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The structure and low-level control equipment of an electronic telephone-exchange system are described in Pt. 1 of the paper. Pt. 2 expands the control to the higher levels of register and unique common control and describes the operation of the whole system. The main problem and objective of the control system is to be economical for all sizes of exchange, for which purpose its cost must be approximately proportional to the size of exchange with only a small constant cost independent of size. To this end, advantage is taken of the low cost, concomitant with the use of t.d.m. (time-division multiplex) switches, of guide-wire path selection and distributed processors to reduce the cost of the unique common processor, the cost of which is minimised by a combination of wired and stored-program logic, the stored-program-logic part being remotely located and shared with other exchanges if an exchange is too small to support it alone.