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Amount Amount
NATURE OF RECEIPT. Estimated. Received.
£. s. d. £. s. d
Payments by Continental Administrations 2,900 – – 3,811 13 11
in respect of the cost of laying and main-
taining International Submarine Cables. |
Sale of Old Stores - - - - - . 36,000 – – 38,947 6 —;
Works and Alterations executed for Railway 10,000 – – 14,741 – 9}
Companies and others. -
Telegrams of Savings Bank Department - - 7,300 – — 7,000 – —
Share of Receipts common to the Postal and 6,855 – – 9,715 5 8
Telegraph Services transferred from the Post
Office Estimate (Sub-Head M.)
Refund by Admiralty for work done . . - - - 304 15 1
Total - £. 63,055 — - 74,520 1 5;

Explanation of the Causes of Variation between Estimates and Receipts.

Due to certain Anglo-French Cables having been repaired by this country at the request of
the French Adminstration.

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In addition the sum of 4!. 8s. 7d., the final balance of the Telegraph Irregularities Fine Fund was paid into the Exchequer as an Extra Receipt.


Vote 5.—POST OFFICE TELEGRAPHs—continued.

S U M M A R Y. - -- —--— – Expenditure, - - compared with Grant. Sub- SERVICE. GRANT. ExPENDITURE. — Head. ! Less More than Granted. than Granted. ---- - - - - £. s, d. £. S. a. £. s. d. £. s. d. A. Maintenance of the Postal Tele- | 1,064,400 - - | 1,021,411 17 4. 42,988 2 74 graph System. B. Telegraph Works - - - || 675,352 – – 657,054 19 13 18,297 - 103 C. - Telegraph Office, London 500,300 – – 495,811 11 1 4,488 & 11 || – D. London Telephone Service - 55,150 – 51,944 5 24, 3,205 14 o E. Railway Companies and others, 58,000 — — 58,915 1 5 - 915 1 5 for transaction of Public Tele- * * * graph Business. F. Manufacture of Stamps, &c. - 2,700 – – 2,476 4 6 223 15 6 | - G. Purchase, etc., of Telegraph 22,000 — — 24,589 13 4} - 2,589 13 44 Engineering Stores. H. Share of Expenses COmmon to the Postal and Telegraph s: vices, transferred from the , 2,457,700 - - || 2,459,041 16 8% - 1,341 16 84 | Post Office Estimate (SubHead L). GRoss TotAL £. 4,835,602 – – 4,771,245 8 94 69,203 2 83|4,846 11 6 Net Surplus of Gross Estimate over Expenditure. £. 64,356 11 23 Deduct, Estimated. Realised. surplux* A Motions in I. Appropriations in Aid - - 63,055 — – 74,520 1 53 £. 11,465 1 53 Total Surplus to be Surrendered. l NET TOTAL - £, 4,772,547 – – 4,696,725 7 34 £. 75,821 12 84

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Wote 5-Post OFFICE TELEGRAPHS-continued.


- Service for which extra Remuneration * Rank of Officer. was made. Amount. | Vote. £. s. d.

A Second Class Clerk, For acting as Secretary to a Depart- 18 – – Vote V.-Post Office Secretary's Office. mental Committee for revising the Telegraphs. (He also Post Office Guide. receiv 57l. out of Vote III.-Post Office.) A Second Class Clerk, For acting as Secretary to a Depart- 10 16 – Vote V.-Post_Office Secretary's Office. mental Committee on Training and Telegraphs. (He also Pay of Learners. received 34l. 4s. –d. out of Vote III.-Post

Office.) An Examiner, For acting as Secretary to an Inter- 7 4 - vote V.—Post Office Accountant General's Departmental Committee on Finan- | Telegraphs... (He also Department. cial Return relative to Telephone | received 221. 16s. –d. Service. | out of Vote III.-Post


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I certify that this Account has been examined by officers under my directions, in accordance with the 29th Section of the Act 29 and 30 Vic, c. 39, including a test audit as directed by Treasury Minute of 27th March 1899, and that, subject to the observations in the annexed

Report, the Account is correct.

John A. Kempe,

Examined, Comptroller and Auditor General.

W. M. Martin,


Vote 5.



1. ExPENDITURE in excess of the Estimate has taken place under the following
Sub-Heads, viz.:-
A. 3, 5, 9, 11.—Maintenance of the Postal Telegraph System.
B. 3.—Telegraph Works.
C. 3, 5.—Central Telegraph Office, London.
D. 2–London Telephone Service.

E—Railway Companies and others for transaction of Public Telegraph business.

G.—Purchase, &c., of Telegraph Engineering Stores.

H.—Share of Expenses common to the Postal and Telegraph Services, transferred from the Post Office Estimate III. (Sub-Head L.).

2. The Savings under Sub-heads A. 1, C. 1, and D. 1. would have been greater but for the decision, in the circumstances described in my Report upon the Post Office Vote, that Head Quarter Salaries should be paid on the last day of the period to which the payments relate. In accordance with this ruling a total, sum of 4,280. 13s. 1d., apportioned between the three Sub-Heads mentioned, has been transferred from the Post Office Telegraphs Vote for the year 1906-7 to that for the year now under consideration.

3. With reference to paragraph 2 of my Report of last year, I have to remark that the Stock Balancing Statement furnished to my Department for the year 1905–6 shows a loss on Rate Book prices of 24,679l. The result of this is that the various works, Telegraph and o have been undercharged at the expense of Sub-head G., Purchase, &c., of Telegraph Engineering Stores, and the Telephone Suspense Head respectively; the variation represents about 1.65 per cent. on the total value of the stores handled.

4. In addition to the sum of 74,520l. 18.5%d. realised as Appropriations in Aid of the Vote, a sum of 4l. 8s. 7d., representing, the final balance of the Telegraph Irregularities Fine Fund, has been paid direct into the Exchequer.

5. The Amount to be Surrendered is, as shown by the Account, 75,821. 12s. 840. £. 8. d. Grant (Gross) - - - - - - - – 4,835,602 – — Expenditure (Gross) - - - - - 4,771,245 8 94 Net Surplus - - - £. 64,356 In 2;

Appropriations in Aid realised in excess of the Estimate 11,465 1 53

Total Amount to be Surrendered - - - £. 75,821 12 84


6. Appended to this Report is an Account of the Receipts and Payments by the Postmaster-General in connection with the development of the Telephonic System, under the provisions of the Telegraph (Money) Acts, 1892 to 1904.

This is the 14th Account of Expenditure under the above Acts, which authorised the issue, out of the Consolidated Fund, of sums amounting to 7,300,000l. for this service.

Issues were made from the Consolidated Fund in 1905–6 to the amount of 750,000l., raising the total issues to 5,750,000l., and leaving an unissued balance of 1,550,000l.

Net expenditure was incurred in 1905–6 to the amount of 762,033l. 158.4%d., making, with that previously recorded, a total of 5,756,819. 14s. 8d., the excess of 6,8191. 14s. 8%d. being temporarily met out of Advances from Postal Revenue.

Of the total sum .#. authorised by the Acts above specified, there remained, on the 31st March 1906, a balance of 1,543,180l. 58. 3}d. available for further expenditure.


Transfer of Salaries from year 1906–7 to year 1905–6.

Loss on
Rate Book






Allocation of Wages.

Stocktaking Discrepancies and Irregular Transfers.

Store .

at Manchester.

Orders for Engineering Stores placed with the Factories instead of with Contractors.

System of cross-check.


Vote 5–Post OFFICE TELEGRAPHs—continued.

The amount recorded under the Suspense Head, which, in the year 1904–5, was shown as 211,6091. 10s. 1d. has now been reduced to 199,207l. 148. 3d. The difference of 12,401. 15s. 10d. is due, I have been informed, “to the fact that the value of Stores allocated to Works exceeded the payments for Stores purchased plus the usual Rate Book percentages for Stores used.”

An Annuity of 70,5361.10s. d has been created to repay the money borrowed in the calendar year 1905, raising the total of the Annuities created under the Acts to 469,887l. 158. -d, provision for which has been made under Sub-Head R. of the Post Office Vote, 1906–7.

The Annuities created up to 1902 run for periods varying from 12 to 20 years from the date of borrowing. Those created since 1902 run for a period of 15 years.


7. A test examination has been applied by my Officers to the Accounts at the Office of the Controller of Stores in }. at the Telegraph Factories at Mount Pleasant, and Holloway, and at the Edinburgh, Glasgow, Manchester, Cardiff, and Woolwich (Sub-marine) Depôts. In view of the remarks of the Committee of Public Accounts in their Second Report for the year 1906, a further test examination has been made of the Accounts of the Royal Engineers, the stations selected being Basingstoke and Wandsworth; and I am able to state that the improvement, to which reference was made in my Report of last year, has been fully maintained during the financial year now under review. In connection with the tests at Edinburgh, Glasgow, and Cardiff, cases were brought to my notice, as in the Districts dealt with in the preceding year, in which wages had been charged to works other than those on which th. men were actually employed. At Cardiff it was observed (1) that a large proportion of the discrepancies disclosed at the local stocktaking had not been reported to the Controller of Stores; and (2) that, in many instances, Accounts had been j by the transfer of Stores from one work to another, in order to effect an agreement, as far as possible, between expenditure and the authorised estimate for each individual work. In reply to Queries that I raised on this matter, I have been informed that the irregularities, the serious nature of which is admitted, have been brought under the notice of the Postmaster-General. In continuation of the remarks contained in paragraph 5 of my Report of last year, upon the question of Store Accounting at Manchester, o have since been informed that the Postmaster-General, having called for a special Report upon this subject, deemed it his duty to take serious notice of the matter as regards each of the Officers in fault, and inflicted such punishment in each case as seemed to him justified. It was further stated that the Pool had before him proposals for securing a better control of Engineering Accounts, but that he was not yet in a position to decide thereon. I may add that, on the occasion of the test examination conducted by my officers in July last, the accounting at this Depôt showed a great improvement, which is doubtless due to the measures recently adopted by the Post Office authorities.

8. In the course of the examination at the Factories at Mount Pleasant and Holloway it was noticed that certain orders for Engineering Stores had been placed with those Factories, although the stores, as shown by the tenders received, could have been supplied by contractors at a considerably lower cost.

o a letter to the Postmaster-General on this subject, I pointed out that the stores in question did not appear on the Statement of Work which normally was to be regarded as appropriate to the Factories, and asked for an explanation of the necessity for adopting a course, which seemed to have entailed an additional and apparently avoidable loss on Public Funds.

In reply I have been informed that, orders were given specially to the Post Office Factories in the early part of 1906, with the sole object of obviating the discharge of hands which would #o. have been necessary in consequence of the slackness of work. It was further stated that the Postmaster-General has lately considered the whole matter fully, and has assigned to the Factories the manufacture of certain additional classes of stores; and it was hoped that he would thus be able to keep the number of hands employed at the Factories fairly constant.

9. At present the Post Office has no system of check to ensure that the issues and receipts of stores between the various Engineering districts, Store-depôts, and Factories duly correspond. The necessity for such a system was recognised by a Committee on the Department of the Controller of Telegraph Stores in 1902, who recommended that a “cross-check” should be instituted between these Branches. In reply to an inquiry on the subject, I have been informed that a proposal to give effect to this recommendation,

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