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PUBLIC RECORD OFFICE

Reference :-

117 C.O. 885

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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

16 November 1896.]

Mr. Gillies-continued.

583. Is not that a primary element? quite eo.

Mr. SIEMENS.

Yes,

584. For instance, take one of the cables you have mentioned that is earning 50 per mile, evidently from your calculation in the case of this cable you do not propose to estimate that they will get 501. per mile?—No, because these cables that are earning the 501. per mile are not under the average conditions, but exceptionally good ones.

585. Exactly, so that it must be on the con- ditions which will be served by the construction of any particular cable that you would estimate and base your calculation for profit ?-Certainly, but you see it has been done by others in this way, that they say the present traffic from the Australian telegrams gives about 210,000, acd it is assumed that at least one-half would at once fall to the Pacific cable, which would be 105,000/

586. Of course. Do you say that is a fair assumption, that inasmuch as at present for the whole of the traffic there is 210,000, a year, that it is a fair calculation to make that the establish- ing of another cable will take half that away or else increase, take some part of it away, that is an assumption that it is going to take half from the present traffic-Well, do you not see, think, the effect will certainly be that the rates are cheapened and the traffic will gradually increase, so that the sum total will be greater with the lower tariff, I mean the receipts, than before. I think it is perfectly fair to think that the new cable will get half, especially if all the Governments concerned contribute; they would see that they got half.

I

on

Mr. Gillies- continued.

[Continued.

they would be likely to be; can you form any

kind of estimate at all ?--No.

589. That is not possible?--No, no; I would not. I can only fall back again upon general numbers, and say if a facility exists it is very sure to be used, and the people will find it out very shortly. I do not say that, of course, for the first year of the cable's existence; business relations will grow gradually, and it will be two or three years before the full benefit of the cable will be experienced by the businese people, and then I fancy the cable will be freely used by them.

590. Can you say, if these are the reasons for estimating obtaining half the work that the present company is getting, why should they not get the whole of it? If with all those feelings in the minds of the various populations which are interested, instead of only getting one- half, why should you not assume that they will get the lot, or as nearly as possible? Because of course the tariff, I presume, on both routes would be the same.

591. You are assuming that it would? Well, I mean that generally happens. If the one was more expensive than the other of course every- body will go to the cheaper one, but even if that goes it would, you see, to a certain extent correct itself, because the more work the Pacific cable I mean gets the slower the messages will go; of necessity. You can send 12 or 15 words a minute, but if the telegrams pour in upon you at the rate of 60 words a minute, some of the are delayed; therefore people will very soon find out that if they all telegraph by the Pacific cable they will not get their messages through quick enough, and then they will go on again by

the Eastern.

592. But that would assume that the present company are not doing their work satisfactorily? -No, no, no.

593. With double the amount that you are assuming that the Pacific Company will get?- No, excuse me. I am saying the opposite alto-

I am saying the Pacific Company would not do their work properly if they got too many messages, and therefore the people would go back to the Eastern.

587. What do you mean by all the Govern- ments contributing; do you mean the value of the Government traffic, as Government traffic, is a serious consideration ?—No, I mean to say that they would simply say to their post offices, or rather telegraph offices, "If you receive cable messages without a Via' you send them by Pacific." Assuming that the cable is established at the charge of the Governments and that the Governments of Australia, of Canada, and Eng-gether. land contribute any sum proportionate to the capital, then all those Governments are directly interested to increase the traffic of the Pacific cable, and they can give instructions at their tele- graph stations that if the public send messages which are not " Via," which have not " Via them, Eastern or whatever it is, then they shall Bend the traffic over the Pacific, and I think they would be helped to a great extent by the public in Australia at least, because I understand that there is a certain feeling that the Eastern Company have been getting as much money out of them as they could; therefore I do not doubt that the Pacific cable will get at least half of the present traffic, and it will get in addition all the new traffic which will spring up between Canada and Australia owing to the greater facilities not only between England and Australia, but hetween Canada and Australia, and between the States. If this cable is the first in the field all the messages from the United States will come to it, too, to that part of the world.

588. Have you any way of ascertaining what

594. Too many; that is another story alto- gether; but I was not saying they would get too many, I was saying if you have a right to assume that they will get half of what the present company is getting, have we not the same right to assume that they may get the whole or nearly all in consequence of persons sending messages being very much interested in its success?-No; do you not see, however much sentiment they may show, they will go only to a certain extent; business men will not telegraph by a route where they know that there are delays, and you see if the messages are always sent during the business hours and they are all handed in during the business hours, therefore they have to be worked off, and if the Pacific Cable office has got a whole heap of messages of course the last messages are delayed of necessity, although they do not work all the 24 hours at that pressure; but it is at the business time when the people

16 November 1896.]

Mr. SIEMENS.

Mr. Gillies-continued.

want to get their messages off. The office is full and then they go to the other office.

595. Are you not assuming that the present company has got its hands full in sending the messages?—So it has, and I think there are great delays, and also that is one of the reasons of the complaint against the present company, the delays.

your

596. I never heard that before, I confess. I confess I have never heard that assigned as a reason; that, in fact, the present company is overworked, and one of the reasons why this cable should be created and this line laid, is because there is plenty of work to do, and that it cannot be properly undertaken by the present company. Have you ever heard that ?—No, not if you ask my personal opinion.

597. I never heard that either, and you are giving a reason now like justification for expect- ing traffic which would be undeniable if assumption is the right one, namely, that the present company have got so rauch work to do that there is a big opening for a new company; now have never heard that reason assigned before. No, I do not think you have quite understood what I meant. I do not say that the present company is overworked during the whole of the 24 hours, it is only during the business hours that there is naturally an accumulation of telegrams, of course. It occurs with every cable company, and with the Post Office; I dare say Mr. Preece would be able to tell you about that. 598. Oh, some of us undoubtedly. I was answering your objection that if I claimed half the traffic why did I not claim the whole. Then as an explanation I said why I did nos claim the whole of the traffic for the new cable was that that would correct itself in some such manner as I indicate, but you must not construe that into my saying that the Eastern Company is not doing the work right. That is quite another pair of shoes.

599. It may be doing it quite right enough, but there is a good opening for the construction of a new cable, this is the inference that I drew from your previous statement, because the present company had as much as they could do, if not more ?-No, I have not said that. I have only answered your objection that if I claimed half the traffic for the Pacific I might just as well claim the whole.

600. Yes?--I say no, cannot claim that because the ordinary routine of handing in messages mostly at the same hour would correct that by itself, because the people would find that in the one office their messages would be delayed and in the other they would get away much quicker, so they would naturally go to the other. At present they have simply to put up with the delay. You see the present company has

got three cables towards Australia, and is only sending 1,300,000 words, and they can send most probably 20,000,000 words.

601. I was anxious: it is a most important matter, the revenue matter, and when you took for granted or estimated that the chances were that they would get half the traffic: I was anxious to know whether it was only a sort of general opinion, or whether there was any good

[Continued.

Mr. Gillies-continued. foundation for saying that they would get half the traffic, because it is everything if the three Governments are going to construct the line: Australia, Canada, and the Imperial Govern- ment it is everything to them to have some good reason to believe that they will get half the traffic straight off; that as soon as we e netruct the line, as soon as they have laid it, half the traffic is yours, in fact you have a business to start with. I was anxious to know if you had any good foundation for saying that they would get half? Surely you have gut inucli better opportunities to judge that than I.

602. Well, I am anxious to get good reasons from others, if these exist. Of course it would be of importance, but if it is a mere speculation it would be a pity on our counting on getting half if we would not get it ?--I mean 1 have investigated for myself that this Atlantic Cable Company earns 501. per mile, and I have cheeked the Eastern Extension Company's figures that they get 357. and 391. Of course at that time; I daresay the present revenue accounts would show what they do now.

603. If you have investigated these, would you be good enough to answer me this question. Did they get that from the very year of their starting?-Certainly not.

604. Well how long did it take before they got up to their present position, because if you are estimating that the average is so much a mile, and you are setting down as a justification for believing that will

you get this revenue, you

are giving us an average of so much a mile the same as some other companies are drawing; then if they did not get that at the beginning why should we assume that we should get it from the beginning?—I do not think that I have said that anywhere.

605. I understood you to say that you based as a reason for expecting that the Pacific Com- pany would get a certain revenue, the fact that other companies got an average revenue? Yes.

606. Then I ask you was the average revenue that the other companies obtained from the very beginning of their work?—I do not think so; in the nature of things it could not.

607. Well, how long would you estimate that the Pacific Company, when it had constructed its cable: how long would you give it before it would have such an average revenue as that 30%. per mile?—I do not know; I cannot tell.

608. Well, you see, if we are to consider the information you have given us on that point as a good reason to believe that we should get it, when are we likely to begin to get it? if none of the others got it from the start.

Of course, after all, these are only estimates, but we would have liked, if there were good reason for believ- ing that the estimate is sound, to hear the basis upon which it is made ?-Well, I mean I think I can explain the basis there clearly. I simply say that I consider the conditions under which the Pacific Cable is to work, that is to say, re- garding the populations at the two ends, and regarding the points it connects, that it is under the average conditions of seven or eight cables, that it has been shown that the average carnings

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