I move—
That a sum not exceeding £4,529,300 be granted 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, 1954, for the Salaries and Expenses of the Office of the Minister for Posts and Telegraphs (45 and 46 Vict., c.74; 8 Edw. 7, c.48; 1 and 2 Geo. 5, c.26; the Telegraph Acts, 1863 to 1928; No. 45 of 1926; No. 14 of 1940 (secs. 30 and 31); No. 14 of 1942 (sec. 23); No. 17 of 1951, etc.), and of certain other Services administered by that Office.
The net Estimate for 1953-54 amounts to £7,005,300, being a gross total of £7,405,985 less Appropriations-in-Aid of £400,685. The net provision represents a decrease of £354,700 on the net provision for 1952-53.
The more substantial variations on the sub-heads—those of £10,000 or more —occur on the following:—
Sub-heads A (1), A (2), A (3) and A (4): Salaries, Wages and Allowances.—The increase of £24,300 is mainly attributable to normal increments of salary, etc. offset by savings on reductions in temporary force and casual employees.
Sub-head D: Purchase of Sites.— The decrease of £35,000 is due to the cost of anticipated acquisition of sites being less than in the year 1952-53.
Sub-head E (1): Conveyance of Mails by Rail.—The increase of £39,810 is required to meet higher charges by railway companies for the carriage of letter mails and to cover increased payment to the Railway Clearing House for the conveyance of parcel post.
Sub-head E (5): Conveyance of Mails by Air.—The decrease of £13,500 is attributable to a reduction in the rates to be charged by air companies for the carriage of mails.
Sub-head G (1): Stores (other than Engineering).—The decrease of £56,080 is mainly attributable to there being no provision for the purchase of emergency reserve stocks in the year 1953-54 and to portion of those stocks being used for current requirements, offset by increased cost of departmental transport, petrol, oil, spare parts and accessories and by the introduction of road taxation for State owned vehicles.
Sub-heads G (2): Uniform Clothing; G (3), Manufacture of Stamps; K, Engineering Materials.—The decrease on each of these sub-heads, viz., £55,610, £73,620 and £251,450 respectively, is mainly attributable to no provision being made for purchase of emergency reserve stocks in the year 1953-54 and to the use of portion of those stocks for current requirements.
Sub-head I (1): Salaries, Wages and Allowances (Engineering). — Increase £51,050, due to normal increments, new posts and increased provision for additional staff arising from the development of the telephone service.
Sub-head L (3): Contract Work.— The decrease of £39,750 arises from anticipated reduction in work undertaken by contractors.
Sub-head M: Telephone Capital Repayments.—Increase £152,560. I should explain that funds for the development of the telephone system are provided under the authority of the Telephone Capital Acts (1924-51) which authorises the Minister for Finance to issue sums out of the Central Fund for this purpose. Repayment of these funds is made by means of terminable annuities extending over a period not exceeding 20 years. In consultation with the Minister for Finance provision is made each year under this sub-head for the repayment of the instalments of principal and interest on the annuities created. The increased provision in the sub-head is an indication of the continuing expansion of the telephone system.
Sub-head Q (2): Provision and Installation of Equipment, etc.—The decrease of £11,770 arises from reduced contract payments for the renewal of equipment at airport radio stations.
In sub-head T—Appropriations-in-Aid —there is an increase of £92,845. Increased receipts are anticipated from the social insurance fund and the savings bank funds for the administration expenses, from the E.S.B. for work undertaken on its behalf, from the sale of obsolete stores and from the British Government for sums paid on its behalf.
Postal Service—During the past year the mail services worked satisfactorily. Letter and parcel mail traffic, which had shown a slight decline towards the end of 1951, fully recovered. Air mail traffic inward and outward continued to show an upward tendency, the most notable increase being in the traffic from the U.S.A. A very heavy volume of mail, somewhat greater than in previous years, was handled last Christmasand the public response to the appeals for early posting ensured timely delivery of correspondence and parcels. In September last a comprehensive scheme for the improvement of the night mail services to and from Counties Louth, Cavan, Monaghan and Donegal and the Six Counties was introduced. Correspondence to and from the counties affected has now been greatly expedited and their postal connections are now on the same general basis as those in the rest of the country.
The general reorganisation of services in rural areas was continued throughout the year and a daily frequency of delivery and a better standard of service has been introduced in the head office districts of Donegal, Lifford, Letterkenny, Boyle, Athlone, part of Dundalk and Tuam. Daily frequency was provided in respect of 96 posts. Revised services for six further areas are in course of preparation.
During the year six new sub-offices were opened; money order and savings bank facilities were extended to 93 sub-offices and 94 new letter-boxes were provided. In December last a new post office was opened at St. Andrew Street to replace the office at College Green which had served the needs of the locality for 80 years. The ground floor contains two main offices, bright and pleasing in appearance, one for the receipt of parcels and the second for the transaction of other public business. The survey of requirements of modern sorting equipment was continued during the year and a further 12 provincial offices were equipped with electrically operated stamp cancelling machines.
Due to unforeseen delay in the printing of essential documents, the introduction of the business reply service, to which I referred last year, had to be delayed. The necessary documents are now available and the service is about to be introduced. It is expected also that the necessary formalities in connection with the extension of the special "Literature for the Blind" postage rate to other articles intended for the use of the blind will shortly be completed and that the extended facilities will be available at an early date.
The commemorative stamp in honour of Thomas Moore to which I referred last year was issued in November last. Owing to the intervention of the printing strike, it was not possible to put the stamp on sale at an earlier date. The Moore stamp was the first stamp ever printed in the recess process in Ireland and it was, in the opinion of many experts, one of the best stamps in the series of Irish stamp issues, if not the best. A special stamp to commemorate the Tóstal was issued early in February. The stamp was printed in the letterpress process in the stamping branch of the Revenue Commissioners. In order to have the stamp on sale about two months before the commencement of the celebrations, it was necessary to have it printed as a matter of urgency for which my thanks are due to all concerned.
The 150th anniversary of the death of the Irish patriot, Robert Emmet, will occur this year and arrangements are being made to issue a special postage stamp in his honour. The stamp will be in two denominations— which have not yet been decided— and it is hoped to have it available for sale early in August.
There is clear evidence of a growing philatelic interest in Irish postage stamps. For example, approximately, 29,000 "First Day of Issue" covers were dealt with on the day of issue of the Thomas Moore stamp. The philatelic demand for the Tóstal stamp has also been satisfactory. The Department is endeavouring to meet the wishes of philatelists by the gradual introduction of light "hair line" engravings in stamp cancellation marks and the provision of case-hardened steel dies.
Telegraph Service.—In the past year the decline in the volume of telegraph traffic continued. It is hoped to have teleprinter working introduced at all major centres south of a line drawn roughly from Ennis to Dublin before the end of 1953. During the past year telegraph service was extended to 32 sub-post offices. Again, during the past year there were representations about the communication facilities with islands off the coast. As I told theHouse last year supplies of the very latest type of radio telephone equipment to replace the existing radio telegraph equipment serving the larger islands have been ordered. Delivery which has been delayed was expected next month but we have just been advised by the manufacturers that there will be further delay because of necessary alteration in design. The new equipment is designed for connection with the public telephone network and it will enable telephone calls to be made to or from the islands at all times.
At present only those islands which have a population of 100 or more are provided with communication facilities with the mainland. The decision to provide such facilities and to limit it on a population basis was taken by the Government in 1939 following consideration by a special committee which had been set up to examine the question. Representations have been made to me to extend the scheme to island with less than 100 population. It will be appreciated from what I have said that this is not strictly a matter for my Department at all. However, I am having all necessary data collected and analysed, and the matter will soon be referred to the Parliamentary Secretary to the Government for such action as he may consider necessary.
Telephone Service.—Expansion and improvement of the telephone service continued during 1952. The number of trunk and local calls increased by approximately 2,500,000 in 1952. New telephone lines installed during 1952 numbered 7,234, which was a record. By the end of the present month the number of telephones in service will, it is estimated, reach 100,000, compared with 61,000 in 1948 and 77,000 in 1950. As a result of the measures taken to speed up work on the rural call office scheme, I am glad to report that a total of 246 sub-post offices were provided with public telephones last year, as compared with 171 in 1951 and 73 in 1950. A further 65 sub-post offices have been connected up to 31st March last. In order to speed the work,arrangements have been made in certain areas to have some of it, mainly the erection of poles, undertaken locally by contract. Some such contracts have already been placed. At the rate of progress realised to date every rural post office in the State will have a public telephone by next year. This will, I am sure, be welcomed by Deputies of all Parties.
The number of waiting applications on 31st March last was 4,810, made up of 2,826 in Dublin and 1,984 in the provinces. Of the total applications, all but a few were made since the beginning of 1951 and the bulk of the remainder was received since the beginning of last year. The corresponding total figures for 1951 and 1952 were 6,400 and 6,100 respectively. It will be noted that the waiting list is being steadily reduced, but the reduction would have been very much greater but that during the past year much more engineering effort than formerly was devoted to improvement of the trunk and maintenance services and to speedier completion of the rural call office scheme. I should mention that until the call office scheme is completed or nearly completed it will be necessary to continue the restrictions on the provision of long rural lines involving abnormal construction work. Thirty-eight telephone kiosks were erected during 1952 and over 22 to date this year. These figures compare with 23 kiosks erected in 1951 and 31 in 1950.
In Dublin, the new trunk exchange at St. Andrew Street was brought into operation during the past year and automatic exchanges were brought into service at Mount Merrion, Dundrum and Foxrock. An automatic exchange at Clondalkin to serve the existing Clondalkin and Tallaght manual exchange areas will be opened very shortly. An automatic exchange is in course of erection at Sutton to serve the Sutton and Howth areas.
In the provinces, a new automanual exchange was opened in Waterford in October last, and small automatic exchanges were provided at Carrickmacross, Trim and Tullow. Within the past month or so, two additional small automatic exchanges were brought into service at Dunboyne and Muine Bheag.A further similar exchange will be brought into operation shortly at Nenagh and an automanual exchange will be opened at Athlone during the summer. Other exchanges due for conversion to automatic working this year are Cobh, Tramore, Ardee, Maynooth and Cahir. Switchboard equipment was extended during 1952 at 116 manual exchanges. Within recent months, the switchboard equipment at both Galway and Sligo has been completely modernised.
The past year has been marked by the extension of no-delay trunk service to practically all the main trunk routes and to a considerable number of other routes. Altogether a total of 14,000 miles of additional trunk circuits were brought into service in 1952 which was the largest circuit mileage ever added to the system in any one year. I indicated last year that it was proposed to eliminate the long delay on calls exchanged over the main routes from Dublin to the west, north-west and south-west by means of 12-channel carrier systems. As a result of special efforts delivery of equipment was obtained and the installation work was effected between September and March last. I am glad to say that the scheme has now been largely completed— resulting in virtual doubling or trebling of circuits on the Dublin-Galway, Dublin-Sligo, Sligo-Letterkenny, Dublin-Claremorris and Killarney-Cork routes and affording substantial improvement on the long distance services to and from the west generally.
Special attention was given during the year to improvement of the trunk service in the areas with relatively high subscriber density in the neighbourhood of Dublin and Cork. Additional circuits were provided on many other routes where the need for relief was most pressing. During the coming year the work of further improving the trunk service will be pushed ahead as rapidly as possible. The programme proposed includes the installation of a 12-channel carrier system on the route between Dublin and Wexford to give additional circuits and a better service generally to the south-east; the provision of additional circuits on an extensive scale on various other importantroutes by the fitting of three-channel carrier systems and the erection of additional trunk lines on a considerable number of shorter routes throughout the country where extra lines are most badly needed.
Meanwhile the planning of a further trunk cable from Dublin to Sligo via Mullingar with a branch to Athlone is proceeding. In view of the magnitude of the work involved it will be some considerable time before the scheme is completed.
During 1952 operator dialling was introduced between Dublin and Belfast thus enabling Dublin telephonists to dial Belfast numbers without the assistance of Belfast telephonists and vice versa. It is hoped to have operator dialling in operation within the next few months between Dublin, Liverpool and London. I should also mention that automatic trunk switching equipment which enables operators to dial through an intermediate exchange to a distant exchange, for example, from Sligo through Dublin to Waterford, is now in use in some of our principal automatic exchanges and is helping to dispose of calls more expeditiously with greater economy of staff and circuit time.
Much of the work in connection with the provision of some 60 additional cross-Channel circuits to give a no-delay service to Great Britain has been done and it is hoped to have the additional circuits for the heavy summer traffic. Owing to delay in getting delivery of terminal equipment it will unfortunately be some considerable time yet before additional circuits between Dublin and Belfast in the new coaxial cable can be made available.
During 1952 continuous service was provided at 12 exchanges where the hours of service were previously restricted.
Training refresher courses for exchange operating and supervising staffs were continued during the year. Refresher courses were also organised for the first time for private branch exchange operators employed in Dublin by private firms. Judging by the number of firms who were anxious that their operators should participate,the courses appear to have filled a definite want on the part of the larger telephone subscribers.
Buildings.—Progress in the Department's building activities was marked by the opening of the new post office and telephone exchange at St. Andrew Street and a major new telephone exchange and engineering headquarters at Waterford. New garages and engineering workmen's headquarters were provided at Distillery Road, Dublin, and the main building work for a mechanical transport repair shop and garages at St. John's Road, Dublin, has been completed. Post Office improvement schemes involving structural alterations were completed or undertaken at Cork, Galway, Sligo, Birr, Clifden, Ballyhaunis, Enniscorthy and Clonmel. Building work was completed in connection with a new automatic telephone exchange at Athlone, and work on a new exchange for Sutton, County Dublin, was brought to an advanced stage.
In the current year the erection of combined Post Office and telephone exchange buildings at Drogheda, Cootehill, Kilrush, Naas and Rathluirc is scheduled for commencement, as well as separate buildings to house telephone exchanges at Limerick, Galway, Sligo, Killarney, Whitehall and Foxrock (Dublin), Greystones and Mullingar. A major extension of Clontarf Telephone Exchange will also be commenced as well as garages and engineering workmen's headquarters at Sligo. Adaptation and extension of existing premises for Post Office purposes will be carried out at Bray, Ballina, Cahir, Carrick-on-Suir, Dundalk, Dún Laoghaire, Kilkenny, Mallow, Monaghan, Youghal and Tralee.
The formalities for the acquisition of the building site at Lower Sheriff Street, Dublin, have now been completed. A combined letter and parcel sorting office with ample garage accommodation for the entire Dublin fleet of postal motor vehicles will be constructed close to Amiens Street Station. There has been an acute and growing need for such a building for many years past. I am satisfied thatthe centralisation of letter and parcel sorting in one building will lead to a distinct improvement in efficiency, to better staff conditions and to a substantial reduction in working costs.
As I intimated last year, efforts have been made to give a more attractive appearance to our provincial post offices by raising the standards of interior and exterior decoration. The possibility of introducing some of the better quality materials which have appeared in recent years is being examined. What we can achieve in this direction is, of course, limited by financial considerations, but I am confident that an appreciably higher standard generally will be achieved gradually.
Savings Banks.—The position of the Post Office Savings Bank may be regarded as reasonably satisfactory. Deposits rose from £12,655,000 in 1951 to £13,330,000 in 1952, and withdrawals from £8,647,000 to £10,967,000, a net surplus of £2,363,000 as compared with £4,008,000 for the previous year. Interest earned during the year is estimated at £1,348,000 and the total amount standing to the credit of depositors on the 31/12/1952 is approximately £57,070,000.
Deposits during the year by the Trustee Savings Banks amounted to £920,000 and withdrawals to £700,000, a decrease of £70,000 on deposits and an increase of £432,000 on withdrawals. The balance to credit of the Trustee Savings Banks at the end of the year, including £246,000 for interest, is approximately £8,513,000.
The abnormal increase in the amount of withdrawals by ordinary depositors and by the Trustee Savings Banks may be attributed largely to reinvestment in 5 per cent. National Loan, the amount being estimated at over £1,000,000.
The combined balances, Post Office and Trustee Savings Banks, on the 31/12/1952 amounted to £65,584,000 as compared with £61,406,000 on the same date in 1951.
Savings Certificates.—Business for the year showed a large increase as compared with the previous year.Receipts from sales amounted to £3,370,000, repayment of principal to £1,576,000 and interest to £638,000. Corresponding figures for 1951 were £1,479,000, £1,015,000 and £417,000. The increase in sales was mainly due to the launching of the fifth issue, with more attractive terms than its predecessor and the increase in repayments was due partly to the same cause, but mainly to the flotation of the 5 per cent. National Loan.
The amount for principal due to investors at the end of the year stood at £15,272,000 as compared with £13,477,000 at the end of 1951.
Savings.—There is running at present a publicity campaign for the encouragement of saving through the Post Office Savings Bank and Savings Certificates. It is too early yet to look for results from the campaign, which was launched only in March last, but it is hoped that, by means of it and other methods of publicity which will be used from time to time, the habit of thrift will be stimulated, especially among small savers, for whose particular convenience and benefit the Post Office savings facilities exist.
The publicity arrangements are in the hands of the director of savings, who was appointed on the 1st January last and occupies a post created mainly with the improvement of publicity in view. The present campaign embraces posters, window bills in buses and railway carriages, press advertisements, animated advertisements on cinema screens and a sponsored weekly radio programme. In addition, arrangements are in hand for the production of a documentary film which will be shown in the commercial cinemas throughout the country, as well as in colleges, clubs and local halls.
Review of financial position.—Last year, when speaking on this Estimate, I indicated that the financial position of the Post Office was unsatisfactory and I warned Deputies and the public at the time of the likelihood of an increase in Post Office charges.
I had, for the sake of accuracy, better repeat what I said during last year's estimate. I quote from columns177 and 178 of Volume 133, No. 2 of the Dáil Debates:—
"The Post Office services are one indivisible whole, and in determining our charges, it is the overall cost we have to recover and it is right that Post Office users as a whole should pay for Post Office services—there is no case for saddling the taxpayer with it. In spreading the burden over Post Office users we will only be following what is done in the larger sphere of State finances, where, in effect, taxes redistribute income through social services. So far as the Post Office is concerned, the proportion of larger users is no different to that of the better off section of the community as a whole.
So I feel I must warn Deputies and the public of the likelihood that only an increase in charges will solve the problem of Post Office finances."
On a commercial account basis the Post Office had a deficit of £317,766 in the year 1950-51, a deficit of £840,662 in the year 1951-52, the increase being largely due to the wage award of 1951, and a deficit estimated at £749,800 in the year just closed. For the coming year, 1953-54, it is estimated that the deficit will exceed £700,000. This estimate would be higher were it not that it had been decided to utilise for current requirements certain of the emergency reserve stocks already accumulated.
The losses sustained are the climax of a continuously deteriorating position beginning in 1946-47 in which a surplus of £85,000 followed one of £214,000, and was succeeded by continuously mounting deficits.
In regard to the division of losses the following are the figures:—Postal Service: Anticipated deficit for 1953-54, £244,000; Telegraph Service, £440,800; Telephone Service, £22,800.
As I have already indicated, the Department's loss in 1950-51 was £317,766 as compared with a loss of over £700,000 likely to be sustained in the current financial year. In considering the position it is instructive to examine the expenditure and income of the Department for these two years. Looking at the balancesheets I find that, while it is estimated that revenue in 1953-54 will show an increase of £1,223,000, approximately, as compared with 1950-51, the increase in expenditure in the same period is likely to exceed £1,612,000; in other words, the deficit standing at the end of 1950-51 will have increased by almost £390,000. The reasons for this tremendous increase in expenditure are not difficult to find. Wages alone increased by £592,000 per annum as a result of the 1951 wages award and this virtually nullified the effects of the increased charges imposed in that year. Mail conveyance costs have risen since 1950-51 by £141,000. The cost of maintaining the telegraph and telephone systems has increased by £247,000; rent, rates, maintenance and repair of buildings have increased by £126,000, pension liability has increased by £44,000 and depreciation of the more extensive plant now in use by £168,000. The increased expenditure on the development of the telephone system is resulting in increased interest charges of £156,000 compared with the year 1950-51. The Post Office, no more than any other concern, cannot avoid the impact of rising cost and it is, I think, a tribute to the Department that its charges have, by careful management, been kept as low as they are.
Now that I have given incontrovertible explanations for the deficit, I should describe in some detail the general features attending these grave losses.
First of all, our loss is not the result of charging excessive rates. The following figures show that rates have been held down to a point not to be found, I would say, in any other public utility or other service, even in a service where the turnover has increased and in so doing enabled overhead costs per unit of traffic or service to be kept low. Compared with that in force in 1923, the minimum letter post rate is up by 25 per cent, The minimum parcel post rate is up by only 11 per cent. Telephone rentals, business line, are up by only 8 per cent., while residential lines are 16 per cent. lower. Local calls now cost 16 per cent. less. Telegramswere, in 1923, 1/- for 12 words whereas now 1/- pays for 9 words.
There are, I am afraid, very few commodities which can be obtained to-day at only a 25 per cent. increase on even pre-war charges. Considering that it now takes 45/- to purchase what 20/- bought in 1939, the present charges for Post Office services generally are now less than 1939 in terms of purchasing power.
As the services of my Department have largely managed to escape acrimonious political discussion, I can say here and now that up and down movements in the volume of traffic cannot be connected with any of the economic changes which form the subject of debate at Budget time. Nor can I blame my predecessor for the present deficit.
The postal traffic, taken as a whole, shows no marked variation in respect of letters or parcels between 1948 and 1952, the years of post-war resettlement, the Korean boom and the subsequent recession. The telephone traffic has risen steadily but slowly from 1948. The telegraph traffic, following a war spurt, has since been decreasing.
All the added expenses, the £592,000 salary award, cost of materials, conveyance of mails, capital charges depreciation had brought about their principal effect before the controversial period from July, 1952, onwards. A large proportion relate to the prices of foreign materials, or of home materials, the cost of which rose in consequence of foreign prices rising. Indeed, the whole picture of the finances serves as a classic example of inflation where no political controversy arises as to whether the causes were induced or stimulated by Government policy.
When I took charge of the Department, I decided that before I could close the gap between revenue and expenditure I would acquaint myself with working methods in all branches and, making use of some fairly extensive experience of large-scale organisation, would have every branch of the Department subjected to close examination. This naturally took some time and I would like at this juncture to saythat the Department has for many years shown the greatest zeal in making proposals for cost reduction, all of which are constantly examined and frequently implemented. In addition, the officers specially trained in business technique continuously make proposals all leading to greater efficiency.
Taking the three services, postal, telegraph and telephone together, I am satisfied that there is no over-staffing and that every effort has been made to keep costs down. A standard of work volume is used in every phase of activity to ensure an economy in staffing which is closely adjusted to the requirements of the service and is no more than is necessary to carry them out at the level at which they are at present provided. In this connection, I would like to emphasise that, while postal traffic in 1952 was 50 per cent. above that for 1939, telegraph traffic 79 per cent. above 1939, telephone trunk traffic 191 per cent. above 1939 and local traffic 135 per cent. above 1939, the total staff increased by only 28 per cent. in the same period. These figures dispose effectively of the suggestion that there is any redundancy.
I must now examine for the benefit of the House the financial position of the three branches separately and if further particulars are required I will give these in the course of my reply.
The loss on the postal services of the Department has been growing steadily over a number of years. In 1950-51 the loss was £154,239; in 1951-52 —£367,842; in. 1952-53—£371,400. In 1953-54 the loss at current rates of charge is estimated at £244,000, but this figure is affected by reductions in expenditure which have been found possible this year but which will not be recurring. The heavy loss is due to the causes already mentioned and it is clear that it cannot be overtaken while charges remain at the present level.
The only way of achieving any substantial measure of economy in postal expenditure would be to impose serious reductions in the services afforded to the public. The largest measure of economy which could be secured would be by a reduction in the frequency of the rural postal deliveries. Our servicesare relatively more costly in rural areas than elsewhere, but to secure a saving of £150,000 by restriction of rural deliveries would involve dispensing with the equivalent of about 1,000 auxiliary postmen and reducing the present frequency of delivery on roughly 1,500 routes. I would consider such a curtailment of deliveries a most retrograde step, and I would be strongly opposed to it. Deputies of all Parties would, I am sure, be up in arms if I were to propose such a measure, as the pressure on my Department down the years has been more for increased frequency of rural delivery than for reduction.
To illustrate the care taken in keeping costs low, may I say that in many of the areas where a daily delivery has been restored the improvement has been achieved without any increase in cost?
Next, the telegraph service loses heavily here as elsewhere, the average cost to the Department per telegram handled being more than double the average charge to the sender. In the far denser urban conditions of Britain the loss of £3,378,000 yearly on the telegraph service compares with ours of over £400,000. Losses, steadily increasing in the last decade, are experienced in many countries abroad.
A detailed investigation of the telegraph service with a view to improving its financial position and efficiency is proceeding. As I said earlier in my speech, conversion to teleprinter working is continuing, and it is hoped to have this system introduced at all major centres south of a line drawn roughly from Ennis to Dublin before the end of 1953.
This will enable some small economies, measured in thousands of pounds only, to be effected. Telegraph charges are now little different from those in 1923, and are insufficient to meet higher costs. Low porterage charges result in a large number of telegrams being handled at a cost that does not leave 6d. for their transmission to the office of delivery. This cannot continue —no one can reasonably expect the Post Office to provide a service indefinitelyat rates representing only a fraction of the cost of operation. In 1952, £11,000 was collected in respect of porterage which cost the Department some £40,000. It is likewise clear that if the telegraph service, 50 per cent. of which is related to business communications and which contains a social service element, is to be run at a loss, a surplus from the telephone service must be available to meet the loss.
I now come to the telephone service. I decided that, as a first step, I would ensure a very great improvement in the speed and availability of service. The details of the progress last year I have given, but let me emphasise one fact. For an increase in engineering staff of some 12 per cent. since 1950, the increased volume of output has been:—Telephones, 11 per cent.; kiosks, 23 per cent.; call offices, 236 per cent.; exchanges increased in capacity 22 per cent. In addition, taking long-term work into consideration, additional trunk circuit mileage provided in 1952 was over 400 per cent. greater than in 1950.
I am glad to say there is continuing progress in output during the first quarter of this year. The tremendous extension of the telephone network taking place was due to plans made in 1946 and put into operation during subsequent years, but further speed in output has been ensured by changes in working methods devised as a result of regular conferences between myself and the officers of the staff.
The whole of the trunk telephone operating service in Dublin and in the provinces has been substantially improved, conditions of work improved wherever possible, training modernised and the standard of courtesy and efficiency on the part of the whole staff permanently and fundamentally raised to the level expected of a country with our tradition of hospitality and graciousness. Complaints of poor service have constantly diminished.
In regard to telephone finances, it must be borne in mind that the profit on the service, which had been decreasingcontinuously for some years, disappeared in 1951-52. The reasons for this are not far to seek. First, wage rates generally are more than 90 per cent. greater than pre-war rates—in many cases they have more than doubled. Secondly, the cost of materials has, on average, trebled since 1939. Thirdly, we have undertaken enormous capital outlay to improve and develop the service. For example, the addition last year of over 14,000 miles of circuits provides a very great improvement in standards of service, but at the same time raises annual interest depreciation and maintenance charges. Taking these three factors together—wages roughly doubled, costs of materials trebled, capital investment in the service since the end of the war nearly treble the total amount previously invested by the Irish and British Governments—one may wonder that it was possible to postpone increases in rates until 1951, when they were brought to a level only 25 per cent. over pre-war.
May I at this juncture point out facts little known to the public? First, the total capital invested in the telephone system rose from £57 per telephone in 1938-39 to £100 per telephone in 1951-52. Secondly, sample costings show that the charges for interest on capital, depreciation and maintenance on the average telephone exchange line provided at current costs in Dublin have risen to about £14 a year. The annual rental, which in the case of residence telephones is £6 5s., scarcely covers the interest on the capital alone.
Thirdly, an examination of accounts during a recent period showed that the average number of local calls per day made by some 15,000 out of 37,000 subscribers in the Dublin and Cork areas was less than two. A still larger number of subscribers in these areas are negligible trunk users. These figures indicate that, making every allowance for the fact that each additional subscriber tends to stimulate more traffic from existing subscribers, a considerable number of exchange lines are being provided and maintained at a loss.
Moreover, as the telephone habit grows, although total traffic increases, the new subscribers tend more and more to be those who will not be heavy users and the number of calls originated per subscriber tends to fall.
It may be suggested that, by reducing charges, traffic would be sufficiently stimulated to meet expenditure. That has not been the Department's experience. When charges were reduced in 1936, the surplus fell by some 40 per cent. and was not recovered until the war years when emergency conditions had stimulated traffic and a 5 per cent. surcharge had been imposed.
Lastly, Deputies may be interested to know that in the United States of America a privately run telephone administration which is generally regarded as a model of efficiency and enterprise, has raised its charges by from 25 per cent. to 28 per cent. since 1946, although it increased its total telephones from 22,500,000 to 40,000,000 since the end of 1945. In New York, despite enormous growth, certain charges have doubled since 1939. These figures show clearly that increased telephone business does not necessarily enable charges to be maintained, still less reduced. Telephone charges here are low in comparison with those in other countries in general.
Summarising, these deficits on the three services are most disturbing, amounting as they do to 12.4 per cent. of our total revenue, including credits in respect of work done for other Departments of State. An improvement could result from increased traffic as the present organisation could dispose of a good deal more traffic without commensurate extra expense, but I am afraid there is no possibility whatever of an increase in traffic of such an order as to lead to a worthwhile percentage improvement on the present position. While it has been possible to secure many small economies here and there, and these are still being sought, I am satisfied that the effect of them would be relatively insignificant in relation to our heavy deficit.
There is no case for asking the general taxpayer to continue to makeup a large deficit on Post Office working. The users of the Post Office services should pay for the services which they obtain. If we could elect to provide Post Office services only in places where they would be completely self-supporting, the problem would not be as difficult as it is. As, however, the Post Office is a public service, its facilities must be made available everywhere throughout the country and not merely in the cities and towns. Charges for service, therefore, have to be such as to recover the cost of providing the Post Office services on a country-wide basis.
Having given the matter earnest consideration, the Government has decided that there is no alternative but to increase postal, telegraph and telephone charges in order that the Post Office should be self-supporting. Should additional costs arise which would materially alter the position which the proposed increases are designed to secure, it will then be necessary to look at the whole position afresh, as it is the Government's intention that the Post Office services should continue to be self-supporting and should not have to have recourse for financing to general taxation.
The Irish Post Office is not alone in having to take this sort of step. Many other countries have had to increase their charges in recent times, amongst them being Holland, Sweden, Denmark, Norway and Finland. In Britain, for example, where the density of population is five times that of this country, and where the cost of postal deliveries and telephone communication per unit of population must be substantially less, a surplus of £20,000,000 has fallen to £5,000,000 in five years, notwithstanding substantial increases in charges. In Denmark, a recent deficit of £840,000 was heavily reduced by increased charges. The increases which it is proposed to make are the minimum that can be made consistent with prudent financing, and, in view of what I have said, I am sure that all Deputies will appreciate that no other course can be taken. The increases will still leave the general public paying for the three services at rates considerably below those whichwould be represented by the fall in the value of the pound to 8/11. At the same time, the improvement of postal services throughout the country will continue and telephone subscribers will be given a more and more rapid service, no delay service already having been introduced, as I have said, into whole regions.
The new postal and telephone charges will be implemented by the issue of statutory Orders. Before the telegraph charges can be introduced, however, a new Telegraph Act will be required, and in order that they may be brought into force on 1st August, it is essential that the new Act should be passed before that date. A short Bill for the purpose will be introduced at an early date and it is hoped to have it passed expeditiously.
In conclusion, I would like to express my appreciation of the loyal and efficient service given by the staff of all grades during the past year.
