19 May, 1927.]

[Continued.

Consideration money for the cancellation of the holding of H.M. Government, £600,000," was that owing to some variation in the agreement made on that bargain when our interests disappeared? -That was in consideration of the cancellation of our shares in the Company.

4820. It appears there as an item of repayment, because it is the most convenient place to put it in. Is that all it is? Yes, I think so.

Sir Assheton Pownall.

4821. Going back to the item which Sir Fredric Wise asked you about, namely, the note to subhead K, on page 155, I see the note says: "Savings under subscription to International Metric Bureau, £82, due to exchange." Was the saving £82, or was the total subscription £82?(Mr. Headland.) The saving was £82.

4822. What was the total amount of the subscription then? (Sir Henry Payne.) 21,649 francs.

4823. Of what country?-French francs At the rate of exchange at the time.

4824. Do you know what it is normally, because the French exchange is different to what it was two or three years ago?About £300.

4825. And it is in continuance of a very old agreement?-Yes, from 1884.

4826. With regard to the item (e) on page 160, what is the Restitution "Forfait " £330,000?-Those were amounts which the German Government was liable to repay in respect of goods taken away from occupied territory.

4827. We have received that?-Yes. 4828. And we have to pay it out presumably?-To the claimants. (Mr. Headland.) You will find the payments under Subhead Q of the Vote.

4829. With regard to the item “Surplus of Clearing Office fees at 31st March, 1925, £45,078," it seems a very big item to have as a surplus on the fees charged? -(Sir Henry Payne.) I do not think so. I do not think the fees are too large f the business is looked at as a whole. Up to the date of these accounts the fees were very large, and after the date of these accounts the fees were diminished, while the expenses will go on to a great

extent.

4830. You charge an initial sum, and those services will continue for some time afterwards-is that it? Yes.

4831. With regard to the note at the bottom of page 162 dealing with the British American Nickel Corporation, Ltd., which has been written off to the tune of over £1,000,000, could you tell us what the cost to the British Government of its holding was?-£629,618.

4832. That is the total for the two lots of stock? Yes, for the whole. That is the whole loss for the British American Nickel Corporation.

4833. Have we had anything in previous years with regard to our holding with the British American Nickel Corporation, Sir Malcolm?-(Sir Malcolm Ramsay.) Yes. It formed the subject of paragraph 18 of my Report last year on the Civil Service Accounts, which was amplified in evidence before the Committee.

Sir Assheton Pownall.

4834. In paragraph 9 on page 152 of the Trading Accounts the loss during the year is shown as £423,000?-(Sir Henry Payne.) Yes.

4835. But in the Appropriation Accounts, page 165, the net surplus to be surrendered is shown as £52,000. I do not quite see how those figures fit in with one another?-The figures in the two accounts would not fit in with one

another, because the account on page 153 of the Trading Accounts is a trading account, and deals with the transactions during the year, whereas the account on page 165 of the Appropriation Accounts is a record of the cash operations during the year.

4836. We are better off in cash by £52,000, although we actually made a loss of over £400,000?-Yes. We are better off in cash than we anticipated when the estimates were prepared in

19 May, 1927.]

respect of the cash transactions during that year.

4837. It is a very serious amount to lose in the year's trading ?-Of course this depends on agreements which were made long ago, and which we really have no power of altering.

4838. And which are still continuing? -Yes. It continues up till 1930.

Mr. Ellis.

4839. Forward sales ?-We have bought a certain part of the production up to 1930, and we have sold it up to 1930.

Sir Assheton Pownall.

4840. When do we have the chance of reviewing the whole transaction afresh? -Up till 1930 we have no chance of reviewing it. In 1930 it comes to an end.

4841. Do you remember the circumstances in which we took on this very unprofitable investment?-It was during the war, at a time when our deficiencies in the production of zinc were very much brought home to us, and I believe it was thought very desirable then to do what could be done to secure that there should be some more extensive zinc production in this country from Australian concentrates than there had been hitherto. Before the War all the Australian concentrates were sold to German and Belgian smelters.

4842. The losses are stereotyped, and nothing can be done really until 1930?I am afraid not.

Major Salmon.

413. I should just like to clear up one point. When the contract was entered into buying on the one hand and selling on the other-did we do it with our eyes open, knowing that we would lose so much per ton for every ton bought and sold? We knew we were losing a large amount.

4844. Notwithstanding that we knew that, we went into a long period contract with our eyes open?-Yes, in order to establish the business here.

4845. What was the estimate given at that time to the Government Department of what the probable loss would be? I do not know.

4846. I suppose it is on record? I do not think it is.

[Continued.

4847. Were the losses contemplated put higher or lower than they actually are? -I do not know. I have not got the other figure. I cannot say.

4848. Was the contract entered into in the year 1921 ?-1917.

4849. And it expires at what date?1930.

4850. It is a 13 years' agreement?— Yes.

4851. Was it not possible before we entered upon this contract to cut our loss and sell it as a going concern?— I do not think so. We have always been anxious to do anything of the sort which was possible, but I am afraid it is not possible.

4852. Have efforts been made to try and sell it as a going concern ?—(Mr. Headland.) Yes, we have tried several times.

4853. No one wanted to carry the baby except ourselves?--That is so.

Sir Fredric Wise.

4854. Insurance is mentioned on page 152 of the Trading Accounts. I thought you carried your own insurance? (Sir Henry Payne.) This is an item put into the accounts. We do carry insurance ourselves. You will see it is put in the Balance Sheet as "Reserve for Marine Insurance, Less Net Marine Losses."

Mr. Briggs.

4855. On page 165 of the Appropria tion Account I see it says the quantity actually bought was 223,000 tons, while freightage was paid on 228,000 tons. Why do you pay freightage of 5,000 more tons? (Mr. Headland.) We took an extra We have a certain quantity from stock. amount in stock. 4856. So that there was really freightage on the full amount?-Yes.

4857. Did I understand you to say that you contracted for all your purchases up to 1930 at a price? (Sir Henry Payne.) Yes, at a price which is fixed in various ways. It is not merely so much a ton. It varies with the market price. It is a price ascertainable.

4858. Did I also understand you to say that you contracted to sell at a fixed price up to 1930?-At a price ascertained according to the contract.

4859. You are contracting for sale?Yes.

19 May, 1927.]

[Continued.

4860. Therefore you need not trouble about any new customers or anything of that kind?-No.

4861. Will you tell me the difference between the price at which you got your contract up to 1930 and to-day's market price? (Mr. Headland.) You cannot tell that because the price varies with the market price of spelter.

4862. Surely supposing you were dealing with a contract till 1930, you would know what price you could sell at to-day. Surely that is easily ascertainable. That is within your knowledge, I should think? We know what price we could buy at to-day, and the price we could sell at to-day.

4863. You know the price you could sell at? Yes.

4864. I want to know the difference between the price at which you could sell which presumably is to-day's market value and the price at which you are obtaining it under your already fixed contract. What I want to know is whether your contract is at a lesser price than to-day's market price, or a higher price? But the contract is not at any fixed figure. It is a price that varies according to the price of spelter.

4865. Oh, it is not a fixed figure?(Sir Malcolm Ramsay.) It has to bear a certain relation to the current price of spelter.

4866. That clears up my question. The contract is not at a fixed price, but is variable with the market price?-Yes, that is so.

Mr. Briggs.

I

4867. On this account there seems to be a very heavy charge for telegrams and telephones. Of course there is an explanatory note, but even taking into consideration what that note says, it seems very heavy. I notice that the charges all through this account are very heavy for telegrams and telephones. would like to ask whether under Subhead A.4, and the explanation given in the note, which refers to the wireless distribution of messages of warning to mariners, that has anything to do with the Daventry distribution at a quarter past nine? Is it any payment in respect of that? (Sir Henry Payne.) No, I do not think it has anything to do with Daventry. It is in respect of navigational warnings, and I think, as stated in the note, we have made arrangements which have very largely reduced the expenditure on this service. Those arrangements came into operation in June, 1926. That reduction would be shown in subsequent accounts, and will, I think, be very striking.

4868. Who issues these radio messages which have incurred this extra cost?It is really the Hydrographer at the Admiralty who is responsible for when they have to be sent out. We went into the question of whether it would not be

possible to give sufficiently good informa tion without sending nearly so many messages.

4869. It is really a charge from the Admiralty to the Board of Trade?—No, it is the Post Office; but the Admiralty decides as to whether the warning as such should be sent out.

4870. With regard to Subhead H on page 174, "North Atlantic Ice Patrol," is that worked by the United States?Yes.

4871. They merely make a claim against us?-For our proportion of their expenses.

4872. Is our proportion higher or less than theirs?-Yes, ours is much larger than theirs.

4872. Then why do they exercise the control? That was an arrangement made under a Convention which was entered into some time ago. I do not know why it was done.

4874. Is it a question of policy or convenience?—I think only a question of convenience.

4875. Are you satisfied with it?-We are quite satisfied with the way in which it is done.

4876. Are you satisfied with the way in which the accounts are presented ?—Yes, I think so. They present the accounts to us, and say what the amount is.

19 May, 1927.]

4877. On what ground is the account proportioned?—I think on the ownership of the shipping using the North Atlantic.

4878. It is purely a matter of convenience that it is done in that way?Yes.

Sir Fredric Wise.

4879. Again with regard to Subhead A.4. I notice the amount, according to this year's Estimate, is down £2,500. Is it likely to be again reduced in the near future?-Yes, very largely.

4880. After 1927?-From June, 1926. 4881. By the Estimate for 1927 it is £11,720. Anyhow, you think it will be reduced?—Yes, I do think it will be reduced very much. I see the Estimate for 1927 is down £3,000. The expenditure in these accounts that we are now looking at was £14,262.

4882. It is down £2,500, is it not?-Yes. I beg your pardon.

4883. And it is likely to come down further ?-Yes.

4884. On page 176 there is an item (c) "Interest on invested portion of above." That refers to the unclaimed wages and effects of deceased seamen. What is that invested in?-(Mr. Headland.) It is invested in a Government security; I forget which.

4885. It is invested in some Government security ?—Yes.

Major Salmon.

4886. On the question of the Mercantile Marine Services generally, is it fair to say that the number of the staff in this Department has gone up? (Sir Henry Payne.) No, not when you make proper allowances. Of course, if you compare the staff with the time before we had the coastguard, it has gone up very largely. If you exclude the coastguard I think it has not.

4887. If we take the whole of the Mercantile Marine Services, 1926-27, is it up or down in the Estimate you are presenting? It is down.

4888. Is there any part of the Department under the heading of "Mercantile Marine Services" from which work has been transferred somewhere else, or dispensed with? Do you mean since 1914?

4889. Yes. No, there has been nothing transferred from it. There has been certain work transferred to it.

[Continued.

4890. With regard to the heading of "Surveyors on page 172. I notice that the Surveyors, under Subhead C.1, "Salaries, Wages, and Allowances," cost £200,000 a year?—Yes.

4891. The amount that you received from them in fees is practically half that. Was it not intended that it should be a self-supporting unit?-The proportion which the fees should bear to the expenses of the Services is provided in the Fees Increase Act of 1923, which provides that half of the cost should be borne by the trade.

4892. If that is so, is it correct to say that half the fees are really being charged, because if you take that section of the department as a whole-and presumably you must take the Surveyors' department as a whole-it is in round figures £216,000. I observe that the ordinary receipts under the heading of "Surveyors' fees, etc.," is £120,000?— Of course, it was not only the Surveyors' fees of which the industry was to bear half; it was certain other services which are defined in the Act. The fees are worked out so as to be in accordance with the Act. I should perhaps make one further explanation. It has not always been possible to work out exactly what the fees would produce. We have in fact during one or two years received rather more than we ought to have received, and now we have to reduce the fees to make it up.

4893. You try to keep it on as even a keel as possible?-We try to keep it as even as possible, but it does mean an adjustment of the fees from time to time.

4894. I notice on page 177 this note: "From the Vote for the Board of Trade the Director of Sea Transport (£1,200) received an allowance of £75 for supervising the Food Council and Food Emergency organisations." Is not that part and parcel of the duty of his office?It is not ordinarily part of the duty of the Director of Sea Transport.

4895. Did this involve him working different hours, or at different times?— It did involve very heavy work indeed. 4896. Overtime work?-Very much.

Sir Malcolm Macnaghten.

4897. On page 174 I notice sub-head P is "Lighthouses temporarily in British occupation." Where are those?—Those are in the Red Sea. They used to be Turkish.

19 May, 1927.]

[Continued.

66

4898. On page 175, sub-head Q, is Special Grant to General Lighthouse Fund." Is that Fund under the control of the Board of Trade? We exercise supervision over it. It is raised by fees charged on shipping for the purpose of keeping up lighthouses.

4899. Those are the light dues?Those are the light dues, and the special grant was for the purpose of removing wrecks which were caused during the War. The General Lighthouse Fund has as part of its duties the removal of wrecks, but not to an unlimited extent, and a very heavy burden was put on it by removing the War wrecks. This contribution was made to assist them to some extent in that. It is only paid after they have borne the expense which they would have been expected to bear before the War in removing wrecks.

4900. The Board of Trade have supervision over the Fund ?--Yes.

4901. Who actually holds the Fund?(Mr. Headland.) The Board of Trade.

4902. Does anybody account for this Fund to this Committee?-(Sir Henry Payne.) No.

4903. Why not?-I do not know.

4904. Is the money raised by light dues charged to shipowners?—Yes.

4905. And it is expended for the purpose of lighthouses and removing wrecks? -Yes.

4906. Nobody accounts for it to the House of Commons?-(Mr. Headland.) The accounts are presented to the House.

4907. Yes, I have seen them. They are difficult to understand. But the Board of Trade are not answerable for them?— When you say we are not answerable for them, to whom do you mean?

4908. To this Committee?

Mr. Ellis.

4909. In whom rests the property in their hands? You have certain balances the result of all these proceedings. Whose are those balances?-The money belongs to the General Lighthouse Fund.

4910. Supposing we were bringing an action at law either against or on behalf of the General Lighthouse Fund, in whose name would it be framed ?-An action at law would have to be taken against either the Elder Brethren of Trinity House, the Commissioners for Northern Lights, or the Commissioners for Irish Lights. 4911. That answers the question.

Sir Malcolm Macnaghten.

4912. Does the Fund belong to all three? The Fund amalgamates the expenditure of all three.

4913. They are remnants of a private corporation. That is what it comes to? -Quite.

Sir Malcolm Macnaghten.

4914. Are the Commissioners of Irish Lights still in existence?-Yes.

4915. For what part of Ireland?-For the whole of Ireland.

4916. For the purpose of lighthouses Ireland is still a united country?—That is so. (Sir Henry Payne.) Well, no arrangement has been made about it yet. Some arrangement will have to be made, and an endeavour is being made to come to an arrangement.

4917. In whose service are the actual lighthouse-keepers, say, off the coast of Cork? (Mr. Headland.) In the service of the Commissioners of Irish Lights.

4918. Who pays the Commissioners of Irish Lights? They receive their money from the light dues.

4919. And they pay themselves?—Yes. 4920. Can they pay themselves what they please?-(Sir Henry Payne.) No.

4921. Who checks that?-(Mr. Headland.) The Board of Trade.

4922. Who checks what the Board of Trade do? I believe the Comptroller and Auditor General checks these accounts. (Sir Malcolm Ramsay) I do examine them. I audit the accounts.

4923. I do not know whether I am in order, but it seems to me very odd that money should not be brought before this Committee. Their right to charge light dues is a right given to them by Statute? -(Mr. Headland.) The Board of Trade decide the light dues.

4924. Is that without reference to Parliament ?-Yes, it is based on the expenditure of the of the three lighthouse authorities.

4925. The Commissioners fix their remuneration, and you fix the light dues? (Sir Henry Payne.) No, the Commissioners do not fix their remuneration.

ex

4926. But they do fix their own penses, and then you fix the light dues to meet what expenditure they say they want? They submit their proposed expenditure to us. (Sir Malcolm Ramsay.) Is not the position of these bodies rather