CO885-(18-19) — Page 672

xvi

CROWN AGENTS' ENQUIRY COMMITTEE:

V

REPORT.

xvii

PUBLIC RECORD OFFICE

Reference :-

PERFIL C.O.885

19 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE

BE REPRODUCED PHOTOGRAPHIC-

INSURANCE SCHEME.

67. Previous to 1895 cases of the widows and orphans of members of the Crown Agents' staff who had been left in poor circumstances had been dealt with individually on their merits, and in some instances either small pensions or lump sums had been granted with the sanction of the Secretary of State. In that year, however, the Crown Agents obtained the sanction of Lord Ripon to the following scheme of compulsory assisted insurance for members of the established staff:-

Officers.

Amount of Policy.

Payment by Officers towards Premium.

With salaries not exceeding £300

*C 1,500

With salaries between £300 and 2450 With salaries exceeding £450 Crown Agents

2,000

15 per cent, of salaries not exceeding

3,000 6,(x))

half the premium; the balance

to be paid from Office Funds,

68. The scheme was voluntary as regards the existing staff, compulsory to all new comers. In the case of officers who retire on pension, the salary at the date of retirement continues to be the basis of the officers' contributions. It was laid down that the extinction of premiums was to be a first charge on the profits, and that surplus profits were to go to the beneficiaries of the insured. The cost of the Office contribution to the scheme was estimated by the Crown Agents at £2,023 a year-to diminish as younger men joined. Arrangements were entered into with the Equitable Assurance Society, and a Declaration of Trust was executed by which the policies were vested in the Crown Agents. Owing mainly to the increase in the staff of the Office since the scheme was started, the anticipations of the Crown Agents with regard to the future decrease of the charge imposed by the scheme upon the Office Funds have so far not been realised. The following are the figures taken from the Crown Agents' accounts:-

Payments by Staff.

Contribution from Office Funia.

COLONIAL CONTRIBUTIONS AND RESERVE FUND.

70. The principle on which contributions are levied from the Colonies and the formation and purposes of the Reserve Fund are described in a circular despatch of the Duke of Newcastle dated 31st December, 1863 (No. 1 of C. 3075). After stating that it had been found necessary to increase the number of the establishment and certain of the salaries, and to render the position of the staff more attractive by giving them advantages analogous, as far as possible, to those enjoyed by officers of the Imperial Government in respect of retiring allowances, the despatch proceeded:--

paying fixed contribu

tions:-

Victoria, Ceylon,

Cape of Gool

£8. d.

£

6. d.

1896

624 2

6

2,336 13 7

1897

646 0 4

2,408 16 4

* Colonies

1898

764 3 9

2,339 6 7

1899

739 17 11

2,438 19 8

1900

764 13 8

2,515 2 8

1901

840 17 3

2,665 11 2

1902

90-1 2 2

2,784 19 4

1903

932 4 2

2,808 12 3

1904

954 18 5

2,832 17 10

1905

931 8 8

2,587 18 0

1906

* '971 11 B

1907

1,01-4 4 2

2,590 8 7 2,638

8 4

Total for 12 years

£10,888 4 8

£30,947 14 4

69. The Committee fully realise that there are great advantages in a liberal system of insurance, but it appears to them that the present scheme is too ambitious in every way and imposes far too great a responsibility on the Crown Agents. While they do not recommend that the existing arrangements should be varied as regards the present contributors, the Committee recommend that a new scheme should be proposed by the Crown Agents of a more modest character to apply only to fresh appointments to the establishment, and that not more than one third of the premiums under this new scheme should be paid from the Office Fund.

Hope, Mauritius, Trinidad, British Tulane, Tasmania, Maita,

Sierra Leone. Gibraltar,

Gambia,

Natal,

Hung Kong"

"With these views I have obtained the sanction of the Lords of the Treasury to a scale and mode of contribution which will, I hope, provide satisfactorily for all these objects. It must, however, be understood, that if in course of time the rate of payment should be found insufficient for its purpose, Her Majesty's Government reserves to itself the power of If it should be found more than sufficient, it will requiring the necessary increase. similarly be reduced. It is, however, not likely that a reduction could be effected at any earlier date, as the present payments are intended not only to meet the current expenses of the Office, but to accumulate a certain reserved fund intended to meet any sudden falling off in the receipts of the Office, and also to provide for the charges on account of retiring pensions and gratuities, to which claims are already accruing, although it is not probable that any such claim can be made for some time to come.

"I now proceed to explain the manner in which I propose that these objects should be provided for, which does not materially differ from the arrangements that have been hitherto allopted.

"In the first place, a commission of one-half per cent. will be charged on all loans contracted and paid off through the instrumentality of the Crown Agents, and on all interest paid through the same channel. A brokerage of one-quarter per cent. is already paid by the Colonies upon the negotiation of fresh loans, which will be covered by the proposed commission. The remainder will go to the support of the Office. I understand that a banker would probably charge about ono per cent. for performing these functions.

"Next, the Colonies have hitherto paid the usual commission of one-eighth per cent. for 2s. 6d. on £100) on investruenta, which was divided equally between the brokers and the Bank of England, from whom the brokers received their orders. Arrangements have heen made by which the broker will hereafter receive their orders direct from the Agents (in itself a decided improvement on the present mode of conducting this part of the business). and the sum hitherto paid to the Bank (one-sixteenth per cent., or Is. 3d. per £100) will go to support the Agents' establishment. Thus a slight increase will be made to the income of the Office, without any fresh charge upon the Colonies.

"Thirdly, any Colony overdrawing its account will be required to pay interest at the rate of 5 per cent. per annum on the amount of its overdrafts. Little will be gained to the Agency by this now charge, which is principally imposed for the purpose of discouraging such overdrafts, by which, in effect, certain Colonies have hitherto borrowed without interest from the rest.

"Lastly (and from this source the bulk of the Office income will be derived), those Colonies which regularly employ the Crown Agents will, as heretofore, contribute an annual eam bearing some proportion to the trouble which the general business of each (irrespective of loans and investments) is found to impose on the Agents and their Department.

"In the cases of Colonies whose accounts are too small to require a fixed annual payment for the general business, the contribution towards the expenses of the Agency will be in the form of a commission of 5 per cent. on all orders executed by the Agents, irrespective of loans and investments.

This commission will continue to be demanded from all Colonies employing the Agents except those hereafter specified, and I could have wished that some analogous principle could But the have been fairly applied to Colonies whose transactions are on a large scale. variety of the business which is represented by these larger accounts is such as to render it impossible to treat them on any uniform rule; and I have been unwillingly obliged to adhere to the present mode of assessment by which the Colonies named in the annexed list are required to pay a fixed annual sumn, determined from time to time by Her Majesty's Government, with the advice of the Crown Agents, who alone are cognizant of the character of the different accounts, and based partly on the relative amounts of those accounts, and partly on the more or less laborious character of the business which they involve. The amounts of these fixed payments will continue in the cases of those Colonies where fixed payments are now made at the existing rates, except in the cases of Victoria, Hong Kong and Natal, to which separate Despatches will be addressed.

Any service of a totally exceptional character (like the railway business of Ceylon and Mauritius) will form the subject of a separate arrangement."

71. The rates of the contributions of the Colonies to the Office Fund have been revised from time to time and are at present as follows:-

(1) One per cent, on all stores obtained through the Crown Agents. (2) One-half per cent. on the issue and repayment of loans and the payment of interest.

per cent. o1.

(3) Fixed annual payments of various amounts* from all Colonies whose general

• See Appendix 111.

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