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CROWN AGENTS ENQUIRY COMMITTEE:

Mr. W. H. MERCER, C.M.G,

2021. Has it ever happened that when you have been asked to invite tenders for work to be done in a Colony you have received a tender from a Colonial firm and have accepted it? No; but I can give you an instance It is outside my department, sʊ which bears upon it. firms in

I do not know the exact details, but I can give you substantially the facts. Thero is a great harbour works scheme in progress now at Singapore, and the contract was eventually let to a contractor who gave us a tender.

2014. We have had evilence that the operation of the cale, wilen says that if supputes are obtained from this country they must be obtained through your office, operates hardly on people having Colonial busi-

take engineering instance. nesses; fur Ceylon, according to their statement they were debarred fron tendering with any prospect of success by the very tact that they were engaged in tha Colony Kweli?—May 1 ask what they tendered for? 11 t want the particular case.

2015. There was a particular cas of grain sheds ?-- I thank that evidence has been given under a mis- apprehensum. I know this class of charge quite well, but two or three cases of that kind were Bien- timal by the Earl of Portsmouth in the House of Lords when be asked for the Inquiry upon the Crown Agents. He mentioned two or three cases of that kind of which he of us had ever heard as could not possibly hear. We do not put up grain sheds or ang building whatever in Ceylin. The complaint an this case, however, is not against the Crown Agents, but against the Colonial tavernment. The Colizi Government in a case like that undertakes the work

If departmentally, just as the London County Council her in some cash. The outside wor tractor complains out there against the overament of Ceylon, just as he does here against the London County Council, but we have absolutely nothing to do with it. That is a matter for the Secretary of State to settle. If the Secretary of State decides the this work is not to be done departmentally in Cylon, but tha üutside contractors at any rate should have the right to temuler, it is for him to say so, but we have we never lor f no vice in the matter; in fact, theme cases.

2010. The case that was put to us was that the Government of Ceylon decided to instruct the Crown Agents -To build a building in Ceylon?

2017. To invite tenders for the setting up of the building? They might ask us to invite tenders.

2018. Let me make it plain-and that you invited tenders in the ordinary way, and these people did, in point of fact, put in a tender-they were not on your list for the start, naturally enough, because they were in Ceylon, and that they were debarrel from any prospect of success because they were in Ceylon ?— Might I ask, Was it a case of the Crown Agents? Per- sonally. I think there is a misapprehension about the whole case. My firm belief is that this was a contract which the Colonial Government were alone concerttel with. I do not suppose for a moment we ever had anything to do with it. What I would suggest is that if the Committee are to receive allegations of this kind, which I think is an extremely reasonable and proper thing to do we should have the opportunity of reply. ing to them at the time. If you are going to go into evidence of this kind, which I hope you will, it should be conducted, I submit with all respect, in a judicial

manner.

2019). You do not seem to apprehend what the object of the questions we are asking you is. If any allega tion reflecting seriously on the Crown Agents were made, of course we should consider it our business to go into it in a ju‹licial manner; but in this particular ease (it is always much easier to conduct a theoretical enquiry by means of questions) the Crown Agents were not to any extent found to be at fault; this is simply a constitutional question as to how far the Crown Agents an debarred by their own rules from accepting That is a very teblers from Colonial contractors. interesting question upon which we want your views, but please understand that where allegations are innle the fullest opportunity will be given to the Crown Agents to reply, as I have already stated?—I do not mak that suggestion in our interest in the least, but simply in the interests of the Committee, which wants to get at the bottom of these things. Suppose, for in- stance, which was not the case in this instance, you knew that certain specific cases were coming forward, then I think there would be a great advantage if we were present, beenuse we could then examine and b

xamined ourselves.

2020. That is a matter for consideration, but on this pant we want to know how far are you deharred. if at all by your own rules from accepting Colonial offers--We are not debarrel in the least.

2022. A contractor in Singapore No, a contractor in this country. There was a great demand in the local Press that local contractors should be allowed to tender, and against that, on principle, we have not got a word to say; but it is clearly a matter for the Colonial Governinent to decide that. We put it to the Colonial Government, and the decision (perhaps I hal better not mention what it was) was that of the Colonial Government. They know their local con- tractors; we do not know them, and we do not profess to know them. We, as I say, are only London agents, If it is u and we deal only with English contractors. question of some local contractor putting in a tender, it is for the Government to say whether he worthy, and whether it is worth while letting him tender. In this case the Government decided the matter, and there is an end of it.

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2023. Again, I ask you: Supposing there to be a Colonial business with an office in this country as they generally have, and you invite tenders, and the London office with its business on the spot submits a tender, and in point of fact does it ever do so? Do such things arise, and if they do, what would you consider to be your duty?—Our rule in all these cases is to invite tenders from firms who are on our approved list. Any contractor who gives satisfactory references can get on that list. In the case of such works as harbour schemes, of course. we do not profess to keep a list; the number of contractors who are really avail- able you can count on your fingers--there are very few, and we know thein. In those cases we generally in- vite tenders by advertisement. Now, if a tender was received in this country from a firm which was really merely the agent of a Colonial contractor, we should take the opinion of the Colonial Government upon it; it would be for them to say, because they know the contractor and we do nut.

2024, Such cases do not arise?-I do not remember one. In all these cases, if the contractor is himself really in the Colony and has only got a London agent. he would tender or attempt to tender locally. Why not? It is much more convenient that he should d it locally. He would not attempt to do it through London.

2025. (Sir Francis Mowatt.) Will you explain what you mean by tendering locally? Is not his tender to the Colonial Government 7-Yes.

2026. Just to illustrate that without going into de tails, are you aware of the Government of Mauritius having accepted a considerable coal contract for the supply of coal in the Mauritius?—Yes.

2027. Did that in any way come through you?—It

did.

2028, When they wanted coal did a local contractor tender direct to the Colonial Government ?--In that case the local contractor was not in Mauritius at all; he was really in Natal; it was a Natal colliery that secure that contract. We were asked by the Govern ment of Mauritius to obtain tenders for coal, and w

W.. obtaimel them, One of them was from Natal. did not decide upon these tenders because we were not asked to do so; we sent them all out to Mauritius, and Mauritius selected the Natal tender.

2029, (Mr. Harris.) Just following up one of the questions you mentioned in reply to the Chairman: that you asked for tenders from your approved list : do you think it possible that a system which runs upon an approved list, and has practically no colonia! manufacturers, etc., upon it, perhaps operates as restraint upon the possibility of giving a chance to the local people?--No, I do not think it does it practice, although I quite see the force of the point that there is a possibility. In practice it works out like this: the Governor and the colonial officials themselves, as a rule, are very anxious, if they pos

MINUTES OF EVIDENCE.

Mr. W. H. MERCER, C.M.G.

sildy can, to place contracts iucally, and quite natur- ally. I do not blame them in the least; all their sympathies and connections are local, and if they local manufacturer, they will and can encourago

they do, and in that case we do not get the order, and never hear of it, because it is not necessary for them to order through the Crown Agents at all if they can procure it locally.

2030. (Sir Francis Moratt.) Is at the role that a Crown Colony can accept tenders for any work that m the Colony without carry ou

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matter of fact. If they cantiot quently do, as get the things, of course it is another matter, and It must be borne in mind that the Crown Colonies, 15 a rule, do not manufactur; in practice these cases do not occur to any appreciable extent. The things are made in this country, and they must be got in this country.

2031. (Mr. Bailey.) The case we have all had in mind was one representing a class where there was a large stock of "material" very largely used in the colony on the spot, and for some reason or another this was passed over and all the similar material was ordered through you from England. Will the Crown Agents be in any way responsible for that?-Not in the least; it is for the Colonial authorities to say whether they will use the local stock or send to us. The only cake on a par with that I remember-n very mportant case-was the case of various stores wanted by the military authorities in South Africa. That is one of the cases. I propose to read to you if the Committee has time to hear me. There the military authorities got certain supplies rally, and other supplies from us. When they had had some experi- ence, they wrote to us and said they had decided to get all their supplies from us. There was undoubtedly a large stock of materials in South Africa, but for various reasons, which they explained in their letter, they decided to come to us. Whether they were right or wrong is a question for them. As a rule, we know nothing about these local materials, not officially, at any rate, but we never put any impertinent in the way, if that is the point-certainly not.

2032. (Chairman.) You will forgive me for putting this question to you, 1 am sure; later on in your evidence I particularly notice in your précis this phrase: A present the Crown Agents and their staff have to make the office pay, and they are enger to secure business " 3- Certainly.

2033. If supplies are obtained locally, you lose the business? But we should never hear of it.

234. But in point of fact you would lose the busi ness, and the Colony, instead of contributing, let us say many thousands to the necessary expenses of the offre, would contribute nothing? That is so.

285. Is it not rather the tendency of the present system to make the Crown Agents in your place esger to secure business, and so, although everybody knows its not increase their own emoluments, and there can be no question of its being unfair in any way. does not the system tend to make it to everybody's interest in the office who wishes to make the office a success. to eliminate the Colonial contractor or the Colonial merchant 7-Well, of course there is something in that, but still what I meant to convey was that we endeavoured to serure business by giving satis faction to our employers by doing the work which they send to us in a proper manuer. I do not how- ever think it affects the question of whether the Colonial Government will decide to give the order lerally or not. That is entirely in their hands. It

is certainly not the case that we bring any pressure. to lear in any such case as that quite the contrary, A Colonial officer has frequently come to me, and said: "I am rather anxious to encourage such and such a branch of business, and I can get the goals at such and such a price,” and if it is very mont our own price I always say: "If I were in your position, I would do so."

2036. Is not that an act of great self-sacrifice on yur part? Does not that means a direct loss to your offie Yes, but really we do not trouble about these matters; we do make the office pay as a matter of

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fact, but on the other hand it is extremely desirable that we should convince our masters, as we regard them, that we do not want to put any difficulty in their way.

2037. I would again impress upon you that you will not mind my pressing the point on behalf of the Cum- mitte-Not at all.

2038. Because everybody knows the actual salaries of the people in the office do not depend in any way ou the business they get, because they are all fixel on a scale, but in your patriotic desire to make your office pay again ask you does it not operate, as far as that desire is strong, to eliminate the Colonial contractor and the Colonial merchant -Oh, no. I quite recognise the point, but in practice I say with confidence that it does not affect it at all.

2039. You think it does not weigh with the office?— Absolutely not at all. We are very frequently asked by these Colonies which are semi-independent, such as the Transvaal was when it was a Crown Colony, to give them information and supply prices, and so forth, and we know perfectly well that our prices will bo compare with the local prices, but we never take the least trouble on that account. We have given them the fullest particulars, and sometimes we have never heard more about it; sometimes we have got the order. That has gone on in hundreds of cases, not only in the Transvaal, but in many of the West Indian Islands, for instance,

2010. (Mr. Harris.) Might I follow up the Chair. man's question by asking what in your opinion is, sto sponk, the vanishing point of the Crown Agents' business with the Colonies? The Chairman suggests that if you followed your policy, as you explained it, u little bit would go here and a little bit there, and a little bit elsewhere. What is the point at which you will say, "No, we must stop" The judges say on some occasions, We know there is a line some. where, but it is very difficult to say where to put it"; and all I can say is that these considerations do not The Colonial affest

business substantially. Government gives us an order, and there is no ques- tion abent it; the things cannot be, and are not, pro- duced in the Colony,

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2041. (Chairmern.) Will they ever be? 1 should not think so.

2012. You do not think there is a danger of the fums of the office being seriously depleted in conse- quence of heal manufacture ?--tih, wi

2013. (Sir Albert Spicor.) Have you ever considered the question in the larger Colonies, and where you are beginning to have firms who are producing, for in- Stance, contractors or engineers, of meeting Colonial feeling by finding out, not when you have actual busi- ness to give out but beforehand, which of these firms, or any of them, are worthy of being placed on your list, so that you could ask for tenders simul- taneously in these Colonies and at home, and really Compare like with like i You say the Colonial Governors at the present time have the matter fully in their hands, but after all you are the business agents for these Colonies, and they have not the same business knowledge that you have, and therefore I can quite understand their being unwilling to take the responsibility of doing these things abroad, whereas, surely you might very much allay some of this feeling in the growing Colonies where you have got firms fairly well established, and who could do some of the work which the Colonial Government Departments cannot do. Have you ever considered that point I quite roguise that that might be the case; there might be a hr in Ceylon which is quite capable of putting up a building required by the Government. As you say, wo are the business ten of the Colonial Governments, but they do not recognise us as their business men for local purposes - not at all.

2014. But would not you be acting in the interests of the Colonies, where you had got some reliable firms to carry out a special kind of work, by inviting ten- ders from your list here, and from a list which you had previously compiles of firms there? We could not do it. I am afraid that the Colonial Governors would rather resent it We do not know anything aliut the manufacturers and big contractors in the Colonies.

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