CABLES AND WIRELESS

Otago Witness, Issue 3882, 7 August 1928, Page 27

CABLES AND WIRELESS

REPORT OF THE CONFERENCE.

GOVERNMENT’S ACCEPTANCE. RUGBY, August 2. A discussion took place in the House o. Commons to-day on the report of the Imperial Wireless and Cables Conference The principal recommendations of the report are:—First, the formation of a great merger between the Eastern Extension and the Western Extension Telegraph Companies and the Marconi Wireless and Telegraph Company, unifying and combining cable and wireless communications throughout the Fmpire; and,, secondly, the promotion 'of a Communication Company, with’ an initial capita] of £30,000,000; to acquire the communication assets of the Cable and Marconi Companies, as well as a lease of the Post Office beam services. 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. It felt convinced that it was acting in the best interests of the pub[ie generally and of the 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 companies concerned, with a view to drawing up a ■ formal agreement on the lines recommended by the conference. Sir John Gilmour 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 considerttion, or in regard to which feller 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 allhands and from every quarter of the Empire there was a measure of accord on the general principles which the conference had' laid down.

PROFITS OF THE MERGER. LONDON, August 2. . Mr C. G. Ammon (Labour) said that the Government’s right to- approve of ; a. eouplle of 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, and the effect of the merger would be that the sources of. news would be In equally few hands. Labour would in no way be bound by

any contract or agreement that the Government would make arising .from the report.

Mr Amery repudiated the suggestion that the scheme was the result of a deliberate and malicious capitalistic attack. First the Canadian and then the Australian Governments 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 that would not be in the interests of the Empire from the viewpoints either of defence or commerce. Secrecy was provided by the cables* and this was essential for both strategic and commercial welfare. The conference concluded that the only efficient means of saving the cables and allowing full expansion of the beam wireless was unitary control. There was no possibility of the dominions partaking in an interimperial, intergovernnient unitary system, consequently the conference sought to obtain the advantage of interimperial State control by other means. The profits of the merger company were limited to 6 per cent., and anything above that must be devoted to the-lowering .of the rates and improving communications. This would give all the advantages of Empirewide unity and co-operation, as well as the effectiveness of private enterprise in- the- interests of the public and the Empire. The creation of this Imperial system would in future be looked upon as a great landmark of Empire development if the agreement had been made at Geneva instead of London, between foreign instead of Empire Governments, Labour would have held it up as an example of fruitful co-operation between the nations.

The motion for the adjournment was withdrawn.

LABOUR VIEW CONDEMNED. LONDON, August 3. Commenting on the cables debate, the Daily Telegraph says that the Government is fortified by the knowledge that the whole Empire unanimously approves the highly complex and in some ways revolutionary proposition. The Opposition cries of betrayal 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 doctrine of ire and crabbing. EXPLANATION OF PROPOSALS. EMPIRE INTERESTS SAFEGUARDED. WELLINGTON, August 3. In the House this afternoon the Prime Minister said: I wish to aslc the indulgence of the House to make a statement on the Imperial Wireless and Cables Conference, and to lay on the table as a parliamentary paper a summary of the report of that conference.

As honourable members are no doubt aware, this conference was set up towards the end of last year to examine the- situation which has arisen as the result of the competition of beam wireless with the 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, Australia, New Zealand, South Africa, .the Irish Free State, India and the non self-governing colonies and

protectorate. ; and New Zealand was represented by the High Commissioner, who was assisted as adviser by Mr John Milward, late manager in the Pacific of the Pacific Cable Board. The full report of the conference 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: — I. That the merger company to be formed will acquire all the ordinary shares of the 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 the wireless system worked by the Pacific Cable Board, the Imperial Atlantic cables, and the led.se of the British Post Office beam services. The Communications Company will meet the annual service of the outstanding debt on- the Pacific Cable Board, and will pay, in addition, a capital sum of £517,000 for Pacific cables, £300,000 for West Indian . Cables, and £450,000 for Imperial cables.. 4. Board of Directors.—The Merger Company,. Communications Company, Cable and Marconi Companies will be identical, and two of the directors, one of whom shall be chairman of the Com- ; munications Company, shall be ap- ; prove< 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 i cent, to the disposal of the Advisory Committee.

6. An advisory committee, including representatives of the ( ernments concerned, shall be set up, which shall bo consulted by the Communications Company in regard to questions of policy, including alterations of rates; and no increase in the present rates shall be made except with the assent of this committee;

7. British 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 the wireless telephone services- in Great Britain is reserved to th Post Office in London. Honourable members will be able to ascertain fo r themselves in detail the principles which led conference to the adoption of this report, but I think it desirable to call attention to a few of sa _hent features of the decision. (1) In the first place-, the success of beam- wireless and t ts potentialities in tne future has conclusively shown that it is able to reduce rates to such an extent as to render the conduct of the cables as a commercial proposition im practicable in future unless they are preserved from direct competition with the beam wireless.

(2) At the same time it is clear tin* beam wireless has two serioiig dispelvantages- which would preclude its use as a sole means of communication. In the P* ace , it is not at present in entirely reliable means of communication In ring 3 /zi°r rS a y. and it is not secret. (6) It is vitally important to every portion of the Empire that mean-? of intercommunication should not be controlled by foreign interests, ar.d any solution must provide as an -sseniial piehminary 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 tn find the best _ method of retaining unaffected th< Empire s means of cable communication without depriving the communities of the benefits of the newer and cheaper system of communication established by beam wireless. The New Zealand Government believes that the solution recommended by conference offers the most promising means of attaining this end, and w e have advised’ his Majesty’s Government that w e are prepared to approve in principle of the recommendations of the conferience. A similar conclusion has been arrived at bv his Majesty’s Governments in Canada, Australia, South Africa and the Irish Free State, and by th e Government of India

“It will be understood, of course, that the proposals made by 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 “ 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 Government in Great Britain, Canada, and Australia, the share of New Zealand being one-ninth. It will be remembered that the capita] for this undertaking was provided by the British Government, and that" the actual expenditure by New Zealand in this connection hag 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 future, in view of the competition" of wireless, is, in our opinion, negligible, and we are quite "ontent to dispose of our interest in the cable on the terms outlined. I wish to make it cleat 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 not prejudiced should the proposed transfer take place.”

EFFECT OF ARRANGEMENT. WELLINGTON. August 2. When the Prime Minister sat down Mr E. J. Howard (Christchurch South) asked: What do we get out of it? Mr P; 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 the 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 questions 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 companies, and it did not interfere with brondbasting. The company would be all-British The Prime Minister agreed to set aside a day for the consideration of the statement and report.