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CONFIDENTIAL.

TELEGRAPHIC CO.MMUXICATIOX TO IXDIA AND

AUSTRALASIA

THE (JAXADIAN ROUl ' v

Suhmitted at the Meetings of the CohnUd Conference, London, h>/
^h\ Saxdford Flemixg.

Foiirteeuth Day — April 27t7i, 1887.
In the remarks which I was permitted to submit to the
Conference on the 20th instant, I confined myself to showing
how important to Anstrah'isia and to the Empire is the establish-
ment of an alternative telegraph line between the Mother
Country and her great Southern Colonies. I attempted to
demonstrate the facility with which such a line could be
secured by taking advantage of the works which Canada has
carried out. I touched upon the enormous advantages which
such a route possessed, owing to its geographical position.
I alluded to the imx)ortant fact that the cables would be laid in
deep water, and "would therefore be free from natural enemies,
and nuich more secure from the attacks of hostile vessels. I
referred to the commercial and political advantages which
it offered in binding together the most im[>ortant of the
Colonies, and Ininging into circuit nearly all the remote and
outlying possessions of the Crown.

if these points be satisfactorily estiiblished, it will become a
matter of importance to consider how such a work can best be
carried out.

Such undertakings as the one in ijuestion have hitherto been

; 8 b^ V
C3)

accomplished by inivate companies subsidised by (roveviimevit ;
and there cannot be iniicli doubt that the Pacific cable might be
manufactured, laid, maintained, and woiked by a pvivale com-
pany, aided by a reasonable subsidy, so as lo give u fair velum to
the owners, while securing to the i>ublic greatly reduced charges.

It may, however, • iisked. Is there no belter means of
securhig even more fully than through the medium of a private
company all the benefits which the new line would confer?

The one other way is for the interested (Tovernments them-
selves to undertake the work, and I think if can be clearly shown
that the desired results can hi this manner be more satisfactorily
and jnore cheaply obtained. In this oi>ini(m I am greatly
strengthened by a. memorandum siibmitied by the representatives
of New Zealand, and yesterday placcMl in the hands of members
of the Conferi^nce. The memorandum to which T refer has been
prepared by the Post mast cr-deneral of New Zealand, and bears
date F(>bruary .), 1887. In mucli that it contains 1 cordially

concur.

I think r am correct in stating that some thirteen years ago all
the telegraphs in India were handed over to the (iovernment, and
have since then been managed by a department under the central
authoritv. I believe if is found that the system works well, and
that the pulilic are better served than they W(M-e before by private
companies, for the reason that the public interests only are
h)oked to undei- the new management, while private companies
verv naturally regai'd their own interests as paramount.

It seems to me most desirable that all cables communicating
witli Australasia, and all telegrajths within the Australasian Colonies
themselves, should be under one management. How this may be

'/V/.?J

accomplished is a, problem which I venture to suggest is well
worthy the nltentiou of the Australasian (ioveriiments. At the
same time, 1 submit that it cannot be regarded with indifference
by the Imix'rial (xovernment or by Canada. I do not know what
are the functions of the Australasian Federal Council, but possibly
these functions could be extended so as to embrace the general
control of telegraphs.

It would not be at all necessary for the Australasian Colonies
to control the cables all the way to England. It would be quite
sufficient thai they should control the cables proposed to be laid
to Vancouver on one side, and on the other side that portion of
the existing system which extends from Australasia as far as
India, embracing tlie line> of what is known as the Eastern
Extension Company. It would be convenient to stop at India,
as India separates the lines of the two companies — the Eastern
Extension and the Eastern Telegraph Company. The Colonial
(Tovernments could not, of course, expropriate that which is
private property ; but possibly some arrangements mutually fair,
both to the public and to vested cable interests, could be reached
by whicli the desired result would be obtained.

It is obvious that a comprehensive scheme such as that
suggested could not be carried out without much consideration
and negotiation, especially with regard to the manner in which
the capital required should be raised and the proportions in
which it should be borne by each separate Grovernment. But I
am unable to see that the general scheme is at all impracticable.
It would only be carrying out in a wider field the system
adopted with so much success in India and in England with
respect to telegraph service. In endeavouring to effect such a

rsTT

joint arrangeinent there are certain leading principles wliich
might be considered.

1. It would be necessary for each of the Colonies to agree to
hand over to the central authority their respective telegraph
systems, retaining a pecuniary interest in revenue in proportion
to the value of the works handed over.

2. The establishment of the new cable across the Pacific would
require new capital, which might be raised, possibly, on the joint
guarantee of the Colonies and the Imperial (lovernment, as in
the case of the Intercolonial Railway of Canadii. P)y such means
tiK money could be obtained al the very lowest rate of interest;
and, for several reasons, it would not be necessaiy in tlie first
instance to lay more than a **ingle Pacific cable ; the scheme
embraces the control of the Eastern Extension lines, and
hence the line from Australasia to A'ancouver would really give
a triplicate service between Australiii and England ; moreover,
deep-water laid cables are not liable to the same interruptions
as shidlow-water cables; in proof of which f mny mention
that the telegraph from Lisbon across the Atlantic to South
America for the first ten years of its existence depended with
great success on only a single line of cable throughout its entire
distance, l^iese cables were (juite recently duplicated to meet
the demands of business.

The ciipital reciuired to lay a single cable to Vancouver
from the Australasian system, reckoned at the low rate of
interest at which money could be obtained, would, 1 estimate,
involve M charge of less than £50,000 a year.

3. New capital would likewise be refjuired to purchase the
lines of the Eastern Extension Company, whenever that

n>iMi»sinv \vinil«l 1m' willing to sell ;il u fair value This ciipital
would also U' obtained at a low rale of interest; and llius tlir
whole conmMt ion lietween India, Austmlasia, Canada, and Givat
Britain «^ould be most poononiically established, and it would
become |»raeticable to red uee charges on messages to (he lowci^t
possible tariff rates.

As the cables of the Kasiern Kxtension Company would be
uwpiired largely in Imperial interests, so as to give an alternate
Hue, independently of the Suez route, to India, China, and Africa,
it is reasonable to a>sume that the lin|)erial (lovernment would
render every assistance in securing them.

I have siud that it would not be necessary for the proposed
Central Telegraph Department to control cables or wires east of
Vancouver. I <lo not think there would be any risk of the
management being debarred at anytime fiom the advantages
of cheap telegraphy from A'ancouver to England. 1 feel quite
warranted in saying that the Canadian Pacific Railway Company
would be willing to enter into an agreement for a long term of
year-s to transmit Australasian messages at the low rates which I
mentioned to the Conference on a jaevious occasion.

I have not cumbered these remarks with calculations. I have
pur[>osely avoide<i them, and referred only to principles. If the
principles lx» ^ound— as I believe they are — and the scheme com-
mends itself to the judgment of the Conference, an important step
will be gained.

Twentieth Ikuj^May (Mh, 18H7.

WJiile I eainiot but regret taking up time at the close of
the Conference, I trust I may be pardoned for venturing to add
a few words on the general question of establishing telegraphic
connection between distant portions of the Empire.

The importance of the question appears to be generally
recognised.

1. It is one of the few subjects specially referred to in the
circular of Mr. 8tanho])e, of date 25th November last, inviting
the several Colonial (fovernments to take part in tliis Conference
by sending representatives.

2. It is one of the questions to which great prominence was
given in the opening address of the President.

3. When the matter was first discussed, on the 20th ultimo,
the Postmaster-General gave utterance to his broad and syu)-
])athetic views, and suggested that the Conference should not
break up without expressing in some way a decsided opinion in
favour of the general policy of connecting telegraphically the
great self-governing Colonies on the Pacific ; and he indicated as
one of the possible results a perfect revolution in the communi-
cation between the Australasian Colonies and the Mother
Country.

4. On the same occasion members of the Conference re-
presenting South Australia, Queensland, the Cape of Good Hope,
Victoria, New South Wales, and New Zealand, expressed generally
their warm sympathy with the objects aimed at ; indeed, I failed

to h'aiii I lull IliciT was a siiijrlf gentleman pifsfiil \vli<» did not
recognises lluif in ihe interests u( the Empire tlie (juestion is
one which is well worthy ofthf greatest attention.

Tiiere were, Iiowevi-r, tai" or two |K)ints raised which I trust
I may he allowed to refer to.

Some (h)ubts wer»' r'X|ire>sed as to the practicability of
connecting ('aua(hi with Au>trala>ia by a direct telcgrajih. 1 do
not iiroitosc to refer to the statement made bv Mr. Patev as to
thedeitth of the ocean. lu>von«l saving that that gentleman lias
intimated to me tliat he was in error. I have asked Captain
Hall — who was attending the Conference a few days back — to be
good enough to furnish all the information i)i the possession
of the Admiralty on this point; and I have no doubt he will
contirni th(^ statements submitte«l by me, as the officers of the
Admiralty can, 1 believe, only lot»k to the same sources as I did
for the information which I laid before you, viz., to the sounding-
made by the "Tuscarora" and the "Challenger" expeditions.
It must l)e admitted, however, that the known facts regarding
the Pacific are somewhat meagre, and it is really a matter of
very great imi)ortauce that every doul>t should be set at rest
by having a proper nautical .-urvey made with the least possible
delay.

Another point was raised liy Sir John Downer, viz., that the
Colony of South Australia had, with great enterprise, spanned the
continent from south to north with telegraph wire; that this line
is a benefit to all the Australasian Colonies; that it was established
at the sole expense of South Australia; that it is maintained by
that Colony at a loss; that the inevitable result of a new telegraph
across the Pacific would be to increase the loss; and, in con-

s«'(jiienri', wliilf !1m* m(Ii«m" CV>ionli*s would jTaiii hy llic new liii(»,
South Au>tralia in a jH*<iiiiiaiv mmi.^c would sutt't r.

Again, it liiLs Im'cii f«-lt that not u litllo considcrat ioii is due to
the jaivatr ('uni(fiuiy, the h^istein Kxtcnsion Telegraph vJoinpany,
which has, with t-oninKMnlabie enterpnse, provided such cable
euniMiunication as tlie whoh* Australasian Coh)nies now enjoy.

For my own ]»art I fully recognise both claims ; while at the
same time, in view of vital Imperial and Colonial interests, I
regard the connection of Canada and Australasia telegrapliically
as an absolute necessity.

The problem which is presented to us is to harmonise all
interests as far as it is possible to do so; and I venture to
remark that, to my mind, its solution lies in the direction
indicated in the observations submitted at the close of the dis-
cussion on the 27th ultimo; and I gather, from observations
which have fallen from several members of the Conference,
that the views then set forth are not unworthy of the serious
attention of all concerned.

The pro],)osal is to bring all telegraph lines, constructed
and to be constnicted, east and south of India, and west and
south of Canada, eventually under Grovernment control. This
appeai« to be the general idea of the Postmaster-Greneral of
New Zealand in his memorandum ; and I can scarcely think
that the time has not arrived when the matter should be
considered, not as a commercial question simply, but as a
question of Imj^erial im|X)rtance in a naval, military, and
political aspect.

I find that the length of telegraph lines in the several
Colonies, as given by Mr. Charles Todd — a gentleman who has

been long and intimately associated witli telegrai)hy in Austra-
lasia—was ill the year 1884 as follows, viz. :—

> leioria

4,020

miles

New South Wales

9,7.16

»»

.South Australia

.1,292

«»

Queensland

6,970

New Zealand ...

4,264

•»

Tasmania

1,18a

Western Austialia

1,905

Total

aa,349

aud that, tiie total revenue in that year was £'.127,734.

According to the same authority, the average cost aj.pears to
be £108 per mile ; so that the whole cost of the 33,349 miles may
be stated at about £3,600,000.

The l^:astern Kxtension Company's lines embrace in all 12,03;!

nautical miles of cable, and it will be remembered that Mr. Pendei-

stated before the Conference that the average cost per mih' wa>

£184. Th(> whole 12,03.1 miles, reckoned at that rate, amounts to

£2,214,440; but if that be the first cost, the present value, owing

to depreciation of the cables, must be considerably less, for 1 Hnd

that about 6,600 miles, or more than half the whole length of

eable owned by the company, has been laid from eleven to

seventeen years. The actual dates wlien the cables were laid,

and the periods they have been submerged, are as follows :—

Laid in 1869

180 miles; now submerged 18 years.

1870 ... 2,409 „ „ ,/ ,7

1871 ... 2,724
1876 ... 1,283

5»

16
11

>»

>♦

liiiid ill

1877

864

187{)

.. 2,444

1880

r)20

1 88;'.

020

1884

o02

188.")

180

864 miles ; now suhiiierged 10 years.

Totjil leiiirlh

12,03,")

"I?

7
4
3
2

11
11

Tlu^ length of cable lo (tomicct Canada with the existmg
telegm])h system of Australasia is placed at 7,600 miles, which,
comi)uted at £'184 per mih^ (the iiist cost of the Kasteni Kxtoiisioii
cables, as stated by j\lr. INMider), amounts \o t'l,398,40().

From these data we juay estimate the hrst cost of all tlu^
cables aad land lines between Vancouver and India as follows: —

New Pacilic cable say ,€1,400,000

Austi'alasian land lines ... ... ., 3,()00,()0(/

Kastevn Extension ,. 2,220,000

Total i7,220,000

Lookinii" at the laiu'e revt'nue from the Australasian land
lines, it may bo assumed that, taken as a whole, they pay workino-
expenses and maintenance. It may not be necessary, therefore,
to consider these lines in dealing with the (juestion of new
cajtital.

If we <'liminate the Australian land lines, theie remains
;t';),620.000 as the united cost of the new Pacitic cable and the
Eastern Extension, system. To this amount should be added the
value of re])airing ships, stations, and other minor matters; and
there ought to be deducted an allowance for depreciation of the
existing cables. There may be various opinions on both points,

'•'»< <i'iMv can scareelj be ii .louht that tl.o round iimxiiim..i
sum of £4,()()(),()00 wouhl b. ;nn,.Iy sufficitMit to cover every
cost uecessary to (vstabh'sb the I'aeitic line and buy out tl.e
Kasten. Extension Company "s properly .)n fair and reasonable
terms.

The interest ..n r4,()( )(),()()() at :\ per eeut. is il2(),()(M) per
annum; but it will be obvious that tlie purchase of the Eastern
Extension system wonid bring with it larg. s«bsi<lies, wliieh
would considerably reduce the interest charges. These subsidies
are as follows: —

Tasmanian ('able subsidv
-Malacca Cable subsidv

,7 ••• ••• ■••

Australian Duplicate Cable subsidy ...
iAhuiilla Cable subsidv

Ton(piin Cable subsidy

Macao Cable subsidy ...

Total toGjTOO

As the Hawaiian Legislature has passed an Act oftering
in),0()(J dollars a year to ])roniote the establishment of telegraphic
eonnection with America, that sum may be considered available
as a subsidy in connection with the Pacific cable, making the
total subsidies X'G0,70(). if we take this sum as an asset, and
deduct it from X'12(),0()0, it leaves a balance of only £.39,300
a year to be met by the united (lovernments.

This estimate shows that the sum of i,'120,(KK) per annum
would be required to meet interest when all the subsidies
run out; but as the larger portion of the .subsidies will not
exijire until the end of the century, it is reasonable to exi)ect

£4,200
1,000

32,400
8,000

10,G00
oOO

tliafc tlie business will then bo so eiionnously incroascd as to
Jidniii of paying all interest clmrges, larjToly, if not wholly, out
of revenue. In the meantime tlic comparatively small sum of
£V)9,80() per annum would be sulhcient to aceomplish all that is
desired.

1 have assumed the cost of the new Pacific cable and the
value of tlie cables of the Kastern Extension Company together
to come, to £4,0()(),00(), but, according <o the opinion of some
experts, that estimate is too liberal. It is held that if proper
allowance be made for the depreciation of the existing cables
£3,000,000 would be nearer the proper value of the two systems.
If a capital of £'8,0()0,()0() suffices for all purposes, the interest at
3 per cent, will be £00,000, from which if we deduct the total
subsidies— £60,700— there will ivmain a balance of only £29,300
per annum io be ])rovided.

Thus an annual payment ranging from l'29,3()0 to £'59,300,
in addition to the existing subsidies, would establish the Pacific
cable and provide for taking over all the cables of the Eastern
Extension ( omjjany. E\'en tlie maximum annual payment could
not be considered bui-densome divided in eijuitabh^ proportions
among the ten (iovernnuMits more or less interested, viz., the
G-oveiliments of Oreat l^ritain, India, Canada, Queensland, New
South Wales, Victoria, South Australia, Western Australia, Tas-
mania, and New Zealand.

As the existing (-olonial subsidies, amounting in all to
£'36,600, are paid by five only of the ten Governments interested
in the larger scheme, it appears to me desirable that an arrange-
ment should be eflfected by which these subsidies would be ex-
tinguished and the new capital provided on a financial basis, by

♦

wliicli Jill the inteipsted (iovernments would contribute in equi-
table proportions.

A scheme of this kind, by which all the telegraplis men-
tioned mny be consolidiited and brought within the management
of one depart iiH'nt under (xovernment control, could, of course,
only be cari'ied out by the co-operation of all the (iovernments
concerned; but 1 venture to >ub'nit that the subject is one
which claims <\arnest considerr^ ion. The scheme outlined, if
carried into effect , would bring Caujida within electric touch
of Australia and New Zealand; it would establish an alterna-
tive line IVom India and Australasia to Enuland, removed as far
as ])0ssible from the theatre of every European complication and
struggle that may arise; it would bring down charges on the
transmission of messages to such moderate rates as would
greatly facilitate intercourse and enormously develop business
between Australasia, Canada, and the Mother Gmntry ; it wcmld
meet the case of South Australia, and enable that Colony to
participate in the genera: advantages to be conferred on all
the Colonies; and it would remove all reasonable objections on
the part of the Eastern Extension Company. In the event
of that company being disinclined to reduce its present high
charges and unwilling to enter into competition with the new
line, it vrould have the option of handing over all its property
and receiving for it a fair and full value. If, however, the Eastern
Extension (Vmipany deteimine to reject such reasonable proposals,
the amoimt of capital to be provided will be so much the less,
and it will become a very easy matter for the Gfoveraments con-
cerned to carry out the essentially important work of connecting
Canada and Australasia telegraphically.