27 April, 1926.]

[Continued.

3268. My point was rather that if they had been in a position to consult Sir Basil Blackett, this loss might not have occurred? (Sir William Clark.) That only refers to one part of the world; we could not actually consult Sir Basil about other countries where there might be fluctuations in the exchange, or where there is a permanent depreciation to meet.

3269. With regard to sub-head F.1, the British Industries Fair, do we get back any of that money?-Yes. The Account is rather upset in this particular year, because the Fair, which usually takes place in February and March, was postponed until May, 1924, owing to the British Empire Exhibition. In the ordinary way, we should have had a second Fair in February and March, 1925, which would have fallen into the same financial year, and that was provided for in the Estimate. That is the reason for the Supplementary which reduced the total amount to £22,000, because we eventually cancelled the second Fair owing to the second year of the Wembley Exhibition. Over the page you will find the Appropriations-in-Aid which represent the takings in respect of the May Fair in 1924. On page 155, we estimated for £12,872, and we actually received £13,579. We made a loss of the difference between that and the £22,000, but that is the first year in the history of the Fair where there has been a serious loss, and it was due solely, I think, to the competition of the Wembley Exhibition.

3270. Do not we get some of that back, because the following year you charge more for space?-The following year we cancelled the show because of the Exhibition. In the current year, 1926, in order to get the Fair started again, we did not like to raise the costs, and the Government also gave a substantial Grant for publicity, as you probably remember.

3271. With regard to Export Credits, what are the terms of reference to the Manager now, with regard to his taking the initiative in advancing loans on his own account?-The limit is £5,000.

3272. Has he advanced any on his own account?-Yes, small sums within that

limit.

3273. Have they been satisfactory?— Yes.

Chairman.

3274. That is his aggregate limit?—The aggregate limit on any one person, not merely on any one transaction but any individual. Supposing an exporter who has already had credits up to £4,000, which are undischarged, comes and asks for another £1,500, we will say, that of course would go to the Committee. If he comes for £1,500 and he has not had any previous amount, or not an amount which would bring the total over £5,000, then it is within the Manager's own discretion.

Sir Fredric Wise.] I did not realise that it meant in the total.

Chairman.

3275. That was my understanding of it too. He can go to £5,000 in one case? -Yes, on one transaction, assuming, as I said before, that the exporter has not already got credits which bring it over £5,000.

Sir Fredric Wise.

3276. How many times do the Committee sit?-They sit officially every

Tuesday. I say officially, because,

naturally, there are gaps for holidays, and so on; but they meet pretty frequently. In addition to that, the ActingChairman is always at the disposal of the Manager of the Department, who consults him during the week. The Acting-Chairman gives up a great deal of his time to the work.

3277. That is all the more reason why the Manager should not be given any actual definite amount?-You may be quite confident, if there is any doubt he always consults.

3278. I remember the case coming up last year? The case came up last year in respect of our earlier business; our first Manager, a banker who had only just retired from active business, was rather inclined to do as much as he could off his own bat, but I think I can safely say that now that is not so.

3279. You think he will always consult you or the Chairman?-Yes, I am quite sure he will do that.

Major Salmon.

3280. Is the work in the Export Credit Department growing?—No, it is not

27 April, 1926.]

growing. You mean growing in the sense of more applications being received? 3281. Yes?-No, it has gone rather slowly; we hope it may make a fresh advance in view of the recommendations of the Credit Insurance Committee, which the Government are accepting, as will be announced in the House at Question Time to-day.

3282. Are the expenses for this department on the increase or the decrease?— They have decreased again. There is a small increase in this particular year, which the Committee is now considering; that was due to our strengthening the salvage side, and I am glad to say it has had very good results; we got money in more quickly, and it paid for itself.

3283. You got your debts back quicker? -That is so.

3284. Have we made a large amount of other bad debts in this department?-On the Advance scheme, as I think the Committee is aware, we made a heavy loss in the early days.

Chairman.] I think that question will come up more appropriately later, when we actually deal with Export Credits, on which there are two paragraphs in Sir Malcolm Ramsay's Report.

Major Salmon.

3285. If I may go back to the question of the Commercial Diplomatic Service and the Trade Commissioner Service, you are treating both these departments under an entirely new method; that is to say you have a representative of the Commercial Diplomatic Service, when it comes to countries outside the British Empire? That is not new: from the time the Department of Overseas Trade was set up, we had this Commercial Diplomatic Service.

3286. And also a Trade Commissioner Service for the Dominions?-That was an older service; the Trade Commissioner Service was instituted about 1908, and as regards the Commercial Diplomatic Service, there were Commercial Attaches before the

Department of Overseas Trade was created, but it was a less formal service than it is now.

3287. The point that I wanted to ask is this: taking them together, is it costing more money to run the department to-day than it did a few years ago?-The department has only existed since 1917.

[Continued.

3288. I agree, but the system existed under the Board of Trade?-Quite so.

3289. The point that I want to know is this; how much more is it costing under the Overseas Trade Department than it did under the Board of Trade?Certainly it costs more than the machinery which existed before the war. I cannot give you the exact figures, I am afraid, for the pre-war machinery; I have not got even the Board of Trade figures in my head; but you have to take also into account the Commercial Department of the Foreign Office which was also concerned.

3290. My reason for asking it is, if it is costing more what justification is there for spending this money? Can you show us any? It is difficult for me to set up an apologia for the existence of the department now, but I will endeavour to, if you wish it.

3291. Are we justified in spending the extra money to-day under this system, as against the system that existed when it was under the management of the Board of Trade? I think what it really comes to is, Is the country really justified in spending a larger amount on the work of assisting trade? As regards the two systems, there can be no question, I think, that the existing system is infinitely more effective than the system before the war. You have now got your machinery for promoting trade overseas in the Commercial Diplomatic Service, the Trade Commissioner and the Consular Service under a single administrative direction. You have got a department which is concentrated on this work, which, on the one hand, keeps in as close touch as it can with the business world, and on the other directs the work of its officers, who now look to it for their promotion, and consequently that side of it is in a much more efficient and effective state now than it has ever been before.

sent

3292. Are all the letters copied and to the Board of Trade by your department when they are sent round? -Certainly, they went to the old commercial Intelligence Branch of the Board of Trade. As to the need for such a department, the justification for it, in the main, is the immense importance of trade to this country, and the advantage which you gain by having, what is now, I think, a very effective intelligence service spread all over the world. It seems, as far as one's experience goes, to

27 April, 1926.]

fill a gap which cannot be entirely filled by private enterprise.

3293. It would be very interesting if one could feel that industry itself were really appreciative of the efforts you try to exercise on their behalf in all parts of the world. Have you any means of knowing if your efforts are really appreciated by industry generally?—Yes, we receive a great many appreciations, I am glad to say; and also, when it was at one time proposed to abolish us, the department was largely kept on, by the Government of the day, owing to the demand which was put forward by representatives of trade, commerce and industries; the Associated Chambers, the Federation of Industries, and so on.

Mr. Harmsworth.

3294. I do not want to follow up that line too far, because I do not see that we can get any satisfaction, especially as it would become almost a debate on why our export trade has declined, as the figures show, month by month since the inception of this department. At the same time I would like to ask whether there is any chance in the near future of the salaries, wages, and allowances in A. B. and C. being reduced. The expenses and allowances all together amount to £231,000 odd, which is a very big proportion of the total of the Estimate, which is £307,000; it is nearly 80 per cent. of the total Estimate?-Yes. We had a very careful scrutiny of the whole staff of the Headquarters Department, which I took charge of myself as a matter of fact, during this last year, and we reduced our staff by 10 per cent. numerically. The Estimates which have been published for 1926-27 will show a saving over the whole department of something over £50,000, although we have taken over the Imperial Institute, which means that the Grant-in-Aid of £12,500 which used to be on the Colonial Office Vote is now on

ours.

3295. Are the salaries, wages, and allowances under sub-head A mostly for the work done in keeping in touch with the Commercial Diplomatic Service, or do you compile statistics as well?-We do a certain amount of statistical work as well in reply to statistical inquiries, but we do not do elaborate statistical work; that is done by the Board of

[Continued.

Trade. The staff keeps in touch with the foreign services, and on the other side it supplies information to the commercial community here.

3296. Do you encourage various industries to send representatives to these different Fairs that take place?-In the case of Exhibitions rather than Fairs perhaps, we give them any assistance they require for the purpose.

3297. I should like to ask this one question with regard to the note on A at the bottom of the page. Part of the excess was due to the appointment of a financial adviser to the British Empire Exhibition; was that at the starting of the Exhibition ?-No; when it was decided to carry on for the second year, it was felt very desirable that there should be a financial adviser for the Exhibition, and it was also felt desirable that he should be quite independent of the Exhibition; consequently his salary had to be paid by His Majesty's Government. That was settled rather late, just before the Estimates were closed, and at the request of the Treasury his salary was placed on our Estimate.

3298. Was he a temporary officer?Yes, he is no longer in existence; he is one of the liquidators now, and no longer paid by the State.

3299. Are the officers in the Commercial Diplomatic Service appointed definitely to their spheres, or do you send them out from Headquarters?-No; they are appointed to a service; there is the service of which they become the officers, and they can be moved from place to place as the demands of the service require.

Sir Robert Hamilton.

3300. There is a note at the end of the Account, which refers to quite a small matter: £187 was not recovered from exhibitors at the British Industries Fair. How was it that exhibitors got away with £187? They were small men who went bankrupt, or something of that kind.

3301. Are not steps taken to see that they pay beforehand?-Yes, as a rule we do collect the money beforehand, but sometimes there is delay and difficulty up to the last moment, and we carry on and try to collect it later. It is only very small amounts in which it happens. The general principle is payment in ad

vance.

3302. You collect beforehand?-Yes.

Chairman.

3304. Paragraphs 63 to 65, on page xxviii of the Comptroller and AuditorGeneral's Report, all deal with the British Empire Exhibition. Sir Malcolm, would you like to add anything on the paragraphs individually?—(Sir Malcolm Ramsay.) Paragraph 63, I think, tells its story. There were a good many exhibits and other things purchased, which really would be stock available for future use. No inventories were made at the time, and afterwards, at the end

of the Exhibition, I was told that inventories of the stock were being prepared, and that is still being done. Of course, one will never know quite, as there was no original record, what there was in the way of show-cases and so forth, and whether any of them have disappeared or not.

3305. Have you anything to say on this, Sir William?-(Sir William Clark.) The inventories have now been completed, and we have no reason to suppose there has been any loss. There was a little delay in completing them, because

29 April, 1926.]

we had rather a complicated business as we sent a good deal of material over to the Dunedin Exhibition direct from the Pavilion. A careful record was kept of that, and now, as I say, the inventory at Wood Lane is complete.

3306. You are satisfied there was no loss? That is so.

3307. Will you now deal with paragraph 64, Sir Malcolm? (Sir Malcolm Ramsay.) The only thing I wish to add to that is that the sum paid to the original contractor, which is mentioned here as £3,000 odd, was really all The nugatory, all wasted expenditure. scenery had been planned on a certain scale, and the contract was placed with this gentleman; then the distinguished man who had taken a hand in the Pageant withdrew, the whole Pageant had to be recast; the original structural work had to be modified, and, as time was short, the second arrangement was made. That involved paying the original contractor the value of his work done, and a percentage of profit on that; the second contractor then came in and did the scenery on the revised scale.

and

3308. Your view is that the £3,094 was sheer loss?-I think Sir William will agree that was. (Sir William Clark.) Yes, that is so.

3309. Would you like to add anything to the paragraph, Sir William?-I think Sir Malcolm has described what happened; there was a complete change in the programme of the Pageant which necessitated a quite different type of scenery, or rather enabled us to do without what would have been very expensive scenery, and in that way we actually saved money, as compared with going on with the original plan; but we had to pay £3,000 compensation, which is £3,000 in a sense for nothing, but the total cost was very much less.

Major Salmon.

3310. In other words you cut your losses?-Yes, the actual scenery cost about £10,000 as against an estimate of £25,000.

Chairman.

3311. All this was done, of course, under cover of the sanction of the Treasury? We obtained sanction from the Treasury.

3312. Now will you deal with paragraph 65, Sir Malcolm? (Sir Malcolm

[Continued.

I Ramsay.) The point on paragraph 65, think, has now been disposed of. The loss was to be apportioned between the Exhibition Authorities and the Department. I noticed in the calculation of the result, that certain receipts which had been given to the British Government had been divided equally, and the Exhibition Authorities had been given credit for half of certain receipts, about £29,000, which appeared to be given exclusively to the Exchequer; so I raised a question whether it was right to give credit for one-half of these receipts to the Exhibition Authorities. The Treasury have now given sanction to the arrangement. (Sir William Clark.) It was not one-half; it was 5 per cent. (Sir Malcolm Ramsay.) I beg your pardon; I should have said a portion.

Chairman.

3313. Is the proportion approximately 5 per cent?-Yes; I must correct my statement. (Sir William Clark.) The arrangement we had with the Exhibition Authorities with regard to these Stadium Displays was that we paid no rent for the Stadium: that we were to share profits half and half, and if there was a loss we were to bear the loss in the proportion according to the expenditure which we both incurred. They incurred expenditure in the actual management and running of the Stadium. It was not contemplated at the time that receipts of this kind would come in. The main item under these receipts was a very generous contribution by Sir Harold Bowden of £25,000 to the running cost of the Pageant; it was therefore felt it was within the spirit of the arrangement we had got with the Exhibition that that £25,000 should be deducted from the total loss before we divided up what each had to bear. That is what actually happened. Technically we ought to have got sanction from the Treasury before doing this; we were late in getting our sanction, but the Treasury in reply to us said, very frankly, that they regarded our arrangements as reasonable, and they would have sanctioned them at the time if we had come forward, as we should have done, at the moment. It is a technical default I think, rather than an actual fault.

3314. Have you anything to add, Mr. Phillips-(Mr. Phillips.) No sir, it was quite a reasonable arrangement to make in the circumstances they were placed in.