THE CABLE QUESTION

Hawera & Normanby Star, Volume IX, Issue 1575, 15 March 1887, Page 2

THE CABLE QUESTION

The present position of the controversy between the Government and the company which owns the cable connecting New Zealand with the telegraph systems of the world is somewhat as follows : The old agreement under which New Zealand paid d£sooo a year has expired, and the Government and the company being unable to came to terms as to what shall be done for the future, it has been arranged that subsidy shall be continued at the old rate provisionally that the whole question is to be considered and settled by Parliament at the ensuing session. Each party is now therefore busily engaged in preparing its case for submission to Parliament. But Sir Julius Vogel lias gone a Yiht\e further and. he has carried war into the enemy's camp. He lays down the principle that cables should be owned by and worked by Government, and says that all that can be said in favour of the Governments retaining the charge of the land lines can be repeated with greater force with regard to taking possession of the means of cable communication between the various portions of Her Majesty's dominions. His idea is that the colonies should purchase existing lines and secure a second line either by way of the Cape or Canada, the total cost of which he estimates at .£5,000,000. Having acquired these lines, he would bring the rates down to a fraction of what are at present charged. " I believe," he says, " the Governments, if they own the cables, can charge a rate of Is 6d a word for urgent messages and Is for ordinary and Press messages the whole way between the colonies and Europe, and soon make a profit on the transaction. Even if they do this great work at a loss, there are, I contend, few objects on which they can spend money with

more advantage. ... It would be almost impossible to set a limit to the benefits which cheap Atlantic cabling has conferred on the people at both ends of the English-American cables. Financially and commercially the results are gigantic, and the social, literary, and educational purposes served are scarcely less important. No one can question that, with cheap cabling, the development of the Australian colonies will increase enormously in speed, and with less liability to reverse." Sir Julius' estimates run in this way : Capital cost of the lines, 365,000,000. Annual expenditure, interest (hhe £5,000,000 being obtained at 3t per cent vmdev a joint colonial guarantee, or 3 per cent, under a British guarantee), £175,000 ; maintenance and renewal of lines, £50,000 ; working expenses, £200,000 ; total, £425,000. Receipts : Estimate, with tariff of Is 6d and Is, and intermediate traffic, 2,500,000 words at Is 6d, £187,500 ; 2,500,000 words at Is, £125,000; intermediate traffic, £100,000. Total, £412,000. This estimate shows a small loss at first, which, divided between the Governments, would be inconsiderable. It would be covered by the savine which would be effected if the Imperial G-overnment guaranteed the loan, or by the subsidy, which it should give in lieu of a guarantee. In any case the development of traffic between the large number of important centres concerned would soon convert the deficiency into a surplus. The above estimate only absorbs about half the capacity of the cables. As a preliminary to this scheme the Eastern Extension Company musst be willing to sell their lines. If they are not •willing to sell well it seems it would- be so much the worse for the company. Sir Julius Vogel would simply subsidise another company to enter into competition with the Eastern Extension Company. "If they fail to come to terras with the Governments, any opposition of theirs will be only temporary. They cannot, with their costly arrangements, afford such low rates ; and, if the Government do not buy them out, there will be much less money on which to pay interest."

The scheme is a pretty big one, and lias much, to recommend it, but we should say it is hardly likely to come to anything for some years to come. The difficulties of arranging matters of this description between half-a-dozen Governments are immense It is just one of those subjects which could be very conveniently dealt with by a Federal Council representing the colonies ; but then Sir Julius Vogel will have nothing to do with the Federal Council.