r ^ ^ >* IMAGE EVALUATION TEST TARGET (MT-3) 1.0 1.1 11.25 ■it Ui 12.2 Hull ^1^ '^.1«r- CIHM/ICMH Microfiche Series. CIHIVI/iCMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 '■■• ' Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. L'Instltut a microfilm* le meilleur exemplaire qu'li lui a M possible de se procurer. Certains difauts susceptlbles de nuire A la quality de la reproduction sont notte ci-dessous. D D D n D n n Coloured covers/ Couvertures de couleur Coloured maps/ Cartes g^ographiques en couleur Pages discoloured, stained or foxed/ Pages dicoiories, tacheties ou piquAes Tight binding (may cause shadows or distortion along interior margin)/ Reliure serrA (peut causer de I'ombre ou de la distortion le long de la marge intdrieure) Additional comments/ Commentaires supplimentaires D D D D i^oloured pages/ Pages de couleur Coloured plates/ Planches en couleur Show through/ Transparence Pages damaged/ Pages endommagies The Images appearing here are the best quality possible considering the condition and legibility of the original copy and In keeping with the filming contract specifications. The lest recorded freme on each microfiche shall contain the symbol — *> (meaning CONTINUED"), or the symbol y (meaning "END"), whichever applies. The original copy was borrowed from, and filmed with, the kind consent of the following institution: Library of the Public Archives of Canada Maps or plates too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les Images suivantes ont At* reproduites avec le plus grand soln, compte tenu de la condition et de la nettet* de I'exemplaire fllm«, et en conformiti avec les conditions du contrat de filmage. Un des symboles sulvants apparattra sur la der- nIAre image de cheque microfiche, selon le cas: le symbols — ► signlfie "A SUIVRE", le symbols V signlfie "FIN". L'exemplaire film* fut reprodult grAce A la gAnArosit* de I'Atablissement prAteur suivant : La bIbliothAque des Archives publlques du Canada Les cartes ou les planches trop grandes pour Atre reproduites en un seul clichA sont filmAes A partir de I'angle supArieure gauche, de gauche A drolte et de haut en bas, en prenant le nombre d'Images nAcessalre. Le diagramme suivant illustre la mAthode : Bibliographic Notes / Notes bibliographiques Only edition available/ Seuie Adition disponibie Bound with other material/ ReiiA avec d'autres documents Cover title missing/ Le titre de couverture manque Plates missing/ Des planches manquent Additional comments/ Commentaires supplAmentaires n Paginatlcn incorrect/ Erreurs du pagination Pages missing/ Des pages manquent Maps missing/ Des cartes gAographiques manquent 1 2 3 4 8 6 Ottawa, 23ra February, 1894. Sir Charles Trri'PEii, Bart., High Commissioner for Canada, London. Dear Sir Charles. — Mr. Bowell has received from you a cliitpingfrom the Sydney Morninn IleraH, of 29th December, 1893, in which some upe is made of an expression attributed to nie respecting the Pacific Cable. Mr. Bowell asks ine to write to you in order that the matter may be set right. While it is quite true that I expressed the opinion that the cable could be laid without any .subsidy from the Imperial Government, I am decidedly of the opinion and always have been of the opinion that some substantial aid should corne from the mother country. It is useless, however, to look any longer to the Home Grovernment to offer a subsidy, or take^ the ini- tiative in any way. If the i'.icific Cable is to be prevented from drifting into foreign hands, I am satisfied that the only course is for the Colonies and Canada to take the initiative boldly as they are now I trust about to do. My views, as to the best means under all the circumstances of establishing the ciible, are set forth generally in a memorandum, dated Sydney, 11th October, 1893, which .Mr. Bowell submitted to the Australasian Governments. As that document was specially prepared for immediate use in the Colonies, it .lid not occur to me to point out in what way the Imperial Government could best render substantial aid, but I have done so in other docu- ments, and I may r^'fi-r you to a communication, dated 28th June, 1888, which I addressed to His Excellency the Governor «• General of Canada, in which the following paragraph appears : — " An important feature of the proposal is the raising of "■ capital on the joint guarantee of the Imperial and Colonial I " Governments. It will be within Your Excellency's know- " ledge that in 1867 a loan was raised on this principle towards "carrying out an undertaking in whicli the Imperial and " Canadian Governments were mutually concerned, the rail- " way connecting Quebec and Halifax. Under this arrange- " ment funds to the extent of £3,000,000 sterling were pro- " vided at a low rate of interest, and by this means, without "in any way drawing on the Imperial exchequer, the Home " Government rendered substantial aid in the construction of " an important section of the National Railway of Canada. By " the same principle ot co-operation, the great undertaking " referred to (the trans-Pacific Cable), to which so much " importance has been attached as a means of bringing into " closer aflinity the distant portions of the Empire, may be " successfully carried out." , It is not nectssary to remind you of tlie circumstances of the Intercolonial Railway loan referred to in the above para- graph. No statesman living is more familiar with all the facts than yourself. No person knows better than you do that the aid rendered by the Home Government was really of a substan- tial kind, that it was felt at the time by the Canadian i>eople 2 to be of groat assistance to them and was highly appreciated ; and, moreover, while it was of soiniu-h benefit, that it has not cost and never will cost the British taxpayer a single farthing. It can be shown that in the case of the Pacific Cable such amsistance as this, will in many imi»ortant respects be of far greater value than an Imperial subsidy, and I venture to say that when the proper time comes the Home authorities may be asked to grant such assistance with every confidence that it will not be refused. Yours faithfully, 8ANDF0RI) FLKMIXG. s- I :J ViPTORTA Chambers, 17, Victoria Stueet. London, 8.W., 13th Marcli, 1894. Mv DEAR Mr. Flemino, — T duly received vour letter of the 23r(l ultimo with reierence to the question of a contribution ])y the TTni)erial (loverment to the cost of the cable from Canada to Australiii, but I sim afraid the conclusion that your proposal dill not involve any contribution from the Imperial Govern- ment will bo established by reference to the documents which were submitted by you both to the Australasian Governments and the Colonial Minister here. In your address to the Chamber of Commerce of Melbourne, you said : " The proposal th<^n is that Australia. New Zealand, " Fiji and Canada should be joint owners of the Pacific cable "; and in another place that " the intention is that it (that is the " liiibility for interest) should be borne in equitable proportions " by all, including New Zealand, Queensland, Fiji and Canada." You will also remember that 1 took great exception to the statement contained in your moniorandum, dated London, 6th January, 1894, handed to Lord Ripon, wherein it was said that " the memorandum submitted by Mr. Bowell to the Austra- " lian (loveniments clearly points out that the Colonies and " Canada can establish a British cal>lc without drawing on the " Imperial Exchequer." I think it unfortunate that these statements should have bet'U put upon record, as I am sure we both agree that the great Imperial interests involved in thi^ undertaking fully warrant that the expenses should be shared by Her Majesty's Government ; and while I concur with you in thinking that it was not wise to look to the Tmperial Government to undertake the initiative in this important matter, I have always felt confident that whenever Canada and Australasia agreed to con- tribute two-thirds of the expenditure required, Iler Majesty's Governni'mt would be unable to withhold the additional one- third necessary to accomplish a work so imi)ortant to the de- fences of the Empire. I notice your statement as to an Imperial guarantee, but in your address to the Chamber of Commerce of Melbourne you said : " This total capital raised on tlu^ joint guarantee of the Australian Colonies, New Zealand and Canada could be placed at tlie low rate of three per cent, making a total charge of £52,350 per annum," which statement did not seem to con- template obtaining a guarantee from the Imperial (lovcrnment. And if indeed that guarantee can be obtained, it would be a very insignificant contribution not only compared with the interests that the Imperial Government have in the matter, but also regarded from the eflfect it would have in lessening the charge to the Colonies. There is no doubt that the Imperial guarantee for the Inter- colonial Railway greatly lessened the cost to Canada without imposing any charge whatever on Her Majesty's Government, but it must not be forgotten that the rate at which Canada could then raise money without an Imperial guarantee was very difierent from the favour we now enjoy with our credit raised to its present high point. ! lueivly n-tor t\v tlmt tin- Home GoviTinnj'iit has ndlicrcd to the vit-WH oxproHscd nt the Colo- nial ('oiiftTi'iii'i'. I will iit>t way rluit thi-y liavf rci^anhxl I lie iiift'rc'stH of" tlie Ka^tt-ni Kxt<'iisii>M (a), iii iiiuri' iiiipirtiint than tlu' intorcKts of ('aiiuida and Aiir»tr»lia. l»ut tin- fiii-trt iipiicar to hIkiw that lln-y liavc evincod no j^rcnf diHir«\ to cstah- MhIi a ciiiiiiM'tini'' line acf.iHH the l'afiH<*. !''i<»iii onr Hfiind[ioint they indi'ed appear to have taken a protcu'tinu^ iiit»'roKt in that conipiuiy hy kecplns; hark the (MXnjM'tinir Hjh- Ir proot' T have onlv fo refer von to tlic statiinent ol the linth l'il)iMiai'v, recently Hent yle. Knowing all thi.-" and a great deal more, for I have watched niOisl carefully every eireuniHtaiue Itearing on the eal>ie, it is not surprising that on ray visit with Mr. Howell to AIl^^rraliu I despaired of aHflintance of any kitid coming directly from the lnH)eiial lioverninent. Miireover, thai feeling of ile.-.pair was not conhned to me, it wa-» evidently shared l>y at least two of tilt) Au.-tralasiaii (-lovornments as ihey liad hein forced liy the ihdiiference and seeming want of wyinpathy ol' the Home (lovernment to granp at thi; prospivt of securing telegraphic eoimeetion across the Pacifieevi'ti through a foreign Company. Thia was the situation wh/n we reacdied Australia on the Dth Octoher ; we were greeted hy announcements in tVie Press that a French ship was actually then at work laying the first section of 800 miles of the Vacific Cahle, under a subsidy, from France, New South Wakv, and Queensland. And it must he confessed there was indeed the greate.-t i)ossible danger of the undertaking so vitally imiiorlant to the Pirltish Empire, [)assing under French control and terminating not at Vancouver, hut at Sun Francisco. I need scareelv sav that I regarded snch a prospect as a natiomil calamity and T imposed upon myself the task of showing the Australian Colonies that it was not too late to avert such an n {'utile to look for any direct and immediate Imperial assistance, and wo honestly felt that to make Imperial aesis- tan(H' an absolutely indispensable condition, would simply be to work into the hands of the enemies of a British Cable across the i'acitic. Tlie present position of the question is no doubt differetit to what it was when we visited Australia and those in control of Impei'inl aiiiiirs may now be awakened to a more correct sense t)f tlieif fluties to the outer Kiimire. It is imnecet^sarv for me to say that I trust that niuy be the case and I shall indeed rejoice if Her Majesty's ( Joverhuient be induced to assist in the et).st of fhh route through Canada. The discussion was renewed from time to time and the more the question was considered the more deeply all present at the Conference became impressed with the vast signiticnnce of the issues which the new line of .communication involve, for England as well as for the Australian Colonies, India, Canada and the whole outer Empire of Great Britain. On the last day of the Conference the following resolutions were entered in the proceedings : — First. ''That the connectit)n recently formed through Canada from the Atlantic to the Pacific, by railway and tele- graph, opens a new alternative line of Imperial communication over the high seas and through British possessions, which promises to be of great value alike in naval, military, com- mercial and political aspects." Second. " That the connection of Canada with Australia by direct submarine telegraph across the Pacific is a project of high importance to the Empire : and every doubt as to its practicability should without delay be set at rest by a thorough and exhaustive survey." 'i hese resolutions expressed the united voice of the Con- ference after the strenuous efl:brts of gentlemen acting on behalf of the Eastern Extension Telegraph Company to impress the delegates with the idea that a direct telegraphic connection between Australia and Canada was unnecessary and imprac- ticable. The lines of the Eastern Extension Telegraph Company ex- tend ♦'rom India easterly to China and southerly to Australia, and they form the only existing telegraph connection between the Australian Colonies and Europe. This company has for years enjoyed a monopoly of all tele- graph business, and naturally solicitous for the future, its representatives left nothing undone to advance views adverse to the projected new line. Day by day Mr. John Pender, the chairman of the company, was in attendance. He was allowed to address the Conference and to circulate docu- ments of various kinds among the delegates, and in every way he used his influence against the project in the private interest ^f the company he represents. 8 Notwithsitaiuling those etibrln the ahove resolutions were adopted, and it is not a little remarkable that they are the only resolutions which were tbnnally submitted and unanim- ously assented to at the Conference. The arguments ofterod on behalf of the company wereconi- batted on public grounds by some of the delegates, and dur- ing the discussion the Postmaster General, Mr. Kaikes, stated very forcibly that it would be absolutely impossible for the English people or for ller Majesty's Government to recognize the mono[toly which tltc conqiany seemed to claim ; he, how- ever, pointed out that while the position assumed by Mr T'ender for his company was one which could never be acccf>ted either by the colonies or by the liritish Parliament, it was a matter of extreme difficulty for the English Government to assist in carrying out the new scheme in such a way as to con- stitute itself a competitor with the existing company, ^^hile he pointed out that difficulty the Postmaster General gave expression to his warm sympathy with those who were seek- ing to promote whut he termed "the most beneticial change of any of the changes Avhich can come out of the conlerence." In the proceedings of the conference ot the 2Tth April and 6th Mivy will be found recorded the general principles of a scheme which would completely obviate the difficulty men- tioned by Mr. Raikes. The scheme has much in common with one proitounded by the Postmaster General of Js^ew Zealand, Sir .iuliuR Vogel. The proposal is to combine the several tele- graph systems of the Australian colonies under one manage- ment, to includt,' the subnier'renoe of a cable across the I'aciiic from Australia to Canada, and to provide tor taking over at valuation, whenever the company may desire, all the cables of the Eastern Extension ("ompaii}'. "While that proposal assumes that a change is demanded by public; expediency, it also recognizes that the existing comjiany, as the pioneer of a system of communication which has materiidly assisted in developing Australian trade, is entitled to just and reasonable consideration. If the new Pacific line will destroy the monopoly of the company and put an end to the profits which the shareholders hitherto enjoyed, the pro- posal carried into effect would return to them the full value of tlie pro[»erty which would be rendered no longer profitable to th(>m. Moreover, although it would scarcely be reasonable for the proprietors to expect compensation for unearned profits, they may fairly claim and be allowed all the profits obtainable until the new line be in operation. • A (piestion will arise as to the value of the cables of the Eastern Extension Company. The testimony of Mr. I'ender at the conference shows that they were laid at an average cost of jC18I per mile. They have, however, been laid a immber of years and have depreciated in value, according to the length of time submerged. Mr. Pender estimates the life of a cable at twenty years, and the published official statements of the company furnish full infoi-mation as to the length and age of the cables it controls. With this data it is an easy matter for an actuary to prepare an estimate of the value, at any given year, of the whole system of cables owned by the company. Appended hereto will be found such an estimate bj' which it appears that all the cables of the Eastern Extension Comi»any are valued as follows : — In 1887 total value £960,195 1888 do 849,475 1880 do 738,751 1890 do 629,675 9 If wo add the cost of the new lino across the Pjicitie, reck- onliii!,- it ut the same rate per mile as tlie cabloH of tht? com- paiij, when tirst hiid, we aliall be enabled to form a tolerably correct idea of the new capitsd reqnired to carry out the general scheme. According to the schonie sni)mit'ted to the General (Conference new capital wonld not be required for the land lines handed over by the Australian Colonies. These u'ould be worked in common with all the cables nnder one management, each colony retaining an interest in revenne in proportion to the value of the lines handed over. It n\ay be assumed that the Eastern Kxtemaon Company will not desire to hand over their prop<'rty so long as it can be worked at the old scale (»f profits, that is until the new line be ready for business, as in all probability nuich time will be spent in negotiations, preliminary arrangements and surveys, the new line can scarcely be in operation before 1890. Accordingly we may take into calculation the estinuited value of the company's cables for that year as under: — Estimate op N'ew Capital. 1. Valuation of the cables of the Eastern Extension Company in the year 1890..£ t530,000 2. (>ost of new cables to connect Australia with ('anada, 7,600 miles at £184 per ™le 1,400,000 £2,030,000 The total new capital then required to carry out this com- prehensive scheme designed to bring under one harmonious management all the telegraphs within the Australian Colonies and all the cables existing or projected from Australia to India and to Canada, appears to be little over two millions sterling. The sum is very much less than that spoken of at the con- ference, but it is impossible to impugn the estimate without calling in question the accuracy of the data which is supplied by the Eastern Telegraph Company itself. £2,030,000 on a joint Government guarantee (Imperial and Colonial) could be raised at a very Ioav rate of interest. At three per cent it would come to £60,900 per annum, a sum which is almost equalled by the subsi(lies now being paid or available as the following table will show : — FJurnsn SiiRSinrFS 1. Paid by New South Wales £ 12,617 2. do' Victoria 14,479 3. do South Australia 4,805 4. do West Australia 499 5. do Tasmania 4,200 £36,600 Foreign Subsidies. 1. Paid by Malacca £ 1,000 2. do Manilla 8,000 3. do Toquin 10,000 4. do Maccao 500 5. Offered by Hawnii 4,000 £24,100 " = Total subsidies £60,700 10 Tnthislist of subsidies it will be iioticofl that only five ]iritii»1i (-'olonics contribute, while I'eii liritisb Governments in all are more or less directly and spficially interested in the estabiishriient of the new line of telegraph. Tt wouM manifestly be unfair to these live colonies if they were left to bear the whole burden. It f'eems proper that the other five iiriti.ih (4overnnients should bear an equitable share of the coat. The available foreign subsidies amount iji all to i'24,100 per annum, [f we deduct this annual asset from the cost per an- num of the new capital (.t:00,!»00) there remains £36,800 to U) met in eciuitable proportions by the ten British ( Soverntiients conceriu^d in the scheme. Lot us assume that lialfthis annual charge be borne by the tive contributing Governments and tlie other half by the five Governments not now contributing the account will stand thus : — 1. New South Wales.. 2. Victoria South Australia ..., "^^estern Australia I'asmania o O. 4. 5. 6. The United Kingdom ^ Alllllnllt^ }■ C 18,4(10 7. India 8. Canada 9. New Zealand. 10. Queensland... 18,400 £ 36,800 The exact proportions payable by each Government can ordy be determined by negotiations and mutual agreement, but the above sets forth generally the features of a scheme which seems well calculated to accomplish the desired object. Five of the Australian Colonies are bound by auTeement to contribute un- til the end of the present century a subsidy of .£36,600 per annum. According to the above division these colonies would have their liability reduced to £18,400 per annum, scarcely more than half w- hat they now pay. Their direct gain would be £18,200 per annum while their indirect gain resulting from reduced charges and facility of intercourse would be infinitely greater. In view of the important advantages in which all would participate, it cannot be urged that the other Governments not now contributing would be greatly burdened by the joint pay- ment of £18,400 per annum. It will not be overlooked that when the foreign subsidies ex- pire a further charge of £24,100 per annum will have to be met from some source. Even if it be required to be borne by the ten governments in equitable proportions, it could not weigh heavily on any of them, but it is anticipated that when all the subsidies run out the revenue from the telegraphs will be amply sufficient to meet interest and every other charge. The new Pacific telegraph system as a Government work will be established with capital secured at a very low interest, makhig it possible for a profitable business to be done at exceedmgly low schedule rates. The great reduction in rates thus rendered possible would give a wonderful impetus to telegraphy and as a consequence to business, it is believed, would so greatly increased as to admit of revenue meeting fully every proper charge against it. This will oe the more apparent when it is considered that at no time would revenue be charge- able with dividends or bonuses which the shareholders of all private companies mainly look for. / ■,!■ ■■' ."■■;.■' v.,: 11 After the diHcusHion at the Conference it can no longer bo held that the oxistonry of tlio Eastern Kxten^ion (Company iniiHt preclude the cBtablishment of the new lino of coinmuni- cation acroas the Pacific ; a line demanded not simply by colo- nial growth and general commercial progress, but in a still greater degree by the exigencies of the Empire. That it Ih vitally expedient to Hccuro the new lino an ameaHuro of defence can be judged l)y tho magnitude of the consequences, which at any time may result from neglect in establishing it. This has been emphatically recognized by the highoHt authorities in England and likewirte acknowledged by members of Her Majesty's Government and by the representatives of all the colonies at the Conference. .. , ' It is claimed that the scheme sot forth moots all the objec- tions which have been raised and goes far to harmonize every interest; it would undoulttedly establish the new line of com- munication at tho least possible cost and enable the principal self-governing colonies to co-operate with the Home Govern- ment in carrying out a jiroject of very great Imperial impor- tance. . -. SANDFORD FLEMING. Appendix to the above Letter. Estimated value of the cables of the Eastern Extension Telegraph Company calculated on the data furnished by Mr. John Pender, Chairman of the Company, viz. : — Original cost per mile £184 and life of cable 20 years. The lengths of cable laid are taken from the official documents of the company. MiloH Laid, WheuLai.1. s„hTrged. Value in 1887. - IHO 3,40JI 2,721 1,283 864 2,444 529 920 502 180 ■ 1869 1870 1871 1876 1877 1879 1880 188;? 1884 1885 18 17 16 11 10 8 7 4 3 2 .S,312 66,488 100,243 106,232 79,488 269,818 63,269 1(»,024 78,613 29,808 . 12,0.% '■ . ,.' 960,195 **,' '1 Similarly the value of the property in the three following years has been ascertained to be as follows : — 12,035 miles of cable, Value in 1888 £849,473 12,035 do ' do 1889 738,751 11,855 do do 1890 629,685 ■A finHiiitrir Iiiij»(ii:.l work. Such a course will awaken England to a due apy)rociation of Colonial strength and vigour and national spirit ; and it will give the Colonies and Canada the strongest possible claim to Imperial sympathy, and assistance in other ways. Such a course will open the great heart of the British ]i.()ple towards their kith and kin beyond the seas in a way in which it has never before been opened. I remain, yours faithfully, 8ANDF0RD FLEMING. Memorandum (referred to in Mr. Fleming's letter) respecting the ■proposed Telet/rnph to connect Australia and India jvith England, by the Canadian Boute. Ottawa, 26th September, 1 887. At the Conference recently called by Iler Majesty's Gov- ernment to consider matters of common interest to all portions of the Empire, attention was directed to the question of con- necting Australia and Asia with England ' by a postal and telegra[)h route through Canada. The discussion was renewed from time to time and the more the question was considered the more deeply all present at th(? (/onference became impressed with tlie vast signiticiince of the issues which the new line of .communication involve, for England as well as for the Australian Colojiies, India, Canada and the whole outer Empire of Great Britain. (^n the last day of the t'onference the following resolutions were entered in the proceedings : — First. ''That the connection recently formed through Canada from the Atlantic to the Pacific, by railway and tele- graph, opens a new alternative line of Imperial commujiication over the high seas and through British possessions, which promises to be of great value alike in naval, military, com- mercial and political aspects." Second. " That the connection of Canada with Australia by direct submarine telegraph across the Pacific is a project of high importance to the Empire : and ever}- doubt as to its I practicability should without delay be set at rest by a thorough jand exhaustive survey." hese resolutions expressed the united voice of the Con- Iference after the strenuous eftbrts of gentlemen acting on Ibehalf of the Eastern Extension Telegraph Company to impress [the delegates with the idea that a direct telegraphic connection petween Australia and Canada was unnecessary and imprac- ticable. The lines of the Eastern Extension Telegraph Company ex- lend *^rom India easterly to China and southerly to Australia, ind they form the only existing telegraph connection between (he Australian Colonies and Europe. This company has for years enjoyed a monopoly of all tele- kaph business, and naturally' solicitous for the future, its jprosentatives left nothing undone to advance views adverse the projected new line. Day by day Mr. John Pender, the lairman of the company, was in attendance. He was Jlowed to address the Conference and to circulate docu- Ivonts of various kinds among the delegates, and in every way |e used his influence against the project in the private interest the company he represents.