10
years from the date on which the Agreement comes into operation.
"The probable effect of the Agreement would be to maintain the present charge of 2 dollars per word for telegrams between the Treaty ports in China and places in this country, if indeed it would not be to raise the charge.
"The exception of Russia in Articles 1, 2, 3, and 4 would leave that country free to agree with China for a lower terminal charge in the latter country than 5 fr. 50 c. It has been observed by a correspondent of the 'North China Daily News,' writing under the name of 'Equity,' that if China is about to take a terminal rate of 2 fr. in respect of Russian messages, as has been reported, and Russia is so to fix her own charge as to make the total charge between the two countries 1 dollar, then there will be the great difference of 1 dollar between the charges from China to Russia on the one hand, and from China to England on the other.
"Here would arise a point which is contemplated in Article 13 of the Agreement. If Russia has a rate of only 1 dollar to China, while England has a rate of 2 dollars, encouragement would be given to the establishment of what are termed 'packing agencies' in Russia, to whom messages will be sent from this country for outward transmission.
"The question arises, On what ground could such an arrangement be made in favour of Russia? It is presumed only on the ground that she is a neighbouring or limitrophe country, and if an exception like this is to be made in favour of Russia as a limitrophe country, it ought to be equally made in favour of India.
"For this reason it should be clearly understood that the Chinese terminal rate should not be higher on Indo-Chinese than on Russo-Chinese telegrams.
"In view, however, of the fact that the Agreement has solely to do with telegrams between China and Europe and countries beyond Europe, it would be necessary to secure the exception in favour of India by means of a separate Agreement.
"It is not suggested that a differential Chinese terminal rate might be adopted for telegrams sent viâ India. Such a course would be evidently contrary to the latter part of paragraph 1 of Regulation XXII of the International Telegraph Convention.
"The terminal rate of 5 fr. 50 c. which is provided for in the Agreement is an abnormally high rate, higher than that charged in any other country in the world.
"While the interests of the Companies are so important, and so large an amount of capital has been expended by them in giving efficient telegraphic communication with China, there might be justification for an Agreement which would establish their relations with that country for a limited time; but the interests of the mercantile community are equally entitled to consideration, and, on this ground, the Agreement should not extend beyond seven years."
11
Sir J. Pender replied as follows: -
* Sir,
346
"Winchester House, 50, Old Broad Street,
London, December 17, 1889.
"I have the honour to acknowledge the receipt of your letter of the 13th instant, intimating that, in consequence of representations made to the Marquis of Salisbury by the London, Shanghae, and Hong Kong Chambers of Commerce against the proposed Chefoo Agreement, his Lordship had thought it right to suspend
any further action in regard to the Agreement until he had consulted the Post Office authorities in this country
on the subject; and that having done so their views were embodied in the Memorandum forwarded with your letter.
"As you are aware, no step in these negotiations has been taken by my Company without first consulting the Foreign Office on the subject; consequently, the approval by Her Majesty's Government of the modified Agreement was given with full knowledge of all the circumstances of the case, and it is therefore to be regretted that Lord Salisbury should have been influenced at the eleventh hour by the representations of the Chambers of Commerce, especially when they are evidently based upon information more or less imperfect.
"I am of course unacquainted with the arguments advanced in support of the representations, but presume the Chambers have not shown how the Tariffs could be reduced without heavy loss to the Cable Companies. It ought not, however, to be forgotten that the Companies have from time to time made considerable reductions in their charges, and are at present only paying moderate dividends to their shareholders, while most of the Government Administrations are working their telegraphs at a heavy loss. On the other hand, the merchants are constantly improving their 'coding' systems by which they are enabled to transmit a large amount of matter at the cost
of a very few words, and I would, therefore, submit that they have very little to complain of in the way of excessive charges.
"The object of the Chefoo Agreement, as already explained, is not to increase existing tariffs, but to protect
the submarine cables against undue competition on the part of China and Russia when their telegraph systems are connected, by giving the Companies a right to be consulted in all tariff arrangements affecting the European traffic. There is no interference with local traffic, so that Russia, India, and China are at liberty to make whatever arrangements they please in regard to the limitrophe traffic exchanged between the respective countries.
"I quite agree with the Post Office authorities that China's proposed terminal rate of 5 fr. 50 c. for the European traffic is abnormally high, but, as you are aware, this was necessary in order to equalize the tariffs by the Russo-Chinese land lines with the cables in accordance with the principle adopted by the International Telegraph Conferences. Without such a terminal rate it would be in the power of Russia and China, whose telegraphs have
[180]
10
years from the date on which the Agreement comes into operation.
"The probable effect of the Agreement would be to maintain the present charge of 2 dollars per word for telegrams between the Treaty ports in China and places in this country, if indeed it would not be to raise the charge.
"The exception of Russia in Articles 1, 2, 3, and 4 would leave that country free to agree with China for a lower terminal charge in the latter country than 5 fr. 50 c. It has been observed by a correspondent of the 'North China Daily News,' writing under the name of Equity,' that if China is about to take a terminal rate of 2 fr. in respect of Russian messages, us has been reported, and Russia is so to fix her own charge as to make the total charge between the two countries 1 dollar, then there will be the great difference of 1 dollar between the charges from China to Russia on the one hand, and from China to England on the other.
"Here would arise a point which is contemplated in Article 13 of the Agreement. If Russia has a rate of only 1 dollar to China, while England has a rate of 2 dollars, encouragement would be given to the establishment of what are termed packing agencies' in Russia, to whom messages will be sent from this country for outward transmission.
"The question arises, On what ground could such an arrangement be made in favour of Russia? It is pre- sumed only on the ground that she is a neighbouring or limitrophe country, and if an exception like this is to be made in favour of Russia as a limitrophe country, it ought to be equally made in favour of India.
"For this reason it should be clearly understood that the Chinese terminal rate should not be higher on Indo- Chinese than on Russo-Chinese telegrams.
"In view, however, of the fact that the Agreement has solely to do with telegrams between China and Europe and countries beyond Europe, it would be necessary to secure the exception in favour of India by means of a separate Agreement.
"It is not suggested that a differential Chinese terminal rate might be adopted for telegrams sent viâ India. Such a course would be evidently contrary to the latter part of paragraph 1 of Regulation XXII of the International Telegraph Convention.
"The terminal rate of 5 fr. 50 c. which is provided for in the Agreement is an abnormally high rate, higher than that charged in any other country in the world.
"While the interests of the Companies are so important, and so large an amount of capital has been expended by them in giving efficient telegraphic communication with China, there might be justification for an Agreement which would establish their relations with that country for a limited lime; but the interests of the mercantile com- munity are equally entitled to consideration, and, on this ground, the Agreement should not extend beyond seven years."
11
Sir J. Pender replied as follows: -
* Sir,
346
"Winchester House, 50, Old Broad Street,
London, December 17, 1889. "I have the honour to acknowledge the receipt of your letter of the 13th instant, intimating that, in con- sequence of representations made to the Marquis of Salisbury by the London, Shanghae, and Hong Kong Chambers of Commerce against the proposed Chefoo Agreement, his Lordship had thought it right to suspend
any further action in regard to the Agreement until he had consulted the Post Office authorities in this country
on the subject; and that having done so their views were embodied in the Memorandum forwarded with your letter. "As you are aware, no step in these negotiations has been taken by my Company without first consulting the Foreign Office on the subject; consequently, the approval by Her Majesty's Government of the modified Agreement was given with full knowledge of all the circumstances of the case, and it is therefore to be regretted that Lord Salisbury should have been influenced at the eleventh hour by the representations of the Chambers of Commerce, especially when they are evidently based upon information more or less imperfect,
"I am of course unacquainted with the arguments advanced in support of the representations, but presume the Chambers have not shown how the Tariffs could be reduced without heavy loss to the Cable Companies. It ought not, however, to be forgotten that the Companies have from time to time made considerable reductions in their charges, and are at present only paying moderate dividends to their shareholders, while most of the Govern- ment Administrations are working their telegraphs at a heavy loss. On the other hand, the merchants are constantly improving their 'coding' systems by which they are enabled to transmit a large amount of matter at the cost
of a very few words, and I would, therefore, submit that they have very little to complain of in the way of excessive charges.
«The object of the Chefoo Agreement, as already ex- plained, is not to increase existing tariffs, but to protect
the submarine cables against undue competition on the part of China and Russia when their telegraph systems are connected, by giving the Companies a right to be con- sulted in all tariff arrangements affecting the European traffic. There is no interference with local traffic, so that Russia, India, and China are at liberty to make whatever arrangements they please in regard to the limitrophe traffic exchanged between the respective countries.
"I quito agree with the Post Office authorities that China's proposed terminal rate of 5 fr. 50 c. for the European traffic is abnormally high, but, as you are aware, this was necessary in order to equalize the tariffs by the Russo-Chinese land lines with the cables in accordance with the principle adopted by the International Telegraph Conferences. Without such a terminal rate it would be in the power of Russia and China, whose telegraphs have
[180]
E
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