messages that the Post Office telegraphs would carry in the first year would be 11,673,000, or, say, in round numbers, 11,650,000. Since the average message would be somewhat over 20 words in length, one might count on average receipts per message of 28 cents; so that the 11,650,000 messages in question would bring the Post Office a gross revenue of $3,400,000. Mr. Scudamore next proceeded to estimate what it would cost to earn the $3,400,000 just mentioned. He began with the total working expenses, in 1866, of the four leading companies, namely $1,650,000. He stated that the companies had said that if permitted to consolidate, they could reduce expenses by $275,000 a year. But if the Post Office were to take over the telegraphs, it would reduce the expenses by more than the last mentioned sum, for it could use the existing Post Office buildings, the existing staff, and so forth. Deducting numerous other items representing expenses that the companies had incurred on account of the operation of foreign cables and the conduct of other forms of business that the Post Office would discontinue, Mr. Scudamore reached the conclusion that the Post Office, in 1866, could have operated at a total cost of $1,325,000 the plants of the four telegraph companies. Mr. Scudamore added 10 per cent. to the last mentioned sum, in order to cover the cost of maintaining and operating the extensions that the State proposed to make at a cost of $1,000,000. He took 10 per cent. because $1,000,000 was 1/11 or 1/12 of the capital invested in the plants of the telegraph companies. That raised to $1,457,500 Mr. Scudamore's estimate of the cost of operating the telegraphs on the supposition of a business of 7,500,000 messages. Mr. Scudamore then allowed 33 per cent. or $437,250, for the assumed increase in the number of messages from 7,500,000 to 11,650,000. He said the Post Office might safely assume that it could increase its business by 55 per cent. at an increase of 33 per cent. in the operating expenses, since the Electric and International Telegraph Company recently had increased its business by 105 per cent. at an increase of 33 per cent. in the operating expenses. Mr. Scudamore's conclusion was that the Post Office could carry 11,650,000 messages, yielding an income of $3,400,000, at a cost of $1,895,000, thus obtaining a net revenue of $1,505,000. To that sum must be added the net revenue to be obtained from the carriage of messages for the newspaper press, $60,000; and $225,000 to be obtained from the rental of the State's cables to the several foreign cable companies. Thus Mr. Scudamore counted on a maximum net revenue of $1,790,000.