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Page 225 would be protests from the Commonwealth Press Union. This rate, reduced from 24d. a word during the war and originally intended only for its duration, is much below the level of other press rates. The lack of Commonwealth agreement and the strong opposition which may be expected from the Commonwealth Press leads me to propose that no increase in this rate should be made at present. The revenue from an increase to 13d. a word would be no more than £25,000 a year.

8. The rate to North America is a special case. The bulk of the transatlantic traffic is carried by the American Cable Companies who operate in this country and most of the increased payments in the United Kingdom will accordingly accrue to them. On the other hand, these American Companies have for some time been operating here at a loss and have for years been pressing for a rate increase; in equity an increase is clearly long overdue, seeing that whereas it costs 8d. a word to send a telegram from here to North America, it costs ls. 44d. a word in the reverse direction. I propose an increase of the "ordinary" rate from 8d. to 1s. This would mean additional revenue for the American Companies of about £380,000 a year. New accounting arrangements now under discussion between us and the Americans might reduce this by £65,000 a year. Until agreement is reached in our current discussions with the Americans, I think we must be prepared to postpone this increase. In that event, some mention of the matter would need to be made in any public announcement.

9. The procedure for introducing the proposed increase in rates is by notice in the London Gazette. No Parliamentary procedure is involved, although a general announcement would need to be made in Parliament.

10. To summarise, I ask for approval to-

(a) an increase in the charges for overseas telegrams, except to the United States and Canada, and excluding the Commonwealth Press Rate, by roughly one-third;

(b) an increase in the ordinary rate to the United States and Canada from 8d. to 1s. a word; this increase being postponed if necessary until agree- ment is reached in the current negotiations;

(c) the making of an early statement in Parliament of our general intentions.

11. This paper has been agreed with the Treasury (with reservations as regards the Commonwealth Press Rate), Colonial Office and Commonwealth Relations Office.

Post Office Headquarters, E.C. 1,

15th July, 1952.

D.

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