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 words, which had risen to 2,457,000 in 1900. The prosperity of India was the cause of this growth. The companies thereupon agreed to reduce the rate to 2s. 6d. per word, and on May 22, 1900, the Secretary of the Treasury announced in the House of Commons that 'it is practically arranged that there should be at once a reduction to 2s. 6d., and if the 2s. 6d. rate brings in a certain number of messages, that rate will shortly be reduced to 2s. 0d.' It was, however, not until March 1, 1902, that this reduction was effected. What was the obstacle?

A certain article in the joint purse agreement provided that no alteration of tariff was to be made without mutual consent of the three contracting parties, one of which was the Indo-European Company. It now appeared that, under the terms of its concessions from Russia and Germany, that company cannot consent to any alterations of tariff, except with the consent of those Governments, and as these consents were withheld, Germany and Russia blocked the way to any reduction of rate between Britain and India. After long and complicated negotiations, the opposition of Russia and Germany was overcome by their being, broadly speaking, guaranteed against any loss in which they might be involved owing to the reduction of the rate, and finally, in March, 1902, the rate was reduced to 2s. 6d.

The receipts from the traffic between India and Europe and America, which in 1879 had been about £320,000, had risen very slowly up to an average of £352,000 by 1900. In view of the great capital outlay involved in the laying of new cables during that interval, this was not a high return. The reduction of tariff then arranged might mean a considerable reduction—at any rate, for a term—even in this revenue, such as it was. So the Indian Government agreed that if the receipts now fell below the 'standard revenue' of £852,000, India would make up one-third of the deficiency, provided this one-third did not exceed about £40,000 in any one year. If, however, the standard