EMPIRE COMMUNICATIONS

Dominion, Volume 21, Issue 261, 4 August 1928, Page 9

EMPIRE COMMUNICATIONS

PROPOSED MERGER SCHEME

RECOMMENDATIONS OF CONFERENCE

PRINCIPLE APPROVED BY NEW ZEALAND

In common with other parts of the Empire, New Zealand is prepared to approve in principle the recommendations of the Imperial Wireless and Cables Merger Conference, according to a statement made by the Prime Minister XRight Hon. J. G. Coates) in the House of Representatives yesterday.

The Prime Minister said that the conference was set up towards the end of last year to examine the situation which had arisen as a result of the competition of beam wireless with cable services, to report thereon, and to make recommendations with a view to a common policy being adopted by the various Governments concerned. The conference consisted of representatives of Great Britain, Canada, the Commonwealth of Australia, New Zea- ■ land, Union of Sjuth Africa, the Irish Free State, and India, and the non-self-governing colonies and protectorates. New Zealand was represented by the High Commissioner (Sir James Parr), who was assisted as adviser by Mr. John Millward, late manager in the Pacific of the Pacific Cable Board. Recommendations Summarised. “The-full report of the conference,” the Prime Minister proceeded, “is not yet available in New Zealand, but a summary ,of its conclusions was made public a few days ago and is contained in the paper now to be laid before the House. The recommendations of the conference .shortly put, are as follow:— “(1) That a Merger Company to be formed will acquire all the ordinary shares of the Eastern, Eastern Extension, and Western Telegraph Companies, and all the ordinary and preference shares and debentures (if any) of the Marconi Wireless Telegraph Company. “(2) There will also be formed a Communications Company, to which the Cable and Marconi Companies will sell all their communication assets in exchange for shares.

“(3) The Communications Company will take over the Pacific Cable Board’s cables, the West Indian Cable / and Wireless system worked by the Pacific Cable Board, the Imperial Atlantic Cables, and the lease of the British Post Office beam services. The Communications Company will meet the annual services of the outstanding debt on the Pacific Cable Board and will pay in addition a capital sum of £517,000 for the Pacific Cables, £300,000 for the West Indian Cable and £450,000 for the Imperial Cables. “(4) The Board of Directors of the merger company, the Communications Company, the Cable and Marconi’s Companies will be identical, and two of the directors, one of whom shall be tho chairman of the Communications Company, shall be approved by His Majesty’s Government in Great Britain. “(5) A standard net revenue of £1,865,000 shall be allowed to the Communications Company and any excess over that revenue shall be allotted, 50 per cent, to the company and 50 per cent, to the disposal of the Advisory Committee. “(6) An Advisory Committee including representatives of the Governments concerned shall, be set up which shall be consulted by the Communications Company in regard to questions of policy, including alterations of rates, and no increase in present rates shall be made except with the assent of this committee. "(7) Briitsh control of all the companies must be guaranteed and the , Governments may assume control of the cables and wireless systems in time of war or other national emergency. “(8) The conduct of wireless telephone services in Great Britain is reserved to the Post Office in London. “Members will be able to ascertain for themselves in detail the principles which led the conference to the adoption of this report,'’’ the Prime Minister continued, “but I think it desirable to call attention to a few of the salient features of the decision—. “(1) In the first place the success of the beam wireless and its potentialities in ’ the future .have conclusively shown that beam wireless is able to reduce rates to such an extent as to render the conduct of the cables as a commercial proposition impracticable in the future unless they are preserved .from direct competition by the beam wireless. “(2) At the same time it is clear that the beam wireless has two serious disadvantages which would preclude its use as a sole means of communication: (i) In the first place it is not at present an entirely reliable means of communication during all hours of the day; and (ii) it is not secret. “(3) It is vitally important to every portion of the Empire that the means of inter-connnunication should not be controlled by foreign interests, < and any solution must provide as an essential preliminary for the retention of both cables and wireless in British hands. “(4) It is essential therefore both for commercial and strategic purposes that the cables should be retained in effective use under British control and the problem before the conference and before the Governments concerned was to find the best method of retaining unaffected the Empire’s means of cable communication -without depriving the

( communities of the benefits of the newer and cheaper system of communiontion established by the beam wireless.

Promising Solution. “The New Zealand Government ✓ •believe that the solution recommended by tile conference offers the most promising means of attaining this end, and we have advised His Majesty's Government in Great Britain that we are prepared to approve in principle the recommendstions of the conference. “A similar conclusion has been arrived at by His Majesty’s Governments in Great Britain,' Canada, the Commonwealth of Australia,, the Union of South Africa, and the Irish Free State, and by the Government of India. “It will be understood of course that the proposals made by the conference have been approved in principle only, and that a considerable number of details will remain. for discussion and agreement before any final arrangement is made with the companies concerned. “More Than Paid Its Way.” “Apart from the general question of ensuring reasonable rates and means of communication New Zealand’s interest is largely concerned with the Pacific cables, in which it is, of course, a partner with His Majesty’s Governments in Great Britain, Canada, and Australia, the share of New Zealand being one-ninth. It will be remembered that the capital for .this undertaking was provided by the British Government, and that the actual expenditure by New Zealand in this connection has been confined to levies made from time to time to meet initial losses. The total amount so subscribed by New Zealand is some £69,000, and by the arrangement now proposed it, seems clear that practically the whole of this amount will be recouped to us. During later years the Pacific Cable has more than paid its way, but its value aS a profit-making asset in the future in view of the competition of the wireless is in our opinion negligible, and we are quite content to dispose of our interest in the cable on the terras outlined. ‘ “I wish to make it clear also that we • have not lost sight of the position of the employees of the Pacific Cable ! Board, and will take what steps are ! possible to see that their interests are 1 not prejudiced should the proposed | transfer take place.” 1

An Empire Monopoly.

Mr. E. .1. Howard (Christchurch South) : What do we get out of it? Mr. 3?. Fraser (Wellington Central) : We just get out. The Prime Minister : I put this to you. After all, it is all-important that these communications should rest within the hands of the Empire. I would suggest that there is very strong reason for the movement which is being made. The Leader of tl\e Opposition (Mr. H. E. Holland) : Does not this mean handing over, these undertakings to private enterprise? The Prime Minister: It does—with the provisos I have mentioned in my statement. In reply to further interjections, the Prime Minister said the proposals would mean that the company taking over the communications would have a monopoly within the Empire. The scheme did not propose the licensing of any new wireless companies, and it did not interfere with broadcasting. The c -npany would be all-British. The Prime Minister agreed to set aside a time for discussion of the summary of the recommendation. ANNOUNCEMENT IN HOUSE OF COMMONS GOVERNMENT ACCEPTS REPORT (United Press Association.—By Electric Telegraph.—Copyright.) (Australian Press Assn.—United Service.) London, August 2. It was announced in the House of Commons that the Government would accept the report of the Wireless and Cable Conference, and that it would shortly negotiate an agreement. (British Official Wireless.) Rugby, August 2. A discussion took place in the House of Commons to-day on the report of the Imperial Wireless and Cables Conference. Sir John Gilmour, on behalf of the Government, said that, having fully considered the report, the Government had decided to accept it, and put its recommendations into effect. The Government felt convinced that it was acting in the best interests of the public generally and of users of the services in particular, for it was only in this way that all necessary communication between the various parts of the Empire could be maintained and developed without undue cost to the public. The Government proposed to enter forthwith into negotiations with the com-r-nies concerned with a view to drawing up a formal agreement on the lines recommended by the conference. Dominion Governments Favourable. Sir John added that, in announcing this decision, the Government was fortified with the knowledge that the attitude of the other Governments concerned was generally favourable to the recommendations of the conference, although there were necessarily certain aspects to which these other Governments wished to give further consideration or in regard to which fuller information was required. In response to telegraphic inquiries replies had been received from the Canadian, Australian, New Zealand, South African, Irish Free State, and Indian Governments, showing that on all hands and from every quarter of the Empire there was a measure of accord on the general principles which the conference had laid down.

REPORT ATTACKED BY LABOUR

(Australian Press Assn. —United Service.) (Rec. August 3, 5.5 p.m.) London, August 2. In the House of Commons, Mr. W. J. Baker (Lab.), on the motion of adjournment, raised the question of the cables and wireless merger, claiming that events had justified the statement . he had made on May 21 that it was a cleverly concocted campaign by newspaper, financial, banking, and insurance interests which had forced the Government into its present position. The cable companies had no right both to receive State assistance and retain casli reserves of eleven millions. The conference’s report was a fitting conclusion to a disgraceful campaign of treachery and knavery. Sir John Gilmour said, that, recognising the forbearance and generosity of his colleagues in the conference, he regretted strongly unreasonable criticism. There was still a possibility of a great expansion before wireless, not ' only for ordinary messages, but for the ! more rapid inter-imperial transmission l of news, which was most important for • the citizens of the whole Empire. Major-General Sir R. Hutchison (L.) said that he believed that the recommendations gave the best solution at- , tainable. He had hoped that something' ' would have been done to develop wireless telephony. Mr. C. G. Ammon (Lab.) said the Government’s right to approve of a couple of the directors was no safeguard, as they would be nominated by the cable companies. Thus their interests would dominate the position. The newspapers in Britain were now in the hands of five people. The effect of the merger would be that the sources . of news would be in equally few hands. Labour would in nowise be bound by any contract or agreement the Government would make arising from the report. Labour Suggestions Repudiated. Mr. L. Amery (Dominion Secretary) repudiated the suggestion that the scheme was the result of a deliberate, malicious capitalistic attack. First the Canadian and then the Australian Government suggested a conference to discuss the grave problem arising from unregulated competition between wireless and cables. Unrestricted competition was likely to end the cable services, and this would not be in the interests of the Empire from the viewpoints either of defence or commerce. Tlie secrecy provided by the cables was essential for both strategic and commercial welfare. The conference concluded that tlie only efficient means of saving the cables and allowing full expansion of beam wireless was unitary control. There was no possibility i of the Dominions partaking in an interImperial inter-government unitary sys- < tem. The conference therefore sought ; to obtain the advantages of inter- ; Imperial stat? control by other means. < The profits of the merger company j were limited. Six per cent, above ,that must be devoted to lowering the rates and improving communications. This would give all the advantages of Em-pire-wide unity and co-operation, as well as the effectiveness of private enterprise. In the interests of public i and Empire creation this Imperial sys- j t tem would in the future be looked • 1 upon as a great landmark of Empire ' development. If the agreement had t been made at Geneva instead of in t

jonclon, between foreign instead of Emlire Governments, Labour would have leld it up as an example of fruitful I o-operation between nations. I The motion for adjournment was withdrawn. LONDON PRESS COMMENTS (Australian Press Association.) (Kec. August 3, 8.5 p.m.) London, AuguSt 3. ; Commenting on the cables debate, I the “Daily Telegraph” says the Government is fortified by the knowledge I that the whole Empire unanimously

approves of the highly complex and in some ways revolutionary proposition. The Opposition cries are a betrayal of a ramp sound more than usually foolish in the face of such unanimity.” The “Daily Chronicle” declares that while several details require examination, the scheme as a whole merits something very different from the Labourites’ spiteful doctrinaire crabbing.