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. < 
 
 statement by Mr. Sandford Fleming. 
 
 <-^i. 
 
 The following Statement wot prepared by request, with the vitw of mbmittlng it to the Pac^"" 
 Cable Conference when it met in London on July Mh, 18»(j. Aa the Committee adjwi/r 
 until October 2fi<A, 18!)(5, tlie Canadian reitreaentativei transmitted the statement to 
 
 ■ • Chairman, the Right Honourable the Earl of Helbome, Under Secrttui-y of State firr tin 
 Colonies. 
 
 Before expressing my views generally on the Pacific cabla, I am asked to relate to the Committee 
 the circumstancen which led to the proposal to span the Pacific f)cean by telegraph. I comply 
 with the re<{ue8t with some hesitation as I urn obliged to allude to my (jersonal connexion with the 
 matter. In referring to this part of the subject I shall confine my remarks to a very few brief 
 •entnnces. 
 
 The projected subaarine electric cable across tlio Pacific from the western dcaboard of Canada 
 has been before ti>e public for many years. The pm^yosal to extend a tidegraph to Asia and 
 AustraliaViaturally followed the establishment of a trans-continental tclegriph through the 
 Dominion. So far back as 1863 the overland telegraph was projected in cunjuiiction wiih the trans- 
 continental railway. In that year the explorations for tlie i astern section ot' the rnilway, between 
 Halifax and Quebec, were undertaken by the Inipcriul and Prcvincial Governments, and in 1871 
 the surreys westerly to the Pacific Oiean were commenced by the (Jovernnient of the New 
 Dominion. A few years after these dates the construction of the telegraph was proceeded with on 
 each re8|)ective section. The Hon. Alexander Mackenzie, Premier and Minister of Public Works, 
 was one of the first to take an active interest in the niattor. Under Iuh adniinistiation the policy 
 was adopted of extending the telegraph from the waters of the St Lawrence to the Pacific coast ; 
 and in 1874 the Government enteied into contracts for conatructing the telegraph in advance of 
 tlie railway over nearly 2,000 miles of territory. 
 
 Occupying the position of engineer in chief of the whole line of railwiiy from Halifax on the 
 Atlantic to Vancouver on the Pacific, the establishment of the overland flegraph Ciime under my 
 ofRcial charge, ana in connexion with my duties my attention was directed to the extension of the 
 electric wire across the Pacific, it became plain to me that the national lino of coinmtinicntion on 
 which Canada was then expending so much would be incomplete without ii connexion with the 
 telegraph systems of the countri&s beyond the Pucitic Ocean, and it l>ecaine equally clciir that 
 the spanning of the Pacific by an electric cable would prove of the highest importance to the whole 
 Empire. 
 
 In the year 1879 I was called upon to visit London on public business wiih the then Premier, 
 Sir John Macdonald. I had prepare)! a telegraph map of the world with the projected line across 
 the Pacific, and its various eastern and western connexions, laid down thereon. I pointed out that 
 by spanning the I'acifie it would be possible to ojjcn up a new means of communication to be 
 employed for purposes of general aimmerce at much lower rates than by existing channels ; that it 
 would at once complete the electric girdle of the globe, and brinj; Gieat Britain, Canada, India, 
 Australia, New Zealand, and South Africa into unbroken telegraphic touch of ouch i ther, entirely 
 indejiendent of the lines widch pass through foreign European countiien. Sir John Msi-donald 
 submitted the ma?' <\nd explained the pro{K)sal to Lord BeHconstield, and I was led to understand 
 that both Premie. rere very favourably impressed with the project, and regarded it to be of great 
 Imperial importance. I am fully warranted in saying thnt the Canadian I rentier so regarded it 
 until his death in 1892. Public attention was for the fi'st time directcil to a British Pacific Cable 
 in my report as engineer in chief of the Canadian Pacific Railway, which was laid before Parliament 
 in 1880. In this report the map referred to is reproduced on a reduced scale. 
 
 Much correspondence followed, to which it is not now necessary to allude. I will only remark 
 that the route first projocte<l was a northern one ; this was owing to the absence of information 
 rettpecting the Southern Pacific Ocean, and the impression which prevailed tliut physical di£Bcullies 
 existed which offered insuperable oljstaclosto the laying of a cable on a direct route Iwtween Canada 
 to Australasia. In consequence of this impression it "as designed to lay the cable from Vancouver 
 to Japan, touching at islands in the Aleutian and Kurile groufw as nii<l-ocean stationa From 
 Japan the connexion with Australasia would be obtained by meiins of the telegraph to Singapoi'e 
 and the E^astem Extension Com])any's lines of telegraph. 
 
 Through the intervention of the Home Government, negotiations were opene<i with the view of 
 sectirmg one of tiie Kurile islands. Japan wh.s asked to transfer ta the British Crown one of these 
 islands in order that the telegraph station should be under British protection. The cession of an 
 island was not obtained, but perinission to land ut any su table point in Yesso was urai<ted, the 
 landing to remain in charge of ami under the protection of Japan. (See letter December 14th, 
 1880, from Sir Harry Parkes and December 23rd from Sir A. T. Gait) 
 
 An agent was sunt to Washington who, after soma difficulty, obtained conditional landing 
 privilcge.s on one of the Aleutian islands. 
 
 On March Int, 1881, the Government of Canada introduced certain resolutions in Parliament 
 with the view of promoting the establishment of the cable. After discussion the resolutions were 
 withdrawn and an Act passed incoq)orating .a company to lay the calile. This company proved 
 abortive, and when its charter ex|iired, further information having meanwhile been obtained 
 lespocting the Southern Pai-ific, it whs represented to the Canadian Government that the physical 
 features of the Southern Ocean would admit of a cable being laid on a direct route from Canada to 
 Australia, and that the long detour by the Aleutian Inlands and Japan could be avoided (See mv 
 letter of October 20th, 1886.) 
 
 91688.-} I. 20.— T/»8. A - 
 

 Correipondonce followed, and on June 8th, 1886, an brder in Council was parsed by the 
 Canadian Governinei)t recommending tliat means be taken to obtain an expreHHion of opinion on • 
 
 the projected <lirac;t cable to Australia from tlie Heveral Uoverninents conceme<l, and to HHcertain 
 what amount of aiMistance each would be prepared to give, and that for this purpoM a Conference 
 uf agents oi the Colonies be invited to niacuss the lubject. The co-operation of Her Majetity'a 
 Imperial Qovernment waa likowiao sought 
 
 On November 25th, 1886, the Home Government summoned a Conference to meet in London the 
 foUowinc to which tho principal Colonial Qovernments were invited to send representatives. 
 
 One of diu , ..jstioni to be specially considered was the development uf telegraphic oommunicationa 
 of utility to the Empi.? 
 
 At the Colonial Conference held in 1887 the Pacific cable was specially considered, and resolutions 
 were passed in respect thereto strongly favouring its establishiueut. The published proceedings of 
 the Conference give the discussions at length. 
 
 Since the Conference of 1887 re|>eat«<l efforts have been made to induce the AdmiraUy to make 
 a complete survey of the bed of the ocean un the most direct route for the cable. A statement 
 respecting tlie nuutical survey Hpi>ears in the repoit of the Canadian Minister of Trade and 
 Commerce on his misi^ion to AustraliH in 1H93 (pagfS 106 to 122). 
 
 In 1888 the Canadian Government invited the Governments of Australia and New Zealand to 
 send delegates to Canada to consider the question of telegraphic connexion and trade relations. 
 Corre8|)ondtiuce resulted, when it was fltially agreed that delegatuLi should l)e sent from Canada to 
 Australia. In 1880 the Hon. J. J. C. Ablwtt (afterwards Sir Joha Abbott, Premier of Canada) 
 with severnl other gentlemen were appointed to proceed on this mission, Imttiie proposed federation 
 of the Australian Colonies then actively discussed had the effect of postponing the visit It \,t» 
 felt that the time was inopportune, and that it would be advisable to wait until the Colonies would 
 be united politically. 
 
 Early in 1893 a Postal and Telegraph Conference was held at Wellington, New Zealand, at which 
 all the Australasian Colonies were represented, and re.solutions weie passed urging the establiyhiuent 
 of a Pacific cable. 
 
 In September 1803 the Cann/lian Minister of Trade and Commerce (the Hon. Mackenzie Bowell) 
 was sent as a delegate to Australia to confer with the several Governments on the subject of the 
 Pacific cable, and the development of trade. A full account of this delegation will be found in tlia 
 repori on the mission to Australia (s«« pages 66 to 106). 
 
 As an outcome of the delegation to Australia, a Conference was held in Ottawa the folhwing J ) 
 
 year (1804). At this Conference the Imperial Government, the Canadian, the South African, 
 and all the Australasian Governments were represented. 
 
 The publiHhed proceedings of the (Conference held in Ottawa in 1894 furnish a full account of 
 the diHCUssions. The following resolutionit were passed in respect to the establishment of the Pacific 
 cable : — 
 
 1. Rejiolued — That in the opinion of this Conference immediate steps should be taken to provide 
 
 telegraphic communication by cable, free from foreign control, between the Dominion of 
 Canada and Australasia. 
 
 2. Rexolved — That the Imperial Government be respectfuUv requested to undertake at the 
 
 earliest possible inonient, and to prosecute "ith uU possible S|)eed, a thorough survey of the 
 proposed cabla route l>etween Canada and Australia; the expense to be borne in eijiiul 
 proportions hy (ircat Britain, Canada, and Australian Colonies. 
 
 3. Reaolved — That it is for the interest, of the Empire that, in caBe of the construction of a cable 
 
 between Canada and Australasia, such cable should 1x3 extended from Australasia to the 
 Cape of Goo<l Hope, ami for that purpose arrangements should l>e made between the 
 Imjjerial and South African Oovernnients for a survey of the latter route. 
 
 4. ReiuAvfd — That in view of the desirability of having a choice of ixjutes for a cable connexion 
 
 b«itween • anada and Aui^tralasia, the Home Qovernment \yt retiueatcd to take innnediate 
 steps t4) sect: 'c neutral landing ground on some one of the Hawaiian Islands, in order that 
 the cable may remain permanently under British control. 
 
 5. Rejiiilved — Thrt the Canadian Government be requested, alter the rising of this Conference, to 
 
 make all necessary inquiries, and genenilly to take such steps as may 1h> ex^H-dient in order 
 to a.scertain tli ; cost of the proposed Pacific eat le, and pnmiote the establishment of the 
 undertaking in accordance with the views expressed in this Conference. 
 
 Acting uuder tho instructions of the Conference of 1804, the Canadian Government invited 
 cable manufacturing contractors and others to state the terms upon which they would lie prepared 
 to lay and maintain in efficient condition a submarine electric cable across the Pacific from Canatla 
 to the Australasian Colonies. Proposals were invited in three different foniis. 
 
 I herewith submit, for the information of the Committee, the detailed general conditions under 
 which projjosals were invited {ste A|)pemlix A.) ; likewise the u-nders sulisequently received 
 by the (/anadian Government ; likewise my report on the tenders, dated November 20th, 1894, 
 made at the request of the Minister of Trade and Commerce (»«« Appendix B.). 
 
 Soon after the tenders were received I prepared a meinorandtiin giving my views re8f)ecting the 
 establishment of the cable. As these views are streni.'thened and confirmed hy snlutoijuent 
 events, I beg leave to submit this memordudum to the Committee as part of the present 
 statetueut 
 
 /?vV^,^ 
 
Memorandum. 
 
 \ ■■ 
 
 Ottawa, December Ist, 1894. 
 
 Tht) information obtained since the meeting of the Colonial Conference in July laat ia of • 
 character to call for special notice. 
 
 The Conference, by the 5th resolution relating to the Pacific cable, requentefl the Canadian 
 Oovemnient to take the necessary steps to urge forward the undertaking in accordance v.ith 
 the views expreHsed by the dulogikt<M and the resolutions passed by them. 
 
 ()n September 10th a Speciid Commission was appointed by the C'anailiau Government to 
 proceed to Honolulu, to enter into negotiations with the Hawaiian Government for the posses- 
 aion of a neutral landing ground tor the cable, should it l>e deemed expedient or desirable to 
 touch at Honolulu or at some other islitnd in the Hawaiian Group. 
 
 The object wo« to obtain a choice of routes. While it was the decided feeling of the 
 Conference that the cable should only touch islands on the route in the p>8se88ion of Great 
 Britain, there were technical as well as commercial reasons fur obtaining i.ne use of an island 
 within the Hawaiian archipela);o. 
 
 The report on the mission submitted for the information of his Excellency the Oovemor- 
 Gentral, November 16th, points out that while there is a fair prospect of obtaining the use 
 of an island on conditions generally acceptable, the result of the mission reniaiim undeter- 
 mined, as it awaits the action of the United States Uovetiiment, owing tu a treaty engagement 
 between the two countries. 
 
 Consequently, as the matter at present stands, there is no alternative line which can be 
 chosen. The route known as No. 1, touching at Fanning Island, is the only route open for 
 adoption. The question of carrying the cable by way of Honolulu or some one of the Hawaiian 
 Islands rests with the Hawaiian Govornraeut nnd the Government of the United States. As 
 soon as the Hawaiian Government feels at liberty to enter into an agreement, such as that 
 suggested durinij the recent mi-«ion, which wo .Id sscuro to them the advantages of tele^jraphic 
 connexion with the markets of the world, it will probably be heard from. Any offer it 
 may make may be considered ou its merits before contracts fur laying the cable be entered 
 into. 
 
 f^ 
 
 t, 
 
 e 
 it 
 It 
 
 Tkndeiw. 
 
 On August 6lh an advertisement appeared in the London newspapi'm asking for tenders. 
 Cable-manufacturing contractors and others were invited by the Ciina<lian Government to 
 state the terms upon which they would be prepnied to lay and maintain in efficient condition 
 a submarine electric cable across the Pacific from Canada to Australa-sia. 
 
 Tenders have been received from some of the best and oldest finiia ; they establish four 
 important desiderata ; — 
 
 1. Tlioy set at rest all questions respecting the practicobility of the project. 
 
 2. They establish indisputably that (ireat Britain can obtain direct telegraphic communi- 
 ca'iun with the British Colonies of the southern hcmispheie, without having resort to any soil 
 not British territory. 
 
 3. They clearly prove that there is no requirement for delay in order to make elaborate 
 preliminary surveys, offers having been received from cable manufacturers of the widest 
 experience, who, with the information and data possessed, ai-e prepared to lay the cable and 
 guarantee its success. 
 
 4. The tenders give definite information as to the cost of the undertaking': moreover, 
 they furnish proof that the outlay of capital required is less than tliu amount which has 
 been estimated. 
 
 The definite data thus obtnined overcome all o' stacles which were supposed to stand in 
 the way of the first resolution patsed by the Conference, viz., that " immediate steps should 
 " he taken to provide telegraphic communication by cable, free frmn foreign control, between 
 " the Dominion of Canada and Australasia." The Governments concerned are now placed in 
 possession of information essential to the consideration of the best means necessary to the 
 consummation of the project. 
 
 As there might lie some divergence of opinion as to the best means to be taken to carry 
 out ths undertaking, tht; Canadian Government, in asking for proposals, intimated that offers 
 would lie receive I in tliree different forms, viz. : — 
 
 Form A. — The cable to lie owned and controlled by Goveminent, to be worked under 
 Government authority, <ind to bo kept in repair by the contractor for three yejirs. 
 
 Form B. — The cable to lie owned, maintained, and workotl by a company under a fixed 
 subsidy for a term of years. 
 
 Form C. — The cable to be owned, maintained, and worked by a company under a Govern- 
 ment guarantee of tiattic for a term of years. 
 
 The only actual oflbrs received are according to Form A, That no offers were received 
 flcconling to Fonns B. and C. may lio due to the fact that it was felt desirable t/i pre<leter- 
 miue the maximum charges, so as to preclude a subsiditied or traffic guaranteed Pacific Cable 
 Company amalgamating or cvuibiniug with the existing company to the disadvantage of the 
 public. 
 
 It was stipulated that under Forms B. and C. the maximum rates to be charged on 
 messages to oiid from Great Britain and the AuHtralasian Colonies shall be three shilliogs per 
 
 A 2 
 
word for ordinany tplegrftntis, two BhitlingH per word for Oovernment telogrami, and one 
 ahillinK and gixponce for pn-Hs tol»-jrniinH. Tnins-I'acific iiiusHat^eH to be charged at pmpor- 
 tionato riites. The*- are the rates aj^rued ujHjn at tlio rostiil and Telegrnph (Jonference bj-ld 
 in NfW Zealand in Marrh lant. 
 
 My opinion aa to the hcAt nieana of eHtabii"hin(; th« Pacific cable luw been long given, and 
 ax early aa the Colonial Conference of 1887. I submitted my views again at the ri'cent 
 Colonial Conference, and on occasions before and since that date I have explaine<l ilie 
 principh'S widch in uiy humble Judgment in view of the public inlereHt should lie followed. 
 
 I do not think it necessary to re]H!>it the a' guments I have frequently used in favour of 
 establishing the Pacific cable as a public undertaking, so that it nniy remain under Uovernuient 
 ownership and contrtjl. 1 beg leave to refer to my remarks which the Minister of Trade and 
 Commerce submitted in a memorandum, datc<l Octolwr 1 Ith, 1803, to the Australasian Quvein- 
 nients, likewise to what I siid nt the Colnnial Con'erence in June lust (extracts are appundc'l). 
 On both occasions I |x>iute(l out thnt it would be unwise to subsiiiisK a company, when tliu 
 object could be attained more economically and far more advantageously to the public by 
 other moans. It has since lieen suggested as an alternative to a hub.-idiMed company (Form B. ) 
 to establish a company under a Uoveinment tratiic uuaiuntee (Form C.t. That is to .say, the 
 company to l>e guaranteed a gross revenue from tratfii? for a term of yeare; the detiiieiicy 
 Itctweeii aetiial earnings and the guarantoe<l earnings to l>e made good by the UovenimentH 
 each year. To my mind this i)lan is scai-cely less objectionabln than the lirnt mentioned. Let 
 us by way of illustration ii.ssnme that a company is loinie I under a Government guarantee of 
 gixms tnirtic equal to 200,000<. per annum for a |>eriod of 25 yenm. What in this case would 
 prevent the existing comfiany and the new conipany entering into a secret pooling agreement 
 by which it would Ihj the ]x)licv of Uith to pass over the old line the greot moss of tlie 
 traltic, the object being to establish against the Governnients each year of the 25 as largo 
 a claim as possiblo under the guarantee 1 I do not see that it would be pusiiible to prevent 
 the two companies aiualgannitin„' their interests in this or in some other way, and as a 
 cnn.sequiMice a p<iwerful monojioly wouhl be built up to exact ita own terms. L'okin^r at the 
 subject in all its bearings, the true plan, in my judgment, is to make the Pacific cuble a public 
 undertaking from its lirNt construction. I am satisfied the more the ^'ubjelt is c>>nsidere<l, it 
 must beccmio clear that only by the observance of the principle of IStiite ownership will tiio 
 greiitest public advantage lx> permanently obtained. If, in esiabiishing the Pacific cable as a 
 public undertaking the ('o-o|x'rativin of the Mother Count>y with Canada and the Austin hwi. 
 Colonies be secured, the iimst advantiigeiius consecpiences will undoubtedly |>nx;eed fix)in tliKi 
 arrangement. The first effect of co-operation would be in connexion with the iidtiid cost of 
 the work, as a joint guarantee would admit of the required lapital be ng raised ot the lowest 
 possible i-ate ol interest. I have only to p<iint to the Intercolonial '.lailway of Canada ns an 
 illustration of the advantages attainable. In 1867 it was arranged between the Home 
 Uoverninent and the Canadian Ooveminent ti> connect t^iiebec and tialil'ax by railwiiv ; h r 
 this purpose ii loan of 8,0()tt,(»0(•^ t)earing the Imperial guarantee was effected at. a low rate of 
 interest, and by this meAiis the Home Covernment rendered sub-<tautial aid in the constnietiou 
 of the National Railway of (^'anada without in iiny way <lrawing on the Imperial Exche(|uer. 
 It can be clearly established that by the same principle of co-o])cration in the case of the 
 Pa'ific cable undei taking, to which so much importance hns Iwen attached as a means of 
 bringing in closer attiiiity the distant (xirtions of the Empiie with the Mother (.'ountiy, it can 
 lie successfully effected without in any way taxing the people of Great Britain, of Canada, or 
 the Australasian Colonies. 
 
 Assuming that the principle >>f co-operation and State ownership be a.ssentt'd to, the capital 
 may be raised by niie of three mivlec, viz. ; — 
 
 The whole amount may be raised by the Canadian, the Australian, and New Zealand 
 
 Governments, and the interest in each case ijuaninteed by the Imperial Government ; 
 
 the relative liability to be borne by the Iin|ierial, Canadian, and Australasian 
 
 Governments, to be apportionivl by nnitual agreement. 
 The wholf.' capital may lie raised by the Imperial (iovemment; the payment of a sum 
 
 e(|ual to the interest on such portion of the cnpitil as inav lie agreed upon, to be 
 
 guarantc(>d by i'snada and the Australasian Colonies in pro(iurt' >n to be determineil. 
 3. The capital may be raised on securities issued thmugh the medium of an Imperial 
 
 Colonial Cable Commission ; a joint guarant<'e for the p.iyment of interest to l)e given 
 
 by the Imperial, the (^ana^lian, «nd the Australasian Governmentw. 
 It is obvious that by either of tliese luodei, the whole of tho ca|iiinl may be obtained at the 
 very lowest rate of interest. The interest woidd Iks a fimt chiirgc agiiin.st revenue, which it 
 can lie shown will be arnple for all purixwes, but as it is expedient to provide for eve y 
 contingency, provision should be made for a deficit The pr iportions in which any such 
 piissible deficit wouhi be made up by each respective Government would be a matter to be 
 determined by agieement. 
 
 As several distinct Governments will be concerned in the project, it may bead\isablc, in 
 order to meet the difficulty of joint ownership, to create an <'rganisation in which the 
 administration would be centralised ; an Imperial Colonial Cable Commission or trust, 
 established by the authority of the several Parliaments. It might consist of three jMjrsons, 
 re])re8cnting the Imperial, the Canadian, and the Australasian Governments respectively, with 
 authority determined by statutes, to obtain capital and to assume responsibility for 
 establishing the work and carrying it on when cumpletod. 
 
 1. 
 
 2. 
 
Among the tenders recoivLMl is an (fftir from an olil-eptabliiihed and ruliable firm to Iny 
 the cable on route No. 1, the l-ilriiiHh route by Fanning iHlaml, for the auni of l,5l7,O00i{. 
 This price incbideii maintenance and repaint for three yeura after the whole line shall have 
 been completed and put in operation; coni«e(|uently there would be no diHliursenicntJ for 
 thcHa serviceK durini; this period to be met by tlie earningH of the t<'legrnph. The coHt uf 
 working, and interest on capital, would be the only charges iigainst ruvonuo during the 
 tirst three years after the cable sliall have bei-u laid. 
 
 The coHt of workini; has been eHtimiitud by Mr. Alex. Siemens at 24,0002. for the 
 operating staff and office ex|)cnBeH at each station. If wt> luhl to this 26 per cent, lor 
 miinageniiint, the whole cost of operating would be 30,0()0i. por aunum. 
 
 The interest charges on the capiUt! expended will depend upon the value the securities 
 may obtain in the money market. These sccuritieH bmring the gu»rant«-e of the Iniperiid, 
 Canadian, and Austruhutian GovommentH would certainly be rated in no way inferior to 
 ConHols. Admitting this view, the rate of interest may be eHtinmtod at 2^ por cent. 
 
 Should the mo^t co* 'v of the several routes which have been spoken of be atlopted, that is 
 to Hay, the route by Finnin;^ Island, with branches t') New Zealand an well an Australia, I aui 
 unable to see with this tender before us, oti'eringto complete it in every respect for l,617,0l;0/., 
 that the capital to be raiHe<l need exceed l.fiOO.OOOi. This cnpiliil raised at 2^ per cent, gives 
 40,000{. as the total interest to be met yearly. As it is advisable in forming an estimate of 
 this kind to make full and complete provision for unforexeen coniiiigenciiw of whatever kinil, 
 10 or 12 per cent may be ailde<l. In this view, 45,00(!i, may be considered the maxiniu'ii 
 interest charge, to which, if we add 30,00()i. for working expt-nscs, we have the sum of 75,000^ 
 ss tlie total fixed charges to be met by revenue in each of the three years after the cable shall 
 have been opened for business. 
 
 RXVBNDK. 
 
 The next question which demands an answer is : What constitutes a fair estimate of 
 revenue ? 
 
 The subject of revenue has bfen diligently considered in all its bt-arings. and 1 have 
 endeavoured to airive at fair and reason. ible estimates; thi-se eslimateH hiive been based on 
 carefully collated inforiniition respei ting the exi-ting telegraph businesH whicli has been 
 steadily and rapidly growing for nearly 20 years. I have submitted the views formed to men 
 of experienced judgment in hucIi matters, and of {>erfectly unbiased minds. It is with 
 Confidence, therefore, that I refer to these estimates, supported, as they are, by the opinions uf 
 gentlemen in hi;!h ottieiid htations, whose sense of responsibility neceKsilMes the utmost cat e 
 and caution in arriving at conclusions. Along with my own views on the subject of revenue 
 I have much satisfaction in appending letters referring thereto it from the fo lowing 
 gentlemen : — 
 
 1. Mr. Geo. Johnson, Statistician to the Dominion Government, Ottawa. 
 
 2. Mr. J. M. Courtney, Deputy Finance Minister, Ottawa. 
 
 3. Mr. W. Hepworth Mercer, Colonial Office, London. 
 
 The Dominion statistician, after an examination of the official returns, gives precise 
 information respecting the voiuniK of teles/raph business l)etweeii Austrnlusia and Europe ; ho 
 likewise presents evidence of its rapid growth, of which the Ibllowiug is an indication : — 
 
 l«75, total words transmitted 
 1875 to 1880, increase in words transmitted 
 1880 to 1886 do. do. 
 
 18f5 to 1890 do. do. 
 
 1890 to 1893 do. do. 
 
 1893, total number of words transmitted 
 
 23,5,160 
 118,188 
 18t,007 
 289,923 
 574,01.1 
 1,401,293 
 
 This officer confirms my statements a-s to the Tolume of business, and more than l«ar8 out 
 my estimate of the share of traffic which must become tributary to the Pacific calile. 
 
 It will be seen from the letters of the other gentlemen that, after a careful exaininntion of 
 the data, they fully substantiate, as far aa it is possible to do so, the estimates of pi-obuble 
 revenue. 
 
 In my letUT on this subject addres.sed to the Honourable the Minister of Trade and 
 Commerce of the 20th July 1>94, I have set forth in detail the re.isoniiig which justifies the 
 view I take with respect to the btisiness to be done by the Pacific cable, and I venture to 
 think that the estimates submitted will be considerably within tlie aetual revenue when it 
 conies to be ascertained. Accoiiling to these eetimates the gross earnings in 1898, the first 
 full year that the calilo could I* in operation, reckoned at the low tariff of two sliillings per 
 word, would amount to llO.OOOi. ; for the year 1899, 12t>,.500i. ; and for the year 1900, 
 143,000^ If from these estimated yearly earnings wo deduct in each case the fixed cliaiges 
 for interest and working expenses of 75,0002., we would have a surplus in 1898 of 35,0002.; 
 in 1899 of 51,.'5002. ; in 1900 of 68,0002., showing a total surplus of 154,5002. for the first three 
 years the telegraph would be in operation. During the whole of this period the cable would 
 Im) maintained by the contractor, and any expense incurred in effecting repsirs would form part 
 of the contract sum to be paid to him. 
 
 A3 
 
1 : 
 
 AfUr the third year the coat of maintaining tho calile would b« a chaige againat lurplua 
 eaminga, wl iih I Hhali show would lie ample for the purpoho, and would, uioreovor, leave a 
 considerable lial&nce each year to lie rarried to a reHerve fund. 
 
 'I he following t^ible c«)verB the rciiiaiiiing Hevcu ut the tirat 10 yeara after the opening of the 
 telegrapli for trattic, uiul ia computed on the princi|ile»i act forth in the appindcd i>ap«Tn. The 
 cost ot repaiia and ranintaiance, UHually estimate*! at 6/. per mile, would iimount to 43,000/. 
 per annum , lur thia aeivicu I have allowed fiO.OOO/., which, added to iutereat and working 
 cxpeuaca, increaaea the charge againat revenue to 1*25,001)^ i>er annum. 
 
 — 
 
 QroH Kerniaci' 
 
 ChaifM, 
 
 Burplm. 
 
 
 £ 
 
 £ 
 
 £ 
 
 Surplus fur the three flret ;'eari • . . ■ 
 
 — 
 
 — 
 
 154,000 
 
 1901 
 
 1/111,500 
 
 125,(XI0 
 
 .34,fi(K> 
 
 liM3 
 
 17<i,(HN) 
 
 I2.'>,(HH) 
 
 fil,(MN( 
 
 1908 
 
 lOL'.AtMl 
 
 125,000 
 
 07.5OO 
 
 1904 
 
 2(K).«ltNI 
 
 125,(M)(» 
 
 R»,tK)() 
 
 1005 
 
 n.\M») 
 
 125,300 
 
 KKI.OOt) 
 
 1900 
 
 242,(KH) 
 
 I25.(MMI 
 
 117,(KM) 
 
 1907 
 
 •26»,Mi 
 
 12^,000 
 
 i:i:t,Aoo 
 
 Total anrplua in 10 yeara 
 
 ■ <74>,000 
 
 The estimate ahowa an inpreaning ai rplus year by year which is fully warranted by the 
 diita. That a surplus is a pi-oltablc oontinKeney is due mainly to the as>unied low interest on 
 capital ; and the low rate of intneat, so important a factor in the calculations, pn supposes the 
 identities tion of the Imperial Gi<vemnient with the Oovei-nmcnts of Canada luid the Australian 
 Colonies in this Imperial-Colonial ]iroj>ct. It is scanely neceH-iar^' to add that nltlioii};h there 
 is no pn>))ability of loss, or insuiliciuncy of revenue to meet all chHr^(^s, it ia indiH|)ensiiblc tlmt 
 the precise reaponsibility attached to the feveral Ooveinmeiits which co-jointly undertake tie 
 work should be clenrly defined. I do not take upon myself to ou^gcst tho proportion of 
 liability each may bear, as this must be a matter for diplomatic arran)remeiit hereafter 
 
 It has lieen my object to sliow by the facts I have presented and the figures I have produced, 
 that a iiiutuitl effort, on tho part of Great Britain and the two great divisions of the Colonial 
 Empire, can establish the Pacific cable with ease, and practically without cutt to the taxiiayer 
 in either country . 
 
 That the estimates 1 have presented will be borne out by actual result* I feel perfectly 
 KHtisfied. I have bai>ed them chiefly on the businei^s which already exists l)etween Australasia 
 and Englsnd, and whieh is year by year incn-asiig with ii very rapid growth. I have tiiken 
 little or no account of the trattic which undoubtedly will spring up ac^o^B the Pacific when 
 the means of telegraphing at luw rates is provided ; a new traffic the whole of which will be 
 tributary to the new line. I am satisfied that my estimates are renj-onable snd reliable, it hns 
 certainly b« en my aim to submit them in a form which time will substantiate and confirm. 
 The tiist effei't of the Pacific cable will be to confer a benefit on the merchants of Great 
 Britain and Ausira)ti.sia, and, indee<l, on tho whole of that section of the comi.iunity in both 
 countries who resort to the use of the telegraph. This is obvious from tho mere reduction in 
 rates a'oiio The reduction from fimr shillings and ninepeuce to three shillings per word will, 
 within the first year after the Pacific cable sh>dl be open, effect a gross saving in Australasia 
 and the Mother (Jountry of I9(>,0()0/. This saving will be repeated annually and will 
 continually be augmented by the growth of business. 
 
 Canada may l(X)k for gains of another kind and in another way. As Miss Flora Shaw has 
 recently so well (lointed out, Canada '• commands the commercial high road of two I emis]>here8," 
 an'l perceiving the value of tlie position has taken ineuna to secure its posseiision. But 
 commerce can novthero be developed without the oiilinary facilities, and (he telegraph is 
 in this age the indispensable adjunct, and in some notable instances the actual pioneer of 
 commerce. 
 
 The mere laying of an electric cable between two opposite shores of an ocean has in our 
 time l>ecome a comparatively commonplace affair, but to connect Cana<Ia with Australasia 
 anil New Zealand by telegraph has more than ordinary hignificance. Tho conteinplated 
 telegraph would greatly strengthen the commercial position of the lands connected by it, and 
 would constitute a common Itetween sister colonies now widely separated. In completing tho 
 " Electric Girdle " of the Empire the effect of the Trans-Pacific cable would bo far reaching, 
 and ita influence would be incalculable. Not the leiist valuable consequence of the proposal 
 aubinitted would be ita high moral and politic il im]x)rt. The co-operation of Great Britain, 
 C'anada, and Auatralasia in establishing this telegraphic connexion would present itself to the 
 world as an ideal " co-partnership " unparalleled in history, and it would furnish a striking 
 development of Britannic unity, perhaps foreshadowing still more important developments in 
 coming years. 
 
 SANPfOBD FleHINQ. 
 
Tho (|i)e«tiou« which the Cuminittes are requeaUil to cunsiJer and report their view4 up3n are a* 
 fullowa : — 
 
 1 la the laying of a cable botween Caua4la and tiie Coloniea of Aualralaiiia practicable from a 
 technical point of vit-w ^ i 
 
 S. If so, what route ehould be aelected for the cable T 
 
 8. What will he the cost (u) of lajring, (b) of maintaining the cable, (c) of the annual working 
 
 ex|ieniMyi I 
 
 4. What revenue will arine from the tralKc which may be expected to ymaa over the cable ? 
 
 5. Should the cable be owned and worked by Qovernnieut ur by a luliMidized private company ? 
 
 9. If the cable were to be national property, what would be the prop<!r metlioil of nianagemeut 
 
 anil adniiniiitration 7 
 
 7. What should be the form of contract offered to a contractor for its construction 1 
 
 I lieg leave ruspectfully to mibmit the following remarks, having reference to the firit four 
 quostionx, I have alruiidy uxpruNHod my views on ({iiestion No. 6 ducidi'illy in favour of Ooiern- 
 mi-it ownersliip. I do not presume to otter any opinion on the tinanuiul question or the nietluxl of 
 administnition. 
 
 1. DoubtH have been raii«e<l as to the pomibility of paHsinit measageN through the section between 
 
 Vancouver »n<l Fanning Island on account of its unprcctMlunted length, tho diutance being 
 3,240 mileh, to which, if Huthcient allowance for slock Im uddcil, the length of cable retpiiretl 
 will be altout .'),(iOU |niilus, a len;{th considerably lexcoediiig tliat of any cable yet laid. 
 Through the courteMy of Mr. Fredeiick Ward, maiMgpr in Ent;land uf the Counnercial 
 Cable (Jom|Niny, I have lia<l the qui'Htion tested practically within the past few days. At 
 my reifueHt Mr. Wanl caused ex|)eriments to be tried through two of the main cables ol 
 hi.t Clompcny. They were loope<l at Cimso (Nova Sci.tia) so an to form a continuous cable 
 line from Water 'ille (Ireland) to Canso and back. The eNperinifnis were pi-rfectly 
 BUcoWul, me^wages were pasHed tliniugh the whole length of I'Jible measuring 4,733 nautiod 
 miles, fully 1,100 miles gnxiter than the Voncouver-Faiining caUe; the result of this 
 trial proves conoiusively that there will Ih) no dittivulty in connexion with the Pouitic 
 cable whirh cannot be overcome. The iKjst |M)Hsiiili' eviilenc»' thit th3 Fiicific cable is 
 practicable frou) a technical [xiint of view is the fact that several of the most euiinent 
 cable minufacturing conti-actois in th; world have otfered to fui ni-h the cable, of a given 
 cupicity for conveying measa^res, to lay it on the be<l of the oceun, and maintain it in 
 cHiicient working condition for thne years for a s|)eciflc sum. 
 
 2. There is only one route open for adoption, \iz , that known ns the Fanning Island route. 
 
 There is no immediate prospecl of any other route lieing availiible. 
 
 3. The lowest tender for iiuinufacturinn and laying the cable, on tlie Fsrining Island route, and 
 
 iniiintaining it in perfect working condition for three years, is that of the India-Unbber, 
 Outta-Purcha, and Telegraph Works Coni]>nny. This firm usks 1,517,000^. for a 12- word 
 p-r minute cable, 1,072,000/. for a 15-word per minute cab e, and 1,H«0,000/. for an l«-word 
 per minute cable, maintenance for three years being inclialed in each ease (^<c« Appendix ti.). 
 
 4. The revenue to arise from the traffic which may lie exjiected to pass over the cable would, I 
 
 firmly l)elieve, exc> od the extimates submitted by nio. I have estimated that there will lie 
 a surplus of 742,000i. In the first 10 years o»er and above inteiest on lapiial, working 
 expenses, refiAirs and innintemince. The surplus would augnient year by year in an 
 inereiisiug ratio, and would Ih) placed in reserve for renewals at some lemote |ieriod, or 
 would oihcrwise be dealt with as the (lovernments may determine. 
 
 1 have the greatest confidance in the estimates sulmittcd by me, liecause I believe them to ho 
 baseil on correct data and calculated on snund princip:es. 1 have certain y striven to make them 
 mo<^lerate, reasonable, and reliable. That the estiiiiat*is are all thai I i lu in for them, I beg leave to 
 point out that tliey have tieen so far confirmed in a most striking manner. 
 
 Fint, w th reH/tect to coxt. In my letter written at Sydney, New South Wales, October lith, 
 1893, and transraittoil for the iiifi>riiiation of each of the Australasian Ooverniu'-nts {we iVibsioii 
 to Australia, page Gil), I placed tho ct.8t of the Fuiming Island n.ute at 1,97)^,000/. Tenders for 
 laying the cable on that route were received at Uttowa in Noxeinlxsr 1S94, and the highest ('rice.t 
 in the tender 1 have mentioned, range from l,517,OOa/. to 1,880,000/., and those prices include the 
 cost of maintaining t'le cable for three years. 
 
 Secoiul, xnlth reHpect to traffic. In the sane letter of Oct<jl>er 11th, 1893, I estimated that the 
 total number of words which may be expected to be telegraphed between Australasia and Europe 
 would be, in 1894 and l!>95, 1,275,191 and 1,453,716 rtS|.ectively (w« page 71). Through the 
 ourtesy of the Pojtinastee-Qenoral ot New South Wales, I have been placed in possession of the 
 actual uumljcr of words transmitted in each of these years, viz, 1,323,241 in 1894, and 1,948,369 
 in 1895. These authentic returns establish conclusively that the actual businosa done has exceeded 
 my estimate ; that there has been an excess of traffic etjual to 4 per cent in 1894 and no less than^S4 
 per cent, in 1895. 
 
 With respect to the proportion of the traffic whicli would fall to the share of the Pacific cable, I 
 beg leave to submit a letter addressed to the Minister of Trade and Commerce, Ottawa 18 months 
 jgo, and I oak that it may be held as part of the statement which I now make. 
 
8 
 
 Dkar Sir, (HIaw«, Decpmlwr 2H, 1H94. 
 
 RKrEHkiNO to our con venation this r .niiiff on the lubjaot uf th« I'miHo caUa, »nd 
 murc' eipecmlly on the question of prolxiblti revenue. 
 
 ' i Tlie point which yon ri(;htly conaideml ot iniportanett rvUt«« to thp iioiirreii of revunue, arnl 
 
 you luikt'd, up'n what ^rountl* I viunipil in my v>iiniat<-H thiit tho Pacific cnl>le woul<l obtttin 
 one liaif the t«lvf(raph Iniiiinraii iN't'veen AuNtralnnia nnd Kuroiie I You ^ugKeatiul a« a 
 pottaibility, from tiju tact that tho oxi-tin|{ linua of tol('|/rnpli had \juen long eitalilithnl, that 
 ihora would be buaint'sa relationN U-twuvn the KoHtcni KxtiMininn Tvlugraph Coiii|Niny and tlia 
 owuera of the Auatralaaian land linea, |iorha|ia an uuili'i-HtandinK or agnHsnii^nt, of Hiich a 
 charact4.>r an would (pre tho existing cable company exclusive contnd of £un)|)ean traliic 
 Collected throughout the Colonii-s. 
 
 J, .. In iinawur to thia I have only to say that the land tulo(n°*l>hs in each one of the seven 
 Australasian Colonies are owiie<l and oiwratuil by the Uovcrnnienta under tlie lV]Mirtnu>nts of 
 Puats iind Telegraphs. There cannot W any ngreumenl of the kind ruferrctl to at present 
 existing, and there is no prol>ability of one bc-ing entere<l into. On the contrary, if the I'acific 
 cablu b« extablislie<l as pr<i|HNied, through the co-operalion of the Australasian (iuvemniei.ts 
 
 ( with Canada and Great Britain, tlie Colonies would have s direct interest in the success of 
 the new line, and every telegraph and {xxtt ottice tliroughout Australia and New Zealand 
 Would prscticiilly become ottices or agencies of the Pacific cable. It is easy to Im< seen, 
 therefore, that there would be a tendency to send European telet^niph traffic ciillected ut those 
 offices (unless s|)eciiilly directed otherwise) by way if the Pacific chI le in pn-t'eienct- to the old 
 route. There can be no doubt whatever that with the Pscific cable establinhed aa j>rt.|>ONpd 
 on tho principle of State ownership, tho several (iove>nment-< st the sources of trattic would 
 have it in their power to direct telegraph business over tho new line ojs they may desire. It 
 does not follow that the power in the hands uf the UovernmontH would le unduly exercised to 
 the injury of the Eastern rxtei'sioii Company. No doubt a di 'sion of the tisffic would for a 
 lime dimin sh the profits of that comiMtny, but the establi>hiiient of tho now luute wiuld 
 •timulute telegraphy above ito normal growth, and in a very few years the volume of business 
 would l>e doubled, so that an equal division would restore to that company as much business 
 as it now controls. 
 
 l<'or these reanons, and the additional reason that the Pacific cable will umiuesiionnbly 
 c<inimand all the teleprsph traffic between North A<nerioa and Australasia, I feel more than 
 warranted in basing the estimatfs of revenue on hnlf the Kuiopenn-Austialian traffic. I feel 
 quite satisfied that the more the ({uestion is looked into my tstimstes will be found moderate, 
 and considerably on the safe siile. For my own {xtit I feel |)erfectly assured thst, if the cable 
 lio laid as a (iovernmrnt work, the estimates of revenue will be borne out by uctual results, as 
 fully as estimates of cott have been verified by the tenders received. 
 
 Yours, &c. 
 Hon. W. B. Ives, Sandford Fleiiino. 
 
 Minister of Trade and Commerce. 
 
 In the foregoing letter I have referred to the Eastern Extension Telegraph Company, snd pointed 
 out that its busintSH would be dimiiiishel by the successful o|M!ration of the Pacific cttMe. The 
 latter, however, would so stimulate telegraphy that in a few years the prii|)ortion of traffic which 
 would fall to the share of the existing line would. I have reason to think, e(|ual the volume of 
 business which st present it commands. It is a question for the Governments to consider how far 
 the compimy may oe entitled to claim that its rcssonnble profits should be ma<le .^d meanwhile. 
 I have on all occasions reeogniscd that every consideration should f)e exteii<led to the comjiany 
 whoiie enteiprise eftublished the pioneer cable to Australasia and first biought the Colonies into 
 tele)jiaphic conntxion w,th the Mother t ountry. 
 
 It is on higher than c< nipetitive grounds t) at a Piici6c cable is adv(X!aic , .md it is iiupossihle to 
 admit that the existeucc of the Eastern Exfent-ion Telefiraph niunt for ever prevent the otablish- 
 ment of a nati< nal line acro»B the Pacific. The discussions at the Colonial CorJereuces ot 18N7 and 
 1N94 go to show that the Pacific cable is dtmnnded not only by the growing requirements of 
 trade aid cuDiiiierce, but as an isK'Utial Ivature in the devcloptueut of the tclvgraphic s,)stciu of the 
 Empire. 
 
 DocHMENTH submitted for the Information of the Committee by Mr. Sandford Flkmino, 
 
 July 8th, 189C. 
 
 1. General conditions under which tenders for laying the Pacific cable were invited. — App. A. 
 2.* The tenders received by the Canadinn Government and letters connected therewith : — 
 
 (rt.) Letter from Sir John Pender .... October 1 9th, 1894. 
 
 (b.) „ Mr. W. Sharpley Seaton - - - October 10th, 1894. 
 
 (c.) „ the Chairman, Telegraph Construction and 
 
 Maintenance Company ... October 19th, 1894. 
 
 (d.) Letter and tender of Mr. Francis A. Bowen • - October 80th, 1894. 
 
 * Note. — The tenden nnd letters under thin hetdiiw irn placed in th« ei»to1)> of the Colnnliil Ofllee for nftrrntt snd not for 
 piibllcstiou. Ai thej were received bjr tbe CsnidiaQ GoTcmmeal in the fiiit place, they are to be returned when required. 
 
(«,) Tender of Si«mein Hio«, it Co. . . . . 
 
 (/.) „ Fiiwli'i-Wariiitf Calile Company - 
 
 (tf.) •• W. I'. Moiiley Tolcgrii|ih Works Company 
 
 (V) „ Iixlia-KuliU-r, (}utta-l'crcha, aiid Telff^raph Works 
 
 ( 'onipany .... 
 
 „ In<lia-Kulil>er, fJutU-l'ercha, and Ttlegraph Works 
 
 ('onipany . - . . . 
 
 „ India-Uulii>er, Outta-Percha, and Tulegraph Works 
 
 (yonipiiny ..... 
 
 !). Report on tnodurs l>y Sandford F'emin^ ... 
 
 Additional ruport on tendem by feundford Fleming 
 4. State owniTHliip and rovunti ' : 
 
 (a.) Llxtritct-t frurn Mr. Fluniin^^'s addretw ... 
 
 (6.) „ „ tnouiorandum . 
 
 (c) „ „ lirttc-r - - . . 
 
 ((/.) letter of C3«or((« Johnson, Dominion Statistician, Ottawa ■ 
 (e.) „ J. M. ('ourtnoy, Duputy MiniHtitr of Finance, 
 
 Utttiwa - - . . . 
 
 (/) „ W. Uepworlh Mercui, Colonial OHioe, London 
 
 (ktobsr 20tb, 1894. 
 OotoW 10th. 1H94. 
 October lUth, 1H»4. 
 
 October 19th, 1804 
 
 Novcmoer t2nd, 1894. 
 
 Doccniber 24th, 189A. 
 Noveinlier 20th, 1894. 
 December lltb, 1894 
 
 July 2nd, 1894. 
 OctoUr 11th, 1893. 
 July 20th, 1894. 
 November 2Uth, 1894. 
 
 December Ist, 1894. 
 Octolier Utli, 1894. 
 
 C> 
 
 APPENDIX A. 
 
 (Adverti»emenl.) 
 
 TnK Pacific Cable. 
 
 The Oovornmpnt of Canada invites cable manufacturin;{contractinf; and others to state the termH 
 upon wliicii thi-y will bt> prepared to lay, and niiiiiitiiin in efHciunt condition, a submarine electric 
 cuble acro!i.s tlit; Pacific from Canada to tho AuHlralaHian Colonics. 
 
 General couditions under whiih the oflurH are to l<e made may be aHCcrtaincd on application at 
 the Dupnrtiiient of Trade and Commerce, in Ottawa, or at the otBce of the High Commissioner for 
 (^niidn in Lnudun. 
 
 OtferH adilresai'd to the undoniigned wil' " received by him until November Ist, 1894. 
 
 Macke.v/ik Uowbi.l, 
 
 Minintcr of Trade and Commerce. 
 Ottawa, August 6th, 1894. 
 
 
 A, 
 
 General Conditions. 
 
 1. At the Colonial Conference, h 'Id in Ottawa between June 28th and July 8th (inclusive), a 
 series of rcHolutiona were posed relating to the Pacific cable icojiics appended). It woh resolved, 
 among other thin>;s, that immediate stops should bu taken to provide dinnit telegraphic communi- 
 cntii'n iMitween the Domininn of Canada and the .\uNtralasiaii Colonics. At the unanimous request 
 of the dek'gatoH present at the Coiifcrcnco, the diitv of ^^ivin;; etlect to the resolations passed, and 
 the views expreised. devolved upon the Canadian (iovernnieiit. 
 
 2. In order to obtain definite data tn enable all tlie (1 iverniuenta concerned toconsider and atlopt 
 the best means of carrying out the u:i(lui't;tkin^, the Can.ulian Guvenimenl deems it expedient to 
 invite proposols for eotabliihinj^ the cable, in three different forms, viz. : — 
 
 Form a. — The cahle tn be owned and controlled by Government ; tolie worktd U'n:f.er Oovemment 
 author ily, and to be kept in rtpiir by the contractor for three yeart. 
 
 Cable mauufaeturing contractors to state the lowest oa^h price for which they will be prepared 
 to supply and lay the cable, the terms and conditions upon which they will guarantee its 
 permani-ncy, and tlie annual payment for which they will maintain it in efficient condition for 
 three years aft-r the whole Ime ^hall have lieen cumideted and put in operation. 
 
 I'ORM B. — The cilbU to be owned. miii)it'iii)i-<l, mid vnrhd by n mbsidiaed Cumftany. 
 
 The contractim^ parties to find the capital, establish, work, and maintain the cable in efficient 
 condition, for a sulisidy to \>e paid to them annually for n term of yi>ar8, by the contributing 
 Oovernmenta. The offers to state the amount of subs'dy to be paid yearly, and the number of 
 years it is to be paid. The maximum rates to l»> charged on messagt^s to and from Great Britain 
 and the Australasian Colonies shall bo as follows : — Three shillings per word for ordinary 
 telegrams; two sliil'ings ))er word for Government telegrams ; am! one shilling and sixpence for 
 press telegrams. The charges on me»s)i;,'e8 between (^anoda and the Colonies to be proportionate. 
 
 Form C — The cable to be ovmed, maintained, and vwrktd by a comjtcny wnder a Oovemment 
 guarnutec. 
 
 The contnvct-'ig parties to find the capital, establish, work, and maintain the cable in efficient 
 
 condition. The '..fiVrs to state what guarantee of gross revenue will bo required ; the diflerence 
 
 between gross earnings and the amount guaranteed to l>e made good each year to the Company by 
 
 the contributing Governments. The rates to be charged for the transmission of messages to and 
 
 82e8a.— II. 3 
 
T 
 
 i 
 
 1(^ 
 
 'rom Great Britain and the Australasian Colonies shall be as followi : — Three Hliillin^ per word 
 for ordinary telegrams; two sliillings pr word for Qoveminent telegrams ; and one shilling and 
 lixpence per word for press niessnges. Trans-Pacific messages to be charged at pru|iortionate rates. 
 The tariff of charges to be approved and not changed unless by governmental sauctiuu. 
 
 Route or Gablr. 
 Offers will be received for laying the cable on each of the routes described as follows : — 
 
 Route No. 1. ^ 
 
 Ccmmencing at Vancouver Island the cable to extend to Fanning Island, thence to a suitiible 
 inland in the Fiji Group. From Fiji to Norfolk Island, and at that point the route will bifurcate to 
 the northern part of New Zealand, and to a convenient point near the boundary between New 
 South Wales ' Queensland. 
 
 Knots. 
 
 Vancouver Island to Fanning Island ..... 
 
 Fanning Island to Fiji 
 
 Fiji to Norfolk Island ...... 
 
 Norfolk Islanil to New Zealand . . . . . 
 
 Norfolk Island to Tweed Mouth, near boundary New South Wales and 
 Queensland ....... 
 
 Total 
 
 3,232 
 
 1,715 
 
 1,022 
 
 415 
 
 761 
 
 7,145 
 
 Route A'o. 2. 
 
 From Vancouver Island the cable to be laid to a small unoccupied island indicated on the charts 
 as Necker Island, situate*! ubout 240 miles westward from the most western island of the Hawaiian 
 Group and about 400 nautical miles from Honolulu. Froni Necker Island the cable to extend to 
 Fiji, and thence, as in route No. 1, to New Zealand and Australia. On the section Wtween Necker 
 and Fiji possibly Howland Island or Baker Island may be available for a mid-ttation, but the exact 
 position has not been ascertained. 
 
 Knott. 
 
 Vancouver Island to Necker Island 
 
 Necker Island to Fiji 
 
 Fiji to Norfolk Island 
 
 Norfolk Island to New Zealand 
 
 Norfolk to Tweed Mouth 
 
 Total 
 
 2,431 
 
 2,546 
 
 1,022 
 
 415 
 
 761 
 
 7.175 
 
 Routt No. S. 
 
 As in route No. 2 the cable to extend from Vancouver Island to Necker Island, thence f o Onoatoa 
 or .some one of the eastern islands of the (Jilbert Group. From this station in the Gilijert Group 
 two branches to extend, one to Queensland and the other to New Zealand. The Queensland 
 branch to touch at San Christoval Island in the Solomon Group and tern\inate at Bowen, 
 connecting at that point with the laud lines, easterly to Brisbane and Sydney, westerly to the (iulf 
 of Carpentaria. 
 
 Knott. 
 
 Vancouver Island to Necker Island 
 
 Necker Island to Onoatoa (in Gilbert Group) 
 
 Onoatoa to Fiji 
 
 Viti Levu to New Zealand 
 
 Onoatoa to San Christoval (Solomon Group) 
 
 San Christoval to Bowen, Queensland • 
 
 ToUl- 
 
 2,431 
 
 1,P17 
 
 980 
 
 1.004 
 
 953 
 
 980 
 
 8,265 
 
 Route No. 4. 
 
 As in routes Nos. 2 and 3 the cable to be laid from the northern terminal point to Necker 
 I«)and. From Necker Island to extend in a direct course to Bowen, touching at Apamana, a 
 central island in the Gilbert Group, and at San Christoval, of the >Solumon Group. 
 
 Kooti. 
 
 Vancouver Island to Necker Island 
 Necker Island to Apamana ((iillxirt Group) 
 Apamana to San Christoval (Solomon Group) 
 San Christoval to Bowen, Queensland • 
 
 2,431 
 
 I, son 
 970 
 980 
 
 Total- 
 
 6,246 
 
11 
 
 Route No. 6. 
 
 As in routes Nos. 2, 3, and 4, the cable to run from Vancouver Island to Necker Island ; from 
 Neckor Island to Fiji, thence tu Jersey, thence direct to New Zealand. 
 
 KnoU. 
 
 Vancouver Island to Necker Inland 
 Necker Island to Fiji - 
 Fiji to Now Zealand 
 
 ToUl- 
 
 2,431 
 
 2.S48 
 1,150 
 
 6,127 
 
 BmUe No. 6. 
 
 From Vancouver Island the cable to extend to Honolulu ; from Honolulu to Fiji, and from Fiji 
 to follow route No. I to New Zealand and Australia. On the section between Honolulu and Fiji 
 one of the Phcenix Islands may possibly be found available for a mid-stution. 
 
 Knota. 
 
 Vancouver Island to Honolulu - 
 Honolulu to Fiji 
 Fiji to Norfolk Island - 
 Norfolk Islnnd to New Zealand 
 Norfolk Island to Tweed Mouth 
 
 ToUl- 
 
 2,280 
 
 2,600 
 
 1,022 
 
 415 
 
 761 
 
 7,078 
 
 Route No. 7. 
 
 From Vancouver Island the cable to extend to Honolulu ; from Honolulu to Onoatoa of the 
 Gilbert Group ; from Onoatoa to San Christoval of the Solomon Group ; from San Christoval to 
 Bowen. 
 
 Knota. 
 
 Vancouver Island to Honolulu 
 Honolulu to Onoivtoa - 
 OnoRt<ja to San Christoval 
 San Christoval to Bowen 
 
 Total - 
 
 2,280 
 
 2,080 
 
 953 
 
 980 
 
 6,293 
 
 Route No. 8. 
 
 From Vancouver Island the cable to extend to Honolulu ; from Honolulu to Fiji, possibly with 
 a mid station on this section if a suitable island be available. Prom Fiji the cable to run direct 
 to New Zealand. 
 
 Vancouver Island to Honolulu 
 Honolulu to Fiji 
 Fiji to Ne»v Zealand 
 
 Total - 
 
 KnoU. 
 
 2,280 
 2,600 
 1,150 
 
 6,030 
 
 The northern terminus of ench route is on Vancouver Island. The cable will land at some 
 suitable point to be determined, probably at Port San Juan, near the entrance of the strait of San 
 Juan, or at BHrclay Sound. 
 
 The several routes above described are shown generally on the accompanying map of the world. 
 The distances given in ench case are believed to be approximately correct, but are not guaranteed. 
 Parties offering to provide and lay the cable must make their own calculations of distances and 
 satisfy themselves. 
 
 C%arac<«r o/'Ca6/««.^Proposal8 will descri'ie the type of cables intended to be used on each 
 section, and state the weiajht ot conductoi-s and insulators per knot in each case. 
 
 Shore EnilH. — The best de-cription of landing cables must be employed at terminal pointii and 
 all mid-stntions. The proposals will describe the character, weight, and length of shore-end cables 
 to be used in each case. 
 
 Spceda— The calculated speeds for each section of the cable shall in no case be less than 12 
 words per minute. 
 
 Stations and Equijmwnta. — Each offer will describe the character and approximate cost of 
 buildings, instnimentH, &c., to be funiished for eaeh terminal and mid-ocean station. 
 
 Rf pairs mul Mninteinanre. — Proposals will state the provision intended to be made for repairs 
 and maintenance, the number, tonnage, and value of repair steamers. In the case of offers made 
 under Form A., the steamers and stores will be found by, and remain the property of the con- 
 tractor, until the end of three years from the completion of the cable, to be then takoq over at a 
 Tpluation as may be stipulated and agreed. . ^ 
 
 B 2 
 
12- 
 
 flurveys. — Charts may lie seen nt tlie Department of Traile and C.)mniertf, Ottawa, and at the 
 office of the High Ciimniissionor for Canada in London, Hliowin},' the so\inding*< which have teen 
 made from time to time in the PaciHc as far iw recorded. It m expected tliat additional soundings 
 will shortly be made, hut parties inakini; jirojiosaU ujust assume all risks, and in the event of a 
 contract being entered into for t-stalilishiug the cahle, the cintracturs must thiiiiiHelvt's ttike nit'ans 
 to find the must suitable points for lauding the cable at all terminal and mid-ocean .stations. It will 
 Ih) understood that in each iuHtance the lauding privileges are to be secured by the contributing 
 (governments. 
 
 Time uf Coviplrllo'n. — The time limited for the completion of the caVile in three years, from the 
 date of the contract ; but as it is desirable to have telographiu communication established as soon 
 as practicable, pro|>08al8 may state a shorter perioil ; or the same parties may make two offers, one 
 on the basis of three years, the other on the shortest jMiriod within which the undertaking may )m 
 accomplished. 
 
 Proposal. 
 
 Proposals basf d on the above general conditions, and in either of the three forms set forth, to be 
 addressed to the Minister of Trade and Connnerce, and delivered at lii-s depaitmeut in Ottawa, on 
 or l)efore the first day of Noveml>er 1 fSO-i. 
 
 Department of Trade and Commerce, 
 Ottowa, August 6th, 1894. 
 
 4. Resolved. — That in view of the desirability of having a choice of routes for a cable connexion 
 between Canada and Australasia, the Home Government lie reijUestMl to take immediate steps to 
 w>cure neutral landing ground on some one of the Hawaiian Islands, in onler that the cable may 
 renmin permanently under British control. 
 
 5. Resolveil. — That the Canadian Government be requested, after the rising of this Conference 
 to make all necessary inquiries, and generally to take iuch steps as may be ezptdienl in order to 
 ascertain the cost of the proposed Pacific Cable, and p.oiiiote the establialimeiit of the undertaking 
 iu accordance with the views expressed in tliis Confeience. 
 
 APPENDIX B. 
 
 Report on Tekdkes. 
 
 Sir, Ottawa, 20th November 1894. 
 
 I HAVE the honour to report on the replies received by you on the Ist inst., in response to 
 the public advertisement of the Government of Canaiia, inviting cable manufacturing cnntraetors 
 and others to state the terms upon which they would lie prepared to lay and maintain in an 
 efficient condition a submarine electric cable across the Pacific from Canada to the Australasian 
 Colonies. 
 
 Ist. Sir John Pender, Chairninn of the Eastern Extension Telegraph Company, 50, Old Broad 
 Street, London, addressed a letter to you, dated ',9th 0':t<>ber 1884, in which he reore.sented 
 (1) that full information resjiecting the depth ami nature of the .sea bed has not heen >btained, 
 and in conseiiuenee reliable ojiinions canndt be formed; (2) that Mr. Alex. Sieuiens' estimates of 
 revenue are fallacious and that my own estimates are not much more reliable; (.'!), that a cable 
 laid as intended would be quite useless and would prove a coiiimcicial failure ; (4) that a telegraph 
 established acnws tUp P«"'Hc ::." fi./jujsed would result in a loss of at least 90,000^. a year to the 
 ciunpany he represents. Sir John I'ender, in short, discourages in every possilile way the attempt 
 to span the Pacific by a Canada-Australian telegra|)h, he states, however, that he will be most 
 happy to enter into net;otiatiuns for accompli.Hhing the work if sufficient inducements be ottered 
 him, and he pleads that his company " will be able to undertake the work on better terms than 
 could be offered by any other company." 
 
 2nd. Mr. W. Sharpley Seaton, 574, O'*! Broad Street, London, likewise addresses you 19th 
 Oct<iber 1894. This gentleman sets forth at same length the great necessity which exists for a 
 detailed survcj', He considers this to be of primaiy importance and couuhels delay until such a 
 survey l>e made. 
 
 3rd. The Chairman of the Telegraph Con.struction and Maintenance Coiiip»iny, 38, Old Broad 
 Street, London,, writes lOth October 1894. He criticises generally the proposals which have been 
 published by the Canadian Government, and raises objections to the conditions la'd down (or 
 intending contractors. He objects to each one of the eight routes specified, and proposes a new 
 route, taking iu Honolulu and Samoa. On this route the firm he represents would lay a cable of 
 a good type and weight between Vancouver and New Zealand (only) for 1,870 OOOi. This 
 amount, however, does not include maintenance fur three years or for any period. Nor does it 
 include a brt.r.'h cable to Australia. He urges as a first step that the line should be sounded over 
 its entire length on the exact route chosen, and he states that his firm cannot undertake to 
 guarantee the repair of the cable uiitil a further investigation has been made of the sea bottom 
 uvor which the cable is to be laid. 
 
1» 
 
 " The writer of this comnuiniration estimates tlmt a cable could be laid on route No, 8 for aboiit 
 1,300,000<., but thiH, hostfttt-'N, would depend upon itn jiroving possible to find an availiible and Hufe 
 inid-Htation Ijetween Honolulu and Fiji. Ho further strtt'js that niaintunance on tins or any route 
 cannot under present conditions be guarantee! by this firm. 
 
 4th. Mr. Francis A. Bowen, 3, Tokonham Huildingf, King's Anns Yard, Lor i, setids a proposal 
 dated 20th Octubor 1894. This gentleman for himself luid liis aa«i>ciates "iters tf> construct and 
 submerge a cable on any route which may be selected for 20(i/. per knot of G0N2-6t) feet. The 
 offer presents itself to me as being in an exceedingly and>igu(>us form, as there is nothing to show 
 what the ti'tal cost may be on any route, and there is no e.xplan ition as to how the total cost is to 
 be ascertained, whether the number of knots shull be roi koned on the actual distance between 
 stations, or on the len'.'th of cable payed out ; noi i.s it clear tliat the price stated includes the cost 
 of buildings, iiisttumentfl, &c., mor-over, iind to m_ mini the most le'ious obje tioii to this offer is 
 tlie specification of the core to be used; the weight of copi)er and gutta-percha appears to lie 
 designed to be the same tlirougliout without reference to the lenifth of sections to be spanned. As 
 specified the core would \x-. U)o liglit for the long section and unnecessarily heavy for the shorter 
 sections. Mr. Bowen places the additional cbirge for maintenance at 237,OOUi. for Uie three 
 years. 
 
 5th. The India-rubber, Gutta-percha, and Telegraph Works Company refer 'to the invitati'-a for 
 proposals under Form " C," tiiat is, on the ba.sis of a traffic guarantee. This company is unable to 
 make a firm offer under this form ; tliey, however, submit an estimate in the following words : — 
 " For your guidance, we may state that in our opinion a 25 years' annual guarantee, payable quarterly 
 " of the following amounts, as placed against the respective routes should suflice for the effective 
 " establishment and r linf 'uauce of ihe cable." 
 
 Route No. 1 
 Route No. 2 
 Route No. 3 
 Route No. 4 
 Route No. 5 
 Route No. 6 
 Route No. 7 
 Route Na 8 
 
 £■ 
 226,00a 
 217,000 
 215,000 
 153,000 
 202,000 
 19!»,0()0 
 184,000 
 197,000 
 
 There i« no other reference in any of the replies received to the establishment of the trans-Pacific 
 telegraph under a Government traffic guarantee (Form C.) and none whatever to the formation 
 of a company to carry out the undertaking under a Government subsidy (Form B ). 
 
 With respeet to the matter of soundings referred to in the first, second, and third communications 
 above noticed, I would Only remark that it would re(|uire soundings to be taken in a very 
 comprehensive manner to give even an approach to a full knowledge of the sea-bed, and that it 
 would involve much cost and prolonged delay. However valuable such a survey would undoubtedly 
 prove ij a scientific point of view, it is by no means indispensable to the laying of a cable or to its 
 effectual maintenance. Cables have been laid and successfully laid when no such comprehensive 
 surveys have been effected ; indeed, the best information goes to show that a large proponion of 
 cables at present submerged have been laiil without any precise and detailed knowledge of the 
 sea- floor. The majoiity of such cables are, I believe, in good working order, and few of them have 
 ever required any gieat expenditure tor repairs. Be i..\ that as it may, the Government is now in 
 jMi-ssession of definite offers from firms of tlie highest standing and widest experience to lay the 
 Pacific cable on any one of the eight routes specified. All the soundings rec|uired for securely and 
 successfully laying the cable are to be mnde by the contractors themselves during the time occupied 
 in manufacturing it, and so satisfied are they on this and all other points that they are (juite ready 
 to enter into contract to complete the undertaking and guarantee its maintenance for three years 
 for a definite sum. 
 
 There are four regular tenders according to Form " A.," accompanied by ample details and full 
 information on all essential jx)ints. After carefully and criliciilly examining and comparing them, 
 I beg leave to submit tlie following abstract : — 
 
 Regular Tenderm. 
 
 Form A. The cable to bo owned nnd controlled by Government ; to be worked under Government 
 authority ; and to be kept in repoir by the contractor for three years. 
 
 No. 1. From Siemens Bros. & Co., 12, Queen Ann's CJate, Westminster, London. 
 
 No. 2. From the Fowler- Waring Cable Co., North Woolwich, London. 
 
 No. 3. From the W. T. Henley Telegraph Works Co., 27, Martin's Lane, Cannon Street, London, 
 and North Woolwich. 
 
 No. 4. From the India-rubber, Gutta-percha, and Telegraph Work* Co., 106, Cannon Street, 
 London, and Silvertown. 
 
 These tenders are baaed on the general conditions prescribed ; they include in each case the 
 manufacture and laying of the cable ; the providing of station buildings and instruments for the use 
 of the operating staflf ; likewise the maintenance and repoir of the entire length of the cable for u 
 period of three years after the whole line shall have been completed and put in operation, 
 
 B 3 "'"' 
 
14 
 
 The pariies tendering »re prepared to enter into contract for tho sums placed opposite the nam* 
 of the firms, in each cose as follows : — 
 
 Rimte No. 1. 
 
 Commencing at Vancouver Island with niid-sUtiuns at Fanning Island, Fiji, and Norfolk Island, 
 and with branches from No. 'oik Island to New Zealand and New South Wales — complete, 
 including maintenance for thrt^ years in each ease. 
 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Works Co. 
 
 No. 3. W. T. Henley's Telograpli Works Co. 
 
 No. 1. Siemens Bros, tc Co. .... 
 
 No. 2. Fowler- Waring Cable Ca - 
 
 Route No. 2. 
 
 £ 
 
 1,517,000 
 1,826,000 
 2,170,000 
 2,360,000 
 
 Commencing it Vancouver Island with mid-stations at Necker Island, Fiji and Norfolk Island, 
 and with branclus to New Zealand and New South Wales — complete, including maintenance for 
 three years in each case. 
 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Works Co. 
 
 No. 3. W. T. Henley's Telegraph Works Co. 
 
 No. 1. Siemens Bros. & Co. 
 
 No. 2. Fowler- Waring Cable Co. - - . - 
 
 Route No. 3. 
 
 £ 
 
 1,316,000 
 ] ,743,000 
 2,140,000 
 2,210,000 
 
 From Vancouver to Bowen (Queensland), with mid-stations at Necker Island and Oncatoa 
 (Gilbert Group), branching at Onoatoa, vid Fiji to New Zealand and vid San ChristoTal (Solomon 
 (iroup) to Bowen — complete in each case, including maintenance for three years. 
 
 £ 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Works C!o. - 1,403,000 
 No. 3. W. T. Henley's Telegraph Works Co. - - - 1,723,000 
 
 No. 1. Siemens Bros. & Co. - ... 2,240,000 
 
 No. 2. The Fowler- Waring Cable Co. - - - - 2,341,000 
 
 
 Route No. 4. 
 
 From Vancouver Island to Bowen (Queensland) direct, with mid-stations at Necker Island, 
 Apamana (Gilbert Group), and San Christoval (Solomon Group) — complete, including maintenance 
 for three years, in each case. 
 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Works Co. - 
 
 No. 3. The W, T. Henley's Telegraph Works Co. - 
 
 No. 1. Siemens Bros. & Co. ..... 
 
 No. 2. The Fowler- Waring Cable Co. - 
 
 £ 
 
 1,068,000 
 1,5.54,000- 
 1,710,000 
 2,125,000 
 
 Route No. 5. 
 
 Vancouver Island direct to New Zealand vid Necker Island and the Fiji Group— complete, 
 including maintenance for three years, in each case. 
 
 No. 4, The India-rubber, Gutta-percha, and Telegraph Works Co. 
 
 No. 3. W. T. Henley's Telegraph Works Co. 
 
 No. 2. The Fowler- Wanng Cable Co. - 
 
 No. 1. Siemens Bros. &.'• Co. - - - - 
 
 £ 
 
 1,291,000 
 1,658,000 
 2,010,000 
 2,050,000 
 
 Route No. 6. 
 
 Vancouver Island to Norfolk Island with mid-stations at Honolulu and Fiji. At Norfolk 
 
 Island, branches to extend to New Zealand and Australia proper — complete and including 
 maintenance for three years in each case. 
 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Works Co. 
 
 No. 3. The W. T. Henley's Telegraph Works Co. - 
 
 No. 1. Siemens Bros. & Co. .... 
 
 No. 2. Tho Fowler- Waring Cable Co. - 
 
 £ 
 
 1,391,000 
 1,740,000 
 2,120,000 
 2,130,000 
 
 ' ■ Route No. 7. 
 
 From Vancouver Island to Bowen (Queensland), with mid-stations at Honolulu, Onoatoa (Gilbert 
 Group), and San Christoval (Solomon Group)— complete, including maintenance for three years, in 
 Mch caw. 
 
15 
 
 Ite. 
 
 nd, 
 ifor 
 
 1011 
 
 ind, 
 
 etc, 
 
 >Ik 
 
 No. 4. The India-rubbor, Gutta-percha, and Telegraph Works Co. 
 
 No. 3. The W. T. Henley'8 Teliigiaph Works Ca - 
 
 No. 2. The Fowler- Vv aring Cable Co. 
 
 No. 1. Tl»e Siemens Bros. Co. - 
 
 Route No. 8. 
 
 £ 
 
 1,081,000 
 1,589,000 
 1,880,000 
 1,900,000 
 
 From Vancouver Island direct to New Zealand, with mid-statious at Honolulu and Fiji' — 
 conip'ete, including maintenance for three years, in each case. 
 
 £ 
 No. 4. The India-rubber, Gutta-percha, and Telegraph Uorks Co. - 1,243,000 
 No. 3. The W. T. Henley's Telegraph Works Co. - - - 1,655,000 
 
 No. 2. The Fowler- Waring Cable Co. - - - - 1,910,000 
 
 No. 1. The Siemens Bros. Co. - - - - - 1,970,000 
 
 The cost of maintenance is variously i-stiiuated by the several firms, the highest being that of 
 the W. T. Henley Telegraph Works Co., who place the cost at llo.OOOi. per annum or 'A^'i.OOOl. for 
 the three years. This is subject to a reduction if the spare cable provided for the purpose be not 
 used. The Siemens Bros. Co. include in their offer for the purpose of niRintenance 27O,OO0i., being 
 at the rate of 00,000^. per year, this also is subject to a reduction if the actual repairs cost less 
 than the sum named. This mode of charging for the maintenance and repair of tlie cable has an 
 obvious advantage. The Fowler- Waring Co. stipulate that a fixed sum, 300,000i., be allowed to 
 guarantee maintenance and repair for the three years. The India-rubber, Uutta-percha, and 
 Telegraph Works (Jo. make no special charge for guaranteeing the maintenance and repairs, and a« 
 their offer for laying the cable on each one of the eight routes is the lowest, it is well to make this 
 point perfectly clear by quoting from their proposal as follows : — 
 
 " The contract prices given liereunder for the different routes include the erection at each cables 
 " landing place of a suitable dwelling-house and operating room for the working staff, with 
 " duplicate sets of all proper instruments at each station ; also the use of two steamships fitted 
 " with cable tanks and all necessary maclvitiery for repairing llie cable, and the coat of nuiin' 
 " taining these ships, at well as the cables tliemselve^, for three years." The contract prices for 
 which this firm is prepared to manufacture, lay and inuiutain the cable for three years on any one- 
 of the eight routes are as follows : — 
 
 £ 
 Route No. 1 ....... 1,517,000' 
 
 Route No. 2 - - • - - - - 1,416,000 
 
 Route Na 3 ....... 1,303,000 
 
 Route No. 4 - - - - - - - 1,068,000 
 
 Route No. 5 ....... 1,291,000 
 
 Route No. 6 ....... 1,391,000 
 
 Route No. 7 - - - • - -■ - 1,081,000 
 
 Route No. 8 - - - - - - - 1,243,000 
 
 This Company states that if entrusted with the contrnct they will undertake to manufacture the 
 table at the rate of 20 miles a day, and will proceed to ship and lay it with the least possible delay. 
 
 An examination of this tender and accompanying documents shows that this Company propoae 
 to use an approved type of cable; the core on the long section (Route No. 1) i.>j to have a copper 
 conductor weighing 533 lbs. per knot, iuauluted with gutta-percha weighing 365 lbs. per knot, the 
 sheathing to be the same as the deep-sea type of cable adopted by the Anglo-American Telegraph 
 Co. in the newest Trans-Atlantic cable laid this year. The shore ends and intermediate cables tu 
 be similar in character and weight to those generally adopted under like circuKistances. 
 
 There is one apparent omission in this tender in connexion with shore end and shallow water 
 cables. I can find no special mention of a metallic protection against " teredos." In the opinion of 
 the undersigned, the core of the cable should be enveloped in a brass tape. The additional cost is 
 not great, and before any contract is entered into with this or any company it should be clearly 
 stipulated that this et&ctive means of protection against the ravages of marine life should be 
 provided. 
 
 I have, &c. 
 
 SaMDFORD FLEMINa 
 
 The Honourable Mackenzie Bowell, 
 
 Minister of Trade and Commerce, Ottawa. 
 
 !rt 
 in 
 
 ADDiTiONitL Report on Tenders. 
 
 Sib, Ottawa, December 11th 1894. 
 
 I HAVE the honour to report on the letter addressed to you by the India-rubber, Gutta- 
 percha, and Telegraph Works Company, of date the 22nd November 1894, on the subject of 
 the tender of that firm for manufacturing, laying, and maintaining the Pacific cable. 
 
16 
 
 Tn my report on tlie tonJors of daio November 20th, 1894, 1 mentioned in the last parapraph 
 that in my opinion it wu«i expedient to make provision for protecting the core of the cable, umler 
 certain conditions, from the ravages of -iLirino life. The letter of the alwve-named coj>y 
 which you have refeiTed to iiie gives the iissurviice that all types of cable proposed to l)0 laid by 
 that firm will l)e provided witli proper protectioTi, that in fiict all cables laid in lean than one 
 hundred fathoms are to have the core sheathed witli meUllic taping oa a protection against the 
 tj'RMlo. This assurance removes the objection which I raiivd. 
 
 In my report ol November 20th all tiie tt'nders referred to were for tne pupply cf caMes having 
 a speed capacity of 12 words per minute. Fur route No. 1 the price of the India-rublxr, Oatta- 
 percha, and Telegraph Works Company is, including maintenance for three years I,5l7,0ll0i. 
 In the letter of this company of the 2ind Novombe • it is kUUkI that higher speed Cttblec will be 
 furnishe<l for t'-is routu at the following [irices, viz. : — 
 A 15 wci-d per minute cable for l,672,000i. 
 An 18 word j)er minute cable for l,880,()00i. 
 {,'ompared with estimates previously made these prices must be held to l)e moderate. My own 
 estimate for a cable on this route (No. 1) as given in your report on the mission to Australia 
 (page 69) is l,978,000i. ; and the estimate furnished the Colonial Office, London, by the General 
 Post Office authorities (see Appendix to the same report, page 79) is 2,924,000^ Neither of these 
 estimates include maintenance for three years; moreover, the estimnto from the General Post 
 Office does not include a connexion with the mainland of Australia whic'i woulil probably bo 
 estimated at JOO.OOOZ. additional. 
 
 We thus have in the tender of the India-rubber, Gutta-percha, and Teleg. %ph Works CJompany a 
 definite offer to lay and maintain for three years a cable from Vancouver to Australia and New 
 Zealand with a speed capacity 50 per cent higher than the cable referred to by the General 
 Poat Office authorities, and for a sum l,244,000i. k.* than their estimate without any allowance 
 for maintenanea, 
 
 I have, &c. 
 
 Samdford Flehinq. 
 Hon. Mackenzie Bowell, 
 
 Minister of Trade and Commerce. 
 
 APPENDIX C. 
 
 The Pacific Cable as a pitblic UnDERTAKiiia owned bt Government. 
 
 (a.) 
 
 Extracts from Mr. Fleming's Addreu at the Colonial Conference, 1894. 
 
 " There are two distinct methixls by which the Pacific cable may be established, viz. : — 
 " 1. Through the agency of a subsidised company. 
 " 2. Directly by Government as a public work. 
 
 " I have given this branch of the ."subject long and earnest attention, and I ^have arrived at 
 conclusions which to my mind art confirmed by every day's experience. 
 
 " At one time I favoured the first method. It has been customary to have enterprises of this 
 character carried out by companies, and it seemed to have been assumed that there was no other 
 way by which the work could be accomjilished. However, when it is considere*! that in the 
 United Kingdom in India, in the Australian Colonies, and in a preat many foreign countries the 
 telegraphs are owned and worked by Governmenta, there appears no good reason why Government 
 ownership should be confined to land telegraph. No doubt it woidd give lea«t initial trouble 
 to Governments to offer liberal subsidies in onler to have the telegraph Across the Pacific laid ami 
 owned by a company, but I am perfectly satisfied that in the long run the second method will Ije 
 found in every respect more advantageous. The interests of a company and the public interssts 
 are not identical ; they are in some respects the very opposite. While the primary object of a 
 com])any is to exact from the public as much ofit aa possible, the interests of the public, on the 
 other hand, are to secure cheap telegraphy, and to have it as free and untrammelled as possible. 
 Suppose, for example, that a large subsidy be granted, such a subsidy as Sir John Pender has 
 declared to lie neces.sury, and that the whole undertaking passed over to the Eastern Extension 
 (Jompany to carry out, would not the ett'ect be to coutimi and perpetuate the telegraphic monopoly 
 which at present exists lietween Australia and the outer world I Would it not simply shut out all 
 jirospect of obtaining the reduced charges to which we may confidently look forward to ; would 
 it not contract intercourse, instead of providing the fullest opportunity for its free and full ex{ian- 
 sion, so much to lie desired ? I Icxjk forward to the time, and I do not think it is far distant, 
 when, if a wise and prudent course be followed, the telegraph will ramify in many directions 
 
17 
 
 unler the ocean to »11 tho principal colonial poHSHssions, and that, in the not dintant future, there 
 will bo a greater reduction in chari^ee on niessagoH than hoH takuii plivco in li.ttt'r postajje during 
 the p»st fifty yean*. 
 
 " Spoakinj,' for myself, I have arrivo<l at the ofincluHion that the true principle to follow, lookinj,^ 
 solely at the public intoreHts, preHont and pnmptictivt', is t > c still lish tho Pncillc cal)l« oh a Giivcrn- 
 nieut work. In my judgment it would lie a fjrave ami irreincdiablt! inistako to give it to tliu existing' 
 oonipony on their own terms, or pcrhapH on any torniH. Even to hand tno work over to a new 
 roinpany entirely distinct from thi- Eastern Extension Cotiipiiny would scarcely mend matterH. It 
 would Iks iin|)oi«ible to pnjvont the two conqianion combining in some form to advance their common 
 odvantof^e to tho detnn.unt of the public interest*). 
 
 " I have elsewhere endeavoured to show the ailvantages derivable from the cstnldishment of the 
 Pacific cable as a public work directly under Government control. It is a matter of oonstjint 
 experience that the promnters of companies, as a mle, set out with the determination to niak>.' 
 large sums of money, that inve-stors are promised large returns, and they are not satisfied unless 
 they are forthcoming. In coiise(|uence !) per cent., and in som*" cases much more than 9 i)er cent., 
 is paid for money raised for private companies, while on the other hand Governments can borrow 
 capital at 3 per cent. Honce it is possible under Government ownership to rudnce chnrges on 
 telegraphy much below the rates charged by private com|)anie8. 
 
 "With the proposed cable under Government control, it is not easy to assign a limit to the 
 reduction in charges for transmitting messages, and with low 'charges there will arise, without any 
 apprecia'ilc extra cost in working, a great expansion in the business of the telegrai)h. Thus the 
 public will 1)0 benefitoil to an extent which would not be possible if the cable became the prop-rty 
 or passed under the control of a private company. 
 
 " I ha<l hoped to have seen present at this Conference his Excellency Sir Ambrose Shea, Governor 
 of the Bahamas. He would, I am sure, have given the tiest testimony in favour of tlie plan of 
 Government ownership. Less than two months ago I had a letter from him in which be furnished 
 indisputable evidence as to the superiority of the principle of Government contnd. The Bahamas 
 are connectc<l with the mainland by a catile owned by Government. The first idea was to have it 
 carried out by a company umler a subsidy of 3,000i. a year for 25 years. Fortuimtely, it wa.s 
 decided to make it a Government work ; the cable is entirely so established, and the policy of its 
 operation is dictattid primaiily by the commercial requirements of the Colonies. Profits are of 
 course desired, but these are hold to bo a 8ul)ordinato consideration. Tliis policy would have been 
 reversed had the cable been controlled by a company, the interests of the company per ne wouM 
 have remained paramount. Sir Ambnise Shea informs me that even in a financial aspect it lias 
 proved fortunate that they kept the cable under Government control. Instead of p^iying 3,000Z. .i 
 year in the form of a subsidy, the charge on the Colony is already reduced to 1,800/. af'.er fully 
 providing for a sinking fund to cover renewals as well as interest on tho cost an<l all other charges. 
 Beyond the ()Uestion of money, the Governor attaches miicli importance to the power held bv the 
 executive for adapting the policy of the cable management to the growing and varying wan^s ami 
 conditions of the Coloiiy. 
 
 " It appears to me that in bringing two of the leading divisi(ms of the Colonial Empire into 
 telegraphic connexion, we cannot do better than place before us the experimetit to which I Im' e 
 referred as having been so successfully tried. Great importance must be attacheil to the views aid 
 ripe judgment of Sir Ambrose Sliea, strengthened in a matter of this kind by the experience of the 
 Bahama cables. Every commercial object points to the expediency of retaining tho Canaila- 
 Au-itralian Civble inider Government ownership ; and, apart altogether from conum^reial considera- 
 tions, there is no reason to warrant that .so import mt a work, undertaken for national purpt)ses, 
 should be removed from the ettective control of the Governments, by who.se authority alone the 
 great principles ot its establishment would be fully observed." 
 
 (fc) 
 
 Estimates of Revenue. 
 Ertmd from Mr. Fleming's Memamndam, Sydney, October 11, 1893. 
 
 " In many cases it is difficult, owing to the lack of information, to form estimates of the probable 
 revenue of a projtx'ted undertaking. In this instance, however, the l)est data is available for our 
 guidance. We have the published statistics of telegraph business by the existing line between 
 Australia and Europe for a number ot years, and it is fair to assume that on the establishment of 
 the Pacific cable, rates and all other things being equal, the business will be equally divided between 
 tlie two lines. 
 
 " I am unable to ascertain the business for the past year, but I givther from the published returns 
 that the number of words transmitted in the year ending May 1st, 1892, was 1,27.5,191. If we 
 divide this into equal parts vja have 037,595 words as a basis for estimating the revenue of the 
 Pacific cable. 
 
 " In examining the returns for previous years some striking peculinrities are apparent. During 
 the eight years from 1882 to 1890 the telegraph business between the Australian Colonies and 
 
 92683.— 11. C 
 
IS 
 
 Crent Britnin increa«c<l on an avorajjo .54,441 wonls each year, Cfiual to 14 pel cent. p«i- nninim. 
 ThiH may be viewed as tliu nuruial incroaHt! under a hi^li turitf, inaMniiich ax tliroiif^hout tlicie ci/^lit 
 yeare tho charjfCH on ordinary inesBaj^s wen? never less tlian On. 4</. per word. ()n May jst, IK'Jl 
 ilie rntt' was relucud from 9s. id. to 4». per word, and within the 12 followini; luimthii tlie husinesm 
 ineruHsed by 448,1)13 words— an incruast of ;>4 per cent on the business of the previous year, and 
 s;il per cei.t. over the normal annual iiw reaHc during tiie preceding eijjht yearn. The further 
 exjian.sion of Imsiness will no doubt for the pvcseiit bo di^turllcd and retarded by an increase in 
 the char>;e8 on messages on tlie 1st January last, but thenj remains the experience of the year 
 1N91-1I2 to establish tlio remarkable ertect of n low tsrifl in stimulating txjlegraphy. In that siiiglu 
 year tlie increiv.se in tiie number of words transmitted under a is. rate was greater than the growth 
 of the business during the whole of the preceding eight years under a !M. 4(/. rate. 
 
 " One of the ilireot benetits to the public firm the Government ownership of the Pacific cable 
 will be the reduction in charges for transmitting inessaL'es. I have already mentioned that with 
 a full and ethcient staff, such as the estimate for working expenses |)rovidcs for, it will cost no 
 more to do a large business than a small. There will, therefoi-e, l)t! no reason for preventing 
 the freest expansion of telegraphy by the new line, by lowering the charges. In my hundile 
 opinion, the rates ncrofs the PaciHc should l)e lowered to 2». per wonl innnediately on the cable 
 being laid, in order that the public may have tho advantage of cheaper coinmunicHtion at tho 
 earliest moment. 
 
 " The projxwed rate of 2». per word f.,r transmitting messages across tho Pacific would reduce 
 charges U-tween Australia an<l Engisnd to 3». 'Ail. in place of 4«. 9(/. as at present. Moreover, 
 messages fi-om Australia receiveil at Vancouver would be forwarded to all imris of Canada and tho 
 United States for an average charge not exceeding 2*. 9d, per word in place of 68. — the ]>resent 
 charge. 
 
 " I wish ... avoid extravagant statements and too sanguine estimate's. I would, in submitting 
 my ideas, [jarticulaily desire to keep strictly within reas<mable probabilities. If we base estimates 
 on the e.\isting volume of busiries"! merely, we must anticipate that there will \xt no great advance 
 over the business of 1H91-02 lor a few years if the charges on messages are again raiseil aa 
 they already have been to some e.xtent. In the calculations which follow, I shall, therefore, 
 assume the business to be at a standstill for three years; that is to siiy, I shall aasume tliat 
 the busine.ss in 1894 will not be greater in volume than it was in 1891-92, and that thence- 
 forth the normal increase of not more than 14 per cent, per annum shall apply. The number of 
 words transmitteil in 1891-92 was 1,275,191. It is a&sumed that the Pacific cable would, if in 
 operation in 1894, obtain one-LuU' of this business.* 
 
 Yenr. 
 
 Nuniher of 
 
 Wi.rdi 
 per Annum. 
 
 RaminfrK nf 
 
 the ( able 
 
 at a«. iwr 
 
 Word. 
 
 £ 
 
 72.ti8« 
 81.612 
 90,5.19 
 99,465 
 108,391 
 
 Yenr. 
 
 Number of 
 
 WoriN 
 per Annum. 
 
 Earninira nf 
 
 Ih.. Cibli- 
 
 at 91. per 
 
 Word. 
 
 1894 .... 
 
 1895 .... 
 
 1896 .... 
 
 1897 .... 
 18*8 .... 
 1899 .... 
 
 6.17.595 
 726,858 
 816,129 
 905,386 
 994.649 
 1,084,913 
 
 1900 .... 
 I'.IOI .... 
 llHI-i .... 
 
 1903 .... 
 
 1904 .... 
 
 1,173,178 
 1.2«2,439 
 1,35 1,708 
 1,440,967 
 1 ,530,230 
 
 £ 
 117,»18 
 l'JU,244 
 1.15,170 
 144,097 
 l.«,0S3 
 
 " In connexion with the estimates of revenue I have pointed out from statistical returns two 
 elements of incr ase of busine-s — (1) a iiurnial increase under an exceedingly high tariff; (2) a very 
 much greater increa-e under a lower tariff. There will be a third inenase which will Ije due to 
 tho development of traffic with Canada and in briiigini; tlie Australian Colonies into direct 
 telegraphic touch with the whole telegraph system of North America. At present telegraphic 
 intercourse is insignificant, but with a 2«. or 2.>'. M. rate across the Pacific in jilace of a (Is. rate by 
 a circuitous route, the circumstances will be favourable to the growth of telegraph business 
 between the two continents, and in consequence the revenue to the Pacific cable fioni this source 
 will ripidly develope to large proportions. 
 
 " In the foregoing estimates of revenue I have reckoned only the normal increase under a high 
 tariff and take no account of the greater iunrease whicli ceitainly will result from tho charges being 
 lowered, as projwsed. I have likewise added nothing from the Australasia-North American business, 
 the whole of which would flow to tho Pacific cable. I sm quite wurriinted, therefore, in expressing 
 the opinion that the estimates of revenue I have prestmted are not exaggerated or unreasonable, 
 and that tlie Pacific cable established by Government in the manner proposed would affect very 
 im|)ortant results. It would practically extinguish all subsidies now paid and render guarantees 
 uunecessiiry. It would permanently establish low rates for <x;ean telegraphy. It would yield a 
 revenue which, after paying working expenses, and providing for mainU-nance and renewals, would 
 make go<xl, all interest charges on the whole cost of the undertnking from the beginning, and in a 
 very few years would furnish large surplus earnings. I venture to think, then, that if the 
 
 * At the dale of uning to press (Maj 1894) it has been ascertained that the traffic Tor 1893 between Europe and Australia 
 consisted of 1,806,716 words, showing that Mr. Klciuiiig*!, CHtimate is eonsidrrably within actual results. If uicrrly the 
 normal increase of 14 p4T ooot. under a high tariff be added to existing basinesri the number of words for 1894 iu thu table of 
 estimated earnings which follows should be 744. B2K in place of 637,599, and the eurniiigs for the same year 74,4H.1/. in plact 
 of 63,769f. Thus establishing that the eatimate* of revenue presented in this meniuraiidum are in no way exaggerated. 
 
 i} 
 
 ♦ \ 
 
J 
 
 19 
 
 resolution pawod by th(! Vrminl and Tolefp-aph Conference in Murrh last* Jw jfcnerally assented to 
 in tlicHu Culonien, tliu UoTeianifiits noeii not he«itftto in incurring tliu eoniparativt-ly siiiall, almost 
 nominal liability, nore.sH."^y to secure u telegniph connexion iu:nm>i the racilic, wliicli every briti»l» 
 Bulijuct will r)-cogni8e to be vt tho ipi'utijtit uatiuuitl and cominorciki value." 
 
 (ft) 
 
 JCxlract from Mr. FltmiiKj's Letter to the Han. Mixckfmie Bowfll, Jidy 20lh, 1894. 
 
 " Witli rt'Bfiect to the revenue. If it will tnke three years to efltabli.sli the cable, 18U8 will be the 
 first year of it« full operation. On pa'.'CH 70 anri 71 of tho report on the nii"Nion to Australia 
 will Ix- found an cHtinuite of the proportion of buninetH which wovild fall to the Hlmre of the PaciHc 
 cable for that year, 189H. The pHtimato w»8 made a year ago and \mv^vi\ on tho usminied telejjraphic 
 business for 1893 Ixftweon Auntnilii> and Europe, whieh has been exci-edod by actual reHults. See 
 footnote, p. 71. Corrcctinj^ tho estimate in this respect, the liuBiness for 1H!)8 may bn si't down 
 at 1,105,0(10 words, which reckoned at 2s. a word would yield a (;ross revenue for the first year's 
 ojieration of the Pacific cable of 110,000^ It will be borne in mind, morodvei, that this estimate 
 is for European business, and includes nothinij for tho busincis between Canada, tho U'dted States, 
 and Australia, at jtrosent significant, Vnit which, in a few years, with greatly improved fiicilities, 
 will undoubtedly ilovplope to consideraldo proportions. For these reasons I am satisfied that the 
 estimates submitted will be fully realised and uioro than confirmed by a'tnid results. 
 
 " Bearing; on these estimates, a fri'-nd wrote me from Loudon a few weeks back, oh follows: — 'I 
 ' have been looking over tho proceedings of the Colonial Conference of 1887, where n memoraudum 
 ' of yours is j'ivon, dated April 1886 (page 101). In it you .show a probable traffic for the year 
 ' 1893 of 133,000 messages, ecjual to 1,330,000 words. The actual business fcr the? past yeir, 
 ' according to Sir John Tender, was 1,30(!,716 words, and according to Australian returns, 1,401,202 
 ' word.s. In either cases the preuiction made eight years avo is approximately correct.' I mention 
 this merely to bring out the fact that the principles on which tho estimates are formed are sound, 
 and that the estimate themselves mny generally bo considered safe. 
 
 " With respect to the charges on rtvenue, viz. : — 
 
 1. Interest on capital. 
 
 2. Working staft" and management. 
 
 3. Repairs and maintenance. 
 
 " The first and second are constant, the third is variable. Experience goes to show that failure 
 and interruptions in cables, due to defects in manufacture or ciuses connected with laying, 
 generally take place within the first year or two. For this and other reasons I propose ♦hat the 
 nisnufacturers shouhl be asked to undertake to keep tlie cable in efficient workin;.' order for throe 
 years ; wo may thus eliminate from revenue account for that period all chaiges for repairs and 
 niaintoi\ance. 
 
 " Assuming that the cost of the cable and its maintenrnce for three years will be, in round 
 figure*, 2,000,000i., the revenue account for the year 1898 would stand as follows : — 
 
 £ £ 
 
 Elarnings as estimat.ed ...... 110,009 
 
 Interest on 2,0()0,000i. at 3 per cent. - • - fiO.OOO 
 
 Staff and management ..... 30,000 
 
 90,000 
 
 Surplus revenue ..... £20,000 
 
 " In the alwve I have taken Mr. Slemons's estimate of the cost of staff required for stations, and 
 office expenses st each point, viz., 24.000i. I have increased Mr. biemens's allowance for general 
 mana>;ement to 0,000/., the two making in all SO.OOOi. per annum. This charge will be constant, 
 and will suffice, as pointed out by Mr. Siemens, for a business more than six times greater than 
 that estimated for the year 1898, and by introducing duplex working, for a traffic 10 or 12 times 
 greater. 
 
 " I have pointed out elsewhere that the average normal increase of telegraph business between 
 tho Australasian Colonies and Europe was 14 per cent, per annum, during the period when the 
 high rates charged for a period of eight years were in force, that is to say, under a tariff rate of 
 9«. \tl. j)er word from 1882 to 1890. Manifestly under the low rates proposed to be charged by the 
 Pacific cable, the normal increase will be greater than 14 per cent, per annum ; more especially as 
 tho whole North American business will receive a great incentive from direct communication, and 
 all this iulditional and con.stantly growing traffic must find its way by the Pacific cable to and 
 from Australia. I venture to think that it would not be too sanguine an estimate to place the 
 annual increa.se of business at 18 or 20 per cent., but to be perfectly safe I sViall limit it to 15 per 
 cent in the calculations which follow, that is to say, only 1 per cent more than the average annual 
 increase realised under the high tariff for the eight years previous to 1890. 
 91888.— Ji. D 
 
20 
 
 " ClTIMATt 
 
 " of the lm«in«ii* of tlio Pncific cal>lo for 10 yearn nftor lU compltitlon, railcuUtcvJ on the iMwiii of 
 1,100,(KM) worJB, fur tliu year 1NU8, an avoraj{i) noriiml iiicreiwe of l.j j,tji cuut. |)er uiinuiii 
 thiTcaftor : — 
 
 (inui 
 Rnniinp. 
 
 Intemt and 
 'Vorhiiig 
 
 i8fm . 
 
 |8!«0 - 
 
 1900 - 
 
 1901 ■ 
 1002- 
 1003- 
 lIMM - 
 lOOJ • 
 10(l() . 
 1907- 
 
 £ 
 IKMNX) 
 IL'0,5(X) 
 I t.'I.IMK) 
 1/.1),.)0() 
 lT«,(HKt 
 n»2..'>(H) 
 3(KMHK) 
 22.V<HX) 
 2I..',(HH) 
 258,500 
 
 n<),i)oo 
 
 tMI.IKH) 
 iX'.'iOO 
 iXt.UOO 
 OO.'XK) 
 iMI.iKK) 
 JKHHH) 
 {NI.'XIO 
 tMMHK) 
 
 uo.ouu 
 
 Hurplut, 
 
 £ 
 20,(X)0 
 
 ;i«,5()o 
 a3,(xx) 
 
 UU,500 
 86,(XX) 
 102,500 
 1I»,(X)() 
 l;i5,5(X) 
 152,(XX) 
 
 uiH,aoo 
 
 " Aa wo liave iliiiiiiiatfil all Imt the fixed rlinrf;eH on rovt^imt) for tho fintt tlin-e yeani, an 
 cxainiimtioii of ilie altuve taMo will fhow that the HUiphiM up to the fourth jeai- will have acoiiiini- 
 latf<l to 109,500^, whioli mim, to^fther with tho annually inn eiiMiii/^ HurpluH thereafter accruiiij,', 
 would lie Huffii'iciit tt) meet nil charges for ropairH nnd inaintonanco and loave a Iwlaiico to he 
 rarried to a cumulative reserve, for reiiewalH at Hunie future day. 
 
 " 1 injiy mention that I iiave snhmitted in outline this financial sclieine to tho delegates frojii 
 Now South Wiilefl, Victoria, Queensland, and Nev Zealand, with whom I hiivo had the advimtn^'e 
 of freipieut consultations since the Conference rose, and I have flio siitisfiicuon to state that it finds 
 favour with uach of them. That feature of the schoino hy which nil tho uiicortiiin chiir;,'es for 
 repairs and maintenance would Ik; emhraeed in thojcontract wiili the m;iiuifa.tureis of the cahle, 
 woulil not only hav e a tendency to H.ciirc a cal>lo of tho very host miike and character, hut it 
 wouM defer all charges af,'ain9t revenue, which revenue could not, fully meet, until a ilate later 
 than the payment of the last annual subsidy to the Kastoni Kxtonsion Company. The Ausfralina 
 (Jovernmoiits n(jw contiihuting to that subsidy could then with greater oas.- make up any poHsilih' 
 shortage which may arise in connoxion with the now cable. Tho eatimato, however, shows clearly 
 that under this scheino there is every pro.spect of the PociHo cable being solf-sustiiining from the 
 first." 
 
 > J 
 
 i 
 
 (d.) 
 
 Letter from Oeorgt Johnson, Esq., Dominion Statistician. 
 
 OflRco of the Statistician, 
 Dear Sir, Ottawa, NovondK-r 2H, lHn4. 
 
 I HAVE examine<) your statement'' before the Intercolonial Conference in re tho I'dcific 
 Ciiblo, and have the following remnrks to make: — First, respo'ting the growth of businehs; aiid. 
 second, respecting the pr.'portion the new route could hope to secure. 
 
 I. 
 
 Taking the statistics of growth I find the following : — 
 
 
 No. of Word! 
 irtBimawd. 
 
 . ' ( 
 
 InereMe. 
 
 
 Yur. 
 
 Aetukl. 
 
 Per C«nt. for ! IVr C'l-nt. 
 I'eriod. i Ywirly. 
 
 Tiiriff per Word. 
 
 1,11,11 
 
 235 160 
 
 35.1,348 
 
 537,355 
 
 827,278 
 
 1,275,191 
 
 1,321,412 
 
 1,401,;^3 
 
 118,188 
 184,(X)7 
 281t,923 
 
 50 
 55 
 51 
 
 10 
 110 
 10-8 
 54 
 3G 
 60 
 
 9*. 4rf. 
 0.. Ul. 
 Oj. id. 
 Ot. 4d. utid 4t. 
 4t. 
 4: Qd. 
 
 The actual increase in the three years 1891-93 over 1890 was 674,015. 
 
 The number of words transmitted is taken from returns submitted to the Postal and Telecrraph 
 Conferences held in Adelaide in May 1890, in Queensland in March 1893, and in New Zealand in 
 March 1894. 
 
B.^-/2: 
 
 \ 
 
 \ 
 
 Tlipy iiliow that during 15 y«»M (1875-90) of high tariff (D/i. Xd. per word) the increaiw in the 
 nuinUsr of wttniH waa 251 N pi-r <ent.,aiiil that during the threu years lHI)l-U'i-08, in which porioii 
 tbo rntc'N wur« ruduccMi to \». and 4m. II>^., thu incroAMi ovvr IHDO wna 110 ' 2. 
 
 For thu whole pcriixi coverod hy thune nttitiHticN tho incroawj in 4!)(i ])er runt. 
 
 From these tiguruH of per-wntag* it apix'ani : Int, that during the pcri(Kl 1876-00 the growth of 
 businena under a 0*. 4(/. tariff was v(|ual tu an annual average of lA ' K per cent ; 2nc|, that under 
 ft 4». and \». Md. tariff the average annual growth from 1890 to 1803 (thrt'e yearn) wai IW per 
 cent. 
 
 Your estimate of 14 per cent. increoM app-jars, in the light of these facta, to b« a very conwrvative 
 one. 
 
 II. 
 
 How much of the business could a cable competing with the existing one hope to secure ? 
 
 (((.) A telegram from MeliKmrnu to biridon by tlm existing line has to travel i3,fi!).') miles of 
 wire, of which 2,704 miles is in Australia, and is, therefore, land wire. Tho land wire in Asia Ih, I 
 juilge, about 1,000 milos more of wire. 
 
 A telegram from Melbourne to Loudon vid Canada would travel 14,414 miles, of which 3,764 
 would l)e land wire. 
 
 In ioN|H-('t to the greater danger of stoppage and delay from land wire, tha two lines would be, 
 priictically, on an e(|uality. 
 
 ({».) Your estimate is that one hidf of tho words sent by cable between Australia and the rest of 
 the woi'ld would lie sent via tho line acnms Cana<la. 
 
 According to the return of 18!(2 there would be, on this estimate, G<>0,706. But some portion of 
 tlie total of 1,321,412 woi'ds must bo AsiatiL- buHlnusii, Kiiicu AuMtrulia imp >rtt) cf tea alonn 
 33,000,000 lbs. a year, direct from AmIii. From various data I fstiiuate the Aniatic business iit 
 one-eleventh of the whole. Deducting this, wo have 1,101,000 wonis to repri'scnt European 
 busini'ss, of wliicli the now pro{x>Hed route wnuld stand a fair chance to secure one-halt. I would, 
 thoreloio, place t'>e estimi-te at 505,000 (or (iOO.OOO) words instead of ()37,505. 
 
 Takinor this estimate and applying to it tlie lli'8 |)er cent, iticreikse, the estimate for 1895 wouM 
 be fiOS.OOO words, or 31,8(50 lem than your estimate. F'T 180(1 it would bo »ll,7()i» words, or 
 4,362 less. In 1807 it would Ih) 048.(100 woi-ds, or 42,000 »wir than your estimate. iMy 
 calculntioii would give fewer words for 1805 und 189(1 and moro words lor 1807, and still more ir. 
 succeeding yeai-s. 
 
 I huvo taken the pcr-centage of tho period when tho tariff was Os. \d. per word. If the 
 [ler-centage under a \». tariff were taki'U, the growth W"idd be much greaer, and undoubtedly 
 the result of a reduction in the rates would be an iucreaso in messages, iu< the table aliuvo given 
 shows. 
 
 I have not dealt with the development of business between North Amorici and Au-tialia, which 
 must in the nature of thiiigi be very great when facilities are provided, and w ill also bo tributary 
 to the Pacific cable. 
 
 Yours, &c. 
 
 Ueuroe Johnson, 
 
 S.indford Fleming, Es(|., C.M.G., C E., Statistician. 
 
 Ottawa, Ontario. 
 
 Letter from, J. M. Courtney, Esq., Deputy Afinititer of Ftruinee, 
 
 Department of Finance, Ottawa, 
 Dear Mr. Fleming, 1st December 1894. 
 
 I H.WE read over very carefully and, I may say, w'tli a great deal of pleasnr',' t'le blue 
 books and documents you left wiih me for perusal in connexion with the .scheme for laying a 
 Pacific table to connect this country and Australasia Both from the fact that it is the pioneer 
 Pacitie cable scheme and also from the magnitude of tho work itself, the consideration of the subject 
 is to mo exceedingly interesting, especiiilly as it has such an intimuto boariiig on the oxpansion of the 
 Empire. 
 
 In writing to you now, however, I wish to be very careful and to guard the position I take from 
 misconception. I chh, of course, have nothing to do with the policy of the Camidian (iovernnient, 
 and in the present financial condition of the (J intinont I could not, if the matt' r were referred to 
 me, on general principles, recommend any scheme that would increase the liabilities of the Dominion 
 either directly or indirectly. From the examination of the facts and figure.«, however, submitted 
 by you I may say I have arrived at the same conclusion as youraelf as to the cost of laying down 
 the cable, fand, in my judgment, tha conclusion arrived at caimot be regarded as over-.sanguiue or 
 forced in any way 
 
 As to the calculations of revenue, I have, of course, taken your own method, and have divided by 
 two tho number of wortla sent in 1892, taking one half to come over tho new cable. But, as it 
 appears from the documents submitted, tho cable could not be in operation for three years yet, or 
 until 1898, oven if commenced at once, and taking tho average anniuil increase in the messages at 
 15 per cent, thu estimate of the work t(.i be done ix, to my mind, very low. 
 
2-2 
 
 It would f»llow, tliurcforo, jikIki'ik )'y t\w oxpitniliturn aikI liy khc n<veiiii« tlial, im far m I car 
 MNi, with thu liiiiiUiil kiiDwIi'il^o ut iiiy iliHptinal in tlm iiinlter, nml iimlwr tlia oi>iiiliti>>iM UMiiitjtl tlie 
 ckhlo liiiit c«ml<l Iw I'liil <l<iwn uiiJ • rtivtmiie ilurivixl whiuli woiilil iiiout nil thu chiirt{us. 
 
 Of coiirwi, ill all thiji it iiiimI I>«i uii(l(>rHt<j<Ml ih»t I iim lo<ikiii(( at thu Hiiaiiciitl fi-iktiir«N of thii ncheino 
 from till) (liicuiiioiitn Iwforr inu, uiid thut I liavu ii i |i«iHoiml ur iliruct kiiowl«Ml|{i< of thn laying nr 
 Working of vhIiIu liiivn. I do not know tliiil a m.'iHimtr lino may not Ih' nti<-«iMnry or tliat other 
 roiititi({i'iiuii'>< may not ari«u wliiuh I Iiiivl' no iiieiuiM of uiitici|)atin(( ur li>ii'Nr<'iii({. 
 
 Yoiipt, iic. 
 (Sigtied) J. U. CuUHTKEY. 
 
 Sandford Flnniiiig, Em]., 
 
 Dltuwa. *• 
 
 (/) 
 Leiitr from W. Hej>wi/rth itereer, Eiq,, Ci/lonuU Ofici, London. 
 
 Ridoan flnli, Ottawa, 
 Dear Mr. SANDroRn Flsmino, i Oct. I Ith, 181»4. 
 
 Hefohk loKviii^' Ottawa I dinirn to cnngratiilatu yon on thoeviiliMipc which \h iio.v in the ikxhoa- 
 •ion.of thu CaniKlian (Jovfnimont that your viuwn an to tlm coHt of lnyiii^ the |)rii|ioH'd I'ltcitic cable 
 wiTR inodonito mid iraMonahli-, It inuHt liu a inatt«r ■>( (rr*>at gratilii'iitiun to you to find after so 
 uiiiny yt-arH of controvfrHy and (>p|>uHition that your oMtiuiatuN aru more than homo out by the 
 prnrtical olfcis now received. 
 
 With roj;iu-d to th« i|Ui)Mtion of thu proHiH^ctivo roveniie of thu cable. I have cni ."ully exaininefl 
 the dntii and Ntudied the priiipiploN upon which you havu forninliited the eNtiniitieK . intnined in 
 your monioranduin dnt«'d Sydney, llili (Ji'tolier 1N03, and your letter to Ur. Kowull of 20th July 
 181)4, and I have Hatiitflpd inyHcIf thnt your concluniona are thorou(;hly sound. A.i.suniing that tlve 
 cable Ih to be a Uovernnieiit ent<^r|iriNe, participnted in by Ureat liritain, (.'an:i(Ia, and Austr.daaia, 
 I think that the iwtiinateH of revenue would at leOMt be fully borne out by actual i-eNultg. 
 
 It MoeniH to inu that then; is now an excellent cofte for ]>reH(-ntatiiin to the varioim partieH intorcBtud. 
 and the AuHtralaMiaii Colonies in ])articulAr will no doubt look fdrward to the acuomplinhment of 
 an enterj)rise which wdl, wo may fairly hope, give them an unprecedetitedly low ttdeKfuphic tariff 
 in return for a Hinuller expenditure tiian they liavo been paying for a comparatively high one. 
 
 I ho|)0, Kpeaking for mynclf, that in a matter of auch wide concern, and involving, lx>iiidoH the 
 direct commercial iH-netits, results the irii|K)rtance of which cannot Ih) estiiiiatud in figures or weighed 
 in II balance sheet, the AuHtrulaxian, the Doiiiiniun, and the Imperial UoverniiientH will all be able 
 t<) join in the project. 
 
 I am, yours very sincerely, 
 
 (Signwl) W. HtpnoRTH Mercer.