Committee Reports::Interim and Final Report - Appropriation Accounts 1943 - 1944::29 November, 1945::Appendix



Paragraph 1.—Explanatory Details in Part I I I of Estimate.

The Minister notes the Committee’s observations, which do not appear to call for further comment on his part.

Paragraphs 2, 3, 5, 8 and 14.

These paragraphs do not appear to require comment on the part of the Minister.

Paragraph 4.—Supply of Mine Casings.

Practically all the inner mine casings (including all the defective casings referred to by the Committee) have been utilised for the drying, transport and storage of moist chlorate manufactured at the Parkgate plant. It is estimated that the cost of providing alternative containers for these purposes would be not less than the cost of the inner mine casings. In these circumstances no question of loss arises by reason of the defective design of some of the inner mine casings.


Paragraph 6.—Utilisation of Dairy Produce (Price Stabilisation) Fund for payment of allowances on dairy produce.

As requested by the Committee, the opinion of the Attorney-General was obtained regarding the legality of the procedure adopted in this matter. A copy of the submission to the Attorney-General, together with a copy of his reply, is furnished in the Appendix to this minute.

The Estimate for Agricultural Produce Subsidies for 1945-46 as submitted to Dáil Eireann contains a footnote indicating that similar subsidies and allowances are payable from the Dairy Produce (Price Stabilisation) Fund.

Paragraph 7.—Allowance in respect of Cold-Stored Creamery Butter.

The Minister has noted with satisfaction that the Committee endorses his view of the action taken by the Department of Agriculture, without prior consultation with the Department of Finance, in making payments of the allowance at the full rate in cases where the butter had not been stored for the full average period. In view of the opinion expressed by the Committee in that regard, the Minister has given his covering sanction to these payments.


Paragraph 9.—Trade loan guarantee.

In accordance with the usual practice in relation to trade loan guarantees the agreements between the company referred to and the Minister for Industry and Commerce provided that the proceeds of the guaranteed loans should be paid into separate banking accounts from which withdrawals would be made only against certificates of a director or other duly authorised officer of the company, countersigned by an officer of the Department of Industry and Commerce designated for that purpose, that the moneys certified for withdrawal were required for making payments for the purposes for which the guarantees were given. The objects of expenditure indicated on the withdrawal certificates were in conformity with these purposes and did not include a payment to any money-lending concern. The company’s auditors certified in due course that the moneys withdrawn from the special banking accounts were expended in the manner indicated on the certificates.


Paragraph 10.—Deficiencies in Barrack Service Stores.

In June, 1943, the Minister for Defence, after consultation with the Minister for Finance, made a Defence Force Regulation providing that, until further notice, amendments of the Vocabulary of Army Stores would be promulgated by means of Army Finance Circulars and that amendments thus published would have the same binding force as if they were published by means of Defence Force Regulations. The object of the Regulation was to ensure that during a period of rising prices amendments of the Vocabulary would be made expeditiously, so that the prices shown therein at any time would be based on the latest contract prices or, in the case of stores for which no contract had been placed for a considerable time, on the replacement value of the stores. The Minister is assured that this object has been achieved by the issue of Army Finance Circulars at frequent intervals.

The cash value of the stores to which the Committee refer is being re-assessed and the increased amount written off will be communicated to the Committee in due course.*

While the Minister for Finance appreciates that the reduction to waste of certain unserviceable stores would facilitate the identification of stolen articles he must have regard to the loss to the Exchequer which this practice entails. The matter will, however, be kept under review.

Paragraph 11.—Kit Deficiencies.

In June last the Minister for Finance approved of the retention by all soldiers on discharge of specified items of personal clothing and necessaries. These arrangements will be incorporated in a comprehensive Clothing Regulation at present in course of preparation but in the meantime they have been put into operation by the Department of Defence. Steps will be taken to ensure that the value of all items subject to surrender under the new arrangements but not recovered or paid for will be disclosed in the Appropriation Account. The Minister is in communication with the Department of Defence regarding losses arising out of deficiencies of personal clothing and necessaries which occurred prior to the introduction of the new arrangements.

Paragraph 12.—Custody of seized lorries.

The Minister for Finance agrees with the views of the Committee.

Paragraph 13.—Damage to occupied buildings.

The Minister for Finance has sanctioned the reduction of the assessments against units in seven cases from £237 3s. 10d. to £108 4s. 4d. in the aggregate. It was established to his satisfaction that in the original assessments a considerable amount of damage had been classed as avoidable which was, in fact, due to the inevitable wear and tear arising out of the occupation under emergency conditions of buildings not designed for military use.

Paragraph 15.—Accounting for stocks of peat fuel.

The Minister for Finance is assured by the Department of Defence that every effort will continue to be made to eliminate waste of turf as far as possible.


Paragraph 16.—Production of Turf for use in Non-Turf Areas.

The Minister for Finance agrees with the view of the Committee. The question of periodical official checks is at present under consideration.

GIVEN under the Seal of the Minister for Finance this 13th day of November, 1945.






Department of Finance.


Roinn airgeadais.

An tArd Aighne.

I am directed by the Minister for Finance to refer to paragraph 6 of the final report (copy enclosed) of the Committee of Public Accounts on the Appropriation Accounts for 1942-43 regarding the legality of utilizing, in accordance with the authority given by Emergency Powers (No. 270) Order, 1943, the Dairy Produce (Price Stabilisation) Fund to supplement the provision made in the Vote for Agricultural Produce Subsidies for the payment of subsidies on the production of dairy produce.

2. The object of the Dairy Produce (Price Stabilisation) Act, 1935, was to secure to producers of creamery butter and other dairy products a better average return on their total output than would have been obtainable if the home price of these products continued to be regulated by the export price to the same extent as in previous years. So long as it was necessary to export surplus butter production at uneconomic prices this object was achieved by—

(i) the fixation by Statutory Order of a comparatively high price for butter sold on the home market;

(ii) the imposition of a levy at a rate less than the difference between home and export prices on all home sales of butter; the proceeds of levy to be paid into the Dairy Produce (Price Stabilisation) Fund established under Section 41 (2) of the Act and to be used for the payment of bounties on exports;

(iii) the disbursement from that fund of bounties on exports of dairy produce; and

(iv) the payment of additional export subsidies out of moneys voted for the purpose by Dáil Eireann.

3. With the cessation of butter exports during the war, it was no longer necessary to utilize the Dairy Produce (Price Stabilisation) Fund to pay bounties on exports. It was decided to continue Exchequer payments by way of production allowances and cold storage allowances so as to avoid asking the home consumer to bear the full cost of butter production. A Vote for Agricultural Produce Subsidies replaced the former Export Subsidies Vote.

4. When the guaranteed price of milk was further increased in the autumn of 1942, it was decided, as a matter of policy, that the Exchequer contribution towards the cost of butter production should be limited to the amount already voted for the year 1942-43. The consumer had, therefore, in one way or another to meet the cost of the increase. A higher retail price for butter was fixed and, in addition, a levy in accordance with the provisions of the Dairy Produce (Price Stabilisation) (Amendment) Act, 1941, was imposed on existing butter stocks, the proceeds of the levy being paid into the Dairy Produce (Price Stabilisation) Fund. On the 9th April, 1943, the Government made an Order under the Emergency Powers Act—(Emergency Powers (No. 270) Order, 1943 (S. R. & O. No. 122 of 1943))—extending the scope of Section 41 of the Dairy Produce (Price Stabilisation) Act, 1935, to permit the payment from the Fund of allowances other than on the export of butter. The amount of allowances payable on butter production during 1942-43 was subsequently met from the Fund, in so far as these allowances had not already been defrayed from the Vote before the close of the financial year.

5. As will be seen from the minutes of proceedings before the Committee on the 30th November, 1944, the legality of the procedure adopted was questioned. In this connection, I am to say that since 1935 the Fund and Vote provision had run side by side and had been used for the same purposes, viz., the subsidization of exports. The attention of the Dáil had not been specifically drawn by note on the Estimate or in the Appropriation Account to expenditure from the Fund on the same service under the authority of the Dairy Produce (Price Stabilisation) Act 1935.

6. It is not clear whether or not the Committee challenge the legality of Emergency Powers (No. 270) Order, 1943, of which a copy is annexed. That Order is, of course, of an enabling character and did not require the Minister for Agriculture to make payments from the Fund under the authority conferred by the Order.

7. If it be assumed that the Order itself was a valid instrument, the question of legality raised by the Committee is confined presumably to the issue whether the Minister for Agriculture, with the consent of the Minister for Finance, was right in availing himself of the authority conferred by the Order to pay production allowances, etc., from the Fund by way of supplementing the Vote provision. It is apparently suggested by the Committee that, in the light of the Appropriation Act, it was illegal to make payments for agricultural produce subsidies otherwise than from voted moneys, and that the illegality would arise whether such payments were made in the financial year covered by the Appropriation Act or whether they were made subsequent to the close of that year (as actually happened).

8. The question whether it was legal to postpone payments due under the terms of the Vote until the Emergency Powers Order had been made after the close of the financial year has not been pursued by the Committee. The Accounting Officer, in his evidence, was not disposed to admit that any payments which were fully matured for payment had, in fact, been postponed; moreover, it was pointed out in evidence on behalf of the Department of Finance (Q. 741-2) that postponement, if it had taken place, did not constitute an illegality.

9. In support of the suggestion of illegality, the Committee refer to the fact that when the annual Estimate for Agricultural Produce Subsidies was submitted to Dáil Eireann at the commencement of the financial year 1942-43, no notice was given that other moneys might be used to defray part of the cost of the service. It was not possible to include any reference in the Estimate to the use of Fund moneys because that Estimate was presented to and approved by Dáil Eireann long before the increase in the price of milk which necessitated the new arrangements. The Committee, while admitting this, suggest that a Supplementary Estimate should have been introduced or else an Excess Vote should have been taken. The necessity for an Excess Vote would, in any event, have arisen only if claims had been paid in excess of the vote Provision before the 31st March, 1943, but the evidence of the Accounting Officer indicated that it is extremely doubtful whether there existed any such excess claims which could have been met before the end of the financial year. The point of policy involved in the arrangements undertaken by the Minister for Agriculture, with the approval of the Minister for Finance, precluded the introduction of a Supplementary Estimate to meet additional expenditure in 1942-43 on agricultural produce subsidies because such expenditure would, in that event, have had to be provided by the general taxpayer, whereas payments from the Fund are in fact derived from levies collected at the ultimate expense of the consumers of butter. The use in the Committee’s report of the phrase “when it was realised that the Vote provision was insufficient” is liable to be misleading; the circumstances would be more correctly described “when it was decided that the Dáil should not be asked to vote any further sums in 1942-43 as a State contribution towards the guaranteed price for dairy produce.” Nor was the question at issue one of “procedure” only; it was one of policy. It was competent for the Government to decide that they would not ask Dáil Eireann to vote more than £499,900 for Agricultural Produce Subsidies in 1942-43 in order to avoid imposing an additional charge to be met by taxation.

10. In view of the foregoing, it would appear that the questions arising for consideration, as requested by the Committee, are whether the Government were legally precluded from giving effect to the decision referred to in the last sentence of the preceding paragraph (the necessary Emergency Powers Order having been made to amend existing legislation) by anything contained (a) in the Appropriation Act, 1942, or (b) in the Constitution.

11. While the annual Appropriation Act enables expenditure to be incurred on a particular service and restricts the amount of money that can be expended from the Central Fund on that service it does not contain anywhere a provision that moneys obtainable from a source outside the Central Fund cannot be expended during that financial year on the same service without the specific prior approval of the Dáil. As an example of somewhat similar, although not in all respects comparable, circumstances, attention may be directed to the case of the Universities and Colleges Vote, which provides for grants to Universities and Colleges, including certain Grants-in-Aid. The Appropriation Act enables these grants to be paid. This is, however, not the only money provided from public sources for the service of Universities. In accordance with the statutes governing the Church Temporalities Fund a grant of £10,000 a year is paid to the National University. Yet no note of this payment, as a matter of information, appears on the Estimate or in the Appropriation Account of the Vote for Universities and Colleges.

12. In any case in which non-voted moneys are expended by a Department the objects of such expenditure and the extent of departmental powers are defined by statute and, in making payment, the Department is in fact giving effect to the wishes of the Oireachtas. The Department of Agriculture is in that position as regards its operation of the Dairy Produce (Price Stabilisation) Fund and the authority conferred on it by the Emergency Powers Order does not appear to be in any way less secure than that conferred by the Acts of 1935-41 nor to involve any breach in the general principle that, in the operation of a statutory Fund, the Department is acting under the authority of the Oireachtas. It could hardly be contended that the Appropriation Act and the Dairy Produce (Price Stabilisation) Acts are mutually repugnant one to the other.

13. As regards the Constitution, the Comptroller and Auditor-General, in his evidence before the Committee, referred to Article 17.2 and Article 28.4.3°. The former provision relates to the requirement of a message from the Government. Neither in the case of the Act of 1935 nor of the amending Act of 1941 was any message transmitted to Dáil Eireann recommending specifically the purpose of the appropriation of moneys in the Dairy Produce (Price Stabilisation) Fund. The messages transmitted in connection with these measures were confined to recommendations in respect of appropriations for administration expenses to be paid from voted moneys. It has not been the practice to recommend by message the purposes of appropriations of moneys in statutory funds. As regards Article 28.4.3°, this provision has never been regarded as applicable to departmental funds set up under statute nor to trust funds under departmental control. Annual estimates of receipts and expenditure in connection with such funds are not presented by the Government to Dáil Eireann. If the Article did apply to these funds such a requirement would apply not merely to such important funds as the Post Office Savings Bank and Church Temporalities Funds and the various Insurance and Pensions Funds, but also to a variety of smaller funds outside the Exchequer such as the Shannon Navigation Fund and the Reid Bequest. It is suggested that the present practice of regarding the requirements of Articles 17.2 and 28.4.3° as applicable only to the Central Fund is based on a proper construction of these Articles when read in conjunction with Article 11, which excludes from the ambit of the single fund contemplated by that Article such exceptions (e.g., the Dairy Produce (Price Stabilisation) Fund) as may be provided by law.

14. The Attorney-General is requested to be good enough to advise—

(1) Whether the Emergency Powers (No. 270) Order, 1943, was a valid Order by virtue of which the Minister for Agriculture could properly make the payments referred to in the Committee’s report;

(2) Whether the action taken in accordance with Government policy in meeting, from the Dairy Produce (Price Stabilisation) Fund, part of the cost of the allowances payable by the Department of Agriculture in respect of butter, etc., produced during 1942-43, was contrary to the provisions of the Appropriation Act, 1942;

(3) Whether the action taken was contrary to any Article of the Constitution;

(4) If the answer to (2) and (3) or either of them is in the affirmative what action (if any) should be taken towards regularisation or indemnification, regard being had to the general remarks in paragraphs 11, 12 and 13 of this minute; and

(5) Generally.

(Sgd.) O. J. REDMOND.

13 Lúnasa, 1945.

Roinn an Árd Aighne.

Árd Aighne,

The matters raised by the specific queries contained in the minute of 13th ultimo from Mr. Redmond, Assistant Secretary, Department of Finance, are purely legal issues and permit of clear answers being given. In the general comment in compliance with the fifth query I wish to guard against any suggestion that while the legal position is free from doubt, there may not be room for varied views as to the preferable financial procedure which should be adopted. In my opinion the queries should be answered as follows:—

(1) Yes.

(2) No.

(3) No.

(4) Does not arise in the light of the foregoing answers.

(5) The present difficulty could not have arisen if the original terms of the Dairy Produce (Price Stabilisation) Act, 1935, authorised payment of allowances on dairy produce in general. I observe that the Fund established by that Act was a permanent creation as distinct from an annual account in which the receipts and expenditure would be closed in respect of every financial year, and a water-tight division drawn which required claims arising in one such year to be met out of the fund for that year and not otherwise. In fact, however, the Act of 1935 has been amended by the Emergency Powers (No. 270) Order, 1943 (S.R.O. 122/43), and such amendment cannot be distinguished from one carried out by an Act of the Oireachtas in the light of the declaration in the tenth section of the Emergency Powers Act, 1939. The subject matter of this legislation was concerned with the maintenance of essential supplies and the power of the Government to amend legislation by Emergency Powers Order cannot be seriously doubted in the face of the terms of the Emergency Powers Act itself. While in general the tenor of Emergency Powers Orders did not offend against the requirements of the Constitution or depart from the recognised legislative pattern, there were instances in which it was necessary to trench on all Constitutional and legislative practice. An example of this is provided by the Emergency Powers (No. 48) Order, 1940, (S.R.O. 266/40) which dealt with the administration of Regional Commissioners. The constitutionality of an Emergency Powers Order was considered in a number of cases by the Supreme Court and the following observations of the Chief Justice at p. 129 of the State (Walsh) v. Lennon and Others (1942 I.R. 112) are in point: “In determining the validity of the Order, this Court must give effect to the Provisions of Article 28 (3) 3° of the Constitution, which makes it impossible to invoke any other Article of the Constitution to invalidate this or any other Order made in pursuance of an Act passed by the Oireachtas and expressed to be for any of the purposes mentioned in the said Article.” It is, therefore, ineffective in law to raise Articles 17 (2) or 28 (4) 3° against Article 28 (3) 3° and if a want of harmony arises the latter Article must prevail. It may, of course, be noted that the accounts of the Dairy Produce (Price Stabilisation) Fund are duly audited and the report of same is obliged to be presented to Dáil Éireann by the Minister for Finance (Section 42 of the Act of 1935). The Appropriation Act, 1942, being expressed in common form, applies certain sums “out of the Central Fund” for the services stipulated in the long title to the Act. This does not seem to touch or include any special statutory fund established by law to aid a service for which provision is also made in the first instance by vote, and indeed the separate existence of the two funds is well exemplified in the present instance by section 41 (7) and (8) of the Act of 1935— provisions which cannot be reconciled with an identity of such funds.

If, of course, the sequence of events had permitted it, it would have been more informative to have inserted a footnote to the relevant estimate referring to the additional source of aid for these subsidies, and should this course be practicable it would have obviated any complaint that a full picture was not given at the earliest opportunity to the House of the Oireachtas primarily concerned in financial measures.

(Intld.) P. P. O’D.

20th September, 1945.

I have considered this matter carefully and I agree with and could add little to the observations of Mr. O’Donoghue. In the absence of any emergency or emergency powers, the alteration effected by the Order (No. 270) of 1943, if desired, would have been and could lawfully have been effected by a statute amending the Dairy Produce (Price Stabilisation) Act, 1935. There can be no doubt that the making of the Order of 1943 was within the powers conferred by the Emergency Code and was as valid and as legally effective as an amending statute would have been—with the added feature that no constitutional restriction or prohibition could be invoked to impair its validity. Assuming, therefore, that Article 17, 2, would have been applicable to the amending statute—contrary to the view I take of it—this provision was inapplicable to the Order of 1943. The provisions of Article 28, 4, 3°, appear to me to be inapplicable to a fund of the nature in question and, therefore, apart altogether from Article 28, 3, 3°, still less applicable to the Order.

I also wish to guard myself from any expression of opinion on the non-legal question that may be involved, viz., the relative merits or desirability of the alternative methods of procedure open.

(Intld.) K. D.,


21st September, 1945.

* See Appendix XII.