Committee Reports > List of Committees > Dáil > 1959 > Committee of Public Accounts > Report - Appropriation Accounts 1957 - 1958

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 9 Aibreán, 1959.

Thursday, 9th April, 1959.

The Committee sat at 11 a.m.

DEPUTY DILLON in the chair

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Mr. C. J. Byrnes, Mr. P. S. MacGuill, Mr. J. F. Maclnerney and Mr. L. V. O’Neill (An Roinn Airgeadais) called and examined.

VOTE 50—INDUSTRY AND COMMERCE

Mr. J. C. B. MacCarthy called and examined.

416. Chairman.—We are dealing first today with the Vote for Industry and Commerce. There are some comments by the Comptroller and Auditor General. Paragraph 59 of his report reads:—

“Subhead J.1.—Food Subsidies

59. The expenditure charged to this subhead is as follows:—

Is there any comment you wish to add, Mr. O Cadhla?

Mr. Ó Cadhla.—I think, Mr. Chairman, you might take paragraph 59, which you have read, and paragraphs 60 and 61 together.

Chairman.—Paragraphs 60 and 61 read as follows:—

“60. The amount paid in respect of flour subsidy comprised:—

61. Payments were made by Grain Importers (Éire) Ltd., to the millers to ensure to the industry as a whole remuneration equivalent to 4s. 6d. per sack of flour produced, after charging all admissible expenses. Following the removal of control on the price of flour as from 13 May 1957, the payment of subsidy was discontinued. The sum of £1,446,677, which is subject to adjustment following examination by the Department of the millers’ accounts, represents the difference between the average cost of production of flour, together with the permitted profit of 4s. 6d. per sack, and the controlled selling price in force during the period to 11 May 1957. The millers’ accounts for cereal years up to and including 1951-52 have been examined and I understand that examination of the accounts for the remainder of the subsidy period will be completed shortly.”

Mr. Ó Cadhla.—The payments to Grain Importers Ltd. were provisional pending examination of the millers’ accounts by the Department. The flour subsidy ceased from 11th May, 1957, and I understand that the examination of the millers’ accounts to that date has now been completed.

417. Chairman.—The Committee has received a minute, dated 5th March, 1959, from the Department of Finance, stating:—

“I am directed by the Minister for Finance to refer to his minute of 2nd May, 1958, on Paragraph 15 of the Report of the Committee of Public Accounts, 1955-56, regarding the adjustment of subsidy payments on the termination of the flour and wheaten-meal subsidy, and to say that he desires to inform the Committee that the examination of the millers’ accounts by officers of the Department of Industry and Commerce has now been completed. The Department has informed the Minister for Finance that the amount due by the flour millers was finally agreed at £186,152 3s. 7d. and that a cheque for that amount has been received from the Irish Flour Millers’ Association.”

May we take it that that concludes the subsidy arrangement finally in respect of flour?—Yes.

Deputy Sheldon.—In other words, the last sentence in paragraph 61 is a satisfactory answer and the whole thing has now been wound up?—Everything has been concluded, and the sum mentioned was the net amount remaining to be refunded to the Minister. That sum has been refunded.

Chairman.—That will come to credit of the accounts in this year?—In the year just ended.

418. Deputy Sheldon.—Was there any element of interest in the sum?—No, there is no element of interest. In fact, we had the converse type of claim from the millers—that they should be allowed interest in respect of certain periods, and we resisted that rather vigorously; in all conscience, then, we could not charge interest.

419. Chairman.—Paragraph 62 of the Report of the Comptroller and Auditor General reads as follows:—

“62. The payment of £1,976 was in recoupment of rebates allowed up to 11 May 1957 to exporters of confectionery and biscuits in accordance with the arrangements referred to in paragraph 70 of the report for the year 1955-56.”

Mr. Ó Cadhla.—The rebate represents the difference between the price paid by exporters of confectionery made with unsubsidised flour and the price at which comparable flour was available to the manufacturers in England. The rebate was paid on all confectionery and biscuits exported, no matter to what market.

420. Chairman.—Are there any further claims outstanding under that arrangement?—I do not think so—not so far as I know.

That business is concluded too?—It should be regarded as final.

421. Chairman.—In paragraph 63 of his Report, the Comptroller and Auditor General comments:—

“63. Bakery wages were increased as from 12 September 1955 in accordance with the terms of a Labour Court award and relief for the extra cost of production which resulted was allowed to master bakers but with effect only from 30 July 1956. It was later decided that the bakers should also be recompensed in respect of the extra expenditure in the period from 12 September 1955 to 30 July 1956. The recoupment took the form of payments at the rate of 3s. 2d. per sack of bakers flour used in the period in the production for sale of price-controlled bread. The claims under this arrangement were paid in the year under review and amounted to £183,238.”

May we take it that that payment means that finality has been reached in this matter?—That payment has been made and that concludes that matter.

422. Chairman.—Paragraph 64 of the Report reads:—

“64. The subsidy on wheaten meal, which was paid to millers to recoup them the difference between the average cost of production together with a profit of 2s. 6d. per sack and the controlled selling price, was also discontinued after 11 May 1957 following the removal of price control. The sum of £107,357 charged to this subhead comprises final payments of £3,909, £38,895 and £64,553 in respect of the cereal years 1954-55, 1955-56 and the period to 11 May 1957, respectively.”

Mr. Ó Cadhla.—The subsidy on wheaten meal also ceased as from 11th May, 1957.

Mr. MacCarthy.—We did not have the same problems there as in the case of flour and that business has completely finished now.

423. Deputy Booth.—I was just wondering how it was there were these arrears in respect of the final payments for 1954-1955 and 1955-1956?—It is the same old story. We never could determine the exact amount until we had accounts for the year concerned. These were rather slow in coming in. We had then to examine them and raise queries, and there was always this backlog. To that extent, it resembled the flour subsidy, but we did not have the same problems of individual items in dispute which delayed settlement in the case of the flour millers.

Is that finished now?—It is all finished now.

424. Chairman.—Paragraph 65 reads:—

“65. Deliveries of flour by millers at the subsidised price in the six-weeks period immediately prior to the date of cessation of subsidy, 11 May 1957, were substantially in excess of those in the corresponding period in 1956. It is estimated that the amount of subsidy involved in the increased deliveries was approximately £220,000 of which about £132,000 was attributable to bakers flour and £88,000 to shop flour.

I understand that when the rise in sales of flour came to the notice of the Department in mid-April 1957 the flour millers were immediately directed to restrict future deliveries in such a way that the total deliveries of flour by the mills in the six-weeks period ending 11 May 1957 would not exceed deliveries made in the six weeks ended 12 May 1956. Because of the extent of the deliveries made by millers before the receipt of the Minister’s direction, and in view of their outstanding commitments to customers for normal supplies, the millers were unable to comply fully with this direction; but the level of deliveries in the second half of the six-weeks period was held substantially below the level to which deliveries had risen in the first half. Consideration was given by the Department to the question whether the subsidy involved in the increased deliveries should be recovered, but it was decided that this would be neither practicable nor equitable.”

Does anything arise on that paragraph?

Mr. Ó Cadhla.—Deliveries of flour by the millers at the subsidised price in the six-week period prior to the date of cessation of the subsidy on 11th May, 1957, were substantially in excess of those in the corresponding period in 1956. In mid-April, 1957, instructions were issued by the Department to restrict deliveries to the 1956 figures, but the millers found it impossible to comply fully with these instructions. It was estimated that the amount of subsidy involved in the excess deliveries amounted to £220,000 approximately and it was decided that it was not practicable to recover this amount.

425. Chairman.—Have you any comment you would care to make on that, Mr. MacCarthy?—The only thing I should like to say is that, while, not in any way reflecting on the Comptroller and Auditor General’s note, the wording of it does possibly, if one were not familiar with all the details, suggest rather that the Department made some blunder or some mistake and authorised excess issues. That really was not the case. On the contrary, this matter would not have come to light at all if we had not been so vigilant. We did not have any control over the distribution of flour from 1952 when rationing was abolished. The only control we had on production was the control given under the Cereals Acts. As you know, under those Acts, the control is exercised for the purpose of ensuring that the millers mill to their quota within a certain tolerance. If they over-mill, they become liable to penalties which are prescribed in the Acts; if they under-mill, they are liable to prosecution. For the purposes of that control, and also as a legacy of the war years, we had been getting monthly returns from the Flour Millers’ Association of the total deliveries of flour. When we got these returns in the early part of April we noticed that the deliveries seemed to be high and, as is not unusual, we asked the reason for this. We quite commonly ask that question. The millers were not able to give any very convincing reason, but some of them did suggest there was possibly a bit of forestalling going on because there had been rumours that something might be done about subsidies in the coming Budget. We pointed out to the millers that this was something we would have to try to stop and, on the Minister’s instructions, we issued what we called a direction to them. In fact, we had no power to give a direction, and the piece of paper was not worth anything. They immediately came back and said: “This is impossible.” The direction was that they should restrict deliveries to the corresponding quantities which had been delivered in the previous year and in the same period. They said this was impossible because they had not been rationing out their customers on any fixed basis. They would already have supplied some of their customers with their full requirements and others with nothing, or only part of their requirements, and no one miller knew with what other millers a particular customer was dealing. We told them they would have to do something about it and that, if issues kept on at this high rate, we would not undertake to pay the subsidy. We felt we at least had a power to limit the subsidy to what we considered to be reasonable quantities. They argued about that. Then the Budget came along and, when we went into the thing finally, we found that, compared with the corresponding period in the previous year, the quantity of flour issued at the subsidised price involved a difference in subsidy of £220,000. We wondered if there was any way in which we could get that back. We could not get it back from the millers because the millers had issued the flour at the subsidised price and, therefore, had not made any profit so far as we could establish. The flour had been distributed to bakers and flour merchants. I forget the exact proportions, but it was not very different from 50/50. So far as the bakers were concerned, they had to keep on selling the bread at the controlled price and the controlled price was retained in operation for some period after the ending of the subsidy so that any excess profits that might otherwise have accrued to the bakers should have been taken care of by the retention of the controlled price. In the case of the flour merchants, there just was not any way in which we could get after them, and we decided we had to throw our hats at it. That was the story. It was really forestalling. Looking back on earlier years, we found that, in these earlier years too, coming up to the Budget, there always was rather an excessive buying of flour, but nothing on this scale.

426. In fact the situation here was closely analogous to the withdrawal of spirits and tobacco from bond, to meet which the Minister for Finance furnished himself with special powers some years ago under which, about a month before the Budget date, he could control, by statutory order, the issues of tobacco and spirits from bond, if he cared to do so? —It was exactly the same situation.

But in this instance the Minister for Industry and Commerce had no such power and, in the absence of an emergency, there was no means of taking powers quickly?—That is so.

427. Deputy Booth.—It does appear rather misleading to say the flour millers were immediately directed to restrict future deliveries in view of the fact that, as Mr. MacCarthy says, the Minister had no power to so direct. I do not know whether it is wise to pass over that without underlining the fact that the Minister and the Department were in fact powerless. Would it be more correct to say that the flour millers were requested. When we link that reference to a direction with the suggestion that the subsidy might have been recovered were it not for the fact that it was not practicable, it puts, I think, the Department in rather a bad light. From what Mr. MacCarthy says it does appear as if they could not have done anything. The only thing I am not quite sure about is whether there was statutory power to withhold, or recover, the subsidy had it been practicable to do so.

Chairman.—I think Mr. MacCarthy has, with great discretion, said substantially what Deputy Booth has just said now. Carefully prefacing his remarks with the comment “Without casting any reflection whatever on the Comptroller and Auditor General’s note” he ventured to suggest that the word “direction” was not correct in view of the fact that there was no statutory power. Nevertheless, a direction was issued, a direction which he knew was ineffective, but interpreted by the millers as a very strong request. He backed up that request, shaking his gory locks at the millers and saying: “Perhaps I will not pay you the subsidy.”?—That is so.

428. Deputy Booth.—In actual fact, would he have power to withhold the subsidy?

Chairman.—They examined the position very carefully and came to the conclusion that perhaps it was better not to go the limit in that.

Mr. MacCarthy.—It was not so much a case of withholding a subsidy because the flour had actually been issued at reduced prices by the flour millers. If we withheld the subsidy from the flour millers we would really be withholding it from somebody who had not made a profit. After consulting the Attorney General it was quite clear that the only possible way of getting it back would be to proceed against individual bakers and flour merchants who had got delivery of the flour in quantities higher than normal. The advice from the Attorney General was that you could take civil proceedings but it would obviously be a monstrous and impossible task to establish that a particular baker did not want all that flour. We would have to go into his accounts and deliveries over the period and even then it was doubtful if the Courts would recognise that any debt was due from the bakers to the Minister.

429. Deputy Cunningham.—Was there a time lag between the time the direction was issued and the Budget announcement? What period elapsed?—There were really two. The first letter said the Minister had directed the officer who signed the letter to ask the flour millers to instruct their members to restrict deliveries. A reply came back saying that that would be impossible and on the 29th April, approximately a fortnight before the Budget date they got another letter to the effect that in view of their observations in reply to the first letter the Minister had agreed to modify the direction sent from his office, and saying that it should be read as restricting deliveries of subsidised flour for the six weeks before 11th May, 1957. There was an interval of two weeks.

430. Deputy Sheldon.—There is one point on which I am not clear. Had the Minister not power, in fact, under the Cereals Act to threaten—if you put it that way—to impose fines for over-milling?—He did not have to threaten. In fact, only two millers were found to have over-milled in that year and these were fined. The thing righted itself in that way because following the abolition of the subsidy there was a drop in the consumption of bread and therefore production of flour over the year did not except in these two cases exceed the quota.

But I understood that the Cereals Act had the effect that in respect of named periods there could be over-milling?— That is the year, the cereals year which ends in August.

Under the Act the year cannot be broken up into particular parts?—No. I should also perhaps have mentioned that the mills which showed the most obvious increases in sales and deliveries were the small mills which had habitually been below the quota. That again was a problem because we could not reasonably castigate them for keeping their production up to what they were supposed to keep it up to. I suggest that the Minister would have been in an awkward position if he had taken up a stricter line before the Budget.

Deputy Cunningham.—The issue of a direction was probably the same in effect. The Minister had the precedent of the action of the Minister for Finance, as the Chairman had said.

431. Deputy Brennan.—Is the Department quite satisfied that the amount of flour to which this subsidy applies was in fact actually delivered?—Yes. Unless all the auditors and people like that were in a sort of a swindle, we are satisfied. After all the same problem could be said to arise ordinarily on the payment of the subsidy. We might get a claim for subsidy and say: “How do we know that this is properly payable?” We had to proceed on the auditors’ certificates.

432. Chairman.—Have you any further observations to make, Mr. Ó Cadhla on paragraph 65?

Mr. Ó Cadhla.—No. My attention had not been drawn to the words which Mr. MacCarthy suggested were liable to misinterpretation as implying that there was something definitely wrong.

Mr. MacCarthy.—I do not suggest that there was anything wrong with the paragraph but I do not want somebody reading it to get the impression that we had blundered to the tune of £220,000.

Chairman.—I think it is very desirable —I am sure you all agree—that where the possibility of such an eventuality occurs that the Comptroller and Auditor General should bring it before this Committee so that it can be fully investigated, examined and clarified.

433. Chairman.—We will now pass to paragraph 66 of the Report of the Comptroller and Auditor General which states:—

“Subhead J.3.—Losses on Sale of Wheat

66. It was arranged that a quantity of native wheat of the 1956 and 1957 harvests which was surplus to requirements should be disposed of through Grain Importers (Éire), Ltd., as animal feed, etc., and provision was made under this subhead to meet the losses involved.

The sum of £641,322 paid to the company is made up as follows:—

Have you any comments Mr. Ó Cadhla?

Mr. Ó Cadhla.—The proportions of native and imported wheat used in the production of flour are agreed between the Department and the millers. The produce of the 1956-57 wheat harvest was more than could be used by the millers and it was proposed to dispose of the surplus through Grain Importers (Éire) Limited. The payments here referred to were mainly on account and the balance of the losses were borne on the Vote for Agriculture, 1958-59.

434. Chairman.—Mr. MacCarthy, in regard to the loss on 18,893 tons of wheat sold for animal feed was this millable wheat?—I think it was not millable. This matter was almost entirely dealt with by the Department of Agriculture. We kept it on our Vote purely for convenience because we had the remnant of the subsidy but, from that year onwards, it has been taken care of on the Agriculture Vote and all arrangements for fixing prices and so forth were settled by the Department of Agriculture. This was wheat which was definitely surplus to the millers requirements for the manufacture of flour and, yes, it was millable, I understand.

Does the payment on account on the anticipated losses on 33,407 tons come within the same category?—Yes, that is the same.

In fact this was the sale of millable wheat primarily designed to clear storage capacity?—Exactly.

435. Deputy Lynch.—Was that exported?—There was some exported and some was carried forward to 1958-59, the storage charges (to such extent as it might be decided by the Government) being defrayed by the Exchequer. Some was sold as animal feed and the loss defrayed by the Exchequer and the balance was to be sold to millers for admixture. In fact no wheat was exported in the financial year 1957-58.

Chairman.—But was some of it subsequently exported, do you know?— Yes.

436. Am I right in saying that if this wheat had been retained, with the failure of the subsequent year’s crop it might have got into consumption as millable wheat?—I do not know. I suggest that is possibly a question that you might ask the Accounting Officer for the Department of Agriculture because, from the 1st April, 1958, my responsibility in the matter ceased.

437. Deputy Lynch.—What amount of the wheat was exported out of the 33,000 tons?—I am afraid I cannot answer that because, as I say, from the 1st April, 1958, I have no knowledge of it. Export control is, in fact, administered by the Department of Agriculture and I would not have any figures on that.

Chairman.—I think, in the light of what Mr. MacCarthy has said, we might reasonably ask Mr. Nagle to see us again to discuss this paragraph with us, in view of the fact that there is this division of responsibility and that, at a certain date, Mr. MacCarthy’s responsibility ended and that responsibility moved over to the Department of Agriculture.

Mr. MacCarthy.—I think that would be much better, if I may say so. Mr. Nagle would know the answers.

438. Deputy Sheldon.—May I go back to a point on paragraph 65? I understood Mr. MacCarthy to say that two millers were, in fact, fined under the Cereals Act. Where is this brought to account?—It is brought to account in 1958-59.

439. Chairman.—Paragraph 67 of the Report of the Comptroller and Auditor General states:—

“Subhead K.—Fuel Subsidy

67. Reference was made in paragraph 55 of my previous report to the payment to Fuel Importers (Éire), Limited, of £250,000 on account of losses totalling £311,948 outstanding at 31 December 1956. The balance of £61,948 was paid in the year under review. A deficit of £51,810 incurred in the year 1957 was also made good to the company from this subhead. The accounts of the company to 31 December 1957 disclose that a balance of approximately 90,000 tons of coal which cost about £800,000 remained unsold.”

Have you any comment to make on that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The accounts of the Company, to the 31st December, 1957, disclosed that a balance of 90,000 tons of coal which cost about £800,000, remained unsold. I am informed that arrangements have now been made to dispose of this remaining stock.

440. Chairman.—Is it disposed of, Mr. MacCarthy?—The answer is yes, and no. We have, in fact, disposed of the stock shown but in the course of clearance it was found that there were approximately 5,000 tons more than expected. That would be due, I think, to shipments having been rather larger than listed. All that remained in the dump on the 6th April, was 1,200 tons so that you may say it has been disposed of.

Has the account been closed?—No. We must clear that amount before we can close the account.

441. I see from an advertisement in the papers, the terms of which I would like you to confirm, that somebody is to be made liable for the restoration of the surface of the park?—That is so.

442. Chairman.—Paragraph 68 of the Report of the Comptroller and Auditor General states:—

“Subhead L.3.—Losses

68. Reference was made in paragraph 57 of my previous report to the liability of Mianraí, Teoranta, for advances and for interest thereon. The net amount due by the company at 30 September 1957 was £196,320 made up as follows:—

The company was unable to discharge this liability and it was written off by supplementary estimate.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The activities of Mianraí Teoranta have ceased and, in this paragraph, we have detailed the losses as finally assessed. They have been covered by supplementary estimate, and the amount brought to credit as appropriations in aid.

443. Chairman.—Has Mianrai Teoranta ceased to exist, Mr. MacCarthy?—It has ceased to function but it has not been formally wound up. It is one of these dormant companies now but although it is maintained in existence we do not pay directors’ fees. They have ceased to function but the Minister’s feeling was that possibly, at some stage, we might want to do some work that the Geological Survey could not do conveniently and that it might be desirable to resurrect the company for such a purpose.

Apart from that is it wound up?—Yes, apart from that.

444. Chairman.—Paragraph 69 of the Report of the Comptroller and Auditor General states:—

“Operations of Bord na Móna Subhead M.—Experiment and Research (Grant-in-Aid)

69. 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 the expenses incurred by Bord na Móna on experimental and research work, subject to a limitation of £250,000. The issues under this head amounted at 31 March 1958 to £234,800 including the sum of £5,000 paid to the Board in the year of account. I understand that in future the Board will finance this work from its own resources.”

Have you any comment, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The Board has undertaken that in future they will bear the cost of experimental and research work.

445. Chairman.—Are we to take it then, Mr. MacCarthy, that there will be no further issue?—The present indications are that Bord na Móna will not request any further issue. I cannot say that the situation might not change in the future. They have been operating profitably and now feel competent to look after this thing themselves.

There is still an outstanding authorisation for £16,000?—That is so.

446. Chairman.—Paragraph 70 of the Report of the Comptroller and Auditor General states:-

“Subhead X.—Appropriations in Aid

70. The amounts allocated and the recoupments from the American Grant Counterpart Special Account of expenditure incurred up to 31 March 1958 on agreed projects sponsored by the Department of Industry and Commerce are shown in the following statement:—

Mr. Ó Cadhla.—That paragraph is merely informative.

447. Chairman.—Can you tell us, Mr. MacCarthy, when it speaks of Appropriations in Aid received from the amounts allocated and recoupments from the American Grant Counterpart Special Account, what is the American Grant Counterpart Special Account?—That is something I would prefer somebody from the Department of Finance to answer. We merely send in the bills; they pay.

Chairman.—Perhaps somebody from the Department of Finance could help us in that matter?

Mr. O’Neill.—They are the monies kept in a special account in the Central Bank which amounted to £6 million held initially and which were, by agreement with the Americans, allocated for various purposes according as expenditure on these purposes was incurred. The amounts were found from the Counterpart Special Account, channelled through the Vote by way of Appropriations in Aid to recoup the expenditure on those purposes from the debit subheads in the Vote. In the particular instances, of the Agricultural Institute and the Scholarship Exchange Fund, it did not pass through the Vote. Provision was made in the relevant Acts to issue directly out of the Counterpart Fund.

448. Chairman.—These monies in the Fund, are they the proceeds of the grant made by the American Government under the Marshall Plan or are they the proceeds of the sale of materials purchased with the borrowed monies?

Mr. O’Neill.—They are the Irish currency equivalent of the dollar grants made under Marshall Aid.

Chairman.—As opposed to dollar loans?

Mr. O’Neill.—Yes. The Counterpart Loan Account is quite a distinct thing from the Grant Counterpart Account.

Chairman.—Its resources are mainly used in recouping the actual repayments of the loan to the United States Government?

Mr. O’Neill.—The proceeds of the Loan Counterpart Special Account have been used up quite some years ago, largely for general Exchequer purposes.

Chairman.—By borrowing?

Mr. O’Neill.—Yes. This borrowing now has to be serviced in the ordinary way as part of the national debt. The grant monies are the Irish currency equivalent of the dollar grants under the Marshall Aid, which do not have to be serviced and are drawn on as required, except in the cases of the Agricultural Institute and the Scholarship Exchange Fund, which were direct grants from the account.

449. Chairman. — Thank you, Mr. O’Neill. We now turn to the Vote itself. On subhead L.1., could you tell me, Mr. MacCarthy, where a firm is given a licence by the Minister for Industry and Commerce, under the terms of which they enter upon a man’s land to prospect, what procedure is available to the person who owns the land to recover from the firm, who have entered his land under licence from the Minister, the damage they may have done in the course of prospecting?

Mr. MacCarthy.—Under the Act he has a statutory entitlement, provided he establishes the damage. We serve notice on every surface occupier before we issue a prospecting licence. Any occupier has a right to object. If he does not object the prospecting licence is issued. The prospecting licence carries with it an obligation to restore any land entered in that way to the condition in which it was at the time a person entered it. That is something which is enforceable in law by any surface occupier who does not receive proper treatment from the licence holder. Of course, we would also regard it as a condition—it might not help the occupier very much—but the license would be invalidated if he refused to comply with that condition.

The surface occupier’s remedy is to institute civil proceedings in the courts? —Yes.

And base these proceedings on the Statute?—Yes.

450. There is a Mining Board?—Yes. That is concerned almost exclusively with the question of compensation for the actual rights. It does not deal with surface damage. When it is a question of the ownership of the minerals underneath the ground, the Board comes into the picture. If the Minister and the owners of the mineral rights do not agree on a compensation figure, then either side may ask to have the matter referred to the Mining Board which acts as arbitrator. It is not a procedure used to any great extent, because normally, where the Minister enters into agreement with the owner, it is usually for a cash payment. All the Mining Board can do is award a royalty. As the royalty is only paid on actual production, the owner of the rights might never see any money. But if they agree voluntarily with the Minister, they may in some cases get a cash payment.

451. Without asking you to express any opinion, has it occurred to you that if a licence is issued in good faith by the Minister to a man who actually proves to be a man of straw, and under that licence he can go in and perpetrate a good deal of damage and then withdraw and announce he has nothing, has the injured proprietor of the surface rights any fund to which he may have recourse for compensation?—No, there is no fund. I would agree that what you suggest could possibly happen. It should not ordinarily happen because the two things to which we must have regard before we give a prospecting licence are (a) the financial resources of the applicant and (b) his technical competence or the technical competence of those he is employing for the purpose. It is true that at the time of making the application he might have funds which might not exist in a year’s time, and therefore he might not be able to pay. But we have not had many complaints. In our history book we have, in fact, only one; and in that case there is some reason to think that the owner sought to have the place improved rather than put back in its original condition.

452. I appreciate that policy is not relevant to our proceedings but I just wanted to clear my mind. If a property owner is confronted with a licence from the Minister he must under penalty admit the licence holder?—Yes.

If the licence holder then proceeds to cause damage, which under the terms of his licence he is entitled to do, and it subsequently transpires he is not a good mark for an action, it seems rather a hardship that the person who is constrained by the Minister’s order to admit the man who has done damage is left without any remedy at all?—I am afraid that is the way it is at the moment. Certainly there is not any provision for any fund which might be drawn upon in such cases.

Chairman.—Then clearly further comment on that is appropriate to the Dáil.

453. Deputy Sheldon.—I thought that the point could be covered by means of a bond.

Chairman.—So did I, but I do not think we are entitled to ask Mr. MacCarthy that. Mr. MacCarthy is administering the law as we make it. If we think the law can be changed, the proper place to advocate a change is the Dáil.

Deputy Sheldon.—What I am getting at is: if there is no provision for the Minister to insist on a bond under the present Act, possibly it could be brought in as part of the requisite financial stability that is required without amending the law?—I gather we have no such right.

Chairman.—I should dearly love to ask Mr. MacCarthy if he did not think such an amendment should be made, but I shall not do so.

454. Deputy Sheldon. — On subhead O.4., I take it that the savings here and on subhead V. are reflected by corresponding figures in the Appropriations in Aid?

Mr. MacCarthy.—Yes, in note 10 on page 158, relative to the Appropriations in Aid, you will see that there was provision for a recoupment of £16,000, under this head, from the American Grant Counterpart Special Account.

Deputy Sheldon.—The actual sums were £1,748 and £3,841, but because the payments were not made under the subhead, I understand there was no grant.

Mr. MacCarthy.—I can give you the make-up of the sums referred to in the note on page 158. The sum which was actually realised is £5,589, which is made up of £1,748 in respect of expenditure on subhead O.4. for the provision of additional laboratories and the sum of £3,841 in respect of expenditure on technical assistance under subhead V.

455. Chairman.—Under subhead P.4., have these projects within the scope of this subhead proceeded since?—You mean the grant-in-aid for industrial development: these are the grants for factory extensions. What we provide here is merely for grants coming in course of payment—not the gross totals. In fact, the amounts approved by the Authority on any given item could far exceed one year’s provision.

456. Under subhead Q.2., has the Prices Advisory Body now ceased to operate?— That has ceased.

457. Under subhead U.3., is this body still functioning?—The Fair Trade Commission, yes.

458. Under subhead V., the saving here is notional, too, in the sense that some of these projects get carried over into the following financial year?—That is so. There is frequently a delay because in most instances, these projects involve the employment of industrial consultants. There is rather a limited number of these people and, although they accept commissions, they are not always able to perform them for some time ahead.

459. Chairman.—Before we end on this Vote, Mr. MacCarthy, I think we discussed with you on a previous occasion— or perhaps it was Mr. Leydon who was with us then, in the 1953-54 accounting period—the question of the Indian Sales Tax Reserve Fund of Tea Importers Limited and we had a note on it. The Department of Finance minute to us incorporated in the Report printed on the 18th June, 1957, was to the effect that the Company’s liability for Indian Sales Tax was still the subject of an outstanding appeal in the High Court of India. We were told the Committee would be informed of the result. Has that been settled?—That has been finalised. Tea Importers Limited lost the appeal but the sum awarded against them was only a small fraction of what they were holding as reserve. I think it was something like £40. No, I am wrong in my memory of that. The tax actually paid was £986. The cost of the legal proceedings was £191. In the meantime the currency had depreciated involving a loss of £12 making a total of £1,189. The total sum they had held was £3,900. Of that they surrendered to the Exchequer the sum of £405 which had been carried in connection with the subsidy of tea. They kept and used for stabilisation, £2,306 which had been picked up before the introduction of subsidy.

That matter is now closed?—Yes.

VOTE 51—TRANSPORT AND MARINE SERVICES.

Mr. J. C. B. MacCarthy further examined.

460. Chairman.—Paragraph 71 of the Report of the Comptroller and Auditor General reads:—

“Subhead A.1.—Córas Iompair Éireann

71. The charge to this subhead comprises—

A sum of £78,635 received in respect of interest up to 31 March 1958 on a repayable advance of £1,000,000 issued to the Board in 1956-57 for capital purposes was credited to appropriations in aid.”

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

Mr. Ó Cadhla.—I have nothing to add to that paragraph. The whole position was revised by the Transport Act of 1958.

461. Chairman.—Is it the position now that this arrangement has been wound up completely?—It has been changed. For a period of five years to come C.I.E. are entitled to an annual grant-in-aid under the recent Transport Act. The sum for the current year is £1,000,000 to which an additional sum of something less than £200,000 was added when the Great Northern Railway was transferred to C.I.E. Out of that £1,000,000 they must pay what was formerly voted separately —the interest on transport stocks. That figure has stood at £793,000 for a few years past, but they will not have to pay all of it because the Act provided for the taking over of responsibility by the Minister for Finance for the redemption of a proportion of the transport stock and the payment of interest on that stock. These provisions will not appear in the Industry and Commerce Vote. The transport stock remaining, which must be serviced by C.I.E., must be serviced in future out of their ordinary grant, the limit of which is fixed in the Act. If they save anything in a particular year they are entitled to carry that forward to the next year.

Deputy Booth.—Could we have any idea as to what amount C.I.E. will have to provide to service their share in the year in question?—It will involve approximately £500,000. With regard to servicing, I may perhaps have misled you there; it is merely the payment of interest. There is no provision for a sinking fund.

462. Chairman.—Paragraph 72 of the Comptroller and Auditor General Report reads:—

“Subhead A.2.—Great Northern Railway Board

72. The agreement scheduled to the Great Northern Railway Act, 1953, provided for the apportionment between the Minister for Industry and Commerce and the Minister of Commerce, Northern Ireland, of the profits and losses, and the capital requirements, of the Great Northern Railway Board. The Act authorises the Minister for Industry and Commerce to pay to the Board the amount of any loss for which he is liable; to make advances towards making good any anticipated loss for which he would be liable; and to make payments to meet capital expenses as provided in the agreement. The certified accounts of the Great Northern Railway Board for the year ended 30 September 1957 show the liability of the Minister for Industry and Commerce for that year to be £616,807, comprising £389,589 for losses and £227,218 for capital expenses. Advances made to the Board in 1956-57 amounted to £409,125.

The charge to this subhead includes payments as follows:—

A sum of £87,539 was received in respect of interest due for the accounting period ended 30 September 1957 on payments made to the Board and has been credited to appropriations in aid.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No. The Great Northern Railway has been transferred to C.I.E. and the accumulated liabilities of the Great Northern Board were discharged under the terms of the Great Northern Railway Act of 1958.

463. Chairman.—Has the Great Northern Railway Company ceased to exist now?—Yes.

The Board is wound up?—That part of the main line on the other side of the Border has been taken over by the U.T.A. and C.I.E. have the lines on this side of the Border.

All outstanding accounting questions as between C.I.E. and the Great Northern Railway Company have been closed?— Certainly. In so far as they affect the Vote here, they have.

464. Chairman.—Paragraph 73 of the Report of the Comptroller and Auditor General reads:—

“73. The hotel and golf course at Greenore were purchased by the Great Northern Railway Company in 1951 with the authority of the Minister for Industry and Commerce, to be held temporarily pending resale to the promoters of an industrial project. As this project was not proceeded with the properties were later sold. Outlay by the Great Northern Railway on the purchase, etc., of the properties (£25,660) was made good from voted moneys in 1951-52 and subsequent years. The net receipts from their disposal (£7,615) were credited to exchequer extra receipts in 1955-56 and 1957-58.”

Any observations to make on that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I might mention that the figure quoted—£25,660—as being the total amount expended includes the original cost of £17,500; loss on running the Greenore Hotel, £5,300; cost of caretaking, etc., over a considerable period, £2,000. It would not be quite fair to compare the figure of £25,660 with the figure £7,615. The comparable figure is £17,500—the original cost.

465. Chairman.—Can you give us any information on this transaction, Mr. MacCarthy?—I can give you the whole story. The golf links were attached to the hotel. Proposals were made to the Minister for Industry and Commerce by a group of promoters of an industrial undertaking to the effect that they were looking for a factory and this seemed ideal from their point of view; they had not yet carried their promotion to the point at which they had any funds, or could themselves make a bid for the property. In those circumstances the Minister authorised the Board of the G.N.R. to buy the hotel—of course the golf links went with it—and hold on with a view to resale to these people when they got their money. In fact, they never got it going. They abandoned the whole idea of the industrial enterprise. The properties remained with the Board of the G.N.R., who offered them for auction. It was impossible to get any kind of bid for the entire and the golf links were sold separately for, I think, £2,000, and the contents of the hotel for £3,250. The price of the property originally was £8,000 and there was an option fine of £850 which would apply if the option were not taken up by 31st October. We made a note of that in the Appropriation Accounts for the year 1956-1957. Efforts were then made to auction off the hotel itself. These were abortive. Eventually it was sold by private treaty for a sum of £4,000. The agreement for sale was signed in April, 1955. There were all sorts of snags involved because the actual purchaser had made an application for a trade loan guarantee and, until the legal formalities in connection with that guarantee had been completed, he was not prepared to put up anything more than the deposit he had made on the purchase. We got the transaction closed eventually and received payment. In addition to the outgoings on the original purchase price we had to pay the Great Northern Railway Board interest on the sum of £2,200 which they had paid and out of which they remained from the 12th August, 1955, up to 9th September, 1957, when the sale was completed. Expenses were also involved in the disposal of the property: auctioneers’ fees £887; legal costs £232; expenses of the Great Northern Company, mainly I think in advertising, came to about £400. The net amount surrendered to the Exchequer was £7,615. That covered two years: £3,680 in 1955-1956 and £3,935 in 1957-1958. The other losses occurred during the period after the hotel had been bought by the G.N.R. Board on the Minister’s behalf. They continued to operate it as an hotel and they did so at a loss. The amount of the loss was approximately £3,000. In addition to the operating losses, then, there were the costs of caretaking, maintenance, rates, insurance, heating and lighting, which amounted to £4,300. Adding these sums to the cost of acquisition of the premises we bring the total expenditure to £25,660. The net loss, taking everything into account, was £18,045.

466. Chairman.—Paragraph 74 of the Comptroller and Auditor General’s Report reads:—

“Subhead A.4.—Sligo, Leitrim and Northern Counties Railway Company

74. Reference was made in paragraph 77 of the report for the year 1952-53 to the payment to the Sligo, Leitrim and Northern Counties Railway Company of a grant towards operating losses and revenue charges. Similar grants were paid in subsequent years, the total amount granted to 31 March, 1958, including £10,000 in the year under review, being £39,000.

The company terminated its rail and road services on 30 September 1957, and, since it had no funds from which its employees could be compensated, provision was made by supplementary estimate to enable compensation to be paid to 91 of its redundant employees domiciled in the State who were not provided with alternative employment by Córas Iompair Éireann. Compensation at the rate of one month’s pay for each completed year of service, with a maximum of 24 months’ pay, was paid on an ex-gratia basis and amounted to £40,913 which is charged to this subhead.”

Mr. Ó Cadhla.—I have nothing further to add to the information contained in that paragraph.

Chairman.—May we take it that this disposes finally of the impact of the Sligo, Leitrim and Northern Counties Railway on the Vote?—Yes.

467. We can turn now, since there are no further questions on these notes, to the Vote itself. Subhead A. we have already discussed on paragraph 71; subhead A.2. on paragraphs 72 and 73 and subhead A.4. on paragraph 74.

Deputy Lynch.—On subhead B., how does the Department arrive at the amount of grant to be given?—There is no immediate answer to that. It depends entirely on the merits of each case, on the financial ability of the party concerned to contribute towards the cost and the importance of the works from a national point of view, and so forth. In practice, we have an interdepartmental committee and, when applications are received, if superficially it seems to the Minister that there is some kind of case for a grant, he refers them to the interdepartmental committee. That committee carries out a very thorough examination of the whole thing. They recommend against giving a grant or they recommend in favour of a grant. Where they recommend in favour of a grant, they suggest the amount. From that moment on, it is of course a matter for the Minister and the Government as to whether or not they accept that recommendation. If it is accepted, the Government determine the amount of the grant and we go ahead and make provision accordingly.

468. Chairman.—On subhead K., what is this protective equipment for Irish ships?—This is the degaussing equipment for dealing with magnetic mines. This question arose earlier but we were waiting to see what the British would do. The British carried out measurements on ships and so on and sent in the specifications for the equipment. The next step is to buy the equipment—if we are going to buy it. We asked the British did they intend to buy it and at first they said “no.” More recently, within the last six months, they said they had decided to buy it for fitting on their vessels in due course. We have only provided £10,000, of which nothing has been spent, but I think in the coming year, 1959-60, we shall show expenditure under that head.

469. Are we to understand that in future all Irish registered ships will be entitled to acquire this degaussing equipment at the expense of the Government? —That may be so as regards existing vessels, but in newly built ships the equipment is automatically incorporated in the vessels. This refers only to older vessels which have to be re-equipped.

470. Are there in fact any ships registered in Ireland except the ships of Irish Shipping and companies which have their head office in Ireland?—I do not think so. I do not think there is any ship registered in Ireland the head office of which is outside Ireland. The B. & I. ships are registered here but their head office is in Dublin.

471. The Waterford Company, the Wexford Company and the Limerick Steamship Company—are they all entitled to have this degaussing equipment at the expense of the Government?—They would if their ships came within the scope of this.

But hereafter they would be required to have new ships equipped with it?— Yes, it should be included in the vessel.

And I take it if they fail to get it included they will not be able to turn to the Government?—They will probably turn but we can turn them back.

VOTE 52—AVIATION AND METEOROLOGICAL SERVICES.

Mr. J. C. B. MacCarthy further examined.

472. Chairman.—There are two comments by the Comptroller and Auditor General. Paragraph 75 of his Report states:—

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

Subhead H.—Constructional Works including Furnishing of Buildings— Dublin Airport

75. Expenditure during the year on constructional works, including furnishing of buildings, at Shannon and Dublin Airports amounted to £80,568 and £48,432, respectively. The total expenditure to 31 March 1958, excluding the cost of acquisition of land, amounted to £2,236,964 for Shannon Airport and £1,436,167 for Dublin Airport.”

Chairman.—Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

473. Chairman.—Paragraph 76 of the Report of the Comptroller and Auditor General states:—

“Operation of Shannon and Dublin Airports

76. I have been furnished with statements giving particulars of the cost of operating Shannon and Dublin Airports. Shannon Airport is managed directly by the Department and Dublin Airport is managed by Aer Rianta, Teoranta, on behalf of the Department.

The expenses and receipts under their main heads are as follows (the figures for the previous year being shown in brackets).

Mr. Ó Cadhla.—It will be noted that at each Airport both expenses and receipts increased, as also did the total deficiency. There is a decrease in the receipts from catering and this was due to the time lag between increases in wages and other expenses and increases of charges for services.

474. Chairman.—Have you any comment, Mr. MacCarthy?—While there was a decrease in the receipts for catering, in the following year the profit was again up to more than £130,000.

That is the profit on Shannon Airport catering and sales services?—Yes.

475. Chairman.—Paragraph 77 of the Report of the Comptroller and Auditor General states:—

“Subhead T.—Appropriations in Aid

77. The surplus earned by Aer Rianta, Teoranta, on the management of Dublin Airport for the year ended 31 March 1957, was £32,468. The deficit on the company’s General Administration Account amounted to £16,791, including £12,277 for interest payable to Aer Lingus Teoranta and British European Airways, arising out of the revision in 1956 of agreements between the three companies. Provision was made in the estimate for the recoupment to the company of this deficit out of the management surplus. The balance of £15,677 was surrendered to the Department and has been brought to credit as an Appropriation in Aid.”

Chairman. — Any comment, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I have nothing to add.

476. Deputy Jones.—Might I ask in regard to the receipts at Shannon Airport —I think I asked something about it on a previous occasion—could Mr. MacCarthy tell us what would be the approximate fees charged to people visiting the Airport?—Yes. That comes under subhead T., receipts from admission charges to airport. The estimated receipts were £3,500 and the actual figure was £3,139. That is subhead T.9. of the Appropriations in Aid. The deficit was £361.

Chairman.—That is on page 167.

Deputy Jones.—I think I saw it announced that it is the intention to change the admission charge. It will come up probably later?—That arises in connection with the new arrangement we propose for the parking of cars under which I think the fee would be paid in respect of the vehicle without regard to the number of passengers. At the present time the fee is 2/6d. for the vehicle and 6d. for each passenger. Under the revised arrangement it will be an all-in fee for the vehicle which would cover the passengers. There will also be of course a separate fee, as there has been in the past, for pedestrians and cyclists.

VOTE 53—INDUSTRIAL AND COMMERCIAL PROPERTY REGISTRATION OFFICE.

Mr. J. C. B. MacCarthy called.

No question.

VOTE 65—TOURISM.

Mr. J. C. B. MacCarthy called.

No question.

The witness withdrew.

The Committee adjourned.