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Revenue Departments—Post Office (Vote 3)

Volume 52: debated on Thursday 24 April 1913

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Motion made, and Question proposed, "That a sum, not exceeding £13,365,840, be granted to His Majesty to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1914, for the Salaries and Expenses of the Post Office, including Telegraphs and Telephons." [Note.—£11,000,000 has been voted on account.]

A year ago, when I presented the Estimates of the Post Office to this Committee I budgetted for an increase of revenue of £3,500,000 in the year—the large increase being mainly due to the fact that the telephones had been transferred from the National Telephone Company to the State, and that the income previously received by that great corporation would in future become public revenue. I am glad to say that estimate has been rather more than realised, and the Post Office shared during the past year in the general prosperity of the country. It is satisfactory to note that of this increase no less than £750,000 was increase in postal revenue, showing the remarkable power of expansion in that portion of the Post Office business. Next year the estimated revenue is £30,625,000, being an increase over last year of nearly £1,500,000. This is in accordance with the favourable estimate of the prospects of the coming year, which was made by the Chancellor of the Exchequer two days ago, and it is also due to the fact that last year was peculiar in containing two Easters, while this financial year contains none, and therefore there will be four more revenue-earning days in the year compared with last year, which partly accounts for the very considerable increase of anticipated revenue. On the other side of the account we estimate for an increased expenditure of £556,000; so that it is plain that the Post Office profits for the coming year will be very largely increased, and we estimate, after allowing for the services which are rendered by the Past Office to other Departments, and after allowing for the services which are rendered by the other Departments to the Post Office, for a net profit for the year of £5,860,000. It is largely this increased profit of the Post Office which has saved the Chancellor of the Exchequer from the necessity of asking Parliament to sanction an increase of taxation. There has been during the last year a general growth of business, except in respect of telegraphs, which, in the presence of competition of the telephones, have long been in a stagnant condition. The Savings Bank has shared in the general national well-being, and the deposits invested in the Savings Bank show an increase in the year of £5,500,000. The sum invested through the Savings Bank in Government securities shows an increase of £1,250,000.

Perhaps in recent years the services with which the Post Office is connected have shown no development more remarkable than in respect of oversea cable communication. The importance of such services can hardly be overestimated when we take into account the conditions of our Empire. Scattered over every quarter of the globe, containing about one-fourth or one-fifth of the whole land surface of the earth, the unity of the Empire must depend in a very large degree upon the rapidity and the cheapness of communication. The problem of Empire is in no small measure a problem of communication. The problem of Empire is in no with much satisfaction the very large reductions in cable rates which have been effected during the last two or three years. At our suggestion the cable companies have adopted a system of charging half-rates for plain language telegrams which are not of an urgent character. There are many communications sent by cable which are too urgent to be sent by post, to undergo the long delay that the post involves, but which are not so urgent that a few hours make any serious difference to the sender or to the recipient; and the companies, on the other hand, are able to handle this less urgent traffic at cheap rates because they can deal with it during the hours of the day and night when their cables are not full with urgent commercial traffic. Consequently, it has been found possible to establish this system of half-rates for deferred plain language telegrams, and we have the satisfaction of knowing that it is now being extended almost all over the world, and the British Post Office may take some little credit for having been a pioneer in this reform. Between this country and the United States and Canada the rates for this class of telegrams were further reduced last summer as the outcome of negotiations which were conducted with the companies by my Canadian colleague, Mr. Pelletier, and myself. Now, instead of the only rate across the Atlantic being what it was a few years ago. 1s. per word, we have a plain language deferred rate at 4½d. per word. In addition many of the companies have consented to introduce an even cheaper form of cablegram, to be dealt with during the slacker periods of the week-end, and they accept cablegrams on Saturday to be delivered in distant parts of the world on the following Monday or Tuesday, and they are charging for these cablegrams about one-fourth of the rates previously in vogue. This system of week-end cable letters has been introduced between this country, Canada, South Africa, Australia, and New Zealand, and also the United States of America and the Argentine, and I anticipate that the system will be still further extended in the future.

The case of India and the Eastern Telegraph Company is under consideration, but it has not yet been introduced. Even of greater importance has been the reduction effected in Press rates between this country and the various Dominions of the Crown. The rapid dissemination of news and an adequate news service between different portions of the Empire is obviously important from political as well as from a commercial point of view. Three years ago the Press rate to Canada and the United States was 5d. per word, and it is now 2½d. during certain hours of the day, and 3½d. during the busier hours. Between this country and India it was 9d. and it is now 4d. To South Africa it was 9d. and it is now 3½d., and between this country and Australia and New Zealand it has been reduced from 9d. to 4½d. during certain hours of the day, and to 7½d. for the urgent Press traffic. Between here and Australia four-fifths of the Press traffic over the Pacific cable is now being sent at the cheap rate of 4½d. As a consequence of these reductions there has been an immense increase of cable traffic. I am not able to give the figures of the traffic of the cable companies. I have not access to some of them, and others are supplied to me confidentially, but I can tell the Committee what has been the result of these changes so far as the traffic of the Pacific Cable Board is concerned, which the Committee will remember is a body consisting of representatives of this Government and the Governments of Canada, Australia, and New Zealand, which conducts the business of cable communication between Canada on the one hand, and Australasia on the other. Comparing the first month of this year when all these reforms had been put into practice, with the first month of 1910 before the reductions began to be made, the traffic carried by the Pacific Cable Board has almost exactly doubled both the commercial and other ordinary traffic and the Press traffic have doubled within the period of three years.

The two taken together; they are not distinguished in the figures supplied to me. These changes have been facilitated by the fact that the Western Union Company of the United States obtained control of the cables across the Atlantic belonging to two British companies: the Anglo-American Company, and the direct United States Company, and they have been able to effect considerable economies by a concentration of business. On the other hand this combination imported the danger that a cable ring might be formed across the Atlantic and the rates advanced to the detriment of the public. While on the one hand I was able by negotiations with the Western Union Company to obtain these greater facilities which are now given, on the other hand I thought it necessary to include in their landing licences a new clause giving the Government of this country control over rates to be charged, and giving authority to the Postmaster-General acting on behalf of the public to require the company, when the conditions justified and necessitated it, to reduce rates that might be held to be excessive. The company are given the right of appeal to the Railway and Canal Commission, which can arbitrate in the event of disagreement. This clause, giving the Government control of rates, will be inserted in all the licences for the landing rights for long distance cables. I had hoped by now to have made much progress with the establishment of an alternative system of Empire communication by means of Imperial wireless stations owned by this Government and by the Dominion Governments and the Indian Government, extending from here to Australia; but, owing to circumstances with which we are all only too familiar, delays have intervened which have postponed this most desirable undertaking. It is now nearly two years since a Sub-Committee of the Committee of Imperial Defence reported that this matter was of urgent importance to the strategic defence of the Empire. Nevertheless, we still seem to be not within view of a conclusion being reached upon this subject. On 14th January of this year the Select Committee of this House, which is now sitting investigating this subject, issued an interim report, in which they recorded their conclusion that the matter was one of urgency, and they asked that an Advisory Committee of experts should be appointed to report as to the best system to be adopted, and that that Committee should be invited to conclude its inquiry within three months. They also urged the Government to secure sites for the erection of the stations that were contemplated. On 23rd January the Committee which was asked for was constituted, and, although the selection of names was by no means easy, the Committee that was formed commands, I think, general confidence. The three months in which they were asked to complete their investigations have now just expired, and I anticipate the report of that Committee in a few days. On 29th January, within about a fortnight of the Select Committee's recommendation, a Commission left this country to secure sites in Egypt and East Africa. We cannot definitely purchase the sites, because the Government contemplated that the contractor, whoever he might be, and not the Government, should bear the risk of any failure from the working of the stations, and the contract which I signed and laid before the House of Commons provided that if the stations when erected were not found satisfactory in their working, no payment should be made by the Government. If that condition is to be maintained, and I think it is a very desirable condition for the safety of the Exchequer, it will be obviously necessary to obtain the agreement of the contractor to the selection of the sites; otherwise, since for technical reasons the site chosen is of great importance in securing the proper working of the station, the contractor might complain that, not having been consulted beforehand as to the sites, he could not be held responsible for the unsatisfactory working of the stations. But sites have now been provisionally selected, though not absolutely secured, in England, Egypt, India, and South Africa, and representatives of the Government are now in East Africa and in the Straits Settlements seeking the sites for the remaining two stations.

4.0 P.M.

May I ask whether the sites will eventually be the property of the Government?

Yes, it is certainly contemplated that they shall be the property of the Government, to whom the stations will belong. The South African Government will own its own stations, the Indian Government will own its own stations, and the remaining stations will be owned by the Imperial Government. The small coast wireless stations belonging to the Post Office in this country show a satisfactory increase of business, the traffic having grown by 15 per cent. last year, and having doubled during the last four years, and new coast stations are being erected, which will be of service to the Mercantile Marine. Last summer we were honoured by the presence in London of delegates from almost all the great countries in the world at an International Conference on Wireless Telegraphy, which successfully concluded its labours, and a new International Wireless Convention was unanimously agreed to, and fresh regulations for the management of this important international means of communication will come into operation next July throughout the world.

My Department during the past year has, of course, had cast upon it a very heavy burden of work in connection with the development of the telephone system. We have had to carry through the amalgamation of two vast systems, each of them covering the whole country, differently organised, and we have been faced by inevitable difficulties, which were fully anticipated, in effecting that amalgamation—difficulties which have taken some little time to overcome. We found that the company's system when it was transferred to us had had its development to no small extent arrested by the fact that the company's licences were coming to an end, and that its business was about to be transferred to the State. The plant was being used to its utmost capacity, and, taken as a whole, there was practically no allowance for future growth. The company had employed during the last year of their licence some hundreds of their staff in taking the inventory of the company's plant with a view to the arbitration, and that large number of men having been withdrawn from the normal work of the company's system the arrears of construction had correspondingly accumulated. We found that in London there were no fewer than 30,000 telephone subscribers who were connected with exchanges which geographically were the wrong exchanges. They had been connected with the exchanges to which it might be convenient to join them, and, from the point of view of good administration and economical management, it was essential to effect a transfer of those 30,000 subscribers to their proper exchanges. Many of the higher officers of the Post Office headquarters staff and of the engineering branch had to give their time for many months to supervising the inventory that was being taken and to the work of the great arbitration, which proceeded for a very long period, before the Railway and Canal Commissioners.

In addition, the Department has been faced by a great difficulty in securing a sufficient amount of skilled labour, in view of the great demand for labour of the kind needed for this work throughout the country owing to the conditions of trade; and last, but perhaps most important, we have been specially unfortunate during this year in having to make good the ravages effected by storms unprecedented in their severity for many years past. The British telegraph and telephone service, of course, has not been alone in this. I was reading only yesterday in an American technical paper that last Easter every overhead telephone line from Chicago was down, and that Chicago was cut off from communication with the rest of the world except by one route. In this country for several weeks during last winter we had to employ an average of 3,000 men in making good the damages done by storms in various parts of these Islands, men who would otherwise have been employed in connecting new subscribers to the telephone and in assisting in the development of the system. These various difficulties, of course, have been made the most of by those who are engaged in the legitimate task of criticising the Government of the day, and especially have they been made the most of by those who for reasons of policy are anxious to prove that all State management of industries is bad. Those who are opposed on principle, whether it is to railway nationalisation or to any other form of the socialisation of industry, find it necessary to emphasise, and I am afraid sometimes to exaggerate, every defect that may occur in the administration of a business such as the telephone service in order to support their own point of view, and they have discovered that the National Telephone Company had virtues which were unsuspected during its life. To judge from comments and articles that have appeared in newspapers one might imagine that never under the regime of the company was a telephone subscriber cut off in the middle of his conversation, never was there a wrong number given, and never was there any delay in connecting a new subscriber with the system. In the circumstances, as I ventured to point out elsewhere a few days ago, I, for my part, can sympathise fully with the feelings of a man who has married a widow and who has continually dinned into his ears the virtues of the lady's first husband.

I should like to give to the Committee one instance of the kind of complaint that is made. It was made by an hon. Member who usually sits opposite, but who is not in the House at the present moment. One day last November he rang up my private secretary and denounced the telephone system in unmeasured terms because, he said, for three-quarters of an hour he had been endeavouring from his own house to ring up his own office. He is connected with Lloyd's. Although he had two telephone lines he was unable to get any reply of any kind or any satisfaction at all. He told my private secretary that he himself had frequently heard the Postmaster-General suggest in the House of Commons that telephone subscribers' complaints were sometimes ill-founded, but here, he said, was clear proof to the contrary, and he wished the Department to know it. With that healthy respect the Civil Service always shows to complaints made by Members of Parliament, the telephone exchange was asked to make immediate investigation. The lines were tested and found to be in order. An officer was sent to the hon. Member's office to see what was the defect, and it was found that his office was closed for Lord Mayor's day. [HON. MEMBERS: "Name."] I have not given the hon. Member notice, so I do not think I ought to mention his name, but the facts are beyond dispute. Although there may be sometimes uncalled-for complaints, and although the difficulties with which the Department have had to contend have been considerable, we are not content merely to state these difficulties and to explain the causes for any lack of full efficiency that may have been evidenced. The Department fully recognises that its business is not to apologise for difficulties, but to overcome them, and not to dwell on the exaggerated complaints that are sometimes made, but to remove the causes of the real complaints, which undoubtedly are frequently occasioned by defects in the service.

I should like, briefly, to tell the Committee what has been done since the transfer along these lines. I give the facts as regards London, because London is, of course, by far the largest telephone district. The figures are available, and I am very unwilling to ask my Department to spend time and labour in preparing a special statistical Return for the whole country, as, to my knowledge, they are very hard pressed with other work. In London, since the transfer, a period of fifteen months, I have increased the operating and clerical staff by 25 per cent. We had a combined staff after the transfer of 5,300 persons. That has been increased in this short period by no fewer than 1,350 additional officers. The wages of the transferred staff, on the average, are 15 per cent. more than under the company. Two large new exchanges have already been opened in London, many extensions have been made in other exchanges, and very large additional works are in progress. Nine thousand subscribers who were connected with wrong exchanges have been transferred to right exchanges, and 5,000 more will be transferred by July; 15,000 remain to be so transferred. A circular was sent to subscribers dealing with defects in the methods of operating, and it had a very useful effect. The consequence of this has been that our statistics show that the complaints of bad service in London have been reduced by very nearly 50 per cent., compared with the number in the early part of last year. I admit that they are far too many, and steps are being taken in every direction to effect further improvements in the service.

With respect to new development, as to which the hon. Member opposite who will follow me will no doubt have much to say, in London we have laid down during this time 162,000 miles of additional wire, and joined up with the service 20,000 new subscribers. Although there is still delay in many cases in providing the telephones asked for, the rate at which subscribers are now being joined up is 25 per cent. more than the average of last year. Half of the orders are now completed within three weeks. Taking the country as a whole, we spent last year just upon £1,000,000 in the improvement of the exchange system, apart from the trunk system, and this year we propose to spend a very much larger sum than that. Last year ninety-eight new telephone exchanges were opened. This year we propose to open 220 new exchanges. Several of them will be on the automatic system, and some tens of thousands of subscribers will be served in the near future from automatic exchanges, the experiments made with which have been very satisfactory. The trunk traffic showed an increase last year of 9 per cent., with rather more than 9 per cent. in revenue, and, owing to having now the local telephones, the trunk telephones, and the telegraphs all under the same management, we are able to organise the trunk service in a more efficient way than has hitherto been possible.

I have not the figures, just now, but from recollection I should say it was rather under £500,000. We did not spend nearly so much as we had hoped to spend, owing to the difficulties I have mentioned and owing to the absence of sufficient skilled labour. In the London trunk exchange now 520 wires come into the exchange, serving the country generally, and there are 180 now wires under construction, so that the capacity of that exchange will be increased shortly by about 30 per cent. A new cable is being laid between England and Ireland for the telephone service; it is the new type of loaded cable introduced by my Department, and is far more efficient for telephone purposes than the old cable. It will be available within the next three months and will provide a means of direct communication between Dublin and Ireland generally, and on this side, Manchester and the whole country through Manchester.

The Continental telephone traffic also shows a very remarkable increase. We have laid new loaded cables between here and France, and also between England and Belgium. The traffic with France has shown an increase of 25 per cent. in the year. I am proposing to reduce the rates and charges for telephone communication between this country and France by about 50 per cent., a reform which would have been effected long ago had not the consent of the French Government been withheld, owing to the necessity of their obtaining Parliamentary sanction, which they have not yet procured. I hope, however, that they will soon be able to join in this reform, which will be followed by an immense increase in telephone traffic between the two countries. A new loaded cable between England and Belgium, the longest submarine cable telephone in the world has been laid. In consequence the number of calls between the two, countries increased last year from 29,000 to 48,000. We shall soon open a public telephone service between London and Switzerland—Bâle, Geneva, and Lausanne—and a new cable is contemplated between England and Holland. We are, too, negotiating with the German Post Office with a view to establishing telephonic communication between England and Germany.

There are a few other points I should like to refer to relating to telephones, which I know is a matter the House is deeply interested in. We have suffered much in the development of the telephone system throughout the country from the delays of local authorities in giving consent for way leaves to Post Office engineers. Some of the local authorities have not delegated their powers to their surveyors or road committees, and, in some cases, months elapse before we can get the necessary consent to enable us to supply subscribers with the telephones which they have ordered. For example, there are cases outstanding at Southport where consent was asked for three months ago, and we are still awaiting a reply. In Northumberland there are cases four months old. The statutory powers conferred on the Postmaster-General contemplate that consent should be given within three weeks. Although I regret that my Department should find itself in conflict with local authorities, I can no longer acquiesce in the prolonged delays that are so often put in the way of the Post Office in supplying the telephone development which is urgently needed by the public. Therefore, although I should be sorry to be obliged to engage in litigation with local authorities, it will be necessary in the future for the statutory notice to be served upon them within the three weeks that the Act of Parliament contemplates, and, if the consents are not given without undue delay, it will be obligatory on me to take the cases into Court.

The system of rural party lines which are being supplied by the Post Office for the benefit of farmers and others in country districts has proceeded very successfully during the year. The scheme at first was not very readily adopted, but now it is being taken up with increasing rapidity in various parts of the country. Nearly 1,000 of the rural residents are now provided with these very cheap party lines, and 500 more are in course of being provided. I am informed that the service is regarded as a rule as being satisfactory, and the difficulty that was foreseen owing to the fact that the conversations of one subscriber on the line might be over-heard by others, is not found to be a real drawback in this country, any more than it has been in the United States and Canada, where this system has been developed to an exceedingly large extent.

How many party lines are there, and in what parts of the country are they to be found?

In no particular part of the country; they are scattered over a great number of counties. I will give the hon. Gentleman the number of lines later in the Debate. I am extending the use of the telephones which are now used by the Post Office for telegraphic purposes in villages throughout the country, so as to make them available to the public. There are many small offices where telegrams are sent, not by the Morse instrument, but by word of mouth through the telephone, and wherever possible these telephones are to be connected with call offices, so that the public in that village can have the use of the telephone system. About 2,000 call offices have already been made available on these lines, and a much larger number will be made available. It may interest hon. Members living in London to know that steps are being taken to extend very largely the telephone system to cab ranks, a facility which is found quite useful to many persons. There are already 300 cab shelters connected with telephone exchanges, and we are now taking steps to provide telephones also in connection with cab ranks at present without them. [An HON. MEMBER: "Who will pay for it? The public?"] The calls are only inward calls; the shelter cannot ring up any subscriber, and the telephones are supplied by the Post Office, which recoups itself by the penny per call it receives from the ordinary subscriber who wishes to use these telephone lines. It is a not unremunerative service. I have formed a small Committee of officers of my Department, of representatives of the Metropolitan Police, of cab proprietors, and of the Cabmen's Union with a view to making this system generally available throughout London.

A more important matter is that, on my suggestion, advisory committees are being formed in a number of our chief towns to co-operate with the Post Office in the improvement and development of our telegraphic and telephonic system. These committees consist of representatives of the local corporations, of the Chambers of Commerce, of the dock boards where there are docks, and of other local authorities, and the local postmaster and district manager of the telephones will be in touch with these committees, and whenever it is desired an officer may be sent down from headquarters to say what is being done in the locality. The more a Department like the Post Office can get in touch with the business community of a locality the better it will be for the community, and the more it will enable the Post Office to render efficient service to the public. There are nine of these committees already formed, and twelve more are in process of formation. I hoped to have been able to co-operate with a non-official Committee of this House, formed under the auspices of the hon. Member for Falmouth (Mr. Goldman). When that Committee was first formed I offered to request the head of the Post Office Telephone Department to attend its meetings and explain what had been done, and what was in contemplation. I also offered to give facilities to members of the Committee to visit our exchanges and see precisely how the work was carried on. I am rather disappointed that that invitation was not made use of by the Committee.

During the year the outstanding event in connection with the telephones has been the Telephone Arbitration to assess the price to be paid to the National Telephone Company for their plant. The sum demanded by the company was £21,000,000, and, after a prolonged arbitration, the sum awarded by the Court was £12,500,000, which was 30 per cent. less than apparently was anticipated by the Stock Exchange, judging from the value of the shares. I am sure that the Committee, as representing the taxpayers, will feel grateful to the Law Officers of the Crown, to the counsel who acted with them, to the officers of my Department, and to the many experts who gave us the advantage of their assistance, for work which has resulted in this great saving of money to the State. The Telephone Arbitration is the crowning, and, I am afraid, the concluding work, in the career of the Post Office solicitor, Sir Robert Hunter, who now is retiring after over thirty years' service to the Department.

The arbitration having been concluded, the time is approaching for a revision of the telephone rates of charge. That is essential in view of the inequalities of charge between subscribers in the various districts. We have collected together an immense mass of statistical information which is now being digested. Committees of the Department are dealing with the problem, which is of the greatest importance, both from financial and com- mercial points of view. We are anxious to give a telephone service at as cheap a rate as can be given consistently with the service paying its own way and yielding a not unreasonable profit to the Exchequer. At the same time, the Committee will probably agree with me that from business mens' point of view, efficiency must be the chief consideration, and that it would be an error of policy if efficiency were sacrificed to cheapness. I am anxious to make the system available so far as possible to the small user. I am impressed with the comparatively small development, hitherto, of the use of the telephone in England. Although we are not far behind Germany, and are much ahead of France and most of the Southern Continental countries, the telephone here is very inadequately developed compared with the United States, or Canada, or the Scandinavian countries.

Can the right hon. Gentleman say exactly how we stand in comparison with France and those other countries?

It is rather too detailed a matter for me to go into. I will give the information later. I have so many points with which to deal, but I may say that in Germany there is one telephone to every fifty-six of the population. We have one to every sixty-five, and France one to a very much larger number of the population. The United States have a very much smaller number. In all probability a Committee will be necessary to investigate the proposed rates of charge, as soon as the Post Office has ready, definite, detailed proposals—a period which I hope is not now very far distant. I have seen in the Press that some hon. Members are thinking of suggesting that a Select Committee of this House should be appointed immediately to consider the working of the telephone system. I should deprecate that course being taken, for such a Committee would find itself faced with an enormous mass of technicalities, with which it would really be unable to cope. It would also find the telephone service passing through a period of transition, and no fair judgment can be formed of the prospects of its development until some little more time has been allowed to elapse since the amalgamation of the two systems. Thirdly, I venture respectfully to suggest that it would be better for the chief officials of my Depart- ment to spend all their time and energies in improving and developing the telephone service rather than in attending and giving evidence before a Committee of the House of Commons and explaining these very technical matters to hon. Members, most of whom perhaps would come for the first time to problems of very great difficulty and complexity.

With regard to telegraphs, the service shows a considerable improvement during the year owing to a number of small improvements in method in the Central Telegraph Office and elsewhere. About a year and a half ago a deputation representing the Press came to see me, complaining of many defects in the telegraph service. I was glad to receive, this year, very cordial letters from the Press Association and the Exchange Telegraph Company expressing their satisfaction with the improvements that have been effected. I have every reason to believe that some hon. Members behind me are likely to raise the question of the interruption of telegraphic communication between Dundee and Aberdeen and the rest of the country, which occasionally, unfortunately, occurs when storms take place. During the last six years those cities have, at all events, never been completely cut off from the telegraph system of the country, except for a few hours in November, 1911—which happened to fall fortunately on a Sunday.

I said during the last six years. Unfortunately it is the fact that almost every winter, sometimes for one day and sometimes for two days or so, there is interruption of the service, causing delay in telegraphic communication with those towns, a delay which gives rise to the greatest inconvenience, especially in view of the fact that the chief industry of Aberdeen is the fish trade, which depends for its success very largely upon telegraphic communication. Hon. Members from constituencies in that part of Scotland urge me to lay underground telegraphs from Edinburgh to join Dundee and Aberdeen with the underground telegraph system of the country. That would involve an expenditure of £130,000. The hon. Member for West Aberdeenshire (Mr. J. M. Henderson) has, I believe, circulated to Scottish Members—and a copy has reached me, and I thank him for his courtesy—a memorandum dealing with this subject, which contains various statements to which I am afraid I must take exception. He mentions a deputation which was received by my right hon. Friend (Mr. Buxton), who was my predecessor, in February, 1907, and he says:—

"The then Postmaster-General fully appreciated the situation, and did promise that underground telegraphs should gradually be extended north from Edinburgh, and no doubt if he had continued in office he would have seen that this was done. The present Postmaster-General has assumed an attitude distinctly hostile."
I looked up with great interest the speech that was made by my right hon. Friend, and these I discovered to be the terms in which the promise was given. My right hon. Friend said:—
"The sections now in progress must be completed before going elsewhere, and as regards Dundee and Aberdeen, with whom I sympathise——"
—a very much used word—
"when these other sections are more or less completed we shall certainly take up the question on its merits."
He went on to say:—
"I do not think yon will expect me to do otherwise than complete the line from Glasgow to Edinburgh, and I can give no pledge as to further extensions at the present moment."

I was not referring to the deputation at all. The circular does not say anything about the deputation. I am speaking of what the Postmaster-General told me.

At this time, in 1906. Aberdeen had been completely cut off, and an appeal was then made to the then Postmaster-General. I naturally assume that my hon. Friend was referring to the deputation which my right hon. Friend received on that very subject from the persons to whom the hon. Member refers. At all events, the answer given by my right hon. Friend to that deputation was not a promise. It was quite clear that after the telegraphs had been extended to Edinburgh and Glasgow the case would be taken up on its merits, but no pledge could be given at that time. My right hon. Friend, I am glad to think, stayed in office for three years after that date, and I am afraid it is not correct to say that my advent frustrated his benevolent intentions. In his memorandum the hon. Member says:—

"The map of Scotland is a blank so far as underground telegraphs are concerned."

The fact is that the expenditure in Scotland on underground telegraphs amounts to 10.4 per cent. of the whole expenditure on underground telegraphs for the whole of the country, and as Scotland contributes to the revenue of the United Kingdom 10.12 per cent., and as Scotland contributes to the Post Office revenue 9.4 percent., I am afraid hon. Members cannot complain of being unjustly treated when they receive in return an expenditure slightly greater than their contribution. Furthermore, by the action of my right hon. Friend in extending underground telegraphs as far as Edinburgh and Glasgow, the communications are protected for the whole of that distance. There are, as a matter of fact, eight wires in the cable from London all the way up to Edinburgh which are exclusively devoted to the service of Dundee and Aberdeen. The hon. Member mentions certain towns in England where underground telegraphs exist, and contrasts them in size and importance with the two cities in which he is interested. These towns are merely places that happen to be on the route of underground telegraphs going elsewhere. The underground telegraphs were not made for the purpose of serving those towns he selects, but were laid for the purpose of connecting the larger centres of this country, and especially of safeguarding cable communications. For example, he picks out Penzance——

The first underground telegraph was laid to Birmingham. There is no cable to Birmingham.

Birmingham is also a town of some little importance on its own account. Furthermore, the cables were going through Birmingham on their way to the North, and the old routes from London to Birmingham were so congested with overhead wires that it was quite essential to find new routes, and it was thought advisable to take the opportunity of laying them underground. Already there is a very heavy loss, as the Committee is aware, on the telegraph service in the country. For every £1 of revenue we receive we are spnding 26s., and I am unwilling to spend this very large sum unless it is absolutely essential and fully justified by the merits of the case. I have communicated with the hon. Member for South Aberdeen (Mr. Esslemont) recently, and pointed out various other means by which communication can be safeguarded at much less expense. There are four main lines of communication between those towns and the South—they are different routes. I have had several sections of these routes rebuilt, stouter poles have been provided and great numbers of additional stays have been put up so as to enable the routes to withstand storms. I have also supplied apparatus to enable telephone wires to be used for telegraph purposes. By an ingenious arrangement they can be used simultaneously.

Are not the telephone wires down when the telegraph wires are down?

The contrary is the case. Frequently the telephone wires are standing when the telegraph wires are down. Further, I am proposing to put up a wireless station at Aberdeen, which will be available for ship and shore work, and which will also be provided with high-speed apparatus, so that it can be used as an alternative means of communication with the South in the case of interruption. Dundee will have the advantage of this, because the wires are never down both North and South of Dundee. If they are down North of Dundee, Dundee will be able to telegraph by wire to the South. If they are down South of Dundee, Dundee will be able to telegraph to Aberdeen, and thence by the wireless station.

It is an Admiralty station. I shall either have the use of that station or a new ship and shore station. I am still in communication with the Admiralty; it is not yet decided. If later on, in years to come, the telephone development justifies the laying of underground telephone wires, no doubt Dundee and Aberdeen will gain the advantage, but I am not willing to spend £1,600 a mile, which is what it costs to lay underground wires, in order to remedy an inconvenience, which I admit is a real inconvenience, for a few hours on one or two days in the year, even for such important industries as the fishing industry of Aberdeen, and the jute industry of Dundee. It is very easy to spend public money, and very difficult and very disagreeable to resist pressure, but I would ask the Committee to support a Minister who feels convinced that on the merits of the case this expenditure of public money is not justified, and who is endeavouring to provide cheaper means of making good defects.

In what other parts of Great Britain is the right hon. Gentleman spending money this year on underground services?

I cannot quote the figure from memory, but it is not a large sum this year. It is mainly to get the cable forward through Chelmsford to the East Coast, where the cables, land which connect us with Belgium and Germany, and also cable communication to Hull, which has long been promised and is comparatively inexpensive. These are the chief extensions this year. In view of the present prosperity of Post Office finances I have made a strenuous attempt to secure the consent of the Chancellor of the Exchequer—I regret it is an unsuccessful attempt—to a reduction of postage rates between the United Kingdom and the Continent. It has long been urged from many quarters that penny postage should be established between this country and France—a movement with which I, personally, entirely sympathise, although I feel that it would not be possible to reduce the rates to France without reducing them to Germany and to our other neighbours in the North of Europe. I was anxious to make the offer to the French Government, although I had no reason to suppose that in the present state of the Post Office finances in France they would necessarily be in a position to accept the offer. But the heavy increase of expenditure in this country at the present time has made it impossible for the Cabinet to propose this reform. The cost of penny postage to France would be £100,000 a year, and to Germany, Belgium, and Holland, £275,000 a year, and to make penny postage universal would cost about £500,000. That is the loss of revenue in the first year. That loss would, so far as postage with France and the North of Europe is concerned, be recouped by the increase of traffic, but very slowly. For instance, penny postage was introduced with the United States in 1908, and the sacrifice of revenue was £136,000 in that year. The traffic has grown, but the profit made on each new letter carried for a penny is exceedingly small, and the consequence is that the whole of the increase of traffic has brought in new revenue to the extent of only £13,000, and the loss now is £123,000 a year. In respect to Imperial penny postage, the loss increases as the traffic grows, for it costs more than a penny to carry a letter to a distant part of the Empire. In 1898, when Imperial penny postage was introduced, the loss was £108,000. It is now £190,000, and as the traffic grows so the loss will increase. For my own part, I certainly am of opinion that the money was well worth spending.

Although I have been obliged to forego, in the existing financial conditions, this reform, which I should greatly have desired to carry out, I an able to inform the House of a number of small improvements of service which I propose to effect. In 1910 my friend Sir Henniker-Heaton sent me a memorandum containing sixty-two proposed Post Office reforms. He himself at that time was about to celebrate his sixty-second birthday. Many of these reforms were impossible—for example, the suggestion that we should buy up all the cables from this country throughout the world. That I think would be an unwise speculation at this time. Further, the suggestion that we should reduce the charges for cables to a penny a word throughout the Empire, and reduce the present rate of 3s. to Australia to a penny—twelve words for a shilling—I am afraid must be regarded as Utopian. But of his sixty-two reforms twenty have already been or are about to be accomplished, and I hope Sir Henniker-Heaton has been able by that fact to feel twenty years younger than he did. In addition, many other reforms not in his list, probably an equal number, have been carried into effect, and I should like to mention some new ones to the Committee. There has been a good deal of public irritation for a long time past with respect to the Post Office Regulations for counting words in telegraph addresses. For example, Herne Bay, which is the name of a town, goes as one word, but Herne Hill, which is the name of a district, is counted as two words. King's Cross, the name of a village in Scotland, counts as one word, and King's Cross in London counts as two. There are many more anomalies of the kind. It would cost too much to count such expressions as High Street or Cadogan Square or Gloucester Terrace as one word. That would mean an immense sacrifice of revenue, but all names of districts, such as Charing Cross, King's Cross, and so on, shall in future be counted as one word. It will cost the revenue a few thousand pounds, but it will save the public many thousands of pounds worth of irritation.

Then with respect to the redirection of parcels, we cannot afford, when a parcel has to be readdressed from one destination to another, to take it perhaps from one end of the country to the other and then back again for a single fee, but I am revising the Regulations so as to effect that, if a parcel is delivered at one address and has to be redirected to another, it shall be carried without additional charge within the same town or district, the whole of London being counted as one district. We are thinking of introducing also a system which prevails in almost every other Post Office, of collecting the charges for unpaid or underpaid letters by means of unpaid letter stamps in place of the present rather primitive method of writing or stamping the figure, a penny or two-pence, on the envelope or card. The matter is still before the Treasury, and I have not yet got Treasury sanction, but I hope to obtain it before long. The public then will know that the charge made to them is authorised, and I hope to effect some saving in the accounting arrangements by this change. Newspapers which are published in the Dominions, if they happen to be posted in this country, have not at present got the benefit of our inland newspaper rates. An emigrant in Canada or Australia sends home a copy of some local newspaper to his brother, and that brother wishes to forward it to some other relative, but that paper cannot be posted at the English newspaper rate and has to be charged according to weight. The publishers of the Dominion newspapers are handicapped in their efforts to obtain an English circulation by being deprived of the benefit of the English newspaper rate for their newspapers which are posted in this country, although they may conform in every particular to the British Post Office requirements. The Empire Press Union, which has rendered useful service in several directions, urged me to effect this reform and to extend the benefit of the English newspaper rate to Dominion newspapers. That I propose to do. It needs legislation, and I propose within a few days to introduce a very brief one-Clause Bill, which, I hope, will receive the general approval of the House.

Yes, all portions of the British Empire. The Post Office has been asked for some time past to introduce a Parcel Post to the Far East by means of the Siberian route, and that also I propose now to establish. All letters for some time past have been sent to the Far East by the Siberian route unless directed otherwise, and the necessity of superscribing letters "which the senders wished to be sent by that route was abolished a few months ago. I am also proposing to take measures to develop in a modest way the Post Office system of annuities and life insurance, a reform which has been urged upon me recently by the Trade Union Congress, among others. The great insurance companies and societies do a business now which brings them in a revenue of £14,000,000 every year. The Post Office system brings in a revenue not of £14,000,000 but of £22,000, and it has long been quite stagnant, showing no signs of growth. I do not think it will be possible for the Post Office to compete with the companies: in the first place, because we cannot do canvassing as they do, and collecting premiums, which accounts for their immense growth of business, and, in the second place, because we have to invest our funds in Government securities bringing in a much lower rate of interest than the investments which the companies are able to make. But I propose to make a modest effort to rescue the Post Office business from its present stagnation, and to issue a simpler policy and to enable the premiums to be paid weekly by means of postage stamps stuck into books. The next reform is for the assistance of approved societies working under the National Insurance Act which pay additional benefits in return for additional weekly contributions from their Members. I propose to enable books to be issued to supplement the insurance cards, to which contributors can affix week by week ordinary postage stamps. Their books will then be returned to the societies, the societies will present the books to the Post Office in bulk, and we shall pay them the money representing the value of these stamps on favourable terms. Hitherto the Post Office has only been willing to purchase unused stamps if they have not been stuck to anything, and it has charged a commission of 5 per cent. for the service. In future we shall pay for these stamps which have been stuck into approved societies' books, and the commission will be reduced to 2½ per cent. for payments of over £50. I think this new method will also be very useful to trade unions, chari- table societes, and many other organisations which collect large sums of money in small weekly contributions.

My next proposal also deals with the Insurance Act, and with the difficulty which approved societies have of getting receipts from the persons to whom they distribute their benefits, especially in the rural districts. A postal order may be sent in payment of a benefit, and the society cannot cheaply obtain the assurance that that sum has been received by the beneficiary. I have under contemplation—I am still in communication with the Treasury also about this—the issue of new books of postal orders of a new type, with the name of the society concerned printed upon them. The name of the beneficiary will be filled in by the society, and the order will be sent to him. The orders will be paid by the Post Office only when they have been receipted by the beneficiary. The Post Office will then act as a clearing house for these receipts, and having paid the orders to which it has secured the name of the recipient, will redistribute the postal orders, after payment, to the societies by whom these orders wore originally issued. That also will be useful, not only to the approved societies, but also to co-operative societies in the distribution of their dividends, to trade unions possibly, and to other organisations which distribute small sums in large quantities. Lastly, I propose to establish a new service for the synchronisation of clocks. For a small fee per annum the Post Office will provide Post Office wires and send along an hourly time signal, and any institution or business house or industrial establishment to whom it is important to have the correct time and which is willing to provide the synchronising apparatus for their clocks can obtain in future annually from the Post Office for a small fee an hourly time service.

5.0 P.M.

It varies with the distance in most cases. If there are a sufficient number of persons co-operating in a district, as there probably will be, it will be £2. I have mentioned to the House that we are contemplating also a tube railway through London for Post Office purposes alone. The plans have been completed. It will be six miles long, running from Paddington to Whitechapel, there will be a 9-ft. tube with two tracks, the trains and trucks will be run automatically without drivers, and the mails, too, will be handled to a great extent automatically. The cost will be £1,000,000 as a capital charge, but the net cost will be exceedingly small when you deduct the present cost of mail traction in the streets. There will be greater rapidity and more even flow of traffic. It will also relieve the traffic in the streets of London. I will shortly be introducing a Bill to enable powers to be taken for this purpose. The laying of this tube through London will enable the British Post Office to maintain its reputation as being the best equipped and the most efficient in the world. [An HON. MEMBER: "How long will it take?"] You mean from point to point? It will be a very few minutes. [An HON. MEMBER: "To build?"] It will be about three years from first to last.

I turn, lastly, to deal with two or three staff questions which have arisen during the year. The perennial agitation for bettering the conditions of service which always goes on among the Post Office staff, and, in my view, is always likely to continue, has been quiescent during the year on account of the inquiry which is now being held by a Select Committee of this House into Post Office conditions. I am sure all the Members of this Committee will be grateful to my hon. Friend the Member for Hexham (Mr. Holt) and his colleagues, belonging to all parties, who have given so much of their time to an inquiry which has been of immense extent, and which has dealt with matters of great complexity. The result, I feel sure, of their investigations will be for the good of the public service. Their Report, I understand, will shortly be ready. Some difficulty has been caused in connection with the payment to sub-postmasters for their work under the National Insurance Act. The Treasury decision on that matter was received with much dissatisfaction by the sub-postmasters, and I am afraid there has been some misrepresentation also as to what that decision was. It has been represented that 10s. was given to the sub-postmasters as their sole remuneration for six months' work. That is not so. There had already been a great deal of delay in settling this matter, and I gave instructions that as an immediate settlement was not in prospect a minimum payment should be made to all the post offices throughout the country without investigating their accounts or estimating the amount of the business performed, and as it has been decided that every post office, no matter how small, should receive a payment of £1 as a minimum, 10s. was distributed to every post office in the country. But that is not to be regarded as the payment for six months, but only as a uniform payment representing the minimum that could be paid to them without investigation or delay.

Can the right hon. Gentleman say when the scale of remuneration for this work is likely to be fixed and announced?

A scale was provisionally announced, but I had given an undertaking that it should not be brought into operation until the Sub-Postmasters' Federation had had an opportunity of making representations if they wished to do so. They did very much wish to do so. They came to see me as a deputation, and I pointed out to them that the scale was based on payment at twice the rate for the sale of postage stamps. The payment to be given for their work under the Insurance Act was calculated on the basis of twice the scale for the sale of postage stamps.

Yes. It would be quite unreasonable to pay according to the stamps sold. A man goes into a post office for insurance stamps, and we calculated it at an average of a little less than 5s. per transaction. The average for postage stamps is about 4d. Clearly, therefore, 5s. being fifteen times 4d., you cannot say that a man has done fifteen times as much work in selling insurance stamps as in selling 4d. worth of postage stamps.

He is taking a great deal more responsibility certainly, but we thought that and any additional difficulty and trouble would be remunerated if we paid him twice the rate allowed for the sale of postage stamps. The sub-postmasters were dissatisfied and disagreed with the basis on which the return was made. I suggested that the only course was to take fresh returns. These returns have been taken, and I hope very soon to be able to communicate with the Treasury, and, if necessary, to make revised proposals. To show how difficult it is to arrive at what is just, let me give an illustration. We said that for every issue of cards the sub-postmaster should receive not less than a shilling a quarter. We thought, at all events, a shilling a quarter was a sum that would not be regarded as too high a minimum, but we find in the case of one sub-postmaster in Scotland that the work devolving upon him per quarter was the issue of a single insurance card, which was to himself as auxiliary postman, for which service he receives the sum of 4s. a year from the State.

With regard to the Telephone Company's staff, the operators have greatly benefited by their transfer to the State. The lowest provincial scale under the Post Office is higher than the scale the company paid in London. Our operators receive more than their supervising staff per individual. The clerks also have gained great benefits. They have had reduced hours, more leave, and their pay has been increased by the sum of £31,000 a year. What was called the electrical staff, on the other hand—the engineers—have not benefited in the same degree. I received a deputation from them to discuss further grievances, which lasted hours, and I came to the conclusion that there were on a number of points real cause of complaint. I have been able to secure the assent of the Treasury to a number of concessions lately announced, which I hope will remove most of their grievances. The year has seen a further advance towards the settlement of the problem of the boy messenger. Three years ago, in 1909, we dismissed 4,400 boys at the age of sixteen because we had no work for them to do. By means of various improvements in organisation that figure was reduced last year to 433, and this year I hope the problem will be completely solved, and that we will be able to absorb all our boys of good character and physique, who wish to stay with us, so that the Post Office will no longer be regarded as a blind-alley employment. I have also established compulsory education classes for the boys in all the centres where educational facilities are available, and also an improved method of drill.

The year has seen the disappearance of the old Post Office building at St. Martin's-le-Grand, which was, in the eyes of the public, the outward and visible embodiment of the British Post Office. It is much to be regretted that the building could not be saved, but it needed reconstruction and redraining. It was badly lighted; much space was wasted, and it was decided we could no longer use so valuable a site to so little advantage. It is interesting to note that only fifty years ago that old building, which has now disappeared, was, with the exception of a small staff dealing with money orders, sufficient to house the whole of the Headquarter Departments of the British Post Office. Now we need eleven immense buildings in that part and other parts of London to house the headquarter staffs. Fifty years ago these headquarter staffs numbered some hundreds. Now they number 31,000 officers, and, taking the country as a whole, the Post Office employs 233,000 people. This vast organisation has its imperfections, no doubt, like all human institutions, and no one is more conscious of those imperfections than those of us who have to administer the Department; but, on the whole, taking it all in all, I venture to claim that my staff is able to perform with efficiency and success the duties indispensable to the welfare of the nation with which it has been charged by Parliament.

I beg to move, "That Item A (Postmaster-General's salary) be reduced by £200."

I hope the right hon. Gentleman will accept my assurance that I submit this Amendment in no captious, personal, or party spirit. I do so in order to raise a discussion on one of the most important public branches in which the taxpayer is most vitally interested. I am sure everybody will admit the ability and the fairness of the Postmaster-General's speech. I do not propose to enter upon all the points of interest which he has raised, but to devote my observations to one branch of the service, which I have studied with some care. I wish to analyse the present system of the telephone service in the country. I perfectly admit that last year was an exceptional one. The difficulties which confronted the Postmaster-General were of a very exceptional character. I am willing to admit the existence of those difficulties, but I believe that it is want of foresight on the part of the Post Office officials which is largely responsible for the difficulties which have arisen. The Post Office knew that the National Telephone Company was under sentence of death. They knew for over eight years that the transfer was going to take place on 1st January last year. They knew that there would be an inventory necessary which would occupy the time of the staff, and they knew that an arbitration was likely to follow. My complaint against the Post Office is that they did not take the necessary precautions to meet the critical day when it arrived. Had they done so many of the difficulties with which we are confronted at the present moment would have been overcome. The question which the Postmaster-General raised with regard to rates will only be received in this House and outside with modified satisfaction. He is only able to promise that he hopes in the future to be able to deal with the rates, which he ought to have dealt with at least two years ago.

His staff could have told him two years ago, with approximate accuracy, what the cost of the plant was going to be. The Postmaster-General has acknowledged the urgency of dealing with these rates, because, in reply to a speech of my hon. Friend the Member for Devizes, he stated that the efficiency of the telephone service, and its development and extension, largely depended upon fixing the revision of the rates, and the delay in the development and improvement which a large number of subscribers are suffering from to-day owing to unfair rates, which he himself acknowledges, is largely due to delay on the part of the Post Office in dealing with the question of rates. The Postmaster-General tells us—and he has been consistent on this point—that he was not going to deal while he was awaiting the award of the Railway and Canal Commissioners. I have never accepted that excuse, and I do not accept it now. The Postmaster-General could have got the information from his technical advisers two years ago. He could have known, and should have known, then the approximate cost of the plant. The only question of doubt was the amount of the depreciation which has been incurred in the plant during the years of operation, and whatever depreciation it had incurred was approximately the amount that the Post Office would have to spend in order to replace that plant. The Postmaster-General has admitted to-day that we were to have an arbitration. The whole basis of the arrangement with the National Telephone Company was that we should buy at a fair value; there was never any question of buying the telephone service under its fair value. The settlement was to be at a fair value, and surely no one wishes to suggest to this House that the valuation was to be other than a fair one. I lay stress on this point because it is of the utmost importance that we should arrive at the right basis in fixing our rates. In my opinion, the Postmaster-General was wrong in suggesting the basis on which he wished to fix the rates when he said the lower the price we pay the Telephone Company the more cheaply shall we be able to supply the service to subscribers. If you buy plant at a depreciated price, surely it only means that you are buying a depreciated plant and the sooner you will have to replace it by a new plant!

Take an extreme case: If you were to buy the plant for nothing, it would not mean that you would have to spend nothing on that plant; it would merely mean that the plant was worth nothing, and that you would have to renew the plant. The true factor in fixing rates is the capital expenditure that is necessary to give us an efficient service. There need, in my opinion, have been no difficulty whatever in ascertaining with sufficient accuracy the amount that would be fair to pay for the plant. Had the Postmaster-General moved two years ago instead of displaying inaction during that period, we should have been spared a great deal of the loss and hardship which subscribers have suffered, and the trouble which has been caused. I lay great stress on the necessity of expanding the service and giving us an efficient service as quickly as possible, and I will refer to a few facts to satisfy the Committee on this question. In the United States you have eight telephones per 100; in Canada you have three telephones per 100; even in Denmark and Sweden you have got three telephones per 100. In Great Britain you have only one and a half telephones per 100. I have examined a statement recently issued in America, and I find that Great Britain, the great commercial country, is almost at the very bottom of the list in a service which is regarded as indispensable to the business community of any great commercial country. The United States put in last year no fewer than 749,000 telephones. We increased our service by fewer than 38,000 telephones. In other words, the United States in one year increased their service by more than the whole service of this country, which amounts to only 600,000 telephones, and they spent last year no less than £8,000,000 on additional plant, and propose to do the same this year, as compared with the insignificant amount which the Postmaster-General now proposes to spend on the telephone service. I regard it as of the first importance that the Postmaster-General should devote his whole attention to reducing the rates in this country, which are too high in many respects, and rapidly increasing the efficiency rather than attempting to make the telephone pay during the period of its development.

He ought to be able to inaugurate extensions and sweeping reforms because he has a balance available, far in excess of that of the National Telephone Company, and he can raise money at a cheaper rate than the company could do. He has way leave powers which were denied to the National Telephone Company, and even though the Postmaster-General says to-day that he has difficulty with way leaves, these are the same difficulties that the National Telephone Company had, and that he should be able to overcome. Moreover, the Post Office is relieved of the licences, which amounted to no less a sum than £250,000 which the National Telephone Company had to pay to the Post Office. It is necessary to insist upon rapid and effective development because the Government has been reprehensibly slack in the matter. I will give a few facts to demonstrate my charges. Take the trunk service to which the Postmaster-General also referred. There was an exclusive monopoly. The Government have been running the trunk service for fifteen years and we can test their intentions and activities by their work in connection with that service. If we look at the records we see in the figures relating to trunk service the rapid development which is characterising itself in all branches of telephone services abroad. I find that in the years 1910 to 1912 there has been no actual increase. There has actually been a drop in construction which also coincides with a decrease in the additional circuits that have been added to the service. In 1910 the expenditure in respect of the service was £371,776; in 1911 it was £279,855, and in 1912 it was only £255,000. In other words, the expenditure on the trunk service has declined by no less than one-third. In 1911 they added no fewer than 182 fresh circuits; in 1912 there actually is a reduction down to 145. During this period there has been a steady increase in telephones in the local areas and it is an elementary fact that the more people use the local service, the more people require the trunk service. No doubt the Postmaster-General did recognise the neglect of his own service in the matter of these trunks because he suddenly came forward last year and stated to the House that he intended to spend in the coming year £1,000,000 on the trunk service. Again, the promise of the Postmaster-General in that respect has not been realised because, instead of having spent £1,000,000 as he intended to spend, on the trunk service, the expenditure only amounted to approximately £500,000.

In any case he stated in answer to a question that in eight months the amount spent was £314,000, and therefore I take it that £500,000 would be within the mark. This continued delay in carrying out necessary construction is most discouraging to those who had hoped for efficiency in the Post Office management. There is no comparison between the trunk service here and that in the United States. In the United States the trunk service is known as a no-delay service, while in this country it is known as an all-delay service. The Postmaster-General himself has stated that he would give us service equal to that of the United States, if we were prepared to pay rates such as they are paying, say, between Liverpool and London, a rate of 5s. instead of the existing rate of 2s. 6d. The Postmaster-General should not forget that 2s. 6d. in this country is almost equivalent to 5s. in America. [HON. MEMBERS: "Hear, hear," and "Free Trade."] I do not know that these remarks have any bearing on this subject. I only want to point out to the Postmaster-General himself, who wanted to make out that he could give us an equivalent service if we were ready to pay 5s. instead of 2s. 6d., which we are paying now, that wages being three times as high in the United States and the money not going as far as in this country, we ought to get as least as good a service for 2s. 6d. as they get for 5s. I also say that there is no comparison even as to the efficiency of the service between this country and the United States. I have been reading a most interesting document issued by the American Telephone Company on this very subject. You can deliver a complete speech and be plainly understood at a distance of 2,200 miles from New York to Denver. I have tried to speak, as the Postmaster-General knows, from Falmouth to London, a distance of 300 miles, and I cannot be heard.

I have a letter even to-day from a firm in Yarmouth who are one of the biggest fishing companies in this country, and have large interests in the North. They wanted to speak to Fleetwood on 14th April. After waiting three-quarters of an hour the trunk call officer at Yarmouth rang up to say that they could speak to Fleetwood. Then the writer of the letter describes how, after all his efforts, when finally he was connected, he could not hear the people at the other end. The Postmaster-General quoted to-day the instance of an hon. Member on this side of the House who happens to be in the City, and who complained of considerable delay in the trunk service, and the right hon. Gentleman said that on inquiry it was found that it was on Lord Mayor's day and that the office was closed. I do not wish to burden the House with a personal concern, but I may quote what happened to me last Friday week, and I have verified it from the exchange. I rang up Cobham, which is only sixteen miles from my exchange. It took forty-three minutes before I got my connection. I could have gone to the place in my motor car in a shorter time than that. Passing on to the general service we find, again, the same things that we have found in the case of the trunk service—slackness in the past to deal with the situation when it did arise. Two years ago, on 19th June, 1911, the right hon. Gentleman said that the Post Office had been taking very active steps for some time past in equipping itself for taking over the company, but as a matter of fact we have seen that the result shows that the Post Office have made very little effective preparation in advance. The Annual Report issued in 1911–12 very frankly admitted, and it was admitted again in the House, that the plant was in a deteriorated condition. The right hon. Gentleman found that he had entered into a commercial transaction with the National Telephone Company by which it was, in my opinion, commercially impossible for that organisation to undertake the future requirements, knowing that its life was a very limited one. Therefore it was the business of the Post Office to have made preparations in advance.

When we faced the Postmaster-General last year with our criticism, he silenced us by saying that he intended to spend £2,700,000 on the telephone service this year. Again he has not fulfilled his promise. I asked him several questions as to how much of the amount had been spent, and he has not been able to give me the exact amount, and I quite understand that this Department is not able to give it at the present moment. But the right hon. Gentleman is forced to admit that a considerable amount remains unexpended, and he gives as his reason that it is largely on account of his not having been able to obtain skilled workmen competent to undertake the work. My criticism is that it is surely up to the Post Office to see that these defects do not arise. The new service is to be extended, and I am sure it is not an excuse to say that our system, its development and its expansion, should be arrested because skilled workmen to undertake the job cannot be obtained. The Postmaster-General, in dealing with the rural lines, has admitted that the service in that direction has been restricted because the Treasury would not give him the money to deal with it. It is the Treasury which is holding up that particular service. Can it be said that the National Telephone Company, during the period which it existed, was not able to carry out the service because it had not skilled labour to do it, or, at any rate, had not the money for the purpose?

I should like to deal with the question of the expansion of the service. Let us see what the activity of the Post Office has been. The Postmaster-General told us that he has been particularly active in the London area. Let me refer to the figures to show the actual position. In the year 1903 the service was on a relatively small scale. The figure in that year was 15,909; in 1904 it rose to 16,000, in 1905 to 17,000; and it went on to 18,000 and 19,000 till, in 1912, we find the startling fact that the figures were back again to about what they were in 1903, and that they had only added 15,902 telephones in the London area. In every telephone service either you have a percentage of increase, or you have a stationary position in regard to increase. In 1903 we find the increase was 30.2 per cent., and it goes on declining till, in London at all events, the percentage of increase is only 7.5 per cent. I ask the Committee to contrast our position with that of America, where you find that the Chicago increase last year was 15 per cent., Montreal 18 per cent., and San Francisco 24 per cent. increase. I submit that there is no reason in the world why in this country we should not maintain a stationary increase of 15 per cent. Oddly enough, we get the same indication in regard to the services outside London. There, again, instead of a stationary increase, or, at any rate, not a progressive increase, you get a decrease in 1908 of 5.49 per cent.—instead of 15 per cent., as it ought to be—and you get down to 5.28 per cent. I think, on these figures, the Committee will agree that we are in a very backward condition, and that a great deal of leeway is to be made up.

I now come to the question of accounts. It seems to me of the very greatest importance that we, in this House, should be able to control and to criticise all the accounts that are presented to us, and I submit that it is impossible for us to discuss up-to-date accounts under the system which exists. We have to discuss the details of the accounts, not for last year, but for the previous year, and if I were to discuss the accounts for the period of 1911 I would be regarded as wasting the time of the House. The only accounts to assist us in arriving at any conclusion are the accounts from 1911 to March, 1912. Let me point out that the National Telephone Company used to publish half-yearly accounts. It has been represented to me that it would be impossible, in view of the entangled conditions of the telephone system of this country, to present half-yearly accounts. The National Telephone Company, whose organisation you are taking over, was able to present half-yearly accounts, and I do not think it should be impossible for this service to be carried on as it was carried on by that company. I do not wish to assume an unreasonable attitude in this matter, particularly as the Postmaster-General tells me that it would entail further expenditure, and that his Department is so busy at the present moment. But I should at least like this assurance from him, namely, that in future he will present some preliminary memorandum dealing with the service during the year, so that when we come to discuss telephone matters in future, we can do so with greater information than we have at the present moment.

I should like to ask the right hon. Gentleman whether he had satisfied himself as to the accuracy of the accounts of 1911–12, before they were presented to the House. If he has so satisfied himself, then I think we are entitled to some explanation of the extraordinary discrepancy which appears in these accounuts. It is a discrepancy of half a million of money, out of a total of only £2,000,000. The accounts of 1911 and 1912 show a surplus on page 100 of the Post Office accounts. We find on that page that the balance available for depreciation, after having provided for the redemption of Treasury loans, amounts to £491,000. This amount is carried forward to page 113 as a surplus, and shown in Appendix O as an accumulated figure. And so that follows through the various pages of these accounts. What I wish to point out is that the Postmaster General has not got that amount; he has never had it; and the real amount is in the White Paper issued four or five weeks ago. That Paper shows that the real amount is, not a balance of half a million of money, but only of £37,000. This grave mistake has been allowed to pass without any explanation being given to the House, and it appears, for the first time, in an obscure passage, as one of the allocations, and it is referred to in four or five places and described as "a clerical error." I think we are entitled to inquire into the nature of this mistake, and to inquire into the position of the Government Auditor who certified the accounts as correct, though showing a deficiency of half a million of money, described as "a clerical error." But if you look into the matter you will realise that it is not a clerical error at all; that it is a piece of crazy book-keeping, and that if the Postmaster-General had only looked into the accounts, with his eye for figures, he would have immediately detected the great error which has been made. It is not merely a question of whose mistake it was; there is something far deeper, and we are entitled to inquire whether the members of the staff should not have looked into the accounts and detected this error before it was presented to the House and country.

The matter is significant from the fact that we know the Post Office telephone system of this country has been consistently run at a loss. In 1911 there was a deficiency of £60,000 on the telephone service. Suddenly, without anything happening, without any change of policy, you find that deficiency removed, and you get a surplus of half a million of money. I think if any hon. Member had the curiosity to look into these accounts he would be bound to detect the error which changed the whole situation from one of great loss to one of a profit of half a million. The Postmaster-General, when he met the municipal corporations of this country, who wanted divided service, said it was impossible to provide it. We know that between this country and Scotland there is a divided control, but what I want is to get from the Postmaster-General a guarantee to the telephone users in this country, who have large business relations with Ireland, that friction will not arise, as it must inevitably arise in connection with this question of divided control. There is another point in regard to Ireland. We have the award, and part of that award applies to Ireland. The telephones which belong to the Post Office might belong to Ireland under the Home Rule Bill should it be passed. But this is a new liability which we are incurring. We have to pay for the telephone system which we bought from the National Telephone Company, and I understand that the amount in respect of the Irish telephones figured in the claim at something between £500,000 and £750,000. I should like to hear from the Postmaster-General whether this amount is to be borne by the Treasury. Are they going to bear this burden, or does he suggest that it should be borne by non-telephone users? If there are no assets in respect of this £750,000, it must necessarily affect the rates that are to be levied in future.

And will pay this amount. That certainly satisfies me on that question. I am sure there are many hon. Members interested in the development of the automatic system of telephone in this country. The Postmaster-General acknowledged to-day that the reports on the automatic service are satisfactory, and therefore I heard with some surprise that, under those circumstances, he does not propose to introduce the service into London. On the question of organisation I have tried to show the serious defects of the present telephone system, and I ascribe them all to the fact that the Post Office is not sufficiently in touch with the business community in this country, and that it is not actuated and animated by a sufficient businesslike spirit. After all, you ought not to ignore, upon a vital commercial question, the opinions and the claims of the business community. I think if the Postmaster-General, if he will allow me to say so, will review the replies that he has on various occasions given to the great commercial and the public authorities, which have gone to him on this question, he will see that those replies have been somewhat arbitrary and uncompromising. As late as the 12th March of this year they suggested that the service was unsatisfactory, and that it was impossible to analyse the accounts unless the telephone accounts were separated from those of the post office. The Postmaster-General gave a flat denial to that suggestion, and declined to consider the suggestion to separate the telegraphs and wireless telegraphy and telephone accounts from those of the post office. They then asked that a Select Committee should be appointed to dealt with the whole question of control and management.

The only thing that the Postmaster-General will promise, and it is a promise which will give no satisfaction to the country as a whole is, that if there is any dissatisfaction on the question of rates, when they are formulated and issued to the country, he will then appoint a Select Committee to deal with this question. The Postmaster-General in the course of his speech to-day referred to the Committee of Members that has been using its best endeavours to promote the efficiency of this service. He was perfectly fair in his comments, and said he had placed at our disposal one of the secretaries of the Post Office, who had offered us facilities for examining the various exchanges. I will give the Postmaster-General this assurance that he may relieve the House of all this public business, which many Members find too great a pressure, and that they will be only too anxious to avail themselves of the opportunity. As regards active co-operation before we could meet the secretary, it was necessary for us to ascertain the condition of affairs; and the House will not blame me if I show them the pile of questions which we raised on this subject of the telephone during the past year in order to arrive at what we think is the policy we can fairly and rightly submit to the Postmaster-General. We met last week, and our intention was, after fully inquiring into the case, to suggest what the Postmaster-General has to-day refused, namely, a Select Committee to deal, not only with the question of rates, but to deal with the whole question of accountancy and control and management. We feel that that is an essential, and the Committee of which I speak would like to press and induce the Postmaster-General to accept the suggestion, and I am sure that that opinion is shared by a very large number of Members in this House. The Postmaster-General said it would be very difficult and very inopportune to have a Select Committee, but we are not satisfied with the system as it exists at the present moment, and what is the use of continuing a system with which we are dissatisfied simply because we do not wish to interfere with it, when by appointing a Committee we might be able to deal with many of the difficulties that are arresting the development of the telephone system at the present time.

We live in a time of speed, and in our daily life and in our commercial life the slowest must inevitably go to the wall. Everything is being speeded up to the highest possible point, and wherever you look transit is being accelerated. The postal service was revolutionised by the telegraphs, and the telegraph is to-day being revolutionised by the telephone. The telephone to-day is the quickest means for the transmission of intelligence and the efforts of the Government and of the Members of this House should be devoted to try and make the system as efficient and as rapidly developed as is possible. Our commercial success in this country largely depends upon our organisation, and I believe an essential feature in our commercial organisation is the confidence that every man must feel that he can place in the telephone, so that when he rings up somebody he does not lose time, and that it is trustworthy in its operation. That is what we wish to see ensured. We are not acting in any antagonistic spirit to the Postmaster-General. On the contrary, our whole intention is to co-operate with him in making this telephone service worthy alike of the national greatness and its reputation. I beg to move.

The hon. Gentleman who has just spoken has given us a very serious lecture on telephone matters, and to the Postmaster-General a very long stream of misfortunes of subscribers to the telephone exchange. I have tried telephones in many parts of the world, and I have always found that wherever you met a telephone subscriber in any new town or country he always has a very long list of grievances. I well remember once being in the office of a business man in Canada when he could not get through to some distant town in a reasonable time. His language was language which I remember to this day. I am afraid it would not be Parliamentary, so I do not propose to repeat it. I think the Postmaster-General is to be very much congratulated on the way in which he has amalgamated the National Telephone service with the Post Office service. I speak as a user of several telephones, when I say I do not think we realise the great difficulties that have had to be overcome in getting those two services into union. Although it has not been at work very long, I believe that in a short time we shall have as good a service in London and in this country as in any country in the world, and, not only that, but I think you will find the prices and charges for our telephone service will compare very well with those of towns like New York and Chicago. The Postmaster-General gave us a very interesting account of his Department during the last year. He told us a great deal about telephones and cables and telegraphs, and he seems to be so taken up with these new departments of his office that he hardly told us anything about the letter post. I was very disappointed that he said so little about letters, and that he practically foreshadowed no reforms whatever in the letter post. I had hoped, after his speech last year, when he had just been discussing with France the possibility of a penny post, that he would have been able to take one step forward in getting a penny post with one of the countries of Europe. He led us to hope that perhaps he might do so this year, even if there were a small loss. He tells us that the Chancellor of the Exchequer does not desire to make any Grant towards a universal penny post. I am very sorry for that, because he mentioned that the loss to this country, if we had a universal penny post, would only be half a million of money. That does not seem to me to be a large amount to pay for the enormous value it would be to the commercial community of this country.

In railway business or the tramway system the experience is that when you reduce the cost of the fare you usually increase your customers tremendously, and in the long run make a larger profit. The right hon. Gentleman told us that the penny post with the United States has not brought in the increase which was expected, but we must remember that it is a great deal further to carry letters to the United States than to the countries in Europe. At the present time we send letters to our Colonies at a penny, distances of 11,000 miles, whereas it costs 2½d. for a letter from Dover to Calais or from London to Paris. Hundreds of thousands of letters are being sent to our Colonies every week through France and Germany. Those letters are carried by the French and Italian railway companies over their railways. The Postmaster-General spoke to us with great pride of the tube which he is making and for which, I suppose, the Treasury has sanctioned the money. I refer to the tube from one end of London to the other, and which, I take it, is being made to give better facilities to the public, quicker transit, and more frequent delivery of letters. I think it is of far more importance to get a universal penny postal service all over the world than even to have our letters delivered a little more quickly in London. You can send newspapers now two ounces in weight to any part of the world for a halfpenny, but I think it is even more important for commercial letters to be carried at a low rate than newspapers. I think the whole of the objections are financial objections. I do hope before he leaves his present office, which are all know he has carried out so well and managed in such a businesslike manner, that he will mark his period of office by promoting a universal penny postal rate all over the world. I do not desire to say anything about the hours or wages of the Post Office staff, because there is a Committee sitting which will report before very long. I wish, however, to refer to two inquests which have been held. I read in the newspaper a few days ago about one of the boys in the service of the Post Office who was riding a bicycle when a motor-bus ran into him and he was killed. At the inquest the Post Office was not represented. It seems to me that when an inquest is being held the proper thing is that the employer, especially if it is a Government Department, should send a solicitor or some other representative to the inquiry. In this case witnesses were not called to show whether the driver was at fault. I do not know whose fault it was that the boy lost his life. There was no one present to cross-examine the driver, and a verdict of "Accidental death" was returned. Every day the streets of London are getting more dangerous for messengers and other people, and I think that when an accident of that kind occurs the Postmaster-General ought to be represented at the inquest. The same paper reported the death of a district messenger boy, and at the inquest not only was the company represented, but the chairman and one of the directors were present to see that proper evidence was called. I hope the Postmaster-General will give instructions that when any inquest of this kind is held some representative shall be present on his behalf.

6.0 P.M.

I do not rise to bring any indictment against the Postmaster-General. On the contrary, I am here for most things to praise him. I believe that the public has great reason to be grateful to him for a long series of postal reforms. That is additionally creditable when one reflects that he has had to struggle, as he tells us, in some cases unsuccessfully, with the Treasury. Why the Treasury should be particularly hard on his Department I do not know, considering that the Treasury itself has become one of the great spending departments of the State, and that the old watch-dog claims a large share of the national meal. Above all he has had to struggle against the settled maxims of a department of the State. I often wonder, when I hear Socialistic talk below the Gangway, whether hon. Members there recognise that, after all, the secret of successful business is the intelligent anticipation of events in the world of trade. A department of the State does not dare anticipate. I think it is a maxim of Meredith's that you ought to live a little ahead of yourself, but a State department cannot live ahead of itself. It follows public opinion; it does not lead it. It must not try to anticipate what the public wants; it has only to answer the public when it raises a cry for some particular concession. That, of course, was true of the Post Office in the old days to a much greater degree than it is now. There is something of the business spirit being infused into it now—as much as is permissible in any business conducted by a State department—and on the principles which must necessarily govern it in that way. But whilst the Postmaster-General has done a good deal in many directions, I think that, even granting these limitations, and allowing that he must maintain the safe principles that the State lays down, if his tenure of office is prolonged, there are many things in all his departments which he must look forward to carrying into effect.

The right hon. Gentleman spoke of his struggle with the Treasury in his effort to extend a cheaper system of postage to the neighbouring countries on the Continent of Europe. I had the honour of seconding the first resolution moved in this House for Imperial penny postage, a resolution which will always be associated with the name of Sir Henniker-Heaton. I would point out to the Postmaster-General that when he quotes the figures as showing an increasing loss on the system of Imperial penny postage he forgets that the mail contracts are made on other than purely postal grounds, and that there are certain allowances which he debits to that account which have no right to be there.

It is an allowance made on the principles of the Government auditor, but it is not an allowance which would be made in the case of private enterprise. Therefore I do not think that the figures which he quotes are reliable so far as the real incidence of cost goes. At any rate, even if they were, I say that it is well worth the cost, and I do not think he ought to be deterred from attempting to carry the principle further in regard to foreign countries. The Treasury would not be a very formidable stumbling block if he applied himself resolutely to its removal. I am sure that nothing would increase the amity of nations more than doing in regard to foreign countries what has been so eminently successful in the case of the British Empire. He has recognised the broad principle, that means of communication are just as important as means of defence for the consolidation of our ocean commonwealth, and, although the principle does not apply in the same way and to the same degree when we are dealing with the larger commonwealth of nations, still it remains the same. I trust that in that regard he is going to press further, and that he will not allow himself to be defeated by any Treasury rules, which, I can assure him, in these days can be very easily got rid of.

The right hon. Gentleman devoted a part of his speech to the changes made in the telegraphic rates. We of the Press have much reason to be grateful to him for the enormous reductions which have been effected during the past few years in the cable rates between this country and the rest of the world, particularly within the circuit of the Empire. It has meant a fuller and better news service both here and in the self-governing Dominions. That is a most important fact, which cannot but make for good in all ways and for all purposes. But more remains to be done. He may be right in not pressing at this moment for the All-Red route of the State-owned cable between this country and the Dominion of Canada. That is only pending the development of wireless telegraphy, which may alter the conditions of the problem; otherwise I think there is no justification for the delay. But I hope that, taking the cables as they are, he will not rest satisfied, either in regard to the public and general service or the special and Press service, before the deferred rates are made the normal rates. There is an approximation to that on the part of the companies. It is quite evident that they have no rooted objection to it, and as the volume of traffic grows I believe that reform can be easily carried into effect. It would be unfair that it should be applied only to the Press service, and I do not plead for it to that limited extent. I believe that in the case of the whole telegraphic service, for which the rates have been lowered, it may be possible to establish the deferred system as the permanent and normal system for all hours of the day and night.

I cannot, I am sorry to say, use the same tone of congratulation in regard to the telephone service. That question has been raised by my hon. Friend the Member for Falmouth (Mr. Goldman). The truth is the Post Office is suspect in this matter. I do not believe that any Member of this Committee can have read the history of the telephone here, as set forth in the different Reports made by Select Committees, without thinking that in many ways it is a discredit. It is to a large extent a case of meddle and muddle on the part of the State, which never allowed private enterprise free play, and yet was very slow to accept any general responsibility. In the first place, the Post Office was afraid that the extension and expansion of the telephone system would cause a loss in the telegraphic service. That loss is now a fact. That to a large extent influenced the telephone policy of the Post Office in its earlier years. There was a Select Committee which inquired into the telephone service in 1895 and another which reported in 1898. I may be permitted to read one sentence from the Report of 1898, because it is to a large extent as true now as it was then. The Report stated:—
"During nearly twenty years we have tried in turn, first, an unlimited competition, next, restricted competition, and afterwards an unregulated monopoly in private hands. But the exchanges still remain limited, in the United Kingdom chiefly to England, in England to urban districts, in urban districts to the commercial classes, and among the commercial classes mainly to merchants and large tradesmen."
That is true. The telephone service in this country has been, and to a large extent is now, a class service. I want the Postmaster-General to approach the problem—I have do doubt he is doing it—in a larger spirit than the Post Office have done up to the present. They do not realise what an enormous stake the country has in obtaining a cheap and efficient telephone service. We are behind all the progressive countries of the world in our telephone service. I do not want to quote many more figures than my hon. Friend has done, but I would like the Committee to consider the percentage increases of recent years. If the telephone service were on a satisfactory basis there can be no question that we should be able to show percentage increases in the use and development of the telephone just as good as those of other countries which have ess commercial interests to study. Yet if you take the years from 1908 to 1913, there is an actual percentage decrease in London from 12.93 per cent. to 7.56 per cent., and in the provinces from 5.49 per cent. to 5.28 per cent. I understand that the Postmaster-General does not contemplate those figures with any satisfaction. He must see that it is no good glossing over the fact or being satisfied with the smooth assurances of his permanent advisers that all is going well. We cannot, in extent of territory or in number of population, compare with the United States, but it is a curious thing that in the United States the total number of telephones is over 8,000,000, and even Germany has 1,700,000, whereas in the whole of the United Kingdom there are only 650,000. Judged by the commercial and industrial standard of this country, these figures are in themselves sufficient condemnation of the telephone system as it exists now; and the right hon. Gentleman does not want to hear anything more.

The State, of course, in the first place was afraid of assuming responsibility, and afterwards it crippled private enterprise. Backed up by a Committee of this House, it tried to institute a most unsatisfactory system of local telephone exchanges. I do not believe that in the long run the subdivision of the telephone system all over the country can possibly answer. I think you are bound to have its control concentrated in the hands of the Post Office. The experiment was tried in a few places, but on the whole we may say it has been a failure. The Post Office has the whole concern in its hands. What has happened during the last few years does not give us any ground for great confidence in the policy that is now being pursued. It is quite true, as the Postmaster-General said, that they have had to deal with the amalgamation of a vast system during the past year, but that has been a certainty for the last seven years. There ought to have been such rearrangement and such reorganisation provided as would have made it impossible for the Postmaster-General to come down here and say, "I have suffered from scarcity of skilled labour; I have been unable to do all I intended." There is no reason why, with their foreknowledge of the change, the Post Office ought not to have been fully prepared to accept that increase. But as a State Department it is governed by antiquated methods of business when it deals with a huge problem. I am not denying that the Post Office has good intentions, but I still fear that red-tape is allowed to have too much play in its management of business matters. The time has come for a dead-lift of effort. The time has come when telephone facilities should be in the hands of all those who may make use of them for the profit and development of their trade and calling.

I imagine that there will be hon. Members speaking here on behalf of the agricultural districts, but whilst the figures quoted by the Postmaster-General as to the extension of common lines in the rural districts may show that something has been done, they are not on a vast scale, and they cannot be accepted as payment in full of the promise which the right hon. Gentleman made to us last year. I am not so much concerned with, nor am I qualified to speak for, the particular necessities of the agricultural classes. I am thinking of the business interests of the country, and, when I speak of them, I am not thinking only of the larger houses which have telephone facilities. I want to see those facilities extended. They can only, in the first place, be extended by a large expenditure—because when you take over a big concern you must not be afraid of big figures—and, in the second place, by an up-to-date spirit of administration. The Postmaster-General spoke of the new facilities for telegraphing and cheaper rates as being a great improvement. I admit that for the larger purposes of Imperial unity they are invaluable. But I also think that for purposes of internal trade and domestic comfort the extension of the telephone to a point where our system will compare favourably with that which is availed of in the United States of America and in the more progressive countries of the Continent of Europe is not less important. If this Debate hastens that consummation it will not have been wasted.

I am quite certain there is nobody who is more ready to accept advice than the Postmaster-General—knowing that it is given for practical purposes. May I, in conclusion, make, these two suggestions to him? First, is it possible for him to associate with the Post Office a Committee or Council of business men who will give advice as to the commercial and industrial necessities of the different parts of the country—I mean a Standing Committee outside this House, which would not of course have control, but which would be at his side if he wanted advice? It would be a consultative Committee, not divesting the right hon. Gentleman of one jot or tittle of his responsibility, nor interfering with his power, but able to bring to him without the necessity of correspondence the daily needs of the commercial and industrial community. Secondly, does he not think that after the large transformation which is going on at present has been effected, that in the next Session of Parliament there ought to be appointed a Select Committee of this House—not to cavil and bring up every instance of particular grievances—which I admit you can find a good many of in every country under the sun where the telephone is used—but to see whether the Post Office has the organisation necessary for dealing with its problems in the right way and on the right lines. I do not see that, after the outstanding press of work is over, there should be any objection on the part of the right hon. Gentleman to this appointment. I take it the hon. Member for Falmouth would be ready to accept the terms of the appointment of a Select Committee next Session, when the crisis has passed, and I think it will be adequate for the purpose.

I wish to congratulate the Postmaster-General on one of his very able speeches. I also congratulate him on the very clever way he has of sometimes making wrong appear right. I hope to demonstrate that presently. I must also congratulate him upon the many favours he has been bestowing upon a great many people outside his own country. He has been able to reduce telegraphing and cabling expenses from 5d. to 2½d., from 9d. to 4d., from 9d. to 3½d. and from 9d. to 4½d.

The average of these amounts works out to the cryptic figures of 9d. for 4d. The telephone charges to France have been reduced, as well as from England to Belgium, and the right hon. Gentleman hopes to establish a better state of things between London and Switzerland, between England and Germany, and so on. What astonishes me is that when he is so generous in every other direction he should not do justice to his own country, or, at all events, to that part of the Kingdom from which I come. I would not take this hostile attitude—I admit it is a hostile attitude—towards the Postmaster-General if I were not forced to it by the feeling that, not he alone, but previous Postmasters-General, have not treated the North-east part of Scotland fairly and justly in this matter. Further, the principal inhabitants, commercial and industrial, of Dundee, Aberdeen, Arbroath, and Montrose are all exceedingly angry, and feel very strongly upon these points. What is the case? About twelve years ago Parliament began granting money for the purpose of securing the towns and telegraphs against interruptions from storm and tempest by the installation of underground cables. I suppose the real object of that was to make certain that that telegraphic communication should not be interrupted, as it was from time to time every year. But one wonders why on earth the authorities did not begin at that part of the country where this thing is not abnormal, but practically normal. The North-Eastern part of the Kingdom is the part where these storms have occurred every year with one or two exceptions. The Postmaster-General referred to the last six years. These storms are very bad storms. They come in cycles, as we all know. In the year 1906, there was a storm on the North-East coast, and an hon. Member of this House was killed at Arbroath, all that district was shut off for three or four days—actually cut off from all communication with anywhere outside. Only last winter on two occasions has this difficulty arisen. Dundee is a very important town. It is the principal jute centre in Great Britain, and it relies for its raw material on India. It is also a great engineering place. It therefore has very large telegraphic communications not only with the jute market, but with the freighting markets, and with the raw material markets of India.

When you come to Aberdeen you also come to where special circumstances apply, as the right hon. Gentleman has himself acknowledged. I wish the Committee to understand this, because this is one of the strongest points that I shall make. Aberdeen is the second largest fish food supply centre in the whole of the Kingdom. Only the week before last there was delivered, on its landing, 4,777 tons of fish, and in one day there was a record landing for Great Britain of 1,050 tons. What happens? Immediately that fish is landed on the wharves in the morning, if you are there, you will see the dealers buying the fish, and immediately on purchase they dispatch telegrams to all parts of the Kingdom in connection with its sale. I have a list of twenty-five telegrams sent by one firm alone in one morning. If these dealers and firms do not immediately get back a reply they cannot possibly arrange for freightage. If the interruption of the telegraphs is only for a few hours, it has the effect of deteriorating the fish and spoiling the man's chance to sell it. A deputation came to see the Postmaster-General, who made a point that nobody had shown him that they had made any loss. The right hon. Gentleman knows—he ought to know perfectly well—that people competing against each other in any particular market are very chary of stating what their losses may be. I persuaded one gentleman to give me the loss that he made on a particular day, 19th February, under circumstances similar to that which I am complaining of.

He dispatched telegrams early in the morning to twenty-five different places, including Bristol, Birmingham, Bangor, Belfast, Hereford, Liverpool, London, and Leamington. Every one of those telegrams was over three hours late, and that was only part of the interruption. So late was the reply from the other side of the Channel that he lost the Irish trade entirely, which meant a loss of £80 or £90. But to get back to what I started from, the underground cable. I did not quite make out from the right hon. Gentleman what his object is. Is it to link up the big towns and give them an advantage over smaller towns, or is it to connect up the cables? If it is to connect up the cables, then my answer is this: The very first underground cable that was laid, was laid from London to Birmingham. In order to make quite sure that Birmingham should be very well served, instead of going up in a straight line from Leamington, the cable was carried to Leamington, and then around by Coventry. In order that Birmingham should not be shut off, or to give it more advantages, it was brought back again through Gloucester and Worcester. The only explanation I can give of that is that the right hon. Gentleman the Member for West Birmingham, was Secretary of State for the Colonies for that year, and the right hon. Gentleman the Member for East Worcester, was Postmaster-General for that year, or the year before. As a matter of fact, what do you find? That these lines are laid, at the expense of over £2,000,000, through and across England right up to Glasgow on the one side, and Edinburgh on the other. And there they stopped at precisely that part of the country which is most affected by those storms.

Let us see what the answer of the Postmaster-General was. He says he does not want to waste public money on something which will not pay. That is the first time this principle has been brought into the public service so far as I know. Does he suppose that all public money voted is going to pay directly? If that is the standard, you would not have the telephone service in half the towns in England. I could show, if I had the figures before me, that if every town paid as much as Aberdeen, that this would pay easily at 4 per cent. for interest and sinking fund. My right hon. Friend says that £130,000 is the capital sum that would be required. Five per cent. would pay interest and sinking fund for that sum in twenty-five years. My right hon. Friend says he wants it capitalized in fifteen years. There I join issue with him. I know something of this business because I consulted the best electrical engineers that are to be found, and they tell me that wires insulated and in lead tubes not only last for fifteen years, but for twenty-five, thirty, and forty years, and longer. Electrical companies' lines have been laid in this very way for twenty years, and actually their electrification is better to-day than when they were started. Assuming twenty-five years' purchase, my right hon. Friend will find that £6,500 or £7,000 a year would pay interest and sinking fund on the capitalised sum. Aberdeen alone pays £20,000. Add to that Dundee and all the other revenue, and you will find you have plenty of money.

Not to any of these towns. Does the right hon. Gentleman say it is run at a loss to these towns?

Certainly, there is a loss over the whole country, and also taking the whole of the Aberdeen section, my advisers calculate that there is distinctly a loss at the present time.

Then if that is so, what is the loss in other places like Leicester, which only pays £10,000; and what is the loss in Oldham, which only pays £2,000 with its 250,000 inhabitants, and in Coventry, and in all these places compared with Aberdeen, which pays £20,000, if it is only a case of linking up.

The hon. Member might take some villages on the route with only 100 inhabitants that pay nothing.

You do not call Portsmouth, a town of over 200,000 inhabitants, a village. If you are going to start this principle of public policy that money is not to be given for any public purposes unless it directly pays interest and capital, all I can say is that it is a novel principle, and would be disastrous to half the Grants you make every year. Do the building of "Dreadnoughts" pay capital and interest if you put it on a commercial basis. If the object of establishing this is that we require it to be done so as to increase and help and aid the commerce and industry in that part of the country handicapped by its great distance geographically from great commercial centres; and if you do not do it for that reason, then I appeal to the right hon. Gentleman to do it for another reason. You wish to link up your cables for national purposes. Well then, you have the Norwegian Cable entering at the North-East of Aberdeen. Will you protect that? Further, you know pretty well that that particular part of Scotland is the danger zone for this often talked of German invasion. You have got your naval base at Rosyth, your submarine base at Dundee, and your aviation base at Montrose, and you have got in Aberdeen a centre for steam trawling for mine sweeping operations. You have another naval base, the finest in the world, I should say, in Cromarty—a naval base that would hold every ship of the whole British Fleet and the German Fleet too, and so situated that it is amply protected by headlands. Are you going to do nothing for that? What is your remedy? You say you will give us wireless. What do you know about wireless? Are you going to have every fish dealer running to a wireless station to send off prices to the market? Do you know that 800 or 1,000 telegrams go from that market alone every day? There is no such thing known in any other place in the whole of the United Kingdom as 800 or 1,000 telegrams from one market alone.

I have asked the leading electrician in this country, "Are you sure that in great storms and snow the whole of the air waves will act?" and he said, "It is very doubtful; it is not at all certain." Of course, the Post Office experts may be better informed than he is, although I feel perfectly certain they are not. I am giving the opinion of one of the leading men of the day; I do not mention his name, as perhaps he would not wish me to. Undoubtedly you cannot say, at the present moment, whether this wireless will carry ordinary commercial messages through storm and snow. The right hon. Gentleman says, "I will see what I can do with the Admiralty." Are you going to have these poor men coming to the Admiralty every morning saying there is a breakdown, and clamouring to get their messages through? This has been going on for years, and several times in the last eight or ten years it has been brought forward. The right hon. Gentleman referred to the speech of his predecessor, and said that his predecessor stated he would be prepared to consider it upon its merits. I say that, considered upon its merits, it will pay better than any other. You are giving it to towns that do not pay, and you have no right to withhold it from towns that pay you better, and which, from their geographical position, are particularly exposed to those storms. You have an underground cable from Penzance to London. I do not see it is needed there to provide against breakdowns, but where you spend this money for that district, why hesitate to assist the commerce of this country, and, in the interest of that other greater national reason, the protection of the country against any chance of invasion by establishing uninterrupted communication.

I wish to say a few words on this question, but I do not want to intervene between the hon. Gentleman who has just spoken and the Government, or to interfere in any way in this interesting domestic quarrel, but it appears to us, who listen to this Debate, that the hon. Gentleman opposite has well established his case. To those of us who are not satisfied with the administration of the telephone system by the Post Office a flood of light was thrown upon the question because of the assumption of the Postmaster-General that he regarded the towns of Portsmouth, Leicester, and other similar places as villages, who got the telephones extended to them because the system happened to pass that way. If that is the method or principle under which the telephone system is extended and caried on, it is no wonder that there should be the mistakes of which we heard from day to day. The hon. Gentleman stated with perfect truth that the Postmaster-General made a long and able and interesting speech, but I am bound to say that it was for us a most unsatisfying speech in so far as that branch of the subject is concerned. The right hon. Gentleman seems to be a close student of his right hon. colleague the President of the Local Government Board, who assumes an undoubted monopoly in claiming for his Department that it is the best that ever existed or could be found. The right hon. Gentleman does not mean to leave the President of the Local Government Board in undisputed possession of this particular form of Parliamentary oratory, and therefore he has entered the lists as a competitor for the same honours. Listening to his speech, one felt that what he wanted to establish was that he is the best Postmaster-General in the best Post Office that the world has ever seen. I do not dispute whether he has claims to that position. I am quite sure he is a very excellent Postmaster-General, and worthy of all our admiration, and that he has unquestioned abilities, and untiring industry. None the less, he has little right to adopt this extraordinary tone of superiority and complacency, because it really is almost ludicrous for the Postmaster-General to come down here to the House and try to brush away in a few sentences and generalities the complaints about the telephone system, which are so well founded, and which do not rest upon imagination or gossip started in a club, or in a tram, or in the street, but which rest upon the actual experience of man after man, whether he lives in town or country, and whatever may be his actual occupation. To come down here and tell us that there are no foundations for these complaints, to dish up the one story he was able to find in the whole list of complaints which made a good tale to tell the House, is to treat this question in an altogether improper way, and it is treating with undue levity what is a very serious and important question. Nobody knows better than the Postmaster-General that it is to the rapid development of this means of internal communication that we are compelled to look more than any other country for the prosperity of our industries and the well-being of our people. He cannot deny that we stand behind other nations in the development of the telephone system. The right hon. Gentleman at the end of his speech made an eloquent appeal to us not to unduly criticise and condemn the officials of his Department. That is the last thing which any of us on this side of the House who have spoken or mean to speak in favour of this Amendment desire to do. As an old official, I should be the last person to criticise the permanent officials or the members of the Civil Service, in the Post Office or any other Department. I am convinced that they are as distinguished and eminent members of that great profession as the permanent officials of any other Department. The complaint we make with regard to the Post Office is that they have been and are to-day too cautious, too slow, and too wanting in imagination and power to look into the future. I remember years ago hearing the general manager of one of our great railway companies discussing with another railway magnate the proper policy of railway managers, and he said, "The rule I have laid down is that I never sanction the expenditure of 1s. unless I can see that we are going to get 1s. 6d. back again." That is what we complain of in regard to the telephone, and it is very much the same as it was with regard to the small post offices in the past.

The Postmaster-General knows perfectly well that it was due to the agitation in this House, and the action of private individuals, that ten years ago the Post Office was induced to put small telegraph offices in country villages. Not only was that the result of the agitation and action of individuals, but it was only when individuals were prepared to guarantee the Post Office against losses for five or seven years that the Post Office embarked upon that policy, which has been such an immense success and such a boon to those who live in the small districts. What is true of the Post Office will be true of the telephones unless the Post Office acts with greater foresight than they have done up to the present. My hon. Friend has offered some criticisms in the able and interesting speech in which he moved this Amendment, and I regret that the Postmaster-General, without hearing the arguments which were to be advanced, and without waiting for criticisms which he knew would be forthcoming, has in advance laid down that he cannot accept the suggestion to appoint a Select Committee. I could have understood him objecting to the appointment of a Select Committee this year, because I know, in the first place, the hands of his Department are very full. In the second place, he has a Select Committee sitting upon one branch of Post Office administration, and we are well advanced in the Session; and it might be inadvisable to appoint another Select Committee now. The language the right hon. Gentleman used on this point seemed to us to be very comprehensive. It may have been misunderstood by us, and he may yet be willing to accept both the suggestions made from this side of the House. It has been suggested that a Select Committee should be appointed forthwith. That suggestion has been made in no spirit of hostility to the Post Office officials in the discharge throwing obstacles in the way or hindering the Post Office officials in the discharge of their duty. It is made because we believe that the allegations which have been made, and the charges which have been advanced, ought to be examined in a more comprehensive and satisfactory way than is possible in the course of a Parliamentary Debate. The Postmaster-General swept these objections away and said that they had no foundation, and that is always what happens in a Parliamentary Debate of this character.

The right hon. Gentleman will pardon me, but he did say that most distinctly, and he endeavoured to sweep away those criticisms. If he did not do so, what was the object of telling to the House the story of the gentleman who complained of the bad working of the telephone when it turned out to be due to his own fault? Is that not sweeping away the complaints?

I maintain that what the right hon. Gentleman said was an attempt to sweep away these criticisms and to treat them as if they were not important. That was the impression, and if that was not his object, then I do not know why he made the speech which he did. If the right hon. Gentleman wanted to admit that there were grounds for complaint and that these criticisms have some foundation and that progress in this matter has not been what it ought to have been——

If that is so, what was the right hon. Gentleman's object in referring to the old company and in telling us about the man who had married a widow and about her experience being similar to his. If the right hon. Gentleman did not intend to sweep these criticisms away, I regret that he did not make a rather different speech, and he entirely failed to convey to us the impression which he evidently set out to convey. What is it my hon. Friend (Mr. Goldman) has proposed? He has asked for a Select Committee. The hon. Member for Mile End (Mr. Harry Lawson), in his speech, said he would willingly compound with the Postmaster-General for a Select Committee to be set up next year, when the moment of difficulty has passed, when there may be greater freedom, and when all these questions can be still further sifted. I hope we may have been mistaken in the language of the Postmaster-General, and that he may still be open to consider the proposal of a Select Committee for another Session. I hope still more that he is open to consider what I characterise as a valuable and practical suggestion put forward by the hon. Member for Mile End, namely, that the right hon. Gentleman should consider whether it would not fortify and assist the General Post Office if they had in existence an Advisory Committee such as my hon. Friend has suggested. It is a practical suggestion and a most valuable one, and I hope the right hon. Gentleman will not dismiss it as one to which the assent of the head of the Department cannot possibly be given. I do not press him for an answer upon that point before the Debate ends to-night. I know it is impossible for the head of a great Department to assent to a proposition of that kind off-hand. We can easily understand that it may be necessary for him to consider the matter further, but I beg of him, before the Debate closes to-night, to tell us that his mind is not closed to the proposal, and, although he may vary it in some form, I hope he will be willing to consider our proposition in general terms.

I desire to congratulate the right hon. Gentleman upon his announcement of the practical completion of the work in which he has been engaged, and for which he deserves the greatest possible credit. I allude to the alteration in the system of the employment of boys by the Post Office which gets rid of the practice of turning a large number of lads out of Post Office employment for whom no other suitable employment can be found. I know how the Postmaster-General has worked himself in this matter, and I am sure he will not complain when I associate with him in this work the name of the late Secretary for the Post Office, Sir Matthew Nathan, who has given a great deal of time and patient labour to the examination of this question, and who deserves some share of the credit for the satisfactory conclusion which has now been arrived at. One other announcement has been made by the Postmaster-General in regard to obtaining wayleaves from local authorities. It is preposterous that local authorities should cause such grave public inconvenience simply because they are not prepared to devolve the duty of granting these wayleaves to their officials. It may be that there are cases in which special provision will have to be made, but in ninety-nine cases out of a hundred—and I speak with some experience in these matters—it ought only to be necessary for a Post Office official to communicate with the surveyor or clerk of the local authority in order to obtain consent. The Postmaster-General now tells us that he proposes to obtain statutory power.

7.0 P.M.

I am not a lawyer, but I confess that I have some misgivings about legal proceedings, which do not take place very rapidly, and my own experience as the head of a Department was that when we had to go to the Law Courts it meant considerable delay. I hope that if the Postmaster-General finds that his powers are not sufficient he will not hesitate to come to this House and ask for further powers, and, if he does, I am convinced that in every quarter of the House his request would be supported. We want these telephones, and it is preposterous that their erection should be delayed by local authorities who are doing no good and protecting no interests by such delay, and who do not seem to appreciate the necessity for a totally different line of action on their part. As to the general question, what I have said is that we want a general extension of the telephone system all over the country. We do not wish to cast any blame upon the officials of the Post Office but we are here to say that there has been in this extension and development of the telephones the same delay as existed in years gone by in regard to the telegraphs. It is no reflection upon the Post Office, and it is a fact that if we had been called upon to wait for the setting up of the small telegraph offices in country villages until the Post Office saw fit to take that step we should not have had them now, or, at any rate, we should not have had them anything like so soon. What we want by the Debate we have initiated to-day and by the arguments we are endeavouring to put before the Committee is to secure that there shall not be the same delay and the same backwardness in regard to the telephone system. The Postmaster-General tells us that a great deal has been done in the extension of the telephone system in London and in some other parts of the country, and he also made a reference to the common line system. My complaint—I have made it before—is that there is too great a tendency to put London and our great towns in the forefront in regard to postal matters and to ignore the fact that those who live in the country pay exactly the same whether it be for the posting of a letter or the sending of a telegram as those who live in the towns. We are not here to ask—it would be ridiculous—that they should have the same advantages in the country districts or the small towns and villages as are enjoyed in the big towns. That, of course, would not be justifiable, but we do ask, and I think we are entitled to ask, that there shall be a fuller recognition of the rights of the people to get from their Government service a fair return for the money they spend in this particular regard. Do they get it? Can anyone pretend that the distribution of advantages by the Post Office is equal over all classes and over all industries in the country? I venture to say that proposition cannot be maintained by the Post Office to-day any more than when I spoke on this subject in reference to a different branch of it, I do not know how many years ago. The Postmaster-General told us that there has been an unmistakeable advance, but he was obliged to admit that the figures of my hon. Friend were correct. Although he tried to dwell upon our advance with satisfaction, it is not to be compared with the advance of other countries.

Why should that be so? Why should we not have our telephone system at least equal to that of any other country in the world? I ask him to tell us what reason there is that makes it possible for the English Postmaster-General, able and industrious as the present Postmaster-General is, and as his predecessors have been, to get up in this House and without shame and confusion to admit that this country stands far behind others in the development of this great and important national service. If that be true of London and of our great towns—and it is true—if it be true that the increase in the laying down of wires during the last year has not been anything like as great as it ought to have been, what is the condition of the country districts? When hon. Gentlemen talk as they sometimes do of the backwardness of the country farmer and the small landowner, they do not realise how tremendously they are left out in the cold in regard to all these aids to industry and advantages of civilisation. I have spoken to the Postmaster-General about this privately, and I say in public that which I have said to him and to his officials. It is not sufficient to tell the people in the country that there is a new system, called the common-wire system, by which they can have the telephone fixed in their farms and houses. It is not sufficient to tell the local people by means of placards that these things are to be had. What would have been done by any business firm who had these telephones to sell, who wanted to sell them, and who wanted to see them in common use? They would not have been content with putting them in their shop windows, or even with an advertisement in the local paper. They would have sent their officials round the country to try and induce and tempt people to have them, and to make them realise that they would be enormously to their advantage.

We do not ask that the telephone should be installed at prices which would make it necessary for the State to pay for these advantages. Let the Department take care that their prices are carefully calculated, but let them also take care that they are based upon the fact that by methods like these they will secure the universal use of the telephone, whereas now it is only partial. Let them base their calculations upon the extended use of the telephone, and not upon the present very modified use of it here as compared with other countries. Let them base their calculations upon the wide extension and use of the telephone, which I am sure will follow, and then, I beieve, without any aid from the State and without calling upon the rest of the community to bear any proportion of the cost, they will be able at once to fix a price which people can pay, which will cover the cost, and which will be a popular price, and will therefore induce thousands to benefit by these discoveries, whereas now these advantages are only enjoyed by tens of people. That is the object we have in the Debate we have initiated to-day. I am sure the Postmaster-General will realise that we do not advance this case because we want to attack him or his administration. It is for no reason of the kind. We believe that an improvement is needed, and that an improved telephone service is of real vital interest to this country.

The Postmaster-General suggested that most of our criticisms were unfounded. He referred to some language I used in a Debate, I think on the Address. I am sorry to say that the information which the Postmaster-General gave me to-day, instead of disposing of the statement I then made really gives pathetic force to it. He said, "How can you charge us with being worse employers than the National Telephone Company, our predecessors? We have spent a large sum of money in improving the wages of our employés." It is rather strange that these people who have been the recipients of these increased wages should be unconscious of the benefits which the Post Office has been showering upon them ever since they became their masters. Since the telephone was taken over by the Post Office the actual service has in many cases not been so good, and complaints have enormously increased. I speak as one who has used the telephone himself at his own residences under the National Telephone Company and to-day under the Post Office. I have found nobody whose experience differs from my own, and I say that there were less complaints then than there are now, that I had less interruptions in the conversations which took place, and that the system worked better and more smoothly. I say further, and I maintain it cannot be disputed, that there must have been some failure in the distribution of these increased payments, because, when I have spoken to the employés of the Post Office in complaint of the existing state of things, they have sympathised with me and have always courteously listened to any complaint, but they have said that since the change conditions are harder for them than they were before. Those facts alone would be enough to justify the action my hon. Friend has taken to-day.

You could obtain from any ordinary individual a long series of definite statements as to cases where the telephone has hopelessly failed. It is no use to come here and tell this Committee that these are only the criticisms that are always made, whether it be of the telephone or the telegraph or any other system of the kind. I say there are more faults than there ought to be, that these criticisms are well founded and that the reason for them ought to be removed. I say this can be done, and I would ask the Postmaster-General to realise that these complaints are made in good faith and to endeavour to remove the cause of them. The Post Office, in my humble opinion, is trying to do too much. I believe there is too much centered in one hand and one Department. We want devolution within the Department itself, and I confess I should like to see the telephone system working as almost a separate Department, with its own head and its own officials. The Post Office officials are as able as any in the land. They are doing their utmost and they are probably working as hard as anybody, but there is too much to do and too much centered in one individual. Until the right hon. Gentleman realises that these grievances do exist, that they are well founded, and that they are not made by casual gossipers talking about these matters because they have nothing else to talk about, and until he sets about to remove them, he will not make the national telephone system as perfect as humanly speaking it can be made, or general, so that all may derive benefit from its use.

The right hon. Gentleman who has just sat down complained, in the earlier portion of his remarks, that an air of levity had been introduced into the Debate. Certainly if that be so, though speaking for myself I do not think it is so, nobody can accuse the right hon. Gentleman of any levity in the interesting speech to which we have just listened. It was my good fortune at one time to be a constituent of the right hon. Gentleman, though not indeed a political follower, and I am sure he will not think me discourteous if I say that his political bark is sometimes worse than his political bite. The Post Office Vote affords a very wide and interesting field for discussion, and it has, I think, been made more interesting than ever by the speech which the Postmaster-General made this afternoon. I am bound to say that I feel a little less ignorant of Post Office matters than I did this day twelve months, inasmuch as it is my privilege to be the Irish representative on the Post Office Committee to which the right hon. Gentleman has alluded. Obviously this is not the time or the place to make any further reference to that Committee beyond endorsing the right hon. Gentleman's hope that at a very early date the results of its deliberations will be given to the House.

I rise for the purpose of drawing the attention of the Committee, and of the right hon. Gentleman, to a matter of very great importance, namely, the delay in the transmission of telegraphic messages between London and Dublin. Here I find myself in complete accord with the remarks of my hon. Friend the Member for Aberdeen (Mr. J. M. Henderson), because our complaints can both be traced to the absence of an underground wire. The right hon. Gentleman himself recognises this. Twelve months ago I had the privilege of drawing his attention to this admitted grievance regarding the commercial community, and indeed the entire community of the city of Dublin, and he said he recognised the importance of a regular and speedy telegraphic service between Dublin and London. The only question therefore is whether that speedy telegraphic service exists between Dublin and London. I will quote the right hon. Gentleman's own view as to the condition of things which has obtained, not for a month or two, but for a very considerable time. Writing some few months ago, in regard to the telegraphic interruption between Dublin and London, the right hon. Gentleman admitted that seventy cases had been reported to him between the 5th December, 1911, and the 30th June, 1912. Some of the interruptions were intermittent and of short duration, and on forty-two occasions the fault had disappeared when the wire was tested or it could not be localised. But in all cases a wire was used in substitution. Anybody who has gone into this question must be convinced that these delays—not in all cases, of course, but in a very large percentage of cases—are due to storm conditions, particularly obtaining on the Welsh coast. What I have ventured to suggest before this, is that a simple solution of the difficulty would be found in extending the existing underground system, which runs as far as Liverpool, to the Island of Anglesey, where, of course, there is a cable to Dublin. I know very well the right hon. Gentleman would answer by pointing out that this would cost £1,600 per mile.

I do not propose to go into these economic considerations, but I do suggest to the right hon. Gentleman and to the Committee that the Post Office service of the United Kingdom is not to be carried on on exactly the same basis as a strictly commercial undertaking by striking an accurate profit and loss account. The right hon. Gentleman would be the first to admit—indeed, he takes pleasure in stating it—that his Department is carried on at a profit of something like £4,000,000 a year, and surely, if that be so, it is not too much to ask that, in a matter of this kind, owing to the very vital interests, not only of Ireland but of the United Kingdom as a whole, which are concerned, the few hundred pounds spent in this way would almost infallibly result in increased telegraphic communications between Ireland and the other parts of the United Kingdom. One defence which may be set up by the right hon. Gentleman, or his colleague, is that if the route viâ, Anglesey breaks down there are alternative routes available. That may be so, but it is almost impossible to get away from the fact that if these alternative routes are used—I am speaking of those viâ Scotland and the North of Ireland—there must be a very considerable delay in the delivery of messages. It is obvious that a telegram which has to be sent to Dublin viâ Scotland or some other than the natural route viâ Holyhead, must be subject to considerable delay in transmission. I have here a letter from the president of the Dublin Stock Exchange. He writes, that since the beginning of the present year the Post Office authorities have officially notified their secretary of complete failure twenty times, thirteen of which are for the present month. The delay on one occasion was for a day. On the other occasion it was usually from thirty to sixty minutes. It is quite evident if these alternative routes to which the right hon. Gentleman referred are resorted to, there must be still greater delay in the transmission of messages.

There is only one direct wire to the Stock Exchange, and, when it breaks down, another wire is brought into use at once.

I accept the right hon. Gentleman's assurance, but the fact remains that it is the universal experience in Dublin that there are frequent considerable delays in the transmission of telegrams. I do not want to detain the House by piling up proofs, but I have here a copy of a resolution unanimously adopted at a meeting of the Associated Chambers of Commerce in London, a few days ago, calling attention to the frequent interruptions in the telegraphic service to Dublin owing to the breaking down of the overhead wires, and requesting the Postmaster-General to place the wires underground so as to avoid the interruptions, which are a source of loss and inconvenience to the commercial community. This is not merely an Irish grievance; it is a grievance common to all parts of the United Kingdom, and if £4,000,000 represents the profit made by this great State department; surely to goodness it would not be too much to ask the right hon. Gentleman to devote a little portion of it to the construction of underground wires for this short stretch. I wish the Rules of the House would allow a copy to be exhibited of the map, for hon. Members would then see how little we are asking. It is a very short distance from Liverpool to Holyhead, and even if it should cost £1,600 a mile, I am not certain but that the money would represent far better expenditure than some which has been indulged in of late years.

On the assumption that the right hon. Gentleman will adopt a non possumus attitude, I was thinking of making an alternative suggestion. If I am correctly informed, there is no submarine cable between Liverpool and Dublin. We know there is one between Holyhead and Dublin, and I would ask if the right hon. Gentleman could not see his way to lay down a submarine cable from Liverpool, either direct to Dublin or to connect it with the existing cable from Anglesey. That would not cost anything like £1,600 per mile. I do not know that I need add anything more. I desire to assure the right hon. Gentleman that all of us on these benches recognise his patience and courtesy, and the sympathy he displays in any matter affecting Ireland which we bring before him. Speaking for myself I am not at all pessimistic. I hope that, notwithstanding the right hon. Gentleman's assurances to the contrary he will see his way to remove the difficulty to which I have referred—not an Irish difficulty simply, but one common to all parts of the United Kingdom.

I desire briefly to raise one or two points regarding the administration of the Department of the right hon. Gentleman. First, however, I wish to say with how much satisfaction we regard his solution of the boy messenger problem. The position is now a very satisfactory one and I only hope that the solution will prove as successful when put to the test of experience as it appears at first sight. I rise at the instance of the men's societies to say a word with regard to the right of official recognition. Since the right hon. Gentleman has been in his present office I understand official recognition has been accorded to the men's unions.

In any case it is an event of comparatively recent occurrence. But the men seem to think that, although they have got recognition it does not quite work out in the way they expected it to. I am given to understand that the practice in bringing grievances to the notice of the Department is to send in a petition signed by more or less all those who suffer from the grievance. Nowadays a more businesslike arrangement is adopted, and communications are received by the Department from the officers of the trades unions. But they complain that their letters are treated very cavalierly, and that they have to wait considerable periods before they get any answer. The right hon. Gentleman rather complained about the delay that occurred when he sought to obtain way leaves from municipalities, and he said that in some cases there had been delays of three or four months. That is exactly what is complained of against his Department in regard to petitions from the staff. It is alleged that the unions have to wait three or four and even five months before getting even a bare acknowledgment of their communication. Again, complaint is made of the nature of replies. What happens, I understand, is this: First of all, the local official or supervisor has to deal with certain matters at the office, and if his decision is appealed against he is enabled to make further representation to the Department. The officials of the union complain that the whole thing is apparently cooked at the local centre, and they can get no satisfaction from headquarters. Complaint is made, too, that in personal charges, for instance, employés are not even able to get the exact particulars of the charges made against them. What happens, apparently, is that when the appeal goes forward the official who originally complained and probably suggested the punishment is the man who is called upon in the long run to give his version of the matter, and that is taken without the man against whom the charge is made being given the details and thus being enabled to prepare an adequate defence.

There is another matter I have been asked to suggest. The staff believe that if they could get more closely into touch with the Postmaster-General they would get better satisfaction. They are desirous of seeing some change made in this respect; they want to be consulted when changes are made affecting their duties or conditions of employment. They suggest that if they are going to have recognition it is not of much use if it is merely to be in the nature of a right to protest. They say, "We do not want to be in the position of seeing the alteration take place, and then come along and grumble that the alteration has been made." They contend it would be far better, and I think they are reasonable, if they are to have the right of protest, to take them into consultation before the alteration is made. Obviously, with a little give and take the matter could be discussed with those who have the work to perform, and with all due deference to permanent officials of the higher order, I submit that a man who has to do the duty has at least some knowledge of what the duty involves and what is likely to be the outcome of the changes that are being made. There is another point in the relations existing between the Department and the men, namely, their complaint in regard to the interpretation of Section 3 of the Super- annuation Act, 1887. It is stated that the Department will not take full advantage of the powers given to them by that Section. That Section states:—
"Where a person at the time he becomes a Civil servant within the meaning of this Act is serving the State in a temporary capacity the Treasury may, if in their opinion the special circumstances of the case warrant such a course, direct that his service in that capacity may be reckoned for the purposes of the Superannuation Acts, 1834 and 1859 and this Act as service in the capacity of Civil servant, and it shall be so reckoned accordingly."
I observe that the powers of that Section are not mandatory, but are dependent upon the word "may," but I suggest that they were not put in there for the fun of the thing, but to be used when occasion warranted. I have had a case given to me which I am sure is selected, because it is a type of many more cases and not because it is the only one that could be brought forward. It is the case of a man who was working in the Hull office from 1878 until 1889. From 1889 to 1908 he was an unestablished storekeeper in the engineering department at Basingstoke. Afterwards he was transferred to the Hull office as an established sorting clerk and telegraphist. Now he is informed that his pension can only date from 1908, and that his previous service in the Post Office on pensionable work is not to be taken into consideration at all. I understand that instead of the powers of that section being adopted, which would entitle him to a pension of 25s. a week, his pension is brought down to 6s. a week. That is not the way to treat men if you want to get the best service out of them. I ask the right hon. Gentleman to consider the point I have brought forward in regard to the treatment of the unions, and I hope that he will be able to do something. I make the suggestion that if he could—I do not know whether it is possible for him to do so or whether the traditions of the service will allow of it—meet the officials of the unions and discuss whether or not it is possible to get a working recognition of the unions, which is more than at present appears to be the case, for it is recognition in word and form, not in deed, probably the service would work much more smoothly than it does now.

There is one other point with regard to sub-postmasters. I should like the Post- master-General to tell us when he is likely to be able to make some definite statement in regard to the remuneration of sub-postmasters for the sale of insurance stamps. I asked a question on the matter a few weeks ago on the occasion of the issue of the fresh order asking for a return of the numbers of transactions, the value of the stamps sold, and so on, and I was informed that was to continue for three weeks, after which something was to be done. I do not know whether the Postmaster-General has taken sufficient account of the fact that for the first six months every sub-postmaster, or whoever was working on his behalf, had to make a record of every transaction of the sale of insurance stamps. If he sold six 7d. stamps, he had to make a record of it day after day for six months. One would have thought that a six months' record of that kind would have been sufficient upon which to base adequate remuneration, and to have satisfied the Postmaster as to what they were going to receive. The right hon. Gentleman ought not to complain unduly if what he intended has been rather misrepresented, because, as far as I have been able to discover, the sub-postmasters themselves have not been able to understand what he really intended to do with them. I have talked with more than one of them, and they have told me they had been selling an average of £70 worth of stamps a week for the last six months, and have received 10s., and they ask what amount they are going to get in the future. They do not suppose that is all they are going to get, but it is all they are sure about, because they cannot get to know what their remuneration is to be. I suggest that the right hon. Gentleman should recognise the great service the postmasters have performed in explaining the Act to many people who were either unable or too careless to read the Act for themselves, and I think that the services they have rendered ought to have received more considerate treatment than the Postmaster-General has meted out to them. If he could, without any further delay, give them some definite intimation of what they are likely to receive, I do not think the service will suffer.

I desire to support the Amendment of my hon. Friend the Member for Falmouth (Mr. Goldman) and to back up his request for a Select Committee. I should like to see that Committee appointed to deal with the question of rates and also the question of the separation of the telephones and telegraphs from the Post Office. They might remain under its authority but yet be a more or less separate Department. I press for that, because what I may call the frame of mind of the Post Office or its policy is not adapted to changing itself rapidly and to dealing as rapidly as I should like to see it deal with an expansion of the telephone system. Whenever one interviews gentlemen at the Post Office one receives the greatest courtesy, but if you ask for any extension they always tell you that you must remember that the Post Office is the only revenue-producing Department we have; therefore they must look to what revenue the proposed additional service will produce. The question of revenue is dinned into your ears. It seems that they look for an immediate return. They are not prepared to put down their money unless they can see almost at once a return for their investment. They want a substantial return in the space of three days. They ought to be content to put their money down and even to sustain a loss at the beginning, but eventually to see that loss turned into a large profit. It seems to be their policy that if they take care of the pence the pounds will take care of themselves.

That is rather a penny wise and pound foolish policy. As an illustration of that, in 1911 there was a discussion in the newspapers and also in this House as to the great damage that was being done to goods sent through the parcel post. The hon. Member for Blackfriars Division (Mr. Barnes) asked what financial saving the Post Office were making by using bags instead of hampers for conveying the parcels. It was admitted that the Post Office had changed the system of using hampers and had substituted bags, thereby effecting a saving. The Postmaster-General was not able to say exactly what was the saving, but he said there was a saving. He also admitted that there was a small increase in the proportion of cases of damage. Any commercial business, whether a monopoly or not, which wanted to retain customers, would not substitute any arrangement which gave even only a small percentage of increased damage to the customers' goods. Another example relates to the hours of labour and wages of the Post Office servants. When the hours of labour were cut down it was done at the expense of the public. The servants were given their half-holiday during the week, and during that half-holiday the post office was shut—I allude to the small post offices—and delay took place in the delivery of telegrams. No arrangements are made for sending off the telegrams, and the public suffer the inconvenience of having to go a much longer distance to send off their telegrams, and also they have to wait much longer in receiving them if the Post Office has to send a longer distance. What the Post Office ought to do when they shut up a small post office is to send a clerk from the head office in the neighbourhood, who would keep the post office going, giving the usual service it gave before to the people. But I presume they were wishful to save a little money—quite a creditable thing to do, but it ought not to be saved at the expense of the advantages of the public.

With regard to the question of the telephone service, the Postmaster-General mentioned a case in which there was an unfounded complaint of an hon. Member on this side. Perhaps I may mention a case in which the complaint was justified, which also happened to an hon. Member on this side, and the hon. Member happens to be myself. My telephone, which is often out of order, was out of order on a certain occasion, and I sent a message to the officials. Nothing was done, and it was still out of order the next day. I sent another message next day, but nothing was done. I did not send a message the next day, but I sent one the day after. Still nothing was done. I then took advantage of the fact of being a Member of the House of Commons, and addressed a personal letter to the Postmaster-General, and put the position before him, and with his usual courtesy he took it up, and the question was inquired into. The reply he sent me was to the effect that no record had been made of the first complaint, that an operator had received the second complaint and had considered that the machine was all right, and had not reported it to the engineer, and that the engineer had examined the third complaint and could not find anything wrong, and it was only when I communicated with the right hon. Gentleman and the engineer made another examination that it was found that there was something omitted and that the telephone was not in proper order. If I had not had an opportunity of communicating with the right hon. Gentleman the telephone would in all probability still be out of order and I should probably have done what a good many others do who use the telephone, got tired of making complaints and perhaps thrown up my telephone. I can assure the Postmaster-General that the reason why more complaints do not come in to the telephone office is that people get tired of complaining. They complain and nothing is done and therefore they cease their complaints.

The Post Office has known for six years that they would have to deal with this question. Business people are pressing very much to have the question of rates and the question of zones settled—both very important questions as has been admitted across the floor of the House. I have asked questions myself on this subject, and I am told that it is engaging the earnest attention of the officials. If we had had a separate department of the Post Office to deal only with telephones we might have got on quicker with these questions of zones and rates. I should like to give an illustration of the importance of an alteration in the zone system. Stockport is an important commercial town with 112,000 inhabitants, and the centre of the town is within six miles of the centre of Manchester. One would have thought it would be a perfectly simple thing to get through without any delay from a town like Stockport to a town like Manchester, but when you go into the question it is nothing of the sort. If you telephone from that part of Stockport which is in the Stockport area to Manchester you have not only to pay a trunk fee of 3d., but it also takes you half an hour to get through. That is a very serious delay to business. But there is more than that. Some years ago there was an arbitrary line drawn across the town of Stockport and on the South side of that line you are in the Stockport area for telephone purposes, and on the other side of the line you are in the Manchester area. The people on the Manchester side of the line certainly have this advantage, that they can telephone through without undue delay and without paying a trunk call to Manchester, but they have this disadvantage, that if they want to telephone to the other side of the line, where the fire station is, and where the town offices are, they have to pay a trunk fee because it has got to go to Manchester and back again, and also it takes them half an hour before they can summon a fire engine by this means. They generally send for a fire engine by other means than the telephone. This is not a new grievance, because in 1911 when I was mayor of the town, I, in company with the Members for the borough, approached the Postmaster-General and pointed out these anomalies. We were received very graciously by the Assistant Postmaster-General, but nothing has been done since then. The same anomaly still exists, and Stockport is still labouring under these disadvantages. I believe in the last week they have sent up another petition, and no doubt they hope that in due course something may be done.

I wish to emphasise once more that some of these complaints and some of these anomalies might have been foreseen had this matter been taken up earlier and more preparation been made for it. The Department knew they were going to take over this business, and if preparation had been made we should not have heard that there were not enough skilled men ready to deal with the many extensions, because surely they could have adopted the methods that any business firm would have adopted. They would have seen that men were being trained so as to be ready when they took over the business. I should like to say a word on the question of automatic telephones. We have heard that they are working with success. I have used them in the United States, where I generally compare the efficiency of their service with the inefficiency of ours. If we can use them more largely we shall eliminate one very great cause of complaint which I hear not only in London but in the country as well, and that is the wrong numbers that we are continually being put on. We hear complaints that when you ask for a number you hear it gabbled over very quickly by the attendant. You may hear it repeated wrongly, but you have no opportunity of correcting it because apparently they do not stay there waiting for you. I do not want to blame the attendants. I think they have really too much to do, and also I think very possibly they have not a sufficient reserve of trained attendants to take the places of those who fall out and to be ready for the natural extension of the service. But if this automatic system can be more readily used that cause of complaint will be largely eliminated, and I should hope we shall see a much better service in consequence.

When I left the House for a very few minutes earlier in the afternoon for the purpose of taking a cup of tea, I picked up an evening news- paper and I saw emblazoned upon it in large letters the phrase, "Verdict for the P. M. G." That was so wholly contrary to my view of our part of this debate that I was surprised until I grasped the fact that it referred not to the Postmaster-General but to the "Pall Mall Gazette." With the hon. Member (Mr. J. M. Henderson) I propose to ask on this portion of the subject for a verdict, not for the Postmaster-General, but for the plaintiffs, or rather, perhaps I should say, for the pursuers. I am sorry my English Friends have received this matter in a spirit of levity. One hon. Member asked where is Dundee? Dundee provides a seat for a Cabinet Minister, and I hope that useful function will entitle it, at any rate, to some consideration in this regard. When I hear my right hon. Friend arguing in these matters I am bound to assume that he believes in underground wires, though I do not think it is very apparent when he is stating the case in answer to those who have not got them. I raised this question on 20th January, and he said in answer to me that during the recent storm the delay was very much greater to Newcastle, which had an underground telegraph, than to Dundee and Aberdeen, which had not. The argument, as I understand it, is that you are better off if you have not got an underground telegraph. Surely, if he puts the argument so far as that, there must have been a very great waste of public money in England! Why spend £2,000,000 on underground telegraphs in other parts of the United Kingdom if you can find an efficient substitute in trunk telephone lines, stouter poles, and the Marconi or the Poulsen wireless system? Why not try all this telegraphic margarine in English districts and let Scotland, at any rate, have some of the real butter. If you draw a line between Edinburgh and Glasgow, you will find no underground telegraphs north of that line. That is not a contemptible area. You have the counties of Dumbarton, Stirling, and Kinross, which contain a large number of industrial towns.

8.0 P.M.

I must take exception to that. The hon. Member would not call Liverpool a village. Does he contend that this large area contains nothing but villages? I think the Scottish Members will take another view. My hon. Friend the Member for West Aberdeenshire has given the case with regard to Aberdeen, where there is a great fishing industry, and so much as 1,000 tons of fish are sometimes landed in a single day. The Dundee jute industry is a unique industry, and must, in an exceptional degree, have constant and uninterrupted telegraphic communication. You might as well ask a broker who does business between London and New York to neglect the factor of time as ask a Dundee merchant to be without telegraphic communication. He cannot afford even for a few hours to be without telegraphic communication. It is only in this area, and in the North of Ireland, that you have the flax industry at all. In that area in Scotland you have the villages—I take the word of the hon. Member opposite—of Dunfermline, Arbroath, Montrose, Forfar and Brechin, all liable to be cut off. I speak quite seriously when I say that even an hour's interruption in telegraphic communication may mean a permanent loss of business which will go to your competitor. I can instance the case of a single firm which lost £600 by a delay of sixty hours in the transmission of a message to St. Petersburg from which they get their flax.

I have perused quite recently a large amount of correspondence with business people who are reluctant to give their names, but I can give the Postmaster-General the names. That correspondence shows quite apart from the absence of underground lines the ordinary delay in telegraphic communication is of a serious kind. Take Arbroath. It seems to take always over an hour to communicate with London, and frequently the time occupied is two hours. I know of a case in which a firm telegraphed to London at eleven o'clock, and they took the precaution to telephone the message at the same time to Glasgow. They got an answer in Arbroath to the message which was telegraphed from Glasgow to London soon afterwards, but they did not get an answer to the direct telegram until nearly four o'clock in the afternoon. I speak with some diffidence on a technical matter of this kind, but I would ask whether there is not a case for decentralisation at the Edinburgh office, and for working Arbroath and other towns in that area through a head office in Dundee. I have seen the correspondence which some of my friends have had with the local offices. We are advised that if it to some extent detracted from the dignity of the Edinburgh staff, decentralisation would certainly add to efficiency. I do not wish to say a word against Civil servants—I was one myself at one time—but perhaps this added leisure would contribute to greater accuracy in the statistics supplied to the Postmaster-General. In this case which had been before the Department for five years, the figures were wrong by nearly 100 per cent.

I will make a point which I think is novel in this connection, and again I make it on the advice of a commercial firm of large experience. The excuse which my right hon. Friend makes for the large development of underground telegraph lines in England is that the larger number of cases there link up with the Continental cables. That is why he pushes the underground wires viâ Chelmsford and Ipswich. That may be, even from the point of view of the Scottish merchant, an aggravation of the offence, because in the case of those for whom I speak it amounts, in their view, to subsidising their competitors. It is the same sort of grievance with which we are familiar in connection with preferential railway rates for foreign products. I do not wish to introduce a party element into this Debate, but I would say that the best Tariff Reform cry in the district to which I am referring is the cry with respect to Belgian yarn. The Free Trade firm who are briefing me in this matter do not object to the import of cheap material but they do object to Ghent and other Belgian towns having better telegraphic communication with London than Scotland has at the present time. Some hon. Members may be going to Ghent to see the Exhibition. It is nearer to London and a cheaper journey than to Scotland. That is the kind of advantage the Belgian manufacturer has at present over his Scottish competitor. But in addition to that the Scottish manufacturer finds the Department which he supports giving uninterrupted cable and underground communication to Belgium, while he is fobbed off with phantom circuits. It is no wonder he continues to worry his Member of Parliament. My hon. Friend put the case for the large towns, but some of the small towns for which I speak are already sufficiently handicapped in competition with the larger towns. The larger towns are near the big buyers, and have greater consideration, but, after all, the continued prosperity of the small towns is of very great importance for the workers who live there.

I contend that a real factor in our national life is the industry in the small towns which tends to keep up wages in the country districts. In spite of economic arguments, I hold that it should be the object of State policy to encourage the small towns. The small town dwindles to the village, and the village feeds the sweated slum. I think it is the duty of a Free Trade even more than a Protectionist Government to facilitate and develop trade by providing adequate telegraphic communication. My hon. Friend spoke slightingly, and I think a little unfairly, of what he called the Members for roads and bridges. After all, the Government which has passed the Development Act to colonise our own country can scarcely preach to the representatives of half a kingdom the undiluted doctrine of laissez-faire. If we neglect the interests of these great areas we shall be robbing our constituents of effective representation. They pay their share of taxation, but they get nothing in the area of Scotland of which I am speaking, while they feel that they are really subsidising their competitors. I am bound to say that there is the strongest feeling on the subject, and I think we should be failing in our duty if we did not press their case until we get satisfaction.

I should like to support the remarks of the hon. Member (Mr. R. Harcourt) in regard to the smaller towns. I want to ask the Postmaster-General two questions about the telephone in agricultural districts. The right hon. Gentleman told us two years ago, and the announcement was very popular, that he was going to start a great scheme of cheap telephone lines for the use of farmers in the rural districts. He told us that he hoped to be able to develop the system to a large extent, but two years have elapsed, and, so far as I can gather from his speech to-day, extremely little has been done in regard to these cheap lines. I think the Postmaster-General told us that 1,000 telephones had been put up on farmers' lines. In answer to a question the other day he stated that 900 contracts had been entered into, but that only 450 had actually been executed. The Assistant Postmaster-General said, in answer to a question, that the funds which have been already authorised for the experimental provision of these lines had been allocated, and that the Postmaster-General hoped to obtain further Grants from the Treasury. I really should have thought that after a period of two years farmers' lines had passed the experimental stage. I am glad to hear that more money is to be spent on these lines during the coming year. I do hope that these cheap telephones will prove a success, and that they will be of the same assistance to the agricultural community in this country as similar lines have been in the country districts in the United States of America.

It being a Quarter past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.