1.—7.

8. You admit, then, that the £10 is not the price they cost you?— Yes. 9. Are you at liberty to say what you give for them? —No; not without the authority of the Western Manufacturing Company. I could get their permission. 10. I see that the charges for wire, poles, and labour varies. It is less in Wellington than elsewhere. How is that?— Because in Wellington we carry the wires on the housetops, and have to erect very few poles. 11. Could you not do the same in other cities?— Not in all places; Auckland, for example. 12. Are they not, in other countries, now laying the wires underground? —Not the telephone wires. 13. You are not aware that that has been done? —Not by telephone companies. They are sticking to the overhead system. 14. Is it not done in New York?— Not as yet. I believe there has been some agitation about making them put the wires underground, but there are practical difficulties in the way which have not yet been overcome. 15. Then in some places you cannot carry the wires over the houses?—lt would not answer in some places. This town is particularly well suited for it. 16. Mr. Fish.] Do you pay the owners of the houses anything for that ?—No. 17. The Chairman.] Will not such an enormous number of wires in the street, as in Auckland, become a public nuisance ? —We shall be obliged to have overhead cables. We have them now to some extent. 18. As to the item for salaries, you have one clerk in each place.—Yes; there have been two in Dunedin within the last six weeks. 19. How many subscribers are there there ?—225 now. 20. Have you arrived at the information as to how many connections one clerk can carry on with ?—One operator, by a system I have invented, and for which I have asked the Government to give me a bonus, can manage 150 with ease. 21. Do you think it desirable that one man should continue for, say, eight hours constantly attending so large a number ?—Yes ; one man in Dunedin has been working up to 200. 22. Hon. Mr. Dick.] He is a very smart man, though?— Yes. 23. The Chairman.] And you give him £129 a year.—That is the proportion of his salary. It does not include a bonus. We give each clerk a bonus of 4s. a number. 24. The cost of linemen, batteries, and materials is £213 in Auckland, £134 in Wellington, £222 in Christchurch, and £268 in Dunedin ; a total of £887 ; an average of £222 for each town ?— Yes ; one pound and seven-tenths is the annual cost of maintenance of each instrument. Out of that there is 12s. for batteries, which leaves £1 for supervision, and for men going round and keeping the line in order. 25. Is that the result of the actual cost?— Yes. 26. Will it not diminish as the number of subscribers increase ?—No; it will rather increase. When an instrument gets out of order, it has to be immediately replaced or put in order. That all takes time. The public are very impatient in these things, and. everything has to be done at once. 27. Repairs —wear and tear —are estimated to cost 7-J- per cent. Is that exclusive of the rest ?— Yes. 28. What does it consist of?— That is the allowance for the usual wear and tear. Of course, in time, we shall have to replace some of the instruments. We have to put in two new cells for each instrument every year. Then this should be remembered : that under the Crown Redress Act we are liable for all accidents. If a pole fell and broke a man's leg we should be put in for it at once. 29. Paper and printing, rent, fuel, light, &c, you put down at £100 a year?—l think that is very moderate. You could not get a room in any of those central places for £100 a year. We take this view :we estimate what would be the cost to a private company starting and doing this. The Government have not had to pay all these amounts, but that is rather less than a company would have been able to do it for. Taking an average of £20 17s. 6d. for each connection, the total cost of the plant has been £12,423. 30. Hon. Mr. Dick.] That is taking no account of the discount you get from the company?—' The return is made up on this basis: that, if a private company had started, this is the amount in hard cash it would have had to pay. Ido not say the Government have paid all that. We were in the position of a man going along the road with a barrow and picking up something on the way which he can carry with a little extra labour. If a private company had done all this it would have cost them more. 31. In some cases you have used the poles already there and have charged for them as if you put them there for the purpose ?—Yes. 32. Have you any idea of the difference between the cost if you had had to erect the poles instead of using those already there ?—The difference would be about £3 17s. 6d. per subscriber. 33. Then that would reduce the cost from £10 17s. 6d. to £7 ?—Yes, no doubt; but no private company could have put them up for £10 17s. 6d. 34. What would have been the cost if you had to put up all new poles ?—The cost for poles has varied. In Christchurch there was no charge for new poles up to the date of the return —the existing poles were used. In Wellington scarcely any were wanted, the wires running on the housetops. 35. The £20 17s. 6d. 3oes not include any of the cost of maintenance?— No. 36. For the-first year the cost of maintenance of 514 connections is given as £2,583 14s.?— Yes. 37. What is that about for each ?—About £5. 38. Then the total cost of erection and maintenance for the first year would be £25 17s. 6d. ?— But you are taking the interest on the capital. If you provide for the cost of maintenance you have your instruments and plant at th; end of the time.

2