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Inclosure 3 in No. 3.
Colonial Office to Mr. Smith.
Sir
Downing Street, March 4, 1880. I AM l'rected by the Secretary of State for the Colonies to acknowledge the receipt of your letter of the 27th ultimo,* stating that the gentlemen whom you represent would adopt a point at or near Halifax, and construct a line thence to Bermuda, if Her Majesty's Government would be willing to contribute a subsidy of 10,0007. a-year for twenty years.
In reply, I am to state that the subsidy asked appears to Sir Michael Hicks Beach to be higher than he would be justified in recommending to Her Majesty's Government for the work proposed to be done; and that he could not, in any event, entertain a proposal of the kind unless first thoroughly satisfied as to the competency of those who might make it to carry the project into effect.
I am, &c.
(Signed)
ROBERT G. W. HERBERT.
Appendix No. 5
BERMUDA TELEGRAPH.
Inclosure 4 in No. 3.
Mr. Smith to Colonial Office.
15, Golden Square, March 5, 1880.
Sir,
I BEG to acknowledge your letter of yesterday's date† on the subject of telegraphic communication with the Bermudas, in reply to mine of the 27th ultimo.
I have consulted Sir James Carmichael on the subject, not having had the opportunity of speaking to Mr. Puleston.
Under the direction of the former gentleman, I beg to submit, in reply, the following con- siderations:-
1. Notwithstanding the difficulties incident to the neighbourhood of the Bermudas, the cost of making and laying the cable, including stations and engineering expenses, is taken at 1207. per mile, or, say, 105,0007.
2. The subsidy asked for proceeds upon the assumption of repayment, with 7 per cent. interest, in twenty years; 6 per cent. would take about eighteen years; 5 per cent. sixteen years. The uncertainty of the continuance of the subsidy is an element which introduces difficulty into the calculation.
If the principle of repayment of cost of construction by instalments, with moderate interest, be accepted, there will not be any difficulty in coming to an understanding.
The price above named will contrast favourably with the prices hitherto submitted to Her Majesty's Government.
The commercial reasons which induce the parties whom I represent to offer to undertake the maintenance and repair of an unremunerative line is the prospect of its extension to the West Indies, and they rely upon this permission being granted to them.
If such parties be encouraged to alter one of their termini to Nova Scotia, the Secretary of State shall be fully satisfied as to their competency to fulfil their engagements.
I gather from the letter with which I have been favoured that the question is now reduced to one of figures; and if I were allowed an interview, with or without Sir S. Canning or Mr. Sabine, I enter- tain no doubt that a satisfactory arrangement would be arrived at.
No. 4.
I have, &c.
(Signed)
GEO. F. SMITH.
Royal Commission on the Defence of British Possessions and Commerce Abroad to Colonial Office.
13, Delahay Street, April 2, 1880.
Sir,
I AM directed by the Royal Commission on the Defence of British Possessions and Commerce Abroad to acknowledge the receipt of your letter of the 10th March, inclosing further correspondence with Mr. G. F. Smith with regard to his proposals for establishing telegraphic communication with Bermuda.
The Commission are unable to form any opinion on the particular merits of Mr. Smith's proposals, or on the financial arrangements suggested by him, but they consider that a line of telegraph placing Bermuda in direct communication with Halifax and the West Indies would, from naval and military considerations, best fulfil Imperial requirements, and would alone call for Government subsidy or assistance.
I have, &c. (Signed)
HERBERT JEKYLL.
*Inclosure 2.
† Inclosure 3.
‡ No. 3.
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