Committee Reports > List of Committees > Dáil > 1943 > Committee of Public Accounts > Report - Appropriation Accounts 1941 - 1942

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 28adh Deire Fómhair, 1943.

Thursday, 28th October, 1943.

The Committee sat at 10.45 a.m.

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

ELECTION OF CHAIRMAN.

Deputy B. Brady.—I move that Deputy Dillon be elected Chairman of the Committee. He has acted in that capacity for a number of years and he is an ideal man for the job.

Mr. Benson.—I second.

DEPUTY DILLON took the chair.

Chairman.—I am very grateful for the honour you do me in appointing me Chairman. Before we begin it might be well to recapitulate briefly the nature of our functions. Most of you are familiar with them, but in actual practice I would suggest to members that there are two important things to remember. One is that the Accounting Officer is not responsible for policy. All we can ask an Accounting Officer is whether the moneys committed to his care by Dáil Eireann have been spent in accordance with the appropriation instructions given to him by Dáil Eireann. Provided he is able to certify that to us, that is as far as his responsibility goes. Secondly, each member of the Committee is fully entitled to any information he may require and each member can address any question within our terms of reference to the Accounting Officer and is entitled to get an answer. On occasion, Deputies will find that the Accounting Officer may not have with him detailed information to deal fully with the inquiry an individual Deputy makes. If the matter is one of substance, the Accounting Officer will always prepare a memorandum and furnish it to the Committee, after he has had time to consult the other officers of his Department. Whilst any individual Deputy has a perfect right to ask for such a memorandum, I would remind Deputies that Accounting Officers are very busy men, and it is not reasonable to expect them to prepare memoranda in regard to trivial matters. Unless the point is one of substance, it is not customary to ask the Accounting Officer to prepare a memorandum in regard to it. On the other hand, if the point appears to be one of substance to the particular Deputy who asks the question, he has a perfect right to get the information he requires, even though his colleagues on the Committee may not share his view as to the importance of the matter. In that event, the Accounting Officer will be prepared to furnish that memorandum. Subject to these two overriding considerations, I think the rules of our procedure can best be learned by the traditional method of breaking the rules and learning by experience how to avoid doing so in the future. If there is any question which any member desires to address to me as to procedure, I shall be very glad, with the assistance of Mr. Maher, who is here to help us, to give him any information I can.

Deputy Briscoe.—There is one matter which I want to raise, but I do not know whether this is the appropriate time to raise it. You will facilitate the members of the Committee individually or together to consult you with regard to certain functions of the Committee. I have a query which I want to put in connection with the physical check on stores, so far as the Comptroller and Auditor General’s Department is concerned, but I can raise it on another occasion, if necessary.

Chairman.—I think the occasion is very appropriate now. Mr. Twomey is not due until 11 o’clock, so we have a few minutes, and I shall be very glad to discuss the matter if the Deputy will raise the question now. With Mr. Maher’s assistance, I expect we shall be able to clear it up. What is the exact nature of the point?

Deputy Briscoe.—I want to know if the Comptroller and Auditor General’s Department is fully empowered to make, on its own, a physical check whenever he likes in connection with stores. I want to find out whether, if a member of the Committee was quite satisfied from information he had that in certain cases “hugger-mugger” was going on, this Committee could suggest that the Office of the Comptroller and Auditor General, in conjunction with the Department of Defence, and possibly this Committee, make an investigation and satisfy themselves as to whether there was any foundation for the suggestion?

Chairman.—Doubtless you wish to keep the matter on general terms at this stage?

Deputy Briscoe.—Yes.

Chairman.—My reply to your specific inquiry is that this Committee has power to send for any papers, any documents or any officer of the Government whom it cares to cross-examine. Mr. Maher will tell us whether the officers of his Department, habitually or in exceptional cases, make the physical check which you have in mind in situ?

Mr. Maher.—That is so. Under the authority given to the Comptroller and Auditor General by the various Exchequer Acts he is entitled to make any inquiry he wishes as regards stores, cash or supplies in kind. How he does that is left entirely to his discretion by the Dáil and if a point arose about his check on any particular kind of stores, it would rest entirely with himself whether or not he would take action on it. If the suggestion came from this Committee in the normal way, he would naturally take serious notice of any implication that there was misuse or misappropriation of stores, or that the accounting system was in any way defective; but before the Committee give a ruling on this matter, I would suggest most respectfully to Deputy Briscoe that they should first decide the line of approach to the question. Does Deputy Briscoe approach the Committee as an individual, as a member of the House or as a member of the Committee? If this question is being raised by the Deputy as an individual, I do not think the Committee should deal with it; if it is being raised as a matter which it is proper for a member of the House to raise, I think it should be dealt with through the medium of the House; but if Deputy Briscoe is raising the matter as a member of the Committee, I think it should go through the formal routine, that is to say, a report should be made to the Committee and the Committee should consider it and give a direction, if they think fit. I think that should first be decided before the Comptroller and Auditor General could take it up.

Chairman.—I take it that your advice in this matter would be that if any individual member of the Committee had reason to suspect that there was specific misconduct in regard to a particular transaction, his proper course would be to ask the appropriate questions of the Accounting Officer when he is before us; and, if he found himself unsatisfied, to raise the matter in Dáil Eireann, or address a formal communication to the Committee requesting that the specific matter be investigated and brought to the attention of the Comptroller and Auditor General?

Mr. Maher.—And this Committee of Public Accounts in its report would refer to the matter and ask that a proper inquiry or investigation, as the Committee thought fit, should be made.

Chairman.—And in the ensuing year, the next Committee would have the Report of the Comptroller and Auditor General on the specific matter raised and there would be no limit to the inquiry which the Committee could proceed to make.

Deputy Briscoe.—That is quite satisfactory, except that Mr. Maher forgot to answer one point. The Chairman observed it immediately. Is the Comptroller and Auditor General’s Office empowered to make a physical check on the spot?

Mr. Maher.—Yes. The Acts, as I have said, give him full discretion; but as a rule it is physically impossible to do that.

Chairman.—Though it is true that test checks are made in several cases?

Mr. Maher.—We occasionally make a test check in the presence of the Accounting Officer’s representative because the Audit Office naturally would not be familiar with the details, the names of and uses to which all these technical stores might be applied.

Deputy Briscoe.—That is satisfactory. I shall consider the approach later.

Deputy M. O’Sullivan.—As a matter of general information, might I ask when is it usual to present the Comptroller and Auditor General’s Report on the various accounts? The financial year which we are now reviewing expired in March, 1942, and we are dealing with matters raised there well over 18 months later. Has something unusual intervened?

Chairman.—Yes, the general election. I entirely agree with the Deputy and the length of time that elapses before we bring it under review has often struck me. That period has been greatly shortened in the last four or five years because the Committee caught up on its arrears of work. In the case of the accounts under review, members will have observed that the financial year ended on 31st March, 1942, and this report was submitted to the Committee on 3rd February, 1943. That is long enough, but taking into consideration the emergency under which we exist and the other matters, on the whole, the lapse of time was not unduly long.

Mr. Maher.—Under the regulations, the Appropriation Accounts for the year ended March, 1942, must be rendered to the Audit Office by November, 1942. Under the Exchequer and Audit Acts, the Comptroller and Auditor General must submit these accounts, with his report thereon, to the Department of Finance not later than the 17th of the following January, roughly ten months after the close of the year, and the Department of Finance must submit them to the Dáil not later than 31st January. In actual practice, it is nowadays nearly impossible to conform to these dates because some of the Appropriation Accounts are not rendered by 30th November. If you look at the Army account, with which we shall be dealing later, you will find that it was not rendered to the Audit Office until 26th January, 1943, roughly three months late. The result was that the Comptroller and Auditor General could not prepare his Appropriation Report and Account until some time in February, so that they were a fortnight or three weeks late. This Report from the point of view of the Audit Office is only a fortnight or three weeks late, but, as the Chairman has said, the lapse of time between May when we were considering these accounts and now is caused by the general election occurring.

Deputy Benson.—It ought to be made clear that we have already dealt with a considerable proportion of these accounts.

Chairman.—The Committee was set up by the old Dáil in February and we had disposed of a considerable part of the Appropriation Accounts before the dissolution. The first business we have today is formally to adopt the evidence taken prior to the dissolution of Dáil Eireann. It is open to us, as a new Committee of this Dáil, to recall all the Accounting Officers who appeared before the Committee of the late Dáil and reexamine them, but that course is not customary. However, I suggest that this Committee should begin its proceedings to-day by adopting the evidence and proceedings of the old Committee and undertake to prepare our report in the light of the evidence elicited by the old Committee. I move accordingly a motion to that effect.

Agreed.

VOTE 30—AGRICULTURE.

Mr. D. Twomey called and examined.

Chairman.—There is a note by the Comptroller and Auditor General commencing as follows:—

Subhead G.—Fertilisers Scheme.

“13. No fertiliser scheme was in operation during the season 1941-42 and the expenditure under this subhead, totalling £52,876 8s. 8d., related to the recoupment to members of the Irish Fertiliser Manufacturers’ Association of the balance due in respect of rebates at the rate of £1 per ton allowed on superphosphate and compound and complete fertilisers supplied by them to retail merchants and co-operative societies during the period 8th October, 1940, to 30th June, 1941.”

540. Chairman.—Does that sum represent the closing of that scheme, Mr. Twomey?—That is so.

541. No further payments remain to be made?—No.

Subhead H.—Grants to County Committees of Agriculture.

“14. The charge to this subhead comprises normal grant amounting to £95,474 10s., special temporary grant totalling £6,000 and payments amounting to £35,329 3s. 3d for the purpose of supplementing Committees’ expenditure on the provision of lime for agricultural purposes.

The normal grant of £95,474 10s. includes a sum of £72,595 approximately equivalent to the proceeds of the agricultural rate of 2d. in the £ levied under the Agricultural Act, 1931, and extra grants, amounting to £22,879 10s. equivalent to the amount of the income of Committees from rates in excess of the statutory minimum 2d. rate.

In addition to the foregoing, sums amounting to £349 5s. were paid to two County Committees from funds derived from penalties imposed under the Corn Production Act, 1917.”

542. Chairman.—Is there anything you care to add to that, Mr. Maher?

Mr. Maher.—The first two subparagraphs show how the total charge of £136,803 is divided. The final subparagraph relates to the payment of £105 in connection with a cider orchard scheme, and the balance of £244 is for grants of £5 each under a scheme for the erection of poultry-houses.

543. Chairman.—The paragraph is mainly informative?

Mr. Maher.—Yes.

544. Deputy Brady.—Numbers of county committees of agriculture did not use a very large portion of this money. I am thinking of our own committees in Donegal where they were unable to get burnt lime. What happens to that money?

Mr. Twomey.—It goes back to the Exchequer.

545. The Department has a scheme for subsidising the erection of lime kilns. Could you say anything with regard to that scheme?

546. Chairman.—I take it, Mr. Twomey, that some of this money might have been appropriated for the purpose of erecting lime kilns?—It comes under another subhead.

Chairman.—Perhaps Deputy Brady would wait until we come to the particular subhead when Mr. Twomey could deal with the point?

Subhead M. 5.—Improvement of the Creamery Industry.

“15. The expenditure under this subhead totalled £3,947 19s. 2d. and receipts in connection with the disposal of creamery properties, which are brought to account as exchequer extra receipts, amounted to £10,701 9s. 3d. The total vote expenditure to 31st March, 1942, from moneys provided for the improvement of the creamery industry amounted to £1,195,715 4s. 4d., and receipts were £239,886 13s. 1d., leaving a net charge on public funds of £955,828 11s. 3d.”

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

Mr. Maher.—No. It is an annual paragraph showing the total expenditure to date on the creamery industry. I understand that the usual returns of expenditure for the year since the commencement of this scheme in 1927, together with the consolidated balance sheet of the Dairy Disposals Company, has been furnished to the Committee.

Chairman.—The paragraph is, I take it, for information purposes. Perhaps I might add that the Accounting Officer renders to us every year a statement of the accounts of the Dairy Disposals Board which will appear in due course as an appendix to our report* and which will be available to any Deputy who cares to peruse it.

Subhead M. 7.—Allowances in respect of the Storage of Butter for winter requirements and the production and acquisition of butter and other dairy products.

“16. In accordance with arrangements made under two schemes for the cold storage of creamery butter to meet home consumption during the winter period, allowances amounting to £63,961 7s. 10d. were paid to creameries and merchants to cover the cost of storage, the rates being 10s. 6d. per cwt. and 10s. per cwt. in respect of the main and supplementary scheme, respectively. In addition, the Newmarket Dairy Company Limited, was authorised to arrange for the cold storage of a quantity of creamery butter, and a payment on account of £8,000 was made to the company in respect of the expenses of storage and commission at the rate of one-half per cent. on the gross turnover. Allowances amounting to £1,009 11s. 1d. were paid to merchants to meet the cost of cold storing non-creamery butter, and the charge to this subhead also includes payments amounting to £2,794 18s. 9d., made to Dublin wholesale merchants and to a creamery in connection with the cold storage of creamery butter during the previous winter. I have inquired regarding the authority under which the last mentioned expenditure was incurred.

An allowance at the rate of 6/- per cwt. was payable on creamery butter produced in the year under review, the expenditure amounting to £192,304 14s. 3d. and equivalent allowances on the production of cheese totalled £10,227 5s. 1d. I am in communication with the Accounting Officer regarding the rate of allowance paid on cheese sold on the home market on and after 2nd December, 1941.

The balance of the charge to this subhead, amounting to £17,987 13s. 4d. relates to the payment of allowances on creamery butter and cheese produced, and non-creamery butter acquired, in the previous year.”

548. Chairman.—I observe, Mr. Maher, that the Comptroller and Auditor General has inquired regarding the authority under which £2,794 18s. 9d. was paid in connection with the cold storage of creamery butter during the previous winter. Can you give us any information in regard to that matter?

Mr. Maher.—This paragraph related to payments of certain storage charges on creamery butter stored in the previous winter. It was considered that the items were outside the scope of the ordinary storage schemes, and that the covering sanction of the Department of Finance for the payment was necessary. This has since been obtained.

549. Chairman.—Can you tell us, Mr. Twomey, how it came that that extrastatutory payment was made?—It was in June of 1940 that the Government requested my Department, in view of what was regarded as a serious state of emergency existing at the time, to arrange with the merchants in Dublin to store a quantity of butter for emergency purposes and it was, therefore, a special emergency scheme, outside the general scheme. The quantity of butter stored under that scheme was about 7,000 cwts., and the expenses incurred were afterwards approved by the Department of Finance.

550. Chairman.—Have you any observation, Mr. Hogan, you care to make?

Mr. Hogan.—No, Sir, except to say that we were satisfied, on the statements of the Department when they sought our covering sanction, that the circumstances of the emergency justified this addition to the normal storage scheme.

551. Deputy Benson.—Could Mr. Twomey tell us whether the whole of this amount of money paid for the storage is borne by the Exchequer. In other words, it may be regarded as a subsidy on the price of butter—is that correct, or is it recovered at all in the sale of butter?

Mr. Twomey.—The storage charge was entirely an Exchequer charge.

552. Chairman.—I think Deputy Benson is referring to the sum of £63,961 7s. 10d., which covered the cost of storage, the rates being 10s. 6d. and 10/- per cwt. in respect of the main and supplementary scheme, respectively.

Mr. Twomey.—That was entirely an Exchequer charge.

553. Deputy Allen.—It could not be considered a subsidy on butter. The 10s. 6d. and 10/- per cwt. is not an extra subsidy on butter to the creameries— would that be right?—No, it was to cover cold storage costs.

554. Deputy Briscoe.—Were these charges for specific times of storage? In fixing these charges was there any arrangement made that the 10/- should cover a specific period and the 10/6 a specific period?—Yes. The butter had to be kept in store for a certain period and could not be withdrawn except with the sanction of the Department of Agriculture.

555. So that it was related to what would be called normal storage charges? —That is so.

556. Deputy Benson.—In regard to Deputy Allen’s remark, surely the position is that if the Exchequer had not borne this sum the butter would have to bear it. Therefore it is a subsidy.

Deputy Allen.—It is of no advantage to the creameries.

Deputy Benson.—Oh, no—it is to the consumer.

557. Chairman.—I observe, Mr. Maher, in regard to the allowance at the rate of 6/- a cwt. on creamery butter produced in the year under review, you are in communication with the Accounting Officer and also in regard to the allowances on the production of cheese, totalling £10,227 5s. 1d.

Mr. Maher.—As regards the cheese, perhaps I should explain that the value of the cheese is fixed by reference to the current price of creamery butter. In the year under review the value of creamery butter was 158/- per cwt. and the equivalent value of cheese, based on this figure, was 95/6, but the wholesale price of cheese was 90/4 and, to cover the difference, an allowance of 5/2 was made. The wholesale price was increased by 4/8 on the 2nd December, 1941, but, notwithstanding this, the allowance of 5/2 continued to be paid. We accordingly asked that the sanction of the Minister for Finance should be sought and this has now been furnished.

558. Chairman.—Can you tell us, Mr. Twomey, why the subsidy on cheese was continued after the wholesale price had been raised to a level stipulated for in the price scheme relating cheese to butter?— It was essential to provide for storage of cheese for the non-production period. The production period for cheese is generally from May to the 1st October, in which period supplies are plentiful and fresh cheese can be made from milk. There is a non-production period running from about October to the following May and, in order to provide cheese for the consumers in that period, it was essential to provide for storage. It is evident that the creameries that we required or requested to store cheese would need something to cover their storage costs. My Department considered that a convenient way of doing that would have been to increase the production allowance of 5/2, and we felt that if there was a moderate increase made in that production allowance the creameries concerned would have been satisfied. But the Department of Finance would not agree that the storage costs in this case should be a charge on public funds. Then there was only one other way of recouping the creamery their storage charges, that was, to allow them to put up the price of cheese. At the time, cheese was controlled by Orders of the Department of Supplies and that was the Department that the producers or storers of cheese approached with a view to getting increases to cover their costs. They satisfied the Department of Supplies that their storage costs would be somewhere in the region of halfpenny a pound, or 4/8 per cwt., and that Department agreed that they might charge 4/8 per cwt. more for cheese that had been stored. We went into the matter at the time and, taking into account shrinkage in the ripe cheese, which amounts to about 2½ per cent., the insurance, interest on capital involved, risk of depreciation and the fact that in the case of stored cheese, unlike butter, there is a good deal of extra labour because the cheeses have to be turned every couple of days. We thought, on the whole, that the extra costs that the storing creameries had to bear would come very close to the 4/8. The creameries themselves claimed it was fully the 4/8. We felt from the information at our disposal that it was somewhere between 4/2 and 4/8. In view of the fact that we were satisfied that the storage costs on the whole absorbed the increased price, we felt there was no case for reducing the production allowance by reason of the fact that the price had been allowed to go up.

559. Chairman.—Would it be unfair to describe that operation as one of short-circuiting the Department of Finance?— It was not, because the Department of Finance specifically said that they thought the storage charges should be met by an increase in the price of cheese to the consuming public. At the time an increase in the price of cheese to the consuming public was not the business of my Department; it was that of the Department of Supplies and, as I said, when the producers approached them, they agreed to the increase and we felt satisfied that there was no case for a reduction in the production allowance by reason of that increase.

560. Was not the whole basis of the scheme that when butter stood at 158/-a cwt., creameries electing to produce cheese from their milk should be entitled to receive 95s. 6d.?—Yes.

561. Therefore, so long as the fixed price was 90s. 4d. the Exchequer was prepared to pay 5s. 2d. in order to make the cheese-butter plan function?—No; that was for cheese that would not be stored, with no extra cost involved.

562. That was the basis of the scheme? —It was.

563. Therefore, does it not seem that when the wholesale price of cheese was raised to 95s. 6d., which was the basic price envisaged by the original butter-cheese scheme, either the subsidy should have stopped or a new scheme analagous to the butter storage scheme should have been launched, allowing a specific charge on the Exchequer in respect of storage charges?—That was our proposal—to allow a specific charge on the Exchequer, but it went the other way.

564. When the Department of Finance refused your scheme, I am suggesting that the Department of Agriculture, very astutely, short-circuited the Department of Finance?—No, we did not. We had nothing to do with it then. Once the question of an increased price arose, then it was the Department of Supplies which was controlling the price of cheese and the producers, as I said, approached that Department and the latter agreed to the increase. It is obvious, is it not, that a creamery that was going to incur storage costs ought to get something more than a creamery that was not incurring them?

565. What seems obvious to me is that once the creameries went to the Department of Supplies and got the price raised to 95/6, at that moment the subsidy under the butter-cheese scheme fell to the ground because there was no discrepancy between the two prices?—I do not agree. I think that is entirely wrong——

566. I wanted to give you an opportunity of expressing your view on that aspect of the question?——because the increased price given to cover storage costs was absorbed in the storage costs and therefore any advantage the storing creameries had in the way of increased price was taken from them by their storage costs and if, in addition, we were to take from them any of the subsidy we would be placing the creameries that stored cheese in a worse position than those who did not store cheese.

567. Chairman.—Mr. Hogan, have you any comment to make to us on this matter?

Mr. Hogan.—I think, Sir, you have put the case for the Department of Finance in much the same way as I would have put it. It appeared to us that the Department were aware of our view, in October, 1941, that it was the consumer and not the Exchequer which should pay for storage charges, none the less, when the wholesale price was increased and payment of the production allowance continued, they had in fact paid the storage charges out of public funds. But, the Department of Agriculture pointed out to us that if the production allowance had been suspended at that time it would have led to inequitable results as between those creameries who stored and those who did not and, on the whole, we felt that we could give covering sanction. The actual benefit to the producer could not be estimated—we thought it was rather slight on the whole—and we thought we could give covering sanction, which we did.

568. Chairman.—Would it be correct to say that the Department of Finance would have expected, when cheese rose from 90/4 to 95/6 that the equalisation scheme between butter and cheese would have automatically ceased to function and that no payment would fall to be met under it?—If the increase in the wholesale price was sufficient, yes.

Chairman.—As it was.

Deputy Briscoe.—I take a different view. As I understand it, what Mr. Twomey——

Chairman.—Let us confine ourselves at this stage to asking questions. We can discuss our report at the last meeting.

569. Deputy Briscoe.—Mr. Twomey and Mr. Hogan have made statements. I want to know is this the position—that the question of subsidy could not be disturbed because an extra charge was being put on certain creameries for the purpose of storing cheese and it was not a question of giving them extra profit or extra price at all. It was an extra charge they had to recoup from someone else. Is that the position?

Mr. Twomey.—That is the position, yes. There is no advantage whatever to the storing creameries.

570. Deputy Benson.—Does that apply to all creameries?

Mr. Twomey.—No, only to the storing creameries.

571. Deputy Cosgrave.—Does it cover the advance in price?

Mr. Twomey.—Taking it all round, we were satisfied that the storage cost lay in or around 4/2 or 4/8, but even so, the creameries who had engaged in storing claimed that even 5/- would not pay them. I think, however, that it is quite certain that if creameries are asked to store butter or cheese for the benefit of the consuming public, during the non-consuming period from December to May, they should not be asked to do so unless they are recouped as a result of the increased price, and the increased price certainly did not do any more than to recoup them for the costs they had incurred, and therefore they were in the same position as the creameries which had sold their commodities immediately.

572. Chairman.—Am I correct in saying that the price of 95/6 was sanctioned by the Department of Supplies only for cold-stored cheese, and not for any other cheese?

Mr. Twomey.—Yes, that is so.

573. Chairman.—Very well. I take it, Mr. Maher, that the last paragraph is purely informative?

Mr. Maher.—Yes.

Chairman.—Well, now we come to paragraph 17—Subhead N. 1.—Diseases of Animals (Ireland) Acts, 1894 to 1938. As this is a very long paragraph, I do not propose to read it in extenso, as it would be a waste of Mr. Twomey’s and Mr. Hogan’s time, but I hope that that will not deter any member of the Committee from asking questions with regard to the paragraph, which will be found in the record.

Subhead N. 1.—Diseases of Animals (Ireland) Acts, 1894 to 1938.

“17. The expenditure charged on this subhead includes £460,012 11s. 2d. in connection with the outbreak of foot-and-mouth disease, the main items being £363,206 6s. 4d., paid as compensation to the owners of 37,527 animals which were slaughtered, and £64,780 1s. 6d. remuneration of temporary lay assistants. Including £22,949 17s. 1d. charged to other subheads, and payments during the previous year amounting to £104,536 0s. 8d. the total expenditure from the Vote for Agriculture up to 31st March, 1942, amounted to £587,498 8s. 11.

In connection with the payment of compensation to the owners of animals slaughtered, I observed that in a number of cases proceedings were taken against the owners of animals for negligence in reporting the existence of the disease and that, in addition to the fines imposed by the courts, approximately £3,100 was withheld from the compensation payable. Fines in respect of these and other contraventions of the regulations, amounting to £2,502 19s. 7d. are included in the account of the General Cattle Diseases Fund appended to the appropriation account.

Certain temporary lay assistants employed on public holidays were allowed only a full day’s pay for each public holiday on which they worked. Owing to the failure to pay these assistants a full day’s pay increased by 25 per cent. in respect of such employment, they became entitled under Section 9 of the Holidays (Employees) Act, 1939, to an additional full day’s pay. With the sanction of the Department of Finance, payments amounting to approximately £100 made to a number of assistants are included in this account.

The Committee of Public Accounts, in its report dated 16th July, 1942, on the accounts for the year 1940-41, referred to certain statements of account furnished by the Dublin Emergency Meat Supply Committee in respect of the sale of carcases of nondiseased animals removed from infected premises. The Committee of Public Accounts was informed that the expenses shown in the statements were not sufficiently vouched, and that a departmental check had revealed a number of errors in adjustment of which an additional payment was made in the following year. As further transactions were carried out in the year 1941-42, the Committee proposed to review the matter further when the accounts for that year were under examination. Sums totalling £28,233 8s. 6d. were paid over to the Department during the year and are brought to account as appropriations in aid. Including £11,447 11s. 9d. received in the previous year, the net receipts to 31st March, 1942, from the sale of salvaged carcases amounted, therefore, to £39,681 0s. 3d. the total number of animals salvaged being 4,828. Of the total amount, £17,703 7s. 0d. was received from the Dublin Emergency Meat Supply Committee, and included £666 12s. 7d. in adjustment of a number of errors found in the course of a Departmental check of the statements of account. Sums totalling £16,085 12s. 7d. were received from the Canning Supply Committee, and the balance of £5,892 0s. 8d. accrued from the disposal of animals by other concerns. While all the animals salvaged were duly accounted for, the statements of account furnished were not certified in all cases, nor were they generally supported by vouchers, and the Department of Finance, in conveying its covering sanction for the arrangements made for the disposal of the salvaged carcases expressed the view that certified accounts supported by vouchers should have been furnished and also that the amount of commission allowed to some of the concerns was too high in relation to the expenses incurred.

The main function of the Dublin Emergency Meat Supply Committee, which was appointed by the Minister for Agriculture in February, 1941, was to secure the supply of meat to Dublin City during the period of the epidemic, and its remuneration was limited in the first instance to the profits earned, provided these did not exceed two and one-half per cent. of the gross proceeds of sales. The Committee’s accounts, which were prepared and certified by a professional accountant, showed for the period 3rd to 30th March, 1941, a net profit of £2,430 3s. 8d., and sales of meat having realised £136,315 15s. 7d., the profit referred to was divided among the members of the Committee as remuneration. For the period 31st March to 11th July, 1941, when the Committee’s operations terminated, a rate of one per cent. commission on gross sales was fixed, and the Committee retained £5,398 9s. 8d. on this basis. The transactions in the second period yielded a surplus of £4,903 1s. 6d., which was remitted to the Department and is accounted for as extra receipts payable to the Exchequer. The Department of Finance, in sanctioning the foregoing arrangements, expressed the opinion that the revised commission allowed for the second period should have been fixed at a rate lower than one per cent., having regard to all the circumstances, including the fact that a monopoly of the trade had been given to the Committee.

I am in communication with the Accounting Officer regarding the disposal of stores and equipment issued in connection with the suppression of the outbreak.

574. Chairman.—With regard to the total payments in connection with this matter, Mr. Twomey, am I correct in saying that from the commencement of the scheme, at the end of March, until the end of July, the members of what has been called “The Big Five,” who had been administering the scheme on behalf of the Minister for Agriculture, received approximately £64,780, for their services?

Mr. Twomey.—This amount includes cost of purchase, freight, slaughtering, and other expenses.

575. Chairman.—But each of the members of that Committee received that amount?

Mr. Twomey.—The remuneration of the Committee was £7,829 for the full period.

576. Chairman.—Well, then, there is an item here regarding wages for the same period. Can you recollect, from the account rendered to you, whether vouchers were produced for the total of this sum?

Mr. Twomey.—No, we did not get vouchers in connection with the charges. A good deal of the amounts were connected with standard charges for slaughtering, and so on, in the Dublin Abattoir.

577. Chairman.—I am referring only to wages In the first place, we are told that the Committee’s accounts showed, for the period, 3rd to 30th March, 1941, a net profit of £2,430 3s. 8d., and that sales of meat having realised £136,315 15s. 7d., the profit referred to was divided among the members of the Committee as remuneration, and when the Committee’s operations terminated, a rate of 1 per cent. commission on gross sales was fixed, and the Committee retained £5,398 9s. 8d. on that basis. We are told that the transactions in the second period yielded a surplus of £4,903 1s. 6d., which was remitted to the Department and is accounted for as extra receipts payable to the Exchequer.

Mr. Twomey.—With regard to those charges, I have not the details in front of me at the moment, but I think that they include, not alone the standard wages involved in the slaughter and dressing of the animals in the Dublin Abattoir, but also payments made to persons who were sent out to buy the cattle.

578. Chairman.—There is also an item here with regard to Corporation charges.

Mr. Twomey.—Yes.

579. Chairman.—There is also another item, amounting to over £5,000, for the period from the end of March to July, and another item of about £4,000 for commissions from the end of March to July.

Mr. Twomey.—That, I think, would be commissions to dealers and agents.

580. Chairman.—Well, take the figure of £23,000 for wages alone, it would be well to bear that figure in mind when one considers the remuneration that was paid to the administrators of the scheme for five months’ work.

Mr. Twomey.—That included office expenses, the employment of men connected with the handling of the cattle and the handling of carcases, and also the employment of men connected with the transport and so on.

581. Chairman.—Of course, there was a large provision for transport, apart from that?

Mr. Twomey.—Yes, but I am referring to charges for loading and unloading.

582. Chairman.—Yes, but I do not think that that item covers transport itself.

Mr. Twomey.—No, they are separate items.

583. Chairman.—Yes, they amounted to some £13,000 from the end of March to July. I see that there are further charges amounting to £2,689 8s. 7d. for freight. Are you satisfied, Mr. Twomey, on the whole, that a freight rate of approximately £4,000 a month, in addition to a commission rate of approximately £1,400 a month, and a remuneration for the five gentlemen administering the scheme at a rate of £300 to £400 a month each, were equitable charges in all the circumstances?

Mr. Twomey.—As regards the actual expenses incurred by the Committee in doing that work, we had no particular check on how many men they employed. The supply of meat to the Dublin and Dun Laoghaire areas involved the purchase and slaughter of something like 1,000 cattle per week and from 3,000 to 3,500 sheep per week. In addition to that, the area from which these people could buy was very restricted, and the number of men that had to be employed in purchasing the cattle, therefore, was bigger, because no markets were being held at the time and the buying agents had to go from farm to farm. Not alone that, but they could only go to farms to which they were permitted to go by our Department. That, of course, meant that the expenses involved in the purchase and collection of the cattle, even before slaughter, were abnormally high. It meant farm-to-farm visits, and the use of motor cars, and so on, for travelling purposes. Again, when it came to the question of the slaughter of cattle in the Dublin abattoir, the scheme proved to be very costly, because the accommodation there was insufficient for the killing of such a large number of cattle and sheep. The result was that the slaughter of these cattle and sheep could not be done in normal working hours, and a great deal of it had to be done at night. Similarly, in the case of the labour employed in the loading and unloading of cattle, a good deal of that had to be done outside normal working hours. I am aware also that the expenses of the Committee were very much higher than they would be in normal times. I would not say that we had means of checking every £1 spent by the Committee. We were concerned mainly with checking the accounts submitted to us and to seeing that the commission which the Committee drew for itself was not more than was agreed to.

584. Chairman.—I observe that the Department of Finance says that, having regard to all the circumstances, the revised commission allowed for the second period should have been fixed at a lower rate than 1 per cent.—including the fact that a monopoly of the trade had been given to the Committee. Have you any comment to make on that observation?

Mr. Twomey.—In a matter of that kind one has to be guided—indeed, one is bound to be guided—by the conditions which obtain in ordinary commercial or trade practices. In the Dublin market, the commission charged by salesmen, either in the fat cattle market or, in the case of store beasts, is 4d. in the £1. Therefore, when we allowed the 1 per cent., which amounts to 2 2/5d. per £1—even allowing for the fact that they had a monopoly of the trade—the rate was considerably less than the commercial rate of 4d. in the £1. I should like to say also that when this arrangement with the Committee was terminated on the 11th July, when circumstances permitted, the Dublin victuallers met and had a discussion with the Committee, and they continued availing of the services of that Committee for four months. In other words the Dublin City and Dun Laoghaire victuallers, or their representatives, went very carefully into this matter, and decided to avail of the services of that Committee, and did avail of their services for four months at the same rate. Accordingly, I do not think that the commission we had been paying was excessive because, if it had been excessive, the hard-headed butchers and victuallers of Dublin and Dun Laoghaire would have made sure to bring down the commission.

585. Chairman.—Has Mr. Fitzgerald any comment to make on that?

Mr. Fitzgerald.—Well, no. We recognised at the time that the Department of Agriculture were up against a difficulty, and I do not think that our Department will press the matter any further, beyond making that comment.

586. Chairman.—If there is no other question to be addressed to Mr. Twomey or Mr. Fitzgerald, I think we can come to the next item.

587. Deputy O’Sullivan.—In connection with the last paragraph there, dealing with the disposal of stores and equipment, I should like to know what the position is.

588. Chairman.—Yes, but if there is no other question regarding the general circumstances—perhaps Mr. Maher would like to say something.

Mr. Maher.—As regards that paragraph, we asked the Accounting Officer to approach the Department of Finance for authority to write off the sum of £8 6s. 7d. being the value of certain stores not accounted for. The necessary authority has been furnished.

589. Deputy O’Sullivan.—Was there only that small amount involved?

Mr. Maher.—That was the difference unaccounted for.

590. Chairman.—On the whole, I think that the writing off of £8 6s. 7d. on such a large transaction was not a discreditable finish to the business.

Mr. Maher.—We merely wanted to get the authority of Finance.

Subhead O. 10.—Flax Act, 1936.

“18. The charge to this subhead includes a payment of £663 0s. 6d. made to a co-operative society on foot of a guarantee given to the society in repect of flax seed imported for the 1940 sowing season and sold to distributors at prices fixed by the Department. The guarantee provided for the payment to the society of the amount by which the proceeds of the sale of seed fell below the sum of the actual costs and expenses of the society in purchasing and selling the seed, and commission at the rate of 3 per cent. on the purchase price. Seed costing £27,181 3s. 3d. realised £31,294 7s. 10d. on sale, while expenses and commission amounted to £3,960, 16s. 7d. and £815 8s. 6d. respectively.”

591. Chairman.—Is there anything you wish to add, Mr. Maher?

Mr. Maher.—The sanction of the Department of Finance for the schemes has since been obtained.

592. Chairman.—Has that scheme terminated?—It has. It continued for one year only and was terminated then.

Subhead O. 13.—Emergency Powers (Cereals) Order, 1941.

“19. The Emergency Powers (Cereals) Order, 1941 (Statutory Rules and Orders, No. 379 of 1941) made in August, 1941, for the purpose of regulating the disposal of the 1941 cereal crop, provided for the establishment by the Minister for Agriculture of a Cereals Distribution Committee. The functions of the Committee were to advise the Minister on matters relative to the assembly and distribution of the oats and barley crops and to act as the Minister’s agent in giving directions for the disposal of oats and barley purchased by holders of licences to deal in those cereals. The charge to this subhead of £2,410 6s. relates to the expenses of the Committee and includes salaries of staff, travelling and subsistence expenses of members, and the cost of provision of office accommodation. The Order also provided for the payment of such fees as the Minister for Finance might prescribe for the issue of grain dealers’ licences and for directions by the Cereals Distribution Committee in respect of allocations of grain. The fees prescribed were £3 for each grain dealer’s licence and 6d. per ton payable by persons to whom grain was distributed through the Committee, and the receipts from these sources, amounting to £3,726, and £2,315 14s. 8d. respectively, are included in the appropriations in aid.”

593. Chairman.—Do you wish to add anything, Mr. Maher?

Mr. Maher.—The particulars referred to will be found on pages 91 and 96, I understand this Committee ceased to function in the following year.

Mr. Twomey.—That is so.

Subhead O. 14.—Emergency Powers (Tillage) Orders, 1939 to 1941.

“20. With a view to increasing the area under tillage, Orders were made under the Emergency Powers Act, 1939, requiring the occupiers of arable land to till a specified proportion of their holdings and the Minister for Agriculture was empowered to enter on and take possession of holdings whose occupiers failed to comply with the provisions of the Orders, and to cultivate such holdings or make conacre lettings. Certain county surveyors were authorised to arrange for the cultivation of lands which it was found impracticable to let in conacre, and sums totalling £1,940 3s. 11d. are charged to this subhead in respect of the expenses incurred under this arrangement. The balance of the expenditure, amounting to £229 10s. 1d., relates to expenses in connection with the making of conacre lettings. The latter amount was recovered from the rents received and is included in the appropriations in aid, together with the sum of £1,707 15s. 1d., representing the proceeds of the sale of crops raised and fencing materials purchased by the county surveyors mentioned. The total receipts from conacre rents amounted to £1,176 6s. 9d. and the disposal of the balance of £946 16s. 8d., which is credited to a suspense account, is, I understand, the subject of correspondence with the Department of Finance.”

594. Chairman.—Have you been advised, Mr. Maher, of the outcome of the correspondence?

Mr. Maher.—Yes. Sir. Since the date of the auditor’s report, an Emergency Powers Order disposing of the balance was made in May last.

595. Chairman.—Perhaps you will tell us, Mr. Twomey, how the surplus of £946 16s. 8d. was disposed of?—It has to be applied, first of all, to the Department of Agriculture expenses and then to any sums that are owed to Government Departments such as my own Department or the Department of Lands.

596. Sums owed by whom?—By the owners of the land. Then, sums due in respect of rates to a local authority would next come out of it and any balance left would be paid to the owner of the land.

597. What was the first item?—Expenses of the Department of Agriculture and any sums owing to the Department.

598. What expenses had you in mind? I understood the surplus was arrived at after the expense of making conacre letting had been deducted?—That is so. It would be sums due to the Department under both headings.

599. By the owner of the land?—Yes. And then sums due for rates.

600. Any remaining surplus to be given to the owner of the land?—Yes.

601. Deputy O’Sullivan.—Were there many cases where the county surveyors had to enter and, broadly speaking, where were they?—There were 34 cases where the county surveyor entered and they were spread over six counties. They were mainly in Tipperary, Cork, Limerick, Westmeath, Meath and Kildare.

Chairman.—I think the counties were Cork, Limerick, Roscommon, Tipperary, Waterford and Westmeath.

602. Deputy Briscoe.—It would not be fair to conclude from this that it would pay some people to allow the county surveyor to enter on their lands, carry out tillage operations, pay all rates and expenses and then hand them over any profit remaining?

603. Chairman.—I think the facts were that in cases where the county surveyors entered on the land and carried out tillage operations, there was a slight loss, but where the county surveyor let the land in conacre there was a slight profit?—In some cases there was a loss where the county surveyors tilled and in some cases there was a slight profit.

604. What became of the profits where the county surveyors tilled?—It will be included in the surplus and distributed in the same way as the surplus from conacre lettings.

605. Chairman.—Did the sum of £1,940 3s. 11d. cover the expenses of the county surveyor in cultivating and in conacre lettings?—There was a net deficit on the county surveyors’ operations in 22 of the cases and in 12 there was a surplus. There was a net deficit over the whole lot.

606. Deputy O’Sullivan.—Was it serious?—It amounted to £373.

607. Deputy Benson.—How is the sum of £1,940 3s. 11d. arrived at?—That includes expenses in connection with conacre lettings as well as where there was direct tillage done.

608. Mr. Briscoe.—What I am trying to ascertain is this. After these payments were made to the Government Departments, it is suggested that there was a net balance which will go to the owners of the land. I was anxious to ascertain whether that was in any case a big amount which could be taken as an inducement to people to get the Government to do the job for them.

Deputy O’Sullivan.—It was unsatisfactory on the whole, I think.

609. Deputy Cogan.—Would the owners of the land not have done much better if they set the land themselves?

Chairman.—Have you any rejoinder to make, Mr. Twomey, to Deputy Briscoe’s remark?—The owners of the land would have done better if they had done their own tilling because you will realise that we had to hire tractors and to hire men to do the tillage and that the rates we had to pay were not very economical. The cost involved in sending an inspector to supervise the tillage had to be included. We had also to pay a caretaker once we entered on the land. The farmer himself would not have to meet all that expense.

610. Chairman.—In fact, the scheme had to function only over an area of 370 acres in the whole State?—That was all. It was just to show farmers as a whole that they could not refuse to do their tillage and get away with it.

611. Deputy Benson.—The sum of £1,940 3s. 11d., Mr. Twomey says, includes expenditure in connection with the conacre lettings but the Comptroller and Auditor-General tells us that it represents expenditure on the cultivation of land which it was found impracticable to let in conacre and that the sum was charged to this subhead in respect of expenses incurred under this arrangement.

612. Chairman.—The correct statement, Mr. Twomey, would appear to be that £1,940 3s. 11d. was spent on compulsory tillage operations in respect of which £1,707 15s. 1d. was recovered from the proceeds of the sale of crops, leaving a deficit on these operations of £233. The balance of the expenditure, £229 10s. 1d., represented expenses in connection with the making of conacre lettings. The total receipts from conacre rents, it appears, amounted to £1,176 6s. 9d., leaving a balance of £946 16s. 8d. to be distributed amongst the owners of the conacre lettings whereas those people on whose lands compulsory tillage was carried out get no payment at all?—That £946 16s. 8d. represents a surplus left out of conacre lettings.

613. Chairman.—This transaction is a little complex, as it was bound to be, and if it is not too much trouble, at your leisure you might prepare a memorandum* setting out how the expenses were allocated, and how the persons who had compulsory tillage and compulsory conacre done for them actually fared under the scheme?—I have the sheet here, and I can send in copies of it.

Subhead P.—Appropriations in Aid.— Levy under the Slaughter of Cattle and Sheep Acts, 1934 to 1936.

“21 As stated in previous reports, the provisions of the Slaughter of Cattle and Sheep Acts relating to the collection of levy in respect of cattle and sheep slaughtered for human consumption ceased to be in force as from 1st August, 1936. The amount collected in the year in respect of levy due but uncollected at the date mentioned was £2,018 0s. 4d., and the amount of levy outstanding at 31st March, 1942, was £11,325 8s. 5d. As noted in the account, sums totalling £2,131 11s. 1d were written off with the sanction of the Minister for Finance.”

614. Chairman.—This, I take it, is in connection with the old free beef scheme? —Yes.

615. Can you give any further information as to the state of this account now? —It is reduced now to £9,600 odd, and we are still receiving sums under it, mostly by an instalment arrangement.

616. You think it best to let the thing drag on in the hope of getting further sums?—Yes, because a number of persons have come to an instalment arrangement with us to pay over a period of years, and if we were to remit the debts generally, these people would feel that they were not obliged to pay any longer.

617. Are you taking any steps to recover by way of decree sums due by other victuallers who have refused to make proposals for repayment by instalment?— We have taken steps. They are all current, they are proceeding.

618. It would not seem fair to let a man off altogether who refused to make any accommodation with you, while extracting the full payment from a man who undertook to pay by instalment, and was doing his best?—They are all being dealt with in so far as they have any means.

Extra Receipts payable to Exchequer.

“22. In my last report, I mentioned that arrangements were made for the refund, by a firm which had applied for a licence to enable it to resume its beef-canning business, of an ex gratia payment of £550 made in the year 1936-37 in consideration of the termination of the firm’s activities as the result of a monopoly granted to another concern. Another firm engaged in the beef-canning business, to which an ex gratia payment of £860 was made in similar circumstances, applied for a manufacturing licence under Section 34 of the Slaughter of Cattle and Sheep Act, 1934, to enable it to resume its activities, and the refund of the payment referred to by half-yearly instalments of £80 was made a condition precedent to the issue of such licence. Sums totalling £260 were received from the two firms in the year under review.”

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

Mr. Maher.—That paragraph is for information only.

620. Chairman.—It is now the policy of the Department, Mr. Twomey, to do away with the monopoly created in the 1936-37 period?

Mr. Twomey.—That is so, to allow the other manufacturers to resume if they desire.

621. Will anybody else who has suitable premises be allowed to get a licence on equal terms?—Yes.

622. Deputy Cosgrave.—And they will be given an ex gratia grant if they want it?—That was only made to two firms in 1936-37 who were paid sums to cease business at the time. It was really in connection with the surplus Kerry cattle for which a market could not be found and an arrangement was made with Clover Meats, Waterford, to undertake to deal with all the surplus Kerry cattle. In order to permit them to do so and to put up the necessary plant, it was essential to give them the trade entirely and two other firms in Dublin who were beginning to engage in canning and had acquired some plant for the purpose were asked to suspend operations and, as compensation for the plant which they had acquired and which would be no longer useful to them, they were paid these sums. When they wished to resume business, we felt that, having paid them something to cease business, it was only fair that on resumption they should make a refund of the amounts.

623. Why were they asked to cease canning operations?—It would not have been economical for the company in Waterford to have undertaken the work they did of dealing with all the Kerry cattle unless they got a monopoly of the business.

624. Chairman.—I take it these two firms are paying the instalments stipulated for them regularly?—Yes.

Paragraph 22 (continued).

“As will be seen from the account. fees amounting to £1,731 were received in respect of licences granted under the Emergency Powers Act, 1939, and Orders made thereunder. These comprised £1,075, being £25 for each licence issued under the Emergency Powers (Control of Export) (Amendment) (No. 9) Order. 1941 (Statutory Rules and Orders, No. 330 of 1941). for the export of cooked meat, and £656, representing £1 for each licence issued under the Emergency Powers (Export of Dead Poultry and Rabbits) Order, 1941 (Statutory Rules and Orders, No. 536 of 1941).

Surplus receipts in connection with the sale of meat by the Dublin Emergency Meat Supply Committee during the period 31st March, 1941, to 11th July, 1941, amounted to £4,903 1s. 6d. and are referred to in paragraph 17 of this report.”

625. Chairman.—Was there no surplus in respect of receipts in connection with the sale of meat by the Dublin Emergency Meat Supply Committee in the period from 3rd March, 1941, to 30th March, 1941?

Mr. Twomey.—There was no surplus. In fact, the amount earned was less than the commission agreed to.

626. Chairman.—Have you anything to add to this, Mr. Maher?

Mr. Maher.—With a view to controlling the trade, the export of cooked meats, except under licence, was prohibited as from 7th July, 1941. The grant of a licence was subject to compliance with certain conditions, including the payment of a fee of £25. As regards the second part, following an arrangement made with the British Ministry of Food, it became necessary to prohibit the export, except under licence, of dead poultry and rabbits, and to issue licences on payment of a fee of £1 to persons with suitable packing premises.

627. Chairman.—There was a good deal of trouble at one time with regard to the quality of cooked meat exported from this country. Has that trouble ceased to bother you?—We do not export that class of meat any longer. It was pressed or cooked meat, but it was found that it was not keeping and the trade had to cease altogether.

628. Is this cooked meat that is exported now all canned meat?—Yes.

Dairy Produce (Price Stabilisation) Acts, 1935 to 1941.—Dairy Produce (Price Stabilisation) Fund.

“23. The rate of levy on home sales of creamery butter, which was 9s. per cwt. during the greater part of the previous year, was reduced to 1s. per cwt. on and from 1st February, 1941, and related only to sales of butter to retailers. Also, levy at the rate of 6d. per gallon ceased to be payable in respect of bulk cream sold on the home market on and after 1st June, 1941. As a result, the net receipts from levies amounted to only £5,591 7s. 6d. as compared with £251,120 2s. 11d. in the year 1940-41.”

629. Chairman.—In fact, that marks virtually the end of the period of subsidising butter and the raising of the price of butter and milk in the creameries?—That is so. This was the machinery to ensure a guarantee of 6d. per gallon for milk at the creameries at the time.

Par. 23 (continued).

“As in the previous year, the Butter Marketing Committee was the sole exporter of creamery butter, which was the only item of dairy produce on which bounty was payable. The bounty for exports on and from 1st April, 1941, was fixed at a nominal rate of 1d. per cwt., and the payments to the Butter Marketing Committee, totalling £2,561 19s. 2d. as compared with £297,506 8s. 4d. in the previous year, comprised a balance of £2,126 5s. 7d. in respect of exports in 1940-41 and £435 13s. 7d. for exports in the year under review.

In addition to the statutory bounty, payments totalling £2,593 17s. 2d. were made to the Butter Marketing Committee under Section 41 (6) of the 1935 Act. These included £1,892 for administrative expenses and £701 17s. 2d. in recoupment of the balance of the trading loss incurred in the purchase and export of creamery butter and cheese in the year ended 31st March, 1941.”

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

Mr. Maher.—That paragraph is mainly for information and particulars of the account will be found on page 103.

631. Deputy Benson.—Is this Committee still in existence?

Mr. Twomey.—It is.

632. Has it any function at the moment?—It deals very largely now with the arrangements for butter in the home market.

633. Chairman.—The fixing of a nominal rate of 1d. per cwt. on exports of butter was simply for the purpose of keeping the scheme in operation in case it was necessary to use it on some future occasion?—Yes, complying with the statutory requirement to have a levy on export.

634. We now come to the subheads. As to Subhead E.—Veterinary Research —I asked on previous occasions if any progress was being made in the use of sulphonamide drugs in the treatment of streptococcal mammitis in this country. I wonder have you any information on that?—Yes, it has been tried, but not with such success as was anticipated. I understand that there is a new drug now which is giving very promising results. I think penicillin is the name of it. It looks like giving more promising results with mammitis than the sulphonamide drugs.

635. Has any progress been made in finding a substitute for the specific for red water to be supplied by Bayer, a German firm, pre-war?—There is a vaccine available which is applied hypodermically in the case of red water.

636. There is a substitute?—Yes.

637. Deputy Cosgrave.—As to contagious abortion, has the Department any information on the new American drug, Strain 19?—Yes, experiments are being carried out on a number of farms with Strain 19, including the Department’s Research Station at Thorndale.

638. Is it too early to have any results?—It is, because it is a calf inoculation which has to be carried out between the ages of four and eight months. You have to wait to see what the results would be.

639. The results in England were satisfactory?—So far as they have gone, but they have not a great deal of experience there.

640. Chairman.—Should success attend this experiment, might we look forward to complete elimination of contagious abortion in the cattle herds of this country?—I would not say entirely, because it does not give complete immunity. We have been experimenting also with certain vaccines which have been developed at the research station at Thorndale and giving results as good as Strain 19 and much easier to produce. Strain 19 is rather difficult to grow and there is a good deal of trouble in the laboratories. It would give a very much greater measure of immunity, but I would not say it would entirely wipe out contagious abortion because some of the animals injected with Strain 19 will become carriers all their lives and do not ever clear themselves of the virus and they would be an essential danger.

641. Deputy Cosgrave.—Will they show the fact that they are carriers?—Yes, they react to the agglutination test and would continue to be carriers.

642. Chairman.—They might possibly be reduced to dimensions that would permit of the slaughter of carriers?—That might be so.

643. Has the Department ever considered requiring the veterinary college to publish a journal giving accounts of any research work that may be done at the college?—They do not publish an independent publication, but the results of some of their investigations are issued in the Department’s journal and also in the publications of the Royal Dublin Society.

644. Deputy Dockrell.—Is Mr. Twomey really satisfied that we do all the research we ought to, in view of our agricultural position?

645. Chairman.—That question might be more properly asked of the Minister for Agriculture. Within the limits of the funds available, is all the work that is possible being done?—Yes, such funds as are available are being utilised.

646. Chairman.—The question of larger provision is one for the Minister for Agriculture. Under E. 4. I take it that a special grant could always be made for a special line of inquiry into a particular disease or problem?—Yes, that is the object of having that.

647. Deputy Cosgrave.—On F. 2, have you any information as to the standard of agricultural education imparted in some of these private agricultural colleges? Have these colleges to satisfy your Department in regard to minimum standards?—Yes, the teachers employed there must be qualified teachers and we inspect the schools occasionally. At least twice a year, an inspector from the Department will visit the school to see how the boys are getting on, but there is no formal examination.

648. I am informed that at X, the standard is extremely low? Has your Department any particular knowledge of that?—We thought it was fairly good and that they carry out their work reasonably well. They have two qualified teachers and the farm end—the practical end—of the business is fairly well run.

649. Are you satisfied with the standard of the live stock?—No, the standard of the live stock on some of these colleges and farms has been always giving trouble.

650. Deputy Allen.—Have you authority to hold an examination?—Not a formal examination. The place is inspected and the boys questioned, but there are no formal papers set.

651. Chairman.—Have you in mind any increase in the accommodation in agricultural colleges, in view of the large number of boys anxious to attend and who cannot find vacancies?—Accommodation is very badly needed and we are in correspondence with the Department of Finance in regard to increasing the accommodation in existing schools; but the difficulty of obtaining building materials has arisen.

Chairman.—I am sure your efforts have the best wishes of the Committee.

652. Deputy O’Sullivan.—On F. 4, is the amount sufficient for an important work of this character?—These are for university scholarships and in addition to what the Department gives directly, the county councils give scholarships which are availed of for agriculture. In fact, the number of boys now taking agriculture at the university and the number being qualified is in excess of the demand for trained men of that kind.

653. Chairman.—In fact, the total sum appropriated here has not been expended? —No.

654. Was that as a result of lack of applications or as a result of lack of accommodation?—I think it was due really to the fact that there were only 17 places. We base it on 20 scholarships and there were only 17 places filled.

Your note says that one scholarship-holder failed to attend at U.C.D. and that two places were reserved for students who had failed to pass the examination the previous year.

655. Deputy O’Sullivan.—Does F. 5 refer to the Albert College?—It refers to the Faculty of Agriculture in University College, which includes the Albert College.

656. Deputy O’Sullivan.—Does the question of the wages of staffs come under this item?

Chairman.—I think the regulating order would govern that; all we could ask Mr. Twomey is whether the rates of wages stipulated are being paid. The question as to whether they are too high or too low is for the Minister for Agriculture, to be discussed in Dáil Eireann.

Deputy O’Sullivan.—That would vitiate my point immediately. My contention is that they are too low, so far as the farm hands are concerned.

657. Chairman.—In whose hands is the discretion of fixing the rates of wages available?—The director of agriculture at the Albert College.

658. It is not a matter over which you have authority?—Except to ensure that the minimum rates provided in the Agricultural Wages Act are being paid.

659. Deputy Cosgrave.—The rate of wages comes under the Act?—Yes.

660. Deputy Allen.—In regard to farmhands only?—Yes.

661. Chairman.—Under F. 8, where is the training of inspectors in horticulture carried out?—Partly at Ballyhaise, partly at the Albert College, and partly at the Botanic Gardens.

662. Deputy Cosgrave.—On G. 1, could you give some details as to the steps taken to improve milk production?—Yes.

663. Chairman.—Are these mainly cowtesting associations?—Yes.

666. Are there any other schemes covered by this subhead?—Cow-testing associations and the provision of dairy bulls for leasing or re-sale.

665. Deputy Cogan.—On G. 2, is the reduction in the amount expended due to the reduction of supplies?—Yes, foot-and-mouth disease in Great Britain prevented us from importing a number of bulls, rams and boars, that would have been brought in. There was also a reduction in the provision for thoroughbred stallions, as there was no demand. We did not expend any money on it. These would be the two main items where the expenditure was less than anticipated.

666. Deputy O’Sullivan.—On Subhead H., what is the explanation of the severe drop in the grants?—The lime subsidy was not availed of fully in a number of counties.

667. Chairman.—Also, I think some County Committees of Agriculture were not in a position to claim payments of the lime grants until after the close of the financial year?—That is so.

668. So that in some measure the saving is illusory?—Yes.

669. Deputy Brady.—On Subhead H., there is a scheme where the Committee of Agriculture made a grant for the erection of lime kilns in congested districts and those grants are availed of and the kilns are erected. An officer of the Valuation Department comes along then and puts a valuation on the kiln. I have a couple of cases in mind—small holders whose total valuation would not be more than £2 and where the valuation on their own dwelling house is 10/-, when the inspector comes along he puts a valuation of £2 10s. 0d. on the kiln, which means that the man demolishes the kiln, the Department are at the loss of the grant and the man is at the loss of his labour as he does not see why he should pay £2 10s. 0d. I wonder if steps could be taken by the Department to get in touch with the Department of Finance and allow this kiln subsidy by the Department of Agriculture to go free.

670. Chairman.—Are you aware that several of the lime kilns have been demolished in order to avoid the imposition of rates imposed by the Commissioners of Valuation?—I did not hear of any. I knew that there was some additional valuation because of the lime kilns put up but was not aware of any of them being demolished.

671. Perhaps you would look into the question, with special reference to the hardship on persons living in congested areas?—Yes.

672. Deputy Brady.—On Subhead I. 2., is this a special scheme for Cavan?— Yes, it is to apply to County Cavan, which is not in the congested area, a scheme similar to one in the congested area. It is north-west Cavan, a very poor area.

Chairman.—Which was not a congested area under the old Congested Districts Board.

673. Deputy O’Sullivan.—What happened the grant in respect of the development of the manufacture of milk powder—Subhead K. 4?

674. Chairman.—If the Deputy will look at the explanatory note at the end, he will find that payment of the grant claimed was deferred until the sales records of the Dungarvan Creamery could be inspected. Has that examination since been concluded?

Mr. Twomey.—It has been, but we have not paid any money yet. We are in negotiation with the creamery society as to the amount which they should get; we do not want to pay them more than will just enable them to carry on in this particular business of making invalid and baby foods.

675. This was a system of inverted tariff—instead of putting on a tariff you gave a bounty on production?—Yes, to enable them to compete with the imported product.

Chairman.—A most admirable scheme; I hope it thrives.

676. Deputy O’Sullivan.—On Subhead L.—Botanic Gardens, Glasnevin—I observe that the explanatory note says that a suitable candidate for the post of assistant keeper was not available. Is it possible one has not been found since, or has the post been filled?—We sent an officer to get specially trained in botanic garden work. He should be coming back shortly, fully trained.

677. Chairman.—Where did he go?— To Kew.

678. Deputy Dockrell.—The note also states that a few vacancies for gardeners existed for some months. Was there any difficulty in finding gardeners?—I think it is that when vacancies occur there is some time lost in finding suitable men.

679. Chairman.—But many students attend the Botanic Gardens?—Yes.

680. And in all the output of the Botanic Gardens’ instructional divisions there was not found a single man suitable for the position of assistant keeper? —For a post like keeper, or assistant keeper, in the Botanic Gardens, you want a man who has done the four years’ University course in horticulture, not the ordinary training that a horticultural instructor gets, which is only a two-years’ course. The number of men who had done the four-years’ University course in horticulture was very limited. There were some good men, but they had not had botanic garden experience, and they were not considered suitable for the post of assistant keeper until they would have got some such experience. That is the reason one of these men was selected. He was sent away, under a scholarship arrangement, for 12 months.

681. Was he chosen by competition or simply arbitrarily?—He was already in the Department’s service. Most of these men who have done the four-years’ University course are in the Department’s service. He was selected by the Department; there was no public competition.

682. Chosen by the Minister and sent away?—Yes. I should say there was a competition held by the Civil Service Commissioners for the post of assistant keeper and everybody was free to apply for that, but none of the applicants was considered suitable for the post.

683. Deputy Dockrell.—Do women do that four-years’ course, too?—There was only one woman that I can remember who did the four-years’ course,

684. Some do the two-years’ course?— A number do.

685. Chairman.—As regards M. 2—fees for reports on agricultural conditions—to whom do the fees go?—The instructors in agriculture, who are officers of the County Committees of Agriculture, and this is extra work we require them to do for the Department of Agriculture. This work is outside their duties pertaining to the County Committee work, and in order to have this special work done we pay them special fees.

686. As regards M. 6—Scheme of loans for the purchase of heifers and agricultural implements—do you think that expenditure is sufficient for the purchase of heifers?—That is only winding-up an old scheme.

687. The original scheme?—Yes, and the arrangement now is that the Agricultural Credit Corporation will issue loans for the purchase of heifers. They have a special scheme. This is only winding-up an old scheme that we had in operation in previous years.

688. You still maintain the scheme for the purchase of agricultural implements? —We still have it running.

689. Deputy Allen.—Up to a limited figure?—Up to £40. Above that sum we have made arrangements with the Agricultural Credit Corporation to issue loans for the purchase of agricultural implements.

690. Chairman.—On M. 9, relating to agricultural production—consultative council, how many meetings did the council hold?—Four meetings.

691. Deputy Allen.—With regard to M. 11—Temporary scheme in connection with farm improvements—I hope this word “temporary” will not mean an early termination of that scheme?—It is a temporary scheme.

692. Chairman.—Am I right in believing that the original proviso in this scheme for farm improvements, which confined it to persons below a certain valuation, has been removed, and now any farmer can avail of the improvements plan?—Yes, any bona fide farmer.

693. There was a provision in the original scheme that only farmers below a certain valuation could apply?—Yes, £200.

694. Deputy O’Sullivan.—I presume Subhead O. 8, dealing with the acquisition of land for allotments, gives an opportunity of raising the question of the employment of temporary instructors. I would like to know from what grade these temporary instructors are recruited and what are the qualifications?—They are largely recruited from men who have done a two-years’ course in horticulture, or at least one year at one of the agricultural colleges.

695. Are there any exceptions to that? —There may be—I am not quite sure— but they are drawn largely in that way. Sometimes there might be a man employed who has had good gardening experience, but has not taken a course.

696. Chairman.—What method is employed in choosing these men?—A departmental selection board; it does not go to the Civil Service Commissioners, because it is of a very temporary nature.

697. Deputy O’Sullivan.—Do you issue advertisements for them?—I do not think we do. We get from the colleges a list of men that they consider suitable; they are interviewed and the best selected.

698. Chairman.—Were the persons interviewed exclusively—those persons recommended by the colleges—or were there recommendations received from other sources?—I would not be quite sure, but I think they were mainly from the list furnished by the colleges. We might have individual applications which would be considered where the men were believed to be suitable.

699. On 0.10—Flax Act, 1936—I should like to mention that a good deal of confusion exists in the flax-growing areas as to the disposal of the purchase price paid by the British Ministry of Supply to the Department of Agriculture for the flax crop. It was widely stated in County Monaghan that the British Government had paid a bonus of 2/6 per stone of flax and that only 1/6 was remitted to the flax-growers and 1/- was turned to another purpose. I interviewed Department officials some months ago and I inquired into that matter and I was informed that there was no foundation for that belief?—None whatever. The 1/6 extra that the British Ministry decided to pay last February was remitted entirely to growers. Those who had sold their flax prior to the date in February when the increase was granted got the back payment through the Flax Development Board; the others got the 1/6 incorporated in the price paid them for their flax—there was no deduction.

700. I communicated to the flax growers in Monaghan the information imparted to me in your Department. Since then Deputy O’Donovan put down a Parliamentary question on the subject and the Minister for Agriculture stated that the Government received 2/6 from the British Government, that they had given 1/6 to the growers and kept 1/-for the Flax Development Board?—Not that money. The 1/6 was paid out in full and that is the 1/6 increase in price given last February. It was paid in full to the growers.

701. And does the 1/- go to the Flax Development Board?—There is not anything of that kind. The Flax Development Board receives grants from the British Ministry of Supply and one could regard the sum that the Ministry are paying over to the Flax Development Board for their work possibly as part of the cost to the British Ministry; but it has nothing to do with the price fixed for growers; there is no deduction off the price fixed for growers.

VOTE 31—FISHERIES.

Mr. D. Twomey further examined.

Subhead G. 3—Advances for Boats and Gear.

“24. Including the advances charged in this account, the total of advances for boats and gear to the 31st March, 1942, amounted to £131,500. The half-yearly instalments of the annuities set up to repay these advances falling due to 31st March, 1942, amounted to £59,972 12s. 10d., while the sums collected by the Sea Fisheries Association from borrowers and transferred to the Department in payment of the annuity instalments amounted to £53,847 0s. 5d., including £20,646 8s. 2d. repaid in the year under review. The annuity instalments were, therefore, in arrear at 31st March, 1942, to the extent of £6,125 12s. 5d., showing a reduction on the amount in arrear at 31st March, 1941 of £10,253 3s. 6d.”

Deputy O’Sullivan.—That was very satisfactory.

702.—Chairman.—That appears to be satisfactory, Mr. Twomey?—It has all been wiped out since.

Subhead G. 4—Advances for General Development.

“25. The total of advances made to the Sea Fisheries Association for general development, including a sum of £1,000 charged in this account, amounted, at 31st March, 1942, to £2,522 14s. 3d. As stated in previous reports this amount is repayable over a period of twenty years by half-yearly instalments, covering principal and interest. Sums totalling £124 11s. were repaid during the year and are included in the appropriations in aid.”

703. Chairman.—Do you wish to make any observations on that, Mr. Maher?

Mr. Maher.—No. Particulars will be found on page 106 of the Appropriation Accounts.

Subhead H.—Appropriations in Aid.

“26. Early in 1942, the British Ministry of Food decided to withdraw all salmon import licences but agreed to purchase direct from a limited number of exporters, and at fixed prices, all the salmon consigned from this country. The Emergency Powers (Export of Salmon) Order, 1942 (Statutory Rules and Orders, No. 73 of 1942), was made for the purpose of regulating the export trade in accordance with the new arrangement. The Order prohibited the export of salmon on and after the 9th March, 1942, except under licence issued by the Minister for Agriculture, and, by direction of the Minister for Finance, a fee of £12 was chargeable in respect of each licence. Thirty-five licences were issued and the fees, amounting to £420, are included in the appropriations in aid.”

704. Deputy McCann.—How many licence holders are there in Dublin?—I think there are two licences for the Dublin area.

705. On what basis were those licences granted?—On the export that was being done in the three years, 1938, 1939 and 1940. That was taken as the basis and anybody who did not export a certain quantity during those three years was not considered for a licence.

706. Would that necessarily mean that those two licence holders were the largest exporters?—They qualified. I could not say that they were the largest exporters. We had great difficulty in connection with this matter. The British Ministry of Food wanted to confine the number of exporters to 20. They desired to route the traffic into a very limited channel in Great Britain. It was only after great difficulty we got the number extended to 35, so as to include exporters who, we thought, had a reasonably legitimate claim to continue as exporters. Even then, a number of people were excluded who, possibly, had a genuine grievance.

707. A number of people in the fish trade felt that they had a grievance?— Yes. We did the best we could to include everybody who should be included.

708. Chairman.—I understand that a special deputation went to London to secure an increase in the number from 20 to 35?—That is so.

Fishery Loans.

“27. As noticed in the account, the Minister for Agriculture, with the consent of the Minister for Finance, has made conditional remissions during the year amounting to £233 12s. 11d. under Section 2 of the Fisheries (Revision of Loans) Act, 1931. Repayments during the year, which are accounted for as appropriations in aid, amounted to £155 6s. 5d., and the balance outstanding on these loans at 31st March, 1942, was £20,058 7s. 9d., including arrears of £20,020 17s. 5d.”

709. Have you any comment to make on that matter, Mr. Maher?

Mr. Maher.—No. That paragraph appears annually, for the purpose of information, as showing the position regarding these fishery loans and remissions.

710. Chairman.—The tendency is for the arrears to disappear?

Mr. Twomey.—These are very old loans, and the people by whom the money is due are no longer engaged in the industry. I am afraid that, in this case, we have got down to a hard core, where the loans will become irrecoverable.

711. Chairman.—In due course, you will have to seek the Department of Finance permission to write those arrears off?—In so far as the men concerned are engaged in the fishing industry and making money, we find that they repay the loans fairly well but a number of these loans were contracted by persons who are no longer engaged in fishing. Accordingly, a great part of that sum of £20,000 will be irrecoverable.

712. When will you consolidate this business and deal with that irrecoverable hard core?—I think that we should do it soon. At present, the fishing industry is prosperous and the public know that fishermen are making a good deal of money and it is not an appropriate time for wiping out fishery loans. For some time, I think we should continue to collect what we can from them.

713. Deputy O’Sullivan.—What is the explanation of item E. 5 (Steam Trawlers —Special Insurance)?—Irish fishing vessels were not able to obtain the benefit of an arrangement under which ships of the mercantile marine are insured against war risks. Taking out separate insurances against war risks would have been far too heavy a burden for them. In order to keep our small fleet of trawlers going, the Government decided that they would bear the cost of the war-risk insurance for the trawlers. Certain conditions were attached to that undertaking. The main condition was that, if one of the trawlers should get sunk, the amount recovered in insurance, between ordinary and special risk, should be applied to the purchase of a new trawler. The company would not agree to that condition and, therefore, we had no expenditure.

714. Chairman.—The trawlers are now arranging for their own insurance?— They are.

715. In regard to F. 1 (Grants to Boards of Conservators and Local Authorities, etc.), do you periodically satisfy yourself that the Boards of Conservators are doing their job effectively?—Yes. If there is any doubt on the matter, an inquiry is held.

716. What is the explanation of F. 6 (River Erne (Tidal Waters): ex-gratia Payment on account of Compensation)? —The Government decided to make payments to the owners of the fishery in that case in view of the fact that their rights to the fishery had been declared null and void after long litigation. It was felt that it would be unfair to the existing owners if they did not get some compensation. The Government decided to give them ex-gratia payments. The amount to be finally paid them cannot be determined until a decision has been reached with regard to taking over the tidal fisheries generally. So far, the people concerned have been getting only interim payments.

717. Deputy Brady.—What is the total amount received by them so far?—This is not the first payment which has been made to them. The total to date is £31,000.

718. Chairman.—This was the subject of a Supplementary Estimate last year? —It was.

719. Deputy O’Sullivan.—Does the amount provided under G. 4 (Advances for General Development) seem sufficient for so important a purpose?

Chairman.—That is not really a question which should be addressed to Mr. Twomey. We can ask Mr. Twomey to account only for the money placed at his disposal. He cannot say whether a sum is sufficient or insufficient. The Minister would be the only person who could answer that question.

720. Deputy Brady.—How is that sum of £1,000 expended?

Mr. Twomey.—In developing markets. The Association have vans for sending fish inland. The money is spent in finding markets for the catches of inshore fishermen.

721. Deputy Cosgrave.—Has anything been done to improve the harbours?— That does not come under the control of my Department.

722. Chairman.—In connection with the activity of the Association in developing markets, how is it that herrings cost 4d. each in the City of Dublin? Would not that suggest that there was a market here for herrings without any development? Has the herring left our shores? —Herring fishing is seasonal. We have a glut at certain seasons and the prices are very low. Then the herring disappears for months.

723. At the time that herrings were at famine prices in Dublin, the Minister of Food in England was authorising people to consume unlimited quantities because of the glut there?—We have a similar position here at times. We have a glut when the herrings come to our shores and we export a good deal during that period. At other times, no herrings are to be had. The development which the Association carries out is in the way of endeavouring to find markets for catches in inland towns which would not be reached otherwise and, in that way, create a continuous demand for the catches of inshore fishermen.

724. Chairman.—If a fish merchant in an inland town or village desires to obtain a supply of fish, can he secure it from the Association?—The Association arrange to give him supplies.

725. Do they require him to take a van load?—No. Their van serves a number of towns.

726. If the merchant is so placed that he fits into a group of towns served by the Association, he may get supplies direct from them?—That is happening at present.

727. Deputy O’Sullivan.—What is the official view regarding fishing on the west coast? It seems to have become extinct. I remember when fish was available to people in the maritime counties, but the fish seem to have disappeared of late.

Chairman.—Perhaps I might suggest to the Deputy that, if he has any specific cases in mind, he should go to the Chairman of the Development Association, who would be glad to discuss matters with him and take steps to rectify the scarcity in any particular area.

Deputy O’Sullivan.—Even people on the coast find it as difficult to get fish as people in the inland counties.

Chairman.—The Chairman referred to is familiar with all the details.

728. Deputy McCann.—How many vans has the Association?—I cannot answer that.

VOTE 68—AGRICULTURAL PRODUCE SUBSIDIES.

Mr. D. Twomey further examined.

Subhead A.—Subsidies on Dairy Produce.

“72. As in the previous year, the Butter Marketing Committee was the sole exporter of creamery butter and bulk cheese, and payments totalling £148,683 6s. 4d. were made to the Committee from this subhead in partial recoupment of a net loss of £149,039 16s. 0d. incurred in the purchase and sale of 104,861 cwts. of creamery butter and 6,810 cwts. of bulk cheese.

Subsidy at the rate of 33/- per cwt. was paid to factory proprietors and non-manufacturing exporters on exports of non-creamery butter, the expenditure amounting to £36,834 4s. 2d. I am in communication with the Accounting Officer regarding the rate of subsidy paid.

The remainder of the charge to this subhead, amounting to £1,417 11s. 11d., relates to the balance of subsidies payable in respect of non-creamery butter and bulk cheese exported in the previous year.”

729. Chairman.—Have you anything to add to the second sub-paragraph, Mr. Maher?

Mr. Maher.—In this year, the value of non-creamery butter was taken at 139/-per cwt., being the equivalent of creamery butter at 158/- per cwt. The price obtained from the British Ministry of Food was 107/-, and subsidy at the rate of 33/- brought the price to 140/—that is, 1/- in excess. In addition, no information was available of the price obtained for exports outside the United Kingdom. We, accordingly, asked that the Department should seek the sanction of the Department of Finance for the rate paid on all exports.

730. Chairman.—What is the explanation of the 1/- discrepancy?

Mr. Twomey.—The rate of subsidy on non-creamery butter has to be determined before the opening of the season. Otherwise, merchants would not know what amount to pay the farmers. We have to estimate as closely as we can at the beginning of the season what rate of subsidy will equate with the price to be fixed for creamery butter. In that year, as nearly as we could estimate, a subsidy of 33/- would be necessary. Having promised the merchants that subsidy, we could not alter it because they bought from the farmers on the basis of getting that subsidy. They had disbursed the money to the producers of farmers’ butter, and having once fixed the bounty, you could not change it.

731. Chairman.—Would it not be more correct to say that they bought from the farmers on the assumption that they were going to get 139/- for the butter which they exported?—No, because they do not know how the market will go. They cannot tell exactly what the position on the export market might be later. They send butter, not only to Great Britain, but used to send it to other foreign markets, and could not tell well in advance what price was going to be fixed.

732. I understand that you fixed a price for creamery butter and, having done that, you are resolved to ensure that those who handled factory butter would get a proportion of the market price, which was 139/- You anticipated that the British Department of Supplies would give 136/- for butter, and you fixed it at 133/-. The British Department of Supplies, in fact, gave you 137/-. Was there any reason why you should not say the price should be 132/- because your undertaking was a fixed price of 139/-?—Of course, the differentiation between creamery butter and factory butter is no great guide. It might be 18/- or 19/-. There is nothing sacrosanct about the 19/-. One could justify a difference of 18/- as well as of 19/-. That is generally accepted as the differentiation between the two. If the differentiation dropped to 18/- instead of 19/-, there was no great case for altering the bounty.

733. Has Mr. Hogan anything to say on the subject?

Mr. Hogan.—We were persuaded by the Department of Agriculture that, in fact, the shilling that has been mentioned was not realised as a gain: that it boiled down to 5d. by virtue of the actual experience of selling charges. The selling charges went up by 7d. and, therefore, the margin was 5d. In fact, as Mr. Twomey has pointed out, it would be very difficult to work out the true equation between non-creamery butter and creamery butter. Any overpayment of subsidy that arose from the error in estimation in the Department was relatively inconsiderable and, on that basis, they were given covering sanction.

734. Chairman.—Mr. Twomey, acting on behalf of the butter producers, succeeded in bamboozling the Department of Finance in getting out with the 1/-.

Mr. Twomey.—There was not 1/- involved. The difference was too small to warrant an adjustment in the rate of bounty.

735. Deputy Briscoe.—Are we to take it that the Chairman is serious in saying that any Department can persuade the Department of Finance to do anything it likes?

Chairman.—Mr. Twomey can do things with the Department of Finance that nobody else can do.

736. Chairman.—On Subhead B., what is the subsidy on potatoes?

Mr. Twomey.—On seed potatoes in the previous year.

737. Was this subsidy on the production of seed potatoes?—No, on exports. It belonged to a previous year.

The witness withdrew.

The Committee adjourned at 1.10 p.m.

* Appendix X.

* Appendix XI