TELEGRAPHIC COMMUNICATION WITH EUROPE.

New Zealand Times, Volume XXXII, Issue 5167, 13 October 1877, Page 2 (Supplement)

TELEGRAPHIC COMMUNICATION WITH EUROPE.

(From the Argus.)

A joint memorandum, signed by Sir Julius Vogel and Mr. Michie, on the subject of duplicating our present telegraphic communication with Europe, has reached the Chief Secretary. The memo, discusses at great length the advantages of cable communication, and the necessity of duplicating the same. It proceeds:— The Eastern Extension Company deserves well of the colonies, and its claims cannot be overlooked. It would probably be deemed illiberal in Governments, and would prove very discouraging to future private enterprise, if, with money borrowed as low as they can now borrow, the Governments were to go into opposition to the company without giving it the opportunity of disposing of its interests ou reasonably favorable terms to itself. The same • consideration should be given to the company as that which the government of a city would give to existing water aud gas works after it had determined that the city should in future take the charge of supplying the inhabitants with gas and water. Before erecting fresh works, all reasonable efforts should be made to acquire existing ones. We think, therefore, the Governments should fairly recompense the company by buying its lines in preference to constructing others on their own account.

We have not come to the conclusions we have indicated without satisfying ourselves that the Governments would not be likely to suffer by them. Obviously, it would be ijnprudent to too narrowly discus 3 the purchasing price, but it is no secret that the company has expended about £600,000 on what is called itß Australian section— i.e., the line between Singapore and Port Darwin ; that the New Zealand line has cost about £290,000, and the Tasrnanian about £70,000, amounting in all to about £960,000. Before further dealing with these figures, it is necessary to consider the mode of duplication. It is, as we have said, essential that there should be a complete duplication of the line between Australasia aud Europe. Tasmania and New Zealand should also be secured against accident to their present single line of commu' ication. This might be cheaply effected by laying a line between the two colonies themselves, which in effect would give to each an alternative means of communication with the main Australasian system. The line between Sydney and Nelson cost £290,000, including the purchase of a steamer. A line to connect Tasmania and New Zealand would cost about £200,000. From England to Singapore, with the exception of the Penang section, there are two lines the whole way ; at some parts there are more than two lines. Between Singapore and Australia there is but one line. We regret to have to touch on the subject of the route of the duplication of the line between Australia and Singapore, since it Is one of great difficulty; but our remarks would be incomplete if we failed to do so. At the conference, whilst the expedieLcy of duplication was admitted, no decision whatever was come to concerning it. In our opinion no duplication would be satisfactory that did not give an alternative line throughout, which of course includes an alternative to the use of the Una between Adelaide and Port Darwin. Bearing this necessity in mind, the following are the routes from which selection would probably have to be made :

1. New Zealand to San Francisco, by way of Honolulu. 2. Western. Australia to Galle. 3. Western Australia (North-west Cape) to Singapore, by way of Java. 4. Normanton to Port Darwin, partly by water, partly by land, and from Port Darwin to Singapore, by cable throughout, touching at Ja?a. 5. Normanton or Cape York to Singapore, by cable throughout, touching at Java, but not at Port Darwin. Inquiries which have recently been made by Sir Julius Vogel point to the first route being almost impracticable on account of the great depth of the water which would have to be passed through. If such a line were laid it is unlikely it ever could be repaired, as the depth of water is greater than that from which a cable has ever yet been raised. The depth at one piint between San Francisco and Honolulu is 3250 fathoms, and at a point between Honolulu and Fiji 3448 fathoms. The deepest line yet laid is supposed to be 2760 fathoms, between Brest and St. Pierre, whilst the depth from which a cable has been picked up is between 2400 and 2500 fathoms. At some time or other a cable will probably be constructed from the United St .tes to Japan ; but it would have to go far north to avoid the depth of water of a direct or more soutfcsrly route. The project of carrying a line from San Francisco to Honolulu, and thence to radiate to J pan and China and to_ Australia, does not appear to be fe. sible. No. 2 route would be outside of the compuny's system altogether. Having already said that we think the company should be liberally dealt with, we consder that if the Governments buy the present line, it would be better policy to make the duplicate line touch at Java, for the business with that place is supposed to be considerable. Besides, the Galle line woidd involve the maintenance of a sepaiate steamer. Another objection to the Western Australian route is that the land line may not easily be maintained,'and, at any rate, the use of it will not be so cheap as that for which the Queensland Government would be willing to give the use of its line. The last objection only can be urged to the third route. It would be cheaper than any other, but it would not satisfy Queensland, and we doubt if the land Hue could be made as safe and trustworthy, apart from the tariff to be charged on it, as the Queensland land line. As to the routes 1 aud 5, we have already said we think the route through Queensland by far the most secure, whilst it is probable that unless the Queensland route were adopted that colony would stand aloof. The adoption of the Queensland route would mean the reduction of the tariff through Australia. The Queensland Government charges for messages to Normanton only Id. or 2d. a word, whilst the South Australian Government receive out of 103. Bd. (the through charge to Adelaide) the large proportion of Is. sd. a word. We do not say the charge is unreasonable (considering the expense and risk South Australia is subject to), but clearly it is altogether inconsistent with cheap telegraphy. Routes 4 and 5 are the two ways by which communication can be made with Queensland, one by connection with Port Darwin, partly by cable and partly by land line, with a second cable from Port Darwin to Singapore, avoiding only the Java land line ; the other by cable from Normanton or Cape York to Java, and thence to Singapore. The cost of route 4 would be about £650,000, whilst that of route 5 from Normanton has been variously estimated at from £750,000 to £1,000,000._ We are not aware what would be the saving of cable cost and the additional expense of laud line of making the starting point from t'ape York instead of Normanton. Wo have made route 5 to start cither from Normauton or Capo York. If tho latter be found preferable it might he adopted. Paying as the Government would in cash, they should, we think, be able to get route 5 carried out for £700,000. As to whether route 5 would be more desirable than route 4 we prefer not expressing an opinion. Wc think one or tho other of these routes the best, and the choice between them should be carefully considered. We are of opinion, however, that if the more costly route is chosen Queensland should pay the difference between it and the less expensive one. As we have said, the Queensland Government now charge Id. or 2d. a word to Normanton, but when it was contemplated by the Queensland Government to join New Wales and New Zealand in subsidising a company to construct a line from Normanton to Singapore, that Government proposed that the charge should be 7». for twenty words, or a little over 4d. a word. But then Queensland was to become liable for a considerable subsidy. Under the .arrangement w« propose, Queensland's contribution will be so much less that she can well afford to relinquish the fractional chargo in excess of 4d. a word which she formerly proposed. We are of opinion that aa imam] sum by

way of subsidy should be paid to the South Australian Government for reducing the rate to that which it is agreed shall be charged through Queensland. With au annual subsidy of £16,000, South Australia should see its way to adopt a tariff of 4d. a word. It could be arranged either to divide all through land receipts between the two colonies of South Australia and Queensland, or else that each should keep its own, and that New Zealand, New South Wales, and Queensland should use the Queensland route, the other colonies the South Australian route, when both lines were open, and of course all can use either route open, in case of disaster to the other.

• The expenditure under our proposal may be approximately estimated as follows : Fort Darwin to Singapore £600.000 Sydneyito New Zealand 290,000 The existing Tasrnanian line .. •• 70,000 The line proposed from Tasmania to New Zealand '-00,000 The lino proposed from Norroantou to Singapore 650,000 £1,510,00.> Four per cent, on which would be .. .. 72,400 Add subsidy to South Australia .. . • 10.00° £82,400 Say £32,400 annually. We have naturally avoided including the profit consideration or good will which should be paid to the company. It should be satisfied with from 10 to 15 per cent. Its shares are now at about 25 per cent, discount, and such a sale should be a good transaction for it, coupled with an arrangement for the use of the Singapore to India section, by which the company would enjoy upon such lines as it retains a virtual monopoly of the Australasian business. Between what we propose and the position of the company, if the Government elected to carry a line from Western Austrah'a to Galle, there can be no two opinions as to the interests of tho company. We have already said Queensland bhould pay anything that is required over £650,000 for the connection between Normanton and Singapore. The amount will be ample if the route is by Port Darwin. If a cable the wholeway is preferred, Queensland should not hesitate to pay the difference. The arrangement would almost certainly be better for her than anything which has hitherto been proposed, whilst we think that it doe 3 substantial justice to South Australia. It must be borne in mind that a reduction of the present almost prohibitive rate of transmission through Australia is a cardinal feature of our proposal. It is easily to be seen that the Governments have an advantage over the present and any other company, for whilst the company has to pay 6 per cent, for its money, the Government can get it for less than 4 per cent. Tt was the knowledge of this, together with the reflection that communication must be kept up, and further expenditure incurred, that led us before going into the figures to conclude that the Governments could with benefit buy out the company. We have taken 6 per cent, as the borrowing rate of the company, although probably its shareholders look for a larger return on their share capital. We have now to consider the question of expenditure. In December, 1874, Mr. Todd, the able Postmaster-General aud Superintendent of Telegraphs of South Australia, who probably has the largest acquaintance with the subject of cable communication with Australia, wrote —" I have no reliable information as to the amount of traffic with Java apart from Australia. I believe, however, lam not far wrong in assuming that it is sufficiently large to cover the whole of the working expenses of the British Australian section by the cables between Singapore and Batavia, and between Banjoewaugie and Port Darwin, leaving the whole of the receipts from Australian business to be carried to profit." These Java receipts are not known to us, and we can only conclude that they must at any rate largely defray the expenses of working the line. The Governments would be able to reduce existing expenditure by doing away with one steamer, and using their own officers for many purposes. We think that on the five lines, viz., the two to Singapore, the New Zealand line, the Tasrnanian line, and the New Zealand and Tasrnanian line, the total expenses should not be more than £12,000 in excess of the receipts from the Java traffic. Adding this amount to the interest and to the payment of £IO,OOO to South Australia, we have an amount of £994,000. The rent of the Singapore and Indian section may also be added. The equivalent will appear on the other side under the head of revenue. We propose that thf rent should commence with the present estimated revenue, and the items of rent and the revenue from this section might be left out on each side. It will, however, be more satisfactory to insert them. In order to make the matter clear, it will be as well to explain how the 10s. Bd., which is the charge from London to Adelaide, is divided:—

8. (1. The compiny transmitting to India receives .. '£ 0} The Indian Government 0 I'i The Java Government _ • • 0 2£

Easte-n Extension Company, India to Singapore 17 1)0, Singapore to Darwin 4 0 South Australia 15

Making in all 10s. Sd. a word. Of the amount receivable by South Australia, Id. probably is considerod as the special carriage to Adelaide, for the same payment enables a message to be takon to Melbourne, in which case it is to be presumed the South Australian Government receive Is. Id., and the Victorian Government Id. The company {vide Colonel Glover's letter to the Agents-General of March 9, 1877) accept Mr. Todd's estimate of 235,000 words as representing the annual traffic of the Australian line. It is probably within the mark, at any rate there must be an improvement going on. This would make the revenue of the Singapore and India section at Is. 7d. a word, £IB6O, aud of the Singapore Australian section at 4s. a word, £47.000. In neither case is tho Java business other than with Australia included. The rent, therefore, of the Singapore and Indian section would be £18,600, with an addition of so much of the traffic between Java and Singapore as extends beyond the latter place. The revenue between Java and Singapore would belong to the Government. We have already incidentally mentioned that the reduction to 6s. a word, which it is proposed to secure, did not include the cost of transmission through the Australasian continent. Any one who studies Mr. Todd's figures and those of the company will satisfy himself of the point. Indeed, a reduction from 10s. Bd. to 65., if it all came off the company's receipts, would leave of its ss. 7d. a word only lid. a word for the whole distance from i'ort Darwin to Madras. The £20,000 was meant to secure a word rato of 6s. to Port Darwin only, which, added to the rate to Adelaide of Is. 5d., would have made together 7s. sd. a word. It is important to remember this, for, as we propose to include the £20,000 subsidy, our plan must involve a reduction on the tariff similar to that which that subsidy was designed to secure. As wc assume that the revonue will not be less than at present, it is necessary for the correctness of our calculations that any reductions that are made should not result in a loss to the revouue. It will of course bo open to the Governments when they own tho lines to consider the question of further reductions. There are many people who believe that considerable reductions may be made without loss of revenue. At any rate, wo contond no loss of revenue worth consideration will result to the cables from the moderate reductions we propose ; tho reduction from 9s. 3d. to Port Darwin to 65., which it was proposed to secure by the subsidy, amounts to 3s. 3d. a word. Of this amount la. Id. will be covered by the reduction we propose on the rate of transmission through Australia. There is thus left 2s. 2d., which wo confidently contend may be taken off the ss. 7d. (the present rate over the two sections from Port Darwin to Singapore, and Singapore to India) without diminishing tho gross revenue. That is to say, wo are of opinion that the total reduction of 3s. 3d. a word between Australia and England will induce 9. sufficient increase of business to fully compensate the reduction of 2s. 2d. on tho sections between Port Darwin and India. As to the reduction in the cost of transmission between Adolaide and Port Darwin, that is partly dealt with by. uuboidy, partly by proinniod increws of bueinosß. In addition, we

think 6d. a word (which is equal to a reduction of 3d. a word, the rate now being 7s. 6d. for 10 words) may be the rate established between Australia and New Zealand without any danger of diminishing the revenue on that line. , The total revenue remains to be considered. It is as follows :

India to Singapore .. £ H'™ Singapore to Port Darwin 47,000 Sydney to Now Zealand 14,000 Subsidy paid by New South Wales and New Zealand Governments .. .. 7,500 Australia to Tasmania, about .. .. 5,000 Proposed Tasrnanian and New Zealand line about 3,500 Tho proposed subsidy 20,000 £115,000 In reference to the subsidy on the New Zealand line, it has only eight years to run, but it cannot be questioned that by that time all need for it will have vanished. It would be superfluous to dilate on the advantages of having the telegraph in Government hands, because this is not likely to be unappreciated by the colonies which have so long had reason to be satisfied with the Government control and management of the land lines. We may, however, observe that the plan which we now propose will, we think, be followed by larger results than might at present be commonly anticipated.

The Governments at the conference at Sydney in. 1873 seemed unanimously to approve of the proposal that the entire line between England and Australia should be acquired jointly by the British, Indian, and Australasian Governments. Our proposal by which the last-mentioned Government would secure part of the lines may work better than a tripartite arrangement. There is probably a better prospect of the English and Indian Governments following the example of the colonial Governments if it be found to work well, than of procuring their co-opera-tion at first in a triple partnership. If, as we expect, increased revenue and largely augmented facilities arise from the step we now propose, its results will powerfully influence the British and Indian Governments.

As we intend to send a copy of this memorandum to our respective Governments, we may be permitted to observe that accident rather than design has led to this movement being confined to ourselves. We have had frequent opportunities of discussiug it, and we have found that our opinions in the main harmonise. We thought it better not to treat it as an Agent-General's question, to discuss which, courtesy might have required of us, that we should request the counsels and co-operation of the London representatives of other colonies. The question does not come before us as Agents-General, excepting as they may feel themselves called upon to represent to their respective Governments the impression which they from tin-o -o time receive.

In thus expressing these opinions, we cannot in any way commit our Governments, or embarrass their action for themselves.

The Agents-General of South Australia and Queensland would, however, probably feel that the questions into which we have entered relating to their colonies are of a nature they would not enter into without consultation with their Governments. On the whole, therefore, we have thought it better to confine ourselves to placing on record merely the result of our own discussions and calculations, to which we have now the honor to invite your consi deration. Akchd. Michie. Julius Vogel. London, Aug. 1,1877.