I gave that if the suggestion is that economy would be obtained by shutting out letters which are at present sent which ought not to be franked at all, I do not believe there is anything in that whatever, but if the suggestion is that fewer letters would be sent, or that more letters would be sent in one cover, that is a different question.

Sir John Marriott.

322. With regard to the Item on page 12: "Travelling and Law Charges," can you separate the Travelling from the Law Charges. It seems to me a very curious conglomeration to put together? In a rough way I can do that.

323. Travelling is what I really want?— These are the total figures for the three Services taken together, that is Postal, Telegraph and Telephone. Travelling was £216,000.

324. That is for 1924-25? That is so.

325. How does that compare, say, with Travelling for 1923-24?-It is £9,000

inore.

326. How do you account for that?Chiefly by the restoration of a number of these Travelling Post Offices, and, to a less extent, to the normal growth of the Service.

327. There has been no increase in allowances, has there?—No.

328. Has there been a diminution? There was a diminution in subsistence allowances; whether that took effect this year I cannot say off-hand. Somewhere about this time there was a diminution in allowances.

329. If there had not been an increase in the Service this would have diminished? I am under the impression that a diminution took place in the previous year; perhaps the Treasury could say. (Mr. Watson.) A reduction is at present under consideration.

330. A further reduction ?-A further reduction of allowances is under consideration, and I think there will be a pronouncement very shortly. (Sir Henry Bunbury.) My recollection is that there was a reduction in the subsistence allowances about 1922-23.

331. Yes, I think there was.

[Continued.

That while retaining the initial cost of sending a telegram the cost after a certain number of words should be considerably reduced. For instance, supposing the charge for twelve words remains the same as at present, the charge per word after twelve, or after twenty or whatever it may be, should be reduced to d., or even less. I suggest there is a large number of people who would very much increase the number of long telegrams they would send, at small additional cost to the Post Office, if that were done? That idea has been considered from time to time.

334. What is the ground on which it has been turned down?-There has been no change in telegraph charges to the public since I think 1919, or thereabouts, I am not sufficiently familar with the subthe ject to know reasons why this suggestion was not adopted. There may be particular reasons or general reasons of policy.

335. Could you answer this question: Am I right in thinking that a very large part of the cost of sending a telegram is the initial cost of sending the telegram, and that the addition of a considerable number of words would add something very much less than a proportionate amount? That is certainly so.

336. The cost of sending twenty-four words is not twice the cost of sending twelve? That is certainly so.

337. You cannot give me the reasons that have been put forward against making an experiment along those lines? -No; I am afraid I cannot recall any particular discussion of that suggestion. I know that the suggestion has been made; I have heard of it.

Major Salmon.

338. I should like to ask what steps have been taken to reduce expenditure under the heading of Telegrams, bearing in mind that the turnover has dropped this last year £230,000, while the expenditure, apparently, has only been reduced to the extent of £9,000. Does not the Department take into account the fact that when turnover is down they ought to try and save expenditure?—I think the Telegraph administration has done its best to reduce expenses in every way open to it.

339. I do suggest that £9,000 reduction in expenditure, compared with a reduction in turnover of over £230,000, is a very small figure?-The great bulk of this expenditure is Salaries and Wages.

340. There are increases under a lot of heads, for instance on travelling, law charges, and miscellaneous expenses, which cover a multitude of sins, the increased expenditure over 1923, notwithstanding the business being less, is very large in proportion to the whole amount; it is £4,000 in round figures?-The increase there is probably, in the main, the law charges in the Sutton Judgment and consequential Judgments.

341. I notice clothing is, in round figures, practically the same?—Yes.

342. But still there is a great difference in turnover?-Yes; the economies that have been made on the Telegraph side were made chiefly in and about 1921 and 1922.

343. But those economies were made, presumably, in connection with a certain volume of business transacted during that year; but if that business declines, surely there ought to be an opportunity to review the economies, to see if further economies could not be made, if the business declined. After all, you run it as a business concern, and the first thing one does in business is to see where you can economise when the turn-over is falling, unless you take the broad view and say "I will make the price cheaper with a view to getting a bigger volume of trade"; which is a different matter altogether? These questions fall very much within the region of policy, and I find it difficult to answer them.

344. The reduction side of the policy?— I can answer as to facts. The question of introducing drastic economies in the Telegraph Service is very much a question of policy, which it would scarcely be proper for me to deal with, I think.

345. Do I understand, then, that the question of reducing the staff for the handling of the telegrams is different to dealing with the staff in other branches of the Post Office Department?-I did not suggest that.

346. I am not now arguing the giving of bigger facilities in connection with the price of telegrams; that is a question of policy: I am on the question of reduction of staff because your business is reducedI will not say reduction, but economy generally? The number of persons employed in the Telegraph Service is falling steadily. I think I am correct in saying that it falls approximately as the traffic falls; but whether the cost of labour per telegraph unit falls in the same way is

[Continued.

another question; and one of the difficulties under which the Telegraph Service is labouring at the present time is that, with a reducing staff, the average remuneration of the individual, on an incremental scale, rises, because you have comparatively few people coming in at the bottom, and you have a growing number of people at the top of the scale, and it would be incorrect to assume that the fact that salaries and wages here are stationary means that the same number of people are employed. The number is falling.

Mr. Briggs.

347. Is there very careful supervision of the number of men put on to a job? I ask you because an instance came to my notice only the other day, of the putting up of a telegraph pole or telephone pole. and there were eight men on it, about three of them watching the other five do the work, for about four days?—I have no reason to suppose that more men are employed than are necessary, but, there again, that is a matter on which it would be necessary to call the Engineer-in-Chief. 348. I asked you because it came under my direct notice.

Major Salmon.

349. Do I understand that in your view there is no possibility, notwithstanding the fact that telegraph business is gradually falling year by year, of cutting down expenditure, because it is a question of policy? Am I correct in assuming that? My answer was that the question of reducing the cost of the Telegraph Service, by such means as are open, is essentially a question of policy; it involves questions of policy.

as

350. That, of course, can be viewed from many aspects; but what I am trying to arrive at is the simple fact that you, responsible officer, the permanent officer, see a department, or a section of a department, where the turnover is falling considerably: am I correct in understanding you to say that you are powerless to deal with it in the way of reducing administration, or reducing expenditure, because it is a question of policy?—I personally am quite powerless; I can only call attention to the facts, and leave those who are responsible for policy to act, or not to act, on any suggestions that I may make. I can only call attention to the facts.

25 February, 1926.]

[Continued.

Mr. Baker.

351. Arising out of the last question, may I ask whether it is not the fact that reducing expenditure on telegraph services has resulted in such a curtailment of facilities that the possibility of a revival in the telegraph traffic has almost disappeared? I should not agree with that at all. The primary cause of the diminishing use of the telegraph is, undoubtedly, the telephone; and that is the universal experience, not only in this country, but in all other countries where they have a telephone service. There is no reason to suppose, for instance, that keeping telegraph offices open for longer hours would restore any considerable amount of telegraph business. I am not suggesting that there are no means of developing additional telegraph business; there may or may not be; but I should doubt whether the hours of business have very much to do with it. The experience of the Post Office is that the vast bulk of telegraph business comes within the business hours of the day.

352. That must be true, but you will agree there has been a big curtailment of facilities? Between 7 o'clock and 8 o'clock in the evening, and between 8 o'clock and 9 o'clock in the morning.

353. I would say between 7 o'clock in the evening and 8 o'clock next morning? -That I think would only apply to Press traffic, to any considerable extent; and Press traffic is unremunerative to the Post Office.

Major Salmon.

354. Do we run our own electric plant? -Hitherto, the Post Office has had its own station at Blackfriars, but that is about to be closed.

355. Will you be able to make a contract which will be more beneficial?-A contract has been made which shows a small saving.

356. With a Company?-With one of the Companies.

Sir Robert Hamilton.

357. With regard to the wireless receiving licences on page 23: "Issue of broadcasting licences to the public, £50,000." What actually is the cost included under that item Issue.''? Then there is a heading: "Administration and issue of licences at headquarters," and "print

66

ing," engineering," " and so on.

What

does that issue of broadcasting licences cover? That is primarily the work of the clerk at the counter in taking the money and issuing the licence.

358. How many licences were issued for that? If I may complete my answer, it also includes the cost, in the Postmaster's office, of keeping the register of licence holders, and sending out the necessary reminders when renewal is due; it includes the cost of all correspondence in connection with the renewal, and also the cost of any visits that may be necessary to secure renewal, by the Postmaster's staff. It is the renewals which have raised that figure from £14,400 in the previous year, to £50,400 in this year.

359. What would be included under the heading of "Administration and issue of licences," the figure of £23,000 just above that? That would be chiefly, but not entirely, dealing with experimental licences, which at this time were issued from headquarters.

360. Could you say how many licences were issued ?-It was broadly about 1,200,000 or 1,300,000. The all-in cost of issue in this year was about 1s. 3d. per licence.

361. It was referred to in debate in the House the other day, and it struck many Members of the House as being a rather big figure for merely handling the licence across the counter?-I ought to correct myself: I said the cost of issue; I should say the total cost of the administration, which includes issue, securing newals

re

362. That is the notice?-And sometimes a second notice and a third notice, and sometimes a visit to the house, and it may be correspondence, and there may be a prosecution.

363. Do you consider there is any possibility of reducing that cost? It is very much in the hands of the public. If licences are renewed promptly, I should expect to see this cost per licence go down.

364. Do you expect as time goes on, people will get into the habit of renewing their licences with less difficulty. Is that the experience with licences dealt with by the Post Office?-In general, 1 should say the British public are fairly good in that matter, and probably better than most foreign publics; but there is room for improvement. It is the same with telephone accounts.

Chairman.

365. There are two pages at the beginning of this class which give a summary, and on that perhaps Sir Lionel Earle will wish to say something to us about the out-turn of the Department. (Sir Lionel Earle.) The only thing I have to say on that is, that I think the efforts of the Department, due very largely, I think, to the very just remonstrances of this Committee as regards under-spending, have resulted in a very satisfactory issue, namely, that the total net surrenders

Sir Henry Craik.

366. Did you say this Committee's remonstrances as regards under-spendings?

-Yes, which the Committee have made for the last two or three years.

66

367. Is not a rather fairer way of putting it over estimating "?-That may be; the result is under-spending.

368. We do not object to your underspending? You must remember times were extremely difficult after the War, and the fluctuations of labour and prices were abnormal, and I think, to estimate for 18 months ahead, which is what i meant, was really beyond the wit of man.

369. I should not like it to go forth that we object to your under-spending; what we object to is over-estimating.-If you like to put it over-estimating; it was safeguarding things in the uncertainty of the situation.

2 March, 1926.]

[Continued.

Sir Fredric Wise.

370. You have not had Supplementary Estimates, have you?-We have had the last year or two.

371. Did you in 1924-25 ?—Yes.

Major Salmon.

372. Could we have, as you go along, what the gross figure of the Supplementary Estimates was?-The final result of the whole Votes is shown on this page which your Chairman has referred to. There is a net surrender of £292,546, which is 58 per cent. of the net Grant. The surplus of the ordinary receipts payable to the Exchequer is included in the figures, on account of this new institution with regard to Appropriations-inAid. I think that is certainly a lower percentage than it has ever been during my term of office.

had better be postponed until we come to the individual accounts.

Sir Fredric Wise.

377. May I ask just one question. You stated that your Estimate was only 5.8 per cent. over. What about your staff in 1914 compared with 1924-25?-The actual staff?

378. Yes?-It 1914, of course. 379. Have you the figures?—Yes, I could let you have those figures, and I could give you also the enormous number of new services which have been thrust upon us, like these housing estates, which we have inherited from the war, and all these coastguard stations, and a good many places in Ireland; we never touched Ireland before the war. There is a mass of things, amounting to a very heavy expenditure, which naturally involve a large increase of personnel, I am sorry to say; but that I cannot help; I have been made to take up these things, and I have had to provide a staff to administer them. I can let you have the figures of the 1914 staff and the present-day staff. They have been given in the House, but still, I will let the Committee have them gladly.

was infinitely less in

Major Salmon.

380. On the comparable work, have you more staff or less staff?-It is very difficult to say. Take the Revenue Buildings, alone. In consequence of the legislation of the House, and increased taxation, we have had to provide for an enormous number of tax areas to collect this money. The revenue is so infinitely greater than it was before, due to taxation, which all means extra staff, and we have to provide offices all over England, Scotland and Wales to do the work, naturally.

381. That is not a recurring expenditure? Yes.

382. Supplying offices for staffs?—Yes. If the House passes new legislation, or new taxes, like, say, the McKenna duties, it immediately means more staff for the Revenue Department and I have to provide the offices to house these gentlemen.

383. The point I really wanted to make was this, that I should not have thought the permanent number of the staff that you require would have been very large inasmuch as when you provide an office for a Government Department, it is not