THE CABLE DISPUTE.

New Zealand Herald, Volume XXIII, Issue 7789, 8 November 1886, Page 5

THE CABLE DISPUTE.

THE PREMIER INTERVIEWED.

SIR ROBERT STOUT'S EXPLANATION. [BY telegraph— association.] Wellington, Sunday. The Premier was interviewed yesterday by the representatives of the Press re the cable question.

Sir Robert Stoot said the position of the Government and the Cable Company appeared to be misunderstood. The Government, he said, originally agreed, along with New South Wales, to pay a subsidy to the company of £7500 per year, on condition that a cable was laid between New South Wales and New Zealand, and the subsidy was to be oontinued for a period of ten years, and, so far as he could see, no provision was made in the agreement to continue the subsidy after the expiration of that period. On the oontrary, be asserts that the agreement implies that the subsidy was not to be oontinued, as per section 8 of the said agreement. The cost of laying the cable was £300,000; but, at the present time a similar cable could be put down at a oost of £140,000, or a cable of muoh superior quality to the present one at £175,000. When first the cable was laid he had no doubt it was right to give a subsidy, as the revenue was not large at the commencement of its working. For instance in 1876 the amount collected in New Zealand by the Government on behalf of the Cable Company was £4302, and assuming that the same amount was collected at the other end, that would give the year's revenue as £8784. In 1877 the total amount oollected for the cable would be about £13,472, and in 1879 about £18,192; but in 18S1 it fell to £15,612 while for the year 1885 it had risen to about £21,226, which sum did not include the amount of the subsidy. Against this amount is to be placed the sum of £2000, which is estimated as the cost of working, so that the company received £18,626 for the cable, and in addition £7500 subsidy, bringing the total profits to £26,126, which was, the Premier argued, a very handsome return, especially when it is considered that a cable could now be laid for £140,000. If the company understood that the subsidy was to be continued, why, Sir Robert asks, did they not see to have a clause to that effect included in their agreement? As a commercial transaction it would be far cheaper for the Government to lay a cable at the estimated cost of £170,000 than continue the subsidy, because, if they only received one half of the revenue that the company now received, it would pay interest and sinking fund, and the expenses of working the cable. If this was done, and the rates reduced, as the Government could well afford to do, there would be a handsome income. Another point to be considered is this : shall the Cable Company maintain a monopoly and charge what increased rates they choose, without a word being said against it ? If such a thing was allowed it would place the colony in a most unfair position. Referring to the proposed cable across the Pacific Ocean, Sir Robert Stout thought it would be of far greater advantage to New Zealand to pay a subsidy to this route. Tho subsidy asked was £10,000, and it was proposed that the Government should be allowed free use for its messages to an amount equal to the subsidy granted. There would, by this route, be very little difference in tho rates now charged on the Eastern Extension Company cable. No doubt the construction of the Pacific cable could not be undertaken at once, but one portion of it could be laid —viz., from Queensland to the North Cape in New Zealand. This portion of the cable could be used until the connecting link with America was completed. So far as he could see, what the Eastern Extension Cable Company wanted was to get New Zealand bound for a lengthened period to subsidise their line, and by this means prevent their giving any assistance to any other proposed route. The point to be considered was, should the colony submit to the dictation of a company that says, unless the subsidy is given, the rates will be increased! By section 13 the oompany had power to increase the rates when the subsidy ceased, but power was also given to the Government to impose a terminal charge on messages transmitted aoross the cable, and that course has been adopted by the Government! The fsot of the company holding power to raise the tariff Bhows the necessity of the Government not being bound in the matter. Sir Robert is of opinion that it would be better for the Press and the telegraphing public to pay the increased rate rather than that the Government should yield to the company ; and he failed to see why those who object to protection can aak the Government to relieve them from this small extra charge. The increased cost to the Press would not, he thought, exceed, £1500, and assuming that the same amount of business was done on the cable lb last year, the cost directly to New Zealand would be only one-third of last year's receipts ; or, in other words, about £3500. Yet the Government were asked to give a subsidy of £5000 to pay the public a portion of the cable charges on their messages. He felt sure that if the company kept up the increased rates, they would lose by it. In conclusion, Sir Robert Stout said the Government had no vote from Parliament to pay the sum demanded, and the Government decline to pay the subsidy, simply because the company demands it If the telegraphing public would only look at the question from a colonial point of view, they would recognise that it was inadvisable for a subsidy to be paid.

Our Wellington correspondent, who was present at the interview, supplements the above report as follows :— The date of the agreement between the Governments of New Zealand and New South Wales on the one hand, and the Eastern Extension Company on the other, is the 24th of June, 1875. Sir J. Voj?el conducted the correspondence whioh led np to this agreement, and drafted the heads of the agreement, which were approved by the solicitors of the company (Messrs. Freshfield) before being signed by the Governors of the respective colonies. The date of Sir J. Vogel's first letter is the 10th of June, 1875. They then wanted £1 for every £20, which ia the same rate they insist on now. The following is the text of the letter of Sir Julius, then Agent-General, to the Government, whioh formed the basis of negotiations that subsequently took place:—" Westminster Chambers, 10th June, 1875. —I found that the Eastern Extension Telegraph Company much desire to enter into an agreement for the work ; and that their desire proceeded, not so much from anticipations of the direct pecuniary result, as anxiety to forestall opposition to their IndoAustralian system. ... I determined to deal with them if I could get favourable terms without making the Government a party to a monopoly, and especially if I could obtain, in connection with an arrangement for a New Zealand oable, an agrees ment to reduce the rates. The Eastern Extension Company, as soon as I opened negotiations with them, intimated they would be prepared to lay a cable between New Zealand and Australia without receiving any subsidy or payment whatever, if the Government would undertake not to promote or aid any competing line. I replied that I could not be a party to any monopoly or any arrangement which would fix the charges." No terminal oharges were to be made to the company, who were also to be free of taxation within the colony for the purposes of the agreement. At the expiration of the subsidy the Governments of New Zealand and New South Wales were to make no terminal charges to or from the company's cable, "go long as the company do not increase their rates beyond the rates chargeable according to the above stipulations." The above stipulations are, in effect that, from the commencement of working, the charge shall not exceed 7a 6d per ten words, and 9d for every additional word, this tariff to be reduced to 5s for every ten words, and 6d each additional word whenever the average number of messages amounted to 200 per day. When the average fell below 200 the tariff was to be restored to its previous rates. In the course of his statement the Premier said, "I do not see how the Government could have acted otherwise than they have done, if the public, including the Press, were to be protected against the consequences of a monopoly. The loss by the arrangements and which the Government have made will not exceed say £5000, and this loss is better to bear than a future monopoly and to be excluded from the benefits which we can obtain from a second cable as well as from participation in the promotion of an enter* prise highly favourable to this colony. The following is from the Melbourne Argus, dated 6ch November :—'« Sir Julius Vogel's attempt to maintain the New Zealand cable by imposing a tax on the people of

Australia has ended in a deadlock. The idea was to exact a terminal charge of four shillings from the sender of each message in these colonies in order that the rates in New Zealand might bo kept at their former level. Such a trick was worthy of its author, but it oould only be successful if the Australian authorities were willing to collect the charges, and the New South Wales Government promptly refused to do anything of the kind. In reply, Sir J. Vogel declines to forward the messages when they reach New Zealand, and they may be in the telegraph office until the people to whom they are addressed call and pay the dues. The oompany have praotically succeeded in its object. Sir J. Vogel's policy inflicts no damage upon the company, exoept by interfering with the traffic, and that involves an equally serious loss to the public If a message from Australia costs fourteen shillings and a reply six, the pound bo paid for the double dispatch is unfairly divided, and this brings Sir J. Vogel into collision, not with the company, but with the other colonies whioh transaot business with New Zealand. To them this state of affairs is annoying, and this principally because it harasses the general public. Mercantile men, who are in .constant communication with Auckland and Dunedin firms, may find ways and means to make the latter contribute their half of the expense; outsiders, on the other hand, who use the cable occasionally, would be compelled to pay the full fourteen shillings, without any chance of recouping. This is an impost which we cannot be expected to bear on behalf of New Zealand."