19 NOVEMBER 1910, Page 15


[To THE EDITOR OP THE " SPECTATOR.") Sin,—That tardy annual, the Postmaster-General's Report on the Post Office for the year ending March 31st, has just made its appearance. A few years ago it was available in August, but it is gradually becoming a Christmas publication. In view of the approaching creation of an exclusive Post Office monopoly in the telephone, the financial results of the present telegraph and telephone work of the Post Office are of interest to business men and political economists. Summarised, they are as follows

Capital Gross Working Expenditure. Revenue. Expenses.

Telegraphs £18,523,019 ... 43,166,192 £3,568,203 Telephones 10,138,128 ... 1,391,377 1,026,933 Total £28,661,147 ... £4,557,569 ... 44,595,136 The excess of expenditure over revenue for the year was therefore £37,567. The working expenditure of the telegraphs was 113 per cent. of the gross revenue. The working expendi- ture of the telephones was 73-8 per cent. of the gross revenue. The working expenditure of the combined undertakings was just over 100 per cent. of the gross revenue. All capital charges on twenty-eight and a half millions of capital have to be met from other sources than the earnings of the combined undertakings. Interest on the original capital of the tele- graphs, £10,800,000, is paid out of the Consolidated Fund. On the capital added since the purchase capital account was closed, many years ago, no interest is paid. Interest and sinking fund on telephone capital are paid partly by net tele- phone revenue, and partly by royalties from licensees ; the royalties for the past year amounted to £320,590, or almost as much as the net revenue of the whole telephone business of the Post Office. The actual net telephone revenue, arising from the trunk line system, the London system, and the provincial systems of the Post Office, amounted to £364,444, or 3.55 per cent. on the total telephone capital of £10,138,128. The amount required for interest and sinking fund on tele- phone capital was £767,007, so the net telephone revenue failed to meet capital charges for the year by £402,563. It is to a Department which produces from a technical industry financial results such as these that the political authorities now propose to entrust the entire telephone business of the