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Copy of CORRESPONDENCE with the WAR OFFICE.

SIR,

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Copy, 10/719 (F. 1).

War Office, London, S.W.,

22nd March 1907. I AM commanded by the Army Council to request you to lay before the Lords Commissioners of His Majesty's Treasury the enclosed statement of probable surpluses and deficits on the several Army Votes, 1906-7, including the Supplementary Vote recently taken ; to assure their Lordships that the deficits shown were unavoidable, and that the expenditure giving rise to them could not have been postponed without detriment to the public service; and to move them to sanction, under the powers conferred on them by the Appropriation Act, 1906, the temporary application of the surpluses to meet the deficits as shown in the statement.

It will be seen that on the account as a whole a net surplus of some 1,193,0001. is anticipated, of which 816,0001. arises on expenditure and 377,0001. on Appropriations in Aid. As regards expenditure, the main causes of the surplus are as follows :

(1) The reductions effected in the Army (men and horses) during the

year 1906–7. As announced in the Secretary of State's Memoran-
dum relating to the Estimates of the year, they provided the money
necessary to carry on the Army, at the establishment authorised
by Parliament, for the whole year; but the considerable reductions
effected in the establishments in 1907-8 have to a very large extent
been anticipated during the current year in the shape of reductions of

actual strength and disbandment of units.
(2) Savings on the Medical, Militia, and Yeomanry Votes owing to the
anticipated increases in strength not having been realised; and on the
Volunteer Vote owing to a falling off in the numbers attending camp,

in spite of an increase in the strength of the force. (3) Reductions in the prices of rations and forage. (4) Delays in the execution of orders for clothing, stores, armaments, and

works. The surplus Appropriations in Aid arise principally from deferred payments by Canada in respect of Imperial troops at Halifax and Esquimalt in 1905-6, and of stores, &c., taken over on transfer of those fortresses to the Colonial Government, from increased contributions from Egypt and the Straits Settlements, from sales of horses on reduction of establishments, and from increased issues of stores and clothing on repayment.

Their Lordships will not fail to recognise that the figures now given are estimates, based upon the best information now available, of the probable expenditure and receipts; and that owing to the unavoidable uncertainty as to the contractors' bills which will mature for payment within the year, and to other causes, some variation from these figures must be anticipated.

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The Secretary, Treasury.

I am, &c.,
(Signed) E. W. D. WARD.

ARMY ESTIMATES, 1906–7.

FORECAST of probable SURPLUSES and Deficits on the several VOTES.

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£ 178,000

€ 118,000

1. Pay, &c., of

the Army,

Due mainly to the reduction in Due to the claim of

the Army, to an over-estimate 62,0001. on Egypt for
of service pay and messing and extra cost in current
kit allowances, to the closing of year, to extra payments
Section D of the Army Reserve, by Canada deferred
and to the fact that the sum from last year(40,0001.),
taken for training of the Army and to the rise in the
Reserve will not be all spent. dollar at Singapore

The surplus was reduced by (24,0001.).
250,0001, in the Supplementary
Estimate.

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389,000

33,000

Forecast of probable Surpluses and Deficits on the several Votes-continued.

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Jamaica 2/25 (W.F.).

War Office, London, S.W., SIR,

15th March 1907. ADVERTING to the last paragraph of your letter dated the 16th ultimo, No. 3080/07, on the subject of the reconstruction of barrack buildings destroyed by the recent earthquake in Jamaica, I am commanded by the Army Council to acquaint you, for the information of the Lords Commissioners of His Majesty's Treasury, that an estimate has now been arrived at of the cost of reproviding the barracks at Up Park Camp, to house the garrison in accordance with the latest approved establishments.

Taking into consideration the fact that a large quantity of old material will be available from the wrecked huts for utilisation on the new buildings, and that many of the old sites can be used, it is anticipated that the scheme of rebuilding will cost 80,0001.

This total includes a sum of about 39,0001. which it is anticipated will be required to cover expenditure on necessary accommodation which can be provided locally, but which will not be commenced until more definite proposals have been received from the station, and, if approved by the Army Council, reported in due course to their Lordships.

In the meanwhile, the Army Council are most anxious to proceed at once with the expenditure of the first portion of the estimate, viz., 41,0001. This sum covers the provision of hutting for the troops and bungalows for the officers, the materials for which will have to be purchased in this country, and I am to request that their Lordships' sanction may be obtained to this Part 1 service being commenced at the earliest possible date.

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If the necessary contracts can be made at once, it is possible that 5,000l. can be brought to account in the present financial year, which expenditure will be met from savings on Vote 10 generally. The expenditure falling on the 1907-8 estimates will be similarly met.

The Secretary, Treasury.

I am, &c., (Signed) R. H. BRADE.

5030/07.

SIR, THE Lords Commissioners of His Majesty's Treasury have had before them Mr. Brade's letter of the 15th instant (Jamaica 2/25 W.F.) further on the subject of rebuilding the Army barracks, &c., which were destroyed by the recent earthquake in Jamaica.

In accordance with the recommendations of the Army Council of the 15th ultimo and 5th instant, their Lordships have already sanctioned on grounds of urgency the immediate commencement of certain minor reconstruction services, viz. :

1. Army Ordnance buildings at Kingston

2. Hospital buildings, &c., at Up Park Camp 3. Buildings at Newcastle and Greenwich

Treasury Chambers, 18th March 1907.

The Secretary, War Office.

£

3,200 5,350 2,700 11,250

In sanctioning the first two items on the 16th ultimo, my Lords expressed themselves unable to sanction the Council's further proposal to begin at once, though no detailed estimate of cost was then available, the general work of reconstructing barrack buildings in the island. Your letter under reply now states that it will cost 80,000l. to rebuild Up Park Camp to house the approved garrison, but intimates that for the present the Council limit their application to 41,000l. for the hutting of the troops and for providing bungalows for the officers, a service of urgency which it would manifestly be detrimental to the public service to postpone till parliamentary sanction could be obtained in the ordinary manner.

In these circumstances, my Lords take the responsibility of sanctioning the immediate commencement of this urgent Part 1 service (in addition to the smaller works referred to above) at a total cost of 41,000l., of which about 5,000l. will fall on Army Vote 10, 1906-7, and will be met from savings thereunder, as will the 1907-8 expenditure, representing (as my Lords assume) the balance of 36,000l. Their Lordships await a further communication as to the second part (39,000l.) of the total estimate of 80,000l. when definite proposals have been received from Jamaica and when the Council are able to make a specific proposal.

Regard being had, however, to the magnitude of the total estimate for this new works service, it is proper that steps should be taken in accordance with paragraph 9 of the First Report from the Public Accounts Committee of 1906 and with the Treasury Minute thereon of 15th December last, to inform Parliament of what is being done by His Majesty's Government. In their Lordships' opinion an explanatory statement such as was contemplated in the Treasury Minute will conveniently take the form of communicating to Parliament Mr. Brade's letter and this reply; and a convenient opportunity for such communication will be afforded this month when the annual statement of transfers between Army Votes, 1906-7, is laid before the House of Commons. With the concurrence of the Army Council, my Lords propose to proceed accordingly.

I am, &c., (Signed)

WALTER RUNCIMAN.

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