TELEGRAPH CABLE SUBSIDY AND CHARGES (FURTHER PAPERS RELATING TO). (In Continuation of F.-3, Sess. I., and F.-2, 3, and 3a, Sess. II., 1887.]

Appendix to the Journals of the House of Representatives, 1890 Session I, F-05

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1890. NEW ZEALA ND.

TELEGRAPH CABLE SUBSIDY AND CHARGES (FURTHER PAPERS RELATING TO). (In Continuation of F.-3, Sess. I., and F.-2, 3, and 3a, Sess. II., 1887.]

Presented to both Houses of the General Assembly by Command of His Excellency.

No. 1. The Chairman, Eastern Extension, Australasia, and China Telegraph Company (Limited), to the Agents-General of the Australasian Colonies. Winchester House, 50, Old Broad Street, London, 8.C., Gentlemen,— 13th May, 1890. As you are aware, a proposal was submitted some time ago by the Eastern Extension Telegraph Company to your Governments for a considerable reduction of the cable charges to the Australasian Colonies upon certain guarantee conditions, the company offering to accept one-fourth of any loss that might be sustained by such reduction; and we now learn from a telegram just received from the company's agent at Melbourne that the proposal is to be discussed at a conference of Ministers on the 20th instant. In view, however, of the early assembling of the International Telegraph Conference to be held at Paris, when the question of reduced tariffs might come up for discussion (although the Conference has no power to compel the company to alter its rates, and, consequently, if any reduction is to be brought about it must be made between the company and the Australasian Governments outsidethe Conference), the company considered it advisable to invite the Agents-General of the colonies to meet its chairman and Sir James Anderson to discuss the question, in order to ascertain whether some solution could not be arrived at satisfactory to all parties. At the conference with you yesterday you urged that a considerable reduction in rates ought to take place at once, and that the method that in your opinion would best invite the support of the telegraphing public and the colonial Governments, and most effectually test the result of a reduction, would be to reduce the tariff at the earliest date to ss. per word, the companies taking half the risk of any loss that might ensue and the colonies the other half, the reduction to be for one year certain, with the right to revert to a tariff not exceeding Bs. per word if the test of the year showed that the reduction to ss. could not be maintained. These views have been carefully considered by my Board; and, as an evidence of their desire to meet the wishes of the colonies as far as possible, and to test the effect on the traffic of a large reduction of the tariff, the Eastern Extension Company is prepared, subject to the approval of its allies, the Eastern and Indo-European Companies, to reduce the tariff between Europe and Adelaide from the Ist January next from 9s. 4d. to ss. per word for ordinary telegrams, from 7s. Id. to 4s. sd. per word for Government telegrams, and from 2s. Bd. to Is. lOd. per word for Press telegrams, on condition that the Australasian Governments will guarantee to make up one-half of any loss that may be sustained by such reduction, the companies taking the risk of the other half —the guarantee to be based on the present cable traffic (1889), and to be for a fixed term of one year, at the expiration of which, if the result of the reduction is found to be encouraging, it might be tested for a further period to be agreed upon. Should the arrangement not be extended, the companies to at once revert to a tariff not exceeding Bs. per word, provided that such a rate gave the companies the same amount of revenue as they at present derive from the Australasian traffic. The companies' present revenue from the Australasian traffic amounts £ to ... ... ... ... ... ... 231,163 And at the proposed reduced rates, and assuming that South Australia would accept a transit-rate of 75 centimes per word, it is estimated that it would anjpunt to ... ... ... ... 120,429 Leaving, if no increase of traffic took place, a loss of ... ... £110,734 To be divided between the companies and the Governments, or £55,367 respectively.

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If the traffic were increased by— £ 10 per cent, the Governments would have to make up ... ... 49,345 20 per cent. „ „ ... ... 43,324 25 per cent. „ „ ... ... 40,314 '"33 per cent. „ „ ... ... 35,295 50 per cent. „ „ ... ... 25,260 * 75 per cent. „ „ ... ... 10,206 92 per cent. „ „ ... ... Nil distributed as follows :—

It will bo seen that this proposal is much more favourable to the colonies than the former one, the companies taking one-half instead of one-fourth of the risk of the redaction, and the liability of the Governments being limited to one year instead of eleven years ; and I therefore trust that it will commend itself to your favourable consideration, and that you will be able to recommend it to your Governments for approval. I have, &c, The Agents-General of the Australasian Colonies. John Pendee, Chairman.

No. 2. The Chairman, Eastern Extension, Australasia, and China Telegraph Company (Limited), to the Agents-Genebal of the Austbalasian Colonies. Winchester House, 50, Old Broad Street, London, E.C., Gentlemen,— 25th May, 1890. Since our conference! yesterday, I have had a meeting with our allied companies, which leads me to believe that we shall be able to eventually come to an understanding with them, more particularly the Eastern and Indo-European Telegraph Companies. The Persian Gulf Department may be more difficult to deal with; but, as that Administration is practically the Indian Government, probably the influence of the colonies upon India may be effectual in bringing them also into the proposed arrangement. However, there is no time to be lost; and it is very important, while the Conferences are sitting in Adelaide and Paris, that the principle should be definitely settled. Therefore, believing that the present difficulties will be overcome, I am prepared to accept the ■Is. tariff, although it involves a very large additional loss in the first instance. Still, I believe that the lower rate will probably more quickly recoup the loss than the higher tariff; and as the 4s. rate was embodied in our first proposition to the colonial Governments, and has evidently made an impression on the minds of the colonists, we are the more anxious that whatever arrangement is made should command the approval and support of all parties concerned. The term for testing the effect of a cheap tariff will be for one year certain ; but if at the end of that period, as I have stated in my telegram to Adelaide, our loss is not a serious one we shall have no objection to extend the term to three years, at the end of which time, if it is found that the loss is likely to be recouped within a reasonable period, the arrangement shall be continued for the remainder of the term of our subsidy agreement with the colonies. It is understood that the reduced tariffs come into force on and from the Ist January next. This will give ample time for the financial arrangements with the different colonial Governments and Her Majesty's Government to be made, but these, of course, rest entirely with Governments themselves. I am, &c, John Pendee, Chairman. P.S. —I enclose a copy of the telegram lam to-day forwarding to our agent at Adelaide, giving the company's decision in regard to Mr. Derham's resolution.

Enclosure. Extension Company to Agent, Adelaide (Sunday, 25th May). Afteb further conferences with Agents-General, and rather than lose present favourable opportunity of settling matter, chairman willing to waive conditions specified in telegram to Todd, 23rd, and will agree to a 4s. tariff for ordinary, 3s. 6d. for Government, and Is. lOd. Press messages. Governments should remember that the half-rate is only given over the Extension lines in consideration of the subsidy which the Extension Company receive from the colonies, and therefore

Colony. Population (1888 Basis). 10 20 per Cent, j per Cent. 25 per Cent. 33 per Cent. 50 per Cent. 75 I 92 per Cent. Iper Cent, i Victoria ... New South Wales... New Zealand Queensland South Australia lasmania Western Australia... 1,090,869 1,085,740 607,380 387,463 318,308 146,149 42,137 £ £ 14,634 i 12,850 14,565 I 12,790 8,147 | 7,154 5,197 i 4,564 4,270 i 3,749 1,967 i 1,721 565 ! 496 & 11,957 11,901 6,658 4,246 3,490 1,601 461 & 10,468 10,417 5,832 3,718 3,054 1,402 404 £ 7,491 7.456 4,171 2,662 2,186 1,005 289 3,027 : Nil. 3,012 '■■ „ 1,686 i „ 1,076 | „ 884 ! „ 405 ! „ 116 i „ Totals 49,345 ; 43,324 40,314 35,295 25-^260 10,206 ! 3,678,046 •

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impossible reduce Government messages below 3s. 6d. With regard to duration of experiment, chairman must adhere to previous proposal, namely : if at end of first year no serious loss involved company will continue experiment for another two years, but this must remain at company's option. Should loss be nearly recouped at end of three years, company will extend arrangement for remainder of subsidy term. Above figures are based on South Australia accepting transit-rate of 50 centimes.

No. 3. Sib J. Pender's Pkoposed Statement to the Conference. Proposed Seductions of Tariff to Australia. As reports are in circulation in regard to reductions in tariff to Australia, I am instructed by the companies interested to state, for the information of the Conference, that, for the purpose of testing the effect of a substantial reduction of the rates to Australia, negotiations are in progress with the Australasian Governments for lowering the rates to 4s. per word for public telegrams, 3s. 6d. per word for Government telegrams, and Is. lOd. per word for Press telegrams for a tentative period of ono year, to be extended if found to work satisfactorily, on the condition that the Australasian Governments guarantee the companies against one-half the risk of loss, the companies taking the other half should the receipts at the reduced tariffs fall short of the companies' present earnings from the Australasian traffic. These figures may, however, be altered as the negotiations are at present incomplete, and for the same reason further details cannot now be furnished, and it is feared that definite terms will not be completed before the Conference closes, but the companies consider it only respectful to the delegates that they should be made acquainted with what is going on, and have therefore desired me to make this announcement; and as soon as the negotiations are concluded the International Bureau at Berne will be fully informed, so that the various Governments represented at the Conference may be officially advised of the arrangements come to. These negotiations relate to the Australasian tariffs only, and do not in any way interfere with the tariff arrangements contemplated for other countries, which will be announced to the Conference at the proper time. As the delegates are aware, the policy of the companies has always been to make the submarine cables as international as possible; and they would be pleased if the benefit of the proposed reductions could be extended to all the nations of Europe. Many important interests are, however, involved in this question, and the companies are therefore carefully considering the matter to see how far it is possible to attain such a laudable object. June, 1890. [Approximate Cost of Paper. —Preparation, nil; printing (1,325 copies), £118s. 6d.j

By Authority: Geobge Didsbuky, Govermnont Printer, Wellington.—lB9o.