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Thursday, 19 July 1906

Mr WEBSTER (Gwydir) .- I move -

That, in the opinion of this House, it is necessary and advisable to adopt the toll or call system throughout the telephone service of the Commonwealth at the earliest possible date.

During the recess a heated controversy has been waged in the metropolitan press in connexion with the proposal of the Government to introduce into the Commonwealth a system which has been generally adopted in countries where the telephone is largely used. No doubt there are many honorable members who thoroughly agree with that proposal, because they have satisfied themselves that the change which has been outlined is urgently required, not only in the interests of the Department, but in the interests of the public. Throughout the large cities of Australia the Government have been subjected to verv strenuous criticism because thev propose to introduce the toll telephone system. City residents strongly object to any change from the flat system - the system under which a yearly rental is paid for the use of the telephone irrespective of the number of calls made by, or the services rendered to, the subscriber. Abundant evidence can be found in almost every civilized country in favour of the adoption of the toll1 system. The other day, when I asked the Postmaster-General whether it was the intention of the Government to make that system compulsory, I was sorry to receive the reply that it was not proposed to make it compulsory in the case of the present subscribers.

Mr Ewing - Only in the case of new subscribers

Mr WEBSTER - Exactly. All the evidence which I have obtained points to the fact that it is not only reasonable to apply the toll system to new subscribers, but that it is absolutely essential - if we are to secure the full use of the telephone service - that it should be made general throughout the Commonwealth. I have taken the trouble to consult authorities upon this matter, whose word cannot be questioned, and they all emphasize the economy attending the adoption of the measurement system as compared with the flat system. In this connexion, I wish to refer to the utterances of Lord Stanley when Postmaster-General of Great Britain. In a letter to The Times, describing the utility of the measurement system, he says -

There are two systems of charge in London - the unlimited service system and the message rate system. The unlimited service system . ii Lord Stanley's opinion, is unsuitable for a modern telephone exchange service, and owes its continuance to the force of custom and the demands of a limited number of large users.

The London exchange system is constantly increasing both in the number of subscribers and the number of exchanges.

In again referring to the matter a little later, he says -

It is clear, therefore, that no fixed rate for unlimited use can adequately correspond with such conditions. If fixed with regard to the cost of the service for a large exchange system, it must necessarily be prohibitive for small users, and if fixed on the basis of the cost of a small exchange system, it must soon become unremunerative. In Lord Stanley's view the proper method of charge is that which was recom mended by the Select Committee "of 1898, under which the payments of the subscribers are fixed in proportion to their use. The measured rate system offered by the Post Office fulfils this requirement, and its advantages have been proved by its acceptance by more than 90 per cent, of the subscribers to the London Post Office system.

The toll system has been in use in the United Kingdom for some time, with the result that it is applied to 90 per cent, of the telephone subscribers there. In corroboration of Lord Stanley's remarks, I desire to quote "from a report by Mfr. John Gavey, Engineer-in-Chief of the British Post Office, who makes these very pertinent remarks -

I think that the true solution of the question of tariffs is the introduction of the measured service - that is, a moderate subscription to cover the line and the. telephone, with a moderate fee per transaction. That system, if generally introduced, would bring about a great measure of economy, not only amongst the users of the telephones, but in the administration of the service. Under the ordinary method of flatrate charging, the large users get the advantage - -the smaller users are penalized. Again, the large users fill up their lines to the very utmost possible degree ; in other words, they will not rent a second line until they are absolutely compelled to, with the result that subscribers who call them up are, in 50 per cent, of the cases, told the line is engaged. The answering of the call and the testing of the line occupies as much of the operator's time as the putting through ; the result is that the cost of working on the flat-rate system is much increased, and the smaller user is penalized, and, I think, whatever measure of economy in rates may be anticipated by the Committee or the country at large will depend rather on the general introduction of the measured service of charges than the perpetuation of the flat-rate system.

These statements emphasize a very important point in connexion with the reform which I am now urging. According to Mr. Gavey, the flat system is not only unjust, but it is detrimental to the efficiency of the service, besides being expensive as compared with the measurement system. He declares that under the flat system certain subscribers will use their instruments to the fullest possible extent. It is that fact which accounts for many persons being so frequently told when they wish to communicate with a certain subscriber that the line is engaged. Important evidence bearing on this question was also given by Mr. W. E. L. Gaine, general manager of the National Telephone Company. These authorities - all men of vast experience - speak in no uncertain voice as to what would be the effect of the proposed change. In referring to a meeting at Sheffield, at which he urged the adoption of the measured as against the flat system, Mr. Gaine said -

I endeavoured to show wilh what amount of plausibility I was capable of that this was the most righteous system that could be, that you paid according to use ; but, in the very strongest language, the meeting did not care for that; they would not have it at any price, and one man coming down the stairs when I was enlarging upon the beauties of the system, said he did not care, &c, it would cost him £g$ a year instead of the j£8 or £10 which he was then paying, and he was not going to have it.

That practically is the objection raised by those who use their telephones to the fullest extent under our system. They complain that if they were called upon to pay according to the use they make of the service they would be charged far more than they are under the flat system. Naturally they are opposed even to the partial change contemplated by the Government.

Mr Ewing - If they obtain too much for their money some one else must be getting too little.

Mr WEBSTER - Exactly. The injustice is, so to speak, a double-edged one. The man who obtains more than that for which he pays is doing an injustice to the State, and is receiving something to which he is not entitled, whilst the person who only occasionally uses the telephone is penalized. He has to pay practically the same as the man who avails himself of the system to the fullest extent. Mr. Gaine, in answer to the question, "And it cuts against popularizing the service," said -

I think it does. The "toll" system I would take with both hands to-morrow, a small charge and id. a message, and I think you will do a great deal to popularize the service.

I have also a report of the evidence given by Mr. John Gavey before the Select Committee of the House of Commons, in which he emphasizes the opinions expressed bv other witnesses to whom I have referred. He said -

Evidently the fear of being charged with the tolls for the excess conversations immediately eliminated all frivolous and unnecessary talks.

That is another aspect of the question. The introduction of the measured system confers a great benefit on subscribers generally by eliminating the unnecessary and frivolous talking which goes on, to the detriment of those having, legitimate business to transact over the wires. I am satisfied that these gentlemen, who are responsible advisers of their Departments, realize the true trouble at the root of the telephone system. Mr. Gavey went on to say -

Differential toll might be imposed somewhat of this character : - Suppose the first 1,500 messages were charged at a penny and the next 1,500 at a halfpenny, and then all beyond that at a farthing.

That proposal was practically, made to override the objection of those who use the telephone to its fullest extent. I believe that it is under the consideration of the Government, and that they will have some suggestion to make to the House with, reference to the scale of charges and the limited number of calls to be allowed under the new regulations. Evidence was also given before the Committee by Sir William P reece, one of the greatest authorities on telephony in the British Empire. He said -

In America (in Buffalo) they started a system of charging only for the work done - they call it " a toll." It is a bad term, but it has got introduced, and we cannot help using it. It means this : That in Buffalo they commenced (in 1S80, about) to charge their renters only for the service rendered, at so much per talk. In Switzerland, and partially in Stockholm, and partially in certain parts of France, they have adopted this toll system. Now, sir, my view is this : That this toll system, in itself, is an extremely fair mode of charging, because you really extract from the user of the telephone something, fro raid, for the service you render him. When you ask, say, two men to pay £20 each in London, the one may send twenty messages in a day, and the other man not twenty messages a month, so that the incidence of the charge is unfair.

These eminent men agree that our present system is not only ineffective and unjust, but also pernicious, from the stand-point of the administration of the service. We have further evidence by equally competent authorities. I have here the testimony of the American Telegraph and Telephone Company, to whose allied systems no less than 2,500,000 telephones were connected on 1st January, 1906. Surely a company controlling so vast a system, and having such a wide experience, should be able to speak with authority on this subject. In their annual report for 1904 they say -

But little need be added to what has been said in former reports with reference to the effect of the operation of the so-called independent telephone companies upon the interests of the Bell company. In some cases their, competition, particularly in view of the rates at which they undertook to supply service, and which they themselves, to a large extent, now publicly acknowledge to have been entirely inadequate, has undoubtedly operated as an embarrassment to the logical progress of the business.

Mr. J.J. Carty, then chief engineer of the New York Telephone Company, made these observations -

Under the flat-rate method of charging in large cities the more times the customer uses his telephone during the day the greater is the expense to the telephone company. This is due, not only to the increased number of operators required, but also to the increased switch-board sections needed for them, and to the increased trunk line plant. By the method of flat-rate charging there is no motive for the telephone company to encourage an increase in the number of calls. For this reason, a flat-rate plan would have to be so engineered, and the rates would have to be so established, that extension stations, desk stands, and other auxiliaries tending to make the use of the telephone easy, and therefore more frequent, must be discouraged.

The existence of the flat rate in such cases would not only be attended by all of these consequences, but many others, one of which in particular is of great importance. I refer to the excessive use of the subscribers' line which such a rate engenders. The consequence of this excessive use is that the busy calls attain such serious proportions that it is difficult, if not absolutely impossible, to give satisfactory service. This trouble from busy calls has at times attained such serious proportions that engineers in various places have exerted extraordinary efforts to mitigate the evil, but without success. This difficulty having been caused by commerical methods could not be overcome by the engineer employing physical methods. The solution of this difficulty lay with the business management, and consisted in the adoption of a proper system of message rates. Once such a method was put into force, all of these difficulties which I have enumerated as pertaining to the flat rate, and many others which I have not taken the time to explain, disappeared.

He then went on to refer to the effect of the flat rate system, and the wisdom of its adoption, saying -

As soon as the message-rate system was adopted all of these difficulties disappeared, and many positive advantages, not even suspected as residing in the message-rate plan, developed. Under the flat-rate system there was every temptation for the subscriber to send as many calls as possible over one line. This, as I have already stated, resulted in overcrowding the line, and was attended by bad reactions of every kind. Those having but small use for a telephone could not afford to pay the high flat rate which that method of working made it necessary for the telephone company to charge. The consequence of this was that only those having a large number of calls installed a telephone, and those having small use of the telephone made it a practice to use the telephones of their neighbours, or did not employ the telephone at all. This practice on the part of the small user was a natural one, in view of the fact that under the flat rate the telephone subscriber considered that it cost him nothing to allow his neighbour to -use his telephone. All of this resulted in a system largely composed of overloaded lines. Under the condition obtaining in our large cities, the relief of an overloaded line can be obtained only at the expense of a second line, which, in most cases, meant doubling the cost of the telephone service. For this, and many other reasons, the desired relief could not be obtained under the flat-rate system.

I think I have read sufficient to show that the leading authorities throughout the world agree that the system in force in Australia to-day is insufficient to meet the demands of the public. They agree practically that it interferes with the economy and efficiency of the service. They all emphasize the point that the person who uses the telephone to its full extent obtains more than that for which he pays. It must be recognised that the greater the number of calls the greater the cost of administration. It has been calculated that fourteen calls a day practically cost as much as the subscription paid by the subscriber, having regard to the necessary addition to working expenses of the amount required for a sinking fund, and to cover interest. That is to say that, when an operator has answered fourteen calls, the subscriber making them has obtained full value for his money. Every subscriber who uses a telephone more than fourteen times a day gets a service for which he does not pay. About 1 per cent, of the subscribers in Australia use their 'telephones over 100 times a day, and 10 per cent, fifty times a day, while a very large number use them more than fourteen:, but less than fifty times a day. But every subscriber who exceeds fourteen calls is getting, a service for which the Department is not adequately remunerated. A person using the telephone forty times a day, if he were allowed the maximum number of 600 calls per annum, and charged id. for each additional call, would be asked to pay ^27 10s. per annum for his telephone service, and, although that is much more than any subscriber pays now, the service would be a very cheap one at the price.

Mr Ewing - Under the present system the Government loses as much as .£20 per year on some telephones.

Mr WEBSTER - I believe that there are cases in which the Government loses considerably more than that amount. Not only does the Department lose revenue, but the service is rendered ineffective, and thus great annoyance is caused. When a line is used to its fullest extent, the effectiveness of the service is necessarily interfered with, many subscribers being prevented from getting the numbers for which they ask, and having to make five or six calls before they can secure connexions. This is very disturbing to their tempers, and results in nervous injury to the operators of the switch-boards. Subscribers, not knowing why they cannot be connected, often assume that the operators are not paying proper attention to their work, and the language used on these occasions is often such as ordinary men would not care to listen to, while sensitive girls have been seen by the superintendent to burst into tears as the result of the insults offered to them. No man would like his daughter to be placed in a position where she might be treated in this way. I hope that the Government will not hesitate to make the proposed change. They should not pander to those who Iia ve been protesting so largely of late against any increase in the rate. I believe that if the change were set about at once, the new system could be in thorough' operation before the end of 1909. When it is brought about, subscribers will be charged for the service actually rendered to them, and no one will have to pay for a service he does not get. Some persons grumble because it is proposed to charge £d. a call for every call exceeding a certain maximum; but that is an absurdly cheap rate at which to send a message over a distance of, perhaps, five or ten miles, a reply being obtainable for which no charge is made. Before the invention of the telephone, urgent messages had to be despatched either by telegram or by special messengers, a system always much less satisfactory than the telephone, and much more costly. Owing to their brevity, telegrams were frequently misread, and no answer could be obtained to them without extra payment, while the tip-keep of messenger staffs was in many cases very large, and in neither instance could communication be entered upon in anything like the time that is taken when the telephone is used. But. while metropolitan subscribers are grumbling at this small charge, if the people in the country ask for a telephone exchange their request is not even considered until proper guarantees are signed to cover possible deficiencies in revenue during a number of years' work.

The people in the large centres of population have hitherto obtained a cheap telephone service to the disadvantage of small subscribers, and of those in country districts. Of course, many whose telephones now are used very frequently would be glad of the adoption of the toll system. Hotel telephones, for instance, are used at all hours of the day and night for the purpose of frivolous inquiries, and often attendants Be constantly kept busy answering the calls of persons who wish to know if certain visitors are staying there. If one halfpenny had to be paid for each call, calls would be less frequent, but the departmental revenue would be increased, while the hotel proprietors, as most of them recognise when the position is explained to them, would be put to less expense fo' attendance. Some of the business men who at present pay only £9 a year, for their telephones - 1 per cent, of them - get a service worth .£100 a year, and would have to pay that sum to the Department if they were charged Jd. each for all their calls Over a certain maximum. On the other hand, there are many small business places where the calls are not more than four or five, or even two a day, and at present they have to pay as much as those who use their telephones continually. That in itself indicates the need for a change - not a half-and-half change, but one which will give the community the full benefit derivable from the toll system. The Government have indicated that they are disinclined to apply the toll system ,to the subscribers who are at present paying the flat rate. If they do not, it will be years before the benefits of the change are fully felt. In America the toll system wasadopted many years ago, and owing to the small annual charge made under that system, the subscribers under the flat-rate system have not increased, but, on the contrary, have gradually diminished, until' they cow number only 1 per cent. The extension of telephones under the measured system has been verv great in other parts of the world. In America there was an increase of as many as 500,000 subscribersin one year, and in Germany the annual calls increased from 20,000,000 to 100,000,000 a year, while d'uring the last four years, there has been a further increase of 40,000,000 calls. In New York in 1893 there were 10,000 instruments in use, and, in 1904, 140,000, only 1 per cent, of which are at present- under the flat-rate system. The American Telegraph and Telephone Company increased the number of their subscribers by 500,000 in one year.

Mr Johnson - From what is the honorable member quoting?

Mr WEBSTER - From a number of eminent authorites to whom I have referred. The report of the American Telegraph and Telephone Company for 1905 - the latest report to hand - shows that instead of .the profits increasing as the number of subscribers is added to. the reverse is the case. The cost of administration becomes greater, and, generally speaking, the expenses increase in far greater proportion than the receipts. In large cities it is more expensive to properly equip the ' service than in smaller communities. For instance, wires have to be carried under ground at very great cost, and other expenses have to be incurred which are not entail,ed in the towns. It has been found in America, Germany, and in England that a higher charge must be made in the large cities than in the towns. Therefore, we are told that we cannot expect any material reduction below the amount estimated bvMr. Hesketh, who suggests that a fixed rate should be charged for 600 calls per annum, and that subscribers should be called upon to pay Jd. for each additional call. He' contemplates, however, that the new system will be much cheaper than that now in vogue. In Switzerland the measured system has resulted in considerably reducing the average number of calls per annum. Prior to its introduction, the average number of calls per annum for telephones was 800, but afterwards the subscribers were so far influenced' by their fears that they might exceed the number of calls allowed" for the fixed charge that the average number of calls was reduced to 544 per annum. It must 'be remembered, in connexion with the charges now made for business and! private telephones respectively, that many business houses do not use their telephones more than two or three times a day. whereas many private telephones are in use upwards of fifty times per day. It is, therefore, anomalous that the business man should have to nay £g per annum for his service, whilst the owner of the private telephone should be called upon for a fee of only £5- The measured system appears to me to be the only, means bv which we can make charges upon an equitable basis.

If, in connexion with our postal system we were to say to business men, " You can post as many letters as you like for £10 per annum, whether it be two or three or a sack full," we should be laughed at, and declared unfit to manage the affairs of the country. And yet that is practically what we are doing with regard to our telephone system. We offer a man an annual service at a fixed fee irrespective of the extent to which he avails himself of it. I trust that the Government will realize the necessity of adopting the measured system as soon as practicable. Experience in other countries has shown that the introduction of that system cf charging has resulted' in a large extension of the service, and a great increase of revenue. The public could be provided with telephone facilities at a much cheaper rate, and the service could be extended to an almost unlimited extent. I recently interested myself in obtaining a telephone exchange for Gunnedah, in my electorate. I communicated with the Department, and' they 'made a proposal to establish an exchange on condition that fifteen subscribers were obtained under the fiat system at £8 per subscriber per annum. Upon the matter being represented to the business people of the town, only five persons proved to be willing to join the telephone exchange under those conditions. Matters were allowed to remain in abeyance for some time, and subsequently I urged upon the townspeople the desirability of subscribing to an exchange upon the measured system. That system has not yet been adopted, but an offer was made to the townspeople to establish an exchange and to charge subscribers on the measured system £4. per annum for 600 calls. This great reduction in the annual fee had a marked effect. Within a very short time, twenty-nine persons indicated their willingness to become subscribers, and within a month that number of agreements were forwarded to the Department. Subsequently, five other agreements were signed, and the townspeople are now waiting until the Government have the courage to bring the new system of charging into operation. This example is sufficient to indicate the large field that awaits exploitation by the Department. Then again, it seems to me that we might very well avail ourselves of the party-Iine system which has been adopted in the United States, England, and elsewhere. In America, three and four subscribers ma'y join in the use of the one line, for which a much-reduced charge is made.

Under this system, great inducements are offered to a large number of persons to avail themselves of the telephone service. It has been proposed that we should allow two persons to use the same line at a charge of£.5s.perannum each, as compared with£5, and it may be possible to permit a larger number of subscribers to share in the use of a line at a still further reduced fee. I have every hope that electricians will soon be able to overcome the difficulties which now arise owing to the possibility of persons connected with the same line being able to overhear conversations to which they are not supposed to listen. Under a system that is now being tested, I believe that it will be possible for twenty subscribers to use the one line without interfering with each other. If present expectations in this regard are realized, it will be impossible to fix any limit to the development of the system. The Government have in Mr. Hesketh, an officer whose heart is in his work, and who understands the whole of the mechanical, electrical,and commercial aspects of the service. He has been to America and' has gained a great deal of valuable information. I should like to quote a few of his remarks with regard to the extension of the telephone service. He says -

To briefly condense the conclusion, it is impossible to avoid after a close study of American conditions, I believethat to establish any telephone system upon secure lines - lines which will induce the greatest number of people to partake in its privileges, is not to leave the outside districts until the large centres are fully provided for, but to build from the outside districts in towards the large centres, or, at the very least, to give to the outside districts an equal share of attention.

It were better to leave the cities to press their requirements, and to go out offering the advantages to the country districts, than to do the reverse. The business men in cities know the use and convenience of a good telephone system ; the farmer may not. Therefore special care should be taken that the advantages are pointed out to him, and that he is given every facility for sharing them.

Mr. Hesketh'sstatements clearly indicate that up to the present time the telephone system has not been used to advance the welfare of the persons who are developing this country. He argues that the system should be developed in the country districts and worked in towards the centres of population. I want the Minister representing the Postmaster-General to recognise that that is a cardinal feature in Mr. Hesketh's report. The Vice-President of the Executive Council represents a country constitu ency just as I do, and he must realize the advantages which telephonic communication would confer upon rural residents.

Mr Ewing - It is an absolute necessity to country life.

Mr WEBSTER - Undoubtedly. It is one of the factors which tend to make endurable the lot of persons settled upon the land. I have no desire to delay the House by quoting from the whole of the material in my possession, because I have already, sufficiently shown that the adoption of the toll system is urgently required in the interests of the telephone service itself. If we send officers to other countries to ascertain what is being done there in the way of providing telephonic facilities, we must be prepared to pay some regard to their reports, and we must face the problems presented to us - not in a halfhearted manner, fearing the opposition of a few city merchants, but in an absolutely fearless and just way. Let us so regulate our telephonic charges that each subscriber shall pay for the service which he receives. That is the basis upon which the Department should be administered. There is no excuse whatever for the Government hesitating to substitute the toll for the flat system at the earliest possible date.

Mr McWilliams - Does the honorable member favour the scale of charges which was framed by the Government, and which was afterwards withdrawn ?

Mr WEBSTER - I am not too sure about that. The scale to which the honorable member refers was an exceedingly liberal one, as compared with the charges that are levied in other countries. I admit that the Government showed a lamentable weakness in withdrawing that schedule. There is no country in the world which offers more liberal conditions than those which were proposed.They proposed 600 as the miximum number of calls allowed for a fixed fee, and1/2d. for each additional call. In Switzerland, the maximum number of calls is 600, and for each additional calla charge of1d. is made.

Mr Thomas - I think the honorable member is mistaken.

Mr McCay - What is the minimum charge in Switzerland?

Mr WEBSTER - It is£6 10s. per year.

Mr McCay - And is a charge of1d. made for each additional call?


Mr Thomas - Is that the information contained in Mr. Hesketh's report?


Mr Thomas - Then, I think that the' honorable member is mistaken. *

Mr WEBSTER - For the benefit of the honorable member for Barrier, I will quote the evidence tendered by Mr. Babington Smith before a Select Committee of the House of Commons upon the charges levied in Switzerland. He says -

I should like to express a very clear opinion that if it can be effected the right thing to do would be to get rid of the unlimited service rale altogether. What is the present tariff? £17 for an unlimited service; but I may remind the honorable member that under the message rate you can get a telephone for £6 ios., and I may perhaps add, that of the Post Office subscribers 90 per cent, take the message rale, and not the unlimited service rate ; that is to say, £6 ios. covering 360 calls.

Mr Thomas - But the honorable member was speaking of Switzerland.

Mr WEBSTER - Yes, I was mistaken.

Mr Thomas - In Switzerland I think that the Department charges a nominal fee and Jd. per call from the jump. That is what the Government ought to do here.

Mr WEBSTER - In England, where the telephone system is controlled by the Government, the annual charge is £6 ros., whereas our charge, under Mr. Hesketh's scheme, would be £7 Further, in the United Kingdom 360 calls constitute a maximum, and thereafter a charge of id. per call is levied. I hold in my hand the figures relating to the charges imposed in Switzerland, Germany, and other countries, but there is no need for me to quote them, because I shall have another opportunity of doing so before the session closes. I am extremely sorry that the Government have yielded to the clamour of the large telephone users in the cities of Australia. It seems to me that the metropolitan press control the Government of the Commonwealth. The newspapers of the different capitals teemed with correspondence upon the Government proposal to introduce the toll system, and the Government, listening to the appeals of interested parties, immediately withdrew their scheme, which consequently did not come into force upon ist July, as was originally intended. It may be their intention to fix 750 calls as the maximum allowed for a fixed annual fee, and they may intend to charge £d. per call for the' first couple of thousand calls in excess of the maximum. If any such proposal is brought forward I shall oppose it. It would be unfair to impose differential rates in regard to the telephone service. I understand that Mr. Hesketh has supplied to the Postmaster- General a later - and a very lengthy and able report - upon this matter. I believe that that report has been before the various officers in the different States, and that it is ready for submission to this House. I should like to have seen it before proceeding with this motion. If the Government do not agree to substitute the toll for the flat system within a period of three and a half years, the reform of which they speak will be a mere make believe - a reform which is unworthy of them and of the gentleman who is controlling the administration of the Postal Department. Upon behalf of the farmers and settlers in the country - of those who do not enjoy telephonic facilities 10-day, Gut who live practically isolated from their fellows - I appeal to the Ministry for consideration. While meting out justice to city subscribers we can at the same time act fairly to residents in the country. There is no justification for the Government resisting my appeal, whilst greasing the fatted sow. City merchants raise their voice against the granting of any concessions to the farmers, and yet, in connexion with the working of a socialistic institution like the Post Office they are prepared to accept five times the amount of service to which they are legitimately entitled. It is they who are getting the benefit of the socialistic machine. They do not object to that, but they are the first to protest against the application of the same system to people who are far more deserving of consideration at the hands of the Government. By placing the telephone charges upon an equitable basis, we shall clearly show that we have the interests of the people at heart, we shall increase the number of subscribers one hundred-fold, we shall give relief to those who cannot afford to pay the present rates, and we shall provide a more effective service. Our telephone system is absolutely out of date. In Svdney the metallic system is not yet in vogue, although it is in operation in Brisbane. In the latter city, subscribers do not suffer from many of the inconveniences common to the single-line system. In order to enable us to establish that improved system throughout the Commonwealth we must obtain revenue from some source. If we do not, the reform will be delayed for many years. By adopting the toll system we shall at once secure the means to enable the metallic circuit to be introduced throughout the length and breadth of Australia, and we shall then be able to connect our telephone wires with numbers of subscribers who cannot be connected under the single-line system. The system calls for reform in regard to its mechanical, administrative, and financial aspects, and I trust that the Government will see that that reform is carried out so that the people may derive to the full the benefit of this great modern convenience.

Mr. LONSDALE(New England) [6.16I. -I can support to a large extent much that the honorable member for Gwydir has said. There is no doubt that the telephone system is of immense importance to the commercial community, and that it is also a great convenience to those living in the rural districts to which it has been extended. As to the method of payment, the call or toll system requires that payment shall be made for the services rendered.

Mr Ewing - It is right in principle.

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