"(d) It follows that, in so far as the income represents the wastage of capital, it is not in the true sense surplus income, but represents existing capital, and thus its investment does not really, as under the present system it appears to do, add to the capital of the Hospital. "(e) Your Committee are of the opinion that the course pursued in some analogous cases by certain other Government Departments should be followed; and that a due proportion of the yearly receipts, past and future, from these wasting assets, should be set aside to meet their depreciation" (Mr. Blake). Question, "That this paragraph be inserted in the Report"-put, and agreed to. Question, "That this Report, as amended, be the Second Report of the Committee to the House "-put, and agreed to. Mr. D. C. Richmond was further examined as to the disposal of Admiralty Stores. The Army Appropriation Accounts were further considered. The Store Accounts of the Army, the Military Works Acts, and the Barracks Act Accounts were considered. Mr. F. T. Marzials, Mr. D. C. Richmond, and Mr. R. Chalmers, C.B., were examined. Mr. D. C. Richmond was further examined as to the disposal of Admiralty Stores. The Army Appropriation Accounts were further considered (in respect to the occupation of Bethnal Green Barracks by the Committee of St. John's National Schools). The Army Clothing Factory, the Army (Ordnance Factories), and Chelsea Hospital Accounts, and the Civil Service Accounts, Class I., Votes 1-5, were considered. Colonel Bainbridge, Mr. F. T. Marzials, Mr. Chalmers, C.B., Mr. D. C. Richmond, Colonel Mulcahy, Viscount Esher, C.B. (attending by leave of the House of Lords), and Sir E. Hamilton, K.C.B., were examined. [Adjourned till Wednesday next, at Two o'clock. The Civil Service Accounts, Class I., Votes 5-end, and Class II. (Votes 5, 6, 23, and 24 being postponed), and Class III., Votes 6 and 8, were considered. Mr. D. C. Richmond, Sir Edward Hamilton, K.C.B., Viscount Esher, C.B., Mr. E. T. Fry, Mr. Henry Graham, C.B. (attending by leave of the House of Lords), Mr. W. Gibbons, Mr. W. P. Byrne and Mr. Jordan were examined.. The Civil Service Accounts, Class II., Votes 5, 6, 23; Class III., Votes 1-5, 7, 9-12; Class IV., Votes 1, 2, 10; and Class V., Vote 1, were considered. Sir E. Hamilton, K.C.B., Mr. D. C. Richmond, Mr. T. Digby Pigott, C.B., Mr. R. J. Bridgman, Sir George Kekewich, K.C.B., Sir Henry Craik, K.C.B., Mr. W. C. Cartwright, C.M.G., Mr. E. Ruggles Brise, C.B., and Mr. Engelbach were examined. The Accounts of Woods, Forests, and Land Revenues, Civil Service Accounts, Class II., Vote 24; Class III., Votes 13-end; Class V., Votes 2 and 3; and Class VI., Vote 5, were considered Mr. D. C. Richmond, Sir E. Hamilton, K.C.B., Mr. F. Hellard, Mr. E. Hewlett, Mr. Engelbach, Sir Clement Hill, K.C.M.G., and Mr. G. Hervey were examined. Draft Third RepPORT, proposed by the Chairman, read the first time, as follows: "ARMY APPROPRIATION ACCOUNT. "1. THE total amount of Exchequer Grants for Army Services in the year 1899-1900 was Q. 798-834. 43,617,200l., including two Supplementary Grants of 10,000,000l. and 13,000,000l. on account of the War in South Africa. ; 3,200,1337. was in addition estimated as the total receipts for · Appropriations in Aid, making up a gross total grant of 46,817,3331. The gross expenditure was 46,133,6567. 118. 4d. 46,133,656. 118. 4d., towards which the actual receipts from Appropriations in Aid were "2. A large number of vouchers for expenditure and receipts during the month of February Q. 835–871. 1900 were lost in the wreck of the mail steamer Mexican,' Duplicate copies of the pay lists have since been furnished, but the vouchers for district payments, viz., for the staff and civilian surgeons, for transport, forage, and stores, for which no duplicates were taken, are irretrievably lost. These unvouched items of district payments and receipts amounted to 710,402l. 178. and 19,2217. 98. respectively. Duplicates of the Accounts and Schedules showing the totals of the charges and credits to the different Votes, compiled in the offices of the Paymasters, together with the supporting certificates of the latter, have been furnished to the Comptroller and Auditor General; and as the original vouchers and receipts were lost before examination, your Committee are prepared to recommend to Parliament that the certificates may be accepted as adequately supporting the charges. "3. A sum amounting to 4,1177. 198. 8d., for which there were no vouchers, was included under Q. 895-928 the certificates of the Secretary of State for War, in Vote I., Sub-Head A., Pay of General Staff. 1560-1579. This sum was paid for services of a confidential nature, and the certificates were similar to those given by the Secretary of State in cases of Secret Service. "The Treasury gave their sanction to the expenditure being so charged in a letter of the 8th of March 1900, having regard to the exceptional circumstances necessitating that expenditure. It also appears that a Regulation, paragraph 660, has been inserted in the Allowance Regulations of the Army, granting a sum of 300l. a quarter to the officer commanding an army engaged in warlike operations, for the purpose of obtaining intelligence connected with such operations.' "In the present War this allowance was increased by the Treasury on the 6th of January 1900, upon the application of the War Office, from 300l. to 1,000l. a quarter. 66 On the 1st of March 1900, the Secretary of State for War informed the Treasury by letter that the expenditure on field intelligence in South Africa up to 5,000l. had been authorised, and a further amount of 7,000l. expended for acquiring information connected with military operations. Lord Lansdowne received the sanction of the Treasury to charging the same to Vote I., Šub-Head A, and to his certificate being considered a sufficient voucher. Your Committee do not concur in this view, they adhere to the opinion expressed by the P. A. C. Fublic Accounts Committee in 1882, that such payments as are described as being for Secret Report, 1882, Service, should be held as properly chargeable to the Secret Service Vote, and not to Army Vote I. Para. 78. They see no limit to the expenditure incurred under the present system, and they entertain the most serious objections to the taking of money without any Parliamentary sanction, and without the usual vouchers. "4. Upon Vote 5 an instance occurred, illustrative of the neglect of the War Office to alter Q. 943-965. their regulations even when recommended by this Committee, in the case of gratuities paid under paragraph 627 of the Volunteer Regulations to 110 men of the 15th Middlesex Rifle Volunteers, who were injured on the 11th of April 1898 by an accident on the London and South Western Railway. "The Public Accounts Committee in 1894 recommended that before granting gratuities in P. A. C. such cases the War Office should be informed of and take into consideration any compensation that 2nd Report, may have been awarded from sources other than the State, and that the Regulation should be 1894, Para. 2. modified with this view.' The compensation paid by the Railway Company to the men amounted in this instance to nearly 10,000l. Yet the War Office had to pay, by the advice of the Law Officers of the Crown, 655l. Os. 6d. as gratuities in addition, because their Regulation had not been altered, as recommended four years before. This has now been done. "5. Upon Vote 7 your Committee made an exhaustive inquiry into a contract, made in October Q. 1042–1294. 1899 in South Africa, for the supply to the troops in the field of 2,000,000 lbs., afterwards extended to 4,000,000 lbs., of meat, by the Cold Meat Storage Company, at 11d. per lb. "This contract was understood by the War Office to relate to fresh meat only; in South Africa Colonel Richardson, who made the contract, distinctly states that it was fully understood on both sides to include frozen meat. As a matter of fact, about 3,000,000 lbs. out of 4,000,000 lbs. supplied was frozen meat. "The risk which the Company incurred was of the greater expenses which they would incur from the constant movement of troops, and even in the case of frozen meat from the 'demurrage' to be paid upon their trucks. As it turned out, the long rest which the troops enjoyed upon the Modder River enabled the Company to make large profits, and they consented not only to a refund of 27,000l. upon their original contract, but in a second contract to charge only 9d. a Ib. for frozen meat. "Your Committee are of opinion that, having regard to the difficulty of supply and the uncertainty of events, Colonel Richardson was justified in making the contract, but that the terms of such contracts should in future be made more clear to the War Office, when reported home, and that in such large contracts, amounting to over 100,000l., legal assistance in making them should be resorted to. "6. The Q. 1351-1352. Q. 1400-1410. Q. 1435-1443. Q. 1465-1519, Appendix, "6. The damages done to the buildings, bridges, and permanent way of the Colonial railways during the war have been the subject of arrangement between the War Office and the Railway Departments of the Cape and Natal. No account has yet been given of the credits and charges, but a provisional statement is being prepared, without waiting for a final adjustment at the close of the war. "7. Upon Vote 10, the cost of the reconstructing the drainage of Hounslow Barracks was very largely under-estimated, and the original cost of 6,500l. rose by successive stages to 11,092l., or about 70 per cent. in excess of the original estimate. Your Committee also note that a sum of 1,000l. was paid by the War Office to the contractor, without any provision having been made by Parliament, and without the sanction of the Treasury having been given. Your Committee desire to associate themselves with the opinion expressed in the Treasury Letter, No. 40, on page 176 of these Accounts, that it is of great importance that estimates of cost submitted for Parliamentary sanction should be such as the House of Commons can accept as final,' that the executive branches connected with these engineering services should be more accurate in their initial estimates, and more careful that the prices charged correspond with existing prices, so that there may not be excesses of 149 per cent., of 70 per cent., and of 66 per cent. in a single year upon three works. "Your Committee desire to deprecate in the strongest manner any diversion of Parliamentary funds without Treasury sanction. "8. A payment of 4,8901. under Vote 6 appears to have been made to the owners of the ss. 'Lusitania,' being one month's hire, which had been engaged by the Imperial Yeomanry as a transport, and was subsequently found by the Admiralty to be unsuitable for the conveyance of troops. "Your Committee are of opinion that this expense might have been saved had the duty of inspecting the transports before hiring been performed by the Admiralty and not delegated to an inexperienced committee. 'Occupation of the Bethnal Green Militia Barracks by the Committee of St. John's National Schools, Bethnal Green. "9. A long correspondence, printed in the Appendix, and an angry controversy has taken place on the subject of the occupation of these barracks by the St. John's Schools, which lasted from March 1899 to March 1900. The Treasury demanded a rental covering the ground rent of 90l. per annum, the payment of all rates, and the cost of a caretaker. The committee, on the other hand, thought that they should be allowed to occupy the barracks rent free, on the ground that the building was used for educational and religious purposes, and that they were already heavily burdened by other expenses. In a letter, however, of the 10th of May 1899, the committee expressed through their secretary, their willingness to pay 50l. per annum as rent. Your Committee desire, in the first place, to express their concurrence with the Treasury in regretting that the War Office allowed the School Committee to occupy a part of the barracks, leaving the settlement of terms for subsequent arrangement. "They cannot in any way admit the plea urged by the School Committee, that they ought to be excused rent on the grounds urged, inasmuch as the Schools are in receipt of assistance from the State, and your Committee are not of opinion that any Department should allow public buildings in their charge to be occcupied rent free. "Your Committee desire further to express their strong disapprobation of the language used by Lord Hugh Cecil in his letter of the 2nd of April 1900, where he says, 'I need scarcely add that I think the attitude of the War Office has been unreasonable and niggardly; that I maintain absolutely that they ought to have admitted us rent free from the first, and that I resent the letter which you communicated to me two days ago, requiring us to vacate the barracks.' Your Committee, while not agreeing with the contention that the War Office could not legally have substantiated their claim, are of opinion that the best course has been taken by them in accepting the sum of 50l., which has now been paid by Lord Hugh Cecil, on behalf of the committee, for the use of the barracks. "10. No question requiring special notice arises on these Accounts. "MILITARY WORKS ACTS ACCOUNTS. "11. No observations arise on these Accounts. Q. 1673-1712. "BARRACKS ACT ACCOUNTS. "12. In connection with the conversion of Woking Prison into an artillery barrack, the War Office had occasion to acquire about 7 acres of land, the price asked for which was 2,5331. The War Office were only prepared to give 2,000l., and the land, with about 2 acres added at the instance of the vendor, was taken under compulsory powers, the arbitration award for the whole area being 6,8391. "Your Committee are of opinion that this result was brought about mainly by the delay consequent upon the Treasury Solicitor not understanding the instructions he received from the War Office in December 1896, to the effect that the land to be acquired was to be used for the erection of barracks. He did not discover this till June 1897, when the steps taken under the Defence Act were abandoned, and proceedings commenced under the Military Lands Act of 1892. It was then too late to obtain the special Act required by the procedure under that Act, and consequently a further delay took place till the following year. Meanwhile the property had change:l hands, and a brickfield set up in the vicinity, which greatly enhanced its value. Your Committee are of opinion that an accurate précis of the circumstances should accompany the letters instructing the Treasury Solicitor to proceed in any legal matter on behalf of the War Office, and that where the difference between the price offered and the price which would be accepted is so small, the chances of an appreciation of value in the land during the necessary legal delay should be considered before compulsory purchase is resorted to. "14. Your Committee have to observe that expenditure outside the repayment services was Q. 1750-1779. incurred upon the Ordnance Factories for 1899-1900, without the sanction of any Vote of Parliament, which was not taken till the 4th of August in the latter year. "Your Committee have called attention to this irregularity before, and desire again to express to Parliament their opinion of the desirability of remedying this irregularity by taking the necessary Vote in March. "15. The value of the output, including semi-manufacture, amounted to 3,551,565l., a sum Q. 1782. exceeding the average of the last three years by 537,6091. last 16. In reference to paragraph 12 of the Second Report of the Public Accounts Committee of Q. 1785-1788 year, it has not been found possible to transfer the Accounts of the Building Works Department to the Central Office, and the existing duplication of account keeping will be maintained until the question of decentralisation is settled. "Your Committee agree that this is unavoidable. "17. Your Committee find from the Comptroller and Auditor General's Report that in the past Q. 1819–1826. 12 years 146,5677. of the sum written off as depreciation on machinery had been applied in aid of Capital Expenditure on Buildings. They are glad to learn, as the result of an inter-departmental Committee, that the extension of buildings out of funds properly applicable to the maintenance of machinery in a thoroughly serviceable and up to date condition is to cease, and that no diversion of savings upon machinery can be devoted to building, or vice versa, without Treasury sanction." Question, "That this Report be read a second time, paragraph by paragraph”—put, and agreed to. Paragraph 2, agreed to. Paragraph 3. Amendment proposed in line 17, to leave out the words "do not "-(Mr. Austen Chamberlain)-Question put, "That the words 'do not stand part of the paragraph."--The Committee divided: Ayes, 4. Mr. Cohen. Mr. Goddard. Sir W. Brampton Gurdon. Mr. Herbert Lewis. Noes, 6. Mr. Baldwin. Mr. Banbury. Mr. Austen Chamberlain. Mr. Cameron Corbett. Another Amendment proposed in line 17, to leave out the words "concur in this view" in order to insert the words "whilst acknowledging that these payments were necessary under existing circumstances, consider that they should not be made in the future without Parliamentary sanction, and that provision for such services should be made by a token vote or otherwise, under a new heading 0.14 d |