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Les diagrammes suivants illustrent la mdthode. fe m 2Zt 1 2 3 1 2 3 4 5 6 / /'-^ rJ V. . T LETTIik TO TH1-; RIGHT HON. SIR WILI-RII) LAURIBR ON THli SUHJKCT OV THE PACIFIC CABLE 'A By sir SANUFOKD FLEMING. December 2Stii, ifcly;. Kcprinted from Queen's Quaktekly, Vol. 5, No. :;. F53 c~ 2 W4f ^jaiionai Library Bibiiotheque rnationale ■ T of Canada du Canada Ottawa, December 28th, 1897. The Right Honourable Sir Wilfrid Laurier, Premier. Sir,— For some months past I have frequently been asked by writers of the press to furnish information respecting the Pacific cable. I have been so applied to as it is well known that I have long felt the deepest interest in the project, having been appointed by the Canadian government to take part in the Colonial Conferences of 1887 and 1894, and in the Imperial Com- mittee of 1896. I have invariably declined to comply with the request from the feeling that it was distinctly understood that the proceedings of the investigation by the Imperial Committee should be treated as confidential until made public by Her Majesty's Government. I have in consequence felt debarred from alluding either to the evidence obtained by the Committee or to the conclusions submitted in their report, or in the special reports presented to the Canadian Government by the Canadian Commissioners and by myself. These several documents were presented nearly twelve months ago ; since then questions have arisen, which were not considered by the Imperial Committee, and many important facts are also obtainable from other sources, explanations respect- ing all of which should, I conceive, be communicated to the public. Since the Imperial Committee closed its investigation the conference of Colonial Premiers has been held in London. Among other matters the Pacific cable was brought before this Conference, and from what has transpired the subject was com- plicated by a new proposition having been submitted by the Eastern Extension Telegraph Company. Consequently, the consideration of the project was deferred. Six months has since elapsed, and I feel called upon to make known some facts and explanations bearing on the questions which, in my humble judg- ment, the public should understand. I trust you will approve of / \'' the information bcinfj given to the public in the form I have now to submit to you. I have the honour to be, Your obedient servant, Sandford Fleming. THE PACIFIC CABLE. pVERYWHERE it is apparent that, the British Empire is -L-' being formed by a process of growth and development and there are many forces actively in operation, all tending to give it shape and strength and distinctive character. Lofty ideals are entertained by men of thought, experience and patriotism ; but the future is veiled from us, and we cannot foretell the precise form of relationship which will eventually be assumed by members of the British family of nations in so many meridians of longitude. If the form of the development to be attained is not clearly foreseen, it can at least be said that the entire British people in all parts of the globe are inspired by a unity of sentiment, and that they are simultaneously moving onwards in one general di- rection. Progress is the watchword in all quarters. It is im- possible not to recognize, the advancement perceptible in the colonies of the southern seas, and equally, the amazing vitality in British Africa. The Dominion of Canada plays an important part in moulding the destiny of her own people and in promoting more intimate relationships between the motherland and the colonies. It is but thirty years since the scattered Provinces of British North America became federated in one government. The Do- minion thus created inherited many remarkable advantages. It can lay claim to the most important geographical position, owing to its extension between the two great oceans ; a position which confers the only means of establishing under the British flag communications between the eastern and western territories of the globe. It enjoys the possession of vast fields of the richest virgin soil, with still unexplored mineral regions of immense extent and presumably of immense value. The population retains the high qualities of the foremost nations of western Europe from which it has sprung, and the wide expanse of unoccupied areas leaves ample room for a large accession to its number. These rich possessions of the Dominion give promise under wise guidance of a splendid future. QUEEN'S QUARTERLY. 226 I It soon became evident, that the development of a country continental in its extent exacted public works of corresponding magnitude. Lines of railway and telegraph were projected from ocean to ocean, and immediately after Confederation, both were proceeded with. In 1874 the policy of establishing the telegraph in advance of the railway was determined upon, and as a corollary to the trans-continental telegraph the proposal to ex- tend the electric wire across the Pacific naturally followed. It can be said that ever since the telegraph reached the coast of British Columbia the Pacific cable has engaged public attention, and that the necessity of this undertaking has been repeatedly affirmed. It received recognition in the conference of repre- sentative colonial statesmen in London in 1887, in that of Otta- wa in 1894, at telegraph and postal conferences in Australasia almost annually, and at various times by chambers of commerce at home and abroad. The dominant idea with those who have most strongly ad- vocated the establishment of a Pacific cable has been the unity of the Empire. They foresaw the difficulty of effecting any practical union between communities separated by distance, so long as they remained without the means of direct and cheap communication. At the same time it was plain to them that a telegraph across the ocean would foster trade and commerc -the life of an Empire such as ours. Among the memorable gatherings of representative men, not the least important was the Conference of Premiers in London on the occasion of Her Majesty's Diamond Jubilee. Before these statesmen met, hopes had been entertained that some defin- ite action would be determined for the inauguration of the scheme. Preparations had long been made for joint action. It was one of the chief objects set apart for special consideration at the con- ference of the Imperial and Australasian governments held at Ottawa in 1894. With this view, the Canadian government, agreeably to a resolution of the Conference, obtained much in- formation on the subject, and transmitted it to all the govern- ments interested in the projected work. Soon afterwards the Secretary of State for the Colonies (Mr. Chamberlain) invited the Canadian and Australasian governments to send representa- tives to London for the purpose of taking part in an Imperial 227 THE PACIFIC CABLE. Committee to be appointed specially to receive evidence and consider the project in every detail. The Committee first met on June 5th, 1896, and on January 5th, 1897 they reported the results of an exhaustive enquiry. The proceedings of the committee and the conclusions which have been formed have not been made public. They have been repeatedly asked for, but as nothing transpired respect- ing the labours of the committee up to the Jubilee week, the opinion gained ground that when the Conference was concluded full information would be given to the public with the decision arrived at by the Imperial authorities and the Colonial premiers. In many quarters it was expected that action would on that oc casion be taken, and that the inauguration of the cable would result as a practical outcome of the Queen's Jubilee. The old proverb tells us that it is often the unexpected which comes to pass. The proceedings of the Conference of Premiers were first made known to the public by an article pur- porting to be published by authority in the London Standard of July 25th, and the subject of the Pacific cable is thus alluded to : " The Conference left the Pacific cable scheme in mid-air, and It IS very unlikely that anything more will he heard of it for a con- siderable time. The position was entirely changed by a proposal by the Eastern Extension Telegraph Company to lay an all British line from Western Australia across the Indian Ocean to Mauritius, thence connecting with the Cape and St. Helena and Ascension The Eastern Extension Company, it is understood, does not ask for a direct subsidy for the new lines, but seeks other concessions from the Australasian governments which if made will justify them in proceed- ing with the work." In the account of the conference of premiers laid before the British Parliament, there is a reference, in two sentences, to the cable, no mention however is made of any proposal having been submitted by the Eastern Extension Company. But the premier of New South Wales (Mr. Reid) returned home from England through Canada, and being interviewed by reporters in Montreal, Toronto and Vancouver, confirmed the statement with respect to the proposal of the Eastern Extension Company. The char- acter of the concessions asked by the company has not been made public, but it has been stated that they desire to obtain exclusive rights for Australia on condition that they connect the colonies with the Cape and lay a new cable from the Cape to I QtJp:EN*S QUARTERLY aa8 England via St. Helena, Ascension Island, Sierra Leone or Bat- hurst and Gibraltar. This scheme is put forward by the com- pany as a subslitute for tlie Pacific Cable. Owing to the fact that telegraphic connection with the Cape is at present extremely defective the proposal of the company is undoubtedly of great importance to South Africa. There are two telegraphic routes from England to Cape Colony. Both have landing stations at Lisbon, one passes through the Mediterranean to Alexandria, through Egypt to Suez, through the Red Sea to Aden, and from Aden t!ie cable follows the east coast of Africa, touching among other points at Mozam- bique and Delagoa Bay in foreign territory. The other route leaves the first at Lisbon and follows the west coast of Africa, touching at some fourteen points ; eight of which are under for- eign flags, those of Portugal, France and Spain. Interruptions are frequent on both routes. There is evidence to establish that during the past four years communication be- tween England and the Cape has been broken many times, and that the aggregate interruptions have averaged in each year 75 days on the west coast route, and 87 days on the east coast route"; showing that each cable is unavailable from six to seven days per month. While this refers to the average period that the cables have been thrown out of use, the durations of single inter- ruptions have varied from one to 30 or 40 days. As both lines are liable to be broken at tb "ame time serious inconveniences have not seldom resulted. ivery one will remember this con- tingency occurring when the Transvaal difficulty was at its height. Intense anxiety was then caused during the cable interruption of eleven days, when South Africa was passing through an acute crisis in her history. Obviously a new cable to the Cape is much required, and as the frequent interruptions to traffic by the two present routes is to a large extent owing to the fact that the cables are laid in the shallow water which prevails along the African coasts, they are in consequence exposed to accidents to which cables in deep waters are not subjected. That part of the proposal, to touch at St. Helena and Ascension, where the water is of ample depth, would give to the cable the necessary security and avoid the difficulties experienced on the present routes. It is, however. '^' 329 THE PACIFIC CABLE. not so clear that the northern half of the new cable would be so fortunate. By landinp; at Sierra Leone or Bathurst and Gib- raltar and terminating in Cornwall, the cable of necessity would be laid for some distance in shallow seas, where it would be ex- posed to injury from various causes, and where too, the agent of an unfriendly nation, or indeed, an evil disposed fisherman, would have it in his power to destroy the cable with ease, totally unobserved. For hundreds of miles it would be exposed to such risks. The question may be asked, would not this proposed new cable from England to the Cape with an extension to Australia be of general advantage ? To such a question there is but one answer. It certainly would be of general as well as special advantage for the reason that we cannot have too many lines of communication. They are needed in the every-day business of trade and shipping, and moreover we must come to recognize that a complete telegraph system ramifying wherever Her Majesty's wide domain extends is an essential condition of the life and integrity of the British Empire. It is on this and on other grounds impossible to admit the claim of the Eastern Extension Company, that the proposal submitted by them is preferable to a trans-Pacific cable, and that it will render it unnecessary. At the Colonial Conference of 1894, the outline of a telegraph system for the Empire was submitted. It was not confined to one side of the globe; the system projected, embraced and en. circled its whole extent. The scheme was illustrated by a map of the world, with the chief cable lines laid down upon it. If the pro- ceedings of the Conference be referred to, it will be seen that a trunk line of telegraph was projected from London through Canada to Australasia, with extensions to South Africa, India and China. It was shown that by the Canadian route all the chief British possessions on the four continents would be brought into electric touch with each other and with the Imperial centre in London. It was demonstrated, moreover, that this result could be accomplished without touching a single acre of foreign soil, and without traversing shallow seas where cables are most liable to injury from ship's anchors and other causes, and where they can be so easily fished up and destroyed. No fact can with greater confidence be affirmed than that the cables by the Cana- r, y a f % i- QUEEN'S QUARTERLY. 230 f tlian route would be far less vulnerable than the existing cables, or those now projecteu by the Eastern Extension Company. But even if no advantage in this respect could be claimed, it re- quires no arf(ument to prove that telegraphic connection between England and Australasia would be inrtnitely less subject to inter- ruption from accident or wilful injury, by having the Canadian line established, in addition to the Eastern Extension, lines, espe- cially as the former would be on the opposite side of the globe and far removed from the immediate theatre of European com- plications. It is not possible to believe that any one disassociated from, and uninfluenced by, the Eastern Extension Company, can view the proposed Canadian Pacific cable with disfavour. If it be important to strengthen the connection between the United Kingdom and the out-lying portions of the ICmpire, no one can question its necessity. But the Eastern Extension Com- pany has never taken a friendly view of the Pacific cable. From the first it has been its determined opponent. The proceedings of the Colonial Conferences of 1887 and of 1894 give evidence of this fact. The report on the mission to Australia by the Cana- dian delegates gives some indication of the intense and persist- ent antagonism displayed by the Company and the manner in which its powerful influence has been employed to thwart the enterprise. It may not be an unwarranted surmise that the im- mediate purpose of the company in submitting to the Conference of Premiers their new proposal was to divert attention from the Pacific cable. The Eastern Extension Company represents a combination of associated companies engaged in telegraph transmission be- tween England and Australasia. The lines of the company com- prise those of three amalgamated companies : r. The " British Indian Extension," from Madras to Singa- pore, with a share capital of ^^^460, 000. 2. The " British Australian," from Singapore to Australia, with a share capital of £540,000. 3. The " China Submarine," from Singapore to Hong Kong and Shanghai, with a share capital of ^^525, 000. The combined share capital of these three companies amounted to ;£r, 525,000. On their amalgamation the united 4- 231 THE PACIFIC CABLE. share capital, by a well-known process of "watering" to the extent of ^^472, 500, was increased nominally to 3^1,997,500. The united company, since known as the Eastern Extension Austral- asia and China Telegraph Company (limited), has been exceed- ingly prosperous ; it has paid 7 per cent, on the en- larged capital, equal to 9 per cent, on the original capital. An examination of the published statements establishes that it has in addition expended out of the profits earned, no less a sum than 5^1,571,540 on extensions and other productive works, and there remains unexpended and undivided to-day a reserve of surplus profits amounting to ^^804, 193. These figures establish that the Eastern Extension Com- pany has become a remarkably profitable investment. It regu- larly pays good dividends, but the dividends are no guide to the profits made. It holds in reserve undivided profits far exceeding in amount the whole value of its cables between Asia and Aus- tralia. The accounts of the company for 1896 and the first half of 1897 show that the net profits actually earned during these periods amounted to 13 per cent, on the present capital, and 17 per cent, on the capital prior to its being watered. Tlie Company is unwilling to have this state of affairs changed. They know perfectly well that the telegraphic traffic is steadily increasing, and that as the traffic grows the profits will become still greater. It is easy, therefore, to understand why the company has never viewed with friendly feeling the proposed Pacific cable. Its managers are not willing to divide the busi- ness with the new line. They must retain it entirely in their possession. They have secured a rich monopoly, and their desire is to make it even more profitable and to strengthen and perpet- uate it. The Pacific cable has been projected in no spirit of hostility to any company or to any country. It has been advocated as a means of extending to the whole Empire the advantages derivable from the geographical position of the Dominion. Canada offers the connecting link in an Imperial chain of telegraphs encircling the globe. When the project is completed, it will bring the mother country into direct electrical connection with every one of the great possessions of the crown in both hemispheres with- out touching the soil of any foreign power. Thus, it cannot fail in QUEEN'S QUARTERLY. 232 a high degree to promote Imperial unity. Indeed, it is difficult to conceive how a perfect union, or any union of the whole is pos- sible without union between the parts. The whole Empire is in strong sympathy with the aims and aspirations which a few years back were limited to a few men of advanced thought. The his- torical event of last June has shown to the world that " the British people are one people .animated by one spirit." It is recognized that we are approaching the period when new relations may be established between the United Kingdom and those younger British communities beyond the seas, known in past history as colonies, but which are passing from colonial tutelage to a higher national status. In order to promote these closer relations, what is more desirable hat more necessary, than that each and all be connected by tne appliances which art and science have devised ? Canada stands first among the British communities of the outer Empire. Scarcely second to Canada we look forward, in no long period, to welcome the kindred Do- minion of Australia comprising under one federal government half a dozen colonies, each possessing great potentialities. What more in harmony with the spirit of the British people than that Canada and Australia be brought in close communion ? Is it not indispensable to vital public interest that those two great units of the Empire — the island continent in the South Pacific and British North America, should possess the means of instantaneous communication, one with the other ? The proposition of tne Eastern Extension Company sub- mitted to the Conference of Premiers has no such purpose in view. Its object is indeed the very opposite. While the con- solidation of the Empire demands that the Queen's subjects in Canada and Australasia shall possess all the advantages which the closest telegraphic connection can effect, the policy which animates that company would cause these communities to re- main severed. Is such a policy to be commended ? Does not the Eastern Extension Company when persistently exercising its manifold and widely ramified influence to keep Canada and Aus- tralia disunited, assume an attitude of hostility to both countries and to Imperial unity ? In the interests of the Eastern Extension Company the Pacific cable has been declared to be impracticable ; its 233 THE PACIFIC CABLE. cost has been greatly exaggerated ; it has been denounced as a work which could not be maintained without burdensome sub- sidies; it has been stigmatized as inimical to telegraphy ^nd trade ; and it has been decried and misrepresented in every pos- sible manner. The explanation is to be found in the fact that the company is unwilling to relinquish its monopoly and to rest satisfied in the future with a reasonabh return for capital in- vested. On this point the writer is tempted to quote a single paragraph from his address at the Colonial Conference of 1894 as given in the proceedings (page 85). "The progress and well-being of Canada, Australasia and the Em- pire cannot be retarded in order that the lucrative business of a private company may remain without change. Even if the chairman of the Eastern Extension Company succeeded in converting us to his commer- cial ethics, that the profits of the monopoly he represents must be maintained inviolate, it does not follow that the project of a Pacific cable would not be carried out in some form, even if Canada and Australasia abandon it. There areindeed unmistakable signs that a Pacific cable may shortly be carried out by France and the United States. We all know that France has already completed a section of 800 miles at the southern end, and the United States has recently ■ expended $25,000 in making an elaborate survey of about one-third the whole distance from San Francisco (to the Hawaiian Islands.) With a rival line in foreign hands, it is easy to see that the Eastern Extension would gain nothing, while the Empire would lose much." With respect to the objections raised by the Eastern Exten- sion Company they have been completely refuted. The very best evidence shows beyond all question that the project is per- fectly feasible, that the cable should be established as a state work, that so established the revenue from business obtainable will be ample to meet every charge, including working expenses, main- tenance, renewal, interest on cost and sinking fund to replace capital; that in fact the cable can be established in the most satis- factory manner, and that aii its advantages can be attained with- out any cost whatever to the tax-payer. That the prospects are of this character is attributable to these facts, viz. : 1. As a state work the capital employed would be obtained at the lowest possible rate of interest. 2. The capital would be limited to the necessities of actual expenditure in establishing the work ; there would be no possi- bility of enlarging the capital account by adding "promotion . expenses " or by " watering stock " in any form. ^ QUEEN'S QUARTERLY. 234 ff 3. No dividend would require to be declared, or bonus paid. Revenue w^ould only have to meet ordinary charges, including in- terest on the actual cost at a low rate, possibly 2^ per cent. 4. Remunerative traffic which would be controlled by the Australasian government already exists. 5. Such traffic is continually growing, and it is difficult to assign a limit to its growth. 6. The facilities created and the reduced charges would open up a new and profitable business across the Pacific which would be subject to the new line. Such being the case, the question may be asked, is there any reason other than the opposition of the Eastern Extension Com- pany why the establishment of this important national work should be farther delayed ? It must be admitted that the Pacific cable in operation would put an end to the monopoly of the East- ern Extension Company and diminish the immense profits it en- joys. As, however, less than half the whole traffic would prove remunerative to the Pacific cable, there would remain ample business to the Company to yield a good return for the capital invested. In the memorandum laid before the House of Commons last July by the Secretary of State for the Colonies, it is distinctly indicated that, while the Home government is willing to co-oper- ate with Canada and the Australian Colonies, the Imperial authorities are unable to see the way to take the initiative, and that they " now await definite proposals from the Colonies interested before proceeding further in the matter." It unfor- tunately happens that the Australasian Colonies remain under the disadvantage of being disunited politically and they are not all equally in favour of the Pacific cable. Western Australia and South Australia being somewhat in sympathy with the Eastern Extension Company. New Zealand, New South Wales, Queen- land and Victoria desire to have the cable laid on the Canadian route. As the traffic to make il a profitable undertaking would have its source chiefly in these colonies, and moreover the land lines within each colony are owned by each respective government, they have it in their power to control the trans-Pacific tele- graphic traffic to the extent required to make the cable a profit- able undertaking. 235 THE PACIFIC CABLE. At this distance it is not easy to understand why these four colonies do not agree to take some definite line of action. It is now close on six months since the Premiers met in London, and as far as known they have not seen their way to agree on any joint proposal, owing doubtless to unexplained local difficulties. Under these circumstances it is not improper to consider if there be any duty or obligation resting on uf in Canada. The Dominion is now looked up to as the elder brother in the British family of kindred nationalities. If as Canadians we have faith in our destiny as no inconsiderable element of the great Empire, are we not called upon again to take the initiative? The mother country awaits a proposal. It cannot well come from disunited Australasia. If we are to be brought within speaking distance of the kindred communities in the southern seas, the first impulse must come from ourselves. Shall the opportunity which circumstances have presentee* be seized and another proof given to the world that '* the Canadian government and people are determined, in all ways, to promote Imperial unity." Sandford Fleming. 'V<