F.—3

16

With regard to the cost of construction and working, and probable receipts, of the proposed Pacific cable, Mr. Pender's estimates are such as no evidence can be found to justify. For instance, his estimate of the cost of two repairing steamers is £40,000 per annum. Colonel Glover's estimate (as stated in his evidence before a Committee of the House of Assembly, New South Wales, 10th May, 1878) is £10,000 per annum for each steamer. It is certainly not from " past experience " that Mr. Pender is enabled to estimate the necessary sum for amortization to renew cables at £75,000 per annum. The directors of the Pacific Telegraph Company have perfect confidence in the success of their undertaking from a commercial point of view, the calculations upon which their estimates are based having been most carefully made by the best possible authorities. In estimating receipts no allowance whatever has been made for the vast increase of traffic which cannot fail to be the consequence of bringing Canada, the United States, South America, and the Pacific Islands into direct communication with Australia. But, indeed, no arguments which can be advanced in favour of the existing systems of cables have any bearing whatever upon the question of constructing a line across the Pacific. From a commercial point of view it is absolutely essential that the various parts of the Empire should be connected by lines as far as.possible free from interruption both in peace and war. Further, it is most desirable that the existing tariffs should be greatly reduced. Both these objects, it is submitted, can be better effected by a Pacific cable than by any other means, with the additional advantage, which no other route could offer, of connecting Canada with Australia, and so completing the girdle of the world's telegraphic communications. From a strategic point of view the advantages are, if possible, stronger. Military authorities are now unanimously of opinion that, in the event of a European war, the Suez Canal could not possibly be relied on as a means of transport to the East. The military road to India and the East, therefore, must undoubtedly be via the Canadian Pacific Railway to Esquimault, and thence by steamer across the Pacific. The importance of establishing telegraphic communication in this ocean cannot be overrated, as a cable from Vancouver Island to Australia would supply an alternative means of communication with India and the East in the event of the lines through the Mediterranean and Egypt being severed, as they infallibly .must be in time of war. These are considerations which have apparently escaped the notice of Mr. Pender, though they are not likely to be overlooked by any one who has a just appreciation of the bearing of Imperial communications upon the science of Imperial defence. A cable from Vancouver Island to Australia would not only be of great commercial advantage to the nation, but it would also be a move of paramount importance in Imperial strategy. It is, in fact, a development which must inevitably take place, in obedience to the laws of expanding civilization. No one can deny that the scheme is one of vital importance to the whole British Empire, and its accomplishment is not likely to be materially retarded by Mr. Pender's appeal ad misericordiam for the continuance of a monopoly in the advantages of which not even his own shareholders have been allowed to participate fully. I have, &c, Habold Finch Hatton, Secretary.

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