285
PUBLIC RECORD OFFICE
Reference :-
TEPHEN C.O.885
7
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
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In the absence of such an agreement, we consider that a duplicate cable might become necessary in the near future, and that the cost of laying and maintaining it would forbid the hope of making the cable self-supporting for many years to come.
II. The rates to be charged for messages and the revenue which the cable expected to earn.
may
be
The previous Committee reckoned on an increase of 10 per cent. of the telegraphic traffic yearly. The number of words transmitted in 1895 was 1,860,423. The statement of subsequent traffic with which the Committee has been supplied shows that this estimate of the yearly increase has so far not been fulfilled, and that no steady progress has been made in the intervening period. The number of words transmitted in the six months from 1st April-30th September, 1899. was 1,088,508, or at the rate of 2,177,016 in one year. We do not think that we are warranted in reckoning on an increase of 10 per cent. on this figure during the next few years, but there were severe droughts in Australia in 1898 and 1899 which affected the wool and other export industries, and no doubt contracted the telegraphic traffic, and previous experience and the growth of Australasia support the belief that an expansion of the traffic will be shown by the records of a number of years. Moreover a reduction of the rate charged and the addition of an American traffic would no doubt materially swell the returns. Although therefore the traffic is from time to time disturbed by circumstances affecting commerce, and does not show continuous and consistent progress, we think that it would be reasonable to reckon on the traffic having attained the number of 2,300,000 words by the end of 1901, being an annual increase of about 3 per cent, to the time when the cable ought to be laid, and that this improvement in the traffic between Australia and Europe would, on an average of several years, be maintained, if not exceeded.
We propose therefore to take this number of 2,300,000 words as the basis of our calculation of the minimum traffic at the opening of the cable at the beginning of 1902. We take this date as we are alvised that the whole valgle could be manufactured and laid in eighteen months.
The previous Committee was of opinion that between a third and a half of the total traffic would go to the Pacific line. Five-rwelfths of the above number would give in round figures 960,000 words,
•
The opinion given by the witnesses to that Committee on this point varied by assigning from one-third to one-half to the Pacific line. If the two services were nearly equal in point of accuracy and speel, and the charge were the same, there would be a tendency towards equilibrium between them; for if one line had at any time more work than the other it would tend to be slower, especially as speed depends largely on the endurance of the operators, and customers would then be attracted to the other The Eastern sections show a higher electrical speed than the Pacific sections would possess, but against this may be set the fact that there are more stations on the former route than on the latter and the greater the number of stations the greater chances of delays and mistakes. While, therefore, any estimate must be more or less speculative, we see no reason to doubt that the Pacific cable would obtain the above, mentioned proportion, ¿e. five-twelfths of the whole traffic.
line.
:
We have thought it right before coming to a conclusion on this point to examine carefully the evidence given by the witnesses representing the Eastern Telegraph Companies on the question. These witnesses, whose evidence was intended to show that the Pacific cable would not be remunerative, and who would not, therefore, be likely to overstate the traffic which it would obtain, gave a computation based on an estimate of what traffic the cable would divert from their own in the case of euch Australasian colony. The estimate of such diverted traffic was as follows:
Western Australia
South Australia
Victoria
Tasmania
New Zealand
New South Wales
!!
Queensland
•
none
none
one-half one-half
three-quarters
homeward three-quarters
outward ne-half
homeward
all
all
outward three-quarters
5
We have applied this mode of calculation to the actual traffics of the colonies in 1898, taking the figures from a report by the Postmaster-General of South Australia, and the following table shows the proportion of the traffic in 1898 (1,983,820 words) which, on the above basis, would have been seinred by the Pacific cable.
Victoria Tasmania
New Zealand
New South Wales. Queensland...
249.517
5,859
166,131
303,912
89,889
815,308
On the assumption previously arrived at of a traffic of 2,300,000 words in 1902, this figure would be increased to about 925,000,
We may add that it was the Colonies of Western and South Australia, with Which, according to the representatives of the Eastern Companies, the Pacific Cable would have nothing to do, that have showed a great falling off in traffic.
This appears. from the following figures :-
South Australia
West Australia
Total Traffle ...
1896.
1897.
1898.
Words.
Words.
Words.
307,487
306,232
299,319
672,810
511,920
376,091
2,324,984
2,122,216
1,983,820
diminution from
This explains the fact that, while the whole traffic for 1898 shows a that of 1897, that for the Easteric Colonies shows an actual increase, and it is mainly with these Colonies that the Pacific project is concerned commercially,
In view of these considerations we think that under existing conditions the above- mentioned figure of 960,000 words may be accepted as the minimum traffic between Europe and Australasia by the Pacific route on the opening of the line.
The present tariff to Adelaide is 4s. 9d, a word, and by the Pacific route our of this sum 18. 67, would, under present arrangements, have to be paid for the Atlantic and American transit, leaving 3s, 3d, to the Pacific Cable. This would give a revenne from 960,000 words of £156,000. It is, however, of the essence of the case that some reduction of the rate is inevitable, and the previous Committee contemplated a reduction. to 2s. For the Pacific transit. As to the rate between this country and Vancouver, we are informed that the Commercial Cable Company and the Canadian Pacific Railway Company would agree to transmit at the rate of Is. a word. The lines of the former Company are landed at both ends on British territory, and the Canadian Pacific Railway Company could provide for forwarding telegrams entirely over British territory.
This route would therefore be an “All-British route, and would accordingly seem to satisfy the first alternative given in the third point referred to us. If however. it was meant in that reference to exelude cables owned and worked by a foreign company, we should be driven under the existing arrangements to use a combination of a British trans-Atlantic Cable Company and a land company, which, though American, works entirely through British territory, Assuming, however, that the Pacific cable charged 2s. a word, its revene would be £96,000; and the through rate, exclusive of any terminal or transit chargésą in* Australia, would be 3s. 6d. or 3s., according to whether the other charge was Is. 6d, or 13. ·
On these calculations, therefore, the cable would wake a small profit at present rates, and a loss of £54,000 at a 28. rate; while if the through rutes were 3s. Gd. and the Atlantic-American charges were Us.. leaving 2s. tid. to the cable, the revenue would be £120,000 and the deficit £30,000.
It may be added that the words above estimated are the paying words, exclusive of the "dead" traffic required for working expenses. But they include Government and press messages, which must be carried at reduced rates, and which appear to be usually