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TOURIST AND HEALTH RESORTS. The net expenditure was £12,880, as against £13,510 for the previous year. The main items of expenditure were the completion of the Blue Bath House at Rotorua, the sealing of paths and drives in the Rotorua Sanatorium grounds, the installation of a new water-supply system at Milford Hostel (Milford Sound), and extensions to the Rotorua electric and water and drainage systems. During the current year it is proposed to proceed with the erection of additions to the Te Anau Hotel, the erection of a reservoir at Rotorua to provide more pressure in the water-supply system, and the erection of staff quarters at Lake House, Waikaremoana, and the Chateau Tongariro. TELEGRAPH EXTENSION. The expenditure for telegraph extension by the Post and Telegraph Department for the financial year in respect of telephone, telegraph, and wireless facilities throughout the Dominion amounted to £135,933 as against £144,159 for the year ended the 31st March, 1934. The amount available for extension purposes, which was approximately the same as in the previous year, was insufficient to enable a large programme of extension works to be undertaken, but a number of works were proceeded with. The main works in connection with, the toll and telegraph services were the installation of additional carrier toll systems between Gisborne and Napier and between Napier and Palmerston North ; the installation of printing telegraph systems between Gisborne and Napier, New Plymouth and Auckland, New Plymouth and Wanganui; the provision of toll dialling facilities between a number of stations ; and the installation of equipment for " demand " working on the Auckland toll board. In addition, an increase in efficiency of toll and telegraph facilities between a large number of stations was effected by the reconstruction of existing equipment, the rearrangement of circuits, and, in a few instances, the erection of new lines. The number of new telephone-exchange connections for the year exceeded the relinquishments by 2,237, as against an excess of relinquishments over new connections of 775 in the previous year. The position in this connection, which reflects the improved economic conditions of the Dominion, is extremely gratifying. To improve the standard of service for existing subscribers and to provide for future requirements, the following additions to the telephone-exchange plant were made : — The laying of 1} miles of underground cable ducts. The laying or erecting of 17 miles of lead-covered cable containing 2,016 miles of wire for subscribers' circuits. The erection of 95 miles of pole-line, and 1,412 miles of open aerial wire for telephone-exchange subscribers' circuits. The telephone-exchange system has been improved in other directions, some of which are indicated hereunder : — The installation of six public call offices and four pay stations. The installation of branching multiple switchboard exchange equipment at Taumarunui and Ashburton and the removal of the Taumarunui Exchange to the new building. The replacement of the existing switching equipment at Kerikeri, Kawhia, Wakefield, Otorohanga, and Te Akau. The installation in the Wellesley Street (Auckland) automatic exchange for battery charging purposes of a 100-ampere motor-generator set and a 100-ampere motor-generator booster. The installation of secondary batteries at a number of exchanges. The replacement by high-grade transmitters of some 19,000 more or less imsatisfactory transmitters on subscribers' telephones in automatic telephone-exchange areas throughout the Dominion. In respect of departmental radio-telegraph and radio-telephone stations, the year just closed has marked probably the most extensive constructional programme since the opening of the stations. As a result, the coast stations of the Dominion are fitted with modern equipment capable of giving a high standard of service. Coincidently with the improvements in the building accommodation at WellingtonRadio, arrangements have been made to modernize all the transmitting facilities.

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