PUBLIC
T།།།། mimmim
RECORD OFFICE
Reference :-
C.O-885
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
17 PUBLIC RECORD OFFICE, LONDON
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Now, by a division of traffic I assume that can only mean division of traffic emanating from particular colonies or from the United Kingdom, which is not routed by the sender, because under all the international telegraph arrangements, we should have no power to divert routed traffic from the route by which it was ordered to be sent to another route, and, therefore, a division of traffic, as I understand it, can only apply to unrouted traffic. Now the unrouted traffic between Australia and the United Kingdom represents a very small proportion of the whole traffic, and a division of the unrouted traffic, therefore, would give us a very small addition indeed to our receipts. On the other hand, if you have a division of traffic and exclude the routed traffic from it, you leave to the Eastern Extension Telegraph Company, and you throw upon us the burden of active competition with our customers for obtaining the routed traffic, and so, instead of saving us, and saving the Eastern, from the expense of competition, which, I thought, was one of the advantages of an amicable arrangement, you throw upon us continuously the burden of that competition. I think also you throw on us that competition under some disadvantage to a body representing Governments, because in the first place the elaborate organisation of the Eastern Extension Telegraph Company, ramified as it is with the whole of the East, necessarily compels them to maintain offices in London, and to exercise large influence with their customers in the East, who also may have transactions in Australia, and gives them an advantage over us in obtaining routed traffic. And in the next place though I do not like to say it, of course all companies, in endeavouring to get routed traffic have recourse to methods, which a body representing Govern- ments does not always like to follow, so we are under a disadvantage. I think, therefore, that you are playing into the hands of the Eastern Companies, if you pool traffic instead of pooling receipts, because, I think, they will get the lion's share of that routed traffic, which would be the lion's share of the whole traffic.
Sir WILLIAM MULOCK: Would you mind my asking you at this point to assume that there is no such thing as routed traffic, and then illustrate the difference between a division of traffic and your pooling?
Sir SPENCER WALPOLE: If there was no such thing as routed traffic, then I can conceive that you might make an arrangement with the Australian Post Office, under which alternate messages should be sent over the two systems. If the office of the company were closed, I can conceive that it would be practicable to make such an arrangement, though it would be unusual to make such an arrangement.
Sir WILLIAM MULOCK: That is not my point. You are proceeding to illustrate the weakness of a division of traffic as compared with pooling, because the unrouted traffic is so small, and you argued that the Company, or whoever controls the two I am not in cables, would not be at liberty to send routed traffic by another route. a position to controvert that proposition, and yet I can hardly accept it, because I am not able to see wherein it is of the slightest importance to the sender of a message by what route it goes, provided it reaches its destination with proper despatch. I would, therefore, like to have a comparison of the two proposals, pooling and division of traffic, upon the supposition that there is no such thing as routing. Would you give it me in that way?
Sir SPENCER WALPOLE: If I may answer Sir William Mulock's question in this way, I should say that if there was no such thing as routing, it might be conceivably possible to divide the traffic between the two systems, sending messages alternately over the Pacific Cable and the Eastern Extension Telegraph Company's lines. That would be an even division of traffic at which he is aiming. My difficulty is that that is opposed to all the principles of the International Telegraph Convention, which lay down that every sender of a telegram is to be afforded an opportunity of prescribing the route by which that telegram is to go, and that his decision in that respect is to be obeyed by the Governments and the Companies. I am very sorry to be so long, but may say one word more on this division of traffic with If some such Australian traffic." reference to the introduction of the words arrangement as Sir John Wolfe Barry contemplates is to be made, I think it neces- sarily must apply to all Australasian traffic.
Mr. PEMBER REEVES: Including Government?
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Sir SPENCER WALPOLE: Well I have in my interviews with him confined myself to ordinary traffic so far. So far I have excluded press traffic and Government traffic. I think he is contemplating all traffic, but I have guarded myself scrupu- lously on that point. If he is to pay us in the event of any breakdown, the equivalent of the sum which we are receiving while we are working, I can hardly conceive that any sane man would consent to pay that sum on the traffic which was not so pooled, that is to say, if we exclude New Zealand traffic from the pooling arrangement, then I think we could hardly ask him to carry New Zealand traffic in the event of a breakdown, or to pay us for our proportion of the New Zealand traffic you consider in the event of a breakdown. My own inclination, therefore, is that his proposal at all, you must consider, at any rate, all Australasian traffic, not merely Australian traffic, and I think you ought to consider the pooling of traffic receipts, as against the pooling of traffic.
LORD STRATHCONA: If, as apparently is the case from the figures here before us, this arrangement would be more favourable for the Pacific Cable than the other, may I ask you why, in your opinion, the Eastern Extension Telegraph Company should prefer this to the other? They have the position equally before them as we have. They must know all the circumstances as well as we do, and no doubt they have considered everything that you have put before us. Can you give any idea, then, why they should prefer that to the other proposal?
Sir SPENCER WALPOLE: First of all I think it is easier probably for a Chairman of a Company to go up to his shareholders and say he has surrendered 150,000 words instead of 300,000 words. But in the next place I think it is possible, though I do not know it, that they may feel that the time is approaching when they want another repairing ship, and that therefore by using our ship they will, to a certain extent, help themselves, while they will be able to do our repairs. They may want half a ship more, and will be glad to get half a ship more, although they may not see their way at present time to get a whole ship.
Sir SANDFORD FLEMING: To my mind there is a vast difference between a friendly understanding or stipulation respecting the division of the traffic, and a pooling arrangement. And I shall enter into this more fully when we come to the draft report. What is a pooling arrangement? Of course it must depend upon the terms of the Agreement between the parties. But is not a pooling arrangement in reality a partnership arrangement, and are we quite sure that a partnership in this I am afraid, particular instance is desirable in the public interests? indeed I am quite sure, it is not. I believe I am not far wrong when I say that it has long been the design of the Companies to gain control of the Pacific Cable. What did Sir William Mulock point out the other day? He referred to elements at work to destroy the Pacific Cable Scheme, and the great_Imperial pur- poses which moved the six Governments to have it established. I am satisfied a pooing arrangement would prove the narrow end of the wedge, which the Company in its own good time would most certainly drive home. It would end, I fear, in I am speak- control passing from Queen Anne's Chambers to Electra House.
ing very plainly, but feel forced to do it, and I feel it a duty to appeal in the strongest manner that I can against a step at this turning point, which would I trust the Conference will not enter result in disaster to the public interests. into or authorise the Board to enter into any pooling arrangement.
The CHAIRMAN: Sir William, would you give us your views?
Sir WILLIAM MULOCK: Well, the question presented by Lord Strathcona had already occurred to me, and it was this. Sir Spencer Walpole explained that a division of traffic must be limited to a division of the unrouted business, and I understood on this point, I may be in error, that Sir Wolfe Barry did not favourably entertain the proposition for a division of traffic. Is that correct?
Sir SPENCER WALPOLE: Yes, that is so; he said it was a new proposal. He did not understand thoroughly, and he did not see what advantage there was in dividing traffic over dividing the pounds, shillings, and pence which that traffic represented.
Sir SANDFORD FLEMING: He said so, and you also with him argued with me, that I see a wide difference between pooling and division of traffic were precisely the same. the two myself.