22 April, 1926.]

[Continued.

Office? It is done now by the Dominions Office; I personally have not had anything to do with it, but having signed the Accounts for 1924-25, though I was not at the Colonial Office during that year, I am responsible for explaining any of the items which appear in our Vote.

2848. Would the expenditure which is before us to-day include the Administration, so far as the Colonial Office is concerned, in regard to Irish Affairs?-The salaries of the staff concerned with the administration of compensation in Ireland are on our Vote, as you will see by the Estimates.

2849. They would appear under Subhead A: "Salaries, Wages and Allowances," in the Account that we are considering now?-Yes. That is practically coming to an end this year. There are only a few officers still employed on that; it is practically finished,

2850. What is going to become of those officers? I am afraid I will have to find that out for you.

2851. Is the work in the Colonial Office on the increase or the decrease?-Do you mean in the Colonial Office itself?

2852. Yes?-I should say it was on the increase.

2853. Have you a larger staff to-day than pre-war?--Yes.

2854. Has it increased during the last year or two?-I do not think it has increased in the last year or two. I have only been in the office for six months, but I should not say it has increased in the last year or two. It has, however, increased very considerably since 1914, like all the other Departments.

Trans

2855. What is the cause of the increase? -I account for it by the increased work; we have taken over SO many responsibilities, the Middle East Department specially causes an increase. We have taken over all the questions concerned with Palestine, Iraq, jordan and the whole of the Middle East, which did not fall on the Colonial Office before. That meant a very large increase, and as you know since the war in all Departments the staffs have increased very considerably. I am going into this very question at the present moment with a Committee, over which I am presiding, to see whether it is possible in any way to decrease the work, which seems to be increasing from day to day.

2856. Now that you are called the Dominions Office, does it mean that that has given you more work, or is it only a mere alteration of the name from "the Colonial Office " to "the Dominions Office "?-I am only responsible for the actual Colonial Office now; Sir Charles Davids is responsible for the Dominions Office, and I am not referring in what I say to the work of the Dominions Office at all; that has been divorced entirely from the Colonial Office.

2857. In the process of divorcement, presumably, the work has been divided?That is so.

2858. Certain work has been earmarked for the Dominions Office, and certain other work has been retained by the Colonial Office ?-That is so.

2859. In reference to the redistribution of work, I presume that in considering the number of staff which should be transferred from the old Colonial Office to the new Dominions Office regard has been had to the amount of work the Dominions Office has taken over?-Quite so, and a suitable organisation for each office.

2860. In the aggregate it will cost the State more money, presumably?—It will, I think, a little; but not very much.

Sir Fredric Wise.

2861. £2,600, is not it?-Yes.

Major Salmon.

2862. Is that attributable to the extra work, or it that merely the difference in administration?-I would not say it was attributable to extra work; it is due to the difference in the sytem of administration.

2863. That is to say you think you have higher-grade officers in duplicate?--You have two Parliamentary UnderSecretaries of State now instead of one; and there is myself and also Sir Charles Davis, who is the Permanent UnderSecretary for the Dominions Office; so there are two new officers, the Parliamentary Under-Secretary of State for the Dominions Office and the Permanent Under-Secretary of State for the Dominions Office.

2864. If the Colonial Office have less responsibility because of the fact that certain important work has been transferred to a new office, does that necessitate having as many high-grade officers still in the Colonial Office ?-I

22 April, 1926.]

[Continued.

should say it did, because it was, I think, generally agreed that under the old system the higher-grade officers in the Colonial Office were overworked; in fact, the officer I succeeded was so hardworked that he has broken down in health completely; I think everyone admitted it was quite impossible for him to cope with the work which he had to do.

2865. I understood you to say that you were reviewing the number of the staff of the Colonial Office at the present time? -I am having a committee, over which I am presiding, which will go into the whole question of the work of the office and see whether it is possible in any way to improve the machinery, and by improving the machinery enable us to do with less staff; but so far, I am doubtful whether I shall find that that is so.

2866. In reviewing the work that you have, do you take any regard to the rank of the officer who is doing particular work in the Colonial Office ?-Certainly I shall. I have only been taking evidence up to date.

Chairman.

2867. As to whether it is necessary to have first-class men doing what is supposed to be first-class work which may be second-class work although first-class men are doing it? That I will go into; I have not arrived at that stage up to date. Up to the present I have been examining everyone in the office, from the highest to the lowest on the administrative staff, asking for suggestions as to the way in which they think I can improve the machinery to make it more efficient, and perhaps cut down the amount of correspondence.

2868. One part of the work which you will undertake will be to have regard to what the individuals are doing, and their ranks?-Undoubtedly.

Chairman.

2869. Have you anything to add, Sir Malcolm, to any of the evidence that has been given?-(Sir Malcolm Ramsay.) No, sir.

2870. Paragraphs 39 to 45, on page xix of the Comptroller and Auditor General's Report, deal with this Vote. I think, Sir Malcolm, paragraphs 39 and 40 deal with Grants-in-Aid?-(Sir Malcolm Ramsay.) Yes, sir. The Grantsin-Aid from this Vote, which are considerable, are not audited by my department, but by the Director of Colonial Audit. The Accounts are up to date now, and I have seen his reports, and the conditions of the various Grants have all been observed. That is with reference to paragraph 39.

military expenditure. I thought that without a little explanation the account might perhaps be rather confusing.

2872. Would the Treasury like to add anything on that point?-(Mr. Phillips.) The explanation is, Sir, that we came to the conclusion that it was merely misleading Parliament to show these Grants for military expenditure as loans, because it was perfectly clear they would never be recovered from the Somaliland revenue. We thought it better to clear the position and show them as out-and-out Grants.

2873. How do you arrive at the amount that is provided?-It results from the Estimates for the Somaliland expenditure.

2874. Is it in the form of a Grant? What about any surrender; does that element enter into it at all?-Surrender would not be made. The sum would be withheld from the Grant we made the next year. If the Grant is too big in any one year we should take it off the next

year.

2875. That is the way you do it? Yes.

22 April, 1926.]

[Continued.

2876. Would you like to add anything on these two paragraphs, Sir Samuel ?I could explain exactly how the £182,000 is arrived at, if you would like me to do that.

2877. I think that would be of interest to the Members?-Of the sum in question, £112,000 was for military expenditure in the two preceding years, and, as explained by the Treasury representative, it was decided that it was not fair to charge that to the Protectorate, and that it should be written off. That left £70,000, and of that £70,000, £49,000 was military expenditure and £21,000 was regarded as a loan to the Protectorate, the terms of repayment to be decided by the Treasury and reported to this Committee.

2878. Does it amount to this, that you have now wiped out the element of loan altogether?-Not altogether. In the actual sum we are dealing with, out of the total of £182,000 there is £21,000 which was regarded as a loan, and £49,000 as military expenditure which is in the form of a free grant, just the same as the £112,000 for military expenditure in the preceding two years.

2879. What I really meant was that as regards the military expenditure the element of loan has disappeared?—Yes, that is so.

2880. To what does the balance apply? -The expenses of Civil Administration; the territory cannot meet its expenditure.

Major Salmon.

2881. On the question of the military expenditure, could you tell me, is there a different system for allocating moneys spent by a Protectorate to that which is spent by the War Office?-The Treasury ruling, I think, was that it was fair to regard the fact that strategically we hold Somaliland, for Imperial reasons, and that for that reason the cost of the Military Department might fall on the Imperial Exchequer. Of course, there are Colonies which are well-off, and have big revenues, enabling them to help, and it is the policy of the Colonial Office to do that wherever it is possible to do so, but it is not so in the case of Somaliland; we have got to ask for assistance even with regard to the Civil administration.

2882. Does the amount of money you have earmarked for military purposes

really cover the whole of the military services, or do Imperial Forces supplement this?-I think it covers them all.

2883. Both for victualling and all expenses? As far as I know, it does. (Mr. Phillips.) Yes.

Colonel Assheton Pownall.

2884. Did I gather that the balance of the loan was £21,000?-(Sir Samuel Wilson.) Of the £182,000, £70,000 was for expenditure in 1924-25 and of this sum £21,000 was regarded as a loan, and it will be decided by the Treasury later on, and reported to this Committee, how it should be repaid.

2885. And of the £29,000 balance in respect of the previous year, which I see here is a loan-(Sir Malcolm Ramsay.) That is the previous year.

2886. That was a loan?—Yes; £29,000 is a loan.

the

2887. Could the Treasury tell us what arrangements have been made with regard to the repayment of these various sums? -(Mr. Phillips.) The question will have to be taken up some day; it depends on the prospect, at present a remote prospect, of a surplus on the Somaliland Revenue. The question of increasing taxation has frequently been considered, but there are extreme difficulties in the way of increasing the Revenue.

2888. The Treasury is not overlooking it, presumably?-No; when there is any money there I think we shall try and obtain the return of our grants.

Mr. Gillett.

2889. May I ask on what principle the Grants-in-Aid are made to these Dominions or Colonies?-(Sir Samuel Wilson.) I do no know whether you would like the Treasury representative to explain this, or shall I?

2890. Perhaps you would be so good? -There used to be purely Grants-in-Aid, and, in 1921-22 I believe it was, it was decided by the Treasury that they should be made in the form of a loan, and that, as soon as the Revenue of the territory or Colony in question could afford to pay back this loan, the Treasury should decide on what terms it should be so paid; that is, what interest should be paid, and what should be paid towards the Sinking Fund. It was also agreed to report to the Public Accounts Committee what

22 April, 1926.]

[Continued.

arrangements were made; my Department being responsible for taking the question up with the Treasury when it was thought opportune to do something towards reducing the loan.

2891. What I really wanted to know was how you arrive at these figures, how does there come to be £50,000 for Cyprus and £100,000 for another Colony ?Cyprus is in a different position altogether.

Chairman.] We are not quite on that point at present, because we shall be coming to the Account later. At the moment we are only on paragraphs 39 and 40 of the Report.

Mr. Gillett.] I notice here a Report about all Colonies and protectorates which have received Grants-in-Aid at any time, and I thought that covered the whole of the question, if they are on the same principle. I notice on the next page they are called Grants-in-Aid, and what I wanted to lead up to was this question of the Accounts which it is said have been examined by the Colonial Audit. I wanted to know whether we had any information about the Accounts of these different Colonies towards which, I understand, we have made Grants-in-Aid; and I want to know on what principal Grants-in-Aid are made, and whether we ever see the Accounts in this Committee.

Chairman.

2892. Could you answer that question on this paragraph? The point is whether this Committee sees the Reports?

Mr. Gillett.

2893. The Accounts of the Colonies ?Perhaps the Treasury could reply to that better than I can. (Mr.Phillips.) The explanation given to Parliament in connection with all these Grants is "The Expenditure out of these Grants-in-Aid will not be accounted for in detail to the Comptroller and Auditor General, but he will be furnished by the Colonial Office with the audited Accounts and with any Report of the Director of Colonial Audit thereon." That is to say, our Exchequer and Audit Department does not audit the Accounts, but they see the Accounts after they have been audited by the Director of Colonial Audit.

the

2894. Does any Committee of House see any of these Accounts?-(Sir Malcolm Ramsay.) No. (Mr. Phillips.) Only to the extent that Sir Malcolm Ramsay might call attention to them. (Sir Malcolm Ramsay.) Parliament does not see the Accounts, but if there were anything unusual I would naturally call the attention of the Committee to it. The principle on which the Grants-in-Aid have been calculated is, broadly, that enough is given to the territory in question to enable them to make ends meet; if the amount in one year proves to be too much, the Grant the next year is reduced. The Estimates are, as a matter of fact, as Sir Samuel will confirm, I believe, seen by the Treasury, and the Accounts also. (Sir Samuel Wilson.) That is so.

2895. Does any Committee see the Accounts of the Colonies?-(Sir Malcolm Ramsay.) No.

2896. Then no Committee really can express any opinion as to whether £10,000, £50,000 or £100,000 ought to be given to these different Colonies?-No, there is no information to enable this House to criticise that. (Sir Samuel Wilson.) I think the Treasury see that nothing more than is absolutely essential is given.

2897. Simply to make up the deficiency?—Yes. When we ask that a Grant-in-Aid should be given to a Colony, we have to explain very fully to the Chancellor of the Exchequer the reason why and why it is not possible to make both ends meet.

2898. Are the Treasury supposed to be responsible for the whole of the expenditure, or simply the Colonial Audit Department? I do not quite understand.

2899. Perhaps I ought really to ask the Comptroller and Auditor General that, Who would say whether they thought the expenditure of the Colony was unsatisfactory. Supposing anything happened, would you look through the Accounts, so as to be satisfied as to how all the money was being spent?-(Mr. Phillips.) Oh yes.

2900. You would?-We do not have first go at them, but we should come in at the end look through Accounts.

and

the

2901. If there was anything unusual, would you report it to this Committee?