Introduction 9 



nothing until a large circle of subscribers had been put in com- 

 munication, no rentals were made payable until July i. From 

 this date until October 31, the end of the financial year, the ac- 

 counts showed a revenue of 3,9067. 5^., only i,i45/. is. of which 

 was applicable to the four months dealt with ; nevertheless a credit 

 balance of 3787. us. ^d. was available, which was carried forward. 

 In the third half-year of the exchange's existence the receipts, 

 after deducting Post Office royalty, averaged 4/. 1 2s. 2d. per line 

 per annum, the annual revenue being 6,4oi/. 2s. ^d. and the 

 number of lines 1,389. The actual working expenses for the half- 

 year were at the rate of 3,2447. 175-. 6d. per annum. Adding to 

 this 5oo/. for directors' fees, 2507. for general expenses, and 1,6507. 

 (5 per cent, on 33,0697, the capital actually expended) for deteriora- 

 tion, the gross expenses were 5,6447. ijs. 6d., or 47. is. $d. per 

 line, leaving a profit of los. nd. per line per annum, or a total 

 profit of 7587. 3.$-. $d. This is only 2*29 per cent, per annum on 

 the capital expended ; but the 33,0697. included the cost of two 

 trunk lines to Bolton, of some 500 spare metallic circuits, of a 

 central switch-table fitted complete for 2,000 lines and with 

 ultimate accommodation for 4,000, and of standards, poles and 

 general fittings of capacity far in excess of immediate require- 

 ments, so as to leave room for future expansion. Less the cost 

 of the trunk lines the actual expenditure on the system had been 

 31,9397, not quite 237. per line. Deducting the cost of the extra 

 accommodation provided everywhere, the cost per line was only 

 some 1 67. But for a town of the size of Manchester with Salford 

 (population 703,507) the rate proposed by the author (see page 25) 

 is 57. 155-., which would materially increase the net revenue and 

 obviously give a municipality or an unburdened company a hand- 

 some margin of profit. 



Most unfortunately for the Manchester public and its own 

 shareholders the Mutual Company was induced to sell its business 

 to the New Telephone Company, Limited. As general manager 

 and chief engineer of the Mutual Telephone Company, the 

 author is glad of an opportunity to state definitely that the sale 

 was in no wise justified in any way by the position of the com- 

 pany. Its business was rapidly increasing ; the proportion of 

 net revenue was growing every month ; many initial difficulties, 



