CO885(3-4) — Page 368

PUBLIC RECORD OFFICE

Reference :-

TITLE CO. 885

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representatives of the Government and the Colonies. The directors to receive no remuneration, and the management to be practically the same und as economical as under

the first plan.

The Eastern Company, in connexion with the Telegraph Construction and Maintenance Company, would in such case be prepared to furnish a portion of the capital instead of granting rebates. The price of the cable, not being all paid for in cash, would be some- what higher, and the capital, inclusive of 50,0001. for the ship, would have to be put at 1,050,000l., of which 400,000l. to be in 6 per cent, preference shafes and the balance in ordinary shares.

The Eastern Company would take the whole of the preference shares, leaving only 650,000l. to be found between the Imperial Government and the Colonies.

As we understand that the Cupe would have subsidised a company with 15,000l. a year and Natal with 5,000/., a contribution of, say, 325,0007. by these Colonies, entailing at 4 per cent. an annual charge of only 13,000. instead of 20,0007., would probably be readily furnished, thus reducing the subscription of the Imperial Government to 325,000/

We have reason to believe that Portugal would pay a subsidy for the communication to Delagoa Bay and Mozambique, and a small subsidy may also be obtained from Zanzibar. These receipts would add to the revenue of the Company, and help towards providing an adequate sinking fund.

We think we have already shown that the Eastern Company has the will and the means to forward the realisation of this beneficial enterprise, and we trust the Government will co-operate in the same spirit.

Mr. ROUND'S MINUTE ON LETTER from EASTERN TELEGRAPH COMPANY, dated February 22, 1878.

MR. PENDER suggests two entirely different arrangements in this paper; the first differs materially from his last scheme, but only in consequence of the Mauritius connexion 'being altogether abandoned as part of the main scheme.

As to capital his printed memorandum of July last (No. 4) suggested a line of 5,520 miles at 2501. a mile, involving an outlay of 1,380,0007.

The present scheme is for 4,000 miles at 2251. (cash), 900,000, and 50,000 for a ship (which last is the same as Sir P. Julyan's estimate); if the branch from Zanzibar to Mauritius were subsequently added, the additional 1,620 miles, at the same rate, 225/., would cost 361,500, and the total would come to 1,314,5007.

As to income, the old scheme reckoned the receipts at 109/. a day, or 40,0007. a year, and the rebate to be allowed by the Eastern Company for these 23 messages a day thus brought to their system 15,7501.

In the present scheme the messages from Mauritius are reduced from six to four and the daily earnings to 937., which reduces the annual receipts to 33,000l. and the rebate to 13,000/

The working expenses Mr. Pender still puts at 7,000/., though the abandonment of the Mauritius connexion reduces the line by one station.

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i.e., the actual annual charge to the Imperial Government would not be great, but it would obviously run all the risks under this scheme; and against his figures it may be said-

4

(e.) It is not known for certain that the Cape and Natal would give 20,000l. ;

(a.) I doubt any messages whatever coming from Mauritius, unless there is a nearer connecting point than Zanzibar. It is true that Mauritius is geographically 1,000 miles nearer Zanzibar than it is Aden, but there is at present no steam communication between Mauritius and Zanzibar, and Zanzibar being some 1,800 miles further from Europe than Aden, to change the mail service would be to add 800 miles to the mail route; and

(b.) As receipts diminish of course rebate would diminish correspondingly, so that I should doubt the gross earnings of such a cable us is proposed being in excess of 40,000Z.

a year.

Mr. Pender's other scheme is quite new, but I think utterly untenable.

By forming a special company for the purpose to be worked as he proposes, the first cost would be increased by an additional 100,000. Of the 1,050,0007, 325,000/. is to be found by the Colonies, 325,000/. by the Imperial Government, 400,000l. by the Eastern Company in the shape of preference shares bearing 6 per cent. interest. No rebate is to be allowed.

it

The 33,000l. receipts would, I suppose, go, first, to working expenses 7,000l., second, a repairing ship 10,0007., thus 16,000l. a year would be left towards paying part of the preference interest, and no provision for a renewal fund would be made. The Eastern Company would take the full rates over its lines, say 26,000l., out of which I suppose would pay 8,000l. to make up the amount due to its preference shareholders, and it would pocket 18,000l., or 5,0007. more than under the other scheme, though it would run greater risk.

but The Colonies would have rather a smaller charge to bear, but the Imperial Government would subject itself to a certain loss.

If the Imperial Government joins in either scheme, I think care should be taken that Mauritius should not be left out in the cold.

The engineers who advised Sir P. Julyan distinctly recommended the Mozambique Channel in preference to the route direct from Natal to Mauritius as less tempestuous, and in this view Mr. Pender evidently agrees, but, even adopting the Mozambique Channel, Mr. Pender shows (Route No. 2 in Appendix to Memo. of July) that going to Zanzibar instead of Johanna adds 170 miles to the main line and 400 to the branch to Mauritius, and it is not clear that the Zanzibar traffic will pay for the extra 100,0001. thus added to the first cost.

Or, again, the line might be taken to the Seychelles. Sir P. Julyan put the second line recommended by this route at 1,356,0007.; this would serve Mauritius, better, and I should like to see an estimate of Mr. Pender's for such a line.

27/2/78.

F. R. R.

4PUBLIC RECORD OFFICE, LONDON

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

suppose This paper gives no estimate for the maintenance of repairing ship, but I annual charge on this account may be put, as before, at about 10,0001. a year, i.e., I assume that the Mauritius branch would affect but slightly this item.

the

Mr. Pender again puts the necessary sinking fund at 2 per cent., as Sir P. Julyan also per cent. did. I believe it is very doubtful whether a cable lasts 20 years, and even a 2 sinking fund would only replace the capital in 25 years.

As to the provision of the original capital, Mr. Pender's proposition simply comes to this, that the Imperial Government should find the money, (which he reckons would cost them 34 per cent.,) taking the Colonial contributions, and that the Eastern Company should merely work the line for a fixed sum, thus getting the additional traffic over the castern lines at half their usual rates, but otherwise running no risk whatever.

Assuming Mr. Pender's figures, the net result of the single direct line to the Cape would thus work out, so far as the Imperial Government are concerned,—

DR.

To interest on 950,0001. at 34

"

working expenses

repairing ship

2 per cent. renewal fand -

£

CR.

-

30,850

£

7,000

By receipts

10,000

29

rebate

19,000

11

Colonial contributions

33,000 (a) 13,000 (b) 20,000 (c)

£66,000

£66,850

No. 7.

DONALD CURRIE, Esq., C.M.G., to COLONIAL OFFICE. TELEGRAPHIC COMMUNICATION with SOUTH AFRICA, and the ADVANTAGE of an alternative ROUTE to the EAST and to AUSTRALIA.

*

SIR,

3 and 4 Fenchurch Street, London, March 6, 1878. REFERRING to my letter of the 8th ultimo, and to the interview which you were, pleased to favour me with a few days ago, I now beg leave to submit in writing the points which, in my opinion, should have the early and favourable consideration of Her Majesty's Government.

It is generally admitted that, in the Imperial interest as well as for the advantage of the Colonies, this country should possess an alternative telegraphic route to the East; on one side, however, it is argued that the present lines across the Continent of Europe and by way of the Mediterranean and Red Sea would, with the addition of other lines laid there, afford sufficient facilities and security, while on the other hand, it is maintained that, in the event of England being engaged in war, there would be, undoubtedly, risk of interruption in the communications through foreign territory, and especial risk in Asia, Egypt, and the Red Sea. This country is dependent upon the good-will of Russia and

• Not printed.

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