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of1097in the United StatesPage 12 ofi¿997ans have watched the development of this scheme with close interest. It represents firstly a convincing proof of our determination to develop sterling sources of food supply. Secondly it is a real domonstration of our belief in the development of our backward territories. We are hoping to take full advantage of any opportunities which may arise for United States capital investment in the British Colonies. It would greatly discourage United States help in this field if we abandoned the one really large scale food production project which we have started since the end of the war. How could we expect United States investors to take the kind of risks which we admit to be too great?
23.
I feel that it is on these wider grounds of policy that our decision must be based. Our detailed estimates of probable income and expenditure are essential - but not the decisive - evidence. It is not possible to demonstrate that
a 600,000 acre scheme will be able to cover its costs - but at the same time it is not possible to prove that it would lose money. The outcome depends on factors which we cannot estimate with any degree of precision. I would be the first to admit that for as far as we can see at the moment we cannot justify the scheme as a purely commercial venture in the precise sense that, allowing for the risks, it is likely to provide a rate of profit in the accepted business sense of that term. The original estimates of costs contained in the Wakefield/Rosa report were too far out for this. But I think that there is every jusification for going ahead with the scheme on the sharply reduced basis now proposed when the wider aspects have been taken into account.
24.
In making this recommendation that the scheme should go forward on the lines proposed by the Corporation I would ask my colleagues to bear in mind the very great differences between these proposals and those which we had when we first considered the project. The present proposals are based on three years' practical work in the bush under tropical con- ditions in East Africa. They are put forward by men who have now had years of experience on the job. The plans are based on lessons which have been learnt and in the sure knowledge that the administrative base to support the enterprise has been safely established. The communications, the workshops, the spare parts and all the other administrative facilities which did not exist in 1947 have now been provided. Experienced men now have the tools with which to finish the job. And the Overseas Food Corporation, although it only took over responsibility eighteen months ago, has already shown itself capable of more sustained leadership and effective organisation in East Africa than the Managing Agency.
25.
I believe, however, that it is essential to strengthen the Board of the Corporation. For obvious reasons I do not want to go into details in this paper, but I will indicate orally to my colleagues the changes which I have in mind and which I have discussed with the Chancellor. I am confident that the result of these changes will be to secure a Board which will ensure not only that the approved programme is carried out with vigour but that the maximum economies in organisation are achieved.
26.
In particular the strengthened Board will have to pay special attention to the pressing problem of improving the accounting arrangements of the Corporation. It is, of course, very unsatisfactory that the Auditors should have had to qualify the 1948-1949_accounts. Undoubtedly there, were extenuathage 12mbances of considerable Bagno12 ante97 the bulk purchase of surplus stores, difficulties of accommodation, an acute shortage of experienced staff. But some part of the
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