mr. McGrath.—I am only questioning delays in the case of the toy factory?— Well, that is due to the fact of the burning.

1256. Chairman.—I may tell you, Mr. Deegan, that the Committee is in rather a touchy frame of mind on matters like this, because we had an analogous case in another Department—not identical.

Mr. Deegan.—Were they burned out, Sir?

1257. Chairman.—No, they were not. I do not know whether your attention has been directed to a certain account from ————————. That was certified in February, 1939, and it was dealt with only after the closing of the financial year. The accounts are not very large but it seems difficult to understand why if an account is certified on the 2nd February it was not, in fact, paid until the 3rd May following?

Mr. Moran.—That certificate of the 2nd February, only meant that they were received into the store at Elly Bay. It was not a certificate that the accounts were in order for payment.

1258. Chairman.—But they were endorsed and ordered for payment by Miss ————.

Mr. Moran.—They were certified as having been received in Elly Bay.

1259. Chairman.—They were endorsed and ordered for payment on the 2nd February, that was not merely that they were received.

Mr. Deegan.—They were received by the man at Elly Bay but not certified at the headquarters office.

1260. Chairman.—I suggest that is begging the very question which we are investigating as to why the head office withheld payment from February until the following May?

Mr. Moran.—It had not reached headquarters until a considerable time afterwards.

1261. Chairman.—I think Miss ———— should be asked why she held the documents from the 2nd February until the 2nd May.

Mr. Moran.—That was because the officer in charge was trying to reconstruct his records. The whole staff was employed trying to reconstruct the records as to the materials that went to Elly Bay. There was a definite delay.

1262. Chairman.—The factory was burned out in November, 1938?—Yes.

1263. Chairman.—These accounts were for January, 1939, and they were presumably received at the centre at Elly Bay on the 2nd of the next month or perhaps they were received earlier but checked then. But there is this lapse of three months between the date of that certification and the date when the payment was made.

Mr. Moran.—All the available officers were trying to reconstruct the records. Before anything could be done these accounts were all left on one side. It was not possible to have the records reconstructed sooner.

1264. Chairman.—You were satisfied that there was no withholding here with a view to preventing the necessity for a Supplementary Vote?

Mr. Deegan.—I am satisfied that the staff did good work and that there was no withholding. I am sure if this man had pressed for his account and looked for his money he would have got it.

1265. Chairman.—In my modest merchantile experience I find that if I were dealing with a firm that was anxious to continue trading with me and to have my account, that firm would not press for their account.

Mr. Moran.—Well, this firm would not press it either because they were looking for an order for machinery.

Chairman.—We do not press good customers lest they pay up their account and deal with us no more.

1266. Now we come to Subhead E 3— Kelp, etc., in which occurs note 58 as follows:—

“58. As an experiment the Department decided to bale with wire a consignment of seaweed for export, but this method of baling proved unsatisfactory and approximately one-third of the seaweed had to be unbaled and despatched in bags. The cost of the bags and labour in bagging amounted to £47 9s. 6d. and, in addition, unused wire, the cost of which was £24 10s. 0d., had so deteriorated that its scrap value, when returned to store, was found to be only £1 5s. 3d.”

In regard to the experiment, that is bound to happen from time to time; can you tell us why the wire which was not used was allowed to deteriorate from being worth £24 10s. 0d. to be only worth £1 5s. 3d.?

Mr. Deegan.—It was exposed to the sea air. It had to be kept in store beside the shore and the effect of the sea air on the wire, even before it reached the seaweed, rusted it.

1267. Chairman.—That is understandable. It was probably galvanised wire?— Yes. We are unable, I am told, to get any wire which will stand up to the action of sea air and water, although we are assured that this is the best method of packing our seaweed.

1268. Deputy Brasier.—Does this seaweed mean carrageen moss?—No, this is kelp.

1269. What is the object of baling it?

Mr. Moran.—It is for export to a firm which requires it for certain chemical extractions.

1270. They do that extraction themselves?—Yes. This contract specified that it should be sent baled.

1271. Deputy Hughes.—How is the baling done—is it ordinary mechanical baling?—Ordinary baling as used for hay and straw.

1272. Wire was your only problem?—Yes.

1273. It looked a feasible proposition? —Yes, it looked a feasible proposition. In fact, we were disappointed with the way it turned out.

1274. I take it it is dried?—Yes, airdried.

1275. Chairman.—Paragraph 59, Comptroller and Auditor-General’s report:—

Subhead H 3—Grants under the Housing (Gaeltacht) Acts, 1929 and 1934.

“59. In previous reports reference was made to the grants and loans which may be made under the Housing (Gaeltacht) Acts, 1929 and 1934, and to the fact that the aggregate amount of such grants and loans is not to exceed the sum of £650,000.

I am informed that at the 31st March, 1939, the position in regard to such grants and loans was as follows:—

Chairman.—I take it that is the usual formal paragraph, Mr. McGrath?

Mr. McGrath.—Yes.

Mr. Deegan.—We have had a new Housing Act since then which gave us an additional £100,000. The limit is now £750,000.

1276. Chairman.—Paragraph 60, Comptroller and Auditor-General’s Report:—

Subhead I—Appropriations in Aid.

“60. An allowance of £70 was made to the firm purchasing the 1937-38 kelp crop, on account of certain extra charges incurred through the failure of the Department’s grinding contractor to maintain output at the rate specified in the contract. An allowance of £140 6s. 3d. was also given to this firm in connection with the purchase of the 1938-39 crop on the grounds that the kelp supplied was not of the stipulated iodine content, and a rebate of 12s. 6d. per ton was allowed on 45 tons on account of the wet condition of the kelp when delivered. These allowances were made with the sanction of the Department of Finance.

In my report last year I mentioned that a number of accounts due in respect of Gaeltarra Eireann knitwear goods and tweeds, by persons resident abroad, had been placed in the hands of a firm which specialises in the collection of foreign debts. Some of these accounts are still outstanding.”

Chairman.—Was there any reason why the kelp should be in a wet condition?

Mr. Moran.—In this case it was a small consignment which was lying at Fanad, County Donegal. Opportunity was taken to send it by a small ship going from Milford, and the probability is that it got wet crossing the sea because it was all right in the store. It was not insured and we had no remedy.

1277. Chairman.—We are aware of the conditions surrounding the disposal of the kelp crop and that accidents will occur. Does that satisfy you, Mr. McGrath?

Mr. McGrath: Yes.

1278. Chairman.—As to the second paragraph, can you give us any information about these bad debts?

Mr. Deegan.—There were four outstanding. Last year I told you that of the six accounts outstanding two had been cleared. Of the four remaining, two have since been cleared and two are still outstanding. In one of the cleared cases only partial payment was received. The balance was irrecoverable and has been written off with the sanction of the Department of Finance.

1279. That is the ————— case?—Yes. In the other case, the sanction of the Department of Finance has been received for writing off the balance of £33, as we ascertained that the gentleman has sought the protection of the American courts with large liabilities and no assets.

1280. I seem to remember that we directed your attention before to an agent who was operating in America and who was drawing substantial advance payments. We wondered if his future commissions would catch up with the advances he had already got?—I should say he has left our service.

1281. Were we able to recover from his commission the advances made to him?—No, his work did not catch up with what we paid him.

1282. How much did he get away with? —About £300, Mr. Moran tells me.

1283. Do you remember what this ——————— account of £113 referred to?

Mr. Moran.—Five or six years ago an agent was appointed in America. This is a factoring arrangement under which the goods are shipped to the consignee. This company was supposed to bear the financial responsibility and pay for it and they failed to meet their liabilities. The matter is in the hands of an American solicitor to see if he can recover.

Mr. Deegan.—It is one of the two outstanding cases. This is the ———— company and the other is ————— which is about £5 10s. Legal proceedings have been authorised in both cases.

1284. Chairman.—Why did we elect to employ a debt-collecting agent in New York rather than the services of the Consul-General?

Mr. Deegan.—We were advised by the Consul-General all along.

1285. He recommended the employment of the debt-collecting agency?—I hardly think he recommended any particular one, but he recommended that we should use that method of getting after our debtors.

1286. I asked the question because personally I find that the Consul-General has been very helpful in dealing with estates and such other matters for citizens of the State and one wonders if the resources of his office would not extend to collecting a debt due to the State itself?—He has been most helpful to us all along.

Mr. Moran.—That is all right where people are willing to pay, but, where people offer resistance to paying, it is a matter for legal people. This firm was employed because they had legal representatives in New York and could do it at a nominal figure.

1287. Chairman.—Is the debt-collecting agency an American concern?—No, it is a London concern.

1288. Chairman.—Paragraph 61, Comptroller and Auditor-General’s report:—

Industrial Loans.

“61. I have been furnished with a schedule concerning the Industrial Loans from which it appears that advances made during the year ended 31st March, 1939, amounted to £12, being the value of machines issued to workers on loan repayment terms. Exclusive of the amounts due in respect of looms, machines, etc., issued to workers on hire purchase agreements, the arrears due at 31st March, 1939, amounted to £9,709 18s. 0d., as compared with £9,616 14s. 9d. on 31st March, 1938.

In my report last year I referred to the sum of £9,383 10s. 6d. due by a company which ceased to exist in 1925 and to the fact that, owing to certain difficulties which had arisen, the negotiations for the realisation of such security for the debt as the State held had not been completed. I understand that the position in this matter remains unchanged.”

Chairman.—It seems we are going backwards?

Mr. Deegan.—The whole amount of £9,700 is practically all due to the case of the Galway Granite Company. A sum of £9,600 odd is due by the Granite Company, and when we wind-up that our position will look very much better.

1289. That is an old legacy from a previous Administration?—Yes. It is referred to in the second paragraph. The position is still as it was last year.

1290. Chairman.—You expect it will be possible to wind-up that?—We do, but in the meantime our books will have interest added every year to that £9,300. It is now £9,600.

1291. As to subhead D 3 in the account proper—Domestic Instruction, what does that refer to?—We have a domestic instructress who came to us from the old Congested Districts Board in Connemara and who does very good work there.

1292. Is that service being extended or is it being allowed to die?—It is certainly not being extended; we have just the one.

1293. You do not contemplate extending it?—No.

1294. As to subhead D 8—Toy Industry, was the damage done by the toy factory fire fully covered by insurance?—No, the Government do not insure. The Government carry their own insurance.

1295. And so suffer the entire loss?— Yes, the entire loss, something over £3,000.

1296. Deputy Brasier.—As to sub-head E 4—Carrageen is the gathering of carrageen increasing?—No, carrageen is more or less stationary.

1297. It is really going back as an industry?—Our figures are much the same year after year. This is carrageen for use as food. We buy it and pack it ourselves and sell it to the retailers through an agent.

1298. Is there any possibility of developing it further?—I think the Department has tried everything that is possible to be tried and has acted on every suggestion put up to it for years past.

1299. Chairman.—I understand that large quantities of sphagnum moss are required in connection with Red Cross supplies. Is that product largely recoverable in the Gaeltacht areas?

Mr. Moran.—No, it is mostly in low-lying bogs in the Midlands. Some samples have been collected and we have been in touch with certain English firms about it but nothing has developed yet.

1300. Chairman.—With regard to sub-head F 2—Advertising and Publicity, we have often made severe criticisms of many Gaeltacht products and I think it is right to mention now that some of the tweeds they are producing are beyond praise. They are splendid tweeds. Some of the stuff they did produce was awful?

Mr. Deegan.—There has been a wonderful improvement. Everything we hear goes to show that, and I think the results in the business go to show that too. We have just had a tweed order for £3,000 from a New York firm, and we would not have got that if the stuff was not first-class.

Chairman.—Despite my patriotic inclinations, I would not be wearing it unless it was first-class. Astonishingly enough, they are now competing, and competing very well, with factory products in Great Britain. Some of their products are equal to the best products of some of the best factories in England, and they are beating them on the Continent.

Mr. Deegan.—It is very good to hear that. It confirms everything we have been told.

1301. Largely as a result, I imagine, of the employment of good designers because their designs are at last becoming really first-class. With regard to subhead H 4, is that scheme in respect of piggeries and poultry houses going ahead?—It is, in the Fíor-Ghaeltacht, which would come under subhead H 3. This H 4 subhead is for the purpose of giving statutory sanction to commitments in the Breac-Ghaeltacht for poultry houses and piggeries only. It is a small matter and it is coming to an end.

1302. Is it coming to an end?—Subhead H 4 is. Our Gaeltacht Act work in regard to houses, piggeries and poultry houses is dealt with under subhead H 3.

1303. I must say that I think the more money we could manage to spend on the erection of live-stock accommodation, even in the Breac-Ghaeltacht and the congested areas, the better, because it is the one thing which is most urgently needed. I have no doubt that you agree with me in that from your experience of the congested areas?—Yes; they must have out-offices.

The witness withdrew.

Chairman.—In due course, each member of the Committee will receive a copy of my draft report, with memoranda attached, and each member will be entitled to submit any amendment to the report which he thinks proper, on receipt of which a meeting of the Committee will be called to consider and adopt the report in its original or amended form.

The Committee adjourned at 12.20 p.m.

* Interim Report, page