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17 PUBLIC RECORD OFFICE, LONDON

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Mr. Henniker Heaton, M.P., Sir. W. H. Holland, M.P., and Sir James Woodhouse, M.P. The Chancellor was accompanied by Sir E. Hamilton, and representatives of the India Oflice and Post Office.

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Sir Edward Sassoon said that in addition to the members of Parliament there were representatives from the Chambers of Commerce of Newcastle, Wolverhampton, Leith, Sheffield, and Bradford. For the past two years they had been waiting for the results of a reduction in rates, while a material increase in cable mileage was taking place. The rate to India had been reduced from 48. to 28. G., and they wished for a further reduction to 28. a word, with a corresponding reduction in the Press rate. As to the West African rates, these had been reduced from the ridiculously high figures, but they were still too high, and they compared unfavourably with what our French competitors actually paid. Then the rates to China also required further reduction. Then as to the Pacific cable, that had reduced the rates to Asia from Australia from 48, 10d, to 2s. 6d. a word, and we had now direct communication with the continent of Africa through it. Owing to one of the Australasian Governments having taken action adversely to the Cable Company, further advantages had been retarded. The Cable Companies were exceedingly prosperous, and had suffered lately by the general reductions, and the benefits derived by the public from those reductions were immense.

Sir Alfred Jones, Sir John Leng, M.P., Sir William Holland, M.P., and Mr. Henniker Heaton, M.P., having supported the arguments for a reduction, the Chancellor of the Exchequer, in reply, said that Lord Balfour's committee, which sat upon this subject, laid down some general principles which he was certainly inclined to accept. Up to a certain point-that was to say, up to the point at which the line was full--- no doubt any increase in the traffic yielded an increased return the company; and, if by reducing the rates one could double the traffic, the transaction might be a very remunerative one not merely to the com- mercial world, but to the company itself, always provided that there was room for the cables laid for the increased traffic. But there came a point at which there was no longer room for any increased traffic on the cable, and then it was necessary to lay a new cable. The increased traffic might be a nuisance to the company; it was also an expenditure for many years before it made any return. As traffic grew and became sufficient to justify the laying of those new cables, they niust be laid, and would be laid. But it did not follow as a simple axiom that every increase of traffic meant an increase in profit to the owners of the cable, or was in itself an advantage to them. Lord Balfour's committee pointed out that mere mileage was not a test of what was a fair charge. Some lines of cable or some land lines were peculiarly costly to maintain. The West African rates, at the time when Lord Balfour's committee first reported, were rates to which they called special attention. They said on the general question with reference to the concession which the Government gave to Cable Companies for landing rights in this country, that "in our opinion the real function of these concessions is to furnish opportunities of correcting any marked unreasonableness ou behalf of the companies." And that was an expression of opinion with which he desired to say that he was in entire agreement; and they recom- mended that those opportunities should recur with sufficient frequency, and that a moderate term should accordingly be fixed for the currency of the concessions, and that the rights should be reviewed, and the conditions which the Government imposed should be revised if necessary. Then they said all the special rates to the Gold Coast and Nigeria, reduced in May last (that was May 1901), should be reduced still further, and when the Eastern Telegraph Company applied for a renewal of these landing rights in 1904, it might be reasonably asked to obtain some concession in that direction from the African Direct and the West African Companies which were associated with it. Now on May 1, 1901, a very considerable reduction was made in the rates to all British possessions in West Africa. For instance, the rate to Bathurst, which had been 48. 7d., was brought down to 3s. 6d., and the rate to Accra from 6s. 3d. to 58. 7d. The rates to Nigeria were all of them reduced, and so was the rate from Sierra Leone. Since that time a still further reduction had been made in the case of every one of those rates with the single exception of Bathurst, which remained at 38. 6d., to which it was

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reduced on May 1. He confessed he could not see that those rates compared unfairly, for instance, with the rates of the French possessions. Take the rates to Nigeria, which were now to Bonny, Brass, and Lagos 58., and other places 5s. 2d. He compared that rate with the German Cameroons on the other side of Nigeria.

Sir Edward Sassoon: Compare it with Senegal.

The Chancellor of the Exchequer The rate to Senegal and the rate to the French Sudan-which are mainly strategical and mainly land lines- was la. 5d., a very low rate indeed. But that was not typical or characteristic of the French rates. If they looked merely at Senegal, then they made a very unfair comparison between the French rates and our own. Bathurst, again, was close to the French possessions. Our rate there was 38. 6d., and the rate to French Guinea was 38. 6d. He did not think that a general comparison of West African rates with the British West African possessious would bear out the allegation that French commerce or French industry was much more favourably treated than our own. With regard to Indian rates, he rather questioned the figures which Sir Edward Sassoon gave when he spoke of the increase in the traffic. He thought that the figures which he quoted from Appendix C. included traffic which was other traffic than that between India and Europe, and traffic, therefore, which did not come under the receipts of the joint purse. The figures were, however, though rather smaller than those which he quoted, sufficiently satisfactory and interesting. The rate per word between Europe and India was reduced from 48. to 2s. 6d. from March 1, 1902. In the official year 1901-02, during which for 11 months the Is. rate was in force, the traffic amounted in round thousands to 2,500,000 words. Its value to the joint purse was nearly 385,000l. During 1902-03 the number of words was 3,153,000, and the value a little over 310,0001. That was to say, that the traffic increased over that of the previous year by 2044 per cent., the figure given by Sir Edward. In 1903-04 the number of words rose to 3,494,000, with a value of 346,000.-nearly 317,000l.-the traffic having increased over 1901-02 by 40 16 per cent. The figures of 1904-05 were not complete, but it was estimated that the number of words would be a little under 3,900,000, and the value about 384,000l. That meant an increase of trallic over 1901-02 of some 55 per cent., but to earn the same revenue as in 1901-02 the telegraph lines had to carry nearly a million and a half words more. Those figures, although not quite as high as those quoted, were, he thought, eminently satisfactory. He must put in a caveat. He did not think that the great increase in traffic was wholly due to the reduction in rates. He thought circumstances in the Far East, in India itself and in the Far East, had led to an expansion of traffic which would have occurred whether the rate had been maintained or not, and upon the continuance of which perhaps we could hardly count. At the same time, he was very glad to be able to inform the deputation that a meeting of the Cis-Indian Joint Purse Committee was held on the 30th of last month. It was there shown that the average yearly value to the joint purse from Indian rates for the three years ending June 30, 1905, was estimated to be just over 352,000. Although this estimate left a certain amount of doubt as to whether the average standard revenue of 352,000l. would be made in the time, it was there resolved that the tariff for ordinary messages between Europe and India should be reduced to 2s. a word as soon as such tariff should be put into operation, but, at any rate, not later than October 1, 1905. In pursuance, therefore, of the arrangement of 1902, by which in the first instance the rate was reduced from 4s. to 28. Gd., a further reduction would in the course of the next few months be made from 2s. 6d. to 2s.; and though that would involve, no doubt, a fresh payment on behalf of the Indian Government in pursuance of their guarantee, he hoped and believed that the response of the traffic to the reduction might be sufficient in a short time to relieve them of any additional burden. That was the announcement of the decision of the Joint Purse Committee, which he knew would be acceptable to them and all trading to those parts. (Cheers.)

Sir Edward Sassoon: Is that irrespective of the traffic between this and October?

The Chancellor of the Exchequer : Yes.

Sir Edward Sassoon: Is that an absolute decision?