On the other hand it is, for instance, no part of the ordinary 
and necessary business of the War Office to act as a supply 
Department to the Admiralty. It may be and often is con- 
venient and economical for one Department to act as the agent 
of the other or for joint buying arrangements to be made, but 
it is difficult to see how in such a case an inter-departmental 
payment is to be avoided. The method by which such a payment 
should be calculated is important, and in this connection it will 
be found that we recommend important simplifications. But to 
dispense altogether with payment is neither practicable nor, 
we think, desirable. It is one thing for a Government Depart- 
ment to receive stationery without charge, since its actual con- 
sumption is closely watched and controlled by the Stationery 
Office with the support of the Treasury. It would be another 
proposition altogether that one Service Department should re- 
ceive, say, stores from another without charge, and this would 
~ertainly not be in the interests of economy. 
(2) The methods now in force for calculating the charge for 
services rendered present considerable diversity. In the main 
this is due to the wide range and extreme variety of the ser- 
vices themselves, but nevertheless there is scope for improve- 
ment in methods and we think that a greater measure of uni- 
formity could be attained and is desirable. A brief conspectus 
nf the present position is given in an Appendix. 
(3) Speaking broadly, Departments in fixing their charges do 
not differentiate between Hxchequer Departments and other 
customers. In certain cases the prices charged to non-Exchequer 
customers do include elements which are not charged to custo- 
mers being Exchequer Departments. In a few cases the position 
nay even be reversed and Departments for some reasons of policy, 
or in virtue of reciprocal agreements, may charge a particular 
non-Exchequer customer less than they would charge other 
~nstomers. mcluding Exchequer Departments. for a like service. 
TRANSACTIONS BETWEEN FXCHEOUER DEPARTMENTS. 
5.—The problem stated. 
Our task is to devise a system which secures to the maximum 
axtent the end of economy; by that we mean a system which 
will remove obstacles to the extension of the practice of bulk 
purchase and under which each Department, while not tempted 
w0 extravagance by escaping charges proper to it, is under the 
maximum inducement freely to utilise the. services of other 
Departments who may be in a position to contract for the 
supply of a given article or the provision of a necessary service 
on the most favourable terms. At the same time the system 
must avoid complications of accounting, inter-departmental 
correspondence and inter-departmental friction.