24 May, 1927.]

[Continued.

4991. Does the same remark apply to the item of £40, the value of photocopying apparatus which disappeared while held on charge by the Air Ministry? Does that belong to the Stationery Office in the same way?-Yes.

4992. What exactly is the reason why certain things of this kind belong to the Stationery Office when they are actually used by other departments? Does this rather curious method date back a long way?-As I have explained, they are purchased from the Stationery Office Vote, and when they are issued to a department for use they remain with that department as long as the department requires them. If the department no longer requires them then they are automatically returned to the Stationery Office, taken on charge there, and re-issued later. In that way they are regarded as Stationery Office property.

4993. I suppose it is in order to save wasteful dispensing with these things and selling of them when some other department may require them. I suppose that is the basis of it? I think it follows the usual practice in public accounting.

Sir Robert Hamilton.

4994. I should like to ask another question with reference to the numbers of the staff. I think you said just now that the office staff was decreasing? -The present tendency is for the office staff to decrease.

4995. I see from the Appendix to last year's Report that the staff on 1st April, 1926, was 1,020, while this year the staff is 1,127. That seems to show an increase rather than a decrease. Can you give us some explanation of that? I see that the warehouse staff remains about the same?-I think that the figure of 1,020 is the increase over 1914. 4996. This Appendix gives the total of the increased staff and the pre-war staff, making a grand total of 1,020?— That paper is an explanation of the inover the pre-war staff on

crease

1st April, 1926.

the

4997. That does not show the total staff ?-No.

4998. Does it mean that that was the increase of staff on the 1st April, 1926, over what the staff was in 1913-14?Yes, that is how I understand it.

4999. But the pre-war staff is given there as 242?-I beg your pardon. I had overlooked that. The increase is 778.

5000. Then the total is 1,020?—Yes.

5001. Whereas the figure you have just given me for this year is 1,127. But you told me that the staff was tending to decrease ?-The staff is tending to decrease. I am afraid I cannot explain the seeming discrepancy. 5002. Can you say what the number is in the Estimate for the coming year?

Sir Fredric Wise.

5003. It is down by 31.-(Mr. Phillips.) The Estimate figures are: For 1925-26, 1,744; for 1926-27, 1,694; and for 1927-28, 1,663. The last two years have shown a decrease. The figures I have given are for the clerical and warehouse staff taken together.

Major Salmon.

5004. I notice from the account that you have a large number of SuppleYou mentary Votes. have Supplementaries under these Subheads E, F and G What was the cause of asking for Supplementary Votes in those cases?(Mr. Codling.) The Estimate for 1925-26 was framed in December, 1924. The progress of expenditure indicated that a minimum level had been reached in the early part of 1924-25, and the Estimate was framed accordingly. After the Estimate had been submitted, but before the end of 1924-25, it was found that the level of actual expenditure during the early part of 1924 did not in fact represent the real level of departmental consumption, the department having been for some years pursuing a policy of postponing work and consuming such stocks as they possessed. On the exhaustion of the departmental stocks requirements could only be met by further purchases, and expenditure was therefore at a higher level than in the previous period. 5005. That was in the 1924?year No, that was the financial year 1925-26, the Estimate for which was framed in December, 1924.

5006. Is one to understand from that answer that you really under-estimated the requirements of the department?-We did.

24 May, 1927.]

[Continued.

5008. And under all the different headings such as printing, binding, ink, and all things of that kind?-It was mainly on Subheads E and G, namely, Paper and "Binding," that was pretty general to all departments. With regard to Subhead F, we saved on the printing. It was the paper and binding and miscellaneous office supplies.

5009. You consumed We consumed more.

more paper?—

5010. During this current year you also came to the House for Supplementary Votes, did you not?-For the year 1926-27, yes.

5011. Was that for paper?-That was paper only.

5012. How do you make your contracts for paper? For what period do you make them?-I do not make period contracts for paper at all. I make contracts for quantities, buying roughly for from three to six months.

5013. From three to six months in advance ?-Yes.

5014. Do you take an option to take a larger quantity if you require it at the same price?-No. The orders are for definite quantities.

5015. Do you have regard to the fact that the market is at a high figure, and you buy a less quantity than you would normally buy if the market were lower? If the price is high do you buy for three months instead of for six months, or do you still buy for six months whatever the price? If there were a sudden rise in price I should buy for as short a period as possible. But, generally speaking, I only buy for immediate requirements, which is, roughly, a three to six months' supply.

5016. Looking at the extra amount that you spent on paper, was that attributable to the increased quantity of paper you require, or to the increased cost of paper?-Mainly to the increased quantity. As a matter of fact, during that period the cost of paper went down slightly.

5017. During which period?-During the period of the year under review.

5020. To what percentage?-I could not tell you offhand. I have not the figures here.

5021. If bulk in purchasing your quantity of paper you watch the market closely, I suppose it is fair to say that at the end of that financial year your stock would be likely to be much less than it would be if the market were at a level or at a low price?-As a matter of fact, my purchases of paper are restricted as far as possible to a minimum, whatever the price is.

5022. So that you do not take advantage of the market when you think the price is going to be dearer ?-When the price is low, and I think it is going to harden, I usually have not got the

money.

5023. So that you cannot take advantage of the market?-Not to that extent. 5024. Have you ever put it to the Treasury that you should take advantage of the market and should have a SIX months' stock instead of a three months' stock?-No, but I could quite imagine what the result would be.

5025. That is not the point. Have you ever put the point to them?-I do not think I have.

5026. If you thought you were going to get sympathetic consideration you think money might be saved under that head? Yes, but of course there is a certain amount of speculation in that, and I do not think it is desirable in a Government Department to speculate on markets.

5027. You cannot have the answer both ways. I understand you to say that you do not take advantage of the low price of the market, although you know from experience and from information you have received that the market is going to harden, because you have not the money. But if you had facilities for getting the money then your answer is, if I understand you correctly, that it would be a speculation, and therefore you would not take advantage of it. Is that so?-Hardly. One can never be quite sure when prices appear to be going to harden that they really are going to harden.

5028. One can never be quite sure of anything. But what I particularly want to direct your attention to is this. As a large user of paper, and being in touch, as no doubt you are, with market conditions, you will no doubt be advised from

24 May, 1927.]

[Continued.

time to time that there is going to be a hardening of prices from one cause or the other. May I take the Coal Strike as an example. You must have known as well as anybody else in the country that there would probably be a difficulty in getting paper, even if the price did not harden, on account of the shortage of coal for machinery if the Coal Strike lasted any time. That being so, did you take any steps with the Treasury with the idea of buying a larger stock in anticipation of those difficulties being likely to arise? No, not to get a Supplementary Estimate and increase my purchases of paper.

5029. Because you did not think the price was going to be any higher?-It was not a question of thinking the price was not going to be any higher.

5030. What was it? Was it because you did not think you would get the money?—I did not think I would get the

money.

5031. You would have made the application if you had thought you could have got the money?-I might have done.

5032. From whom do you buy your paper? From mills in the kingdom.

5033. Do you buy all of it in the United Kingdom, or some of it from the Dominions?-Practically all from the United Kingdom.

5034. So that you can control it more easily? Yes.

5035. What is, roughly, the quantity that you buy at one time?-It varies very much.

5036. What is the tonnage roughly?-I am afraid I could not tell you offhand. Periodically a large schedule is put out for perhaps 100 varieties of paper.

5037. Do you try and standardise your paper so as not to have as many as 100 varieties? It is standardised as far as possible.

5038. Do you take the same line as regards trying to standardise your paper as you do as regards anticipating difficulties with the Treasury? No. I have more control over departments which I supply than I have over the Treasury which supplies me with money.

5039. Would it, therefore, be fair to say that you are down to as small a number of varieties as possible?—Yes. 5040. If you could reduce the varieties you would obviously be more economical in the general running of the department? Not necessarily. A reduction might mean eliminating certain sizes,

61121

which might mean cutting to waste in printing.

5041. When you talk of 100 varieties let me understand what you mean. You buy the paper as paper, and therefore the 100 varieties do not arise in question when you are buying the paper?-Yes. The paper is bought to specification in regard to size, substance, and what it is made of.

5042. You buy the paper from the mills cut in such a way that it is economical for printing on?-Yes.

5043. That is what you mean when you say there are 100 varieties?—Yes.

5044. There is one thing under subhead K which I do not appreciate. That subhead refers to upkeep of machinery, consumable stores, and wages. Will you tell me what that means? I see the estimated amount was £328,000?-That is the cost of the printing works in regard to the upkeep of the machinery and consumable stores such as ink, type, metal, and so on, and the wages of the staff.

5045. That is for the printing works at Harrow?-At Harrow and Hare Street and the Foreign Office Press and the War Office Press, and the rest of them.

5046. That is all the outgoings?—Yes. 5047. And the contra amount for that is what you debit the department with? -The contra amount for that is what the Stationery Office credits the printing works with. (Mr. Phillips.) Under Subhead F they set out the whole cost of the printing. They put this under Subhead K, because otherwise Parliament would never see the figure of £327,000, which is the separate cost of so much of the printing as is done at the Harrow works.

5048. As I understand, Mr. Codling has added other places besides Harrow? -(Mr. Codling.) It includes all Government printing works.

Mr. Ellis.

5049. You do not suggest that it would be wise for your Department to become jobbers in paper, do you?-I do not think it would be advisable.

5050. Let me put it in this way. am not suggesting any reflection on your competence, but would it not mean that every Director coming to take your placə would have to be pretty well qualified in that sort of job, and during his progress through the department he would not be in the way of getting special knowledge with regard to paper such as would be desirable?-Possibly not.

Р

5051. There are difficulties?-There are difficulties. The chief difficulty that appeals to me is that I do not think it is desirable in a Government Department to speculate on markets.

5052. It is becoming a speculator purely and simply if it buys forward more than for its immediate wants, is it not? -It is.

Sir Fredric Wise.

5053. You may possibly know that a statement has been issued showing the gross net total cost of Public Departments?-Yes.

5054. According to that statement, I notice that your gross total cost is £2,400,000 odd. Does that include all the items which are mentioned in Class II, Vote 30, as well as the items of other various Votes?-(Mr. Phillips.) It is the allied services plus the total expenditure. Column xi. represents the figure of gross expenditure shown in Appropriation Account as £2,300,878. If you take in the allied services it becomes £2,457,000.

5055. Checking the accounts, I notice that items with regard to the Stationery Office appear on pages 99, 104, and 107 of the Appropriation Accounts. Are those items included in the figure shown in this statement of £2,400,000?—(Mr. Codling.) I take it that those are a portion of the £2,300,000 which is allocated to the Votes you have referred to.

5056. Where is the figure of £3,603 shown on page 99, included?-I think you will probably find that under the Office of Works.

5057. It is so hard to check the amounts of these particular items with the total amount shown in the columns of this statement of gross and net cost.

Chairman.

5058. Mr. Phillips, let us take the specific case of the Office of Works item

[Continued.

of £3,603 on page 99 of the Appropriation Accounts referring to some extension at Harrow. Would not that be included in column ii. of the Statement of gross and net cost under the heading of Buildings, Maintenance, etc.?-(Mr. Phillips.) Yes. The figure of £66,272 includes all such items as this particular item of £3,603.

Chairman.] That is a reply to the question Sir Fredric Wise was asking.

Sir Fredric Wise.

5059. I thought this White Paper showing the gross and net cost of Public Departments was a new White Paper?It has been published for some years.

5060. But I thought it was a new classification? (Sir Malcolm Ramsay.)

No.

5061. I thought these columns in this statement were drawn out from the particular Votes?-(Mr. Phillips.) The point is that for buildings generally we have one column only. We should have to have about ten extra columns to be able to point to every particular building Vote.

5062. I see; thank you. What is the stock of your paper, Mr. Codling? How many tons of paper have you got?—(Mr. Codling.) Speaking offhand, I should think that at any one time I have about 3,000 tons in stock.

5063. Is that more than last year?Well, that is not a fixed quantity. It is an average. It is about the same as last year I should think.

5064. If I remember rightly, you were not quite certain in replying to Major Salmon as to how much you pay per ton for the paper?-The average price of paper during 1925-26 was 3.24d. per lb. 5065. How much a ton?-About £30 a ton.

24 May, 1927.]

centages? Yes. The account has been re-arranged, and certain items are shown on the left hand as deductions which were shown on the other side last year. The net effect is to enable the figures of expenditure to be related to the production.

5069. That is, I think, an important point in comparison with last year's account, as far as the form of the account goes?—Yes.

Mr. Cyril Lloyd.

5070. I am rather puzzled about the figures of stock. I see in this account that the materials consumed, which I suppose includes the paper, appear to be of a value of £9,959 6s. 11d. ?-(Mr. Codling.) There is no paper appearing in this account. All the paper is supplied, and not brought to account here at all.

5071. Then this really is not a trading account? It is a trading account on the lines that the Stationery Office does its business with its contractors. That is to say, the printing contracts made by the Stationery Office do not cover the cost of paper. The contractors are supplied by the Stationery Office with the paper on which they print. The Stationery Office buys the paper and supplies it to its contractors.

5072. It seems to me rather extraordinary that the cost of paper should not be brought into the trading account. Is that established practice? That is established practice.

contractors

was

Do

5073. The wages are brought in. those wages cover the whole of the printing, or are there contractors' figures for wages? The wages here are the wages cost of the works. Why I mentioned the because the printing works are treated exactly on the lines of an outside contractor. (Sir Malcolm Ramsay.) The object of the account is, as defined in the first two lines of the text, namely, to show, on the one hand, what the work done has actually cost and, on the other hand, what the same work would have cost had it been done by contractors instead of in the Government Printing Works.

5074. Then all the Government contractors receive their paper in the same way, do they?-(Mr. Codling.) That is so, yes.

5075. Ought we not, Mr. Chairman, to have a sort of balance sheet of the paper

61421

[Continued.

stocks, because there seem to be large stocks of paper in existence, but they do not appear in the trading accounts.

Chairman.

5076. Is there not a reference to that? -(Mr. Watson.) There is a reference to it on page 245 of the Appropriation Accounts.

5077. The reference is at the top of that page. It shows the value of the stock in hand on 31st March, 1926, and it shows the value of the paper. That is what you mean, Mr. Watson?—Yes, and just below that is shown the value of the paper in contractors' depots for printing.

Mr. Cyril Lloyd.] But there is no account of the purchase and exhaustion of stock, except the note at the foot of that page which says "the stocks of paper in the warehouses and printers' depots were depleted to the extent of approximately £13,225."