Q. 3810.

written off. In the view of the Treasury, the accounts, as pre- Q.3883. pared on the present basis, represent a complete record of the cost of the operations to which they relate. They are compiled Q. 3875. on a basis of fact and the Treasury strongly deprecate the periodic writing-down of the capital invested in the business and periodic revaluation of the assets. While the witnesses who gave evidence on behalf of the Treasury agreed that sooner or later, when some degree of stability has been obtained, it might be necessary to write off charges for interest in arrear and to write down the capital, they represented strongly to the Committee that their policy in this matter must be very conservative and that they Q.4805. should only depart with great caution from a form of account which, as far as possible in the circumstances, records actual cost. In the circumstances your Committee do not suggest that there should be any immediate modification as regards these items and they are content to leave it to the Treasury to determine the moment at which it may be appropriate to relieve the accounts of these accumulated charges for interest. Such an opportunity might perhaps present itself in 1926, when, as stated below, there will be a financial settlement between the Ministry of Agriculture and the County Councils in regard to the Small Holding undertakings carried on by the latter.

55. Up to now the interest charge has been calculated at the Bank of England rate current at the time when the original capital was issued to the undertaking by the Treasury, except where capital was specifically raised for the service, in which case the Trading Account has been debited with the actual rate of interest paid. This practice has resulted in certain anomalies and we understand that in preparing the accounts for the year 1923-24 the interest charges are to be re-assessed on the following basis as regards (a) borrowings for capital expenditure the rate of interest shall be that fixed for local loans (minimum rates). as regards (b) borrowings for working expenses the average Bank Q.4104. of England rate for the financial year will be adopted.

ADMIRALTY.

56. Construction of Merchant Ships in His Majesty's Dockyard.—In 1920 the Admiralty contracted to construct two oil tank vessels for a private company at a fixed price of £310,000 each. This work, like the construction of locomotives at Woolwich, to which reference is made in paragraph 40 of this Report, was under- Q.6455 taken primarily with a view to finding employment for dockyard employees who otherwise would have been dismissed, and followed upon a recommendation of a Committee, presided over by Lord Colwyn, appointed to consider how far it might be possible to utilise any facilities which the Admiralty might have available in the Royal Dockyards for the construction of merchant ships. The Accounts submitted to your Committee in respect of these services for the period ended 31st March, 1922, are provisional only, but we are informed that so far as can be seen at present

Q. 6457

& 4237.

there is likely to be a total loss, including interest, of £208,000 on this transaction. The construction of these ships gave employment to some 2,000 men. At the time the contract was undertaken the company had produced evidence that these tankers could be built elsewhere at the price accepted by the Admiralty. The high cost of construction is to some extent accounted for by the following reasons: (1) The work in many respects was so arranged as to give the greatest amount of employment possible, i.e., some of the work was divided between different yards which might have been concentrated if economy had been the sole object in view (2) it was carried out by men who were used to high class warship work and was of a high standard, and (3) the output was prejudiced by the fact that shortly after the work was taken in hand the Government decided that short time should be worked in the dockyards.

MINISTRY OF AGRICULTURE AND FISHERIES.

57. Land Settlement.-The position of Land Settlement in England was outlined in paragraph 17 of last year's Report. It may be convenient to bring the figures up to date.

It will be remembered that in England and Wales small Q. 4014, etc., holdings are provided in the great majority of cases by County Councils, the number provided directly by the Ministry of Agriculture being relatively small.

Q.4246-50.

Q.4327.

The capital already expended or commitments incurred on small holdings provided by the Councils under the Land Settlement (Facilities) Act, 1919, appears to be upwards of £15,000,000, and the Ministry do not at present propose to enter into any further commitments.

The losses incurred by the Councils on their holdings are recouped to them year by year until 1926 by the Ministry out of the Small Holdings Account. The amount so paid in 1922-23 was £732,494 as against £512,990 in 1921-22. The number of separate holdings represented by this amount was stated to be upwards of 30,000 (including some 20,000 settled since the Armistice). In 1926 a valuation of the Councils' undertakings Qns. 4295 & will be made with a view to ascertaining and settling the final liability of the Ministry in respect of them.

4302-5.

Q. 4250.

Q. 4246.

We are informed that the capital expenditure by the Ministry on their own Farm Settlements was rather less than £1,000,000. Some of these settlements have since been transferred to County Councils, and the Ministry state that they are trying to dispose of other settlements, where they can, in the same way. The number of small holders (including men on profit-sharing settlements) remaining on the Ministry's estates in April, 1924, was Qns. 4012-6 447. The losses incurred by the Ministry on all their farm settlements from the dates of commencement until 31st March, 1923, amounted to £333,000.

& 4243.

Q. 3982.

As explained above, there will be a final settlement in 1926 of the Ministry's liabilities for the small-holding undertakings carried on by Councils, and your Committee recommend that at the same date the Ministry should give further careful consideration to the question of the continued retention by them of any of their own Farm Settlement Estates that may still be in their hands.

BOARD OF AGRICULTURE, SCOTLAND.

58. Small Holding Colonies.-In Scotland, small holdings are provided directly by the Board of Agriculture.

The advances by the Public Works Loan Commissioners to the Board to 31st March, 1923, for Land Settlement schemes amounted to £1,113,228 out of the total provision of £3,000,000

for this purpose.

The losses on the small holding colonies administered by the Board on estates acquired by them were shown as approximately Q. 4066. £200,000 to 31st March, 1923, and were incurred in connection with schemes for 1,099 new holdings and 251 enlargements of existing holdings.

Your Committee are informed that the work of land settlement

in Scotland is still being carried on, and that further schemes are Qus. 4076 & being entered into by the Board.

MINISTRY OF AGRICULTURE AND FISHERIES AND FISHERY BOARD

FOR SCOTLAND.

59. Government Guarantees for the Autumn Herring Fishing Seasons 1919 and 1920.-The balance sheets relating to these two schemes include among the assets, for the season 1919, German Government Bills valued on 31st October, 1921, at £948,926, and for the Season 1920 Russian Government Bills, valued on 31st March, 1922, at £208,380. (Ministry of Agriculculture and Fisheries £138,505 Fishery Board, Scotland, £69,875.)

4140-1.

These bills, German or Russian, were divided into groups Q. 870-4. having different maturities. We were informed in March last Q.901. that all of the bills which had fallen due by that date had been Q. 910. discharged.

STATIONERY OFFICE.

60. Government Printing Works.-Your Committee have examined the Accounts up to the 31st March, 1922, of the printing undertakings now conducted on behalf of H.M. Government. A Trading Account and a Balance Sheet have been prepared for each of the four different establishments conducted by the Stationery Office, viz., the Foreign Office Press, the Hare Street Printing Works, the Harrow Printing Works and the Kingsway Press.

Your Committee are informed that a special Committee appointed by the Treasury is now considering the general question whether or not the Government printing press or presses should be continued, and that this Committee has recently appointed a

Q.923.

Q. 438.

Q.680.

Q. 691.

Q. 625.

Qns. 638643.

ns. 380384.

sub-Committee to consider this question exclusively from the point of view of the results disclosed by the Accounts. In these circumstances, and as it is natural to suppose that the subCommittee will have access to accounts completed to the latest possible date, your Committee think it best to abstain from detailed comment on the accounts which they have had before them. Further, the workings of the presses admittedly suffered from difficulties in the earlier and experimental stages, and a review of the Accounts to the 31st March, 1922, does not enable your Committee to arrive at a true view of the results of the undertakings.

In these circumstances, your Committee will confine themselves to making the following observations. First, as indicated above, the operations of the different Presses have been shown in the Account before us as separate concerns, although the distribution of the general work as between Hare Street and Harrow has been settled by considerations of general convenience and without regard to the profit of the particular branch. Your Committee is of opinion that in future there should be one amalgamated Balance Sheet for the whole of these undertakings, though separate Trading Accounts should continue to be kept in respect of each. We understand that this course will be adopted.

Secondly, it appears from the evidence before your Committee that the Accounts relating to the Harrow Works contain no charge for interest on working capital, this charge having been offset by a general credit on account of the trading profits made. which have remained in the business, and that the Comptroller and Auditor General is not altogether satisfied with the course which has been adopted.

The Committee have requested the Comptroller and Auditor General to consult with the Treasury in regard to the principles on which these items should be dealt with, and we shall hope to hear next Session that an agreement has been reached.

BOARD OF TRADE.

61. Reparation Dyes.-Under the terms of the Treaty of Versailles, Germany is under an obligation to hand over certain dyestuff's as part of the British share of the total reparation deliveries. The price at which these deliveries are credited to the British Account is fixed by the Reparation Commission, and the sale in this country of the dyes so supplied is under the control of the Board of Trade.

The attention of the Committee has been called to the fact that a certain block of these dyes was sold by the Board of Trade to an agency on behalf of an association representing the bulk of the colour users in this country at prices which appear to have been lower than could have been obtained from a willing purchaser in the market at the time. In fixing the price on this favourable basis, the Board of Trade were influenced by a desire