F.—3a

4

Payable by— 1. New South Wales ... ... ... ... ... N 2. Victoria 3. South Australia ... ... ... ... ... V £18,400 4. Western Australia 5. Tasmania ... ... ... ... ... • •• . 6. The United Kingdom ... ... ... ... ... N 7. India 8. Canada V 18,400 9. New Zealand 10. Queensland ... ... ... ... ... ••• . £36,800 The exact proportions payable by each Government can only be determined by negotiations and mutual agreement, but the above sets forth generally the features of a scheme which seems well calculated to accomplish the desired object. Five of the Australian Colonies are bound by agreement to contribute until the end of the present century a subsidy of £36,600 per annum ; according to the above division these colonies would have their liability reduced to £18,400 per annum, scarcely more than half what they now pay. Their direct gain would be £18,200 per annum, while their indirect gains resulting from reduced charges and facility of intercourse would be infinitely greater. In view of the important advantages in which all would participate, it cannot be urged that the other Governments not now contributing would be greatly burdened by the joint payment of £18,400 per annum. It will not be overlooked that, when the foreign subsidies expire, a further charge of £34,100 per annum will have to be met from some source. Even if it be required to be borne by the ten Governments in equitable proportions, it could not weigh heavily on any of them; but it is anticipated that, when all the subsidies run out, the revenue from the telegraphs will be amply sufficient to meet interest and every other charge. The new Pacific telegraph system as a Government work will be established with capital secured at a very low interest, making it possible for a profitable business to be done at exceedingly low schedule rates. The great reduction in rates thus rendered possible would give a wonderful impetus to telegraphy, and, as a consequence, the business, it is believed, would so greatly increase as to admit of revenue meeting fully every proper charge against it. This will be the more apparent when it is considered that at no time would revenue he chargeable with dividends or bonuses which the shareholders of all private companies mainly look for. After the discussion at the Conference it can no longer be held that the existence of the Eastern Extension Company must preclude the establishment of the new line of communication across ihe Pacific; a line demanded not simply by colonial growth and general commercial progress, but in a still greater degree by the exigencies of the Empire. That it is vitally expedient to secure the new line as a measure of defence can be judged by the magnitude of the consequences which at any time may result from neglect in establishing it. This has been emphatically recognised by the highest authorities in England, and likewise acknowledged by members of Her Majesty's Government and by the representatives of all the colonies at the Conference. It is claimed that the scheme set forth meets all the objections which have been raised, and goes far to harmonise every interest. It would undoubtedly establish the new line of communication at the least possible cost, and enable the principal self-governing colonies to co-operate with the Home Government in carrying out a project of very great Imperial importance. Ottawa, 26th September, 1887. Sandford Fleming.

Appendix, to Memorandum, 26th September, 1887. Estimated value of the cables of the Eastern Extension Telegraph Company, calculated on the data furnished by Mr. John Pender, chairman of the company, viz.: Original cost per mile, £184; and life of a cable, twenty years. The lengths of the cable laid are taken from the official documents of the company:— Miles laid. When laid. Years submerged. Value in 1887. 180 1869 18 £3,312 2,409 ... ... 1870 .... ... 17 ... ... 66,488 2,721 1871 16 100,248 1,283 1876 11 106,232 864 1877 10 79,488 2,444 1879 ... ... 8 269,818 529 1880 7 63,269 920 1883 4 163,024 502 1884 3 78,513 180 1885 2 29,803 12,032 £960,195 Similarly, the value of the property in the three following years has been ascertained to be as follows: — 12,035 miles of cable, value in 1888 ... ... ... ... £849,473 12,035 miles of cable, value in 1889 ... ... ... ... 738,751 11,855 miles of cable, value in 1890 ... ... ... ... 629,685 [Approximate Cost of Paper.— Preparation, nil; printing (1,800 copies), £2 lis.]

Authority : Geobge Didsbuby, Government Printer, Wellington.—lBB7.