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The contractors, after getting this special wire, made arrangements with the Southland Times, North Otago Times, Timaru, Herald, New Zealander, and Hawke's Bay Herald to subscribe a proportion of this £2,000 a year in return for receiving special messages by the special wire. One of the conditions of the contract with the Government is that no more favourable terms for a special wire between the same places shall be granted to any other paper. Subsequently another special wire was taken up by the Press Agency or the Canterbury Press at the same price and for precisely the same stations, the cost of each wire to the department being, I presume, exactly the same. There was a proposal made after the terms of our arrangement were agreed upon to divide the cost of a special wire into £1,000 for each Island ; but that my proprietors strongly objected to, and desired that the amount should remain £2,000 for a special wire from one end of the colony to the other. Since January a competition between the contractors for the two wires has gone on. We apportioned the £2,000 in proportion to the circumstances of the subscribing papers. There are three rates of payment —the highest beiDg £325; next class, £225; and the smaller class of papers on the special wire, £175. Since that was done the New Zealander, which had contracted for two years for the special wire at £225 a year, has gone into liquidation, and the contractors for the other special wire have underbid us, so that the new proprietors of the paper have gone over to the other agency, leaving the contracting parties for our wire to pay the £225 between them. In the same way we were in communication with the Ashburton Mail to receive by our wire, for which we pay £70; but the other contractors applied for a special wire there also, and underbid us. Our contractors now pay for their special wire to Ashburton, without getting anything towards the cost. In the same way the Grahamstown Advertiser was in negotiation with us, and we got the special wire open there at an expense of £70 a year; but the Advertiser now takes its telegrams from the contractors for the other wire. My object in mentioning these facts is to show that that there is no partiality shown towards us, and that there is keen business competition between the contractors for the special wires. I desire to say that, from the first, the w-orking of the special wire has been intensely unsatisfactory to the papers connected with it. Tho agreement was made at the suggestion of gentlemen connected with the Press, who are acquainted with the working of special wires in England, where they are constantly used —for instance, between London and Paris, to Manchester, Glasgow, &c. —and work excellently well; and they thought the system would work a3 well here. It did work very well last session, as between Wellington and Auckland, for the New Zealand Herald; but we were imfortunate enough in some way to excite the hostility of the head of the Telegraph Department to the proposals that we made, and every obstacle has been thrown in our way with regard to the use of that wire, so that its value to the papers has been rendered very small in comparison to what they had expected, and had a right to expect. Nothing could he more unsatisfactory or unfair than the way Dr. Lemon has carried out this agreement with us. We have been in constant antagonism with Dr. Lemon since the wire was started, and have had bitter cause for complaint at the way we have been treated. I will give two examples which have occurred within the last forty-eight hours —one example connected with the system of Press telegrams, and the other relating to the special wire. They are examples of what is constantly taking place. The Tauranga Times takes telegrams from our office, and the station at Tauranga is open on their publication nights to receive telegrams up to 10 o'clock. The office is open up to that hour for Press telegrams. It will be in the recollection of the Committee that the Loan Bill was an important matter the other night. I was anxious to get the result of the debate on that Bill to Tauranga that night, and at a quarter to 10 o'clock I took a telegram of about seventy words for Tauranga to the office here. I said to the officer, "Do net let Tauranga go ; it is a 10 o'clock station." He said he thought it was an 8 o'clock station, but went and looked, and came back and said " All right." The station is a 5 o'clock one on off-days. Last night, after 5 o'clock, I received this memorandum from the Telegraph Office here, when it was too late to inform the Times .* —{The memorandum was left with the Committee. It stated that, through an oversight on the part of some operator, who was under the impression that Tauranga was an 8 o'clock station, my message had not been sent.] The office did not give me an opportunity during yesterday to send a telegram explaining what had occurred. That is not a solitary instance. Hardly a week passes that numbers of telegrams are not returned, to me in the same way, and I. very often get back a memorandum that the officer has been fined half-a-crown, and the fine I believe goes to the revenue. There have been occasions on which the department, by not sending the telegrams, has by the fine made 100 per cent more than it would if the telegram had been forwarded. That is a sample of the way Press telegrams are treated. The other case refers to the special wire. Last night a telegram of between 3,000 and 4,000 words of parliamentary news was put in. The instructions are that the parliamentary news shall tako precedence of all other matter, but only about 1,500 words of the message in question got beyond Christchurch. It all went North, but, with the exception of about 1,500 words, it was stuck up in Christchurch, and yet I received a number of ordinary interprovincial messages of particularly little interest. I received last night a large number of these messages, which ought to have been stopped at the sending station to give precedence to the parliamentary. I will read a list which I have here of the number of words : Napier, 130; Christchurch, 238 ; Auckland, 300 ; Dunedin, 50 ; Christchurch, 106 ; Invercargill, 40. All this interrupted the parliamentary message. There is hardly a night that the special-wire work is cleared off. The transmission rate should, I believe, be about 1,200 words an hour with fair working, but our rate of transmission does not average 800 words. I have here a record of our messages for months back, and it shows an average of under 800 words per hour. The other night, on the occasion of the moving of the want-of-confidence motion, I obtained a general order that all the parliamentary news that could not be sent through by special wire should go through after 2 o'clock as Press telegrams, aud be charged for as such. This was that all that was unfinished at 2 o'clock ou our special wire should go as a Press message at ordinary rates. The consequence was that the average on our wire was from 1,500 to 1,700 words up to 2 o'clock, and there was very little to send through after. This shows what could be done, and contrasts strongly with the usual rate of special-wire transmission. The officers have told me, "We are obliged to remain until 2 o'clock, and there is no need for any hurry. We plod along slowly." The whole of the arrangements between the Press and

Mr. Gillon.

August 6, 1879,