Appendix 2 (d). Appendix 2 (e). Appendix 26. Appendix 3. Appendix 7. of Commit On the 21st October, 1920, Major Boyd wrote a letter to Sir Alexander Prince stating that at a conference held at Eaton Square on the 6th April, 1919, it had been agreed that a reserve should be made in the final Expeditionary Force Canteens' figures on account of losses which the Navy and Army Canteen Board might make in the conduct and winding-up of the Expeditionary Force Canteens organisations overseas, and that it was impossible at the present time to name any specific sum which would represent the losses of the Navy and Army Canteen Board in the old Expeditionary Force Canteens areas, although these losses would be very heavy. To this Sir Alexander Prince replied that the reserve which was discussed at the meeting in April 1919, only contemplated losses arising under certain conditions in the ultimate winding-up of the business of the Expeditionary Force Canteens taken over by the Navy and Army Canteen Board; and that it would be seen from the Minutes in question that a reserve was contemplated only if an appreciable time had not elapsed between the 1st May, 1919, and the ultimate closing down of ex-Expeditionary Force Canteens areas, and although he did not feel justified in making or even recommending any reserve of this nature, he presumed it would be quite open to the Expeditionary Force Canteens Committee to bring to the notice of the War Office that the Navy and Army Canteen Board felt itself entitled to something in this respect and that any claim that they might advance and substantiate would, of course, merit the closest investigation and consideration. On the same day a meeting of the Expeditionary ForceCanteens Committee was held, at which it was resolved to adopt the report of the officials and to forward it at once to the Army Council with the following observations :-" The profits of the Expeditionary Force Canteens shown in the balance sheets for the Western Continent, and the Mediterranean and the East, respectively, are subject to a contingent liability in accordance with the terms of an arrangement entered into between the Expeditionary Force Canteens and the Navy and Army Canteen Board, which are contained in the Minutes of a conference held on 6th April, 1919, and subsequent conferences of 30th April, 1919, 23rd July, 1919, 8th October, 1919, and 21st July, 1920. The Expeditionary Force Canteens are informed by the Navy and Army Canteen Board that they are not in a position to state what these losses will be. In these circumstances the Expeditionary Force Canteens are not in a position to set up any reserve to meet this contingent liability and they therefore report these circumstances, leaving the Army Council to make any provision they may find necessary." On receipt of this Report the Secretary of State for War referred the matter to a Committee under the chairmanship of (See Report Sir Samuel Roberts, Bart., M.P. This Committee recommended tee on Can- that the losses incurred by the Navy and Army Canteen Board teen Profits should be deducted from the profits previously made by the (Cmd.1280) Expeditionary Force Canteens. This was approved by the Secretary of State for War 1921). V. THE TRADING POSITION AT THIS DATE. Your Committee are of opinion that it was arranged that the Navy and Army Canteen Board should take over the business of the Expeditionary Force Canteens and wind it up as soon as possible, but that it was necessary that the business should be continued after the Armistice as long as troops were maintained in the war areas, that the Navy and Army Canteen Board should continue to supply the troops as before and that the profits of the Expeditionary Force Canteens should be utilised to make good any losses that might arise in the winding-up of the business of that undertaking. Your Committee are of opinion that it would have been impossible to wind up the Expeditionary Force Canteens without incurring losses; goods which had been bought in war time had to be sold in peace time, officials had to be sent home and had to be maintained during the winding-up of the undertaking. The change of policy of the Government in demobilising the Army more quickly than and on a different method from that which had been originally intended, was also certain to ensure losses by the Navy and Army Canteen Board owing to stocks having been purchased on the understanding that demobilisation would go on slowly, but which purchases, owing to the quicker demobilisation, became useless for the purpose for which they were bought. 12, & 40. Your Committee are of opinion that the charges which have Qs. 6, 11, been brought by Lord Wolmer, "Truth," and others, to the effect that improper uses were made of the profits of the Expeditionary Force Canteens, have not been substantiated. Q. 1. s. 9-11,16, 27, 35, 36, also Q. 2825. Your Committee examined Lord Wolmer. He stated that in his opinion the profits of the Expeditionary Force Canteens should have been divided amongst ex-soldiers and not used to make up the losses incurred in the winding-up of the business and in the operations of the Navy and Army Canteen Board during the demobilisation of the troops. Your Committee have stated that in their opinion losses in winding-up were unavoidable. They have also pointed out that under the arrangements made by the Army Council it was never intended to divide the profits only amongst ex-soldiers of the great war, but that the profits should be handed over to the War Office to be dealt Appendix with primarily to alleviate the sufferings of disabled ex-soldiers, no statement being made limiting the distribution to soldiers disabled in the great war, and the allocation of the remainder was to be applied by the Council in their absolute discretion to the benefit of the soldier and his dependents. 1. (Cmd.1717) 1922. VI. THE FINANCIAL POSITION. Your Committee investigated the report made to the Government by Sir William Plender in 1922. They are satisfied that this report sets out accurately the financial position, and they have also satisfied themselves that the sums which stood to the credit of the two Institutions have been properly handed over to the authorities. Below is a summary of the amount available for distribution and the method by which it was distributed : DISTRIBUTION OF PROFITS MADE BY THE EXPEDITIONARY FORCE Q. 1453. Appendix 6. Q. 1407. In addition to the distributed total of.. Further payments in respect of rebates were made to units of His Majesty's Forces and to forces of the United States of America, amounting to (see para. 3, page 4 of Sir William Plender's Report) Thus the total sums applied by the Army Council to the good of the soldier and his dependents amounted to .. 9,513,246 19 5 6,584,100 99 £16,097,347 92 Sir William Plender stated in his evidence : "When one comes to look at this organisation as a whole whose turnover was £160,000,000 sterling, and that the net profits, including the rebates, come to £16,000,000 sterling or equal to 10 per cent. on the turnover, and that such profit was earned under War conditions, when buying was difficult, when sales were very often made under fire, when consignments passed through many countries and many hands, I think that the result —and I speak as a business man with some experience-is not unsatisfactory." With regard to the loss of £2,469,370 19s. 9d. Your Committee have had the following figures laid before them. Of the profit of £10,256,291 17s. 6d. disclosed by the Accounts of Expeditionary Force canteens, a sum of about £3,500,000 represents the stocks and equipment transferred to the Navy and Army Canteen Board on 1st May, 1919. The remaining balance was realised. The above figure of loss therefore represents partially the loss on the disposal of stocks included in the Expeditionary Force Canteens' figure of profit and partially the loss on winding up a rapidly dwindling business, as set out in the following statement :— Loss on Disposal and Realisation of Stocks Share of Headquarter expenses of Cost of winding up, after bringing into .. £ s. d. 1,181,019 6 11 465,423 3 8 465,606 4 7 357,322 4 7 £2,469,370 19 9 |