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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON ALLY WITHOUT PERMISSION OF THE

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Sir F.

that they (the Crown Agents) should really act as Agents to the distant Government, and not as a Government Department with powers of revision and criticism." Swettenham's view, to which I will refer again later in this despatch, may be, and probably is, widely held, but it is impossible for me to contemplate the possibility of the Crown Agents becoming solely responsible to the Colonial Governments and not also responsible to the Secretary of State.

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7. While quoting from Sir F. Swettenham's despatch, I may note in passing that he is not correct in inferring that dissatisfaction with the Crown Agents "seems to be proved by the fact that whenever a Crown Colony becomes a responsible government, it ceases to take advantage of the Crown Agents and appoints its own Agent in London." reference to the Parliamentary Paper of 1881 will show that it was the Lords Commis- sioners of the Treasury and the Secretary of State who objected to the Crown Agents Treasury, continuing to act for New Zealand and the Cape of Good Hope, on the ground that such November 26, 1880,

an arrangement was "liable to be misconstrued as involving Her Majesty's Government, C. 3075, both indirectly and directly, in responsibility for acts and obligations over which it has p. 9.

no control."

C. O. to

Miscel- laneous, No. 142.

p. 75.

p. 77.

8. It is due to the Crown Agents to make this correction, and I make it also in order to emphasise the point that, if the arrangement under which the Crown Agents are responsible to the Secretary of State as well as to the Colonial Governments has its draw- backe, it also confers distinct advantages on the Crown Colonies. The fact that the Crown Agents are not only agents of the Colonial Governments but also directly subordinate to the Secretary of State gives them, in the capacity of agents for the Colonial Governments, a position and credit in financial and commercial matters which they would not otherwise enjoy; and it will be necessary to take this point into account in considering, as I propose to do later, whether in any respects the existing arrangement should be modified.

9. Another difficulty arises from the fact that the Crown Agents act for a large number of Colonies, varying in size and importance as well as in geographical, racial, and industrial conditions. There must be general uniformity of practice in the commercial dealings of the agency, and there can be but one set of fundamental rules and principles for the guidance and control of this large business. If any of the larger Colonies experience inconvenience from this cause, there must be set against it the undoubted economy which results from the single agency and "the advantage of concentrating the general experience derived from the business of many Colonies in one body."

10. While, however, the many Colonies and Protectorates, for which the Crown Agents transact business, differ widely from each other in most respects, they have all this one common feature in their relations to their agents, that they are principals at a distance. The result is that personal communication between the principals and agents, with the advantages which such communication possesses over writing in the way of clearing up misunderstandings and rectifying mistakes, only takes place at intervals of time which are sometimes prolonged. In the 14th paragraph of their letter of 7th April 1902, the Crown Agents note that much might be done to overcome the difficulties caused by distance, to place da in closer touch with the wishes of Colonial Governments, and on the other hand to bring home to Colonial officers the conditions under which we have to work, if such officers when on leave in this country could arrange to visit this In this view office more frequently and discuss matters with which they are concerned.”

I cordially agree, and you will no doubt agree also and give instructions accordingly.

11. The above is sufficient to indicate that the position which the Crown Agents Occupy is to come extent anomalous, and that the system is one which from the necessities That so few difficulties com- of the case gives occasion for a certain amount of friction. paratively have occurred seems to me to be evidence at once of the satisfactory manner in which the business has been conducted, and of the good sense of principals and agents alike.

12. I now turn to consider some of the specific complaints which have been made; and, in doing so, I note with satisfaction that the number of complaints is small in propor- tion to the number of the Colonies which have answered my circular despatch, and that but few of them are seriouė. I do not propose to deal at length with the merits of the particular cases. A more general survey will be sufficient for estimating whether, and if so in what main respects, the Crown Agents have been found wanting. Whatever criticisms and suggestions may be made, however, it is obvious that in this, as in every other large business, mistakes must be expected to occur from time to time, and it is not possible to eliminate altogether the possibilities of error and misunderstanding.

13. The most general complaint is that of delay in the execution of the orders which are sent from the Colonies. Some 15 or 16 of the Colonial Governments note this point,

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including among them a large proportion of the more important Colonies; it therefore Miscel requires special attention. The complaint of delay is of course a very common one No. 142. against private firms as well as against Government Offices, and the Crown Agents' Office, partaking of the character both of a commercial house and of a Government Office, was not likely in any case to be exempt from the charge. I am by no means satisfied with the length of time taken in some cases to execute orders, but, generally speaking, the delay did not occur in the Office of the Crown Agents. In some instances the causes of delay were special and temporary and have already been or are being removed. For instance, as is suggested in Sir Charles Bruce's reply to my circular, in the answer by the late Sir H. Thompson, and in various other passages in the printed correspondence, the South African war caused undue pressure on certain classes of manufacturers and pp. 8, 9. made it more difficult for them to execute the orders entrusted to them in the specified time, while it also delayed the shipping and transit of goods.

that

p.

85.

14. The Crown Agents, in paragraph 45 of their letter of 7th April, 1902, state p. 83. that the delays which criginate in their own office "at their worst are a small matter compared with those which cause general and well-founded complaint from the Colonial Governments, and which, we may add, cause us constant trouble and anxiety, viz., the failure of contractors to complete orders in the contract time." In this connexion the question arises of the use to be made of the clause usually included in contracts which provides for the payment of penalties by contractors in the event of delays, The Crown Agents, while stating in their letter of the 7th of April, 1302 (paragraph 50) "on the whole our recent tendency has been to increase the fines," are, I think clearly right in pointing out that a drastic application of the remedy might produce worse results than the disease. It is not unnatural that a tendency should, as Sir C. King Harman notes in his despatch dated 16th July, 1901, be "attributed to the Crown Agents to p. 4. attach more importance to the excuses or denials of incriminated agents or firms than to the remonstrances of the Colonial Governments," the latter being at a distance, whereas the firms are on the spot; but this question as to how far the letter of a contract should be insisted on and penalties exacted, is one which constantly exercises both Government Departments and private firms, as the evidence quoted by the Crown Agents in paragraph 49 of their letter of 7th April, 1902, shows, and I do not think that the Crown Agents have been in any way remiss in the matter. There are many instances given of contractors being fined, of their being made to replace defective articles, and of their being required to give full money compensation for bad material; and I note at least one instance of a contractor being, in addition to fine or compensation, struck off for a while from the list of the firms who are invited to tender.

15. A cause of delay which is hardly open to serious criticism, is the time taken in inspection and in testing the quality of the goods which are ordered. The Crown Agents write that "the success which we claim in respect of quality and price is necessarily p. 83. attained at some sacrifice of speed"; and their claim seems to be justified, since these papers contain but few complaints on the score of quality and price. It is one main reason for the present system under which the Governments of the Crown Colonies are for the most part restricted to buying the bulk of their stores direct from this country, and through the Crown Agents alone, that the system ensures or ought to ensure that the -Governments receive full value for their money, being served by agents who are not paid directly by fees or commissions, and who can provide adequate and vigilant testing of the I am aware that this quality of the goods that are supplied to the Governments. inspection, as must be the case with any system of inspection, is sometimes at fault. Sir R. Moor, for instance, refers in his answer, dated 30th November, 1901, to two cases of shipment to Southern Nigeria "in both of which the inspection was far from satisfactory"; but, on the other hand, Southern Nigeria supplies the very striking example, to which the Crown Agents refer in paragraph 24 of their letter of 7th April, p. 80. 1902, of the treatment which a Government is liable to receive, even from a good firm, when it does not protect itself by inspection. That there is on the whole more careful and more systematic testing of goods supplied than would be secured in any other way is not, I think, reasonably open to doubt. In any particular case, it will of course always be a question how far, in order to save time, inspection should be dispensed with. Sir A. Hemming writes in his despatch of 8th October, 1901, that "the prompt supply p. 27. of the thing that will serve the required purpose is often of greater real value than the long delayed supply of a possibly superior article," and while I fully agree with the Crown Agents in thinking that "it would be unsafe to diminish to any considerable -extent the amount of inspection now provided," I am willing that the Colonial Govern- ments in giving their orders should use their discretion as to dispensing with inspection

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