CABLE MERGER

Evening Post, Volume CVII, Issue 58, 12 March 1929, Page 17

CABLE MERGER

PASSING OF THE BILL

LABOUR OPPOSITION

A UNIFIED CONTROL

(From "The Post's" Representative.) LONDON, 11th December.

After three days' debate in the Committee _stage tho Imperial Telegraphs Bill has been read a third time, the voting being 235 to 97'—a majority of 138. . •"■■'--■■

The Bill authorises the salo of the telegraph undertakings established under the Pacific Cables Acts, 1901 to 1924, and the West Indian Islands (Telegraph) Act, 1924, and of certain submarina undertakings in the possession of the Postmaster-General.

On clause 1., which lays down that the board with' the consent of and on the terms approved by all the partner Governments may sell the Pacific Cable undertakings to the Communications Company as from Ist April, 1928, Mr. W. J. Baker (Labour) moved an amendment to omit the words "and' on the terms approved by." Ho said; that the original cost of the Pacific Cable in 1902 was £2,000,000. It was duplicated, and that duplication was completed in 1920 at a cost of £2,720,000. The price. to be paid by the' merger was £517,000, plus the outstanding debt, of £1,233,000. That outstanding debt was liable to interest at 3 per cent., a figure at which the Communications Company, the Cable Company, and the 'Marconi Company' were not able to borrow the money. It meant a large gift to them. Cables which cost £7,134,797 were to be handed over for £2,500,000. (Cries of '.'Shame.") When the merger was first mooted the shares in the Marconi Company were nothing like what they were now on the Stock Exchange, but after the most terrible speculation and manipulation on the most: astounding scale the present market price of the whole of the Marconi shares was not equal to the amazing figure that this Government was prepared to let them have.: ': r ' ■■"■'■' ' ' .'■•■ ■'"•'. ' If, proceeded Mr. Baker, they took the 10s shares at £4, the £1 shares at £5, and the 7 per cent, preference at £5, the present market value of the Marconi undertaking was not more than £16,250,000. Yet the Government were prepared to let them have over £17,000,000/ The. Government should insist on' the value of the Marconi Company being the ' value of the shares prior to the boom, which was engineered as the result of information obtained from the imperial Conference by improper means.' ' There was a growing feeling that this was a costly bargain, and it was essential that the Government should provide greater safeguards. . ' i . WILD ALLEGATIONS. :. The Postmaster-General. (Sir W. Mit-chell-Thomson) said that some honourable members seemed to think that the body which considered the matter was a Cabinet Committee, but he wished them to realise that it was essentially an Imperial. Conference' composed, of delegates fully accredited by their respective Governments^ ■ r In his- Speech Mr/ Baker indulged in wild allegations of corruption, and he went so far as to say that money/, had been made by information im*ii properly obtained from the Imperial Confereneei '■■■'■'■> ■ ! '■l ■•'.' ;: . .■;■'.. The hop. gentleman had no right to say that sort of thing.in that House or in public without having, some sort of foundation for it. Everybody knew that there was intelligent anticipation and unintelligent on the Stock Exchange, but the Government had no responsibility for .that. He was perfectly certain that no leakage of information could be traced to any member of the Imperial Conference, and he was' bound to take the earliest opportunity to repudiate that suggestion if it were ever made. The other criticism of the Bill was founded on the immovable prejudice that the fusion should be effected on a basis of public ownership. In pressing the case against a privately-owned undertaking the Opposition has been from the first at a heavy disadvantage, owing to the fact that the history of the Post Office's dealing with the invention of wireless is quite well known, and cannot bo held up to admiration. Apart from the f,act of that record of 1 bureaucratic backwardness, there could be no reasonable answer to the contention that the wireless service, with a scientific technique that was still in an early experimental stage, was manifestly unfitted for Departmental handling. DISASTER TO THE EMPIRE. In summing up for the Government, Mr.Amery said that the debates on this subject- had been based on misapprehension aa to the ■character, of the Bill itself. It was a Bill embodying recommendations of the Imperial Conference, and also an enabling Bill giving the Government power to sell the cables in question. The beam service was not Government owned. It had two endsj and its success depended on the working of the whole service, including both; ends. One end was owned by the Government and the other was privately owned. On the suggestion of the Canadian Government, a conference of all the Government's concerned considered the Whole question. The problem was that, left to pure, unregulated competition, the beam service, by its much greater cheapness, might' put the cables out of action, while not being in a position wholly to replace the cables. It would have been a disaster to the Empire if the cable service had been put out of action or had -been sold to foreigners. The Conference came to the conclusion that the essential thing was to have a single, unified administration, which would get the full use out of the beam service and yet have no financial interest in putting the cables out of action. As to the'suggestion that the beam system should be made an entirely State system, the other Governments within the Empire had for some years definitely, made up their minds not to run wireless as a Government service GREAT ACHIEVEMENT. The Conference recommended a scheme which would secure so far as I possible all the advantages to be derived from the unification of direction and operation,^.'arid at the same time preserve for the Governments concerned control over the unified undertaking and safeguard the interests, of the public in general and the cable and wireless users in particular, at a minimum of cost. The scheme which the Conference agreed upon, and which the Governments concerned accepted, carried out those desiderata. It was not a scheme for the. conversion of Government-owned property to private hands. While direct Government working was for the time being suspended in the case of the British beam system, and .'certain cables -jointly held by the various Governments'were being transferred to the new undertakings, on • the other hand a very much > larger cable system and an equally large beam system were to be.-brought under a measure of control which they had i\ever been subjected tobefore.. The Government *s ; intention was to carry out in the fullest sense the recommendations of the Advisory Committee, which was to have absolute powers in regard to any proposed increases of oxisting rates and also in regard to the allocation of the funds which became available for rate reduction. Thoy believed that they had got very good

value indeed for the State for these cables, and, so far as the Pacific cable was concerned, so did the other Govern; ments.. Speculation,.that went on outside was no concern of the Government, and certainly had no relation to the value of tho assets. It was based on the belief that a rationalised and unified system was likely to bo more efficient ■ and earn greater profits. They had been dealing with a question of great complication, in which every Government of the Empire was interested, . and it was by no means an easy matter to arrive at agreement between tho different Governments. Vet these Governments had managed to arrive at a unanimous conclusion. (Cheers.) That was one of the greatest achievements of interImperial co-operation that had ever boen arrived at. (Cheers.) It would bo one of the finest instruments for cooperation that . they could afford. It was not tho mere "selling of a Government asset to private, interests, but a great piece of constructive work in strengthening the fabric of the Empire. (Cheers.)