The War Stores Commission resumed their inquiry on Friday week,
when Mr. Arnold-Forster gave his evidence. The Secretary for War explained that the transactions under con- sideration were prior to his taking office, and he had no personal knowledge of them. The War Office were aware of the "dual system," but not of the abuse of it, and he could easily conceive of a "dual system" which might be perfectly allowable and legitimate. The system was introduced under high authority in South Africa, and the War Office were entitled to assume that it was being worked on a reasonable basis. As soon as the contrary was suggested, it was their business to make inquiries. The witness's attention was called to a query by the Comptroller and Auditor-General, and a minute by a responsible War Office official suggesting that the Audit Department should be told to mind their own business. Mr. Arnold-Forster explained that the Audit Office had no right of inquiry into matters of policy, but, on being pressed, admitted that the case in question was within their legitimatnephere. It was not brought to hie attention that the General Officer commanding in South Africa had no financial adviser, and he was not prepared to dispute the necessity of such an officer. In conclusion, he said that the Finance Department was not his special department, and it was impossible f6r him to scrutinise its working. A deter- mined effort had been made, however, to reform the whole financial system.
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