7 June, 1923.]

re-sale by him to a well-known firm of merchants in the City. This firm is one with whom the Roard had been in the habit of dealing by way of purchase, and it is difficult to understand, therefore, why the Board could not sell to this firm direct instead of allowing Mr. Stanley to purchase and re-sell to them." What we were told a little while ago was that Mr. Stanley received a commission. Did he receive a commission and a profit? The commissions would receive would be on the resales to Pollock, therefore if it was a direct purchase by Stanley and a sale by him himself, commission would not have been payable then, so far as I could get any information on the subject, but, you will remember, we say we did not know in respect of what goods the commission was paid, we could not trace it

even.

he

1674. And therefore you cannot say whether Mr. Stanley received a commission for selling goods to Pollock and then shared the profit with Pollock?-I could not say, I do not know at all.

1675. It would not be impossible?— Very few things are impossible. I really do not know anything about it. I could not possibly answer.

1676. Very well. "The prices at which Mr. Stanley so re-sold gave him an all-round profit of 12 per cent. on the prices paid by him to the Board, without his having had to handle the goods." Do I understand from that that Mr. Stanley having purchased a certain amount of goods and having resold them in this form, all Mr. Stanley did was to go to the Board and say: "Deliver these goods to that firm," and then he took the difference?-That is what it amounted to. (Mr. Rae Smith.) He would hand the delivery orders over. That is how it would be done.

1677. Then he practically got 12 per cent. for being again an agent.-(Mr. Fisher.) In those particular cases, yes.

1678. And having been a friend of Major Van den Bergh he could find out from Major den Bergh whom they had been in the habit of buying these goods from? I could not answer that question,

do not know personally. (Mr. Rae Smith.) Stanley acted as a principal in those purchases, not as an agent.

1679. I quite understand he acted as a principal, but as a matter of fact all he did was to obtain a delivery order and hand it over, and he never had to

[Continued.

move the goods or do anything of that sort?-No.

1680. Though nominally a principal, as a matter of fact he was really an agent? On the other hand, he might not have re-sold.

1681. He might not have been able to re-sell, in which case he would have been left with the goods?-Yes.

1682. I only ask this because of your paragraph: "This firm is one with whom the Board had been in the habit of dealing by way of purchase, and it is difficult to understand, therefore, why the Board could not sell to this firm direct instead of allowing Mr. Stanley to purchase and re-sell to them "-and I said I presume Mr. Stanley, being a friend of Major Van den Bergh, would know that they had dealings with this particular firm.He would not necessarily know that, he might learn it from his acquaintance. 1683. He might learn it. Then paragraph 131: "We find that Major Van den Bergh sold to Mr. Stanley, 1,220 dozen cigarette cases-electro-plate on brass and each capable of holding 40 cigarettes— at 3d. each, equalling £183, the cost to the Board being 3s. 4d. each, or £2,440 in all. These cigarette cases were apparently re-sold by Mr. Stanley to Mr Pollock. The cigarete cases were not manufactured at the time of their sale to Mr. Stanley, and, in fact, arrangements had already been made with the manufacturers by the Department at Tower Bridge Road which buy goods of this nature, to cancel the contract without payment." Am I to understand from that that there was no obligation on the Board to pay 3s. 4d. for these cigarette cases because they had not been manufactured and the contract had been cancelled without payment, but that they were so anxious to give Mr. Stanley an advantage that they buy the cigarette cases at 3s. 4d. and sell them to him at 3d. I do not know that one can quite put it in that way. That transaction rather illustrates the lack of coordination there was between Major Van den Bergh's department at Knightsbridge and the Buying Department at Tower Bridge Road which made it possible for Major Van den Bergh to sell goods which might never have been in existence.

1684. You mean they may not have known that the contract was cancelled?No.

1685. They may have been under the impression that they were obliged to take them? That may be so.

Chairman.

*1695. We have had a copy of the evidence taken last week put before us. I have not had time to go all through it, but I find there are two or three mistakes. On page 90, Question 1542, it reads: "You mean if they had been sold abroad he would have got more than 20s. a thousand owing to the duty, and would have got the money for the cigarettes abroad"; it should be " for

got the money the cigarettes as well," not "abroad "?-(Mr. Fisher.) Yes.

1696. Then on page 92 the word "not" is put in, which renders it exactly what I did not mean it to be;" and the reasons for his modifications are not those letters which I read out to you." It should read "The reasons for his modifications are those letters which I read out to you "" not " ought to be out. that correct?—Yes.

Colonel Campion.

Is

1699. I do not know whether there are any others; I have not had time to go through it very carefully, but, if there are, we must have them corrected. In paragraph 133 you state that "Major Van den Bergh sold to Mr. Stanley, in August, 1919, 479 dozen pairs of braces at 3s. 9d. per dozen pairs, although sales of similar braces, but of a much larger quantity (5,000 dozen pairs) had been made by the Buying Department in June, 1919, to the Belgian Commission at 10s. 9d. per dozen pairs." That again shows very great want of business knowledge. (Mr. Fisher.) It is a transaction that I cannot explain more.

1700. There again it is, unfortunately, a sale to a friend of his.-Yes. (Mr. Rae Smith.) Yes, Mr. Stanley; that is quite right. I do not think the mere fact that it was sold to a friend of his would invalidate the sale if the price were right.

1701. No, it would not invalidate the sale, but it makes it look rather peculiar if he sells to a friend of his in August certain articles at 3s. 9d. per dozen pairs when the same articles were sold in the previous June at 10s. 9d.-I quite agree.

1702. Further on you say there were considerable numbers of goods sold by the Board to Mr. Stanley, then to Mr. Pollock, and then to Messrs. A. W. Gamage, Ltd., and the price which Mr. Pollock obtained was approximately 29 per cent. over and above the price charged by the Board to Mr. Stanley. You further say that if Messrs. Gamage had been approached it is difficult to believe that "they would not have been prepared to pay the Board at least as much as they had paid to Mr. Pollock, who, as they doubtless knew, was not ordinarily engaged in trading in the goods sold to

them."

Those particular goods, sold to Mr. Stanley and then to Mr. Pollock, are the goods about which Mr. Pollock could have had no business knowledge.-(Mr. Fisher.) So it appeared to us. (Mr. Rae Smith.) They were not goods in which he ordinarily traded so far as we ascertained. 1703. It was not his business?-It was outside his ordinary business.

1704. This paragraph seems to be one of the worst, I think-paragraph 138. Apparently Messrs. Cook, Son & Co., of St. Paul's Churchyard, who are very leading people, were willing to purchase certain goods at 11s. per dozen pairs, and then it appears Major Van den Bergh had sold 7,500 pairs to Mr. Stanley at 7s. who had transferred them to Mr. Pollock, by whom they had been sold to Messrs. Cook at 11s. No, at 9s.

Captain Viscount Curzon.

1705. Does "transferred " mean sold to Mr. Pollock?-(Mr. Fisher.) That is one of the things we could never find outwhether they were sales, or whether Mr. Stanley bought as agent for Mr. Pollock.

Chairman.

1706. If they had been bought by Mr. Stanley at 7s. and sold to Mr. Pollock at 7s. Mr. Stanley would have got nothing out of it? That would be so.

1707. But if they were merely transferred to Mr. Pollock, he might claim that whatever profit Mr. Pollock made he was to share according to some arrangement made between them?-He might.

1708. In any case apparently the nation suffered, because Messrs Cook, Son & Co. got at 98. what they were prepared to pay 11s. for, and the nation only got 7s. for what they could have got 11s. for?That was our conclusion.

1709. That is correct?-Yes.

1710. I do not know whether I need go into these things any further; they are all the same sort of thing. Then we come to the Watford Development Company, which is, according to their Memorandum of Association, a company formed to carry on the business of refreshment contractors and club proprietors, and Mr. George Blake has an interest in that company. The Board apparently sold to the Watford Development Company a large quantity of armchairs at 3s. 6d. each, windsor chairs at 8s. 3d. each, bentwood chairs at 1s. 6d. each, and pianos, one at £10, one at £14, and 46 at £15. You draw

[Continued.

attention to Sir Francis Towle's instruction that no sale by private treaty was to be made at a price less than that obtained under similar conditions at auction, and then you say the prices realised at auction for this class of goods were: Pianos, £29 10s. Od. to £37 10s. Od., as against £10, £14 and £15; armchairs at 11s. to 15s. as against 3s. 6d.; and small chairs at 4s. 6d. to 7s. as against 3s. 3d. There again Major Van den Bergh appears not to have carried out Sir Francis Towle's instruction, and to have sold articles at very much below their value. Who is Mr. Blake? Was he a friend of Major Van den Bergh? Not that I know of. (Mr. Rae Smith.) There may have been some difference in the condition in which the various goods were; I do not remember. On the face of them, there is great discrepancy in the price.

1711. Did you ask Major Van den Bergh what his explanation for these sales was? -I do not think we knew that until after we had completed his evidence.

Mr. John Robertson.

1712. It would be a strange coincidence if all the articles Mr. Blake had-somewhere about half a million pounds worth, if I remember aright-were all of a lower quality than these for which a higher price had been obtained?-It would be a strange coincidence, but, with regard to the figure you mentioned of half a million pounds, that is a greater sum than the total sales to Mr. Blake. I am afraid I cannot give you the exact figure of the sales to Mr. Blake, but the majority of the sales to him were of articles, such as pork and beans, which were difficult to get rid of, and as to which we found great difficulty in criticising the prices. We point out earlier in our Report that, so far as we could tell, the prices paid by Mr. Blake were not unreasonable. Our chief criticism lay, in regard to prices, towards the sales made to Mr. Stanley and Mr. Pollock, and also to the Watford Development Company (which we are now considering), in which Mr. Blake did have a considerable interest.

Chairman.

1713. I think as far as I am concerned I will conclude my examination by drawing the attention of the Committee to your sub-paragraph (d) in paragraph 147 of the Report, in which you say "That

12 June, 1923.]

upon the commencement of private treaty sales at Knightsbridge by Major Van den Bergh unsatisfactory features become apparent," and you enumerate them:

66

(1) Little or no comparison with auction prices before making a private treaty contract; (2) little or no attempt to obtain competitive offers or to consult the buyers in the Board's employ; (3) a lack of co-ordination with the departments holding goods, resulting in sales in excess of stock; (4) neglect to make use of the most obvious markets; (5) the giving of credit to purchasers without proper enquiries being made as to their financial standing, and the making of sales to persons who were on friendly terms, rather than terms of business relationship, with Major Van den Bergh, resulting in favourable treatment being accorded to them; (6) lack of co-ordination by Major Van den Bergh with the Accounts and other branches properly concerned; (7) failure to keep proper record of terms arranged." Then you add in paragraph 148: "It is to be understood, however, that the remarks contained in the preceding paragraph are not intended to apply to the Board's methods of sale of surplus stock at the present time." Those "unsatisfactory features deal entirely with Major Van den Bergh? (Mr. Fisher.) Yes. (Mr. Rae Smith.) They really relate to the period from July to October, 1919.

1714. The only other thing I have to say is that in paragraph 150 you indicate that the statements made in reply to Mr. Richardson's question on the 9th December, 1919, in the House of Commons "will not bear examination in the light of a close investigation of the transactions between the Board and Mr. Blake. The answer was prepared in accordance with information furnished by the Board, and this information, while doubtless supplied in good faith, we feel was prepared with an insufficient knowledge of the facts. I understand from that you do not make any charge against the War Office, but the War Office merely wrote to the Board and asked for information and the Board supplied the information, which was, as a matter of fact, incorrect, though, in your opinion, it was supplied in good faith? That is right. (Mr. Fisher.) Yes.

1715. They you say: "The answer to Mr. W. Thorne's question on the 20th May, 1920, appears to us to state the facts with sufficient correctness, save that the statement in the final paragraph could hardly have been made had there been an

[Continued.

investigation at the time into the transactions in relation to the disposal of the Board's surplus stocks." That again, I presume, deals with the Board and not with the War Office itself?-(Mr. Rae Smith.) There was no misstatement by the War Office; they had to take the information which was given to them.

1716. It is as well that that should be known, I think? There is no question about any misstatement on their part.

1717. In paragraph 153 the Report really comes back to Major Van der Bergh, and practically the greater part of your criticism is directed to the sales, amounting to approximately £520,000. made by Major Van den Bergh between July and October, 1919? (Mr. Fisher.) That is so.

Mr. John Robertson.

1718. I do not know that I have any really important questions to put, because they are set forth in this evidence, and1 the obvious answer is that you are only the party reporting, and you have endeavoured to make your Report very clear. There is one question, however, I should like to put. I understand you are a lawyer, Mr. Fisher?-Yes.

1719. In this Report you draw attention to certain transactions between private firms and these parties which are referred to?—Yes.

1720. You remember the letters which were produced on the last occasion?-Yes.

1721. When you produced those letters you said the production of those letters modified your opinion, that is to say, the opinion expressed in the document you put in on the last occasion ?-Do you mind showing me where I say that?

1722. I have not the reference at the moment, and I will leave that in the meantime, but you do remember the letters that were put in on the last eccasion from this Major Van den Bergh? -Yes.

1723. They set forth that there had been offers to private firms? Yes. 1724. You make reference to that in your evidence ?-Yes.

1725. What is your reference to it?I shall have to find it. I think you are referring to paragraph 10 of my Observations, in the final part of it.

Chairman.] I think that is dealt with in my question on page 92 of the Minutes. where I say: "I may be wrong in my