ARMY (SUPPLEMENTARY) ESTIMATES, 1903–4.

HC Deb 22 February 1904 vol 130 cc575-630

Motion made, and Question proposed, "That a Supplementary sum, not exceeding £2,700,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1904, for Additional Expenditure, in respect of the following Army Services, viz:—

	£
Vote 1. Pay, &c, of the Army	2,000,000
Vote 6. Transport and Remounts	2,100,000
Vote 7, Provisions, Forage, and other Supplies	2,030,000
Total	£6,130,000
Excess Appropriations-in-Aid (Votes 1, 6, 7, 9, and 10)	3,430,000
	£2,700,000

MR. LOUGH (Islington, W.)

On a point of order, would it not be possible to take each item separately? Say that for Somaliland?

* THE CHAIRMAN

The hon. Member can move to reduce the Vote so far as the Somaliland expenditure is concerned, but it is not the practice to put these items separately.

* THE SECRETARY OF STATE FOR WAR (Mr. ARNOLD-FORSTER,) Belfast, W.

hoped he was not creating a very bad precedent in asking leave to address the Committee at that stage, but there were circumstances connected with the Vote which made it desirable for him to say a few words in explanation. The figure was a large one, amounting to £2,700,000, its character was composite, and it was practically a sweeping up of all outstanding accounts of the late war, supplemented by certain items which had no connection with the war. The Vote on account of the war related to transactions most of which took place many months ago—in fact, some years ago—and a great many of the incidents out of which the Votes arose had been discussed over and over again in Parliament. Although the amount of this Supplementary Estimate was large, he did not think any reflection could be cast on the Accountant-General of the Army in consequence of it. He could not give the exact figures of the actual expenditure beginning 1899, but he found in 1899–1900 there was an under-expenditure of £500,000 on a Vote of £43,000,000. The following year on an expenditure of £91,000,000 there was an under-expenditure of £600,000; in the next year on a Vote of £92,000,000, the under-expenditure was £254,000; and in the last year on a Vote of £69,000,000, there was an under-expenditure of £446,000. It would, he thought, be admitted, considering the circumstances under which the sums were voted, that this was not a discreditable record for the finance department of the War Office, and that it gave no ground for sneering at that office.

He did not propose to discuss the details, but he felt it was due to the Committee to explain why these accounts which, in most cases, referred to transactions which were closed two years ago, came in now. There was a large sum in the Estimate which represented payments to be made on account of the colonial contingents. These accounts had to go through the process of being confirmed in South Africa, and that was the reason why they were now brought for the first time before the House. The final Yeomanry charges had been delayed on the same ground. There had been many matters which it had been absolutely impossible to put into the account without careful investigation of the correctness of the claims put forward. Under the head of Gratuities there was a payment of £100,000 to the South African Constabulary. It was not originally contemplated to make this payment; but it was decided, in view of the fact that the services of the Constabulary were practically as much military as those of other troops in South Africa, to give the gratuity to them. There was also a small Vote for the Army Service Corps, rendered necessary by the retention of the services of a considerable number of natives, who had been engaged by the Army Service Corps in removing the great accumulation of stores, and by the provision of the necessary storehouses required to prevent deterioration of the materials. The railway charge had been referred to by his right hon. friend the Member for Wolverhampton. The railways of the Transvaal and Orange River Colonies were taken over by the military during the war, and on the conclusion of the war a claim was made by the War Office against the Colonial Governments for the work and labour that had been done, and the expenditure that had been incurred for the maintenance of these railways. This claim was not admitted in the first instance by the Colonial Governments, but there was no doubt that it was a valid one. They had not yet, however, been able to obtain payment from the two Colonies, and therefore it was necessary to write off the sum which appeared in the Estimates, though he hoped he was not too sanguine in anticipating that this amount might, at an early day. appear on the other side of the account. Then there was a Vote for land and inland water transport, which was practically due to the large number of troops kept in South Africa since the conclusion of the war, as well as a Vote for sea transport, which was due to the bringing back of more troops than was originally contemplated. The amount for provisions and allowances was attributable to the continuance of the very high cost of provisions in South Africa, and the necessity of retaining special allowances, which alone could enable the officers and men to face the conditions under which they were living. The cost of forage was also very high, and the amount under this head was made greater by reason of the large number of horses left in the country in excess of the ordinary stock, and until those horses were disposed of it was necessary to provide forage, at very high cost, for their sustenance.

The other principal branch of the Vote was the expenditure which had been incurred in respect of Somaliland. He did not propose to discuss on this Estimate the question of the policy in Somaliland. The Leader of the Opposition, he thought, the other day rather misrepresented what was going on in that country when he suggested that the war which we were compelled to carry on was an aggressive war, made with the object of taking the territory of somebody else. There had been three incursions into territory under British protection, and on every one of those occasions we had had in selfdefence, and in defence of those to whom our word was pledged, to take up arms. This was the third occasion on which we had had to resist the incursion of this enemy; and he honestly believed, how ever unpalatable it might be to us, that we should be compelled to carry on this unprofitable and unsatisfactory conflict.This was one of those campaigns which any Party sitting on his side of the Hous would be compelled to undertake and carry through. He was sure the Government took no pride in it and did not rejoice in it; but as long as our Empire was what it was, and as long as our responsibilities were as great as they were, occasions must arise when wars of this kind would have to be undertaken. He did not like to be too sanguine, but he did not think he was overstating the purport of the information at the disposal of the Government when he said that the operations were now in a more satisfactory position than they had been for many months past. Though he was very far from desiring to make any prophecy, he thought they were within reasonable distance of a development of this campaign which would make it much easier for them to bring it to a conclusion. So long as the enemy was within our territory, as he was now, so long as he was under arms, and so long as the Government were certain, as they now were, that if they left him alone the movement would recrudesce and that they would be rewarded for their moderation by being compelled to make further military efforts, he thought they had no option but to continue the campaign until it was brought to a successful conclusion.

There was also on the Estimates a small item for the China Expeditionary Force. It was perhaps strange that this item should appear on the accounts now; but the Indian Government undertook a large amount of work in connection with the expedition, and they had only now rendered the accounts—hence the delay.

An item for increased pay and messing allowance required explanation. The reason of it was this, viz.: At the close of the war the establishments of two branches of the Army were largely in excess of the normal establishment. At the beginning of that year an estimate was made that there would be a large reduction of the establishment of the Army during that year. That anticipation had been realised. The numbers had come down to almost the precise figure that was anticipated, but they had not come down in exactly the way anticipated. The result was that they had, in addition to the extra troops in Somaliland, which accounted for a portion of the extra sum, an excess in the two most expensive branches of the service, viz., the artillery and cavalry, while they had a deficit, he was sorry to say, in respect of the infantry. It was not possible to forecast with exactitude what number of men would go out of every branch of the service during the year. It had been within the power of many men in these two branches to go into the reserve: but as a matter of fact, contrary to anticipations, they had chosen to remain in these two branches of the service. Hence it was that the Government had to ask for this additional sum for pay for messing allowances during the year. These were not matters with which he was very familiar, but he had thought it might ease the situation and render the discussion more profitable if he made these explanations on points which had struck him on first examining the Votes.

SIR H. CAMPBELL-BANNERMAN (Stirling Burghs)

thought no apology was needed from the right hon. Gentleman for explanations which only anticipated inquiries which obviously must be made. They were now led to believe that they were emerging from the penumbra of the South African war. It was time that this should be so, and the Committee would be relieved to have this assurance. With regard to the new sub-head B.B. to Vote 6, "Expenditure in connection with Imperial military railways, £900,000," he wished to know whether it was not within the cognisance of the War Office at the time of the ordinary Estimates. When new items of large amount were introduced into the Supplementary Estimates or a small amount in the original Estimate was swollen into a large amount by these Estimates they began to wonder whether, human nature being what it was, there was not a little temptation to produce a somewhat more favourable Budget than circumstances really justified, by postponing till the Supplementary Estimates expenditure which might very well have been anticipated. Even the appearance of such a procedure was to be avoided, but certainly some of these items had that appearance. The same observations were applicable to sub-head M.M. in Vote 7, "Compensation claims in South Africa, £600,000." Why was this not provided for in the original Estimate? If not, why not? The loose and summary figures used in these Supplementary Estimates roused, he would not say suspicion, but a little of that surprise which the right hon. Gentleman appeared to have experienced himself when he had to look into them. For the compensation claims there was the round figure £600,000, for the item B.B., £900,000, and under sub-head E., excess appropriations in aid, in the entny "Proceeds of sale of cast and other animals, £1,000,000," there was no great evidence of exact calculation in these figures. These deductions of excess appropriations in aid had been carried to a length never contemplated when they were first authorised. One of the reasons for the authorisation was that some departments, as, for instance, the Admiralty, were deterred from selling old and superfluous stores because the money would go to the Treasury instead of being retained by the Admiralty; but when they came to deal with large sums like this there was apt to be confusion in the account and an uncertainty as to how far they might not be paper figures, which was much to be deprecated. Another characteristic of these figures was the disproportion between them and the figures in the original Estimate. These disproportions were especially remarkable in the items of pay to the Colonial contingent, Imperial Yeomanry, and gratuities to the troops for active service, for which they were now asked £800,000, £150,000, and £100,000, as compared with £5,000, £10,000, and £3,000 in the original Estimate. In regard to the China payment, it was surely known that that would probably come into account this year, and ought therefore to have been provided for.

Another feature of these Estimates was the discrepancy between the figures and the promises of the Government. He would take the case of Somaliland. He was not going to discuss the merits of the policy; enough was not known of it to enable him to do so. But on 18th June the Secretary of State for War stated— The expenditure up to date on the Somaliland expedition amounts, so far as can be estimated, to about £400,000, as against £500,000 voted in last year's and the present Estimates. They had therefore about £100,000 in hand then, and now the Committee were asked to vote another £1,600,000. On 20th July the present Postmaster-General said— As regards future operations, we are now in communication with General Egerton, but it would, of course, be impossible to publish the detailed action proposed. Further, it is not possible at present to calculate the possible expenditure, but there is no intention whatever of undertaking enterprises involving fresh expense. In view of these statements he thought further explanations were required both as to form and as to figures, apart altogether from the merits of the policy.

But more important than the details was the overwhelming expenditure dis- played as a whole. The Army expenditure this year amounted to £36,945,000, and it was almost impossible to tell what portion of this was a permanent recurring yearly charge. With regard to these Supplementary Estimates, he had tried to discover what proportion of the expenditure was of a permanent recurring yearly future charge, and what proportion was in payment of something past and done with. He had tried to find out what proportion represented expenditure which would go on year after year. The broad fact was that in 1895 the Army cost £18,000,000, and, keeping out war expenditure, before the present Estimates were presented, the cost was close on £30,000,000, an increase of £12,000,000. The Navy was to cost this year £35,727,000, as against £17,545,000 in 1895, therefore the Army expenditure had gone up 50 per cent. and Naval expenditure 100 per cent., £30,000,000 for both services having been added since the right hon. Gentlemen opposite came into power. When dealing with the first Supplementary Estimates of the year, they were entitled to consider the whole question of expenditure and make a comparison between the total expenditure for those two years. In 1895, the whole national expenditure was £93,918,000, and this year it was £139,199,000, an increase of £45,000,000, or, with Supplementary Estimates, £49,000,000. Within ten years there had been an increase of over 50 per cent., and this quite apart from the sum expended upon the war. There was no sign whatever of diminution, the truth being that an attempt was being made to create in this country a first-class military Power as well as a first-class naval Power, without any clear idea, so far as the country knew, why this should be done. A new council was created, possibly to arrange a rational basis for a wholly irrational departure. The increase would absorb twice over the product of the income-tax in 1895; it would practically swallow up the whole of the estimated receipts of the tax for the present year. That showed the rate at which expenditure was now going on. How much of the estimated taxation of this year would be required to find the sum of £65,000,000, or £66,000,000, which represented the cost of these two services. The income and property tax would not cover half, and the whole of the receipts from Customs, amounting to £34,000,000,would be required to make it up. Taking the 1895 scale of taxation, to which all except tariff reformers would be glad to return, the receipts from income-tax, Customs, Excise, and stamps, would be required to maintain the fighting services. He had already given a comparison between 1895 and this year, and he had stated that there were no signs of diminution. The Government appeared to be unrepentant and unable to take any steps in the direction of economy; these small wars might almost be regarded as part of the normal expenditure of the country, and so they drifted along. But not from want of serious warnings.

Speaking at Bristol, after his resignation in 1902, the right hon. Gentleman the Member for West Bristol said— They should remember that he had told them that in the last seven years the ordinary expenditure of the country had increased at a rate of no less than 5.500,000 a year. They could not go on in that way. They must stop the rate of increase. If they did not what would happen? He would tell them what would happen. A shilling income-tax would be utterly insufficient for the needs of the country even in time of peace; and all the people who complained now of the little, the small taxation that had been imposed upon sugar and corn, would be face to face with heavy taxation, not only perhaps on those articles, but on other great articles of popular consumption. They would have changed their fiscal system from a system of light taxation which had prevailed during the last forty years, and under which the industries of the country had been enormously developed, to a system of heavy taxation which would keep those industries down. His resignation, as he told the House last June, was due to the indifference with which his remonstrances were received by his colleagues. Proceeding, the right hon. Gentleman said— I had protested as Chancellor of the Exchequer for years against that growth of expenditure. I had protested to my colleagues, I had protested to this House; and I had endeavoured to show to the country what I thought were the great dangers to our finance of that growth, because it must never be forgotten that that growth has been far in excess of the automatic growth of our revenue. Well, Sir, my protests and my sermons were received with indifference. But I am thankful to think that there has been a turn in the tide. Where was the turn in the tide? Then he went on to refer to his successor, the late Chancellor of the Exchequer, and his Budget speech promising a considerable reduction in the Army expenditure in the course of the next year or two. He would now pass on to what the right hon. Gentleman the Member for Croydon said as Chancellor of the Exchequer— As regards Army expenditure I hope we may be able to make considerable reductions in the next year or two as reorganisation on a normal peace footing becomes complete. But both these right hon. Gentlemen, admirable preachers and prophets, were now on the Back Benches with none of the little influence they once possessed with the Government. The Secretary of State for War had lately told them that he looked for no reduction in the expenditure, but he said they were getting better value for their money. The present Chancellor of the Exchequer belonged to the school believing in increased taxation on a scientific basis, and believed that taxes were only just beginning their career, and that the revenue they produced under these circumstances would be a mere by-product. That was the opinion of the Chancellor of the Exchequer.

THE CHANCELLOR OF THE EXCHEQUER (ME. AUSTEN CHAMBERLAIN, Worcestershire, E.)

But the right hon. Gentleman is not reading from my speech.

SIR H. CAMPBELL-BANNERMAN

said he was not quoting the right hon. Gentleman's actual words, but what he had stated was the legitimate deduction from his speech. [MINISTERIAL cries of "Oh, Oh!"] There had been efforts on the part of successive Chancellors of the Exchequer to check the growth of expenditure, but the efforts had been unavailing, and the present financial situation demanded the earnest attention of the House. A day should be allotted for consideration of the situation before the House was committed to this expenditure. This was called for by several circumstances. There was the expectation of reduction in expenditure held out a few months ago and not fulfilled; there was the suspension of the £30,000,000 from the Transvaal, which naturally disturbed the financial position of the country; there was the fact that half the taxation imposed for the war had not been removed, nor was it likely to be removed; and the revenue prospects were most unfavourable. He regretted to say that the Government and the House seemed to have lost hold, to a large extent, on expenditure. He urged that the House should assert itself and have a full and searching examination and discussion upon this subject, which was as near to the prosperity, happiness, and future of the country and the Empire as any subject in which the House could be engaged.

MR. GIBSON BOWLES (Lynn Regis)

said he entirely agreed with the right hon. Gentleman that it was most desirable that an opportunity should be afforded of discussing what he ventured to think was the most grave and serious financial situation into which this country was gradually drifting.

* THE CHAIRMAN

The general financial situation of the country is not open for discussion on this Vote. That will come up on the Budget. The hon. Member is not entitled to discuss that on the War Office Supplementary Estimates.

MR. GIBSON BOWLES

said he quite recognised that. He was referring to the suggestion which the right hon. Gentleman the Leader of the Opposition was allowed to make, and which he presumed it would not be out of order to refer to. He was about to say that he hoped the day would come, because this was not the day, when such a discussion would be in order. The seriousness of the financial situation was by nothing so absolutely proved as by this very Estimate now before the Committee. He thought an Estimate of this sort was absolutely unexampled, and if the Committee would permit him he would show why. This was an Estimate which professed to be for £2,700,000. As a matter of fact it was an Estimate for £9,500,000. The original War Office Estimates for this year were £37,600,000. Now, the Committee were asked to add to this sum £6,100,000. The original appropriations in aid for this year were £3,740,000. The Committee never voted that sum. The Committee could not in any way deal with appropriations in aid. It could neither add to nor diminish them, and for the sufficient reason that it was not the House or the Committee that granted appropriations in aid. It was the Treasury acting under an Act of Parliament. The Committee were now asked to authorise an additional expenditure of £6,100,000, and an additional appropriation in aid of £3,400,000, and he submitted that instead of deducting the one from the other, the one should be added to the other. The first remark he had to make was that this was nothing less than enormous. He reminded the Committee that the original net Vote of last year was £34,250,000. The addition to this of £6,100,000 represented an addition to the expenditure of nearly 20 per cent. on the original Vote. What was the justification of a Supplementary Estimate? There was no justification whatever in ordinary times for any Supplementary Estimate at all. A commonly prudent Government had no Supplementary Estimates. A Supplementary Estimate before this Government came into office was of rare occurrence, and when there was a Supplementary Estimate it was for £100,000 to £200,000. But since 1895 the average had been £2,000,000 to £3,000,000 of Supplementary Estimates. He was pre- pared to admit that occasions might arise when the Government was unable to foresee with accuracy, or even with a moderate approach to accuracy, the expenditure of the year. New circumstances arose, and these were the only things that justified the Government in coming to the House for an entirely new grant of money. Therefore, whenever a Government came to the House with a Supplementary Estimate, it came as it were with a rope round its neck. It was bound to justify every item of that Estimate, and to show in respect of every item that it consisted of expenditure on matters which could not possibly be foreseen when the original Estimate was presented.

The Secretary of State for War had said that he was taking a course to-day which was inconvenient, but it was one which he thought was convenient, and he thanked him for doing so, and for making a statement at the beginning of the discussion. He followed the right hon. Gentleman's statement throughout, and he was bound to say that in his opinion it entirely failed to show that the circumstances were such that this extra expenditure the Committee were now asked to sanction, could not have been foreseen when the Estimates were presented last 3-ear. On the contrary, some of the remarks of the right hon. Gentleman tended to show that they could have been foreseen. For instance, he told the Committee that certain items referred to matters which were finally closed two years ago, and that others referred to expenditure which was really incurred four years ago, but had not yet been brought into account. Why were these items brought forward now? Our system was annual. Things were supposed to be cleared up and ended at the close of each year, and, if we were to have this new system introduced, we should have our financial system worked on the plan followed in France where, by the introduction of what was called an "Exercise," accounts were sometimes dealt with ten or eleven years after the date to which they referred. He thought they were approaching that now. It seemed to him that some of the items here were such as must inevitably have been foreseen at the time, and certainly they ought not to have been left so late as this. The last item of the Vote was £600,000 for "South Africa-Compensation Claims." There had been discussion after discussion in this House on that matter, and they had voted sums up to millions for compensation claims. How could the Government say now that this was expenditure of an unexpected nature, and that at no previous portion of the year could it have been foreseen? How that could be contended he could not conceive. The same might be said of almost every item. He was not complaining of the items; they might be quite correct, but he was complaining of their being put before the Committee in a Supplementary Estimate. When the Public Accounts Committee were sitting he remembered asking with respect to several of the matters indicated here. He asked an official from the War Office what was the total amount of such and such an expenditure—referring to expenditure by officers in the field. That official was a very able man indeed, but his reply was "I cannot tell you." He asked "Can you tell me within a million or two?" and the reply was "No, I cannot." That was the state of mind to which the War Office was reduced by South African expenditure. That expenditure was of the most lavish kind. There was practically no sort of Estimate. The right hon. Gentleman had referred to the item of £1,000,000 for "Proceeds of sale of cast and other animals, etc." How could £1,000,000 be the wiping out of the whole account? When they wiped out an account they got the pounds, shillings, and pence. There was no finality about £1,000,000. With regard to Appropriations in aid he reminded the Committee that they were in a somewhat different situation. They were made, as he had pointed out, by the Treasury acting under the Public Charges Act, and the House had no control over them. Let the House observe that this Supplementary Estimate represented two huge mistakes—a mistake of £6,100,000 on the original Estimate, and a mistake of £3,400,000 on the Estimates of the Appopriation in aid. Such large mistakes, he fancied, had never been made before. He would not enlarge on that now, although he should object later on to the great vice of Appropriations in aid. They meant the withdrawing of the control of this House from the finances of the country. Last year they amounted to no less than £13,000,000, and this year they would probably amount to still more. He most earnestly begged the attention of the House and the Committee to the growing practice of the Government in making Estimats which were not to be trusted, and of coming in with Supplementary Estimates which were not justifiable and which played a part of a most dangerous character in dealing with Appropriations in aid.

MR. BUCHANAN (Perthshire, E.)

said he agreed with the hon. Member for King's Lynn that the Government in laying before the Committee Supplementary Estimates like this were practically presenting a second Army Budget for the year. When the Committee came to go into the discussion of details it would be found, from those enormous sums asked for from the Committee, that the Estimates of the various sub-heads a year ago turned out to be absolutely fallacious. The right hon. Gentleman the Secretary for War in the few remarks with which he had opened the debate did not make any attempt to justify the conduct of the War Office. The right hon. Gentleman made a few observations on several of the large charges, but he did not say why these large charges, which might have been foreseen, had not been entered in round figures in the Estimates for the current year. There was the large figure of £800,000, payments to the Colonial contingents. The War Office must have known that a large sum of that sort was outstanding to the Colonies and that it would probably, and ought to, come in for payment in the current year. Why then was it not put in? With what countenance could the Government justify presenting an Estimate for £5,000 at the beginning of the year and in the month of February bringing in a Supplementary Estimate for £800,000? The right hon. Member the Secretary for War did not attempt to explain how it was that the War Office should be ignorant of the existence of a claim of this magnitude. In the next head the original Estimate was for £10,000, now it was £150,000: and in the third the paltry sum of £3,000 was in the original Estimate, now it was £100,000. Whence came that? Surely the Committee had a right to demand that a department should have a little more foresight as to the amount of the claims that must necessarily come in during the currency of the year. If all this confusion was true in regard to these particular charges, it was still more so in regard to the China charges. The right hon. Gentleman said that this was money that ought to have come in course for payment on 31st March, 1903; therefore it must have been known that it was due. Why, then, was it not in the Estimates? He had doubts that the delay was in the India Office; because he had found that very often it was the War Office that was responsible. The Committee had a right to some excuse or explanation how it came to pass that no sum whatever had been inserted in the earlier Estimates of the year for the £900,000 for Imperial Military Railways and £600,000 for South Africa—Compensation Claims? The right hon. Gentleman himself allowed that these had been outstanding sources of quarrel and disagreement between the War Office and the Colonial Office for two years past; and if there was going to be such a vast sum placed on the charges for the current year it should have been in the original Estimate.

This criticism applied with even greater force in regard to the Appropriations in aid. The hon. Member for King's Lynn, who had referred to this subject, did not point out its full gravity. He could quite understand that at the conclusion of a great war, larger sums for Appropriations in aid might be coming in, than on ordinary occasions; and the War Office might fairly come forward with some justification for what took place last year and the year before. The war came to an end in June two years ago and the expectations of the War Office were considerably thrown out of gear. The Appropriations in aid went up from £3,430,000 to £6,130,000, because when the war came to an end the War Office wanted to sell a good deal of their property in South Africa; but certainly that was an enormous discrepancy. In the previous year the Appropriations in aid amounted to £4,500,000, while in the Supplementary Estimates there was an additional sum of £5,500,000 or a total of £10,000,000. The war having come to an end a careful department might have anticipated that a very large sum must come to the credit side of the account, and if that was the case last year, â fortiori it should have applied this year, when the war had been finished for more than a year and a half, and when the War Office must have been aware of what they had to sell in the shape of cast horses and other animals, provisions, forage, stores, and materials, but there was as great a discrepancy as in preceding years. Under Vote 6 for the sale of cast horses and other animals the yearly Estimate was £77,000 while the Supplementary Estimate was £100,000, but the discrepancy was even greater in the case of sales of provisions, forage, and supplies. In the Estimates for the year the amount given was £76,800, while in the Supplementary Estimates it was £1,600,000. The discrepancy was not so great on the next item—Stores £650,000 and £500,000; and for Materials £137,000 and £130,000. But putting the four items together the amount in the original Estimates was £941,000 nd the sum now given in the Supplementary Estimates was no less than £3,430,000 or an increase of 350 per cent. Surely they had a right to expect from the head of the War Office some statement to account for the hopeless error into which the War Office had fallen. This matter was important because it would become, under the existing system, almost impossible in future for students to discover the real cost of the war. He thought that it was of the greatest importance that the Public Accounts Committee should devise some alteration of the present practice, in the direction of simplification of the accounts of payments usually put under the heading of Appropriations in aid.

THE FINANCIAL SECRETARY TO THE WAR OFFICE (Mr. BROMLEY DAVENPORT, Cheshire, Macclesfield)

said that he did not intend to follow the right hon. Gentleman opposite into the regions of prophecy. He would endeavour to answer the considerable number of Questions that had been put to the best of his ability, and if he did not make himself perfectly clear he hoped hon. Members would be indulgent. The hon. Member for King's Lynn had referred to these Estimates as altogether unexampled, and had suggested that there was something improper in applying Appropriations in aid to meeting deficiencies in the Army Estimates. There was, however, nothing new in the practice, and if the hon. Member thought there was anything improper in it, he was surprised that he did not make the same speech last year. While we were at war it was absolutely impossible to arrive at an exact estimate of the cost of particular services. As to the question of the expenditure upon Imperial military railways, upon which he had been asked a question, he thought he could make the matter quite clear. So far as the War Department was concerned it was only an affair of book-keeping, and no money had passed. These railways had belonged to the Transvaal and the Orange River Colonies, and had been captured as prizes of war by our Army. During the war they were worked by the military authorities as military railways, and on the con- clusion of hostilities they were handed over to the Colonial Government. Their price bad been a matter of discussion between the War Department and the Colonial Office, and finally a sum of £1,250,000 had been agreed upon. When he took office that sum was regarded as due to the War Department, but in the last few weeks it had been realised that under the South African War Loan Contribution Act, 1903, all moneys over and above £3,500,000 paid by the new Colonies must go, not to the relief of taxation, but to relief of the National Debt. It therefore became necessary in the Estimate now presented to write off £900,000, £350,000 of the amount having been already charged against the Army Votes in the form of stores supplied from stock. So far as the War Department were concerned, they realised that if, and when, this sum was paid over it would not go to them but would go in relief of the National Debt.

The hon. Member turned to the excess of Appropriations in aid, and said he had been asked what was the meaning of the £1,000,000 shown. He explained that when the transports ceased to be required they contained a large quantity of coal; that receipts from the sale of transport animals in South Africa, other than the Transvaal and Orange River Colonies, amounted to £440,000; and that animals and vehicles in the Transvaal and Orange River Colonies accounted for £410,000. Altogether there were items amounting to a bout £1,000,000; but he did not suggest that that would be found to be the precise sum.

MR. LOUGH

Then if we have not to pay it, why should it be in the Estimates?

MR. BROMLEY-DAVENPORT

said that it was because they had sold the railway, for which they had paid nothing, to the Colonial Government for£l,250,000.

* SIR EDGAR VINCENT (Exeter)

Why, if nothing is being paid, should we have a sum on the Estimates of £900,000?

MR. BROMLEY DAVENPORT

It is put down to balance our account, to show that we no longer take credit for the sum of £900,000.

* SIR EDGAR VINCENT

But that really is no explanation. Because you do not receive a sum which you expected, are you justified in stating that you are going to spend a sum which you do not intend to spend at all?

MR. BROMLEY DAVENPORT

I am told that it is necessary to show it in this way.

* MR. ARNOLD-FORSTER

said that there would have been an Appropriation in aid to the extent of the £900,000, which would have been in reduction of the amount payable on the Supplementary Votes which they now had to pay. But that amount they now realised would not be paid, and, therefore, the original charge on the Supplementary Votes would not be met by a corresponding Appropriation in aid. In that sense they would have to pay £900,000 more out of the Army Votes.

* SIR EDGAR VINCENT

To whom? Who is the money to be paid to.

SIR H. CAMPBELL-BANNERMAN

Might I ask one question? Take the next item, "Cast horses, £1,000,000." The hon. Gentleman takes credit in an Appropriation in aid for cast horses. Now supposing it was found, when that amount was gone into, that that was a mistake and that the amount was only £500,000. Would the hon. Member put the £500,000 down as having been spent on cast horses?

SIR HENRY FOWLER (Wolverhampton, E.)

Are we to understand that the Estimates presented and approved by the House last April are £1,250,000 less than they ought to have been because you expected this amount to come back?

MR. BROMLEY DAVENPORT

said he was sorry he could not answer that Question; he did not look into the matter. He desired to make it quite plain. This sum would not be deducted from the Estimate. He was told that it was necessary to include it for book-keeping purposes. We had paid no money and had received no money. As regarded the Yeomanry accounts, he thought that, in view of the conditions under which the men were recruited, coming as they did from many parts of the world, and receiving different rates of pay, it was rather unreasonable to expect that the accounts should be completely and accurately wound up so soon after the conclusion of the war. As to the China expeditionary force, the Vote comprised money expended to the amount of £400,000. There were, however, surplus Appropriations in aid amounting to £200,000. The old system of conducting a war was by a Vote of credit, and he was not quite sure, from the point of view of this House, whether that was not better. Hon. Members, at all events, then knew the amount for which they were responsible in any year. But it became much more difficult when a war was conducted, not by the War Office but by the India Office. The accounts were made up in China; they were then sent to India to be checked and audited, and were then sent to the War Office, by which they were presented to this House. That might be undesirable but it was in strict accordance with the recommendations of the Finance Committee. The expedition to China was in 1901, and though the delay in getting these accounts, he admitted, was most undesirable, still it was unavoidable. The same would apply to the Somaliland operations which were being conducted by the Indian Government. With regard to the compensations claims, £600,000, that was made up of three amounts, as hon. Members knew, in 1903. The Transvaal and Orange River Colonies agreed to take £3,000,000 in satisfaction of those claims. £1,500,000 was paid by us in 1902 and it was estimated in 1903 that the total amount of these claims amounted to £4,500,000, and the two Colonies agreed to accept £3,000,000 in satisfaction.

MR. EDMUND ROBERTSON (Dundee)

congratulated the hon. Member on his first appearance as a member of the Government supporting the Estimate before the Committee, and said had the hon. Member been more frequent in his attendance before he occupied his present position, when the Estimates were discussed, he would not have imagined that the hon. Member for King's Lynn was making the protest he had made for the first time. It was not the first nor the fifth time that the hon. Gentleman and many others had made the same protest. The hon. Member had been speaking for twenty-five minutes in explanation of the military expenditure on South African railways but he could not even now pretend that he understood what those explanations were. So far as he had been able to gather the original statement contained an item of Appropriation-in-aid of £900,000 which was wrong.

MR. BROMLEY DAVENPORT

said he found that he was mistaken in the statement he had made. He found that the £900,000 was actually spent and that it was now only charged against the Army Vote because it had not been repaid. It was anticipated that it would be repaid and it was admitted by the Colonies that it was due. As a matter of fact £350,000 was repaid, but the remaining £900,000 which was expended could not be repaid, and therefore bad to be charged against the Army Vote.

* SIR EDGAR VINCENT

Was it spent on these railways?

MR. BROMLEY DAVENPORT

Yes.

MR. EDMUND ROBERTSON

said he was obliged for the explanation but it did not correspond with what he understood the Secretary of State for War to say.

* MR. ARNOLD-FORSTER

said there was no discrepancy. This amount of £900,000 was taken out of the Army funds as a temporary expenditure, and it was expected that it would be paid back. It was taken with the sanction of the Treasury. out of the Army Votes for current expenditure, and it was expected that it would be repaid.

MR. EDMUND ROBERTSON

said it now appeared thatthis£900,000 was an advance with the sanction of the Treasury from the Army funds because it was expected that it would be repaid within a year; it was therefore a loan.

MR. BROMLEY DAVENPORT

Expended by the military on a railway at a time when that railway was being worked by the military.

MR. EDMUND ROBERTSON

said this amount was nothing but a loan which was not repaid as they expected it would be. They had had four or five explanations as to this matter but he could not say that he understood any one of them. This question ought to be raised on an Amendment which would bring the question before the Committee in a definite manner, when, perhaps, that Committee would get a proper explanation form the Government. His right hon. friend the Leader of the Opposition in his speech had taken the financial ground, which was the only ground which could be taken in this matter. The right hon. Gentleman had shown what the amount would be if these items had been passed, but he omitted to take note of the Military Works Bill.

* THE CHAIRMAN

Order, order! This is not the occasion upon which to enter into a general review of Army expenditure. Upon Supplementary Estimates the debate must be strictly confined to matters contained in those Estimates.

MR. EDMUND ROBERTSON

remarked that these Estimates so enormously swelled the total naval and military expenditure that he should hesitate before accepting them. Once these and the corresponding Naval Estimates were accepted the gross amount of naval and military expenditure would be nearer £85,000,000 than £75,000,000. A large amount of the extra expenditure related to the unhappy war in South Africa, the true character of which was becoming day by day more visible. The Estimates included a sum of £3,845,000 required for excess expenditure connected with South Africa. Before voting that sum the Committee were entitled to have a definite account of the total cost of the war to this country. Another point on which information was necessary was as to how much of these Estimates was for ancient and how much for current expenditure. It was recently stated that the present cost of the Army in South Africa was about £80,000 a week, but the Committee were entitled now to ask for more precise information. How much was to be the expenditure on military services.

in South Africa in the year ending 31st March, 1904? He further asked how the additional charge placed on the revenue of the country by these Supplementary Estimates was to be met?

* THE CHAIRMAN

That point cannot be discussed in Committee of Supply at all. The hon. Member must wait for Committee of Ways and Means.

MR. EDMUND ROBERTSON

thought that possibly some preliminary suggestions might be allowed. The Estimates as they stood upset the financial equilibrium of the year, and until he was satisfied that that equilibrium could be restored he would be inclined to withhold his assent to the proposals. With regard to the item for pay to the Colonial Contingents, would the right hon. Gentleman state definitely what were the financial arrangements as to the pay of those contingents during the war, the amount paid to the colonials, both from this country and from the Colonies, and how that pay compared with that of the British soldier.

MR. RITCHIE (Croydon)

said there could be no doubt as to why the money was required to be voted for the railway. The great bulk of it had been spent on rolling stock.

THE SECRETARY OF STATE FOR INDIA (Mr. BRODRICK,) Surrey, Guildford

explained that of the £1,280,000, £800,000 was spent on new lines or on substantial repairs of the old lines, and £480,000 on rolling stock.

MR. RITCHIE

said the question of how the money was spent was not very material, and his recollection was that the bulk of it went in rolling stock, but, of course, the right hon. Gentleman was better informed as to that than he was. The course which had been adopted in bringing the matter before the Committee was perfectly plain and justifiable. In the expectation that it would be repaid by the Colonies the money had been placed to a suspense account. He had his doubts as to whether it would be repaid; he supposed that the Govern-; ment had their doubts also, and they had therefore acted quite properly in coming to the Committee, stating they were not quite sure about the money being repaid, and asking the Committee to vote it. Even if the money was repaid it would go to the National Debt, so that the Government were acting quite properly, though he was bound to say that the explanations which had been given left much to be desired. The right hon. Gentleman the Leader of the Opposition attributed to him the prophecy that the cost of the Army would be immediately reduced. He had never been so foolish as to make any prophecy of the kind. All he did was to express the feeling entertained by himself and his colleagues that they might look in the near future for a reduction in expenditure. These Supplementary Estimates certainly added very considerably to the cost of the Army for the year, but, in view of the fact that a great deal of the money had been spent so far from home, and that they were engaged in winding up a long and costly war, he thought that if ever a Supplementary Estimate for a large sum was justified it was on this occasion. But when the Secretary of State for War took credit for having brought the war estimates and the expenditure nearly to an equality, he could not help remembering that when responsible for the finances of the country he was led by the then Secretary of State; for War to expect, not only that there would be no more expenditure in winding up the war, but that there would be a surrender of several millions. Naturally as Chancellor of the Exchequer he was very pleased to hear that, and he looked forward to being able to present to the House a much more favourable Budget than he ultimately was able to do. Gradually the £5,000,000 or £6,000,000 that were to be surrendered dwindled away; further information brought the sum down to £3,000,000,then to £2,000,000,and finally there was to be a deficit. He did not blame the War Office in this matter, but when credit was taken for the correct estimate of the final cost he could not help saying that that did not agree with his recollection of the circumstances of the case. The War Office naturally had to accept the estimates sent them from South Africa, and those estimates as to the final cost were constantly changing. The conclusion he came to was that the financial control in South Africa left much to be desired. The Government were apparently sensible of the fact, for he noticed in the Press the other day that they were about to send out an Audit Commission to go into the whole question. Going by his own experience, when in office, he had no faith in any estimates of expenditure sent from South Africa, and he would not be in the least surprised if the Secretary of State for War was disappointed with regard to these Estimates winding up the war expenditure.

There was one other item of expenditure which had, he would not say astonished him, but at any rate caused him considerable disappointment. When this expedition in Somaliland was undertaken, it was not contemplated that anything like this amount was likely to arise at all. The original idea was some £300,000 or £400,000, and the Estimates presented to the House were for £500,000, £250,000 one year and £250,000 the next year. Circumstances had occurred which led them to go beyond what was originally contemplated. He attached a great deal of value to precedent in this matter, but cost what it might, no Government could possibly leave that country now without making a clean job of it and fulfilling the task they had undertaken there. It was very unsatisfactory that the amount had been so considerable, and he confessed that he did not think they had seen the end of it yet. He was afraid they would not succeed in locating the Mullah, and if they did they would not catch him. Even if they succeeded in catching him, he believed that another Mullah would arise. He hoped some member of the Government would be able to tell them how soon they expected the operations to be brought to an end.

MR. BRODRICK

said the Secretary of State for War had asked him to say a word in reply to what had fallen from the hon. Member opposite, and from the Tight hon. Gentleman the Member for Croydon in regard to this expenditure. He agreed with what had been said by the hon. Member for King's Lynn about the practice of introducing Supplementary Estimates. When he was at the War Office some years ago, after Lord Randolph Churchill's strong attacks upon the expenditure, a great effort was made and the Supplementary Estimates' system was put for a time entirely on one side, and for two or three years running there were no more Supplementary Estimates, and the principle was only started again in recent years. He thought it would be impossible to compare what had taken place this year with any other year. With regard to what had been said about the operations in Somaliland he would leave it to his right hon. friend to deal with the adjustments. He wished, however, to explain exactly what were the difficulties which made it impossible for the Government to forecast last February what would be the receipts and the outgoings in South Africa with regard to these Supplementary Estimates. The Committee would recollect that last February they had not then completed the return of the troops, and there was a constant movement of troops from South Africa to this country which went on until last April. There was also the difficulty in regard to the stores sent out. The military authorities had not then decided what transport they were going to keep or what forces, and to take a mere survey of the stores and decide what amount was to be sold was a matter involving many months work. His right hon friend the Member for West Birmingham had not completed his visit to South Africa when those Estimates were framed, and it was inevitable that an immense number of questions must remain entirely unsettled, involving finance in which the report of his right hon. friend was the main deciding factor. This had especial regard to an item of expenditure connected with the railways amounting to £500,000. Those railways were taken over by the military authorities as quickly as they were captured, and they were administered purely for military purposes. They were broken by our enemies in a variety of places, all the chief bridges had to be put up again temporarily, and ultimately repaired. Sidings and short lines had to be added under military control. All this stood at £800,000 in the War Office accounts, and£400,000 was for locomotives and other non-consumable stores. For all this, after proper deductions for depreciation, they expected payment when taken over by the South African Colonies from the civil authorities. That was a charge which was reasonable from the War Office point of view. There were prolonged negotiations.

SIR HENRY FOWLER

asked where the working expenses of the lines came in.

MR. BRODRICK

said the working expenses were entirely paid out of the military funds. The military authorities naturally held that they were entitled to use the lines to the fullest extent. It turned out to be difficult to adjust the claims of the civil authorities for wear and tear of the lines held by the British troops, or where they had spent money necessary to repair the lines. He put the case as strongly as he could from the point of view of the War Office, and the case was considered by the Government with great care. In the end the Treasury agreed that this £900,000 should not be charged against colonial revenue. Whether that was a wise policy or not was a matter for discussion, but he thought hon. Members would see that they had no alternative but to treat that sum as it was treated in these Estimates. They could not possibly take credit for the £900,000 still under discussion, upon which the then Colonial Secretary had not advised them. They could not charge it before, because they hoped to have a larger sum, and as soon as the sum could be settled it was brought before the House. He agreed that those charges were unsatisfactory, but in the course of a war, which lasted nearly three years over such a vast extent of territory, such charges were unavoidable, and the question for the Committee was whether the Government had shown want of foresight and caution in not avoiding those charges, or whether they were to blame for not submitting them to the Committee before. He thought he had shown that to submit them before was impossible. As regarded want of foresight, he agreed that in the management of the finance of the war they wanted a better authority on the spot than they had in South Africa. He was attacked the other day upon this point. He might say that the moment he took office he sent out one of the ablest men in the War Office to act as Lord Kitchener's adviser, and the hon. Member had brought before the House the considerable sums which had been saved to this country by that gentleman in South Africa. He was glad that the system they began at Alder-shot, Salisbury Plain, and in Ireland was now being followed in South Africa, and he hoped this system would in future not only prevent unnecessary expenditure, but would also bring it within the purview of the House earlier. He was sure that the House would acquit the Government of any desire to depart from the precedent of the past in this matter.

* SIR A. HAYTER (Walsall)

said he should like the right hon. Gentleman who had just spoken to toll the Committee why these items appeared at all on the Military Estimates. One million had been voted on two previous occasions in the Civil Estimates, and now when the war was over these items were transferred to the military expenses. He could not understand why they had been so long in winding up this matter, The Estimate contained an item of £900,000 for "Expenditure in connection with Imperial military railways in South Africa." The whole of the accounts for railways in Cape Colony and Natal had been wound up some time ago, and he should like to know why there had been this extraordinary delay in regard to the accounts for these military railways. He asked the right hon. Gentleman to state also why they appeared in the Military Estimates and not in the Civil Service Estimates. Another item with regard to which he wished an explanation was £100,000 for ' Gratuities to the troops for active service." It was known long ago that the gratuities would amount to £1,800,000, and the amount had formerly been voted. He did not understand why this £100,000 had been left behind. The item of £150,000 for the pay of Imperial Yeomanry in South Africa included the famous5s. per day. He did not intend to reopen that question, because it had already been thoroughly thrashed out. He urged that the equipping of such a force should be in the lands of the regular military agents, because it had been found during the war in South Africa that the Yeomanry Committee competed with the agents of the regular Army for some things, with the result that the Yeomanry paid higher prices and received inferior goods.

* SIR EDGAR VINCENT

said the House would find themselves in a strange position if the Government made a practice of following all their disappointments by Supplementary Estimates. If the income-tax fell behind the Estimate by £5,000,000 were they to have a Supplementary Estimate? He would be the last to deny that the winding up of the accounts of the great campaign afforded some justification and excuse for considerable arrears, but he doubted whether this general principle altogether justified the enormous Supplementary Estimates which were now before the House. It must be remembered that they had rather lost their standard of measurement with regard to the Estimates. This £6,000,000 represented no less than twopence on the income-tax, and that was a very large amount to bring before the House as a Supplementary Estimate. In addition to the financial obligation it imposed upon the country, it had this secondary effect, that it very largely destroyed the value of the discussion on the Budget. When the Estimates were presented about the usual time they were entirely falsified by the two extraordinary Budgets which the country had now to meet. He referred to the Supplementary Estimates and to the expenditure on capital account. He hoped that the Government, now that we had done with war finance, would get on to the peace footing with the utmost rapidity, and that they would do their best, not only in the matter of frankness in stating fully all the expenditure they expected to incur, but also in regard to pressing their subordinate officers not to make safe Estimates but correct ones, to present to the House budgets worth discussing. It had been said that the House of Commons had somewhat lost control over expenditure in general and military expenditure in particular. He ventured to press upon the Government the consideration of those measures for improving the financial control over expenditure which were set forth in the Report of the Committee on National Expenditure presented last July. He associated himself entirely with what the late War Minister had said in advocacy of decentralisation of audit. One of the grave defects of our financial system was that the audit came too late after the events and was conducted too much by persons entirely ignorant of the kind of expenditure they were called upon to control.

MR. CHARLES HOBHOUSE (Bristol, E.)

said he thought the hon. Gentleman who had just sat down had put his finger upon an important point with regard to Army expenditure and the supervision of the Army Audit Department. He would not go into details, but he would say that the War Commission pointed out that a great deal of the expenditure in South Africa was entirely due to the fact that the Army Pay Department, which had the spending of £80,000,000, was absolutely unfit either by training or knowledge to give any sort of financial expert advice to the general in the field. The late Secretary of State for War had alluded to the fact that when he had taken office he had sent out to South Africa an expert. He did not doubt that fact, but he did not think that it absolved the predecessor of the hon. Gentleman from the charge of neglect in not having done so before, or absolved the Government from responsibility for the increased cost of the war owing to that neglect. It could be clearly pointed out that at least two or three millions were lost to this country by the neglect of having a proper financial department in the field. There was another point in connection with this expenditure upon which he wanted to touch. The second item of these Estimates was with reference to the "Pay, etc., of Colonial Contingents." The personnel of the Army Pay Department in South Africa was only half what it ought to have been. Instead of having 130 they had only 65 paymasters, and instead of having a force of 500 clerks they had only 250, and that was the reason all these accounts had fallen so hopelessly into arrear. It was not only the difficulty of collecting accounts from mobile forces, dispersed battalions or scattered departments of the Army, which rendered the collation of these accounts impossible, but it was due largely to the fact that, owing to the absence of paymasters in the field, no accounts in many cases were kept at all. These were the reasons why more than a year after the close of the war they got in accounts for £800,000 for the pay of the Colonial Contingent, and £150,000 for the pay of the Yeomanry. Both of these forces had been disbanded more than a year ago. However difficult it might be to supply the accounts at the time, there was no excuse except the want of personnel in the Pay Department for their not having long ago reached the War Office. The Secretary of State for India was a confirmed optimist. He came down to the House when Secretary of State for War day after day, and told them that all was well in every branch of the Army, that the accounts were in perfect order, and that, in fact, not a word of justifiable criticism could be offered in regard to the whole system. Perhaps the right hon. Gentleman could not speak freely so long as he sat on the Treasury Bench, but if he was free to speak he would admit, now that he had quitted the War Office, with which he was so long connected, that all was not so well there as he had represented to the House.

The test of good administration was not how much they spent, but how much value they received for what they did spend. The first was a mere spendthrift policy, and invariably brought those adopting it into the bankruptcy court. That was where the Government was landing this country in the matter of Army expenditure. It had been pointed out that the Army Estimates for the current year amounted to £43,000,000, of which this Supplementary Estimate represented something like a fifth; and the official explanation was that no accounting had been at all possible. All this was merely the aftermath of the war. The Government scattered their millions in every direction, and they could not be surprised if, when they were not really winding up but trying to wind up the expenditure they found it had very largely exceeded the Estimates. The late Secretary for War said that after the remonstrances of Lord Randolph Churchill the custom of presenting Supplementary Estimates ceased. He wished the recent remonstrances from both sides of the House against the uncontrolled extravagance of the present Government had had the same effect. Take the case of the Colonial Contingent. While a great deal of this expenditure was due to the lack of accounting, a great deal was also due to lack of preparation for war. The pay of the Colonial Contingent had been throughout the campaign a source of the greatest difficulty for the authorities out there and the War Office at home. Despite the fact that in previous wars Colonial Contingents had been utilised, the experiences of the officers had never been collected and collated. Until three months ago the Government knew nothing about the organisation necessary to start a similar force. They were presenting a bill for £800,0000 to the House when the services of one officer for six months at an expenditure of £500 would have given the War Office the necessary information. This was a practical point, and he hoped the Secretary for War would do something in this direction in the course of his reorganisation. These might be small items but they went to make up a large whole, and the proper supervision of them would contribute) to the smooth working of the organisation. The Imperial Yeomanry were charged in this Supplementary Estimate with £150,00;). A late Secretary for War had said that that corps was an audacious innovation and he decided to leave them to their own resources. And what was the result? Over £10,000,000 had been expended in South Africa on these colonials, and with the present Vote the amount came to something over £11,000,000. Surely that was a subject worth consideration. When similar cases arrived a large sum ought to be saved by the careful preparation beforehand of the details of successful organisation.

* MR. AINSWORTH (Argyll)

said he should like to know to whom the railways under discussion belonged, who worked them, and who got the profits. According to the Under-Secretary for War these railways in the Orange River Colony and the Transvaal were taken over during the war and therefore he presumed they passed into our possession for nothing. An expenditure of £900,000 had been incurred on them, and under those circumstances one would think these railways were a very valuable asset, and he should like to know who received the profit, for surely they ought to pay more than their working expenses, and under favourable circumstances there ought to be a considerable balance to the good. He presumed the railways were now the property of the British taxpayer, and that being Imperial military railways they were managed by military officers, but under whatever circumstances it must be manifest that there must be a profit out of the working of the line.

* MR. ARNOLD-FORSTER

said that in answer to the hon. Gentleman who had spoken he meant to state that the railways to which he had referred were now the property of the Transvaal and Orange River Governments. He believed they were not profitable. He understood a great deal of expense had been incurred to put them in proper order after war usage. It should be remembered that the Committee were now dealing with Supplementary Estimates, of which he had had no previous experience, but he shared the view that Supplementary Estimates if properly presented should deal only with unforeseen expenditure. The hon. Member for East Bristol had made some remarks with which he entirely sympathised, and which certainly had great weight. The hon. Member spoke of the large amount of the Estimates which were due to excessive payments during the war, and he suggested what the remedy ought to be—a remedy which he was perfectly confident ought to be applied, and he hoped very shortly would be applied—and that was to provide the proper financial staff as part of the ordinary staff of every commander in the field. Until that was done and the staff practiced in time of peace to do what it was called upon to do in time of war, there would be this excess of expenditure in every campaign that was undertaken. A vast amount of the excess of expenditure was due to the fact that there had been no preparation in utilising the forces of the Colonials, and also the Volunteers from this country. He believed the irregularity of employing hundreds of men on different engagements, varying from day to day, had contributed largely to the expense and the confusion. He did not say that was avoidable at the time. The experiment having been made, however, they ought never to find themselves in the same difficulty again. They hoped very soon to have a scheme which would, he trusted, enable them to avoid these errors in the future.

The right hon. Gentleman the Leader of the Opposition had found fault with him because he had been sparing in his references to expenditure, and had held out no hope that we might ever return to our normal expenditure in our War Office Estimates. If he did not think that was possible he would not be standing there; but he did not want to anticipate what he might have to say at a later date. The right hon. Gentleman was therefore doing him an injustice in his remarks on a recent occasion in declaring that he had no hope of a reduction in our expenditure. That was not a correct representation of what he had said. What he did say, and what he adhered to, was, that he was not so crazy as to suppose that we could, instantly and at this moment, alter the scale of expenditure on the Army to any serious extent. That he believed to be true, but he should not like that statement to be construed as meaning that he did not believe we could with advantage reduce the expenditure on the Army. On the contrary, trusted he would be able to give effect to the hope which he had expressed at no distant date. An hon. Member asked for information in regard to Somaliland. He had already alluded to the matter, but he might add that the position was this. The Mullah had been driven northwards, by the energy of General Egerton and his troops, to a point which was on the edge between our protectorate and the desert. We had three positions, in fact—one on the west, one on the southwest, and one on the south, near where the Mullah now was. It was hoped that, by the co-operation of the chiefs who occupied this corner of North-East Africa, the Mullah would be placed between four forces, and that so we should be able to deliver a very heavy blow at him. In this way an opportunity might be given to bring these operations to a close with some certainty that the trouble would not begin all over again. The hon. Member for Walsall had asked a question in regard to certain railways in South Africa, and a grant that had been made for replacing railway stock owing to losses in the war. That was a purely civil transaction. The Vote under discussion had simply to do with military expenditure and the operations on the railways for the purpose of moving troops. As to the Army Pay Department they were very sensible of the reforms which were necessary, and he had no reason to suppose that the hon. Gentleman's recommendations would not receive attention. He thought he had answered all the definite questions which had been put to him.

* SIR HENRY FOWLER

said that with regard to the warlike operations in Somaliland, what they had to complain of was that the Government did not in the first instance tell the House of Commons what were their aims, who would conduct the operations and what would be their probable cost. The late Chancellor of the Exchequer said that the original comparatively small Estimate for those military operations had passed the House of Commons. The House did pass those relatively small amounts very easily, but if the House had been told that they were only initial expenditure, as he might almost call it, he thought the House would require more information than had been given it as to the beginning of the war, who were going to carry it on, and what were the objectives of the Government which when achieved would bring the war to an end. They had the usual paraphrases about prestige and the obligations of this country to certain tribes who had trusted to British authority. But the House had not been given any details and did not know what those obligations amounted to, and how far the interests of this country were involved. At one time there was some doubt as to whether the war was being conducted by the Foreign Office, but it was no use crying over spilt milk, they would have to pay for it. Although he did not share the sanguine expectations of the Secretary of State, he hoped the war would be brought to an end as rapidly and cheaply as possible. The great value of the debate was, however, the eliciting from all parts of the House objections to the unsatisfactory state of those Supplementary Estimates. There were two Leaders in this House who did a great deal to destroy that practice. They were Mr. W. H. Smith and Mr. Gladstone. Mr. Gladstone set his face like flint against it, and in his Cabinet, too, and no such remarks could have then been made as were made by the penultimate Chancellor of the Exchequer last year with reference to the support in the Cabinet of the Prime Minister. Mr. Gladstone looked on a Supplementry Estimate as almost a crime on the part of the department which presented it, and it was no easy task to get over his objections. The Estimates were cut down at the beginning of the year with the intention of presenting Supplementary Estimates to fill up the gaps. They were to be regarded as a dose of medicine to be taken in the early weeks of the session before the Appropriation Bill could be passed. They were all agreed that the Cabinet should put down its foot with regard to those Estimates, but the tendency of all departments and the strong influence they were able to exercise, enabled them to continue this disastrous procedure which caused the House to lose control over the expenditure of the year. He was not blaming the Government just now, because no doubt war was an exceptional time; one of the Supplementary Estimates was for £6,000,000 for the Army, and there was also an Estimate for the Navy of £1,500,000 or £1,750,000 and also for the Civil Service. Look how that increased the taxation of the year. The value he attached to the debate was that it directed attention to the financial unsoundness, the tendency to extravagance, and the diminution of the control of the House of Commons, which this growing practice of Supplementary Estimates involved.

MR. LABOUCHERE (Northampton)

said that the general discussion showed that military expenditure had increased, was increasing, and ought to be diminished, unless the country were to be absolutely ruined, and also that Supplementary Estimates had reached such a stage at present that they had become a scandal. Those two propositions having been admitted it was their duty to thoroughly examine the divers items in the Supplementary Estimates. It was no use hopping from one to another and talking about Somaliland one moment and the Imperial Yeomanry the next. The Estimates should be examined item by item, and they should have an explanation of every subject as it appeared on the Paper. The first item was regimental pay, extra pay and messing allowance. It was necessary to some extent to give the allowance, but surely the Government knew the cost of living in South Africa was greater than in England. They were not told the amount of the extra pay that had been given. They had been told by the ex-Minister for War that the soldiers at Wellington Barracks were absolutely in the same condition as would be the miserable Chinese who were to be brought to South Africa to work in the mines. If that were the case there would be no necessity to vote anything, as the Army would be fighting as slaves. He should like the right hon. Gentleman to explain his position on that point. He thought the right hon. Gentleman ought to do something before they voted a further farthing for the Army, since he thought the position of the soldiers in Wellington Barracks was that which would be the position of the Chinese slaves in South Africa. An explanation was required before proceeding to the next item.

MR. WHITLEY (Halifax)

said he agreed with the hon. Gentleman that it was desirable that after a general discussion on the Vote they should look into every item and have an adequate explanation. One or two matters had arisen during the discussion which had not been answered. There was the sum which the House was asked to vote for the Imperial military railways in South Africa. They had it that it was an item which they expected would be received from Lord Milner as representing the 'Civil Governments in South Africa. He wanted to know whether the right hon. Gentleman would lay before the House the correspondence which had passed between himself or the Treasury and the South African Governments with regard to the liability for this amount. Did Lord Milner acknowledge the debt or did he not?

MR. BROMLEY DAVENPORT

Certainly.

MR. WHITLEY

asked if the correspondence would be laid on the Table.

MR. BROMLEY DAVENPORT

said there was no correspondence, but a bargain had been settled long ago. The account had to be written off so far as the Army was concerned, because it could not be paid to the Army account.

MR. WHITLEY

said that as he understood the matter the money when paid would be paid to the National Debt, Was there a contract to pay the money, or was there not? If there was a contract some evidence of it should exist, Was it as flimsy a contract as the bargain entered into by the ex-Colonial Secretary with reference to the £10,000,000? There was a matter of £1,250,000 due to the taxpayers of this country from the taxpayers of the Transvaal, and before it was written off they had a right to know whether it was a good or bad debt or merely a hypothetical expectation.

MR. BROMLEY DAVENPORT

Does the right hon. Gentleman desire an answer now? I hardly understand what he means by the correspondence. There has been no correspondence; it is an acknowledged debt.

MR. WHITLEY

said he was glad to hear that explanation. He was glad to have extracted so strong a statement as that given to the Committee and hoped in a few days to be informed exactly how the bargain stood. It was extremely important that the Committee should see how it stood and how soon the money was to be repaid. It was only six months ago that this House voted £35,000,000 which was handed over to these Colonies which they could not yet have spent, and if this debt was acknowledged to be due why was not it paid out of the £35,000,000. This was only one illustration of the methods of finance between the House and the Transvaal Government, by which we did all the paying and the Transvaal all the receiving. There was a plea to be made on behalf of the British taxpayer. With Consols below eighty-six it was time they constituted themselves the champions of the British taxpayer. He noticed other items, such as that to the South African Constabulary, £100,000, and a similar amount with regard to the China Expedition. When these Votes were before the House list year they were told the amounts then required were the final amounts. Now they were asked for further sums and were not told whether they were final or not.

* SIR CHARLES DILKE (Gloucestershire, Forest of Dean)

said the Question of his hon. friend had been clearly answered by the Financial Secretary to the War Office, but the answer given was diametrically in the teeth of the account of the transaction given by the late Chancellor of the Exchequer the right hon. Member for Croydon. The Financial Secretary had stated that this was an absolute bargain; the then Chancellor of the Exchequer had referred to no such bargain, and said he had had the gravest doubt whether we should ever get the money back at all.

MR. RITCHIE

said he asserted there was no bargain at all. It was a claim made by the Treasury against these Colonies and it was contested. When he left the Treasury it was still a matter of dispute between the Colonial Office and the Treasury as to whether this money would be repaid.

* SIR CHARLES DILKE

said the right hon. Member's observations justified the statement he had made. The hon. Member's impression no doubt was that it was a bargain, but that impression was not true. It was clear that there was no agreement, and equally clear that the explanation of the Government would have been mi leading if the matter had not been cleared up. The matter upon which he rose, however, was another matter, and was the most important question which had been mentioned this afternoon in the course of general debate. The right hon. Gentleman the Leader of the Opposition had referred to a promise which he thought had been given last year by the then Chancellor of the Exchequer that there would be a reduction in military expenditure, and the present Secretary of State had used language of a definite kind at Liverpool in relation to that matter. The right hon. Gentleman the Secretary of State had said it was not for him to reply to statements made in the previous year on the question of Army expenditure. The matter had been raised last year on several occasions and finally by a direct Question in the House, and what he (Sir Charles) then understood the then Chancellor of the Exchequer to mean was that he did look forward to a considerable reduction in military expenditure in a year or two from that date. Unless a word was now said upon this point the Committee might be left with a very different impression from what they then had. As he understood, the Government did not desire to recede from what was then said but intimated that at a time of shift and change in the War Office they could not make any such change in the forthcoming Estimates, but that the words of the late Chancellor of the Exchequer were still to be relied on.

MR. GIBSON BOWLES

said he just desired to make the matter of the £900,000 clear. The Financial Secretary said there was a binding contract to pay it. It was clear that the hon. Gentleman did not believe there was a binding contract, otherwise he would not have put it into a Supplementary Estimate. It was put into this Estimate because the Government believed it to be a bad debt, and they desired to write it off. If the Government believed it to be a binding contract there would be no necessity to write it off. This Vote showed the Committee for the first time a fact which nobody would have believed. It allowed a Government for the first time to withdraw a sum of £900,000 from a Vote, and devote it to a purpose for which it was not voted nor intended. The Committee voted every sum with the greatest exactitude, and thereby, as they fancied, chained up the Government, but they did nothing of the kind, because the Government came one day and said we have taken £900,000 from Army funds and spent it on two railways and we have got a lot of rolling stock and other things which we thought we should have sold and got the money back, but we have not and now we ask you to sanction this. Let the Committee remember that but for this Vote every farthing of the £3,340,000 which was an Appropriation in aid would have gone to swell the old Sinking Fund. It was only this Vote which withdrew it from its proper destination, and when this amount was voted, as he supposed it would be, the result would be to deprive the Chancellor of the Exchequer of this amount which would have gone to diminish the Debt. He rose particulary to ask the Secretary of State for War whether he adhered to the statement that there was a binding contract by the Colonies to repay this £900,000, and if so why ho put it in a Supplementary Estimate.

MR. BROMLEY DAVENPORT

reminded the Committee that these transactions occurred before he came into office, and the information given to him was that it had been agreed, with the approval of the Treasury, to accept the round sum of £1,250,000. That, he thought, justified him in the language he had used. He now understood from the late Chancellor of the Exchequer that ho was wrong, and that the acceptance of the sum did not take with it the acceptance of the Colonies, but the acceptance of the Treasury and the War Office. To that extent he was inaccurate in the language he had used.

MR. WHITLEY

thought the hon. Member had placed the matter once more in a fog. Was this agreement simply one between the Treasury and the War Office, and not between the Home Government and Lord Milner; and did the hon. Member still maintain that there was no correspondence on the subject?

MR. AUSTEN CHAMBERLAIN

said that unfortunately he had not been present during the whole of the discussion, laving been engaged in important business in another part of the House, but he thought the Committee had received from his hon. friend the Member for Croydon a clear account of what had taken place. There were included in the Appropriation in aid sums of money to be covered by the sale of stores and animals in South Africa. They were for sales made to the Colonies, and for which the Colonies did not dispute their liability, but in the present state of their finances it was not possible to recover the amount immediately, and therefore the Government were unable to take it into credit at the present time.

MR. BUCHANAN

That is another explanation.

MR. AUSTEN CHAMBERLAIN

said that if hon. Members would follow him they would see that his explanation was not inconsistent with what had already been said. There was also a claim by the War Office against the Colonies for a sum of money expended on the railways. The figures of the claim were agreed as between the Colonies and the Government, but the Colonies had raised a counterclaim for damage done to the railways while in the occupation of the troops, for wear and tear, and so forth That counterclaim was disputed by the Government, who held that they ought, to recover the £900,000. He hoped that when the Colonies were in a more pros perous condition the sum would be recovered, but nobody who knew the present position could think that the Government would be wise or indeed that it would be possible to press for immediate payment. He could not at the moment give the exact figures of the counterclaim, but the amount was very similar to that of the claim of this country. The Government did not think the claim a fair one, but the correspondence was still proceeding on the subject. The Financial Secretary had been misunderstood. What he said was not that there was no correspondence, but that it was not in his possession. The Treasury supported the War Office in the claim they had made, and in their objection to the counterclaim. He apologised for his absence during part of the debate: it was not due to any want of respect to the Committee, but because of urgent duties elsewhere.

SIR H. CAMPBELL-BANNERMAN

said the point which had troubled him was not so much the absence of certain sums from the Appropriation in aid as the fact that this item of £900,000 was to come out of the taxpayers' pocket, although the hon. Member said it was nominally only a question of account.

MR. AUSTEN CHAMBERLAIN

explained that the £900,000 was out-of-pocket expenditure from military funds by the War Office on these railways. Being the subject of a claim against the Colonies, it was not charged direct to the Votes of the year, but was kept in the suspense account as long as there was a prospect of its being recovered within a reasonable period. Now that the Government knew they could not get the money this year they thought the suspense account should be closed, and they accordingly asked the House for the money. They were not writing the amount off as a bad debt; that would be a very different operation; he still hoped to recover the money, which when paid would go to the Sinking Fund.

SIR JOHN GORST (Cambridge University)

thought the transaction was now perfectly clear. The £900,000 had been spent out of war funds, without the authority of Parliament, for the benefit of the Colonies, and because there was no Appropriation and no Parliamentary sanction the expenditure was carried to a suspense account. The Government now found that the money would not be paid by the Colonies, and at the eleventh hour they came to the Committee of Supply to vote the money which had been illegitimately spent out of war funds for colonial purposes.

MR. BRODRICK

said there was really no foundation for the remarks of the right hon. Gentleman. This money had been expended, not for colonial purposes, but for the use of the Army: it was spent by the engineers solely for the purpose of transporting the troops. The contention of the Government was that the money having been expended and the lines having benefited to the extent of £900,000 that sum ought to be reimbursed by the Colonies on taking over the railways.

MR. RUNCIMAN (Dewsbury)

thought it was clear from the explanations that had been made that this £900,000 must be treated as a bad debt. He doubted whether the action of the Government in placing the sum on the Supplementary Estimates had improved their chance of ultimately recovering the money, as the Colonies when pressed would immediately say, "Oh, you have already received the money from the British taxpayer; we are in rather a bad way, and under the circumstances we think we are justified in asking that the matter should be allowed to lie where it is." The incident would simply add to the uneasiness felt both inside and outside the House with regard to the way in which. Supplementary Estimates were accumulating. The enormously heavy expenditure of the services had a great deal to do with the distress in all our home trades. £30,000,000 of extra expenditure used in unproductive works must naturally cripple our industries, not only in the amount of capital available, but in the spendable capital for the home markets, which were the best customers for our manufactures. He wanted to know how far this kind of thing was to go, and he was curious to know how the present Chancellor of the Exchequer was to be a drag on the wheel. The Chancellor had certainly a very uncomfortable prospect before him so far as the Budget was concerned, for there never was a time in the history of the country when it was necessary for the right hon. Gentleman to put on the brake more heavily than at present. They had not only to foresee a very heavy expenditure, but a considerable amount of rebellion among the British taxpayers at the heavy total expenditure of the year. Some of the items were entirely unexplained, and as many of them had not been sorted out in the financial archives of the Treasury and War Office, there would be considerable dissatisfaction among those who would be asked to keep up the standard of the Navy. He considered that these Votes were not only bad from a financial point of view, but they injured the prospects of the First Lord of the Admiralty when he came down for a large Vote in the course of the next few weeks, and if it were only for the sake of the Navy he should join heartily against this proposed increased expenditure.

MR. BRYCE (Aberdeen, S.)

said there was another item about which they ought to hear something more. He gathered that the Government were hopeful of cutting off the Mullah in the north-eastern portion of the province, but they ought to be told what was the policy of the Government. Did they intend to pursue him into the desert beyond if he escaped? They knew how very elusive his forces were, and the escape of part of his force might enable him to reappear again in another part of the country. They wanted to know whether the Government intended to try and make some sort of peace, or would they go on pursuing the Mullah into the desert? The sum of £1,600,000 was now asked for, and they had been told in reply to a Question that they were spending money upon this expedition at the rats of £115,000 per month. That would mean another £1,500,000 if it continued for another year. Before they voted this sum they were entitled to have a much fuller statement, or at least they were entitled to have another opportunity of discussing this practice, which had become a very serious drain upon their expenditure. He hoped a proper explanation would be given.

* MR. ARNOLD-FGRSTER

said he had already spoken twice with regard to Somaliland. He was not at all sanguine about a campaign of this sort. The right hon. Gentleman had asked most fairly what was the policy of the Government in regard to Somaliland. He did not think it was necessary to go through the whole history of the expedition from its initiation. There was very little more to say about the incidents of this campaign, for they were tedious, difficult, and prolonged. One incident was very much like another, except that the earlier attempts were marked by failure and the more recent ones had been marked by considerable success. He could tell the Committee the policy of the Government in a word. In the first place, it was on no account to add to our responsibilities or to increase our territories. In the second place, it was to continue the campaign until they had made it reasonably probable that further raids upon our territory would not occur. He had good reason for believing that they were nearer the realisation of that hope than they had been for some time past. It was a fact that the position was now, from the military point of view, less unfavourable than it had been in the past. It had been stated that they had driven the Mullah into the northern portion of the protectorate. There was a British force in his rear, and on the east side there was another force cooperating. The routes taken by the troops were governed to a large extent by the water supply, and therefore the procedure was not so absurd as some hon. Members appeared to think. The next few weeks they hoped would produce developments which, while they might not be decisive, would throw a good deal of light upon the policy they could adopt in the future. The Mullah had retreated across the waterless desert with great loss to his troops, and he was now located in a district from which there were but limited means of escape. If the Mullah were to escape with an unbroken force and a reasonable probability that he would recommence his ! raids, the policy of the Government would again be the same as that of any other Government under similar circumstances, for they would have to continue those military operations which they had been compelled to undertake and which the Government regretted as much as any hon. Gentleman opposite. There was nothing more to be said, and he thought he should be simply wasting the time of the Committee if he elaborated at any great length the past history of this campaign. The present was satisfactory, the future was unknown, but the policy of the Government was perfectly clear.

MR. BUCHANAN

said these Estimates included the pay of the Colonial Contingents, and this was one of the most important questions which had been discussed that afternoon. A large number of those items might perfectly easily have been foreseen and inserted in the general Estimates of the year. He did not think there was a single case amongst the many items which afforded a stronger example of this want of prudence and knowledge on the part of the War Office than this item of £800,000 for Colonial Contingents. Here in the last month of the financial year was a proposal for contingents whose services were rendered a year and a half ago, and during that time there had been ample opportunity, if not for definite settlement, at least to enable the War Office to have done something to meet these demands. The total amount rendered under Estimates for this item was only £5,000. The War Office was either so blind or in such a hurry or actuated by a desire to make its figures as low as possible that they grossly underestimated this item. One speaker had said that large sums had been asked for in previous years and there was a balance over, and the conclusion to be drawn from that was that the claims were not satisfied and they ought to have inserted a sum in the Estimates. They ought to have some more satisfactory explanation from the representatives of the War Office on this subject. By not putting down an adequate sum in the general Estimates the figures had been made fallacious. He begged to move a reduction of this item by £10,000.

Motion made, and Question proposed, "That Item, Vote I, Sub-head F (B), Pay, etc. of Colonial Contigents (South Africa), be reduced by £10,000."—(Mr. Buchanan.)

MR. WINSTON CHURCHILL (Oldham)

said the point on which the Committee were entitled to information could be put in one sentence. The Estimate last year was only £5,000, and the amount in the Supplementary Estimate was £800,000. It did not seem that that could be a mistake. Consequently there seemed to be a deliberate underestimate of what the total amount under this head would be. Perhaps it was wrong to impute motives before hearing the explanation, but he thought they were entitled to an explanation.

MR. RITCHIE

said that so far as he was concerned he must repudiate the suggestion that there had been any attempt to deceive the House of Commons by putting down an Estimate of £5,000 when they knew the amount would come to £800,000. It was no doubt a startling increase.

MR. COURTENAY WARNER (Staffordshire, Lichfield)

said they did not suspect the Treasury of trying to deceive the House of Commons, but the War Office was quite capable of doing this to make things more comfortable with the Treasury. What they objected to was the taking of these sums on the Supplementary Estimates instead of on the ordinary Estimates. It seemed to have been supposed that a surplus of £400,000 from the preceding year could be utilised in order to reduce the sum to a very much smaller amount, but even if that had been the case there would still have been a very large difference between £500,000 and £800,000. That did not explain the whole thing. This was only one of a series of mistakes that had been made. He must press for a better explanation than had yet been given on this point.

* MR. ARNOLD-FORSTER

said he had already explained that in the Votes of 1902–3 there was a sum of £400,000 available for the purpose. Naturally, it was expected up to the last moment that this sum would come in, so as to enable it to be used for some portion of this Estimate. He did not think that any hon. Member would suppose that the £5,000 included in last year's Estimate was seriously intended by the War Office officials or by the Secretary of State to indicate exactly what would have to be paid. He was sorry there had been delay in the preparation and auditing of the accounts, but he was not responsible for it.

MR. GIBSON BOWLES

said it appeared from what the right hon. Gentle-I man had just said that he forgot the character of the Vote. The £5,000 was I for arrears of pay. It was indicated, ! therefore, that this would end the job. Having cheerfully voted £5,000 to end ! the whole of the claims of the Colonial Contingents the Committee were this year confronted with a demand for an extra £800,000. Surely no story out of "Alice in Wonderland" was more curious than this of the £5,000 Estimate which had grown to £800,000. He suggested that it was a step towards intercepting £3,000,000 which would otherwise go to the extinction of the National Debt. No Chancellor of the Exchequer and no Financial Secretary could ever contemplate without the greatest horror the prospect of anything going to the extinction of the National Debt.

MR. BRODRICK

said that he was not responsible for the appearance of this sum in its present form. As regarded half the item Parliament was made aware that it would have to be provided, but the adjustment was not concluded at the close of the last financial year. With regard to a considerable portion of the remainder very large sums had been under dispute with the Australian colonies as to the precise terms on which their contingents had to be paid, and as to the precise liability of the Imperial Government. This caused delay in the adjustment of the accounts. He could assure the Committee that there was nothing in the nature of concealment in this matter as had been suggested. He fully admitted that there was great objection, if it could be avoided, to arrears being brought forward in this way, but in this case, with regard to three-fourths of the money, it would have been absolutely impossible for the House of Commons to have been made aware of it earlier.

MR. LABOUCHERE

said he was entirely at a loss to understand how the money was spent. Somebody in the House was responsible for the money that was expended, but one Gentleman after another had got up on the Treasury Bench to say that he was not responsible. An ex-Chancellor of the Exchequer also had said that he was not responsible. Who, then, in the name of wonder was responsible for the money? Ministers and ex-Ministers had been rigging the pea about, and now it is impossible to tell under which thimble it was. The Australian Governments scouted it, and the men brought an action against them for the payment of their 5.s a day which was paid. Was this payment only an advance by the Colonies, or did these men get 5s, a day from the Colonies and 5s. from the War Office? He Wanted to know what the transaction was from the beginning. Last year Parliament was told that these arrears of pay were £5,000, while this year a modest little sum of £800,000 had been sprung upon them; and yet they were informed that no one was responsible. The whole thing from beginning to end was an absurdity, and showed hew thoroughly badly the War Office accounts were kept. He did not see on the Treasury Bench the Chancellor of the Exchequer, who had disappeared. Were they to take it tacitly that the right hon. Gentleman held he was not responsible by not speaking? The Committee ought to put a stop at once to this kind of procedure, and register some kind of protest. The country was being fooled, and the House of Commons ought to look more closely into these matters when they saw the wrong that had been done. Therefore, for his part, he would cheerfully go into the Lobby with his hon. friend and vote for this reduction. He only regretted that it was not for the larger sum.

MR. RUNCIMAN

said he wished to ask whoever was responsible for this Vote, how many men the sum represented. If it represented 10,000 men that meant that it was pay for 320 days. Then, when did the men actually receive the money in the year 1903–4, or in the previous year, or had they got it yet? He understood that there were still some creditors of the War Office amongst the men. When hon. Members saw the £5,000 on the Estimates last year, they understood that that was to clear up the accounts; and this £800,000, which seemed an absolutely new payment, required a much fuller explanation than had been given.

* SIR EDGAR VINCENT

said the Committee ought to be informed which of these items were token Votes and which were not. Were they to be told next year that, although they had voted £2,700,000, that was merely an intimation that there was a further sum to pay, and had no reference whatever to the real amount? They must know whether these sums were final or not.

* MR. ARNOLD-FORSTER

said that his hon. friend the Member for Exeter would have an opportunity of judging when he saw the Estimates which would be shortly introduced. These items represented actual payments, and so far as his knowledge went they were final payments. If not, he should put into the Estimates the sums necessary to cover the costs. He could not tell the hon. Member for Dewsbury off-hand how many colonial troops left at a particular period of the year, or the number of men represented by the vote of £800,000.

MR. WINSTON CHURCHILL

asked when the men were paid.

* MR. ARNOLD-FORSTER

said he supposed they were paid from the beginning of the war. The accounts for them were not rendered by the Colonial Governments till quite recently. There had been two separate payments to these troops, one by the Colonial Governments and the other by our own Government on the accounts supplied by the Colonial Governments, and checked by the War Office.

MR. WINSTON CHURCHILL

said they were entitled to ask the late Secretary for War what were the reasons which induced him to fix £5,000 last year as being the proper amount that would be required. The explanation might probably be that so low a sum was fixed because it would be much easier to get it through the Committee, and thus take away the control of the House of Commons.

SIR EDWARD GREY (Northumberland, Berwick)

said he wished to know what happened to the £400,000 which was voted, but was not spent. Was it surrendered to the Treasury, and diverted afterwards to some other purpose?

MR. BRODRICK

said the right hon. Baronet was perfectly justified in asking the Question. The £400,000 was not spent, and was surrendered to the Exchequer in consequence. The £5,000 was put in the Estimates because he was assured that the sum at that time in course of payment, including the £400,000 which was not spent, would sufficiently cover the charges to be met. The sum the Committee were now dealing with was part of the adjustment of a sum of £10,000,000. He assured the Committee that his one wish in presenting the Estimates had been to put in all charges whatsoever, and to clear off the whole business. He had put every possible pressure on the Officials accordingly, but it had been found impossible to get all the items brought into account before the Estimates were prepared.

MR. LLOYD-GEORGE (Carnarvon Boroughs)

said he hardly knew whether the mistakes made or the explanations given of them were the more extraordinary. According to the answer given to the right hon. Gentleman the Member for Berwick there was a surplus of £400,000 from last year, and the explanation was that that sum was surrendered to the Exchequer because it was not considered necessary

* MR. ARNOLD-FORSTER

That sum was necessary.

MR. LLOYD-GEORGE

said he was fully aware of that. It was then stated that only an Estimate of £5,000 would be required, but now a Supplementary Estimate for £800,000 was brought forward. If accounts were kept in such an absurd fashion in any counting-house in the Kingdom or by any county council somebody would have to go. He ventured on a previous occasion to call attention to the manner in which these Appropriations-in-aid were brought forward. That was the way in which the expenditure was increasing year by year. No one made an estimate of what was happening. The Financial Secretary to the War Office said in his explanation that after all they could not be absolutely precise in their Estimates. He, himself, did not expect anything unreasonable and if it was only a question of £5,000 or £10,000 the hon. Gentleman's explanation would be adequate, but when only £5,000 was asked for and the Vote was increased to £800,000 it was rather | trifling with the House of Commons to make such an explanation. How much more of it would the House of Commons stand? It seemed to him that the terrors of dissolution paralysed the power of criticism of hon. Gentlemen opposite. It was perfectly certain that in their own business they would not allow a clerk who made such a scandalous error and who repeated it to enter their office again.

MR. BRODRICK

said it was only an error of 4 per cent.

MR. LLOYD-GEORGE

said it was an error of 1,600 per cent.

MR. BRODRICK

said that as the Colonies paid £6,000,000 he was over estimating it when he said the error was 4 per cent. It was really only about 2½ per cent.

MR. LLOYD-GEORGE

said the war was over ten months before the right hon. Gentleman made his statement last year. He tabled his account in March and whatever happened after that it was trifling in amount. It seemed to him that this was trifling with the House of Commons and that something should be done to have the Supplementary Estimates more carefully framed. The Estimates were increasing year after year and the only man prepared to accept the responsibility for that was the Financial Secretary to the War Office, who really was not responsible. He hoped the House of Commons would record its sense of the absurd way in which these accounts had been prepared.

MR. WHITLEY

said the matter of the Vote of £800,000 for Pay, etc., ought to be explained. Was that amount included in the sum paid in the form of commission to the Colonial Governments for financial transactions connected with

the payment of colonial troops? He noticed that the Comptroller and Auditor-General drew attention to certain claims made by the Colonial Government for a 3 per cent. commission on the amount transmitted through them for the colonial soldiers. He wanted to know if that were the case.

* MR. ARNOLD-FORSTER

said he believed the commission was paid in respect of stores, but he could not trace the amount.

Question put.

The Committee divided:—Ayes, 128; Noes, 197. (Division List No. 8).

AYES.
Abraham, William (Cork, N. E.)	Grant, Corrie	Partington, Oswald
Ainsworth, John Stirling	Grey, Rt. Hn. Sir E. (Berwick)	Pease, J. A. (Saffron Walden)
Allen, Charles P.	Gurdon, Sir W. Brampton	Power, Patrick Joseph
Ashton, Thomas Gair	Hayden, John Patrick	Price, Robert John
Asquith, Rt. Hn. Herbert Henry	Hayter, Rt. Hon. Sir Arthur D.	Rea, Russell
Barry, E. (Cork, S.)	Hemphill, Rt. Hon. Charles H.	Reddy, M.
Bayley, Thomas (Derbyshire)	Henderson, Arthur (Durham)	Redmond, John E. (Waterford)
Bell, Richard	Hutchinson, Dr. Charles Fredk.	Redmond, William (Clare)
Boland, John	Jones, D. Brynmor (Swansea)	Rigg, Richard
Brown, George M.(Edinburgh)	Jones, William (Carnarvonshire	Roberts, John Bryn (Eifion)
Brunner, Sir John Tomlinson	Jordan, Jeremiah	Roberts, John H. (Denbighs.)
Burt, Thomas	Joyce, Michael	Robertson, Edmund (Dundee)
Buxton, Sydney Charles	Kearley, Hudson E.	Roche, John
Caldwell, James	Kilbride, Denis	Rose, Charles Day
Campbell, John (Armagh, S.)	Labouchere, Henry	Runciman, Walter
Campbell-Bannerman, Sir H.	Lambert, George	Samuel, Herbert L. (Cleveland)
Causton, Richard Knight	Langley, Batty	Schwann, Charles E.
Condon, Thomas Joseph	Law, Hugh Alex. (Donegal, W.	Sheehan, Daniel Daniel
Crean, Eugene	Leese, Sir Jos. F. (Accrington)	Sheehy, David
Cremer, William Randal	Len, Sir John	Sinclair, John (Forfarshire)
Crombie, John William	Levy, Maurice	Slack, John Bamford
Cullinan, J.	Lloyd-George, David	Smith, Samuel (Flint)
Dalziel, James Henry	Lundon, W.	Soames, Arthur Wellesley
Davies, M. Vaughan (Cardigan)	MacNeill, John Gordon Swift	Soares, Ernest J.
Delany, William	MacVeagh, Jeremiah	Spencer, Rt. Hn. C. R (Northants
Devlin, Joseph (Kilkenny, N.)	M'Arthur, William (Cornwall)	Strachey, Sir Edward
Dewar, John A. (Inverness-sh.	M'Hugh, Patrick. A.	Sullivan, Donal
Dilke, Rt. Hon. Sir Charles	Morgan, J. Lloyd (Carmarthen	Taylor, Theodore C. (Radcliffe)
Donelan, Captain A.	Murphy, John	Tennant, Harold John
Doogan, P. C.	Nannetti, Joseph P.	Toulmin, George
Ellice, Capt E. C (SAndrw's Bghs	Nolan, Col. J. P. (Galway, N.)	Wallace, Robert
Ellis, John Edward (Notts.)	Nolan, Joseph (Louth, South)	Walton, Jn. Lawson (Leeds, S.)
Evans, Samuel T. (Glamorgan)	O'Brien, James F. X. (Cork)	Warner, Thomas Courtenay T.
Eve, Harry Trewlawney	O'Brien, K. (Tipperary, Mid.)	Wason, Eugene (Clackmannan)
Farquharson, Dr. Robert	O'Brien, Patrick (Kilkenny)	Wason, Jn. Cathcart (Orkney)
Fenwick, Charles	O'Brien, P. J. (Tipperary, N.)	Whiteley, George (York, W. R.
Ferguson, R. C. Munro (Leith)	O'Connor, James (Wicklow, W.	Whitley, J. H. (Halifax)
Flavin, Michael Joseph	O'Donnell, John (Mayo, S.)	Whittaker, Thomas Palmer
Flynn, James Christopher	O'Donnell, T. (Kerry, W.)	Williams, Osmond (Merioneth)
Foster, Sir Walter (Derby Co.)	O'Dowd, John	Yoxall, James Henry
Freeman-Thomas, Captain F.	O'Malley, William
Gilhooly, James	O'Mara, James	TELLERS FOR THE AYES—Mr. Buchanan and Mr. Charles Hobhouse.
Gladstone, Rt. Hn. Herb. John	O'Shaughnessy, P. J.
Goddard, Daniel Ford	Palmer, Sir Chas. M. (Durham)
NOES.
Agg-Gardner, James Tynte	Gore, Hn. S. F. Ormsby-(Linc)	Murray, Rt. Hn. A. G. (Bute)
Aird, Sir John	Gorst, Rt. Hon. Sir John Eldon	Myers, William Henry
Allhusen, Augustus Henry Eden	Goschen, Hon. George Joachim	Nicholson, William Graham
Ailsopp, Hon. George	Goulding, Edward Alfred	Palmer, Walter (Salisbury)
Anson, Sir William Reynell	Graham, Henry Robert	Peel, Hn. Wm. Robert Wellesley
Arnold-Forster, Rt. Hn. Hugh O.	Greene, Sir E. W (B'ry S Edm'nds	Percy, Earl
Atkinson, Rt. Hon. John	Greene, Henry D. (Shrewsbury	Platt-Higgins, Frederick
Bagot, Capt. Josceline FitzRoy	Gretton, John	Plummer, Walter R
Bailey, James (Walworth)	Greville, Hon. Ronald	Powell, Sir Francis Sharp
Bain, Colonel James Robert	Hain, Edward	Pretyman, Ernest George
Baird, John George Alexander	Hall, Edward Marshall	Pym, C. Guy
Balcarres, Lord	Halsey, Rt. Hon. Thomas F.	Reid, James (Greenock)
Baldwin, Alfred	Hambro, Charles Eric	Ridley, Hn. M.W. (Stalybridge)
Balfour, Rt. Hn. G. W. (Leeds)	Hamilton, Rt. Hn Lord G (Midd'x	Ridley, S. Forde (Bethnal Green
Balfour, Kenneth R. (Christen.)	Hamilton, Marq. of (L'nd'nderry	Ritchie, Rt. Hn. Chas. Thomson
Banbury, Sir Frederick George	Hare, Thomas Leigh	Roberts, Samuel (Sheffield)
Hartley, Sir George C. T.	Harris, F. Leverton (Tynemouth	Robertson, Herbert (Hackney)
Bathurst, Hon. Allen Benjamin	Haslett, Sir James Horner	Rollit, Sir Albert Kaye
Bhownaggree, Sir M. M.	Hatch, Ernest Frederick Geo.	Rothschild, Hn. Lionel Walter
Bignold, Arthur	Hay, Hon. Claude George	Round, Rt. Hon. James
Blundell, Colonel Henry	Heath, James (Staffords., N. W.	Royds, Clement Molyneux
Boscawen, Arthur Griffith	Hermon-Hodge, Sir Robert T.	Sackville, Col. S. G. Stopford
Boulnois, Edmund	Hogg, Lindsay	Sadler, Col. Samuel Alexander
Bowles, T. Gibson (King's Lynn	Hope, J. F (Sheffield, Brightside	Samuel, Sir H. S. (Limehouse)
Brodrick, Rt. Hon. St. John	Horner, Frederick William	Sandys, Lt.-Col. Thos. Myles
Bull, William James	Houston, Robers Paterson	Sassoon, Sir Edward Albeit
Butcher, John George	Howard, J. (Midd. Tottenham)	Scott, Sir S. (Marylebone, W.)
Campbell, Rt. Hn. J. A. (Glasgow	Hozier, Hn. James Henry Cecil	Seely, Maj. J. E. B. (Isle of Wight
Carson, Rt. Hon. Sir Edw. H.	Hudson, George Bickersteth	Seton-Karr, Sir Henry
Cantley, Henry Strother	Hunt, Rowland	Sharpe, William Edward T.
Cavendish, V. C. W. (Derbyshire	Jessel, Captain Herbert Merton	Sinclair, Louis (Romford)
Cayzer, Sir Charles William	Johnstone, Heywood (Susse,	Smith, James Parker (Lanarks.
Cecil, Evelyn (Aston Manor)	Kenyon, Hn. Geo. T. (Denbigh)	Smith, Hon. W. F. D. (Strand)
Cecil, Lord Hugh (Greenwich)	Kenyon-Slaney, Col. W. (Salop	Spear, John Ward
Chamberlain, Rt. Hn. J. A (Wore	Kerr, John	Spencer, Sir E. (W. Bromwich)
Chapman, Edward	Knowles, Sir Lees	Stanley, Hn. Arthur (Ormskirk
Clare, Octavius Leigh	Laurie, Lieut. -General	Stanley, Rt. Hon. Lord (Lanes.
Olive, Captain Percy A.	Law, Andrew Bonar (Glasgow)	Stewart, Sir Mark J. M'Taggart
Cochrane, Hon. Thos. H. A. E.	Lawrence, Sir Jos. (Monmouth)	Stock, James Henry
Coghill, Douglas Harry	Lawrence. Wm. F. (Liverpool)	Strutt, Hon. Charles Hedley
Colston, Chas. Edw. H. Athole	Lawson, Jn. G. (Yorks., N. R.)	Talbot, Lord E. (Chichester)
Cox, Irwin Edward Bainbridge	Lee, A. H. (Hants., Fare-ham)	Talbot, Rt. Hn. J. G (Oxfd Univ.
Cross, Alexander (Glasgow)	Legge, Col. Hon. Heneage	Taylor, Austin (East Toxteth)
Crossley, Rt. Hon. Sir Savile	Leveson-Gower, Frederick N. S.	Thorburn, Sir Walter
Dalkeith, Earl of	Lockwood, Lieut.-Col. A. R.	Thornton, Percy M.
Dalrymple, Sir Charles	Dong, Col. Chas. W. (Evesham)	Tomlinson, Sir Wm. Edw. M.
Davenport, William Bromley	Long, Rt. Hn. W. (Bristol, S.)	Tuff, Charles
Dewar, Sir T. R (Tower Hamlets	Lonsdale, John Brownlee	Tutnell, Lieut.-Col. Edward
Dickson, Charles Scott	Lowther, C. (Cumb., Eskdale)	Tuke, Sir John Batty
Disraeli, Coningsby Ralph	Lucas, Reginald J.(Portsmouth	Valentia, Viscount
Douglas, Rt. Hon. A. Akers	Lyttelton, Rt. Hon. Alfred	Vincent, Sir Edgar (Exeter)
Duke, Henry Edward	Macdona, John Gumming	Walrond, Rt. Hn. Sir William H
Dyke, Rt, Hn. Sir William Hart	Maconochie, A. W.	Warde, Colonel C. E.
Elliot, Hon. A. Ralph Douglas	M'Arthur, Charles (Liverpool.	Webb, Colonel William George
Faber, Edmund B. (Hants, W.)	M'Calmont, Colonel James	Welby, Lt.-Col. A. C. E (Taunton
Faber, George Denison (York)	Malcolm, Ian	Welby, Sir Chas. G. E. (Notts.)
Finch, Rt. Hon. George H.	Martin, Richard Biddulph	Willoughby, de Eresby, Lord
Finlay, Sir Robert Bannatyne	Maxwell, W. J. H. (Dumfriessh.	Wilson, John (Glasgow)
Fison, Frederick William	Middlemore, Jn. Throgmorton	Wodehouse, Rt. Hn. E. R. (Bath
Fitz Gerald, Sir Robert Penrose-	Milner, Rt. Hn. Sir Frederick G	Wood, James
Flannery, Sir Fortescue	Moon, Edward Robert Pacy	Wortley, Rt. Hon. C. B. Stuart
Flower, Sir Ernest	Morgan, D. J. (Walthamstow)	Wyndham, Rt. Hon. George
Forster, Henry William	Morrell, George Herbert	Wyndham-Quin, Major W. H.
Fyler, John Arthur	Morrison, James Archibald
Galloway, William Johnson	Morton, Arthur H. Aylmer	TELLERS FOR THE NOES—Sir Alexander Acland- Hood and Mr. Ailwyn Fellowes.
Gardner, Ernest	Mount, William Arthur
Gordon, Hn. J. E (Eilgn & Nairn)	Mowbray, Sir Robert Gray C.

Original Question again proposed:—And, it being after half-past Seven of the clock, the Chairman left the Chair to

make his Report to the House.

Committee report Progress; to sit again this evening.