HC Deb 07 June 1880 vol 252 cc1353-64

in rising to move— That a Select Committee be appointed to inquire into the circumstances attending certain purchases and re-sales at enormous loss of porter, hay, and other stores, described at page 126 of the Report of the Comptroller and Auditor General on the Naval Appropriation Accounts, and the system under which, but for an accidental circumstance, the transactions would have escaped notice, and to consider what measures should be adopted to prevent such a waste of public money in the future, said, the matter was of very great importance; but it was one which lay in a nutshell. At the page indicated in the Naval Appropriation Accounts, there would be found particulars of a transaction involving gross mismanagement and very gross extravagance. During the recent Elections hon. Members on that (the Ministerial) side of the House were very fond of talking of economy; it seemed to him that the time had come when, instead of dealing with economy in the abstract, they should deal with it in the concrete. It appeared from the story told in the Report of the Controller and Auditor General that two large purchases of porter and one of hay were made in 1878 with a view to the despatch of an Expeditionary Force to the East. When the Prime Minister was discussing the Six Millions Vote for War purposes, he stated it would be utterly impossible to spend the money, even in time of war, so rapidly as was alleged by the Ministers then in Office. If they looked to the story told in the Report, they would see how it was accomplished. In 1878 the Admiralty purchased from Messrs. Walker and Co., the brewers, porter in barrels to the amount of £6,225. Before the articles were delivered it was discovered that they would not be wanted, and the order was cancelled on the payment of £2,750. So that for this order never executed the company received a bonus of upwards of 42 per cent. At the same time another large purchase of porter was made from another firm of brewers, Messrs. Truman, Hanbury, and Buxton. The amount in this case was £8,250, and £250 more was charged for rent. The purchase was made in February, and the delivery did not take place until the middle of June, which showed that there could be no great haste or hurry about the transaction. Even then the delivery was taken in such a form that the porter never left the brewers' premises. When it was discovered that this porter would not be wanted, the Admiralty sent to Messrs. Truman, Hanbury, and Buxton, and got them to take it back, which they did at £4,725, leaving a loss of £3,782, or over 45 per cent on the original cost. A third instance, showing the recklessness of the way in which business was transacted by the Government, was still more striking. With a view to the same expedition, the Admiralty purchased a large quantity of hay for the Transport Service. Having swept the home market, they sent over to Rotterdam, or some other place in Holland, and there purchased 1,200 tons of compressed hay at £5 15s. per ton, the cost being over £6,894, and then they incurred a charge for wharfage dues to the Millwall Dock Company of £1,900, making altogether £8,796, exclusive of the cost of sending a Commissary over to inspect it before it was shipped, and exclusive of the cost of surveying. Well, the bay was disposed of afterwards for £1,596, and they thus lost £7,200—a loss a great deal more that the original value of the article. On those three transactions the loss incurred by the Admiralty amounted to £13,700, or nearly two-thirds of the entire value. That loss was owing to a squabble between two Departments of the Government—the Admiralty and the War Office. When it was perceived the porter would not be wanted, an offer was made to transfer it to another Department, which fell through. But the case of the hay was much worse. The hay was damaged coming from Holland; but the greater part of it was sound. It was shipped on the survey of an Army Commissary officer, and when it became obvious it would not be required efforts were made again to hand it over to the Army; but it appeared that the Board of Survey which sat upon it refused to take it. This Commissary officer proposed that the horses should be referred to practically in the case in order that they might pronounce upon the quality; and, so far as the spoiled hay was concerned, he proposed that that should be used as bedding instead of straw. Both these propositions were overruled, and the hay was ultimately bought at 10s. for the hay spoiled and 35s. for the sound hay. He had had the curiosity to trace that hay a little further. It came to Glasgow; it was purchased by the Tramway Company to a large extent. He had written to the Secretary of the Company, asking for his opinion on that hay; and he had his reply that the hay in question was bought by the Company at the price of 60s. per ton, and it was of the very best quality, and they were fortunate enough to secure 300 tons of it. His Motion was for a Committee of Inquiry. They would be told that they knew all about it; but it appeared to him that they did not. They did not know who this Commissary officer was who manifested such an exceptional amount of common sense in his suggestions, and who were his Colleagues, who had overruled him. He had found this—that when discussing these matters of transfer from one Department to another and their difficulty, Members shook their heads and muttered something about commissions. He did not know that the absence of commissions in such matters was a stumbling block; but it was well that that should be cleared up. Without, however, imputing anything about commissions, he must say that an amount of imbecility so far as the Public Service was concerned, as prejudicial as corruption, seemed to prevail. He could not see why so great a loss was incurred in the case of the porter never delivered. The barrels and the hay would both have kept. These were not solitary instances; they were only specimens of what often occurred. Had it been otherwise, he should not have moved. The Auditor General drew attention to very large quantities of raisins bought in March, 1878. 136,000 lbs. were purchased at from 29s. to 33s. per cwt. In October, 100,000 lbs. of these were sold at 14s. 6d. per cwt., and in January and February, 1879, other purchases were made at 28s. and 21s. per cwt. The Auditor General said it was not a little remarkable that in one bill the Admiralty were charged for the purchases made in January and February, 1879, and were credited with the proceeds of sales in October, 1878. There were similar transactions in arrowroot. The explanation about the raisins was that those bought were new and those sold were not; but he did not know that seamen were such epicures in regard to raisins that they could not do except with new fruit. What was there to prevent the Admiralty in the case of the porter to make a bargain with the brewers to supply such quantities as were required on condition of receiving a certain moderate sum if the contract was not proceeded with? In his speech about Cyprus, his hon. Friend (Mr. Rylands) had referred to the case of coal boxes having been sent out to the Island which would have served almost for an Arctic expedition. Mrs. Stevenson, in her book, mentioned warming-pans also being sent out with the Expeditionary Force to the Island. In the recent article in The Times he noticed that a French writer was struck with the manner in which the quay at Larnaca was built in all manner of fashions. He found it was the work of the first English Governor, who authorized some dozens of contractors to erect specimens of what they proposed for a quay, these specimens to be afterwards demolished, and their place taken by the one selected. This cost £300,000, and by the time that the money was spent there was no money left to go on with the quay. He found another result of this extravagance mentioned in the money article of The Times, November 17. A letter was published relating to the contracts of the Indian Council. It was announced that the Indian Council paid 34s. and 35s. per ton of freight for conveying rails to India, while the Great Indian Peninsular Company was paying only 25 In other cases there were discrepancies of 4s. or 5s. between the Government and private Companies. But into these matters he did not propose to enter, as they were simply matters more or less of rumour; but here they had before them certain specific instances of gross mismanagement. In bringing forward the question, he was not bringing it forward as a hostile Motion against the late First Lord of the Admiralty. At the time these transactions took place, that right hon. Gentleman had his attention directed to far more important matters. But they would never get these Departments managed economically or efficiently until they dealt with them as with private business, and went down to the men responsible for the details. Who was to blame in regard to the contract? Who would not allow the spoiled hay to be used as bedding? and who was it pronounced the hay not fit for Army use? These things must be inquired into, and there was no use having Departmental inquiries. They could not expect that a man with Cyprus warming-pans on his conscience, or coal boxes or Indian freights, would deal harshly with the gentlemen who made a little mistake about hay or porter. One would simply excuse the other, and an amount of red tape would be introduced, which would prevent any good being done. By far the most satisfactory means of dealing with this question was to refer it to a Committee of the House. He therefore begged leave to submit the Resolution standing in his name.


in seconding the Motion, said, the hon. Member for Glasgow (Dr. Cameron) had, he considered, done good public service in asking the attention of the House to the transactions referred to. He was indisposed to make a personal attack upon the right hon. Gentleman the late First Lord of the Admiralty; but the House had a right to claim an explanation of how these transactions took place, which were altogether of an unbusiness like character, and which would never have been carried out if the parties carrying them out had been personally involved in the profit or loss. When it was found that the porter was not needed, what ought to have been done? It was an article of undoubted quality, commanding a given price in the market, and they could, if they liked, have sold it at a very moderate loss; but instead of going into the open market to re-sell the porter, the Government, after having agreed to pay Messrs. Truman, Han-bury and Co. £ 8,250 for it, re-sold it to them for £4,725. He should never have believed the statements about the porter and the hay unless they had been vouched for by the Auditor General; because he never knew a case in which there seemed to be so small an excuse as there was in regard to these two transactions. The hay was bought, without judgment and in a hurry, from a long-headed Scotchman, named Mackintosh, to whom £5 15s. per ton was paid; and when it was sold back to him, although a portion of it was only slightly damaged, all that was paid per ton was £l 15s., and shortly afterwards Mr. Mackintosh sold the hay again for £3 per ton, and the people who paid that amount considered they had got a very good bargain. This showed that the Government, instead of re-selling to a private individual, ought to have taken it into the open market where they would have realized a proper price. It had been by a mere accident that these things had been found out, and he believed if the truth was really known very large sums of the public money had been wasted during the past few years in regard to the re-sale of miscellaneous stores. And all this arose from that unbusinesslike manner in which some of the public Departments were conducted. A man might be almost an idiot, yet once in the Public Service he got on by mere seniority to the top of the tree, and, although he might make idiotic mistakes, he was never discharged from that service unless what he had done led, or was likely to lead, to public scandal. What was wanted was that the servants of the public should be treated as were the servants of those engaged in the ordinary business transactions of the country. If a man was specially able and zealous let him have a chance of promotion and better provision; but if a man was to be guilty of such idiotic transactions as those to which attention had been called on the present occasion, all that he could say was that he ought to be turned out of the Public Service. If inefficient and and inexperienced men were removed from the Public Service there would be a proper flow of promotion amongst those who were efficient. At all events, this particular matter was one which called for further inquiry, and he hoped that the Government would see their way to agreeing to the appointment of the Committee which his hon. Friend asked for. Recently, he had received information from Lancashire of Government stores being sold at incredibly low prices, and had he remembered that this debate was about to take place he would have brought down the particulars in reference to those matters. He begged to second the Motion now before the House.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "a Select Committee he appointed to inquire into the circumstances attending certain purchases and re-sales at enormous loss of porter, hay, and other stores, described at page 126 of the Report of the Comptroller and Auditor General on the Naval Appropriation Accounts, and the system under which, but for an accidental circumstance, the transactions would have escaped notice, and to consider what measures should be adopted to prevent such a waste of public money in the future,"—(Dr. Cameron.) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."


thought the circumstances which had been brought forward were such as required special investigation. Whether that was undertaken by a Committee specially appointed, or by a remit to the Public Accounts Committee, was not, he thought, a matter of much importance. He understood the subject had come before the Public Accounts Committee, and that some of the matters referred to had already been privately discussed. He did not himself have any special knowledge in regard to the porter contracts, although he thought the statements that had been made were worthy of attention. As regarded the hay, he believed he was the first to bring the matter before the House some time ago; and he should like to say that matters were even worse in one particular than had been stated by his hon. Colleague, and in this way—that when the Navy entered into the contract they were not buying it for their own use. They were buying it really for the use of the Army. It was to victual the transports going to Gallipoli and intended for the use of Cavalry horses. He understood that there was a stipulation that the hay should be taken by the Army in the event of its not being wanted for the Navy, and he wanted some inquiry made in regard to the conduct of the Army officers in this particular. He wanted to know who it was that surveyed the hay on behalf of the Army, and who it was that refused to carry out the terms on which it had been bought? It was quite certain that the hay was not unsound. Some parts of it had got a little damaged while at Millwall; but, in the main, it was perfectly good, and there was thus no reason why it should not have been taken over by the Army. He believed that what really was wanted was that the officer who refused to take over the hay should be cashiered. He did not think anything short of that would tend to remove evils of this kind. Whenever anyone spoke of the transfer of stores from one Department to another they were always told it could not be done—that there were difficulties in the way. Well; but what were the difficulties? People did not hesitate to say that the difficulties were that no commissions passed in transfers between one Department and another, that officers buying outside could manage to get commissions, whereas officers buying from another Department could not. He did not say it was true—he hoped it was not; but it was a very unfortunate thing for the Public Service when such things could be stated at all; and it was very much to be desired that there should be a searching inquiry in a case like this, where there was a manifest neglect of the public interest, and throwing away of the public money in the most flagrant manner. In order to see what reason there was for these allegations, he hoped the Government would grant the inquiry; but he was very much afraid, in inquiries of that sort dependent on permanent officials, whatever Government was in power a new Government would not be very much better than an old. The other day he had put down a Motion on the subject of the sale of Naval Stores, and he never thought for a moment it would be refused. The Secretary to the Ad- miralty immediately began to make difficulties, and said he did not believe it would be of any use, and would like to know what it was wanted for, and all kinds of difficulties of that kind, without absolutely refusing, which he had no doubt came not from himself, but from the permanent officials of the Department. He should like to see that the Members of the Liberal Government were above being made slaves of in this fashion by the permanent officials. If his Motion for Returns was refused—and it had not been refused yet—he intended to press for thorn. As regarded the present Motion, if his hon. Colleague went to a division he should support him.


said, he quite agreed that the facts which had been disclosed in the Appropriation Accounts were such as justified the inquiries which had been made by the hon. Members for Glasgow. The officer who was employed, and whose duty it was to make the purchases referred to, was a gentleman whose name had always been mentioned in the House with great respect—Mr. Rowsell, who was selected, entirely because of his ability, by the present Secretary of Sate for War, when the latter right hon. Gentleman was at the Admiralty, and who had also done good service under Mr. Goschen, the late Mr. Ward Hunt, and under himself (Mr. W. H. Smith). He believed that the Public Service never had a more competent and earnest official than Mr. Rowsell. It was a fact that the Admiralty made it a condition with the Secretary of State for War that if the purchase of hay which had been alluded to was not required it should be taken over by the War Department. It was necessary that the purchase should be made in advance, for it was not always possible to obtain a large quantity of hay for an expedition at a week's, at a fortnight's, or even at three weeks' notice. The hay was purchased with the approval of the then Secretary to the Admiralty, and with the assistance of an Army officer, and it was shipped, and came over to this country. Some of it sustained damage in transit; but a great deal of it was in perfectly good condition. It was next surveyed when it became necessary that it should be taken over, when the particular officer referred to himself sat on the Board of Survey; but the Board over-ruled him, and de- clined to take the hay for Army service, on the ground that it would be exceedingly injurious to the horses. That was a simple statement of fact. He did all he could to induce the Army authorities to take the hay, but they refused, and there was no alternative but to part with it on the best terms possible; and he thought the contractor who purchased it gave a fair price. With regard to the porter, that which was required for hot climates was porter which was not saleable in England. The late Board of Admiralty did all they could in endeavouring to persuade the Indian Government, which did require porter of the character alluded to, to take it; but the information was that the specification had been altered, and that they declined to take it. Under these circumstances the Admiralty officers did the best they could. If it had been sold here a still greater loss would have resulted, for there was, practically, no market in England for the particular description of porter in question. The subject was one, he might add, on which he did not think a Committee could supply any further information, although he, of course, should not object to such an inquiry if he thought it would be of any real advantage to the Public Service. He might add that almost one of his first acts, when he went to the Admiralty, was to make the accounts open to the inspection of the Controller and Auditor General. He was satisfied that at the present time we had a very zealous and conscientious body of public servants; and although errors were sometimes unavoidable, he believed they occurred as rarely in the Public Service as in any private undertaking. Nothing was more calculated to discourage those officers than the imputations which were sometimes made against them in the House. It was a mistake to suppose either that they were idiotic or that they were promoted by seniority independently of ability; and during his tenure of Office at the Admiralty he was not aware that he appointed a single man to a post of responsibility on the ground of seniority alone.


admitted the serious loss to the public in connection with this transaction; but it appeared to him that all the facts were now ascertained, and he doubted whether any further inquiry would elicit additional information. Having a knowledge of the gentleman to whom reference had been made, he (Mr. Shaw Lefevre) felt it very difficult to agree that he had made himself a party to the mistake; and he could not hut think that the purchases were reasonable purchases. He was of opinion that the loss had arisen from want of co-operation between the two Departments, and he understood that in future an arrangement had been made for the purchase by the War Office of the stores to be used on board the transports. The War Office were, he thought, unwise, under the circumstances, in rejecting the hay, which, if not of first class quality, was, at all events, good enough for ordinary purposes, and was the same as that supplied to the German troops during the Franco-German War. He was not aware of the mode in which old stores were now disposed of; but he would make inquiries, and if he was not satisfied he would not object to a Committee on the subject next Session. He was glad the present question had been raised, inasmuch as officials of Departments would see that the public eye was upon them, and that no such want of co-operation as that to which he had alluded would be tolerated.


said, he should support the Motion of his hon. Friend the Member for Glasgow, because the question of the hay was simply a disagreement between the two Departments of the Army and Navy, as to how the service of the Army Transport should be conducted. The relations between them in respect to the purchase of supplies required revision. The Naval Department, by trying to carry on the transport by sea of the troops, was necessarily responsible for their supplies whilst on board. For this duty the Admiralty was not trusted. That was one of many instances of the bad arrangements of the War Office, providing the Navy with guns and projectiles, and the Admiralty attempting to carry on the transport by sea of the Army.


remarked, that the right hon. Gentleman opposite (Mr. W. H. Smith) had not carried to the Admiralty the same zeal for the promotion of the public interest as he had shown while at the Treasury, otherwise he would have endeavoured, by means of an appeal to the Treasury, to make the War Office fulfil their agreement in the matter under discussion.


said, he would withdraw the Motion in consideration of a certain concession made by his hon. Friend (Mr. Shaw Lefevre)—namely, the promise to appoint a Committee on old stores next year.

Amendment, by leave, withdrawn.