HC Deb 28 November 1922 vol 159 cc478-81
8. Mr. DOYLE

asked the Under-Secretary of State for War what steps the War Office takes to assure itself of the soundness of the Army agents with whom it deals; whether in the case of Sir Charles R. McGrigor, Baronet, and Company any such steps were taken; and what measures it proposes to adopt in order to indemnify those ex-officers who, in the belief that the Government's dealings with this firm were a guarantee of its solvency, have, through its failure, lost both Army gratuities and private savings?

9. Lieut,-Colonel CROFT

asked the Under-Secretary of State for War what steps it-is proposed to take to compensate officers who are affected by the failure of Messrs. Sir C. E. McGrigor and Company, official Army agents?


asked the Under-Secretary of State for War what steps the War Office proposes to take in the case of the McGrigor bank failure, more especially in regard to payments made to the credit of officers after the institution was known by the War Office to be insolvent?

13 and 14. Sir J. REMNANT

asked the Under-Secretary of State for War (1) what action the Government propose to take in order to indemnify those Army officers and their dependants who have incurred losses through the failure of the Government agents, Sir C. R. McGrigor, Baronet, and Company;

(2) whether any payments were paid on behalf of the War Office into Sir C. R. McGrigor, Baronet, and Company, after the 6th October last, when it is reported notice was given to the Treasury that the position of this company was unsound?

17. Sir W. DAVISON

asked the Financial Secretary to the War Office what action is being taken to give assistance to officers and their dependants who are in financial difficulties by reason of the failure of the Army agents, Sir Charles R. McGrigor, Baronet, and Company; whether he is aware that it has not been the practice for this bank to publish duly audited balance sheets; and what steps were taken by the finance branch of the War Office to satisfy themselves of the solvency of these Army agents?

Lieut-Colonel GUINNESS

I would refer the hon. Members to the answer which I gave on the 24th inst. to the hon. and gallant Member for Yeovil (Mr. A. Herbert). With regard to Questions Nos. 10 and 14, payment of Army non-effective pay and of officers' widows pensions is made by the Paymaster-General and not by the War Office, and I understand that on 13th October last the Paymaster-General made payments amounting to £13,340, in respect of sums due to certain persons who had given powers of attorney to Messrs. McGrigor in that behalf. I do not think that the fact that these persons had for their own purposes made the private arrangements in question with Messrs. McGrigor entitles them to exceptional treatment at the expense of public funds. As I have stated, the War Office were in no way responsible for the stability of this firm as bankers. The War Office were only legally responsible for the obligations of Messrs. McGrigor as Army agents and this agency work ended with the payment of public money either to the officers concerned personally or into their banking accounts whether at McGrigors' or elsewhere. With regard to Question No. 17, I am aware that this bank in common with others of undoubted stability had not made it a practice to publish balance sheets.


Arising out of Question 14, was there any reason for the payment of this £13,000 after the War Office had had notice that the position of McGrigor and Co. was unsound; and who was responsible for that payment?

Lieut.-Colonel GUINNESS

I answered the hon. and gallant Member, that that payment was made by the Paymaster-General, who is not under the War Office. I would point out that, if the War Office had in the first instance taken action on the notice which Sir William McGrigor gave, that he was in difficulty, they would have done away with all possibility of his retrieving the position, and would have immediately caused suspension of payment. It was greatly to the interests of the customers of the bank that the delay took place, as it enabled Sir William McGrigor to raise £100,000. which went to the benefit of the sufferers and made it possible to issue an early dividend.


Is it the practice of the War Office to pay in sums of money due to officers to an institution which has declared itself insolvent?

Lieut.-Colonel GUINNESS

The War Office did not pay any money to McGrigor's after the first notice of their difficulties was received. They did not, as the right hon. Gentleman suggests, declare themselves insolvent. They did not put the details of their position before the War Office. They only said that they were in difficulties.


Will the hon. and gallant Gentleman answer the last part of my question? If there was no duly audited balance-sheet, will he inform the House what steps were taken by the finance branch of the War Office to satisfy themselves of the solvency of these army agents?

Lieut.-Colonel GUINNESS

No special steps were taken. I would remind the hon. Member that several inquiries have been held from time to time as to the system of army agents, and it has been the deliberate policy of the War Office, as a result of these inquiries, neither to control nor in any way interfere with the banking business of these army agents. When the Supplementary Estimates which will be laid on this subject are discussed, it will be possible to give a fuller answer than is possible in question and answer across the floor of the House.


Is it not very natural that these officers should have authorised a recognised banking firm to receive money on their behalf, being led to that belief by the practice of the War Office and the Paymaster-General, and is it not a very hard thing that these men having followed the directions of the War Office should now be mulcted in a loss of £13,000?

Lieut.-Colonel GUINNESS

It is just because there is a hard case that the Government are going to recommend the House to make a grant. It is not the case that there was any direction to any officer to bank with Messrs. McGrigor. They were not even compelled to draw their pay through Messrs. McGrigor. They could get a cheque through the Command Paymaster. As a matter, of fact, more than one-fourth of the officers who were paid through Messrs. Holt and Messrs. Cox in the War instructed those agents to pay money as it became due to them into other banks. So that it was clearly understood by officers that there was no obligation, as suggested by the hon. Gentleman.

Several hon. Members rose


The House will have an opportunity to debate the whole matter later.