13

F.—3

Pacific Cable Scheme.

As said to be put forward by promoters : —- Length, about 8,300 nautical miles. Capital, say, £2,000,000— £1,000,000 in £10 shares. £1,000,000 in 4-per-cent. debentures. Tariff, 4s. per word. Expenses. £ Cost of working, estimated at ... 50,000 Interest on debenture capital at 4 per 40,000 cent. £90,000 Traffic, estimated at ... ... 150,000 Subsidy ... ... ... ... 100,000 £250,000 Leaving a balance of £160,000, or 16 per cent, interest on the share capital.

Estimated cost by Eastern Extension Company, based on actual experience of cable-work-ing :— Length, about 8,300 nautical miles. Capital, say, £2,000,000. Tariff, 4s. per word (3s. for Pacific cables and Is. for Atlantic cables and land-lines). Expenses. £ £ Cost of working stations and 20,000 London expenses Two steamers and rnainten- 40,000 ance of cables Amortization to renew cables 75,000 in twenty years — 135,000 Interest on debenture capital at 4 per 40,000 cent. £175,000 Beceipts. £ Half existing traffic with 100 per cent. increase, say, 500,000 words at 3s. per word 75,000 Subsidy required to cover expenses ... 100,000 £175,000 Leaving nothing whatever for interest on the share capital, which at 5 per cent, would require an additional subsidy of £50,000. Note. —The 6d. per word calculated for Atlantic cables would probably be increased to Is. or Is. 6d., in which case balance for Pacific cables would be 2s. 6d. or 2s. respectively, which would reduce the estimated receipts from £75,000 to £62,500 and £50,000 respectively.

If the Australasian Colonies granted the subsidy of £100,000 asked for by the promoters of the Pacific cable, the amount required from each colony on basis of population, as compared with the Eastern Extension Company's guarantee proposal—assuming that traffic increased 100 per cent, by reduction of tariff—would be as follows:—

No. 5. The Hon. Sir J. Vogel to the Chaikman, Eastern Extension Company. Sib,— Wellington, 14th February, 1887. I have the honour to acknowledge the receipt of your telegram of the 25th January, and of your memorandum and letter dated the 23rd December last. I do not answer your telegram by the cable, as I have nothing of immediate interest to say to it in reply.

3.— F. 3.

Colony, Subsidy for Pacific Scheme. Proposed Guarantee to existing Companies for 4s. Tariff. Victoria New South Wales New Zealand South Australia Queensland Tasmania ... Western Australia £ 29,734 28,497 17,454 9,674 9,585 4,037 1,019 £ 16,353 15,672 9,599 5,321 5,274 2,221 560 100,000 55,000