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Inclosure 8 in No. 1.

Admiralty to Colonial Office.

Sir,

Admiralty, January 22, 1877. I HAVE laid before my Lords Commissioners of the Admiralty your letter of the 21st ultimo, and the inclosed copy of a letter addressed to the Earl of Carnarvon by Mr. Walter Armstrong, inquiring whether Her Majesty's Government would be prepared to lay a telegraph cable between Bermuda and St. Thomas in the event of a Company laying a cable from the Azores to Bermuda and thence to New York.

2. In reply, I am to acquaint you that my Lords would suggest that this proposal should be declined, as the present project for connecting Bermuda and New York with Europe by way of the Azores would not secure, in the event of war, a perfect control over the European end or at the Azores junction. Similarly, in a cable from Berinuda to St. Thomas, in war our control would be imperfect at the latter station.

3. Since the receipt of your letter my Lords have received a despatch from the Commander-in- chief on the North American and West Indian Station, calling attention to the necessity of establishing telegraphic communication between Halifax and Bermuda.

4. From a naval point of view, this appears to their Lordships far the most desirable route; and looking to the large sums which have been spent on Bermuda, both as regards defences and naval establishments, and having also in view its great importance as the head-quarters of the North American squadron and a central position between the North American British possessions and the West Indies, my Lords are strongly of opinion that telegraphic communication ought to exist between Bermuda and Halifax.

5. My Lords believe that to lay down a cable would probably cost some 200,000; but a more convenient mode would be to endeavour to arrange with one of the telegraphic Companies to lay down and maintain a cable, on condition of receiving from Her Majesty's Government such annual subsidy as might be agreed on, because, as a commercial transaction, such a line can never pay the interest of the money sunk and the working expenses.

6. Before proceeding further in this matter, or bringing the same under the consideration of the Treasury, my Lords would be glad to learn if Lord Carnarvon would be disposed to take joint action with the Admiralty, and contribute a portion of the annual subsidy which would be required.

Appendix No. 5.

BERMUDA TELEGRAPH.

No. 2.

I am, &c. (Signed)

ROBERT HALL

Sir,

Royal Commission on the Defence of British Possessions and Commerce Abroad to Colonial Office.

13, Delahay Street, February 13, 1880.

I AM directed by the Royal Commission on the Defence of British Possessions and Commerce Abroad to acknowledge the receipt of your letter of the 30th January,* inclosing correspondence with respect to a contemplated line of telegraph via the Azores to the United States, and the proposal to include Bermuda in this system.

I am to state, in reply, that the Commission, having carefully considered the question, are of opinion that, upon military and naval grounds, it is most desirable to place Bermuda in telegraphic communication with this country and with Halifax.

2. With reference, however, to the route which should be taken for this purpose, they would remark that, as no line of cable to Bermuda could be expected to be laid without Government assis- tance, and as it is improbable that Her Majesty's Government would subsidize, or in any other way assist, more than one system, it is important that the system selected should be the most advantageous for British interests. This subject has, the Royal Commission believe, received on previous occasions consideration from some of the Departments concerned; and a line connecting Bermuda with Halifax is preferred to any other cable route. In this preference the Royal Commission entirely concur.

3. There is on this point another consideration to which the Royal Commission desire to advert. For some time past the telegraphic system of the West India and Panamá Telegraph Company has been understood to be in an unsatisfactory condition, the cables being frequently broken, and the Company being unable, from financial weakness, to carry out the requisite general renewal of their lines. Two deputations have recently waited on the Secretary of State urging the grant of additional assistance to the Company, either from Imperial funds or from the revenues of the Crown Colonies interested. The Royal Commission have to observe that, on military grounds, the present telegraphic communication with the West Indies (even when otherwise in a satisfactory state) is open to one grave objection: messages between England or the Dominion of Canada and the West Indies must pass either through the United States and Cuba, or (as soon as the communication between Demerara and Pará is com- pleted) through Portugal, Madeira, the Cape Verdes, and Brazil. It appears to the Royal Commission that the line of telegraphic cimmunication between the United Kingdom and the important West Indian Colonies should, if possible, be either wholly by submarine cable or viâ Halifax and Bermuda; and they would therefore suggest whether the present condition of the West India and Panamá lines does not afford an opportunity of discussing, with the Companies concerned, the feasibility of estab- lishing a line of cable connecting Halifax and Bermuda with the telegraphic stations in the West Indies, the cable from Bermuda being landed at Sombrero, Antigua, or some other of the lesser British Antilles. Such a line would be only half the length of the proposed cable from Portugal to Cape Cod.

* No. 1.

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