Committee Reports > List of Committees > Dáil > 1950 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1947 - 1948

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 25ú Eanáir, 1950.

Wednesday, 25th January, 1950.

The Committee sat at 11 a.m.

Mr. W. E. Wann (An tArd-Reachtaire Cuntas agus Ciste), Miss Máire Bhreathnach, Mr. T. K. Whitaker and Mr. M. Breathnach (An Roinn Airgeadais) called and examined.

VOTE 55—INDUSTRY AND COMMERCE.

Mr. J. Leydon called and examined.

625. Chairman.—The Report of the Comptroller and Auditor-General, paragraph 51, reads as follows:—

“Subhead C. 1.—Incidental Expenses.

The charge to this subhead includes sums amounting to £124 18s. 3d., being the expenses of providing and distributing milk in Galway City when supplies ceased owing to a one-day strike by the vendors in October, 1947. Receipts from sales of milk amounting to £55 4s. 5d. have been credited to Appropriations in Aid.”

Mr. Wann.—In view of the unusual nature of this expenditure, it was thought desirable to mention it in the Report. One thousand gallons of milk were purchased, of which 139 gallons were sold at the statutory price of 7½d. a gallon. One account of the early termination of the strike the balance of the milk was left unsold. It was subsequently distributed free of charge to the local units of the Army and to local schools.

626. Chairman.—Paragraph 52 reads as follows:—

“Subhead L.—Food Subsidies.

The expenditure charged to this subhead, totalling, £8,644,659 19s. 3d., was made up as follows:—

The flour subsidy, paid to Grain Importers (Eire), Limited, was the amount required to control the price of flour and to regulate the earnings of the milling industry, which were limited to a percentage of an agreed figure representing capital employed, together with the cost of providing any additional capital in excess of the agreed figure. The payments comprised £6,418,701 12s. 0d. in respect of losses incurred in connection with the allocation of imported wheat and flour during the period 23rd February, 1947, to 21st February, 1948; £26,223 8s. 11d. for remuneration of importer-distributors for wheat handled on behalf of the company in the calendar year 1945; £227,754 in respect of adjusting payments for the cereal year 1945-46 made by the company to the millers following examination of the millers’ accounts by officers of the Department of Industry and Commerce; and a payment of £500,000 on account of subsidy for the cereal year 1946-47.”

That is a very comprehensive statement, in brief, of the position in regard to the flour subsidy. Perhaps Mr. Wann might like to make a further statement regarding the matter.

Mr. Wann.—The biggest item in the £7,172,679 is that of £6,418,701 representing losses in connection with the allocation of wheat and flour to millers at less than cost. The other items making up the figure are: £26,223 8s. 11d.—remuneration of importer-distributors; £227,754—adjusting payments for the cereal year 1945-46; and £500,000 on account of subsidy for the cereal year 1946-47.

Deputy Sheldon.—That last figure is only a payment on account. I presume there will be final figures and that an adjustment will be required?

Mr. Wann.—That is right.

627. Deputy Sheldon.—It says earlier “cost of providing any additional capital”. I presume that does not include the actual capital itself, does it?

Mr. Wann.—No, only interest. An agreed figure of £4,000,000 was taken as representing the capital employed. If additional accommodation had to be obtained the interest charged on that was allowed.

628. Deputy Sheldon.—There is a slight difference in the terms relating to the different years. That for 1945 refers to remuneration. That for 1946 refers to adjusting payments for the cereal year. With regard to remuneration, in 1945, of importer-distributors, Mr. Leydon, was there a different basis at that time or what is the particular point?

Mr. Leydon.—Subject to what Mr. Wann may have to say, I do not think there is any significance in the different terms. There was continual argument as to whether the amount of the remuneration was sufficient or not, but the basis has not been changed.

Mr. Wann.—They refer to two different things. The first refers to payments to importer-distributors for handling and distributing the wheat. The other figure is an adjustment of the losses incurred on selling to the millers at less than cost.

629. Deputy Sheldon.—With regard to remuneration, would that be included in what is referred to as “a percentage of an agreed figure representing capital employed”?

Mr. Wann.—Is the Deputy referring to the £26,223 8s. 11d.?

Deputy Sheldon.—Yes.

Chairman.—Should we not start at the £500,000 first, Mr. Wann, being the earliest in time?

Deputy Sheldon.—The £26,223 8s. 11d., for remuneration of importer-distributors for wheat handled on behalf of the Company in the calendar year 1945, is the earliest in time.

Chairman.—And the Deputy now requires some further information?

Deputy Sheldon.—I have been satisfied.

630. Chairman.—The next item seems to be £227,754 in respect of adjusting payments for the cereal year 1945-46 made by the company to the millers following examination of the millers’ accounts by officers of the Department of Industry and Commerce. Do we understand from this that the adjustment for 1945-46 was not made until 1947-48?

Mr. Wann.—That is right.

Chairman.—Perhaps Mr. Leydon might be able to tell us more about it. I know this is a very difficult question and that we ought, perhaps, to have given him some notice but it is very difficult for the Committee also, unless the members study the reports and accounts of these different companies, to ask, perhaps, the questions they should ask. However, perhaps the best way to deal with it would be to ask Mr. Leydon to explain the circumstances, in so far as they appear to him, so as to give a further explanation of how these matters have arisen, if the Committee desire the information. In this case, the point is that an adjustment was made for 1945-46. A substantial amount of money was involved. The adjustment was made in 1947-48.

631. Mr. Leydon.—It is not easy to reach finality on the accounts for a particular cereal year. When the accounts come in from Grain Importers they have to be examined by the Prices Branch of the Department of Industry and Commerce. Very often various questions are raised about particular items that are charged, so a system of making payments on account is adopted. It is only when the argument is concluded that finality is reached—sometimes it takes a long time to reach finality. The Committee has already commented on the fact £500,000 was paid on account for the year 1946-47. This falls into our financial year 1947-48. They had a claim for another £59,000 but the Department was not entirely satisfied. The argument about that continued and it was settled finally at a later stage. In fact, it was not, I think, until July, 1949 —to give an indication of the length of time these things go on before finality is reached on the balance withheld—that the outstanding balance was paid.

632. Chairman.—What is the cereal year?—The cereal year ends in August.

633. When would the payment then have to be made?—At different times. There are payments on account as the year goes on. At the end of every two months they send in statements showing the amount of wheat that the millers get in, and we make payments on account. It is impossible, in practice, to say just what the figure is going to be over the year because we cannot foresee what the price is going to be, what will be the amount of native wheat they are going to get in, what the moisture content of the native wheat will be and what is going to be the figure for what is technically called over-weight, that is the additional water added to imported wheat. It is impossible to get finality within the year. We may have to make payments on account to keep them in funds and then we make a final payment as soon as the millers’ accounts have been examined and the claims settled.

634. We have the phrase here, “in respect of losses incurred”. When you use the expression “losses” there, do you mean losses arising from the fact that after the subsidy had been made flour could not have been sold at the fixed price or do you mean any other type of losses? —The price of flour is controlled and the miller has to sell at the controlled price. To enable him to sell at the controlled price, he has to get wheat at a certain price. He has to pay the statutory price for native wheat. Imported wheat is allocated to him by Grain Importers and Grain Importers say what is the allocation price for the imported wheat. The object is, if we can attain it, to fix the allocation price to the miller at such a level that after allowing for what he has to pay for the native wheat, he will get the remuneration to which he is entitled. It has never worked out that way. Grain Importers have had to fix an allocation price for imported wheat which is less than the price they have to pay. These are the losses referred to in this paragraph, the losses suffered by Grain Importers in allocating imported wheat at a price less than the cost.

635. It is also your object to regularise the price to the milling industry. Can you say whether its earnings vary very much or whether its percentage of profit remains fixed, whether changes in the market or changes in the supply position will alter the percentage?—There is no change in the percentage. It has remained at the same level since, I think, 1941. We allow them 6 per cent. on the capital employed.

636. With regard to additional capital, how do you check the additional capital required?—The accounts of individual millers are examined.

637. supposing a miller finds himself in a very opulent state—I do not know whether that is possible —and decides completely to reconstruct his premises on the ground that he is modernising his plant or his premises, how would the Department deal with that situation?—I am in some difficulty in answering a hypothetical question of that kind but the Department would certainly examine any case of reconstruction of that kind. It might be that the miller could do that and secure economies in production costs as a result of reconstruction.

638. We have the phrase “together with the cost of providing any additional capital in excess of the agreed figure”. The agreed figure is the capital?—Yes, for the milling industry as a whole. It has been actually agreed at £4,000,000. It is not a question of the capital of individual firms. We are not concerned with that. When the £4,000,000 was originally fixed, it was arrived at by a synthetic process of examining the accounts of the different mills.

639. I think it would be necessary for the Committee to know how this matter of the additional capital employed works out in practice because it seems there are considerations such as the one I have pointed out. If the question of the modernisation of a particular mill or a particular industry arises, is your Department not interested in the question of fixing the additional capital required? The Committee would like to get more information as to what is likely to happen and what has been happening in such a situation.

Deputy Sheldon.—It really means working capital?—The figure we fixed originally was £3,600,000. That was about the year 1941. That figure was afterwards increased, I think in 1943, to £4,000,000. That is supposed to represent the capital permanently employed in the industry. Over and above that some millers have to get some temporary banking accommodation on which they have to meet the interest charge and the effective interest charge is recognised as a proper charge in their account. I am assuming that that is what the Comptroller and Auditor-General has in mind.

Mr. Wann.—That is so.

Mr. Leydon.—If I might elaborate that a little further, if the milling industry as a whole increased their permanent capital by £500,000 I think they would almost certainly come to us immediately with a request that the £4,000,000 should be increased to £4,500,000 and that would be taken as the basis on which the remuneration at 6 per cent. would be calculated.

640. Deputy Sheldon.—Can you say what the increase has been already?—The only increase has been that agreed on at an early stage. The original figure was fixed in 1941 at £3,600,000. About two years afterwards the figure was increased on representations from the millers, to £4,000,000. It has remained at that figure since.

641. Chairman.—That does not necessarily mean that they have not modernised their plant, equipment and premises?—So far as I am aware there has not been any largescale equipment or modernisation in the milling industry for a very long time. It would have been impossible for a considerable period to get any new plant or equipment.

642. In any case, in so far as the fixed price is concerned, there is a certain guarantee that they will not in fact suffer any loss. To that extent they are in a better position to improve their business in that way and perhaps to reduce prices?—If the millers came to us with the request that we should increase the agreed figure of £4,000,000, they would certainly have to justify the claim for remuneration on the increased capital.

643. My contention is that so long as the business over a period of years has a guarantee that it will not suffer a loss, it is obviously in a much more sheltered position than a business open to competition. In fact they are guaranteed this profit and therefore they should be able to look forward, over a period of years, to improvements in the industry and to a reduction, by internal economies, or savings in the cost to the public?—I think that is so. There is a further complication in this which I think the Committee will appreciate, that while the remuneration is fixed at 6 per cent. over the industry a whole it is not fixed at 6 per cent. for individual firms. The remuneration with which we are concerned is allowed on the agreed capital for the whole industry and it is divided between individual millers on a formula agreed amongst themselves.

644. Are you in a position to review this figure of 6 per cent.?—We are in a position to review it and the millers are in a position to look for more. It is not my responsibility now, but I know that the millers for some time have been grumbling about the 6 per cent.

That is 6 per cent. over and above all expenses, costs of distribution, etc.,?— Yes.

I hope I have not led the Committee on a wild goose chase but there is the question of how this sum of £227,754 was made up?—It is an adjusting figure. If you were to go into details it would involve getting particulars which I am afraid I am not in a position to give you now. There are big sums involved every year and the adjusting figure may be one way or the other at the end of the year. This is the balance which we found due to them on the examination of their accounts.

645. Mr. Wann.—The amount was made up as follows:—

646. Deputy Sheldon.—Could Mr. Leydon say how this figure for depreciation is arrived at? It is very considerable and it is given in addition to the 6 per cent.?

Mr. Leydon.—It is on a different plane to the 6 per cent. The 6 per cent. is remuneration on capital. The depreciation figure is a figure for depreciation, the wear and tear of plant. I can tell you that the figure was arrived at after very long arguments with the millers.

Deputy Sheldon.—It is the first time personally that I have noticed that there was a figure for depreciation?—You must allow for a depreciation charge in any business. Actually that was a compromise figure arrived at between ourselves and the millers. I do not think it is unfair.

That was for one year?—The £150,000 was for depreciation. That is a figure that has been there from the beginning.

647. It would be fair to say that a net figure of 6 per cent. in times of ordinary trading would be considered a low figure by the industry?—It would be considered a low figure by the industry. I hope the Committee will not ask me to make any admission here for the record afterwards. It was definitely considered a low figure by the industry and there are still grumbles about it.

I only want to establish it because it might be thought by some members of the Committee that they were getting away with this 6 per cent. in addition to this depreciation? The millers guaranteed 6 per cent. is different from the fluctuating percentage which they might earn in normal times.

Chairman.—It seems to me to be a giltedged security?—That is not quite right. It has never been guaranteed.

648. Deputy Sheldon.—It was not arrived at solely to remunerate the milling industry, but in order to secure supplies of food to the population?—Yes. It was part and parcel of this earlier arrangement.

649. Chairman.—The importers’ or distributors subsidy basis for the handling of wheat is the basis of 2/4 per ton. Does that vary from year to year?—We have had to increase it slightly. The importers and distributors have been looking for 5/-.

On the grounds of increased costs?— Yes—and that their services were not being adequately remunerated.

650. The note by the Comptroller and Auditor-General continues:—

“The subsidy on wheaten meal for the cereal year 1946-47 was paid at varying rates representing the difference between the average cost of production together with a profit of 2s. 6d. per sack, and the controlled selling price.”

This subsidy has ceased now? Am I in order in asking such a question?—The Minister for Agriculture is responsible for it now. I will answer for the 1948-49 period as well as for this 1947-48 period. After that, it will be accounted for by the Department of Agriculture. The 1948-49 period was the responsibility of the Department of Industry and Commerce. As from 1st April, 1949, these subsidies were transferred to the Minister for Agriculture—the cereal subsidies, not tea and sugar.

651. The “average cost of production” is mentioned here. It must be difficult to ascertain that?—It is. There are always arguments as to what should be allowed and what should not be allowed. The figure is arrived at after an examination of the accounts of a number of the wheaten-meal millers.

652. Have you power to examine their accounts over past years, irrespective of whether they came under the subsidy arrangements or not—say pre-war years, if you wanted to get an idea of the normal costs?—I think we would have power to call for those accounts. There are about 65 millers and only about 35 of them apply for subsidy.

653. These are what are called country millers—small millers down the country? —Generally speaking, yes, but some of them are in a fairly big way of business.

654. Deputy Sheldon.—I presume it would be the big ones that look for the subsidy?—Yes, mostly the big ones.

655. Chairman.—Have you any figures, Mr. Wann, about the costs of production?

Mr. Wann.—No.

Chairman.—And you, Mr. Leydon?

Mr. Leydon.—I hope the Committee will not press me to disclose figures which ordinarily are regarded as confidential; this includes information furnished to the Department in the course of price investigations. There have been some questions in the Dáil as to whether we disclose information about particular firms. Generally, we do not disclose particulars of production costs of business concerns.

Chairman.—The Comptroller and Auditor-General apparently has not got the average cost of production. Have you even a figure mentioned for that, Mr. Wann?

Mr. Wann.—No.

656. Mr. Leydon.—I am prepared to make those figures available to the Comptroller and Auditor-General, if he would like to see them.

Chairman.—That would be a way out. If the position is that the Dáil is granting money on the basis of a certain cost of production, I can see the point that it may be unfair to make public the figures of individual firms; but if it comes to a question of the Comptroller and Auditor-General having the information it would be difficult to resist his getting it?—I am not resisting any suggestion of giving it to him.

Deputy Sheldon.—The figure is for the industry as a whole and not for individual purposes?—Yes.

657. Is the Department of Finance consulted?—There are two stages in the argument. First, there is the argument between ourselves at the industry and then between ourselves and the Department of Finance, which ill much more friendly one. The Department of Finance has to be satisfied about all these arrangements.

658. They would see the confidential figures?—Yes.

659. Deputy Fitzpatrick.—As only about 50 per cent. of the millers seem to ask for the subsidy, what case do they make or how is it presented that they feel they are entitled to it while the other millers are able to work without claiming it at all? Has it ever been proved that it is completely bad management on the part of the firms which apply for it?—The guess of any member of the Committee is as good as mine as to what the explanation is. It is a fact that a number of these wheaten meal millers have mixed businesses and the wheaten meal milling is, in some cases, perhaps a relatively small part of the total business. It might pay them to sell their wheaten meal at a loss because of other business that it brings them. They might not want to have the Department poking into their transactions over the whole range of their activities. I am only speculating, as I cannot really offer an explanation. I am quite satisfied that it is not because they can operate at a profit that they do not apply.

660. Then we may take it that it is purely the people who are engaged 100 per cent. in milling who apply for this? We may be guessing but you are not, as you know the particulars?—I could not give a categorical answer to that question, without having a detailed examination made of the people who applied and those who did not. Of the people who do not apply, we would have to make inquiries as to whether they were conducting a mixed business or not. A number of them we know are. It would entail a good deal of research.

Deputy Sheldon.—Anyhow, the subsidy has been withdrawn now.

661. Chairman.—When you pay them the difference between the average cost of production together with a profit of 2s. 6d. per sack on the controlled selling price, there seems to be an assumption there that the average cost of production does not contain an element of profit; or, is it assumed that the profit of 2s. 6d. should be paid over and above whatever profit they are making?—I can answer that question only by saying that ordinarily profit is the margin that is left between what you realise for what you sell and the cost of producing it. The cost of production is the cost which has to be met by the business man and it is the margin that represents the profit. The cost of production would not, of course, include any element of profit.

662. If you have a large number of small producers and a small number of bigger producers, of course the average cost of production may be lower than in a great many of the units. I think that is the case in the flour milling industry. Is not there always the position then, that in fact the subsidy payment which the State will make will have to have regard to the cost of production of the least efficient unit?—We examine the accounts every year of a fairly small number of representative millers. If you pursue your argument too far, I think it would lead to a suggestion that we have not been paying enough by way of subsidy. In fact, no one has gone out of business. I think that is the test.

663. When they say the average cost of production, that is probably a formula, but one wonders whether, in fact, seeing that no one has gone out of production, it is the average cost of production of the weakest unit which in the long run is the basis?—It would not be the cost of production of the weakest unit. It may be that the weaker units have less out of it in the end than the more efficient ones. I think that is inevitable when you work on a formula of this kind.

664. Chairman.—The note by the Comptroller and Auditor-General continues:—

“Subsidy at the rate of ½d. per 4 lb. loaf was payable in respect of batch bread baked and sold up to and including 26th January, 1946, by all bakers licensed under the Emergency Powers (Bakers) Order, 1941 (Statutory Rules and Orders, No. 453 of 1941). An increase of ¼d. per 4 lb. loaf in the subsidy rate was authorized by the Government to be paid to certain Dublin bakers with effect from the 27th January, 1946. This increase was extended in the year under review to other Dublin bakers with effect as from the 27th January, 1946, and to bakers in other areas according as they established their claim for relief. In January, 1947, it was decided that additional subsidy should be granted to the Dublin bakers to the full extent of their increased expenditure on wages arising out of awards by the Labour Court, and similar relief was later granted to bakers in other areas in respect of wage increases granted by the Court. The payment of subsidy was discontinued from 1st November, 1947, consequent on a reduction in the price of flour. Subsequently, however, it was decided that subsidy should be paid in respect of wage increased granted up to 1st November, 1947, other than those covered by awards of the Labour Court, and also that from this date the price of flour supplied to bakers should be further reduced by 2s. 6d. per sack.”

There is a reference at the top of page 23 to the subsidy rate authorised with effect from 27th January, 1946, and extended in the year under review to other Dublin bakers, a reference to their claim for relief. What was the basis of this increase?—It was on account of increased remuneration, extra holidays and so on. It was an increase in the bakers’ costs. That entire paragraph represents a rearguard action fought against very heavy odds by the Department. Each stage in that paragraph represents what happened as the Department was pushed from ditch to ditch. There is no doubt that during the entire year 1947 the Department was subject to very heavy pressure and the additional subsidy which we found it necessary to pay as a result of these various wage awards amounted to about £110,000 in the year. That explains the major portion of the increase in the subsidy for that year as compared with the previous year.

665. What was the reason referred to at the end of the paragraph—that the subsidy payments were finally made in respect of wage increases other than those granted by the Labour Court?—That is another long story. We resisted claims except in cases where the increases were made on recommendations from the Labour Court. There were certain cases, however, in which the bakers decided not to wait for the Labour Court. They felt the men had a fair case. We were of the opinion that, whether they had or had not, they should go to the Labour Court as the charge would be a charge on the subsidy. We fought that battle for a long time but they undoubtedly had a fair case and, in the end, we had to give way.

666. Deputy Sheldon.—In effect this whole paragraph means that increased wages in the baking industry were met by the State?—Yes.

667. Chairman.—What is the present position? I understand from last year’s evidence to this Committee that you have now changed over to a subsidy on flour only?—That is true. Batch bread subsidy came to an end.

668. Chairman.—The paragraph continues:—

“Following a decision of the Government to reduce the price of tea as from 1st November, 1947, the Minister for Finance authorised the payment to Tea Importers (Eire), Limited, of a subsidy equal to the difference between the cost price of tea plus overhead expenses and the selling price. The audited accounts of Tea Importers (Eire), Limited, for the year ended 31st March, 1948, showed a net loss of £738,293 against which was credited a balance of £1,120 from the previous year and the £700,000 paid in respect of the subsidy in the year under review, leaving a balance of £37,173 due to the company.”

Chairman.—Is this company a State company for the purpose of importing tea?—It is a State-sponsored company. The nominal capital is very small. It amounts to only £100. This company was appointed on the initiative of the Department. It is charged with the sole responsibility for the importation of tea.

669. Deputy Sheldon.—It is non-profit making?—Yes.

670. Chairman.—The next sub-paragraph reads:—

“Subsidy at the rate of 2d. per lb. was payable with effect from 1st November, 1947, on sugar sold for domestic consumption and not for manufacturing purposes, following the Government’s decision to effect a reduction in the price of sugar. The amount of £434,987 1s. 7d. charged to this subhead was paid to Colucht Siúicre Eireann, Teoranta, in respect of this subsidy on the basis of statements certified by the auditors of the company.”

In the case of these subsidies on tea and sugar do you follow the financial year, or is there a particular year?—We make payments on account to both Tea Importers, Limited, and the Sugar Company as months go by. The financial year for the purpose of the subsidy is our financial year, that is, the year ending 31st March.

671. Do you examine the accounts of these companies?—We certainly examine these accounts very closely and critically in our Prices Branch. I am not sure whether Tea Importers’ accounts are not audited by the Comptroller and Auditor-General.

Mr. Wann.—They are.

672. Deputy Sheldon.—Do you do the Sugar Company Accounts?

Mr. Wann.—No.

673. Chairman.—Have you authority to examine the accounts in the case of the Sugar Company?

Mr. Leydon.—Yes, and we examine them very closely. The payments on account are made on periodical certificates from their own auditors, but they are closely examined at the end of the year before we close the year.

674. There are, of course, hidden reserves very often in companies of this size. You will notice if you read the financial papers that some financial corporations are in a position to call upon their hidden reserves without making any changes in their balance sheet. I think there is no doubt that corporations of this size should be able to have reserves also. The reason I make that comment is so that it will not appear that a mere examination of a balance sheet will give you all the information you require. I think it must be investigated very closely?—If it will put your mind at rest, we are never satisfied with just the balance sheet presented to shareholders. We get much more detailed and elaborate accounts. We raise queries on them and we get answers. I might mention that in this particular year on the ultimate examination we found there was an excess payment of approximately £5,013. That was adjusted in the following year.

675. Chairman.—The final sub-paragraph of paragraph 52 reads:—

“Owing to increased costs of imported materials for the production of margarine the Government decided that production costs should be subsidised to enable the retail price of the commodity to be maintained at 1/8 per lb. Accordingly, subsidy was fixed at the rate of 3d. per lb. on margarine sold by manufacturers for domestic consumption in the period 1st January to 31st March, 1948. The amount of £30,708 5s. 6d. charged to the subhead represents the subsidy due for the period 1st January to 29th February, 1948, as certified by the auditors of the manufacturers concerned and verified by officers of the Department of Industry and Commerce.”

Is this continuing?—No. That subsidy came to an end in 1948.

676. Deputy Sheldon.—Could Mr. Leydon give us the total amount spent on food subsidies by the State up to the end of the accounting year?—It will appear in the Appropriation Accounts. It is merely the tot of the figures in the various Appropriation Accounts up to and including these accounts. Perhaps this document will give you the information you need.

That covers it.

Chairman.—I think this should go in as an Appendix.*

Mr. Leydon.—I would suggest that Mr. Wann might have a look at that before it is put in.

677. Chairman.—Paragraph 53 of the Report reads:—

“Subhead M.—Fuel Subsidy.

“The arrangements with Fuel Importers (Eire), Limited, under which losses incurred by the company in the marketing of turf and timber fuel were borne by the company and issues were made from voted moneys in recoupment thereof, continued in operation, and the total payments to the company, including £1,075,000 issued in the year under review, amounted at 31st March, 1948, to £5,776,000.”

Does that mean for that particular year?

Mr. Wann.—There was £1,075,000 issued in the year.

678. What period is covered by the £5,776,000? From the time of the setting up of Fuel Importers, Ltd. I think it was 1941.

Mr. Leydon.—1941. If you would like details for the years—up to the end of 1944, the total amount granted was £830,000; 1944-45, £1,180,000; 1945-46, £1,433,000; 1946-47, £1,258,000 and 1947-48, £1,075,000. That is the figure mentioned in the Report.

679. Chairman.—At the examination here of the Accounting Officer for the Department of Defence yesterday, there was reference to the Department of Industry and Commerce instructing the Army authorities in this year that they would not be allowed to cut turf for their own purposes. The Committee appreciate that the intention of the Department of Industry and Commerce was to safeguard supplies for the people of Dublin and other areas, but it happened that there was very wide variation in the prices charged in the two counties, Kerry and Galway, and overpayments had to be made to agents over and above the contract price in order that the Army authorities would get their requirements. Furthermore, turf had to be brought long distances from Kerry to Gormanston?

680. Deputy Fitzpatrick.—The particular amount of money which we queried yesterday is not accounted for here?

Chairman.—No; it is in the Department of Defence Vote.

Deputy Fitzpatrick.—The Accounting Officer yesterday was not able to give any explanation as to why turf had to be brought from Kerry to Gormanston under instructions from your Department?

681. Chairman.—It is difficult for Mr. Leydon to deal with this matter without notice, but it seems that the Army people would have been able to do the job more economically as they had plenty of men at their disposal at the time but you restricted them, for no doubt good reasons, to these two areas?—

Mr. Leydon.—Paragraph 77 of the Report says:—

“. . . . . . the Minister for Industry and Commerce was unable to agree to Army needs being met from the supplies available for domestic users in the non-turf areas.”

The Minister for Industry and Commerce, and the Minister for Supplies in earlier years, had been taking a very firm line with regard to the Army cutting its own turf. We could not be expected to supply them, if they did not cut their own requirements, from the supplies purchased for non-turf areas like Dublin, which had been brought in at considerable expense. We thought the Army should cut its own turf and not get turf from these exiguous national supplies. It was for that reason that the Army, having failed to cut its own turf, had to go elsewhere, but I do not think the Army can blame us for that.

Deputy Fitzpatrick.—The explanation given to us was that they had to go to Kerry and bring it to Gormanston. The increase did not arise in relation to cutting of turf in Kerry but in relation to its transport to Gormanston. They had no explanation for that—they put the blame on the Department of Industry and Commerce, stating that that Department had fixed Kerry as the place where they were to get the turf for Gormanston.

682. Deputy Sheldon.—There is some slight confusion about this matter. A certain amount of turf would be required, and, so far as the State is concerned, it is immaterial whether the Department of Industry and Commerce or the Department of Defence was responsible. Some turf would have to come from Kerry and if the Army had not brought it up and borne the cost of their Vote, the Department of Industry and Commerce would have had to bring it from Kerry and charge it to this Vote. So far as the State is concerned, it does not really matter— it is merely an inter-departmental matter as to who will bear the cost involved in the longer distance?

Mr. Leydon.—That is probably correct. It is a question of the Vote on which it falls, unless it could be done more cheaply by one Department than by the other; but it is news to me that we could tell the Army where to cut their turf. I doubt if we ever did it. It may be that the Army had difficulty in getting turf in places with good roads for lorries and so on, but I should like to have an opportunity of verifying it, if there is any point being made about it. I cannot say from recollection that we ever told them: “You must go to Kerry for it.”

Deputy Fitzpatrick.—The turf was cut through agents, the turf cutters in the Army having been demobilised. They had to make arrangements to produce their own fuel and they made those arrangements through agents. They cut the turf in Galway and Kerry and transported it from Kerry to Gormanston. Some of us felt that that was an unnecessary expense which the State had to bear?—What was the alternative?

683. The alternative was to cut turf in the Dublin Mountains and keep the turf in Kerry for Kerry?—There are limits to what you can cut in the Dublin Mountains. We had to get it cut everywhere—as much as we possibly could— and much of it which had to come to Dublin had to come long distances. We had at one time to secure the use of Army lorries to bring turf from Galway and other equally remote places to the Phoenix Park. We had to resort to all sorts of measures to get in adequate supplies.

I can quite see that in the emergency years when there was no alternative, but in relation to the year under review I am not prepared to accept that it was an economic proposition to have turf cut in Kerry and transported to Dublin?—I am not contending that it was an economic proposition, but I should like to remind the Committee that this particular year was certainly an emergency year—probably the worst we had. At one time in 1947 we were getting no coal at all.

684. Deputy Sheldon.—To clear up another point, it is not correct to suggest that the Department prevented the Army from cutting their own turf. It was an Army decision whether they should send Army personnel to Kerry to cut the turf or whether they should buy through agents?—We had nothing whatever to do with that.

Deputy Fitzpatrick.—The Army turf cutters had been demobilised and they had to get agents.

Chairman.—Perhaps we had better leave it at that.*

685. Paragraph 54 of the Comptroller and Auditor-General’s report reads:—

“Subhead N.—Miscellaneous Turf Production Schemes.

The sum of £3,333 10s. 2d., which is charged to this subhead, was paid to local authorities in recoupment of losses incurred since 1941 on the sale of turf otherwise than to Fuel Importers (Eire), Limited, Government Departments or local institutions. Including £110,133 7s. 7d. paid in the previous year, the total amount recouped up to 31st March, 1948, was £113,466 17s. 9d.”

Chairman.—Is this matter still continuing?—The clearing up of the payments is still continuing, but the scheme for county council turf came to an end in 1947.

686. Deputy Sheldon.—Is there any hope of the outstanding amounts being cleared up soon?—We hope to finish them by 31st March next in the current financial year. We are in the hands of local people because we have to wait for certificates from the Department of Local Government. It is on these certificates that we pay.

687. The reason I mention it is that the balances are gradually going up slightly through interest charges?—I am not sure what you mean by interest charges. We are willing to pay as soon as we get the certificates. I hope we are not being blamed in the matter because we are only too anxious to do it. We had provision for making the payments and the certificates did not come in. The amount paid in 1948-49 was about £61,000 and we have provision for £27,000 in the current Estimate and we expect that the current Estimate will see the last of these claims.

688. Do I take it that the interest charges which are mounting in the meantime will have to be borne by the county councils? This is probably more a matter for Local Government, but I understood it is one of the things upon which there seems to be some variation of opinion— whether county councils had been guaranteed against all loss or whether the term “loss” was not taken to include interest charges?—It is an honours question which I would not like to answer. In fact, I am not in a position to answer it.

Deputy Sheldon.—That is one of the troubles—no one is prepared to answer it.

Deputy Gilbride.—It has never been answered.

Deputy Sheldon.—The Department is more or less an agent in the matter much on the lines of the Board of Works?

Mr. Leydon.—We foot the bill.

689. Chairman.—Paragraph 55 of Comptroller and Auditor-General’s report reads:—

“Minerals Development.

Subhead P.1—Advances to Minaraí, Teoranta.

Subhead P.3.—Compensation for Mineral Rights Acquired.

The charge of £33,976 5s. 0d. to subhead P.1. represents advances of £31,000 made to Mianraí, Teoranta, under section 10 of the Minerals Exploration and Development Act, 1941, as amended by section 16 of the Minerals Company Act, 1945, and advances of £2,976 5s. 0d. under section 3 (1) of the Minerals Company Act, 1947. A payment of £117 6s. 4d. for compensation in respect of mineral rights acquired by the State is charged to subhead P.3. and treated as an advance to the company, as were similar payments charged in the accounts of previous years amounting to £4,763 10s. 10d. Including these amounts the total advances to the company up to 31st March, 1948, were £401,176 17s. 6d.

Section 2 (2) of the Minerals Company Act, 1947, provides that the Minister for Finance shall as soon as may be after the 30th September, 1947, issue a certificate in writing certifying (a) the sum which in his opinion represents the value of the assets of the company as on the 30th September, 1947, and (b) the sum due to the Minister for Industry and Commerce on the 30th September, 1947, on foot of advances under the Slievardagh Coalfield Development Act, 1941, and the Minerals Exploration and Development Company Act, 1941, as amended by the Minerals Company Act, 1945, and the interest thereon. Section 2 (3) of the Minerals Company Act, 1947, further provides that on the date of the issue of the certificate the company shall stand released from the liability to pay to the Minister for Industry and Commerce so much of the certified liabilities as is equal to the difference between the certified value of the assets and the certified liabilities. Pursuant to section 2 (2) of the Act, the Minister for Finance certified on 15th October, 1948, that £66,554 7s. 6d. represented the value of the assets of Mianraí, Teoranta, as on the 30th September, 1947, and that the sum due on that date by the company to the Minister for Industry and Commerce on foot of advances and the interest thereon was £446,418 10s. 6d. The company, therefore, by virtue of section 2 (3) of the Act stands released from the liability to pay to the Minister for Industry and Commerce £379,864 3s. 0d.”

690. Deputy Davern.—There is a reference in the note to the total amount advanced. Does that refer to the financial year?—It is the aggregate from the beginning.

691. Chairman.—What is the reason for the provision in the second paragraph of the note?—Put as simply as I can, the reason is that there is no prospect that we will ever be able to pay it back.

692. Do you take the assets for the particular year?—The assets as they stand at the date of the certificate.

693. Deputy Sheldon.—Boiled down, this has the effect of changing advances into Grants-in-Aid?—Yes, that is the effect of it.

694. Chairman.—What is the amount due by the Company on the 31st March, 1948? I do not know whether we have a balance sheet?—Perhaps you could send us the figure if you have not got it by you?—The figure would be £66,000 plus whatever was issued between then and the end of the year.

Mr. Wann.—£10,710.

Mr. Leydon.—I will send you a note on that.*

695. Chairman.—The Committee would like to know what is the position of the Company at present, whether it is working still and whether it is continuing with any better results?—The Company is still carrying on operations. It has opened a new mine at Slieveardagh which has not passed the development stage. It will be, perhaps, another year and a half, on the estimate of the Board, before the Company reaches the stage of full production at Slieveardagh. Three independent outside experts made reports on the possibilities of Avoca and they reported to the effect that there were possibilities of mining sulphur, copper, lead and zinc but the expenditure of a considerable sum would be required to prove whether the ore could be mined on a commercial basis. The Company is still carrying on operations in those two places on that basis. I do not know if that is sufficient for your immediate purpose.

696. The intention with regard to Avoca is that if you can get a company or prospectors to take the work in hand, you do not intend to continue operations. If you do not get a company, you will carry on operations until you know whether you will continue or not?—I have done my best to show you the position at the present time, but if you want to know what are the intentions for the future, it will be a more difficult question to answer because all activities of this kind are subject to review by the Government from time to time and I should certainly hesitate to make any forecast of what the future would be.

697. Are the accounts of the Slieveardagh Company published separately?— There is only one Company now. Originally there were two Companies, but they were amalgamated and now there is only one, Mianraí, and the accounts are, of course, available.

698. Are they doing anything about any other areas and have they general responsibility for mineral development?— They have general responsibility but I am not aware of activities in any other area.

699. There is a note on paragraph number 56, on the operations of Bord na Móna:—

“Subheads Q.1. to Q.5.

The issues made from the Grants-in Aid during the year comprised £328,425 for the production of turf for use in non-turf areas (Subhead Q.1.), £9,959 for cost of administration (Subhead Q.2.), £3,500 for general development (Subhead Q.3.), £49,300 for experiment and research (Subhead Q.4.), and £450,000 in respect of the cost of the turf production scheme hitherto undertaken by county councils (Subhead Q.5.).”

700. Deputy Fitzpatrick.—With regard to Q.4. could we get a further explanation of how the money is spent for experiment and research?—I am sorry but I am not in a position to give a detailed answer to that question. These are Grants-in-Aid and are not subject to detailed control by the Department. The Board, in its report, refers generally to its activities.

Chairman.—We cannot make any progress I am afraid, Deputy Fitzpatrick. In the case of Grants-in-Aid the money is granted to a particular institution and the Department is not entitled to question the manner in which it is expended by that institution or company. We will have to rely on the report of Bord na Móna.

701. Deputy Fitzpatrick.—Have we any method of finding out how the money is spent?

Chairman.—In the case of a Grant-in-Aid; you have not.

Deputy Sheldon.—Except to read the report. A very big report is produced each year by Bord na Móna.

Chairman.—They are fairly punctual with their reports, too.

Deputy Sheldon.—You can get them all in the Library.

702. Chairman.—The paragraph continues:—

“Section 52 of the Turf Development Act, 1946, provides for the payment out of voted moneys during 1946-47, and in each of the nine subsequent financial years, of grants towards expenses incurred by Bord na Móna on experimental and research work, subject to a limitation of £120,000. The issues under this head, including the £49,300 charged to subhead Q.4. in the year under review, totalled £55,300 at 31st March, 1948.”

That is the total amount allocated.

703. The paragraph further continues:—

“Receipts amounting to £189,687 0s. 7d. in respect of sales of turf produced under the turf camps scheme are included in the Exchequer extra receipts. I understand that the scheme terminated on the 31st March, 1948, and that arrangements are being made to dispose of the property held by Bord na Móna on behalf of the Department.”

Is there anything in the point about extra receipts?

Mr. Wann.—There is no particular point. I do not know whether the property held by Bord na Móna on behalf of the Department has been disposed of.

Mr. Leydon.—That has been disposed of.

704. Chairman.—The paragraph goes on:—

“Sums amounting to £37,382 8s. 3d. were received from Bord na Móna, and are included in the Exchequer extra receipts, in repayment of advances made for the development of certain bogs. At 31st March, 1948, the amounts outstanding, including interest, for advances made from voted moneys for the development of bogs were:—

The Board is generally responsible, I take it, for the repayment of advances made for the development of certain bogs. You are not concerned with the development of bogs?—No, the Board is responsible.

705. Deputy Sheldon.—Will the receipts from the property held by Bord na Móna on behalf of the Department come in in the subsequent year as Exchequer receipts?—I can give the figure now.

No, I just wanted to make sure that they would be shown.

Mr. Leydon.—You will have that opportunity. I should like to make a comment, with your permission, Sir, lest there be any misunderstanding as a result of the comment made by Deputy Fitzpatrick. I should like to make it clear that not only have the Board’s reports and accounts for the year ending 31st March, 1948, been made available, but the report and accounts up to 31st March, 1949, have been made available since about July. They are, I think, reasonably prompt in producing their report.

Chairman.—If there is any reference in future to any of these companies here it would be as well, I think, to have the report here or to have it at the succeeding meeting so that Deputies can consult it if they wish.

706. There is a paragraph, number 57, on licence fees, which reads:—

“Licence etc., Fees.

As will be seen from the account, licence and other fees payable under section 11 of the Supplies and Services (Temporary Provisions) Act, 1946, amounting to £8,129 19s. 1d. were credited as Exchequer extra receipts. The principal items were Fabrics (Import Licences), £3,866 17s. 7d., and Duplicate Ration Books, £2,296 7s. 8d.”

707. Deputy Sheldon.—How much is charged for a duplicate ration book?—A shilling.

708. The amount is very high, not 1/-, but the fact that £2,296 came in?—We have had to issue an awful lot of duplicate ration books, I am sorry to say.

709. Chairman.—We shall now take the Vote. As to subheads J.1. and J.2., is the International Labour Office still continuing?—It is still in existence.

710. Deputy Sheldon.—With regard to subhead K—Health Emabarkation Certificates—is that service still going on?— That was handed over from the Department of Industry and Commerce to the Department of Social Welfare. I have an impression that it has been discontinued, but I am not quite sure about that.

711. Chairman.—There were no fees for this service?—No.

712. Deputy Sheldon.—As to subheads Q.1.—Production of Turf for Non-Turf Areas—and Q.2.—Cost of Administration —these are both given as Grants-in-Aid. Usually a Grant-in-Aid is passed on the amount voted and these two are less than the amount voted. In what way are these Grants-in-Aid different from the normal ones?—These Grants-in-Aid are paid as they apply for the amount. They apply for a given amount and if they have a balance on hands at the end of the year it is not surrendered. It does not follow that they are compelled to apply for the whole amount.

713. Chairman.—Had this Grant-in-Aid under Q.1. reference to the emergency situation or is it intended that it should be a normal thing; the amount of money seems very large for a Grant-in-Aid?—It was a very bad season and the weather interfered with the operations. The scheme was discontinued as from the beginning of 1948.

Will that subhead now disappear?—Provision for that heading has disappeared.

714. Deputy Sheldon.—As to subhead R.1., dealing with the Labour Court, a note on page 194 says that an ex-gratia payment was made to the Deputy Chairman of the Labour Court in respect of 8 days attendance at the offices of the Labour Court. The amount works out at something like £9 per day and the Court was not then in session. It is not clear to me why such a payment should be made. Did the Deputy Chairman in fact do any work, or was this a sort of disturbance claim?—It was not a disturbance claim. This occurred at an early stage in the existence of the Court. The Chairman had to go abroad and the members of the Court felt that, in the absence of the Chairman, whose appointment was a full-time one, the Deputy Chairman should be in attendance for any questions that might come up for consideration, questions of administration or some urgent question arising in connection with a labour dispute or matters of that kind. It was in these circumstances that he attended. The original sanction from the Department of Finance provided for payment only when the Court was in session and therefore we had to get special sanction for payment for attendance on this occasion.

It looks like the American scheme by which the Department of Agriculture paid farmers for not raising hogs. How much would he get if he had been working when he got over £9 per day when he was not? —I do not think it is quite fair to say he was not working.

715. It seems a high rate of remuneration?—Senior Counsel are highly paid. If you employ them I think you will probably come to the same conclusion as a client when you get their bills.

Chairman.—Is he a Counsel?—Yes, a Senior Counsel.

Deputy Sheldon.—That covers my point.

Mr. Leydon.—May I say that the Deputy Chairman to whom this refers is not the present Deputy Chairman. The Deputy Chairman at that time was a Senior Counsel, but the present Deputy Chairman is not.

VOTE 56—AVIATION AND METEOROLOGICAL SERVICES.

Mr. J. Leydon further examined.

716. Chairman.—Paragraph 58, Comptroller and Auditor-General’s Report reads:—

“Subhead A.5.—Acquisition of Land, Buildings, etc.

Subhead A.6.—Rent and Rates on Land, etc.

With a view to the establishment of a village settlement in the vicinity of Shannon Airport approximately 243 acres were acquired by a vesting order made under the provisions of Emergency Powers (No. 315) Order, 1944 (Statutory Rules and Orders, No. 74 of 1944). It was decided, however, to abandon the scheme before any formal offer of compensation was made to the owners, a payment of £97 5s. 4d. made in 1946-47 for a building, which was acquired by agreement, being the only expenditure incurred up to 31st March, 1948, on the acquisition of these lands. Rates and land annuities paid up to 31st March, 1948, amounted to £644 3s. 5d. of which £278 18s. 6d. is charged in the account under review. I understand that the Department of Finance has sanctioned the re-conveyance of the lands to the former owners, subject to certain conditions, and that negotiations to this end are proceeding.”

Have you anything to add to that, Mr. Wann?

Mr. Wann.—There were 23 owners. I do not know whether negotiations have been completed.

717. Chairman.—How does the matter stand at present, Mr. Leydon?

Mr. Leydon.—I am sorry to say that it has not yet been concluded. The County Council was one of the parties concerned. The County Council accepted the transfer of the property acquired from them. In the other cases we offered re-conveyance. Three of the holders refused outright. In 12 cases we could not get any sort of a reply one way or the other—they just kept putting us off. In eight cases they stated that they were willing to accept re-conveyance on the approved terms, but, when the documents were presented for signature, they refused to sign. It has been most illuminating to see how much you upset them by the acquisition of land and how much more you upset them when you offer the land back to them. These negotiations are still proceeding.

Chairman.—That would be a classical case for future generations. You give people back their property with a slight profit, I suppose, and they do not wish to have it.

718. Deputy Sheldon.—Did the approved terms include compensation for disturbance?—No, the approved terms provided that they sign an acknowledgement discharging the Minister from all liability and that they recoup the Minister all the outgoings in the way of rates, etc., paid by him since the vesting date.

719. I do not wonder that they did not sign?—Lest there might be any misunderstanding, I may say that these people were left in occupation while the land was vested in the Minister.

Deputy Sheldon.—That is a very different thing.

720. Deputy O’Sullivan.—Why was the scheme abandoned?

Mr. Leydon.—Because the staff changed their minds.

Was it intended for the staff?—Yes. Housing conditions were very difficult. We had a great deal of sympathy with the staff, who had difficulty in getting suitable accommodation anywhere near the Airport or in Limerick, and their associations were consulted and the view they put to us was that they would like accommodation reasonably near the Airport. We acquired a site along the Ennis Road where the Airport road joins the main road. The staff changed their minds later and did not quite like this idea. We decided immediately that there would be no point in going on with it.

721. Chairman.—What is the position with regard to staff accommodation at present?—It has become very much easier. A number of houses have been built around Limerick; and we have been able to accommodate a number of the unmarried staff in hostels at the Airport. The accommodation problem is not acute at the present time. Those who live in Limerick get certain facilities in so far as that we pay part of the cost of their fares.

722. We can now take paragraph 59 in the Report of the Comptroller and Auditor General:—

“Subhead A.7.—Constructional Works including furnishing of Buildings—Shannon Airport.

Subhead A.8.—Constructional Works including furnishing of Buildings—Dublin Airport.

Expenditure during the year on constructional works, including furnishing of buildings at Dublin, Shannon (Rineanna) and Shannon (Foynes) Airports, amounted to £235,722 18s. 0d., £261,417 3s. 5d. and £8,806 10s. 6d., respectively, bringing the total expenditure, as at 31st March, 1948, to £727,561 9s. 4d. for Dublin Airport, £1,420,540 1s. 2d. for Shannon Airport (Rineanna) and £162,780 13s. 1d. for Shannon Airport (Foynes), exclusive of expenditure on the acquisition of land. Contracts for major works at these airports in the year under review were in most cases placed in fixed sums, but some were again entered into on a cost plus profit basis, and in one case the Department arranged with a contractor already working on the site to carry out certain work which was regarded as urgent at the rates and prices applicable to his original contract, while in another case works to an estimated value of £60,000 were entrusted to a contractor as extras on an existing contract as it was considered that competition was unlikely to result in a saving to public funds.”

The members of the Committee will see there the total expenditure on these airports up to the present. Contracts are still proceeding for major works. The Comptroller and Auditor-General has noted that, in some cases, contracts were entered into on a cost plus profit basis. I presume, Mr. Leydon, you are trying to get away from that system?—We never liked it. I explained to the Committee on previous occasions why, in certain circumstances, we felt forced to adopt this system of a cost plus profit basis. We had only three in 1947-48 and none since then.

723. If these were very substantial contracts, the Committee would be interested to have some information from you about them?—There were three. The first was the erection of wings at the terminal building. The amount of that on the cost plus profit basis was about £13,000. The next one was the clearing up, and making of repairs to an area damaged by fire at the Airport. In that case we had to proceed at once and could not wait. The cost was £4,500. The third one was in Dublin— the flooding of the basement of the terminal building. It would be quite impossible, I think, to get any sort of a tender for putting that right because nobody knew what was wrong or where the water was coming from. The cost of that was £862.

724. Chairman.—The concluding portion of paragraph 59 in the Report of the Comptroller and Auditor-General reads:—

“In connection with the construction of additional accommodation at a terminal building, I observed that the lowest tender received was £45,540 18s. but that, owing to unavoidable delay in completing the contract documents, arrangements were made with the contractor to carry out the initial stages of the work on a cost plus profit basis, the amount paid being approximately £13,000. The value of this work measured at the rates quoted in the contractor’s bill of quantities amounted to £7,446 0s. 3d., and the original tender for £45,540 18s. was reduced by this sum, and a contract placed for the balance of the work at £38,094 17s. 9d. I have inquired regarding the discrepancy between the actual cost of the work carried out on a cost plus profit basis and the value as reflected in the contractor’s bill of quantities.”

Have you any further information to give the Committee, Mr. Wann?

Mr. Wann.—The net effect of the change was that for work valued at £7,446 in the original contractor’s estimate £13,000 was paid, a difference of £5,554. The Accounting Officer explains that the works executed under the cost plus profit contract at a cost of £13,000 are not directly comparable with the corresponding items included in the original price of £45,500, because it became necessary to alter the structural design of the buildings, and so apparently we got value for the additional expenditure.

725. Chairman.—Have you anything further to add, Mr. Leydon?

Mr. Leydon.—On the general question of the cost plus profit basis I do not think I have anything to add to what I have already said. As regard this particular case, the first-floor roofs of these wings were originally designed for a new form of construction which consisted of a number of concrete units of light weight. After the tenders had been received, and before the work started, it was found that the particular materials required could not be obtained and so an alternative form of construction of reinforced mass concrete had to be provided for. That made it necessary to change the design. The change involved a substantial increase in cutting, excavation and filling, and the substitution of reinforced concrete columns for steel stanchions. The extra expenditure involved in all this is included in the cost plus profit part of the contract. There were some other items arising out of the cost of the transport of workers and so on. The only other comment I have to make is that while this redesigning occasioned additional cost in the early stages of the building, our professional advisers say that it resulted in an appreciable saving at later stages of the work. It is not possible to give the Committee a precise figure in regard to that, but I am advised that it would be of the order of £3,000, which should be set off against the difference between the £7,446 and the £13,000.

726. Deputy Fitzpatrick.—There is the question of an existing contractor getting £60,000 for extras. That seems to be a very big amount. It is said here in the paragraph that extras estimated at £60,000 were entrusted to a contractor because it was considered that competition was unlikely to result in a saving to public funds. Is it not likely that there would be a good deal of competition for a £60,000 contract?—It is a big sum but this was a big contract. This was a contract for over £300,000 at the Dublin Airport for the construction of concrete runways. The extras consisted of work of a similar kind, the construction of taxi-ways and the widening of an apron. If you have a contractor engaged on a job of that kind it is going to be very difficult to get another contractor to tender for a similar job on the same site. Any other contractor who does tender for it is going to be at a great disadvantage in comparison with the man who has his plant and equipment on the spot. These works could not be left over until the completion of the main contract.

727. The general feeling is that contractors always make their money on the extras. They say so themselves. This was a similar type of work to that which had already been estimated?—It was similar work, widening an apron and the construction of taxi-ways. It was the sort of work that the contractor was doing.

It was an extension of the work that he was doing?—It was.

Then you were in a position to estimate the amount. Even contractors themselves admit that it is on the extras they make their money?—I know that.

728. Deputy Sheldon.—Had the contract gone too far to readvertise so far as the new design was concerned? That, I take it, would mean breaking the contract and I presume in that case the contractor would have a claim against the Department for the breaking of his original contract?—I think it had gone too far. Quite apart from that, one of the complications in this case was that there was an acute squabble going on between the master builders and the Department engaged on construction works about certain clauses in the contract. We just could not have got tenders at that time anyhow.

Sitting suspended at 1 p.m. and resumed at 2 p.m.

Chairman.—We were dealing with Vote 56 before lunch and I take it we are finished with the paragraph under consideration relating to these constructional works at the Airport.

729. The next paragraph, number 60, refers to the management of Dublin Airport. I think this paragraph is informative enough and I need scarcely read it. May I ask, Mr. Leydon, whether the profit of £10,787 15s. 3d. referred to has yet been brought to account?—It has.

730. The next paragraph, No. 61, relates to “Subsidy in respect of Air Services.” Towards the end of the paragraph on the next page members of the Committee will see:—“Including the sum of £458,650 charged in this account, the total subsidy paid to the company now amounts to £750,000, and it is stated in a note to this subhead that the full payments due to Aer Rianta, Teo., could not be made pending the enactment of legislation to extend the subsidy limit contained in the Air Navigation and Transport Acts.” Has that matter been rectified?—No. But the Bill has been introduced.

731. Paragraph 62 relates to Appropriations in Aid and the Comptroller and Auditor-General has asked to be furnished with certain documents in connection with the audit of these receipts and with information regarding the amount of the fees outstanding at 31st March, 1948?

Mr. Wann.—The documents required were manifests and it appears that these were destroyed locally without authority. Copies of some of them, but not all, were obtained from the Revenue Department and the Department of Justice. That is the position.

732. Deputy Sheldon.—How many of them are outstanding?

Mr. Wann.—We got 75 per cent. of those we asked for.

Chairman.—Have you any further information on that, Mr. Leydon?

Mr. Leydon.—The documents asked for by the Comptroller and Auditor-General were summaries and manifests. We were able to produce all the summaries, except one or two that were lost in transmission, and a number of the manifests had unfortunately been destroyed at the Airport without authority from headquarters. We were, however, able to secure them from the customs authorities or the immigration authorities, who also got copies. The Comptroller and Auditor-General was so informed. It was explained that it was a bulky set of documents and before we put either Department to the trouble of producing all the manifests we asked him if he wanted them all. His reply was that he wanted those which he indicated. We were able to produce those which he marked.

Mr. Wann.—I do not think quite all.

Mr. Leydon.—Very nearly all.

733. Chairman.—He also asked for information regarding the letting of rooms —receipts from the letting of rooms—and the arrangements made with the Catering Comptroller for the management of the hostels.

Mr. Wann.—These hostels are managed by the Catering Comptroller, who keeps separate accounts for them. He collects the charges for the lettings and he defrays expenditure out of the proceeds. The balance is remitted to the Department at intervals and is brought to account in the Appropriations in Aid. The point is that the charges are on an approved basis. I think I may say that we are now satisfied as to the position.

734. Chairman.—The next paragraph deals with Shannon Airport catering services. There is a question in that paragraph as to the agreement between the Minister for Industry and Commerce and the Catering Comptroller. That provided that signed copies of the inventory of furniture and equipment supplied by the Minister to the catering service would be exchanged between the Minister and the Catering Comptroller. There seems to be a difficulty in getting a complete inventory. I wonder would it be possible to secure the necessary information for the Comptroller and Auditor-General?

Mr. Leydon.—Yes. I am glad to be able to report to the Committee that we have now been able to remedy that defect. At the time the catering service started, the pressure of work was tremendous both in the Department and in the catering service. Of course it would have simplified matters if the inventories had been prepared at the time. Unfortunately they were not but the information was available in the Office of Public Works or the Department of Industry and Commerce, The information has been extracted and that work has been completed to the extent that the inventories have been compiled and sent to the Catering Comptroller for his agreement. That is the stage that has now been reached. The work has not been finally completed but a list was sent to the Catering Comptroller and it has been with him for the past three months.

Mr. Wann.—That matter will come under notice in the course of the next audit.

735. Deputy Sheldon.—In the course of paragraph 63 it is stated that the building has been offered for sale fully furnished? —That is the building at Foynes. That building has been taken over by the Limerick County Council for use as a sanatorium at an agreed figure.

736. Chairman.—Including the furniture?—No, that does not include furniture. Some of the furniture was transferred to Shannon Airport.

737. Deputy Sheldon.—At the end of the paragraph there is a reference to a sum of £5,000 in respect of catering profit and is it still charged to a suspense account?

Mr. Wann.—I do not know whether it is still so charged.

Mr. Leydon.—The position was that no-finality was reached between the Catering Comptroller and the Department pending the settlement of a number of outstanding accounts that were under discussion for some years back. These points have now been cleared up and a new agreement has been made with the Catering Comptroller. I do not know if that sum has actually been cleared but it is in the process of being cleared. At any rate, the basis on which the account can be finally settled has been agreed between the Department of Finance and ourselves and the Catering Comptroller.

VOTE 58—TRANSPORT AND MARINE SERVICES.

Mr. J. Leydon further examined.

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

738. Deputy Sheldon.—As regards subhead A.3—Grants for Harbours—has there been any improvement in the harbours since the year under review? Has it been possible to catch up on the work, because apparently at this time there was difficulty?—The whole question of grants for harbours was considered by the Government. I do not think I could say there was any progress made for quite some time after this particular year of account. The general question of harbour development has been taken up in recent months very actively and the examination of the applications that have been received is kept up at high speed.

VOTE 60—INDUSTRIAL AND COMMERCIAL PROPERTY REGISTRATION OFFICE.

Mr. J. Leydon called.

No question.

VOTE 73—REPAYMENT OF TRADE LOANS ADVANCES.

Mr. J. Leydon called.

No question.

The witness withdrew.

VOTE 29—AGRICULTURE.

Seán Ó Broin called and examined.

739. Chairman.—Paragraph 19 in the Report of the Comptroller and Auditor General is by way of information to the Committee in connection with fertilisers’ subsidies. In it the following appears:—

“The accounts for the 1946-47 season showed that a subsidy of £17,770 2s. 7d. was required to bring the profit earned up to the figure authorised, and this amount was accordingly paid to the manufacturers and is included in the charge to this subhead.”

Perhaps you would inform the Committee what the amount manufactured was and the profit allowed per ton, together with the profit actually made and that which had to be made up?—The profit per ton allowed by Industry and Commerce was at one time 10/-; it was then reduced to 8/- and in this particular year, I think, it was reduced to 6/- per ton.

740. What was the total tonnage manufactured?—The total output was about 100,000 tons of superphosphates; about 11,000 tons of Semsol, which is a mixture of ground phosphate and superphosphates. They sold a small quantity of ground phosphate. It amounted to about 4,000 tons. There was also a compound fertiliser—about 28,000 tons. The total would be round about 150,000 tons.

741. Can you give us the profit actually made on that by the manufacturers?— This is arrived at by Industry and Commerce. It would be about £40,000 to £50,000, I think.

Mr. Wann.—It would be about £46,000.

742. Chairman.—That is the profit allowed to the manufacturers at 6/- per ton. Then a subsidy had to be paid of £17,750 to bring the profit earned up to the figure authorised?

Mr. O Broin.—Yes.

That means that they did not make £46,000. They were short £17,770 and you had to make that good?—That is so.

743. Deputy Sheldon.—Does Mr. Ó Broin know that there has been a tendency for the amount of ground lime phosphate used to increase?—There has been a definite tendency recently to use more ground phosphate.

744. The paragraph continues:—

“The balance of the expenditure relates to payments on account, totalling £1,287 10s. 0d., made to two concerns in respect of superphosphate imported from Holland.”

Mr. Wann.—The total quantity imported was 3,560 tons. The subsidy due on that was £2,663. A sum of £1,287 10s. 0d. was paid in the year under review leaving about £1,375 to be paid in the coming year.

Chairman.—The paragraph in relation to subhead G.4—Improvement of Poultry and Egg Production—is by way of information only.

Mr. Wann.—The scheme referred to in the paragraph was initiated in the year under review and only what might be described as preliminary expenditure was charged to this Vote.

745. Chairman.—Paragraph 21, which relates to subhead H.—Grants to County Committees of Agriculture—is also by way of information only.

746. Paragraph 22 is as follows:—

“Subhead L .4.—Scheme to encourage the commercial production of glass-house crops in Gaeltacht areas.

Provision was included in a Supplementary Estimate for this new service, the main item being a sum of £30,495 for the cost of erection of propagating houses, packing sheds, growers’ glasshouses, etc. Contracts amounting to £101,145 8s. 0d. were placed for the erection in each of the Counties Donegal and Galway of a central building and 100 glasshouses, and instalments on foot of these contracts, totalling £45,685, were paid in the year under review. The expenditure charged to the subhead also includes a sum of £1,255 for architects’ fees, and the balance, £828 16s. 10d., relates to remuneration and travelling expenses of staff, and general expenses.”

747. Deputy Sheldon.—Can we take it that, because there is an over-expenditure, the scheme went ahead with greater speed than was anticipated?

Mr. O Broin.—This scheme was initiated in the early part of 1947. It went ahead with considerable speed. We tried to get the houses up so as to be in production for the 1948 season. We proceeded as quickly as we could to have them erected.

748. Deputy Sheldon.—Was it the rate of putting the service into operation that caused the excess on the subhead or was it that prices were higher for the construction than anticipated?—Partly the rate of progress and partly because prices were slightly higher than had been anticipated.

Chairman.—Will there be a note on this in the following year?

Mr. Wann.—Yes.

749. Chairman.—The second subparagraph of paragraph 23, which relates to subhead M.M.5—Special Temporary Scheme of Loans for the Purchase of Cattle and Sheep—is as follows:

“As will be seen from the account, payments to the Agricultural Credit Corporation, Limited, totalled £303,519 15s. 11d., being £302,466 14s. 6d., for advances for the issue of loans, and £1,053 1s. 5d. for administrative expenses. Repayments of loans amounting to £331 are included in the appropriations in aid.”

These loans are not repayable, to any extent, in the year under review. Is that not so?

Mr. Wann.—No. I think those were repayments made before the due dates.

Mr. O Broin.—They were voluntary payments which were made before they were due.

750. Chairman.—With regard to subhead M.6—Improvement of the Creamery Industry-paragraph 24 states: “As will be seen from the account, no expenditure was incurred under this subhead during the year.” The Comptroller and Auditor-General has given a statement regarding the Dairy Disposal Company, Limited, and there is also a balance sheet of this undertaking. The last balance sheet of the Company would be that of 1st January last?*

Mr. O Broin.—The consolidated balance sheets are generally made up as at the end of the calendar year. I think that probably the account you have before you is the consolidated balance sheet as on the 31st December, 1948. I do not think we would have one for 1949 yet.

751. Chairman.—There have been repayments on foot of an advance of £112,000 made in March, 1933, of which £84,000 was paid in the 1946-7 period, apparently, and a further sum of £7,000 was repaid during the year under review, making a total refund of £91,000 in respect of the advance referred to. How about the balance?—The balance of the £112,000 has since been repaid. The total sum has now been cleared.

The Department of Agriculture is down £547,000 on the liabilities side to £520,000.

752. In the paragraph which relates to subhead M. 10—Potato Reserve Scheme —we read: “Expenditure in the year under review amounted to £38,351 19s. 0d. and receipts from sales, which are brought to account as Appropriations in Aid, totalled £33,832 19s. 5d.” The second part of paragraph 25 deals with an arrangement for the accumulation of a ware potato reserve in 1948. “Expenditure in this connection to 31st March, 1948, amounting to £780 1s. 6d., is charged to this subhead, and the Appropriations in Aid include £480 8s. 0d. in respect of receipts from sales.”

753. Paragraph 26 refers to subhead M. 11.—Farm Buildings Scheme. This is a scheme in respect of which a sum of money was provided but was not fully expended in the year in question.

754. Paragraph 27 refers to subhead O. 5.—Agricultural Produce (Cereals) Acts, 1933 to 1939, and Emergency Powers (Cereals) Orders, etc. This is in connection with wheat vouchers for artificial fertilisers. How does the matter stand at present as regards the clearing off of these claims?

Mr. O Broin.—We are trying each year to clear off one year’s credit vouchers. We started in 1947 on the dockets issued in respect of the 1943 crop. In 1948 we tried to do the 1944 crop and so forth.

755. Deputy Sheldon.—I think there is a difficulty in regard to that matter. In my own area I have not been able to apply because I could not get a form on which to apply. The Post Offices never had them. I asked several times. Perhaps this is a matter for the Post Office? —I must say that I cannot understand it. I have not heard any complaint of that character.

756. The difficulty arises. I am wondering about the position if it does happen. Will farmers lose the subsidy for that year if their application is not made by a certain date?—No, but it would be more convenient for us to make our payments out of the provisions of the yearly Vote. If he can supply the printed dockets, and we have the counterfoils which show that nobody else has got a credit voucher in respect of that docket, a farmer who applies at any time will get it. However, naturally, we would like to work off our schedule. Otherwise, the position of our finances would be considerably upset.

I have no idea if that happens everywhere but it has certainly happened to me?—I shall have inquiries made, but I must say that I have not heard any other complaint.

757. Chairman.—There is a small paragraph at the end here regarding the payments to importers of seed wheat.

Mr. Wann.—The total cost of the wheat, including commission, was £25,457. Receipts were £22,349, leaving a sum of £3,108 11s. 11d. payable to the importers by way of subsidy.

Chairman.—You make arrangements with a particular form or firms, Mr. Ó Broin, in a case like this?—Yes. The firm here was Pedigree Seed Growers. This was a particular transaction in order to get some “Progress” seed wheat from Sweden—a variety which we thought it would be very useful to get. We arranged with Pedigree Seed Growers to do the importation and distribution.

758. Deputy Sheldon.—Is that not a sort of joint firm representing various seed interests?—Yes, Seed and Nursery Trades Associations.

759. Chairman.—Paragraph 28 refers to subhead O (10)—Emergency Powers (Tillage) Orders. The general effect of this paragraph is that it deals with the losses on these lands taken over by the Minister for Agriculture under the Compulsory Tillage Orders.

The paragraph continues:—

“The total receipts in connection with this service to 31st March, 1948, amounted to £26,004 15s. 9d. of which £21,627 10s. 10d. was applied towards defraying expenses, including £5,209 10s. 4d. brought to account as Appropriations in Aid during the year under review. The sums disbursed to 31st March, 1948, totalled £3,818 10s. 1d. comprising £2,928 6s. 4d. to State and local authorities and £890 3s. 9d. to the occupiers of the holdings concerned.

In my last Report I mentioned that the Committee of Public Accounts in its Report on the Appropriation Accounts, 1945-46, noted that it was not possible for the Department ultimately to make a profit in connection with the enforcement of the Orders relating to compulsory tillage and expressed the hope that every effort would be made to keep losses at a minimum. I understand that in the case of holdings where the expenses exceeded the receipts, the total of the deficits amounted at 31st March, 1948, to £12,327 10s. 8d., as compared with £7,669 11s. 4d. at 31st March, 1947.”

There seems to have been an increase?— Yes. As I explained on the last occasion here, it was almost impossible to avoid deficits where the Department had to enter on holdings and do the tillage themselves. The real factor that determined the amount of the deficit is the number of holdings entered in the year. In 1947 we had to enter on 97 holdings, which was a considerable increase on the number of holdings entered on in 1946. Of these 97, we had to do the tillage ourselves in 57 cases as against 21 cases in 1946. Naturally when the number of cases of that kind is increased, it is almost inevitable that the deficit should increase. The only way we could avoid increasing these losses would be to refrain from entering on the holdings.

760. You are bound to till yourself?— Where we found that there had been persistent default and where we entered on the land, the first procedure was to try to get the cultivation done by conacre tenants. Where we failed in that, we had to do the tillage ourselves and that was an inconvenient and costly process.

761. Paragraph 29 of the Report of the Comptroller and Auditor-General deals with subhead P.—Appropriations in Aid —Levy on the Slaughter of Cattle and Sheep. There is an amount outstanding. Is it hoped to collect the amount?—We are still collecting a few hundred pounds every year. The amount outstanding at the moment is only about £1,500 and we may collect most of that. We are coming to the end of this particular item, I think.

762. Paragraph 30 deals with the Extra Receipts payable to the Exchequer in respect of licences granted under Emergency Powers Orders—the licensing of persons engaged in the business of producing, processing and selling specified classes of agricultural seeds, and licences issued under the Emergency Powers (Export of Dead Poultry and Rabbits) Order, 1945. The rabbits have been having a bad time. Are they completely exterminated?—No, they are not, unfortunately.

763. Deputy Fitzpatrick.—Turning to the details of the Vote as given on page 92, how do you account for the excess of expenditure over the amount granted on Agricultural Schools and Farms?

Chairman.—The explanation is given on page 97: “Excess mainly due to the increased cost of seeds, manures, feeding stuffs and farm requisites generally; to the grant of increases during the year in the wages of farm labourers, etc., and the necessity for employing additional labour more extensively than was anticipated.” I presume the farm receipts will appear in the Appropriations in Aid?—Yes.

764. We shall come to that later. In connection with subhead F. 8.—Educational Tours for Instructors in Agriculture —The grant does not seem to have been utilised?—It could not be utilised.

765. Why was that?—The intention was to take a number of Agricultural Instructors on a tour of farms in Great Britain but on account of the very bad weather in Britain in the early months of 1947, we though it inadvisable to attempt to undertake such a tour and we abandoned it entirely.

766. Are you going to abandon it completely? I am not suggesting that you can learn anything from English agriculturists but I see other people pondering on the advantages of foreign travel and so perhaps the agricultural experts would like to see what is going on there?—It is a matter that we consider from time to time, that is, whether we should not make provision for a tour to enable these men to see forms of agricultural activity elsewhere.

They are making tremendous strides in some respects over there.

Deputy Sheldon.—There are a number of factors affecting agriculture over there which the Department might not like to see in operation here. There are bigger subsidies for ploughing and heavy subsidies for manures which make all the difference. The amount of manure for which I would pay £100, the farmer in Northern Ireland can get for £40. That would have to be borne in mind as a background when considering what it is possible to do in this country.

Chairman.—There is the advantage of being au fait with what is being done elsewhere.

Deputy Sheldon.—I agree.

767. Chairman.—With regard to subhead M (3)—Printing of Special Departmental Publications—what do the booklets or the pamphlets cost at present or are the entire Departmental pamphlets collected in one book?

Mr. O Broin.—We have put the pamphlets into five separate bound volumes, dealing with different subjects. The price varies from 1/6 for some of them to as low as 3d. It depends on the size of the volume of course.

768. Deputy Davern.—With regard to subhead J—National Stud—what does that expenditure represent?—That is the expenditure incurred on the rent of the lands which comprise the National Stud farm.

769. Deputy Mrs. Crowley.—Arising out of subhead I. 4—Scheme to Encourage the Commercial Production of Glasshouse Crops in Gaeltacht Areas—there is a reference in the Report of the Comptroller and Auditor-General on page 11 to a sum of £1,255 for architect’s fees. If that scheme were extended to other areas, would those plans belong to the Department or would another architect have to be employed to prepare new plans?—I think another architect would have to be employed because the preparation of the plans would be a small part of the work which the architect has to do. He would have to keep an eye on the construction as it proceeds and visit the site frequently.

770. The plans do not belong to the Department? They belong to the architect?—I think they probably belong to the architect. We could draw up plans ourselves—that is our horticultural staff —for glasshouses. In fact the architect’s plans were drawn up in consultation with our staff.

771. Deputy Fitzpatrick.—It is the practice to get a separate Departmental architect to draw up the plans?—This was not in accordance with the normal practice, which is to get the Board of Works to do this kind of work, but they were very heavily pressed at the time with other work and said they could not undertake it in time to get the houses in working order for the following growing season. We had to employ the architects and the contractors ourselves. It is an operation we do not usually perform, as it is generally done for us by the Board of Works.

772. Chairman.—Would these plans not be available, would you not have the right to publish them, as general information for our tomato growers?—I am not quite sure as to what our position is in regard to these plans. The point has not been considered.

773. Deputy Sheldon.—On subhead M (4)—Loans and Grants for Agricultural Purposes—there was actually more received for the repayment of loans than was expended on new loans. Appropriations in Aid, No. 13, shows receipts £28,864, while the loans granted come to £23,971. That is something which happened purely in this year under review, I imagine?—Yes, that is purely fortuitous. It does not indicate any permanent relationship between those figures.

774. Chairman.—On N (1), Diseases of Animals (Ireland) Acts, how do you distinguish in this case the expenditure from other administrative expenditure? Is it by way of grants to the local authorities, for example, specific sums? How are you able to differentiate?—The outstanding example of the payment of grants is the grants we pay to the County Committees of Agriculture. Under N. 2, we recoup County Councils a certain part of their expenses in connection with the work they carry out under the Diseases of Animals Acts—that is recoupment of actual expenditure incurred.

775. There has been no modification of this Tuberculosis Order since 1926. Are you empowered to change the amounts?— The compensation for slaughtered animals is rather complicated. Part of the compensation is payable out of the general Cattle Diseases Fund. We contribute about half that fund and the other half is raised by a levy on the rates in the various counties. There is a limit to the amount that can be levied in rates and that limit has been increased from time to time by special amending legislation. As regards the Bovine Tuberculosis Order, we have a good deal of discretion, we can vary it, and we are thinking at present of making a new Tuberculosis Order of a more extensive nature than the present one, in order to encourage the more extensive eradication of animals affected with tuberculosis.

776. The amount seems small for the purpose in view?—It is. It is only the very bad cases, when the animals are very far gone, that are reported to the local authorities for slaughter. We would like to see them reported at an earlier stage.

777. Under subhead O. 2., what is the nature of this payment?—This is the administration of the Dairy Produce Acts. We maintain a staff of dairy produce inspectors who make frequent visits to creameries and check deliveries of milk, butter fat content and the various data we require for the payment of production allowances to creameries. The figure covers the payment of salaries of the staff, which is one of the principal items.

778. On O. 5.—Grants under the Agricultural Produce (Cereals) Acts—the note says that the saving was mainly due to the fact that many wheat growers did not utilise the credit vouchers in time.

779. Under the item, Extra Receipts, you say “Sales of Creameries”. I presume that if a creamery were being sold we would hear more about it than we do through this footnote?—Yes, there is generally a good deal of attention directed to the sale of creameries.

780. Under Appropriations in Aid, on page 100, there is a long list of money received, £325,000 in all realised.

VOTE 30—AGRICULTURAL PRODUCE SUBSIDIES.

Seán Ó Broin further examined.

781. Chairman.—There is a paragraph, number 31, by the Comptroller and Auditor-General as follows:—

“Subsidies, Allowances, etc., for Dairy Produce.

In previous reports I mentioned that allowances on the production of creamery butter were payable at such rates as enabled the price of milk supplied to creameries to be maintained at 10½d. per gallon for the period 1st April to 30th November, and at 1s. per gallon for the period 1st December to 31st March. In April, 1947, the Government decided that the price of milk delivered to creameries should be 1s. 2d. per gallon from 1st May to 31st October, and 1s. 4d. per gallon from 1st November to 30th April, and that the additional cost involved should be met by increasing the retail price of creamery butter from 2s. 4d. to 2s. 8d. per lb., and by increasing the existing subsidy. The retail price was accordingly advanced on 17th April, 1947, and the sums disbursed in allowances on creamery butter produced on and after 1st April, 1947, amounted to £1,877,318 6s. 4d. in the year under review. The charge to the Vote also includes payments totalling £81,140 5s. 3d. made to the proprietors of registered butter factories in respect of non-creamery butter acquired by them and sold to the Butter Marketing Committee for household use. In addition to expenditure of £800,604 7s. 4d. in the year 1946-47 on allowances in respect of creamery butter produced and non-creamery butter acquired in that year, payments amounting to £33,073 9s. 5d. were also made during the year under review, bringing the total cost of these allowances for the year 1946-47 to £833,677 16s. 9d., as compared with £950,965 6s. 7d. for the year 1945-46. The remainder of the expenditure charged to the Vote, £73,459 16s. 2d., comprises a payment of £30,000, on account, made to the Butter Marketing Committee in respect of a deficiency in the Committee’s trading account for the year ended 31st March, 1948, and sums totalling £43,459 16s. 2d. paid to Creameries in connection with the Department’s schemes for cold storage of creamery butter for winter requirements.”

That is by way of information?

Mr. Wann.—By way of information, yes.

782. Chairman.—What exactly does the Butter Marketing Committee do?

Mr. O Broin.—Its main function is the storage of butter for winter use in the Dublin area and in some other parts of the country—Donegal, for example. Creameries would incur considerable transit charges in supplying butter to that area, so the Butter Marketing Committee undertakes the work.

783. Chairman.—Paragraph 32 regarding the Dairy Produce (Price Stabilisation) Fund shows the state of this fund. I notice the levy was also payable on cheese. The payments out of the Fund were made solely to the Butter Marketing Committee. We shall pass on now to the Vote at page 107.

784. The Dairy Produce (Price Stabilisation) Fund is referred to by the Comptroller and Auditor-General in that paragraph 32. There is a balance in hand. Does that mean the Exchequer is not called upon?—Yes. Really the Fund and the Vote are both mainly applied to the same purpose. We draw on the Vote first. When that is exhausted we draw on the Fund.

785. Deputy Sheldon.—Has the Fund gone on increasing?—No. It has been frequently exhausted.

Chairman.—It does not look as if it would stand very much?—It would not stand very much at the moment.

VOTE 31—FISHERIES.

Seán Ó Broin further examined.

786. Chairman.—Paragraph 33 of the Comptroller and Auditor-General’s Report deals with subhead G. 2.—Advances for Boats and Gear—and reads as follows:—

“Including the advances of £16,750 charged in this account, the total advances for boats and gear to 31st March, 1948, amounted to £155,500. The half-yearly instalments of the annuities set up to repay these advances falling due to 31st March, 1948, amounted to £128,027 13s. 0d., while the sums collected by the Sea Fisheries Association from borrowers and transferred to the Department in payment of the annuity instalments amounted to £117,608 17s. 2d., including £11,652 19s. 9d. repaid in the year under review and credited to appropriations in aid. The repayments were, therefore, in arrear on 31st March, 1948, to the extent of £10,418 15s. 10d., as compared with £10,437 0s. 2d. in arrear on 31st March, 1947.”

Mr. O Broin.—The advances on boats and gear are made through the Sea Fisheries Association. In principle they are repayable on an annuity basis by halfyearly instalments over a period of 20 years. In practice the Association is required to pay over annually the amounts deducted by way of principal and interest from the receipts from sales of fish caught by their members.

Chairman.—What is the explanation for the increase in the arrears? Was it due to a particularly bad year?—I am afraid that is a difficulty inherent in the situation. We can never get rid of some deficits in repayments. As in every other occupation, there are men who are not so successful as others. Where an unsuccessful fisherman has had to surrender his boat, it means that that boat must be allotted to some one else at a lower valuation and one cannot saddle the new hire purchaser with his predecessor’s debt. There seems to be no way at present of making up a certain proportion of these arrears that arise from time to time. I am afraid that is a matter we shall have to discuss with the Department of Finance.

787. Deputy Sheldon.—Taking the risks into consideration, the percentage seems to be fairly low?—Conditions were, of course, very favourable for fishermen during the war years. There was a good market and prices were good. We reached a very low arrear figure in March, 1946. It was down to something in the region of £4,000. Since then it has increased again. Some of the best fishermen have paid off the instalments due on their boats.

788. Chairman.—Is not the 20 years’ period rather long? What would the life of a vessel be generally?—That would depend a good deal on the care taken of it.

Deputy Sheldon.—On an average it would be 20 years. Some fishing boats are much older than that?—That is true.

789. Chairman.—We pass on then to paragraph 34 of the Report:—

“Subhead G.3.—Advances for General Development.

Sums amounting to £9,000 were advanced during the year under review to the Sea Fisheries Association for general development purposes. These advances are repayable by the Association over a period of twenty years by half-yearly instalments covering principal and interest, but no instalments fell due for repayment during the year.”

790. If there are no questions on this, we will pass on to paragraph 35 which reads:—

“Fishery Loans.

Repayments of fishery loans, which are accounted for as Appropriations in Aid, amounted to £157, and the balance outstanding on these loans at 31st March, 1948, was £20,304 10s. 5d., including arrears of £20,266 16s. 0d. There were no remissions during the year under the Fisheries (Revision of Loans) Act, 1931.”

What is the position there?—That refers to the very old loans issued 30 or 40 years ago. As a matter of fact some go back to 1910. Most of them are irrecoverable. Probably the bulk of them will have to be written off. At the moment we have a proposal before the Department of Finance to write most of them off as irrecoverable.

791. Would the same people who got grants under the old scheme get grants under the new scheme?—They may have. Some of them may have become hirepurchasers under the new scheme.

792. Presumably if a borrower failed to meet his obligations under the old scheme you would be rather careful in dealing with him under the new scheme?—The Directors of the Association have the responsibility of examining into the suitability of a man before granting hirepurchase facilities. That is one of their principal functions.

The witness withdrew.

The Committee adjourned.

* See Appendix XIX.

* See Appendix XVI and XX.

* See Appendix XXI.

* See Appendix XXII.