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themselves for this object. On the one side the western route from Lisbon to Madeira and Cape de Verds, thence touching at the various West Africap Settlements, besides showing a greater distance than a line on the eastern coast of Africa, has the great disadvantage of being throughout a single line of cable, and subjecting the through traffic from the Cape to India, Australia, and other castern countries to a most circuitous route vid Lisbon and a prohibitive tariff.

Moreover, this line would grant telegraphic communication to the Cape Colonies only, leaving out the important English Colony of Mauritius. It is, therefore, obviously not the interest of the Colonies or this country to adopt that route.

On the eastern side the choice would lie between a direct line from Aden (touching at Seychelles) to Mauritius and Natal, and one from Aden to Zanzibar or one of the Comoro Islands in Mozambique Channel, thence to Natal, with a branch line from Zanzibar or the Cormoro Islands to Mauritius. The line,to Zanzibar and Natal is the one recommended, although the longest, because it would be impossible during the greater portion of the year to repair the long section of the direct cable from Mauritius to Natal on account of the prevailing winds, whilst along the other route a cable could be maintained with comparative case.

At Aden the line would be taken to the station of the Eastern Telegraph Company. This arrangement would save the cost of an independent station, and would secure to the new lines the advantage of being worked as part of the great system of cables to England and America on the one side, and India, China, Australia, New Zealand, &c., on the other.

The duplication of the Eastern Telegraph Company's lines between Suez and Bombay is now completed. This Company's system comprises a length of 15,000 miles of submarine telegraph cables, consisting of two lines from India to Egypt, and triplicate lines thence to England. From India to China, Australia, New Zealand, Tasmania, &c., the cables, 7,370 miles in length, are in the hands of the Eastern Extension Telegraph Company, which for all practical purposes is part of the same system.

The experience which the Eastern Telegraph Company has gained, transmitting as it does every kind of traffic-commercial, colonial, polítical, and local-enables it to form a trustworthy estimate of the traffic which may be looked for from the projected lines.

The estimate is as follows :----

Place.

Messages

per Diem.

Tariff, Aden.

Amount.

Mauritius -

6

48. per word

Natal

3

5. per word.

Diamond Fields

*

Elizabeth Town Cape

6

23

Or, in round figures, 40,0007, per annum.

១៩នននន | តួ

20

30

109

It is evident that this traffic, although it will doubtless grow with time, is insufficient to give any adequate dividend upon the amount of capital required, and that therefore the line must in the first instance be established otherwise than by private enterprise.

The length of the recommended line is 5,520 miles of cable, which at 2507. per mile- being the price at which the Telegraph Construction and Maintenance Company would undertake the manufacture and laying-shows the amount of capital required to be about 1,380,0001.

The Eastern Telegraph Company understand from the Telegraph Construction and Maintenance Company, whose agents have been carrying on negotiations with the Colonies for several years past, that the Colonies are disposed to grant the following subsidies :-

Cape Colonies Natal

Mauritius

Making a total of

-

£15,000

5,000

•

7,500

•

£27,500 per annum.

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It is suggested that Her Majesty's Government should enter into such negotiations with the Colonies as to enable the capital to be raised under an Imperial guarantee.

In this case the annual expense on account of interest would not exceed 34 per cent., or 44,850 The further charges would be working expenses, viz. :—

Four stations at 2,5007, each Sundries

£10,000

-

Expense of Repairing Ship (to be stationed at Mauritius)

-

1,000 10,000

£21,000

Or a total of €5,8507.

This amount would be still further increased in the case of an independent company

by salaries to directors, officials, and expense of offices in London.

On the revenue side of the account would appear the—,

Estimated traffic, say

Subsidies from the Colonies

£40,000

27,500

£67,500

leaving only a surplus of 1,650l. to be applied towards repairs and the formation of a reserve fund,

It appears, therefore, to the Eastern Telegraph Company that further assistance, beyond that of enabling the capital to be raised on the cheapest possible terms, is required to make the undertaking one capable of immediate execution instead of postponing its realisation to a far distant future.

Under the circumstances the Company feels disposed to co-operate with Her Majesty's Government and the Colonies, and to contribute what will practically amount to an annual subsidy of 18,7507. in the following manner :—

1. The Eastern Telegraph Company will undertake the entire management and working of the new lines, for a fixed charge of 7,0007, per annum, thereby effecting a saving of 3,0007. a year.

2. It will grant to the new lines a return of one moiety of the traffic which will accrue to the Eastern Telegraph Company from messages derived from the new system, until such time as the net income of the new lines will in itself be sufficient to allow of an amount equal to 3 per cent. on the capital being set aside for reserve. According to the present tariffs, the Eastern Company would receive in respect of 23 messages per day, a sum of 31,500l. per annum, and the amount to be credited to the new lines would, therefore, amount to 15,7501. From these sources the surplus of income would be made up to 23,000l. from the commencement, and there can be no doubt that the traffic would steadily increase, and add substantially from year to year to the amount applicable to a sinking fund.

It may be mentioned that the Eastern Telegraph Company's cable between Aden and Bombay has never been broken since it was submerged in 1870, and the cable in the Red Sea between Aden and Suez has not cost more than 15,0001. for repairs during the seven years it has been working. It is, therefore, only reasonable to assume that the cables laid along the safe line projected will not entail any heavy expenditure for repairs, and that an adequate sinking fund would gradually accumulate.

The Eastern Telegraph Company begs to recommend these suggestions to the consideration of Her Majesty's Government, and trusts that it may be the means of conferring on the Colonies in Southern Africa the great boon of telegraphic communication with the rest of the world.

It will be seen that the Eastern Company is prepared to contribute largely towards the revenue of the new lines, and is in a position to give aid and facilities to an extent which no other combination can possibly offer.

The responsibilities of the Imperial Government are by this plan reduced to such a minimum that it may be said this great and beneficial undertaking becomes comparatively easy of execution, and it is therefore to be hoped that it will not be long before this last important link in the telegraphic chain which binds the Colonies to the mother country will be completed.

B 3

PUBLIC RECORD OFFICE

Reference :-

CO. 885

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

PUBLIC RECORD OFFICE, LONDON

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