Having brought to light what 1 consider to be the true relations between shareholder and subscriber and the inequalities existing between them, I am of opinion that-—granted that these inequalities are] happily removed—it should not_be 'a difficult matter to reconstruct the Company in the near future and run its finances on a much mors economical basis that at present.
For a great public service like the Telephone Company all now capital required for future operations could be raised at 6 per ce interest practically in perpetuity better still-shares might be issued to Telephone subscribers without guaranteed dividend but with a per cent discount on their subseriptions.
Furthermore, with the remov-! of the "Depreciation Reserve Impost" the reduct shareholders' discounts, the saving of interest on 'F2,000,000 subscriber's capital, venture to say that the Company: would be in a position to meet all expenses (reserves of all kinds pr:- hibited) by a subscription of at least. 25 per cent. less than at present for doth business and residential telok phones, dot large enough for total repbecements to be charged to revenue in the year in which they occur, and is spread over a peri e eres its for this remton that his charge Gon of a reserve, Ho might legitimately attempt to prove that the rate of depreciation is excessive, but the above general statement is the ype of argument that is especially singled out for attack by every author of books on auditing or accounts. I challenge Mr. Reid recognized authorities.
Tam, ete, Younc ©, A, Shangh:
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