xpect to pay precisely the same total interest whether he required
the money for one month or for twelve; and for the same reason it
seems an absurdity to sell electricity to the customer who uses it but
a comparatively few hours a year at the same price at which you would
sell it to the customer using it ten hours a day and three hundred
days a year, when it is remembered that interest is the largest factor
in cost, and the total amount of interest is the same with the
customer using it but a few hours a year as it is with the customer
using it practically all the year around.

I have dwelt thus at length on the question of interest cost in
operating a central station system, not alone for the purpose of
pointing out to you its importance in connection with an electrical
distribution system, but also to impress upon you its importance as a
factor in cost; in fact, the most important factor in cost in any
public service business which you may enter after leaving this
institution. Most of the businesses presenting the greatest
possibilities from the point of view of an engineering career are
those requiring very large investment and having a comparatively small
turnover or yearly income. Of necessity, in all enterprises of this
character, the main factor of cost is interest, and if you intend
following engineering as a profession, my advice to you would be to
learn first the value of money, or, to put it another way, to learn
the cost of money.

Before leaving this question of interest and its effect upon cost, I
would draw your attention to the fact that while interest is by far
the most important factor of cost, it is a constantly reducing amount
per unit of maximum output in practically every central station
system. When a system is first installed, it is the rule to make large
enough investment in real estate and buildings to take care of many
times the output obtained in the first year or so of operation. As a
rule, the generating plant from the boilers to the switchboard is
designed with only sufficient surplus to last a year or so. In the
case of the distributing system the same course is followed as in the
case of real estate and buildings, with a view to minimizing the
ultimate investment. Mains are laid along each block facing, feeders
are put in having a capacity far beyond the necessity of the moment;
consequently interest cost is very high when a plant first starts,
except, as I have stated, in the case of