Chairman.

4018. Does the contract for the HebriIdian Steamer Service come before Parliament? (Mr. Lamb.) Yes, I understand so; it is made by the Post Office.

4019. And the receipts are not from the MacBrayne Services, but from the services which you run?-Yes; that is a drifter that we run, a supplementary service.

Sir Fredric Wise.

4020. With reference to the salary of a member of the staff temporarily lent to the Irish Office, which is mentioned on page 231, is that paid by the Irish Office? -No, that is paid out of our Vote.

4021. Should not we receive it back from the Irish Office?-(Sir Malcolm Ramsay.) The substantive salary of staff lent from one Department to another is always paid by the parent Department; the reason being that the officer remains for discipline purposes, pension and promotion, a member of his original Department.

4022. Is he still lent to the Irish Office? -(Mr. Lamb.) No.

Mr. Leif Jones.

4023. You spent a very small sum out of the grant in respect of unemployment schemes ?-Yes, that is due to the fact that the Local Authorities have not applied. This £70,000 is to be applied in paying a proportion of the interest and Sinking Fund charges on loans. The amount We are called upon to pay depends upon the time at which the Local Authorities contract these loans, and they have been much slower than we anticipated in contracting the loans; therefore, they have not made application for grants.

4024. But the £70,000 was your Estimate? Yes, but we could not tell how quickly they would move or finance these undertakings.

4025. Why could not you form some sort of idea as to that?-This Estimate was based upon schemes that had been approved by the Unemployment Grant Committee; that was the stage at which

1 May, 1924.]

[Continued.

Local Authorities did not put in their claims. They are coming in now.

4028. They are coming in now?—Yes; they were much slower in claiming than was anticipated, I suppose, possibly, because they had to settle the loans before they put in a claim.

4029. You took £66,000 for the next year's service, did not you?-I forget what the figure was. (Mr. Fass.) They have taken £180,000 this year. (Mr. Lamb.) Yes, that is right. We had £120,000 last year.

Malcolm Ramsay.) No, sir; it is all properly accounted for.

Mr. Black.

4032. I should like to ask whether the conditions of the employment of the police are exactly the same in Scotland as they are in England?-(Mr. Lamb.) You mean with regard to pay, and so on?

4033. Yes? Yes, flat rates all over, and the conditions of service are practically the same.

Chairman.

4034. There are two paragraphs in the Comptroller and Auditor General's report with reference to this Vote: paragraphs 27 and 28. Perhaps it would save time if Sir Malcolm would tell us what was explored last year, so that we may avoid covering the same ground?-(Sir Malcolm Ramsay.) Last year the Committee found it somewhat difficult to follow the various statements which were appended to the account-e.g., two statements reproduced the same matter in a different form, and in their Report they recommended

that these particular statements should be simplified. That has been done, and the Committee will see what the result is when they come to statements B and D, which relate to the Agricultural (Scotland) Fund and the Land Settlement operations, which are included in the transactions of the fund, but only form a part, though a very large part of it There was another statement which presented a summary of the opera tions of the Board in regard to certain small holdings that last year was drawn up on a purely cash basis, and again the Committee found that rather difficult to

1 May, 1924.]

reconcile with the figures in the other statements. In consequence, at the request of the Committee, the Department have now presented a summary of their balance sheets on an income and expenditure basis, which, although it is not quite appropriate to an appropriation account, which deals purely with cash, does show the position on a trading basis of these estates.

4035. And the detailed expenditure was gone into carefully last year, was it; because we do not seem to get it in these accounts on quite the same big scale that we get it with regard to the English accounts?-(Mr. Fass.) That is in the Trading Account. (Sir Malcolm Ramsay.) There is a further point on the Trading Account that perhaps I might mention: in the case of England you have a separate Profit and Loss Account and Balance Sheet in respect of each of the small holdings. Last the year question came up whether the Committee wanted to have the details of each holding; the matter was discussed with the Treasury and myself, by the last year's Chairman, and on behalf of the Committee he directed us to confine the account which will be printed in the trading volume to a summary of all the estates.

4036. Is there any other point in paragraph 27? No, Sir.

4037. The point of paragraph 28 is that the £131,000 is a cumulative loss?—Yes. If I might suggest it, that paragraph will become clearer if you take it when you come to Appendix C. The only other point I have to make before the Committee about Appendix C is that it is not quite final. The figures are approximately correct; I have all the detailed accounts, but they are not yet finally passed. Perhaps there will be some slight variations in the figures, but nothing to affect the broad position.

[Continued.

is this: that, under Treasury direction, all expenditure out of the Development Fund which is actually conducted by public Departments, e.g., the Board of Agriculture for Scotland and the Ministry of Agriculture in England, and the Fishery Board in Scotland, is charged gloss to the sub-heads of the relative Votes, but a sum exactly equivalent to the amount charged to the Vote is appropriated in aid. The object of that operation is to secure Parliamentary control over the spending of these grants. The net effect on the Vote is nil, but for purposes of record all the expenditure is brought in gross, and the sum expended is paid over from the Development Fund through a Suspense Account to the credit of Appropriations-in-aid.

Mr. Leif Jones.

4040. On what principle are these grants with reference to the extension of milk recording made? To whom do you make them and in what way?-(Sir Robert Greig.) They are made to the Scottish Milk Records Association, which is a public body formed for this purpose, which body organises the taking of milk records in Scotland, and receives contributions from the farmers whose cows are recorded, and this grant of ours is a grant towards the organisation expenses of this association.

4041. Is it only for the organising expenditure at the beginning, or will there be a permanent drain on the fund?_ There will be a permanent drain in a way. Grants are made of a certain sum to a new society for the first year, and a smaller grant is made in the second, and a still smaller grant in the third year, and then the grant ceases; but, as new societies join the organisation they become automatically entitled to the advantages of a new society; so that, while the expenditure on existing societies is declining, as the societies reach the age of three years, it continues as long as new societies join the organisation.

4042. Are the societies growing up at a great rate? The figure here is a little over £3,000.

4043. Yes?-That figure is not increasing substantially. It fell away during the war, because there was a natural decline in the demand for this work; but it has increased since the war; but practically the same number of cows dealt with, and therefore practically the same expense is incurred.

are

1 May, 1924.]

[Continued.

4044. There is a public charge of £3,000 a year for this milk record work. Will that be permanent? It will be permanent so long as the Development Commissioners decide it is a work that should be assisted. If they decide it is no longer necessary to assist it, it will be withdrawn.

4045. Is it considered a great advantage in Scotland?—Yes; it is the most elaborate and effective system of milk recording anywhere, and it has had a very great effect upon the value of the pedigree dairy herds in Scotland, and the question simply comes to be: How long it will be necessary to use this fund for the purpose of educating the farmer to do it for himself?

Mr. Black.

4046. With reference to the accounts on pages 240 and 241, I see in addition to the grants of £75,000 and £53,000 there is a net loss of £72,000, is not there?There was a balance in hand of £212,000, and it is reduced to £151,000; so am I right in supposing that the cost of carrying on these settlements is £72,000, in addition to the £75,000 and £53,000, which have come out of grants?-I am afraid I do not quite follow.

4047. On the receipt side you have a Parliamentary grant in aid of £75,000?

-Yes.

4048. And another one of £53,000?Yes.

4049. That is £128,000; and then there has been a loss of £72,000 on the balance, so altogether it comes to nearly £200,000 of loss in carrying on these Land Settlements, does not it? (Sir Malcolm Ramsay.) Perhaps I may intervene. This is merely a cash account, and the fact is that they have lived on their balances, as you point out, to the tune of £72,000, but that does not necessarily mean loss, because the whole object of the fund is that they get certain receipts and they have to make certain payments, under Statute or under schemes, and this is simply a summary of the cash

transactions of the fund.

Mr. Arnold Williams.

a

4050. Can we be told the items on the receipt side that relate to the profits, and are items of real income as distinct from grants. Which are they? (Sir Robert Greig.) Well, there are rents obtained from the Board's estates.

4051. They amount to about £40,000? -Those are real receipts. Then there are repayments of loans and repayments of annuities.

66

66

4052. May I ask what those repayments of loans are? You will see on the other side of the account, Loans, £23,892 168. 8d.," and Receipts, £2,255"; and similarly below, under "Landholders Schemes," Loans £20,000, Receipts £6,925 and so on.

4053. Have we any way of answering Mr. Black's question as to arriving at the figure that this has cost the Exchequer? That figure is not simply the difference between the balance in hand at the beginning and the end, but the total of the cost? If you turn to the next page you will see that the abstract balance sheet shows the number of smallholders settled, and the cost to the State has been £150 per head so far. That is, perhaps, a figure you would want. I may say that the cost which I gave to this Committee last year, I think, was rather under £300 per holder, in the case of Highland settlers, and £1,000 per holder in the case of Lowland settlers.

Chairman.

4054. Does this cover quite the same ground? I do not know that it does, but I imagine what is wanted is to know what it is really costing the Government.

4055. There would be certain ground covered by the Agriculture (Scotland) Fund, which might not be covered by the Smallholding Colony; or is it a different statement of the same work?You see that the funds provided by the Public Works Loan Commission passed through the Agriculture (Scotland)

Fund.

Mr. Black.

4056. Was the £150 per annum, or the total sum?-No; that was the capital expenditure, the total cost to the State to begin with. Some of that is recoverable.

Mr. Arnold Williams.

4057. I take it, every item here except the £40,000 and, possibly, some of the suspense accounts is a definite charge upon the Revenue? (Mr. Fass.) The first three items, the £15,000 and the Parliamentary grants of £75,000 and £53,000, are, broadly speaking the cost

1 May, 1924.]

to the Exchequer in the year. The statement is, as the Comptroller and AuditorGeneral says, merely a statement of the payments into and out of the fund. if you want to get to the cost to the State you may take those three items, as representing what has been paid into the fund, as being the cost of the estate for the purposes of the fund.

4058. When you use the word "Purchase" of land on the receipt side, what can that mean ?-(Sir Malcolm Ramsay.) This heading includes both purchase and sale. The Board first of all buy an estate and when any portion of it is sold the proceeds are credited to this heading. May I just add this: the position

generally of the Agriculture Fund is this: Parliament grants so much a year for the purposes of agriculture. This year it was £75,000 plus the £53,000; it varies. Under the Statutes the maximum granted in any one year may be £200,000 in addition to the amount required to meet the annual loss on land settlement. These grants, instead of being spent directly out of the Vote, go into the Agriculture Fund, which forms a sort of reservoir out of which the detailed expenditure is made. This account represents a summary of the ledgers; it includes a good many transactions which might be eliminated. It includes all the credit and debit balances, and brings it all in gross.

Sir Fredric Wise.

4059. Might I ask if these arrears of rent have been collected since March, 1923? (Sir Robert Greig.) No.

4060. What is the figure now?-The figure for this year's rents in arrear is £9,420, and the annuities in arrear, £5,355.

4061. That is to March, 1923; I meant for the following year. Has any of that been collected?-Since March, 1923, some of it has, no doubt.

4062. This figure has not increased?-I think it probably will have increased, partly because of the extreme distress in the North West Highlands this year.

Chairman.

4063. With reference to the Abstract Balance Sheet on pages 242 and 243, there was a limit laid down as to what should be spent on land settlements, was not there?-Yes; we are still within the limit.

[Continued.

4064. What was the total limit that was laid down? Originally £3,500,000. 4065. You are keeping within that?Yes; we have not spent that yet.

Mr. Leif Jones.

4066. I see the total loss on these holdings appears to be £203,440; is that right? Yes.

4067. In what sense is it loss? Is "loss" the right word? Does it simply mean the cost of the scheme?-It certainly is lost; it is the cost of settling these people on the land on these Estates up to date; it depends on how you regard it.

4068. It is the cost of carrying out a scheme which Parliament has sanctioned? -That is so.

4069. It was necessarily a loss; there could not be a profit?-There could not possibly be a profit.

4070. Then the word "loss" is rather misapplied?-This is the form of accounts that is required of us, and it is put in in that way.

4071. Would that be the total cost of settling these small holders?-No, the cost will increase beyond that.

4072. But that is the total cost up to date?-Up to date that is the cost.

4073. Is it a continually increasing cost? Will there be the cost of the scheme every year?-Yes, but not for ever; the cost will increase for a time.

4074. Take an individual holding, when does the loss or the cost cease?-The individual holder has borrowed money to erect his building, and he pays interest on that, and the interest is paid for 50 or 80 years onwards; he pays such a low rate of interest that the cost to the State is considerable because of the low rate of interest.

4075. Can you tell me off-hand what the ultimate cost of the scheme will be, or is there no limit?—I cannot tell you that.

4076. Is there no limit to the number of holdings?-Our present instructions are to provide land for the ex-Service men; when these ex-Service men are provided for there still remains a large number of civilians, and I do not know what the policy of the Government may be then. But at all events in Scotland there are 10,000 applicants for small holdings.

Sir George McCrae.

4077. I observe on page 243 that your loans advanced to holders, less capital repaid, amount to £126,438 in respect of