PUBLIC RECORD OFFICE
Reference :-
C.O.885
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
19 PUBLIC RECORD OFFICE, LONDON
viii
CROWN AGENTS' ENQUIRY COMMITTEE:
financial business, as distinguished from loans and commercial transactions, exceeded £10,000 a year when the rates were last fixed. These now amount to £3,100.
There are also various miscellaneous payments such as inspection charges, interest on overdrafts, fees for the inspection of stamps.
An abstract of the complete receipts and payments of the Office Fund for the year 1907 will be found in Appendix IV.
72. If the receipts of the Office Fund during the year are less than the expen- diture, as has happened on several occasions, and the deficit cannot be met from the working balance of the Fund, it is provided from the interest on the Reserve Fund. If the opposite is the case, the surplus of the Office Fund (a reasonable working balance being kept in hand) is transferred to the Reserve Fund. Except during the years in which the Department was put to considerable expense in transferring their office from Downing Street to Whitehall Gardens, the steadily growing capital of the Reserve Fund does not appear to have been drawn upon, and on the 31st December, 1907; it had reached the very large sum of £431,310. It is invested in securities approved by the Secretary of State, in the names of the Permanent Under-Secretary of State for the Colonies and the three Crown Agents. It forms a part of the accounts of the Crown Agents, which are now audited by the Comptroller and Auditor General.
73. The Committee agree with the view held by the Colonial Office that this Reserve Fund is a public fund under the complete control of the Secretary of State.
The proposal which the Committee has made in paragraph 64 for declaring the Reserve and Office Funds to be Public Funds within the meaning of the Superannua- tion Act of 1892, will, if carried out, romove any possible doubt as to the nature of these Funds.
74. The present amount of the Reserve Fund renders it necessary to consider how the fund should be dealt with in future. It has been seen that the objects with which it was started in 1863 were twofold.
75. The first, and at the time perhaps the most important, of these objects was to meet any sudden falling off in the receipts of the Office, due to such causes, for instance, as the grant of self-government to a colony and the consequent loss to the Office of its business, or the temporary fluctuations in the magnitude of the business transacted. Experience extending over many years proves that there need be little fear of any sudden and general loss of revenue from the above causes.
76. The second object of the Fund was to provide for the charges on account of pensions and gratuities. Such charges have hitherto been met in accordance with the decision of the Secretary of State in 1878, not from the Reserve, but from the Office Fund. It is, of course, impossible to forecast the total amount to which the pension charges might rise. The experience of the Civil Service has however shown that a capital sum sufficient to produce 20 per cent. per annum of the total pensionable salaries of the Department is generally adequate. But it is probable that, owing to the present constitution of the staff of the Crown Agents' Office, a somewhat larger sun may be required, which the Reserve Fund in the opinion of the Committee would be quite able to meet in addition to the other calls likely to be made upon it.
77. In the evidence stress was laid upon a third possible charge against the Reserve Fund, viz., the necessity in about 18 years' time of obtaining new offices or the renewal of the lease of those at present in use.
78. How far the Reserve Fund could properly be used to indemnify the Colonial Giovernments for losses caused through mistakes by the Crown Agents or their staff is open to some question. The position of the Crown Agents in this respect is at present not well defined. Each of them is required to find security for £10,000, and no doubt in the case of dishonesty or gross negligence they could be required to make good any loss so caused themselves. But it does not appear to the Committee clear that they can be held pecuniarily responsible for mistakes honestly committed by themselves or their staff, and if not the loss would properly be met from the Office or Reserve Fund. Judging from the past history of the Office, cases of compensation will not be very numerous or very important in amount.
REPORT.
xix
79. While, however, the fullest consideration is given to the possible future liabilities of the Fund, as indicated above, the Committee are satisfied that its present amount is sufficient to meet any possible calls upon it. With the view, therefore, to prevent any further increase in the capital of the Fund, the Committee recommend that the dividends from the Reserve Fund securities should be credited to the Office Fund. In order to maintain as nearly as possible an equilibrium between the revenue and the expenditure of the Office Fund, any balance on that fund might be distributed The question might further be pro rata among the various contributing Colonies. considered from time to time to what extent the contributions from the Colonies might be reduced.
80. In this connection the question of the charges on the issue and repayment of loans requires special attention. They are the most variable of the important sources of income. The Committee suggest that these charges might be reduced or even . swept away and a consolidated annual charge for management substituted.
SHIPPING ARRANGEMENTS.
81. It will be readily admitted that one of the most important of the Crown Agents' functions is to secure the safe despatch of the various stores ordered through their Agency.
82. The Crown Agents do not make their own arrangements for shipping stores to the Colonies, but, following the system adopted by the India Office and the The Shipping Admiralty, they entrust this business to outside shipping agents. Department of the Crown Agents is in reality not a shipping department at all; its main duties are confined to advising the Colonial Governments of the despatch of stores and forwarding the bills of lading; it also looks after the insurance of goods with some help from the shipping agents. With it is combined the checking section, which, besides examining invoices with a view to payment, looks after a number of mis- cellaneous accounts.
83. Under the system adopted by the Crown Agents, as soon as a tender or contract is accepted, a shipping order embodying particulars of such tender or order is sent to Messrs. J. and A. B. Freeland, the outside shipping agents of the Department.
84. Messrs. Freeland claim that their duties include the supervision of all details in respect of an order, with the exception of inspection, that they keep in constant touch with suppliers and shipowners by telegram, telephone, and correspondence; that they negotiate freights, supervise the stowage of cargo, report accidents, settle disputes, and take a certain part in insuring and settling insurance claims.
85. They are remunerated by a commission which is regulated partly on a tonnage, partly on a parcel basis, and not on the cost of freight. Their charges are included in
the freight accounts and not kept separately by the Crown Agents; but we find that the receipts of the Agency on a return of the value of shipments in
>>
1904 of £2,541,935 wore 1905 £2,080,482
"
1906 £2,133,659
11
£9,287
£8,232 £10,047
Further, they received from Shipping Companies in respect of commission on passages taken for Colonial officials, &c., £435 in 1904, £387 in 1905, and £521 in 1906.
86. It appears to the Committee that the present arrangements for shipping are not only unduly expensive but must lead to delay and reduplication of work.
87. The idea held by the Crown Agents that their Shipping Agents possess exceptional technical knowledge and perform a function which could not be performed by an ordinary Government Department, containing, of course, the requisite experts, is,
• 21
RECORD OFFICE❘ Reference —
COPYRIGHT PHOTOGRAPH-NOT TO
#2