PUBLIC RECORD OFFICE
Reference :-
mmmmm.C.O. 885
PUBLIC RECORD OFFICE, LONDON
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favour of joint action on the part of the Governments, both in raising the capital, and in completing the undertaking.
8. Having no promotion money or "financing" expenses to pay, no caution money to deposit, and comparatively little expense to incur for management, less capital, and diminished working expenses would be the consequence, while the rate of interest on which the capital could be raised on Government debentures, compared with that which a company, with a limited guarantee, would be called upon to pay on an equal amount, would be at least 25 per cent. in favour of the former.
9. Nor do the advantages stop here, for the cost of maintenance of submarine cables is simply a question impossible to solve. A trustworthy company will naturally make a somewhat extravagant estimate of the amount, in order to be provided for the worst that can happen, and their capital would be increased accordingly, whereas the Governments would practically become their own insurers of the risk, and would only be called
upon to reîniburse the actual outlay, which, judging from the experience of others, might prove to be little or nothing, or might be very high. Or if it should be thought desirable to form a reserve fund to cover repairs, when that fund had reached what might be thought a sufficient amount, the excess would be divided
pro rata
the contri- among butors, or if necessary, be devoted to duplicating the lines. Among minor advantages, they would be able to maintain (if necessary) in one of their own seaports, such as Mauritius for instance, a vessel for cable repairing purposes, at comparatively small cost, and their present administrative and telegraphic establishments, both at home and abroad, would, with slight augmentations, after the cables were once laid, suffice for the extra work which submarine communication would involve, without entailing heavy working expenses.
10. It is scarcely necessary to add that, as guarantors, the property would not belong to the Governments, nor would the natural increase in the number of messages sent ever result in a direct profit to them, as may in the course of time possibly be the case if they become proprietors instead of guarantors.
11. All these considerations combined point most unmistakably to direct Govern- ment action, as being by far the best calculated for the accomplishment of this important object.
12. It will be much more difficult to determine what Governments are to contribute, and in what proportion their several contributions should be made.
13. No one will probably venture to deny the fact that the means of instantaneous communication with these distant parts of the empire, and with the naval and military forces to be found there, are objects of great political importance, both to Imperial and Colonial Governments, the value of which, in the event of a war with any maritime power, could scarcely be overrated. From a pecuniary point of view only the saving which might result at such a moment from a single message would more than equal the whole cost of the undertaking.
14. The commercial advantages it would be calculated to confer on the contributing States, if I may so term them, must needs be somewhat in proportion to the interest they severally possess in the trade conducted between the points of communication. The shipping interests will probably be the most largely benefited, and this interest is chiefly, indeed it may be said almost entirely, vested in the United Kingdom. Assuming, there- fore, that England's interest in the imports and exports are only a moiety of the whole, and that politically her advantages were assessed in the same ratio, she would still, by her preponderating share in the carrying trade, derive far greater benefits from the establishment of electric communication than any of the other countries concerned. This being so, and bearing in mind that without her aid the project must fall to the ground, it appears to me that the present is one of those exceptional occasions in which the parent State may be most reasonably asked to co-operate with her Colonial offspring in the accomplishment of what is nothing less than an object of national importance.
15. Without attempting to enlarge upon the political view of the question, which possesses peculiar interest at a moment when the confederation of the South African States is in contemplation, I pass on to the consideration of cost, adding some sugges tions as to ways and means, and endeavouring to apportion the financial burden as fairly as possible among those most interested in carrying out the work.
16. To obtain something like reliable data upon which to base my calculations, I bave found it necessary to call in the professional aid of Messrs. Forde and Hockin, civil engineers, who have had considerable experience in similar undertakings, and who are now engaged in directing the construction and laying of a cable between New South Wales and New Zealand.
5
17. The annexed report of these gentlemen, after discussing the various possible routes that may be followed, points to the conclusion that one of the two following should be adopted :-
18. No. From Aden to Algoa Bay, with stations at the Seychelles, Mauritius, and Port Natal. Total distance, 4,394 knots. Estimated cost, 1,099,7991.
19. No. 2. From Aden to Algoa Bay via Seychelles, Zanzibar, Mozambique, and Port Natal, with branch from Seychelles to Mauritius. Total distance, 4,666 knots. Estimated cost, 1,306,1427.
20. Of the various other routes laid down, two only call for further notice. That terminating at Delagoa Bay (the cable portion of it), would be the least costly, but the necessary land line to connect that place with Port Natal, besides having to pass through an extensive foreign territory, would be exposed to dangers against which it might be difficult, if not impossible, to provide, and its adoption has therefore been treated as impracticable.
21. The other is what may be termed the Ceylon Route, which, though shorter in its submarine portion, passes for a long distance through a sea of unknown depth, and would be so much more costly for the transmission of messages to Europe, that it would probably prove in the long run the most expensive line of the whole. My further observations will therefore be confined to routes Nos. 1 and 2.
dices A. and B.
22. To borrow sufficient capital to carry out the first of these will, I think, involve.an annual charge, including maintenance, of about 67,2321. and for the second about 79,2721.* *See Appen-
23. To raise this money, I propose to associate in the undertaking the Governments of England, the Cape of Good Hope, Mauritius, and Natal, and to make them severally responsible for the following annual contributions:-
England
Cape of Good Hope Mauritius Natal
-
3
26,076
If Route No. 1 be adopted. If Route No. 2 be adopted.
£
22,558
25,843
30,772
14,473
17,234
4,358
5,190
£67,232
£79,272
24. The Governments of India, the Orange Free State, and the Transvaal, the two latter more especially, might fairly be expected to contribute something towards an undertaking from which they would all derive more or less advantage; but. in the present stage of proceedings, and to avoid delay, it would seem better that the four first- named Governments should come to an agreement as to the expediency of promptly executing the work, and as to the principle of association suggested for doing it.
25. The contributions of the States interested in a less degree may hereafter be applied to the reduction pro rata of the sums to which the other four contributors now stand assessed.
dices A. and B.
26. It has been found most difficult to determine what proportion of the liability should be borne by the several Governments interested. So far as the Colonies are concerned, the question is one of ability rather than one of will, and this fact has led to the adoption of income, or revenue, as the measure to determine their several contributions.† See Appen-
27. It is evident, however, that the same principle could not be applied to the Home Government, but bearing in mind that her interest in the project is far greater than that of any other of the associated States, it was felt that one moiety of the liability might fairly be assigned to her. This sum, in itself extremely moderate, has undergone a further reduction of about one third in consideration of an Imperial guarantee being given to a Colonial Government loan for raising the necessary capital. Though really costing the guarantor nothing, it is estimated that the guarantee will enable the borrowers to raise the money at a rate of interest about 1 per cent. less than it would otherwise cost, and a corresponding reduction has accordingly been made from the proposed contribution, reducing the annual maximum liability of the Home Government to the comparatively small sum of 22,5587., or to 26,076, according to the route followed.
28. The responsibility of maintaining the cables in working order, after they are once laid, and out of the hands of the contractors, should, I propose, devolve upon the Colonial Governments concerned; and all expenses fairly chargeable to maintenance should be defrayed out of the fund to be formed for that special object.
A 3