Committee Reports::Report - Appropriation Accounts 1941 - 1942::04 November, 1943::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Déardaoin, 4adh Mí na Samhna, 1943.

Thursday, 4th November, 1943.

The Committee sat at 11 a.m.

Members Present:






L. Cosgrave.

B. Brady.

M. E. Dockrell.




M. O’Sullivan.

DEPUTY DILLON (in the Chair).

Mr. J. Maher (Oifig an Ard-Reachtaire Cunntas agus Ciste), Mr. C. S. Almond, Mr. G. P. S. Hogan and Mr. L. M. Fitzgerald (An Roinn Airgeadais), called and examined.


Mr. W. Smyth called.

No questions.


Mr. W. D. Carey called and examined.

Revenue Account.

“5. A test examination of the Revenue Account has been carried out with satisfactory results.”

738. Chairman.—I take it that you have no comment to make on that, Mr. Maher?

Mr. Maher.—No comment.

Extra Statutory Repayments of Customs and Excise Duties.

“6. Extra statutory repayments of Customs duties and of Excise duties amounting to £2,004 7s. 5d. and £588 14s 6d., respectively, were made during the year.”

739. Chairman.—Have you anything to add to that, Mr. Maher?

Mr. Maher.—Yes, these cases fall into two main classes. In the Customs class are those cases in which a licence for free import was issued subsequent to the payment of duty or in which a licence would have been issued had application been made. In the second class are repayments of Excise duty on non-defective unused tyres returned to the manufacturer and some small miscellaneous payments.

740. Chairman.—In regard to these cases where Excise duty is refunded after the goods have been imported is there any means, Mr. Carey, of notifying the public that anybody who applies for similar treatment will get it?

Mr. Carey.—I take it that you are talking of Customs duty, Mr. Chairman?

741. Chairman.—Yes.

Mr. Carey.—I think that it rests with the Minister for Industry and Commerce rather than with us, because the issue of a licence is dependent on the recommendation of the Minister for Industry and Commerce.

742. Chairman.—I see, but what I wanted to elicit was this: Suppose you made to A or B a refund of Customs duty, and found that six other importers had paid the same amount on the same commodity, would you notify them to that effect, and tell them that they could also get a refund?

Mr. Carey.—I could not tell you offhand what is the practice there.

743. Chairman.—I should like to know whether the attitude of the Revenue Commissioners is merely one of complete detachment in the matter of collecting duty where it falls due.

Mr. Carey.—Unless there is a recommendation from the Minister for Industry and Commerce for the issue of a licence, we do not issue one.

744. Chairman.—Of course, I hope, Mr. Carey, that you discharge me from the fault of asking questions in regard to policy?

Mr. Carey.—I understand that.

745. Chairman.—Do the Revenue Commissioners simply act in a spirit of complete detachment, remitting duty where the licence is produced and collecting it from the other citizen who does not produce a licence?

Mr. Carey.—I think that the practice has been that the Minister for Industry and Commerce would give notice, but that is a matter for him, and not for us. We would not take steps ourselves to communicate directly with importers and tell them that they can get licences if they make application to the Department of Industry and Commerce, because that is a matter between the Department and the importer.

746. Chairman.—And, therefore, if your attention was directed to the fact that the Department of Industry and Commerce had notified the public that over a given period applications for licences to import, let us say, veneered wood, would be granted to all applicants, and if you found that 99 per cent. had procured a licence, but that one innocent soul had imported the veneered wood and could produce no licence, would you calmly proceed to assess him for the duty?

Mr. Carey.—If it came to my own notice, I would communicate with the Department of Industry and Commerce and suggest to them that they should communicate with the person concerned.

747. Chairman.—That is my point. I wonder is that being done?

Mr. Carey.—I shall inquire as to that.

748. Chairman.—That is what I expect, but I wondered if it were being done.

Mr. Carey.—I shall look into it and let you have a note.*


“7. I have been furnished with a schedule of the several cases involving a loss of £50 and upwards in which claims for duty or interest receivable under the Revenue Acts were remitted during the year ended 31st March, 1942, without statutory authority, from motives of compassion or equity arising out of particular circumstances in individual cases. The reasons given for remission appear to be satisfactory. The total amount shown in the schedule is £1,137 17s. 6d. as compared with £7,280 18s. 11d. in the preceding year. Of the total, £356 12s. 4d. has been remitted in respect of income-tax. £274 1s. 1d. related to two cases in which assessments were raised but subsequent evidence revealed no net liability to tax, and £82 11s. 3d. related to a case where the assessed party was destitute and recovery was impossible. The remissions also include four cases involving sums in respect of estate and succession duties and interest on such duties amounting to £781 5s. 2d.

The above figures do not include duty passed as irrecoverable for various reasons.”

749. Chairman.—Have you any observation to make on that, Mr. Maher?

Mr. Maher.—No. That paragraph is furnished annually for information.

750. Deputy M. E. Dockrell.—What amount would be involved in that phrase “passed as irrecoverable for various reasons”?

Mr. Carey.—I could not tell you offhand. The position is that the Revenue Commissioners do not try, so to speak, to get blood out of a stone. For instance, a man may owe us taxes for two or three years, and skip over to England, and we cannot get at him. Passing an amount as irrecoverable does not mean that we remit it; so that, if the man came back we could take proceedings against him.

751. Deputy M. E. Dockrell.—His liability is still there?

Mr. Carey.—Yes, his liability is still there, and we could proceed against him.

752. Deputy L. Cosgrave.—Over any period of years?

Mr. Carey.—Yes, any period of years.

753. Deputy M. E. Dockrell.—There is no statute bar in such a case?

Mr. Carey.—No.

754. Chairman.—In short, Mr. Carey, might it be inferred that that paragraph is meant to convey that the amount concerned is passed as irrecoverable for the present?

Mr. Carey.—Yes, you could put it that way. So long as there is any prospect of recovery of the amount, we do all that we can to recover it, but if it is obvious that there is no prospect of recovering it, we should not worry further.

755. Deputy M. E. Dockrell.—Supposing that, afterwards, you are able to collect the amount that had been passed as irrecoverable, is it shown that you have succeeded in collecting it?

Mr. Carey.—It would be notified in the ordinary way.

756. Chairman.—I do not think, however, Mr. Carey, that the sum involved would be very large?

Mr. Carey.—No, it is not very large.

757. Chairman.—Well, now, we come to the Vote itself. With regard to subhead K.—Motor Cars for Frontier Patrols—are you satisfied, Mr. Carey, with the conditions under which frontier patrols have to carry on?

Mr. Carey.—I think we are doing the best that it is possible to do in the circumstances. Of course, in regard to the question of both imports and exports across the Border, if we wanted to deal completely effectively with smuggling either way, we should need a small army there, and the outlay that would be necessary to deal with such smuggling would be on a very large scale indeed. I think that, having regard to all the circumstances, the measures we are taking are the best that can be taken.

758. Chairman.—I take it that the difficulties are very big?

Mr. Carey.—The difficulties are colossal.

759. Deputy Briscoe.—These patrols have to function night and day?

Mr. Carey.—Yes, night and day.

760. Deputy Briscoe.—With regard to Subhead P.—Compensation—I notice that the amount of £350 is put down here as being less than the amount granted, which also was £350. In other words, there was no expenditure. I am not clear as to what is meant by providing compensation in advance, so to speak. Is it for injuries or damage that you might do to somebody or their property?

Mr. Carey.—Well, suppose that an official car was involved in an accident, and that legal action was taken, we should have to meet whatever damages might be assessed against us.

761. Deputy Briscoe.—Would it not be better, then, to have a token vote of £10? After all, it seems peculiar to have an amount down there of £350 which was not used in that year at all.

762. Chairman.—Yes. Can you tell us, Mr. Carey, why the system of providing a token vote for £5 or £10 was not availed of there?

Mr. Carey.—I am afraid that I could not tell you about that in detail without going into the whole history of the matter. The practice has been to base the provision on the expenditure which would be incurred if all the cars were insured annually against third-party risk. We do not insure the cars so we have to carry our own insurance and the estimate is based on the expenditure which would be incurred if we were insuring all the cars against third-party risk.

Chairman.—That seems to be a reasonable basis.

763. Deputy O’Sullivan.—What does subhead R.—Appropriations in Aid— arise from?

Chairman.—You will find a full note of them on page 14. Mr. Carey will give us information in regard to any particular subhead if any question occurs to you.

764. Deputy Dockrell.—As regards item No. 7 of the notes under subhead R. there seems to be a big discrepancy between the estimated proceeds of customs sales, £1,000 and the amount actually realised, £2,679 17s. 8d?

Chairman.—Perhaps you would look at the explanatory note further down?

765. Deputy Dockrell.—Is there any more accurate way of assessing the amount?

766. Chairman.—I suppose Mr. Carey cannot be reasonably expected to anticipate all the activities of enterprising smugglers on the Border?—Quite. One cannot anticipate what the seizures are likely to be.

767. Deputy Dockrell.—Do they not average out over a number of years so as to enable you to arrive at a closer figure than two and a half times the estimate? —You will bear in mind that in this particular year there was a considerable drop in imports. Supplies were not so readily available as they had been—that is, in the year 1941-42—and I suppose the quantity of material available was not as great as in previous years.

768. Deputy Dockrell.—That, I think, would tend to bring about a reduction in the amount realised from sales instead of an increase.

769. Chairman.—It might serve to encourage an enterprising smuggler to attempt to bring in larger quantities of smuggled goods?—A shortage of supplies makes smuggling more profitable.

770. Deputy Benson.—Might these goods not also include seizures of exports? —A good deal of the increase arises in connection with the control of exports.

771. Deputy O’Sullivan.—As regards item 11 of the notes—charge for administrative expenses in connection with widows’ and orphans’ pensions—does that cover the actual investigation of the claims or purely head office administration?—It would include all expenses in connection with the investigation of widows’ and orphans’ pensions, but it is something which we recover from the Department of Local Government and Public Health. It is a book-keeping item as far as the Government is concerned. We do work which is technically work for the Department of Local Government and Public Health and they repay us.

772. Deputy O’Sullivan.—Does the question of policy, the actual form in which investigations take place, arise on this matter?

Chairman.—If you want to ask Mr. Carey whether he was satisfied that his officers were doing their duty I think that would arise.

Mr. Briscoe.—Or overdoing their duty.

773. Deputy O’Sullivan.—The question is what general policy is pursued because it is within the knowledge of everybody that the investigation generally assumes a sort of harsh experience from the point of view of the beneficiary.

774. Chairman.—Perhaps I might put the question in this way: Are you satisfied, Mr. Carey, that the officers are carrying out your instructions with meticulous fairness or are they exceeding the duties assigned to them?—I should be surprised to hear that any of them were exceeding the duties assigned to them.

775. Deputy O’Sullivan.—I should like in that case to be able to get specific instances to show that some of them are carrying out their duties more in the letter than in the spirit of the Act.

Mr. Carey.—If any specific case were brought to my notice I should certainly be prepared to go into it.

776. Deputy Briscoe.—On the top of page 15 there is a note which says:—

“Extra Receipts—Sums totalling £83 13s. 3d. were received in respect of compensation for loss of the services of officials injured in accidents.”

Does that represent claims against other insured persons?—It would arise in this way. If one of our officers were injured in an accident and we lost his services for a certain period during which we paid him his salary, we would have a claim against the person responsible if we could prove negligence on his part.

777. Would that be over and above his own claim for compensation? After all, if a man is injured, no matter whose employee he is, he has his own claim?—I do not think that a claim made by one of our officers would be the same as that of an ordinary individual, because our officer would be getting his salary in full during the period of illness. The ordinary man who is injured in a motoring accident can put forward the claim that he lost wages for so many weeks. Our man could not say that. I think you could say that a claim made by an officer of ours would be abated to the extent of our own claim.

778. Or would it be included in the total amount of compensation paid to him, portion of which you would recover from him?—I could not tell you the machinery exactly. The principle, however, is clear, that if through the negligence of someone else we lost the services of a man for a certain period and that we were paying his salary for that period, we have a claim.

779. Deputy Briscoe.—The point I am trying to get at is this. It raises a very wide principle. If any of us happens to be an employee of the Revenue Commissioners and we met with an accident either by day or night, does the question of whether we shall sue for compensation rest with us entirely or are we going to be directed by our employers who will have suffered the loss of our services during the period of incapacity? If we have to negotiate a settlement does the Department continue to be an interested party in the litigation or in the settlement? It is a question of the principle followed.

780. Chairman.—I think, Deputy, this is a matter of extreme detail with which Mr. Carey could not be expected to have familiarised himself before coming here this morning. If it is a matter to which you attach importance, no doubt Mr. Carey will send a note to the Committee explaining the procedure.

Mr. Carey.—Would you like me to send a note to the Committee?

Deputy Briscoe.—Yes.

Mr. Carey.—Certainly.

781. Deputy Briscoe.—I am not interested in extreme detail but what I am interested in is would a civil servant who had notified the Revenue Commissioners of the details of an accident be guided or forced by them to proceed with litigation?

782. Chairman.—That would be best met by having your officers look into the matter and by sending the Committee a note on the general principles guiding you on this matter.

Mr. Carey.—The principle would not differ from that observed in any other Department.

783. Deputy Briscoe.—It would apparently differ from the principle followed in outside Departments?—That I cannot tell you. I shall let you have a note* on the matter.


Mr. W. D. Carey called and examined.

Chairman.—There is no note by the Comptroller and Auditor General in connection with this Vote.

784. Deputy Benson.—As regards Subhead D.—Sums Irrecoverable—apparently there was no grant for that. Is that an item which is likely to recur every year and if so, why was it not included in the original Vote?

Deputy Briscoe.—It is due to an error.

Chairman.—There is a note dealing with it.

785. Deputy Benson.—Admittedly, but is it an item that is likely to be an annual charge or is it one that occurred only in this particular case?

786. Chairman.—Would I be correct in interpreting the question in this way: Is there an annual Subhead D. for sums irrecoverable or is this an exceptional subhead?—It is in effect an annual subhead.

787. Deputy Benson.—If it is an annual charge why was something not included in the original Vote for it? Is it not a matter to which this Committee has referred on various occasions, that subheads are opened in a Vote for which nothing was originally estimated or voted? There are two sums here for which nothing was voted.

788. Chairman.—Is it your practice, Mr. Carey, to have an annual subhead or do you merely raise a subhead with the Department of Finance sanction, in the event of some error arising?—It is only in the event of an error that we raise a new subhead. In fact we have had something under this subhead in most years.

789. In the original estimate for this year you had subheads A., B., C. and Appropriations-in-Aid; D. and E. have apparently been raised in the course of the financial year with the Department of Finance sanction?—That is the practice.

790. Deputy Dockrell.—In the Notes, item No. (1) states:

“In addition to the cash recoveries under Subhead C., further recoveries amounting to £1,655 8s. 0d. were effected under Section 7 (3) of the Old Age Pensions Act, 1911 by withholding payment of Pension Orders.”

How does that situation arise?—The position is that you may get a pension revoked or reduced as from a date earlier than the date of the Order. Pensions are payable as a result of decisions of either the local pension committee or the central pension authority. A case may arise in which it emerges that a man has been guilty of fraud and our officer raises a question. The question is investigated and it is found that there was fraud, and the pension is withdrawn or reduced as from a past date. There is power to recover in one or other of two ways— either by claiming the cash from the pensioner, if you can get it or, as may happen in a case where a pension is reduced, by deducting from the continuing pension the sum that had been paid in the past as a result of the fraud.

791. Deputy Briscoe.—It includes also questions where people have been given pensions to which they were not entitled, or much earlier from the point of view of their age?—Yes.

792. And when they reach the pensionable age it is recovered?—Yes.

Chairman.—Anyone who is paid a pension from 68 to 69 gets no pension from 70 to 71.


Mr. W. D. Carey further examined.

Subhead A.—Bounties on Sugar made from home-grown Beet.

“8. Section 5 (2) of the Finance (Miscellaneous Provisions) Act, 1935, provided that whenever drawback is paid in respect of sugar made in Éire from beet grown in Éire the Revenue Commissioners shall pay a bounty of an amount equal to the difference per cwt. between the Excise duty paid on such sugar and the Customs duty chargeable, at the time at which the said Excise duty was paid, on like sugar not manufactured in Éire and not made from beet grown in Éire. The difference between the Customs and Excise rates of duty was 15s. 2d. per cwt. and bounty at that rate was paid on home-produced sugar exported up to 31st December, 1940.

By Emergency Powers (No. 60) Order, 1940, however, which came into operation on 1st January, 1941, the above sub-section was amended to read that the bounty should be at such rate per cwt. as may, from time to time, be determined by the Minister for Finance, after consultation with the Minister for Industry and Commerce. Pursuant to this Order a rate of 15s. 2d. per cwt. was determined as from 1st January, 1941, and of 10s. per cwt. as from 15th September, 1941.”

793. Chairman.—Have you any comment to make on that, Mr. Maher?

Mr. Maher.—The purpose of the Estimate is the payment of bounty to compensate for the difference between the duty-free price of such sugar and that of imported sugar. Since the beginning of the emergency the cost of imported sugar has increased and the difference in price between it and home-produced sugar became less than the rates of bounty actually paid, with the result that the payments of bounty under the Order were more favourable than the basis of payment provided for in the Estimate.

794. Chairman.—Have you any comment on that, Mr. Carey?—I think our only comment is that we are simply paying officials. The rate at which bounty is to be paid as from the 1st January, 1941, which covers the whole of this account, is determined by Order by the Minister for Finance and our duty is simply to pay in accordance with the Order.

795. Chairman.—A question arises as to whether an Emergency Powers Order does, in fact, override the express provisions of the Estimate in connection with which it is supposed to have been made. If you are directed by Emergency Powers Order under subhead A of Vote 8, to pay a sum substantially in excess of what that subhead authorises you to pay, do you feel bound to do that without a Supplementary Estimate presented to Dáil Eireann and authority being vouchsafed to you by such Supplementary Estimate?—We are bound by the law, that is to say, by what has statutory effect. After all, the Estimate is something for the Minister for Finance. The Order has statutory effect in place of the original Act and has the same force as the original Act had and we are bound by the terms of the Order.

796. Chairman.—Mr. Hogan, can you help us in this matter where an Emergency Powers Order seems to conflict with the limits imposed by the Estimate in regard to which the Emergency Powers Order has been made?

Mr. Hogan.—I do not think that is quite the position—not as I see it. The Estimate, subhead A of this Vote, is in the same terms as in other years with one exception, that is, in Part III. The explanation in Part III. is in the same terms as in other years except that it adds to the statutory reference to Section 5 (2) of the Finance (Miscellaneous Provisions) Act, 1935, a reference to the Government Order of the 31st December, 1940, so that the Dáil, in voting the money for this service had regard to the fact that the money was being paid in accordance with that Order. That was brought to their notice in that way and I think, so far as the Parliamentary authority for the spending of the money is concerned, it is there.

797. Chairman.—It seems quite clear that in respect of the Estimate in the following year, that is, 1942-43, the explanatory note to Subhead A was redrafted to make it quite clear that this was a bounty in the discretion of the Ministers; but the note to Subhead A. in the Estimates for the year at present under consideration by the Committee specifically states that the bounty is to be paid to compensate for the difference between the duty-free price of such sugar and that of imported sugar. During the period in which 10/- per cwt. was being paid for that purpose, I understand it was estimated by the Department of Industry and Commerce and the Department of Finance that the cost of imported sugar was actually about 7d. greater than that of home-produced sugar and, therefore, it appears that we were paying a bounty of 10/- to people for buying sugar 7d. cheaper than they could have bought it somewhere else. Did that seem to the Department of Finance to be a normal procedure?

Mr. Hogan.—You are raising the point as to whether the Minister, in pursuance of his statutory powers took a correct decision, after consultation with the Minister for Industry and Commerce, in determining what the rate of bounty should be. That determination as to what the rate of bounty should be was fully discussed by the Department concerned, and it was agreed that the rate should be 10/- per cwt. as from the 15th September, 1941. The whole purpose of the original amendment of the law by the Government Order was to enable the bounty to be reduced because the situation had changed owing to the emergency.

798. Chairman.—I think we are entitled to ask you to explain to us, Mr. Hogan, on behalf of the Department of Finance, how it came about that the Minister directed the Revenue Commissioners to pay 10/- per cwt. to exporters under Subhead A., which provided that compensation should be paid for the difference between the duty-free price of such sugar and that of imported sugar, when, in fact, the imported sugar was dearer than the home-produced sugar. How can you compensate people for doing something manifestly to their own advantage?

Mr. Hogan.—I think it must be remembered that the provision for payment of bounty to exporters of sugar composite goods, such as biscuits, confectionery, and so on, was there under the Act of 1935, whether in fact any sugar was imported. The sole licensed importers of sugar were the Sugar Company and if they had not imported and in fact only home-grown beet sugar was on the market, in spite of that fact the exporter of these goods would be entitled to the bounty. So the question of whether there are imports of sugar in a particular period does not arise in determining the rate of bounty. The real crux was that the world price of sugar was so much less than the price for home-produced sugar that it put exporters in an unfavourable position in foreign markets. During the emergency conditions, of course, it gradually became apparent that there was no world price for sugar that could be relied on. I am not quite sure, but I think I am right in saying that, during the particular accounting period in question, there were no imports of sugar, even by the Sugar Company— that is, during 1941-42. To the best of the combined wisdom applied to the problem and having regard to the manufacturing interests concerned, it was thought that the 10/- rate was an equitable rate of bounty from that date in September, 1941, with the intention of reducing it further at a later period; and it was, in fact, so reduced to 5/- a year later and now it is no longer paid—that is, in respect of exports after the 1st April, 1943, there is no payment.

799. Chairman.—Can you help us, Mr. Maher?

Mr. Maher.—I think the Committee has all the facts and that it would be for the Committee at a later stage to consider whether, in cases such as this where a statutory Order provides for payment in excess of the Estimate, provision for payment should be made and a supplementary estimate introduced to cover the payments.

Mr. Hogan.—I do not quite appreciate Mr. Maher’s point, because the payment of the moneys from Subhead A. was mandatory. “There shall be paid” is the provision in the Act of 1935. The Order of December, 1940, does not take away that “shall.” The Revenue Commissioners have no option but to pay and, in fact, the Minister under that Order of 1940, had to determine a bounty. So I think the conflict between the terms of the Estimate and the terms of the Order of 1940, was more apparent than real.

800. Chairman.—It does appear that Section 5 (2) of the Finance (Miscellaneous Provisions) Acts, 1935, applied to the payment of a bounty to compensate for the difference between the duty-free price of home-produced and that of imported sugar.

Mr. Hogan.—Those words you have mentioned do not appear in the Act.

801. Chairman.—They are merely explanatory to the Estimate. In any case, the Estimate for £50,000 was brought before the Dáil with that explanation and those were the grounds on which the Dáil voted the money. It then appears— I may be wrong—that the best inquiry at the time decided to make an Emergency Powers Order that the price of imported sugar should be 30/10d. and of home-grown sugar 30/3½d. Therefore, we had a situation arising in which manufacturers were getting 10/- cwt. to compensate them for buying sugar at 30/3½d. when the alternative source of supply would cost them 30/10d.

Mr. Hogan.—I do not think the comparative price was that mentioned, because there were several rather empirical bases of determining what the imported price should be. You might take the landed cost of Cuban sugar or of British sugar, or take a mean, or take the average of the British controlled price for manufacturers and the British controlled price for consumers. It was difficult to get any firm price, and as you could not get imported sugar in any case, the bounty had necessarily to be determined arbitrarily, with proper regard to the equitable relief due to the exporters, which was, and continued to be, the real basis of the Vote provision.

802. Deputy Cosgrave.—Can expenditure be authorised under this Order without the matter coming before the Dáil?

Mr. Hogan.—No. “There shall be paid out of moneys to be provided by the Oireachtas….” There must be a vote.

803. Deputy Benson.—With regard to Subhead B.—Bounties on home-grown tobacco manufactured on which drawback is paid or found unfit for manufacture and destroyed—what is the explanation of the statement that the percentage of stalks and offal discarded as waste in the process of manufacture was much below the average of previous years? Have we got more of it in our cigarettes?—It is not a matter on which I can give you official information. The fact is there that the claim to us for allowances in respect of the proportion of stalks and offal is vastly lower than it was prior to that year.

804. Chairman.—Is the total volume of home-grown tobacco assessed for duty, lower?—There is at present a restriction with regard to the leaf released from bond, but I cannot tell you from memory what the position on that point was in this particular year, 1941-42.

805. Chairman.—Deputies may draw whatever conclusions they like from this scarcity of stalks and offal. It may be an improved product or it may be a burden to the consumer.

The witness withdrew.


Mr. John Leydon called and examined.

Subhead F.—Flour and Wheaten Meal Subsidies.

“73. In accordance with the note in the Supplementary Estimate for this service. issues in respect of flour subsidy were made to Grain Importers (Eire), Limited, to enable that company to give effect to the directions of the Minister for Supplies in regard to the adjustment of wheat prices. Under this arrangement, the company imported wheat and allocated it to flour millers at such prices fixed by the Minister as would maintain the price of flour at its then existing level and at the same time regulate the earnings of the milling industry. The subsidy paid related to the company’s allocations of import wheat during the period 13th October, 1941, to 28th March, 1942, and the prices charged to flour millers were 21s. per quarter from 13th October, 1941, to 15th February, 1942, and 28s. per quarter from 16th February, 1942, to 28th March, 1942. The applications for subsidy show that, during the period under review, 251,597 barrels of imported wheat, costing £907,500 14s. 3d., realised £165,086 14s. 3d. on sale at the prices indicated. The loss amounted, therefore, to £742,414. A sum of £278,405 5s. 0d. portion of certain funds estimated at £330,000 at the disposal of Grain Importers (Eire) Limited and the Wheat Reserve Committee, referred to in the note to the Estimate, was made available towards the cost of subsidy, leaving a net charge on public funds of £464,008 15s. 0d. I am in communication with the Accounting Officer regarding the basis on which the sum of £278,405 5s. 0d. was allocated from the funds mentioned.”

806. Chairman.—Have you anything to add to that, Mr. Maher?

Mr. Maher.—In the supplementary Estimates presented to the Dáil on the 13th November, 1941, the amount available from the reserve accumulated by the Wheat Reserve Committee and Grain Importers Limited was estimated at £330,000, whereas the amount actually applied was £278,405. Since the date of the Comptroller and Auditor General’s report the Accounting Officer has informed us that if the estimated expenditure of £550,000 provided for in the Supplementary Estimate had been incurred in the financial year, the contribution from the reserve would have been £330,000. As, however, there was a saving on the Vote, the contribution from the reserve was reduced pro rata. We have been informed since that the balance of the reserve was applied for subsidy purposes over the remainder of the cereal year, ending on the 31st August, 1942.

807. Chairman.—Have you any comment to make, Mr. Leydon?—No, Sir, unless there is any particular question you wish to ask me.

808. What was the original purpose for which this sum of £330,000 was accumulated by Grain Importers Limited?—To enable the Department of Supplies to keep the price of flour down at a later stage when the price of wheat rose. We anticipated a rise. We could have prevented this sum from accumulating by allocating imported wheat to the millers at a lower price than they were actually charged. The question of a subsidy was not immediately in the offing when we were considering it. If we had not allowed this sum to accumulate it is true that flour would have been cheaper for a period; but at a later stage the rise in price would have been correspondingly more steep, or the burden of the subsidy correspondingly heavier.

809. What was the machinery whereby that sum of £330,000 was accumulated?— It arose from the difference between the price at which wheat was purchased by Grain Importers (Éire) Limited and the price at which it was allocated to the millers. It was contributed to by the fact that we had brought in a substantial quantity of wheat before the war at a comparatively favourable price and when wheat prices rose we allocated it more or less at the current price and thereby made a profit, which was subsequently utilised for the benefit of the consumer.

810. Was there not some question of a levy of 1/- per sack on flour delivered by the millers?—Yes. The balance remaining from the proceeds of that levy has been utilised for the same purpose.

811. Was that contributed to the fund? —Yes. The fund was utilised in the manner I have explained; and the Comptroller and Auditor General was satisfied, I understand, about the utilisation of the 1/- levy. He audited the accounts. The levy to which you refer was accumulated by a body called the Wheat Reserve Committee. The 1/- a sack went to the accumulation of a reserve, in so far as it was not required to meet current charges. The levy proved more than was required and the surplus was utilised for the benefit of the consumer.

812. Was the 1/- per sack on flour used to build up a fund to compensate millers for storing wheat?—It was intended to cover administrative costs generally.

813. And it turned out to yield a substantial surplus to what the costs demanded?—Yes, that is so. The whole of the surplus was utilised in the way I have mentioned.

814. And it was subsequently used to subsidise the price of flour at a later date?—Yes.

815. How much went to the millers as a fee for storing wheat?—I could not give you that information to-day. It did not all go to the millers. Wheat was stored wherever we could get suitable storage. All the available storage accommodation was used. We utilised all the suitable storage we could find anywhere in the country.

816. With regard to that period when we were paying persons for storing wheat, was it their own wheat or was it wheat that remained the property of Cereals Limited?—It was for storing wheat which was imported to form a national wheat reserve and which became the property of Grain Importers (Eire) Ltd. Grain Importers were generally responsible for periodical inspections to make sure that the wheat was preserved in good condition.

817. They subsequently allocated the wheat to the millers at a price which was considerably above the price at which Grain Importers bought it and the proceeds went to swell the fund of £330,000? —Yes, that was the position.

818. The note by the Comptroller and Auditor General says that the purpose of the flour subsidy was to enable the company to give effect to the directions of the Minister for Supplies in regard to the adjustment of wheat prices. He points out that under this arrangement the company imported wheat and allocated it to the flour millers at such prices fixed by the Minister as would maintain the price of flour at its then existing level and at the same time regulate the earnings of the milling industry. Can you give us any information as to the basis of the earnings of the milling industry?—The industry was taken as a whole.

819. Perhaps, Mr. Leydon, before I proceed with that matter, I should read the concluding portion of paragraph 73 of the Comptroller and Auditor General’s Report. It is as follows:—

“The charge to the Vote in respect of subsidy is dependent on the cost of imported wheat and the amount received by Grain Importers (Eire) Limited from the millers to whom the grain is allocated and, as indicated above, the arrangements made contemplated that the allocation price should be such as would stabilise the price of flour and at the same time provide an agreed margin of profit for the milling industry. I observed that, on and from 23rd May, 1942, the price at which imported wheat was allocated to the flour millers was increased by 1s. 10½d. per quarter in order to offset profits made during the seven months ended 28th March, 1942, in excess of the agreed percentage, and I have inquired as to what extent these extra profits were attributable to an under-estimation of the allocation prices of imported wheat.”

I wonder if Mr. Maher wishes to add anything to that?

Mr. Maher.—In the preliminary accounts furnished by the millers for the period ended 27th March, 1942, it was indicated that an excess profit over the cereal year would be made; that is, a profit in excess of what is stated to represent 6 per cent. on the capital of the industry. On this basis the proportion of profit for the seven months ended 28th March, 1942, would be about £120,000. But the preliminary accounts indicated that a larger sum would be earned. To offset the excess profit the allocation price of imported wheat was increased on 23rd May, 1942, and the Accounting Officer has informed us that the final adjustment could not be made until after the accounts for the full year were available.

820. Chairman.—Has that final adjustment been made, Mr. Leydon?—Yes, Sir.

821. Could you give us any information as to the basis on which the earnings of the milling industry were regulated?—I do not know how deeply you wish me to go into this subject, but to put it very briefly, it was agreed, after prolonged negotiations, that the capital employed in the milling industry as a whole, the capital genuinely and necessarily employed in the milling industry as a whole, should be taken at £3,600,000 and the remuneration allowed to the millers was calculated at 6 per cent. on that figure. This remuneration is distinct from working charges and depreciation.

822. The net profit?—the net profit. I am afraid of the expression “net profit” because people do not always take the same meaning from it.

823. You refer to the total sum allocated amongst the millers. Was that a matter of arrangement between themselves or was it one over which you exercised supervisory powers?—Actually it was a matter for arrangement between the millers themselves. The millers set up a committee from amongst their number, a committee called the Millers’ Control Committee, to devise a scheme. They asked me to act as chairman of that committee. With the Minister’s approval, I agreed. I am not acting in my official capacity as chairman of that committee. I was informed that the millers unanimously invited me to act as chairman and I agreed to do so. After a good deal of discussion, a scheme was approved by the millers for distribution of the profits amongst the industry as a whole.

824. Was that scheme accepted by all the millers or was the decision a majority one?—The scheme was adopted unanimously by the Millers’ Control Committee. So far as I am aware, it was accepted unanimously by the industry as a whole— that is to say, the Irish Flour Millers’ Association. I have not heard that there was any dissentient voice.

825. Had any miller who believed he had a grievance under this system of allocation a right of appeal to the Minister or to anybody else?—It was not really a matter that concerned the Minister. It was decided by the millers themselves. So far as the Department of Supplies was concerned, it did not matter what basis was chosen by the industry for distribution of the profits. We were concerned merely with the fixing of the profits for the industry as a whole. That raised a great many difficulties and a number of contentious questions. The scheme adopted in the end, as was inevitable, was in the nature of a compromise. It would surprise me if there were not some millers who have since felt a little dissatisfied with the operation of the scheme. The effect of the allocation was that millers who were making a high rate of profit put a proportion into the pool for distribution amongst millers who were making a low rate of profit or no profit.

826. Or for the benefit of persons who had over-capitalised their concerns?—I used the expression “capital necessarily employed in the industry”. Where capital is employed in a particular enterprise that is not necessary for that enterprise, it is excluded for the purposes of the 6 per cent. The millers claimed to have a figure of the order of £5,000,000 as capital necessarily employed in the industry. The figure eventually settled, after prolonged discussion between my colleague, Mr. Griffin, and the professional advisers of the millers was £3,600,000.

827. If an individual miller feels that he did not get his share of the total sum allocated, what redress has he?—I am afraid I should find it very difficult to answer that question. It is really a hypothetical question. So far as I am aware, it has not arisen. It is a matter for the industry itself.

828. If the object of the provision of public money in this way was to ensure that the distribution of that money was fair and equitable under the circumstances and if it emerged that, as a result of the delegation by your Department of the power to distribute this money to an extra-statutory body, certain individuals got none at all, should there not be some form of redress?—If that should arise I should agree, but it never did. There was never any question of any individual company or milling unit getting no money at all.

829. If they got less than they were entitled to, who was to arbitrate?—The Flour Millers’ Association unanimously passed a series of resolutions appointing the Millers’ Control Committee to devise a scheme for the distribution of profits. The form of the resolution, which really constituted the terms of reference of the Millers’ Control Committee, did bind the Association to accept the decision of the Committee. That Committee—there were 13 millers on it—unanimously adopted a scheme. The scheme was in operation for an initial period and was unanimously prolonged for another period.

830. Under present conditions, in the event of disagreement arising in that Committee, there is no machinery whereby the allocations could be reviewed?—The necessity for that has not yet arisen.

831. If it should arise, it would be a matter for consideration by the Minister as to how best to meet it. No machinery is provided in the event of disagreement? —I dare say the Minister would have to consider it. The Minister could not be indifferent to the position of the milling industry or even to its internal arrangements, but he is concerned with the milling industry as a whole.

832. What was the total sum paid to this body for distribution amongst the millers as a whole?—Six per cent. on £3,600,000. That is the figure for remuneration.

833. That is what we might describe, subject to the reservations you have mentioned, as net profit, to be divided amongst the various companies?—Yes. There was also an allowance for depreciation in respect of the industry as a whole.

834. That was over and above the costs of which account had been taken?— Depreciation would be part of the costs.

835. In addition to the 6 per cent., an appropriation was made for depreciation? —It was one of the items about which there had been a great deal of discussion —what figure should be allowed for depreciation on the industry as a whole. A figure was eventually agreed to.

836. In addition to the 6 per cent.?— Before the 6 per cent. was arrived at, all costs, including the charge for depreciation, had to be eliminated. Six per cent. was then allowed.

837. What was the total sum of the costs, in addition to the £216,000 which was given to the milling industry?—I could not answer that question from recollection.

838. Would you be able to get the figure for us at your convenience?—I should like to know exactly what you mean. Do you mean the whole costs, including the costs of raw material—that is to say wheat, wages, maintenance and so forth?

839. I have no doubt that all this was reduced to some kind of formula by you in ultimately determining the basis on which the C per cent. was to be arrived at?—I am afraid that it is not capable of reduction to a simple formula like that.

840. Perhaps you could tell us what the actual sum received by the millers in the year under review was?—There was no question of the millers receiving any sum. It was a question of how much of the proceeds of the sale of flour they would be allowed to retain.

841. That is the figure I should like to get?—£216,000, after providing for all charges.

842. What did all the charges amount to?—All the costs, including the costs of wheat, wages, maintenance and depreciation?

843. Surely, at some stage, the costs must have been ascertained?—The investigation involved an elaborate examination of the accounts of each milling company.

844. And a final figure was arrived at? —I do not know if the figure was ever totted up but, if it is a matter of interest to the Committee, I could get it done. With great respect, I do not think that the figure would be of much value to the Committee.

845. I should be long sorry to waste your over-pressed time in the preparation of figures which are not informative. What I should like to find out is the cost of flour to the consumer, the proportion of that cost due to the cost of materials, the proportion due to milling expenses and the proportion allocated as profit—the 6 per cent. Let us say that consumers spent in a given year—taking a round figure—£4,000,000 on flour. That £4,000,000 went ultimately to three destinations—(1) to pay for wheat, (2) to pay millers’ expenses, and (3) to pay millers’ profit?—I can give you that figure.*

846. Deputy Briscoe.—Is not the situation this: there are a number of millers, each of whom is independent, as distinct from the whole working together, and in each of these cases their 6 per cent. is conditional on their producing to some authority their balance sheets as independent concerns? One concern might have a slightly higher cost of production than another and, consequently, not get 6 per cent., but, in the heel of the hunt, it is the Department’s responsibility to see that the price of flour is kept as low as possible, the maximum allowance being 6 per cent.

847. Chairman.—Mr. Leydon will tell you if your estimate of the situation is correct. I do not think that it is.

Mr. Leydon.—I find it difficult to follow the Deputy’s question.

848. Deputy Briscoe.—The ordinary miller has a business and the millers have been brought into a form of control, the primary responsibility of the Department of Supplies being to see that they get wheat as cheaply as possible and that, after manufacturing it into bread, the public get the bread at a certain price, allowing for Government subsidy and so forth. Having estimated the proper capital value of each institution, the Department fixes the maximum net profit at 6 per cent. The Department’s anxiety is to see that the profit is kept within that figure. When the millers got together, it was probably found that some millers could earn more than 6 per cent. on the prices fixed by the Minister or on sale prices and that others could not. That is why you have this body created. A surplus from one is made available for the deficiency of another, the net result being that, so far as the public is concerned, a maximum profit of 6 per cent. is permitted and the price of bread is kept as low as possible?—You mean 6 per cent. for the industry as a whole?

Deputy Briscoe.—Yes.

Mr. Leydon.—I think that that is correct.

849. Deputy Allen.—Could any individual miller get from this pool more than 6 per cent. in any particular year? —Not under this arrangement.

850. Deputy O’Sullivan.—How many millers were involved in the pool and what were their respective shares of the £216,000?

851. Chairman.—I doubt that that question would be in order. We can take counsel later about it if the Deputy so desires. I do not think it would be permissible to inquire from Mr. Leydon the allocation of profit to any individual. I think that we are constrained to deal in bulk figures and that we cannot ask Mr. Leydon to communicate to us the details of any individual business revealed to him under the seal of secrecy. That would agree with your view, Mr. Leydon?—Absolutely.

852. You will be able to give us the total number of millers involved in the pool?—Speaking from recollection, I think it was 31.

853. Some would be very small and some very large?—Yes.

854. There would be no question of an average between them. Some of them would be producers of hundreds of sacks and others of much larger quantities?— There is a very big disparity between the smallest and the largest.

855. Deputy Cogan.—Are any millers receiving less than six per cent. profit?— Not at present.

Mr. Leydon.—My colleague, Mr. Griffin, thinks it is conceivable that in the working out of the application of the arrangement which was arrived at on general principles, some millers might get less than six per cent. profit, and some more. The Department of Supplies is not really concerned as to what the profit of a particular miller may happen to be. Our attitude was that, having fixed the profit for the industry, it was primarily a matter for the industry itself to arrange for the distribution of that profit.

856. Deputy Cosgrave.—I thought you said that you fixed it at six per cent.

Mr. Leydon.—For the industry as a whole. It cannot exceed six per cent.

857. But an individual miller might make in excess of six per cent. Is that the position at present?—He might on the application of the formula. We have not information as to what exactly an individual miller gets.

858. There is nothing to prevent him making a sum in excess of six per cent?— There is nothing in the arrangement to prevent individual millers from getting more than six per cent.

Deputy Briscoe.—That is quite different from what I understood. I thought that the position was that the millers, as a whole, were allowed to make a maximum of 6 per cent. on the total capital.

859. Chairman.—That is what I thought you thought and I felt it was not quite correct. Mr. Leydon seemed to agree with your estimate?

Mr. Leydon.—Six per cent. on the capital employed in the industry as a whole. At that stage the millers consider the question of the distribution of the profit.

Deputy Briscoe.—I further understood and understood wrongly—Deputy Cosgrave has now made it clear—that 6 per cent. was the maximum a miller could make on his capital, assuming that it was on a basis of having satisfied the proper authority as to what his capital was. It now appears that a man could, in fact, make an unlimited amount in excess of the 6 per cent., this depending on how he worked his business, and that the dividend to a person not able to make the 6 per cent. under the existing arrangement is purely gratuitous on the part of the millers as a whole to that individual. I think that is the view that I hold now.

680. Chairman.—Mr. Leydon will correct you if that is wrong.

Mr. Leydon.—I should like in the first place, to apologise if I have in any way misled the Committee; it was quite unintentional on my part—

Chairman.—Not at all.

Mr. Leydon.—I would like to say that this is a very complicated question. Quite frankly, my information about it is information which came to me as Chairman of the Millers’ Control Committee. The Department is not officially concerned with the basis of distribution at all. With all respect, I would ask you to consider how far I ought to be pressed here to disclose information without at least getting the permission of the milling industry.

861. Chairman.—I think it would be perfectly fair for you to say that you preferred not to reveal any knowledge coming to you as Chairman of that Committee. Still, I think it permissible to ask, having satisfied the Committee that your directions were to allow the sum of 6 per cent. on the total capital agreed on between the Minister and the millers, whether the Minister continued to exercise any supervision as to the distribution of this money between the various millers. Now, I take it your answer is that the Minister has no discretion as to how the £216,000 was to be distributed between the 31 millers who constitute the milling industry?—It is very difficult to give a simple answer to that question because, while, I am Chairman of that Committee by virtue of an invitation from the Millers’ Association, I cannot, of course, dissociate myself from my official responsibility as Secretary to the Department of Supplies, and, therefore, I have knowledge of what is going on. If the position had been otherwise and if the millers had been prepared to agree amongst themselves to appoint a chairman of their own and agreed unanimously on a basis of distribution, I do not think the Department of Supplies would be concerned very much as to what the basis was, assuming that there was unanimous agreement amongst the millers about it.

862. Chairman.—Our difficulty is, had that been the case, that the Committee might have deemed it necessary to say that they could not approve of the handing over of a large sum of public money to a bunch of 31 millers, leaving its allocation to the complete discretion of an extra-statutory body. Your presence as Chairman of the Committee alters the situation somewhat, and would seem to suggest that the Minister did retain some kind of general supervision over the distribution of the money amongst the several millers. As regards the question which Deputy O’Sullivan asked, I think I would be inclined to say that it goes a little too far in asking how much each individual miller got because that would be revealing intimate business affairs. The question, on the other hand, whether the Minister was prepared to give his approval to a scheme which permitted one miller to get eight per cent. and, for the purpose of making a reductio ad absurdum, another miller two per cent. on his capital, is, I think, one on which we can at least ask a question, or you may elect to say that you have no information and that the Minister declines all responsibility for the allocation. Are we to take it that officially the Department repudiates all responsibility as to how the money is allocated amongst the 31 millers?—I am not going so far as that. The position at the moment is that the Department of Supplies is aware that the millers arrived unanimously—we have no information to suggest the contrary—at a basis of distribution of this profit of 6 per cent. as between themselves. Now, quite frankly, I think that is a very considerable achievement for an industry of that kind, where one remembers the varying interests in it—interests large and small—and I do not think that the Department of Supplies, with all its worries in various other directions, should concern itself greatly as to the equities of a scheme which had been unanimously accepted by the industry. One will bear in mind that, before the scheme of control, every miller made his own profit. some very much more than 6 per cent. and some, perhaps, less, and that there was no occasion for interference then.

863. Chairman.—That, of course, is a matter of opinion, but does that meet your question, Deputy Briscoe?

864. Deputy Briscoe.—There are two things involved. First of all, the Department of Supplies is concerned with seeing that there is sufficient flour available for the people’s requirements, and that it is disposed of to them at as near a fixed price as they can possibly fix, and limiting, as far as they can, the profits of the industry to a certain maximum. Now it would appear from what you have said that the position is this: that the millers have formed themselves into a body, that 6 per cent. is put into a pool, that certain persons will get more than that and certain others will get less. Apparently, there is even the possibility that some may make a loss because it is quite possible that the one fixed price all through will have a different effect on the small and the big man.

865. Chairman.—I think Deputy Briscoe quite misunderstands the position. Perhaps you will clarify it between us. I understand that at present the millers’ costs, which I think have ceased to have much significance, are merely taken as a global figure for arriving at the ultimate profit that is to be allowed to the entire industry. But the millers themselves have distributed £216,000 amongst 31 millers in order to give each a reasonable return on his capital. Is not that the case?

Mr. Leydon.—I am afraid it is not quite as simple as that. It might appear at first blush that the millers’ costs have ceased to have any significance.

866. Chairman.—Individually.

Mr. Leydon.—Yes, but, in fact, if a miller’s costs go up unreasonably he runs the risk, when his accounts are examined at the end of the year by my colleague, Mr. Griffin, that Mr. Griffin may very well say: “This is an entirely unreasonable increase in costs and is going to be disallowed; it is going to come out of your profits.” The miller will, naturally, also have to consider that when control ceases, and when the subsidy ceases, he will have to get back again to the stage where he must stand on his own legs. Because of that he will, naturally, want not to have his costs unduly high.

867. Chairman.—If the miller were to give inflated costs, the result of that would be to raise the global figure for the costs that are going to be charged on the entire output of flour. Mr. Griffin may then say “I am going to lop off 10 per cent. of your costs from the global figure; that global figure having been allowed, six per cent. will be given to the committee. If you get £1,000 out of that, your excess costs, which I have lopped off the global figure, will have to be defrayed by yourself out of the allocation made to you by the committee.”

Mr. Leydon.—I think that is what would happen.

Mr. Griffin.—Except this: in principle we are dealing with the industry as a whole. We examine the accounts of each undertaking separately. We examine the expenditure in each undertaking and we make certain adjustments in the auditor’s figure for profit. In that way we arrive at the net profit during the trading year for each unit in the industry. The total profit is either more or less than the permitted profit of £216,000. If it is more, the surplus has to be handed over. In arriving at the net profit in the case of an individual unit, we may disallow some expense because we thought it was grossly excessive in comparison with the previous years. That would have the effect of reducing proportionately the amount of profit to be allowed to the industry as a whole. The method by which that is going to be settled between that particular miller in the case of expenses so disallowed and the millers generally would depend entirely on the internal arrangements of the millers themselves. If persons claim on the basis of their certified accounts, these accounts are examined. Their figures are all readjusted and we give our decision on them. These are considered by us, and finally, approved by the Minister and it is on that basis that the division is made between the millers. It is quite possible that, while we might disallow a claim in an individual case, the millers themselves might deal more leniently with it, but the reverse might very well be the case also.

Deputy Briscoe.—That is as I saw it.

868. Deputy Cosgrave.—It follows from that that one miller could get all the profits.

Mr. Leydon.—No. I do not think that could conceivably happen.

869. It is unlikely, but it could happen?—I do not think it could.

870. Even in the case of a small minority?—I do not think so.

871. Is there any means of ensuring that it could not?—The millers themselves would ensure it.

872. But that is the only means?—It is a very effective means because the millers themselves have agreed on the amount of the distribution. A small minority could not settle a basis of distribution that would be favourable to themselves.

873. Let us say that a majority agreed on a basis of distribution and that a number of individuals got nothing, or got a lower profit than they considered they were entitled to, they have no tribunal or nobody to which they can appeal?—Well, presumably, they would raise the question at the Irish Flour Millers’ Association, a body which includes in its membership all the millers.

874. And the Irish Flour Millers’ Association, if it wanted, could give effect to the claims of these millers?—It could change the basis of distribution at any time.

875. But there is no other means by which it could be enforced?—I find the greatest difficulty in answering hypothetical questions. I hesitate here and now to try and formulate answers to questions which are purely hypothetical, and which raise all sorts of contentious issues. I think it is conceivable that, in the last resort, if anything of the kind did occur the Minister would probably be appealed to. I do not feel that I could answer with confidence difficult questions of that kind.

876. Chairman.—I think it is relevant to inquire, in the case of the allocation of public moneys delegated to an extrastatutory body, whether interested parties shall have the right to appeal from the decision of that delegated body.

Mr. Leydon.—I presume what they would do would be to raise it with the Flour Millers’ Association. They might change the basis of distribution. I presume they could appeal to the Minister if they wished, but what action would be taken in the circumstances I cannot say.

878. Deputy Allen.—There is nothing in the articles of the association to prevent them from appealing to the Minister for a decision?—Nothing whatever.

879. Deputy Cosgrave.—There is no machinery to which they could appeal except by way of direct approach as private individuals?—I do not think it is necessary, with all respect, to have special machinery for a matter of that kind. In the Department of Supplies we have ample experience over four years to satisfy us that if people feel seriously aggrieved they can write in. They do not need any special machinery for that.

880. You fix 6 per cent. on £3,600,000 and do you not think it necessary that some machinery should be available for individual millers if they found they were not getting satisfaction? I understand that has not happened but if it did happen?—If an individual miller feels aggrieved he can go to the Flour Millers’ Association and raise it at a meeting of the Association; or, as a last resort, he can appeal to the Minister. There is nothing to prevent that.

881. Chairman.—We may assume that the Minister has not abandoned control of the £216,000?—No.

882. He retains that power?—In the last resort.

883. Deputy Briscoe.—Does the Flour Millers’ Association notify the Minister or the Department of the method they were adopting in making a distribution. Do they send in any report?—I cannot recall any such report. I am aware of the position as Chairman of the Millers’ Control Committee.

884. But not to the Department of Supplies?—I have knowledge of what is going on and with the consent of the Committee I told the Minister in a rather informal way what the position was.

885. Chairman.—I assume that if an informal channel of information were not open to the Minister, he would have some formal means of determining what the situation was?—Yes.

886. In fact he knows what the allocation is every time the Committee has met?—He knows the basis of allocation. It is fixed from year to year and may change. If the Minister had to take up the question of distribution of profits and fix some basis of his own there would be, I think, some other consequential steps to be taken. That is one reason why I hesitated to pursue this question.

887. Deputy Briscoe.—We need not fear that the chairman of this body would ever withhold information from the Minister?—I do not think so.

888. Deputy Cosgrave.—The only knowledge the Minister has as to the distribution is informally?—That is so.

889. Deputy Allen.—We can take it that Mr. Leydon, as chairman of the committee, is ex officio representing the Minister.

890. Chairman.—I think we may take it that he is not. Am I correct in saying that that is what you are not, Mr. Leydon?—Your assumption is quite correct.

891. Deputy Cosgrave.—At the end of paragraph 73 the following appears: “I have inquired as to what extent these extra profits were attributable to an under-estimation of the allocation prices of imported wheat.”

Mr. Maher.—As soon as the Department realised that the profits were likely to exceed six per cent. they increased the allocation price.

Mr. Leydon.—Yes. I hope the Committee will appreciate the very great difficulty, even in the case of an individual company, of estimating profits ahead, and how much more difficult that was over the whole industry with something like 30 units. That being so, at the end of the seven months’ period we asked them for interim accounts and on the basis of what we got we came to the conclusion that they would get more than six per cent. and we made an adjustment. On the final examination there was a surplus of £56,847 and that was duly surrendered.

892. Deputy Cosgrave.—I take it that was excess profit made over the seven months?—No, over the whole year; the excess profit after the increase in the allocation price. The rate of profit earning was too high at the allocation price in force when we got the interim accounts and we increased the allocation price of wheat so as to reduce the profit. After that there was a surplus of £56,847 which was duly surrendered.

893. Chairman.—To whom?—Actually the money was paid over to Grain Importers (Eire), Ltd., out of the pool. It is used then to reduce pro tanto the subsidy payments from the Exchequer.

894. And I take it, comes in in aid of the appropriation by Dáil Eireann for the subsidy on bread?—Yes.

Subhead G.—Bread Subsidy.

“74. In order to meet the increased cost of production of batch bread, payment of subsidy at the rate of ½d. per 4-lb. loaf was authorised in respect of batch bread baked and sold on and from 13th October, 1941, by bakers licensed under the Emergency Powers (Bakers) Order, 1941 (Statutory Rules and Orders, No. 453 of 1941). Subsidy was payable on submission of a form of application supported by a statutory declaration and payment was made in full if the application was accompanied by an auditor’s certificate. In the absence of such certificate, only 75 per cent. of the authorised amount was paid.

In the course of my audit of the claims for subsidy, I observed that in several cases in which payment was made on the foregoing basis, subsequent investigations by authorised officers of the Department revealed that complete records of sales had not been kept by the bakers concerned. In reply to my inquiry regarding these payments and the extent to which inspection of records had been carried out, I was informed that where subsidy was paid on foot of improper claims the Vote has been relieved of the amounts, which have been charged to a suspense account pending further examination. With regard to inspection of records, the Accounting Officer states that subsidy was paid to 190 bakers in the period ended 31st March, 1942, that inspection was carried out in 55 of these cases before 31st March, 1942, and that a total of 175 inspections was carried out up to 23rd November, 1942.”

895. Chairman.—Have you anything further to add, Mr. Maher?

Mr. Maher.—The applications in many cases were based on records of batch-bread produced whereas the subsidy was payable on the sales. The amount charged to suspense was £850 and of this sum £680 has been recovered. The balance of £170 related to cases in which it has been established that satisfactory records were kept and the amount has been subsequently charged to the Vote.

896. Chairman.—Are you satisfied on the whole that the batch-bread subsidy is working satisfactorily?

Mr. Leydon.—Yes, considering it on the whole.

897. Chairman.—And that bakers are not getting more or less than they are entitled to?—I am satisfied about that. Actually they have to produce an auditor’s certificate and we have from the Department of Supplies carried out inspections in practically all cases in order to satisfy ourselves that records were kept. The procedure initially was that where a subsidy claim was supported by an auditor’s certificate and was otherwise in order, we paid in full. Where no auditor’s certificate was submitted in support of a claim, we paid 75 per cent. of the subsidy for the first two subsidy periods; but for the third and subsequent periods payment was withheld unless an auditor’s certificate was produced covering the whole lot. We did find in some cases that auditors gave production figures instead of actual sale figures. Things have been adjusted now and all over-payments recovered. The bakers are not all applying for the subsidy but so far as they have done so, it is working reasonably well.

898. Deputy O’Sullivan.—Some applied and some did not. What is the explanation?—I am afraid I could not give any explanation. I can only assume a number of possible explanations.

899. Chairman.—I suppose one explanation would be that they have gone over to the production of what is described as fancy bread?—Possibly. In other cases, it might be that the production of batch-bread was so small that they did not wish to go to the expense of producing an auditor’s certificate. There may be other reasons.

900. Chairman.—That is my experience that they have almost completely gone over to the production of fancy bread to avoid the annoyance of claiming, and also because it is easier to make fancy bread with 100 per cent. extraction flour than batch-bread.

901. Deputy O’Sullivan.—What is the amount of the subsidy?—There is a subsidy of ½d. on a 4-lb. loaf.

Chairman.—They are bound to sell the loaf at a lower price than fancy bread. In fact, I think on fancy bread they get the subsidy from the customer and on plain bread half from the customer and half from the Government.

Deputy Briscoe.—You could force bakers to make batch-bread if you thought the fancy bread business was developing to too great an extent.

Chairman.—There is no power to do that without a special Emergency Powers Order.

Deputy Briscoe.—Then one could visualise a certain area in which no batch-bread would be available but only fancy bread. Then there would be a grievance on the part of the public and it would be a hardship. It would be interesting to know if that could be stopped.

902. Chairman.—I think I am right in saying that there is no power at present to compel a baker to produce any quantity of bread as the law stands.

Mr. Leydon.—If it became a serious problem there is no doubt that the position could be remedied.

903. —Chairman.—I take it that at present no such power exists.

Extra Receipts Payable to Exchequer.

“75. Section 8 of the Emergency Powers Act, 1939 (No. 28 of 1939) empowers the Minister for Finance to fix the amount of the fee payable for a licence issued under or for the purpose of an Emergency Powers Order and the manner in which such fee shall be collected and disposed of. In the year under review, the prescribed fees were collected in respect of licences issued under fifteen Emergency Powers Orders and were brought to account as Exchequer extra receipts. As will be seen from the account, the fees amounted to £22,455 17s. 6d. Of this total, £18,069 10s. 0d. was collected by means of postage stamps affixed to application forms for licences and £4,386 7s. 6d. was received in cash. The principal items were: Tea (Retailers’ licences), £10,934 9s. 6d; Sugar (Wholesalers’ and Retailers’ licences), £4,851 17s. 6d.; Kerosene (Retailers’ licences), £3,797 13s. 0d., and Salt (Importers’ licences), £1,210.

In the course of a test examination, I observed that the stamps affixed to certain application forms had not been cancelled by perforation or punching. I accordingly inquired whether the Accounting Officer was satisfied that the general arrangements made for the supervision of the cancellation of stamps were adequate to ensure that the stamps had been duly cancelled. I was informed that, following receipt of my inquiry, arrangements were made to have a general check carried out on stamped application forms held by the Department, in so far as this was possible, and that steps were taken to have proper cancellation effected in any case where this was overlooked at the time of receipt of the application. The Accounting Officer also stated that the arrangements made for the supervision of the cancellation of stamps affixed to application forms have been reviewed, that he is satisfied that they are the most satisfactory that can be made in the circumstances, and that appropriate instructions are being given to the staff concerned.”

904. Chairman.—Does that assurance satisfy you, Mr. Maher?

Mr. Maher.—Yes. Since that report was written, we have examined the accounts for a later year and we find that the new scheme of inspection and control outlined by the Accounting Officer is working satisfactorily.

905. You have no comment to make on that, Mr. Leydon?—No, I do not think it calls for any comment. At the time these difficulties arose the staff concerned were working under terrific pressure. We subsequently made a complete check of over 90 per cent. of the applications received and the percentage of those cases in which there had been failure to cancel the stamps in accordance with the regulation was .09.

906. I suppose it would be quite an easy matter to put whatever stamp is put on a document coming into the Department of Supplies over the postage stamp affixed to the application?—Whatever the fee is, the stamp is affixed to the application.

907. But surely a rubber stamp is applied to a document coming in indicating the date on which it was received?—Yes.

908. If that were applied over the postage stamp affixed to the document it would be an effective cancellation?—We do not think so. Perforation is really the most effective method and it is the method we adopt now.


Mr. J. Maher called.

No question.


Deputy Briscoe.—Might I ask for a little special consideration at our meeting next Wednesday? Could we meet before 11 o’clock, before the Accounting Officer comes in, in order that I may put certain matters to you on which you could rule beforehand rather than when the Accounting Officer is here?

Chairman.—Inasmuch as we are taking only the Army Vote on Wednesday, we could ask General McMahon to wait for a few moments while we discuss these matters. We can ask him to come at 11.15.

Deputy Briscoe.—That is satisfactory.

The Committee adjourned at 12.55 p.m.

* Appendix XII.

* Appendix XIII.

* Appendix XIV.