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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. necessary in connection with their general busi- ness, would they not be disposed to give their business to that company-Possibly they would; I do not know; possibly they would.

255. I am asking you for the purpose of ascertaining whether we have any reasonable expectation of getting 50 per cent. or anything approaching it ?-Remember, the 50 per cent. is an arbitrary division, but included in that 50 per cent. is the new business to be developed between America and Australia.

256. I quite apprehend that. It would, every word of it, I take it, go over the Pacific cable.

257. No doubt the existing cable companies to Australia have an arrangement with the Atlantic cable companies for the American busi-

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Of course they do not come into competi- tion with them. It would be quite a different thing with a new cable reaching the points that they are now at, and taking away from them the business or a portion of the business they now have. We have to keep that open for contidera- tion, have we not?-Oh, yes, surely.

Mr. Jones.

258. In your estimates of receipts you evi- dently anticipate by a reduction of the cost per word to increase the total receipt very largely year by year. Ile ventures to say, "It will not be too sanguine to estimate 20 per "cent. per annum.” Well, that is on the prin- ciple, I suppose, of like a reduction in postage, And people will get more in the way to use it. you also estimate that we should have the entire North American business, or a good portion of it, as far as London. Now, I might ask Mr. Fleming if we can compete with the present existing modes as far as London. For instance, can they not compete with us for a

portion of the North American business on the other side? Not very easily. You mean to carry North American business through Europe to Aus- tralia?

259. No; to carry Australian business through Europe to North America? That would be very difficult indeed; they would require to carry their messages over three-fourths of the globe in place of one-fourth or one-third.

260. Yes, exactly. Well, now, there is another point. The great depth of water is spoken of as being so much greater than on many existing lines.

Have you any idea whether, in the event of a fault, as it is called, in the cables, the expense of taking up and repairing those cables would be very much greater with this increased depth of water than under present circumstances?-No; I am not of the opinion that it would oe very much greater.

261. Or more difficult -And the necessity for it would be much less according to experience. I have already referred to a cable laid from the eastern shore of the Atlantic to South America, at Pernambuco. That is laid in water almost as deep as any portion of the Pacific that the Pacific cable would pass through, and it has been laid for 20 years, and, as I said before, there has never been any repairs called for in the deepest water, as a matter of fact.

Mr. Jones continued.

[Continued,

262. In that case then, I suppose, there has been no actual experience as to the difficulty of picking up the cable for repairs?--Well, the depth is so very little more than cables that have already been laid and successfully raised that I do not think there would be much difficulty; it would not be very much greater than in the case of the cables across the Atlantic. The deepest part of the Pacific that I know of that would be passed over by the Pacific Cable would be 3,100 fathoms. The Atlantic is some 2,500 fathoms in depth. Well, of course, there is the difference between 2,500 and 3,100; it is not so very serious.

263. Has it not been shown by experience that the breaks or faults that may have occurred in a cable have, as a rule, occurred near the end of the cable and not in the centre?-Almost entirely, except where there is shoal water in the centre. In soine cables that have been laid the water has not been uniformly deep from end to end; there may be a bank in the middle, as there actually is in this very cable to Pernambuco; there is a ridge that crosses the middle, and repairs have been made there, but the repairs are in comparatively shallow water; there has been no necessity for repairs except there.

264. Well, considering the construction of this cable and its importance in a national sense, throwing aside the commercial consideration, what do you consider would be the great national advantage over existing lines of communication at the present time ?-I think it is very clear that the more cables that are laid the better for the British Empire.

What 265. That is not exactly what I mean. I mean to say is this: the present modes of com- munication pass through foreign territories; the proposed line will pass over British soil. What advantages then, in a national aspect, in the event of difficulties occurring and it being desir- able to communicate with British possessions, would this line give us over existing lines?—In my view a cable across the Pacific in any direc- tion would be an immense advantage to the British Government, whether it touched on foreign territory or British soil. Of course, we think it better to have it touching on British soil, but even an international cable touching at Hono- lulu on the way to Australia would, I think, be of great advantage to Great Britain."

266. Quite so. The more cables you have, and the more ways of opening up communica tion, we all understand, the better, but the Government of Canada have instructed us to say that almost their concurrence-though it is not put quite so strong as that-would be that the cable should touch only on British soil. They evidently attach very great value to the fact that a national work of this kind should be viewed more in a national sense than a com- mercial sense, looking to the advantage to the Empire at large. You do not think, then, that it would be of supreme importance to have it ?—I think it would be of very great importance to have a cable touching on British soil, and, as I have said before, my own idea is that the first cable laid should be laid from one British point to another. When it becomes necessary to lay a second cable over the same general route, that

12 November 1896.]

Mr. Jones-continued.

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

cable might well find its way to points where it would be of general commercial advantage, such as Honolulu.

267. Exactly; then it will be for the Govern- ments concerned to decide, when they do decide, whether it must not follow, as a matter of course, whether it should solely rest on British soil?--

Mr. Murray,

268. When you said that you were strongly in favour of the cable being owned by the Governments concerned, you did not exclude the idea of its being undertaken by private enterprise if that were practicable?—Oh, no.

269. Practically there is no prospect of its being undertaken by any unsubsidised or un- guaranteed company?—I think, in the interests of the colonies, it would be better to have it undertaken as a State work.

270. Then you would exclude private enter- prise under all circumstances? -Oh, I would not exclude them if there is no other way. If the Governments were not disposed to make it State work, then the next best thing would be to have it made by a subsidised company.

271. At present there is no prospect of any unsubsidised company undertaking it?-None whatever.

272. That, I presume, means that the pros- pect of an adequate return on the capital em- barked is not very attractive, or not sufficiently attractive? It might be assumed that that was

the case.

273. In other words, that there is a certain amount of risk attaching to it?—Yes.

274. You suggest that the different Govern- ments concerned should undertake to impose that risk on their own taxpayers?-I do not think there would be much risk of any heavy liability being incurred, as I have shown by these papers.

Of course, I may be entirely wrong; others may hold different views.

275. But there is some risk?-There is always some risk.

276. And that risk, whatever it is, you sug gest should be undertaken by the taxpayers of the different countries concerned?--If there be any risk.

277. Yes, such as it is?-Yes.

278. And you propose that the Governments should undertake a competition with an existing private enterprise doing the same work?—That is not the sole object.

279. No, but that is, in fact, what you do propose? That might be one of the resulta.

280. A necessary result?—Yes.

281. And in carrying out this competition you would materially reduce the profits of the existing enterprise?—I did more than that; I proposed at one time that the Government should buy out this company at a reasonable price, so as to avoid competition.

282. But at present the proposal before us is that the Government should compete directly -Until they see their way to come to some other arrangement.

283. And the competition will result in a serious reduction, at any rate, in the gross

[Continued.

Mr. Murray-continued. revenue of the existing concern?--To that extent the public would be the gainers.

284. And the other enterprise would lose? - Well, they would lose in profits, certainly.

285. Then, further, though this competition will be carried on at the risk of the Governments concerned, the benefits of it will not be exclu- sively confined to the countries involved, but will be shared by everybody who chooses to use the cable? Yes, the benefit would be enjoyed by the patrons of the line.

286. In other worde, the Governmente con- cerned would be cheapening telegraphic com. munication for the benefit of all the world, and not for the benefit of their own countries alone?

Yes, that might certainly be helil.

con-

287. And having regard to those two siderations, that it is a Government competition with a private enterprise, and that it is 'n Govern ment competition carried on in a philanthropic spirit for the benefit of all the world, do you not think that that creates a situation of some diffi- culty for the Governments who are going to undertake it?-At least the part of the world that is chiefly concerned is the British world. There is no other natian su deeply conccrued as Great Britain that I know of; it is the British world that would benefit by it.

288. Not exclusively?-Not in theory, but practically it would be the British world.

289. But you do not see any difficulty in the British Governinent and the Australian Government and the Canadian Government undertaking an enterprise of this sort at the risk of their own people, but for the advantage to some extent of a great many other people a -Well, looking at the public advantages that would result, I do not very clearly see why a company, a private company, should stand in the way for all time.

290. Then one word as to these tenders: You still adhere to it that they were firm offers when they were made, whatever they are now ?—I believed them to be firm offers when they were made, and it is for the parties tendering to say to-day whether they are ready to carry them

out or not.

291. Probably they would have to be con- siderably revised, would they not?—It is just possible.

292. Have you looked into the prices of It may materials at all since ?—No, I have not. be that materials have gone up in price; that I do not know.

293. But you do not know that?- No.

294. Did you notice the offer, or rather the estimate, of the Silvertown Company under Form "C."?-Yes, I remember an offer was made on Form “C."

295. They asked, did they not, for a guarantee - It was not a firm of 226,0001. a year?.

offer.

296. No; but that was the best estimate that they could make?-It was the only offer under that form made by any party.

297. It was 226,0001. a year, was it not?- Oh, yes; page 13, 5th paragraph. "The India: rubber, Gutta Percha, and Telegraph Works Company refer to the invitation for proposals

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