UNEXPENDED WAR FUNDS

Otago Witness, Issue 3414, 20 August 1919, Page 25

UNEXPENDED WAR FUNDS

ROYAL COMMISSION ASKED FOR. THE Y.M.O.A. SINGLED OUT. (Fhom Oub Own Coebespondent.) WELLINGTON, August 12. Some £1,700,000, according to the belief of the New Zealand" Returned Soldiers' Association, remains unexpended from the funds collected for war purposes. The association, in a. recent pohoy statement, urged that the closest supervision should be exercised over the expenditure of the money, and that a uniform policy for the final disposal of the funds • should be laid down. The executive demanded the immediate appointment of a Royal Commission to investigate the whole question of war funds. The New Zealand Returned _ Soldiers' Association has issued the following statement in further reference to its demand for a commission of inquiry into certain war funds: —To a deputation on August 2 the Minister of War Funds announced that he would not accede to the request of the association for a commission of inquiry. The following points in his remarks on this occasion call for comment: —(a) He stated that certain information had now been demanded from the body to whose account the association had drawn his attention. This statement was satisfactory and significant, (b) He stated that the body in question had sent a deputation to him protesting emphatically against the demands of the department. This statement was much less satisfactory, and much more significant, (c) He stated that the commission, if appointed, would have two years' work ahead of it. This statement was neither satisfactory nor significant. In reference to the third assertion, the association points out that it desired the commission, for two broad purposes—(l) to frame recommendations as to the ultimate disposal of the funds; (2)I to investigate certain matters to, which it had drawn the Minister's attention. In the association's opinion the fulfilment of both these objects would neither demand much time nor would it be necessary for the commission to leave New Zealand to secure the necessary evidence in reference to the second point. In reference to the first object, the Minister's view, as stated to the deputation, was that this should be done by Parliament, in accordanoa with the desires of the contributors. The association could not concur in this view, the question of war funds being one which demanded more detailed consideration than Parliament could be expected to give to it with the tremendous agenda paper in front of it. It was for this reason that the association had suggested nominees of the Red Cross and the patriotic societies advisory board on the commission. _ It had no questions to raise on the administration of the funds of these bodies, but if anybody else had such queries to put forward this would naturally affect the personnel of the commission. The refusal of Cabinet to sanction the commission had forced the hand of the association, and it was now obligad to announce to the public the body to which it had referred and the specifio points to which the attention of the Minister had been directed. The body in question was the Y.M.C.A., and the matters were indicated in the following correspondence : "The Minister of Internal Affairs, "Wellington, June 6, 1919. [Confidential.] *' Dear Sir, —At a reent date the executive of my association appointed a committer to collect information on the general position in reference to war funds. As a preliminary inquiry it obtained a number of balance sheets of war organisations, and has devoted some time to the examination of them. A report was formulated, and submitted confidentially to our recent conference in Christchurch, and as a result I have been instructed ;o bring before your notice a number of matters in connection with the balance sheets obtained by my executive from the Y.M.C.A. The principal points are enumerated in the accompanying statement, and copies of the balance sheets in question are attached and marked. The conference was of opinion that if. the deductions from the balance sheets are correct a most disquieting state of affaire is revealed, and considered that the matter was all the mow urgent in view of the continued disbursing: by the Y.M.C.A. of its war funds. My executive trusts that you will authorise an investigation of the situation immediately, and would be glad to know of the result. In justice to the Y.M.C.A., the executive naturally wishes first to assure itself of the accuracy of its deductions, and in the meanwhile considers that this matter should be treated as confidential, and, upon verification, contemplates appropriate public action. I 'should therefore be glad if you would kindly indicate at your earliest convenience the results of your inquiries and any action proposed by your department. I may add that on the prima facie results of its investigation, and subject to their verification, my executive is strongly of opinion that a Royal Commission is desirable to investigate matters relating to the disbursement of war funds, to supervise the liquidation of assets in connection with them, and to frame recommendations as to their ultimate disposal. I beg to remain, Sir, faithfully yours, " (Signed) Douglas Setmoue, "General Secretary." The Y.M.C.A. has been entrusted by the publio with a sum of some £400,000 to be expended on New Zealand soldiers in accordance with the objects for which it had been raised. The Y.M.O.A. was responsible to the people of New Zealand for its stewardship, and for the economical administration of this fund. Directly it was responsible - to the War Fund Department, which in this case was either unable or unwilling to comment upon the points raised. The association was not making charges, but it was emphatically of opinion that the matters referred to demanded in the publio interest an authoritative investigation. The failure of the War Funds Office to dispose of the points raised argued at least faulty administration somewhere, and consequently the investigation should be conducted by an outside commission. The association regretted that the rn'opesed commission had not met with general support from bodies in charge of war funds. It would have preferred that the questions raised should have been submitted directly to the commission without prior publication, but the latter course was now unavoidable. The publio could hardly fail to be astonished at the position indicated, or to recognise- that the assooiation had established

a strong prima facie case for investigation. On the other hand this course had the disadvantage of prejudicing tho Y.M.C.A. in the eyes of the public until the charges had been investigated, and placing convenient stones in the hands of those who objected to it on principle. Most returned soldiers fully recognised the fine work done by the Y.M.C.A., and if the Y.M.C.A. could explain satisfactorily the questions raised nobody would be better pleased than this association. The association was not unaware that strong evidence in justification of some of its administration might be submitted by the Y.M.C.A. Only a competent commission could form a reliable opinion on the merits of the case, and the association was confident that its proposal was as directly in the best interets of the Y.M.C.A. as in those of the country. Even if funds were strictly administered in accordance with the purpose for which they had been raised, there was still immense scope for faulty administration and overlapping. In reference to the recent Feathorston disclosures, for example, it should be remembered that the Y.M.C.A. had a salaried officer in tho camp, and that the Red Cross and Salvation Army were also working. It is understood, too, that three organisations, with building3_ and staffs maintained from Avar funds, are still at work in Rotorua. What the association wishes to know is whether in such cases the most economical methods are being pursued. It remained to be added that the association, in taking this course, has no kind of designs on any of the war funds. The suggested personnel of the commission alone should make this clear, since the association had only one representative as against three others who represented custodians of funds." Y.M.C.A. DEPUTATION. COMPLETE INFORMATION PROMISED. . WELLINGTON, August 12. A deputation representing the executive of the Y.M.C.A. waited on the Minister of Internal Affairs to-day to explain various matters in connection with the relationship of the war funds section of the Internal Affairs Department to the Y.M.C.A. and its work in military hospitals in' New Zealand. The Minister was informed that a complete balance sheet had been prepared, and further explanation arising out of ths balance sheet and statement, would be available to the secretary of the War Funds Office when asked for. The Minister expressed satisfaction with the information given, and said the suggestion was made that possibly a conference of representatives of the Red Cross, Y.M.C.A., War Funds Office, and the military authorities would be the best method of bringing about a clear definition of respective responsibilities. He desired, on the part of the Government, to express the highest appreciation of the work done, not only in New Zealand, but in every field of war, by the Y.M.C.A. He was satisfied that there was no legitimate ground of complaint in connection with the expenditure of the association's funds. There 'were doubtless matters under consideration by the War Funds Office, which required explanation. These inquiries, however, did not in any way question the honesty of administration of the fund, but were required for the balancing and synchronising of the funds in various theatres for audit purposes. He wished to assure the deputation that the Government would take no part in any inquiry on the assumption that there had bean improper dealings with the funds. The Government was not going to take part in any movement that would have the effect of dishonouring the magnificent work the association had performed, not only in New Zealand, but throughout the whole of the Empire.

RETURNED SOLDIERS' COMPLAINT. REPLY BY Y.M.C.A. WELLINGTON, August 14. The report of the Returned Soldiers' Association Committee set up to inquire into the administration of the Y.M.C.A. war funds has been forwarded to Sir James Allen. It states that according to the balance sheets issued the Y.M.C.A. collected about £400,000, whereof ,£31,290, or less than 8 per cent., reached the men overseas in the form of trenoh comforts. The Y.M.C.A. statement is quoted as showing that £18,158 was remitted to Egypt in the two years ended September, 1918, and it is declared that no statement was submitted as to the disposal thereof,'leaving it to be supposed that the money was pooled ill a general fund with the American and British Y.M.C.A.'s. Salaries and administratvo expenses amounted to £38,004, while the value of the comforts distributed to the men in the trenches was £31.290. Further complaints are made that no return has been submitted of the revenue from the soldiers' hostel in Wellington or the Shakespearean Hut in England, or from the tea rooms in Lamb-ton quay, Wellington. Further buildings, furniture, and equipment represent £17,678 in expenses, but nothing appears in the statement of assets. A further sum of £57,338 for buildings, tents, and equipment is similarly treated. It is pointed out that in the British Y.M.C.A. statement a parallel amount of £70,000 disappeared in like manner. Complaint is also made regarding the redemption of coupons. The Soldiers' Association comments that the moneys collected by the Y.M.C.A. were for free distribution to soldiers and were never intended for trading; also that the Y.M.C.A. still pays out of the war fund the salary and expenses of officers meeting returning drafts as well as the maintenance of Y.M.C.A. huts at Rotorua, Waihukurua, Invercargill, Hanmer, and Somes Island. All these places, it is contended, are staffed and maintained on money collected for the trench comforts fund. .. * The Y.M.C.A. National Executive has issued a lengthy reply, summarising its operations during the war It states that moneys were expended through the exigencies of the war in ever-increasing degree and in directions not_ originally contemplated, including work in the New Zealand military camps, hospitals, and soldiers' huts, work on troopships from and to New Zealand, work in Egypt and Palestine, including a soldiers' recreation club at Esbekia and Gardens at Cairo, work in England at all the military camps and hospital*, and in London (whence all the operations in England and France wero controlled), work in France from the base to the firing line, and work at Colon, in the Panama Canal. The Y.M.C.A. National Executive comments on the fact that the Returned Soldiers' Association, whose avowed object was to secure a satisfactory

explanation of the matters raised in its questions, approached tho Minister with a request for a Royal Commission and then, being unsuccessful, gave a statement to tho press without notice of any kind to the Y.M.C.A. The reply continues that the basis of tho appeal for funds was always general, and not for any special branch of war work. The Red Triangle Day appeal realised £219,000. It is not true that the primary basis of the appeal on that occasion was for comforts for the men in the trenches, though stress was naturally laid on this phase of the work. A full balance sheet of the Y.M.C.A. up to March 31, 1918, will be completed and audited, and is now in the committee's hands. A' balance sheet of the operations in England and France to the same date will be issued shortly. A full balanoa sheet covering the work in England and France to November 30, 1918, has already been published. Free services to the men at the front accounted for £118,780, or 72 per cent, of the moneys sent overseas for Y.M.C.A. work. The administrative expenses were actually very low. The total income for Y.M.C.A. war work in New Zealand and overseas was £361,451, whereof £163,800 was remitted to London, as well as sums to Egypt. A large sum is still earning interest in New Zealand. The policy was to conserve this for work during the winter of 1918-19, tho money beinpr remitted as required. The Returned Soldiers' Association Committee had over-stated the Y.M.C.A. work administrative expenses bj over £25,000, probably through lack of knowledge of what the Y.M.C.A. had done in the firing lino in the last two years. The money sent to Egypt was expended in connection with tho British Y.M.C.A., the New Zealand troops to receive all the attention necessary. Only one New Zealand Y.M.C.A. man was there, and it was obviously impossible for him to creat3 a special organisation. The New Zealand soldiers were guided by this arrangement, which continued throughout the war. Tho Wellington Soldiers' Hostel accounts have been audited, and will shortly be published. The Shakespeare Hut was run by a British organisation, the New Zealand Y.M.C.A. paying £SOOO, which waa about one-third of the cost. The question! of the inclusion of plant in assets has been decided by tho auditors, and the Y.M.C.A. was not concerned with what other associations did. The trading profits from canteens reverted to the men in the shape of comforts. In conclusion, the Y.M.C.A,'. states that members of the ail their own expense, spent a considerable timo overseas to satisfy themselves that the money was being spent according to the wishes of the donors. The Y.MIC.A. has done its best at home and at the front, and is content to leave its case to the judgment of the contributors. POSITION OF Y.M.C.A. WELLINGTON, August 18. In replying to the returned soldiers' statement the National Committee of the Y.M.C.A. states that the report of Messrs Watkins, Hull, Hunt, and- Wheeler, auditors of the Y.M.C.A. War Fund, was sent by the auditors to the Controller and Audi-tor-general, and is now in his hands. The committee is seeking the Auditor-general's permission to publish the report, and will do so if his permission is obtained. The Dominion Executive of the Returned Soldiers' Association issued the following statement to-night:—" Our reply to the National Executive of the Y.M.C.A. has been delayed pending tho publication of theiivaccounts and the auditors' report. Tho accounts, together with tho report of the London auditors, duly appeared in to-day'a Wellington papers, but although there ia on one of the Now Zealand accounts a qualified certificate which refers to.a separate report, we must of necessity wait for the publication of that particular report before further dealing with the matter. We invite tho National Exeoutive of < the Y.M.C.A. to publish the missing document without delay. In continuing our pressure for a commission, we wish to emphasise again the two broad issues which we have already made clear in our public statement of last week and previously to the Minister of Internal Affairs—(l) That we require a royal commission for the purpose of framing recommendations for tho ultimate disposal of war funds generally; and (2) that we require it further in order that a proper investigation of certain matters to which we have drawn the Minister's attention without. satisfactory results may be made. The Y.M.C.A. has represented itself as a body singled cut for an attack camouflaged under the broad purposes of a commission. To this we giv© a most unqualified denial. In pressing for the first object we had hoped that the commission suggested would be able to dispose of what we regarded aS a minor matter in connection with the 9Scond.