F.—B.

4

2. The financial results of the year 1907-8 are set forth in the following statement: Receipts. £ i. d. £ a. d. Traffic receipts .. .. .. .. 113,548 18 1 Lesa Atlantic Com panics charge for conveying date and time, and for delivering duplicate copies in London and other large centres in United Kingdom .. .. 3,911 13 'i 109,637 5 1 Interest on deposits .. .. .. .. .. 522 17 3 Deficiency recoverable in the following proportions : — United Kingdom .. .. .. 17,322 18 4 Canada .. .. .. .. 17,322 18 4 Australia .. .. .. .. 20,787 10 0 New Zealand .. .. .. 6,929 3 4 62,362 10 0 £172,522 12 4 Expenditure. £ s. d. Fifth annuity payment .. .. .. .. .. 77,544 18 0 Head office (salaries and expenses) .. .. .. .. 1.315 9 1 Read office (advertising, canvaaaing, engineers' fees, royalties, and cost of remitting money Home) .. .. .. .. 1,596 12 7 Stations (salaries and expenses) .. .. .. .. 38,764 16 1 Sl)ip (salaries and expenses) .. .. .. .. 16,759 12 11 Provident Fund .. .. .. .. .. .. 1,511 3 8 Renewal Account .. .. .. .. .. .. 32,000 0 0 £172,522 12 4 3. As compared with 1906-7, there was a falling-off of £2,852 15s. 2d. in the gross traffic receipts ; but of this the greater part (from £1,800 to £2,000) is apparent only, not real, the accounts for 1906-7 having included the receipts at Southport for thirteen months, while those for 1907-8 include only twelve months' takings. As regards the remainder of the decline, it may be observed that the message revenue of 1906-7 was enhanced by the increase of business resulting from various circumstances described in paragraph 2 of last year's report, viz. : the earthquake at San Francisco, interruptions to the Eastern Extension Company's cables, and the general prosperity of trade ; whereas during 1907-8 the cable has had to contend against adverse conditions of trade resulting from the panic in America of last summer and autumn, and the unfavourable influences mentioned in paragraph 7 below. The only set-off against these was an increase of traffic which resulted from a week's interruption of the Eaatern Extension Company's Cocoa Island cable in August last, and, taking all the circumstances of the two years into account, it may be considered satisfactory that the revenue of the cable has been maintained so well as it has been. 4. On the expenditure side of the account there has been an increase, as compared with 1906-7, of £4,082 13s. Of this, £2,027 165., was due to the insurance which it was decided during the year to effect on the Hoard's cable-ship ; but under the terms of the contract with the underwriters a considerable rebate is claimable for periods during which the vessel remains in harbour, and on this account nearly one half of the premium will probably be eventually recovered. The remainder of the increase is attributable to various causes, such as the normal gnnvtli of incremental salaries,the increase in the charges for officers going on leave now that the staff has had some years of Service in the tropics, and the fact"that the accounts include the cost for a whole year, instead of for nine months only, of the new offices opened in Sydney and Melbourne in 1906, to which reference was made in paragraph 4 of last year's report. Exclusive of the annuity payment of £77,544 18s. covering interest and sinking fund on the capital advanced bv the National Debt Commissioners, the expenditure on the maintenance and working of the cable during the vear. including the sum of £32,000 carried to the Renewal Account and the sum of £1,511 3s. Bd. contributed to the Provident Fund, amounted to £94,977 14s. 4d., or £15,182 Bs. less than the net revenue earned by the cable. The annuity to the National Debt Commissioners absorbs this surplus, and £62,362 10s. in addition, 'which has to be made good by the several Governments associated in the enterprise. 5. The total contributions to the Renewal Fund, including interest, amounted on the 31st March last to £198,836 12s. lid., £12,500 of this sum being held in spare cable. The amount of £177,691 12s. lid. is invested in Home and colonial securities, as shown in Statement VI, while a balance of £8,645 was in hand, and has since been invested. All interest earned on the investments is added annually to the fund, and is not treated as part of the revenue of the year. 6. The Board's forecast of its probable revenue and expenditure during the year 1908-9, as submitted to their Lordships on the 20th December last, is as follows :— £ £ Traffic revenue .. .. .. 108,000 | Sixth annuity .. .. ..' 77,545 Estimated deficit .. .. .. 69,566 Renewal Fund .. .. .. 31,000 Working-expenses .. .. .. 69,021 £177,566 £177,566