Committee Reports > List of Committees > Dáil > 1955 > Committee of Public Accounts > Report - Appropriation Accounts 1953 - 1954

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 27 Deireadh Fómhair, 1955.

Thursday, 27th October, 1955.

The Committee sat at 11 a.m.

DEPUTY CARTER in the chair.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Mr. M. Breathnach, Mr. T. J. Malone, and Mr. J. Mooney (An Roinn Airgeadais) called and examined.

VOTE 47—LANDS.

Mr. T. O’Brien called and examined.

201. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads:—

“Land Purchase Accounts.

Rent and Interest Accounts.

Rates are payable on lands held by the Irish Land Commission pending disposal by allotment or otherwise. Section 7 of the Rates on Agricultural Land (Relief) Act, 1946, provides for the granting, subject to certain provisions, of relief from rates by way of employment allowance in respect of adult workmen employed on land. I have inquired whether consideration has been given to the question of the Land Commission’s entitlement to such allowance in respect of herds employed on its lands.”

Mr. Ó Cadhla.—The surplus income on these accounts is brought to credit of the Vote or treated as Exchequer Extra Receipts. The Accounting Officer has informed me that the question of claiming the employment allowance had now been considered by the Land Commission, and that the position will be reviewed in a year or two to see how the results may repay the effort.

202. Mr. O’Brien. — Could I add to that? I doubt whether there is much in this for the Land Commission. To qualify in respect of a particular piece of land for a particular rating year the Land Commission would have to have had in employment on that particular piece of land an adult workman for the whole of the previous calendar year. For example, for the rating year 1955/56, they would have to have had in employment in the previous calendar year, 1954, a workman for the whole of that calendar year. I gather that two workmen working for the same period of six months would not qualify—would not count as one—though two workmen working for successive periods of six months would count as one workman. It is very seldom that the Land Commission would be able to fulfil all these conditions; we get land say in March, April or May of a particular year and by February of the following year we have it allotted. Again, some of the herds that we have are employed at little more than nominal sums—10/- or 15/- a week. I am very doubtful whether they would be qualified as workmen at all. We would have to spend a lot of time keeping records of data to test our entitlement, only perhaps to find in the end that we would not be entitled at all. Frankly, I do not think there is very much in it for the Land Commission.

203. Deputy Bartley.—I do not think the matter ought to be pursued further.

204. Deputy Sheldon.—Does the Land Commission get even a primary allowance? Do they get any allowance not related to rates paid?—I think we get the primary allowance but not an employment allowance, unless we qualify for it.

My understanding of the Act would be that the Land Commission would be entitled only to the one allowance in respect of the land it held in one local authority area. In the case of any land owner, all the land he owns is put together for the purpose. He does not get a primary allowance on each parcel of land. It is taken as one piece. If the Land Commission had forty pieces of land in County Roscommon, they would be entitled only to one primary allowance for the county? — I do not think it is possible to take all the lands together; each particular hereditament is taken separately so far as the Land Commission are concerned.

For the purpose of getting the allowance by a private owner, they are certainly aggregated. It happened to me. I have three farms in three different townlands and I am allotted only one primary allowance on the three. If the Land Commission is getting away with it, I must see what I can do?—I do not think we are getting away with it. We are specially provided for in the Rates on Agricultural Land (Relief) Acts.

I would be surprised if you were.

205. Chairman.—What is the extent of the land held by the Land Commission in this respect?—About 18,000 acres in all.

206. Are the lands held by the Land Commission for a long period before being allotted?—No. For example, there was a question in the House yesterday and the answer to it was that the amount of arable land held in hands for more than one year was 18,000 acres.

Deputy A. Barry.—That is the average?—It works out about that. It is inevitable that there would be a certain amount unallotted from time to time. There is a settled pool and it has tended to become fixed in a pattern at about that amount.

Deputy Sheldon.—That is what a great many people think.

Deputy A. Barry. — The comment is very considerable on that matter.

207. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:—

“It was noted that in certain cases bog rents in respect of the 1953 season were not put into collection until 1954 and I have inquired as to the reasons for the delay.”

208. Mr. Ó Cadhla. — I raised this question on the schedules of lettings for five bogs in County Roscommon. The Accounting Officer points out that these covered 763 lettings and that there were 71 bog schedules in Roscommon alone in 1953. The delay in issuing receivable orders is attributed to the large number of lettings and the difficulty of obtaining signatures to the various schedules. The individual rents are very small, about 6/-, I think?—That is right.

Mr. Ó Cadhla. — I am told that the total amount of arrears in collection on the 31st March, 1954, amounted to over £4,000?—In the particular cases (they all occur in one county, Roscommon) the delay occurred in just five out of a total of 71 schedules. The point at issue here was actually the delay in collecting the amounts. The time the five particular schedules reached the collection branch from the county inspector was a particularly inopportune one in 1953, for the reason that the collection branch was then engaged in the preparation of a general issue of new ten-year receivable orders. Had the branch not been so engaged, these amounts would have been collected in due order.

209. Chairman.—In this connection you must issue an enormous number of orders in the process of collecting these rents. What does the present system of collection cost as against the old system that obtained in the landlord’s day? Is the present system calculated towards economy?—It is. We were tempted from time to time to resort to collecting by means of personal collection by the bog bailiffs. In fact, this was tried but there were defalcations and we had to drop it. We were open to severe criticism on that when it was happening.

210. Deputy Bartley.—On subhead A— Salaries, Wages and Allowances—there is a note stating that there is a saving due mainly to delay in filling vacancies and to the suppression of a number of posts as an economy measure. What was the nature of the posts that were suppressed? —They were posts on the internal staff not on the outdoor staff. The posts involved were: 1 Higher Executive Officer, 8 Executive Officers, 1 Staff Officer, Grade III, 18 Clerical Officers, 10 Writing Assistants, and 5 Shorthand Typists. They were spread over the various branches.

Deputy A. Barry.—Did it result in a slowing up of your work?—No.

Deputy Bartley.—Over what period of time was the economy effected?—Almost entirely in the year 1953/54. I think the Minister for Finance undertook in the Budget of that financial year to review the Civil Service. There was a general economy circular issued and this was our contribution to it.

211. Chairman. — On subhead C — Incidental Expenses—you have an excess on this subhead and one of the reasons given is increased expenditure on surveys. What type of surveys?—These are bog surveys. The type of survey in question is known as face bank survey and lock-spitting for allotments and seasonal lettings. When they are making their surveys the inspectors have to employ what are known as chain men. In that particular year the amount expended on bog development happened to be very high; it was as much as £70,000.

212. On subhead D — Office of Public Trustee—what kind of trusts are administered by this office? — They are trusts to which the Settled Land Acts of 1882-1890 apply. The Public Trustee in this country is not a general trustee as in England. It is merely a post of Public Trustee to facilitate sales under the Land Acts. The post caters for those cases, e.g., minors and tenants for life, where the owners would not be qualified themselves to receive the money, and the Judicial Commissioner when he is allocating the funds hands them over for investment by the Public Trustee who has to act prudently. Apart from that the Public Trustee is an independent functionary and the accounts of the Office are rendered direct to the Comptroller and Auditor General and not to me or through me as Accounting Officer.

213. On subhead G — Fees payable in connection with proceedings under Section 28 of the Land Act, 1933—you are liable to recover most of these fees?— That is right. There is an income subhead on the Appropriations-in-Aid side. For example, the estimated outlay that year was £7,600 and the estimated income was precisely the same. The actual outlay was £6,918 and the actual income was £6,576, so they follow. The reason for the fall in that year in the amounts on either side was that we estimated on issuing 39,000 warrants but had to issue only 36,000.

214. On subhead H.1—Payments under Section 11 (7) of the Land Act, 1923— I see from the Estimates that this expenditure relates to contribution to price. What precisely does this term mean?—On the passing of the 1923 Act by way of inducement to landlords a special contribution of 10 per cent. of the purchase money was added. It was comparable to the bonus under the 1903 Act which was also an inducement to landlords under that Act. The State pays 10 per cent. on the ascertained purchase money and has to meet both interest and sinking fund on this tenth; the total amount required for that purpose is provided in this subhead.

215. On subhead H.3—Payments under Section 27 (2) of the Land Act, 1933— this expenditure relates to the halving of annuities. Are all annuities still halved? —Yes. In fact some of them were reduced at the time by an additional 5 per cent.; they got a 55 per cent. reduction.

216. Deputy Bartley. — In regard to creating annuities, is the new annuity created on the old basis and then halved? —Yes. There is a particular requirement in the Land Act of 1933, Section 19, which says that we shall assess the annuity on the basis on which it was hitherto assessed and then halve it.

217. Chairman. — On subhead H.4— Deficiencies in the Land Bond Fund and the Local Loans Fund under Section 37 of the Land Act, 1933, as extended by Section 24 of the Land Act, 1950—how do these deficiencies arise? — These are small deficiencies arising from the writing off of annuities due to coast erosion. If any portion of land happens to be permanently submerged from flooding or coast erosion, part of the annuity is written off under this section. The deficiencies in the Land Bond Fund or in the Local Loans Fund have to be made good but deficiencies in the Purchase Annuity Fund have not to be made good.

218. On subhead J — Advance to meet Deficiency of Income from Untenanted Lands purchased under the Land Acts, 1923-1950—you had a profit of untenanted land. Do you charge all your expenses against the profit from untenanted land? —Yes. As you will see in the note on subhead J on page 130 receipts for that particular year were £111,292 and payments were £92,237, leaving a surplus of £19,055. The receipts are just the income we get from lettings and the payments represent rates, herds’ wages and any other outgoings. The surplus is brought in as a counter-balance against subhead J. The reason for that is that there were gross deficiencies in former years amounting to £265,000 from loss of income from untenanted land. For the last 14 years there have been gross profits amounting in all to £205,000 so that there is still a deficiency of about £60,000 over all. As soon as that deficiency is worked off the Department of Finance will authorise us, if we then have profits, to credit them as Appropriations-in-Aid of the Vote. At the moment they are surrendered as Exchequer Extra Receipts.

219. On subhead L.1 — Loss on Unoccupied Holdings—I see there was no charge against this subhead. Does this mean no tenants were dispossessed during the year for non-payment of annuities?— It is only a token Vote and it would not necessarily mean that at all because tenants could be dispossessed and we could have a working profit if we happened to manage the land successfully. For a number of years though there have been very few cases of taking possession for default.

220. On subhead L.3—Advances under Section 43 of the Land Act, 1939 — are these advances repayable?—They are.

221. On subhead M—Advances to meet Payments under Sections 13 (3), 15 (2), 18 (2) and 19 (1) of the Land Act, 1931— to whom are these advances made?— They are made to landlords. This subhead relates to over-issued Land Bonds arising in the main from the reduction of tenants’ annuities with a consequential reduction in the landlord’s money. The landlord’s purchase money is based on the tenant’s annuity and if the annuity is reduced the amount payable to the landlord is reduced. Therefore, bonds that have been placed to credit are over-issued by the capital amount of the reduction and we are entitled to recover the over-issued bonds. In some cases we fail to do so where the persons concerned are outside the jurisdiction or are dead. There is an income subhead in Appropriations-in-Aid for this item also.

222. Deputy Bartley.—What is the connection between the landlord and the annuitant? Seeing that all the land in the country is now administered by the State and the Land Commission, I do not understand how any payments between a tenant and a landlord arise?—They do not.

Then I do not quite understand the explanation.

Deputy Sheldon. — The Land Commission pays the landlord.

223. Deputy Bartley.—It is because I am aware of that fact that I am querying the connection that appears to exist, from what the Accounting Officer has said, between the annuitant and the landlord. How is the payment to a particular landlord affected by anything the State has done in respect of the annuity subsequent to the acquisition of the land by the State? Did not all land come under the jurisdiction of the State under the 1923 Land Act? Is that the position?— Yes, that is the position. The particular type of land here concerned is tenanted land as distinct from untenanted land. If I may cite a particular case — take a landlord’s estate comprising 100 tenancies. Before the Land Commission stepped in that landlord had been receiving 100 rents. When the Land Commission took over that estate the first step was to reduce the rent by 25 per cent. and collect what was known as payment in lieu of rent. The Land Commission paid that payment in lieu of that reduced rent over to the landlord, less income-tax and cost of collection. Five years later they come along and convert that rent into an annuity and reduce it by another 10 per cent., that is 35 per cent. reduction as distinct from 25 per cent. The landlord’s purchase money is an automatic calculation of that sum. It is the annuity capitalised at 4¾ per cent. If the rent was £10, that is, 200 shillings, the annuity payable would be 130 shillings, that is 35 per cent. reduction. The rent of £10 hitherto payable to the landlord would then become an annuity payable to the Land Commission of £6 10s. The price to the landlord is determined by capitalising that £6 10s. at 4¾ per cent. In other words, it would be about £136 plus the 10 per cent. State contribution that the Chairman referred to earlier. The landlord would get that sum by way of purchase money from the Land Commission and £136 plus 10 per cent would be put to his credit in bonds. If the Land Commission, being satisfied that the holding was not security for that annuity of £6 10s., come along and reduce it to £4 10s., then the landlord is entitled only to the £4 10s. capitalised at 4¾ per cent. and should get only £94 plus 10 per cent. State contribution. Therefore, there has been an over-issue of bonds to the extent of £42 plus 10 per cent.

Deputy Bartley.—I see it now.

224. Mr. O’Brien.—The Land Commission are entitled to recover that £42 from the landlord, if they can. We keep generally a guarantee deposit of 10 per cent. of the purchase money to meet a contingency like that but if that is not sufficient we can call on him still and we have in fact gone after a good deal up to the point of proceedings. Where we find them outside the jurisdiction, as many of them are, in America and Australia, we do not proceed any further.

225. Deputy A. Barry.—It is part of the machinery of acquisition?—It is part of the machinery of vesting the landlord’s interest in the Land Commission, that is tenanted land as distinct from untenanted, which we acquire completely and take over. It is an adjustment of the landlord and tenant account.

226. Chairman.—In the statement on the subhead on page 131 it is mentioned that you wrote off £7,000 odd during the year?—Yes.

Is the remaining £13,000 odd a good debt?—I would not like to count on it, Sir. We do get in a little. We have an income subhead account on it. If you would refer to the top of page 132—item No. 7 there, you will see we got £105. We continue to do the best we can, with the advice of the Attorney General.

227. In regard to subhead N—Advances to provide Funds for the Maintenance of Embankments or other Works—in what circumstances are these advances made? —Sometimes we get applications made to us for the preservation of embarkments or watercourses or works of that type. We may make up our minds that the State should not step in, that it is more a matter for the local people themselves, but we will come to their rescue to this extent, that we will agree to set up a capital fund, provided they undertake to repay it. We will set up a fund of say £5,000 to look after a particular watercourse provided the local beneficiaries undertake to repay us that £5,000 and generally they do. We hand that fund of £5,000 over to the public trustee for investment and it will be invested and yield a dividend each year, and if there are small matters to be attended to in the course of the year the dividend will be used to defray those expenses, and usually it is handled by two or three local trustees appointed by the local land holders.

Deputy A. Barry.—The repayment is added to the annuity?—It is.

228. Deputy Bartley. — You have one general fund covering this service, is that so?—That is right for all items of any kind arising on that watercourse.

229. Deputy Bartley. — Apparently, from what the Accounting Officer says, there has been a more satisfactory experience in relation to the maintenance of embankments than there has been in the repayment of special charges for drainage under the 1925 Act. Of course, the Land Commission did not administer that. I understand it was the local authorities. Was it not?—I think that is right.

Deputy A. Barry.—It is a much smaller thing, I suppose. It is a more immediate matter.

Deputy Bartley. — At any rate it is satisfactory to know that this method of maintaining the embankments is working satisfactorily?—It is.

Deputy Sheldon.—Collection by annuity is a great safeguard?—Yes.

230. Chairman.—In regard to subhead Q—Deficiencies under Section 11 of the Land Act, 1950—how do these deficiencies arise?—Since the passing of the Land Act, 1950, the Land Commission in acquiring untenanted land have not been redeeming the annuity. Hitherto it was redeemed out of the owner’s purchase money. Now it is not. The Land Commission had much more freedom to deal with the land when the annuity was redeemed. Now that the land continues subject to the annuity we find that it pays the State better sometimes to cease the old annuity altogether. Suppose we make up our mind that the land is security for an annuity of £X, and we have an existing annuity charge of £10 on it. The only amount we can put on by way of fresh annuity is £X—£10. Now if the old annuity has only five or six years to run, as it might have if set up under the earlier Acts of 1891 or 1896, then the old Advance (being repaid by the £10) would expire pretty soon, and thereupon the whole £X would go towards repayment of the fresh advance —because the £10 no longer needed for the old advance would be applied as additional sinking fund towards the new advance which might thus run out in about 20 years. The State would be losing money unnecessarily in that way because if we set up a new annuity for the whole amount as from a current date it will run for about 64 years. Therefore, it is in the interest of the State or the Land Commission to cease the old annuity there and then, particularly if it has a short period to run.

Deputy Bartley. — The Accounting Officer says that the State would be losing money if the advance is prematurely paid.

Chairman.—Yes.

Deputy Bartley. — He expresses regret that the State’s position in regard to interest payments is changed so prematurely as all that. I think we will have to check up on the Land Commission’s morals in relation to usury.

231. Chairman.—In regard to item No. 5 in the Appropriations-in-Aid, what are excess annuities?—They arise in the first instance from any profits we make. If we buy an estate for £1,000 and sell for £1,100—a most unusual occurrence—the annuities on the excess thousand would be excess annuities, but the main bulk of excess annuities arise from improvement advances. The money spent is charged to subhead I, which is a grant from this Vote, but though it comes out as a grant we do not spend it all by way of grant; for example, we recover some of the improvement expenditure by means of advances. If we want to build a house for a tenant for £1,000, we pay out £1,000; we make £800 of it free grant and £200 an advance and make him repay the £200 and the annuity on that £200 comes in as an excess annuity. It is the aggregate of all those advances for improvements which are collected by means of annuities that come in as excess annuities. They do not come under Land Purchase Accounts proper.

Deputy Bartley. — Are these cases where the Land Commission builds the entire house, itself?—Yes, or it could be any other form of improvement or drainage.

232. On the matter of houses I want particularly to be informed on one particular aspect. At present, I understand, there is a grant of £800 given to a tenant to build a house. Is that the present figure?—It is about that, Sir.

Am I to understand from what the Accounting Officer said that they are in fact charging £1,000 against a house in respect of which the tenant receives £800 and which he builds himself—there is no £200 calculated into his annuity subsequent to such a transaction taking place? Is it correct to say that at the present time the Land Commission gives a grant of £800 to a tenant whose holding has been rearranged?—Roughly—yes.

I should have referred to rearrangement work. Am I correct in saying that the figure at the present time is £800 to a tenant who undertakes to erect his own new house on a rearranged holding?— The figure in that case varies between £660 and £700, depending on the house plan.

So £700 is the maximum?—Yes.

The figure of £800 exercised my interest in the matter. I was told that £800 is the grant now given to a person who builds his house in these circumstances. Is that correct?—No.

I was inclined to suspect that the Land Commission was surreptitiously clapping on an annual charge, by way of annuity, of an additional £200 which they regard as an advance. What is the position?— That does not take place.

Possibly I would not have been alarmed in the matter were it not for the Accounting Officer’s remarks about interest payments which he was no longer able to collect. What is the position about the £800?—The £800 would be where we would be building the house ourselves by direct labour or by contract.

233. Chairman. — I notice that under Extra Receipts payable to Exchequer, there is an item, Surplus income of Rent and Interest Account No. 3 in the year 1952-53, whereas an item, Surplus income of Rent and Interest Accounts No. 1 and 2 occurs under Appropriations-in-Aid (No. 3). Why are the amounts treated differently?—Nos. 1 and 2 relate to 1903-1909 acts estates of the Congested Districts Board and the Estates Commissioners. The No. 3 Account relates to the Land Commission 1923 Act estates. The No. 3 Account appears here in the accounts for 1953/54, but it is in respect of the year 1952/53 because it was earned in 1952/53 but was not paid over until after the 31st March, 1953. It is a counterpart of subhead J, further down, and the amount that appears this year as the surplus on subhead J will appear up here next year as an Exchequer Extra Receipt. Accounts Nos. 1 and 2 are somewhat different. In the early days of the 1903/1909 Act, the Land Commission and the Congested Districts Board made a profit in dealing with some of the estates, having to pay interest on the purchase money only to the amount of 2¾-3 per cent. while, at the same time, collecting amounts equivalent to 3¼ per cent. or 3½ per cent. Therefore, there was an intervening profit of ½ per cent. over a number of years. That built itself up into a sum of £500,000 which we have invested. It is the dividends from these investments that appear as Appropriations-in-Aid for Accounts Nos. 1 and 2.

VOTE 48—FORESTRY.

Mr. T. O’Brien further examined.

234. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead C.2—Forest Development and Maintenance, etc.

The charge to this subhead includes £472 10s. 0d. in respect of motor tax on a number of tractors at the annual rate of £31 10s. 0d. each. In view of the nature of the work on which these tractors were engaged I have asked for information regarding the rate of duty applicable.”

Mr. Ó Cadhla.—I have been informed by the Accounting Officer that the Local Government Department has agreed that the 5/- agricultural rate is applicable to these tractors.

Mr. O’Brien.—That is correct.

Deputy Sheldon. — It is a bit of a change.

235. Mr. O’Brien.—We had two types of tractors—wheel type and track type. At first, the Department of Local Government said the appropriate rate was £31 10s. for the wheel type. Then we began using the track type on the roads and we asked the Department of Local Government for an assessment of the tax on these and we were told it was 5/-. We then wondered if the first rate was correct and went back and discovered that they would accept the 5/- rate for the wheel type tractor as well as the track type.

236. Deputy Bartley.—Would it not be possible to treat this type of payment from one State Department to another under the heading of Payment in Lieu of Rates? Does it not add greatly to the accounting work?

Deputy Sheldon.—But these are different accounts. The Road Fund is a separate account. You could not do it with taxation.

Deputy Bartley.—I am referring to the machinery of the thing. I am not suggesting that there would be any net loss eventually anywhere. The State vehicles do not have to pay insurance like the rest of us.

Mr. O’Brien.—An arrangement was made a few years ago that each Department would in future pay its own taxes on these vehicles; they had been exempt for years.

237. Deputy Bartley.—Why does that not apply to the more important provision of insurance? Surely it is more important to have the car insured?

Chairman.—I think it all goes into the Road Fund.

Deputy Bartley.—Is this not all connected with the intricacies of accounting and public finance?

Deputy A. Barry.—You must have it, I suppose.

Deputy Bartley.—Do the Committee see the whole underlying idea?

Chairman.—It is the result of legislation, more than anything else.

Deputy Sheldon.—I would fight to the last to see that the State puts its contribution into the Road Fund.

238. Deputy Bartley. — How, for example, is the Department of Posts and Telegraphs recouped for all the postal services rendered to all the Departments of State?

Deputy A. Barry.—The Departments pay with their funds.

Deputy Bartley.—Is that exactly what happens here?

Deputy A. Barry.—It is vaguely like it.

Chairman.—No.

Deputy Bartley.—I say “no.”

Deputy A. Barry.—In effect, it is.

Deputy Bartley.—Deputy Sheldon is dealing very much with labels.

239. Deputy Sheldon.—On the contrary All these other internal transactions deal eventually with the one fund—the Exchequer. Therefore, you might say there is a great deal of unnecessary in and out. But the Road Fund is quite separate. I think it is most important that any State vehicle should bear the same tax as any private person has to pay because they are using the roads in just the same way.

240. Deputy Bartley.—When you use the word “fund,” I understand it presupposes some different treatment. We were referring a moment ago to an Improvements Fund. We had a Tourists’ Roads Development Fund the last day. A large number of funds come up in the course of our examination of these public accounts. I do not see how that alters the fundamental idea that I wish to bring to the notice of the Committee.

Chairman.—You are touching on matters now that are the result of legislation. I think it would be better to raise that in the House.

Deputy A. Barry.—I am inclined to agree with him in principle but if we followed that logic, Mr. Chairman, we would not be required.

241. Chairman.—Paragraph 57 of the report of the Comptroller and Auditor General reads as follows.

“The sanction of the Department of Finance was obtained in 1951 for expenditure of £220 on the repair and improvement of a house on State forest land. The work was completed in 1953 at a cost of £609 and I have inquired whether the sanction of the Department of Finance was obtained for the excess expenditure.”

Mr. Ó Cadhla.—The Department of Finance has sanctioned the excess expenditure. I am informed it was due to a much higher expenditure than was anticipated on the installation of the water supply and also to the collapse of a wall which was being broken through to provide a doorway.

242. Mr. O’Brien.—That is right—and the collapsed wall had to be completely re-built; that work was entirely unanticipated.

Deputy J. Brennan.—The estimate was wrong?

Mr. O’Brien.—It was wrong in the sense that it was under-estimated.

Deputy T. Lynch.—With an old building, it can happen that, according as you work, it keeps falling down.

Deputy J. Brennan.—They did not anticipate water installation, first. Is that correct?—We did. Some of the extra work arose from the water supply, particularly the deepening of a well. We had to go much further down there than we expected; it was a rather unpredictable proceeding also.

243. Chairman.—Paragraph 58 of the report of the Comptroller and Auditor General reads as follows:—

“Subhead H—Appropriations-in-Aid.

Sales of forest timber are generally effected by public auction, or by tender, but small quantities are sold locally at prices fixed by the Department. It was noted that considerable quantities of timber were disposed of at a forestry centre at the prices fixed for local small sales and I have inquired as to the circumstances in which the sales were conducted on a non-competitive basis.”

Have you anything to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The Accounting Officer has informed me that in this particular forestry centre the produce was mainly of three kinds—fire-wood, pulp wood, light thinnings, and poor quality commercial timber. It would be difficult and uneconomical to arrange for the sale of these stocks by auction or competitive tender. With regard to light thinnings, I understand competitive sale by tender is now the practice at this particular forest.

244. Mr. O’Brien.—The transaction here referred to one particular forest at Kilsheelan, Co. Tipperary. It comprises about 4,700 acres and is one of our biggest forests. More than 4,000 acres are productive. That forest is built up from a number of existing plantations which were laid down before the Forestry Division stepped in at all. We enlarged it, but the plantations which were already in existence before we moved in were of such size and extent as to warrant the setting up in the locality of a few small private enterprise saw milling units and they had been in the habit of getting their requirements from the produce of the existing plantations. We kept up the practice in the interests of local good will of serving the local saw milling units.

245. Deputy A. Barry.—It became a very confined avenue of sale so?—It did, for a while, but there was a reason for it in that the tradition had been there of local buying from the place. In addition, there was the other reason given by Mr. Ó Cadhla—the type of material, brushwood, firewood and light thinnings.

246. There would be a constant check by the Department on the level of prices? —There would; we had fixed prices. The material was pretty well scattered so that the ordinary procedure of sale would not serve. Our impression and, in fact, our experience was that the cost of piling, lotting and listing all the scattered material would make an auction most uneconomic and we are satisfied we did the right thing.

Deputy Bartley.—And the population of the district would not be big enough to sell direct to each consumer, I take it.

247. Deputy T. Lynch.—There is one thing wrong with this type of sale, that it leaves itself open to the great abuse of a man taking timber he did not buy. I have had experience of selling plantations and you will sell a lot of bad commercial timber, but if you do not watch him—

Deputy Bartley.—A keen forester with a good pair of eyes would correct that.

Deputy T. Lynch.—It is not fair to the forester because it is very hard to keep track of the average small sawmill man. My experience of a great number of them —and I will say this in public—is that their consciences do not bother them a whole lot when taking timber out of plantations.

248. Chairman.—How much do the sales amount to in the year?

For that forest?—It would be about £5,000 for that particular forest.

Deputy A. Barry.—It is not a completely desirable practice. It has weaknesses and it has temptations.

Chairman.—It has, of course.

249. Mr. O’Brien.—Of course, it is not a general practice. Normally we sell by inviting tenders by advertisement and it is only firewood and inferior material we would sell locally at fixed prices except in the case of this forest where the tradition had been for the local saw millers to get timber from the existing plantations and we did not like to disturb that. In fact, we did try in 1951 to advertise one sale and we got a chorus of protest that the local people were not able to compete.

250. Deputy J. Brennan.—There was a considerable quantity of firewood, I take it, being disposed in this way? It was mainly firewood?—Mainly firewood and boxwood.

And the poor people were accustomed to purchase at a fixed price certain bundles or lots?—Yes.

Deputy J. Brennan.—I think we should not worry about it.

Deputy Bartley.—It is a very desirable thing to encourage and I imagine that the Land Commission’s ability to ensure that the poor got the timber at the lowest price was very circumscribed. They cannot be direct deliverers to each household.

Deputy J. Brennan.—The only thing we might take note of is the fact mentioned in paragraph 58 of the Report of the Comptroller and Auditor General: “It was noted that considerable quantities of timber were disposed of.” The practice may have grown to be overcommercialised. It was ordinarily a standing custom but it was probably abused.

251. Chairman.—I think they always dispose more or less of ladder poles and thinnings—saplings and that sort of thing?—There is an inevitable series of windfalls, as well as lop and top, that it is impossible to do anything else with and we would only alienate local good will by attempting to commercialise it.

Deputy J. Brennan.—Sometimes an auction would only result in the competition excluding people who were very well entitled to get their share of what was going for firewood. By this means, they would have been able to get a fair chance against all other people.

Deputy Bartley.—I think we have no choice but to leave it to the discretion of the Forestry people themselves.

252. Chairman.—Paragraph 59 of the Report of the Comptroller and Auditor General reads:—

“In accordance with authorisations issued by the Department timber was sold on various dates between March 1950 and May 1952. The relevant invoices were not issued to the purchasers until September 1953 and I have asked for an explanation.”

Mr. Ó Cadhla.—The Accounting Officer has explained that the delay in issuing the invoices was due to the failure of the forester to furnish to headquarters details of the timber issued and also the failure of the headquarters sales section to obtain the information from the forester. He further states that these matters are under investigation and steps will be taken to guard against similar delays in the future.

Mr. O’Brien.—All I can add is that, in effect, the forester fell down on the job. He is a very fine field officer, but, rather inclined to neglect correspondence from time to time, and he was at fault in that.

Deputy J. Brennan.—The two things do not go together?—I must say that our own domestic people were at fault in allowing him to remain at fault and every body has got a sharp pull-up as a result.

253. Chairman.—Generally what control is exercised to ensure that all timber sold is eventually paid for?—It can only be sold on the basis of written authorisations and normally has to be paid for before removal.

Deputy Bartley.—I take it this is commercial timber and not a question of firewood?—It is commercial timber.

Deputy J. Brennan.—It has to be paid for before removal?—Generally.

There was a year of a lag almost—or more—before the invoices were issued. Was it not removed for all that time?— It was in this case and that is what prompted the Comptroller and Auditor General to raise the matter, because it was out of line.

Deputy A. Barry.—How did a buyer know what size cheque to pass, if there was no invoicing done?—He did not know.

Deputy J. Brennan.—It was on the hire purchase system.

254. Chairman.—Paragraph 60 of the Report of the Comptroller and Auditor General reads:—

“It was noted in a particular instance that sawmill products delivered by the Department were rejected as not being in accordance with specification. A further quantity awaiting delivery was also rejected for the same reason. I am in communication with the Accounting Officer regarding the disposal of the rejected material.”

Mr. Ó Cadhla.—The Accounting Officer informed me that the rejection of the lots referred to was due to the inferior quality of the timber and that the quantities rejected have been either used as stakes or sold for 25/- a dozen. Arrangements have been made for the purchaser to inspect timber in future, before it is finished.

255. Chairman.—This is an infrequent occurrence?—A most infrequent occurrence. Really they were crossarms for use on transmission poles and 901 crossarms were involved in the first consignment. It was five weeks before we found out that the material was rejected and in the meantime we had been producing a second lot of 614. Had the rejection come earlier, we would not have undertaken the second consignment, but there was actually no loss because we used the material either as stakes in our own forests or sold it as stakes at 25/- a dozen.

256. Chairman. — What price did the purchaser pay for crossarms?—5/8.

Deputy Sheldon.—And you sold them at 25/- a dozen?—I mean 5/8 each.

Deputy Sheldon.—Mr. O’Brien stated that at 25/- there was no loss, that he was still within his costs.

Deputy Bartley.—No loss on rejected material.

Mr. O’Brien.—It was sub-standard; the quality was not up to their requirements.

Deputy Sheldon.—At 25/-, Mr. O’Brien says there was no loss. Does he mean he can afford to sell them at 25/-?—I was afraid you might raise that but it is really a question of the value of the raw material.

Deputy Bartley.—There must have been a revaluation if they were rejected.

Deputy Sheldon.—We will leave it at that. I think it is better to say that there was a revaluation.

257. Deputy J. Brennan.—On the question of specification, were there tenders invited or was there any competition in regard to it?—There was no competition; it has become almost standard practice to supply crossarms in this case and we have been doing it for years. This was one of the first rejects we had.

258. Chairman.—Paragraph 61 of the Report of the Comptroller and Auditor General reads:—

“Unauthorised tree fellings were carried out extensively at a forestry centre in the year 1952 and a forester and a head labourer, who were prosecuted and acquitted in connection with the matter, were dismissed from the service. I have inquired as to the amount of the loss involved and also regarding the control exercised over the felling and disposal of timber.”

259. Mr. Ó Cadhla.—The Accounting Officer has informed me in the course of his reply to my inquiry that the estimated loss was £660 and that £93 due to the forester was withheld against it. A claim for the maximum sum of £300 payable by the insurance company under the foresters’ fidelity guarantee bond was made in April last. Also, the matter has been referred to the Department of Finance. The Accounting Officer has set out in his reply a detailed description of the system of control over the felling and disposal of timber which I propose, with the permission of the Committee, to submit in evidence. I can find no fault with the system as outlined, but there seems to be some difficulty with regard to stocktaking. He states that in recent years with the increase in the quantities and varieties of forest produce at many forests, it has not been practicable to carry out surprise stocktakings. No method of satisfactory stocktaking under modern conditions has so far presented itself, but it is hoped that it will be possible to devise an adequate system of check following the introduction of more stringent methods of controlling the sale of timber. The matter is one of considerable difficulty and a full solution may not be found quickly. Additional staffing needed to commence re-organisation on the lines contemplated will shortly be proposed.

260. The description of the system referred to is as follows:—

“A programme of work for each forest is drawn up for the periods April-September and October-March each year. On these programmes, which are issued to the forester, all his field work is stated and authorised. Except for routine work or matters needing urgent attention, a forester is not permitted to carry out any operations not included in the programme without first obtaining approval from either his district inspector or headquarters.

Each forest is divided into a number of properties and each property is subdivided into compartments, referred to by numbers. Each forester is required to submit Weekly Returns showing the nature of the work carried out in the different properties and compartments in the week. Where a sawmill or sawbench is attached to a forest, separate weekly returns are furnished showing the volume of timber sawn during the week. Separate weekly returns are also furnished showing the amount of timber sold during the week, to whom sold and the price at which it was sold. The forester should issue a receipt, a duplicate of which is furnished to headquarters, to each person from whom he receives money for produce sold. Separate monthly returns are furnished showing the amount of felled timber in stock at the beginning of each month, the amount which came into stock during the month and the amount sold or otherwise disposed of during the month and the amount in stock at the end of the month. Sales of timber made locally by a forester must be made under an Authority obtained before-hand from Headquarters.

The labour staff of a forest is usually divided into a number of squads, each squad in charge of either a “skilled labourer” or a “head labourer.” The man in charge keeps a Time Book in which he records, inter alia, the nature of the work on which each man is engaged. Time sheets are furnished weekly to headquarters.

Periodic visits are made to each forest by the District Inspector in charge of the District in which the forest is situated. He inspects the work in progress, checks the time sheets and, where possible, carries out a general inspection of the forest.”

261. Mr. O’Brien.—The net loss in a recent review of the case comes to £400 and even that is based on an optimistic value of the material as firewood. Our control system is by means of what are called monthly timber off-root returns which have become less effective in view of the large-scale thinning operations which we have commenced in recent times. I am hoping to overhaul it. It is a very difficult thing to control the actual felling and disposal of produce over a given area of 4,000 or 5,000 acres. I do not want to say that we cannot do it and I do not want anyone who may subsequently read this to be tempted to think that the Department cannot control it as I believe that shortly we will.

262. Deputy Bartley.—Is there any information as to what the annual value of the losses has been for a number of years back arising out of irregularities of this kind?—There are only three or four cases that I know of in my time as Accounting Officer. On an average I would say the net loss would be less than £100 a year.

263. With reference to the control system and the proposal to recruit additional staff to eliminate these irregularities altogether, would it not be wise to compare the value of the annual loss arising with the potential cost of the extra staff? It might be better to continue as you are and thereby save rather than incur additional expenditure in respect of staff with no guarantee that there will not be a loss in future?—The additional staff will be mainly concerned with better marketing arrangements.

Chairman.—They will not deal entirely with the point raised by Deputy Bartley? —They will be concerned with control also, that is good control and better marketing arrangements which will lead to a prompt disposal of the material from the wood.

264. Could you say over what period these fellings took place?—Over a period of between eight and nine months in this particular case. It is very difficult to detect dishonesty on the part of anybody in the middle of a huge plantation.

How was the case brought to light?—An anonymous letter.

Deputy J. Brennan.—They are useful at times.

265. Chairman.—Have you any method of perambulation of the forest?— The forester is expected to carry out surprise checks even on outlying compartments of the forest and he does so. But if there is a gang working and they fell 2,000 trees it is very difficult to miss a dozen or so out of that. Forests are usually in very outlying, backward and isolated places away from communication; a lorry can go up a boreen and go away again unnoticed; theft is very difficult to eliminate, unless by a most elaborate system of checking which, as Deputy Bartley suggested, would be most uneconomic.

It would appear to me as difficult to stock-take as it would be to do that?— That is quite right.

Deputy J. Brennan.—It is really as profitable to take a chance with having certain defects in the present system than to re-arrange it?—That would not be a good attitude to have if we can avoid it.

Deputy J. Brennan.—I wonder how much unauthorised felling took place last year?

Deputy Bartley.—This is not the sort of timber that would go into fuel?—We did not have any known sizeable theft.

266.Chairman.—Paragraph 62 of the Report of the Comptroller and Auditor General is as follows:—

“The lettings of shooting rights included one for a period of five years from 1951 to 1956 at £25 per annum and another for ten years from 1949 to 1959 at £200 per annum. It was noted that the rents, which are payable annually in advance, were not collected for the years 1952 and 1953 and I have communicated with the Accounting Officer.”

Have you anything to add, Mr. Kiely?

Mr. Ó Cadhla.—The Accounting Officer in his reply explained that with regard to the first letting there were various delays in dealing with the matter due to shortage of staff and the loss of the relevant file. I understand that the arrears in this case have since been paid.

Mr. O’Brien.—Yes, and for the subsequent year, 1954.

Mr. Ó Cadhla.—With regard to the second case, I understand that it is at present the subject of legal proceedings and it is suggested that it might not be wise to discuss it.

267. Deputy A. Barry.—What time lag takes place? Say the rent is payable by the 1st January, when does the Department see it has not come in?

Deputy J. Brennan.—They get six days notice every six weeks after that.

Deputy A. Barry.—Why did the time lag take place? Why did they not try to collect it more speedily?—The file was lost in that case.

268. Deputy Bartley.—Arising out of the general question of the loss of files, what arrangements are made for the duplication of essential information to provide against losses of files which occur from time to time in all Departments?— The only attention that has been given to that so far as I know has been in connection with the possibility of an emergency. Photostatic copies have been made of all important documents.

269. Chairman.—Do you receive much revenue from shooting rights in general? —Yes. As you will see from the income subhead at the bottom of page 135 the income from shooting rents was estimated at £5,000. We got £7,029.

Deputy J. Brennan.—If a man is behind in any of his payments in these matters, he usually sees his local T.D. and asks him to make representations on his behalf.

270. Chairman.—Do you employ game-keepers?—Not on the forestry side; the lessee is usually made responsible.

271. Deputy A. Barry.—I wonder what kind of accounting system is there?— There is a register of all these rents kept. For some reason the collection of this particular rent and of three or four others was overlooked.

That is completely abnormal?—Yes, quite unusual; and to prevent any recurrence a modern Kardex Record of all these lettings has been set up.

Deputy A. Barry.—That was all I wanted to know.

272. Chairman.—Paragraph 63 of the Report reads as follows:—

“Stores.

It was noted on a test examination of the stores records that issues of building materials were not recorded in certain cases and I have asked for information on this matter. I have also inquired as to the date and result of the last complete stocktakings carried out at central stores depots and forestry centres.”

Have you anything to add, Mr. Ó Cadhla?

273. Mr. Ó Cadhla.—The Accounting Officer has explained that the failure to record certain issues of building materials which had been purchased in 1950 and 1951 was due to inexperience of the officers in immediate custody of the stores and the absence of proper store records until 1953. He has arranged stocktakings of all stores except fencing materials. Regarding fencing materials, he states that, owing to the exceptionally large quantity of material involved and the disproportionate cost of shifting and physically counting all the rolls of netting and barbed wire in stock, resort had to be had to volumetric estimation of the contents of the stores. As the circumstances which gave rise to the stockpiling of this material are unlikely to recur the Department’s policy has been to clear the smaller stores to meet current requirements and keep close check on the issues with a view to discovering any deficits. Until the quantities involved are further reduced, a full stocktaking is not possible. It might be well if I submit in evidence the Accounting Officer’s full reply which is as follows:—

(1) Supplies of building materials for the Department’s housing programme were stockpiled in 1950 and 1951 at Rathdrum forest and, to a lesser extent, at Dundrum forest. The materials were placed in charge of a Housing Surveyor and the foresters responsible for the other stores at those centres were entrusted with their immediate custody. Building materials were issued by the foresters on direct requisition from the Housing Surveyor; they were not regarded as pertaining to the Central Tool Stores at these forests and transfers were not covered by Advice Note. These temporary arrangements had to be continued until 1953 when an improved staffing position at headquarters enabled a proper system of recording the transfer and utilisation of these materials to be initiated. The appointment of a second Housing Inspector in 1953, who was also entitled to draw on the building stocks, had in any event made the previous arrangement unworkable.

As a first step a Kardex record of all building materials at Rathdrum and Dundrum was set up. Arrangements were made to have all subsequent issues covered by Advice Note. To build up the records of previous issues, it was necessary to have recourse to (1) the requisitions already issued, and (2) the files dealing with the repair or construction works on which the materials were used. The issues covered by a Requisition Book of 50 requisitions from the Housing Surveyor were entered in the record, but a small number of requisitions from a second book in the possession of the Housing Surveyor at the time the record was being set up were not recorded as that book was still in action. That book was subsequently mislaid and the issues covered thereby have had to be recorded by reference to the files dealing with their receipt. The records of issues from Rathdrum have now been completed subject to verification in stocktaking; owing to pressure of work it has not yet been possible to complete records of issues from Dundrum but the matter is at present being dealt with on overtime duty.

Inventories of the materials at Rathdrum and Dundrum were made in March and April, 1953, and April, 1954, but were intended mainly as a guide for use at headquarters for issues on requisition. A proper stocktaking will be put in hands next month and the final reconciliation will then be possible.

Details in regard to the specific instances mentioned in the inquiry under reply are given in the attached memorandum.

(2) Completed stocktakings at 152 forest centres were carried out in the period May-September, 1953. They covered the period 1949-1953 and sanction of the Minister for Finance to write off as irrecoverable a sum of £299 6s. 2d. being the value at current prices of lost tools was obtained (D/Finance sanction S.86/6/42 dated 13 Lúnasa, 1954). Stocktaking has been carried out for 1954 in all forests but investigations have not yet been completed in a few cases. It is proposed to have an annual stocktaking of the tools in all forest centres.

Stocktaking of tools at the Central Tools Stores at Rathdrum and Dundrum and at the Reserve Tool Store at Kinnity was carried out in March/ April, 1954. The sanction of the Minister for Finance to write off as irrecoverable a sum of £96 17s. 4d., being the value at current prices of tools and equipment disclosed as lost during the period 1948/1953 at Dundrum and Rathdrum Stores, was conveyed in D/Finance Minute S.86/4/42, dated 28 Meán Fómhair, 1954. There were no losses at Kinnity. It is intended to have an annual stocktaking of the Central Tool Stores. Inventories of fencing materials stored at Rathdrum, Portumna, Collooney, Emo and Dundrum were carried out in November/December, 1951. Owing to the exceptionally large quantities of material involved and the disproportionate cost of shifting and physically counting all the rolls of netting and barbed wire in stock, resort had to be had to volumetric estimation of the contents of the Stores. As the circumstances which gave rise to the stockpiling of this material are unlikely to recur the Department’s policy has been to clear the smaller Stores to meet current requirements and keep close check on the issues with a view to discovering any deficits. Until the quantities involved are further reduced, a full stocktaking is not possible.”

274. Chairman.—Have you anything to add?—No, I do not think so except to say that the forestry service has for a few years been rapidly expanding. There was a fairly big intake of material and it was not easy to account for it all promptly. In the train of the rapidly expanding service came the need for stockpiling, particularly wire netting. I am certainly aware that we have done our best; the system is practically as good as we or anybody else can make it.

How much did you stockpile?—About four years’ supply of netting wire. I cannot say that myxomatosis has come to our rescue very much or that we can take a risk on it as yet.

275. What is the present position regarding stocktaking in the various stores?—I made a particular note for myself and if the Committee have no objection, I will read it; it is pretty short.

“An unsatisfactory situation had arisen in relation to the stocking and issue of building materials, largely due to lack of adequate staff. Even with increased staff available after reorganisation the reconstruction of records of purchases and issues prior to the setting up of the Kardex system of records has had to be done on overtime working. This work has been completed and a complete physical check of the building stores was carried out in June, 1955. The task of checking and investigating discrepancies is at present in progress. With regard to forest stocktaking, stocktaking at all forest centres was carried out in the period July to September, 1954. Checking and reconciliation of the figures has been completed and the authority of the Minister for Finance to write off as irrecoverable the sum of £78 10s. 5d. being the value of tools and materials lost during the year has been sought. Stocktaking of the tool stores at Dundrum and Rathdrum was carried out in July, 1954, but due to pressure of work, reconciliation of discrepancies has not yet been effected. Stocktaking of a small tool store at Kinnitty has also been effected and no loss was disclosed. For the reasons set out in the reply to Audit Query, a complete physical stocktaking of the large quantities of fencing wire in stock is not feasible at this stage and it is proposed to deal with the situation as stated in the reply.”

276. I take it you carry large quantities of general stores?—Yes.

277. Where are your stores located? Are they centralised?—No. They are pretty well distributed throughout the country—Rathdrum, Dundrum, Kinnitty, and so on.

Deputy J. Brennan.—I suppose they are convenient to your large schemes?— They are so distributed as to make for convenient and economic distribution.

278. Deputy Bartley. — I take it the volumetric check would be applied to materials purchased only and not to the materials produced on State forests?—It has been applied to wire netting.

279. Deputy T. Lynch.—How are you situated as regard storage space?—That is one of our headaches.

280. Deputy A. Barry. — If you have big expansions in mind would your present machinery be able to face up to it? We will have to make it do and it will do.

281. Deputy O’Hara.—Are your stores of such fuels as diesel oils, etc., kept under roof also?—Yes.

And all your machinery?—Yes. Sometimes we make use of tarpaulin to cover our machinery during the summer months, but all machinery is under roof in the winter months.

282. How do you check quantities of fuel sent out to the various machines?— We make the drivers keep a log.

283. Deputy T. Lynch.—I take it that when you have large stocks of wire netting in storage they are laid out in ranks for checking purposes?—You mean that they would be easily countable?

Yes. I mean you do not have them all piled up higgledy-piggledy?—I shall convey the Deputy’s remarks to the staff concerned.

284. Deputy A. Barry.—Under subhead A—Salaries, Wages and Allowances— there was a saving because of unfilled vacancies in the forester grades. Has that position changed?—That was merely a temporary situation. The appointment of twenty new foresters was postponed while the position of serving foresters was being examined under the Establishment of Foresters Act of that year. We did not want to establish new trainees before the serving foresters had been cleared, and we accordingly postponed the appointments.

285. Chairman.—Under subhead C.1— Acquisition of Land—I should like to know why land acquisition is dealt with as a Grant-in-Aid?—There is a special footnote in connection with that subhead. We cannot control the date of the incidence of charge and it is therefore desirable that there should be a reserve fund as a cushion against commitments. Strictly speaking, there should be in that fund a reserve sufficient to meet all our obligations, otherwise it would offend against the canons of strict accounting, because we should not enter into commitments for which the Dáil has not voted the money. That is the idea behind this Grant-in-Aid.

286. Have you much difficulty in securing land suitable for afforestation?—In the year under review the situation was that we acquired a total of 20,436 acres, of which 17,750 were plantable. That means we had an unplantable intake of about 2,700 acres which is quite good as far as our average goes. The intake of land in the past three years has been: 1952/53, 19,418 acres; 1953/54, 20,436 acres and 1954/55, 17,497 acres. The total amount acquired for forestry to date is 300,000 acres, of which 250,000 acres are plantable, and of that about 200,000 acres have, in fact, been planted at 165 different forests. That is the sum total of the situation.

287. Deputy Bartley. — You say that 250,000 acres were plantable. Does the Forestry Division acquire land which is of no plantable value?—We do.

Is it encouraged?—We must buy the good with the bad; for instance, we have to take the unplantable tops of mountains.

Deputy J. Brennan. — So you have 50,000 unplantable acres on hands?—That is so.

288. Deputy A. Barry. — That means that at the moment you have 45,000 acres still to be planted? — Yes. The general principle is that you should have in hand about three times your annual planting target because afforestation has to take place in a planned way. In other words, we should know now what we shall have for planting in 1958 because we have to prepare the ground, we have to put in seeds in the nurseries, we have to transplant the seedlings and in all it takes three solid years. In fact, some authorities are inclined to think that the planning period should be longer than three years.

Deputy Sheldon.—Three years seems to be cutting it fine all right.

Deputy Bartley.—In other words, it would be desirable to have a longer period than three years?—That is so. In Britain the period is five to eight years.

289. Chairman. — Under the subhead C.2—Forest Development and Maintenance, etc.—the bulk of the expenditure seems to be for labour?—Yes.

290. Deputy T. Brennan.—There is a suggestion in the note to subhead C.2 that there is a delay in the recruitment of labour. I do not understand why that could not be obviated since there is so much labour available?—A general expansion was contemplated but the labour availability was not what we would have wished. However, the Committee will notice that it did improve later on in the year; in the early part of the particular year our labour force was fairly small but in the end it increased very much—it increased from 3,670 at the beginning to 5,200 at the end. It is sometimes difficult to get labour precisely when and where it is needed.

Deputy T. Lynch.—I suppose it is also difficult to get workmen to go up to the top of the hills and places of that kind? —Yes.

291. Chairman.—Under subhead C.3— Timber Conversion—what is involved in timber conversion in State forests?—It means mostly thinning, the need for which recurs in five-year cycles.

292. How many sawmills have you roughly?—We have two fixed ones, one in Cong and one in Dundrum and we have a variety of portable saw units.

Is Cong in full operation now?—Yes, since 1954.

293. Deputy J. Brennan.—Under subhead D — Grants for Afforestation Purposes—is your scheme of grants run in co-operation with the schemes operated by county committees?—As a matter of fact there is almost a mutual exclusion there.

How is your county grant scheme going?—Only fairly. Exactly 378 acres were planted in the year under review, and 207 acres have qualified for the second instalment of the grant. The grant is paid in two instalments of £5 each.

294. Deputy Bartley.—I think it would be desirable that there should be a liaison between the Forestry Division and the county committees in their respective grant schemes?—The county committees specify shelter belts and the Forestry Division’s grant provides for plantations over two chains wide.

Deputy J. Brennan. — I do not think most of the committees would object to any applicant buying the trees under their subsidised schemes and planting them in any formation so long as they were assured that the trees were actually planted.

295. Deputy Bartley.—I do not suppose that the Forestry Division goes in for grants for fruit trees such as the county committees cater for?—No.

296. Deputy Sheldon.—With regard to replanting, where privately owned trees are cut, how is the replanting controlled?

—It is obligatory to replant.

How is the operation of that worked?

—By inspection.

Deputy A. Barry.—Does the owner of the trees apply for permission?—Yes, but felling licence may be subject to a replanting condition enforceable within two or three years. The matter comes up for review in the ordinary way; the local officer of the Forestry Division makes the inspection and is asked to see whether the replanting obligation has been implemented. If it has not, the land owner is warned and in fact there may be prosecution.

Deputy Sheldon. — Can exemptions be got?—Strictly speaking, no.

297. Deputy J. Brennan.—Subhead E.2 —Exhibits at Shows—the cost of preparation of materials for exhibits proved lower than normal: what exactly is covered by that?—Usually models at the Spring Show and other country shows. I have seen a model sawmill unit exhibited.

298. Subhead F—Agency, Advisory and Special Services—the amount granted included provision for payment of wages to university students to be employed on research work in State forests but no students were employed. Did they all go off to England and work there during the holidays, or what is the position in regard to students failing to take advantage of this?—We leave it entirely in the hands of the universities. Generally, the students come along and carry out an assessment or in other words a measurement of the increment of growth in plantations in a chosen forest. Usually five or six students come along; they did not come along that year but, as I said, we leave it entirely to the universities.

Deputy Sheldon. — Judging by the amount of the grant, one would not expect many to turn up?—No, but it is a practical help to the students. The work can be done in three or four weeks; it is of value to us also.

Deputy J. Brennan—And it has some educational value?—Yes.

299. Under subhead G—Incidental Expenses—the excess under this subhead was due in part to increased expenditure on fire-warning publicity in the press: would it be relevant to ask what is the damage done by fire?—There is a note overleaf at page 136 stating that a sum of £1,266 was written off in respect of losses incurred as a result of forest fires during the year. That is the smallest we have had for years.

I was anxious to know if it was diminishing?—It is.

Deputy Sheldon.—Was it up this year?

—This year we were very fortunate also.

Deputy T. Lynch. — You were very lucky you did not lose the entire forest down at Passage East?—That is so.

The ganger there brought the men off the railway line and they cut a trench and blocked off the fire otherwise the whole of the forest would have been burnt?—Of course, forests are very vulnerable.

300. Deputy J. Brennan.—Afforestation has grown so much on the receipt side that it seems to me the machinery is not properly geared up to deal with it. As the young forests develop more and more income will accrue as a result of sales. It will be very difficult to deal with that situation. It is different from mere shopkeeping where the goods are displayed on the shelf and there can be stocktaking and a checking of sales. But it will be very difficult to devise a foolproof system in relation to forestry. Some effort should be made to deal with an expansion which is bound to come and grow considerably in the years ahead as young forests develop? — We have that very much in mind and anticipate that increase.

301. I did not know there was already such an income from afforestation. I was under the impression it would be absolutely negligible as yet. These thinnings present a considerable problem?—We have practically a ready-made market for thinnings—the Athy Wallboard Company and the paper companies.

And I suppose pit props?—They are exported. Of course, there is a certain limit to the diameter—anything in excess of 8-inch diameter at the lower end may not be exported. But thinning is something that has to be carried out whether or not there is a market because it would be folly and not forestry to let the trees fight it out themselves.

302. Deputy O’Hara. — How do you settle the question of price with the Athy Wallboard Company for thinnings?— Actually there is a middleman system operating; we sell competitively through agents, and they deliver to the Athy Wallboard Company.

Deputy A. Barry.—You sell ex-forest? —Ex-forest, yes. We did sell at a fixed price at one time, but we have dropped that arrangement; the other has proved more profitable to us.

Deputy T. Lynch.—It looks as if you will have more competition for it?—That is right.

VOTE 49—GAELTACHT SERVICES.

Mr. T. O’Brien further examined.

303. Chairman.—Paragraph 64 of the Report of the Comptroller and Auditor General reads:—

“Subhead I—Losses.

The amount charged to this subhead, which was opened with the authority of the Department of Finance, includes an ex-gratia payment of £65 to the manageress at a knitting centre as compensation for loss of personal belongings destroyed by fire in September, 1952, and £1 in respect of the loss of official cash. As noted in the account, the loss on machinery, materials, etc., has been computed at £378. A note in the account of the Vote for Public Works and Buildings for the year 1952/53 records that the value of the buildings destroyed was assessed at £500.”

Mr. Ó Cadhla.—I have nothing further to add, Mr. Chairman.

304. Mr. O’Brien.—The only thing I can add, Mr. Chairman, is that the fire occurred on a Saturday afternoon while the resident manageress was absent visiting another centre. She had taken every precaution to extinguish any fire that had been in the grate before she left; but when she got back in the evening at 10 p.m., the place was burning. She summoned the Gardaí and neighbours and ultimately got the fire brigade from Galway; but it was too late. This fire was at the centre on Gorumna Island.

305. Chairman. — Have you any information as to the cause of the fire?— No, we have not the slightest idea. We tried to find out. Apparently it was an old building, the property of the C.D.B., and possibly there were little cracks in the hearth and some hot ashes had penetrated down to the old timber.

306. Deputy Bartley.—You transferred all your activities there to Lettermore?— That is right. There was no loss of employment as a result of the fire. It was a small centre with one indoor and five outdoor workers.

What is the present position?—These employees were not disturbed in any way. The five outdoor workers had been working in their own homes and the indoor girl was supplied with a knitting machine in her own home.

Will the centre be reconstructed?—It is being managed from Lettermore at the moment and we will try to continue that if we can.

307. Deputy J. Brennan.—Was there insurance?—No.

Deputy Bartley.—The State carries its own insurance.

Mr. O’Brien.—The only insurance provision we have is for goods in transit.

308. Mr. Bartley.—I take it a system of home employment and central marketing is preferred rather than congregating workers in a building operated by Gaeltacht Services. Is that so?

Deputy Sheldon.—Circumstances alter cases.

Mr. O’Brien.—We had this centre for circular knitting machines only.

Deputy Bartley.—What you do now is issue these machines to suitable applicants in their own homes?—That is so.

309. Is it not necessary to train young girls in the operation of these machines? How can that be done if you have not a centre?—It is done from the centre in Lettermore at the moment. It was done in Gorumna Island hitherto. That was the fundamental idea in having the centre; it was a training centre. I have seen some of these centres myself where youngsters on their way home from school drop in and are trained as knitters under the guidance of the manageress. They become quite skilled in a few months or a year and they are then able to undertake even the most difficult patterns in their own homes. I agree we must have a centre for training purposes. Otherwise the manageress would have to devote too much time going around to each individual household. We are satisfied training can be arranged from Lettermore at the moment.

310. Deputy A. Barry. — How far is Lettermore from where the fire occurred?

Deputy Bartley.—I would say five or six miles. The place where the building was burned is practically on the border between two islands connected by a bridge. One end was catered for by this centre which was burned out. I think they would have too long a distance to travel to Lettermore.

Deputy A. Barry.—That is the point.

Deputy Bartley.—But I would be prepared to leave the matter to the good judgment of the administrators of Gaeltacht Services. I am sure they would not like to see any falling-off in the number of knitters in these two islands, but I just want to draw attention to the need to ensure that there will not be any such falling-off.

311. Chairman.—Paragraph 65 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead H—Appropriations-in-Aid.

The agents’ commission deducted from the proceeds of sales of products of rural industries includes a sum of £1,426 paid to an agent who took legal proceedings against the Minister for Lands arising out of the termination of his services in 1942. A settlement was reached under which the agent’s claim for commission and interest agreed at £1,716 was partly offset by a counter claim for £290 in respect of certain property of the Department which had been retained by him. A sum of £51, representing interest on a deposit lodged in Court, was received and is included in the extra receipts payable to the Exchequer.”

Mr. Ó Cadhla.—That paragraph is for information only.

312. Deputy Bartley. — What was the total claim for compensation in this case? —It was several thousands. The amount we lodged in Court was actually £1,057. It was short of what was awarded, but the actual claim was for many thousands.

Deputy J. Brennan.—The amount of interest would indicate that the amount claimed was big?—But that was over a particularly long period of time because it was a protracted action. It went on for ten years. It was before the High Court and the Supreme Court and ultimately, before the case was concluded, the plaintiff had become bankrupt and the Official Assignee had to be joined in the proceedings.

313. Deputy T. Lynch. — There must have been some costs?—There were two parts to the action; one for wrongful dismissal, which the agent lost, and one on the question of commission moneys due to him, which he partly won. We lodged a certain amount in Court in the belief that it would be adequate to meet any reasonable demand, but the amount finally awarded to him was a little more.

314. Deputy Bartley.—On the appointment of commission agents, I take it that the Director of Gaeltacht Services reserves the right to dispense with the services of a commission agent without reason stated?—That is so, he can be dismissed without cause assigned.

315. Deputy J. Brennan.—With regard to the note to subhead A on page 138, I take it that the technical posts in this industry should not be left unfilled for very long.

Deputy Bartley.—What services are in question?—All the services. There were 36 vacancies, of which 27 related to technical posts.

Deputy J. Brennan.—I am thinking of the losses through the absence of technical people for any length of time.

Deputy Bartley.—Are these connected with the tweed industry?—Tweed, knitwear and toys.

Have the vacancies anything to do with housing? — Only one or two relate to housing inspectors.

Or marine products? — No. We are aware of the need for filling technical posts quickly but do not find it easy to get the necessary technical assistants. On the knitwear side we have been without a production manager for two and a half years, despite four attempts to recruit— even going outside the country.

316. Deputy J. Brennan.—I appreciate that it might be better to have none rather than have an unsuitable one?— We had foreign people living in Tourmakeady but they abandoned it.

Deputy J. Brennan. — We have an English manager in Kilcar—which is not without its protest from certain Gaelic organisations at times.

Deputy Bartley. — You could get an Englishman with as good a knowledge of Irish as an Irishman.

Deputy J. Brennan.—I am quite satisfied that he is a good man.

317. Chairman. — With regard to the note on subhead B, to what places were journeys made to develop foreign markets? — There was one visit to the U.S.A., two to Germany and a few to England. The cost was £1,374. As well as that we have a stand at the Frankfurt Fair in Germany.

318. Deputy J. Brennan. — These contacts are necessary. Private producers have to do it, too. Have we permanent agents in other countries?—Yes, resident agents.

That should obviate a lot of the necessity for sending across?—In point of fact, the agents come to visit us here but the number of visits we make is pretty small, though particularly the American businessmen like to see someone and have a personal contact from the organisation itself.

I take it the organisation of Coras Tráchtála Teo. is helpful in developing markets?—Yes.

Deputy T. Lynch.—It is imperative that you send out your own men?—It is desirable. They like to see faces at least once a year.

Deputy A. Barry.—Anyway, the amount is small.

319. Deputy J. Brennan.—On Subhead D.4, there is a note?—Rural electrification was responsible there.

Are we using the Mona Jet System much for heating purposes?—We are examining the position with a view to installing it.

Chairman.—Do you expect to find it economical?—Yes, from our investigations so far.

What was the system?—I think it was oil.

320. With regard to the note on subhead D.5, concerning goods sent by air to meet customers’ demands for early delivery, is an addition made to the selling price in such circumstances?—No, the cost is borne by the vote. We would have fallen down on meeting a delivery date or be so close to it that we would be forced to send the goods by air.

Deputy J. Brennan.—The prices may have been quoted already?—Yes and a delivery date would have been quoted to which we would have to keep.

321. Deputy J. Brennan.—On the note to subhead D.6, Advertising and Publicity, I wonder if it is a wise step to curtail advertising even when the product is going well.

Deputy A. Barry.—It is not normal commercial practice.

Deputy Sheldon.—It is a question of policy?—I entirely accept the Deputy’s view there but at the same time we cannot and do not want to advertise beyond our own production capacity. The sales that year were very good. Tweed sales in 1952/53 were £110,000 and in 1953/54 they went up to £171,000, of which £108,000 was exported.

322. Deputy J. Brennan.—Would it be relevant to ask if this is being maintained at present?—It is.

There is no sign of a falling off?—No.

I thought there was a little slackness in the industry at home?—In 1952/53 the tweed sales were £110,000; in 1953/54, £171,000; in 1954/55, £238,000. There was a peak last year in the home market for tweed.

Deputy A. Barry.—Due to fashion trends?—Yes.

323. Chairman.—Are the services of the Stationery Office availed of for advertising in all cases?—No. Ours is commercial advertising. We need promotional displays and we have a firm of advertising consultants who do our work. It is really a business concern and we do not use the Stationery Office. Lay-out and promotion mean a lot.

Deputy Bartley.—The reduction is in home advertising?—Yes.

324. Deputy O’Hara.—I understand that for some years some stuff was almost unsaleable. To what do you attribute the boom?

Deputy A. Barry.—It is very fashionable now.

Deputy J. Brennan.—Good tweed was never unsaleable.

Deputy T. Lynch.—Quality caused a lot to be left on hands.

Deputy J. Brennan.—People are confused about the difference between Donegal homespun and Donegal tweed. You cannot sell homespun. At one time it was the only thing you could get. It is completely different from tweed. Homespun has gone completely?—That misconception is very hard to cure.

325. Deputy T. Lynch.—Was there English tweed selling as Donegal tweed? —We brand each piece “Made in Donegal.”

Deputy J. Brennan.—Someone who got “Donegal Tweed” said it was made in Huddersfield.

Deputy Bartley.—Is there not a product selling in London, with two “e’s” in it.

Deputy J. Brennan.—I had complaints, I remember. They were advertising “Donegal type tweed.”

Deputy Bartley.—As far as I know, the word “type” was left out of this particular trade description?—Maybe it was two “l’s” for Donegall Street in Belfast.

Deputy Bartley.—Two “e’s”, I was told.

326.Mr. O’Brien.—Deputy O’Hara mentioned knitwear. The actual sales were: 1951/52, £84,000; 1952/53, £148,000; 1953/54, £125,000 and 1954/55, £130,000.

Deputy A. Barry.—How would this relate to volume?—It is a step-up in volume, as well as price.

327. Chairman.—On the Appropriations-in-Aid, what are the trading results for this year, 1953/54, in respect of rural industries and marine products?—They show a trading loss of £124,000.

328. Deputy Bartley.—The sea rods, I take it, is the larger of the two; it is bigger than the carrigeen?—Yes, sea rods were much bigger than carrigeen.

Is there any prospect that the full processing of these sea rods will be undertaken here at home in Ireland. I understand we process them partly at the present time and export these partially processed sea rods to a firm in Scotland. Is that so?—That is so.

Is there any likelihood that in the near future we will be able to go ahead and take on some extra processes in this particular industry?—My information on that is that we do merely the grinding and converting into meal. The final process of extraction of alginates is done by Alginate Industries Ltd. That firm have a trade secret which they will not disclose. I believe we have no hope of carrying it out ourselves.

Deputy A. Barry.—Is it done here?— An English firm have the secret and will not divulge it.

329. Deputy Bartley.—What are the commodities into which this raw material is finally manufactured?—They include many medicinal products and jell substances. One thing I do happen to know is that the smoothing effect on ice cream is produced from these alginates. They are mixed in several medicines and have a variety of commercial and industrial uses.

330. That is a satisfactory explanation as far as it goes but have we referred this problem to our own industrial research institution in this country?—I am not aware that we have in the sense that that operation is not under the Department proper; the operations at the factory at Kilkerrin in connection with the sea rod industry are directly managed in their industrial sense by an Irish company which is in association with an English company and is known as Alginate Industries (Ireland), Ltd. As to what precisely they do or intend to do I have no information.

Is the State not the owner of Alginate Industries in Ireland?—The Minister did hold 51 per cent. of the shares.

331. What was the effect of the last Act that was passed? Was it not to acquire a still larger share of these industries?— It was to enlarge the capital.

In the enlargement of the capital, the money was provided by the State. Did we in fact allocate a share of that to the Scottish owners?—No. They were interested only in one particular item, the alginate side. We were enlarging the capital of the company to look after carrageen. The Irish company were interested in that but the English company were not.

332. Seeing that the State is the larger owner, I think it ought to take all practicable steps to ensure that we will find out as much about the processing of this raw material as possible so that eventually we will be able to manufacture the final commodities as is being done abroad now. I take it that it is for purposes of this sort that our industrial research institution was established and I do think that the matter ought to be referred to them if that has not already been done?—I will certainly take that matter up and advise the manager of the company to do so.

Deputy O’Hara.—It seems to be in the best interests of the industry to find out this secret.

Deputy Sheldon.—It might and it might have the opposite effect, ruin the entire industry.

Deputy Bartley.—I do not see what detrimental effect research by the institution could have on the activities at Kilkerrin. I take it that it would be done quite independently of what is being done in Kilkerrin. After all, it is their job to find out industrial secrets.

333. Deputy J. Brennan.—A point I want to make is that an overall loss in trading amounting to £124,000 in respect of rural industries at a time when rural industries are flourishing is difficult to understand?—It is very difficult to understand, I agree.

Private concerns are paying excess profits tax on the same industries?— Taking the industries as a whole they are run really as a social service and as well as that they are isolated and scattered industries. Take knitwear: there are twenty-seven separate centres scattered in four different counties with twenty-six manageresses. Would any orthodox business-man run industries of that kind? He would centralise the lot under one roof and lop off the unprofitable units. The State, running them as a social service, cannot very well do that, because the interests we are catering for are not altogether business interests but the welfare of the people in the Gaeltacht: to keep them at home and in the places in which they have always lived, and preserve the Irish language which they speak. An overall loss in a situation like that is very difficult to avoid. We cannot keep the industries only where they will be most profitable any more than, say, the Post Office can keep its rural offices only where the postal service would be remunerative. That such areas have competitive disadvantages is a principle accepted in the Undeveloped Areas Act. Kilcar is 204 miles from Dublin, Crolly 230 miles and Elly Bay over 200 miles.

334. Deputy Bartley.—That is borne out by the circumstances surrounding the establishment of similar industries by private enterprise. They applied for a loan through the Department of Industry and Commerce. When they were asked to base this industry, which was essentially an industry suitable to the Gaeltacht, in one of those areas, they refused to do so for the reasons set out now by the accounting officer. They applied ordinary commercial tenets to their reasoning and simply would not go there. The State is doing this and if there is a loss arising out of it I think we ourselves wish that a loss should be risked so that these industries will be placed where we want them. I do not think anyone ought to cavil at a loss if we are satisfied that the administrators of the industries are doing the best they possibly can?—I did not like the question of losses to go without some comment. It strikes me as an individual that it is a case of private neglect becoming the public project not so much because of the industries engaged in but because of the places in which they are engaged.

Deputy T. Lynch.—The main thing is that the profit motive is not the only one.

335. Deputy J. Brennan.—There is another aspect which strikes any person intimate with the conditions of the working of these industries. Private enterprise frequently find themselves in very keen competition with the State sponsored industries and one of the principal grievances is that they have to compete against an industry subsidised by the taxpayers’ money. We have various firms in the industry in Donegal in private enterprise and their feeling is that Gaeltarra Eireann is one of their greatest competitors and very often in their prices on the foreign market.

Deputy Bartley.—There is an answer to that. Private enterprise has been aided by the State for the purpose of making private profit on working that material but they would not work in the places where the national interest requires that they should; still they have got aid out of the public purse for their own private enterprise to make a private profit.

336. Chairman.—With regard to item No. 4 in the notes at the end of the Vote, the amount of bad debts noted as written off as irrecoverable appears to be high? —There is a sum of £2,358 written off. One single item of that is £2,327 and it is for one particular account. Goods were delivered about 1947 to an English firm about whom we had a satisfactory report from the bank but the firm went bankrupt in 1949. We happened to be among the unsecured creditors who got nothing on the composition. That one item accounts for 99 per cent of the bad debt.

The witness withdrew.

The Committee adjourned.