CABLE PROBLEMS

Dominion, Volume 8, Issue 2420, 27 March 1915, Page 14

CABLE PROBLEMS

POSITION OF AUSTRALIA PROPOSALS OF THE ROYAL COMMISSION Before the construction of the Pacific Cable, the cable enterprises of the worl'd from an Imperial point of view consisted broadly of two parts—the Atlantic Cable System (with its offshoots iii the West Indies as a subsidiary branch) and the Eastern and Eastern Extension System, which covers Africa, the Bed Sea, India, the Far East, and Australasia. These two cable groups, 'including all that at that time was most important in the cable world, represent a triumph, of far-sighted' and .vigorous privato commercial enterprise. The idea which underlay the construction'of the Pacific Cable was primarily the desire for a fresh system of- communication between Australasia and the Mother Country—the desire being, partly a sentimental, partly a business one, . Australasia was already well served ■by-the Eastern and Eastern Extension Systfem. It was strongly felt, however, in the Dominions that a State-owned cable from Australasia to Canada, and thence, communicating with Great. Britain via the Canadian land lin'es and the Atlantic Cable System would promote . Imperial sentiment and at the same time by means of .competition reduce cable rates to Australasia. . The result justified the anticipation. The cable rate to Australia was reduced by the Eastern lines fwm 4s. 9d. to 4s. in

1900, to 3s. 6d. in 1901, and, ultimately to 3s. in 1902 in anticipation of the 3s. rate initiated by the Pacific Cable on its construction in the last-mention-ed year.' It should iri all fairness, however, be pointed out that the Eastern Company." have contended that these ratqs \Vero -reduced automatically' bv the 'Standard Revenue Agreement of April' li;:;-M00„':'&d that the competition'of the' Pacific Cablo lias prevented them fr6nt further reducing tlicir rates to 2s. Gd.

Proposed Atlantic Cable. The Pacific Cable having been thus triumphantly .laid, it was ' inevitable .that the "movement towards a Stateowned system should go farther. The Eastern System is.an "All-Red route," that is to say, it is'conducted by British enterprise throughout British territory.' The alternate route from Aiis-. tralasia to England via the Pacific, Canada, .and the Atlantic is not "all red" —an-American company being in possession .of the' land lines and of the Atlantic cable system. -The desire in Australia and New Zealand for a Stateowned Atlantic cable, as revealed by the Report of what is generally known as the "Dominions Royal Commission," to whose labours we shall have to refer presently in detail, is a strong and ardent one. With it is inevitably linked up the question of a reduction in rates of the Pacifio cable. Private enterprise is affected by this proposal in two wayß. - A reduction in rates on - the Pacifio Cable would affect the position of the Eastern companies—the other enterprise now serving Australasia and the construction of. a State-owned Atlantic cable could not be viewed with .indifference by the .Atlantic-companies) The arguments -for and against the two proposals have been developed by witiheSs'es before the Dominion Commission as follows:—

The principal grounds for advocating -..the construction of an Atlantio State-o'iVned cable are: (1) control in case of emergency; (2) prevention of monopoly, and of a consequent increase of rates; (3) reduction of rates. The argument that in case of. emergency the Atlantic cables being owned by a foreign company would put Great Britain at a disadvantage is met by the fact that:the terminals' of these cables- are all in British territory; tho eight cables of the- Western - Union group and .the five of the Commercial Cable group land in Newfoundland, and so give tho British, Canadian, and Newfoundland Governments complete control of them in the ©vent of war. It is also urged that the question of the difficulty of taking possession of the terminals in the case of tho United States being neutral in hostilities between Great Britain and . another Power could not arise in practice, as there would bo .no object in doing so. The fact that any cable can be cut, be it State-owned or private, should also not be over'lookcd, As regards tho prevention of monopoly, it is urged that there is very keen competition between the two groups of Atlantic cablo companies, while the General Post Office-can- check any tendency to increase rates by its control .of. the renewal of landing licenses to the companies concerned. These powers.can, however, only be used to a limited extent, and with the greatest discretion.

Ratef; and the Pacific Cable. Tho arguments concerning the possibility of reducing rates as a consequence of the introduction of a Stateowned Atlantic cablc aro more complicated, and cannot well be reviewed without reference to the question of reduction of rates' on tho Pacific Cable. It is pointed out on tho one hand- that it would be difficult to effect any such reduction while working the cable! on a commercial basis, 'llie traffic on such' a cnbla would necessarily be almost 1 entirely. Australasian—that is matter

handled by the Pacifio Cablo Board. The land lines in Canada are in-tho hands of the Atlantic cablo companies, and no Canadian traffic could, therefore, be expooted for a State-owned Atlantic cable. The total traffic on the Pacific cable is less than one-half of the average amount now carried by each Atlantic cable, and less than one-fifth of what a single cable could carry. For these reasons the General Post Office in evidence before the Commission estimated an annual defioit of £20,000 oil such a State-owned cable, being the difference between, £5(],000, the approximate annual cost, and £30,000, the estimated receipts at existing rates of the Atlantic transmission of Australasian tiaffic.

On the other hand, the original estimated deficit given by Mr. Samuel in his speech before the Imperial Conference was £30,000, and the revised estimate is made by reason of the fact that the Pacific Cable Board traffic is improving. This is held by the advocates of the State-owned cable to prove that the deficit even in present circumstances will be a constantly diminishing one, and they strengthen their argument by a consideration of the effect which they; think a reduction -of cable fees on tho Pacific would have on the traffic. The actual capacity of the Pacific cable is about 7,000,000 words per annum, but some 5 or Si million words are estimated as about tho maximum load which is advisable if the danger of tho cable getting blocked with unimportant matter is to be avoided. The present number of words passing over the Pacific cable is only about 3,000,000, or from three-fifths to six-elevenths of the business which could be done.

Rate Reduotlon. The opinion is strongly held in Aus-. tralasia that a reduction in cable fees on the Pacific cable would result in a greatly -increased traffic, bringing the. annual business of the cable up to its capacity, and so providing more business

for the proposed Atlantic cable. The opinion is largely held in Australia that the Atlantic rates are too heavy, and that the decision to construct a Stateowned Atlantic cable would bring about a reduction of rates in the same way as the Pacific cable reduccd the Eastern rate. , '■ It may be well to show what Mie rates - to Australia are,- and how th'oy are apportioned. The' following table gives these details: — : ' ■' 1 Ordinajy Govt. Press moss- m&bs- messages. ages. ages, s. (1. s. (1. d. Atlantic companies ... 0 9 0 45 35 Canada ...V. 0 J 01J • 1 .Pacific Cable Boards. 17, 095 "2 Australia 0 5' 0 4 1 ' i 0 , : 7i The argument on the other side is that the, traffic carried by. the Atlantic group- for tlio Pacific Cable Board is only about 2 per cent.-of the group's total traffic; that a reduced rate on the proposed State-owned Atlantic cable would flood such a cable with more business than it would be able to handle, and by mere congestion force it to raiso its rates to the lovel of the other Atlantic cables. Be this as it may,' the feeling in Australasia is that such a cable should be undertaken and that the people would bo prepared to subsidise it on the grounds that it would more quickly make the Pacific cable pay, and that it would be an important Imperial undertaking. For the Pacifio cable a lower rate is demanded even under a substantial subsidy.

Other Faotors. Two other points should be mentioned bear on this subject. One is the fact that a single cable' in the Atlantio would be a risky experiment, as interruptions, in the Atlantic are more frequent than in the Pacific, and it would be unwise to rely upon one cable. The estimated annual -deficit would, of course, be much greater for two cables tba/i for one. 'l'he other point is that tho. possibilities. of wireless telegraphy constitute an unknown factor. The existing companies can look forward to' the advent of wireless telegraphy, if'not with equanimity, at least with resignation. It is obviously a different thing to sink a great amount of capital in a' fresh enterprise that may be out of date in. a short time after completion. For .this' reason in particular, and also because they had not yet collected opinion in Canada on tho subject, the members of the Commission in their second interim report (January, 1014) refrained from prououncing upon the project.

Deferred and Week-end Cables. The "deferred" telegrams were introduced on January 1, 1912. Their use has been rapidly extended, and tho system has undoubtedly proved a success. The Commission draws' attention to the fact that these "deferred" messages must be written in plain language, and as the use of codes brings about ji reduction estimated at one-sixth to one-sixtieth, tho privilege of sending a "deferred" messago at half rates is not So great a concession as appears at first sight. The contention is that tho private sender is "harshly treated as compared with the expert ' coder and tho commercial house."

The week-end cablegram was started 011 January 1, 1913. These messages have to rcach tho terminal offices by Saturday night, and aro in 110 case dplivcred before Tuosday .morning; unless extra charges were paid for transmission by telegraph at either end, messages had to be. posted to and from the cable termini. There might, therefore, be a long delay in delivery, and the Commission suggested that weekend messages should be transmitted by telegram throughout, an arrangement which has now. bean mads,

Since the report of the Commission was issued week-end cablegrams have been introduced on the Eastern system between Australia and South Africa (April 1, 1914) j between South Africa and New Zealand, and between South Africa and India, Burmoh, and Ceylon (May 1, 1914), also between South Rhodesia and Nyasaland and India, Burmah, and Ceylon (May ,1, 1914). Arrangements have also been made by the Pacific Cable Board for a system of week-end telegrams to be introduced between Canada and Australia. Terminal Rhargcs. Another important recommendation made by the Commission has reference to the Australian terminal charge. The rates via Pacific Cable to Australia and to New Zealand are the same, but the Commonwealth Govornment charges a terminal rato of sd. per word for transmission. of ordinary messages over its lines against a charge of Id. by the New Zealand Government. The Pacific Cable Board thus raceives 4d. per word more oil New Zealand messages after paying these charges. The New Zealand Government contends, therefore, that the New Zealand rate should be brought down from 3s. to 2s. Bd. The Commission considers the contention just, and recommends that the Commonwealth Government- should also reduce its terminal charge from'od. to Id.

Before concluding this short review of 'Imperial cable problems, the new cables of the Eastern system should be mentioned. These, as shown in the map above, run from Aden to Colombo, Colombo to Penang, and Penang to Hong-Kong.- They, provide ' a new route if required for the Australasian traffic, which at present runs via Cocos : Island, South Africa ;I 'and St. Vincent, arid should also relieve the line between Cocos Island and Durban of the Far Eastern traffic, which has occasionally to bo sent over it now.