EMPIRE COMMUNICATIONS.

Taranaki Daily News, 27 July 1931, Page 6

EMPIRE COMMUNICATIONS.

When the amalgamation of wireless and eable interests was mooted three years ago there were many who saw in it only an attempt on the part of the cable companies to obtain a monopoly, and thus earn dividends without milch regard to the service rendered. Critics of the proposed amalgamation maintained that the cable companies’ nervousness in regard to tlie competition of radiotelegraphy was far-fetched and was only a move in the game, whereby it was hoped io obtain control of all Empire communications. The Sequel has proved tlie foresight of tho cablb authorities. Amalgamation has been brought about with safeguards for public interests, but instead of tho elimination of competition leading to steady earnings it has hilt synchronised with a tremendous fall in traffic until this year, the fifrst under the unified control, so small a profit has been made that the dividend to preference shareholders can only be met by drawing upon reserves. Nor do those in control foresee any likelihood of improvement in the near future. On the contrary, they anticipate a still further reduction in .traffic, stating that the prospects of the year’s work resulting in a loss must be faced and steps he taken at once to prevent such an unfortunate return to those who have invested capital in tho undertaking. The organisation has been unfortunate in commencing combined operations at a time when economic depression is world-wide. With trade turnover shrinking in nearly every direction and the need for reducing costs imperative such services as telegraphs and cables are bound to be affected. It must be remembered that it is upon the commercial community the oversea telegraph services depend for the bulk of their revenue. It might be worth the consideration of those in control of those services Whether they are not too dependent upon commercial traffic. At existing prices the Use of oversea telegraph services for social purposes is extremely limited. While conditions continue to bo depressed it is likely to be loss than ever. Bub if special rates could be framed for such traffic, not necessarily for messages requiring immediate delivery at their destination, a new demand for oversea service might be created. Judging from experience within the Dominion it is a demand that would continuously increase and would enable telegraph plants to be utilised when ordinary traffic is slack. Tho future policy in regard to Empire communications is to be re-cast with a view to preventing losses that are threatened, and the decisions of the authorities will be awaited with a good deal of interest in New Zealand. Meanwhile it appears to have been good policy to relinquish the Dominion’s interest in the Pacific cable while it still remained a marketable asset.