F.—l

2

The schedule below shows the changes in detail:—

TELEPHONE INCOME. The marked increase in telephone receipts (£234,503) is accounted for mainly by the fact that a considerable portion of the receipts are for service to be rendered during the financial year 1924-25. TELEPHONE CHARGES. One of the most important alterations during the year was the adoption of a new system of rating for private and business telephones. For very many years the telephone system has been carried on at a loss, owing to the basic rates being lower than the actual cost of the service given. The growth in the number of subscribers naturally increased the annual loss ; and, after a careful examination of the telephone systems of other countries, it was decided to amend the rates in the direction of requiring a higher payment from those who make the most use of the service. The rates are designed to provide for annual charges such as interest on the capital expended, depreciation, and working-costs. Hitherto any shortage has been made up by the general taxpayer ; now the service will be paid for by the users. A noticeable increase in subscribers in suburban and country districts has resulted from the amended rates, and no doubt this will enhance the value of the telephone to business people by placing them in telephonic communication with an increasing number of customers. TELEPHONE SERVICE. A graph showing the remarkable development in the use of telephones during recent years will be found at page 25. Following on the Great War, the unusual demand for telephones —which it may be said is world-wide —could not be met by manufacturers. But it will now be seen that the " waiting-list" is being steadily reduced, and that the time is not tar .distant when the list will be abolished. It is the aim of my Department to render more efficient service each year. Observations made during the past year at the four principal city exchanges show that the average time elapsing between a call by a subscriber and the answer by a telephone operator is 4-61 seconds, and that the average time elapsing between the termination of a conversation and the disconnection by an operator is 4-29 seconds. This must be considered very satisfactory under present conditions, when it is remembered that much of the apparatus is worn and cumbersome and that a dual system of automatic and manual working is in operation. TELEGRAPH AND TELEPHONE CIRCUITS. The general extension of electric-power lines of extra-high voltage in practically all parts of the Dominion has necessitated a good deal of work by the Department in altering and removing telegraph and telephone circuits and installing devices for the protection of departmental lines. The conversion of all earthworking telephone-lines to metallic, and the keeping of all telephone circuits in the highest state of efficiency so as to prevent inductive disturbances from the high-power lines, are also rendered necessary. These are factors that have contributed to the increased cost of telephone circuits as compared with pre-war figures.

Item. Old Rate. New Rate. Letters and letter-cards for inland delivery Letters and letter-cards addressed to Great Britain and British possessions, United States of America, and to all other places to which Postal Union rates (minimum 2Jd.) do not apply Post-cards (inland) Packets (inlanel) comprising commercial papers, books, and printed papers, pattern and sample packets, and unregistered magazines l£d. for first 2 oz. ; Id. for each additional 2 oz. l£d. for first ounce; Id. for each additional ounce Id. for first ounce ; Jd. for each additional ounce. Id. for first ounce ; lei. for each additional ounce. Single, Id. ; reply, 2d. Id. for first 2 oz. or fraction thereof ; over 2 oz. but not exceeding 4 oz., IJel. ; l£d. for each additional 4 oz. up to 1 lb. ; and 2d. for each additional pound up to 5 lb. 2d. for each copy if not exceeding 8 oz. ; Id. for each adelitierrial 8 oz. For tho first pound, 6d. ; 2d. for each additional pound up to 10 lb.; Id. for each additional pound beyond 101b. up to 281b. 2d. Single, fit. ; reply, lei. |el. for each 2 oz. up to 2 lb. ; 2d. for each additional pound beyemel 2 lb. up to 5 lb. Each copy, Id. for each 8 oz. Registered magazines (irrland) Government packages J-d. for each 2 e)z. up to 2 lb. ; 2d. for each additional pound beyond 21b. up to 10 lb. ; Id, for each additional pound beyond 101b. up to 28 lb. Id. Late fee