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31 July 1908.]

CROWN AGENTS' ENQUIRY COMMITTEE:

Sir E. BLAKE.

from the point of view of detail rather than from s broad point of view, and a Crown Agent must look at questions from a very broad point of view or he will be constantly caught. That is my view.

3935. (Chairman.) Is there anything else you would like to say-The next point I noted in running through the evidence was that I should like to say something about Sir Frank Swettenham's evidence, and something about the evidence of Mr. Rees and Sir Bradford Leslie.

3996. We must say a word about the Nyasaland business, but that comes in another part of the ques- tions I would like to ask you, because that raises a matter of policy which I thought I would ask you about? I thought you would ask me questions about the evidence of our staff.

3937. What is your point with regard to the evidence of Sir Frank Swettenham ?-I am & good deal sur- prised that he should have put such evidence before you. Every point that he has brought forward has been submitted to the Secretary of State, and he has been ruled against. Therefore, you have in the Colonial Office the ruling on all these cases.

3938. Such as, for instance-7-Such as, for instance, the question of whether the Crown Agents should be absolutely the agents of the Colony and do whatever they are told, whether it is right or wrong, and on the question of the Singapore Railway whether it should be carried out under a consulting engineer or not, and, which is the most important from my point of view, the allegation that we made bad investments. That is a point he brought before the Secretary of State.

3939. You will have observed that I said we did not propose to go into that question ?—But I do not like a thing like that to appear, that we had actually made bad investments; it was nothing of the kind; they were excellent investments at the time, but like every- thing else they had depreciated. If you care to have a little reminiscence I can tell you a most amusing one; Sir Frank Swettenham took exception to these investments and urged that everything should be put into Consols about 95 or 96, but I deprecated that and said there was quite enough in Consols and they had far better not do so. However, the Colonial Office said, "Oh! very well, if you wish to have your way, do so." We went into Consols to a large extent, and they dropped to nearly 80, although now they have gone up to about 86 again. Last autumn the successor of Sir Frank Swettenham wrote to the Secretary of State: "I see that the Crown Agents are purting money into Consols. Why do they put money into Consols Consols have been knocked about very much indeed." My answer was: "Here is a most amusing dilemma; one Governor finds fault with us because we did not go into Consols, and his successor finds fault with us because we do go into Consols." I maintain that we were right on both occasions; if our advice had been taken we would not have bought Con- sols at 96, and when we did buy Consols at 82 I con- sider we made a most excellent bargain.

3040. (Sir Francis Mowatt.) That, apparently, was not an instance in which you said that Sir Frank Swettenham was snubbed by the Secretary of State?— The Secretary of State first of all snubbed him and told him that it was very improper of him to have allowed such an expresston to be made by the Legisla- tive Council as that these securities were not proper.

3941. (Chairman.) What was the date of that?-I cannot tell you, but the Colonial Office have all the papers on record. I fancy it was during Mr. Chamber- lain's time as Secretary of State.

3942. (Mr. Gibson.) In fact Sir Frank Swettenham reproduced the causes of complaint which he dealt with in his despatch of 1901, and which were settled and satisfactorily disposed of by Mr. Chamberlain in his despatch of 19037-Yes, he ignored all the answers his evidence is simply ignoring everything that was settled.

3943. (Chairman.) Is there any other particular point that you wish to mention to ust-No; I think

from my point of view we should be perfectly pre- pared, and in fact we propose, to put in a written statement in reply to the evidence, but I think 1 can tell you that Sir Frank Swettenham's evidence is worth nothing-there is nothing in it.

3944. The Committee will be the best judges of that, I suppose-He is a very good friend of mine, and always has been, but he has simply stated his own side and ignored everything else; that is all.

3945. Now, in thinking over how I should best assist the Committee, if I could, in asking you further questions, I have considered that the best way to divide up the subject would be somewhat as follows: First, to ask you as to your relations as Agents; next, as to local supplies-a point upon which we are not clear; thirdly, the allegations of undue harshness, with regard to which you might like to make a reply to Mr. Rees; fourthly, the assistance of other kinds that Agents sometimes render; and, fifthly, the question of the staff. With regard to the first point, put in a word. do you regard yourself as the master or the servant of the Colony you serve?-That is a question that was asked of me before the Shipping Rings Commission. Th Commission, amongst other questions, asked me how we stood, and I said we practically had to serve two ma8- ters, but the Secretary of State was practically a Court of Appeal. That was my view of the position--that if a Colony has any complaint against us it appeals to the Secretary of State and the Secretary of State passes his judgment. On the other hand, if a Colony asks us to do a thing which we think to be wrong, we submit it to the Secretary of State and take his instructions. It is a very difficult position-that of having to serve two masters.

3948. You cannot say, in a word, which you are? There is just this instance we have had about the investments; there your principals putting it in commercial language called in question your invest- ment of their money?-Yes, and we reported on it to the Secretary of State.

3947. And he rapped them over the knuckles ?— He did.

3918. You became upon that occasion somewhat in the position of a master, did you not?-Of course, that is a point upon which I might, perhaps, help the Committee. A good many years ago it was laid down that with a view of saving the Crown Agents from these kind of attacks, the Secretary of State, if he adopted our views, should incorporate them in a despatch of his own. That, I am afraid, is very fre- quently not done; I am afraid very often our letters are sent out to the Colonies and give very great offence. We write with perfect freedom; we think we are bound to give the Secretary of State an honest opinion on the subject, but that honest opinion may be very distasteful, and sometimes it is very distasteful.

3949. With regard to such hostility as exists, you would suggest that the Secretary of State should not bring you into it? That is so; we are his advisers, and he should issue a kind of edict of his own; he should say: "I have considered this matter and I have decided so and so."

3950. (Sir Albert Spicer.) I take it that when a difficulty has arisen and you are not prepared in- stantly to follow the wishes of a Crown Colony unless you get an authorisation from the Secretary of State, your statement of the case goes to the Secretary of State without theirs?-Oh dear no; we always put all the facts before him.

3951. You put the facts before him as they have arisen in your correspondence?—Yes.

3052. I can quite understand that time does not always permit of it, but do you give them notice that you do not agree with them, and are going to put the matter before the Secretary of State, giving them the opportunity of putting forward their statement as well?-No, because I cannot conceive of a case where time would permit of its being done. If the Govern- ment ask us for advice we always give it as a matter of course but very often it comes to us as an order.

3053. I am not speaking of that side; I am speak ing of the circumstances when you, so to speak, appeal

MINUTES OF EVIDENCE.

Sir E. BLAKE.

from the Crown Colony to the Secretary of State. In these days of cablegrams would it not be possible, and would it not get rid of a great deal of the difficulty, if you were to give them the opportunity of simul- taneously with your report sending in their own?- Of course, on such a question as stores or supplies we should undoubtedly, but these financial questions are far too intricate to put into a telegram.

3951. They know that you differ with them, and we none of us like being condemned on an ez parte statement?—No, but it seems to me that it is the duty of the Secretary of State to go into the matter.

3955. Still, the Secretary of State is asked to go into it on the statement of one side?-No; we simply submit the papers to him for his decision with such remarks as we think will help him to arrive at a decision. We do not attempt to dictate what he should do.

3058. I quite understand that; but I can clearly understand the other side feeling at a disadvantage?- 1 quite understand the feeling, but I do not see how it can be got over, because, if it is possible, we always write to a Colony. We always desire to avoid showing up a Colony.

357. All our Colonies are within a very few weeks, and a cable can be sont when absolutely necessary?— We are constantly cabling.

3958. (Sir Francis Mowatt.) With regard to what has just been said, in advising possibly against the views of a Colony I assume you send to the Secretary of State the Colony's correspondence with you up to that time-Everything.

3959. So that practically he would have before him the whole story told by the Colony as well as your views upon it?—Yes.

3960. (Mr. Gibson.) In that one case of investments where you practically disagreed with the Colonial Government's suggestions, did you consult tho Colonial Office before you made your investments, or after?- These investments are of very old date; they were made before the Boer War, and everyone knows that there was a most frightful depreciation of securities. The Secretary of State gives us certain broad in- structions; for instance, he says: "There is £10,000, £20,000, or £80,000 to be invested," and we invest it according to the best of our judgment at the time. These were invested in securities which at the time were considered the best, but owing to the Boer War there has been a fearful depreciation of these securi- ties-overy bank, every insurance company, is exactly in the same position; only these bank managers who are on the Legislative Council think this is a grand opportunity of getting their knife into the Crown Agents. That is what it amounts to.

3061. Did the Colonial Government suggest the securities?—No, it was left to us.

3902. In this particular case it was left to you?- Yes, and Mr. Chamberlain ruled it always should be left to the Crown Agents.

3963. (Sir Francis Mowatt.) You say that you made an extremely good investment; did you invest in Consols at 981-90, I think I said.

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3064. Before the Boer War?-No; what I said was that this was during the Boer War. Sir Frank Swettenham said: "Having regard to the great depre ciation which has occurred in these Colonial Govern- ment securities, I think that the greater part of our securities should be put into Consols." As matter of fact, the Colonial Government securities depreciated earlier than Consols; any man who has to do with the City knows that; it was very remarkable fact, but Consols dropped most after the War. It was not during the War they dropped so badly, but they dropped afterwards, and Sir Frank Swettenham found fault with us for not going into Consuls when they were standing about 95 or 96, and then they dropped away down to nearly 80. I am afraid this unfortunate state of affairs will continue so long as we have to serve two masters. May I give you an instance? Years ago when the Felerated Malay States, where Sir Frank Swettenham

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[31 July 1908.

was, were first beginning to grow, they asked whether they might in effect have rather a freer hand than the Straits Settlements Colony, and I had a conversa- tion on the subject with Sir Robert Meade, who was then Under-Secretary, and he said that so long as anything they sent us did not appear to us to be wrong, we might do it without referring to the Colonial Office, but if it appeared to be wrong, then we should refer to the Colonial Office. I put this rather absurd case to him: "For instance, if they order railway carriages and they appear to be reasonable we are to order them at once, but if they say that the wheels are to be gilded we are to refer to you," and he said: "Exactly, when there is obviously a wrong thing like that refer to us." That was the broad instruction I had, and we have acted upon that since.

3965. (Chairman.) With regard to local supplies and these other questions, we need not take very long over referring to the hostility which there has been against the Crown Agents, although we know they are trying hard to do their best. As to the first question, you have given us some information. With regard to the local supplies, it was brought before us in evidence that the Indian rule is that wherever it is possible to obtain supplies locally, so far as the public interest does not suffer, a preference should be given to the local supplies and I think it was a Madras order that was quoted to us. It was works and not supplies in the case of Madras-but I think it would apply to supplies also there. We had also evidence from people in Ceylon, Messrs. Walker?-Yes, they were the people who supplied Lord Portsmouth with information.

3966. Whoever inspired Lord l'ortsmouth, they said there was a very general feeling. We asked this ques- tion of a great many witnesses, and they all agreed there was the feeling of hardship, and one man went so far as to say: "Certainly, it might be very good for them, but the Crown Agents were making them vir- tuous and wealthy against the will of the unofficial members." What is your principle, and can you suggest to us any amendment of your principle which would work better?-The last instruction on the sub- ject was that the Colonies were to buy through us all imported goods. Of course, it is a very thorny ques tion--it is a question of policy, and it is a question that the Colonial Office ought to settle. The Crown Agents have no opinion on the subject; of course, they like to do a good business and to make a sufficient in- come to pay their way, but from the point of view of their own personal comfort the fewer of these thorny questions there are the better.

3967. There is one concrete question; it was said by one of the witnesses from Ceylon, I think, that it hav- ing been decided by the Governor on the spot to invite tenders, he sent over here to your office; there was a Ceylon firm with an office here in London, or with agents here in London,who would have liked to tender, but owing to the system under which the Crown Agents work they had no opportunity of ten- dering, although they were the men o the spot? I think there is some perfectly good explanation of that, but I have not had time to look it up.

3068. How would that work in practice?-Of course, our position is that we know nothing about local firms. 3069. Had they any opportunity of tendering through their agents here?-It rests entirely with the local Government; if the local Government, for instance, were to say to us: "We want such and such work done and there is an excellent firm here which should be included, their London agent is So-and-so," we should send the papers to that firm; but if they do not tell us that, we suppose that the Colony does not desire any local firm to be asked.

3970. It seemed to us that there was in practice nothing between the Governor giving the work locally, which has obvious drawbacks if there is no other com- petition, and its being forced to be done from here?— That is so.

3071. It appeared from the evidence given that you could not combine the two; once it comes over here the local firm has lost all chance of tendering, even though it tendered lower; do you think that is so?-I do not think it is so; I think there is probably the most