Committee Reports::Report - Appropriation Accounts 1951 - 1952::15 July, 1953::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Dé Céadaoin, 15ú Iúil, 1953.

Wednesday, 15th July, 1953.

The Committee sat at 11 a.m.

Members Present:


P. A. Brady,




D. J. O’Sullivan.

Mrs. Crowley.




Mr. W. E. Wann (An tArd-Reachtaire Cuntas agus Ciste), Mr. G. P. S. Hogan, Mr. M. Breathnach and Mr. J. F. Maclnerney (An Roinn Airgeadais) called and examined.


Mr. J. Garvin called and examined.

252. Chairman.—Paragraph 40 of the Report of the Comptroller and Auditor General states:—

Subhead I.1—Contributions towards Housing Loan Charges of Local Authorities.

The charge to this subhead comprises non-statutory contributions amounting to £86,241 5s. 7d. made to local authorities in recoupment of the additional charges incurred in certain loans advanced from the Local Loans Fund for subsidy housing schemes by reason of the increase from 2½ per cent. to 3½ per cent. per annum in the rate of interest prescribed by the Local Loans Fund (Rate of Interest) Direction, 1948 (Statutory Instrument No. 158 of 1948), and £710,492 2s. 8d. for contributions towards loan charges of local authorities under the Housing (Financial and Miscellaneous Provisions) Acts, 1932 to 1950.”

That is for information Mr. Wann?

Mr. Wann.—Yes. With regard to the non-statutory contributions, in its report on the accounts for the previous year the Committee referred to the method of calculation of these contributions and took the view that recoupment should be confined to the additional amounts actually paid by the local authorities following re-calculation of the annuities. I have recently been informed that the provision in the Department’s Estimate for 1953-54 is, in agreement with the Department of Finance, based on the assumption that it will be possible to adopt the loan charges method of calculation for the subsidy and to adjust payments made in previous years to that method of calculation.

253. Chairman.—I take it, Mr. Wann, that the views expressed by the Committee have been adhered to?

Mr. Wann.—I think so.

254. Chairman.—Have you come to a final agreement with the Department of Finance on this, Mr. Garvin?

Mr. Garvin.—It would appear that we have, although it will mean that the calculations will have to be made in the Department of Local Government. We thought that the Board of Works could give us advance information as to the amounts which will be payable but the arrangement contemplated is apparently based on our making the calculations ourselves. We also wished to have a simplified arrangement whereby the 2½ per cent rate of interest would be the net charge to the local authorities and the Local Loans Fund mortgages would be adjusted accordingly. Apparently it has not been found possible to make an arrangement like that. This interest subsidy will, therefore, continue from year to year to be calculated by the Department of Local Government and paid to local authorities.

255. Do you think that the other method would be more convenient?—I expressed that view last year.

256. Chairman.—Have you anything you would like to say Mr. Breathnach?

Mr. Breathnach.—Nothing, except that the Commissioners of Public Works say that they have consulted their legal advisers on the matter and that they are obliged to collect the full amount, that they could not take just the difference from Local Government and collect the balance from the local authorities. They say that their legal advisers advised them and that this arrangement is the only suitable one for them.

257. Chairman.—I take it in any event, so far as the local authorities are concerned the net result will be the same?

Mr. Breathnach.—Yes.

258. Chairman.—The first sub-paragraph of paragraph 41 of the Comptroller and Auditor General’s Report states:—

Motor Tax Account.

A test examination has been applied to the Motor Tax Account with satisfactory results. The certificates and reports of the Local Government auditors who examine the motor tax transactions of local authorities were scrutinised, in so far as they were available, but in seven cases this audit had not been completed at the date of my test examination.”

Has there been any improvement in that respect?

Mr. Wann.—I understand that the certificates of the Local Government auditors have been received in six of the seven outstanding cases.

259. Chairman.—It is fairly normal that there should be some delay, Mr. Garvin?

Mr. Garvin.—Quite normal. The seven accounts referred to were those of County Galway, County Longford, County Mayo, County Monaghan, County Kerry, the County Borough of Dublin and the County Borough of Waterford. Six of these accounts have since been audited and the seventh that of the Dublin Corporation, is in course of audit. The tax accounts cannot be prepared by the local taxation officer until the completion of the financial year to which they relate. When submitted to the Department the accounts are checked and any outstanding points raised and settled so that the matters are simplified for the auditor. We really take the view that the question of delay does not arise if the accounts are audited in the financial year subsequent to the financial year to which they relate. In fact these six accounts were completed in the ensuing financial year and the Dublin Corporation account is in course of being completed.

260. Of course the Dublin account is very much bigger than the others?—Yes, it is an enormous account.

261. Chairman.—The rest of paragraph 41 which is for information states:—

“The gross proceeds of motor vehicles, etc., duties in 1951-52, including £37,656, 2s. 3d. attributable to fines collected by the Department of Justice, amounted to £3,191,476 5s. 1d. compared with a total of £2,838,763 8s. 2d. in the previous year. Fees amounting to £6,273 0s. 6d. received under the Road Traffic Act (Parts VI and VII) (Fees) Regulations, 1937 (Statutory Rules and Orders, No. 92 of 1937) are also included in the receipts. A statement of the gross and net receipts of the Motor Tax Account, and of the payments thereout to the Exchequer, appears on pages 6 and 7 of the Finance Accounts, 1951-52.”

262. In regard to subhead F.F.— Expenses of Committee on Road-Surfacing in relation to horse-drawn Traffic—I notice that the Report of the Committee has been printed. Has it been published in the sense of being made available to Deputies or is it for the Minister’s information only?—Yes, it is on sale; so I take it that there are copies in the Oireachtas Library.

263. In regard to subhead H, I observe that in your notes you refer to the question of capitalising a subsidy. Has that been done?—Yes. That transaction has been completed now.

264. This was an old transaction?—It was a loan raised by a particular public utility society over 30 years ago. Now they are in a position to undertake further building and they wished to wind up their liabilities in this regard and to start afresh. They have been facilitated as between my Department and the Office of Public Works.

265. With regard to subhead I.2— Grants under the Housing (Financial and Miscellaneous Provisions) Acts, 1932 to 1948—how does it arise that it is difficult to estimate what balance of grants would be due under the Housing Acts of 1932 to 1948?—All of these cases should have been completed by the 31st March, 1950. It had been expected that at least they would be disposed of by the 31st March, 1951. This was not possible due to difficulties arising in connection with insistence on full compliance with the statutory requirements. The provision for the year ended 31st March, 1952, was, accordingly, insufficient to meet expenditure. We are never quite sure when we may receive outstanding claims in respect of payments that, in the normal course, should not be expected.

266. Have you any idea as to the probable amount outstanding now?—I fancy that it would be very small. In the Estimates for 1953-54 we still continue that token sum but it is merely a precaution.

267. Have you not any real way of determining it?—No. Even in the normal course, where we use statistics of building under subhead I.3, our main information is that an application is made to us for a grant and that a grant has been allocated. Until we get the final certificate to pay the grant, we do not know that the house in question has been completed.

268. With regard to subhead I.3— Grants under the Housing (Financial and Miscellaneous Provisions) Acts, 1932 to 1950, and under the Housing (Amendment) Acts, 1948, 1949 and 1950 —does it ever arise that, instead of a payment being deferred, it is wiped out altogether through a house not being brought up to standard?—Yes. We have discretion either to make a payment less than the maximum amount of the grant or to refuse to pay a grant at all when the standard of the building is, in the view of the Minister, unsatisfactory or such as would not warrant payment of the grant.

269. There is a good deal of delay in dealing with these grants. Is that due to the difficulty of getting inspectors?— I would not say that it is due to difficulty of recruitment. We have a permanent staff and a temporary staff which is capable of fairly flexible recruitment, increase or decrease, to meet current requirements. When arrears are seen to mount up in a particular area we release one of these men to assist the permanent inspector in the district. I think the present position is more satisfactory than it has been in the past five years. The general establishment arrangements are more flexible than they have been previously.

270. The point is made to me that, sometimes, when the inspector turns up, the applicant is not there to meet him. Apparently the inspectors are not able to say in advance that they are coming. We appreciate that it is very difficult for a man, especially in a rural area, to be on hand all the time. Do you, however, think it would be possible to devise some scheme whereby they could give a rough idea of the time they could be expected to call?—It is the practice of some inspectors to drop a note in the letter box, if there is one, or to leave word that they will be around at some other time, specifying the time if they can. In other cases, where the inspector might be on an itinerary of two counties or more, it would be very difficult for him to indicate in advance when he would be around again in a particular locality. Some of the inspectors are quite insistent that it would be impossible for them to give that indication.

271. The present system might lead to a lot of expenditure on travelling, as a man might have to call as often as three or four times. Is that not so?—The inspector tries to avoid that by fitting in a visit to that house on his next itinerary but that, as has been said, may give rise to delay.

272. Deputy Mrs. Crowley.—Do you find that the scheme works better now that the initial stages have been transferred to the Department of Local Government as distinct from the local authority?—Naturally, when we put an end to the devolution of the work, we had difficulties for a while. We had to take back an enormous amount of papers and reorientate the internal staff of the Department of Local Government. We put a good deal of Organisation and Methods thought into the matter, and we flatter ourselves that we now have it working very satisfactorily.

273. Chairman.—With regard to subhead I.5—Competitions for Designs for Housing Schemes—has that been abandoned?—Yes.

The witness withdrew.


Mr. J. Leydon called and examined.

274. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General states:—

Subhead A.A.—Preparation and Issue of Ration Books.

The sum of £20,970 6s. 6d. charged to this subhead represents the cost of preparation of the fourth issue of ration books. The cost of paper and printing, which is borne on the vote for Stationery and Printing (No. 24), amounted to £58,357, while the cost of delivery by the Department of Posts and Telegraphs assessed at standard postage rates amounted to £31,409. Consequent on the decision to abolish rationing of foodstuffs as from 5th July, 1952, the necessity for the use of these ration books by the public did not arise.”

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

Mr. Wann.—No doubt at the time the contract for these ration books was placed the abolition of food rationing in 1952 was not anticipated.

Mr. Leydon.—That is the position. Actually, it was decided in 1950 that a fresh issue of ration books would be required. The order had then to be placed. The ration books were to be delivered in September, 1951, but, in fact, we did not get them until some time later. We were not able to complete the issue until early in 1952. We had to extend the rationing periods, and so forth, to prolong the life of the existing books. Then, in April, 1952, the Minister for Finance announced in his Budget statement that rationing would be abolished. The books were, therefore, not required.

275. Chairman.—The first two subparagraphs of paragraph 54 of the Report of the Comptroller and Auditor General read as follows:—

Subhead J.1—Food Subsidies.

The total expenditure on food subsidies in the year under review amounted to £9,619,836 12s. 8d. made up as follows:—











Wheaten Meal














The functions of the Minister for Agriculture in relation to flour and wheaten meal subsidies were transferred to the Minister for Industry and Commerce with effect from 1st October, 1951, by the Wheat and Flour (Transfer of Ministerial Functions) Order, 1951 (Statutory Instrument No. 284 of 1951). Of the total expenditure of £7,674,836 12s. 8d. on these subsidies a sum of £7,000,000 which had been estimated for under subhead P of the vote for Agriculture (No. 27) was charged to that vote, the balance, £674,836 12s. 8d., being borne on this subhead.

The flour subsidy, paid to Grain Importers (Éire), 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. In previous years imported wheat was allocated to flour millers by Grain Importers (Éire), Limited, at prices estimated to enable the industry to earn the agreed remuneration. As from 1st April, 1951, the wheat was sold to flour millers at a price approximating to the economic price, and payments of subsidy were made to the millers by the company in order to bring their costs of production, plus the agreed profit, down to the level of the controlled price of flour. The expenditure comprised £7,584,011 8s. 10d. in respect of these payments and of losses incurred by the company on the allocation or sale of imported wheat and flour for periods up to 1st March, 1952, and £1,046 10s. 2d. being the balance due to importer-distributors for wheat handled on behalf of the company in the year 1949. Final adjustment of the subsidy payable to Grain Importers (Éire), Limited, for the cereal years subsequent to 1947-48 and of amounts payable to importer-distributors for the years subsequent to 1949 had not been effected at 31st March, 1952.”

276. Where the cost of providing any additional capital is referred to, is that where a bank overdraft was required, or something like that?—Generally a bank overdraft or temporary accommodation of that kind, working capital.

277. What would the cost be in that case?—It would be the interest paid to the bank or to the lender.

278. Could you give us a figure for that?—Offhand, I am afraid I could not give that figure. It would be taken from the accounts. All the accounts are examined.

279. Could you say what advantage there was in changing the system from the 1st April, 1951?—At the time that was done, the Minister for Agriculture was responsible for it. I should hesitate to take on the job of explaining why it was done. As you will see, it was not re-transferred to the Minister for Industry and Commerce until October, 1951.

280. There is a reference to a final adjustment not being effected. Could you say where that has reached now?—It has made some progress. I should like, if I may, to explain to the Committee that it is a very tedious job. In the first place, the millers’ year ends on the 31st August. We have to get the accounts of all the millers. There are 36 of them. It takes a considerable time before we get the accounts. We have not yet got all the accounts for the year 1951-52. The accounts for 1948-49—that is, the first year after the period to which the Comptroller and Auditor General refers— were not received until August, 1950. That year has been completed and finalised. The 1949-50 accounts were not received until August, 1951; in the case of one account for that year, there are some charges still subject to dispute. Apart from that, they can probably be completed in this financial year. The examination of all these accounts is a very tedious business and gives rise to all sorts of arguments between ourselves and the accountants for the millers.

281. To revert to this question of the cost of providing additional capital, I should like to ask the Department of Finance about it. I take it that in these cases, where millers have to find additional capital, it would be quite well recognised both by the borrower and by the lender that this would be underwritten by the State. Did that have any effect on the rate of interest?

Mr. Breathnach.—There was no special interest arranged, but they have been given the actual rate charged by the bank.

282. Would you not agree that in a special case like this there should have been a case for a special rate of interest? After all, it was guaranteed by the State. Could you say if the banks did charge their ordinary normal rate for an overdraft?—So far as I know, they did.

283. Perhaps you could let us have a note as to what rate was charged and if any conversations took place between your Department and the millers and the banks?—Strictly speaking, the overdraft was not guaranteed. It was an arrangement between the individual millers and the banks.

284. Were the millers not aware that they were going to be provided with the cost of providing additional capital?

Mr. Leydon.—The millers were aware of it. I do not think the question of the interest rate was ever the subject of discussion with the banks. Perhaps I might explain that if the millers, instead of getting temporary accommodation in this way, had provided permanent capital, they would have been entitled to remuneration at the rate of 6 per cent. on the average, which inevitably would have cost more than paying for temporary accommodation for a limited period when carrying heavy stocks on ordinary banking terms.

285. I appreciate that, but, at the same time, so far as I know—I do not know a great deal about banking practice —where a borrower is able to give a very good guarantee to the bank, he does get money from the bank on overdraft at a lesser rate of interest than he would get it in the ordinary way if he had not got that guarantee. I wonder if that was applied in this case?—While I recognise the force of that argument, I am not sure that it would go the whole way, because there was no formal Government guarantee. There was an arrangement in existence, and I imagine that the banks would have regard to what they considered the security afforded by the particular borrower. I am not sure that the interest rate was the same in the case of all the millers.

286. A miller would have a fair idea, at any rate, that he was under guarantee from the Government in regard to the business of milling. If he thought he had to pay the interest rate himself, he might make a bigger fight with the bank than if he knew that the Government was going to pay the interest rate for him. In these circumstances, he might not in any particular instance have worried himself very much about the interest rate—it was not going to fall on him eventually—and I wondered if that was recognised, and if the Department of Finance interested themselves at that point as the eventual payers of the interest?—I see the force of the argument, but that applies not merely to the interest rate. Whenever there is an arrangement of this kind for Exchequer subsidies, it extends not merely to interest rates but to the whole cost of operation, and it is very difficult to try to establish a detailed control to ensure that the operations will be carried out on the most economical possible terms.

287. This is not something which suddenly happened in 1951-52. It had been going on, and I think it would have been proper for someone in the Government service, either in the particular Department concerned, Agriculture or Industry and Commerce, or almost certainly Finance, to decide that it would be worth while inquiring what rate was being charged by the banks, seeing that the State was going to pay the interest?— The interest was scrutinised. I will send you a note, if I may, explaining just what information we have about it and how it worked out.*

288. Chairman.—Paragraph 54 of the Report goes on:—

“The subsidy on wheaten meal for the cereal year 1950-51 was paid to millers at varying rates representing the difference between the average cost of production, together with a profit of 2/6 per sack, and the controlled selling price.

The subsidy on tea was paid to Tea Importers (Éire), Limited, and represented the difference between the cost price of tea plus overhead expenses and the selling price. The audited accounts of the company for the year ended 31st March, 1952, revealed a net trading loss of £2,070,634, and after deducting £69,137, the balance due in respect of an excess payment of subsidy in the previous year, the net amount of subsidy payable was £2,001,497. Amounts paid as subsidy totalled £1,945,000, leaving a balance of £56,497 due to the company at 31st March, 1952.”

289. That was preferable to Tea Importers, Limited, owing you money? You remember that we had a discussion before about whether interest was paid. I take it that there was a mutual forbearance arrangement by which, if you owed them money, they did not charge you interest, and, if they owed you money, you did not charge them interest? —That is so.

290. Chairman.—Paragraph 55 of the Report states:—

“Reference was made in paragraph 53 of my report for the year 1949-50 to an amount due by Comhlucht Siúicre Éireann, Teoranta, consequent on certain adjustments of subsidy in respect of the years 1948-49 and 1949-50. A repayment of £32,921 11s. 7d. was received from the company in the year under review and is accounted for as an exchequer extra receipt. I understand that a further amount, due from the company has been repaid in the year 1952-53.”

Mr. Wann.—The amount received in 1952-53 was £852 4s. 5d. and that clears the matter.

291. This, of course, is finished with now?—Yes.

292. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads:—

Subhead K.—Fuel Subsidy.

The sum of £3,030,372 12s. 9d. charged to this subhead was paid to Fuel Importers (Eire), Limited, being £3,007,597 12s. 9d. in recoupment of accumulated losses incurred in the marketing of turf, timber fuel and coal to 31st December, 1951, and £22,775 in respect of losses incurred up to 29th February, 1952. The total payments of subsidy to the company amounted at 31st March, 1952, to £9,806,372 12s. 9d.”

293. Deputy Cunningham.—What period does that sum of £3,000,000 odd cover?—The financial year to which the accounts refer. It was payable within that year. There was no subsidy payment in 1949-50 or 1950-51. I am not quite sure what point the Deputy is making—whether he is inquiring about the year in which it was paid or the period it covered.

294. My point is that it covered more than a year?—It did. There was no payment during 1949-50 or 1950-51.

295. Chairman.—This is the accumulated loss of three years?—Yes, There was a token provision of £5 in each of these years 1949-50, 1950-51 and 1951-52. Then there was a supplementary of over £3,000,000 taken in 1951-52.

296. Could you say what the current position is?—The position at the moment is that their overdraft, about the middle of June-the latest figure I have-was approximately £2,609,000. There would be an addition to that for interest of about £50,000 from the beginning of the year. Against that overdraft, they have substantial stocks of coal.

297. In this fuel business, no account is taken of stock on hands—coal, turf or anything else?—It would be shown in the company’s accounts, but for the purpose of this account it does not appear.

298. Chairman.—Paragraph 57 of the Report of the Comptroller and Auditor General reads:—

Subhead L.1—Advances to Mianraí, Teoranta.

The charge of £13,640 to this subhead represents advances made during the year to Mianraí, Teoranta, under section 3 of the Minerals Company Act, 1947, as amended by section 2 of the Minerals Company (Amendment) Act, 1950. The total liability of the company for advances and for interest theron amounted at 31st March, 1952, to £179,708 0s. 10d.

In exercise of the powers conferred by sections 11 (2) and 12 (3) of the Minerals Exploration and Development Company Act, 1941. and section 8 (2) of the Minerals Company Act, 1945, the Minister for Industry and Commerce with the consent of the Minister for Finance, agreed to the postponement to 1st April, 1952, of the payment by the company of interest on advances and of the repayment of instalments of advances which fell due on 1st April and 1st October, 1951.”

Has any repayment been made?—No. There has been a further postponement of the interest.

299. Is this Slieveardagh or is there more in it?—Slieveardagh, yes.

300. Chairman.—Paragraph 58 of the Report of the Comptroller and Auditor General reads:—

Operations of Bord na Móna. Subheads M.1, M.2, M.3 and M.4.

The issues from the grant-in-aid during the year comprised £16,000 for experiment and research (subhead M.1), £12,000 for publicity and marketing (subhead M.3), £54,000 for grants for housing (subhead M.4) and £271,000 for cost of turf production under local schemes (subhead M.2). Production under local schemes was confined to machine-won turf and receipts from Bord na Móna in respect of sales amounted to £181,000 which is credited to subhead T—Appropriations in Aid.

Section 52 of the Turf Development Act, 1946, as amended by section 2 of the Turf Development Act, 1950, provides for the payment out of voted moneys of grants towards expenses incurred by Bord na Móna on experimental and research work subject to a limitation of £250,000. The total issues under this head, including £16,000 in the year under review, amounted at 31st March, 1952, to £153,800.

Section 6 of the Turf Development Act, 1950, provides for the payment to Bord na Móna of grants, of such amounts as the Minister for Industry and Commerce, with the consent of the Minister for Finance, may fix, towards the expenses incurred by the Board under approved schemes for the building of houses for occupation by servants of the Board. The section provides further that the total amount of such grants shall not exceed £360,000, and that a grant in relation to any particular house shall not exceed £180. As stated above, issues under this head in the year ended 31st March, 1952, amounted to £54,000 (subhead M.4).

The exchequer extra receipts include a sum of £13,441 17s. 9d. received from Bord na Móna as interest on advances made for the development of Clonsast, Glenties, Kilberry, Derryounce and Barna bogs. Interest is charged on advances for the development of bogs only when the bog in respect of which the advance was made goes into production or after a period of five years from 21st June, 1946, the date of establishment of Bord na Móna, whichever is the earlier. At 31st March, 1952, the amounts outstanding, including interest, for advances made from voted moneys for the development of bogs were:—






































Other bogs










Has there been any capital repayment? —Yes. At the 31st March, 1952, an arrangement was made that the principal outstanding would be funded and paid over a period of 25 years. All the instalments of the annuity that fell due have been paid up to the present, including one which fell due on 1st April of this year. That is, two half-yearly instalments have been paid.

301. Paragraph 59 of the Comptroller and Auditor General’s Report reads as follows:—

Subhead P.—Repayment of Advances for Rural Electrification.

Section 41 (3) of the Electricity (Supply) (Amendment) Act, 1945, provides that one moiety of moneys advanced to the Electricity Supply Board for rural electrification out of the Central Fund shall be repaid to the fund out of moneys provided by the Oireachtas at such time or times as the Minister for Finance shall direct. The Minister for Finance has directed that the amount of £725,000, being one moiety of £1,450,000 advanced from the Central Fund in the calendar year 1950, should be repaid by means of an annuity over a period of 50 years, interest being calculated at 3¼ per cent. The sum of £54,809 11s. 0d. charged to this subhead comprises £29,434 15s. 0d., being the first two half-yearly instalments of this annuity, and £25,374 16s. 0d., the amount payable in the year under review in respect of the annuity established for the repayment of one moiety of the advances made from the Central Fund in the year 1949.”

302. Paragraph 60 of the Comptroller and Auditor General’s Report reads as follows:—

Subhead S.—Dollar Exports Organisation (Grant-in -Aid).

Córas Tráchtála, Teoranta, was incorporated on 21st December, 1951, for the purpose of promoting commodity exports to the dollar area. By warrant dated 12th January, 1952, the Minister for Industry and Commerce appointed the first directors of the company for a period of 12 months from the date of its incorporation. The grant-in-aid of £10,000 was issued to the company to enable it to defray its preliminary expenses together with costs of administration and general expenses for the period to 31st March, 1952.”

You audit the accounts of that body, Mr. Wann?

Mr. Wann.—I do.

303. Chairman.—It is not a statutory body?

Mr. Wann.—No.

304. Chairman.—The accounts have been presented for audit, have they?

Mr. Leydon.—The accounts have been audited.

305. They have been presented to the Dáil?—Yes, the report and the accounts were presented. There is no statutory requirement, but the Minister felt they ought to be presented, and they were presented within the last week or so; that is the report for 1952-1953.

306. I take it that up to the end of 1952 only preliminary work was done?— That was all. In 1952-1953 they spent £61,000 odd. The grant was £66,000 and the account was £61,000.

Mr. Wann.—That is correct.

307. Chairman.—Paragraph 61 of the Comptroller and Auditor General’s Report which is for information reads as follows:—

Subhead S.S.—Grant to An Foras. Tionscal.

An Foras Tionscal was established by section 4 (1) of the Undeveloped Areas Act, 1952, to aid industrial development in undeveloped areas. The Act became law on 22nd January, 1952, and section 12 authorities the Minister for Industry and Commerce, with the consent of the Minister for Finance, to make grants to the Board out of moneys provided by the Oireachtas to enable them to perform their functions, the aggregate amount of grants under the section not to exceed £2,000,000. The grant of £200 charged to this subhead was provided by supplementary estimate to meet the remuneration, personal travelling and incidental expenses of the chairman and the members of the Board.”

308. Paragraph 62 of the Comptroller and Auditor General’s Report reads as follows:—

Suspense Account.

Section 15 of the Tourist Traffic Act, 1939, provided that non-repayable grants limited to £45,000 in the aggregate in any one financial year could be made to the Irish Tourist Board, and provision for a grant-in-aid of this amount was included in the original vote for Irish Tourist Board (No. 14) in the year under review. This vote is accounted for by the Office of the Minister for Finance and payment of the final instalment grant in-aid was made to the Board in September, 1951.

Fógra Fáilte, the tourist publicity organisation, was set up during 1951, and the necessary financial provisions for this body were included in the Tourist Traffic Bill which became law on 3rd July, 1952. Provision was also included in the Bill for payment to the Irish Tourist Board in respect of the financial year ended on 31st March, 1952, of such sums, not exceeding in the aggregate £27,000, as the Board should require in addition to the sums provided under section 15 of the Act of 1939.

I observed that in addition to the amount issued from the vote No. 14 in the year under review payments amounting to £10,000 and £7,000 were made by the Department of Industry and Commerce to the Irish Tourist Board and Fógra Fáilte, respectively, in the period 1st January to 13th March, 1952, and charged to a suspense account. In reply to an inquiry regarding the authority for these payments I was informed that it was intimated to the Board in June, 1951, with the agreement of the Department of Finance, that they could proceed on the assumption that additional funds to the extent of £15,000, later increased to £20,000, would be made available before the end of the financial year. Pending the enactment of the legislative authority provided for in the proposed Bill it was decided that an additional £27,000, including £7,000 for tourist publicity, should be provided by supplementary estimate for vote No. 14—Irish Tourist Board. It was considered essential, however, that in the meantime the two bodies should be provided with funds and, with the agreements of the Minister for Industry and Commerce and the knowledge of the Government, a suspense account for this purpose was opened in the vote for Industry and Commerce from which the advances of £10,000 and £7,000 were made. On 6th March, 1952, a Grant-in-Aid of £27,000 was made available by way of a supplementary estimate for vote No. 14 to meet the additional expenses of the Irish Tourist Board including grants for tourist publicity. Dáil Éireann was informed that the estimate related to expenditure which in the main had already been incurred, and that the supplementary estimate was intended to regularise the position. The full amount of the additional grant was issued from vote No. 14 on 24th March, 1952, and on 28th March, 1952. a sum of £17,000 was paid by the Board to the Department of Industry and Commerce in recoupment of the amounts advanced from the suspense account.

As the votes accounted for by the Office of the Minister for Industry and Commerce did not include any provision for the advances of £10,000 and £7,000 made to the Irish Tourist Board and Fógra Fáilte I have deemed it desirable to refer to the matter.”

Have you anything to add, Mr. Wann?

Mr. Wann.—The facts are fully set out in the paragraph. The position appears to be that the Department of Industry and Commerce loaned £17,000 to the Tourist Board and Fógra Fáilte on the understanding that this sum would be repaid if and when an addition to the original grant was voted by Dáil Éireann. As stated in the paragraph, none of the Votes accounted for by the Department of Industry and Commerce include provision for any payment to these bodies and in the circumstances I think the Accounting Officer will agree that the advance of £17,000 can hardly be regarded as a normal or a legitimate transaction.

Mr. Leydon.—I am sorry the Comptroller and Auditor General saw fit to use the word “legitimate.” If you will allow me to explain my approach to this as Accounting Officer, I will begin by admitting quite frankly that in this case there was a technical aberration of a temporary character from the righteous path of pure, orthodox treasury dogma. I can say that straightaway. But, in dealing with this problem we had to adopt a practical point of view. A Bill had been introduced in the Dáil by the previous Administration in the beginning of 1951 and that Bill, which provided additional funds for the Tourist Board, lapsed on the dissolution of the Dáil. When the new Administration came into power the tourist problem, amongst others, was immediately taken up by the new Minister. The Tourist Board had been encouraged on the strength of the Bill which had been introduced and circulated to incur additional expenditure in the confident hope that the money would be available during the course of the year. Tourism requires considerable advanced planning and expenditure in the way of publicity, organisation, and so on. The Tourist Board itself raised the question with us in June. Of course, we were fully conscious of the financial problem in the Department of Industry and Commerce and we told the Board in June that it could proceed on the assumption that additional money would be available for it during that financial year. This advance was made in December, 1951 and it was I, as Accounting Officer, who authorised it. The position was that a new Tourist Traffic Bill had been introduced by the new Administration again providing additional funds. I had the approval of the Minister for Industry and Commerce for the course adopted. At my request the Minister mentioned it to the Government because I recognised, as I say, there was this technical irregularity. We had to keep the tourist administration and tourist service going. This is a matter about which there was no controversy in the Dáil. All Parties were agreed that additional funds should be provided and the Board had been encouraged to incur commitments, and the public faith was pledged to the Board. It was a question then of how to get the Board out of the difficulty in which it found itself. Now at that particular time the Department of Finance accounted for this Vote. That was always an anomaly because, while technically they accounted for the Vote the service was under the control of the Minister for Industry and Commerce and it is he who is responsible for tourism. That anomaly has since been corrected by transferring the Vote to the Department of Industry and Commerce. I am now Accounting Officer for the Vote for Tourism. It is for that reason that I, as Accounting Officer, authorised this advance; that was the only way in which to honour the pledge of public faith which had been given to the Tourist Board. Something similar, though it is not quite analogous, was done when the previous Administration established the Industrial Development Authority. The Government wanted to set that Authority going immediately and the Authority was financed by an imprest from the Vote for the Department of Industry and Commerce. The position is not completely analogous for the reason that I was not at that time Accounting Officer for this particular Vote, but, in essence, it was the same thing and that situation was subsequently regularised by Supplementary Estimate and legislation.

309. Chairman.—At the time this money was given the Dáil was not sitting?—It was not sitting in December, 1951. On the 31st December, 1951, I authorised these advances.

310. The Supplementary Estimate was introduced in February, 1952?—The Bill had been introduced on the 11th December, 1951, three weeks before I authorised this advance. The Minister in introducing the Estimate explained that the expenditure had already been incurred. He brought the Accounting Officer’s head on a charger to the Dáil and the Dáil very kindly sent it back to me but apparently somebody else is looking for it now.

311. You will appreciate that the Committee cannot very well pat you on the back when an irregularity occurs?— I did not expect that. Will any member of the Committee who wants to condemn me put himself in my shoes and ask himself what he would have done?

312. Seeing that the Minister for Finance was at the time responsible for Vote 14, I cannot see why the Department of Finance did not hold this baby themselves?—I did not think it would be reasonable to ask the high-priest who is custodian of the dogma to lend himself to a technical irregularity of this kind.

313. That only makes me all the more suspicious in regard to the mens rea. You knew this was irregular?—I opened my statement with a frank admission that it was a technical irregularity.

314. Our duty is to see that technical irregularities do not occur. If we were limited to inquiry in relation to non-technical irregularities it would be a serious reflection on the Civil Service. The technical irregularities are the ones we normally come up against?—This is very technical, indeed. The public faith was pledged. How was that to be honoured? It is in that sense that I call it technical. The matter was complicated because there was a change of Government half way through the year. I have here the Bill which was introduced providing £500,000.

315. After all, the change of Government had taken place the previous June, six months before. This was not an emergency that suddenly cropped up in the month of December. Could it not have been foreseen, when the Dáil was sitting that autumn, that money would be required?—The new Minister for Industry and Commerce had quite a lot of things on his plate. He had to consider the whole problem of tourist policy, what financial and other provision should be made and what legislation would be promoted. The situation was foreseen as far back as June. At that time we had to write to the Tourist Board telling them that they could proceed on the assumption that the money would be provided.

316. That is the very point I do not understand. When it was foreseen in June, why were not some steps taken during the autumn by way of supplementary estimate?—Because the new Government’s policy in relation to tourism had not really been finally settled and it would not be practicable to make a statement on policy because policy had not been formulated.

317. It had been intimated to the Board that the Department knew they would need money and that they could assume that they would get the money. As you pointed out, both sides of the House were in agreement that money for the development of tourism was something that was essential. Therefore, it seems to me that the Supplementary Estimate would not have taken up very much Parliamentary time?—Of course, the Accounting Officer cannot decide about Supplementary Estimates. Matters of that kind have to fit into the parliamentary programme. The Minister felt that the Supplementary Estimate should be taken at the same time as the Second Reading of the Bill and it was.

318. Mr. Wann.—What about the Contingency Fund?—We raised that with the Department of Finance.

319. Chairman.—We have heard your point of view Mr. Leydon. I think I can speak for the members of the Committee when I say that we appreciate your difficulty but we will have to consider at a later date to see what our own opinion on the set-up is.

320. Mr. Hogan.—Might I say a word—

Chairman.—Certainly, Mr. Hogan.

Mr Hogan.—since the name of the Department of Finance was drawn into the discussion? As regards the Suspense Account payments, we were not consulted at any time. I think that out of consideration for our feelings, as he said, the Accounting Officer did not put it up to us because if we had been so consulted and asked for approval, I doubt if we would have been very well able to give an approval, which would have been valid in the eyes of the Comptroller and Auditor General, having regard to constitutional aspects and to the provisions of the Appropriation Act, 1951, and of the Tourist Traffic Act, 1939. I do not think we could have given such approval. Although it may have been technical in the eyes of the Accounting Officer and although there are many circumstances which make it quite distinct from a plain breach of an appropriation, it was not a transaction which the Department of Finance would have felt able to approve. We were not asked whether we would approve or not.

The anomaly referred to by Mr. Leydon was a statutory anomaly. The Tourist Traffic Act, 1939, placed responsibility on the Minister for Finance to finance the Tourist Board. As you, Sir, suggested that the Department of Finance might have “looked after the baby” instead of the Department of Industry and Commerce, perhaps I am free to comment that if the circumstances had been made known to the Department of Finance they might have asked that the Supplementary Estimate in 1951/’52 should be taken by the Department of Industry and Commerce so as to bring the whole circumstances of the payments from the Suspense Account in their Vote to the notice of the Dáil.

As regards the Contingency Fund, I accept Mr. Leydon’s statement that the question was discussed informally with an official of my Department but it was not specifically put forward to the Department. If it had been put to us we would, I believe, have agreed to make an advance in so far as there were funds available in the Contingency Fund at the time.

Mr. Leydon.—It was put orally and informally to a Principal Officer of the Department of Finance who was dealing with this matter. I think it is a little unfair for Mr. Hogan to say that if it had been put to them they would have agreed to it. The man we were dealing with at that time said they could not.

Mr. Hogan.—I am not trying to take an unfair advantage of the Accounting Officer. There is a distinction between that earlier suggestion and a formal request in regard to making provision from the Contingency Fund at the later stage when the payments became due and the amount was much less.

321. Chairman.—With regard to subhead H—Subscriptions, etc., to International Organisations, Special Services, Enquiries, etc.—how was the contribution to O.E.E.C. arrived at? What was the basis of compensation?—It was a round figure. I think it was £15,000 in the first year. I am afraid there was no scientific basis for these contributions. We subsequently reduced our contributions, because we felt we were not getting value for the amount of money we were asked to pay. I believe there is a lot of horse trading in connection with these matters.

322. With regard to subhead J.2—Remission of Penalties—last year you sent us a note showing the amounts which had been collected and those that had been waived. Do I take it that this is a continuing matter or are you trying to find some new method of getting out of this awkward position in regard to penalties? There is a note in this connection on page 155. It is not a very happy position if penalties apparently become purely formal and are waived automatically. What is the position?— Up to the present they have been waived. These penalties were introduced in the Cereals Acts, 1932 to 1934, so that the bigger millers would not swamp the smaller ones. During the war we tried to economise in regard to transport and we eliminated the arrangements under which, for example, Limerick would be sending flour up to Sligo, Donegal and so on. Zoning was put into operation. It was because of that arrangement that each miller had to operate within an allocated zone. Sometimes this meant that millers were not able to adhere strictly to their quotas, and, at the same time, comply with the zoning arrangement which was made in the national interest. That was the basis of it. As we get away from control more and more, we hope to revert to the position as contemplated by the Cereals Acts.

323. And if the millers incurred penalties they would have to pay them? —I do not want to commit myself on that at the present time. I should hope so. We certainly hope to get back to that position.

324. On subhead R.2—Travelling Expenses—I notice that you have made a very great reduction in the number of inspectors. How have you been able to do that in the circumstances?—We have decontrolled quite a number of commodities—decontrolled them, as far as price is concerned—and so were able to reduce inspections to a minimum.


Mr. J. Leydon further examined.

325. Chairman.—Paragraph 63 of the Report of the Comptroller and Auditor General reads:—

Subhead A.1-Payments in respect of Steamer Services.

Reference was made in paragraph 65 of my last report to the payment of subsidy to the Galway Bay Steamboat Company, Limited, in respect of the operation of the service between Galway and the Aran Islands up to August, 1951, when it was taken over by Córas Iompair Éireann. A sum of £600 was paid to the company by way of subsidy in the year 1951-52 and is included in the charge to this subhead, the balance of the charge, £223 9s. 10d., being a residue of an amount due for repairs consequent on the stranding of the s.s. Dun Aengus in 1947. A sum of £195 15s. 6d. received from the underwriters as a final payment under the insurance claim in respect of this stranding is included in the extra receipts payable to the Exchequer.

Under the terms of the settlement dated 9th July, 1951, with the Galway Bay Steamboat Company, Limited, which was subsequently made a Rule of Court, the ownership of the s.s. Dun Aengus was, with other assets of the company, vested in the Minister for Industry and Commerce. As stated in a note to the account, the offices, furniture, equipment and stocks of coal taken over from the company, which were valued at £150, were transferred to Córas Iompair Éireann without payment. The legal transfer of the vessel to Córas Iompair Éireann had not been completed at 31st March, 1952.”

Were there any further payments to the Galway Steamboat Company under the settlement?—There were payments made in 1952-53 on the basis of the final audited accounts.

326. Has the legal transfer been completed since the date mentioned?—Yes. The transfer has been completed. Córas Iompair Éireann have taken over the boat and have got it overhauled.

327. Paragraph 64 of the Report states:—

Subhead A.2—Passenger Facilities at Cobh.

Arrangements were made for Córas Iompair Éireann to carry out certain works on railway premises at Cobh to improve accommodation for tourist traffic. The original estimated cost was £22,000, of which 90 per cent. was provided under this subhead, the remaining 10 per cent. to be borne by the harbour authority. Owing to increases in the cost of raw materials and to modifications of the original scheme, the estimate of the cost of the work has been increased to £32,000. As noted in the account, completion of the work was delayed by a labour stoppage and the amount of £19,000 charged to this subhead represents a payment on account to Córas Iompair Éireann.”

Has the work been completed since?— The work has been completed, but we have not yet got the final account from Córas Iompair Éireann. It was completed about March last.

328. Paragraph 65 of the Comptroller and Auditor General’s Report reads:—

Subhead A.4—Payments to Córas Iompair Éireann.

Subhead A.5—Repayment to Central Fund of certain Advances to Córas Iompair Éireann.

The non-repayable grant of £1,817,000 provided by supplementary estimate under subhead A.4 was made to Córas Iompair Éireann towards operating losses and revenue charges, excluding interest on transport stock, in the year ended 31st March, 1952. The interest on transport stock falling due in July, 1951, and January, 1952, which amounted to £477,000, was met by repayable advances from the Central Fund in accordance with section 30 of the Transport Act, 1950.

The amount of £433,000 advanced from the Central Fund to Córas Iompair Éireann in 1950-51 under section 18 of the Transport Act, 1944, and section 30 of the Transport Act, 1950, to meet interest payments on the debenture and transport stock was repaid to the Central Fund from subhead A.5. These sections provide that all moneys required from time to time by the Minister for Finance to meet payments under the State guarantees of the principal and interest secured by such stock shall be advanced from the Central Fund, and that sums so advanced shall be repaid by Córas Iompair Éireann to the Central Fund within 12 months of the date of the advance and where repayment has not been made as prescribed any amount remaining outstanding shall be repaid to the Central Fund out of moneys provided by the Oireachtas.”

Can you say, Mr. Leydon, what the current position is?—The current position is that pressure is being kept up on Córas Iompair Éireann to balance their expenditure against their revenue. There is a reorganisation programme under way at the moment which, it is hoped, will go some distance, if not the whole way, towards the achievement of that object.

329. The first part of paragraph 66 in the Report of the Comptroller and Auditor reads:—

Subhead A.6—Great Northern Railway Company (Ireland).

Pending the completion of arrangements for the acquisition jointly of the undertaking of the Great Northern Railway Company (Ireland) and for its future management and operation, the Minister for Industry and Commerce and the Minister of Commerce, Northern Ireland, agreed that in order to maintain existing services and appropriate employment the liabilities incurred by the company in the ordinary course of business would, in so far as the resources of the company might prove insufficient, be met out of public funds, this Administration’s proportion being fixed at 40 per cent., subject to certain adjustments.

Of the amount of £135,500 paid to the company and charged to this subhead, £118,000 related to the apportioned operating losses of the company in the period 1st January, 1951, to 31st March, 1952. As stated in a note to the account, the payments were made on the basis of provisional figures, and on the understanding that on the final determination and apportionment of the loss any excess payment found to have been made would be refunded by the company. I understand that the final figures for the period referred to are not yet available.”

330. Are the final figures yet available? —No.

331. The paragraph goes on to say:—

“The balance of the charge to the subhead, £17,500, was paid in respect of the acquisition of the Greenore Hotel which was purchased by the company with the approval of the Minister for Industry and Commerce. In the event of the resale of the property the company has undertaken to pay over the proceeds to the Exchequer.”

332. Have you anything to say on this, Mr. Wann?

Mr. Wann.—I understand that this property was purchased with the intention of selling it to an industrial concern and that the scheme has fallen through. I do not know the present position regarding the sale of the property.

333. Chairman.—Has anything further happened, Mr. Leydon?

Mr Leydon.—The property has not yet been sold. Some offers have been received for it. They are under consideration but no decision has been taken to sell. I might, perhaps, explain that there was an important industrial project under consideration at the time. They had a very definite interest in the Greenore Hotel and railway property. The difficulty was that while the Dundalk, Newry and Greenore Railway Company could sell the hotel they could not dispose of the railway property without a formal Abandonment Order. The only way to preserve the property intact as it stood in case it would be required for this project, was to allow the G.N.R. to buy the property. That is the explanation.

334. If one is to judge by item No. 8 in the note to subhead N—Appropriations in Aid—the net annual rentals payable by Córas Iompair Éireann must be a very small item?—That is a very old story. It relates to nominal rents for a couple of colliery railways built, I suppose, 40 or 50 years ago. They were built by the British Government and leased by the Office of Works to the old Midland Great Western Railway Company. This is something that has come down right through the various processes and transitions from the old Midland Great Western Railway Company to Córas Iompair Éireann. The rent is probably less than £2 for each railway. There are two of them.


Mr. J. Leydon further examined.

335. Chairman.—Paragraph 67 of the Report of the Comptroller and Auditor General reads as follows:—

Subhead E.—Acquisition of Land, Buildings, etc.

Reference was made in paragraph 58 of my predecessor’s report for the year 1947-48 to the compulsory acquisition in September, 1945, of 23 holdings comprising 242 acres in connection with a scheme for the establishment of a village setlement in the vicinity of Shannon Airport. The scheme was, however, abandoned before any formal offer of compensation was made to the owners and, following protracted negotiations, agreement was reached in 1950 on the general terms of the reconveyance of the holdings. As indicated in a note to the account, 183 acres, including 2 acres retained for the airport water supply scheme, had been finally dealt with at 31st March, 1952, leaving 59 acres not yet reconveyed. The expenditure incurred to that date in connection with the 23 holdings amounted to £4,937 8s. 8d., including £2,383 13s. 2d. for compensation, etc., to landowners, £1,897 19s. 0d. for rates and annuities, £326 16s. 6d. for legal expenses, and £329, being the cost of the 2 acres required for the airport water supply scheme. One holding of 4 acres, the reconveyance of which was not accepted, was resold for £232 10s. 0d., the net expenditure being, therefore, £4,704 18s. 8d.”

If the Committee would look at the note given by the Accounting Officer at page 165, they will see that the matter is explained very fully. I take it the man who would not take back the four acres thought the price he was getting was one he might not get again?—It is one thing when you are buying land from a man and a different thing if you want to sell it back. The difficulty one is up against in a case of this kind is that there is an element of disturbance. It is a very genuine consideration in a lot of these cases where there are very small holdings.

336. Have you managed yet to deal with any of the 23 holdings outstanding at this time?—There are seven owners still to be dealt with and about 58 acres involved. Three of the draft deeds of transfer are ready; two of the cases of title are very complicated, but the matter is nearing completion; and in one case the owner is insane. That leaves one other case, in which the County Council is concerned. I do not know how long that will take.

337. Paragraph 68 of the Report of the Comptroller and Auditor General which is for information reads as follows:—

Subhead G.—Constructional Works including Furnishing of Buildings— Shannon Airport.

Subhead H.—Construction 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 £30,401 1s. 9d., £78,415 18s. 11d. and £693 1s. 10d., respectively, bringing the total expenditure, as at 31st March, 1952, to £1,179,154 5s. 9d. for Dublin Airport, £1,873,757 15s. 5d. for Shannon Airport (Rineanna) and £168,917 0s. 6d. for Shannon Airport (Foynes), exclusive of expenditure on the acquisition of land.”

338. Paragraph 69 of the Report of the Comptroller and Auditor General reads as follows:—

Settlement of a Claim for Damages.

This special subhead was opened with the authority of the Department of Finance to bring to account a payment of £1,000 to an air company one of whose aircraft was damaged at Shannon Airport in October, 1949. The company claimed damages against the Minister for Industry and Commerce in respect of injury to the aircraft and consequential loss of earnings while undergoing repair, and the case was settled out of court on the basis of an ex-gratia payment of £1,000 without admission of liability.”

Mr. Wann.—The original claim of the air company was considerably in excess of the £1,000 ultimately accepted in settlement.

339. Chairman.—I suppose this is a case of doing the best you could. You seem to have been reasonably successful in cutting down the claim?

Mr. Leydon.—The original claim was for £4,290. There was a claim for damage to the aircraft and for loss of earnings while the aircraft was undergoing repairs. There was another consideration in connection with the settlement, that if a case of this kind did go to the courts, which could have happened, I am quite certain that the legal representatives of the owner of the aircraft would be slinging a good deal of mud at the airport authorities and at the personnel and a lot of that, even though it is not justified, does stick and does a lot of harm. The Attorney General was consulted about this and, on the whole, I think it was a good settlement.

340. Chairman.—Paragraph 70 of the Report of the Comptroller and Auditor General reads as follows:—

Subhead S.—Appropriations in Aid.

The miscellaneous receipts include a sum of £8,228 10s. 11d., being the amount received from certain air companies using Shannon Airport in respect of the cost of operation of the North Atlantic Radio Telephony Service (Nartel). The necessary radio equipment was loaned free of charge by the companies concerned, and the expenditure involved in the operation of the service including salaries (subhead A), rental of telephone lines (subhead C) and electricity charges (subhead J), together with a percentage addition for overheads, was repaid by the companies. The service, which commenced on 27th April, 1950, is still on an experimental basis.”

Does this service continue?—This service has been changed over from a kind of recommended practice to a standard service now because telephony takes the place of telegraphy.

341. Is there not a current dispute on this?—It is not quite a dispute. In June, 1952, I.C.A.O., the international body which regulates these matters, made these standard requirements for services. Up to that it had been a voluntary arrangement, and that is why we were able to make a satisfactory arrangement in recovering the cost from the air companies. When this became a standard part of the equipment and services provided at the airport, the air companies told us that they were going to terminate the voluntary arrangement. We have now introduced an arrangement—in fact, it comes into operation to-day—under which we charge £5 for each contact, that is, where an aircraft, whether it is landing at Shannon or passing, communicates with Shannon Airport for guidance or for any information about weather, and so on. A “contact” includes any number of messages backwards and forwards on the one flight and we charge £5 a time for that. Naturally, the air companies do not like it. We feel we are quite within our rights. The Canadians have done something similar, and they have had it in operation for some time. Their charge is 13 dollars as against our £5. The air companies are complaining, and I assume that was what you were thinking of.

342. I saw a reference to it. These conversations, of course, are recorded permanently?—In the control tower, yes.

343. Chairman.—Paragraph 71 of the Report of the Comptroller and Auditor General reads as follows:—

Subsidy in respect of Air Services.

A sum of £104,500 was paid to Aer Rianta, Teoranta, in 1949-50 under the terms of the Subsidy (Aer Rianta, Teoranta) Order, 1950 (Statutory Instrument No. 86 of 1950) in respect of estimated losses of the company and of Aer Lingus, Teoranta, for that year. The actual amount of the losses, as subsequently determined by the Minister for Finance and the Minister for Industry and Commerce, was £66,723 14s. 6d., and the excess payment of £37,776 5s. 6d. has been refunded by the company and is accounted for as an exchequer extra receipt. The losses for the year 1950-51 have been similarly determined to be £3,075. As the amount of subsidy paid in 1950-51 to meet the estimated deficit for that year was £2,740, a balance of £335 remains due to the company.”

There is a big difference in the estimated losses and the actual ones in 1949-50. I suppose that is something you cannot really foresee?—In the Department we are completely in the hands of the air company on that. We cannot possibly estimate what the outcome will be.

344. Have they big losses for 1951-52? —No, but for 1952-53 there have been.

345. When you say there was no loss for 1951-52, do you mean actually or that you have not determined the total?—I had better give you a separate note about the company’s operations for 1951-52 and 1952-53.

346. It is really 1951-52 we are concerned with. That is the year of account?—As far as the year of account is concerned, I do not think there was a loss.

347. I presume if they make a profit they do not give it back to make up for the years in which there was a loss?— No.

348. That is all right. If you discover that there is something about 1951-52 you wish to tell us, you can send a note? —I will send a note explaining the position and bring it right up to date. Actually they have gone into the red again. I have not got the figures with me, and I prefer not to rely on recollection.*

349. Chairman.—Paragraph 72 of the Report of the Comptroller and Auditor General reads as follows:—

Management of Dublin Airport.

The accounts of Aer Rianta, Teoranta, for the year 1950-51 revealed a surplus of £3,884 on the management of Dublin Airport, and this amount, together with a sum of £2,500 advanced in that year against an estimated loss on this service, was received from the company and is brought to account as an exchequer extra receipt. A profit of £19,595 on the management of the airport was disclosed in the company’s accounts for the year ended 31st March, 1952, and this amount has, I understand, been surrendered to the Exchequer in 1952-53.”

350. Paragraph 73 of the Report of the Comptroller and Auditor General reads as follows:—

“Reference was made in paragraph 57 of my report on the accounts for the year 1948-49 to the absence of inventories of furniture and equipment purchased from voted moneys and issued to Aer Rianta, Teoranta, for use at Dublin Airport, and to the question of the reconciliation of stocktaking returns with the records of purchases. Inventories have since been compiled and copies have been furnished to me together with details of discrepancies revealed by stocktaking. As stated in a note to the account, deficiencies to the amount of £767 16s. 11d. were written off with the sanction of the Department of Finance. In addition, certain items, the original cost of which amounted to £177 2s. 2d., had became unserviceable through normal wear and tear and were also written off.”

Have you anything to say on this, Mr. Wann?

Mr. Wann.—The position as regards records and stocktaking is now, I think, satisfactory.

351. Paragraph 74 of the Report of the Comptroller and Auditor General reads as follow:—

Catering Service—Shannon Airport.

I referred in paragraph 61 of my report on the accounts for the year 1949-50 to the completion of agreed inventories of furniture and equipment supplied to the catering service as required by the agreement between the Minister for Industry and Commerce and the catering controller. A complete stocktaking of this furniture and equipment was carried out in January, 1952, and comparison with the inventories revealed a number of discrepancies which are the subject of correspondence between the Department of Industry and Commerce and the Department of Finance.”

Have you anything to add, Mr. Wann?

Mr. Wann.—I do not know whether this matter has been brought to a conclusion.

Mr. Leydon.—It has not been brought to a final conclusion yet. A great deal of the amount has been cleared but not all.

352. Chairman.—Is there anything the Department of Finance would like to say about that?

Mr. MacInerney.—So far as we have gone the Department of Finance is satisfied with the situation as long as there is a proper explanation of discrepancies, and so on. I think the Department of Industry and Commerce is in a position to see that in future the stocktaking will be properly carried out.

Mr. Leydon.—The total amount outstanding for which we have asked for authority to write off is only £61. It has all been cleared except for that amount. If I may add a word by way of explanation, I think the work “deficiencies” there should be in inverted commas.

353. Chairman.—The word “deficiencies” does not occur in that paragraph. Do you refer to paragraph 73?—It runs through all of this.

354. It does not occur with regard to the catering service. Deficiencies are not mentioned, only discrepancies?—The deficiencies on the previous one included nearly £500, covering a period of ten years, for cups, saucers, glasses, plates and so on. I do not think these are deficiencies. Our wives do not call them deficiencies, anyway.

355. You were able to estimate very closely the landing fees at Shannon, Mr. Leydon?—Yes. I thought that was a very good estimate. Thank you, sir, for noticing it.

356. In regard to extra receipts, none of them is capable of previous estimation, except some minor ones, I would say?—It is very difficult to estimate what you will get under most of these heads.

357. What is referred to in No. 10— Sale of head rent interest in property at Foynes?—At Foynes there was a complicated situation. There were yards and some buildings on them belonging to the Eagle Arms Hotel. There was a head rent of £10. It was part of a general settlement in the matter of the disposal of the Minister’s interests in these yards and stores. They had been acquired in 1945 and were not any longer required. We have sold most of our interests. We have been selling everything we can there, including the head rent, which was something like £10 and we got £100 for it.


Mr. J. Leydon further examined.

358. Chairman.—The extra receipts appear to be flourishing, Mr. Leydon?— At least they are paying their way, with a little over.

359. Thank you very much, Mr. Leydon, for your very full notes. They have been very useful.—Thank you very much, sir.

The witness withdrew.

The Committee adjourned.

* See Appendix VIII.

* See Appeendix IX.