CO885-(6-7) — Page 384

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PUBLIC RECORD OFFICE

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Reference :-

C.O. 885

6

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

PACIFIC CABLE COMMITTEE:

After the third year the cost of maintaining the cable would be a charge against surplus earnings, which I shall show would be ample for the purpose, and would, moreover, leave a considerable balance each year to be carried to a reserve fund.

The following table covers the remaining seven of the first 10 years after the opening of the telegraph for traffic, and is computed on the principles set forth in the appended papers. The cost of repairs and maintenance, usually estimated at 6l. per mile, would amount to 43,000%. per annum; for this service I have allowed 50,000l., which, added to interest and working expenses, increases the charge against revenue to 125,000l. per annum.

Surplus for the three first years

1901

1902

1903

1904

1905

1906

1907

Total surplus in 10 years

Gross Earnings. Charges.

Surplus.

£

£

£

159,500

125,000

176,000

125,000

154,000 34,500 51,000

192,500

125,000

67,500

209,000

125,000

84,000

225,500

125,500

100,500

242,000

12.5,000

258,500

125,000

117,000 133,500

£742,000

The estimate shows an increasing surplus year by year which is fully warranted by the data. That a surplus is a probable contingency is due mainly to the assumed low interest on capital; and the low rate of interest, so important a factor in the calculations, presupposes the identification of the Imperial Government with the Governments of Canada and the Australian Colonies in this Imperial-Colonial project. It is scarcely necessary to add that although there is no probability of loss, or insufficiency of revenue to meet all charges, it is indispensable that the precise responsibility attached to the several Governments which co-jointly undertake the work should be clearly defined. I do not take upon myself to suggest the proportion of liability each may bear, as this must be a matter for diplomatic arrangement hereafter.

It has been my object to show by the facts I have presented and the figures I have produced, that a mutual effort, on the part of Great Britain and the two great divisions of the Colonial Empire, can establish the Pacific cable with ease, and practically without cost to the taxpayer in either country.

That the estimates I have presented will be borne out by actual results I feel perfectly satisfied. I have based them chiefly on the business which already exists between Australasia and England, and which is year by year increasing with a very rapid growth. I have taken little or no account of the traffic which undoubtedly will spring up across the Pacific when the means of telegraphing at low rates is provided; a new traffic the whole of which will be tributary to the new line. I am satisfied that my estimates are reasonable and reliable, it has certainly been my aim to submit them in a form which time will substantiate and confirm. The first effect of the Pacific cable will be to confer a benefit on the merchants of Great Britain and Australasia, and, indeed, on the whole of that section of the community in both countries who resort to the use of the telegraph. This is obvious from the mere reduction in rates alone. The reduction from four shillings and ninepence to three shillings per word will within the first year after the Pacific cable shall be open, effect a gross saving in Australasia and the Mother Country of 190,000l. This saving will be repeated annually and will continually be augmented by the growth of business.

Canada may look for gains of another kind and in another way. As Miss Flora Shaw has recently so well pointed out, Canada "commands the commercial high road of two hemispheres," and perceiving the value of the position has taken means to secure its possession. But commerce can nowhere be developed without the ordinary facilities, and the telegraph is in this age the indispensable adjunct, and in some notable instances the actual pioneer of

commerce.

The mere laying of an electric cable between two opposite shores of an ocean has in our time become a comparatively commonplace affair, but to connect Canada with Australasia and New Zealand by telegraph has more than ordinary significance. The contemplated telegraph would greatly strengthen the commercial position of the lands connected by it, and would constitute a common between sister colonies now widely separated. In completing the "Electric Girdle" of the Empire the effect of the Trans-Pacific cable would be far reaching, and its influence would be incalculable. Not the least valuable consequence of the proposal submitted would be its bigh moral and political import. The co-operation of Great Britain, Canada, and Australasia in establishing this telegraphic connexion would present itself to the world as an ideal "co-partnership" unparalleled in history, and it would furnish a striking development of Britannic unity, perhaps foreshadowing still more important developments in coming years.

SANDFORD FLEMING.

PAPERS.

211

The questions which the Committee are requested to consider and report their views upon are as follows:-

1. Is the laying of a cable between Canada and the Colonies of Australasia practicable from a

technical point of view?

2. If so, what route should be selected for the cable!

3. What will be the cost (a) of laying, (b) of maintaining the cable, (c) of the annual working

expenses?

4. What revenue will arise from the traffic which may be expected to pass over the cable?

5. Should the cable be owned and worked by Government or by a subsidized private company!

6. If the cable were to be national property, what would be the proper method of management

and administration!

7. What should be the form of contract offered to a contractor for its construction?

I beg leave respectfully to submit the following remarks, having reference to the first four questions. I have already expressed iny views on question No. 5 decidedly in favour of Govern- ment ownership. I do not presume to offer any opinion on the financial question or the method of administration.

1. Doubts have been raised as to the possibility of passing messages through the section between Vancouver and Fanning Island on account of its unprecedented length, the distance being 3,240 miles, to which, if sufficient allowance for slack be added, the length of cable required will be about 3,600 miles, a length considerably exceeding that of any cable yet laid. Through the courtesy of Mr. Frederick Ward, manager in England of the Commercial Cable Company, I have had the question tested practically within the past few days. At my request Mr. Ward caused experiments to be tried through two of the main cables of his Company. They were looped at Canso (Nova Scotia) so as to form a continuous cable line from Waterville (Ireland) to Canso and back. The experiments were perfectly successful, messages were passed through the whole length of cable measuring 4,733 nautical miles, fully 1,100 miles greater than the Vancouver-Fanning cable; the result of this trial proves conclusively that there will be no difficulty in connexion with the Pacific cable which cannot be overcome. The best possible evidence that the Pacific cable is practicable from a technical point of view is the fact that several of the most eminent cable manufacturing contractors in the world have offered to furnish the cable, of a given capacity for conveying messages, to lay it on the bed of the ocean, and maintain it in efficient working condition for three years for a specific sum.

2. There is only one route open for adoption, viz, that known as the Fanning Island route.

There is no immediate prospect of any other route being available.

3. The lowest tender for manufacturing and laying the cable, on the Fanning Island route, and maintaining it in perfect working condition for three years, is that of the India-Rubber, Gutta Percha, and Telegraph Works Company. This firm asks 1,517,0007, for a 12-word per minute cable, 1,672,000l. for a 15-word per minute cable, and 1,880,000l. for an 18-word per minute cable, maintenance for three years being included in each case (see Appendix B,). 4. The revenue to arise from the traffic which may be expected to pass over the cable would, I firmly believe, exceed the estimates submitted by me. I have estimated that there will be a surplus of 742,000l. in the first 10 years over and above interest on capital, working The surplus would augment year by year in an expenses, repairs and maintenance. increasing ratio, and would be placed in reserve for renewals at some remote period, or would otherwise be dealt with as the Governments may determine.

I have the greatest confidence in the estimates submitted by me, because I believe them to be based on correct data and calculated on sound principles. I have certainly striven to make them moderate, reasonable, and reliable. That the estimates are all that I claim for them, I beg leave to point out that they have been so far confirmed in a most striking manner.

First, with respect to cost. In my letter written at Sydney, New South Wales, October 11th, 1893, and tranemitted for the information of each of the Australasian Governments (see Mission to Australia, page 69), I placed the cost of the Fanning Island route at 1,078,000l. Tenders for laying the cable on that route were received at Ottowa in November 1894, and the highest prices in the tender I have mentioned, range from 1,517,0037, to 1,880,000%., and those prices include the cost of maintaining the cable for three years.

Second, with respect to traffic. In the same letter of October 11th, 1893, I estimated that the total number of words which may be expected to be telegraphed between Australasia and Europe would be, in 1894 and 1895, 1,275,191 and 1,453,716 respectively (see page 71). Through the courtesy of the Postmaster-General of New South Wales, I have been placed in possession of the actual number of words transmitted in each of these years, viz, 1,323,241 in 1894, and 1,948,369 in 1895. These authentic returns establish conclusively that the actual business done has exceeded my estimate; that there has been an excess of traffic equal to 4 per cent. in 1894 and no less than 34 per cent. in 1895.

With respect to the proportion of the traffic which would fall to the share of the Pacific cable, I beg leave to submit a letter addressed to the Minister of Trade and Commerce, Ottawa 18 months ago, and I ask that it may be held as part of the statement which I now make.

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