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PUBLIC RECORD OFFICE

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

PUBLIC RECORD OFFICE, LONDON

12 November 1896.]

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

Sir Donald Smith-continued. tender, and I am inclined to think they considered that they had sufficient information.

216. Had they any idea, a proper idea, of the quantity of cable, the length of cable, that would be required for the distance from Fanning Island-Yes, they had.

217. IIa they surveys sufficient for the purpose?—Yes, sufficient for the purpose.

218. We are told that the depths vary from one and a half to two miles to five or six miles;

it must make a very great difference in the actual length of cable used, must it not?— Let me clearly understand you there, is the distance from Vancouver to Fanning Island variously estimated ?

219. From Vancouver to Fanning Island and other places too. The distance is ascertained by spherical trigonometry, and those cable manufacturing companies have men who can do that, each one of them has, and they do it, and each one is responsible for the distance calcu- lated by him. It would be impossible for the Government of Canada or the Imperial Govern- ment, or any government, to give them any other information than that which they can obtain themselves in that way.

220. But was there no actual survey made before an attempt was made to lay the Atlantic cable; did they not know within a comparatively small quantity the length of cable they would require ?--I doubt if they knew so closely as they did in this instance, because they had not the same experience, and did not know how much should be allowed for slack. These manufacturers who tendered have a very much better knowledge of the percentage of slack needed. The actual distance from one given point to another on the face of the globe is easily ascertained by those who know the way, but that is simply surface distance. The cable requires to be considerably longer than the surface distance, and those manufacturers who tender, each one of them had really better information, because their experience gives it them, than those people who had to do with the laying of the first Atlantic cable.

221. But you speak of an Atlantic survey, and when we hear of a mountain in the sea two, three, or four miles high, and that the cable must be on the bottom everywhere, how are they to ascertain that for themselves without a survey, and how can they give an exact tender or anything approaching a tender? Is it not really then more of an estimate ?--Well, it is that with all tenders, more or less.

222. With all tenders?-Tendering for rail way work or any other kind of work, there is always something of this kind.

223. Is there not always a preliminary survey in constructing railways?-Nearly always, yea, but with regard to the material to be excavated and so forth, the contractor very often has no knowledge whatever, he has to run the risk. The same with laying cable; there may be a necessity over a portion of the route for a greater allowance of slack than others, but they know pretty nearly what the average allowance needed is, and they apply that average per- centage to their surface distance.

[Continued.

Sir Donald Smith-continued. 224. When they have the opportunity of eurveying there has been a survey, preliminary or otherwise, more or less exact, before the tender is made. Is not that so? In the case of?

225. Railways ?—Yes.

226. Let us take railways; there is so much rock-work Yes.

227. There is so much earth-work, and so on. I merely refer to it, as to the relative difficulty in the one case that you have not to contend with in the other, and consequently the great difficulty that they must have in making any- thing like an exact tender without knowing the lengths that are required or the difficulties they have in their way? Well, sir, tenders for railways are often made and contracts entered into with very little knowledge of the kind of work to be done. I need not refer to any par ticular case, but in all new countries, at all events, contracts are often taken for constructing railways with very little knowledge indeed of the kind of work to be done.

228. Have they not had in every instance a instance. preliminary survey ?—No, not in every In some places s preliminary survey would not be within hundreds of miles of the line con structed afterwards.

229. Let us take a railway you and I know something of the Canadian Pacific Railway. Was there no preliminary survey before contracts were given out? There was a preliminary survey, but the preliminary survey was hundreds of miles from where the line is now built, in some places through the Rocky Mountains.

230. Much of it was done then not by con- tract, but on the responsibility of the railway company, was it not. They contracted to do a certain work; they felt they must go on with that work, that it must be done, and those portions of it where exact measurements were not available these were executed by the com- pany themselves, that is under its supervision, was it not?-Yea.

231. Did the cable tenderers know what were in or what difficulties there facilities landing at Fanning Island, and at the different islands; had they exact surveys or soundings, or was information within the knowledge of the contractors?-1 do not think they had full know. ledge with regard to these points, but they had a general knowledge. They had access to all charts that had been made by the Admiralty, and pro- bably they had access to other information, but. they had not full information; they calculated, I imagine, that they would get full information for themselves during the manufacture of the cable; indeed that was pointed out to them as necessary in some of the papers. remember which, but in some of the papers laid before them they were told that they would have to find out that for themselves.

I do not

232. Must it not be looked upon as much more of a speculation than is usual? is it not much more so than it would be in tendering, we will say, for any railway work ?--It is cer- tainly more than in some cases of railway work,

but not in all. There are hundreds of cases of railways being undertaken with no more infor- mation than is obtained in this case.

12 November 1896.]

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

Sir Donald Smith-continued. 233. Do you think those gentlemen who tendered, or those firms who tendered, if they believed that they would have been held to their tenders, would have undertaken the responsi- bility? I think they would.

234. That they would have undertaken the responsibility? I think they would, each one

of them.

235. Well that is saying a very great deal. 1, myself, cannot see how they could approximate so closely. The only firm, as far as my recollec tion serves me, that stated they would not without further knowledge be responsible for their tender and be prepared to carry it out was The Telegraph Construction and Maintenance Company. It is a long time ago since this matter came before me, but I think that is the only company that showed any inclination to hesitate.

236. Has it been ascertained that they can land with sufficient ease a cable at the different points mentioned? It is assumed.

237. But has it been ascertained?—It has not been ascertained.

238. It is an assumption so far only?-AB assumption.

239. Then they must make a survey before they can be certain of that? They must make a survey to find out the best place for landing.

240. It may be found that a cable cannot be landed at certain points with safety? I imagine, sir, that it would be practicable to land a cable mere engineering almost anywhere. It is a question, which can be overcome.

241. Is it likely that each of those giving these tenders had the same information? Yes, sir, I think each one had precisely the same knowledge, and I refresh my memory by referring to the advertisement which is before me. The advertisement save, in the middle paragraph: "General conditions under which the "offers are to be made may be ascertained on application at the Department of Trade and "Commerce, in Ottawa, or at the office of the High Commissioner for Canada in London." They all had precisely the same information.

242. And what did that consist of 2-Well, no doubt your assistant, Mr. Colmer, will have a copy; I have not a copy.

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243. I am merely asking as a member of this Conference. Yes, pardon me.

Mr. Gillies.

244. Were the usual conditions insisted on with a firm sending in a tender that there should be a deposit with it? I would like to refer to the actual conditions, I do not remember what the conditions were.

Sir Donald Smith.

245. Now, with regard to the revenue, you are of opinion that something like 50 per cent. of the business could be acquired by the new com- pany, that is business now transacted by the On what do Eastern Telegraph Companies.

you base that ?-I am of opinion, sir, that a business equal to 50 per cent. of the existing business may be reasonably counted on.

[Continued.

Sir Donald Smith-continued. 246. You mentioned, I think, that, assuming the cable to be the property of the different Governments, they would be able to influence a very great portion of the traffic? Yes.

247. Now have you anything to show the proportion of revenue derived from Government business as apart from commercial business?— I have not before me at this moment; no doubt that could be had; I have not got it.

Mr. Gillies.] It is very small compared to the other business.

Sir Donald Smith,

248. Is it not the case that Governments in the Colonies must be guided very much by the influence of the business men and by Members of Parliament, and that they could not well discriminate in favour of one Company over another? Well, I do not know, I am sure; I do not know whether I can say yes or no to that question, My impression was, and is, that these lines being Government property the traffic would have a very fair opportunity of floating over the Pacific cable.

249. We have now the case of a company which, at the present moment, has the whole of the business, and, from their point of view, not too much revenue for their shareholders. They have many thousands of shareholders, I believe, in the different companies. A very large pro portion of them are business men in England and in Europe. Now, in fighting a new company would they not be fighting for the very life of their business?-They have always done so.

250. And they would do everything they possibly could with Governments and with others to maintain, as far as they could, their revenue? -There is no doubt.

251. Then would the Government business, or that they could influence, at all compare with what the companies would be able to obtain from the general commercial public, who may have a personal interest in it? That is one of those things I think we ought to consider.--I do not think the bare Government business would form a very large part of the business done; the com- mercial business would be the chief business, no doubt.

252. The commercial business would be the great bulk of it, and the fact that the line would be a Government line might not lead to the transfer of business from the other company unless greater efficiency was offered ?—I think it is more likely that some arrangement would be come to between the two companies to share the business.

253. You are not only proposing to take a portion of the business from that company now but you propose to depreciate the value of the business that remains with them? You expect to reduce it by about one-half, or at least very considerably? I only wish to arrive at what a new cable might reasonably expect to have of the business now controlled by the other com- panics-A Pacific cable would not expect to do much of the China business; it would not touch at China.

254. But if merchants could send messages by a company that touches at all those points

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