109
Chapter XV.
MISCELLANEOUS PROBLEMS.
1. In the course of our deliberations we encountered certain questions of some importance which, either by reason of their confidential nature or because of their limited scope, were not suitable for inclusion in the chapters forming the main body of this Report.
2. After consideration, we decided to include in a special Miscellaneous Chapter such of these problems as could appear in a public document and, where reasons of privacy prevailed, to submit our findings in the form of a supplementary confidential Report.
("A") CABLE RATES.
1. Representations were made to the Commission that the cable rate in Hong Kong was unduly high and constituted a definite burden on the trade of the Colony. It was given in evidence that one important trading concern spent no less than $30,000 per annum on cables and considered the charges to be excessive especial- ly as between Hong Kong and London.
2. At the invitation of the Commission evidence in explanation of this matter was given by Mr. Carter, Manager in Hong Kong of the Eastern Extension Tele- graph Company, Limited. A summary of this evidence is contained in the following paragraphs, Nos. 3, 4, 5, 6 and 7.
3. The Eastern Extension Telegraph Company is a branch of the large Merger concern, Cable & Wireless Limited, an Imperial public utility company adminis- tered by private enterprise combined with State supervision of essential elements.
4. International cable charges are fixed in gold francs and converted into local currency at a conversion rate which is subject to periodic readjustment. Since 1913 the gold franc charges, Hong Kong-London, have been reduced from Frs. 5.50 per word, (full rate) to Frs. 3.45 per word, the last reduction taking place in 1929.
5. These rates compare favourably with the rates fixed by the same Company of G.Frs. 3.50 in the Straits Settlements, G.Frs. 3.84 in French Indo-China and G.Frs. 4.00 in the Dutch East Indies. In addition to the full rate there are reduced rate services at one half and one third of the full rate charges.
6. It has not been found possible to make any further reductions since 1929 for although, by the introduction of labour saving inventions, the Company has effected economies to the extent of £2,000,000 sterling during the last two years, yet at the present moment they are only in a position to pay a .23% dividend on less than half their capital. There are several reasons to account for this:
(a) Excessive competition has resulted in an over-development of telegraphic facilities which has led to an uneconomic position for all concerned. The estab- lishment of lines of direct communication between various European countries and their Colonies has cut into the whole structure of international telegraphy and, by reducing the volume of international cable traffic, has prevented the reduction of
rates.
(b) Cable companies have to carry a heavy burden of taxation in the form of royalties and transit and terminal taxes imposed by various Governments. In some cases these taxes were originally imposed in times of prosperity and have been con- tinued without alleviaton in times of depression, while in others they have no justi- fication in services rendered by the taxing Government.
It is hoped that before long modern inventions will provide a weapon where- with to fight for more reasonable terms, but the whole question is very delicate and is not likely to be solved in the immediate future.