PUBLIC SAFEGUARDED

Sun (Auckland), Volume II, Issue 401, 9 July 1928, Page 9

PUBLIC SAFEGUARDED

Cable-Radio Merger EFFICIENCY AND EARNINGS Dominion Representation (United P~A.—By Telegraph — Copyright) (Australian P.A.—United Service) Reed. 12.52 p.m. LONDON, Sunday. ANOTHER forecast of the Imperial Wireless-Cable Conference report says the board of directors will be elected by the board of the projected merger company, including representatives of the cable companies, Marconis, and two members chosen by the Government. There will be also an advisory council, on which the Dominions will be represented, to review questions of policy and the distribution of earnings.

A condition will be imposed that out any profit exceeding the present level 50 per csst. vriii be applied, either to reducing Ska charges to the public, or providing asdifional facilities. By this means, the efficiency of private enterprise should be secured, while the interests of the public will safeguarded. authoritative statement It' is authoritatively stated that although the. Imperial Cables-Wireless Conference has recommended that the operation of the cable and wireless properties concerned shall be undertaken by a purely communications company, the Government will not be responsible, directly or indirectly, for that aosnpany or financially interested in it All the Government properties, except the beam wireless stations, which will be lea.sed for a period of years, will be sold outright to the new company, whose capital will be in the neighbourhood of £30,000,000, The present earnings of the various properties will constitute the standard revenue. Any excess will be divided equally between the company and the public. That is to say, for a reduction in the rates the interests of tile public will be protected by the creation of a consultative body, consisting of representatives of the different Governments. This body will also control the rates and decide upon the allocation of the profits available for lowering the charges. A STRONG CONCERN The project will not affect the East-ern-Marconi merger, but as the merger company will hold shares in the cable and wireless companies it will necessarily control the communications company. It is expected, however, that

the boards of the two companies will be similar, to ensure uniformity o£ policy. The main idea underlying the scheme is to ensure co-operation and co-ordination of the systems which will really not be competitive but complementary under a unified management. Economies should be secured that cannot be obtained under the present haphazard system. The new company will be very strong financially and well able to undertake any form of development necessary.