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Sub-enclosure 2 in No. 1. The Accountant to the Treasury, London, to the Secretary to the Treasury, London. Sir,— .Treasury Chambers, Whitehall, S.W., 15th August, 1911. I have the honour to report that I have audited the accounts of the Pacific Cable Board for the year ended 31st March, 1911, in accordance with the instructions conveyed in their Lordships' minute of the 17th April, 1902, and have found themcorrect. The annual expenses of the cable, as defined in section 3 (2) of the Pacific Cable Act, 1901, as far as they were not met out of the receipts arising in connection with the cable, amounted in the year ended 31st March to £48,210 11s. 9d., and a sum of £34,818 15s. 2d., representing thirteeneighteenths of the net expenditure, is therefore recoverable from the contributing Governments, viz. :— £ s. d. Australia (six-eighteenths) ... ... ... ... 16,070 3 11 Canada (five-eighteenths) ... ... ... ... ... 13,391 16 7 New Zealand (two-eighteenths) ... ... ... .. 5,356 14 8 £34,818 15 2 I beg to submit that the accompanying account, which has been duly certified, be presented to Parliament in compliance with section 7 of the Pacific Cable Act, 1901. I have, &c, The Secretary to the Treasury. G. H. Hunt, Auditor.

Enclosure to Sub-enclosure 2 in No. 1. The Chairman, Pacific Cable Board, London, to the Secretary to the Treasury, London. Sir,— Queen Anne's Chambers, London S.W., 10th August, 1911. I have the honour, on behalf of the Pacific Cable Board, to submit, in the form hitherto adopted, the following accounts : — (I.) The sum issued out of the Consolidated Fund, and the expenditure of the Board on Capital Account. (II.) The money borrowed and the securities created. (III.) The aggregate amount of capital expenditure up to the 31st March, 1911. (IV.) The expenses of the cable in the year ending 31st March, 1911. (V.) The account of the Provident Fund; and (VI.) The account of the Reserve and General Renewal Fund. 2. The results of the year's working are set forth in the following statement : — Beceipts. £ c. d. £ s. d. Traffic receipts ... ... ... 140,313 2 5 Less Atlantic Companies' charge for convey- \ ing date and time, and for delivering duplicate copies in London and other large centres in United Kingdom ... 4,170 6 7 136,142 W 10 Interest on deposits ... ... ... ... 225 10 2 Refund tolls and dues ... ... ... ... 202 16 3 Charter of " Iris" ... ... ... ... 2,106 12 3 - , £138,677 14 6 . Expenditure. Head office (salaries and expenses, canvassing, engineers' fees, £ s. d. and royalties) ... ... ... ... ... 7,114 811 Cable-stations (salaries and expenses) ... ... ... 57,308 8 0 Ship's salaries and expenses ... ... ... 13,035 14 8 Provident Fund ... ... ... ... ... ... 1,884 16 8 Renewal Account... ... ... ... ... ... 30,000 00 Excess of receipts over expenditure ... ... ... • •. 29,334 6 3 v:. . £138,677 14 6 3. The sum of £29,334 was thus available towards meeting the annuity of £77,544 payable to the National Debt Commissioners in respect of interest and sinking fund on the sum of £2,000,000 advanced by them for the purpose of providing the capital required for laying and equipping the Pacific cable. This is £11,378 more than was available in the year 1909-10, and reduces by an equal amount the sum to be provided by vote of th« Imperial and Dominion Parliaments, which ■will be £48,210 for the year under review. " ■>-:■>--:■■