CO885-(7-8) — Page 139

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PUBLIC RECORD OFFICE

Reference :-

THETIC.O.885

PACIFIC CABLE COMMITTEE.

1

(Secret and Confidential.)

REPORT.

The Committee have considered the points specified in the instrument of appointment, and submit the following report upon them.

1. The cost of (A)"laying and (8) maintaining the line, and whether as a single or duplicated cable.

(A.) The Committee have consulted Messrs. Clark, Forde & Taylor, as to the cost of laying the cable, and have been furnished by them with an estimate, including provision for two maintenance ships and all other initial expenditure, which amounts to £1,708,659, and they are assured by Mr. Taylor that this figure will be within 5 per cent. of the contractors' prices. This estimate contemplates a cable with a core

of 600 lbs. copper and 340 lbs, gutta percha per nautical mile for the long section between Vancouver and Fanning Islands, with a speed of eight paying words per minute. It will be observed that the amount is closely approximate to that of £1,800,000, which was arrived at by the Pacific Cable Committee of 1897, after taking the best available evidence; and the Committee are of opinion that it may be taken as a basis of calculation.

(B.) The previous Committee calculated that the capital of £1,800,000 would be raised at 24 or 24 per cent.; and on the latter assumption they estimated the total aumal charge as follows:-

Interest

Sinking fund

Working expenses Maintenance

Total

E

49,500

17,178

22,000

70,000

£158,673

}

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Taking the above items in their order, we have to observe :—

(1) That the interest, if the money be raised, in existing circumstances cannot

be put at less than 3 per cent.

(2) That, assuming this rate of interest, the charge for sinking fund would be

correspondingly reduced,

We are of opinion that the interest and sinking fund together should be put approximately at £70,000, instead of £66.673 in the previous Committee's calculation.

(3) That we have satisfied ourselves that the working expenses could not be

safely put at less than £25,000,

(4) That the charge for maintenance, which is made up of £40,000 for replace- ment and repairs, and £30,000 for the fixed expenses of two repairing vessels, is somewhat higher than is necessary, and that a provision of £25,000 for the former service, and of £30,000 for the latter, would be sufficient; this being a total of £55,000 instead of £70,000.

We contemplate, therefore, an annual expenditure as follows :-

Interest and sinking fund

Working expenses

Maintenance

Total

as against £158,673 in the previous report.

70,000

25,000

55,000

£150,000

On the question whether the cable should be a single or a duplicate line, we have nothing to add to the previous Report, except that it would probably be in the interests of both the associated Governments and the Eastern Companies to come to a working agreement under which rates could be arranged and traffic could on certain conditions be transmitted indifferently by either system. If this were done the Pacific cable would take the character of a line duplicating the Eastern route, and the reasons for laying a second Pacific cable would have much less force.

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