F.—Ba.

The business with West Australia has. largely increased, owing to the developments in goldmining and consequent active speculations. The last two years, however, show a steady decline. Looking at the figures for the other colonies, we find also a decrease in 1898 on 1897. It would not be safe to estimate a vearly increase in the future of more than 5 per cent.; but, to take a favourable view, I would allow, say, 900,000 words as the Pacific cable's share in 1903 or 1904. These would consist mostly of ordinary messages, and the balance the average proportion (about one-ninth) of Government and Press matter. The through rate suggested is 3s. on ordinary messages; or, deducting the out-payments to Europe, the Atlantic cables, Canada, or American land-lines, and Australia, say, Is. 6d., the Pacific share would be Is. 6d. Taking, for simplicity's sake, all the words at ordinary rates, we have : — With One Gable. £ s. d. Eevenue—9oo,ooo words at Is. 6d. ... ... ... 67,500 0 0 Expenditure —One cable ... ... ■•• ••• 175,500 0 0 Loss, first year, at 2*, per cent, interest on capital ... 108,000 0 0 Or, if interest 2f per cent. ... ... ... 113,000 0 0 With Two Cables. £ s. d. Eevenue—9oo,ooo words at Is. 6d. ... ... ... 67,500 0 0 Expenditure—Two cables ... ... ••• ... 306,000 0 0 Loss, first year, at 2| per cent, interest on capital ... 238,500 0 0 Or, if interest 2f per cent. • ... ... ... 248,500 0 0 Australia would bear one-third the loss. With a through rate of 3s. 6d., or Pacific charge of 2s. per word, the figures would be : — One Cable. £ s. d. Eevenue ••• 90,000 0 0 Expenditure (taking interest at 2*} per cent.) ... ... 175,500 0 0 Lossfirst year ... ... ... ... ■•• 85,500 0 0 Or interest at 2f per cent. ... ... ... 90,500 0 0 Tioo Cables. Eevenue 90,000 0 0 Expenditure (21 per cent, interest) ... ... ... 306,000 0 0 Loss first year 216,000 0 0 Or at 2f per cent. ... ... ... ••• 226,000 0 0 have before said, it would not be safe to calculate on a greater average rate of increase of traffic than 5 per cent, per annum. Assuming this to be accepted, then with two cables, and taking the interest on capital at 2| per cent., and the Pacific rate at 2s. a word, the loss during the first ten years would be approximately as follows : — Loss. £ s. d. First year 216,000 0 0 Second year ••• 211,500 0 0 Third year 206,775 0 0 Fourth year 201,814 0 0 Fifth year ... 196,604 0 0 Sixth year 191.135 0 0 Seventh year ... ... ••• ••• ••• ••• 185,392 0 0 Eighth year ... ... ... -•• ■•■ ••• 179,361 0 0 Ninth year "3,029 0 0 Tenth year ... ... ■•■ ••• •■• ••• 166,380 0 0 Total £1,927,990 0 0 or an accumulated loss in ten years of £1,927,990, without counting interest. With one cable the loss would be — £ s. d. First year ... ... ••• •■• -.-• ■•- 85,500 0 0 Second year ... ■■■ -•• 81,000 0 0 Third year ... ... -•• ■•■ •■• ••■ 76,275 0 0 Fourth year ... ... -•- ••- ■•• ■■■ 71,3 if £° n Fifth year ... ... ■-• ••■ ••• ■•■ 66 »1° 4 ° ° Sixth year ... ... --• ••• •■• ■■ 60 > 63 5 0 0 Seventh year ... ... ••■ ••• ■•■ •■■ 54,892 0 0 Eighth year ... ... • ■ ••• ■•■ ■■• 48,861 0 0 Ninth yLr 42,529 0 0 Tenth year ... ... ... ■•• ■■• ■■■ 35,8b0 O 0 Loss in ten years £622,990 0 0

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