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PUBLIC RECORD OFFICE

Reference :-

TELC.O. 885

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

PUBLIC RECORD OFFICE, LONDON

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APPENDIX to No. I.

The Eastern Extension Australasia and China Telegraph Company, Limited, to Colonial Office. (Received October 20, 1894.)

MY LORD,

Winchester House, 50, Old Broad Street,

London, E.C., October 19, 1894.

I HAVE the honour to enclose herewith, for your Lordship's information, a copy of a letter that I have addressed to the Canadian Minister for Trade and Commerce, in reference to his public invitation for tenders for a Pacific cable.

SIB,

Enclosure.

I have, &c.

JOHN PENDER,

Chairman

The Eastern Extension Australasia and China Telegraph Company, Limited.

Winchester House, 50, Old Broad Street,

London, E.C., October 19, 1894. REFERRING to your advertisement inviting tenders for a Pacific cable between Canada and the Australasian Colonies, I have the honour to state that, although, in my opinion, a Pacific cable is not at present needed on commercial grounds-the existing Australasian service being more than equal to all requirements yet, if the Governments interested consider such a line a necessity in the interests of the Empire, and are prepared to make a substantial contribution towards the cost of it, the cable companies, over which I preside will be found quite ready to co-operate in the matter and, with their large experience and many facilities, will be able to undertake the work on better terms than could be offered by any other company not so favourably situated. Moreover, a Pacific cable in combination with the existing service would form a triplicate line, whereas, if laid in opposition to the present system, it could not be considered an efficient service unless laid in duplicate.

It is easy enough to lay a cable in almost any ocean depth, but it is quite a different matter to efficiently maintain it, and, before any contractor can form a reliable opinion on this point, it is absolutely necessary that full information should be available ns to the exact depths and nature of the sea bed along the proposed route.

This was the view adopted by the Colonial Conference in 1887, and endorsed by the recent Ottawa Conference when it passed the second of the five resolutions annexed to the General Conditions.

I am, of course, aware that many valuable soundings have been taken in various portions Pacific of the Pacific Ocean since 1887, and that important technical improvements have been effected in cable laying, but, nevertheless, it would be running no slight risk to lay a cable without further knowledge than we at present possess, and any guarantee of maintenance that might be given would necessarily have to include a large sum for contingencies.

It should also, I think, be clearly understood by the Governments concerned that a cable with a calculated speed of 12 words per minute, as required by the General Conditions, would in practice give an actual working speed of little more than four words per minute, which for ordinary The cables most recently laid give a working speed of 25 to 30 purposes would be quite useless. words per minute.

Having already stated my views in regard to the financial prospects of a Pacific cable, and shown that, under the most favourable conditions, it would be a financial failure unless largely subsidised, it is unnecessary for me to dwell upon that phase of the question now, beyond calling attention to the fallacy underlying Mr. Siemens's estimate of revenue, viz., that the greater the length of a cable the larger would be its receipts. This is so obviously inaccurate that it does not need any comment.

Nor is the estimate given in the letter which Mr. Sandford Fleming addressed to you on the 20th July last much more reliable, as he bases his figures on an average normal increase of traffic of 15 per cent. per annum, whereas the Australasian traffic for the current financial year shows a decrease in the number of words transmitted at the rate of nearly 12 per cent. compared with the last financial year, and an estimated loss of nearly 30,000l.

A falling off is also noticeable in the New Zealand inter-colonial traffic, although the tariff between Australia and New Zealand was reduced on the 1st January 1893 from 88. 6d. to 28. per 10 words. The revenue also shows a decrease at the rate of 59 per cent. for the current financial year as compared with the receipts before the reduction of tariff.

Consequently, with these disappointing results before us, and having, at the express request of the Australasian Governments themselves, raised the Australasian tariff from 48. to 48. 9d. per word, I venture to submit that a further reduction to 38. per word, as required by the General Conditions, is not only unreasonable but would be most injurious to the existing system, which would thereby risk a further loss of 90,000l. a year, in addition to the heavy losses from which it is now suffering in consequence of the last reduction of tariff.

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In conclusion, I wish it to be distinctly understood that it is not my desire to oppose the laying of submarine cables, but rather to facilitate their extension wherever needed, and as soon as the Governments concerned have decided upon the laying of a Pacific cable, and the requisite data is forthcoming to admit of the work being successfully accomplished, I shall be most happy to enter into negotiations for carrying out their wishes in the matter.

I have, &c.

JOAN PENDER,

To the Hon. Mackenzie Bowell,

Minister for Trade and Commerce,

Ottawa.

Chairman.

II. THE POSITION OF THE EASTERN TELEGRAPH COMPANIES AS REGARDS COMMUNICATION

BETWEEN GREAT BRITAIN AND AUSTRALASIA.

The original telegraphic communication with Australia was established in 1872 by private enterprise without Government assistance. The line, however, was in part single, and it was found "could not be depended upon to secure the communication against interruption." (Sir J. Pender, letter of 4th April 1894, p. 359 of C. 7553.) The result was that in 1880, in consideration of an undertaking by the Eastern Extension Telegraph Company to duplicate the line between Penang and Australia, certain of the Colonies agreed to pay a subsidy of 32,4001. a year, then divided according to population as follows:-

Victoria

New South Wales

South Australia Western Australia

This subsidy is payable till the end of the present century.

£

14,478

12,617

4,805

498

£32,400

A yearly subsidy of 4,2001, is also paid for the Tamanian cable. New South Wales and New Zealand at first paid 2,5001, and 5,000. respectively for the New Zealand cable, but under the existing agreement between the Company and the guaranteeing Colonies as regards the New Zealand local cable connection the Colonies have to make up to the Company any deficit between the actual earnings of the New Zealand cables and the sum of 20,0004., provided such deficit does not exceed 9,000l. For the year ended 30th April last the amount payable under this agreement to the Company is 5,924).

It may be added that the Company receives the following other

subsidies

Amount.*

Government.

£

35,000 British

15,000

Cape

5,000

Natal

19,000

British

19,600

British Colonies

1,000

British

96,600 (in 1887).

For

South African cable.

Da. do. Do.

du.

African direct.

West Indiau.

Malacca connection.

British and Colonia!

• These are Sir J. l'eader's figures, p. 130 of C. 5091 (1887). Since then 14,0007. has to be added for the Zanzibar-Seychelles

line, and 14,000/. for the Seychelles-Mauritius. The usual terin for such subsidies is 20 years.

It also receives certain foreign subsidies :--

Manilla - Tonquin

Maccao -

£

8,000

10,000 500

In 1887 (after the Colonial Conference had met) the Eastern Telegraph Companies proposed to the Australasian Colonies that the latter should guarantee the annual revenue of the companies from Australasian telegrams, based on the average of the three years ended 1886, for 13 years, the unexpired term of the duplicate cable subsidy, and make the throngh tariff 48. per word. The annual traffic receipts on that basis were put at 185.000, representing at a 48. tariff, 80,000l., or 105,0001, less, and the companies offered terins which in effect reduced the maximum liability of the Colonies to 78,7501,

It was estimated that if the traffic receipts increased by---

25 per cent. the contribution would be

#

50

75

H

100

"

"

£

63,750

48,750

33,750

18,750

This offer was eventually accepted by the Governments of New South Wales, Victoria, South Australia, Tasmania, and Western Australia, with these alterations, that the Governments agreed

0 92688.

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