Chairman.

330. (To Mr. Welby.) The Comptroller and Auditor General states, in the second paragraph of his Report, that as regards the examination of the London District and Provincial Post Office Accounts as to Treasury authority; the mode of remunerating Sub-Postmasters and Receivers; and the apportionment of rents of premises jointly occupied by postal and telegraph services; he has only to report that it has been communicated to him by direction of the Postmaster General, that on the 25th of September last the Lords of the Treasury informed him that these questions would shortly engage their attention. Can you inform the Committee whether any progress has been made with those questions which have been so long under consideration ?—The Treasury have had all these three subjects under their consideration, and they have been in communication with the Postmaster General and the Audit Office upon the subject. With respect to the first of these subjects, viz., the examination of the London District and Provincial Post Office Accounts as to Treasury authority, an arrangement has practically been made between the three departments which is at present in course of being reduced to official record. A report was made by the Treasury officers of accounts upon the subject, upon which a communication was made to the Audit Office; and the Audit Office have proposed a scheme which appeared to the Treasury to meet the object in view, and which is now in course of reference to the Postmaster General. I have reason to believe that the Postmaster General will approve

Chairman-continued.

12 March 1579.

it also; and as soon as his reply is received, Mr. Welby, B., the correspondence will be submitted to the and Mr. Ryan. Committee. Passing on to the second subject, viz., the mode of remunerating sub-postmasters and receivers, the first impression of the Treasury upon this point was that there was a well-founded objection to the present mode of remunerating the postmasters; but they found that the Postmaster General took a different view; for administrative reasons he thought the present mode the best. It then occurred to the Treasury that in all probability a Departmental Committee would be the best means of settling the question; but before nominating such a Committee they referred the question again to the Postmaster General, and asked him to favour them with the reason which induced him to differ from the Comptroller and Auditor General. They have now received from the Postmaster General a letter stating his views at length; and it appears to them that the views which he puts forward are so well founded, and the reasons which he gives for maintaining the present system so strong, that they are prepared to maintain the present system. present system. They are communicating this letter to the Comptroller and Auditor General with their decision thereon, and it will then remain for the Comptroller and Auditor General to give his opinion, and to state whether he acquiesces or whether he will press his objection.

331. (To Mr. Ryan.) The objections of the Comptroller and Auditor General were confined to matters of account, were they not?-They were.

REVENUE DEPARTMENTS, &c.

Vote 3.-Post Office-continued.

Chairman-continued.

332. These officers are paid partly by salary and partly by poundage, are they not?-They are paid in different ways: by commission, and by poundage, and by salary. As a matter of account and simplicity of record, it appeared to the Comptroller and Auditor General that the alteration which he recommended would be an improvement; but of course, until he has seen the answer or the objections of the Post Office, he can give no further opinion.

333. (To Mr. Welby.) Have you any observation to make with respect to the apportionment of rents and premises jointly occupied by Postal and Telegraph Services ?-The heads of the Post Office and the Treasury have conferred upon the subject of this apportionment of rents, as stated in the evidence given before the Committee last year; and, as the result of that, a communication was made by the Treasury to the Postmaster General, who has replied at length, giving reasons contrary to the view entertained by the Comptroller and Auditor General. The correspondence is under the consideration of the Government, and I have reason to believe that a direction of the Government will very shortly be issued upon the subject.

334. In paragraph 3 the Comptroller and Auditor General says, "With regard to the excess of the cost of management of Government Annuities and Insurances over the amount received by the Postmaster General, I have been informed by the Post Office that the Treasury have not yet communicated their decision on this question." Has any decision yet been arrived at by the Treasury?-The Treasury have not yet come to any decision upon that question.

335. If I remember rightly, the Act relating to these annuities requires that there shall be no excess of cost?-That is the case.

336. And this question has been reported upon by the Comptroller and Auditor General for many consecutive years, has it not?-The question that the Comptroller and Auditor General has reported upon is comparatively a simple one; but there are other questions which require to be taken into consideration by the Treasury with regard to the management of these annuities, which are difficult in themselves, and which will require consideration. That has been the reason of the delay in dealing with the matter hitherto.

337. Is it likely that any action will be taken with respect to this question before long?-So many of the questions that have hitherto occupied the attention of the Treasury are now cleared up, that I am in great hopes that it will be in their power to settle it very shortly.

338. (To Mr. Ryan.) With respect to the em

REVENUE DEPARTMENTS, &c.

Vote 3.-Post Office-continued.

Chairman-continued.

ployment of persons in provincial post offices before they have received Civil Service certificates, in the Treasury letter (D.) to the Comptroller and Anditor General (page 425), the following passage occurs: "However, if you will specifically point out wherein the notice of 16th January 1872 (as it is really worded), fails, in your opinion, to meet the cases to which, in the postal service, my Lords hold that some such notice must be applied, nothing is easier than to alter it, if my Lords and the Postmaster General concur in doing so, under the powers reserved in Clause VIII. of the Order in Council of the 4th June, 1870." Has the Comptroller and Auditor General pointed out to the Treasury in what respects the notice fails? Before the Comptroller and Auditor General felt himself in a position to answer that Treasury letter he thought it necessary to communicate with the Post Office, in order to ascertain exactly what was the nature of the examination to which those persons were submitted, and on whose behalf, inasmuch as there seemed to be some point not clearly understood between the Treasury and the Post Office in the evidence before the Committee last year. He has recently received a letter from the Post Office, in which it is pointed out that those persons are examined by the postmasters, and not by the Civil Service Commissioners, but that the postmasters act, in so doing, as the agents of the Civil Service Commissioners, and therefore, if the Civil Service Commissioners are prepared to accept the examination by the postmasters, of course the Comptroller and Auditor General has no observation to make upon it. With regard to the question of whether the Order in Council fully meets the case of these persons or not, the first view taken by the Comptroller and Auditor General was, that it was really not wide enough in its terms to do so, and that was the view which was held by him last year before this Committee; at the same time, if the Treasury, as the department which practically framed this Order in Council, holds that it does embrace this case (and we are now distinctly informed that it does), I do not think the Comptroller and Auditor General, whose only object is to regularise these appointments, would raise any objection to accepting that Order as covering these cases.

339. As I understand, the contention of the Treasury now is that the whole class is included in the Order?-That is their contention. The view of the Comptroller and Auditor General was that it applied rather to the cases of individuals than to the case of a very large class, as this is.

early expression of their views on the subject; has any reply been received?-Not yet.

348. With respect to the arbitration with the Royal Mail Steam Packet Company, if I remember rightly, that arbitration refers to accounts for the years 1872, 1873, and 1874?-It does, under a previous contract.

349. We have been informed upon more than one occasion that those accounts are to be referred to arbitration without more delay than is necessary; is this matter likely to be soon settled ?— It is believed that the Post Office will have to go to arbitration with the Royal Mail Steam Packet Company. The opinion of the Post Office counsel has been received within the last month, but I am sorry to say it is not a final one, inasmuch as he suggests that a further investigation of accounts should take place. That investigation is almost concluded; and I hope we shall be able to settle the matter in one way or the other very shortly, whether the Post Office will have to go to arbitration or not.

Mr. Ryan, and Mr. Blackwood.

12 March 1879.

Chairman. 350. You are the Accountant General of the Navy ?--I am.

351. With respect to the mode in which the debts of seamen and marines are credited and charged, it is stated in the letter numbered B 3 (page 20) that there is a departmental inquiry into the question of the desirability or otherwise of keeping a distinct account in the Admiralty ledger for debts of seamen and marines afloat, which involves the consideration of all the details referred to in the letter from the Exchequer and Audit Department of the 18th November 1878; has that departmental inquiry been concluded? It has, and we have directed a letter to the Treasury, stating what the Admiralty would be prepared to do, and pointing out that to keep such an account as the Comptroller and Auditor General suggests, would cause a very considerable amount of clerical labour; but we quite admit that he hits one important point, when he says that one of the results of the present practice is, that balances irrecoverable are not reported to the Treasury for sanction. We can see our way to meet that, and we shall do so forthwith; but as regards the keeping of an account, to show exactly what the debts due are, we see considerable difficulties, and the matter is now under the consideration of the Treasury.

352. (To Mr. Ryan) That report, I presume, has not yet been submitted to the Comptroller and Auditor General?-The Comptroller and Auditor General has received a copy of the letter which the Admiralty had addressed to the Treasury upon the subject, but he has not received the Treasury decision.

353. You cannot state, therefore, whether the suggestions in that Report would meet the

Chairman-continued.

views of the Comptroller and Auditor General ? -I cannot state that they would meet his views, because the proposal is to continue an arrangement which, in our view, is contrary to sound principle as well as to the Exchequer and Audit Act, inasmuch as it proposed to charge against the Vote sums which are advanced on account of seamen's wages, but which have not yet become due; and it also has the effect of charging to one year that which may properly be payable only in the next year. At the same time we are unable to state whether or not the amount which is involved is a very large one, and our examination of the details has not gone far enough to enable us really to form a thoroughly sound opinion. I should not like to commit myself at present as to what our view may ultimately be.

354. (To Mr. Welby.) The Treasury has not come to any determination with respect to this question ?-No; not yet.

355. Referring to paragraph 5 of the Comptroller and Auditor General's Report, has any determination been arrived at by the Treasury with respect to the general question of extra receipts? The Committee were informed last year that a Committee of the Treasury, under the presidency of the Secretary of the Treasury, had before it the proposal made by Mr. Mills upon this subject. They have been very anxious, in laying their remarks upon that proposal before the Committee, to accompany it not only with the opinions of the Departmental authorities, but also with the opinion of authorities known to the House of Commons; and they have got all the opinions which they thought would be desirable to add to their Report, except one of the most valuable, that of Sir Thomas Erskine May. Sir Thomas Erskine May has promised to let

Mr. Hamilton.