THE PENNY A-WORD CABLE.

New Zealand Herald, Volume L, Issue 15201, 15 January 1913, Page 8

THE PENNY A-WORD CABLE.

"SOMEWHAT VISIONARY."

WHAT IS THE MINIMUM COST 1

Those who, with Mr, H<mniker Heaton, look forward to the time when cablegrams shall cost but a penny a word, will be interested in an explanation given yesterday by Mr. John Milward, manager in the Pacific for the Cable Board. The capacity of a cable- for word-carrying, Mr. Milward eaid, is strictly limited by certain conditions. The speed of working is reduced enormously as the length of the cablo increases, and is aleo dependent upon tho sensitiveness of the instruments employed. The revenue-earning power of a cable depended upon the capacity of the line as to speed of transmission, and after a certain stage a reduction in rates must mean a loss, since there could be no increase of business over the cable to meet tho expenditure. " The penny-a-word cable," said Mr. Milward, "is somewhat visionary." -

An interesting pamphlet published by the board and distributed to the guests at the luncheon given by the Cable Board yesterday has a section dealing with this question. It is. estimated that the utmost number of paying words that coidd be sent over the cable in a year under existing conditions is not over 7,000,000. For the year 1911-12 the total expenditure in connection with the cable is . estimated ■... at £188,500, against which a revenue of some £18,500 may be earned on traffic between Australia and New Zealand, leaving a sum of £170,000 that would have to be earned on the main line of cable in order? to place it in a position to dispense -with all assistance from the partner Governments. To obtain £170,000 from 7,000,000 words means that each word must on the average be worth to the cable just under 6d. But to compensate for the proportionately lower rates on Government and press messages and on " deferred" messages, the word-rate on "ordinary" messages must be considerably. higher than the average word-rate; and in viow of the very low rate that would be chargeablo on the rapidly-increasing press traffic, it could not safely be put at less than 9d. To this would have to be added at least another 7d to cover the charges (reduced in equal proportion) of the other administrations concerned in the Pacific route, so that a total of Is 4d a word may bo taken as the irreducible minimum below which the rate on " ordinary" Australasian messages could not fall, under existing conditions of cable telegraphy, if the revenue from the Pacific cable is to cover its outgoings. To duplicate or triplicate the cable would not greatly affect the minimum indicated, inasmuch "as even if the additional cables were employed to their full capacity, the cost of capital and of working would increase the annual expenditure to an extent that would leave no very great increase* of profit from the increased traffic. If, as is more likely to be the case, the second or third cable was only partially occupied, thcro might even be a loss.