In 1898, another committee was appointed with Mr. Hanbury as chairman, "to enquire and report whether the telephone service was calculated to become of such general benefit as to justify its being undertaken by municipal and other authorities, regard being had to local finance." The committee were of the opinion that the existing telephone system was not of general benefit either in the kingdom at large or in those portions where exchanges existed, that it could hardly be of benefit so long as monopolistic conditions existed, and that it was capable of becoming much more useful if worked solely or mainly with a view to the public interest. They condemned the flat rate subscription charge of the company as of benefit only to the wealthier commercial classes in English cities. They commented unfavourably upon the fact that in the London area there were only 237 call offices open to non-subscribers, and that as a rule messages could not be sent from them to subscribers except when the sender and recipient were in the same postal district or town, when the message might be delivered. They were of the opinion that the telephones were far more useful in other countries where the conditions were not so favourable. Conditions, they thought, were unlikely to improve under the present management. The company must pay dividends on an inflated capital; its licence would expire in 1911, and the Government was hardly likely to pay the company at that date for goodwill. In addition, there were no restrictions on charges, the company had a motive for limiting its subscribers, as expenses increased proportionately with an increase in their number, and the question of way-leaves was a source of great difficulty. Finally, they declared in favour of competition by the municipalities and the Post Office as tending to reduce rates, extend the system, and, if the Government should eventually purchase the telephones, give alternative systems to choose from. The Government adopted the committee's report, and, in a Treasury Minute of the 8th of May, 1899, laid down the principles upon which licences should be granted by the Postmaster-General to the municipalities, and announced that in London the Postmaster-General would himself establish an exchange system.[833] [833] _Rep. Com._, 1898, xii, 383, pp. iii-xiii.