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24 March, 1927.] Sir CLAUD SCHUSTER, K.C.B., C.V.O., K.C.

bring to the knowledge of the Committee the fact that this actual thing before them, though prepared in the way in which it must be prepared, does mislead them. This statement that a certain amount is appropriated-in-aid is a perfectly irrelevant statement. It does not matter whether it is appropriated-in-aid or not. It happens to be a certain part of the fees earned by the Court which, because they are earned in a particular way, are taken as appropriations-in-aid; but fees earned for precisely the same services and taken more conveniently by way of stamps go straight into revenue and do not occur in this account at all.

1370. Could you not put a note at the foot of the page of the account showing the distinction, and showing what is actually received?-I have always desired to do so, but I do not think I am allowed to. This really, just like all the other departments administered by the Lord Chancellor, is a trading concern, though it may be perhaps improper to talk about the Supreme Court of Judicature in such a way. It is a trading concern in this respect that it purports to balance, subject to this. It has always been the theory that the taxpayer ought to pay the cost of criminal justice and the litigant ought to pay the cost of civil justice, and as no human being can determine what the cost of criminal justice is, it is arrived at by taking off the allowances and superannuation of the Judges and causing that to fall upon the taxpayer, and endeavouring to adjust the fees so that they cover the rest.

That

attempt at adjustment has not proved successful, because the course of business has varied so from year to year, and we have been unable to get a stable equilibrium. When we have enough years to go on, we shall do something to the fees, and then the figures will balance. Now we make rather more than we ought to.

Mr. Briggs.

1371. With regard to the Pensions Appeals Tribunals, that is a constantly diminishing service, is it not?—Yes.

1372. May we at any early date see the figures for travelling expenses in this connection, which are very great, amounting to £27,000, very considerably reduced within the next year or two?— If you would look at the years succeeding one another, you would see that there

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has been a very considerable reduction. I think the figure shown in this account is 50 per cent. of the figure of the previous year.

1373. The total for salaries and travelling expenses amounts to £56,000 in the year under review. Could you tell me what it was last year?-(Sir Malcolm Ramsay.) Last year it was £90,000, and the year before £154,000. (Sir Claud Schuster.) This figure will go on getting less, but it will not get less so quickly, because we shall be left with work on which we shall have to keep the Tribunal in operation, although it will not probably have enough to do. Sooner or later we shall get to that position, I mean. I do not think we shall arrive at that position next year.

Major Salmon.

1374. Would it not be possible for the Treasury, or Sir Claud Schuster, to see if we could not have a paper sent in explaining the real position? I think it would save a lot of time?-(Mr. Phillips.) The position is that there is a White Paper called "Account of Receipts and Expenditure of the High Court and Court of Appeal," which sets out the matter perfectly clearly. (Sir Claud Schuster.) If that has been circulated, I have not had it, and I have been rather at a disadvantage in consequence.

Chairman.

1375. I understand, Mr. Phillips, that is not one of the two White Papers before us to-day?—(Mr. Phillips.) I understood that it was. I am rather surprised if it is not.

Mr. Ellis.] If we had had this two or three days ago we might have had an opportunity of examining it.

Chairman.

1376. One of the accounts that we have before us to-day is still only in proof form. It is circulated at the last moment, and in proof form only. I cannot say how that comes about?-(Sir Claud Schuster.) I am extremely sorry if we are in any way guilty of not having produced the proper papers at the proper time. I had not realised that you had not the ordinary White Paper that is circulated every year, and which I think is in a different form this year, and drawn on purpose to try to show this information more fully that I have always thought this Committee ought to have.

24 March, 1927.] Sir CLAUD SCHUSTER, K.C.B., c.v.0., K.C.

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we do not certify. (Sir Claud Schuster.) This is not really an account at all. This is really, if I may use such an expression, in its present form a "fad" of my own. I have been trying for a very long time to have a document circulated so that the Committee might have a paper showing what the thing actually costs and what it produces. It has nothing to do with any accounting except in the sense that it is a picking out from the different accounts of the items which are relevant, but it is not a Government account in the sense of requiring to be certified or checked or anything of that kind. It is a sort of prospectus. It is an endeavour to show what the actual state of affairs is.

Major Salmon.

1380. It has rather lost its object through the White Paper not being produced?-I am very sorry about that.

Mr. Briggs.

CLASS III.

On VOTE 6.

COUNTY COURTS.

1381. Subhead B. of this account shows the expenditure has been less than the grant, and the explanatory note says that this is due to the re-organisation of the staffs ?--Yes.

1382. Can you give me the comparable figure last year, so that one may see what economy has actually been effected?-It is very difficult to answer that question, because 1925-26 is the first complete year of the new system, taking it as a financial year.

1383. But the new system does not affect the way the salary is paid?-Oh yes, it does.

1384. It only affects them in their grouping; it does not affect the total ?

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Court Officers' salaries and allowances. No matter how they are arranged, they still have salaries and allowances. I would like to know the total of those salaries and allowances, however they might be grouped, in 1924-25 ?—The Account Appropriation for 1924-25 showed a grant of £680,000 and an expenditure of £660,000; but it would not be fair to suggest that the difference between the two was an economy. It is not. The difference between the two is due, in the first place, to the fact that the 1924-25 figures cover 15 months, and these figures only cover 12 months. That is the first observation that has to be made to discount the thing.

1387. If one may take that first observation-it is an increase and not an economy if we have £670,000 over 15 months and £602,000 over 12 months. That is an increase?-I quite agree it is. That is what I was pointing out. I was trying to do a little mental arithmetic to see how the two things were comparable. I am afraid I am not quite clear about the question.

24 March, 1927.] Sir CLAUD SCHUSTER, K.C.B., C.V.O., K.0.

1388. Subhead B. states that the salaries and allowances amount to £602,000, and the explanatory footnote says that the year 1925-26 was the first complete year of the reorganisation of County Court staffs, and economies resulted from abolition and grouping of Courts which became possible owing to the death of Registrars.-That is an explanation of why £602,000 was spent as against an estimate of £613,000. The word". economy "there is only intended to refer to the difference between the amount expended and the amount granted.

1389. Very well; then I would like to know whether this regrouping has not only effected an economy between the grant and the expenditure but actually in the service? We think so, but I could not possibly answer that question quite definitely for another couple of years or

so.

not

1390. That is what I fail to understand, because it only refers to salaries and allowances.-I am afraid I have made myself clear. The sentence in the explanatory note which reads: "Economies resulted from abolition and grouping of Courts which became possible owing to the death of Registrars," is not intended to be a claim of virtue in respect that we have made economies as against the year before; it is intended as information to the Committee that we asked for £613,000 and only spent £602,000 because, in fact, we did save £10,000 that we did not expect to save. claiming that we actually saved as against the year before.

We are not

1391. Has this grouping effected any economy? That is what I want to know? I have no doubt that it either has effected an economy or will do so; but I would prefer, if I might, to have another year or two to think about it, because it takes a long time to work out.

1392. That reason I entirely fail to understand.-I think I could make it clear, but could only make it clear at the cost of a great expenditure of time.

1393. The item is the largest one in this account.-It is the only substantial item in the whole running of the Courts. This is the item by which the thing stands or falls. May I explain in part? Before the reorganisation the County Court Registrar was remunerated, speaking quite broadly, in part by

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salary, or something that was very like a salary, about which we knew, in part by fees taken in accordance with the scale laid down by the Treasury, which went into his own pocket and in which the State had no share, and in part by operations carried on by him of which we knew nothing at all except that he carried them on, and out of which he made a substantial profit. We took over from him those two latter sources of revenue, and as he had a vested interest we, of course, had to buy him out. We bought him out by fixing his salary at the amount, roughly speaking, which we thought was a little less than the profit he was making. Of course, the result of that is to appear to swell the amount we are spending on salaries. On the other hand, we are drawing sources of revenue which were not previously available to us, and they have proved to be, in fact, greater than we expected.

1394. Now I can understand your desire for another two years to see how it works out.-What I do not want to be forced to do, if you do not mind, is to give a figure, because I cannot give it, and if I did, I think it would be misleading. You cannot possibly tell with a business like the County Court, which varies enormously according to the state of trade.

1395. You could give us a figure, but it would need qualification?—Yes.

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24 March, 1927.] Sir CLAUD SCHUSTER, K.O.B., C.V.O., K.C.

The accounts of the County Courts, as I explained last year, are examined by Sir Claud's officers, and they send me summaries. I accept these and do not examine the details.

1400. This involves a very large sum of money?—Yes. The Committee approved last year of the proposals 1

made.

1401. Yes, I remember that.-I may, perhaps, say that all our information goes to show that the reforms instituted since Sir Claud has been in office, as explained last year, have been working One can very well. never guarantee that there will not be defalcations in the County Courts, but all the evidence goes to show that they will be found out much more quickly than they used to be.

1402. Are you satisfied, Sir Malcolm?— Completely satisfied. Of course, it has not been working very long so far, but we are quite satisfied. (Sir Claud Schuster.) I should like to add that no human being is ever going to be able to make a water-tight and fool-proof organisation which is going to prevent the stealing of small sums of money on this service except at such an expense as would vastly exceed the losses. Malcolm Ramsay.) I might explain that I do not send down people to test these receipts, because that would mean their travelling all over the country and doing

(Sir

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EXPENDITURE OF THE ACSUPREME COURT OF JUDICA

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24 March, 1927.] Sir CLAUD SCHUSTER, K.C.B., C.V.O., K.C.

in French francs he gets French francs; if he brings in Swiss francs he gets Swiss francs. That is our liability, and no more. It is as if people brought in so many bits of paper. (Sir Malcolm Ramsay.) They are bits of paper, not cash. They are dollar bonds, and so forth.

Colonel Henderson.

1412. What do you mean, Sir Malcolm, by the expression in your Report on page 9, "5 securities of value not expressed"? Do you mean they have no marketable value?-(Sir Malcolm Ramsay.) These particular securities had no par value. (Sir Claud Schuster.) They are of no face value, and I suppose they are only stated in order that one may say they are there.

1413. Not being a lawyer, of course, I do not quite understand, if these securities are of some considerable value in the total, as apparently they are, what the Supreme Court is doing with them at all, but I will not pursue that point because it is not in order. These things are not paid in as security, I take it?— Oh. dear no. Probably there might be a difficulty in disposing, say, of the residuary estate of somebody, and proceedings begin in the High Court about that. The Courts begin, perhaps, by making an order that everything which belongs to the residuary estate shall be brought into Court. Then the executors or whatever persons have control bring in everything they have got and we take it.

1414. Regardless of whether it is worth less or not? Yes. That has nothing to do with us. All we do is to take it and keep it until told to do something else.

Major Salmon.

1415. When you take it do you put it into the bank?-These are all at the bank. We do not keep anything at the office.

1416. It all goes into the bank, and is credited to the account?-That is a much larger question. It is credited in all sorts of different ways. (Sir Malcolm Ramsay.) These securities belong to the Suitors; they are in the custody of the Court. The Court has responsibility for producing the securities when the Judge makes an order.

1417. They are negotiable securities in the way of bearer bonds, and therefore the Court take the responsibility, when

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they accept them, to produce them when there is an order for them to be produced? (Sir Claud Schuster.) Yes, certainly. But we may have a cash liability in some cases.

1418. What I want to be clear about is this. You pay them into a bank to the credit of somebody ?-(Sir Malcolm Ramsay.) They are held in the name of the Court.

1419. They are simply held in custody by the bank?-Yes. The bank holds them to the order of the AccountantGeneral.

1420. And there is no interest on them? -(Sir Claud Schuster.) On which?

1421. On the bonds?-There are a very great many different forms of lodgment. These things of no face value would be put into the bank, and my obligation is to produce them again when the Court tells me to do so. I might possibly be told to take a sum of cash to the credit of a particular account in the Chancery Division and invest it, and then my liability would be a different one. We have a great many millions of pounds invested nominally in my name which, as far as the bank is concerned, is just there to my credit.

Colonel Henderson.

1422. If you had bearer bonds would you be responsible while in your custody? -Yes.

1423. What do you do with the interest; do you credit that to the account also?—Yes.

Mr. Ellis.

1424. Surely you are in the position of a trustee to the estate?-I may be in quite a different position according to the different ways the things are dealt with.

1425. According to the order given you by the Court? Yes. For instance, King's Bench money is not invested and does not bear interest; but Chancery money generally speaking is invested and does bear interest.

Major Salmon.

1426. Do you charge fees for doing this work? No. Of course practically every transaction has already attracted a fee. Before the Court made its order a fee

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