A member having asked how depreciation was handled between 193 and 1034, Major Brown alluded to the practice.of all telephone companies who want to preserve their capital intact, of getting a commun depreciation percentage for the whole of the property. This was "done step by step, by determining the lite of every item of the plant, and multiplying by capital investment for each item. If the percentage were applied to the whole plant in Yelephone companies, it amounted to 1% er cent, per annum; in all systems that percentage had to be set aside for amortization of the capital.
Replying to a further question, Me. Wray said there was no depreciation fund as such, but a depreciation reserve, which was a liability ae count. This practice was the conversion was carried out so quickly had finally made the total cost greater or less. Major Brown replied that was a difficult question to answer, ince two opposing factors had to weighed against one ancther, the one hand, for the work to be: done in this selentitic manner, ity engineers had to be brought' from all over the world, which of course added to the cost; at the same time, through the employment of this high rade professional assistance, the Work was organized and finished in record time, thus reducing the period for which the whole staff had to be paid. Possibly in the final estimates the cost would be slightly increased by this procedure, but it was dif. ficult to state this with certainty Time Not Unreasonable 'The member asked if it wax in the experts' opinion, an unreasonable Fequest that the conversion should he made within two years, and Major Brown replied that it was not unreasonable, The question having been raised as to the means by which the company safeguarded itself agains: exchange fluctuation, the Treasurer and Controller observed that the company settled exchange at what considered a suitable rate and time On the whole the subscriber had, on lance, no reason to be dissatisfied.
Major Brown, in the course of further discussion, said it was desirable that the Council should ap. preciate the care taken to insure proper control of the Telephone Company's labour and other operntions. "He considered that" the {telephone industry had arranged labour control, as regards measure of output and similar matters, belte: than any other industry of which hho had experience. The Special Telephone Committee had always avoided, so far as possible, making direct comparison with other coun-les, because of the varying local conditions. Even in one aystem, where the workers might be expected to have practically the same degree of skill, the results varied conside:- ably. With regard to local labour, did not think the Chinese them: elves would claim that they had s: much experience as British American operatives in the tmaintenance of this kind of plant.
Considering "Cost of Operations jand Maintenance," the experts ex-Dressed the opinion that there is no possibility of reducing the cost of equipment and plant until it can be constructed either in China itself or deser than is ut present possible.
Text read from the printed page and cleaned; old type leaves the occasional error.