14 June, 1923.]

[Continued.

Chairman.

2096. (To Sir Alexander Prince.) What is your occupation at the present monment? (Sir Alexander Prince.) Very largely unemployed, but, inter alia, I am honorary adviser to the War Office in connection with Army Institutes and like matters.

Chairman.

2097. What are you, Colonel Benson? -(Colonel Benson.) I am Mr. Benson; the Colonel has disappeared. I am at the moment, or have been since the 1st of June, General Manager of the Navy, Army, and Air Force Institutes.

Chairman.

2098. You, Sir Alexander Prince, have put in a précis of evidence, which, I think, largely confirms what Sir George May has told us. Were you in the room when Sir George May gave his evidence? -(Sir Alexander Prince.) Yes; I did not hear it all very clearly, but I was here.

2099. You say you did not hear it all clearly? I think I have the essence of it. 2100. Your evidence seems to me more or less to confirm the evidence which has already been given to us by Sir George May. You state in your précis, as Sir George May has already told us, that you were first Honorary Director, and then Controller from the inception of the Expeditionary Force Canteens until it was dissolved. You then give the reasons why it was started, and you state, as I understand it, that the capital was found by the Treasury by way of loans which were repaid?-Up to a point, yes.

2101. Have you any further statement to make now. I will leave it to you?—I am afraid that I cannot add very much. I shall be very pleased indeed to answer any questions and to be examined on any of these points, but to make a statement would involve a very long matter.

2102. The précis of your evidence is to this effect: That the organisation was established after due consideration; that the money was provided to a great extent by the Treasury by way of loans, which loans were subsequently repaid with five per cent. interest, that the officials connected with it gave an undertaking that neither they nor the respective organisations with which they were connected should derive any profit or gain of any

kind, and they were determined to make such arrangements in regard to the accountancy and finance as would render it possible at the close of the organisation to produce to the War Office accounts and balance sheets prepared and vouched for by a reputable, firm of independent chartered accountants, and such an arrangement was made by the officials, and was approved by the Army Council. Then you say the organisation quickly grew and spread to Gallipoli, Egypt, Mesopotamia, Italy, Salonica, and, ultimately, Germany and Constantinople. The personnel of the organisation was provided in the ordinary commercial way by procuring employees who were eventually enlisted into a special branch of the Royal Army Service Corps, and care was taken to select, as far as possible, proper people. All claims and pensions through disability or sickness granted to the personnel were paid by the organisation, and no charges were borne by the public. You then say the services of the organisation were appreciated by the troops, and that may perhaps best be gathered from the letters of appreciation, copies of which are attached, from His Majesty the King, who, on his visits to France, was frequently catered for in the E.F.C. officers' rest houses, the General Officers Commanding-in-Chief, and others. Was any special attempt made to do things exceptionally well for His Majesty?-No; on the contrary it was not always known he was coming. The point was he insisted on being treated exactly the same as his junior officers, and he paid for his meals. It was not done at the expense of the soldier.

2103. You next say: "At the time of the Armistice the position of E.F.C., which was essentially a war organisation, had to be considered, and the E.F.C. officials recommended that it would be more economical to close down the E.F.C. as a separate organisation and transfer the running of the conteens to the Navy and Army Canteen Board, which was the canteen organisation conducting canteens for the troops at home and in some places abroad." That is in confirmation of what Sir George May said—that it was thought to be more advantageous to have one concern instead of two?-Yes, that was

so.

2104. Then you give the reasons for that: "The officials considered that this arrangement would prevent the dupli

14 June, 1923.]

cation of controlling officials, various offices and warehouses, and would facilitate the liquidation and selling of the stocks, the reason for this proposal being (apart from the great economy to be effected in personnel, etc.) that the N.A.C.B. as a going concern being permanently established in a large way of business would be in a better position to deal with sales and disposals than a temporary organisation." I presume what you mean by that is that the N.A.C.B. being in business would be able to sell some of the goods which they took over from the E.F.C. retail instead of being obliged to dispose of them at any price they could get?-No; the real reason would be that as they were in business and permanently established in business, they would have connections with business houses, with merchants, and have a greater pull on them by continuity of their transactions than a temporary organisation which was going out of business. Then you say: "The officials of the E.F.C. were naturally desirous of giving an account of their stewardship,' feeling that they had a heavy moral responsibility to the War Office and the Armies in the Field in carrying out a responsible trust reposed in them. The officials were, for various reasons, opposed to the idea of a simply merging of the E.F.C. accounts into the N.A.C.B. accounts." I suppose that was because the officials desired that the War Office should know the actual state of affairs when they gave up?-The officials were taken at the beginning of the war-that is a long time ago, in 1915-rather on trust. Great responsibilities and a great deal of power was put in their hands, and, naturally, they wished to show the result of their work and to show that everything that they said they carried out had been carried out.

2105. (To Colonel Benson.) Your précis is very short, and in it you state that you have seen Sir Alexander Prince's précis and you agree with it? (Colonel Benson.) That is right.

Mr. John Robertson.

2106. One question arises on the evidence given here by Viscount Wolmer. On the first day, on page 17, Question 135, Mr. Morrison asked: "Who made the exact promise about the profits going to the ex-service men. Was it a decision of the Cabinet, the Secretary of State for War, or who?" and the answer was,

[Continued..

"The promise is on the price list."(Sir Alexander Prince.) Yes.

2107. Subject to the assets being realised, has that promise been carried out and the profits devoted to the men? --I am afraid I cannot give you a direct answer. In the first place, as stated here, a decision was arrived at that the profits of the organisation should be devoted to the benefit of the soldier and his dependents. That decision was arrived at by the Secretary of State, at that time Lord Kitchener. As to what has been done the sole responsibility of the officials of the organisation-and when I say the officials I mean the Controller and the Deputy-Controller-was to hand the proceeds, that is to say the profits, over to the War Office at the conclusion of the life of the organisation, and the entire profits would be disposed of at the discretion of the Army Council. I cannot tell you what they have done.

2108. May I draw your attention to the first three lines of your précis in which you say: "Having with Colonel Benson created the organisation known as the Expeditionary Force Canteens, and, having been connected with it first as Honorary Director, and subsequently as Controller from its inception until I made my official report to the Army Council in October 1920." You were Controller until October, 1920?—Yes.

2109. Is it a fact that on the price list the statement was made and the soldiers induced to buy on that assumption-that if there were profits those profits would be given to them?-The soldiers were informed that any profits available would be handed over to the Army Council, and would be disposed of at their discretion, and it was indicated that they would be entirely expended for the benefit of the soldier and his dependents.

2110. Has this been done?-I am not in a position to say; I am not a member of the Army Council.

2111. If it has not been done-no matter who did it-then it would not be carrying out the promise given to the soldiers? I should be disappointed if every promise that was made was not carried out.

2112. I am not concerned about every promise. If this promise was not carried out, the promise that came directly under your notice, and was on your price list, it would be violating that promise to the soldiers?

Chairman. I do not think we can ask

14 June, 1923.]

the witness that question, because he is not in a position to answer it. In the first place you quote a statement made by Lord Wolmer, which is an inaccurate statement. We have already had from the War Office the actual agreement which they made with the soldiers. It has nothing to do with the ex-Service man. It was never intended to give it to the ex-service man, but to give it to the soldier or his dependents whether he was in the Army now, or in 20 years' time, or at any time. Therefore that statement by Lord Wolmer is incorrect, and that we have from the evidence of the War Office giving the actual written statement. Now you ask Sir Alexander Prince whether that has been carried out. Sir Alexander Prince not being a member of the Army Council cannot answer that question.

Mr. John Robertson.] But he can say if it was not carried out it would not be carrying out the promise.

Chairman.

2113. That is only his opinion?-I stated that I should be disappointed, and that is as far as I can go.

Mr. John Robertson.

2114. I just want to refresh your memory with the statement that was made, and ask whether it is correct that it was to the soldiers who were serving at the time and who might happen to be soldiers at any time that these profits were to be devoted?-The entire disposal of the profits is in the discretion of the Army Council.

2115. Then it is not correct for anyone to say that the profits were to be for the ex-Service men and their dependents? -I do not remember that phraseology. I think it was "the soldier and his dependents."

Chairman.] I have already stated that it had nothing to do with ex-Service

men.

Mr. Hugh Morrison.

2116. It is not correct according to the War Office statement?-"The good of the soldier" is as far as my recollection goes,

Mr. John Robertson.

2117. Then the promise was not on the price-list?-A copy of this statement was, I think, printed on the price-list.

[Continued.

2118. Was it a copy of the statement to the effect that it would be at the discretion of the Army Council?

Chairman.

2119. We have the statement here: "The whole of the profits made by the Expeditionary Force Canteens will be passed to the War Office and devoted to the good of the soldier and his dependents under the orders of the Army Council". That is what was on the pricelist? I believe that was actually signed by the Director of Supplies at the time -General Long-on behalf of Lord Kitchener, as far as I am able to recollect, but it is a long time ago.

Mr. John Robertson.

2120. The Controller would have some definition of what "soldier " was. Would that mean a soldier who served during the Great War or a soldier who served after the Great War?-It would apply to any soldier.

2121. Any soldier, so long as that surplus was used for the benefit of the soldier or his dependents ?-That was my view.

2122. But at the discretion of the Army Council?-Certainly they were the sole arbiters.

2123. They might devote it to another purpose?-Certainly, I could not have questioned it. So long as the profits were handed over to them I could not question what they did with them, neither would I.

2124. At least this was the statement that was made-that the profits were to be so used at the discretion of the Army Council?-Yes; the money had to be handed to them.

Colonel Hodge.

66

2125. I should like, first of all, to refer you to the evidence given by Viscount Wolmer on page 7, question 30, where he says at the end, May I also suggest that Sir Alexander Prince, who was Controller of those Expeditionary Force Canteens, should also be called "? Then he went on to say: Referring to that same pamphlet from which I have just been quoting, if you look at page 9, immediately above this letter, you will see there is a letter from Sir Alexander Prince, on the same subject "?-I am afraid I have not that letter before me, but no doubt you can refresh my memory.

14 June, 1923.]

2126. I will read it to you as carefully as I can. This is in a pamphlet put in by Viscount Wolmer, and on page 9 there is this letter from you, dated 5th January, 1921, and I think it is addressed to "Truth"?-If it is in regard to a statement made by Sir Archibald Williamson, it was sent to the Press generally-to the whole of the Press.

2127. I will read the letter. "Dear Sir,-My attention has been drawn to the official report of the Parliamentary Debates of December 23, 1920, which records a reply given by Sir A. Williamson to a question by Major M. Wood on the subject of the Expeditionary Force Canteens Report and Balance Sheet. I should like to point out that the reply contains certain inaccuracies on material points." I do not know that it is necessary for me to read paragraphs 1 or 2, but you then say: "As late Controller of Expeditionary Force Canteens I beg to state: (1) That the total discount returned to the troops was under £2,000,000. (2) That the report and balance sheet referred to, which signed by the late Deputy Controller and myself in October, 1920, covering the period up to August 31, 1920, made provision by way of reserve of a sum which, in our opinion, was amply sufficient to cover all losses on unsold stock belonging to the organisation." You say there,

was

I covering the period up to August 31, 1920." The nearest balance sheet that I have approximating to that date is 2nd July, 1920. Would that be the one? -I think it must be this one I have here. I do not know whether the Committee has the Expeditionary Force Canteens Balance Sheet up to 31st August, 1920, which was drawn up in October, 1920 ?

2128. I have not?-That was the one. 2129. At any rate, without seeing it, perhaps I can ask my question. You say in this letter, "which, in our opinion, was amply sufficient to cover all losses." -Do you mind finishing that sentence?

[Continued.

we now know of the liquidation of the N.A.C.B., would you still say that the reserves then set aside were sufficient to cover all losses?-This statement was quite correct then, and I have no reason to alter my views.

Mr. Hugh Morrison.] May we ask what the reserves were? The witness is being asked questions on a balance sheet which none of us have ever seen, and therefore we do not know what the

reserves were.

Colonel Hodge.

2133. We certainly have not seen that balance sheet. Could I see it now?-It

is not a private document. It was a document that was signed by Colonel Benson and myself and submitted to the War Office in October, 1920.

2134. May I call for that balance sheet? (The witness produced the balance sheet.)

Colonel Sir Arthur Holbrook.

2135. That refers to the Expeditionary Force Canteens only?-Certainly; I am only concerned in that.

Colonel Hodge.

copy

2136. You have not another of this balance sheet?-Not with me, but Colonel Benson has one.

2137. Perhaps he will kindly hand that to you for a moment?-If it comes to a question of figures, I am afraid I am not a sufficiently good accountant to be examined on figures at this stage. The balance sheet was drawn up by our accountants. I will answer everything I can, but I am a layman on a question of accounts.

Mr. John Robertson.] I am afraid I could not allow the examination of the witness to go on from two documents which I have not in front of me. If we are to examine a witness on a document we must all have it in front of us.

Chairman.

2138. I do not quite see what Colonel Hodge's object is. Sir Alexander Prince has written a letter, and I do not quite know who he wrote it to?-It was addressed to the Press.

Colonel Hodge.] We began with Viscount Wolmer's evidence.

14 June, 1923.]

Chairman.] Yes, I know that he asked. that we should read this letter.

Colonel Sir Arthur Holbrook. 2139. The letter was sent to "Truth" according to the pamphlet we have?—It was addressed to the Press, and no doubt Truth "had it, and every other paper. Chairman.] All the witness states is: "(1) That the total discount returned to the troops was under £2,000,000. (2) That the report and balance sheet referred to, which was signed by the late Deputy-Controller and myself in October, 1920, covering the period up 31st August, 1920, made provision by way of reserve of a sum which, in our opinion, was amply sufficient to cover all losses on unsold stock belonging to the organisation." That is only the opinion of the witness. As a matter of fact, we have had other witnesses who have shown quite clearly that the provision made did not cover the losses.

Colonel Hodge.

to

[Continued.

our business, but, at the same time, if there are any innuendos attaching to any statement Viscount Wolmer may make, speaking for myself, I feel it my duty to follow it out and see what it is worth.

Chairman.] It is rather an awkward question, because Lord Wolmer made many statements in his evidence, which, in my opinion, have never been confirmed, and I think if we are going to follow up everything Lord Wolmer said and ask for every report and every letter he has alluded to, we shall be here till the end of the year. As far as I can see, none of the evidence which he said that we should ask for has been of any use to us.

Colonel Hodge.] Then I think perhaps I can see a way out. I am going to call for that report, and I suggest that it be circulated to the members of the Committee, and if, after perusing it, they think it necessary to again call Sir Alexander Prince, they can do so.

Chairman.

Will

2143. I have no objection to that. you put it in? You have a copy of it?— I have a copy here.

2144. If you are afraid of exceeding your powers we can order you to do anything, and you cannot be hauled over the coals by anybody else?-It is a document which I submitted through the Chairman to the War Office, and it is a War Office document. I do not know whether I am in order in parting with it.

2145. Certainly, because the terms of our reference are that we may call for persons, papers, and records ?-I do not know whether it would be more regular to apply for it through the War Office. I do not mind.

2146. We will ask the War Office for it. That will put you in a less invidious position? I do not feel at all nervous about it.

2147. We will make the application to the War Office.

Colonel Hodge.

2148. For the same reason, if we each have a copy of "East and West with the E.F.C." it may be interesting reading? -If I have copies you shall have them, but I am afraid they are nearly all used up.

2149. On page 2 of your précis you refer to how the personnel of the organisation was provided, and specialists in