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PUBLIC

RECORD OFFICE

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‛「༴། ། ། ཱ། །

Reference :-

C.O. 885

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PUBLIC RECORD OFFICE, LONDON

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

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PACIFIC CABLE COMMITTEE:

The Hon. Dr. Cockburn: Well, then, is the Conference willing that an opinion should be expressed that in the event of South Australia coming in the guarantee would be given?

The Hon. Mr. Duffy: We are willing enough to give it, if it means, in a business point of view, a reasonable thing. It is not a question of making anything out of the transaction, but of not Insing too much, for the present condition of our finances will not allow it. If it is shown to be likely to amount to a reasonable sum, I would have no hesitation in recommending my Government to do it.

The Hon. Mr. Cook: Let me understand you. I would not ask our treasurer to pay this amount irrespective of the other project. Whatever is paid here will be part of the project.

The Hon. Mr. Duffy: We will lose something, certainly. (Long pause.)

The Hon. Mr. Cook: I think if we pass this and telegraph it over-

The Hon. Dr. Cockburn could not see any good object to be gained.

The Hon. Mr. Cook: We make no stipulation.

The Hon. Dr. Cockburn: It means this, an outsider would say: "The idea that South Australia

" has always had with regard to the attitude of the other Colonies towards her transcontinental line is

**

a my.h" that they are only prepared to consider her interests it advantageous terms can be made for the future. That is the way I should read it.

The Hon. Mr. Cook quoting: "Having regard to their vested interests in the transcontinental line." Can that be interpreted in that way?

The Hon. Mr. Reeves: I do not feel inclined to force (using the word only in an amiable sense) Dr. Cockburn's decision by repeated argument or hurrying at this moment. It seems to me absolutely inevitable that South Australia must come in and it will be to her advantage. If her representative feels doubtful on the point, I do not feel disposed to urge it.

The Hon. Dr. Cockburn: I have already stated that South Australia desires to come in. The Hon. Mr. Cook: Then where is the trouble?

The Hon. Mr. Reeves: Of course it must be a question of terms.

The Hon. Mr. Cook: It looks like this-is not this Dr. Cockburn's attitude-supposing his Government decline to come in, he wants an expression of opinion that we are still prepared to give South Australia something?

The Hon. Dr. Cockburn: No; because I said if the resolution is carried I would pledge myself so far as possible, that is, my Government, to come in.

The Hon. Mr. Cook: I am strongly of opinion that if the matter goes over, and the other four Culonies into the project, it would be very difficult for you to come in afterwards.

go

The Hon. Dr. Cockburn: If it is carried, what is your intention?

The Hon. Mr. Cook: It is expressing our wish that you should come in.

The Hon. Dr. Cockburn: On this being carried, I say that the condition on which South Australia would come in would be that her hopes in the past as regards the attitudes of the other Colonies would be realised; that is, they agree either to guarantee-

The Hon. Mr. Cook: You see the position; you have something to part with; surely you can say what you value it at. Until we know what your idea is about it, it is useless for us to make a proposition.

The Hon. Dr. Cockburn: When will this proposition be made?

The Hon. Mr. Cook: I candidly confess I do not think it ought to take many hours to fix a broad proposition, which would serve as a basis for discussion. (Long pause.)

The Hon. Dr. Cockburn: Well, would this be an acceptable proposition-that a guarantee should be given to South Australis that when the Pacific line is constructed, her receipts from her line would not be allowed to fall below the average (say) of the last five years?

The Hon. Mr. Duffy: We would like to know what that is: we could not bind our Governments without.

The Hon. Dr. Cockburn: Yet you are asking me to bind mine. (No, no.) You can never know when you give a guarantee what you are pledging the Colony to; you do not know whether there will be a loss, or how much.

The Hon. Mr. Cook: Supposing you have You have been making at least 5 per cent. on your line

The Hon. Dr. Cockburn: The returns this year have certainly been better.

The Hon. Mr. Cook: You are making between 5 and 6 per cent.-

The Hon. Dr. Cockburn: No; there have been only two years when there has not been a dead lose.

The Hon. Mr. Cook: Oh, yes, I say you are. Can you expect us, if that line has reached paying point, and there is a prospect of its continuing to pay 5 per cent, to guarantee that per-centage if we you had a guarantee of can get money at 3 per cent.? Would not the point of equity be reached if current interest?

The Hon. Mr. Thynne: I think at the present time that is more than any of the Colonies would be prepared to do on the outlay. It could not possibly be considered worth anything like that.

The Hon. Mr. Cook: I am speaking of the valuation, whatever that may be

The Hon. Mr. Thynne: I think his suggestion was that the revenue has been so much during the last five years--would we guarantee to South Australia that she shall lose nothing of that traffic? That is, guarantee that her revenue shall not be reduced.

The Hon. Mr. Cook: I say it would not be fair to guarantee that return.

With less business the

expenses would be less also. If present revenue were guaranteed and the expenses decreased, a handsome profit would result. That would not be fair. We only want to prevent a greater actual

loss,

PAPERS.

The Hon. Dr. Cockburn: There have been two years in which there has not been an absolute loss, taking interest and working expenses into account-this year, and another year some time back.

The Hon. Mr. Cook: Averaging the years, you want to be guaranteed against loss; that point is reached when you get current interest.

The Hon. Dr. Cockburn: Current interest would hardly do; we should want interest and working

expenses.

The Hon. Mr. Cook: I am speaking of the net returns; the interest on the loan should be guaranteed.

The Hon. Mr. Duffy: And working expenses.

The Hon. Mr. Cook: What do you mean by the two years' return? Gross monetary return? The Hon. Dr. Cockburn: I say that, except for two years, taking the interest on the line and working expenses as our expenditure, and the revenue from the line as our receipts, in every case the expenditure and interest have exceeded the receipts of the line.

The Hon. Mr. Cook: And now the return is 5 per cent.?

The Hon. Dr. Cockburn: For this year only. We only ask for a guarantee of the average for five years, which would not give that return. I throw in three lean years and two fat years. We do not want to make a loss,

The Hon. Mr. Thynne: The cable traffic at the present time all goes over this line, it is the only business our cable would affect, and some assurance is wanted that the amount of her receipts from this cable traffic shall not be reduced.

The Hon. Mr. Cook: No, that is what I say would not be a fair basis. Supposing a certain amount of business is now done: in future expenses will be very much reduced, and if they are making 5 per cent. now and the present receipts are guaranteed, it might mean 7 or 8 per cent, on the undertaking. All they want guaranteed is that they will not lose. That is reached when the working expenses are paid, depreciation accounted for, and interest provided. To calculate on the same receipts as now would be absolutely unfair: that would put their profit up considerably.

The Hon. Mr. Thynne: I do not propose they should always be guaranteed the same general receipts. We should have to find out their cable traffic and calculate on that.

The Hon. Mr. Cook: It seems to me it is a simple matter. Pay the expenses of working the line, and pay ourrent interest on it.

The Hon. Dr. Cockburn: Last year our revenue was 43,9261.; working expenses, 18,2807; annual interest on loans, 24,7031.; making a total of 42,983. Showing a gain, but in other years (which Dr. Cockburn gave) there had been losses in some cases up to 12,000l. and 14,000/

The Hon. Mr. Duffy: What interest do you pay? It must must be very high? The Hon. Mr. Reeves calculated it must be more than 4 or 4 per cent.

The Hon. Mr. Cook: It would be better to take it over and get the money at 24 per cent. Some conversation ensued which it was impossible to catch, Dr. Cockburn referring to some papers mentioned the sum of 332,000,--" exclusive of guarantee "" in round figures, 32,940l."—&c. Mr. Cook asked something concerning a guarantee. Mr. Reeves asked the total lues on the last five years, &c.

The Hon. Dr. Cockburn continuel: Well now, is this proposition intended to stand as "Dr. Cockburn," or "the South Australian Government" and what terms do you expect me to state? I have already suggested that you guarantee us on something like our present basis for the last five years. I think that is a fair thing. We want to feel assured that the Pacific Cable will not land us in a bigger loss than the average loss for the last five years,

The Hon. Mr. Cook: With the option of taking it over?

The Hon. Dr. Cockburn: I would like to consult my colleagues before saying that. It is a big question, and I would not like to say that right out. You see, it is a question of policy, as a portion of the line belongs to our local telegraph system, and it might lead to complications.

The Hon. Mr. Cook: Can you tell us how much of it belongs to your telegraph system? You may consider your proposition in regard to this line a very handsome one; here is part of it, the main trunk of your telegraph system, and you are proposing to add to it the cable receipts of other Colonies.

The Hon. Dr. Cockburn: Yes, but there is very small local traffic.

The Hon. Mr. Cook: It would have to be there if there were not the cable line to carry the traffic.

The Hon. Dr. Cockburn: But not maintained on anything like its present scale.

The Hon. Mr. Cook: It was constructed originally to open up your country?

The Hon. Dr. Cockburn: I hardly think the Northern Territory existed in name 24 years ago-

at any rate, there was little settlement there.

The Hon. Mr. Cook: Well, gentlemen, what do you say?

The Hon. Mr. Duffy: Where are we exactly? Suppose we do not do anything until Dr. Cock- burn gives us in the morning a formal statement what he is prepared to do?

The Hon. Mr. Reeves: I feel the position of New Zealand a little difficult. Of course, I am perfectly prepared to go as far as voting for a general resolution that an equitable concession be granted to South Australia. I think she is entitled to it; but if we are to go and pin ourselves to Apecific details here, and recommend our Governments (Mr. Cook: "That pins us"), and if there is to be a reservation as to the terms on which South Australia comes in (and we have an intimation from her delegate that she is not likely to come in on equal terms, even after we have made this proposition), then the question must be seriously considered. I have no objection to vote for the general resolution, that some equitable concession should be given. But at the present stage I am not prepared to say how much further I will go after what we have heard.

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