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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

3 December 1896.]

Mr. Gillies-continued.

190

Mr. LAMB.

3008. Have you in your mind how soon that might be that you think we would be under the necessity, through pressure of business, to double the cable?—Well, I think you ought to begin to think of it in two or three years.

3009. I suppose you consider that if there was a break from any cause it would be forced It ou at once?-That would hasten matters. would bring the necessity home.

3010. Then you gave an estimate the other day of probable traffic. The estimate you have given to-day, of course, was the maximum capacity of the cable if you had traffic to fit that ?—Yes.

3011. Have you changed your opinion in any way with reference to the estimates previously furnished of the traffic that would be likely to be obtained? I have only changed it because I have discovered a mistake in my calculation. I made my estimate on the assumption that every word would be fully paid for instead of reduced rates being paid for Government messages and press. In fact, in the other calculation I took that into account, and in the calculation of probable revenue I forgot to take it into

account.

3012. That is to say, you over-estimated the probable revenue? Yes; making allowance for 2 per cent. Government, and 10 per cent, press, at two-thirds rates for the Government, and one- fourth rates for the press, the sum I arrived at at the end of 10 years, of 85.4837, ought to be 78,500/.

3013. And then you have not seen reason to change your opinion with reference to the amount of traffic that there would be?-No; I feel that I could not prudently estimate the diversion of traffic at more than one-third, or the annual increase at more than 7 per ceut., and in saying that, I take into account the liability to interruption of the cable, which would so seriouly affect the growth of the traffic, and deprive you for a certain time of all traffic.

3014. What percentage have you allowed for that ?—I am afraid I cannot give that.

3015. That is, you have made a deduction from the total by taking a percentage off for possible breaks, which would last a little time before repair?-Yes. I have not got the thing worked out here with me, but I adhere to my e-timate.

Sir Donald Smith.

3016. You heard the evidence given by Mr. Carson, I think ?--Yes.

3017. Also by Mr. Robert Gray, Mr. Gray mentioned, I think, that with a cable of 525 lbs. of copper and 368 lbs. of gutta-percha, 60 letters could be transmitted per minute, that is letters forming practical or paying words. I think such was the case, and that he said he had advised with Lord Kelvin with regard to this ?—No, sir.

3018. Practical, not theoretical?-I think he used the word "practical," but in a different sense from that in which you use it.

3019. He used the word "practical "?-[ think he did use the word "practical," but it

[Continued.

Sir Donald Smith-continued. was quite evident that he used it in a different sense from that in which you use it.

same Bonse

3020. In what sense then are we to understand that he used the word "practical "_?—He used it in the

as Mr. Precce's "theoretical" and Lord Kelvin's "theoretical "; that is, the maximum possible speed of the cable.

3021. What are we to understand by the evi- dence given by Mr. Carson that 10 paying words, or 80 letters, can be transmitted per minute ?-I think Mr. Carson was speaking of a very special service on the Atlantic cables which are not under the regulations of the International Telegraph Convention, and on which a miscel- laneous business is not done, and my answer to him would be that, on a miscellaneous service like that between England and Australasia, you would have to use the preambles and indica- tions which are prescribed by the International

I could show the Committee Convention. parallel case in the internal service of this country.

3022. He nya distinctly 10 paying words: that would be, duplex, 20 paying words by using the automatic key ?-Well, I do not accept his statement as applying to a Pacific cable.

3023. Then you have not modified your own opinion?-Not in the least.

3024. Not with regard to the number of pay- ing words?-No.

3025. Ten each way? -His statement that duplex is equivalent to doubling the capacity is, in my opinion, contrary to experience.

3026. It stands, however, that you have not modified your views with regard to this, notwith- standing the evidence we have heard, both from Mr. Carson and Mr. Robert Gray ?—That is so, but I did not understand Mr. Robert Gray to give the same kind of evidence as Mr. Carson. 3027. Although Mr. Gray spoke of practical words? Yes.

3028. On the authority of Lord Kelvin ?-- I do not think that he entirely agreed with Mr. Carson; that was the impression left on my mind.

3029. You speak of certain engagements the Government or Post Office were under to the Anglo-American Companies?-Yes.

3030. May I ask what these engagements are which might interfere in any way with an arrangement with another cable

P company I have here in my hand the heads of agreement made between the Duke of Montrose as Post- master-General, and the Atlantic Telegraph Company and the Anglo-American Telegraph Company in 1868. This Agreement was sche- duled to the Telegraph Act, 31 & 32 Viet. c. 110, and the 7th clause is as follows:-"The Post- "master-General to hand to the Companies in "London all messages which can be sent by the "Companies' Cables, and the Companies to hand "to the Postmaster-General in London all mes- received through the cables unless other- sages "wise expresly required by the sender in either

. саве.

3031. For what period of time; how many years? That agreement had no limit of time in it.

3 December 1896.]

191

Mr. LAMB.

Sir Donald Smith-continued. 3032. It is without limit ?-That agreement. 3033. And may not be abandoned by either party on giving notice?-I am going to explain that that agreement was followed by a memo- randum. When the Telegraph Act of 1869 which gives the Postmaster General the exclu- sive privilege of transacting telegraph business was in preparation, the Atlantic cable companies, which I have mentioned, opposed the Bill. That was to enable them to negotiate further with the Postmaster General, and a memorandum was signed by the Postmaster General and the companies explaining-

3034. If you can mention the length of time for which the Government is under agreement with the companies, I think it will be quite sufficient perhaps it may be given in the memo- rendum? The memorandum both limits the agreement and also varies the terms of the agree.

ment.

3035. Then, if you will be good enough to go on ?-The memorandum limits the agreement to 30 years, with clauses providing for a revision of its terms at the end of the first 10 and 20 years, and

3036. That is really all that is material. Is it your opinion that there will be any advantage in having a cable from England to Canada, and on to Australia, which would not touch on any foreign ground? I think it would be liable-- very liable to attack. In the first place the land line across Canada can be tapped at any point and the messages read by any telegraphist crossing the frontier, and in time of war it would be easy to break the line down by an armed party.

3037. But would it not be less liable to inter- ruption if all the stations were on British ground rather than on foreign ground?--I do not think it would, because of this enormous stretch of land territory. 1 think that lays it open to

attack.

3038. You think that with proper vigilance on the part of the Telegraph Company, the stations being on islands pertaining to Great Britain, would not be safer from interference than it the connections were on'foreign ground ?--No, I do not think they would.

3039. They would not ?—No.

3040. It would make no difference; that the lines are equally safe on foreign ground as on English? Well, I would put it in this way. that all the present stations are worked by British clerks. They are only accessible land over 790 miles until you reach Australia. By the other route they would be accessible on land over between 3,000 and 4,000 miles.

on

3041. I am speaking of the landing of the cable; it would appear to me that there would be more safety if you had it on your own ground than on that of a foreign nation, and that you would have greater facilities for watching it in the neighbourhood of the points at which the cables were landed ?--If you are speaking only of landing places, I have no doubt whatever that landing places on British territory are better and safer than landing places on foreign territory.

[Continued,

Sir Donald Smith--continued. 3042. But on the whole you think the cable would not be safer against interruption by foreign countries in the event of war?-The cable itself would not be more liable to interruption or less liable to interruption, but the whole line of communication in my opinion would be open to that special kind of interruption in Canada because the line runs near the frontier of another State.

Mr. Jones.

3043. You laid great stress, Mr. Lamb, upon the idea that it would be unfair to the existing companies that a new line should be promoted which the Imperial Government,by her assistance, concurred in or contributed to; would you think, looking at the position of the existing companies, that they would have anything very much to complain of? Are you aware of the position of the company as represented by their published reports? I am aware that they are in a very satisfactory financial position.

3044. Are you aware that the statement laid before the shareholders in 1893, showed at the close of that year that a total sum of 633,6861. had been accumulated after paying out of revenue the cost of new cables and cable renewals to the extent of 1,160,6857., and after paying interest on the watered stock of 1,250,000/?—I do not. know the exact figures, I only know that, in general terms, they are in a favourable position. 3045. Well, it was admitted the other day that their stock was watered to the extent of 250,000, but they stated that that had been wiped out, and that it had been wiped out in this way, that the earnings of the company had been invested in cables, thereby making it represent actual value. Do you think the public would consider that they would have a very good case considering the position they are in and their earnings, that they had shown by their own annual statement ?-I think there are some members of the public who would not consider the Company's interests in the least, but would only look to the question of the reduction in the rates for telegrams, but there is a large section of the public in this country who are concerned in these companies as investors, and I think they would take a different view.

3046. Naturally, but do you think the public, the English-speaking people on this side and the colonists on the other side of the water, are going to remain satisfied with the existing conditions as they are for all time to come ?—No, I should not like to say that.

3047. Well, would it not practically amount to that --No; I am sorry if I have conveyed that impression as being my view. My own view would be that the course of trade would probably require the construction of a Pacific cable some day.

3048. How do you reconcile that with the opinion that you give now, that it would be un- wise as well as unfair to attempt the construction of another cable? I note that you say here that the course of trade some day will no doubt justify a Pacific cable. You said that before?— Yes

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