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22 June 1908.J

CROWN AGENTS' ENQUIRY COMMITTEE:

Mr. H. W. BADOCK.

732. (Sir Albert Spicer.) Do you know what you were getting when the Bank rate was 7 per cent. ?- We never got quite 7 per cent., but we got as high as 6 per cent.

733. (Mr. Bailey.) Would you tell us very briefly what your method is with regard to issuing your Treasury bills?-We do not as a rule, when we are preparing our estimates, estimate for India bills; we avoid issuing them when we can, but we sometimes issue them at the last moment if we find that it is bad for the issue of permanent stock. The Bank of England issue an advertisement that on a certain date they are willing to receive tenders for half a million or a million, or whatever it may be. Only ten days ago we issued two and a half millions India Sterling Bills. Tenders are received, and, of course, although it is open to us to reject any tender, they go to the highest bidder.

731. Just as you do with those jeans which you invite by tender?—Yes.

735. (M. Harris.) There are probably occasions, as there are in the ease of the Crown Agents, when you have to undertake larg works, railways, etc., in anticipation of the period of issuing your loan. 1 you ever have any difficulty in financing or do you always issue your loan prior to taking up the work?-We have what is called a Railway Pro- gramme; we arrange provisionally for three years ahead and our scale for the last three years has been a £10,000,000 programme. That, as I think .explained before, we apportion when framing our estimates mainly between companies and Government loans. Then we are more or less committed to that programme. We are very reluctant to reduce it. In emergencies we have temporarily reduced it by £1,000,000, but we make a great effort to provide the money and the reason is this that directly the programme is authorised, ex- penditure is often commenced, and if the money is not found, the work must stop, and of course that is a great less to the State; so that although the occasion upon which we have to raise money may not be very favour- able, we sometimes pay a little more sooner than stop the work. In a general way we provide for the Programme we lay down.

734. And you look upon that as part of your ordinary financial operations?—It is A Necessary

nancial transaction.

737. And you have never come to any real diffi culty over it 7-No. We had, as matter of fact, some time ago during the famine in India. tem- porarily to reduce the programme by £1,000,000, and we told the various companies and the State railway authorities in India. You must reduce your pro- gramme by £1,000,000, and you can do in the way that seems must suitable to you." They sent home a tehneed programme. But we found means after- wards of storing the original programme.

738. Before any loan was issued ?—Yes. We do, I may say, sometimes anticipate the usual date for the issuing of the loan. For instance, the £5,000,000 Indian Sterling loan raised in January was to meet the railway programme of this year, 1908-09.

739. That was a loan in advance of your need for it-Yes, but it had been arranged; our estimate was framed in October, and we knew that we should want

the money, we saw our opportunity in January and

took it.

740. That money is lent out in the way you ex- plained to the chairman just now? That is so; we use our balances in that way.

741. I will only trouble you with one more ques tion; do you find that you have any difficulty in dealing with these financial operations from your being a Government department, and not absolutely with a free hand as the Crown Agents have? Have you at times wished to have more control over your clerks, a different organisation and so forth, or are you quite satisfied with the way in which the office runs-Taking a large department like mine I have no hesitation in saying I'am satisfied with the way in which the office runs as at present. I can con- ceive a difficulty; I have seen one or two cases in quite a small department where an application has been made to the Civil Service Commissioners, and

they have not got the right man, but in a depart ment like mine, if a man came to me and I wanted him for particular work and he was not quite the man for that, I should put him at some other work for which he was qualified; my work is so varied.

742. I was looking at it quite generally; for deal- ing with your financial work, you do not find it go on less smoothly because you have your permanent staff?--No. I have had no experience of anything else, but I certainly have had no difficulty arising from that.

743. (Chairman.) If it were put to you which you would sooner have-the independence of an office more or less independent of the State, or the arrangement under which you recruit at present, where the whole thing is run on the Civil Service basis, you mean the advantages of being in the Civil Service outweigh the possible advantages of the other method, in your view? In my view they do, and my view is based upon an experience of the two classes.

744. (Mr. Harris.) When you say that you are a large Department, are you larger than the Crown Agents?—There is an Accountant-General, a Deputy Accountant-General, and 52 clerks.

745. (Chairman.) 52 is the total 7-Yes, apart from the Accountant-General and the Deputy.

That ex-

cludes messengers, that being the clerical staff.

746. And typists?—I have no typists as such in my Department, but I have three second-class clerks who ar excellent typists,

747. That is everybody except messengers ?—Yes.

748. (Sir Francis Mowatt.) gather from your general evidence that yours is a Department purely of finance and of accounts, but not of administration in India?--Yes.

749. I will illustrate it in this way: the execution or administration of a great public work in India, for which you would have to find the money is not under your control ?—No.

750. Under whose control would the construction of a great bridge over a river be the absolute watch. ing of it from day to day and inspecting?—There are two possible authorities in a case of that kind. If it were a State railway it would be, of course, primarily under the people on the spot, the Public Works Department of the Government of India, but that is in the last resort controlled by the Railway Depart ment of the India Office, by what is called the Public Works Department of the India Office. If it were a company's bridge, it would be under the control of the company's officers in India, and they would be super- vised by the Consulting Engineers of the Company in London and by the Government Director of Indian Railways at the Board in London. On every Indian Railway, as we guarantee the principal and interest, we have a Government Director representing the Secre- tary of State with power of veto. Finally the Secre tary of State in Council has absolute control.

751. The control and inspection from day to day would not fall under the Stores Department, which supplies the stores for the construction Of a State railway, no. When once the stores have boen

shipped and sent away the Stores Department have

clone with them.

752. (Mr. Gibson.) One point about the staff. You are of opinion that the entry by open competition by the Civil Service is the preferable method. There are two ways, really, of staffing your office by means of the Civil Service Commissioners. In your Department you have two grades, the higher and the lower, the higher entering by a different examination?—Yes, what is called the first division and the second division.

753. For the class of work you have to do in your office, are you in favour of having two distinct forms of neruitment, the higher and the lower, that is to say, do you consider that your existing system is preferable to having a system under which all men come in at the bottom and work their way up to the top?-My own opinion is undoubtedly that for certain work in my Department it is desirable that we should have a

MINUTES OF EVIDENCE.

Mr. H. W. BADOCK.

We have a limited proportion of first-class men,

umber, but the work of a large part of the Depart- ment, as you can see from the establishment, is done by second-class clerks.

754. (Chairman.) Of the 52, how many are first class and how many second?-Those who are described on this sheep as seniors and juniors are the first class, bu: you can get it best from the estimates.

755-6. Do juniors become seniors?—Normally, yes; that is a natural development. We do not enll second- class clerks juniors; it is a question of terms. The first- class clerk is a junior when he comes into the office, and he then becomes a senior in due course, and ulti- mately may go higher. The second division clerks we divide into three classes-the second division, the higher grade, and the staff clerks.

757. (Chairman.) What I meant was, could they pass from one to the other?-We follow exactly the Trea- sury rule there; it is possible after eight years' ser- vice, and several men have done so,

758, (Mr. Gibson.) You are aware that in soveral olives a new system has been introduced by which a mewhat higher class than the Second Division clerks has been instituted, with the idea that promotion throughout to the higher grades should be open to them?--Ys

770. Do you think that would be an improvement on your present system ?--I may say it was tried in our partment; I came in under it myself, and it was not considered a success. It was abolished in 1894 in favour of bringing in a proportion of higher grade Ban. When I entered the department in 1876 there was a special examination, that is to say, we had collo- quial French and German and mathematics, very much the same kind of examination as you are referring to

nyw.

760. That was the old supplementary branch before the introduction of the second division ?—No, it was a special examination altogether for the India Office, but it was very similar to what they are trying to do now. 761. With the limits of age somewhat the same, from 18 to 1947—No, I think in those days it was 18 to 22 or 24. I am not sure which.

702. (Sir Albert Spicer.) Do you say a second-class clerk cannot advance to the first-class 1--The second- class clerk cannot advance for eight years in our office, and I think that is the same in the Treasury, but afterwards he can by selection.

763. Not by re-examination ?—No; but he gets ā fresh certificate of qualification from the Civil Service Commissioners.

704. (Mr. Gibson.) Sir Ernest Blake says that in his office there is a tremendous amount of routine work, and that he proposes to enter all his clerks at the bottoni, hoping to get a sufficient number of qualified men to succeed to the higher posts, and he has no first-class clerks -Where I think that the higher grade men excel more particularly is in important correspondence. It depends upon the amount of literary work you have and the extent to which you are a correspondence department. Mine is an Accounts Department uspécially, but when I tell you that we have 50,000 letters every year which have to be dealt with, either by forms or by sometimes carefully prepared replies, you will understand the magnitude of our correspondence.

765. (Chairman.) In connection with paying pen- sions, for instance?--Yes, we have an enormous num- ber of letters, and we have the very troublesome work of assessing income-tax, which leads to a great deal of correspondence in consequence of the recent complica- tions. Then we have 4,000 or 5,000 references from other departments of the office asking for our opinion. These on many questions have to be very carefully worded, because when our opinion goes to another department and is adopted, the phraseology of the dispatch that goes to India or to the other public department is practically what we have said. "Often our reply is enclosed as the official reply, so that for that kind of work you want higher class men.

768. Another question was asked, and we never got at the correct proportion; what is the proportion of

37

[22 June 1908.

first and second-class clerks -We have 39 second-class clerks and lō first-class clerks. Including the Account- ant-General and Deputy Accountant-General, there are 15 of the first class, and they either came in by the first- clase examination or in one or two cases by special examination or else have been promoted

767. Will you keep to those proportions as far as you can seÌ is that about the proportion you think right it is the proportion which I have no doubt we shall have to kerp; in 1891 it was proposed to reduce the proportions, and you will notice that un that list there are certain men who are called re- dundant.

768. To reduce which class?—The first class; but considering the rate at which our work has been grow- ing and the character of it, I do not think it will be possible to reduce them.

extra

unes

769. (M1. Louthes.) On the other hand the second division is slowly increasing too; you took ou three last year-Yes; it is increasing very much I have statistics-here as to the number of pay and pension cases. I do not know whether the Crown Agents have any work of that kind. We have an enormous pension and pay list in this country. The particulars 1 have been giving you of the work of the department have been mainly concerned with the accounts and finance side, but the examination of the claims connected with this £10,000,000 of stures that we ship to India is a further very important part of the work. Then there is the control of the railway companies; two officers from my department are deputed to audit the accounts in London of all the railway companies and to report to the Secretary of State through me anything which it is desirable he should know or which calls for action on his part. Three of my staff are engaged almost exclusively on railway work.

770, (Mr. Harris.) You referred just now to the very heavy work induest by Income Tax collections; Would you kindly bridy state what that work is? Wised this year something like 16,000 Income Tax forms, which have to come back to us for com- pletion. In future years by a recent arrangement with Somerset House that number will be somewhat less, but every year we shall issue fully 9,000 or 10000 Income Tax forms, I presume that we all have been neripients of something of the kind in our Full time, and you know how complicated they are. particulars of dividends and income of every sort. ant charges on income, have to be entered. bave to be examined and certificates given, apon which we either assess at the Pd. or 18. rate or allow various scales of abatement, and so on.

Those

771. Do you receive any allowance from the Inland Revenue Commissioners for that work – We do re ceive an allowance which does not at all represent the work done; we receive £1,200 a year.

772. Is that paid into the office funds? It is treated as a miscellaneous receipt of the revenues of India.

773. Is it divided up amongst the members of the staff?—No, it used to be, but that has been done away with.

771. (Sir Albert Spicer.) With regard to finance, were you at all inconvenienced during the financial stress last Autumn, or was your system elastic enough to enable you to postpone issuing?—We try to keep in this country a sufficient balance to tide us over a diffi- cult time. We have to maintain a balance of £500,000 at the Bank of England by arrangement with them ; that is the minimum, and we try to arrange to have a balance of not less than 2 to 23 millions. Our balance is fed, as you know, mainly from two sources, from Indian Debt or railway company's capital paid to us and from sales of Council Bills on India.

775. So that you were not specially inconvenienced by that period of financial stress --No; that is to say we had no difficulty from week to week of paying our way and meeting our requirements.

776. You did not choose that period for issuing loans 7-As a matter of fact, we issued a million Sterling Bills in October, and we issued a Sterling Loan of five millions in January.

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