§ Mr. SHERWELLasked what are the reasons for the difference in the average cost of construction per telephone station belonging to the systems of the National Telephone Company and of the Post Office respectively, recently stated by the chairman of the National Telephone Company to be from £22 to £23 per station in favour of the latter company?
§ Mr. HERBERT SAMUELMy attention has been called to the statement in question, which has since been quoted in several other quarters. The president of the National Telephone Company appears to have overlooked the fact that the expenditure which he took as the cost of the existing Post Office telephone stations included a sum of about £1,000,000 expended in providing plant for the use of his company, although he had previously mentioned the rent paid by the company for part of this plant. This sum should, therefore, have been added to the company's expenditure, raising the average cost by about £2 per station. A corresponding deduction would reduce the Post Office expenditure by about £11 10s. per station. Expenditure on land and buildings seems to have been excluded from the company's cost per station, and included in the cost attributed to the Post Office system. Part of the Post Office expenditure has been for plant to replace the company's overhead wires and cables, and some of their older exchanges, after their system will have been taken over by the Post Office at the end of 1911. About 65 per cent. of the Post Office stations are in London, where a very costly underground system has been provided, and the average length of the lines in use is about double the length of the lines on the company's general system. The Post Office has also provided all the underground junction wires for communication between the exchanges of the two systems in London. If proper allowance were made for these circumstances, the cost of the Post Office exchange system would compare favourably with the cost of the company's system.