CO885-(16-18) — Page 252

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PUBLIC RECORD OFFICE

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Reference :-

C.O-885

17 PUBLIC RECORD OFFICE, LONDON

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Mr. PEMBER REEVES: Pardon me, there is the highly important question of their giving without qualification the same concessions which they give to the Eastern Extension Telegraph Company; they avoid answering that altogether.

The CHAIRMAN: That was not put as a question. It was assumed to be the case, and if they do not negative that assumption, that assumption stands.

Mr. PEMBER REEVES: I should not feel satisfied with not receiving any notice of that.

The CHAIRMAN: Well, Lord Jersey has not at present adopted the suggestion which is made by Mr. Deakin, namely, that he should consult the Eastern Extension Telegraph Company? Does the Conference think it desirable that he should or not?

LORD STRATHCONA: Is it at this stage of the proceedings for the Conference to consult or to have anything to say to the Eastern Extension Telegraph Company before you have made some arrangement with Australia?

Sir WILLIAM MULOCK: Well, Lord Jersey is representing Australia here, and the Australian Government has suggested to Lord Jersey that he should consult the Eastern Extension Telegraph Company. This was a cable from the Australian Government to Lord Jersey, their representative, not to us; and they suggest that to save time, instead of their negotiating, Lord Jersey should negotiate, doubtless for the information of this Conference. Is that the way you construe it?

The EARL OF JERSEY: Yes.

Sir SANDFORD FLEMING: If I may venture to say so, I am inclined to think that Mr. Warren, the Agent in Australia, in a very few hours after the contents of the message were made known to him, would telegraph to his own people, and if they have any proposition to make the Conference will give it respectful attention. There is nothing, however, to prevent Lord Jersey seeing them, but I doubt the propriety of the Conference going to them.

The CHAIRMAN: That is not proposed. But the question rather for us is whether we can make any progress before Lord Jersey goes to the Eastern Extension Telegraph Company, or whether we can get the Australian Government to move any further before that consultation takes place.

Sir WILLIAM MULOCK: We may have to adopt independent action, and carry on the business of the Pacific Cable as best we can. I would suggest, therefore, that we now consider the policy, the future policy, of the cable, and if during the progress of that subject the Eastern Extension Telegraph Company cares to open negotiations with us, I am sure we will be pleased to discuss the situation with them. I suppose there would be no objection whatever to Lord Jersey inform- ing the Eastern Extension Telegraph Company that we are now arranging for inde- pendent action, but that if they desire to approach us we will be pleased to hear them. He has the request of the Australian Government to interview them with reference to that Agreement, and it would very naturally follow in the course of his interview that the object of rescission would come up for discussion, and a very legitimate opportunity would arise for him to mention that we were arranging our plans for an active prosecution of the interests of the cable in Australia and elsewhere. Our first procedure I think must be on the assumption that we have to fight our own way.

Now I have gone through, but I will not say very intelligently, the papers furnished by Sir Spencer Walpole and Mr. Reynolds.* We asked Mr. Reynolds to furnish the Committee with an estimate of the cost of an active campaign, giving details of expenditure and making suggestions as to the way for carrying on the business, and also asking for an estimate of the financial results. I received on Saturday Mr. Reynolds' statement, and that statement indicates that his estimate is that a business campaign such as he would advise would involve an outlay per annum of £7,410. That was the estimate of 14th July, 1905. I also have before me an estimate of Mr. Reynolds of 27th March, 1905. The figures of the cost of such a campaign as set forth in this paper of March last are £5,430, a difference

Appendices 6 and 7.

47.

of nearly £2,000. Doubtless he can explain that difference. It is such a material difference that I would like to understand how it came that £5,400 was his judg- ment in March, and it has grown to be £7,400 in July. It shakes my confidence a little in the estimate.

Mr. REYNOLDS: Well there is one item of £1,000 which I put in for maps, book- A special lets, pocket books, &c., which is not included at all in the other estimate. distribution of maps, pamphlets, and other things forms a very large portion of the Company's propaganda. The New Zealand Government have urged that course upon us over and over again. Since I submitted the first estimate I have been going into the cost of this, and that accounts for more than half of the difference to which Sir William Mulock has called attention. And the rest of it is due to further com- I added £100 munications from Australia. I think I under-estimated the cost.

to the travelling charges, and increased the office expenses; for which I thought my estimate of £200 was too low. Similarly I have gone in for a larger amount of adver- tising. The Eastern Extension Telegraph Company advertise in many leading news- papers in Australasia; we do not advertise in a single one, and advertising had not I account for £1,000 in one item alone; the been adequately allowed for by me. other items are all charges I think I under-estimated in the first instance. We have had many letters from Australia and New Zealand on the subject of the cost of an active competition of this kind involving advertising in the newspapers and in other

ways.

Sir WILLIAM MULOCK: Then had you not all that information before you, when you prepared the estimate in March last?

Mr. REYNOLDS: No; but if you read my first memorandum, you will see that

I guarded myself very much, and gave £6,000 as my total estimate.

The CHAIRMAN: The point rather is what has induced you to consider that these maps are necessary when you did not consider them necessary in March.

Mr. REYNOLDS: Well, I drew up that memorandum for my Board only; it was an explanatory memorandum; I hoped it would be criticised by my Board; it was not put before this Conference, it was submitted to the Board with the object of criticism, and I discussed it with the Chairman, and the Chairman more than once said to me, "I think your estimate is rather low."

Sir SPENCER WALPOLE: May I point out, in corroboration of what the Manager has said, that his main figures are exactly identical in both estimates. What he has done in his later estimate is to add £1,000, rightly or wrongly, for the distri- bution of maps, pocket-books, &c., on the lines adopted by the Eastern Extension Telegraph Company. That is a policy which is strongly advocated by our New Zealand representative at the Board. He has raised his estimate for advertising and canvassing, and the distribution of pamphlets, which again is a policy strongly advocated, from I think £500 to £2,000, and I think also you will find that in the Sydney Office he has also raised his estimate by stationery, printing, uniform, I think, with those servants, and miscellaneous charges, from £250 to £500. exceptions, the whole estimates are substantially identical. Of course it is a mere matter of opinion whether the Board is wise in making this great distribution of maps, booklets and pocket-books, somewhat on the lines adopted by the Eastern Extension Telegraph Company, but certainly it was the opinion of my Board if we entered into competition at all, we ought to make that competition effective.

I demurred to his Mr. Reynolds is quite right in saying that

the ground that it would not provide original estimate in March, on us with the machinery which was adopted by the Eastern Extension Telegraph Company. I should like to corroborate Mr. Reynolds on that point. And I also wish to point out for what it is worth that those estimates referred only to com- petition in Melbourne and Sydney. They do not touch any question of the possible opening of offices elsewhere, say at Brisbane; we have only taken the minimum competition at Melbourne and Sydney. I have now had an opportunity of com- paring the two estimates for the two offices, and Sir William Mulock will find that, except for the last item, they are both of them practically identical and the same estimate; the last item in the Sydney Office has been increased by £250, the last item in the Melbourne Office has been increased by £120, and I must take full responsibility on myself of saying that I thought that Mr. Reynolds erred on the