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PUBLIC RECORD OFFICE

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C.O. 885

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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

PUBLIC RECORD OFFICE, LONDON

26 November 1896.]

The Marquess of TWEEDDALE, Mr. H. A. C. SAUNDERS,

and Mr. F. E. HESSE.

[Continued,

Sir Donald Smith --continued.

2052. Then there would be no danger to be apprehended from such in the deep waters of the Pacific No, unless it is different in the waters with which I am acquainted.

2053. But so far as you know there would be no danger?-Not much; I know of three cases in over 260 fathoms.

2054. In making the agreement with the Australian Colonies for a reduction of the rate from 9s. 4d. to 4s., yon assumed as the basis, 237,000% ?—(Marquess of Tweeddale.) That is (Mr. Hesse.) That was the first basis taken for the guarantee.

BO.

2055. And your Company and the Australian Governments were to bear the loss equally to the extent of 10 per cent.?-That is, the modified basis was limited to 10,000 (Marquess of Tweeddale,) The modified basis? (Mr. Hesse.) The modified basis. The first basis was that the Colonies and the Company would hear the loss equally up to any amount, whatever the loss night be.

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2056. But it was reduced then to 10 per cent.? The tariff was raised, and the risk or the loss was limited, as far as the Colonies were con- cerned, to 10,000Z.

2057. May I ask how much in any one year the Colonies had to pay ? For this guarantee ?

2058. Yes, for the guarantee, the largest amount?-£27,000 or 28,0007. in one year.

2059. You mentioned, I think, that were the tariff reduced to 3s., and assuming that

you lose 672,000 words, there would be a loss 10 you of 198,000l. ?—Yes.

2060. May I ask, then, what was the dividend given by your company at the time of this arrangement?-When we entered into the gua- rantee arrangement ?

2061. Yes. What was the dividend on the 2,500,0007. ?—Seven per cent.; 5 per cent. dividend, and 2 per cent. bonus.

2062. That is 7 per cent. It would follow, would it not then, were it to turn out as you appre- hend, that you would really have no dividend to give on the 2,500,0001., that is, assuming 237,0007, as your income; I presume, at that time, you really had none, and you would have had 23,000Z., besiles, to take off your other securities - If that were the present income from the Austral- asian traffic; but the income is much greater

now.

2063. Yes, yes; but I am looking to the position at that time?—If those were the figures, and we lost 197,000, of course, there would be no dividend for the shareholders from that traffic.

2064. I think you mentioned that the first year after this arrangement there was a loss of 30,0007; but next year something under 50,000%; and the third year only 12,000?— Yes.

2065. It would appear from that, then, that the traffic was largely increasing-it had increased largely on the third year?—The tariff during the third year was increased from 4. to 4s. 9d., in order to diminish this loss-the loss in the two preceding years.

Sir Donald Smith-continued.

2066. In the third year, with that tariff, the loss was 12,007, only 7—It was that year with The 4. 9. tarif

2067. It was increased then?—It was in- creased. (Marquess of Tweeddale) At the re- quest of the colonies.

2068. But I think you said that there was a large increase of business on the reduction of the tariff?—A large increase in the number of words.

2069. Of business? Of business; but a very large loss of money-income,

2070. Now, looking to that, is it your opinion that there would be a very large increase of traffic, and the rate should be reduced still lower, to 35, ?—A reduction from 4s. 9d. to 38.

would not be the same as from 9s. 4d, to 48. It was a tremendous reduction from 9s. 4d. (almost a prohibitive rate) to 4s.

2071. But still it would be a very considerable reduction from 4s. 9d. to 30. ?---- Yes; but our experi- ence goes to prove this, that sometimes when the rate is increased, the business is increased notwith-

standing, and a reduction of tariff does not We always bring about an increase of work. have experienced that in China, where a reduc- tion of tariff gave us no more business.

2072. I think you said that in a depth of 2,700 odd fathoms, it took 215 days to repair the cable. During that time what interruption was caused to the business lines?—(Mr. Saunders.) There was no interruption to the business lines at that time, because we had our duplicate cables there; the interruption was in the No. 1 cable, the original cable,

2073. Had you been depending on one cable your business would have been interrupted over the whole of that time?-Oh, yes.

And

2074.

could that time have been shortened in repairing the cable?—No.

2075. Every expedition was used? Every expedition. The ship was at Aden. The first ship spent 55 days over the repair, had to aban don it then for 148 days, during the monsoon; and the second ship, immediately it was fit weather for work, spent another 48 days in putting it through.

2076. So it was only the duplicate of the cable that saved you ?-Oh, quite so.

2077. What is the greatest number of letters you allow in a word in the East over your cables (Mr. Hesse.) Ten letters for extra European traffic.

Yes.

2078. The same as on the Atlantic?

2079. I think you mentioned that the cabling or telegraphing from the East by your line to North America, the United States, and Canada was of very little moment?-Infinitesimal.

2080. £10,000 or 11,0007,? - £10,000 or 11,000 represents the whole value of that traffic.

2081. Do you think that, by having a cable direct from Vancouver to Australia, traffic would be developed to a great extent between Australia, the East, and the United States, Canada, and America generally-Not unless a trade is first established between America and Australasia.

26 November 1896.] The Marquess of TWEEDDALE, Mr. II. A. C. SAUNDERS,

and Mr. F. E. HESSE.

Sir Donald Smath-contined. 2082. But do you not think that it would help in developing a trade to have direct coni- munication there-But they have immediate communication now. It is only a question of tariff. They get messages now nearly as quickly, if not quite as quickly, as they would if a cable were laid across the Pacific.

2083. How long would it take by your line? --It takes a very few minutes longer for a mes- sage to be sent to America from Australasia than for a message to come to, say, London.

2084. In practice, how longg --A minute or two; it is only the further transmission from London to New York, which takes a very few minutes.

Chairman.

2015. What would be the cost of a word from San Francisco to Sydney, say ?—Six shillings; 4s. 9d. plus 1s. 31.

2086. So that a reduction to 2s. would be a very great reduction ?— It would be a big reduc

tion.

Sir Donald Smith.

2087. What would be the actual time from Australia ?— Assuming that il message from Australia to London takes an hour and a-half, it would be another three or four minutes, say, five minutes longer, to reach Canada or the United States.

2088. We have had in evidence, or at least it has been given as the opinion of some experts, that they could have messages in ordinary course from Australia to America within half-an- hour, and in special cases, readily in a quarter of an hour? That depends, of course, upon the speed of the cable,

2089. Yes, but with such a cable as is spoken of now for the Pacific Ocean ?- Of course it all depends upon the speed of the Fanning-Van- couver section. If they could get through it only one or two words per minute you can pretty well calculate the time for the whole dis-

tance.

2090. Say four stations across the Pacific. that would make a very little difference as to time? Yes, it might be shorter.

2091. Not considerable?—No; but half an hour or so does not make very much difference in practice.

2092. And you hardly think that there would be a great development of traffic by having a new line across the l'acific direct to America? -It is difficult to form an opinion. At present there is, comparatively speaking, no traffic.

2093. But there must be a very considerable volume of business between America, Australia, and the Eastern countries ?-We are told not. We know what the traffic is. There is very little traffic, but the trade relations are not, according to some people, much developed yet between Australia and Canada,

[Continued.

Sir Donald Smith -continued. 2094. It is proposed that it should be 23. only to America, as you are aware. Then I think you mentioned that there would be a charge of 4. for land lines, and 2d. in Australia. Is that the usual charge in Canada? – It is an assumption based upon actual charges now.

2095. It is assumed from actual charges? - From actual charges.

2096. From actual charges in Australia?- Yes.

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2097. And in Canada, you assume that it is the case in America ?-We know what it is in America.

2098, Twopence and 4d. Then you cannot give any opinion as to what would be the effect on the traffic in lowering the rate to 3s;?—It is an unknown factor.

2099. Looking to your experience in the past? --Well, we have had both ups and downs, Sometimes with a reduction of tarif we have had les- business, and with an increase of tarit we have had more business.

2100. Has it been found that with greater facilities of postal communication, the telegraph traffic has become less ?-1 do not think so. We have no experience of it.

2101. Is it not likely that it would be so; that it would affect it to some extent ?—No, I do not think the difference between five weeks and four weeks for a letter to reach Australia could make very much difference in the telegraphing, If it were a difference between a week and a fort- night it might.

across

2102. At present, for instance, I think it takes a shorter time to Japan and to China by going the American continent than it does round the l'eninsular and Oriental ?--If there were a direct cable, you mean, between Canada and Japan.

2103. I am speaking now of postal communi- cation. I think it is 22 or 23 days by America?

Yes. 2104. Is it not much longer the other way?— Yes.

2105. Now it is within a short time that this great reduction of time has taken place. Would not that have a considerable effect on the telegraphic traffic?—I do not think so.

It is only

2106. It would not?— I think not.

my opinion. Reducing the time, say, from a mouth to three weeks would not make very much difference 1 think, in telegraphing.

2107. You consider it absolutely necessary for safety that you should have a cable dupli- cated? Yes.

2108. Regularity of transmission?— For safety,

yes.

2109. You would not depend on one cable for, We have at any rate, more than a year ?--No.

cases put duplicated and triplicated; in some down four cables.

2110. As an absolute necessity for continuous communication ?—As an absolute necessity. R 2