CO885-(16-18) — Page 253

PUBLIC RECORD OFFICE

Reference :-

C.O.88

17 PUBLIC RECORD OFFICE, LONDON

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

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side of not providing enough for miscellaneous charges, which my experience tells me are always larger than people expect in the first instance.

The CHAIRMAN: Can we begin upon that £7,410 as a basis for discussion?

Sir WILLIAM MULOCK: Have we any evidence of opinions from persons whose views are worth having, that would be useful for us at this stage? I have received some correspondence that may or may not be helpful. I rather hesitate to burden the Conference with it, but if we are going to begin a campaign of this kind, it might be helpful to hear the views of some. I have some letters from Mr. D. H. Ross, who is the Canadian representative in Australia; one of our Canadian com- mercial agents; I have also a communication from Mr. Otto Klotz, who is a very able officer of the Canadian Government; he wrote a letter to his Minister, the Hon. Mr. Sifton, part of which has a bearing upon the Pacific Cable, and it has been transmitted to me. I also have and probably we have all received the same copies of opinions of Senator Stainforth Smith as to the best method for prosecuting our business in that part of the world, and I also have an analysis made by the Secretary of the Post Office Department, Ottawa, of the progress of the Pacific Cable since its inception. All these communications have been a little helpful to me, and if they would be any advantage to the Conference, I should be very pleased to place them at the disposal of the Conference for their study.

we

The CHAIRMAN: I throw out as a matter of discussion before we go into, these details which Sir William has adumbrated, whether we should not first endeavour to settle whether we

are going to fight and prepare any elaborate are contemplating a pooling machinery for that purpose, or whether arrangement. If we contemplate a pooling arrangement, as I think a good many of us do, it may be necessary, should we not be able to carry that through, that experts should go into the question of the machinery precisely necessary, but I confess I do not for myself think that this Conference is very much adapted for discussing the precise details of the competition. At any rate, as a preliminary to that, can we make up our minds whether we intend to fight, or whether we intend either to pool.

Sir

Sir WILLIAM MULOCK: We have not any overtures from the Eastern Extension Telegraph Company, which has been very aggressive against us. Spencer Walpole, in the communication which he sent to me on Saturday, which was sent to all the members I suppose, concludes with these words: "I have reason for believing the Eastern Extension Telegraph Company is anxious to arrive at an agreement." I do not know whether those reasons are such that he would be at liberty to give them to the Board, and that they would be in some way introductory to negotiations.

Sir SPENCER WALPOLE: I hope Sir William Mulock will accept from me without going into details my assurance that I have good reason for making that statement. The intimation was made to me on what I thought was good authority that there was a hope on the part of the Eastern that our deliberations would come to some sort of peaceable agreement. When the intimation was made to me I simply said I had I added that the paragraph which many no authority to enter into the matter. members of the Conference might have read in "The Standard," so far as I knew, was absolutely unauthorised.

Sir WILLIAM MULOCK: What paragraph?

Sir SPENCER WALPOLE: The paragraph in "The Standard" respecting our first meeting, stating that we had decided on a pooling arrangement.

Sir WILLIAM MULOCK: I did not see that.

Sir SPENCER WALPOLE: And the gentleman who spoke to me evidently had that paragraph in his mind, and he was asking whether there was anything in it, and I said, "No, to the best of my knowledge it was absolutely unauthorised." But that intimation certainly did lead me to believe that an overture would be welcomed by our rivals, and I thought myself justified in adding that paragraph to my memorandum.

The CHAIRMAN: Well, it would take us some considerable distance in our dis- cussion if we could agree on the main outlines of a pooling arrangement; if a

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pooling arrangement be ultimately possible, reserving of course always the full right to fight if the pooling arrangement cannot be achieved on the terms on which we are willing to grant it. The main outlines of a pooling arrangement I think Sir Spencer Walpole has indicated in his memorandum;* we might take that as a basis

of discussion.

Sir SANDFORD FLEMING: On that point, Sir, I would like in three or four words to express my views. The Federal Government of Australia has repeatedly given assurances that it is ready to give the Cable Board the saine advantages as it has granted the Company. It may therefore, I think, be assumed that the special wires through Australia to Sydney and Melbourne will be granted the Cable Board. On that assumption I now refer to the information given in the paper

which 14th July, in

there is some furnished by the Board, dated valuable information entirely new to me, because I had not the advan- tage of seeing the estimate dated March that Sir William Mulock has referred to. But this estimate, to my mind, is not unsatisfactory as to the money which will probably be required to carry out an effective campaign. I hope the money provided will be ample for the purpose. That being the case, I think, Sir, we ought to proceed in the first place to consider the matter that you mentioned a moment ago; an In the first arrangement for the division of the traffic might follow a little later. place I think it would be wise to resolve to proceed with the utmost energy to The estimates dated procure for the Pacific Cable its due share of the traffic.

14th July, furnished by the Board, go to show that the revenue of the Pacific Cable may be increased thereby from £25,000 to £30,000 per annum, the estimate of £30,000 being based on the estimates of the Company's officers themselves on some past occasion. If that be now resolved on, in the event of the Company proposing an arrangement by which the annual traffic would be equally divided between the two routes, and the large cost of a vigorous competition on both sides saved, the Conference would then recommend this as a proper solution of the difficulty.

Sir WILLIAM MULOCK: Do you mean all the traffic between Australia and Europe?

Sir SANDFORD FLEMING: Yes, all traffic equally divided.

Sir WILLIAM MULOCK: Canadian, United States, European.

Sir SANDFORD FLEMING: Yes, not for ever, but for a period of years; I thought that a period of five years would be satisfactory to all; it could be renewed after five years.

Sir WILLIAM MULOCK: And how would that turn out financially if we each carried half? Have you gone into the figures at all?

Sir SANDFORD FLEMING : I am afraid I have not the figures with me.

Sir WILLIAM MULOCK: And how would it turn out if the bulk of the traffic had to be carried by the Pacific Cable, and we had to pay 1s. 6d. per word out of our share from the pool?

Sir SANDFORD FLEMING: Well, I never considered the probability of that. Sir WILLIAM MULOCK: No, but might just happen under that arrangement that the bulk of the traffic for any reason, legitimate or otherwise, had to be carried by the Pacific Cable.

If for every word we pool the receipts of 3s., and then we divide equally what is in the pool, that would give us 1s. 6d. each. But if we had to pay 1s. 6d. to carry that word, we would not get a halfpenny; is not that correct?

Sir SPENCER WALPOLE: It appears to me if any pooling arrangement is arrived at it must be arrived at in concert with the Canadian Pacific Railway and the Atlantic Companies, and unless they will come into the same arrangement that we do, and carry the whole of the traffic for what would be their proportionate share of the pool, the thing would be hopeless to compass.

way.

Sir WILLIAM MULOCK: I should think you could urge the same thing in another

See Appendix No. 7.

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