'I~-eebanks, such as the Penn Treebank (PTB), offer a simple approach to obtaining a broad (:overage grammar: one can simply read the g rammar off the parse trees in the treebank. While such a g rammar is easy to obtain, a square-root rate of growth of the rule set with corpus size suggests that the derived grammar is far fi'om complete and that much more treebanked text would be required to obtain a complete grammar, if one exists at some limit. However, we offer an alternative explanation in terms of the underspecification of structures within the treebank. This hypothesis is explored by applying an algorithm to compact the derived grammar by eliminating redundant rules rules whose right hand sides can be parsed by other rules. The size of the resulting compacted grammar, which is significantly less than that of the full t reebank grammar, is shown to approach a limit. However, such a compacted grammar does not yield very good performance figures. A version of the compaction algorithm taking rule probabilities into account is proposed, which is argued to be more linguistically motivated. Combined with simple thresholding, this method can be used to give a 58% reduction in g rammar size without significant change in parsing performance, and can produce a 69% reduction with some gain in recall, but a loss in precision. 1 I n t r o d u c t i o n The Penn Treebank (PTB) (Marcus et al., 1994) has been used for a ra ther simple approach to deriving large grammars automatically: one where the g rammar rules are simply 'read off' the parse trees in the corpus, with each local subtree providing the left and right hand sides of a rule. Charniak (Charniak, 1996) reports precision and recall figures of around 80% for a parser employing such a grammar. In this paper we show that the huge size of such a treebank grammar (see below) can be reduced in size without appreciable loss in performance, and, in fact, an improvement in recall can be achieved. Our approach can be generalised in terms of Data-Oriented Parsing (DOP) methods (see (Bonnema et al., 1997)) with the tree depth of 1. However, the number of trees produced with a general DOP method is so large that Bonnema (Bonnema et al., 1997) has to resort to restricting the tree depth, using a very domain-specific corpus such as ATIS or OVIS, and parsing very short sentences of average length 4.74 words. Our compaction algorithm can be easily extended for the use within the DOP framework but, because of the huge size of the derived grammar (see below), we chose to use the simplest PCFG framework for our experiments. We are concerned with the nature of the rule set extracted, and how it can be improved, with regard both to linguistic criteria and processing efficiency. In what tbllows, we report the worrying observation that the growth of the rule set continues at a square root rate throughout processing of the entire t reebank (suggesting, perhaps tha t the rule set is far from complete). Our results are similar to those reported in (Krotov et al., 1994). 1 We discuss an alternative possible source of thi,~ rule growth phenomenon, partial bracketting, and suggest that it can be alleviated by compaction, where rules that are redundant (in a sense to be defined) are eliminated from the grammar. Our experiments on compacting a PTB tree1For the complete investigation of the grammar extracted from the Penn Treebank II see (Gaizauskas, 1995)