CLASS IV, VOTE 2.-BRITISH MUSEUM.

Stock of Publications at Bookstall.

25. The deficiency of stock to which I referred in paragraph 34 of my last Report had increased to 450l. in July 1926, but a stocktaking in October 1926 revealed no further loss. I accordingly asked that steps should be taken to clear the accounts and the Treasury have now sanctioned the write-off of the total loss.

CLASS IV, VOTE 9.-SCIENTIFIC AND INDUSTRIAL RESEARCH.

Application of Grant in Aid to meet deficit.

26. In paragraph 32 of my Report for 1923-24 I pointed out that it had been foreseen that in the peculiar circumstances of this service the grant voted annually in respect of research work might be insufficient, and special provision had been made for meeting excess expenditure due to unforeseen requirements of research, subject to Treasury sanction, from the unexpended balance of the Grant in Aid voted in 1921-22 for the further development of the work of Research Boards and Committees. Thus in the year then under review the Grant in Aid had been drawn upon, with Treasury approval, to the extent of 9,8261. 1s. 8d. to meet the excess of expenditure over estimate. The Accounting Officer explained to the Public Accounts Committee that the provision of the Grant in Aid had enabled the Department to make a closer estimate of requirements, and had led to very distinct economy in expenditure. The Committee made no comment upon the position.

In 1924-25 a further sum of 15,000l. was voted as a Grant in Aid, and at 31 March 1925 the balance of the Fund was 44,6731. 18s. 4d.

The present account shows that, besides an excess of gross expenditure over estimate amounting to 6,361. 2s. 10d., there was a deficiency of Appropriations in Aid realized of 15,4631. 12s. 5d., making a total deficit on the Vote of 21,824l. 15s. 3d. for which, under ordinary conditions, an Excess Vote would have been required. With the consent of the Treasury, however, the whole of this deficit has been met, under the arrangement described above, from the Grant in Aid Fund, which is thus reduced to 22,8491. 3s. 1d.

Although the application of this fund to meet a deficiency of Appropriations in Aid as well as an excess of actual expenditure does not appear to have been contemplated when the scheme was framed, the use to which the fund has been put in the present instance may doubtless be regarded as a logical development of the original plan.

But this year's account brings into relief an aspect of the case which I suggest requires further consideration, viz. that the procedure adopted has resulted in effect in the establishment of a reserve fund in connexion with this Vote from which a deficiency can be met without further

CLASS IV, VOTE 13.-NATIONAL LIBRARY, SCOTLAND.

27. The Account as printed shows a gross expenditure of 1,8071. 17s. 3d. and ordinary receipts amounting to 1,8877. 4s. 11d., of which 1,80771. 17s. 3d. has been appropriated in aid of the Vote, leaving a surplus of 791. 7s. 8d. payable to the Exchequer.

The receipts so brought to account include a sum of 500l. of which the position is peculiar. This sum represents accumulated income which was in the hands of the Scottish National Library Endowment Trustees and was, on 22 October 1925, paid over by them to the Librarian to meet the running expenses of the Library. On 26 October 1925, when the National Library of Scotland Act, 1925, came into force, this sum was still intact in the hands of the Librarian, and it was used to meet in part the outgoings of the Library subsequent to the transfer. It appeared to me that this 500l., being accumulated income of the Endowment Trust, fell under the terms of Section 4 of the Act to be transferred to the new Board of Trustees as capital, and that consequently it could not properly be taken in relief of the Vote of Parliament, but, in the special circumstances, and to avoid delaying the publication of the Appropriation Accounts, I agreed to accept the Account as rendered on the understanding that this question should be referred for legal decision. The point has since been referred to the Law Officers of Scotland who have endorsed my view of the matter.

In these circumstances it will be necessary to make good to the Trust Capital of the Board this sum of 500l. It is for consideration whether an excess Vote should be taken for this purpose or whether, in the very peculiar circumstances of the case, the situation will be met if the necessary provision is made in the Vote for the National Library, Scotland, for 1927.

CLASS V, VOTE 1.-DIPLOMATIC AND CONSULAR SERVICES.

Subhead K.1.- Inter- Allied Rhineland High Commission.

28. Consequent on the introduction of the Dawes Plan, under which the expenditure on this Commission became a direct charge cn. the Annuities, the accounts (hitherto retained by Germany) have been rendered for audit as from 1 April 1925. In addition to the cash expenditure of 53,3221., which was satisfactorily vouched, charges amounting to 11,500. are included in this account for the " deliveries" under Articles 8 to 12 of the Rhineland Agreement in respect of billeting, transport, etc. Of the 11,500l., vouchers have been furnished for 8501. only, being direct payments by the Commission, and 5,1401. represents the agreed sum for " deliveries for the period 1 April to 31 August 1925 when it was not possible to scertain their exact value.

From 1 September 1925, summaries certified and approved by the local British and German authorities have been rendered for "deliveries to the value of 3,216., and the remaining 2,2941. has been brought to account with Treasury sanction, pending the receipt of claims from

CLASS V, VOTE 1-contd.

Germany. The vouchers to these summaries of claims, which are settled through the Reparations Commission in Paris, are retained by Germany and, as they have been examined locally by a representative of the Foreign Office, I have accepted the certified summaries without further question.

Subhead K.1.- Anglo-Turkish Mixed Arbitral Tribunal.

29. Under Article 92 of the Treaty of Lausanne, Mixed Arbitral Tribunals were to be set up to deal with disputed cases of property, contracts, &c., and in November 1924 the Treasury sanctioned the terms of appointment of the British members on the assumption that no appointment would actually be made until it was possible to constitute the Tribunal effectively.

In anticipation of the constitution of the Tribunal at an early date, the neutral President, British members, and some subordinate staff were appointed in April and May 1925, for which covering Treasury authority was obtained in September 1925, involving expenditure of 4,650l. from this Vote during the year 1925-26. This expenditure includes 4131. for travelling expenses of the three British members, who proceeded to Constantinople in May 1925. Two members returned to London in August 1925, one of whom went again to Constantinople in November 1925 and the other not until May 1926.

In response to my inquiries, I am informed that the Tribunal was not formally constituted until 19 April 1926, but that negotiations with the Turkish Government and preliminary work on the claims have continuously occupied the British members since their appointment.

Subhead K.1.- Austro-Hungarian Rolling Stock Commission.

30. Under the terms of the Treaty of Peace with Austria an International Commission was formed in 1919, to distribute the AustroHungarian rolling stock among the Successor States, the cost of the Commission to be borne by the interested governments in proportion to the value of the stock allocated to them.

It was ultimately decided that the Successor States should pay to the President of the Commission a lump sum to cover his fees, and to provide for the reimbursement of certain advances which had been made from this Vote to meet the expenses of the British Section of the Commission.

I was informed in May 1925 that the sums due from the Successor States had been paid over to the President, but as yet no credit has appeared in the accounts in respect of the advances made from the Diplomatic and Consular Vote, which amounted to 12,6291.

I have recently asked what is the present position as regards the

CLASS IV, VOTE 13.-NATIONAL LIBRARY, SCOTLAND.

27. The Account as printed shows a gross expenditure of 1,8071. 17s. 3d. and ordinary receipts amounting to 1,8871. 4s. 11d., of which 1,8077. 17s. 3d. has been appropriated in aid of the Vote, leaving a surplus of 791. 7s. 8d. payable to the Exchequer.

The receipts so brought to account include a sum of 5001. of which the position is peculiar. This sum represents accumulated income which was in the hands of the Scottish National Library Endowment Trustees and was, on 22 October 1925, paid over by them to the Librarian to meet the running expenses of the Library. On 26 October 1925, when the National Library of Scotland Act, 1925, came into force, this sum was still intact in the hands of the Librarian, and it was used to meet in part the outgoings of the Library subsequent to the transfer. It appeared to me that this 500l., being accumulated income of the Endowment Trust, fell under the terms of Section 4 of the Act to be transferred to the new Board of Trustees as capital, and that consequently it could not properly be taken in relief of the Vote of Parliament, but, in the special circumstances, and to avoid delaying the publication of the Appropriation Accounts, I agreed to accept the Account as rendered on the understanding that this question should be referred for legal decision. The point has since been referred to the Law Officers of Scotland who have endorsed my view of the matter.

In these circumstances it will be necessary to make good to the Trust Capital of the Board this sum of 500l. It is for consideration whether an excess Vote should be taken for this purpose or whether, in the very peculiar circumstances of the case, the situation will be met if the necessary provision is made in the Vote for the National Library, Scotland, for 1927.

CLASS V, VOTE 1.-DIPLOMATIC AND CONSULAR SERVICES.

Subhead K.1.- Inter- Allied Rhineland High Commission.

28. Consequent on the introduction of the Dawes Plan, under which the expenditure on this Commission became a direct charge cn the Annuities, the accounts (hitherto retained by Germany) have been rendered for audit as from 1 April 1925. In addition to the cash expenditure of 53,3221., which was satisfactorily vouched, charges amounting to 11,500. are included in this account for the " deliveries " under Articles 8 to 12 of the Rhineland Agreement in respect of billeting, transport, etc. Of the 11,500l., vouchers have been furnished for 8501. only, being direct payments by the Commission, and 5,1401. represents the agreed sum for " deliveries " for the period 1 April to 31 August 1925 when it was not possible to scertain their exact value.

From 1 September 1925, summaries certified and approved by the local British and German authorities have been rendered for "deliveries " to the value of 3,2161., and the remaining 2,2941. has been brought to account with Treasury sanction, pending the receipt of claims from

CLASS V, VOTE 1-contd.

Germany. The vouchers to these summaries of claims, which are settled through the Reparations Commission in Paris, are retained by Germany and, as they have been examined locally by a representative of the Foreign Office, I have accepted the certified summaries without further question.

Subhead K.1.- Anglo-Turkish Mixed Arbitral Tribunal.

29. Under Article 92 of the Treaty of Lausanne, Mixed Arbitral Tribunals were to be set up to deal with disputed cases of property, contracts, &c., and in November 1924 the Treasury sanctioned the terms of appointment of the British members on the assumption that no appointment would actually be made until it was possible to constitute the Tribunal effectively.

In anticipation of the constitution of the Tribunal at an early date, the neutral President, British members, and some subordinate staff were appointed in April and May 1925, for which covering Treasury authority was obtained in September 1925, involving expenditure of 4,6501. from this Vote during the year 1925-26. This expenditure includes 4131. for travelling expenses of the three British members, who proceeded to Constantinople in May 1925. Two members returned to London in August 1925, one of whom went again to Constantinople in November 1925 and the other not until May 1926.

In response to my inquiries, I am informed that the Tribunal was not formally constituted until 19 April 1926, but that negotiations with the Turkish Government and preliminary work on the claims have continuously occupied the British members since their appointment.

Subhead K.1.- Austro-Hungarian Rolling Stock Commission.

30. Under the terms of the Treaty of Peace with Austria an International Commission was formed in 1919, to distribute the AustroHungarian rolling stock among the Successor States, the cost of the Commission to be borne by the interested governments in proportion to the value of the stock allocated to them.

It was ultimately decided that the Successor States should pay to the President of the Commission a lump sum to cover his fees, and to provide for the reimbursement of certain advances which had been made from this Vote to meet the expenses of the British Section of the Commission.

I was informed in May 1925 that the sums due from the Successor States had been paid over to the President, but as yet no credit has appeared in the accounts in respect of the advances made from the Diplomatic and Consular Vote, which amounted to 12,6291.

I have recently asked what is the present position as regards the