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PUBLIC RECORD OFFICE

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Reference :-

C.O-885

17 PUBLIC RECORD OFFICE, LONDON

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know there is nothing special about that-they may put the Bill through Parlia- ment, which in its present form I would regard as a great calamity.

The CHAIRMAN: We are seeking, I am seeking, for the moment, to obtain your assent to the amendment of the Commonwealth Agreement, and the amendment of it in a sense which Sir William Mulock suggested, and which is undoubtedly favourable to the Pacific cable. I will ask Lord Jersey whether he thinks the Commonwealth would assent to that.

The EARL OF JERSEY: I may say frankly I have no means of knowing whether they would assent; all I can say is that apparently when the Bill for that Agreement was brought in it was advocated on the ground that it did limit the powers given to the Eastern Extension Telegraph Company, but as Sir William Mulock pointed out once or twice it leaves the limitation of those powers to the good will of the Commonwealth Government, and therefore to that extent it takes away power from the other partners to determine the facilities given to the Eastern Extension Telegraph Company.

The CHAIRMAN: Yes.

The EARL OF JERSEY: But as I said before, I would certainly ask the Common- wealth Government what is now their view. Of course, it is a year or two ago since the Bill was debated, but I would find out their present opinion and put before them Sir William Mulock's view, as expressed at our first meeting

The CHAIRMAN: Yes.

The EARL OF JERSEY: And if that view is also supported by Sir Sandford Fleming as representing New Zealand, it would be a great accession of strength. Of course, if I could say that the two partners were anxious to have the point settled in this way it would strengthen my cablegram very much.

The CHAIRMAN: Yes.

LORD STRATHCONA Even if the Commonwealth Government now consider that they have a right to terminate that Agreement at the end of ten years, I think we should add "and no longer." I understand Sir Sandford Fleming's view to be that while he would object to pooling he would be disposed to say for his Government and for himself personally, that if the Agree- ment is modified so as to give to the Pacific Cable Company all the advantages that the other Company-the Eastern Company have under this Agreement equal advantages then you would be disposed to recommend that to your Government; is it not so Sir Sandford?

Sir SANDFORD FLEMING: I would certainly place it before the Government. My personal views are not exactly the same as those of my Government, but they are very near it, and I am not prepared to give a final answer to the question just at this moment. I would like to communicate with them first, placing something definite before them.

The CHAIRMAN: Of course that is a very definite thing to propound to them, viz., whether, without binding themselves further, it would be acceptable to them to have the Commonwealth Agreement amended in the sense which we have just referred to. It seems to me that there can hardly be but one answer to that. It is in favour of the position taken up by the New Zealand Government, and at any rate it is in harmony with the views of Sir William Mulock, and it certainly seems to me to be a good beginning, but I can quite follow, Sir Sandford, that you do not wish to be pledged beyond that.

Sir SANDFORD FLEMING: No.

The CHAIRMAN: Or to commit yourself to any course of action beyond that particular course. So far, if I might venture to advise, it seems to me that you could not prejudice yourself, and would be a substantial gainer.

Sir SANDFORD FLEMING: You will understand, Sir, that I have had a good deal of exchange of communications with the Government of New Zealand.

The CHAIRMAN: Yes.

Sir SANDFORD FLEMING: And I understand their views pretty well.

The CHAIRMAN: Yes, I think we are a little premature in getting to the division of the traffic, or anything in the nature of pooling. That is entirely outside what we are discussing at the present moment. The question before us to-day, as I conceive it, is whether we can communicate at any rate with fair unanimity between ourselves to Australia, our desire that their Agreement should be modified by being restricted for 10 years, by being in substitution, definite substitution of the New South Wales Agreement. That seems to me to be good business, and though I do not want to commit Lord Jersey at all, it seems to me to be a course which he thinks would be very likely to be accepted by the Australian Government. May I point out that, supposing that be accepted, we have then attained a certain step in the course of the negotiations. The situation of the parties remains in this wise, viz., that all the parties have in their hands every means of offence or defence, if you like to put it so, that they had before, that is to say that the Commonwealth Government could at once authorise the Pacific Cable Board to open offices wherever they pleased, and in such way could initiate a very severe competition with the Telegraph Company. There can be no doubt that that would be a cause of very great expense to the Pacific Cable Board, as it would he a source of very great expense to the Eastern Telegraph Company.

Sir SANDFORD FLEMING: We should be free to do that

The CHAIRMAN: Nothing that is now proposed would prejudice those rights; both parties would be able to compete with each other in the bitterest way possible. The question is, when there are two parties confronted with that alternative, whether, to put it quite frankly, something much more reasonable might not be done; but that is for the future: to-day I am only putting to the Conference whether at any rate, we might not get so far as to communicate the general sense of the Conference, that the Commonwealth Government should accept the amendment proposed by Sir William Mulock.

Sir SANDFORD FLEMING: Does it not very much hinge on what the Common- wealth Government will do? The matter is entirely in their hands; they know exactly how the whole subject is regarded by New Zealand. These letters which I place on the table, exchanged between the two Premiers, point that out; they have a full knowledge of everything that New Zealand has to say on the subject so far; if there is any fresh discussion to be had, the proposition should now come, I think, from the change of view of the Commonwealth Government.

We

The CHAIRMAN: If I may say so, that is precisely what we wish to do. recognise that the first step in this matter requires the assent of the Commonwealth Government, and we are quite aware that they have the materials for decision in their hands, and what I am suggesting to the Conference is, that the Conference should propound to the Commonwealth Government a plan for their acceptance I quite recognise that you would not like or rejection-that is a definite proposal. without consultation with your Government to commit yourself to anything upon that point; but we ourselves think, if I may venture to say so, I think from what you have said that, at any rate, were that amendment accepted by the Common- wealth Government, it would be a step in your direction.

Sir SANDFORD FLEMING: Yes, yes.

The CHAIRMAN: And it would be an assistance, if you felt yourself able to say,

so far as that proposition is concerned, that it has your assent without committing you to anything else whatever; or, if it would make it--

Sir SANDFORD FLEMING: I could not here, at this stage, say whether I would assent to it or not; I am not speaking for myself, I am speaking for those who sent me here.

The CHAIRMAN: Quite. Would you follow then, Sir Sandford, and see whether, as an outline of the views of the Conference it is in harmony with your view, some such thing as this: "The Conference notes that the operation of the New South

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