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believing that the time would shortly come when the undertaking would be effected by private enterprise, without pecuniary assistance from Government.

5. Last year the subject was again mooted by Mr. Pender who, on behalf of the Eastern Telegraph Company and the Telegraph Construction Company, proposed a line connecting Natal with Aden, with a branch to Mauritius, and within the last few weeks Mr. Donald Currie has addressed a letter to me urging the construction of a line from the Cape Colony to the Cape Verde Islands (which are already in communication with Europe) either via St. Helena and Ascension, or vid the West Coast of Africa. Mr. Currie does not give any definite financial shape to his proposals, but strongly advocates the western route, arguing that it would form a necessary link in any future alternative line of communica tion with the Australian Colonies and the East, and that it would be less exposed to the

danger of being interrupted by an enemy in case of war. Mr. Pender has also quite recently brought forward his scheme in a modified form.

6. The principal features of his present proposal are a direct submarine line from Aden to Zanzibar, Mozambique, and Natal, thence to be continued by land lines to Cape Town, a route about 3,500 miles in length, and requiring 4,000 miles of cable; the branch from Zanzibar to Mauritius, involving an additional 1,600 miles, being left for separate consideration. Mr. Pender states that the lowest price for cash at which the Telegraph Construction and Maintenance Company would make and lay the line within nine months of the date of order would be 900,000/. (about 2257. a mile), and that the cost of a repairing ship and equipment would add 50,000. to the necessary first outlay. This sum of 950,000l. he proposes should be raised by Government, probably involving an annual charge of 33,000l. for interest. He offers that the Eastern Company, who have a station at Aden, should work the line for 7,000l. a year, and allow a rebate of 15 per cent. from their ordinary tariff for all messages sent over their system. The value of this rebate he estimates at 13,000l. a year, and he calculates the receipts of the new main line at 33,000/. at a tariff of 58. a word from South Africa to Aden. To the cost of construction and the working expenses must be added the cost of maintenance of the repairing ship, &c., estimated by Mr. Pender at 10,000l. a year, and the formation of a sinking fund for the renewal of the cable, which he thinks should be at least 2 per cent., i.e., 19,000l. a year, calculating the life of a cable at 20 years.

7. Assuming these figures to be accurate, the relation between expenses and receipts would be as follows:-

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instance, they would incline to raising a loan for the construction of a telegraph in the event of Her Majesty's Government being prepared to cover such a loan with their guarantee; or whether, if it should be decided to provide the requisite capital in another way, they would be prepared to contribute an annual subsidy, to what extent, and on what conditions. In short, I shall be glad, before making any formal proposal as to the carrying out of the undertaking, to know the views of the various Colonial Governments concerned.

10. I have refrained from expressing any definite opinion as to the respective merits of the different schemes proposed. This must be a matter for further inquiry with the assistance of professional advice; but the difficulty and expense of laying and repairing either a deep-sea line via St. Helena and Ascension, or a series of land or iu-shore lines on the West African coast will, I fear, constitute a serious objection to the Atlantic route.

I shall, however, be glad to consider any observations or suggestions which you may send to me on this as on other points of the question.

I have, &c.

To the Governors of

the Cape, Natal, and Mauritius.

て

(Signed) M. E. HICKS BEACH.

Dr.

Interest on cost of construction

Working expenses

Repairing ship

Renewal fund

Receipts Rebate

£33,000

7,000

10,000

19,000

£69,000

Contra.

£33,000

13,000

£46,000

To Cap

(*) Natal.

(3) To Mauri.

tiks.

and

leaving a deficit of 23,000l. to be provided by the Governments concerned. The receipts might no doubt be added to by making stations at Delagoa Bay or Mozambique, have just received a letter from Mr. Pender in which he states that the Portuguese Government have offered a subsidy of 2,5001. a year if the cable be landed at Delagoa Bay, and 5,000 a year if it be landed also at Mozambique. On the other hand, the estimates of receipts may of course not be justified by results.

▼

8. In any case, and whatever route or scheme be finally adopted, it is evident that the enterprise could not at present be remunerative without material assistance from the several Governments concerned, and I now desire to inform you that, looking to the increasing importance of the question and the improbability of its being dealt with by inde- pendent enterprise, Her Majesty's Government are prepared to co-operate with the Colonial Governments in an endeavour to establish telegraphic communication with South Africa in such a way as, after consideration and discussion, may be thought most desirable.

9. I have therefore the honour to request that you will bring the matter with as little delay as possible before (1) your ministers; (2) the Legislative Council; (3) the Council of Government, with a view of ascertaining in what way and to what extent they would be prepared to co-operate with Her Majesty's Government; whether, for

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