F.—B.

while a balance of £2,750 12s. 6d. was in hand, and has since been invested. All interest earned on the investments is added annually to the fund, and is not treated as part of the revenue of the year. 6. The Board's forecast of its probable revenue and expenditure during the year 1906-7, as submitted to their Lordships on the 30th December last, is as follows: — £ I £ Traffic revenue .. .. .. 88,600 Fourth annuity .. . . .. 77,545 Estimated deficit .. .. 87,006 Renewal fund' .. .. .. 33,000 Working-expenses (including £8,000 for expenses in connection with opening offices and competitive tactics in Australia) .. .. .. .. 65,061 £175,606 £175,606 7. The land-line services in Canada, Australia, and New Zealand in connection with the cable have been generally well maintained by the Governments concerned and by the Canadian Pacific Railway. The Atlantic companies have afforded uninterrupted cable-communication throughout the year, and a rapid and efficient service. 8. The Board is glad to be able to acknowledge the consistently good and loyal service rendered by their staff throughout the year. The health of the staff has been generally satisfactory, and the Board is glad to report that no serious illness has occurred. 9. Under Captain Sharp the efficiency of the Board's repairing vessel and the discipline of the ship's company have been well maintained. In deference to the wishes of the Governments of Australia and New Zealand, the Chinese stokers have been replaced by natives of Norfolk Island, who have so far given satisfaction. 10. In accordance with the recommendations contained in the report of the Conference of the various Governments concerned, which was issued in July last, and in consequence of the negotiations with the Eastern Extension Company having fallen through, the Board despatched their General Manager, Mr. Reynolds, to Australia to initiate active competition in that colony. The company having refused to accept the Commonwealth agreement as defined by the Conference, the Commonwealth Government at once withdrew the privileges provisionally extended to the company in Melbourne, and accorded to the Board facilities in Sydney similar to those enjoyed by the company under the New South Wales agreement. Advices from Mr. Reynolds indicate the early opening of the Board's offices in the latter city. 11. The attached statement may be of interest as showing the progress of the traffic since the opening of the cable.

Number of International Messages and Words.

I have, &c, The Secretary, Fis Majesty's Treasury, Whitehall, S.W. S. Walpole, Chairman.

No. 5. The Secretary, General Post Office, Wellington, to the Superintendent, Pacific Cable Station, Doubtless Bay. Sir, — General Post Office, Wellington, 15th September, 1906. I have the honour to acknowledge the receipt of your letter of the sth instant, covering statement showing the amount due by this Government as its share of the cost of working the Doubtless Bay Station for the year ended the 31st March, 1906. In reply, I have to inform you that the amount due—namely, £640 14s.—will, as desired, be paid into the Bank of New Zealand at Auckland to the credit of your Board's London account. , I have, &c, Thomas Rose, for Secretary. The Superintendent, Pacific Cable Station, Doubtless Bay, [P.C. Stns. 06/38.]

10

Year. Messages. Ordinary. G £™™- Press. Total. Words. Remarks. Ordinary. Gove ™" J ment. Press. Total. 1902-3 18,494 915 1903-4 64,595 3,128 1904-5 67,677 3,018 1905-6 (approximate). 35 890* 387 19,444 68,613 71,082 81,130 202,313 24,210 1,831 744,034 83,116 37,819* 781,028 71,575 19,110 228,354 864,969 871,713 917,281 Cable opened 8th December, 1902. * Cricket.