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 loss of revenue which might arise from this latter reduction. The loss was, in fact, heavy, since it is but seldom that the telegraphing public responds early and adequately to reductions of rate. Consequently, in 1898, at the urgent instance of the guaranteeing Governments, who smarted under their share of the loss, the rate was raised to 4s. 9d. At that point it remained till 1900, when it was reduced to 4fS. At the same time, further future reductions were arranged, subject to the continued receipt of a minimum or standard revenue, as in the case of India and South Africa. Accordingly, at the opening of 1901 the rate was reduced to 8s. 6d., and to 8s. at the opening of 1902. This is the existing rate.

There is an instructive lesson to be derived from the facts of the Australian traffic. In 1896 the total number of words passing between Australasia and Europe and America was 2,225,000, and the yield to all parties concerned £383,000. In 1899 the rate had not been changed in the interval, and the words were 2,149,000, or practically the same. In 1902 the tariff had fallen from 4s. 9d. to 8s., or a reduction of 37 per cent It might have been expected that this would have immensely stimulated the number of words sent. By no means. In 1902 the number of words was 2,358,000; the yield in 1902, owing to the reduction of rate, being only £246,000, as against £383,000 in 1896. This demonstrates that reductions of rate do not necessarily produce increases of traffic. It was in December, 1902, after these serious reductions and losses, and when great increase of capital outlay had been undertaken by private enterprise, that the British Government entered the field against its own citizens.

The result was, of course, disastrous. In 1908 and 1004 almost all the profit from the Australasian cables owned by private persons, and constructed after thirty years of labour and thought, was swept away. On its side, the British Government, with the Colonial Governments concerned, realized a loss of upwards of £200,000 on the working of its Pacific cable. Such are the