11 May 1922]

Chairman.

403. Did they make it wider or longer? --Both.

404. How many more names do they get on a page in the new way than they did in the old way?-I am afraid I have not worked out that calculation.

405. I see it is about 24 names more to the page?-I believe they also did away with those band advertisements in the middle of the page, which gave a larger area for the names of the subscribers.

406. Then having decided that, what did you do?-At the time that this contract was ending, the Stationery Office were taking over Harrow Works for Government printing. I was in possession of a large amount of plant purchased during the war at very low prices, and I had, therefore, the nucleus of a plant for doing this work. In any case the type had to be re-set. It is very doubtful whether, if it had been put up to tender, more than one tender would have been received, because the work was such that it required a very large plant to carry it out.

407. Did you ask McCorquodales if they could print it?-McCorquodale's could print it, because they had printed it in the past.

408. But they were not asked to estimate for this new one?-They were not asked to tender for this, because I was satisfied that it was possible to do it, at any rate, as cheaply in the Government Works as McCorquodale's had been doing it; and a nucleus of work was required for the Government Printing Works.

409. That is, you had to get work to justify the Government Printing Works? -No, I would not put it in that way. The Government having decided that there were to be Government Printing Works, I had to find some nucleus of work to begin them with.

410. That is, there was not plenty of work at that time to start the Government Printing Works, or to justify them?There was plenty of work, but there was Do work that was available at the moment to put into the Government Printing Works.

411. Therefore we could have put off having a printing works at that time?— That raises another question. The Government was in possession of a large printing factory which had been acquired and purchased for the production of food ration books. A decision had to be taken then ás to whether the experiment

[Continued

should be made, or whether the premises and the plant should be disposed of.

412. And it was thought to be cheaper to get work and print it there than to send it out?-That, among other considerations, I believe, influenced the Government at the time.

413. So you decided then not to issue it to tender at all?-I decided not to issue that for tender.

to

414. What was the difference in your estimated cost at that time of producing the Telephone Directory in this enlarged size, proportionate the number required, and the price which you had been previously paying to McCorquodales? -The cost to Harrow for the first issue, including composition, £40,936 12s. 2d.

was

415. How many copies was that ?-That was for 231,950 copies of the London Directory plus the Provincial Directories in varying numbers.

416. What was the previous price for 231,950 copies, roughly?-I cannot give you that exactly. At McCorquodale's previous contract rates, making allowance for the increase in bulk and quantity and the increase in labour costs (there were two increases, one of 7 per cent. and one of 9 per cent.), the cost of printing the same London and Provincial Directories by McCorquodale would have been about £33,000, exclusive of composition.

417. Did yours include composition ?— That first £40,000 included composition.

418. How much was the composition in your case?-About £10,000, I think. The cost of the second series of Telephone Directories, done by Harrow, was £31,267 16s. 7d. That includes only the cost of alterations.

419. Therefore, you do not save much, if anything, by taking it away from the private printer?-The cost of the third Directory was £23,454 16s. 8d.

420. But that fall in price would have governed a private contractor very much as well, would it not?-That fall in price was largely owing to the Stationery Office getting into its stride in the production of this work, to which previously it had been unaccustomed. Certain improvements in production were made.

421. But in order to decide that the Telephone Directory that you were going to print at the estimated cost, was not excessive, you did not ask McCorquodale to give you a quotation with which to compare your own cost, did you?-I do not think there is much likelihood that

11 May 1922]

McCorquodale's price would have been lower than the price they had previously been doing the work at.

422. Forgive me for saying so, but that is not the point. You did not ask them for an estimate ?-The Stationery Office intended doing this work itself, and it is not my practice to ask for tenders unless they are what I call firm tenders; that is, that there is an actual intention of putting out the work to somebody. I regard it as unfair to ask a firm to work up a big quotation involving a lot of work of that nature, when there is no intention of giving them a chance of getting a contract.

423. If you had asked McCorquodale's for a tender for this work, for which I think there is some reason for them to expect to be allowed to tender, as they had been doing the work before, and that tender had been £5,000 or £6,000 cheaper than you could have done it for, you would not have given it to McCorquodale's, having decided to give it to the Government Printing Works?-That is a hypothetical question which I am afraid I cannot answer.

424. The point is this. Here is a firm that had this contract for a great number of years, and they lost this very large amount of business through no fault of their own, and they are not given an opportunity of quoting, first of all, in order that Government money might be saved in printing it, and at the same time to give you a guide as to whether it would be a logical thing to print it yourself. You would have had something to go on?-I am quite satisfied from McCorquodale's previous charges, that the Stationery Office could do it as cheaply as, or more cheaply than, McCorquodale's could; and that has been borne out by the actual facts.

425. Did the Postmaster-General decide to increase the size and width of this book without consultation with the Stationery Office in the first instance ?That decision was the result of considerations which had been going on for quite a long time, and I believe it would have taken place before, but for the war.

426. But had you known about it before it was decided?-Yes, before it was decided to do this in the Government Works.

427. Who pays for the printing of the Telephone Directory? Is it general Government expenditure?-I believe every subscriber is entitled to one free copy.

[Continued

428. But who pays for it? Is this charged up in the general printing costs? -It is paid for out of the Stationery Office Vote.

429. The Post Office issue tenders or give out contracts to private firms to get the advertising for this Telephone, Directory, do they not?-No, that is done by the Stationery Office.

430. By tender ?—Yes.

431. Was that re-tendered for at that time when you altered the size and shape of it? It was somewhere about that time, but I am not quite sure whether the actual dates coincided.

432. Do the same people get the advertising now as always got it?-No; the advertising contract was taken by another firm.

433. Who?-J. Weiner, Limited.

434. How many firms tendered for the advertising space at that time?-I am afraid I do not carry the number in my head; it was not a great number.*.

435. Was he the cheapest ?-His was the best tender.

436. How does he tender; on a percentage basis, or on guaranteed revenue, or what?-He tenders on a basis of so much per cent. of the total receipts.

437. He bears all the expenses of getting them ?—Yes.

438. What is the percentage?-Speaking from memory, I think it is 80 per cent. for the Stationery Office.

439. That means he gets 20 per cent. for getting the advertising?—Yes. I think that was for the first year. I am not sure whether for the second and succeeding years the percentage for the Stationery Office was not greater.

440. You can let us know that?-Yes.t 441. What becomes of this 80 per cent. as against the cost of issuing? What does it amount to? How much is the advertising revenue which you received, say, on the first issue?-I do not carry the exact amount in my head. I believe at the present moment the revenue from the advertisements is £90,000 to £100,000 a year.

442. Therefore you make a profit on this job? Yes.

443. To whom does that profit of roughly £50,000 a year go? How is it credited?-It goes to the Exchequer as appropriations in aid of the Stationery Office Vote.

36453

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11 May 1922]

445. Was that the lowest tender: 80 per cent. to the Stationery Office?-That was the best tender.

446. That is one of the profitable jobs which the Stationery Office do?-One of some of the profitable jobs that the Stationery Office do.

447. Since you took this Telephone Directory contract away from McCorquodale's, have you had any complaint of having done that, either from McCorquodale's or the printers generally, or the trade unions? Has anyone complained about your taking this contract away from a private printer?-I should say probably I have had complaints, but I do not recall any specific instance at the moment.

448. You are satisfied that you cannot get the Telephone Directory printed more cheaply anywhere else than you printing it yourself? I am, at the present time.

are

449. This is an old point which I have raised with you before. Was the cost of the Harrow property, the capital account and overhead cost of operating it, included in the estimated cost of the printing of the Directory? That is so. 450. Have the Harrow works paid for themselves yet? They have not paid for themselves yet.

451. You get £50,000 a year out of That one job that you do at the works.*

is a very large sum. What do the Harrow works cost, where this job is printed? I am afraid I have not got that information with me; I could not say that off-hand. †

452. That is a very big sum, £50,000 a year; it is five per cent. on a million? -It is coming down; it will not £50,000 a year in future.

be

453. It ought to be more, because you have got your same advertising revenue and yet you have got it reduced in cost? -I beg your pardon; I thought you were talking about the cost of printing.

454. I am taking your profit on the Telephone Directory as compared with the cost of the Harrow property, the works where this is printed? But let me make this clear. The advertising contract would go on, whether it was done at Harrow or whether it was done by a private contractor. It is a separate matter altogether.

455. As this printing is now a Government job, and it costs a certain amount to print it at the Harrow works, and it shows a minimum profit of £50,000, it shows that the Harrow works is a very profitable concern that one

See Q. 781.

on

† See Q. 916.

[Continued

figure alone, does it not?-In connection with this matter.

456. You do not show it at all, as a matter of fact?-No. In connection with that one matter, it is a profitable undertaking. The Telephone Directory is a profitable undertaking.

457. I fully agree with that, but the point is practically the old point which we have always discussed here: whether a Government printing office is justified and whether also this particular Telephone Directory is a thing that they ought to print, or whether it should be printed by private printers?-Perhaps I might tell the Committee that the Telephone Directory, when printed by McCorquodale's, was printed on flat bed machines. In was printed in a number of their works. They did not do it all in one of their works. The Stationery Office now print it on rotary machines."

458. What is the advantage of that? -The advantage of that is that I can always get the work out now to time; I believe it was very seldom got out to time before. Printing by rotary machines is faster and cheaper than printing on flat bed machines.

11 May 1922]

Mr. Howard Gritten.

468. Is there not any provision or rule which obliges you to put these matters up to tender on the expiry of a running contract?-A contract of this sort would not be renewed without Treasury authority, if there were any special reasons for renewing it.

469. If there is no rule governing this matter, on whose discretion does it rest? -The rule is that at the expiration of a contract of this nature, it would go up to tender. If I thought there were some very special reasons for continuing it, say, for another year, I should put those reasons before the Treasury, and the Treasury would decide one way or the other.

Chairman.

470. That is really, in a sense, it rests with you?-No; it rests with the Treasury.

Mr. Howard Gritten.

471. On your suggestion?—Yes. Chairman.] I think it is only fair to say this point has been raised by one or two other Members of the Committee, as to Mr. Codling's authority and the enormous power which he has in dealing with these matters, and whether that power is sound or whether it ought to be limited, not necessarily limiting his judgment in the ordinary course of conduct of the Stationery Office, but in contracts like this, whether it ought to be definitely decided that these things must come up for tender, without any discussion at all.

Mr. Howard Gritten.] The presumption being that he has used that power with ability and discretion.

Chairman.] Yes, I have not the slightest doubt about that. I have every confidence in Mr. Codling.

Witness.] That is provided for, because as I say, it cannot be done without the authority of the Treasury.

472. I appreciate it, and I am sure the Committee will agree. Then will you

36453

[Continued

bring us the agreement with Weiner's at the next meeting, and the tenders which you received from other firms before you made this agreement?-Yes.

473. Then at the end of the first year's trading under this agreement with Weiner's, how much of the money for the advertising contract which he had at that time, was paid; how long after the year was it before you received the money? Is there any money outstanding, and in that first year were there any bad debts, and if so, how much? You will give us that information?—Yes.*

474. How does he receive this commission? Does he pay you, deducting his proportionate share, and then give you a cheque? Yes.

475. Is the time when he has got to pay that money to you, specified in the contract ?-Yes.

476. That is all covered in the agreement?-Yes.

477. This is a very valuable contract; it is the most valuable contract that I know of in the Government, and one which wants most careful attention.

Mr. Howard Gritten.

478. Proceeding to another point: with regard to the Buff Directory, the directory which is arranged and indexed according to professions, trades, occupations, etc., when was that first published by the Post Office Authorities? I think the hon. Member is referring to the list of classified trades.

479. Yes; I mentioned it as the Buff Directory? That is a directory with which I have nothing to do. I believe it is leased by the Post Office to a firm who print it at their own risk. It is not printed by the Government.

Chairman.] But it is in competition, of course, with the Post Office Directory.

Mr. Howard Gritten.

480. It is issued to subscribers together with the ordinary Post Office Telephone Directory. We all get a copy of it?—I think you have to pay for your copy.

481. No; it is given to you. What I wanted to know was whether it is within your knowledge who originated the idea of this Buff Directory?-I am afraid I do not know very much about that.

482. You consider it to be in competition with the ordinary Telephone Directory, do you not?-It is, and it is not,

*See Q. 673-699.

B 3

11 May 1922]

in a sense. There is supposed to be a demand for the list of classified trades.

Mr. Howard Gritten.] You do not happen to know, for instance, that it was originated by a FrenchCanadian gentleman together with an ex-service officer? It would be of interest to know on what terms to the originators or vendors the Post Office took it over.

Chairman.] That is a matter which Mr. Codling says he had nothing to do with; it does not come within his province.

Mr. Howard Gritten.

483. I was wondering whether it was within his knowledge.-I am afraid that is a Post Office matter.

Chairman.] The fact that will interest us, I think, from the point of view of economy, is that if there is a competing directory, it naturally might take away revenue from the present directory, through advertisers preferring it, and therefore reduce the profit to the Stationery Office on the money which the Government has to risk every year in printing.

Mr. Howard Gritten.] The point I understood the Chairman was making is that the Post Office merely get as revenue the sum of money they get for leasing it out to private contractors.

Witness.] Yes, they get a premium.

Chairman.

484. Did they consult you as to whether you thought it was a wise thing to have another directory in addition to the one you were printing for them, and whether it would interfere with you in any way? -I knew about this directory, but I do not think I was consulted officially.

Mr. Howard Gritten.

485. So that you yourself know nothing about the cost of producing that directory? No, I know nothing about that cost.

486. Not coming within your province? -No.

Chairman.

487. Have you had any complaint from Weiner's, as the result of allowing them to issue this directory?-I rather think that directory was in existence when Weiner's contract was taken by him.

488. But he has not raised it since, as having any difficulty in getting advertising as the result of a competing directory?-I think not. I believe the

[Continued

classified trades list is found to be useful to a certain extent, and I believe the Post Office are considering extending that into the provinces as an official directory, not as a leased directory on a premium basis. That means that I should print it and be responsible for the advertisements in it.

489. I do not know how long ago it was, but there was considerable comment both in the press and elsewhere, as to the very bad binding of the Telephone Directory that it fell apart, and that generally it was not very satisfactory. Who binds it?-It is bound now by the Stationery Office.

490. I am talking of the new directory. Did you have trouble in binding it?There was a certain amount of difficulty at the beginning, but that has all been overcome now. I never have any complaints now.

Mr. Howard Gritten.

491. Who supply those chains by which directories are attached at public call offices?-The Post Office.

Chairman.

492. Do you sell any of these directories ?-I think a number of bound copies of the directory are sold to subscribers who desire to have them bound. They are bound in stiff covers.

493. If you increase the number of telephone users as a result of reduced rates for the telephone which are coming into effect, naturally that will increase to a very large extent the number of subscribers to be recorded in this book, and will add considerably to the expense. Had that been considered at all by your office?-Considered in what way?

494. Do you have to meet the demand for directories from the Post Office?Yes.

495. Does that demand exceed the number of subscribers in the Telephone Directory?-I should say probably it does, because some firms buy copies in excess of the one to which they are entitled as subscribers.

496. Who gets the revenue from the selling of them?-The Stationery Office.

Mr. Howard Gritten.

497. What is the price of an extra copy? I am afraid I could not say offhand.*

* See Q. 710, etc.