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PUBLIC RECORD OFFICE

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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

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PUBLIC RECORD OFFICE, LONDON

30 November 1896.]

Chairman-continued.

Mr. LAMB.

manner in which they have carried out their communications with fortified stations and colonies, and as pioneers they have run risks which other people at the time were not prepared to run and they have gained, with a certain amount of trouble and expense, experience which is now available without trouble or expense for new-comers who wish to enter into competition. And again I think I can say from a fairly long experience of negotiations with those companies that I have not found them unreasonable.

2245. Do you think that it would be impos- sible to make a reasonable arrangement with these companies supposing the line was definitely decided on ?—I think it would be possible to make an arrangement, but I feel confident that it would involve compensation in some form, and I am afraid there might be different opinions as to the reasonableness of the compensation.

2230, Quite su; that could only be ascer- tained by negotiation ?—Yes,

2251. But on what kind of principle do you imagine compensation would he asked for?- I think they would expect part of the loss they arc now suffering to be made god by the Governments concerned,

Mr. Murray.

2252. The loss they are now suffering ?--1 beg your pardon, the luss they would suffer by the diversion of traffic.

Chairman.

2253. The kind of demand they would make would be make a guarantee to us against a * diminution of our present receipts up to a "certain figure" is that what you mem? Well, I am not sure that they might not go further than that and look a little to the future.

2254. You think that they might ask also for a guarantee against loss of prospective increase of revenue?-I am sure they would.

2255. Is there any regulation of the Inter- national Telegraph Convention which relates to competition and which hears at all on the con- sideration of this question ?—Yes. Paragraph 4 of Article 10 of the International Convention rends as follows (I will give it in English, if I may): The charges composing the tariffs applicable to the messages exchanged between "the contracting States may at any time be Then * modified by a common agreement." Article 17 of the Convention is as follows:- "The high contracting parties reserve to them- selves respectively the right to make separately among themselves particular arrangements of "every kind in matters of service which do not "interest the generality of the States." I read these extracts because they are mentioned in the regulation of the Convention which I am now about to quote. That regulation is No. 27, and the first paragraph is as follows: "Alter- "ations of the rate or bases of application "of the tariffs which may be agreed upon States by virtue of "between interested

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paragraph 4 of Article 10 and of Article 17 "of the Convention should have for object

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Chairman- continged.

| Continued,

30 November 1896,

and effect not the creation of competition in charges between existing routes, but, on the contrary, the opening of as many routes as possible to the publie at equal charges, and the necessary combinations should be so made that the terminal rates of the first and final administrations remain equal, no matter what route is followed." The word to which I would call attention are "not the creation of * competition in charges between existing rontes,” I think what this means is this: where a tele- private graph service is entirely in the hands of a company it is of course a question of commercial enterprise whether a competitive line shall br provided, but where States are concerned the in- tention of the International Telegraph Conven- tion is that one set of States shall ma disregard the interests of another. In this case I think it might be shown that the Mother Country and the Australian Colonies—who are all parties to the International Convention would be dis regarding the interests of India, which is also a separate member of the International Union. But this is a matter which I can deal with at a later stage. At present I would only say that it might afford another ground for complaint on the part of the existing companies that we should be acting contrary to the spirit of the International Convention. I can give you a recent instance of a State refraining from acting Russia Contrary to the spirit of the Convention. has recently established a line of telegraph to the utmost verge of Siberia, and has brought that telegraph into communication with the land tele- graphs of China, but, acting in the spirit of Regulation 27, she has refrained from adopting a competitive tariff on this strategic line, and she has thus paid regard to the interests not only of the able companies but also of Britiel India.

2256. Then, is the Indian Government the only one you would consider might have reason to complain in view of that regulation ?—As far as I can see at present that is so. Of course, I am speaking now of Governments. The com- panies I think would have reason to complain, but that is a different matter.

2257. Yes, I meant Governments?—Yes. 2258. Now we come to the question of the first. financial prospects of such a cable; will you. of all, give the Committee your estitute of the probable revenue that would accrue to suchy a cable, if made, on the all British runte - Yes. I estimate that one-third of the traflic would be diverted, and I do not see how with a 38. rate the Pacific Cable could hope to retain more than 18. 6d. The present charge for a telegram from England to Vancouver is 1s, 6irl.

Then in the

case of Australia, if we set aside South Australia and West Australia, where the terminal rates rate for are high, the average terminal Australia is a little more than 2d.

Mr. Murray.

2259. A word? Yes. If Is. 6d. for the Pacific Cable were added, the total would be a little more than 3s. 2d., but I am ready to assume Is. 6d. along with 38.-Is. 6d, out of 3s.

Mr. Murray-contimed.

Mr. L. AMB.

On these bases the receipts would work out as follows: The total number of messages in 1895 were 1,860,000, in round figures.

Chairman,

2260, Ol words?-0f words. I beg your pardon of words, 1,Singon, one-third of which i- 620,000 words, and this at 18. d. a word equals 16,5001/, I estimate the increase year by year for 10 years at 7 per cent, I can give the figures for every year if your Lordship wishes.

2261. We have them alrealy ?-Then, in the tenth year the revenue would have risen from 46,5007, to 85,ANO, In considering this question of increase. I m not sure that the experience of the Post Office is of much use, hut we can give some information about it. for what it is worth.

9262. I shall ask you for that presently, please but I shank like to ask you one or two other ques tions first. Now, you estimate that one-third of the Australian traffic would be divered to the new cable --Yes.

2263. Why do you take that figure ? On what is that estimate based 7-It is an estimate that can- not be male with arithmetical accuracy in fact, I suppose that no estimate on this subject can), but, I think, first of all, we must consider n possible interruption of the cable; the Pacific Cable. A breakdown on this eable would the seriously affect its commercial position ; traffic would be down back on the old routes, and it would be difficult to recover lost ground. It is one thing to have a breakdown on a cable which affords the only means of communication, like that for instance to Mauritius, and quite another thing on a cable which is in competition with well-established services,

That is one of

the thing.! think, that we have to consider,

2261. On that your estimate is based on the the Pacific Cable is not supposition that duplicated? - Everything that I say is with reference to a single cable. Then I think we ongli to consider the ramifications of the Eastern group of companies in Europe, and the pro- bability that they would retain early all the You have Continental traffic for Australa-in. only to look at a telegraph map of the world to find that all along the shores of the Mediterranean they touch various countries and get into com- mmunication with the continental manufacturing towns. Then the favourable position of the Eastern group of companies with regard to Western Australia and South Australia must be borne in mind, and it is from these two colonies that about 40 per cent, of the total traffic comes

Mr. Gillies.

2265. From Western Australia and South Australia, you say 40 per cent. of the present traffic comes?—Yes.

2266. And you consider that that will be wholly lost to the Pacific Cable -Practically wholly lost.

2267. The traffic from Western Australia includes the very great increase of last year? - That is 80.

2268. Do you know whether the Company is of opinion that that very great increase through

[Continud.

Mr. Gillies --continued.

exceptional circumstances is not likely to last?

Then I do I am afraid I cannot answer that. not know whether your Lord-hip would like me to go on and say why I take only 7 per cent.?

Chairman,

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2269. Presently. It is concivable, is it not. that it this eable were made, ant made with the hearty Colem Prace

The Australian Colonies, the special interests of South Australin anel West Australia being considered, is it not conceivable that under those circumstances those

colonies would fet, at any rate, sane of their traffic go by the new route?- My impression is that the route of the Eastern group of companies would remain the better route the that traffic.

2270. This estimate that the new cable would have m-third of the existing traffic, all the circumstances of the case being taken into con- sid ration, and allowing for possible breakdowns on the new route, is that estimate of an attraction of one-third from the existing companies basel on the supposition that the tariff was reduced at once from 4s. 9d. to 3s. per word ?—Yes.

2271. What effect would it have on your estimate if there was no reduction in the rate; that both lines charged 4s. 9d.?-Well, the Pacific Calde route would not get so much, but I have not carefully considered what that effect would be.

2272. Why ?-Because the traffic would not grow so much.

2273. No, but we are not taking growth; we are taking existing traffic? Oh, I beg your pardon, Because there would not be that same sympathy created for the new route that would be created for it if it were the means of re- during the rate.

2274. You think that that sympathy would be of assistance?--Certainly.

2275. Because I imagine we may take it as absolutely certain that if the new route charged 31. a word, the old ronte would too?--Certainly.

2276. And yet that sympathy would be worth something? I think it would be worth some- thing.

2277. Anything very material?—No, I do not think it would be very material.

2278. Therefore, speaking roughly, given an equal rate on both lines, you think whatever that rate was, whether it was 4s. 9., or 4s., or 3s. a word, that, speaking roughly, the new line would attract one-third of the traffic?-About one- third in either case I should say; less than one- third if the rate was maintained, but I do not think it would make a very great difference.

2279. You estimated an annual average in- crease to the new line, starting with one-third of the existing traffic, of 7 per cent. ?—Yes.

2280. What do you estimate the annual average increase for the whole of the Australian traffic to be ?-1 have not made an estimate for the whole of the traffic. There again I have considered that it would be chiefly from the Colonies to the east of Western Australia and South Australia that the traffic for the Pacific Cable would come, and the business there, except in Queensland, which might be influenced by the

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