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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

30 November 1896.]

Chairman-continued.

Mr. LAMB.

the bulk of the traffic going over these cables is dealt with throughout by Government administrations, and not in relation with on- panies. I do not think, therefore, that they afford a real precedent. As to your Lordship's last question. I think that ownership by the Go- vernment night leal to demands for cables in other parts of the world of the same kind, and that this would still further disturb the relations of the Government with existing cable companies; in fact, the Government would be interfering with private enterprise in a very special manner, and would be stepping on a slide which would I think it would arouse carry it into difficulties. resentment and contention and claims for com- pensation.

2219, On that question of Government euter- prise, does that argument that you have just adduced apply more to this case than to any other case of Government stepping into a field which is usually occupied by private enterprise?—I am not aware of any case where Government has stepped in to compete against existing com- panies. I may remind your Lordship of the case of the telegraphs of this country. The Government did not step in to compete with the existing telegraphs, but bought them up entirely, and, as I have shown in the case of the cables to the Continent, there again it did not step in to compete, but bought up the Submarine Tele- graph Company, which previously worked those cables.

out.

2220. What about the Parcels Post? — I am afraid 1 want a little time to think that In that case the railway companies are the persons chiefly concerned, and the Post Office are working in harmony and partnership with the railway companies, and indeed. I think I may say that the railway companies get the best of the bargain, and I do not think that you would find that the railway companies would complain that the Post Office hind stepped into a business in which it was competing with them.

2221. Would it be accurate of that to say that the Government did undertake on its own account a line of business which till then had been exclu- sively in the hands of railway companies and carriers, but it disarmed the opposition of vested interests by making an agreement with those interests which satisfied both parties?--I think that would be a correct description of the case.

2222. And that is a principle that is applicable elsewhere, I presume?-Quite so.

I

2223. You instanced this case of joint owner- ship with foreign Governments: putting aside the element of competition, presume that what is possible as a joint partnership with foreign Govern- ments would be certainly not more difEcult with other British Governments? Certainly

not.

-

2224. But assume for the sake of our inquiry that it was decided that the cable should be laid and that it should be owned by the Imperial and Colonial Governments, how would you advise such a cable to be managed?-Well, I give this advice with great diffidence, but my own opinion is that it would not be necessary to establish an expensive board of management. The Canadian Government might appoint a manager at one end,

Chairman--continued.

[Continued.

the Australasian Colonies a manager at the other, and the supervision of the undertaking might be directly under the Canadian Government and under the Queensland Government. I think it is desirable to have direct responsibilityfixed on some Government, and I think that the Australasian Colonies might commit the supervision to one colony, say Queensland, who would be answer- able for the maintenance, and working of the cable up to a certain point, and that Catada might be charged with the responsibility up to that point from the other direction. I

suppose it would be necessary to have a small committee in London of, perhaps, three members, and this small committee might be constituted the trustees for the sinking find. I

that I repeat give this advice with very great hesitation, and simply because I have been asked to give it : your Lordship has asked me.

2225. I am afraid. I must go on asking you, Mr. Lamb, as there is no one else we can ask. Would you, giving your answer under the same limitation, advise that in such a contingenez there should la no kind of trust established, or central board of management, on which all the Governments interested could be represented? I do not see that it is necessary, I think, so fat as this country was concerned, we ought to be content to accept the accounts rendered by either Queensland or Canada, and these accounts could easily be checked here, and if any question arose the question could be referred to the consultative committee.

2226. Would you have no manager there representing and responsible to all the Govern- ments? We have na manager on our continental cables. On each side there is complete manage- ment up to a certain point, and complete con- fidence on both sides, and we take each other's accounts with perfect satisfaction. For instance the Belgian Government have no repairing steamer of their own, and we undertake entirely the repairs of the Anglo-Belgian cables. When When we I say "we" I mean the Post Office. repair a cable the Belgian Government trusts us

We say entirely.

that our ship has been that she has put employed so many days;

in so much cable that she has recovered so much old cable, and that this old cable on being stripped and sold has realised so much ; and they accept our account and I can see no reason why Canada and England should not Recept

accounts from Queensland, and rice versa.

2227. Suppose negotiations had to be under- taken we will say with some Atlantic Submarine Cable Company for the purpose of getting reduced through rates to Vancouver, who in those circumstances would undertake those negotiations?-I think the committee might

do it.

2228. Or suppose again that it was desired to achieve a working arrangement with the Eastern Telegraph Company, who would undertake those negotiations?-Again I give the opinion with great diffidence, but I see no reason why a small committee, such as I have suggested, should not do that.

2229. Would not such a committee as you

30 Narember 1896.]

Chairman—continued.

Mr. LAMB.

suggest, though in a limited degree, 1 admit, ant in certain respects to a board of manage- ment?—Yes, but it would be very limited.

2230. What hitherto has been the practice of the Imperial Government with regard to sub- sidies --As far as I am aware the Imperial Government has never given a subsidy to pro- cure the laying of a competitive cable or to bring about a reduction in rates. It has simply given subsidies to procure communication where com- munication did not previously exist. There is an apparent exception in the case of the Cape, but if necessary 1 think I could explain that that exception is more apparent than real,

2231. I think we should like to know wherein

the distinction lies-The subsidy originally given for the communication to the Cape was distinctly of the kind that I have described ; that is, it was to bring about communication with a place that had previously no communica- tion, bait in course of time a demand arose for a reduction in the rates, and Her Majesty's Government joined in guarantee for reduction of the rates on this ground. They found that the charges for Government telegranis could be so reduced as to more than pay them for anything that they might lose under the guarantee arrangement, it

was 10t # question of estimate; it was a question of ascertained facts, and they first of all ascertained that they were paying so much a year for Govern- ment telegrains and that the reductions which were offered would put into one pocket more money than they took out of the other, and therefore in reality they have not contributed. They have only taken money out of one pocket and it into another.

pur

Mr. Murray,

2232. Why do you call that a guarantee?-- I am afraid I used the word guaranteed loosely. It is a direct subsidy,

Chairman.

2233. Direct subsidies have been given many times, have they not, for the sake of reducing the cost of oceanic postage? — I am afraid cannot give you any evidence on that subject.

I

2234. You do not know whether that is the case or whether it is not-I cannot give you any trustworthy or satisfactory evidence on that subject.

2235-6. Could you send it us?-Certainly,

Sir Donald Smith.

2237. Has not a subsidy been given for a cable to Bermuda - Yes.

Chairman.

2238. Suppose this line were made, and this Committee came to the opinion that in such a contingency it ought to be owned by a subsidised private company and not by the Government. Can you give any estimate, how

Chairman-continued.

[Continued.

ever rough, ' what subsidy, say, the Eastern Extension Telegraph Company would require to make and maintain such a line? -I am afraid I canot estimate what the Eastern Extension Company might demand, because I think they would take into account their loss on existing system and not simply look at the matter from the point of view of laying the Pacific Cable.

their

2239. Then say a company? - I do not think I can go behind the suggestion which has been made by the India Rubber, Gutta-perelia, and Telegraph Works Company, that they should be guaranteed 226,0007 a year.

2240. Gross receipts?-Gross receipts. 2241. That is that anything short of that sum would be given by the associated Govern- ments?—That. I understand, is their sugges-

tion.

There was a previous suggestion, I believe I do not know whether I ought to mention it

or not.

2242. Was there any previous suggestion of the same kind ever made to your knowledge?— About 10 years ago, Mr. Mathew Gray, the then managing director of the India Rubber, Gutta- pereha and Telegraph Works Company, in con- junction with certain other gentlemen, offered to lay a Pacific cable for a fixed subsidy of 100,000, a year.

2243. For any definite period of years -For 25 years.

2244. And is there any other offer of the same kind that you know of?—I think that about the same time there was one from a com- pany calling itself The Pacific Cable

Company," of 75,000 a year.

W

2245. And with the rough materials at your disposal for forming an opinion, do you think that those offers are near the reasonable mark ?-- I think that they ought to be borne in mind in any estimate of the expense of laying the cable, I think they throw a light on what the probable expense would be.

2246. But you are not prepared to state a sum yourself which you think represents the probable loss-If your Lordship wishes it, I am pre

pared to give an estimate of both revenue and

expenses.

2247. Well, we will come to that very shortly. If the Imperial Government were to assist in the establishment of the Pacific Cable either by subsidy or by guarantee or by participation in ownership, what effect would it have on the existing companies who have cables running to Australia I think you have had it in evidence that there would be a direct loss on the part of those companies (I am speaking from memory) of about 116,0007, a year, if the rates were not reduced, but if the rate was reduced to 3s. a loss of about 196,000l. a year (again I am speaking from memory), and I think the companies would have some reason to com- plain, because they have rendered the British Government valuable services on many critical occasions. I could instance some of them, if necessary.

2248. I think we may take that as allowed on all hands?—Yes. And I think they have rendered a steady service to this country in the

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