The Development of Rates of Postage Part 21

(a) Salaries, Wages and Allowances 10,538,318 (b) Rent, Rates, Office Fittings, Water, Light and Heating 268,981 (c) Conveyance of Mails (excluding Payments to Foreign and Colonial Administrations):--

By Rail-- Ordinary Postal Packets 1,292,460 Parcels 1,197,037 --------- 2,489,497 By Road 662,010 " Packet 890,530 --------- 4,042,037 _Less_-- Contributions received towards the cost of Packet and Mail services _130,335_ --------- 3,911,702 (d) Purchase of Stores and Uniform Clothing 452,065 (e) Manufacture of Stamps, etc. 128,000 (f) Travelling, Law Charges, and Incidental Expenses 180,527 (g) Estimated Rental Value of premises belonging to the Post Office used for Postal purposes 278,344 (h) Estimated Pension liability for the year 1,169,406 Amount expended by other Government Departments in respect of various services rendered, viz.:--

(i) Maintenance and Repair of Buildings 160,200 (j) Rates on Government Property 95,676 (k) Issue of Postage Stamps 22,193 (l) Stationery, Printing, etc. 112,308 (m) Cost of Audit (Exchequer and Audit Department) 3,612 ------- 393,989 (n) Net Revenue contribution to the Exchequer for the year 6,143,459 ----------- 23,464,791 ===========

--_Annual Report of the Postmaster-General_, 1913-14, Appx. N, p. 92.

TABLE C

STATEMENT OF EXPENDITURE, SUMMARIZED AND ADJUSTED.

ITEMS IN TABLE B. NET COST.

(a) and (h) STAFF, 11,707,724.

_Deduct_-- (1) Officers in charge of Eastern Mails 1,000 (2) Post Office Agencies Abroad 17,000 (3) Cost of Services to other Departments} 516,789 (4) " Money Order Service }excluding 156,000 (5) " Postal Order Service } Postage 530,000 (6) " Registration and Insurance Service 264,000 (7) " Express Delivery Service 52,000 (8) " Private Boxes and Bags 41,000 (9) " Cash on Delivery Service, Reply Coupons, Certificates of Posting, Late Fee Services, etc. 50,000 --------- _Proportion allocated to Staff_ 1,444,264 10,263,460

(b), (g), (i), and (j) BUILDINGS, 803,201.

_Deduct_-- In respect of (3), (4), (5), (6), (7), (8), and (9) above 96,587 706,614

(_c_) CONVEYANCE OF MAILS, 3,911,702.

_Deduct_-- (1) Packet Services outside the United Kingdom 582,935 (2) Conveyance of Mails across Panama 2,931 (3) Receipts from Foreign Countries for Land Transit 51,000 -------- 636,866 3,274,836 (_d_), (_e_), (_k_), and (_l_) STORES, 714,566.

_Deduct_-- In respect of (3), (4), (5), (6), (7), (8), and (9) above 86,938 627,628 (_f_) and (_m_) MISCELLANEOUS 184,139 ----------- Total 15,056,677 ===========

TABLE D

COST OF STAFF AND BUILDINGS.

In the examination of proposals for revisions of staff and accommodation at post offices, the whole work of the offices is reduced to a common denominator for each chief division of the work, and is stated in terms of that denominator.

Thus all indoor work is reduced to and expressed in terms of units representing the work in connection with 1,000 letters posted and delivered, the term "letter" in this connection covering all packets sent by post other than parcels. There are no ratios for the separate cla.s.ses of "letters."

All outdoor work is reduced to and expressed in terms of a unit of 1,000 letters (posted and delivered), i.e. the complete service.

For office accommodation the unit is 1,000 letters posted or delivered, whichever is the greater number at the office in question.

Certain ratios are taken for the expression in terms of letters of the various divisions into which the work performed by the post office falls.

As between letters and parcels the ratios are as follow:--

UNITS RATIOS.

-------------------------------------------------------- VALUE IN LETTERS.

+----------------------------------------- Indoor Outdoor Office Work. Work. Accommodation.

--------------+--------+---------+----------------------- Letter posted 3/5 -- } { 1 (whichever is the " delivered 2/5 1 } { greater traffic) " forwarded 1/3 -- 1/2 " collected -- x -- Parcel posted 6 -- 6 " delivered 6 10 6 " forwarded 4 -- 6 " collected -- 10x -- --------------+--------+---------+-----------------------

1,000 letters (weekly) = 1 unit of postal work.

For each unit of work so determined there is a corresponding normal cost.

For indoor work the normal cost is approximately 15, for outdoor work 22 10s., and for office accommodation 2 10s., per annum.

Since the unit to which a certain normal cost is allowed is built upon calculations which give a parcel a definite relative value as compared with a letter, the ratios show the relative cost to the Post Office of a letter and of a parcel.

TABLE E

RELATIVE COST OF STAFF FOR LETTERS AND PARCELS.

It is estimated that on the average more than half the total number of letters are not sent forward direct to the post office of destination, but are forwarded from the office at which they are posted to an intermediate office; that is to say, more than half the total number of letters travel in two mails, and incur a handling at an intermediate office. The handling at that office is termed "forwarding." The letters are termed "forward letters."[630] Expressed in another way, the estimate is that all letters are forwarded, on the average, in 1.6 mails.

It is estimated that on the average a greater proportion of parcels travel in this way in two mails. The actual estimate is that a parcel travels in 1.8 mails.

Hence--

Total handling of 1 letter = 1 letter posted + 1 letter delivered + 0.6 letter forwarded.

Total handling of 1 parcel = 1 parcel posted + 1 parcel delivered + 0.8 parcel forwarded.

Now a letter forwarded = 1/3 letter posted and delivered (Table D).

And a parcel forwarded = 1/3 parcel posted and delivered (Table D).

Hence total handling of 1 letter = 1.2 letter posted and delivered.

And total handling of 1 parcel = 1.26 parcel posted and delivered.

The ratio between the total cost of handling (indoor) of 1 letter and the total cost of handling (indoor) of 1 parcel is therefore--

1.2 1 : 1.26 12 = 1 : 12.6.

The normal unit cost for indoor work is 15 (approximately).

For outdoor work the ratio is 1: 10, and the normal unit cost 22 10s.

The ratio for all indoor and outdoor services is therefore approximately 1: 11.

TABLE F

ACTUAL COST OF STAFF FOR LETTERS AND PARCELS.

The total cost of handling a parcel is 11 times the total cost of handling a packet other than a parcel (Table E).

In 1913-14 the total number of parcels dealt with was 133,663,000 (Table A).