P.—l.

the speech-efficiency of all circuits between the most important centres, and to make provision for an adequate number of circuits on all busy sections. These improvements will undoubtedly act as a stimulus to the further development and popularity of the toll service. The new toll-board equipment ordered for installation at Hamilton has now been received and will be in use within the next few months. The new board, on which fourteen operators can be employed simultaneously, will provide modern facilities for dealing with the growth of toll traffic in the Auckland - Waikato - East Coast district centering on Hamilton. Extension equipment for the Auckland and Wellington toll boards is now due to arrive, and extensions of this type of plant will be made also at Palmerston North, Blenheim, and Oamaru during the current year. TELEPHONE-EXCHANGE SERVICES. Further records in telephone development were established during the year. At the 31st March last the number of subscribers had reached the record total of 147,850, an increase, after allowing for relinquishments, of 9,710, or 7 per cent., over the number of connections at the end of the previous year. The total number of new connections was 18,330, an increase of 1,434 over the record of the previous year. The following figures illustrate the growth in telephone connections in recent years : — Year ended Number of Connections. 31st March, 1920 .. .. .. .. .. 68,203 31st March, 1930 .. .. .. .. .. 128,603 31st March. 1935 .. .. .. .. .. 123,947 31st March, 1936 . . . . . . . . . . 129,202 31st March, 1937 .. .. .. .. .. 138,140 3]st March, 1938 . . . . . . . . . . 147,850 The equipment for the new automatic-telephone exchange at Napier is now arriving in the Dominion, and the installation work is proceeding. Tenders have been called for the automatic-telephone-exchange equipment that is to be installed at Gisborne and New Plymouth to replace the existing manuallyoperated systems. Extension equipment for the St. Albans automatic exchange, Christchurch, as well as initial equipment for the two new sub-exchanges at New Brighton and Mount Pleasant (Christchurch), is due to arrive in the Dominion in the course of a few months. Extension equipment for the Dunedin main exchange and for the Hamilton, Hastings, Hawera, and Khandallah (Wellington) exchanges is under order. Quotations are expected shortly for equipment for new exchanges at St. Heliers, Mount Albert, Avondale, and Otahuhu, and for extension equipment to be installed at Wellesley Street (Auckland). AERADIO SERVICES. The radio service to aircraft initiated last year has been extended and is now an important part of the radio organization of the Department. As mentioned in last year's report, a standing committee, known as the " Aeradio Committee," was constituted to implement recommendations previously made to me as Minister of Defence concerning the provision of radio facilities for communication with aircraft. To obviate the setting-up of a new Department or a complete organization within an existing Department to undertake this service in its entirety it was decided that the action necessary to give effect to the recommendations of the Aeradio Committee should be delegated to the Department having the facilities to undertake the work. Accordingly the installation of radio equipment at the various aerodromes and the maintenance and operation of the stations have devolved upon the Post and Telegraph Department. This work has been carried out in co-operation with the Public Works Department and the Air Department.

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