F.—B

52

With Two Cables. £ s. d. Eevenue—900,000 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-t per cent.) ... ... 175,500 0 0 Loss first year ... ... ... ... ... 85,500 0 0 Or interest at 2f per cent. ... ... ... 90,500 0 0 Tivo Cables. Eevenue ... ... ... ... ... ... ,90,000 0 0 Expenditure (2-| 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 tratlic 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 ... ... ... ... ... .. 173,029 0 0 Tenth year ... ... ... ... ... ... 166,380 0 0 Total ... ... ... £1,927,990 0 0 m or an accumulated loss in ten years of £1,927,990, without counting interest. With one cable the loss would be— £ s . a. First year ... ... ... ... ... ... 85,500 0 6 Second year ... ... ... ... ... ... 81,000 0 0 Third year ... ... ... ... ... ... 76,275 0 0 Fourth year ... ... ... ... ... ... 71,314 0 0 Fifth year ... ... ... ... .. ... 66,104 0 0 Sixth year ... ... ... ... ... ... 60,635 0 0 Seventh year ... ... ... ... ... ... 54,892 0 0 Eighth year ... ... ... ... ... ... 48,861 0 0 Ninth year ... ... ... ... ... ... 42,529 0 0 Tenth year ... ... ... ... ... ... 35,880 0 0 Loss in ten years ... ... ... £622,990 0 0 If we allow an increase of 7 per cent, per annum, which, I fear, is not likely to be realised, the loss would still be very serious, as shown in the following table :—

If we take the Committee's somewhat lower estimate of the yearly expenditure, and put the cost of the cable at £2,000,000, which under such a specification as would satisfy' the Imperial

Expenditure. Expenditure. Seven per Cent. Increase. £ s. d. 173,500 0 0 £ s. d. 306,000 0 0 Kevenue. Loss with One Cable. Loss with Two Cables. First year Second year Third year Fourth year Fifth year Sixth year Seventh year Eighth year Ninth year Tenth year 900,000 words at 2s. ... 963,000 ... 1,030,410 ... 1,102,539 ... 1,179,716 ... 1,262,297 ... 1,350,657 ... 1,445,202 ... 1,546,366 ... 1,654,611 £ 90,000 96,'300 103,041 110,254 117,972 126,230 135,065 144,520 154,636 165,461 s. d. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 £ 85,500 79,200 72,459 65,246 57,528 49,270 40,435 30,980 20,864 10,039 s. d. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 £ 216,000 209,700 202,959 195,746 188,028 179,770 170,935 161,480 151,364 140,539 s. d. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0