As the business increases from, year to year, the item of interest per unit of maximum output consequently will constantly decrease, owing to the fact that each additional unit of output following an increase of connected load increases the divisor by which the total interest is divided. The result is from year to year the interest cost of each additional unit of maximum output is a constantly reducing amount, and consequently the average interest cost of each unit of maximum output should, in a well regulated plant, grow less from year to year until the minimum interest cost per unit is reached. This minimum interest cost is reached when the capacity of the whole system and the total units of output at maximum load are identical, although of course it will always be necessary to have a certain margin of capacity over possible output, as a factor of safety.

This same rule, although to a less extent, applies to the operating and general expense cost, that is, the cost other than interest. To particularize, the manager's salary and other administrative expenses do not increase in proportion to maximum output of station; therefore, the cost of administration per unit of output, if the business is in a healthy condition, must be from year to year reduced. There are a great many other expenses that are not directly in proportion to output, and these follow the same rule. In a well-run plant the percentage of operating expenses to gross receipts will stand even year after year, while the income per unit of output will be constantly reduced. This is an excellent evidence of the fact that the cost per unit of output is constantly being reduced, as, if it were not, the percentage of expenses to gross receipts would be increased in direct proportion to the reduction in price. Moreover, it should be borne in mind that there are many difficulties in the way of universal use of electric energy from a central station system. It is the rare exception to find a house not piped for gas and water. In the case of the latter it is almost invariably the rule that owners are compelled to pipe for water, under the sanitary code of the municipality.

On the other hand, in a large residential district, it is the exception to find a house wired for electric light; consequently the output of current per foot of conductor is at the present time very low as compared with the output of gas per foot of gas pipe in any of the large cities. The expense of wiring (which must of necessity be borne by the householder) is large, and it is often a barrier to the adoption of electric illumination, but as the rule to wire houses becomes more general, the output per foot of main will constantly increase, and therefore the interest per unit of output per foot of main will constantly decrease. This same rule will apply in the case of expenses of taking care of and repairing the distribution system, although to not so great an extent.

If you will take into account these various factors constantly operating toward a reduction of operating and general expense cost, and interest cost, the conclusion must necessarily be forced upon you that the price at which current can be sold at a profit to-day is in no sense a measure of the income per unit which it will be necessary for central station managers to obtain in the future. In 1881-82 it was difficult to make both ends meet with an income of 25 cents per kilowatt hour, to-day there are many stations showing a substantial return on their investment whose average income does not exceed 7 cents per kilowatt hour, showing 70 per cent. reduction in price in less than two decades. How far this constant reduction in cost, followed by a constant reduction in selling price, will go, it is difficult to determine; but if so much has been accomplished during the first 20 years of the existence of the industry, is it too much to predict that in a far less time than the succeeding 20 years electric current for all purposes will be within the reach of the smallest householder and the poorest citizen? But few industries can parallel the record already obtained.

If you will trace the history of the introduction of gas as an illuminant, you will find that it took a much longer time to establish it on a commercial basis than it has taken to establish most firmly the electric lighting industry. All the great improvements in gas, the introduction of water gas, the economizing in consumption by the use of the Welsbach burner, have all been made within the time of those before me, and yet, notwithstanding that when these gas improvements started, the electric lighting business was hardly conceived, and certainly had not advanced to a point where you could claim that it had passed the experimental stage - notwithstanding this, the cost of electrical energy has decreased so rapidly that to-day there are many large central station plants making handsome returns on their investments at a far lower average income per unit of light than the income obtained by the gas company in the same community. In making my calculations which have led me to this conclusion, I have assumed that 10,000 watts are equal to 1,000 feet of gas. This comparison holds good, provided an incandescent lamp of high economy is used as against the ordinary gas burner.

To make a comparison between electric illumination and incandescent gas burners, such as the Welsbach burner, you must figure on the use of an arc lamp in the electric circuit instead of an incandescent lamp, which is certainly fair when it is remembered that incandescent gas burners are, as a rule, used in places where arc lamps should be used if electric illumination is employed.

With such brilliant results obtained in the past, the prospects of the central station industry are certainly most dazzling. While the growth of the business has been phenomenal, more especially since 1890, I think it can be conservatively stated that we have scarcely entered upon the threshold of the development which may be expected in the future. In very few cities in the United States can you find that electric illumination exceeds more than 20 per cent. of the total artificial illumination for which the citizens pay. If this be the state of affairs in connection with the use of electricity for illuminating purposes, and if you will bear in mind the many other purposes to which electricity can be adapted throughout a city and supplied to customers in small quantities, you may get some faint conception of the possible consumption of electrical energy in the not far distant future. Methods of producing it may change, but these methods cannot possibly go into use unless their adoption is justified by saving in the cost of production - a saving which must be sufficient to show a profit above the interest and depreciation on the new plant employed. It is within the realms of possibility that the present form of generating station may be entirely dispensed with.

It has already been demonstrated experimentally that electrical energy may be produced direct from the coal itself without the intervention of the boiler, engine and dynamo machine. Whether this can be done commercially remains to be proved. Whatever changes may take place in generating methods, I should, were I not engaged in a business which affords so many remarkable surprises, be inclined to question the possibility of any further material change in the distributing system. Improvements in the translating devices, such as lamps, may add enormously to the capacity of the distributing system per unit of light; but it does seem to me that the system itself, as originally conceived, is to a large extent a permanency. Should any great improvements take place in the medium employed for turning electrical energy into light, the possible effect on cost, and consequently selling price, would be enormous.

The proposal of Gov. Black, which has now become law, to depute to Cornell the care of a considerable tract of forest land, and the duty of demonstrating to Americans the theory, methods and profits of scientific forestry, has a curious appropriateness much commented on at the university, since two-thirds of the wealth of Cornell has been derived from the location and skillful management of forest lands, the net receipts from this source being to date $4,112,000. In the course of twenty years management the university has thrice sold the timber on some pieces of land which it still holds, and received a larger price at the third sale than at the first. The conduct of this land business is so systematized that the treasurer of the university knows to a dot the amount of pine, hemlock, birch, maple, basswood and oak timber, even to the number of potential railroad ties, telegraph poles and fence posts on each fourth part of a quarter section owned by Cornell. Certainly, Cornell is rich in experience for the business side of a forestry experiment such as Gov. Black proposes.

The university forest lands from which its endowment has been realized are in Wisconsin.

Books may be called heavy when the qualifying term is not applied to their writers, but to the paper makers. It is falsifications in the paper that give it weight. Sulphate of baryta, the well known adulterate of white lead, does the work. A correspondent, writing to The London Saturday Review, gives the weight of certain books as: Miss Kingsley's "Travels in Africa." 3 pounds 5 ounces; "Tragedy of the Caesars," 3 pounds; Mahan's "Nelson" (1 vol.), 2 pounds 10 ounces; "Tennyson" (1 vol.), 2 pounds 6 ounces; "Life and Letters of Jowett" (1 vol.), 2 pounds 1 ounce. To handle these dumb-bell books, The Saturday Review advises that readers take lessons in athletics.

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Before the Electrical Engineering Department of Purdue University, Lafayette, Ind., May 17, 1898.