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wires were on the public highway and the trees on private land.

257. Of course, I could tell you, but it is not for me to tell you. What I mean is that there has been rather a suggestion made to the Committee that paragraph 9 of the Comptroller and Auditor General's Report is a criticism showing that is a hardship on the Post Office. I think, on the other hand, it would be a distinct injustice to the Local Councils and to the owners of private property if the burden were put upon them?-IS I may say so, I think that is quite an arguable view.

Major Salmon.

258. More especially when you go and lay telephone wires or telegraph wires and do not pay anything for using their property to lay them on or under as the case may be? That is so, as regards wires constructed by the Post Office. The Post Office does pay rates in regard to certain acquired wires.

259. But not ordinarily?-Not with regard to wires laid by itself.


260. Have the Treasury anything to say on this?-(Mr. Phillips.) I can only repeat what I said, namely, that we are not satisfied we could persuade Parliament that it was a hardship.


261. Have you anything to say, Malcolm, on paragraph 10 of your Report dealing with the sale of the Tenter Street site?-(Sir Malcolm Ramsay.) The implication in the paragraph is that an offer of £14,250 lapsed in effect through delays in negotiation. If anybody was to blame, I do not, however, suggest that the Post Office was at fault, because at that time the Disposal Board and Office of Works were acting as agents for the sale of this property. The question may perhaps be raised how far this was a firm offer. I have examined the correspondence, and I find nothing to suggest that it was not a firm offer throughout. The situation is undoubtedly complicated, but by the time this offer came along the complications caused by the L.C.C. requirements had, I think, been removed. (Sir Henry Bunbury.) If I may, I feel I must rather dissent from Sir Malcolm Ramsay on this. In terms the offer, which I have lately seen for the first time, was not a firm offer. It was an enquiry whether a firm offer of a certain


sum would be considered. On the merits it was, and remains, incredible to us that anyone who knew the disabilities which had attached themselves to this site would make a firm offer of that sum. And I may point out that the site was put up a few months before to public tender with a statement of the disabilities attached to it. Nine offers were received of which the lowest was £900 and the highest £3,000, and there is a good deal of other evidence which confirms the belief that no one who knew the conditions attaching to the site would ever offer £14,000, or anything like it.

262. Sir Malcolm, have you anything to say in reply to that?-(Sir Malcolm Ramsay.) The first letter which notified an offer to the Post Office was dated 13th June, from the Disposal Board, and that simply said there was an offer and did not suggest in any way that it was not a firm one. That is what puzzles me. (Sir Henry Bunbury.) But the letter of the firm who made this offer said: "With reference to our letter to you of the 3rd December last, we shall be glad to know whether a firm offer of £14,250 would be accepted."

Sir Robert Hamilton.

263. Is that letter addressed to the Post Office or to the Disposal Board?The Disposal Board. (Mr. Phillips.) 1 do not know whether the Committee would like to go into this when Sir Daniel Neylan comes. He is abroad at the moment.


264. We will postpone this matter till later. With regard to paragraph 11 of the Comptroller and Auditor General's Report, dealing with the Post Office Savings Bank accounts, we asked you last year, Sir Henry, the cost per transaction. Have you worked it out this year?-(Sir Henry Bunbury.) Yes, I have the figures. The cost per transaction for the year 1925 was 8.86. 265. That is down, is it not? That is down.

Major Salmon.

266. With regard to the sum expended in the year ended 31st March, 1926, are the expenses generally up or down?The whole vote is up.

+ Soe Qs. 7067-7106

8 March, 1927.]



267. What is the cause of that?Chiefly the normal growth of Post Office business, and the development of the telephone system.

268. How is it that in making up your accounts you Ideal with the wireless under the telegraph system? You may have a reason for that?-Might I suggest that that will come more conveniently on the commercial accounts?

269. Very well. On the question of stores and other engineering materials, and also engineering establishment, you seem to have an enormous increase of stock this year? That increase was fortuitous. It was due to the fact that deliveries towards the end of the financial year were somewhat heavy, and the engineering expenditure-that is the issue of stores to the engineering works -was a little behind.

270. Does it really mean that it is convenient from a departmental point of view to have a big stock in the stores, and not such a good thing to have it charged to the Department?-No. The Department does all it can to keep down its stocks. The difficulty is to keep the issues of stocks under control, because they are determined by the rate of progress, chiefly of telephone capital works. In the spring of 1926 there was a certain slowing up of telephone capital expenditure for various reasons, which slowed up the issue of stores, and that led to the increase in the stock which is shown on page 44 of the Accounts. That increase disappears; it is not a permanent increase.

271. The second year rights itself?-I am never willing to prophesy about a particular year in this matter, because we find by experience that our prophecies so often come wrong. If we had a bad

storm this month we should find the telophone work slowed up, and labour devoted to storm repairs, and the stores would once more be accumulating in stock. But either this year or next year we expect a substantial reduction in the stock; that is to say, we expect to get rid of the accumulation which took place in the spring of 1926.

272. I suppose you have a method in the Department of knowing how long the stock will last you?-Oh, yes.

273. There is no fear of accumulating a great deal of old stock?-That matter is watched very carefully. There is a large amount of what might be called

old stock carried for renewals and replacements of existing plant of old pattern. For instance, we carry quite a considerable stock of magneto apparatus for renewals and extensions of magneto installations which are not yet due for scrapping. In that sense carry a considerable quantity of old stock, but the Controller of Stores is constantly watching to see that he does not carry old stock which he is not likely to want.


274. There is a difference between dead old stock and old stock, is there not?— I agree.

Sir Robert Hamilton.

275. What is the number of your staff at present?-At the 1st January, 1926, it was 221,937.

276. How does that compare with the last pre-war year?-We have to exclude Southern Ireland, and I am afraid I At cannot tell you the figure off-hand. one time, three or four years ago, it was lower than pre-war, even after Southern Ireland had been excluded from the pre-war figure. Whether it is still lower than pre-war, I do not know. I should expect to find it much about the same.

277. How do you account for that-the services not being so heavy as they were? -No. It is probably true to say that in some respects rather more work is being got out of the same amount of staff than was the case before the war. I think there is no doubt there has been a certain raising of the efficiency level. Then secondly, the number of boy messengers employed has been considerably reduced by changes in organisation. Thirdly, there is less employment of part-time labour than was the case before the war.

278. You mean you get more work out of the whole-time people than out of the part-time staff?-Two part-time count as two, and one whole-time man

as one.



279. The number of staff you have given is the number of staff up to January, 1926?-Yes.

280. Have you got the number for

1927-I have not that.

21. Perhaps you could let us have it? -Yes, I will do so.t

* See Q. 510.

8 March, 1927.]



Sir Robert Hamilton.

282. With regard to Subhead N, I see there is a considerable over-expenditure in superannuations?—Yes.

283. Is it not possible to estimate those? What is the cause for the overexpenditure?—The cause is that the number of retirements, and the amount of the additional allowance, has been increasing faster than we thought it was increasing.

284. Why? The reason why it is increasing is because it reflects the great increases that were made to the Post Office staff and Post Office work in the period from about 1885 to 1895. The Post Office was then rapidly expanding, and now we are getting the retirement of the people who went in at that time. The reason why it is increasing faster than we expected is because our information was inadequate. We have now taken steps to obtain absolute facts. We are reluctant to do so, because one hates calling for special returns as it creates work; but it is quite clear that without a special return of the number of people who are going to retire in the coming twelve months we cannot forecast this figure with the accuracy we ought to be able to do.

285. You are now asking for the information so that next year you hope to be closer to the estimate?-Yes.


to Subhead E.6


286. Turning page 29 of the Accounts, which deals with the Post Office (London) Railway Act, 1913, have you anything to say on that, Sir Malcolm ?-(Sir Malcolm Ramsay.) There will be this year no separate account under the Post Office (London) Railway Act, because there has been no expenditure under the Act. Such expenditure as there has been is charged to the Post Office vote, and is recorded in this note.

Sir Robert Hamilton.

not cross?—I am afraid I cannot say offhand. I could find out.†

Mr. Gillett.

289. Is the Post Office Railway in London finished now?-Thé construction is finished, and the equipment is being delivered.

290. When do you expect it to be used? -Some time this summer. In fact experimental trains are running now. The whole thing is in the stage of being tuned up, but all the rolling stock has not yet been delivered.

Major Salmon.

291. What is it anticipated to save when it is running?-Time.

292. Not money?—No.

293. I see under Subhead G there is an increase of £32,000 in stores and clothing. Can you give us any reason for that? It is due to the fact that more motor vans were bought than was expected, and also that the expenditure on petrol for Post Office vans was much larger than had been expected. That was under-estimated in the original estimate.

294. Does the petrol for vans come under stores ?--Yes.

Mr. Briggs.

295. With regard to Subhead N, dealing with superannuations, I see the supplementary note says that the actual number was 1,607 at the average value of £347. Is that equivalent to pensions of that amount?-No. That is the lump sum additional allowance. Civil Servants to whom the Superannuation Act, 1909, applies-and that is so now with the great majority of them-receive a maximum pension of half-pay and a lump sum. Under the previous Acts the maximum pension was two-thirds, and there was no lump sum.

296. The total sum of nearly £3,000,000 represents pensions and superannuation ? -Yes, including the lump sums.

297. It is a very big amount, is it not? It is a large amount. you tell It applies to a very large staff. There are about 220,000 Post Office servants.

287. With regard to Subhead E.3 dealing with packet services, can me whether that would cover the contract for the mail from Scrabster ?-(Sir Henry Bunbury.) Yes.

288. Is any money recovered under that contract where the mail boat does

298. But then you would not divide that by the 220,000?-Oh, no: but the

† See Q. 512.

8 March, 1927.]



Post Office personnel is now, I think, larger than the British Army, for instance. I am afraid you must expect a large pensions vote.

Major Salmon.

299. Would you expect that the expenditure would be more than granted by £131,000? Is that necessary? No. The excess under that Subhead was due to under-estimating.

300. Under-estimating how many men were going to retire? Yes. That is to say, if our information had been correct, we could have estimated the pensions much more closely than we did, but we had not enough information.

301. Will you ever have enough information? Yes. I have taken steps to see that we have in future.

302. So that this will not occur again? -No.


303. With regard to Subhead 0.1, would you be kind enough to explain the variation between the expenditure and grant there?-That is due mainly to economies.

304. Have you anything to say on that, Sir Malcolm ?-(Sir Malcolm Ramsay.) I think it is partly due to appliances introduced. (Sir Henry Bunbury.) The Committee may be interested to know that the ledgers of the Savings Bank are going to be kept, and are already in part being kept, by machines instead of by hand posting. It is a very large reform that will produce substantial economies.

305. Where did you buy the machines? -From America.

306. I suppose we do not manufacture them in this country?--I do not know. This pattern is certainly not made in England.

Major Salmon.

307. What does it cost to collect wireless licences?-The total cost of collection and administration is just under 1s. 3d. It is about 1s. 2 d.

308. And you receive 10s. Od. ?—Yes. That includes not only the cost of issue, but the cost of securing renewal, and the cost of prosecutions, for instance, and the general cost of administering the service.

309. What about overhead charges for licences? That is included in the figure.

310. What overhead is it debited against? Is it debited on the overhead of the telegraph service, or which service? It is treated as part of the telegraph service.

311. So that when you say it costs 1s. 2 d., it reduces the net cost of the overheads of the telegraph department? -Yes.

312. Could you tell us what part of the 1s. 2 d. is the overheads? ls. 2 d., I gether, is the total figure?-To speak of overheads in connection with the wireless licence service is a little difficult, because, in a sense, it is all overheads.

313. May I put it in another way? It costs so much for staff definitely earmarked for issuing the licences ?-No. There is very little staff definitely earmarked to issue licences. Licences are issued in conjunction with a great deal of other Post Office business. I doubt if you would find a single position at any post office counter where the clerk was solely employed in issuing wireless licences.

314. But in crediting the telegraph department, to what extent of the 1s. 24d. is the telegraph department credited?— The position is this. The expenses of dealing with wireless licences, which are ascertained by a costing investigation to average 1s. 2d., are part of the expenses charged against the telegraph service.

315. How much of that 1s. 24d. ?-The whole of it is part of the working expenses of the telegraph service.

316. Are we correct in understanding that the 1s. 24d. is a credit to the telegraph service, and that, whatever the number of licences issued may be, it is multiplied by 1s. 24d. ?-No. The credit which is given to the telegraph service is the amount collected for licences less the amount paid to the British Broadcasting Company or Corporation.

317. Where does the 1s. 2d. come in? -The 1s. 24d. is the result of a costing investigation to find out what is the cost of administering wireless broadcasting.

313. Therefore it is fair to say that the 10s. Od. less 1s. 2d. is all profit?-Out of the remaining 8s. 94d. part goes to the British Broadcasting Company, and the rest remains Post Office revenue, and

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called in; and examined.



Sir HENRY BUNBURY, K.C.B., again cailed in; and examined.


321. Sir Malcolm, your Report on the Post Office Commercial Accounts is, I think, purely formal in character ?—(Sir Malcolm Ramsay.) Yes.

322. Have you anything to add to that? I do not think so. The pre

liminary memorandum explains fully the method by which the accounts are compiled. I do not think I can usefully add anything.

323. Have the Treasury anything to say on it? (Mr. Phillips.) No.

Major Salmon.] I notice, Sir Henry, that on page 8 of the memorandum it is stated that "Additional columns have been introduced in which expenditure, income, etc., are expressed as per

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