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PUBLIC RECORD OFFICE

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Reference :-

C.O. 885

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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO'

PUBLIC RECORD OFFICE, LONDON

12 November 1896.]

Mr. Gillies-continued.

Mr. FLEMING, C.M.G., C.E.

is only one route that can be selected just now. I am under the impression that before many years- probably before a second cable is required -a better and more friendly feeling will have been established between ourselves and the United States, so that the second cable could be I feel very certain laid, touching at Honolulu.

of that. What I mean is, when it becomes necessary to lay a second cable it will go that way, and it will become largely the commercial cable.

148. But it is your opinion at present, as far as this proposal about a Pacific cable goes, that the route that has been suggested latterly is really the only route that is practicable at present ?-There is only one route open for selection.

one from Vancouver 149. That is the Fanning Island, and then to Fiji, and from Fiji to Norfolk Island, and from there one line to New Zealand, and the other to not far from Brisbane --To the larger island.

Sir Saul Samuel.

to

150. But you have seen the route proposed by the Conference in Sydney?—I have.

151. I wish to adopt that.-It is precisely the route referred to here, and known as Number; the Fanning Island route, as nearly as possible. There may be a few miles difference in the exact landing epot indicated on the Aus- tralian shore; that is all.

152. You concur in what they propose?- There is no other; I cannot help concurring.

153. You concur in the line that they propose in the colonies; the one you have just men- tioned ?—Yes, speaking generally, it is the only

route.

Mr. Gillies.

154. Then we come to the third. Explain what would be the cost of laying and main- taining a cable and the annual working ex- 1 suppose maintaining the cable does not penses. mean maintaining the cable for three years, as many of these companies agreed to do. The cost, I suppose, of laying a cable means every- thing connected with the cable until it is ready for working?-Of course it does, and the cost of maintenance is for all time.

155. Do you estimate the cost of laying the cable and maintaining it for three years on the lowest estimate sent in to you or on a higher estimate ?--I took the actual tender; the lowest tender for route Number 1, which was 1,517,000. for a 12 word per minute cable.

156. Yes, but that is for, as I understand, a speed of 12 words per minute?—Yes.

157. That is the lowest that there is prac- tically for any cable, is it not?-That is the lowest.

158. In your opinion, should it be seriously contemplated not to exceed that?--I think that a cable of a larger capacity than 12 words per minute would be advisable. I think it should be perhaps 18 words per minute, 50 per cent. higher capacity.

159. Then from 1,500,0001, you would have to increase that to 1,880,000/?--To 1,880,0001,

[Continued.

12 November 1896.]

Mr. Gillies continued. yes. These prices include the cost of maintain- ing the cables for three years.

160. After the three years have expired what would be the cost, do you estimate, of maintaining a cable, and all working expenses ?-Oh! I have already estimated 50,000l. a year as a sufficient sun to cover the cost of maintaining,

161. The question was asked you by the Chairman if you could form any satisfactory explanation in your own mind of how there was such a difference of opinion as to the cost of maintaining the cable per annum for three years between so many of those companies who have had large experience; whether it was because there were long distances, or whether because the Bea was to gone extent unknown? - Well that might be an element, but I really do not know.

162. Then would it be wise, in your opinion, to estimate the cost of maintaining the cable at 50,0001. a year instead of, as Mr. Siemens does in his estimate, 90,0007. a year?-Well, after the third year I think 50,0001. would be quite enough; 90,000 for one of the first three years possibly might be required. It would be erring on the safe side, at all events; and if I mistake not, Mr. Siemens undertakes to return any portion of the 90,000, which may not be re- The Siemens Brothers Co. include in of in intenance quired. their offer for the purpose 270,000, being at the rate of 90,000 per year, this also is subject to a reduction if the actual repairs cost less than the sum named.

163. Oh, that he can fairly afford to do; he would not want to charge unnecessarily; he would not want to fix an estimate of expenditure and to stick to it, however much too high?-No; it is very clear from this that he thinks 90,0007. an outside figure for the maintenance.

164. Oh yes, certainly.--And it may be a good deal less; it may be hall the 90,000%, and, as I said before, the repairs to cables usually become necessary during the first year or two.

165. But what is the evidence on that sub- ject-1 think the evidence is very clearly what

I state.

166. You mean the experience of various companies who have laid cables and maintained them in cases where there were long intervening distances?—Yes. The theory of those who have had to do with the laying of these cables is this. I will illustrate. with two ink bottles, if I may If there be in any por- be permitted to do su. tion of the ocean a space over which a cable is laid without resting on the bottom it will very soo give way of its own weight, and when it gives way the electrical communication will be interrupted; the repairs are immediately effected, and they take very good care in making those repairs to lay in a great deal of slack to make sure it goes to the bottom, wherever the bottom may be, and in that case the cable is better and sounder than ever it was before. Breaks never occur, or seldom occur, at the same place.

167. Well, of course, it would be evident that that would differ materially in nearly every case. If you got a smooth level buttom, with little or no disturbing influences; once a cable is laid, as pointed out in the evidence in some of the

Mr. FLEMING, C.M.G., C.E.

Mr. Gillies-continued. statements here, one does not know how long it As a might last without interruption ?—No. matter of fact the cables that are laid in the deepest water are probably the most lasting. Take the cable across the Atlantic from the European side to Pernambuco; that cable has never required any repairs, except in compara- It has been laid now tively shallow water.

some 20 years and there have been no repairs effected, certainly none in water over 1,500 or 2,000 fathoms; none whatever.

168. How would you account for the differ- ence of opinion that there is among specialists with reference to the desirability of providing year by year a certain sum as amortisation? Oh! I think it is quite unnecessary in this case.

169. How do you account for the difference of opinion on that subject?—I do not know that there is much difference of opinion to-day. There was a difference of opinion at one time, but I do not know that there is any difference of opinion to-day.

169. You do not think that any provision of that kind is necessary?—I do not think it is at all necessary. I think it is unwise to lock up money in that way, as a matter of policy.

170. You were asked about the revenue likely to be derived from this cable, and asked upon what grounds you made the estimate of receiving about 50 per cent. of the proceeds the Eastern Company now get from their line to Australia. I have not been able to understand exactly why you fixed it at 50 per cent.?-Well, I found it necessary to adopt some percentage, and con- sidering the fact that messages could be sent from Australasia to London as cheaply the one way as the other, I

no reason why the traffic should not be equally divided, or approxi- mately evenly divided, especially if we bear in mind that a new traffic would be developed which would all go by the Pacific cable. That is the traffic between North America, including Canada and the United States, and Australia.

S&W

171. But I thought that was not estimated; I thought you had left that out of consideration. Would you get 50 per cent. of the existing traffic without taking into consideration the new traffic referred to, which would be obtained through another source altogether?—I did not include that because I had no means of ascertaining what it would amount to, but that should undoubtedly be considered in estimating revenue, and knowing that a very considerable new traffic would develop year by year I felt warranted in taking one half of the European traffic as a basis for estimating.

172. Straight off-Straight off, yes. 173. And you have not thought that it was a little too much to expect that you would get half of the traffic straight off?—I do not think 90 at all.

174. I see you mention in one of your letters that really the matter would be very much in the hands of the Governments; that they, having the control, could no doubt induce persons to send by the new cable rather than by the old one, and in fact that there was no real reason why they should not get the whole of the traffic?—I do not think I stated that.

Mr. Gillies-continued.

[Continued.

175. I think awfully near it; I think it is very near it?-There is a letter of nine on the subject at page 212.

176. Yes. "There can be no doubt whatever "that with the Pacific cable established as pro-

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posed, on the principle of State ownership, the Beveral Governments at the sources of traffic "would have it in their power to direct telegraph "business over the new line as they may desire.'

Sir Saul Samuel.] That means their own business, I suppose.

Mr. Gillies.

176 No, the general business otherwise it would not mean anything. Well, I certainly had that opinion when I wrote this letter, and I hold it still

177. Do you mean to say that any Government would be justified in forcing people to send their communications by a particular route?-They would naturally send the business over the line which the Governments owned in which they were interested, unless the messages were directed to as they do here. If a go by some other line, juet telegram is sent from London to Canada, the sender "By Commercial very often puts at the top, Cable," or by this line or the other route, and it is of course sent in that way, but if he does not put it

178. You do not mean that they would bring any pressure to bear ?—No, I do not mean that at all.

.-I 179. It is an unfortunate expression.- say I do not it is as the Government may desire. suppose the Government would wish to do any gross injustice to the existing Cable Company.

Chairman.

180. You mean that where no preference was indicated by the sender the Governments would send it over their own line; that is what you mean ?—Yes.

Mr. Gillies.

181. That is quite another thing; I gathered quite a different meaning from this, that really, as we were all interested, being practi- cally, all shareholders in this new company, we would do what we could to induce all the business to go our way, and having the command of the situation that we would do it ?--Please read the next sentence, or perhaps I I am wrong in asking you to do that.

"It does not will read it for you if I may, "follow that the power in the hands of the "Governments would be unduly exercised to "the injury of the Eastern Extension Company. "No doubt a division of the traffic would for a "time diminish the profits of that company, but "the establishment of the new route would *" stimulate telegraphy above its normal growth, "and in a very few years the volume of busi- "ness would be doubled, so that an equal "division would restore to that company as "much business as it now controls."

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