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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

2 December 1896.]

Chairman--continued.

168

Mr. PLATFORD.

wool might spring up between San Francisco and Australia ?—I do not imagine it, unless the wages in America approach the wages in Europe.

Sir Saul Samuel,

2693. May I venture to say that there is a trade at the present time between Australia and California in wool?—I do not know of any; I am not aware of a single bale ever going, and, therefore, my contention is, with regard to that point, that the service is an adequate one, and that for commercial purposes the cable is not required.

Chairman.

2694. Is that opinion your private opinion, or Govern- are you speaking now on behalf of your

behalf of my ment? Well, practically, on Government too. Then there is another point

in connection with the line that has been urged in its favour, and that is that the line across the Pacific would be of great benefit for strategical purposes. Of course I cannot speak as an ex- pert upon that, but I suppose the best authority that we could go to on a question of that sort would be the British Hydrographer. We know bis opinion in 1887, which he communicated to the Imperial Conference of that day,

2695. Is one of the duties of the Hydrogra- pher to consider questions of strategy?—I should imagine so.

2696. I think you can take it from me that that is not 80.

Questions of strategy 1 think

you will find belong to the Intelligence Depart- ment? At all events he gave his opinion, and he was a man who was examined on that parti- cular point at that particular Conference, and i would imagine that the Conference would not have examined him on that special point: as far as I know, I know of no others who were ex- I should imagine they would not amined : examine a man unless he was supposed to be able and competent to give an opinion on that point, So far as I know there has nothing occurred since 1887 to lead him to modify his views on the subject.

When was 2697. Let us get that quite clear. Admiral Wharton examined. He has expressed his opinion in writing, I am aware, but was he ever examined?--The opinion in writing was a report by him on a proposal to connect Van- couver Island and New Zealand by a submarine telegraph.

2698. It was a report? I do not think they In that report he examined any witnesses. says: "Looked at from an Admiralty point of "view, the sole advantage of a submarine cable "across the Pacific would be the power of com- "munication afforded with ships at Honolulu " and the Fijia" (you are leaving out Honolulu now, at least it is proposed to leave out Honolulu now), "and surrounding groups. This "advantage cannot be considered as in peace "time, great, and it would not appear in time "of war to be important, as the Fijis are the

Chairman-continued.

[Continued.

"sole possessions affected." Then I think it is admitted, as far as these cables are concerned, no matter where they are laid, or how they are laid, in time of war they can be readily cut.

2699. That again is rather a question for experts --Well, it is, but as far as I can ascer- tain, the highest authorities who have spoken ou the subject in the past have given it as their opinion that it is not required for strategical As far as I can see, there seems to purposes. be nothing in the point of the strategical impor- tance of the cable.

Sir Donald Smith.

2700-2702. Do you not think that it would be of importance, Mr. Playford, even in time of peace, that all confidential messages from one Govern- ment to another should be in the hands of British subjects, transmitted through British lines, and on British territory throughout? Considering that you have codes, secret codes, in which you could transmit messages, even if they go through foreign hands in secresy. I do not see where the advantage comes in.

2703. It would be quite possible? - Un- doubtedly. Then there is another question in connection with it, apart from the fairness, or otherwise, of the Government competing with private enterprise, and on the assumption that no compensation will be allowed to the owners of present lines, the next question is, Will the line pay? I think there can be only one answer, and that is, No. I do not think that the most sanguine promoters of the line think it would all events, in the first instance, and the chances whether it would pay in the future

pay, at

are remote.

Chairman.

2704. I suppose that is a question of the com- parative cost and the comparative revenue?-- Undoubtedly.

2705. On that point, before you leave it, can you give me any information as to the likelihood of the expansion of the Australian telegraphic business? No, I cannot. My own idea is that, of course, as the colony prospers, it will neces- sarily expand, but as to what extent I cannot say. There has been an abnormal expansion of traffic as far as Western Australia is concerned, last year, in consequence of the mines that were found in that part of Australasia; but on the point of whether it would pay I would like to read from a letter which I received from Sir Charles Todd, dated 24th March 1896 (Sir Charles Todd is our Superintendent of Tele- graphs, and is an authority on all of these as follows: points), in which he writes me

"It must be borne in mind, when estimating the "amount of business that would pass through the "Pacific cable, that it will rely solely on the "Australasian traffic, of which it will obtain "only a small portion. We may admit that "it will carry all American-Australasian mes- "sages, which amount, however, to less than 4 per "cent. of the whole. Excluding these messages,

2 December 1896.]

Chairman-contined.

169

Mr. PLAYFORD.

all West and South Australian business will flow through the present cables, as also will "more than one-half of the Victorian and Tas- "manian business, and possibly, also, at least "one-half of the traffic with New South Wales. In addition to this, the present cables will com- "mand all telegraphic communication between Australasia and China, India, and the Eastern * countries. It will not therefore be an over-

** estimate to say that the Darwin and Roebuck routes will command at least three-fourths of the whole of the telegraph correspondence of Australia."

+

2706. The effect of that is that Sir Charles Todd estimates that the maximum proportion of the present traffic which this new cable would expect to get would be one-fourth? Yes, roughly one-quarter. "Last year's traffic, I see, was over 1,900,000 words, being an abnormal increase owing to the gold boom and speculation “in Western Australia, whose mes-ages in 1895 → totalled no less than 433,000 words, or eight times the previous year's total. This can hardly be maintained. My estimate of 500,000 words for the Pacific cable is reasonable even in four years' time. The financial position of the undertaking, therefore, is approximately as follows: The revenue, we will say, would be "50,000%; the expenditure, working, and main- "tenance, 55,000; the amortisation will, say, be 70,000, the interest on the borrowed expendi- "ture will be some 34,000%, making a total of 179,000, or an actual loss per year on the working expenses of 129,0007. The figures, even though only approximately correct, con- clusively show the costly nature of the proposed undertaking."

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not.

2708. That is so;

2707. Are you aware that last year, leaving West Australia out of the reckoning altogether, the increase of the telegraphic business was 20 per cent. over the previous year? No, I am

the Eastern Telegraph Company have told us so. Would you consider that that rate was at all likely to be maintained or not? I think it would not, because I know that the increase of the traffic was very largely due to financial complications with banks and others who have had to telegraph messages, very long ones, over here in consequence of the position that they found themselves in with regard to the persons who had lent them money

here.

2709. That was the case in 1895, was it? That was the case in 1895, all through 1895.

2710. Would you think that 10 per cent. as a normal rate of increase was a reasonable estimate? I may say

that that has obtained on the average during the last 20 years. Would you consider that a reasonable estimate for the future?-That would entirely depend, of course, upon other conditions, such as the rate that you charge for your messages. Of course, if the messages are reduced in price from 4s. 9d., as proposed, to 3s., possibly there would be an increase, though not a very great one. As a rule, the increase is not so large as anticipated; we reduced our messages from 9s. 4d, down to 4., and we

[Continued.

Chairman-continned. found that the loss was so great that the Colonies were only too glad to ask the Government of South Australia and the Eastern Extension Com- pany to quietly put up their rates. The Eastern Extension Company put up their rates 9d., to 4s. 9d., and the Colony of South Australia put up their rate for the line across the Continent from 5d. to 7d. The increase of traffic therefore that was anticipated in consequence of the lowering of the rates never occurred; it was tried for a certain length of time and then was abandoned, and we put up the rate to a higher one in con- sequence of the loss that was being sustained, but undoubtedly if there was a drop of 1s. 9d, a word down to 3s., that would have some effect, and the effect it would have must be in the direction of increasing the traffic.

2711. But supposing the tarifi remained the same; do you think that 10 per cent. is a reason- able estimate of increase, of annual increase ?— I should say so if the figures work out from the start, in 1872, to now, 1896—you take the total increase and divide by the number of years—that ought to give you the percentage of average increase from the commencement, and that would be a very fair estimate, I should imagine, of what you may anticipate in the future.

2712. If that is so, you observe the fact is, that every 10 years the traffic more than doubles? I do not know; I have not got the figures before me; I have not seen the figures.

2713. If that was the case, if the best estimate that could be obtained was that every 10 years the traffic doubles, of course there must be an end of it sometime; if in the next 10 years the trattic was likely to double itself each decade, would that alter the views you hold as to the necessity for a fresh cable ?—No, it would not, simply for equal to the increased traffic that you anticipate. this reason, that the present communications are

You see you have at least now, with the present lines, without any addition whatever, except possibly some duplex working on one line across the Continent, and one also up to Roebuck Bay— you have ample room for saying that you could do about four times the present amount of traffic without any increase in the lines of communica- tion.

Therefore on that point I say that I do not think it would pay. Now if the cable is laid as proposed by the Governments, and 1 may say here that if a cable is laid across the Pacific at all, I think Mr. Fleming's view that it should be laid by the Governments in preference to being laid by a company is a correct one, because per- sonally my own view of the matter is this, that all these means of communication should by rights belong to the Government in preference to belonging to private individuals.

So far as I know now, the whole of the telegraphic com- munication in the Colonies is in the hands of the Government; but supposing the cable is laid, of course there is the question then to consider as to what will be the result to the colony of South Australia and the colony of Western Australia and also to the Eastern Extension Com- pany. I should imagine that in view of the policy of Great Britain, and so far as I know of Canada and of the whole of the Australian colonies, work that com- that when they undertake a

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