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In view of the Colonial Conl'ere'ice to >)e held in June at Ottawa, at which the scheme for a cahle hetween Austialia antl Canada is to be considered, representations have been lately made to the Colonial Office. The advocates of the undertaking urge that the British Government should unite with the Governments of Austra- lasia and Canada in guaranteeing the interest upon the capital required for a single line of cahle. The Intercolonial Conference at Wellington considered that a guarantee of four per cent, upon a capital not exceeding i' 1,800,000 for fourteen years would be suffi- cient to induce a company to undertake the construction of tlie line. But Mr. Sandford Fleming, the chief Canadian promoter of the scheme, thought thut a joint guarantee of three per cent., representing a total charge of i,'52,;-i50, would be sufficient, while the Colonial Conference thought £72,000 would be needed. Mr. 8andford Fleming suggests five routes, his object being to touch only at places where British inlluence is supreme. J>ut tin; Wellington Conference proposed that the cahle should toiu;li al both the Sandwich Islands luid Samoa. In opposition to the .scheme important representations have luen submitted to the Mar(iuis of Kipon on behalf of the cable comj)uiiies which control the existing lines between the United Kingdom and Australasia. They urgi' that the existing service was establislied solely I'y private enterprise, no (iovernmenl subsidy, guaninlee, or exclusive landing rights having been granted to the company. A cheap tariff was tried in 185)1-92 and resulted in a loss of i'.")."), ()()(>, borne equally by the guaranteeing Australian (ioveniment.s and tJie r /fff •MrfMi^Mliad^MMMllHi (•()Hi|»!iiiy. I'or llir sccoikI vciir tin- loss miioiiiiU'il to i'lM.uOO. vlicn the (lovcnniH'nts coiicrnit'd were iiiKlniiiiciUal in raising' the tiirilV I'lMiii Is. to Is. '.Id. on .laiiimry 1, IHim. Tlu' loss for tlie fiiiifnt )far is i-sliinatt'd at i'l'i.CMM). It is uit,'»'d that as tlu; presont cahlr is duplicated tlirou{,'lioiit, and capahlo of cairyin}^ a far greater traHif than at present, an additional service is not wanted, and that the cost of i"2,()00,()(K), or i'4,()(M),00() if diipli<'ated, would end in ruinous competition. ^Ioreov«'r, if the lnij>erial (lovernnient joined in the proposed ^.{uaraiitec it could not in cipiity refuse to assist the existing' service to the s^anie ixtent. Any diversion of route would also inflict a heavy loss on the Indian M\cliesoo,ooo Wdrlciiijj Kyjvcijws Miiintinutitn- H5.U00 jiinrtizivti guiirnnt i>n t" repfacf ciiWIe lit L'ud of fintiUen yen l''(iur |>cr Clint. int'-Tittt on capitiil Leaving nftcr (U-dintiiig i-ntiiniitiMl iarning> And the i»rtn»)std i ptr cent. ;,'Uiiriinttc ... £4.'),0(»0 7-',.0(Ml 8 K XT I! ACT from a Pajur read before the IuhjuI Colonial Jnsdtutej London, on Hth May, 1.S04, hij Hon. Siu Chakles Tupper, entitled " Canada in uelation to THE Unity of the Emi'IHK." I As to the cable, I may say the following,' resolution was passed uininiinously by the Colonial Confi'icnt-e called and presided over by the Secretary of State for the Colonies in 1HH7, und after the Hid)jeet had been fidly discussed and all the objections urged by those interested in existing routes c()nsidere of Imperial coiiMnniiicmtinn over tlie liigli seas and tliroii^'li Uritisli pOHsessions, wliieh promises to be of great value alike in naval, military, eonimei'cia), and politieal aspects. Second, — 'I liat the connection of Canada with Australia liy direct suii- marine telegnipli acroHH the Pacniic is a project of lii^'li importance to the Knipire, and every doubt as to its practicability should without delay be set at rest by a thorough and exhaustive survey. The recent visit of the lion. Mackenzie IJowell, the Canadian Minister of Trade and Connuerce, and Mr. Sa)idford Fleming, who has given so much attention to the question of a Pacific cable, has excited increased interest in that question in Australasia. It has been fcdlowed by a visit to Canada from Sir Thomas Mcllwraith from Queensland, and the Hon. Robert lleid from Victoria, and, as already stated, a Conference is to be held at Ottawa on June 21 next. The Australasian Postal and Telegraph Conference, recently held at Wellington in New Zealand, heartily eiulor.sed the proposal for a cable from Vancouver to Australia with the .same unanimity that characterised the Intercolonial Conference held at Loiulon in 1887. Of cour.se those who have long enjoyed a monopoly may be expected to oppose competition, and I am not surprised at the protest made by those interested parties to Her Majesty's Govern- ment, and published in I'fie I'iwes of April 19, iHlJl. In that protest the statement of the Wellington Conference, that a guarantee A 2 of 1 |M r cM'iit. for fourteen years womM probably induce tbc company to iiiidertiike the work, is treated as an admission that the cable must be ri'iicwed at the end of that period. No reason is shown in tiio artieic! why fourteen years should be determined on as the life of a eable, and it is contrary to the experience of the existing cable companies. Mr. Sandford Fleming took twenty-five years as a basis for ealeulation ; and that this period .seems a fair one is shown by the fact that some 5,9,50 miles (or about 80 per cent.) of the IH.OOO miles of cable now forming the system of the Eastern I'lxteiision Telegra|)h Comi)any is more than twenty year.s old, and is still in working condition, the balance of about 12,050 miles Ix'ing duplications and extensions laid since 1871. Mr. Sandford Fleming's suggestion that a joint guarantee of 8 per cent, would be sutVu'ient was made on the supposition that the Pacific cable wo)d0. As, however, the tarilT for the Canadian and Auu'rican tratlic to and from Australia would be cheaper by the Pacific than by the existing routes ( by about Is. per word), this traflic would certainly pass through the Pacific cable. Besides, tlie tnifVic from and between the islands at which a Pacific cable touched should bo added. Estimating the traflic from these sources at £15,000 for the first year, a total traflic of iJ!)0,250 may reasonably be looked for in the first year's working. j\Ir. Sandford Fleniing states that the normal increase of traflic uiuler the old l)s. Id. rate between Europe and Australia was 14 per cent, per annum ; but taking it only as 12^ per cent., wo have for the second year the amount of £108,280, aiul so on progres- sively in each succeeding year, as long as the rate of increase of traflic remains the same. It is therefore obvious that the protest against the proposed cable is largely based upon fallacies. If the reasons urged by those wlio liave so long enjoyed a monopoly should result in her Majesty's Government not giving the assistance required, the competition dreaded would not be prevented but transferred to a company under the control of a foreign Power, and England will have lost her opportunity. In conclusion, permit me to say that Australasia and Canada make no "demand" upon the taxpayers of this country, but on the contrary propose to unite with her Majesty's Croverinnent in providing an alternative line of steam and cable communication between England and Australasia and Canada, uniting those great possessions of the Crown more closely to each other and to the Mother Country, and furnishing in the best manner possible the means of expanding the trade and strengthening the unity and defence of the Empire. K XT I i ACTS FROM DISC T SSI OX. The Hon. DfTNcw Gillies, — It struck mo, as I read the Paper, that that Paper had been written with a set purpose. You will rcmonibcr that in 1887 there was in London a Conference repre- senting all the Colonies of the Empire and India. Tliat Conference did a great work. Among the subjects dealt with were the two subjects brouglit before our notice this evening, and altliougli no 6 I' absolute (liJi'ision may have been arrived at c'oncc'niiii<< tlii'iii. the ConfiTi'iicc did a{,'ree m to the iiiiportuiice of the Kmpiro uctiuf{ to;,'t;th('r on queHtioiis of this kind, and of },'ettin<,' such eonipleto infoiination as would enaldc such uetion to be ial<(?n. 'rhere was no idea of one part of tins Knii)ii(' seeking to <^iim an undue advan- ta^'e over tlic otlier, and the oidy thinj,' 1 would say to the <,'entle- nmn who spoke a<,'ainst the leetui-e, Sir .John C'olojnb, is that on that occasion nolxxly su^'j^ested the idea of doin}^ anything other than was just and fair to every part of the Empire. There may be some divergence of opinion as to the vast res|)()nsil)ility which iKjlongs to Great liritain, not as the Empire, but as head of tho Empire. An Jsmpire can be nothing without its head, and wo look to the House of Commons, the House of fiords, and the Queen, as representing this Empire, to do their duty along with those who are beyond the centre. What was that duty ex[>ected to be? The first thing they determined upon was that before taking " a leap in the dark," before eml'arking on this great expenditure, we should ascertain what that expenditure would amount to. Now nobody at that time knew what the cost of the cable would be, and with that view an Admiralty survey of a complete character was thought to be necessary. 1 am not saying that they agived that the whole of tho responsibility should rest on the Imperial Government, but they did declare that in the interest of the Empire this matter was of sullicient importance to recjuire an exhaustive survey to enable those concerned to determine whether the project was reasonably within their njeans. That work, so far as 1 know, has never been com- pleted, and as a matter of fact we do not know, if we took the route suggested, how nuich the scheme would cost. Here I would say that 1 sincerely hope the Government will have sullicient lirnniess and confidence to resist any request impi'operly and nnreasonably made. It has agreed to the Conference at Ottawa, which is to be a Conference of delegates from the various Colonies and from the head of the Empire itself. As 1 said at the outset, 1 believe the Paper was read with a clear object, and that object was to tell the story from the author's point of view on the huportant subjects which are to be raised at that Conference. 1 am not now going to say whether in my opinion Victoria, New South Wales, and the other Colonies have always subscribed to the full amount for every- thing that had reference to the welfare of the Empire. It is too large a question, and, besides, it is not the question to-night. The question is. Ought we to have communication under liritish control from Canada to Australia ? Is it desirable in the interests of the wliolo Kinpiro? If you dociilu that it is not, you strike at the vi'i-y root of the project, aiul svi' rieed j,'o no furtlier. If, on the otlier hand, the (piestion is decided in the allinnative, the question tljat arises is, How nuich will it cost, wlio shall be the contrihutories, and in what proportion oi.j,'iit they, equitably, to contribute '.' As 1 understood Sir .lohn (Joioiub, he struck at the very root of tho qiu^Htion. He char},'es tlie (.'(donies with never bavin;,' contributed their fair proportion. That is not now the (piestion. Let us },'et rid of side issues and deciile the bij,' (juestion, and having done that, then will come the time to ask how much tiie several Colonies ought, on the merits, to contribute towards what will have been acknowledged to be a national and Imperial work. If it is not Imperial, if you say it is only a nuitter between Canada and Australia, England will be bound, in the interests of her pi'()})le, to say, " We cannot help you ; we belit've it to be a good work, but we do not feel interested in it." Why should not Kngbuid be interested? Who is to pay for the work? These are (juestions which will be settled at the C!onference. As to the (juestion " Who is to protect the line when laid?" I would ask Sir .John Colomb, Who, in the event of war, would protect the existing line? Does he mean to say, Lie quiet and see the line picked up and destroyed ? Not for a mojnent. That is not England's way, and never was. If a friend of the Empire — a friend of l-'.ngland —one that was an ally — was put to trouble, what would England do ? England would act the numly part she always has acted. She would prevent those lines being taken up and destroyed, whosoever might attempt it. Would the existing company pay for the defence of the present line and prevent its being taken up? Certainly not. What are the navies of (Ireat Britain for ? They are for the defence of her people and her honour, and I venture to say it would be a stain upon her honour to allow the humbli'st of her citizens in any part of the world to be the subject of injustice and outrage, to say nothing of her Colonies, which arc^ bone of her bone. Wlierever project of the nature now under discussion is shown to be ultimately for the great good of the Empire, the Colonies will not be slow to pay their shart;. In the matter of naval defence, they have not shirked their duty imder the arrangemi'Ut made a few years ago, and I am ccnifident the Imperial Oovernment will not shirk its duty. Lieut. -Colonel Sir Cieokoe S. Clahkk, K.E., K.C.M.O.: There is one thing in this interesting Paper which I a little regret. I coiild wish Sir Charles Tupper had not introduced some of the figures he has given us. All pi'ogress in every Colony contributes 8 soiiu-'tliiiiv,' lo tilt' str.'iij,'lli mid ^lory of llif l-liiipiit' ; l»ut to t-xprcsn the valiU' of tlmt coiitrihiitioii it> i' x. il. is (litlifull. I could ciiticiso (li«>H(> fij,nnvs ratlior Hcvcicly. They socin, for oxample, to bo put forward a!^ (•oinparal)lt' with other t'xpcmhturr, Hiich, for instauci', as tho contriljutioii of tho AustraUan Colonies to the Navy, or the cxptiiiditun' whicli will fall shortly on tho Homo (lovorn- iiunt for tho construotion of tho harbour and dock at (libraltar It would, I think. hi»K' west. I do not think an Imperial subsidy could be bettor applied than in encouraf,Mnj? such a i)roject, and 1 thorouj^'hly endorse all that has boon ipiotod (m that bend from Sir Andrew Clarke. As to Sir John Colomb's criticisms, T do not a<,Moe wifli him. I cannot see how the increased burden is to arise. Tho twenty-knot steamers which are to bo i)ro- vided will Ik; v«'ry well able to take care of themselves if they arc used for commerce. If they are used for war, nidit ijunst'n) they have not to be defended. As to tho cables, I do not think they will recpiire any special protection. It all turns on tho naval policy this country is to pursue — whether that policy is to be vi<,'orou.s otleiisive, searcbin<^ out an enemy's vessels wherever they may bo, or a miserable defensive, waitinj,' for an enemy's attack. There is one •^nciit iind distinctively national forces which alone can keep till! Kmpire t();,'etlier and ])i()t(!ct the commerce upon which the Colonies, as well as tin; Mother Country, de|)end for existence. I hope that the time will coiue when every Colony of whatever (Ici^Mce will contribute sonietliiii^' to the national navy. Tho CiiAiKMAN (tho Mar(|uis of liorne), in |)ioposiiif,' a vote of thanks, said : I think the inakinj,' of extensive i)ro,L,'iammes and lookinj,' too far ahead and ^'i<,'antic theories, all a mistake. 1 believe wo ouglit to take in band those questions which are being pushed by the authority of! the Governments of tho day. You have such a (juostion in the matter of cable and mail comnuniication between Canada and Australia. I believe Great J>ritain will find it greatly to her advantage to further tluit end ; and 1 hope all those who may have belonged to the Imperial Federation League will give a hand to the cause. D CORRESPONDENCE. From "THE TIMES," May 16, 1894. THE PACIFIC CAlJIiE QUESTION. Sir John Ponder has luIdnsHcd the followin}^ litter to Sir Charles Tapper : — WiNCIIKSTI'.ll TIoCSK, LoN'DuN, K.C., Mnj ir,, IHJM. Dkak Slit CiiAUi.Ks TtiiM'KU, — I havo carcriilly looked tlirou^di the paper wliicli you read last week at the iiientiiiL; of the Uoyal Coloiiiiil liistiliiU', and liad 1 l»ecn well enoiij,di to Jitteiid the lueetiiij,' I should hiive iiia(h an elVort to he present. I caiiiiot, however, allow your slatoinei)t to pass unehallenj^'od that tile " protest aj^'ainst the [iroposed cahle is lar^'ely hascd upon fallacies," feeliii.i,' eonvineed that il" you would earei'ully study our fi^'ures a)i2, .showing,' that Mr. Sandford Fleming's estimate of a minimum 12\ per cent, is (piite misleading. It is eipially unsafe to rely too closely on calculations of increase resulting from reductions of tariff, experience having unfortunately sliown that on more than one occasion a falling-off of trailic has actually taken place after a substantial lowering of rates, instead of a considerable increase, such as your paper indicates would result if the Australian tariff were reduced from Is. 9d. to 8s. 8d. per word. Then, again, jour description of the existing system as a "monopoly" cannot be justified, seeing that it has never received any exclusive landing rights from the Australian (lovernmcnts, but has had to rely upon the business-like and economical principles upon which it has been established and worked for its freedom from competition. In fact the field has always l)een open to all comers to compete with us, and upon e(iual terms 1 should have nothing to say against it, but supported by Government aid it would be quite another matter ; and if a Pacific cable were established on this basis and the pioneer company, which has done so much for the Australasian Colonies in providing them with perhaps the best submarine service in the world, were ignored, it would certaiidy be disastrous to private enterprise, and the Governments interested could not in connnon fairness adopt such a course without granting similar pecuniary assistance to the existing system. No doubt a single cable could be constructed and laid for £1,800,000, and it would undoubtedly materially benefit the cable manufacturers, but no company who knew anything about the business and would be held responsible for carrying it through could undertake the woi'k with any prospect of making it pay on the terms of the Wellington Conference resolution. At the present moment, however, the proposed cable is not really needed for commercial purposes, and therefore the expendi- ture of nearly two millions sterling, when neither the Imperial nor 4 n Colonial riovornnicnts can well afford it, would, in my opinion, be an uinviin-antable waste of money. If, however, the Governments concerned consider a second cable is re(iuired for stratej^'ic purposes, which I very much doubt, they must, of course, pay for it, and, as I have frequently stated, my company would be quite prei)ared to undertake the work on lair and reasonable terms, which terms would necessarily be more favourable to the (lovernments than could be obtained from any other company, owing to the exceptional facilities possessed by the existing system. The probability of opposition arising from foreign sources does not in the least alarm me, but should competition be brought about through English and colonial agencies on the proposed terms the result must inevitably be that no dividend would be forthcoming for the new company, and little, if any, for the pioneer service. I have thought it only fair to yourself as well as to the companies whicli I r(q)resent that you should be placed in possession of the above infornuition, as you will doubtless be njaking further reference to the Pacific cable movement, and, with so much atten- tion now being paid to all public utterances on the subject, it is of the greatest importance that all figures bearing on the question should be as accurately stated as possible. 1 am sending a copy of this letter to The Times. Yours faithfr.lly, JOHN TENDER. Sir Charlks Tuiter, Bart., G.C.M G., C.B., Sec. From "THE TIMES," May 18, 1894. THE PACIFIC CABLE QUESTION. Sir Charles Tapper has sent the following reply to Sir John PeDder : — Victoria Chambers, 17, Victoria Street, London, S.W., May 17, 1894. Dear Sir John Penher, — In reply to your letter of the 15th inst., received yesterday after I had read it in the The Times, I must first express my regret that you were prevented by indisposition 12 !l from being present when my paper (of wliicli I Iiail sent yon a copy) was read at a meeting of the Eoyal Colonial Institute on the 8th of May, Yon say : " I cannot allow your statement to pass unchallenged that ' tlio protest against the proposed cable is largely based upon fallacies.'" Those who read that protest will find that it is largely based upon two statements, which I regard as fallacious. First, that " tlie existing service was established solely by private enterprise — no Government subsidy, guarantee, or exclusive landing rights havnng been granted to the comi)any." I do not think any person reading tbat statement would suppose that the " existing " companies with which the projxjsed Pacitic Cable will compete are now, and for many years past have been, assisted by Government subsidies and guarantees, amounting to the present time to £2,100,0(X). The Eastern Extension Company alone have received of that amount about £(548,000, and the African lines, described by you as an alternative route to Australia, £1,887,000. Second, that the calculations made in the protest to show the unprofitable character of the undertaking assumed that the life of the cable would be only fourteen years. You say : " Y'ou are entirely mistaken in stating that some 5,350 miles (or about 80 per cent.) of the 18,000 of cable now forming the system of the Eastern ]<]xtension Telegraph Company is more than twenty years old and is still in working condition." ]\Iy authority for that statement was the Derne list, pid)lished in 181)2, as furnished by the Eastern Extension Company to the International Telegraph Dureau, and which I accepted as reliable. The following are the figures : — I* < From Madras to Pcnang From Penaiig to Siiii;ii|K>re From Singapore to Saigon (Cochin China) From Saigon to Hongivong From Singapore to Jiatavia (Java) From IJanjowangie to Port Durwin ... From Flinders, near Melbourne, to I^ow Head (Tasmania) Date of Laying. r.eiietli of Cables in nautical miles. 1870 1S70 1,45.1 •115 1.S71 ti:}7 1871 5)8 < 1870 639 1871 1,137 1869 180 Total .5,346 I l: ^ ^ I will now atld the liighest existing authority on that question, Sir John Pender, ut tlie ini'etin<,' of tlu- Brazilian Telegraph Com- pany on the 2n(I of this month, said : — " As you are aware, one of these cahles is twenty years old ; and therefore it is at all events approaching a period of age \ hieh causes us to he careful in pro- viding for its renewal." You say : " Then again your description of the existing system as a * monopoly ' cannot he justified." I do not know what you call a monojioly, hut I have under my hand the report made to the Government of Canada hy 'Slv. Sand- ford Fleming (who was one of the Canadian delegates to the Colonial Conference, held in London in 1HH7). In that report, speaking of the discussion upon this cahle question, he says : — " The Postmaster-General (Mr. Uaikes) stated very forcihly that it would he ahsolutely impossihle for the English people or for her Majesty's Government to recognise the monopoly whiiii the com- pany seemed to claim." AVith the evidence Ijeforc me that active efforts are now in opera- tion to promote the construction of a Pacilic cahle under the control of a foreign Government, I cannot share your douhts as to its prohability, nor can I agree with you as to the strategic value of a Ih'itish Pacific cahle, concurring, as I do, with the opinion ex- pressed by the GIoId' of the ]i)th ult,, which in an article very friendly to the existing lines, says : — •' In the first place, there can he no (juestioii at all that a cable across the Pacific would he of the very highest strategical import- ance to us. Not only would it furnish us with a duplicate medium of connuunication with our furthest colonial possessions, hut it would also have the advantage of standing less chance of being- cut by our enemy in time of war. The eastward-bound cables, by means of which we communicate with Australia at present, touch far too many places en route to be strategically safe. Moreover, if an enemy should succeed in cutting the cable, it would probably be somewhere between Aden and England, in which case India would be completely cut off from telegraphic connuunication. The pro- posed Pacific cable, howeve)', would then enable us to transmit our messages by an alternative western route." I do not propose to discuss the question of ti'aOlc, or the normal increase that may reasonably be expected, further than to say that I have reason to believe that no difliculty will be experienced in securing the construction and operation of the cable upon the lines 14 suggested by the Wellington Conference, or such a modificatio!! as may be adopted by the conference shortly to be held at Ottawa. Having confined my remarks to the principal points raised in your letter, I remain, Yours faithfully, CHARLES TUrPEB. P.S.— I have sent a copy of this letter to The Times. Sir John Pendek, M.P. From "THE TIMES," June 1, 1894. THE PACIFIC CABLE. Sir J. Pender has addressed the following further letter to Sir Charles Tupper : — Winchester House, Old Broad Street, E.C, Maij 30. Dear Sir Charles Tupper, — Absence from home has alone prevented me from replying to your letter of the 17tli instant earlier. First, — Permit me to point out that although it be true that certain of the Australasian Crovernments have from time to time granted subsidies and guarantees to the Eastern Extension Tele- graph Company, my statement that telegraphic communication with Australia was established solely by private enterprise is quite accurate, the subsidies and guarantees having been given for specific purposes other than the establishme' -^f the communication. For instance, the subsidies were grante( •• able the company to dupli- cate the Australian section of the line, not because it was unequal to the traffic requirements, but because the Governments and tele- graphing public had found to t leir cost that no confidence could be placed in a single line, and, as my experience fully bears out this view, I contend that if a Pacific cable is to afford the same measure of security as the existing system it must be duplicated. The guarantees were granted, as you are aware, to obtain the substantial reduction of tariff from 9s. 4d. to 4s. per word. Secondly, — Your reference to the Berne list as your authority for stating that the Eastern Extension Company's original cables, 15 altliough more than twenty years old, were still in working order, explains how you have heen misle;! in the matter, the list only giving the dates when the early cables were first laid with tht'ir respective lengths, without showing the extensive cable renewals Avhich have since buen found necessary. Thirdly, — As to the question of monopoly, I find on looking through the official report of the Colonial Conference (18H7) that the remarks attributed to the late ^Ir. Raikes really referred to the following paragraph of a paper which Mr. Sandford Fleming read to the conference immediately before Mr. Raikes addressed the delegates, namely : — " Mr. Pender submits that the existing company (Eastern Exten- sion Company), as the pioneer of telegraphic comnumiciiti(m with Australia, is entitled to a large share of consideration at the hands of the colonies." Consequently to represent this perfectly reasonable contention as a claim to monopoly is simply absurd. But none of these points have any important bearing on the real question at issue — nainely, is the proposed Pacific cable an under- taking which can be recommended to the investing public ? The Pacific cable project as I understand it, is as follows : — It is proposed to lav gle line of cable connecting Canada with Australia at a cost of *l, 800,000, and in order to raise this sum guarantees for fourteen years from the several Governments sup- posed to be interested to the amount of £72,000 per annum are to be obtained. Now let us examine this proposal from the point of view of an intending investor : — Capital Working Expenses ... Maintenance £25,000 ...35,000 (*NoTB.— This is Mr. Sandford Fleming'B own calculation.) Amortization to replace capital at end of 14 years' guarantee Less Earnings estimated on basis of one- half of tlvi Eastern Extension Comitany's receipts fron\ the Australasian traffic ... Four per Cent. Guarantee... £1,800,000 £60,000* 105,000 £105,000 £45,000 72,000 117,000 Leaving an actual loss to inveators of £48,000 per annum. I(> Suppose, for the sake of avf?unient, we assume that the Pacific cahle mi{,'ht oiu; way or another oldaiii as much as tlie whole of the Eastern Extension Company's present Australasian receipts, even then there wo'ild bo absolutely no return on the capital invested, and if the Pacilic cable were duplicated the loss would probably amount to i'120,000 [)er annum. The above fiijures will, I am sure, be rej,'arded by all conversant with the expenses attendin<,' the workin.L,' and maintenance of cables laid in deep seas as not only moderate, but rather under the nuirk, for it must not be overlooked that no allowance is made for a prolonged interruption, a contingency which is very probable to a single cable laid in such extreme depths as have been proved to exist in the Pacific, and during which interruption the guarantees would of course cease to be paid. I observe with some surprise that you quote witli approval an article which appeared in the Ghihe. It is evident that the writer knows very little of the subject, for he says in case of the cables between Aden and I'higland being injured all connnunication with India would be interrupted. As a matter of fact, no fewer than three other routes practically under the control of the existing system would still be open for trailic. Again I fail to imderstand on what grounds the writer holds that a single line of cable nearly i),000 nautical miles in length laid in the Pacific should stand less chance of interruption than the existing cables. AVith such figures as I have above placed before you, and which as a director of a submarine cable company you can fully appre- ciate, I would ask whether you would consider yourself justified in putting your name to a prospectus inviting subscriptions from the public fbr a scheme showing such disastrous financial results, even with the aid of the suggested Government guarantee. I remain. Yours faithfully, JOHN PENDEE. P.b. — I am sending a copy of this letter to Tlw Times. IT From "THE TIMES," June 7, 1894. I THE PACIFIC CABLE SCHEME. The following further correspondence has passed hetween Sir Charles Tupper and Sir John Pender : — Office of the High Commissioner for Canada, 17, Victoria Street, London, W.C, June 4, 1891. Dear Sir John Pender, — In reply to your letter of May 30, I beg to remind you that we joined issue on the following points : — Ist. Whether the " existing service was estabhshed solely by private enterprise." 2nd. Whether the life of a cable is fourteen years. Hrd. Your assertion that my '* description of the existing system as a monopoly cannot be justified." 4th. That a Pacific cable has no strategic value. I respectfuUy submit that the admission that the •' existing service " has already received Government subsidies exceeding £2,000,000 settles the first issue. You reject the authority of the Berne list, for the accuracy of which I supposed you were responsible, quoted by me in support of my contention as to the life of a cable, but you have not met my (piotation from a recent speech of your own, which showed the life of a cable to be nearer twenty-five years. Permit me to quote the further evidence of another high authority on that question— your late colleague Sir James Anderson, who was knighted for laying the first successful cable between England and America. In October, 1H8(), at a meeting of the Direct Spanish Telegraph Company, Sir James Anderson presiding, said: " They estimated the life of the Barcelona cable at twenty-five years." It had then been in opera- tion thirteen years, and great improvements have been made in the manufacture of cables since the Barcelona cable was constructed. 1 think I may now fairly consider the second part of our contro- versy disposed of. As to the " monopoly " question, you intimate that Mr. Raikes was misled by Mr. Fleming. I will now give you an authority which I am sure you will respect, for it is your own. I find the following statements in a letter written by you to Sir Henry Holland, dated April 18, 1887: "If reference is made in anyway 18 to the existing companies as a monopoly, my answer is that it has been so created by tlie great energy with which the company have carried on their extensions. ... I would also draw your attention to the fact that while it has been made a monopoly through the circumstances I have stated, Ac." While this public record remains you will, 1 imagine, hardly repeat the statement that I am not justified in considering the '♦ existing system as a monopoly." As to the question of the strategic value of a Pacific cable, not only the (Huhe, from which I quoted, but the Press generally of this country, of Australasia, and Canada have been emphatic in their declarations in opposition to your views, nor can I see how any disinterested man can hold any other opinion. The cable communication between this country and India and Australasia passes through several foreign countries, and in the contingency of a European war could not be relied on. You say, in reply to the statement in the (ilobe that in the case of your cable between Aden and Jiombay being injured communica- tion with India would be interrupted, that you have three other routes practically under your control. I suppose the three routes you refer to are those given in the oflicial maps of the International Bureau : — 1st. Through Piussia, Siberia, Japan, and China. 2nd. Through Germany, ivu'Jsia, and Persia to Kurrachee. 3rd. Through Constantinople and the Euphrates Valley to Kurrachee. I am not aware that these long overland lines are under the control of the Eastern Telegraph Company. For Imperial purposes the first and second routes present insu- perable difficulties, and I do not think that your experience in telegraphy with India will lead you to consider as reliable the Euphrates Valley Line, which belongs to the Turkish Government and passes through a country bristling with physical difficulties, rendering the maintenance of good comnnmioation almost impos- sible. You must, however, admit that, if the Indian land wires in the neighbourhood of Kurrachee and Bombay were interrupted, all communication by telegraph between these towns and Calcutta, Madras, and Australia would require to be transmitted to Europe for re-transmission through the only remaining route open to the East — viz., through Russia, Siberia, Japan, and China. An all- British line, via Canada, to Australia, remote from any hostile influence, might at any moment, therefore, become vital to the 19 best interests of the Empire. As to the financial prospects of this enterprise, I am glad to find that you have revised the estimate you submitted to Lord Ilipon in April, and now make the deficit £48,000, instead of £120,000, at wliich you then stated it. I beg to suggest that if you will place the amortization of the cable at twenty-five years, and add the receipts of the large volume of United States and Canadian traffic that will be created by a Pacific cable, and make fair allowance for the usual increase of traffic, your latest calculation will be considerably modified. Allow me to add that your adherence to fourteen years as the life of the cable in order to show the scheme financially impracticable will, in my opinion, convince many persons that the enterprise cannot be condemned by fair calculations. I remain, Yours faithfully, CHARLES TUPPER. P.S. — I am sending this letter to The Times. Sir John Pender, G.C.M.G., M.P. The Eastern Extension, Austramsia, & China Telegraph Company, Limited, Winchester House, 50, Old Broad Street, London, E.C, June 6, 1894. Dear Sir Charles Tupper, — I have received your letter of the 4th inst., from which it is quite clear that our views on the Pacific cable question are so divergent that no practical purpose will be served by continuing the correspondence any longer. lint before closing it permit me to briefiy deal with the principal points raised in your last letter, and to express the hope that the facts and figures which have been elicited by the correspondence may be found useful to the Ottawa Conference, and more particu- larly to the investing public, who will eventually have to decide the question if it is to take a practical shape. With regard to the first point, I think any unprejudiced person reading my previous letter will have been convinced that the pioneer service to Australia was established solely by private enter- prise, and that the Government subsidies granted years afterwards for an entirely different purpose have no bearing on the argument. 20 As to the Hocojid point, it is tine that there are cahh'S still work- ing which were laid twenty-live years aj,'o ; hut, on the other hand, many cahles equally well nuinufactured and laid have heen known to require entire renewal in as short a time as tweKr to seventeen years after they have suhnu'rj,'ed. In short, the life of a cahle is notoriously uncertain, dcijendint,' very largely on the locality and nature of the hottom over which it is laid, and it is therefore impossible to accurately measure such an unknown quantity. I have never, however, asserted that a Pacific cahle would last only fourteen years. All I have done is to base my calculation for amor- tization on the period fixed hy the Wellin^'ton Conference for the proposed guarantee — vi/., fourteen years. If, however, we take twenty years, which is the more usual period for subsidy or guarantee arrangements of this kind, as the basis of calculation, the financial result to an investor would still be most disappointing, as shown by the following figures : — Capital ... Workinjj Expenses Miiiutenance ... £1,800,000 £25,000 .. 35,000 Amortization to replace Capital at end of twenty years Lens Earniuifs estimated on basis of one-half existing traffic Four per cent, guarantee £60,000 67,000 £45,000 72,000 £127,000 117,000 Leaving an actual loss to investora of £10,oOO' And if the Pacific cable were duplicated, which I contend would be absolutely necessary to make it a successful competitor to the existing system, the loss would, of cour.se, be immensely greater. When writing to Sir Henry Holland the letter to which you refer I was endeavouring to meet objections raised by opponents to the strong position which we had built up, and which had been described as a monopoly. As a matter of fact, our control of the Australian traffic has never depended on the possession of exclusive privileges, which alone would constitute a monopoly in the strict sense of the word, but it has been the result of good businesslike work carried out on strictly economical principles. As to the strategic question, I can only express surprise that you should think a Pacific cable would be safer in time of war than the existing cables which follow the principal trade routes, where 21 a, British war vessels would prosuniably be found in far greater force than in such a remote region as the Pacific Ocean. The three alternative routes wliich I had in mind when referring to the (Slohf article were : — 1. Tlie cables from England to Aden round the coast of Africa. 2. The Indo-European Company's system. 8. The Great Northern Company's system. With the Indo-European and Great Northern Companies we have working agreements, and the first-named route is, to a largo extent, owned by the Eastern Company. With regard to your last point, the only difi'erence between tlie figures submitted to Lord Eipon and those given in my letter of tlie 80th ult. is that in the one case the deficit includes four per cent, interest on capital and in the other the deficit is shown without interest. But the practical result to an investor is precisely the same, and with such figures before you I would again ask whether you would be prepared to put your name to a prospectus inviting subscriptions from the pubHc for such an unprofitable scheme. Having now answered your letter the correspondence must cease as your time and mine is much too valuable to be taken up with an academic discussion of this kind. If, however, the question should take a more definite shape, I shall be happy to resume the discus- sion with a view to arriving, if possible, at a practical result. Yours faithfully, JOHN PENDER. To the Honourable Sir Charles Tuppek, Bart, G.C.M.G., C.B. From "THE TIMES," June 9, 1894. THE PACIFIC CABLE QCESTION. The following further letter has been sent by Sir C. Tupper to Sir J. Pender : — Office of the High Commissioner for Canada, 17, Victoria Street, London, S.W., June 8. Dear Sir -Tohn Pender,— I am not surprised to find by your letter of the (ith inst. that you wish to close the correspon- S2 dencc wliich you initiated, iind T ciuinot help thinking tliat those who have followed it will wonder why it was over commenced. I am quite satisfied to leave all tiie .luestions at issue to the judgment of the puhlic. Your adnnssion that the " existing service " has already received over £2,000,000 of (lovernment suhsidies; that the life of a cable may fairly he estimated at twenty years ; and that you are responsible for the statement that the existing service to Australasia is a '« numopoly " is very satisfactory to me. I am also glad that I have been able to induce you again to revise your estimate. In reply to your question I venture to suggest that capitalists will not be influenced in this matter by your opinion or mine, as their decision will depend upon the action of the Govern- ments of the United Kingdom, Australasia, and Canada. Yours faithfully, CHARLES TUPPEll. Sir John Pender, G.C.M.G., M.P. OflO r cnt lias hat iiul rico am our hat 1 or irii-