CO885-(15-16) — Page 378

PUBLIC RECORD OFFICE

61

Reference :-

C.O.8

.885

16 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

| COPYRIGHT PHOTOGRAPH-NOT TO

2

in support of such a construction. An argument on the other side might be raised from the fact that Section 22, which comprises the grant of land in connection with the trans-Atlantic cable, is referred to in the pre-emption clause.

The question, however, does not arise in this simple form.

The Newfoundland Company, after having put up an inland system of telegraphs in Newfoundland, was unable to obtain the necessary capital to undertake the enter- prise of connecting Newfoundland and Europe. Ševeral of the leading members of the Company then joined with English engineers and capitalists to start an English Company, afterwards known as tire Atlantic Telegraph Company, to work in con- junction with the Newfoundland Company, and to have the advantage of the ex- clusive rights enjoyed by that Company. Thereupon, in 1857, a further Act of the Colonial Legislature was passed (20 Vic., cap. 1), by which the Newfoundland Company was authorised to give its consent that the Atlantic Telegraph Company of England should extend its submarine cable to and touch and enter upon New- foundland upon conditions to be arranged between the two Companies. The cable of the Atlantic Company, when landed on Newfoundland, was to be deemed in law to have been made in compliance with the provisions of the Act of 1854, and to be an extension of the telegraph line of the Newfoundland Company to Europe as if it had been constructed by the Newfoundland Company, and it was enacted that "all rights, privileges, benefits and advantages which the Newfoundland Com- pany would have had if they had established, constructed and worked a line of tele- graph between Newfoundland and Ireland" were to be enjoyed by the Newfoundland Company upon the laying down of the submarine cable of the Atlantic Company between Newfoundland and Ireland. The Act also authorised a consolidation of the Newfoundland Company with the Atlantic Company, the consolidated Company to have all the rights, powers and privileges which the Newfoundland Company then bad, together with such other powers, rights and privileges as might be given to it by any Act of the Imperial Parliament (Section 2). Any Company incorporated by Imperial Act of Parliament under the name of the Atlantic Telegraph Company, Limited, or any other analogous Company, was to stand in the place of the Atlantic Telegraph Company, Limited, and the Colonial Act was to be deemed to apply to such Company (Section 3).

It was then provided (Section 4) that nothing in the Act contained should affect any lien, claim, right, title, interest or privilege secured to the Imperial Government or to the Governments of Newfoundland or of the other North American Colonies and of the United States, respectively, under the provisions of the Act of 1854; and such lien, claim, right, title, interest and privilege should exist and be in force with respect to any new lines or cables that might be established by the said Companies or either of them "in Newfoundland and between Newfoundland and the Continent of America."

From the provision just quoted it is obvious that the intention of the New- foundland Legislature was that the Newfoundland. Government should retain its right of pre-emption reserved by the Act of 1854, over the telegraphic lines con- structed by the Newfoundland Company in the island and between the island and the continent of America, whether those lines remained the property of the New- foundland Company or became the property of the Atlantic Company, or any analogous Company incorporated by English statute. But there is no evidence of On the any intention that the new cable to be laid by the Atlantic Company between England and Newfoundland should be subject to that right of pre-emption. contrary, the limitation of the rights of the Newfoundland Government to the tele- graphs in the island and between the island and America seems to indicate that it was not intended in 1857 to extend the right of pre-emption to the trans-Atlantic cable, whatever may have been the intention of the Act of 1854 in that respect.

A few months later the Atlantic Telegraph Company was incorporated by Imperial Act (20 and 21 Vic., c. CII.). The Act recites the original incorporation of the Company under the Joint Stock Companies Acts, dissolves that Company, It does not recite any specific Agreement with the authorised and incorporates a new one. Newfoundland Company, but by Section 49 the new Atlantic Company to make agreements with the Newfoundland Company and any other Company working telegraphs in or out of the United Kingdom, for working telegraphic lines and for the through transmission of messages. There is no reference in the Imperial Act to any right on the part of the Colonial Government of Newfoundland to acquire the property of the Atlantic Company. This Act must be taken as giving effect.

3

to Section 3 of the Colonial Act of the same year. Alternative procedure was con- templated by that Act, consolidation between the Newfoundland Company and the Atlantic Company, Limited (Section 2) on the one hand, and the incorporation by the Imperial Parliament of an English Company to take the place of the Atlantic Company, Limited (Section 3) on the other. The second course was adopted. No consolidation of the Newfoundland Company with the English Atlantic Telegraph Company took place.

In 1858 the first cable between Ireland and America was laid, but unfor- tunately a fault occurred within a few months, and communication became impossible. Great difficulty was experienced in raising capital to pursue the adventure, and it was not until 1865 that the Atlantic Company endeavoured to lay a new cable; a fracture occurred before the operations were completed, and communication was not even then established.

Owing to difficulties in the way of giving preferential rights to further capital which might be raised by the Atlantic Company, in 1866 a new Company, the Anglo- American, was formed for the purpose of laying a new cable and also of picking up and mending the cable of 1965.

The Agreement between the new and the old Companies defined the mode in which the joint enterprise was to be carried out, and gave the Atlantic Company the option, up to the 1st January, 1869, of entering into possession of the profits of the new Company on certain terms.

Upon the strength of this Agreement the new cable was laid and the cable of 1865 repaired, and in 1867 the Agreement was confirmed by Act of Parliament (see 30 Vic., c. XXVIII.).

In the same year, 1867, an Act of the Colony of Newfoundland was passed, giving further powers with respect to the raising of capital by the Newfoundland Company for the purpose of constructing land lines and cables to the continent of America. It is clear, therefore, that up to this date the Newfoundland Company still had a separate existence, and was engaged in developing communication be- tween Newfoundland and America, while the English Company was engaged in establishing communication between Newfoundland and Europe.

In 1870 a further' Act of the Imperial Parliament was passed (33 and 34 Vic., c. XCIX.) authorising the Atlantic Company and the Anglo-American Company to amalgamate. From a recital in this Act it appears that the Newfoundland Company was still in existence.

The Act provides that, on the registration of certain stock specified in the Act in the names of shareholders in the Atlantic Company, the entire undertaking of the Atlantic Company and "all their estate, rights, powers, interests, privileges and property of every description as existing on the 1st February, 1870," should, "sub- ject to the contracts, obligations, debts and liabilities of the Company," by virtue of the Act vest in the Anglo-American Company. And, further, that when the provisions of the Act had been complied with, the Atlantic Company should be dissolved.

Part V. of the Railway Clauses Act of 1863, relating to amalgamation, is applied to the amalgamation. But Section 39 of the applied enactment is expressly accepted. This is the section which applies the special Acts relating to the dis- solved Company to the amalgamated Company. The effect of its exception, there- 1ore, is that the special Acts of the Atlantic Company do not apply to the Anglo- American Company.

In 1873 the opinion of Sir Richard Baggallay and Mr. Henry James (now Lord James of Hereford) was taken by the Government of Newfoundland as to the power of the Government to purchase the telegraph lines and plant of the New York, Newfoundland, and London Telegraph Company. The opinion ran mainly upon the question whether the Company was entitled to any payment for goodwill or in respect of future earnings, or whether the Act of 1854 contemplated only a purchase of plant in situ. The Counsel consulted do not seem to have had before them the peculiar relations of the Anglo-American Company and the New York, Newfoundland, and London Company, and their opinion applies in terms only to purchase from the latter Company.

The attention of the same Counsel does, however, appear to have been subse- quently called to the effect upon the property of the Newfoundland Company, if that Company became amalgamated with the Anglo-American Company, and. relying upon the effect of Section 4 of the Act of 1857, they seem to have advised