THE ALL-RED CABLE.

Auckland Star, Volume XXX, Issue 144, 20 June 1899, Page 4

THE ALL-RED CABLE.

The disappointment which has been caused in Canada and Australasia by the decision of the Imperial Government in regard to the method by which it proposes to assist the construction of the much-discussed "AllRed" cable is widely shared in the Old Country, and the meanness of the Government's proposed "liberal arrangement" is ironically commented on in almost every newspaper of

standing

It is pointed out that the decision of" the Imperial authorities not to become partners in the scheme must add to the cost of construction and entail a heavier annual interest charge on the line. The "Times," in touching upon the point, says: "Putting the capital required for the construction in round figures at £2,000,000, and taking the difference between the price of Canadian 2* per cent, stock a.nd British 2$ per cent, stock we get the first cost of the Imperial modification of the original proposal. The price of British 8* per cent, stock on Saturday was 103ij, of -Canadian ,91f, or a difference of £12 per £100. Twelve per cent, on £2,000,000 is £240 000, and this is the sum the decision of Her Majesty's Government must be estimated as adding to the cost of construction of the ca.ble." The annual interest charge on the amount mentioned at 24 is £6,000, so the Imperial pi-oposal amounts to this: If the cable which Her Majesty's ministers admit "cannot fail to promote Imperial unity" is a success, the Gc%ernment having added £6,000 per annum to the yearly charges against revenue will get for nothing 50 per cent reduction on and priority for all messages it may send by the new route, and to all intents and purposes will have, so to speak, the senior partner's voice in the management of the line. If the cable, as seems most likely, fails' to pay its way- for the first few years of its existence, the Government only contracts to pay fiveeighteenth's of the difference between out-goings and receipts up to £20,000 per annum.

Only in event of the cable being worked at a. loss of nearly £80,000 a year will the maximum subsidy be-

come payable, and, in the ordinary course of* events, the probable loss for the first few years, say five, is not likely to exceed an average of £10,000. The friends of the new cable put the probable, loss at a much lower figure. They calculate a loss of £13,000 on the first year's working, and look for expenditure and income to balance at the end of the third year. In this event the British Government would only be called upon to pay some £6,000 all told for the privileges demanded. Even talcing- the higher figure—an average loss of £ 10,000 for five years—the cost to the Home Government for its privileges in perpetuity of sending at half rates would be but £14.000. Looking at the matter in this light, one cannot wonder that the Home press waxes ironical at the Government's suggestion that this "liberal arrangement" ought to be accepted by the colonies "as a proof, of their cordial desire to co-operate with the colonial Governments in any undertaking of general concern."

Whilst regretting that the Government has not dealt, with the matter in a broader and simpler spirit, and given the aid in the manner recommended by the Cable Committee, the "Times" urges the colonies interested to accept the Imperial Government's offer and commence to lay the cable at once, lest the Yankees, who are not given to talking for ten years about an enterprise which they have once conceived as desirable of execution, should start on the projected cable from Frisco via Hawaii and the Philippines, and by joining hands with "the rtdoubtable British cable ring" lessen the probable earning powers of the .All-Red route.

"Financially speaking-" (says the "Times"), "the worSt result of the Imperial proposal is known when it is recognised as adding £240,000 to the capital cost of construction. On the other hand, {he Imperial Go%'erument renounces any future share in the profits of the scheme. Perhaps when fairly balanced the advantage and the disadvantage may, from a colonial point of view, be found to come not far short of'counteracting one another. The Canadian assumption that the withdrawal of the Imperial Government from the original scheme in'olves the failure of the enterprise can haraly be warranted by facts. It may have added difficulties' which are the more keenly felt because they were unexpected, but if the colonies concerned fan see their way to accept the financial basis proposed to them, and the Imperial Government in its turn can modify some of the conditions which are felt to be unduly onerous, we cannot but think that British interests will be more truly served by the immediate construction of the cable than by the possibly better conditions of a mutual contract which might be obtained by further delay."