Orders of the Day — Disposal Board.

– in the House of Commons on 27 March 1928.

Alert me about debates like this

Photo of Mr James Remnant Mr James Remnant , Holborn

I wish to speak on another subject, which I am afraid is not so interesting as the one we have just listened to, nor is it likely to attract so many speakers. I wish the House to consider the Disposal Board and Liquidation Commission. I want to persuade them to insist on the Government appointing an independant Committee to inquire into the many cases, as rumour has it, where the administration has not been as it ought to be. I am particularly sorry that the Chancellor of the Exchequer is not present this evening, because he would have power to give us this Committee, and I am afraid my hon. Friend the Financial Secretary to the Treasury can only give us, if he sympathises with us, the cold satisfaction of consulting his right hon. Friend as to whether it can be given. I hope that the Financial Secretary to the Treasury will tell us-whether the report in the newspapers, that the Disposal Board is to end on 1st April, is true. I hope that it does not mean that the whole of the administrative staff of the Disposal Board is to be transferred to another Department of State, as has happened in so many other cases. Only on 11th March there was another announcement in the papers —that at the special request of the Government the Disposal Board was to be continued for another three months. In my humble opinion, the Disposal Board ought to have been ended 18 months ago, to the advantage of the country and the taxpayers. When we consider these great schemes of Empire settlement as we have just done, we must recognise that it will he impossible to carry them out unless we are economical in the administration of the great Departments.

When questions have been put to the Chancellor of the Exchequer dealing especially with the brass scrap contracts, he has invariably said that he is quite certain that everything is all right, and that he sees no reason to differ from the decision arrived at by his predecessor in office. I hope, before I have finished my speech, to give the House a few details in reference to this brass scrap which will satisfy hon. Members that a Select Com- mittee ought to be appointed, with full power to call for any documents, without having privilege urged, as is so often the case, where business men and lawyers could be represented—law enters greatly into the question—and where, if necessary, witnesses could be called and evidence taken on oath. Without a full and free inquiry I am afraid that the country will not be satisfied. In dealing with this brass scrap contract I shall have to refer to three firms. The House may remember that after the Armistice the Disposal Board were able to deal with individual applications for metals and did not enter upon block sales. The Press started a campaign, urging the early closing of the Disposal Board. The Board then went in for block sales. One of the earliest transactions in block sales was with a firm at Birmingham, E. J. Smith & Co., a firm who before the War were not engaged in the metal trade at all but were a firm of speculative builders and became metal merchants during the War and had practically the sole right to deal in this metal to the exclusion of all the other metal merchants at Birmingham. Why this firm should have been selected, I do not know.

One of the first contracts that this firm had with the Government was to take brass at £56 a ton. The price dropped shortly afterwards. The firm was then relieved of its contract and was put on a 5 per cent. commission basis, which, according to an answer given in this House, represented a net profit to that firm of something like £80,000, although if it had been held to the contract the firm would have been bankrupt. It is a very curious transaction. Where a contractor makes a profit he sticks to his contract, but directly the price drops he is relieved by the Disposal Board of the obligation to carry out the contract. It is a very nice way of doing business, and many of us would like to be treated in that way. About that time another firm, a firm that had been tried during the War with great contracts, and who never let the Government or the country down—a firm well known in the engineering world—entered into a contract. The Disposal Board entered into a contract with them to take brass scrap (amongst other goods), which they sold for the Government, at £35 per ton. The contract was based on a minimum of a £5,000,000 deal and the whole organi- cation of the firm was placed at the command of the Government. Sir Howard Frank sneered in a letter to the "Times" at a firm which showed only a nominal capital. I would like to ask him how much capital was represented in his business—nothing more or less than the office furniture. Why he should jeer at a firm which nominally had only £37,000 capital I cannot understand and to say the least of it, showed extraordinarily bad taste on his part. However, this firm was asked by the Government to give financial guarantees and they had not the smallest difficulty in getting Messrs. Coutts and Company to guarantee them absolutely and entirely for 5,000,000 golden sovereigns which was the minimum extent of their contract. This firm, Rownson, Drew and Clydesdale, an eminent firm with great credit proved themselves capable contractors for the Government during the War and this was the firm with which the Government entered into a contract and as I will submit in a few minutes the Government did not act according to their contract with the consequence that they have to pay compensation to the extent of between £45,000 and £50,000. This agreement laid it down that the Government could call upon this firm to sell, on the terms arranged, the minimum or as much over as they liked, of this brass scrap among other articles.

According to Clause 5, Schedule A, they could be called upon to sell practically any stores which the Government choose to require them to dispose of. Sir Howard Frank has said that this firm could only deal with 120 tons of brass. They contracted with their sub-contractors at £35 a ton to take all that was available, and the only thing they could get out of the Government was 120 tons of brass while the Government were willing to offer other people, at a far less price, the scrap which they could insist on this firm taking. The consequence was that they did not hand to the firm anything like the quantity of goods which they had in store, and, as I say, they had to pay from £45,000 to £50,000 compensation for not carrying out the contract, although the Government had the goods. The other contractor takes a very different aspect altogether, and that is the British Metal Corporation. Hon. Members opposite, and in various parts of the House—and I agree with them absolutely and entirely—think it is very wrong for men who have got to know the intricate business of any Department to take positions as directors or managing directors of companies which have immediate dealings with the Government. It is bad enough for Ministers. If Ministers do it, they cannot complain of other people following suit, but I think the ordinary Member of Parliament, like myself, is very sorry indeed to see anything of that sort taking place. Under D.O.R.A. the Ministry of Munitions and Disposal had the right to see all the contracts of all the metal merchants in the United Kingdom, which makes the present case much stronger.

The British Metal Corporation got a huge contract—and this is the main contract for this brass scrap—for 150,000 tons at £24 2s. per ton, while it is sold by this other firm, Messrs. Rownson, Drew, and Clydesdale, at £35 per ton. At the end of the first year of Rownson, Drew, and Clydesdale's contract, during which the Disposal Board had undertaken to hand over goods to the extent of £5,000,000 worth, the Government actually owed them as compensation £125,000, and it would no doubt have paid the firm to have taken it, but they said: "No, we have seen too much of what is going on. We feel that we are under a duty to do our best by the country, and we will give you another year within which to complete your contract. We shall not want compensation; we want to work for our money, but we make one proviso. We will agree to extend it for another year, to allow you to carry out your contract without compensation, provided you accept the area clearance scheme which has been prepared at the request of Lord Inverforth and which has already been submitted." The Disposal Board accepted that, but they never carried it out. If they had carried it out, it would have meant closing up within six months all these different sections of the Disposal Board, and this is where I do blame the Disposal Board that they did not see carried out the various arrangements which they, with their eyes open, had made in reference to these contracts. The British Metal Corporation came on the scene. They were not registered before the Armistice; they were registered immediately after the Armistice; and came into being. Who are the directors? I will not give the names now. [HON. MEMBERS: "Yes, do."] I am very willing to show them to any hon. Member who likes to see them, but I will say this much, that they were all of them, with two exceptions, men who had held advisory positions to the Ministry of Munitions or Disposal Board dealing with these very metals for which they were going to get this contract. One of them, Mr. Rucker, is the managing-director of the British Metal Corporation. He was the late Controller to the Disposal Board on non-ferrous goods. Some hold positions on the Metallgesellschaft. The late Sir Samuel Evans said, when dealing with the Metallgesellschaft and its kindred companies, that the hand of this German company was seen and its powerful influence exhibited at all times and places. The Disposal Board gave this British Metal Corporation 150,000 tons of this stuff at £24 odd per ton. We are told by some that this was only scrap brass. The ordinary man in the street thinks that scrap brass is old brass broken up, and all that sort of thing, but what will the Minister say who is going to reply when I ask him if he knew that some of it was new material which had been, under Sir Howard Frank's authority, transferred to scrap in the stores schedule at the various depots. [An HON. MEMBER: "Some of us have seen that done! "] If hon. Members doubt me, let me assure them that I hold in my hand the White Paper issued by the instruction of the Disposal Board, and over the signature of Colonel Corbett, which deals with this contract of the British Metal Corporation, and says: the brass scrap of 70/30, that is, 70 per cent. copper and 30 per cent. of zinc, which at the time was selling at from £60 to£80 per ton, was to be handed over to this corporation. The depots were to be very careful to select brass scrap of the proper analysis. The little grub screws at the head of the shell were actually taken out at the expense of the Government, thus saving the corporation a pound or two per ton. When Sir Howard Frank talks about scrap brass, as though he did not know that under his own instructions new commercial brass, e.g., rods, tubes and sheet, were to be included and called brass scrap, really he is asking us to believe what I am sure my hon. Friend would not believe if he had all the facts before him When the Chancellor of the Exchequer was answering a question put by an hon. Member recently, he said that there was a great deal more behind this question than appeared on the face of it. There is. It is very difficult, at this late hour, to answer all the questions that have been raised, and go into all the technical points in connection with the matter, but I hope that when I tell the House that, by the directions of the Board, new brass rods, sheets and tubes were, just immediately after the signing of this contract, suddenly transferred to scrap, and that the whole was sold, at a less price than could have been got under a contract which was already running, they will agree with me that a very drastic inquiry should be immediately held. I know it has been said on behalf of the Disposal Board that Messrs. Rownson Drew and Clydesdale actually signed a contract for £25. They did, because, when this contract was signed without competition or even consulting the trade, their sub-contractor came and said to them, "How can I pay you £35 when the British Metal Corporation have this huge amount hanging over the market at £24? I can only give you £25." That was on the eve of the signing of this huge contract. The Government had made it impossible to get £35 when they handed over this vast amount at £24 per ton to the British Metal Corporation. Another very surprising statement was made by Sir Howard Frank, to the effect that he kept in touch with the trade, that the trade was consulted on this question, that it was open to competition; but, unless you had the facts before you, you would be inclined to believe it. But directly it was hinted about that this vast amount of scrap brass was to be sold to the British Metal Corporation, the Birmingham metal merchants, the London metal merchants, and the big metropolitan metal merchants throughout the country, wired to Sir Howard Frank protesting against it, and gave him notice that a big demonstration of protest would he held. At a meeting at Birmingham the following resolution was passed: This meeting of Birmingham metal merchants, holding the view that block sales should only be made after the material has been offered to competition, strongly protests against the sale of brass announced in the Press, and should any portion exist of material previously sold which may not have been taken up by other contractors, will feel compelled publicly to agitate for a complete inquiry into the whole of the circumstances. A London meeting also passed a similar Resolution, and they gave notice to the Government, before the contract was actually signed by the British Metal Corporation, that they were holding meetings protesting against the metal being sold without competition from the British metal merchants, and indirectly for the benefit of British trade. But directly the contract was signed, to show what this British Metal Corporation was clearly after—I would emphasise that some of the directors were continuing the influence of the Metallgesellschaft—the greater part of the brass was shipped immediately to Frankfort, the home of the company which the Non-ferrous Act was passed to suppress. I ask the hon. Gentleman will he let us have a full and free Committee to inquire into this question? I shall be delighted if I am proved to be wrong, but the information given me is so strong that I feel almost inclined to lay my money on the case I have stated. The Chancellor of the Exchequer has said he is quite satisfied that everything has been done properly and efficiently. If so, he need not fear an inquiry. I think we ought to have an inquiry, and I hope the House will support me in my appeal.

There is another question on the sale of depots in France. I want to ask the hon. Gentleman if he saw the report of the Audricq depot which was made in 1921 at the request of Lord Inverforth, in which the value of that depot was put at £1,250,000, and it was coupled with an offer to clear it almost immediately. What is the result now? Audricq and three other larger depots, of the value of about £4,000,000 at a low estimate were sold to two men for £2,000,000. They were in possession for some months and then were let off their contract. They paid the Government £389,000 on account. The Government estimate what is left at £500,000. I want to know what happened to the difference, and why these men were allowed to have this contract without proper financial guarantees? I want to know also why Mr. Hughes, one of these two men who failed in their contract to pay for these depots is allowed to buy some of our capital ships that we sold last year. I asked the Admiralty to give me the names of the 11 capital ships that were sold last year, their tonnage, the price paid for them and the conditions attached—whether they were to be broken up in this country for the benefit of our unemployed or not. A great many of them were taken straight away to Germany and other foreign parts. But the Admiralty again, like so many other Departments said, "It is not in the public interest to give you the information asked for." Why not? It is the taxpayers' money. The thing is done. I want to prove, what I am told is the case, that for one of these ships the price accepted from Mr. Hughes was less than another offer that was made. I want to know why Mr. Hughes was allowed to buy these ships when he could not carry out his other contract. It may be necessary to preserve secrecy when we are dealing with delicate negotiations in foreign affairs, but in this case the representatives of the taxpayers are entitled to have the information.

The same thing happened at the end of the last Parliament. Sir Eric Geddes, the Economy Minister, who is very keen on economy when it does not affect his own pocket, was paid by the North Eastern Railway £50,000, or, rather, the North Eastern Railway would not pay, and the Government paid. When I asked the Government to allow the agreement to be placed on the Table, they refused, and I do not know how we can make them. All this nonsense about its not being in the public interest to give information when the taxpayers' money is concerned ought not to be tolerated. The House of Commons has the right to be master in its own house, and these refusals will not satisfy those who are anxious to promote economy. We have heard about railway engines at Woolwich. I approached the firm and said to them: "There has been a lot of talk in the House of Commons about the Woolwich locomotives. Would you have taken them? "They replied:" Yes. We should have been obliged to take them if the Government had asked us to do so." I asked in the House whether the Government had asked this firm to take the engines. They did not do so. The transactions of the Disposal Board have been dilatory. They have been opposed to the early closing of the Disposal Board, and have purposely put obstacles in the way of handing over materials which this firm could have dealt with. I believe the reason was that the officials were afraid of losing their appointments. There were more engines at Shoeburyness. At high tide the sea came nearly up to the engines, and the effect of the sea air on the engines can be imagined. It was recommended that these engines, and other engines from other parts, should be transferred to some central place, where they could be scheduled and disposed of. The Shoeburyness engines were still there up to a month or two ago. Why has the Disposal Board not taken the ordinary course of preserving if they do not choose to sell these expensive engines, that are being reduced practically to scrap-iron?

In June, 1921, it was reported that there were 12,000,000 sand bags lying at Dagenham waiting to be sold. They were costing £1,500 a year in rental alone, although within 2. yards of the place where they were stacked there was Government free property where they could have been stacked for nothing. Although it was recommended that this vast number of stacks should be sold when they had a market value, they have been bought for pulp, and are being turned into the "Daily Mail" newspaper. I could give plenty more cases, but I am sure there are other hon. Members who, from their experience, can give others. I do appeal to my hon. Friend to report, if he cannot give us permission himself, to the Chancellor of the Exchequer the feeling in the House, and to press him to give us an inquiry, which alone can satisfy, not only hon. Members in this House, but many people outside.


The comprehensive and—if I may say so—outspoken speech which the hon. Baronet has just delivered renders my task a comparatively light one, although in so wide and comprehensive a question there are hound to have been omissions. I can, at least, dot the i's and cross the t's of the points to which he gave expression. It will be admitted in all quarters of the House that this is by no means a party question. This is a matter upon which all parties in the House can co-operate. In the demand which the hon. Baronet has made for a full and independent inquiry, there will be considerable sympathy of an active kind expressed by hon. Members. While I desire to reinforce the request of the hon. Baronet for such an inquiry, I ask that the inquiry should go much further than merely into the transactions of the Disposal Board itself. I ask that such an inquiry should go so far as to ascertain what were the individual transactions of servants of the Disposal Board and of ex-employés of the Board. I regard this question as extremely important, and I feel sure that that view will be supported in this House, because it is desirable that the nation should be protected against waste and reckless expenditure, and that administration must be beyond reproach.

There are in this country to-day very grave and disquieting rumours amongst the public. The man in the street asks, in perhaps a vague way, without the submission of facts, questions relating to the transactions of the Disposal Board. It is true that his knowledge does not enable him to submit evidence of an authentic character, but there are men engaged in this business, men whose practice it is to purchase large quantities of surplus stores, and who were engaged in that kind of business long before the War, who themselves are complaining bitterly, and with reason, about the conduct of the Disposal Board. Surely, some consideration will be given by this House to complaints emanating from such a quarter. I submit that the hon. Baronet and those who, like myself, will support him in his demand for inquiry, are rendering a public service. It may be urged that during the War waste was bound to take place. With that view I should express sympathy, because, in a time of national crisis, it is extremely difficult to avoid waste and even reckless expenditure. But there was no excuse whatever after the War was ended. Having regard to the fact that there was quite justifiably a desire in the country for economy of the most drastic kind in the interests of the nation, the Disposal Board should have exercised much greater care than it did with regard to administration. When we refer to the Report for 1922 of the Public Accounts Committee, which I am sure will he regarded with due interest by hon. Members, the minutes of evidence which were taken in May, 1922, show that two very prominent officials of the Disposal Board were examined before the Committee, and reference was made to the following alleged conduct of the Board in this matter. I quote from a statement made by a prominent member of the Disposal Board: As a result discrepancies were disclosed which proved in some instances that the results of previous stocktakings were untrustworthy. The question was put to Sir Daniel Neylan, who, as is well-known, was a very trusted official of the Disposal Board: Who took the stocks? And he replied: Our officials at the Ministry. I submit that that admission is in effect a very grave charge against the officials of this particular Department. I submit another case as indicating the extraordinary manner in which that Board conducted its business. It so happened that the Board proposed to dispose of a very large quantity of stock, and there was a gentleman with a speculative mind who approached the Department and offered to purchase. A subordinate official entered into an arrangement, without the consent of his superiors, to sell the surplus stock, and then it transpired that the would-be purchaser was not in a position to purchase because he had not the necessary finance. That, perhaps, is not unknown even in the most respected and trustworthy business circles, but look at the evidence that was given before the Committee. The question was asked by a member of the Committee, an hon. Member of this House in the last Parliament: What notice was taken of the conduct of the officer who had granted this contract without reporting the matter to you? The reply was: The officer who did that stated that he did it for the reason that he thought this man, being the son of a peer, was in such a position and so on that it was not necessary to refer to me as to his financial standing. I do not want to hurt the feelings of hon. Members who may have some sympathy for impecunious peers or peers' sons, but I do submit that conduct of that kind ought not to be tolerated by a House which has a very great respect for business capacity.

11.0 P.M.

I pass on from the Public Accounts Committee, although with very great diffidence I submit that hon. Members would find ample material in the Report of that Committee to justify demanding an inquiry such as has been suggested. I am going to submit one or two points to the hon. and gallant Member in a somewhat hesitant way because until I am assured that the Government are prepared to conduct an inquiry such as has been asked for I am not prepared to submit all the evidence which is in my possession. I am prepared on this occasion to indicate the purport of the evidence which will be submitted to an inquiry if it takes place. I ask the hon. and gallant Member two questions. First of all, whether he is aware that there was in the possession of the Disposal Board telephone material which had never been used, which cost £7,000, and which was sold by private treaty for the sum of £15. I can understand the amazement, perhaps not expressed amazement, but existing amazement, when I put a question of that kind. My submission to the hon. and gallant Member is: You hold your inquiry and the facts will be tabled. I pass on from that and leave it for Members to digest. I submit another question— whether the hon. and gallant Member is aware that the Department, or at all events, an official of the Department, purchased a large quantity of printed forms weighing 65. tons, valued at £27,000, which was never utilised by the Department or by any other Government Department, and which was eventually sent to the paper-makers to be pulped, a gross loss of £27,000 to the nation, and reflecting, I think I can say with absolute justification, a very sad condition of affairs so far as the Department is concerned. I ask the hon. and gallant Member whether he is aware of these alleged cases—facts. I put it no higher than that. He can reply, if he cares, at the proper moment.

Now I come to a matter about which I have submitted questions to the right hon. Gentleman the Chancellor of the Exchequer, and which was perhaps the primary reason -why I intervened in the discussion. I refer to the peculiar position of the Georgetown Munition Depot, which occupied a tract of ground more than one mile square. Perhaps there are hon. Members who know something of the district and of the depot itself who will support me in the statement I have just made. It is a fact—and here I do not ask questions of the hon. and gallant Member—that these buildings, at all events 75 per cent. of the buildings—I do not wish to exaggerate—have been disposed of by private treaty for a sum which is not stated, but which is believed to be about £10,000, to a syndicate, through the medium of an ex-official of the Disposal Board. The transaction was conducted in a somewhat underhand way. I hasten to assure the hon. and gallant Member that I am not accusing him, or even his right hon. Friend the Chancellor of the Exchequer, of doing underhand things.

I am rather imputing them to the Disposal Board, and to the general administration of that Department. The transaction was conducted in, I say, an underhand way; but there is a more serious aspect of the question than that. Communications were received by the Disposal Board from contractors, asking if they would be permitted to tender. Their letters were not acknowledged until the Department informed those contractors that the buildings had been disposed of by private treaty in the manner I have already indicated. I submit that is a very serious state of affairs. But that is not all. It is alleged that the buildings would have fetched, at the very least, by public auction £50,000, and that is not an exaggerated estimate. They are tremendous buildings, and I am certain that the mere statement that I make will be quite sufficient for the purpose.

There was some lead electric cable lying at Georgetown, 19 miles in length, which was disposed of, not by public auction, but privately, to a firm in Glasgow—I do not care at the moment to mention the name—for the sum of £1,500. Every person associated with the business is bound to admit—I know that many contractors associated with the business have already stated it—that at the very least £5,000 would have been obtained for that material. I do not want to submit any further facts with regard to what happened at Georgetown, except to indicate the serious displeasure which has been manifested among contractors in Scotland at the action of the Department, and I think they have got a justifiable ground of complaint. They are in the business, and they naturally expect that, if the Government are disposing of surplus materials and stores and buildings by auction, the Government will continue to dispose of such materials and buildings by auction, and not permit ex-officials of the Department to use their influence and their undoubted knowledge in order to assist their friends to undertake transactions of that kind.

Now I come to what is the most serious matter of all. I am going to ask the hon. and gallant Member if he is aware that a Report was prepared by an official of the Department, Mr. J. H. Beer, on the 7th February, 1920, at the request of the Board, on the transactions of the Disposal Board; that that Report was placed in the hands of Lord Inverforth, who was then Minister of Munitions, Sir Sigmund Dannreuther and Sir Daniel Neylana Report of a startling character, which was never made public, and which, I presume is still in the hands of the Department. I ask why this report was never made public? What was the purpose behind its concealment? Surely, if it was desirable to conduct an investigation into the transactions of the Board, it is equally desirable to record the facts in the interests of the nation. In support of my contention that such a report was submitted to the Department, I will read a, letter, which was sent by an official of the Disposal Board, while in the employment of the Department, to a certain official of the Board, sometime in 1921. I hope the House will forgive me if I do not give dates or names, but I am prepared to submit both dates and names and all the necessary and ancillary facts if the hon. and gallant Member will assure the House and myself that an inquiry will be held. That letter was sent relative to the Slough Depot, and Mr. J. H. Beer's report of the 7th of February, 1920. The letter is as follows: In reply to your verbal request that I should let you have copies of the above Report (which you have already read when auditor in this Department) I have to say that the documents constituting the above Report and supplementary papers were handed me for personal custody [by a gentleman named] upon his quitting this Department on the 22nd instant. For the first time an opportunity has been afforded me of reading them, and of reading a copy (apparently) of the comments made by the Committee which sat on the 2nd, 3rd, and 4th March, 1920, at Slough, to consider the Report. I cannot find anything in the Report or supplementary papers which would justify any additional action now in the interests of the public, having regard to the magnitude of other waste scandals of which we have read in the Press in the meantime.It is probably true to say that had the Report been acted upon more fully early in.1920, certain additional criminal prosecu- tions might have been sustained. It must be remembered that, in all likelihood, the Committee had in mind the difficulty of securing the necessary evidence to lead to convictions.It is a gruesome story of indifference in those in administrative positions; of negligence and wrong to the detriment of the public funds; and to the ordinary standards of decent conduct. It allows of the inference that there was lack of administrative foresight and lack of adequate accounting methods at the initiation of the Slough Depot scheme.Knowing what we do of the indifference of those in high authority to the proper conservation of public money; of the atmosphere of prodigality and waste to which they have become inured and to their adroitness when adverse criticism arises, of so representing the measure of official responsibility as not so much individual as spread over a number of persons in descending degrees, of fractional accountability, so as to make it next to impossible to attach a particular quantum of reproach to any individual—I do not see how the cause which you have at heart in common with other comparatively helpless officials could be benefited by the reopening of this sepulchre.I should prefer to take the responsibility of sending you copies of these documents as you suggested only when it is fairly demonstrated that some really useful public service would be effected. I would be freed from regarding them as solely confidential and private by being so satisfied, and that the action which it was proposed to take was justified and was unlikely to be taken otherwise. I would ask the House to note that this is sent from the office of the Disposal Board by a somewhat prominent official. I think the House will admit that it is very surprising, but, if the House had been regaled with statements regarding transactions of the Board, as I have been, they would not regard this as surprising at all. At all events, I submit that a prima facie ease has been made out for an independent inquiry. I think it is worth reiterating that this is not by any means a partisan statement. I am certainly not attacking the present Government because of something for which, presumably, the late Government are in some degree responsible. In the interests of the nation, in the interests of efficiency, in the interests of the House of Commons itself, which is, after all, always jealous of finance and expenditure, it is desirable that the Financial Secretary, if he cannot himself give the assurance, should convey to the Chancellor of the Exchequer and the Government the urgency and desirability of insti- tuting an inquiry, where the terms of reference will be of the widest and most comprehensive character, to enable us to plumb the depths of the transactions of the Disposal Board.


I join with the hon. Member who has just spoken in saying that the complaint I have to make against the Disposal Board is not a complaint against the existing' Government, which, of course, was not responsible for the appointment of the Disposal Board or for the policy which guided its actions. My complaint is that the action of the Disposal Board is hammering perhaps, the last nail into the coffin of a whole industry, unless that policy is immediately reversed. May I for a moment draw the attention of the House to what happened in the early days of the automobile industry? The legislation which this House failed to pass a quarter of a century ago placed many of the countries in front of this country in a most important industry. It was many years before the mechanical genius of this country brought us to a level with those countries which had been in front of us. Happily, when the commercial motor vehicle was being developed there was no such handicap, and this country became beyond question pre-eminently the first in the design and manufacture of these commercial vehicles. A very satisfactory industry, giving much employment, had been established at the outbreak of war. Then, unfortunately for this industry, the whole aspect of affairs was altered. As the House is aware, all these factories were commandeered, and either continued in the manufacture of motor lorries or were put on to other work which the Ministry of Munitions thought they were better able to tackle in the interests of the country. That goodwill which we had achieved all over the world was lost, because we could not supply other countries, when the production was required by our own Government, and other countries, like the United States, were able to capture the markets, as they had a perfect right to do.

The industry realised the perilous state of affairs which had arisen, because even during, the progress of the War and as early as 1916, they commenced to formulate plans which were submitted to the various Government Departments concerned as to the method which should be adopted, in their opinion, for the disposal of the vehicles after the War. The Departments included the War Office, the Ministry of Reconstruction, the Ministry of Munitions and the Board of Trade. Several practical schemes were put forward and were promised consideration, but the War terminated, and nothing was done in the way of the adoption of any scheme. Then individual manufacturers negotiated, first with the Ministry of Munitions and then with officials of the Disposal Board, for the purchase of vehicles of their particular make and between the Armistice and time when the Slough contract was entered into, they had actually purchased lorries to the value of at least £1,500,000 at prices—and this is an important point—which were relatively high. For example, one prominent firm bought 900 of its own vehicles back at an average cost of £380 and other manufacturers were proceeding on similar lines. They were endeavouring to preserve their own industry, and at the same time as the prices show, to give a really good return to the nation for these vehicles.

It might be thought, in such circumstances, that if the Disposal Board has any scheme in mind for the wholesale disposal of this material, they would at least take into their confidence the association representing the manufacturers and see what they could do. I believe something in the nature of a bombshell fell into the midst of the manufacturers when they learned that a contract for disposal had actually been entered into without a single one of them being taken into consultation. What was the result of the operations of the people to whom the disposal of the vehicles was entrusted under the Slough contract? They immediately slumped the price to a level at which it was impossible to imagine the vehicles being sold. What then was the position of the manufacturers who had even within three weeks of the Slough contract purchased from the Disposal Board some of their own vehicles? The firm to which I have referred as purchasing their vehicles at £380, bought no fewer than 200 of them three weeks before the Slough contract was entered into; at about that price, and within three weeks the Slough people were offering the same vehicles at a price of £72.

Ordinary business people dealing with each other would not have been guilty of an action of that sort. I do not think anybody could, to use the common saying, have the conscience to sell a man an article for £380 with the knowledge that some uncontrolled people were going to sell the same article immediately afterwards for a fraction of that price. Of course, this manufacturer and many others who were in the same position had to cut their losses at once by selling all these vehicles, which they had bought at high prices from the Board, at the prices which were then quoted by Slough. Needless to say, this entirely destroyed the industry so far as the manufacture of new vehicles was concerned. It is true that at that time we were not faced with the threat of unemployment, but it may be safely estimated that the amount of skilled and unskilled labour which is taken in constructing a motor lorry of average size is equal to the employment of 100 men for a week; that is, of course, the complete manufacture. It will not be denied, I think, that the average dole being paid at present is not less than 20s. a head, and in that case every 100 men put out of employment in this way receive £100 at least per week.

What is the value which the Government is receiving for allowing these 100 men to be out a work? I do not know what they are receiving, and I am confident they do not know themselves what is their share of the spoils, but since the gross price of these vehicles is £72, it is certain that the Government share of that would not amount to more than half, probably a very great deal less, so that for £35 of realisation of these commodities, £100 in doles is being paid, altogether apart from the consideration that this industry is day by day being crushed to death and will be completely extinct before long. The actual employment to-day in factories making motor vehicles in this country is only 10 per cent. of what it was in the year 1920, and that, notwithstanding that the use of these vehicles has increased enormously since that date. The various manufacturers have tried to keep a stiff upper lip over this business and to keep their factories going, in the hops that this never-ending flow of secondhand vehicles at these prices may end and that the good time may come when they will be able to manufacture new vehicles, but they cannot keep on doing that for ever. During the last two years, 12 of the leading factories have lost £2,500,000 amongst them, while four have had to go into liquidation, and I ask hon. Members to consider how long it will be before all the rest of these factories have also to go into liquidation, and the industry become completely extinct.

Let us look for a moment at the attitude taken up by other Governments under exactly similar circumstances. My right hon. Friend the Chancellor of the Exchequer, in answer to a question the other day, said—and his authority is quite good enough for me—that the United States Government put a duty of 90 per cent, on the re-importation of their surplus motor vehicles back into that country. In other words, they made it impossible for anyone to buy one, and if they wanted a motor vehicle they had to buy a new one. What became of the large quantity of American vehicles? Of course, a large proportion of them were put into this country and dumped at prices as low as, or less than, those I have mentioned. I feel confident that it is the opinion of this House that a new industry such as this ought not to be crushed out of existence, and I hope the Government and the Chancellor of the Exchequer will take that view. It cannot be denied that transport of all kinds is one of the primary necessities of the country. Anything that can be manufactured for it ought to be encouraged and not made extinct, as looks likely in this particular case. It may, per haps, give hon. Members some idea of the new business which has been lost to industry when I point out that during the last year, ending last August, one complete year, there was an accession of no fewer than 20,000 licences for commercial motor vehicles. I trust my hon. and gallant Friend the Financial Secretary will represent these facts to the Chancellor of the Exchequer. I hope, looking at the matter from the economic point of view and leaving sentiment altogether out of the question, that the Treasury will decide that not one single vehicle more shall be dealt with in the way the others have been, thereby putting this industry on the footing of other industries in which every effort is being made to promote more employment.

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

; The speech to which we have just listened very vividly explains without many words of mine the main difficulties with which the Government has been confronted on questions with which the Disposal Board and the Liquidation Commission have dealt. It has been continually said by hon. Members inside and outside this House, in criticism of the Board and the Commission: "Why do you not get on with your work; cut your losses; get rid of all this mass of machinery which is only an aggravation to the country and a disappointment to those who have to deal with it." At the same time we are told by the hon. Member for Coventry (Sir E. Manville): "For goodness sake do not try to get rid of your obligations; hold on to the motor-lorries at Slough; do not put them on the market and realise what you can for them." Surely that is an extraordinary position to be adopted at the present moment? It is perfectly true that the members of the Disposal Board—which, by the way, has come to an end this evening—would be the first people to wish to be free from their obligations. For they have worked for years, "un-honoured and unsung," gratuitously, criticised for all their work which has been done ungrudgingly, particularly by men in a high position in the commercial life of this country, who have deliberately devoted their services, at the request of the State, to carry out their arduous and disappointing job. Therefore it is only fair to say that in criticising you will always find—as has been said to-night—thatif the price, so charged by those responsible for the management of the affairs of the Disposal Board is one that may seem to one section of the public too high, then the Board is attacked, and told that they are preventing the purchaser from the Board getting rid of what he has purchased in a free or reasonable market; while, on the other hand, if the price is too low they are told that they are defrauding the British taxpayer of his due. Both sides wish to have it both ways. I suggest, even as regards the cases that have been referred to—and with which I will deal in a moment—there are many other aspects, and it is just as well for hon. Members to recognise it. They have a bearing on these matters. First and foremost there is undoubtedly this, that the people of the country would require that the aftermath of the war, represented by these masses of surplus stocks, should be got rid of as soon as possible, and at the best price that, under the circumstances of the day, could be, obtained. The business men who were on the Disposal Board were certainly not less capable of understanding what was a business price than many of the critics outside, who had not to contend with the difficulties with which the Board have been confronted. The hon. Member for Linlithgow (Mr. Shinwell) said that he would only give us specific instances of what, I venture to suggest, he meant to call scandals, if we promised in advance an inquiry. Surely he is putting the cart before the horse. We could not possibly, and no one could possibly, consent to an inquiry merely on the suggestion, "If you do grant us an inquiry, we will try and put before you what we may call evidence."


I am sorry to interrupt the hon. and gallant Gentleman, but, as a matter of fact, I did put to him some questions, and ask him if he was acquainted with the facts.

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

I am not disputing that, and I will come to it in a moment. At the same time, the hon. Member does not controvert my statement that he said he would only give us the evidence, as he called it, on condition that we first promised an inquiry. As regards the question to which he has just referred, am I aware of certain facts and certain rumours? There are a great many people who call things facts nowadays which are not exactly facts, but which, when they are investigated, are found to be merely base rumours, and, therefore, it would be quite futile on my part to say, and, indeed, the hon. Member would be the last person to expect me to say, that I am acquainted with all the facts, to which he has not referred in detail, or cognisant of all the rumours, of which one has heard many, but, perhaps, not the particular ones to which he refers. I can, however, reply to one suggestion that he put forward, namely, that in regard to the position of Georgetown. The hon. Member seems to infer, as, indeed, he did in a Question in the House the other day, that there is something malignant underlying the transaction of the sale of the hutments at Georgetown, that there was some individual who, having inside knowledge, used his position as a former employé of the Disposal Board to get some consideration over and above the terms which might have been granted to anyone else. I can assure the hon. Member that he is not correct. As a matter of fact these hutments at George town were valued, by a gentleman named Major Dunsmore, at £15,600, and they were also valued by another and quite independent gentleman named Jarvis, who valued them at almost identically the same amount, namely, £15,360.


Is the hon. and gallant Gentleman referring to the whole of the buildings at Georgetown, or simply to the huts occupied by persons employed there?

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

I am alluding to the sale of the hutments to which the hon. Member referred, and to which he could only have referred, because he brought in the question of the identity of this former employé of the Disposal Board.


I am sorry, but the hon. and gallant Gentleman must not put words into my mouth which were never there. I did not refer to hutments, but to the whole of the buildings at Georgetown.

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

The hon. Member referred to the supposed transaction of a former employé of the Disposal Board, and it is only as regards these hutments and their sale that the name and identity of this gentleman comes in at all. That is the only sale referred to, and, as I have said, Major Dunsmore valued them at £15,600 and Mr. Jarvis at £15,360. This other gentleman, who left the employ of the Disposal Board in July, 1920, but who was employed subsequently by them on various occasions to make valuations, also submitted his valuation, which was £15,000, or almost identically the same as the others. The fact that this gentleman had been employed by the Board weighed in the minds of the members of the Board, and, therefore, they carefully considered as a body whether they could accept this, in view of that fact. They absolutely and unanimously came to the decision that in so far as the valuation was identical and the price was the same, there could not be the slightest objection and there was no reason why they should not accept the tender offered on behalf of someone else by this individual. There is no mystery about it. There can be no complaint of the transaction, and there can be no real inference or insinuation which could possibly be drawn as regards the actual transaction. It would be very unfair indeed to the candour and the honesty of those distinguished gentlemen who are members of the Disposal Board, who considered the matter personally and collectively because of the identity of the individual referred to.

Then I come to the charge made by the hon. Baronet the Member for Holborn (Sir J. Remnant). I am a little sorry that he has made these charges, because I really think they are based upon a very unsure foundation. As regards this particular case, the complaint of Mr. Donald of Rownson, Drew and Clydesdale, when I heard the matter was to be raised, en-entirely uninfluenced by any Treasury official or anyone else, I took the papers and last Sunday read and re-read them three times, perhaps disposed almost by my naturally combative spirit to imagine that there would be some reality underneath the charges put forward. I searched and read as fairly as I could the whole history of these very difficult and complicated transactions, and I honestly came to the conclusion that there is not a shadow of basis or foundation for anything the hon. Member has said. There are two distinct charges, one that by the sale of what is called this mass of brass scrap the Disposal Board made a very bad transaction and lost the taxpayer and the Government a very large sum of money, estimated at £1,500,000: and there is another suggestion that the failure of the Disposal Board to meet its obligations as regards Mr. Donald, has resulted in the payment of compensation amounting to £50,000 to that gentleman or that firm I agree the compensation has not yet been paid. I will deal with that first. It is rather a curious position for Mr. Donald to adopt, because I am sure, as he says, he is actuated by the purest spirit of public patriotism. Mr. Donald, on behalf of this firm, entered into a contract with the Disposal Board in March, 1920, when prices were very high indeed, and the contract was for £5,000,000. It was a very definite contract. It was not a contract involving all kinds of supply services and stocks of every kind. It was definitely articles of brass, and what was called in an item of the contract "Rownson's Encyclopædia." That was a well understood term involving certain things within the contract itself.

Photo of Mr James Remnant Mr James Remnant , Holborn

If the hon. and gallant Gentleman is referring to the schedule in the contract which was made and signed by the Disposal Board, if he reads Clause 5, practically any article of engineering use could be insisted upon to be sold under this contract.

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

The hon. Baronet will find out, if he looks at the original, it was not so devised. It distinctly said articles of brass—not scrap brass at all—and those 'things included in Rownson's Encyclopædia. It was not a general contract affecting all these matters of surplus stocks of engines, hutments, buildings, etc. It was a very definite and limited contract. It has been said that a sale of brass scrap took place. Why It was the Disposal Board itself that gave permission to these people, because they could not dispose of articles of brass for which there was no market, to convert them into brass scrap; and now the hon. Member makes it a charge against the Disposal Board, when they did this for the convenience of the contractor. He bases his charge as regards the financial loss upon the price of £35 a ton for brass scrap. He must know perfectly well that that is not a correct figure. For heavy brass scrap £35 a ton was the figure, but there was light brass scrap at £26 a ton, and there was irony brass scrap at £20 a, ton. He bases his argument as to the loss to the Exchequer on 150,000 tons at £35 a ton for all this brass scrap.

Photo of Mr James Remnant Mr James Remnant , Holborn

It is a fact that 120 tons which the Disposal Board did hand over included that for which £35 a, ton was asked, good, bad or indifferent, heavy or otherwise.

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

The facts are not as my hon. Friend states. Mr. Donald disposed of only 102 tons of this scrap, and only seven tons were sold at £35 a ton. The accusation is that the 150,000 tons which were sold to the British Metal Corporation should have obtained £35 a ton, but if the hon. Member had gone a little more deeply into the matter he would know that he could not have got that price, and that Mr. Donald himself in September, 1921, before the Disposal Board signed this contract with the British Metal Corporation, himself asked prices from his sub-contractor very much less than those to which reference has been made.


Is the Financial Secretary aware that within three weeks they were selling at 100 per cent. profit; that what they bought at £3,000,000 has been sold for £6,000,000?

Photo of Major Sir Archibald Boyd-Carpenter Major Sir Archibald Boyd-Carpenter , Coventry

I am afraid that does not help my argument. [HON. MEMBERS: "Hear, hear! "] I would remind hon. Members that I am dealing with the accusation that the Disposal Board, by dealing with the British Metal Corporation, deliberately sacrificed £1,500,000. That is not a fact, as is proved by the very prices which Mr. Donald had to give to his sub-contractor to get rid of the brass scrap to which reference has been made. Therefore, it is not a fair criticism, nor is it a just statement, to say that by the sale to the British Metal Corporation this amount of money was lost. The hon. Member has referred to £24 and a few shillings as being the average price per ton. If he will look at the figures which we obtained, namely, the £3,650,000, which was paid by the British Metal Corporation for these 150,000 tons, he will find that it is almost identical with the average price to which he has made reference—£24 and a few shillings per ton. Therefore, there was no loss because the metal was handed over to the British Metal Corporation. The Disposal Board got exactly the same price that Mr. Donald could have got, no more and no less. I have tried to point out that the price received by the Disposal Board is almost identical with the price that Mr. Donald could have obtained.

Then there has been this reference to the £50,000 compensation. As I ventured to say a moment ago, that contract was entered into at a time when prices were very high, and the contract was for £5,000,000 Prices fell, and then what happened? The Disposal Board had quite genuinely and honestly entered into an agreement with a firm. They could not have expected that steady and very real fall in prices. What did they do? They had entered into a contract where the terms to Mr. Donald of this firm were not unfavourable. It is only fair to remind the House that Mr. Donald of this firm was getting 2. per cent. sales commission and 16 per cent. for charges—18. per cent., while the average price under all other transactions has only been seven per cent. It was not altogether an unfavourable contract. Yet, when prices fell, what did the Disposal Board do? They said to Mr. Donald, of this firm, "Well, come on, we will try to adjust the position between ourselves. We have entered into a bad bargain. Prices have fallen. We could not anticipate that, but we are not going to turn round on you and shove you out now because the position is less favourable for us to-day." So they tried to arrive at terms with him in order that his expectation of his commission should not be diminished to such an extent that he and his firm might feel aggrieved. Was that a dishonourable thing to do? It was the only thing that an honourable body of people on behalf of the Government could have done. Now it is brought up against the Disposal Board to-day. It is said, "Why did you do this wickedness? You have involved the country in paying £50,000 compensation, and this is against the public interest." It is open to Mr. Donald, of course, if he is animated by a public spirit, not to claim that £50,000, and the Board and the Exchequer will be very glad to have that money; but it was a transaction that was done purely from a business point of view. The situation had altered, but they were not going to repudiate an agreement, even if they were representatives of the Government. Therefore it is not a fair criticism or accusation to be brought against the Disposal Board.

I do not know that it would be useful to delay the House much longer, or to say much more upon this vexed question. When for four years a Disposal Board of this character has been at work dealing with three million different cases, with sums of money amounting to over £670,000,000 involved, which has already been paid in as a result of these transactions, it would be folly and stupidity not to say that even the most keen-sighted business man on the Disposal Board might be found napping at a critical moment. It would be ridiculous to suggest that there were not probably faults and failings in some of these transactions. But when one has said that, surely one can say something else—that it would be the height of imprudence to-day to suggest that a roving Commission of Inquiry should be set up, which would be incapable of delving into three million cases, which would sit for weary months and, perhaps, years. We should all be in our graves before it reported, if it were set up. It would be the height of imprudence, it would be impracticable, and I believe it would be quite the worst slur upon that very devoted work of those highly-skilled business men who have given up their time for four years. It would not only be so: it would be worse, because there is no need for it. If there were any great scandal, the Comptroller and Auditor-General can put forward his remarks. The Public Accounts Committee has the power and the right to investigate all these matters. When there is a clear issue the House of Commons will always act through the Public Accounts Committee. It would be invidious, impracticable, and unnecessary to establish such a roving Commission of Inquiry as is suggested. The matters of detail brought forward to-night are not substantiated in fact.


Why was it that in the Georgetown case the matter was arranged by private bargain, and not by public auction?


Because it is often found, in affairs of this nature, that it is more convenient to adopt the system of private tender. Therefore, I hope that the House w ill not press the holding of such an inquiry, which would take an immense amount of time, involve considerable expenditure, and be a grave reflection upon these gentlemen who have given up their time and labour for four years. It would be a reflection upon their honesty and their business ability. I care not much about the reflection on their business ability, but I deprecate very much that these men, who gave up their time to serve the State, should have brought against them what would be regarded by many who have served on the Disposal Board as a personal charge. It would he regrettable, in these circumstances, if the House were to insist on such an inquiry, which would do no good, involve much expense, and bring more speedily to an end the opportunity of securing public service unrewarded from many distinguished men.


I regret very much that the Financial Secretary, in dealing with the inquiry which has been suggested, has not had time or opportunity to reply to the criticisms and suggestions of the hon. Member for Coventry (Sir E. Manville) in regard to the disposal of heavy motor lorries by the Disposal Board. The hon. Member gave some telling instances, which I think merit the attention of this House, in regard to the extremely serious effects that have been caused by the way in which that great quantity of surplus motor wagons has been dealt with by the company. It is not only the interests of the companies that have been affected, but those of trade generally. I would appeal to the Financial Secretary to make representations to the proper quarter with regard to this question, but more particularly from the point of view of those people who are engaged in this heavy motor industry, which I think as much as, if not morn than, any other industry will be affected seriously by the continuance of this trade in these surplus motor wagons.

12 M.

Figures have been quoted by the hon. Member for Coventry, which show how very seriously the whole of the heavy motor industry has been affected. Now I would like to point out that the most serious effect in this respect is that the whole of those who use this type of motor traction in connection with their transport work have been induced by the weights of the vehicles offered to adopt very much heavier types of engines than need have been adopted if there had been a more convenient and more modern type of motor wagon than is now being used. It is impossible to estimate the extraordinary expense that is incurred in the upkeep of the roads by the use of these lorries, which are so much heavier than those required. When one thinks that it was possible to purchase from the Slough Trading Company a motor wagon at far below the cost of such wagons to-day, of the cost per mile of running those wagons, and of the wear and tear of the roads, taking a wide view we are making a very bad bargain in allowing these lorries to be used.

In my constituency there is a company which has been engaged in this industry, and practically four-fifths of the men in that company have been deprived of employment almost entirely on account of the fact that there is no opportunity for the sale of the type of motor lorry they are manufacturing. What applies to my constituency applies in a very much greater degree to the constituency of the hon. Member for Coventry. Though it is very easy to say it now, these things ought to have been dealt with in a very much more drastic way than that in which they were. The American Government hasp a much more courageous method. They did not attempt to sell them, or at least not in their own country, and only at a price which, if they were brought over, would have made them more than if bought at home. [HON. MEMBERS "Protection! "] It may be protection. At any rate, it had this effect, that the American Government said they were not going to bring over a lot of unsuitable material which they could not use and throw it on the market of America quite regardless of economic laws. [HON. MEMBERS: "Protection! "] It may be very well for us to protect, our country against exceptional circumstances, and I am perfect free to admit, as a sound Free Trader, that I should be prepared to destroy surplus and damaged vehicles if imported into this country rather than flood the market with them. It is an extraordinary case with which we are dealing. Extraordinarily unsuitable heavy types of wagon, at the very moment when we need employment in ibis country, are being foisted on the market by artificial means, at absurd cost, and without regard to the character of the employment that is concerned. [HON. MEMBERS: "Hear, hear!"] I make hon. Members a present of my conversion. The cost of the material in these wagons is, after all, a very small proportion. The highly-skilled work engaged on the production of these machines out of the raw material is a very high relative cost in the wagons in question.

It would be better if, instead of continuing this policy, the Government were to declare, quite firmly, that they were not going to dispose of any further surplus wagons to the Slough Trading Company. They would therefore restore to a proper economic basis of competition the companies that are engaged in this work. In this way, by first of all taking off the roads the heavy wagons and putting on in their place 30 cwt. to 50 cwt. wagons, they would save an enormous cost to the taxpayer. In the second place, by getting rid of the unemployment, they would save a large sum of money in doles and would inevitably increase the prosperity and purchasing power of the working classes. I appeal to the Financial Secretary to the Treasury to make representations in the proper quarters, in order that this industry, which may truly be described at the present time as a distressed industry, may be restored to that very large prosperity which it enjoyed in the past by producing these excellent motor vehicles.


I will not detain the House long in telling them, what they may not know, that at the present moment I happen to be the Chairman of the unfortunate Disposal Board. Although a reply has been most adequately given from the Front Government Bench, I think the House might like to view for once the chief actor in this terrible drama. I confirm absolutely all that my hon. and gallant Friend the Financial Secretary to the Treasury has said about the unfortunate statement made by the hon. Baronet the Member for Holborn (Sir J. Remnant). I tried to assure the hon. Baronet many times that the allegations he was about to bring before the House were entirely without foundation, but, at the same time, I told him I should be very glad indeed if he would take the opportunity of raising the matter on the Floor of the House. There have been so many things said with regard to the action of the Disposal Board, that I thought it right that an opportunity should be given, both to the attacker and to the defender, to state their cases on the Floor of the House.

The allegation in the case centres around the sale of brass. As I have already said, I confirm everything that the Financial Secretary has said to-night. There is no shadow of foundation for the allegation made by Mr. Donald that brass of the nature described was included in this contract. Nothing was further from the fact. Certain articles of brass were included in this contract, and for this reason. We found it was impossible to sell, and we allowed the contractors to turn them into scrap brass and sell them as such. When the other quantity of brass came along, we made the contract, as we thought, in the interests of the State, with the British Metal Corporation. It is true that no tenders were asked, but it has never been the policy of the Disposal Board to invite tenders for every article that they have to sell. Sometimes, in business—as business men in the House know—it is convenient to make contracts with firms of substantial standing. We made a contract with the British Metal Corporation for £3,600,000, and when I tell the House that that total sum was paid in cash to the Disposal Board within six months of making the transaction, I think they will agree we did not make a very bad bargain.


They made an enormous profit:


I hope every contractor who has had to work with the Disposal Board has made a profit. People are not in business for the benefit of their health. If we had set out to make it impossible for them to make a profit at all, we should have sold nothing. What is the Disposal Board there for? Our business is to dispose, and surely a contractor is entitled to make a profit. I do not know how much they made.


Nearly 100 per cent.


That is not my concern. We made the best possible bargain we could at the time, and we considered it a good bargain. Further, with regard to Rownson, Drew and Clydesdale, it is an extraordinary thing that nothing was said about this brass contract with the British Metal Corporation by Mr. Donald's firm until almost a year after we made the contract with the British Metal Corporation. Why? Mr. Donald is a disgruntled contractor. He imagines he should have made much more out of the Disposal Board than they have allowed him to make, and therefore he, like many other contractors, squeals. He imagined that he had an omnibus contract with us, with which ho could deal in such a manner as to sell everything we possibly could give him. Indeed, at one time he suggested that, as we were selling about £230,000,000 worth per annum, he might get a contract for the balance, which would leave him the comfortable sum of £11,000,000. That is the sort of contractor we have sometimes to deal with. Many times we had to call the firm in question, particularly in regard to their charges. They had a commission for selling; they also were allowed expenses. The Disposal Board have sold almost £700,000,000 worth of goods for the State, at something under 7 per cent. The cost in Mr. Donald's case has been something just under 18 per cent. Had we given Mr. Donald the contract to sell the brass, it would have been subject to such a like commission as I have suggested. Therefore, I ask the House whether they really think, on the whole, that the Disposal Board made such a very bad bargain?

The hon. Member for Holborn brought out some further points, which I know he brought forward in all sincerity. He suggested that new brass was transferred by the ton to the British Metal Corporation. That is not so. Very little new brass was transferred to that contract at all, but only sheets and such like articles that could not be sold as such. It is asserted the Trade was not consulted. The Trade was consulted. Brass screws were extracted from articles in which they were in order to make the brass come within the new category and to be sold at the highest price. Before we entered into this contract, we had sold £9,000,000 of brass. Up to that point I suggest that the Disposal Board did know something about brass, and the knowledge was not confined to Mr. Donald or the British Metal Corporation. These are just a few facts I thought the House might like to know.

When the Government wishes to get any matter conducted in which they thought they would like the services of business men, people are asked to join the various Boards, and on the Disposal Board I find various names which I am sure will give confidence to the House. On that Board, at the time of its inception by Lord Inverforth, whose name stands high in the City of London, we have Sir William Ellis, managing director of one of the largest steel works. Mr. Hitchens, the present deputy-chairman, and chairman of Cammell, Laird and Company, Sir Philip Dawson, Sir Sydney Henn, Sir William Beveridge, Sir Henry Maybury, now at the Ministry of Transport, and several others, in- cluding a chartered accountant. Are these gentlemen who are likely to make bad contracts willingly and to defraud the country to the extent of £1,500,000,000? The hon. Member who lays this charge has picked out about two items in connection with the whole of our transactions, numbering about 3,000,000.

Photo of Mr James Remnant Mr James Remnant , Holborn

I had not time for more.


I dare say that the hon. Member could not have readied £700,000,000, even if he had had time. All the contracts could hardly have been bad. Is it fair, at a time like this, to raise a question of this sort? I do not object to criticism, but I like fair criticism, and I am sure that the House will agree that any business firm in the City of London who carried out 3,000,000 contracts to the extent of £700,000,000 was bound to have made one or two bad debts and one or two bad bargains. I do not say that every action of the Disposal Board has been good, but I do say that every member of the Board has been actuated by the greatest sincerity to do his best for the country. It must be remembered that this was not simply a case of selling articles that were at our doors. After the Armistice these stores were scattered all over the world, and they had to be collected before they could he sold. We shipped no less than 100,000 tons of stores from Mesopotamia to Bombay and Calcutta to sell them there. In one year alone we took 1,000,000 tons of stores out of store in order to sell them. At the same time, we have destroyed 1,500,000 tons of explosives. All these things had to go on at the same time as we were selling goods. I submit that that is a record of which any Board would be proud. I do not ask the House to throw any bouquets at the Board. We ask for no credit, for we have only done our simple duty by the State. But I do ask for fair criticism of our acts, which have been done with the best intentions.

In conclusion, let me add this: if this country in future is to get the benefit of the advice of business men in carrying out work of this kind, such business men will not object to fair criticism, but if unfair criticism is levelled at them when they are asked to take on jobs of this kind, I am quite sure that the day is coming when very few business men will give their time to work of this sort, and I personally would very carefully consider the matter before I again tackled such a job, which has meant work night and day for four years. Simply because one or two contracts have not pleased disgruntled contractors the matter is raised on the Floor of this House without the whole of the case being taken into consideration.


I am not a "disgruntled contractor." I never had a penny-piece from the Disposal Board, but I would ask this question: Did they make a contract with one firm in this country to buy 85,000 tons of steel scrap at £12 10s, a ton? Did they absolutely default in delivery, although they had thousands of tons of steel scrap at their back, and did the firm finally cancel the contract and the country lose £250,000, and was the scrap finally sold to another contractor, not at £12 10s. a ton, but at 45s.? That is one case on which I challenge the Board. How many similar cases are there of steel scrap, where contractors were willing to pay enormously high prices, but where this incompetent Board missed the market, lost the trade, and lost this country millions?