Naval and general?—Yes. (Sir Malcolm Ramsay.) I do not think the witness has explained to the Committee what is the urgency of the decision as regards the first point that we discussed I gather the House of Commons is pressing for the Air Estimates for the coming year to be issued, and they ought to go to press next week.

Sir Henry Craik.] We will give our decision at once.

Mr. Ellis.

75. What is there to be said about the medical side. The Treasury ask for two recommendations, one for the medical side, and one for the other side.-(Mr. Millar.) I ought to have mentioned the Medical Vote. Again, by analogy with the Navy, one would expect a separate Medical Vote. There is not very much in it though, so far as the Air Force is concerned, and you get pretty full details as to the medical staff in Air Vote 1 on page 6, where the total strength of the medical branch and the total amount of their pay are set out. Then you get the Nursing Service after that. It is a matter to which we attach

[Continued.

considerably less importance, but we are inclined to think on the whole it would be advisable to have a separate vote.

76. Would you bring all the stores into that vote as well?-Yes, the medical stores. (Mr. Bland.) I think if we had a Medical Vote it should have everythingthe stores and hospitals. It would amount to a little more than we have on pages 6 and 7. (Mr. Millar.) You would get the hospitals in that. (Mr. Bland.) We thought it not large enough to cause a separate vote. I may say that the Air Council rather hope that they will not be driven into having a great many separate heads. We have nine votes, and we thought with our relatively small Force and relatively small expenditure that was sufficient.

Chairman.

77. But it is a growing expenditure?— Yes. If it grows in fresh directions we should see reason for fresh Votes, but if it grows on the same lines then we could let the Votes expand. That was our view of it.

Chairman.] If there are no further questions, we will consider the matter in Committee.

79. What do you mean, Sir Malcolm, by a test examination of the Revenue Account ? Where are we to find this Revenue Account which you submitted to a test examination ?-That is not included in this volume, Sir; that is the General Customs Revenue which appears in the Finance Accounts which are published at the end of the year, the Beer Duty and Dutiable goods of all kinds. The Exchequer and Audit Acts do not require a separate account of that to be laid before this Committee, but I am instructed to examine the Revenue to see that there are proper checks on the collection, and I or my Officers have access to the records of the Commissioners of Customs and Excise and go through them and make a test examination with a view to seeing that the duty assessed is properly brought to account and paid

over.

80. Then we are bound to accept your statement; we have no means of examining it?—I examine it on behalf of the Committee. If I find, as I have found, matters to which the attention of the Committee should be drawn, I mention it in this Report although they do not have before them the actual figures of the revenue collected.

81. We accept this as a statement from

you acting as an Officer for us, but we do not go into a further examination of it?Unless there is any point in which the Committee is interested? It is my duty to call attention to any matters which seem to be irregular or to require explanation, but if I find that everything is regular I make no mention of it.

82. What I am asking is this. You say that you would accept this unless certain things occurred, but how are we to find out or judge of that at all-what means have we to judge of it? I was thinking then that Members of the Committee have a good deal of information in the House on questions which interest them in debate, and they very often ask questions on revenue matters in which they are interested.

83. But there would be no information officially in our possession which would entitle us to make any criticism?—No, that is so; I am afraid the Committee has to rely on my examination to direct their attention to any unusual features which one would hope the Committee would investigate.

Mr. Charles Roberts.

84. What is this remission of £1,341 28. 7d. on the Key Industry Duty? Why was that remitted?-(Mr. Cunningham.) That was a case where certain goods from Germany, chemical apparatus, hosiery latch needles and such things were imported at a date three or four months before the Key Industry Duty was imposed. At the time a question was raised a to whether these things were liable to the German Reparation Levy, the importer claiming exemption and the Board of Customs desiring proof in support of the claim. Correspondence about their liability for the levy lingered on until

8 March, 1923.]

after the Key Industry Duty had been imposed. It follows that when the goods were finally cleared they ought in strictress to have been charged with the Key Industry Duty although, had there not been this discussion as to liability, they would not have been liable. It was just the delay which kept the goods at the Docks until the Key Industry Duty had been levied which brought them technically within the charge of that duty. My Board considered that the circumstances were such as to give the importers an equitable claim to relief from the Key Industry Duty.

Mr. Ellis.

85. Technically they had not been cleared, as I understand it. They were not cleared until after the imposition of the Key Industry Duty.

86. If you had gone along faster, they would have been cleared?—Yes.

Chairman.

87. Turning to the Vote itself on page 4, Sir Malcolm, would you please explain this excess more than granted of £1,070 for the use of private rooms for Official purposes? I understand that is a provision for travelling collectors? That is sub-Head K. These are allowances which &re made to Excise Officers in small towns in the provinces for providing in their own houses a room to be used as a Revenue Office. That allowance was raised from £10 a year to £18 and it was expected that the arrears of the increased allowance would all have been paid within the preceding year. However, we had eventually to carry over a great part of those arrears into the year we are discussing, and hence the excess.

Colonel Assheton Pownall.

88. Does this clear off the arrears?Yes.

Sir Henry Craik.] I am astonished at the accuracy of the estimate; I have acted as Accounting Officer myself and I think you have been very successful in gauging your wants?-Thank you.

Mr. Wise.

89. On Subhead C (6 Travelling and Subsistence Allowances "-The excess was due to a larger payment than we anticipated in respect of certain allowances which are called disturbance allowances. Those are allowances given to unattached

[Continued.

officers in the first few years of their official life. They have to lead a wandering existence going about from place to place officiating for officers absent on leave or sick leave. When they move from one place to another they get their travelling expenses.

90. First class?-Third. They also get by way of compensation for the expense of living, because it is more expensive if you have to change your lodg ings every three weeks or so, an allowance of 3s. 9d. a week for four weeks and then 2s. 6d. for another four weeks -as I say, by way of compensation for the increased cost of living imposed by this peripatetic life.

91. 3s. 9d. beyond their salary, is that? -Yes.

92. That does not take them very far. -That is all they get; it is 3s. 9d. a night please forgive my slip.

Colonel Assheton Pownall. 96. On Subhead Q, on page 5, Superannuations and other non-effective charges," that increase was a very big one, although it is accounted for, I agree, in part by the note at the bottom of the page. There is a difference of nearly a quarter of a million.-The fact which underlies that is that at the end of August, 1921, a very large number of officers retired voluntarily when, in the ordinary circumstances, we should have expected them to continue in office until after the end of the financial year. That threw from Subhead B, salaries, on to Subhead Q, 770 cases of retirement in the year instead of the normal 250 to 300. 97. There were pension reasons for it. Yes, there were.

98. They got a higher rate of pension by retiring? It coincided with a substantial drop in the Civil Service bonus.

8 March, 1923.]

[Continued.

Colonel Stephenson.

99. Is that a matter which was suggested by a sliding scale of pensions? Those pensions are not irrevocable, are they?-Pensions are now on a sliding scale, as you say.

Colonel Assheton Pownall.

100. That is so now, but it was not then? That is so.

Mr. Wise.

101. Under Subhead 0 you have "Losses by default, fraud and accident." What is the fraud?-There is a note below. £290 of that was due to defalcations by an officer who falsified receipts for moneys which he received on passengers' baggage in the docks.

102. Is that checked now ?-It is a very difficult thing to check, but to the best of our ability we have made the safeguards watertight.

Mr. Robert Young.

103. What is the Fine Fund, Subhead N? I believe that is peculiar to the Customs and Excise Department. It is a fixed sum of £200 set aside under a subhead of the Vote for distribution by the Board for the relief of necessitous cases-cases of distress or necessity among their Officers. It is built up, as the name implies, by fines which are paid by the Officers for disciplinary reasons.

Chairman.

104. Is there not a contribution from the Treasury? Does the £200 consist entirely of accumulated fines?—The £200, if I may say so, is the limit to which we are allowed to spend; the fund is built up of fines-I am afraid I cannot give you the exact figure off-hand, but it consists of whatever the fines have amounted to, less the disbursements in. aid of necessitous cases.-(Sir Malcolm Ramsay.) I think the Fund on the 31st March, 1922, amounted to £350.

105. I would like an explanation with regard to this selling of offal tobacco under Subhead P.-" Expenditure on the destruction of offal tobacco abandoned for payment of drawback."-(Mr. Cunningham.) Offal tobacco, as you know, Sir,

is

106. Explain how the excess of £259 comes about.-Offal tobacco is the refuse of tobacco manufacture, and by law the manufacturer is entitled to hand that back to the Board of Customs

and Excise who are bound to take it and dispose of it. Until recently the Board were able to make a contract with certain people, who took this stuff off their hands as it came along, paid for it and took it. and used it for the manufacture of insecticides, but the contract expired about the middle of the year under discussion and the Board were unable to find anybody to take on a new contract, the result being that, instead of making money out of this stuff we had to destroy it at the Crown's cost.

Sir Henry Craik.

107. Do you anticipate that this impossibility of selling it will continue? How do you account for it?-I cannot account for it; for some reason there is no market for the stuff at present.

108. For the insecticides ?-No, for the offal tobacco; it is a sort of powdery snuff-like substance quite useless for smoking, of course.

109. It had been used for making insecticides?-Yes.

110. Has there been a decay in the sale of that sort of thing?-I suppose some other article has come into competition with it.

Colonel Stephenson.

111. It was used a great deal in the war for curing ringworm in horses. Was that how they were able to get rid of it, do you think, during the war years?— We did get rid of it during the war

years.

112. To the Army?-It may have been to the Army.

Sir Henry Craik.

113. And you cannot in any way get rid of your pledge to the owners ?-Unfortunately not; we are bound to take the stuff; the law obliges us to take it and destroy it.

114. And you cannot force them to destroy it; you have even to incur the expense of destroying it?—Yes.

Chairman.] How much a ton did it cost to destroy?-I am sorry I could not give you that offhand. (Sir Malcolm Ramsay.) 11s.

Mr. Gershom Stewart.

115. Do they sell it to you?-(Mr. Cunningham.) They dump it on us; we have to repay the duty on it.

8 March, 1923.]

Mr. Johnston.

[Continued.

connection with the Bill of Entry.' That refers to the services you render to other traders, does it not? Will you explain what it means?-The Bill of Entry is a very old word for the system under which the traders, merchants, importers and others, may apply to the Board of Customs for statistical information which is not published in the ordinary Blue Books.

126. And you charge- -?-We make a charge based on the length of time which is required to produce these special statistics.

Mr. Wise.

127. No. 3 gives the "Cost of collection on revenue in the Isle of Man." Why should we pay the cost of that?-This is a recovery; we recover from the Isle of Man Government the estimated cost of collecting their revenue for them.

Colonel Assheton Pownall.

128. We provide people to collect it and they hand us back the actual cost of their salaries?-Yes.

129. But they keep the revenue?That is so.

Mr. Gershom Stewart.

130. Are you going to do that in the case of the Free State? A similar arrangement is at present in force with the Free State.*

Chairman.

131. May I invite your attention to the paragraph at the top of page 7 starting "Payments were made from this Vote to various Officials and retired Officials of the Department on account of special services rendered to the Admiralty Marshal during 1914-19," and then there follows a list of the extra payments. Do all the instances given in this list refer to the period 1914 to 1919, or do some of them refer to one year only? They all refer to the whole period of the War.

132. Have you anything to say, Sir Malcolm, on the whole Vote? (Sir Malcolm Ramsay.) No, Sir, I think all the points have been covered by the Committee.

State.