APPENDIX No. 16.

PAPER handed in by Mr. F. Phillips.

SCOTTISH BOARD OF HEALTH-LOSS ON REALISATION
OF INVESTMENT.

(Qs. 2525-2527.)

The investment was made by the National Debt Commissioners in August, 1922 and the bonds were paid off in February. 1925.

The investment showed a net return, after providing fully for the capital loss, of 3 per cent. per annum.

In August, 1922, Treasury Bill rate was as low as 2 per cent. The Treasury Bill rate rose subsequently but £100 invested at Treasury Bill rate in August, 1922 and reinvested each three months at the Treasury Bill rates current at the date of reinvestment would have earned a shade under 24 per cent. per annum over the period to February, 1925. The investment in 5 per cent. Exchequer Bonds was therefore decidedly more profitable than investment in Treasury Bills.

APPENDIX No. 17.

PAPER forwarded by Brigadier-General Sir S. H. Wilson, K.C.M.G.,

K.B.E., C.B.

KENYA UGANDA RAILWAYS.

(Qs. 3063-3077.)

At the meeting of the Public Accounts Committee on the 27th of April, Sir Fredric Wise asked about the relation of the Uganda Railway Annuities of £319,111 9s. 6d. to the sum of £434,812 which was mentioned in Mr. Amery's reply in the House of Commons on the 15th February as the amount of the loan charges now borne by the Uganda Railway. The figure of £484,812 in the Official Report was due to a mis-copying of a faulty figure 3.'

This sum has no relation to the amount of the Annuities, and no payments have been made by the Uganda Railway in reimbursement of the capital cost of the original line which was met by these Annuities. The question of repayment has been frequently discussed with the Treasury, who have agreed that it should be held over until 1934, in view of the continuing necessity of heavy charges for the maintenance and improvement of the railway system and for its extension. The length of the line is already very nearly double and will soon be much more than double that of the original Uganda Railway.

In regard to the latter item, the Secretary of State has now received proposals from the local Government for making the port of Kilindini a self-supporting organisation, separate from the Railway; and, if these proposals are carried out, this item will presumably not appear in the Railway accounts for future years.

The sum of £331,080 for interest and sinking fund charges in 1926 is made up of several items shown in the attached statement.

Item 1 is that portion of the Kenya 6 per cent. Loan, issued in the open market in 1921, which represents railway services.

Items 2, 3 and 4 were sums voted by Parliament under the Colonial Services Estimate in the years named, for railway improvements in Uganda itself. Items 5 to 8 represent advances to Uganda from the Local Loans. Fund, at various rates of interest, under the provisions of the East African Protectorates (Loans) Act, 1914. Item 9 is part of the Uganda Development Loan of £550,000, instalments of which were provided under the Colonial Services Votes, 1921-2 to 1923-4, the rate of interest being 5 per cent. and repayment being deferred until Uganda can raise a loan on its own account.

The full amounts of these advances to Uganda are set out on page 96 of the Finance Accounts for 1924-25. The charges in respect of the railway and marine portions (items 2 to 9) are borne by the Kenya-Uganda Railway administration since the amalgamation of the transport services.

Item 10 represents the interest on advances made through the Crown Agents for the Colonies, in anticipation of the raising of a further Kenya loan of £3,000,000 in the open market for transport purposes.

With regard to the "Old loans paid off" under Item 1 in the table, these represented sums advanced to Kenya by the Imperial Government, similar to the Uganda advances covered by items 2 to 8 of the table. Some of these sums were found from the Old Sinking Fund, some under the Colonial Services Vote, and some under the Act of 1914. In certain cases these advances ranked as prior securities to later loans and, in order that the issue of the £5,000,000 in 1921 might not be prejudiced by offering to the public a second mortgage, it was decided to pay off so much of the previous loans as had not already been covered by sinking fund payments.

It will be observed that the table does not contain provision for interest on the loan of £3,500,000 voted by Parliament as a supplementary estimate in March, 1924. This loan was free of interest for five years, after which it will be repaid by annuities, of interest and sinking fund combined, equal to 6 per cent. of the principal amount.

30th April, 1926.

(Signed) S. H. WILSON.

APPENDIX No. 18.

PAPER forwarded by Mr. T. C. Macnaghten, c.M.G., C.B.E.

OVERSEA SETTLEMENT DEPARTMENT, DOMINIONS OFFICE.

Passage Loans.

(Qs. 3179-3214, 4215, etc.)

Assistance towards the cost of passages may consist either of a grant, of a loan, or both. During the period under notice, the assistance granted was normally as follows in the case of

Australia.

Persons 17 years of age and upwards, a free grant of one-third of the cost, a loan of one-third and a loan of the other third, together with £3 10s. 6d. for initial expenses, where really necessary. Children over

12 and under 17, a free grant of one-half the cost and a loan of the other half; children under 12, a free grant of the whole cost. In addition, where necessary, free travelling facilities were provided from the migrant's home in this country to the port of embarkation.

The loans, in the words of the Agreement, were "repayable by monthly instalments of such amount and commencing after such period from the date of landing as the Commonwealth Government shall determine in the circumstances of each case and in accordance with the general principles approved by the Secretary of State and the Commonwealth Government."

New Zealand.

A scheme, on more complicated lines (dividing migrants into seven classes), equally generous as regards grants and equally elastic in its provisions for collecting loans, was in operation in New Zealand.

Canada.

As regards Canada, the arrangement then in force permitted a free grant for children over 14 and under 17, and for adults loans of any amount up to the total cost of transport from the port of embarkation here to the rail destination in Canada. The conditions of repayment were left entirely to the Dominion Government to determine in the circumstances of each case.

In addition to loans made under Agreement with the various Dominions, they are also made under Agreements with various philanthropic societies. The details and objects of these Agreements vary. Loans made through philanthropic societies in 1924-25 amounted to £3,680 11s.

The entire responsibility for the collection of loans rests with the Dominion (or Society) concerned, and difficulties experienced by Canada have led to the completion of a new Agreement with the Dominion Government which came into operation on the 1st January, 1926, under which more generous allocation of free grants is provided for, and the cessation of loans, except in certain exceptional cases.

Of the total expenditure of £389,202 19s. 6d. under Subhead D (Assisted Passages) during 1924-25, £251,485 2s. 2d. consisted of free grants, and £137,717 17s. 4d. of loans.

These loans were made in 13,039 cases. This figure does not represent the number of persons concerned: a man with his wife and family would rank as one case, as would a single man.

In view of the elasticity of the arrangements for repayment referred to above, it is impossible to indicate any special amount as definitely in arrears either now or at the end of the financial year under notice. The accompanying statement A, however, shows (under the respective Dominions or Societies) the present position as regards loans made, from the beginning of operations under the Empire Settlement Act to the end er the financial year under notice, giving the aggregate of loans made, repaid and outstanding. Statement B shows the number of cases as distinct from the amounts.

The statement in the Appropriation Account of cases of Passage Loans. written off during 1924-25 (188 in number) can be classified as follows:Deceased

...

Deported owing to physical or mental unfitness

(undesirable)

(otherwise unsuitable)

Returned of own acccrd

Special cases

21

86

5

10

62

4

188

The corresponding number in the previous year was 81. Up to the end of 1925, no cases of ordinary default had been put forward by the Dominion Authorities to be written off, e.g. cases of migrants to Canada who had crossed to the United States of America and been lost sight of. But it is now evident that a fairly extensive number of such cases will have to be included in the account for 1925-26 (probably about 750).

The figures shown for Australia and Canada show the position so far as credits posted to individual accounts at 31st March, 1926, are concerned. Repayments of £14,296 from Australia and £5,785 from Canada have been received since that date, and as postings have not yet been made, it is not possible to allocate the credits between the various years, or to say how far the figures showing the state of the individual accounts are affected.