PUBLIC ACCOUNTS COMMITTEE (REPORT OF THE) ON THE QUESTION OF ESTABLISHING A PACIFIC-CABLE SERVICE, TOGETHER WITH MINUTES OF PROCEEDINGS AND APPENDICES.

Appendix to the Journals of the House of Representatives, 1898 Session I, I-07

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1898. NEW ZEALAND.

PUBLIC ACCOUNTS COMMITTEE (REPORT OF THE) ON THE QUESTION OF ESTABLISHING A PACIFIC-CABLE SERVICE, TOGETHER WITH MINUTES OF PROCEEDINGS AND APPENDICES.

Report brought up on 30th August, 1898, and ordered to be printed.

ORDERS OF REFERENCE. Extracts from the Journals of the Bouse of Representatives. Tuesday, the sth Day of July, 1898. Ordered, " That Standing Order No. 211 be suspended, and that a Committee, consisting of fourteen members, bo appointed to examine into and report upon such questions relating to the Public Accounts as they may think desirable, or that may be referred to them by the House or by the Government and also into all matters relating to the finances of the colony which the Government may refer to them; five to be a quorum: the Committee to consist of Mr. J. Allen, Mr. Duthie, Mr. Fisher, Mr. Fraser, Mr. Graham, Mr. Guinness, Hon. W. J. M. Larnach, Mr. McLean, Mr. McNab, Mr. Montgomery, Captain Russell, Mr. Tanner, Hon. J. G. Ward, and the mover."— (Rt. Hon. R. J. Seddon.)

Tuesday, the 2nd Day op August, 1898. Ordered, " That the question of establishing a Paoifio-oable service be referred to the Pablio Accounts Committee." —(Rt. Hon. R. J. Seddon.)

The Public Accounts Committee, to whom was referred the question of establishing a Pacificcable service, has the honour to report that, in the opinion of the Committee, — 1. It is desirable that telegraphic communication between England and New Zealand vid Canada and the Pacific should be established. 2. The Colony of New Zealand should agree to join with such of the Australian Colonies as are prepared to do likewise, upon the basis of a guarantee of four-ninths of the cost of construction and annual deficiency (if any) by such colonies, New Zealand's proportion of the guarantee not to exceed in any case one-eighth of the whole cost. 3. For the purpose of working the cable, it is desirable that a central authority should be empowered, on behalf of the contributing countries, to carry out the laying and working of a cable across the Pacific. 4. The maximum rates for ordinary messages between New Zealand and the United Kingdom should be 3s. per word ; for Government messages, 2s. per word ; for Press messages, Is. per word and 6s. per hundred words. 5. The construction, control, and maintenance of the cable should be intrusted to the Canadian Government, upon the understanding that each contributing colony shall have the right to be represented and to vote upon all matters appertaining to policy, acceptance of tenders, or anything material in the management of the cable. .6. The contributing country and colonies should jointly own and control the cable. 7. It is desirable that, with a view of furthering the establishment of a Pacific-cable service, a conference of representatives from the several countries concerned should be held in New Zealand at an early date. 30th August, 1898. W. J. M. Labnach, Chairman. I—l. 7.

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MINUTES OF PEOCEEDINGS.

Wednesday, 27th July, 1898. The Committee met pursuant to notice. Present: Mr. Duthie, Mr. Fisher, Mr. Fraser, Mr. Graham, Mr. Guinness, Hon. W. J. M. Larnach, Mr. McLean, Mr. McNab, Mr. Montgomery, Captain Eussell, Et. Hon. E. J. Seddon, Mr. Tanner, and Hon. J. G. Ward. The order of reference having been read by the Clerk, the Et. Hon. E. J. Seddon moved, and it was resolved, That the Hon. W. J. M. Larnach be Chairman of the Committee. The Committee then adjourned till further notice.

Thuesday, 4th August, 1898. The Committee met pursuant to notice. Present : Hon. W. J. M. Larnach (Chairman), Mr. Fraser, Mr. Graham, Mr, Guinness, Mr. McNab, Mr. Montgomery, Captain Eussell, Et. Hon. E. J. Seddon, Mr. Tanner, and Hon. J. G. Ward. The minutes of the previous meeting were read and confirmed. The Clerk read the order of reference referring the question of the establishment of a Pacificcable service to the Committee. Besolved, on the motion of the Hon. J. G. Ward, That a return be procured showing, with regard to cablegrams both between New Zealand and England and between New Zealand and Australia, —(1) Press rates, Government rates, and commercial rates separately; (2) revenue received separately; and (3) the number of messages separately since the reduction in charges: also a return giving similar information for a like period previous to the reduction in charges. Besolved, on the motion of the Hon. J. G. Ward, That application be made to the Eastern Cable Company, pointing out that the colony are past contributors and guarantors, and requesting them, as a matter of courtesy, to let the Committee have copies of their balance-sheets for the last eight years. Besolved, on the motion of the Et. Hon. E. J. Seddon, That the papers in the hands of the Postal Department referring to the establishment of a Pacific-cable service, and not being confidential, be printed and circulated amongst the Committee. Besolved, on the motion of the Et. Hon. E. J. Seddon, That maps be procured showing,— (1.) The existing cable-lines between England and Australasia ; (2.) The proposed cable-line between England, the Cape of Good Hope, and Western Australia; (3.) The proposed route of the Pacific cable ; (4.) The existing cable-line between France and New Caledonia; (5.) The existing cable-line between America and Honolulu : such maps to show the points of touching and transmission. The Committee then adjourned till further notice.

Wednesday, 24th August, 1898. The Committee met pursuant to notice. Present: Hon. W. J. M. Larnach (Chairman), Mr. Duthie, Mr. Praser, Mr. Graham, Mr. McLean, Mr. McNab, Mr. Montgomery, Captain Eussell, Et. Hon. E. J. Seddo-n, and Hon. J. G. Ward. The minutes of the previous meeeting were read and confirmed. Resolved, on the motion of the Hon. J. G. Ward, That the balance-sheets of the Eastern Extension Australasia and China Telegraph Company for the past eight years be printed and circulated. Besolved, on the motion of the Hon. J. G. Ward, That the maps supplied to the Committee by the Postal Department be lithographed and circulated. The Hon. J. G. Ward gave notice that he would move at the next meeting of the Committee that,— (1.) In the opinion of this Committee it is desirable that telegraphic communication between England and New Zealand via Canada and the Pacific should be established. (2.) That the Colony of New Zealand should agree to join with such of the Australian Colonies as are prepared to do likewise upon the basis of a guarantee of four-ninths of the cost of construction and working-expenses. (3.) That for the purpose of working the cable it is desirable that a central authority should be empowered upon behalf of the contributing countries to carry out the laying and working of a cable across the Pacific. (4.) That in the opinion of the Committee this should be intrusted to the Canadian Government, upon the understanding that each contributing colony have the right to be represented and to vote upon all matters appertaining to policy, acceptance of tenders, or anything material in the conducting of the cable. (5.) That New Zealand's share of the guarantee should be a maximum of £20,000 per annum.

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Besolved, on the motion of the Et. Hon. E. J. Seddon, That this Committee meet at 10.30 a.m. to-morrow for the special purpose of considering the Pacific-cable question. The Committee then adjourned till 10.30 a.m. to-morrow.

Thuesday, 25th August, 1898. The Committee met pursuant to notice. Present: Hon. W. J. M. Larnach (Chairman), Mr. Duthie, Mr. Fisher, Mr. Fraser, Mr. Graham, Mr. Guinness, Mr. McLean, Mr. McNab, Mr. Montgomery, Captain Eussell, Et. Hon. E. J. Seddon, Mr. Tanner, and Hon. J. G. Ward. The minutes of the previous meeting were read and confirmed. The Government Printer attended, and gave information to the Committee concerning the printing of documents and maps ordered at the previous meeting. The Hon. J. G. Ward, having obtained leave from the Committee to amend the motion of which notice was given by him yesterday, moved as follows : — That, in the opinion of the Committee, — (1.) It is desirable that telegraphic communication between England and New Zealand vid Canada and the Pacific should be established. (2.) The Colony of New Zealand should agree to join with such of the Australian Colonies as are prepared to do likewise, upon the basis of a guarantee of four-ninths of the cost of construction and annual deficiency (if any) by such colonies, New Zealand's proportion of the guarantee not to exceed in any case one-eighth of the whole cost. (3.) For the purpose of working the cable it is desirable that a central authority should be empowered, on behalf of the contributing countries, to carry out the laying and working of a cable across the Pacific. (4.) The maximum rates for ordinary messages between New Zealand and the United Kingdom should be 3s. per word ; for Government messages, 2s. per word; for Press messages, Is. per word and 6s. per hundred words. (5.) The construction, control, and maintenance of the cable should be intrusted to the Canadian Government, upon the understanding that each contributing colony shall have the right to be represented and to vote upon all matters appertaining to policy, acceptance of tenders, or anything material in the management of the cable. (6.) The contributing country and colonies should jointly own and control the cable. Mr. Montgomery then moved, by way of amendment, to add the following words: " That it is. desirable that a sinking fund should be established out of profits to redeem the liability of the contributing countries on their guarantee." On the question being put, That the words proposed to be added be so added, a division was called for, and the names were taken down as follows :— Ayes, 3 : Mr. McLean, Mr. Montgomery, and Captain Eussell. Noes, 9 : Mr. Fisher, Mr. Fraser, Mr. Graham, Mr. Guinness, Hon. W. J. M. Larnach, Mr. McNab, Et. Hon. E. J. Seddon, Mr. Tanner, and Hon. J. G. Ward. And so it passed in the negative. The Hon. J. G. Ward's motion was then put and carried. Besolved, on the motion of the Hon. J. G. Ward, That it is desirable that, with a view of furthering the establishment of a Pacific-cable service, a conference of representatives from the several countries concerned should be held in New Zealand at an early date. Besolved, on the motion of the Et. Hon. E. J. Seddon, That the above resolutions be reported to the House, and that the Chairman be requested to ask leave of the House to lay the evidence on the table at a later date. The Committee then adjourned till further notice.

Tuesday, 30th August, 1898. The Committee met pursuant to notice. Present: Hon. W. J. M. Larnach (Chairman), Mr. Fraser, Mr. Graham, Mr. Guinness, Mr. McNab, Mr. Montgomery, Et. Hon. E. J. Seddon, Mr. Tanner, and Hon. J. G. Ward. The minutes of the previous meeting were read and confirmed. A letter from the Government Printer having been read by the Clerk, Resolved, on the motion of the Et. Hon. E. J. Seddon, That the resolution passed on the 24th August with regard to the printing of maps be rescinded so far as it applies to the map showing the proposed route of the Pacific cable.

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APPENDIX A.

PAPERS LAID BEPOEE THE COMMITTEE ON THE PROPOSED PACIFIC CABLE. No. 1. The Hon. Audley Coote, Sydney, to the Hon. the Postmasteb-Geneeal, Wellington. Waverley Park, Sydney, — May, 1898. Ec Pacific Cable. Deae Sir, — I have the honour to bring under your notice an article which appeared in the Electrical "Review on the 4th and 18th March of this year under the title " The Empire and Telegraphcables." I enclose herewith a reprint of the article, which will, I feel sure, be of special interest to you just now, when the British Government has under consideration the proposal from the Premiers of Australia in respect of the Pacific cable. It is my intention to hand the article as well to the Australian Press, as their interests, although of less Imperial importance than those of the Governments of Australasia and Canada, must also be furthered by the carrying-out of the project which I have so long advocated—viz., the completion of the link still wanting in the chain of telegraph-cables encircling the globe, and the connection on that link of the colonies of Australasia and the great islands of the Pacific Ocean. I have, &c, The Hon. the Postmaster-General, Wellington, New Zealand. Audley Coote.

Enclosure in No. 1. The Empire and Telegraph-cables. [Reprinted from The Electrical Review.] In the varying accounts of a new and important scheme of telegraph-cables which have lately been widely circulated among the Press throughout the colonies as well as in England there is to be found sufficient internal evidence to warrant us in concluding that all of these emanate from a single source. Although differing somewhat in the manner in which the statements are presented, as well as in the style of treatment, still, in the main body of these paragraphs and articles the recurrence of the same prejudiced and garbled statements all point to a common source of origin. We have frequently dealt in detail with the numerous points raised, but, as the subject has assumed a more interesting aspect lately, owing to the aggregation of errors which are now being so widely disseminated, it is, perhaps, well that the more important of these should again be treated of at the present time. The subject of a system of submarine cables, which, starting from England, would be carried on to Cape Town, touching only at the various British possessions on the way, is not a new one, nor is the proposed continuation of such a line from Natal to Australia, via Mauritius, Eodriguez Island, and the Keelings, a new conception. A somewhat similar scheme was fully dealt with by Mr. Hofmeyr when representing the Cape of Good Hope at the Imperial and Colonial Conference held in London in 1887, and was recommended by him as an addition to the scheme for a cable across the Pacific Ocean from Canada to Australasia, which was one of the principal subjects before the Conference. This additional scheme, which, as a supplement to the Pacific cable, it may be remembered, was rendered necessary by the inefficiency of, and frequent interruptions to, the then existing system of cables, has lately assumed an importance which ten years ago it did not possess. About the time of the first Colonial Conference it was the cables to Australia which were continually breaking down, but latterly the cables to the Cape have deprived them of the record for frequency of interruption, and therefore the supplementary scheme referred to by Mr. Hofmeyr is strongly advocated by the Eastern Extension Telegraph Company, the Eastern Telegraph Company, and its offshoot the Eastern and South African Telegraph Company, the latter of which suffers both in purse and reputation owing to the frequency of interruptions to the Cape cables. The point to which we take most serious objection is that the popular advocates of Mr. Hofmeyr's project hope to advantage their cause by a continuance of the system of inaccuracy in figures and statements advanced, and by so doing to prejudice opinion against the Pacific cable route. For example, it used to be roundly asserted that the depth through which a Pacific cable would have to pass was " estimated at 12,000 fathoms (or fourteen miles) in some places." This assertion was contained in a note from the Postmaster-General of South Australia to his Government, and, coming from such a source, aroused a natural objection on their part to examine any further into the matter, more especially when the same authority further asserts, in the same note, with a courageous confidence worthy of a better cause, that " as the Government are aware, I have given this subject very great and careful consideration —more so, perhaps, than any one else." We 2—l. 7,

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are glad to see that this figure (an utterly imaginary one) is now reduced, by others better informed, to." a depth of five miles;" it is not, however, made clear by these recent critics that this latter depth (which really does exist) occurs in an isolated depression which is more than 600 miles away from the proposed Pacific cable route. We may mention here that there are two cables lying in West Indian waters which were laid within sixty miles from a similar depression, more than four miles and a half in depth, and one of them has been working for over twenty-five years without giving any exceptional trouble. An unbiassed examination of the Admiralty charts will prove to any one that along the proposed route of the Pacific cable the general depth to be expected in the deepest sections averages about 2,700 fathoms, and that the greatest depth would in all probability not be more than 3,200 fathoms —a depth, we may say, no greater than that in which a cable has recently been laid between New York and Hayti, and about the same as that met with along the line of the Government-supported cable which has just been laid from Bermuda to Jamaica. The Pacific cannot, therefore, be looked upon as an ocean of impossible depths, nor one where a cable cannot be picked up if necessary ; indeed, experience teaches us that a cable has been picked up at the depth mentioned. The route sketched out vid the Cape to Australia has, as yet, been but very imperfectly surveyed; it seems, however, to have an average depth similar to that through the Pacific Ocean, and in one place at least along the Cape line there is a depth of nearly 3,200 fathoms. Thus it will be seen that as regards depth of water the supplementary route has absolutely no advantage over the Pacific line. It is true that a cable between Vancouver and Fanning Island would be longer than any one length suggested for the supplementary route, but the length required would exceed by less than 250 miles that of a cable at present being laid across the Atlantic, and would in reality be about 250 miles less in length than the advocates of the Cape route make it out to be. The following quotation from an Australian paper is another sample of the class of information circulated. Eeferring to the Vancouver-Fanning Island section, we are told, " This section is practically twice the length of the longest section of the 'Cape' proposal." Now, this is an utterly misleading statement, as the real length of the section spoken of is here increased, for the purpose of condemning it, by some 1,200 miles. As the writer in this case illustrates his article by a map on which the proposed lengths of " the Cape route " are all carefully set down, it seems incredible that he should be so ignorant as he would appear to be regarding the original scheme, which he criticizes adversely. It has also been said that, being a " single line," the Pacific cable has no alternative in case of interruption; but those who, in their anxiety to furnish objections, advance this as an argument seem to forget that, if correct, the same objection also applies to the proposed single line from the Cape, and that, should either of these single lines break down, the already existing cables to Australia would afford more or less useful alternatives to one as much as to the other of these proposed single lines. We have dealt with some of the more prominent of the objections which are now being revived against a cable through the Pacific. The " enormous depths " of this ocean, it will be seen, are now discounted, and we even find it put forward, with an austere assumption of impartiality, that the great depth of water through which the Cape cable must pass would obviate the serious danger of interruption to which the existing lines to Australia are exposed in the shallow Java Sea. We quite agree with the opinion expressed that the present cables which pass through the Mediterranean would probably be rendered useless in case of warlike complications, as this did actually happen during the Egyptian war ; but we would go still further and point out that the same objection applies with equal force to several sections along the proposed Cape route, which, in places, would necessarily have to lie in very shallow water, and where they could be easily cut by the enemy. Take, for example, the section which would pass off Brest, where, for more than 150 miles, all the existing lines to Africa and the East are in water of less depth than 100 fathoms; and through this dangerous belt it is now seriously proposed to lay a strategic cable. In the caee of the Pacific scheme any such danger is quite avoided. To turn to another aspect of the new " supplementary " scheme, we find that to carry it out some 13,700 miles of cable would be necessary, to which should be added 1,000 miles of land-line from Cape Town to Natal. We also find that the cable would be landed in no less than eleven different places—almost all points of weakness —the last being the town of Perth, in Western Australia. As opposed to this, we find in the Pacific that the length would only be 7,600 miles, and the landing-places only five in number, lying in a part of the ocean little frequented by foreign vessels of war, the cable terminating between the towns of Sydney and Brisbane, on the east coast of Australia. Should the cable bifurcate from Norfolk Island to New Zealand an additional length of 450 miles will be necessary, and an additional landing-place will be created. In continuation of this comparison, it should be borne in mind that the two existing cable routes to Australia converge at Java, and, bifurcating thence, end, one at Port Darwin in the north of Australia, the other at Eoebuck Bay in the north-west of Western Australia; Thus we find that to reach the centres of the greatest population, which lie in the east and south-east of the continent, telegrams have to travel over very great lengths of land-lines. In the case of the Eoebuck Bay cable there is a distance of about 3,300 miles to be traversed from that point before even Melbourne is reached, and more than 4,200 miles (about half the length of the Pacific cable) before Brisbane is reached. Again, a telegram vid Eoebuck Bay, destined for the town of Burketown in Queensland, has to travel over a length of land-line which is greater than the distance between London and Calcutta, or several hundreds of miles more than the distance intervening between London and Vancouver. The land-wire from the Port Darwin cable-station is not so long, giving about 2,400 miles to Melbourne and 3,300 miles to Brisbane. It is now, we are told, proposed to land the " Cape " cable at Perth, the capital of Western Australia, which is more than 2,000 miles by land-line from Melbourne, and over 3,000 miles from Brisbane. On the other hand, in the case of a cable landing on the Pacific coasts of Australia the main centres of

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population and commerce are within easy reach, Melbourne being only about 450 miles south of Sydney by land-line, while Brisbane is about 530 miles to the north. The great importance of these figures will be at once evident when we realise that the long land-lines from Port Darwin and Roebuck Bay, the only means by which telegrams from Europe can be forwarded at present, have been interrupted on no less than fifteen occasions during the last six months, the duration of each of these interruptions varying from a few hours to several days. In speaking recently of the Eoebuck Bay land-line, Sir Charles Todd, the Postmaster-General of South Australia, says it " is acknowledged to be the worst line in Australia, the many fogs on the coast rendering it very hard to get signals through." It is thus clear that a Pacific cable would offer advantages which cannot reasonably be looked for, either in the case of existing cables, or in that of the proposed cable from the Cape. The land-lines in the compact group of colonies, Victoria, New South Wales, and Queensland, are numerous, and here reliance has not to be placed on long single wires, as in the cases above referred to. Duplicate communication with New Zealand can be easily assured by a short branch cable from Norfolk Island. The advantages above indicated are obvious, if we consider that the population in the south and east of Australia is about 4,200,000, who carry on a total export and import trade equal to about £120,000,000 annually, employing for this purpose some 17,000,000 tons of shipping. Id would therefore seem beyond dispute that a cable landing right in the heart of this busy district is much more to be ' desired, and is much more worthy of support, than one which would terminate in Western Australia, in which vast area (eleven times the size of Great Britain) the total population, although increasing, is less than that of the town of Cardiff, and the trade and shipping correspondingly small, the exports and imports for 1896 being valued together at something over £8,000,000. We propose to touch but lightly on the financial side of the question. We were informed through the Press that the cable to be laid via the Cape is to be carried out in return for " certain privileges." Some light has recently been thrown on the nature of these privileges, one of which seems to be the payment of £25,000 per annum by the Cape Government for twenty years; another being the prolongation of the annual subsidy of £32,400 which has been paid by the Australian Governments to the Eastern Extension Telegraph Company since 1879, and which, if not renewed, will lapse in July, 1900. There may be other concessions which have not yet come to light. It is a question whether the limits of modesty are not being overstepped, when we remember that one of the companies concerned, i.e., the Eastern Extension Telegraph Company, has already received from Australasia subsidies amounting to over £750,000; and that in the ten years ending December, 1896, the annual receipts of this company, which are now about £640,000 (including subsidies), have increased by £187,459, and this not withstanding a reduction in rates of about 50 per cent., which was only brought about under great pressure. An allied company, the Eastern and South African Telegraph Company, of which almost the entire capital is held by the Eastern Telegraph Company, has received in subsidies from various Governments a total of considerably over £1,000,000. It is not, perhaps, a cause of wonder that even a far-fetched attempt should be made to secure the continuance of similar " privileges," but we do not think that it is at all in the interests of the colonies, or of England, to assist in the consolidation of any such monopoly. We have dealt at this length with the subject as it seemed only fitting and just that, however useful a cable to Australasia vid the Cape may be, the claims to superior utility, both strategic and commercial, of a cable vid Canada to Australasia should not be undermined by the circulation of misleading information.

No. 2. The Secretary, General Post Office, Wellington, to the Hon. Audlet Coots. Sic, — General Post Office, Wellington, 2nd June, 1898. I have the honour, by direction, to acknowledge the receipt of your letter of the ultimo, forwarding a reprint of a newspaper article which appeared in the Electrical Beview of the 4th and 18th March last under the title of "The Empire and Telegraph-cables." The Post-master-General desires me to thank you for the article, which he has read with much interest. I have, &c, The Hon. Audley Coote, Waverley Park, Sydney. W. Gray, Secretary.

No. 3. Sir Sandford Fleming, Ottawa, to the Hon. the Premier, Wellington. (Telegram.) Ottawa, 29th June, 1898. Since writing you 23rd June [not printed] think advisable leave share Canada New Zealand open, and hope you will offer simply New Zealand will join Canada in making up quota of one-third, Could you instruct Agent-General to arrange proportions ?

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No. 4. The Agent-Genebal to the Hon. the Pbemieb. (Telegram.) • London, 19th July, 1898. Confidential : Pacific Cable. — Canadian Postmaster - General in London. Have ascertained Canadian views on cable friendly but indefinite. Agents-General Queensland, Victoria, New South Wales, myself glad have authority meet Imperial Government and Canada here at informal conerence view facilitate adoption some scheme. No binding decision to be settled, but opinions onference to be sent to respective Governments. Glad you authorise me accordingly.

No. 5. The Hon. the Peemiee to the Agent-Geneeal. (Telegram.) Wellington, 21st July, 1898. Pacific Cable.—Referring to your cablegram nineteenth, much pleasure authorising you confer with other Agents-General and representatives of Imperial Canadian Governments as proposed.

No. 6. The Hon. the Peemiee, Melbourne, to the Hon. the Peemiee, Wellington. (Telegram.) Melbourne, 25th July, 1898. Confidential.—l received the following telegram from our Agent-General, viz.: " London, 19th July. —Confidential: Pacific cable.—Canadian Postmaster-General now in London. I have ascertained Canadian views on cable friendly but indefinite. Agents-General for Queensland, New South Wales, New Zealand, and I would be glad to receive authority to meet Imperial Government and Canada here at informal conference, with a view to facilitate adoption of some scheme. No binding decision to be arrived at, but opinion of conference to be transmitted to respective Governments. Should be glad to know whether you will authorise me accordingly.—Andeew Claeke." Probably you received similar message. I replied that this Government had no objection to conference on terms proposed.

No. 7. The Hon. the Peemiee, Wellington, to the Hon. the Peemiee, Melbourne. (Telegram.) Wellington, 25th July, 1898. Yes, I received a cable from our Agent-General same terms as yours, and replied that I saw no objection our Agent-General attending conference so long no committal.

No. 8. The Hon. the Peemiee, Wellington, to the Hon. the Pbemiee, Brisbane. (Telegram.) Wellington, 28th July, 1898. Pacific Cable.—Our Agent-General also instructed.

No. 9. The to the Hon. the Peemiee. (Telegram.) London, 29th July, 1898. Pacific Cable Confeeence.—Suggest communicate Premier, Queensland. Only he and yourself can save scheme and secure for colonies reduced cable-rates. Outside Queensland and New Zealand every one lukewarm. Am convinced cable will pay from outset. Involve no burden taxpayers.

No. 10. The Hon. the Peemiek and Colonial Teeasueee, Sydney, to the Hon. the Peemiee, Wellington. (Telegram.) Sydney, Ist August, 1898. Have received the following cable, dated the 29th July, from our Agent-General: " Pacific Cable : Informal conference held to-day. Canada represented by Postmaster-General and High Commissioner for Canada; New South Wales, Victoria, Queensland, South Australia, New Zealand by Agents-General. Canadian representatives suggested Canada would probably guarantee two-ninths

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cost, but not more. Her Postmaster-General undertook to do his best for scheme on this basis. Imperial Government contribution will certainly not exceed one-third. Can Australasian Colonies guarantee remaining four-ninths ? Please telegraph reply before 10th proximo. Please inform other Governments." Since receipt of above the following cable has been received: " Eeferring to my telegram of 29th July, I beg to point out that Imperial Government, Western Australia, and Tasmania were not represented at informal conference."

No. 11. The Hon. the Peemiee, Wellington, to the Hon. the Peemiee, Sydney. (Telegram.) Wellington, 4th August, 1898. Pacific Cable.—Your message first received. Kindly let me know replies from other colonies, and what your colony prepared to do. New Zealand strongly favours the Pacific cable.

No. 12. The Hon. the Peemiee, Wellington, to the Hon. the Peemieb, Brisbane. (Telegram.) Wellington, 4th August, 1898. Pacific Cable.—Have received message from Agent-General conveying purport of suggestion made by conference, of which you, no doubt, have also been advised. lam most anxious to co-operate, and to see the scheme adopted. Have referred matter to Committee of House of Eepresentatives for consideration and report. I should be glad to have your views, and also to know support likely to be given by the other colonies.

No. 13. The Hon. the Pkemiee to the Agent-Geneeal. (Telegram.) Wellington, 4th August, 1898. Pacific cable and your telegram 29th : Matter now before Public Accounts Committee. Hope favourable reply in few days. Have communicated with Queensland.

No. 14. PAPEES OF THE CANADIAN HOUSE OF COMMONS. Eetubn (No. 94) to an Addbess of the House of Commons, dated the 18th April, 1898, for a copy of the Eeport of the Committee appointed by the Imperial Government in 1896 to consider the question of a telegraph-cable between Canada and Australasia; also, of any reports or correspondence to the Canadian Government from the Canadian representatives on said Committee, or Sir Sandford Fleming, in regard to the same subject. By order. E. W. Scott, Secretary of State.

Sic, — Department of Trade and Commerce, Ottawa, 21st May, 1898. I have the honour to hand you herewith a return to an address of the House of Commons of the 18th of April ultimo, " for a copy of the report of the Committee appointed by the Imperial Government in 1896 to consider the question of a telegraph-cable between Canada and Australasia," &c, in so far as the Government is at liberty to publish the same. The report itself asked for is held as confidential, under instructions from the Imperial authorities not to publish until permission is given to do so. A recent cable to the High Commissioner stating that a call had been made for the report brought a reply to the effect that the Treasury considers it inadvisable to publish the report before Her Majesty's Government have arrived at a decision as to the policy to be adopted. The other papers called for are herewith complete. I have, &c, W. G. Paemelee, Deputy Minister. Joseph Pope, Esq., Under-Secretary of State, Ottawa.

Eepoet of Sandfobd Fleming to the Hon. the Ministee of Teade and CoMmebce. Sic, — Ottawa, 30th January, 1897. On the 21st October last I had the honour to be officially notified by you of my appointment, by Order in Council, associated with Sir Donald A. Smith and the Hon. Alfred G. Jones, to represent the Canadian Government at the Pacific Cable Conference to meet in London at an early date. Leaving Ottawa the following day I was able to report myself at the Colonial Office on the 3rd November,

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Before the Imperial Cable Committee could be called together a difficulty presented itself. In accordance with the original design of the Secretary of State for the Colonies, it had been determined that there should be two representatives for Canada, two on the part of the Australasian Colonies, and two for the Home Government. As it was held to be expedient to adhere to this arrangement it became necessary to reduce the number of the Canadian representatives. Recognising the importance of the Dominion being represented on the Imperial Committee by the High Commissioner and an ex-Minister of the Crown of the status of Mr. Alfred Jones, I expressed my willingness to retire. On Wednesday, 7th November, I wrote the Secretary of the Committee to that effect, and requested him to inform the Chairman, Lord Selborne, that, as Mr. Laurier, the Premier, had been good enough specially to ask me to assist in the business of the Committee, I was prepared to meet his wishes and those of the Committee itself as far as I was able, and as might be considered expedient. On 9th November I learned by telegraph from Ottawa that the Order in Council appointing me one of the Canadian representatives in conjunction with Sir Donald A. Smith and the Hon. A. G. Jones had been cancelled, and that a new order had been passed appointing these two gentlemen to serve on the Committee, and myself to act as expert adviser. On 10th November I received a note from the Secretary of the Committee in reply to my letter of the 7th, conveying, on behalf of Mr. Chamberlain and Lord Selborne, an expression of their thanks, asking me to attend the first regular meeting of the Committee. The Committee met to receive evidence on the 12th November. I appeared as the first witness, when I submitted my views as they are set forth in Statement No. 1 appended. My examination continued throughout the sitting, as will appear in the printed proceedings. The investigation was continued from week to week until the middle of December. At the conclusion of the examination of witnesses I placed in the hands of the Canadian representatives, on 16th December, a " note " reviewing the evidence and furnishing additional information which I considered would be useful to the Committee. Had I been recalled I would have embraced the opportunity of submitting this additional information as part of my evidence, for the reason that the facts presented throw light on points of importance, and remove doubts as to the weight which should be attached to the testimony of some of the witnesses. I beg leave to refer you to my " note " of 16th December, which I append, and ask you to consider it part of this report. (See Statement No. 2.) With your permission I will briefly summarise the results of the investigation : — 1. All doubts as to the practicability of laying an electric cable from the western coast of Canada to the Australasian Colonies, touching only on islands in the possession of Great Britain, is now entirely set at rest. The best authorities known were examined, and not one of them expressed the least misgiving on this point. 2. It has been definitely ascertained that the total cost of a cable of the type recommended would be less than one and a half million pounds sterling (£1,500,000). 3. The evidence goes to show that the annual charges, including interest on capital, allowance of maintenance and renewal, sinking fund to provide for the replacement of capital in fifty years, together with all ordinary working-expenses, would not exceed the following amounts : Interest at 2f per cent., £37,500; maintenance and renewal, £70,000; sinking fund, £15,386; workingexpenses, £22,114 : total annual charges, £145,000. 4. With respect to the earning capability of a cable of the Lord Kelvin type, this is fully discussed in my " note "of 16th December. All the best evidence establishes that, worked with modern transmitting and receiving apparatus precisely as the Atlantic cables are now worked, the Pacific cable would be capable of transmitting twelve paying words per minute. At this rate the cable, fully employed for eighteen hours a day and three hundred days in the year, would transmit 3,888,000 paying words in twelve months. Moreover, this is not the full capacity of the cable, as there would be nothing to prevent it being worked twenty-four hours each day, if business required. It is obvious, therefore, that the cable proposed to be laid would have ample capacity for transmitting a full share of the business for a considerable number of years to come. The whole telegraph traffic between Australasia and Europe in 1895 did not exceed 1,948,369 words, and it is not claimed that more than one-half of the whole would be diverted to the new route. The returns for 1896 have not yet been received. 5. The revenue cannot be definitely ascertained. We have, however, in the existing business, and in statistics respecting its continual growth, excellent data for forming fairly reliable estimates. The Government returns indicate a remarkable vitality in telegraphy between these distant colonies and Great Britain. Notwithstanding the very high charges exacted from 1875 to 1890, never less than 9s. 4d. per word, the number of words transmitted increased within each period of five years 11 per cent, per annum, and during the whole fifteen years the growth was equal to an annual average of 16-8 per cent. Since 1890 the tariff has been lowered from 9s. 4d. to 4s. 9d. per word, and the average yearly increase for each of the five years ending with 1895 has been 27 per cent. While it is not to be expected that this extraordinary growth will be continued indefinitely, there can be no reasonable doubt that a still further reduction in charges on messages, consequent on the completion of the Pacific cable, will stimulate telegraphy and tend further to increase traffic for some time to come. I have already, on various occasions, presented my own views and calculations respecting the probable volume of business in future years. I need not repeat them here. I shall, however, submit carefully prepared estimates based on the opinion of others. In each case it will be assumed that the cable will be in working-order by the beginning of the year 1900, and the estimates will indicate the possible earnings for six years from that date. The gross earnings will be reckoned at the rate of 2s. a word, and from which will be deducted an expenditure of £145,000 annually, the sum considered sufficient to include all charges.

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In Estimate No. 1 it is assumed that of the 1,918,369 words transmitted in 1895 the share of the Pacific cable would be 750,000 words, or 38J per cent, of the whole, and that there would be an increase of traffic averaging 10 per cent, each year. Estimate No. 1. Year. Gross Earnings. Annual Charges. Defioienoy. Surplus. £ £ £ £ 1900 120,788 145,000 24,212 1901 ... ... 132,866 145,000 12,134 1902 ... ... 146,153 145,000 ... 1,153 1903 160,768 145,000 ... 15,768 1904 ... ... 176,845 145,000 ... 31,845 1905 ... ... 194,529 145,000 ... 49,529 Totals ... ... ... .. 36,346 98,295 Net surplus by end of 1905 ... ... 61,949 In Estimate No. 2 it is assumed that of the whole number of words transmitted in 1895 (1,948,639) the share of the Pacific cable would be 811,932 words, or about 41 -J- per cent., being the mean between one-third and one-half of the traffic, and that the annual increase will average 12£ per cent., the mean between 10 per cent, and 15 per cent. Estimate No. 2. Year. Gross Earnings. Annual Charges. Surplus. £ £ £ 1900 146,414 145,000 1,414 1901 ... ... ... ... 164,715 145,000 19,715 1902 ... ... ... ... 185,304 145,000 40,304 1903 ... ... ... ... 208,470 145,000 63,470 1904 234,725 145,000 89,725 1905 264,066 145,000 119,066 Net surplus by end of 1905 ... ... ... 333,694 When in London I deemed it important to obtain from leading Australians information bearing on the question of revenue. The steps taken are set forth in my note of the 16th December, and the information obtained is given in the appended paper, in which also will be found a list of the gentlemen who were good enough to favour me with their opinions. The following estimate (No. 3) is based on the opinions generally expressed, namely, that the Pacific cable will obtain 50 per cent, of the whole business, and that telegraph traffic will increase annually at the average rate of 15 per cent. Estimate No. 3. Year. Gross Earnings. Annual Charges. Surplus. £ £ £ 1900 .. ... ... ... 195,960 145,000 50,960 1901 ... ... ... ... 225,354 145,000 80,354 1902 ... ... ... ... 259,157 145,000 114,157 1903 ... ... ... ... 298,031 145,000 153,031 1904 342,735 145,000 197,735 1905 ... ... ... ... 394,144 145,000 249,144 Net surplus by end of 1905 ... ... ... 845,381 The calculations are made on the assumption that the cable will be completed and in operation by the beginning of 1900. Each of the three estimates shows a net surplus by the end of 1905 as follows: Estimate No. 1, net surplus earning by end of 1905, £61,949; Estimate No. 2, net surplus earning by end of 1905, £333,694 ; Estimate No. 3, net surplus earning by end of 1905, £845,381. The data on which No. 1 is based have been taken with excessive caution, and I feel warranted in saying that the estimate itself may be regarded as a minimum estimate. No. 2 must be held to be an extremely moderate estimate. No. 3is based on the general opinion of many gentlemen of high standing, the heads of great mercantile firms, and others familiar with Australasian trade and prospects. Such opinions must undoubtedly carry with them great weight. According to Estimates Nos. 2 and 3 the earnings of the Pacific cable for transmitting European-Australasian telegraph traffic would yield a surplus from the first year of its operation. In addition to a share of the Australasian-European business, the Pacific cable will be in a position to obtain all the traffic between Australasia, Canada, and the United States. There are no data to admit of any proper estimate being formed of the trans-Pacific new traffic, but it is not improbable that with a direct cable and low rates it will rapidly develop, and in a few years assume substantial proportions. In concluding this summary of the results of the recent investigation, I feel fully justified in saying that the estimates of revenue establish beyond all doubt that the Pacific cable, if laid as a national undertaking under Government control, will be more than self-supporting. The sums which form a charge on gross earnings in each case provide, it may be said, for a double replacement of capital. The allowance for maintenance insures the complete renewal of the cable in addition to meeting the cost of current expenses, and the sinking fund provides for the.

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extinction of the original loan when it matures. All surplus earnings may therefore be regarded as profit; but, as the national object to be attained in establishing the cable is not to realise dividends, the policy of the contributing Governments, when profits accumulate, will probably be to lower the tariff of charges, and by this policy confer additional benefits on trade and commerce. I have, &c, Sandford Fleming. Hon. Sir Eichard Cartwright, Minister of Trade and Commerce. Statement No. 1 (referred to in the preceding Beport of Mr. Fleming), submitted in evidence to the Imperial Cable Committee, 12th November, 1896. Before expressing my views generally on the Pacific cable, I am asked to relate to the Committee the circumstances which led to the proposal to span the Pacific Ocean by telegraph. I comply with the request with some hesitation, as I am obliged to allude to my personal connection with the matter. In referring to this part of the subject I shall confine my remarks to a very few brief sentences. The projected submarine electric cable aoross the Pacific from the western seaboard of Canada has been before the public for many years. The proposal to extend a telegraph to Asia and Australia naturally followed the establishment of a trans-continental telegraph through the Dominion. So far back as 1863 the overland telegraph was projeoted in conjunction with the trans-continental railway. In that year the explorations for the eastern section of the railway, between Halifax and Quebeo, were undertaken by the Imperial and Provincial Governments, and in 1871 the surveys westerly to the Pacific Ocean were commenced by the Government of the new Dominion. A few years after these dates the construction of the telegraph was proceeded with on each respective section. The Hon. Alexander Mackenzie, Premier and Minister for Public Works, was one of the first to take an active interest in the matter. Under his administration the policy was adopted of extending the telegraph from the waters of the St. Lawrence to the Pacific coast; and in 1874 the Government entered into contracts for constructing the telegraph in advance of the railway over nearly two thousand miles of territory. Occupying the position of engineer-in-chief of the whole line of railway from Halifax on the Atlantio to Vancouver on the Pacific, the establishment of the overland telegraph came under my official charge, and in connection with my duties my attention was directed to the extension of the electric wire across the Pacific. It became plain to me that the national line of communication on which Canada was then expending so much would be incomplete without a connection with the telegraph systems of the countries beyond the Pacific Ocean, and it became equally clear that the spanning of the Pacific by an electric cable would prove of the highest importance to the whole Empire. In the year 1879 I was called upon to visit London on public business with the then Premier, Sir John Macdonald. I had prepared a telegraph map of the world, with the projected line aoross the Paoifio and its various eastern and western connections laid down thereon. I pointed out that by spanning the Pacific it would be possible to open up a new means of communication to be employed for purposes of general commerce at much lower rates than by existing channels ; that it would at once complete the electrical girdle of the globe, and bring Great Britain, Canada, India, Australia, New Zealand, and South Africa into unbroken telegraphic touch of eaoh other, entirely independent of the lines which pass through foreign European countries. Sir John Macdonald submitted the map and explained the proposal to Lord Beaconsfield, and I was led to understand that both Premiers were very favourably impressed with the project, and regarded it to be of great Imperial importance. lam fully warranted in saying that the Canadian Premier so regarded it until his death in 1892. Public attention was for the first time directed to a British Pacific cable in my report as engineer-in-chief of the Canadian-Pacific Eailway, which was laid before Parliament in 1880. In this report the map referred to is reproduced on a reduced scale. Much correspondence followed, to which it is not now necessary to allude. I will only remark that the route first projected was a northern one; this was owing to the absence of information respecting the Southern Pacifio Ocean, and the impression which prevailed that physical difficulties existed which offered insuperable obstacles to the laying of a cable on a direct route between Canada and Australasia. In consequence of this impression it was designed to lay the cable from Vancouver to Japan, touching at islands in the Aleutian and Kurile Groups as midocean stations. Prom Japan the connection with Australasia would be obtained by means of the telegraph to Singapore and the Eastern Extension Company's lines of telegraph. Through the intervention of the Home Government, negotiations were opened with the view of securing one of the Kurile Islands. Japan was asked to transfer to the British Crown one of these islands in order that the telegraphstation should be under British protection. The cession of an island was not obtained, but permission to land at any suitable point in Yesso was granted, the landing to remain in charge of and under the protection of Japan. (See letter 14th December, 1880, from Sir Harry Parkes, and 23rd December, from Sir A. T. Gait.) An agent was sent to Washington, who, after some difficulty, obtained conditional landing privileges on one of the Aleutian Islands. On the Ist March, 1881, the Government of Canada introduced certain resolutions in Parliament with the view of promoting the establishment of the cable. After discussion the resolutions were withdrawn and an Act passed incorporating a company to lay the cable. This company proved abortive, and when its charter expired, further information having meanwhile been obtained respecting the Southern Pacific, it was represented to the Canadian Government that the physical features of the Southern Ocean would admit of a cable being laid on a direct route from Canada to Australia, and that the long detour by the Aleutian Islands and Japan could be avoided. (See my letter of the 20th October, 1885.) Correspondence followed, and on the Bth June, 188G, an Order in Council was passed by the Canadian Government recommending that means be taken to obtain an expression of opinion on the projected direct cable to Australia from the several Governments concerned, and to ascertain what amount of assistance each would be prepared to give, and that for this purpose a conference of agents of the colonies be invited to discuss the subject. The co-operation of Her Majesty's Imperial Government was likewise sought. On the 25th November, 1886, the Home Government summoned a Conference to meet in London the following year, to which the principal Colonial Governments were invited to send representatives. One of the questions to be specially considered was the development of telegraphic communications of utility to the Empire. At the Colonial Conference held in 1887 the Pacific cable was specially considered, and resolutions were passed in respect thereto strongly favouring its establishment. The published proceedings of the Conference give the discussions at length. Since the Conference of 1887 repeated efforts have been made to induce the Admiralty to make a complete survey of the bed of the ocean on the most direct route for the cable. A statement respecting the nautical survey appears in the report of the Canadian Minister of Trade and Commerce on his mission to Australia in 1893 (pages 106 to 122). In 1888 the Canadian Government invited the Governments of Australia and New Zealand to send delegates to Canada to consider the question of telegraphic connection and trade relations. Correspondence resulted, when it was finally agreed that delegates should be sent from Canada to Australia. In 1889 the Hon. J. J. C. Abbott (afterwards Sir John Abbott, Premier of Canada) with several other gentlemen were appointed to proceed on this mission, but the proposed federation of the Australian Colonies, then actively discussed, had the effect of postponing the visit. It was felt that the time was inopportune, and that it would be advisable to wait until the colonies would be united politically. Early in 1893 a Postal and Telegraph Conference was held at Wellington, New Zealand, at which all the Australasian Colonies were represented, and resolutions were passed urging the establishment of a Pacific cable. In September, 1893, the Canadian Minister of Trade and Commerce (the Hon. Mackenzie Bowell) was sent as a delegate to Australia to oonfer with the several Governments on the subject of the Pacific cable and the development of trade. A full aocount of this delegation wilj be found in the report on the mission to Australia (see pages 66 to 106).

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As an outcome of the delegation to Australia, a Conference was held in Ottawa the following year (1894). At this Conference the Imperial Government, the Canadian, the South African, and all the Australasian Governments were represented. The published proceedings of the Conference held in Ottawa in 1894 furnish a full account of the discussions. The following resolutions were passed in respect to the establishment of the Pacific cable : (1.) Resolved, That, in the opinion of this Conference, immediate steps should be taken to provide telegraphic communication by cable, free from foreign control, between the Dominion of Canada and Australasia. (2.) Resolved, That the Imperial Government be respectfully requested to undertake at the earliest possible moment, and to prosecute with all possible speed, a thorough survey of the proposed cable route between Canada and Australia ; the expense to be borne in equal proportions by Great Britain, Canada, and Australian Colonies. (3.) Resolved, That it is for the interest of the Empire that, in case of the construction of a cable between Canada and Australasia, such cable should be extended from Australasia to the Cape of Good Hope, and for that purpose arrangements should be made between the Imperial and South African Governments for a survey of the latter route. (4.) Resolved, That, in view of the desirability of having a choioe of routes for a cable-connection between Canada and Australasia, the Home Government be requested to take immediate steps to secure neutral landing-ground on some one of the Hawaiian Islands, in order that the cable may remain permanently under British control. (5.) Resolved, That the Canadian Government be requested, after the rising of this Conference, to make all necessary inquiries, and generally to take such steps as may be expedient in order to ascertain the cost of the proposed Paciflo cable, and promote the establishment of the undertaking in accordance with the views expressed in this Conference. Acting under instructions of the Conference of 1894, the Canadian Government invited cable-manufacturing contractors and others to state the terms upon which they would be prepared to lay and maintain in efficient condition a submarine electric cable across the Pacific from Canada to the Australasian Colonies. Proposals were invited in three different forms. I herewith submit, for the information of the Committee, the detailed general conditions under which proposals were invited (see Appendix A); likewise the tenders subsequently received by the Canadian Government; likewise my report on the tenders, dated the 20th November, 1894, made at the request of the Minister of Trade and Commerce (see Appendix B). Soon after the tenders were received I prepared a memorandum giving my views respecting the establishment of the cable. As these views are strengthened and confirmed by subsequent events, I beg leave to submit this memorandum to the Committee as part of the present statement : — " Memorandmn.-Otta.via:, Ist December, 1894.—The information obtained since the meeting of the Colonial Conference in July last is of a character to call for special notice. The Conference, by the fifth resolution relating to the Pacific cable; requested the Canadian Government to take the necessary steps to urge forward the undertaking in accordance with the views expressed by the delegates and the resolutions passed by them. On the 10th September a special Commission was appointed by the Canadian Government to proceed to Honolulu, to enter into negotiations with the Hawaiian Government for the possession of a neutral landing-ground for the cable, should it be deemed expedient or desirable to touch at Honolulu or at some other island in the Hawaiian Group. The object was to obtain a choice of routes. While it was the decided feeling of the Conference that the cable should only touch islands on the route in the possession of Great Britain, there were technical as well as commercial reasons for obtaining the use of an island within the Hawaiian archipelago. The report on the mission submitted for the information of His Excellency the Governor-General, 15th November, points out that, while there is a fair prospect of obtaining the use of an island on conditions generally acceptable, the result of the mission remains undetermined, as it awaits the action of the United States Government, owing to a treaty engagement between the two countries. Consequently, as the matter at present stands, there is no alternative line which oan be chosen. The route known as No. 1, touching at Fanning Island, is the only route open for adoption. The question of carrying the cable by way of Honolulu or some one of the Hawaiian Islands rests with the Hawaiian Government and the Government of the United States. As soon as the Hawaiian Government feels at liberty to enter into an agreement, such as that suggested during the recent mission, which would secure to them the advantages of telegraphic connection with the markets of the world, it will probably be heard from. Any offer it may make may be considered oa its merits before contracts for laying the cable be entered into." Tenders. On the 6th August an advertisement appeared in the London newspapers asking for tenders. Cable-manufactur-ing contractors and others were invited by the Canadian Government to state the terms upon which they would be prepared to lay and maintain in efficient condition a submarine electric cable aoross the Pacific from Canada to Tender's have been received from some of the best and oldest firms _; they establish four important desiderata: (1.) They set at rest all questions respecting the practicability of the project. (2.) They establish indisputably that Great Britain can obtain direct telegraphic communication with the British colonies of the Southern Hemisphere, without having resort to any soil not British territory. (3.) They clearly prove that there is no requirement for delay in order to make elaborate preliminary surveys, offers having been received from oable-manufaoturers of the widest experience, who, with the information and data possessed, are prepared to lay the cable and guarantee its success. (4 ) The tenders give definite information as to the cost of the undertaking ; moreover, they furnish proof that the outlay of capital required is less than the amount which has been estimated. The definite data thus obtained overcome all obstacles which were supposed to stand in the way of the first resolution passed by the Conference —viz., that " immediate steps should be taken to provide telegraphic communication by cable, free from foreign control, between the Dominion of Canada and Australasia." The Governments concerned are now placed in possession of information essential to the consideration of the best means neoessary to the consummation of the project. " . As there might be some divergence of opinion as to the best means to be taken to carry out the undertaking, the Canadian Government, in asking for proposals, intimated that offers would be received in three different forms, viz.: —Form A: The cable to be owned and controlled by Government, to be worked under Government authority, and to be kept in repair by the contractor for three years. Form B : The cable to be owned, maintained, and worked by a company under a fixed subsidy for a term of years. Form C : The.cable to be owned, maintained, and worked by a company under a Government guarantee of traffic for a term of years. The only actual offers received are according to Form A. That no offers were received according to Forms B and C may be due to the fact that it was felt desirable to predetermine the maximum charges, so as to preclude a subsidised or traffic-guaranteed Pacific Cable Company amalgamating or combining with the existing company to the disadvantage of the public. It was stipulated that under Forms B and C the maximum rates to be charged on messages to and from Great Britain and the Australasian Colonies shall be 3s. per word for ordinary telegrams, 2s. per word for Government telegrams, and Is. 6d. for Press telegrams. Trans-Pacific messages to be charged at proportionate rates. These are the rates agreed upon at the Postal and Telegraph Conference held in New Zealand in March last. My opinion as to the best means of establishing the Pacific cable has been long given, and as early as the Colonial Conference of 1887. I submitted my views again at the recent Colonial Conference, and on occasions before and since that date I have explained the principles which in my humble judgment in view of the public interest should be followed. Ido not think it necessary to repeat the arguments I have frequently used in favour of establishing the Pacific cable as a public undertaking, so that it may remain under Government ownership and control. I beg leave to refer to my remarks which the Minister of Trade and Commerce submitted in a memorandum, dated the 11th October 1893, to the Australasian Governments, likewise to what I said at the Colonial Conference in June last (extracts are appended). On both occasions I pointed out that it would be unwise to subsidise a company, when the obiect could be attained more economically and far more advantageously to the public by other means. It has since been suggested, as an alternative to a subsidised company (Form B), to establish a company under a Government 3—l. 7.

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traffic guarantee (Form C). That is to say, the company to be guaranteed a gross revenue from traffic for a term of years; the defioienoy between actual earnings and the guaranteed earnings to be made good by the Governments each year. To my mind, this plan is scarcely less objectionable than the first mentioned. Let us, by way of illustration, assume that a company is formed under a Government guarantee of gross traffic equal to £200,000 per annum for a period of twenty-five years. What, in this case, would prevent the existing company and the new company entering into a secret pooling agreement by which it would be the policy of both to pass over the old line the great mass of the traffic, the object being to establish against the Governments each year of the twenty-five as large a claim as possible under the guarantee ? I do not see that it would be possible to prevent the two companies amalgamating their interest in this or in some other way, and as a consequence a powerful monopoly would be built up to exact its own terms. Looking at the subject in all its bearings, the true plan, in my judgment, is to make the Pacific cable a public undertaking from its first construction. lam satisfied the more the subject is considered it must become clear that only by the observance of the principle of State ownership will the greatest public advantage be permanently obtained. If, in establishing the Pacific cable as a public undertaking, the co-operation of the Mother-country with Canada and the Australasian Colonies be secured, the most advantageous consequences will undoubtedly proceed from this arrangement. The first effect of co-operation would be in connection with the initial cost of the work, as a joint guarantee would admit of the required capital being raised at the lowest possible rate of interest. 1 have only to point to the Intercolonial Railway of Canada as an illustration of the advantages attainable. In 1867 it was arranged between the Home Government and the Canadian Government to connect Quebec and Halifax by railway; for this purpose a loan of £3,000,000, bearing the Imperial guarantee, was effected at a low rate of interest, and by this means the Home Government rendered substantial aid in the construction of the National Railway of Canada without in any way drawing on the Imperial Exchequer. It can be clearly established that by the same principle of co-operation in the case of the Pacific-cable undertaking, to which so much importance has been attached as a means of bringing in closer affinity the distant portions of the Empire with the Mother-country, it can be successfully effected without in any way taxing the people of Great Britain, of Canada, or the Australasian Colonies. Assuming that the principle of co-operation and State ownership be assented to, the capital may be raised by one of three modes, viz.: (1.) The whole amount may be raised by the Canadian, the Australian, and New Zealand Governments, and the interest in each case guaranteed by the Imperial Government; the relative liability to be borne by the Imperial, Canadian, and Australasian Governments, to be apportioned by mutual agreement. (2.) The whole capital may be raised by the Imperial Government; the payment of a sum equal to the interest on such portion of the capital as may be agreed upon, to be guaranteed by Canada and the Australasian Colonies in proportion to be determined. (3.) The capital may be raised on securities issued through the medium of an Imperial Colonial Cable Commission ; a joint guarantee for the payment of interest to be given by the Imperial, the Canadian, and the Australasian Governments. It is obvious that by either of these modes the whole of the capital may be obtained at the very lowest rate of interest. The interest would be a first charge against revenue, which it can be shown will be ample for all purposes, but, as it is expedient to provide for every contingency, provision should be made for a deficit. The proportions in which any such possible deficit would be made up by each respective Government would be a matter to be determined by agreement. As several distinct Governments will be concerned in the project, it may be advisable, in order to meet the difficulty of joint ownership, to create an organization in which the administration would be centralised; an Imperial Colonial Cable Commission or trust, established by the authority of the several Parliaments. It might consist of three persons, representing the Imperial, the Canadian, and the Australasian Governments respectively, with authority determined by statutes, to obtain capital, and to assume responsibility for establishing the work and carrying it on when completed. Among the tenders received is an offer from an old-established and reliable firm to lay the cable on Route No. 1, the all-British route by Panning Island, for the sum of £1,517,000. This price includes maintenance and repairs for three years after the whole line shall have bean completed and put in operation ; consequently there would be no disbursements for these services during this period to be met by the earnings of the telegraph. The cost of working and interest on capital would be the only charges against revenue during the first three years after the cable shall have been laid. The cost of working has been estimated by Mr. Alex. Siemens at £24,000 for the operating staff and office expenses at each station. If we add to this 25 per cent, tor management, the whole cost of operating would be £30,000 per annum. The interest-charges on the capital expended will depend upon the value the securities may obtain in the money-market. These securities, bearing the guarantee of the Imperial, Canadian, and Australasian Governments, would certainly be rated in no way inferior to Consols. Admitting this view, the rate of interest may be estimated at 2J per cent. Should the most costly of the several routes which have been spoken of be adopted—that is to say, the route by Panning Island, with branches to New Zealand as well as Australia—l am unable to see with this tender before us, offering to complete it in every respect for £1,517,000, that the capital to be raised need exceed £1,600,000. This capital raised at 2J per cent, gives £40,000 as the total interest to be met yearly. As it is advisable in forming an estimate of this kind to make full and complete provision for unforeseen contingencies of whatever kind, 10 or 12 per cent, may be added. In this view £45,000 may be considered the maximum interest-charge, to which, if we added £30,000 for working-expenses, we have the sum of £75,000 as the total fixed charges to be met by revenue in each of the three years after the cable shall have been opened for business. Revenue. . The next question which demands an answer is: What constitutes a fair estimate of revenue ? The subjeot of revenue has been diligently considered in all its bearings, and I have endeavoured to arrive at fair and reasonable estimates: these estimates have been based on carefully collated information respecting the existing telegraph business, which has been steadily and rapidly growing for nearly twenty years. I have submitted the views formed to men of experienced judgment in such matters, and of perfectly unbiassed minds. It is with confidence, therefore, that I refer to those estimates, supported, as they are, by the opinions of gentlemen in high official stations, whose sense of responsibility necessitates the utmost care and caution in arriving at conclusions. Along with my own views on the subjeot of revenue I have much satisfaction in appending letters referring thereto from the following gentlemen : (1) Mr. George Johnston, Statistician to the Dominion Government, Ottawa ; (2) Mr. J. M. Courtney, Deputy Finance Minister, Ottawa ; (3) Mr. W. Hepworth Mercer, Colonial Office, London. The Dominion Statistician, after an examination of the official returns, gives precise information respecting the volume of telegraph business between Australia and Europe; he likewise presents evidence of its rapid growth, of which the following is an indication : 1875, total words transmitted, 235,160 ; 1875 to 1880, increase in words transmitted, 118,188; 1880 to 1885, increase in words transmitted, 184,007 ; 1885 to 1890, increase in words transmitted, 289,923; 1890 to 1893, increase in words transmitted, 574,015; 1893, total number of words transmitted, 1,401,293. This officer confirms my statements as to the volume of business, and more than bears out my estimate of the share of traffic which must become tributary to the Pacific cable. It will be seen from the letters of the other gentlemen that, after a careful examination of the data, they fully substantiate, as far as it is possible to do so, the estimates of probable revenue. In my letter on this subject addressed to the Hon. the Minister of Trade and Commerce of the 20th July, 1894, I have set forth in detail the reasoning which justifies the view I take with respect to the business to be done by the Pacific cable, and I venture to think that the estimates submitted will be considerably within the actual revenue when it comes to be ascertained. According to these estimates the gross earnings in 1898, the first full year that the cable could be in operation, reckoned that the low tariff of 2s. per word would amount to £110,000; for the year 1899, £126,500; and for the year 1900, £143,000. If from these estimated yearly earnings we deduct in each case the fixed charges for interest and working-expenses of £75,000 we would have a surplus in 1898 of £35,000, in 1899 of £51,500, in 1900 of £68,000: showing a total surplus of £154,500 for the first three years the telegraph would be in operation. During the whole of this period the cable would be maintained by the contractor, and any expense

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incurred in effecting repairs would form part of the contract sum to be paid to him. After the third year the cost of maintaining the cable would be a charge against surplus earnings, which I shall show would be ample for the purpose, and would, moreover, leave a considerable balance each year to be carried to a reserve fund. The following table covers the remaining seven of the ten first years after the opening of the telegraph for traffic, and is computed on the principles set forth in the appended papers. The cost of repairs and maintenance, usually estimated at £6 per mile, would amount to £43,000 per annum. For this service I have allowed £50,000, which, added to interest and working-expenses, increases the charge against revenue to £125,000 per annum.

The estimate shows an increasing surplus year by year which is fully warranted by the data. That a surplus is a probable contingency is due mainly to the assumed low interest on capital; and the low rate of interest, so important a factor in the calculations, presupposes the identification of the Imperial Government with the Governments of Canada and the Australian Colonies in this Imperial-Colonial project. It is scarcely necessary to add that, although there is no probability of loss, or insufficiency of revenue to meet all charges, it is indispensable that the precise responsibility attached to the several Governments which co-jointly undertake the work should be clearly defined. Ido not take upon myself to suggest the proportion of liability each may bear, as this must be a matter for diplomatic arrangement hereafter. It has been my object to show by the facts I have presented and the figures I have produced that a mutual effort on the part of Great Britain and the two great divisions of the colonial Empire can establish the Pacific cable with ease, and practically without cost to the taxpayer in either country. That the estimates I have presented will be borne out by actual results I feel perfectly satisfied. I have based them chiefly on the business which already exists between Australasia and England, and which is year by year increasing with a very rapid growth. I have taken little or no account of the traffic which undoubtedly will spring up across the Pacific when the means of telegraphing at low rates is provided ; a new traffic the whole of which will be tributary to the new line. lam satisfied that my estimates are reasonable and reliable: it has certainly been my aim to submit them in a form which time will substantiate and confirm. The first effect of the Pacific cable will be to confer a benefit on the merchants of Great Britain and Australasia, and, indeed, on the whole of that section of the community in both countries who resort to the use of the telegraph. This is obvious from the mere reduction in rates alone. The reduction from 4s. 9d. to 3s. per word will, within the first year after the Pacific cable shall be open, effect a gross saving in Australasia and the Mother-country of £190,000. This saving will be repeated annually, and will continually be augmented by the growth of business. Canada may look for gains of another kind and in another way. As Miss Flora Shaw has recently so well pointed out, Canada " commands the commercial high-road of two hemispheres," and perceiving the value of the position has taken means to secure its possession. But commerce can nowhere be developed without the ordinary facilities, and the telegraph is in this age the indispensable adjunct, and in some notable instances the actual pioneer of commerce. The mere laying of an electric cable between two opposite shores of an ocean has in our time become a comparatively commonplace affair, but to connect Canada with Australasia and New Zealand by telegraph has more than ordinary significance. The contemplated telegraph would greatly strengthen the commercial position of the lands connected by it, and would constitute a common bond between sister colonies now widely separated. In completing the "electric girdle" of the Empire the effect of the trans-Pacific cable would be far-reaching, and its influence would be incalculable. Not the least valuable consequence of the proposal submitted would be its high moral and political import. The co-operation of Great Britain, Canada, and Australasia in establishing this telegraphic connection would present itself to the world as an ideal " co-partnership " unparalleled in history, and it would furnish a striking development of Britannic unity, perhaps foreshadowing still more important developments in coming years. The questions which the Committee are requested to consider and report their views upon are follows : (1.) Is the laying of a cable between Canada and the Colonies of Australasia practicable from a technical point of view ? (2.) If so, what route should be selected for the cable ? (3.) What will be the cost (a) of laying, (&) of maintaining the cable, (c) of the annual working-expenses ? (4.) What revenue will arise from the traffic which may be expected to pass over the cable ? (5.) Should the cable be owned and worked by Government or by a subsidised private company ? (6.) If the cable were to be national property, what would be the proper method of management and administration ? (7.) What should be the form of contract offered to a contractor for its construction ? I beg leave respectfully to submit the following remarks, having reference to the four first questions. I have already expressed my views on question No. 5 decidedly in favour of Government ownership. I do not presume to offer any opinion on the financial question or the method of administration. (1.) Doubts have been raised as to the possibility of passing messages through the section between Vancouver and Fanning Island on account of its unprecedented length, the distance being 3,240 miles, to which, if sufficient allowance for slack be added, the length of cable required will be about 3,600 miles, a length considerably exceeding that of any cable yet laid. Through the courtesy of Mr. Frederick Ward, manager in England of the Commercial Cable Company, I have had the question tested practically within the past few days. At my request Mr. Ward caused experiments to be tried through two of the main cables of his company. They were looped at Canso (Nova Scotia) so as to form a continuous cable-line from Waterville (Ireland) to Canso and back. The experiments were perfectly successful, messages were passed through the whole length of cable measuring 4,733 nautical miles, fully 1,100 miles greater than the Vancouver-Fanning cable; the result of this trial proves conclusively that there will ba no difficulty in connection with the Pacifio cable which cannot be overcome. The best possible evidence that the Pacific cable is practicable from a technical point of view is ttie fact that several of the most eminent cable-manufacturing contractors in the world have offered to furnish the cable, of a given capacity for conveying messages, to lay it on the bed of the ocean, and maintain if in efficient working-condition for three years for a specific sum. (2.) There is only one route open for adoption—viz., that known as the Fanning Island route. There is no immediate prospect.of any other route being available. (3.j The lowest tender for manufacturing and laying the cable, on the Fanning Island route, and maintaining it in perfect workingcondition for three years, is that of the Indiarubber, Gutta-percha, and Telegraph Works Company. This firm asks £1,517,000 for a twelve-word-per-minute cable, £1,672,000 for a fiteen-word-per-minute cable, and £1,880,000 for an eighteen-word-per-minute cable, maintenance for three years being included in each case (see Appendix B). (4.) The revenue to arise from the traffic which may be expected to pass over the cable would, I firmly believe, exceed the estimates submitted by me. I have estimated that there will be a surplus of £742,000 in the ten first years over and above interest on capital, working-expenses, repairs, and maintenance. The surplus would augment year by year in an increasing ratio, and would be placed in reserve for renewals at some remote period, or would otherwise be dealt with as the Governments may determine.

Gross Earnings. Charges Surplus. Surplus for the three first years .. 1901 .. 1902 .. .. - .. 1903 .. 1904 .. 1905 .. 1906 .. 1907 .. £ 159,500 176,000 192,500 209,000 225,500 242,000 258,500 £ 125,000 125,000 125,000 125,000 125,000 125,000 125,000 £ 154,000 34,500 51,000 67,500 84,000 100,500 117,000 133,500 Total surplus in ten years 742,000

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I have the greatest confidence in the estimates submitted by me, because I believe them to be based on correct data and calculated on sound principles. I have certainly striven to make them moderate, reasonable, and reliable. That the estimates are all that I claim for them, I beg leave to point out has been so far confirmed in a most striking manner. First, with respect to cost: In my letter written at Sydney, New South Wales, 11th October, 1893, and transmitted for the information of each of the Australasian Governments (see Mission to Australia, page 69), I placed the cost of the Fanning Island route at £1,978,000. Tenders for laying the cable on that route were received at Ottawa in November, 1894, and the highest prices in the tender I have mentioned range from £1,517,000 to £1,880,000, and those prices include the cost of maintaining the cable for three years. Second, with respect to traffic : In the same letter of the 11th Ootober, 1893, I estimated that the total number of words which may be expected to be telegraphed between Australasia and Europe would be, in 1894 and 1895, 1,275,191 and 1,453,716 respectively (see page 71). Through the courtesy of the Postmaster-General of New South Wales, I have been placed in possession of the actual number of words transmitted in each of these years—viz., 1,323,241 in 1894, and 1,948,369 in 1895. These authentic returns establish conclusively that the actual business done has exceeded my estimate : that there has been an excess of traffic equal to 4 per cent, in 1894, and no less than 34 per cent, in 1895. With respect to the proportion of traffic which would fall to the share of the Pacific cable, I beg leave to submit a letter addressed to the Minister of Trade and Commerce, Ottawa, eighteen months ago (28th December, 1894), and I ask that it may be held as part of the statement which I now make : " Referring to our conversation this morning on the subject of the Pacific cable, and more especially on the question of probable revenue, the point which you rightly considered of importance relates to the sources of revenue, and you asked upon what grounds I assumed in my estimates that the Pacific cable would obtain one-half the telegraph business between Australasia and Europe. You suggested as a possibility, from the fact that the existing lines of telegraph had been long established, that there would be business relations between the Eastern Extension Telegraph Company and the owners of the Australasian land-lines, perhaps an understanding or agreement, of such a character as would give the existing cable company exclusive control of European traffic collected throughout the colonies. In answer to this I have only to say that the land telegraphs in each one of the seven Australasian Colonies are owned and operated by the Governments under the Departments of Posts and Telegraphs. There cannot be any agreement of the kind referred to at present existing, and there is no probability of one being entered into. On the contrary, if the Pacific cable be established as proposed, through the 00-operation of the Australasian Governments with Canada and Great Britain, the colonies would have a direct interest in the success of the new line, and every telegraph- and post-office throughout Australia and New Zealand would practically become offices or agencies of the Pacific cable. It is easy to be seen, therefore, that there would be a tendency to send European telegraph traffic collected at these offices (unless specially directed otherwise) by way of the Pacific cable in preference to the old route. There can be no doubt whatever that, with the Pacific cable established as proposed on the principle of State ownership, the several Governments at the source of traffio would have it in their power to direct telegraph bnsiness over the new line as they may desire. It does not follow that the power in the hands of the Governments would be unduly exercised to the injury of the Eastern Extension Company. No doubt a division of the traffio would for a time diminish the profits of that company, but the establishment of the new route would stimulate telegraphy above its normal growth, and in a very few years the volume of business would be doubled, so that an equal division would restore to that company as much business as it now controls. For these reasons, and the additional reason that the Pacific cable will unquestionably command all the telegraph traffic between North America and Australasia, I feel more than warranted in basing the estimates of revenue on half the European-Australian traffic. I feel quite satisfied that the more the question is looked into my estimates will be found moderate, and considerably on the safe side. For my own part, I feel perfectly assured that, if the cable be laid as a Government work, the estimates of revenue will be borne out by actual results, as f ally as estimates of cost have been verified by the tenders received." In the foregoing letter I have referred to the Eastern Extension Telegraph Company, and pointed out that its businesss would be diminished by the successful operation of the Pacific cable. The latter, however, would so stimulate telegraphy that in a few years the proportion of traffic which would fall to the share of the existing line would, I have reason to think, equal the volume of business which at present it commands. It is a question for the Governments to consider how far the company may be entitled to claim that its reasonable profits should be made good meanwhile. I have on all occasions recognised that every consideration should be extended to the company whose enterprise established the pioneer cable to Australasia, and first brought the colonies into telegraphic connection with the Mothercountry. It is on higher than competitive grounds that a Pacific cable is advocated, and it is impossible to admit that the existence of the Eastern Extension Telegraph must for ever prevent the establishment of a national line across the Pacific. The discussions of the Colonial Conferences of 1887 and 1894 go to show that the Pacific cable is demanded not only by the growing requirements of trade and commerce, but as an essential feature of the development of the telegraphio system of the Empire. Sandfobd Fleming.

Documents submitted for the Information of the Committee by Mr. Sandfobd Fleming (Bth July, 1896). 1. General conditions under which tenders for laying the Pacific cable were invited—Appendix A. Not printed. — 2.* The tenders received by the Canadian Government and letters connected therewith: (a) Letter from Sir John Pender, 19th October, 1894; (6) letter from Mr. W. Sharpley Seaton, 19th October, 1894 ; (c) letter from the Chairman, Telegraph Construction and Maintenance Company, 19th October, 1894 ; (d) letter and tender of Mr. Francis A. Bowen, 20th October, 1894 ; (c) tender of Siemens Brothers and Co., 20th October, 1894 ; (/) tender of Fowler-Waring Cable Company, 19th October, 1894; (g) tender of W. T. Henley Telegraph Works Company, 19th October, 1894 ; (h) tender of Indiarubber, Gutta-percha, and Telegraph Works Company, 19th October, 1894 ; tender of Indiarubber, Gutta-percha, and Telegraph Works Company, 22nd November, 1894 ; tender of Indiarubber, Gutta-percha, and Telegraph Works Company, 24th December, 1895. Appendix B. —3. Report on tenders by Sandford Fleming, 20th November, 1894 ; additional report on tenders by Sandford Fleming, 11th Deoember, 1894. Appendix C. —4. State ownership and revenue : (a) Extracts from Mr. Fleming's address, 2nd July, 1894; (b) extracts from Mr. Fleming's memorandum, 11th October, 1893; (c) extracts from Mr. Fleming's letter, 20th July, 1894 ; (d) letter of George Johnson, Dominion Statistician, Ottawa, 29th November, 1894 ; (c) letter of J. M. Courtney, Deputy Minister of Finance, Ottawa, Ist December, 1894; (/) letter of W. Hepworth Meroer, Colonial Office, London. 11th October, 1894.

Advertisement.] Appendix A to Mr. Fleming's Statement No. 1. The Pacific Cable. —The Government of Canada invites cable-manufacturing contractors and others to state the terms upon which they will be prepared to lay, and maintain in efficient condition, a submarine electric cable across the Pacific from Canada to the Australasian Colonies. General conditions under which the offers are to be made may be ascertained on application at the Department of Trade and Commeroe, in Ottawa, or at the office of the High Commissioner for Canada in London. Offers addressed to the undersigned will be received by him until the Ist November, 1894. —Mackenzie Bowell, Minister of Trade and Commerce.— Ottawa, 6th August, 1894. General Conditions. 1. At the Colonial Conference, held in Ottawa between the 28th June and Bth July (inclusive), a series of resolutions was passed relating to the Pacific cable (copies appended). It was resolved, among other things, that immediate steps should be taken to provide direct telegraphic communication between the Dominion of Canada and *Note.—The tenders and letters under this heading are placed in the custody of the Colonial Office for reference and not for publication. As they were received by the Canadian Government in the first place, they are to be returned when required.

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the Australasian Colonies. At the unanimous request of the delegates present at the Conference, the duty of giving effect to the resolutions passed, and the views expressed, devolved upon the Canadian Government. 2. In order to obtain definite data to enable all the Governments concerned to consider and adopt the best means of carrying out the undertaking, the Canadian Government deems it expedient to invite proposals for establishing the cable in three different forma, viz.:— Form A (the cable to be owned and controlled by Government; to be worked under Government authority, and to be kept in repair by the contractor for three years).—Cable-manufacturing contractors to state the lowest cash price for which they will be prepared to supply and lay the cable, the terms and conditions upon which they will guarantee its permanency, and the annual payment for which they will maintain it in efficient condition for three years after the whole line shall have been completed and put in operation. Form B (the cable to be owned, maintained, and worked by a subsidised company).—The contracting parties to find the capita), establish, work, and maintain the cable in efficient condition for a subsidy to be paid to them annually for a term of years by the contributing Governments. The offers to state the o,mountof subsidy to be paid yearly, and the number of years it is to be paid. The maximum rates to be charged on messages to and from Great Britain and the Australasian Colonies shall be as follows : Bs. per word for ordinary telegrams; 2s. per word for Government telegrams ; and Is. 6d. for Press telegrams. The charges on messages between Canada and the colonies to be proportionate. Form C (the cable to be owned, maintained, and worked by a company under a Government guarantee).—The contracting parties to find the capital, establish, work, and maintain the cable in efficient condition. The offers to state what guarantee of gross revenue will be required; the difference between gross earnings and the amount guaranteed to be made good each year to the company by the contributing Governments. The rates to be charged for the transmission of messages to and from Great Britain and the Australasian Colonies shall be as follows : 3s. per word for ordinary telegrams ; 2s. per word for Government telegrams ; and Is. 6d. per word for Press messages. Trans-Pacific messages to be charged at proportionate rates. The tariff of charges to be approved and not changed unless by governmental sanction. Route of Cable. Offers will be received for laying the cable on each of the routes, described as follows : — Route No. I. —Commencing at Vancouver Island, the cable to extend to Panning Island, thence to a suitable island in the Fiji Group. Prom Fiji to Norfolk Island, and at that point the route will bifurcate to the northern part of New Zealand, and to a convenient point near the boundary between New South Wales and Queensland : Vancouver Island to Panning Island, 3,232 knots; Fanning Island to Fiji, 1,715 knots; Fiji to Norfolk Island, 1,022 knots ; Norfolk Island to New Zealand, 415 knots; Norfolk Island to Tweed Mouth, near boundary New South Wales and Queensland, 761 knots : total, 7,145 knots. Route No. 2. —From Vancouver Island the cable to be laid to a small unoccupied island indicated on the charts as Necker Island, situated about 240 miles westward from the most western island of the Hawaiian Group, and about 400 nautical miles from Honolulu. From Necker Island the cable to extend to Fiji, and thence, as in Route No. 1, to New Zealand and Australia. On the section between Necker and Fiji, possibly Howland or Baker Island may be available for a mid-station, but the exact position hos not been ascertained: Vancouver Island to Necker Island, '2,431 knots ; Necker Island to Fiji, 2,546 knots ; Fiji to Norfolk Island, 1,022 knots ; Norfolk Island to New Zealand, 415 knots ; Norfolk to Tweed Mouth, 761 knots : total, 7,175 knots. Route No. 3. —As in Route No. 2, the cable to extend from Vancouver Island to Necker Island, thence to Onoatoa or some one of the eastern islands of the Gilbert Group. Fiom this station in the Gilbert Group two branches to extend, one to Queensland and the other to New Zealand. The Queensland branch to touch at San Cbristoval Island in the Solomon Group and terminate at Bowen, connecting at that point with the land-lines, easterly to Brisbane and Sydmy, westerly to the Gulf of Carpentaria: Vancouver Island to Necker Island, 2,431 knots; Necker Island to Onoatoa (in Gilbert Group), 1,917 knots ; Onoatoa to Fiji, 980 knots ; VitiLevu to New Zealand, 1,004 knots : Onoatoa to San Ctiristoval (Solomon Group), 953 knots; San Ohristoval to Bowen, Qaeansland, 980 knots: total, 8,265 knots. Route No. 4. —As inKoutes Nos. 2 and 3, the cable to be laid from the northern terminal point to Necker Island. Prom Neoker Island to extend in a direct course to Bowen, touching at Apamana, a central island in the Gilbert Group, and at San Christoval, of the Solomon Group: Vancouver Isiaud to Necker Island, 2,431 knots ; Necker Island to Apamana (Gilbert Group), 1,865 knots ; Apamana to San Christoval (Solomon Group), 970 knots ; San Christoval to Bowen, Queensland, 980 knots : total, 6,246 knots. Route No. 5. —As in Routes Nos. 2, 3, and 4, the cable to run from Vancouver Island to Necker Island ; from Necker Island to Fiji, thence to Jersey, thence direct to New Zealand : Vancouver Island to Necker Island, 2,431 knots ; Necker Island to Fiji, 2,546 knots ; Fiji to New Zealand, 1,150 knots : total, 6,127 knots. Route No. 6. —From Vancouver Island the cable to extend to Honolulu; from Honolulu to Fiji, and from Fiji to follow Route No. Ito New Zealand and Australia. On the section between Honolulu and Fiji one of the Phoenix Islands may possibly be found available for a mid-station: Vancouver Island to Honolulu, 2,280 knots; Honolulu to Fiji, 2,600 knots; Fiji to Norfolk Island, 1,022 knots ; Norfolk Island to New Zealand, 415 knots ; Norfolk Island to Tweed Mouth, 761 knots: total, 7,078 knots. Route No. 7. —From Vancouver Island the cable to extend to Honolulu ; from Honolulu to Onoatoa, of the Gilbert Group ; from Onoatoa to San Christoval, of the Solomon Group ; from San Christoval to Bowen : Vancouver Island to Honolulu, 2,280 knots; Honolulu to Onoatoa, 2,080 knots; Onoatoa to San Christoval, 953 knots; San Christoval to Bowen, 980 knots: total, 6,293 knots. Route No. 8. —From Vancouver Island the cable to extend to Honolulu ; from Honolulu to Fiji, possibly with a mid-station on this section if a suitable island be available. From Fiji the cable to run direct to New Zealand: Vancouver Island to Honolulu, 2,280 knots ; Honolulu to Fiji, 2,600 knots ; Fiji to New Zealand, 1,150 knots : total, 6,030 knots. The northern terminus of each route is on Vancouver Island. The cable will land at some suitable point to be determined, probably at Port San Juan, near the entrance of the Strait of San Juan, or at Barclay Sound. The several routes above described are shown generally on the accompanying map of the world. The distances given in each case are believed to be approximately correct, but are not guaranteed. Parties offering to provide and lay the cable must make their own calculations of distances and satisfy themselves. Character of Cables. —Proposals will describe the type of cables intended to be used on each section, and state the weight of conductors and insulators per knot in each case. Shore Ends. —The best description of landing cables must be employed at terminal points and all mid-stations, The proposals will describe the character, weight, and length of shore-end cables to be used in each case. Speeds. —The calculated speeds for each section of the cable shall in no case be less than twelve words per minute. Stations and Equipments. —Each offer will describe the character and approximate cost of buildings, instru* ments, &c, to be furnished for each terminal and mid-ocean station. Repairs and Maintenance.— Proposals will state the provision intended to be made for repairs and maintenance, the number, tonnage, and value of repair steamers. In the case of offers made under Form A, the steamers and stores will be found by and remain the property of the contractor until the end of three years from the completion of the cable, to be then taken over at a valuation, as may be stipulated and agreed. Surveys. —Charts may be seen at the Department of Trade and Commerce, Ottawa, and at the office of the High Commissioner for Canada in London, showing the soundings which have been made from time to time in the Pacific, as far as recorded. It is expected that additional soundings will shortly be made, but parties making proposals must assume all risk; and, in the event of a contract being entered into for establishing the cable, the contractors must themselves take means to find the most suitable points for landing the cable at all terminal and mid-ocean stations, It will be understood that in each instance the landing privileges are to be secured by the contributing Governments,

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Time of Completion.— The time limited for the completion of the cable is three years from the date of the contract, but, as it is desirable to have telegraphic communication established as soon as practicable, proposals may state,, a shorter period, or the same parties may make two offers, one on the basis of three years, the other on the shortest period within which the undertaking may be accomplished. Proposals. —Proposals based on the above general conditions, and in either of the three forms set forth, to be addressed to the Minister of Trade and Commerce, and delivered at his department in Ottawa on or before the Ist day of November, 1894. Department of Trade and Commerce, Ottawa, 6th August, 1894. 4. Resolved, ,That, in view of the desirability of having a choice of routes for a cable-connection between Canada and Australasia, the Home Government ba requested to take immediate steps to secure neutral landingground on some one of the Hawaiian Islands, in order that the cable may remain permanently under British control. 5. Resolved, That the Canadian Government be requested, after the rising of this Conference, to make all necessary inquiries, and generally to take such steps as may be expedient in order to ascertain the cost of the proposed Pacific cable, and promote the establishment of the undertaking in accordance with the views expressed in this Conference. Appendix B to Mr. Fleming's Statement No. 1. Report on Tenders. Sib,— Ottawa, 20th November, 1894. I have the honour to report on the replies received by you on the Ist instant, in response to the public advertisement of the Government of Canada, inviting cable-manufacturing contractors and others to state the terms upon which they would be prepared to lay and maintain in an efficient condition a submarine electric oable across the Pacific from Canada to the Australasian Colonies. 1. Sir John Pender, Chairman of the Eastern Extension Telegraph Company, 50, Old Broad Street, London, addressed a letter to you, dated 19th October, 1884, in which he represented (1) that full information respecting the depth and nature of the sea-bed has not been obtained, and in consequence reliable opinions cannot be formed; (2) that Mr. Alex. Siemens's estimates of revenue are fallacious, and that my own estimates are not much more reliable ; (3) that a cable laid as intended would be quite useless and would prove a commercial failure ; (4) that a telegraph established across the Pacific as proposed would result in a loss of at least £90,000 a year to the company he represents. Sir John Pender, in short, discourages in every possible way the attempt to span the Pacific by a Canada-Australian telegraph. He states, however, that he will be most happy to enter into negotiations for accomplishing the work if sufficient inducements be offered him, and he pleads that his company " will be able to undertake the work on better terms than could be offered by any other company." 2. Mr. W. Sharpley Seaton, 57£, Old Broad Street, London, likewise addresses you 19th October, 1894. This gentleman sets forth at some length the great necessity which exists for a detailed survey. Hβ considers this to be of primary importance, and counsels delay until such a survey be made. 3. The Chairman of the Telegraph Construction and Maintenance Company, 38, Old Broad Street, London, writes 19th October, 1894. He critcizes generally the proposals which have been published by the Canadian Government, and raises objections to the conditions laid down for intending contractors. He objects to each one of the eight routes specified, and proposes a new route, taking in Honolulu and Samoa. On this route the firm he represents would lay a cable of a good type and weight between Vancouver and New Zealand (onlj) for £1,870,000. This amount, however, does not include maintenance for three years or for any period; nor does it include a branch cable to Australia. He urges as a first step that the line should be sounded over its entire length on the exact route chosen, and he states that his firm cannot undertake to guarantee the repair of the cable until a further investigation has been made of the sea-bottom over which the cable is to be laid. The writer of this communication estimates that a cable could be laid on Route No. 8 for about £1,300,000, but this, he states, would depend upon its proving possible to find an available and safe mid-station between Honolulu and Fiji. He further states that maintenance on this or any route cannot under present conditions be guaranteed by this firm. 4. Mr. Francis A. Bowen, 8, Tokenham Buildings, King's Arms Yard, London, sends a proposal, dated the 20th October, 1894. This gentleman, for himself and his associates, offers to construct and submerge a cable on any route which may be selected for £200 per knot of 6,08266 ft. The offer presents itself to me as being in an exceedingly ambiguous form, as there is nothing to show what the total cost may be on any route, and there is no explanation as to how the total cost is to be ascertained, whether the number of knots shall be reckoned on the actual distance between stations, or on the length of cable payed out; nor is it clear that the price stated includes the cost of buildings, instruments, &c, moreover, and to my mind the most serious objection to this offer is the specification of the core to be used; the weight of copper and gutta-percha appears to be designed to be the same throughout without reference to the length of sections to be spanned. As specified the core would be too light for the long section and unnecessarily heavy for the shorter sections. Mr. Bowen places the additional charge for maintenance at £237,000 for the three years. 5. The Indiarubber, Gutta-percha, and Telegraph Works Company refer to the invitation for proposals under Form C—that is, on the basis of a traffic guarantee. This company is unable to make a firm offer under this form ; they, however, submit an estimate in the following words : " For your guidance we may state that in our opinion a twenty-five years' annual guarantee, payable quarterly, of the following amounts, as placed against the respective routes, should suffice for the effective establishment and maintenance of the oable: Route No. 1, £226,000; Route No. 2, £217,000 ; Route No. 3, £215,000 ; Route No. 4, £153,000 ; Route No. 5, £202,000 ; Route No. 6, £199,000 ; Route No. 7, £184,000; Route No. 8, £197,000." There is no other reference in any of the replies received to the establishment of the trans-Pacific telegraph under a Government traffic guarantee (Form C), and none whatever to the formation of a company to carry out the undertaking under a Government subsidy (Form B). With respeot to the matter of soundings referred to in the first, second, and third communications, above noticed, I would only remark that it would require soundings to be taken in a very comprehensive manner to give even an approach to a full knowledge of the sea-bed, and that it would involve much cost and prolonged delay. However valuable such a survey would undoubtedly prove in a scientific point of view, it is by no means indispensable to the laying of a cable or to its effectual maintenance. Cables have been laid, and successfully laid, when no such comprehensive surveys have been effected : indeed, the best information goee to show that a large proportion of cables at present submerged have been laid without any precise and detailed knowledge of the sea-floor. The majority of such cables are, I believe, in good working-order, and few of them have ever required any great expenditure for repairs. Be all that as it may, the Government is now in possession of definite offers from firms of the highest standing and widest experience to lay the Pacific cable on any one of the eight routes specified. All the soundings required for securely and successfully laying the cable are to be made by the contractors themselves during the time occupied in manufacturing it, and so satisfied are they on this and all other points that they are quite ready to enter into contract to complete the undertaking and guarantee its maintenance for three years for a definite sum. There are four regular tenders according to Form A, accompanied by ample details and full information on all essential points. After carefully and critically examining and comparing them, I beg leave to submit the following abstract: — Regular Tenders. —Form A. The cable to be owned and controlled by Government; to be worked under Government authority ; and to be kept in repair by the contractor for three years : No. 1. From Siemens Brothers and Co., 12, Queen Anne's Gate, Westminster, London. No. 2. From the Fowler-Waring Cable Company, North Woolwich, London. .No. 8. From the W. T. Henley Telegraph Works Company, 27, Martiu'a Lane, Cannon Street, London, and

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North Woolwich. No. 4. From the Indiarubber, Gutta-percha, and Telegraph Works Company, 106, Cannon Street, London, and Silvertown. These tenders are based on the general conditions prescribed ; they include in each case the manufacture and laying of the cable; the providing of station-buildings and instruments for the use of the operating staff; likewise the maintenance and repair of the entire length of the cable for a period of three years after the whole line shall have been completed and put in operation. The parties tendering are prepared to enter into contract for the sums placed opposite the name of the firms, in each case, as follows :— Route No. I. —Commencing at Vancouver Island, with mid-stations at Fanning Island, Fiji, and Norfolk Island, and with branches from Norfolk Island to New Zealand and New South Wales —complete, including maintenance for three years, in each case : No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,517,000. No. 3. W. T. Henley Telegraph Works Company, £1,826,000. No. 1. Siemens Brothers and Co., £2,170,000. No. 2. FowlerWaring Cable Company, £2,350,000. • Route No. 2. —Commencing at Vancouver Island, with mid-stations at Necker Island, Fiji, and Norfolk Island, and with branches to New Zealand and New South Wales —complete, including maintenance for three years, in each case: No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,316,000. No. 3. W. T. Henley Telegraph Works Company, £1,743,000. No. 1. Siemens Brothers and Co., £2,140,000. No. 2. Fowler-Waring Cable Company, £2,210,000. Route No. 3. —From Vancouver Island to Bowen (Queensland), with mid-stations at Necker Island and Onoatoa (Gilbert Group), branching at Onoatoa, via Fiji, to New Zealand, andwia San Christoval (Solomon Group) to Bowen —complete in each case, including maintenance for three years : No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,403,000. No. 3. W. T. Henley Telegraph Works Company, £1,723,000. No. 1. Siemens Brothers and Co., £2,240,000. No. 2. The Fowler-Waring Cable Company, £2,341,000. Route No. 4. —From Vancouver Island to Bowen (Queensland) direct, with mid-stations at Necker Island, Apamana (Gilbert Group), and San Christoval (Solomon Group)—complete, including maintenance for three years, in each case : No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,068.000. No. 3. The W. T. Henley Telegraph Works Company, £1,554,000. No. 1. Siemens Brothers and Co., £1,710,000. No. 2. The FowlerWaring Cable Company, £2,125,000. Route No. s. —Vancouver Island direct to New Zealand, via Necker Island and the Fiji Group—complete, including maintenance for three years, in each case: No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,291,000. No. 3. W. T. Henley Telegraph Works Company, £1,658,000. No. 2. The Fowler-Waring Cable Company, £2,010,000. No. 1. Siemens Brothers and Co., £2,050,000. Route No. 6. —Vancouver Island to Norfolk Island, with mid-stations at Honolulu and Fiji. At Norfolk Island branches to extend to New Zealand and Australia proper —complete, including maintenance for three years, in each case : No. 4. The Indiarubber, Gutta-percha, ana Telegraph Works Company, £1,391,000. No. 3. The W. T. Henley Telegraph Works Company, £1,740,000. No. 1. Siemens Brothers and Co., £2,120,000. No. 2. The Fowler-Waring Cable Company, £2,130,000. Route No. 7. —From Vancouver Island to Bowen (Queensland), with mid-stations at Honolulu, Onoatoa (Gilbert Group), and San Christoval (Solomon Group)—complete, including maintenance for three years, in each case: No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,081,000. No. 3. The W. T. Henley Telegraph Works Company, £1,589,000. No. 2. The Fowler-Waring Cable Company, £1,880,000. No. 1. The Siemens Brothers Company, £1,900,000. Route No. 8. —From Vancouver Island direct to New Zealand, with mid-stations at Honolulu and Fiji— complete, including maintenance for three years, in each case: No. 4. The Indiarubber, Gutta-percha, and Telegraph Works Company, £1,243,000. No. 3. The W. T. Henley Telegraph Works Company, £1,655,000. No. 2. The Fowler-Waring Cable Company, £1,910,000. No. 1. The Siemens Brothers Company, £1,970,000. The cost of maintenance is variously estimated by the several firms, the highest being that of the W. T. Henley Telegraph Works Company, who place the cost at £115,000 per annum, or £345,000 for the three years. This is subject to a reduction if the spare cable provided for the purpose be not used. The Siemens Brothers Company include in their offer for the purpose of maintenance £270,000, being at the rate of £90,000 per year ; this also is subject to a reduction if the actual repairs cost less than the sum named. This mode of charging for the maintenance and repair of the cable has an obvious advantage. The Fowler-Waring Company stipulate that a fixed sum, £300,000, be allowed to guarantee maintenance and repair for the three years. The Indiarubber, Gutta-percha, and Telegraph Works Company make no special charge for guaranteeing the maintenance and repairs, and, as their offer for laying the cable on each of the eight routes is the lowest, it is well to make this point perfectly clear by quoting from their proposal as follows : " The contract prices given hereunder for the different routes include the erection at each cable-landing place of a suitable dwellinghouse and operating-room for the working staff, with duplicate sets of all proper instruments at each station ; also the use of two steamships fitted with cable-tanks and all necessary machinery for repairing the cable, and the cost of maintaining these ships, as well as the cables themselves, for three years." The contract prices for which this firm is prepared to manufacture, lay, and maintain the cable for three years on any one of the eight routes are as follows : Eoute No. 1, £1,517,000 ; Route No. 2, £1,416,000; Eoute No. 3, £1,303,000'; Route No. 4, £1,068,000 ; Route No. 5, £1,291,000; Route No. 6, £1,391,000; Route No. 7, £1,031,000; Route No. 8, £1,243,000. This company states that if intrusted with the contract they will undertake to manufacture the cable at the rate of twenty miles a day, and will proceed to ship and lay it with the least possible delay. An examination of this tender and accompanying documents shows that this company propose to use an approved type of cable; the core on the long section (Route No. 1) is to have a copper conductor weighing 5331b. per knot, insulated with gutta-percha weighing 365 lb. per kuot, the sheathing to be the same as the deep-sea type of cable adopted by the Anglo-American Telegraph Company in the newest trans-Atlantic cable laid this year. The shore ends and intermediate cables to be similar in character and weight to those generally adopted under like circumstances. There is one apparent omission in this tender in connection with shore-end and shallow-water cables. I can find no special mention of a metallic protection against teredos. In the opinion of the undersigned, the core of the cable should be enveloped in a brass tape. The additional cost is not great, and before any contract is entered into with this or any company it should be clearly stipulated that this effective means of protection against the ravages of marine life should be provided. I have, &c, The Hon. Mackenzie Bowell, Minister of Trade and Commerce, Ottawa. Sandford Fleming. • - Additional Report on Tenders. Sir,— Ottawa, 11th December, 1894. I have the honour to report on the letter addressed to you by the Indiarubber, Gutta-percha, and Telegraph Works Company, of date the 22nd November, 1894, on the subject of the tender of that firm for manufacturing, laying, and maintaining the Pacific cable. In my report on the tenders of date the 20th November, 1894, I mentioned in the last paragraph that in my opinion it was expedient to make provision for protecting the core of the cable, under certain conditions, from the ravages of marine life. The letter of the above-named company which you have referred to me gives the assurance that all types of cable proposed to be laid by that firm will be provided with proper protection—that, in fact, all cables laid in less than 100 fathoms are to have the core sheathed with metallic taping as a protection against the teredo. This assurance removes the objections which I raised. In my report of the 20th November all the tenders referred to were for the supply of cables having a speed-capa-city of twelve words per minute. For Route No. 1 the price of the Indiarubber, Gutta-percha, and Telegraph Works Company is, including maintenance for three years, £1,517,000. In tho letter of this company of the 22nd November it is stated that higher speed oables will be furnished for this route at the following prices, viz.: A fifteen-word-per-

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minute cable for £1,672,000; an eighteen-wotd-per minute cable for £1,880,000. Compared with estimates previously made these prices must be held to be moderate. My own estimate for a cable on this route (No. 1), as given in your report on the mission to Australia (page 69), is £1,978,000; and the estimate furnished the Colonial Office, London, by the General Post Office authorities (see appendix to the same report, page 79) is £2,924,000. Neither of these estimates includes maintenance for three years ; moreover, the estimate from the General Post Office does not include a connection with the mainland of Australia, which would probably be estimated at £200,000 additional. We thus have in the tender of the Indiarubber, Gutta-percha, and Telegraph Works Company a definite offer to lay and maintain for three years a cable from Vancouver to Australia and New Zealand with a speed-capacity 50 per cent, higher than the cable referred to by the General Post Office authorities, and for a sum of £1.244,000 less than their estimate without any allowance for maintenance. I have, &c, Hon. Mackenzie Bowell, Minister o£ Trade and Commerce. Sandford Fleming. Appendix C to Mr. Fleming's Statement No. 1. THE PACIFIC CABLE AS A PUBLIC UNDEBTAKIN& OWNED BY GOVEBNMENT. (a.) Extracts from Mr. Fleming's Address at the Colonial Conference, 189 i. " There are two distinct methods by which the Pacific cable may be established, viz.: (1.) Through the agency of a subsidised company, (2.) Directly by Government as a public work. " I have given this branch of the subject long and earnest attention, and I have arrived at conclusions which to my mind are confirmed by every day's experience. At one time I favoured the first method. It has been customary to have enterprises of this character carried out by companies, and it seemed to have been assumed that there was no other way by which the work could be accomplished. However, when it is considered that in the United Kingdom, in India, in the Australian Colonies, and in a great many foreign countries the telegraphs are owned and worked by Governments, there appears no good reason why Government ownership should be confined to land-telegraph. No doubt it would give least initial trouble to Governments to offer liberal subsidies in order to have the telegraph across the Pacific laid and owned by a company, but I am perfectly satisfied that in the long-run the second method will be found in every respect more advantageous. The interests of a company and the public interests are not identical; they are in some respects the very opposite. While the primary object of a company is to exact from the public as much profit as possible, the interests of the public, on the other hand, are to secure cheap telegraphy, and to have it as free and untrammelled as possilile. Suppose, for example, that a large subsidy be granted, such a subsidy as Sir John Pender has declared to be necessary, and that the whole undertaking passed over to the Eastern Extension Company to carry out, would not the effect be to confirm and perpetuate the telegraphic monopoly which at present exists between Australia aud the outer world ? Would it not simply shut out all prospect of obtaining the reduced charges to which we may confidently look forward? Would it not contract intercourse instead of providing the fullest opportunity for its free and full expansion, so much to be desired? Hook forward to the time—and I do not think it is far distant—when, if a wise and prudent course be followed, the telegraph will ramify in many directions under the ocean to all the principal colonial possessions, and that in the not distant future there will be a greater reduction in charges on messages than has taken place in letter-postage during the past fifty years. " Speaking for myself, I have arrived at the conclusion that the true principle to follow, looking solely at the public interests, present and prospective, is to establish the Pacific cable as a Government work. In my judgment, it would be a grave and irremediable mistake to give it to the existing company on their own terms, or perhaps on any terms. Even to hand the work over to a new company entirely distinct from the Eastern Extension Company would scarcely mend matters. It would be impossible to prevent the two companies combining in some form to advance their common advantage to the detriment of the public interests. " I have elsewhere endeavoured to show the advantages derivable from the establishment of the Pacific oable as a public work directly under Government control. It is a matter of constant experience that the promoters of companies, as a rule, set out with the determination to make large sums of money, that investors are promised large returns, and they are not satisfied unless they are forthcoming. In consequence, 9 per cent., and in some cases muoh more than 9 per cent., is paid for money raised for private companies ; while, on the other hand, Governments can borrow capital at 3 per cent. Hence it is possible under Government ownership to reduce charges on telegraphy much below the rates charged by private companies. " With the proposed cable under Government control, it is not easy to assign a limit to the reduction in charges for transmitting messages, and with low charges there will arise, without any appreciable extra cost in working, a great expansion in the business of the telegraph. Thus the public will be benefited to an extent which would not be possible if the cable became the property or passed under the control of a private company. " I had hoped to have seen present at this Conference His Excellency Sir Ambrose Shea, Governor of the Bahamas. He would, lam sure, have given the best testimony in favour of the plan of Government ownership. Less than two months ago I had a letter from him in which he furnished indisputable evidence as to the superiority of the principle of Government control. The Bahamas are connected with the mainland by a cable owned by Government. The first idea was to have it carried out by a company under a subsidy of £3,000 a year for twenty-five years. Fortunately it was decided to make it a Government work; the cable is entirely so established, and the policy of its operation is dictated primarily by the commercial requirements of the colonies. Profits are, of course, desired, but these are held to be a subordinate consideration. This policy would have been reversed had the cable been controlled by a company; the interest of the company per se would have remained paramount. Sir Ambrose Shea informs me that even in a financial aspect it has proved fortunate that they kept the cable under Government control. Instead of paying £3,000 a year in the form of a subsidy, the charge on the colony is already reduced to £1,800 after fully providing fora sinking fund to cover renewals, as well as interest on the cost and all other charges. Beyond the question of money, the Governor attaches much importance to the power held by the Executive for adapting the policy of the cable management to the growing and varying wants and conditions ol the colony. " It appears to me that, in bringing two of the leading divisions of the colonial Empire into telegraphic connection, we cannot do better than place before us the experiment to which I have referred as having been so successfully tried. Great importance must be attached to the views aud ripe judgment of Sir Ambrose Shea, strengthened in a matter of this kind by the experience of the Bahama cables. Every commercial object points to the expediency of retaining the Canada-Australia cable under Government ownership ; and, apart altogether from commercial considerations, there is no reason to warrant that so important a work, undertaken for national purposes, should be removed from the effective control of the Governments, by whose authority alone the great principles of its establishment would be fully observed." ESTIMATES OF REVENUE. (b.) Extract from Mr. Fleming's Memorandum, Sydney, 11th October, 1893. " In many cases it is difficult, owing to the lack of information, to form estimates of the probable revenue of a projected undertaking. In this instance, however, the best data are available for our guidance. We have the published statistics of telegraph business by the existing line between Australia and Europe for a number of years, and it is fair to assume that, on the establishment of the Pacific cable, rates and all other things being equal, the business will be equally divided between the two lines. lam unable to ascertain the business for the past year, but I gather from the published returns that the number of words transmitted in the year ending the Ist May, 1892, was 1,275,191. If we divide this into equal parts we have 637,595 words as a basis for estimating the revenue of the Pacific cable. "In examining the returns for previous years some striking peculiarities are apparent. During the eight years from 1882 to 1890 the telegraph business between the Australian Colonies and Great Britain increased on an average 54,441 words each year, equal to 14 per cent, per annum. This may be viewed as the normal increase under a high tariff, inasmuch as throughout these eight years the charges on ordinary messages were never less than 9s. 4d. per

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word. On the Ist May, 1891, the rate was reduoed from 9s. 4d, to 4s. per word, arid within the twelve following months the business increased by 448,913 words —an increase of 54 per cent, on the business of the previous year, and 831 per cent, over the normal annual increase during the preceding eight years. The further expansion of business will no doubt for the present be disturbed and retarded by an increase in the charges on messages on the Ist January last, but there remains the experience of the year 1891-92 to establish the remarkable effect of a low tariff in stimulating telegraphy. In that single year the increase in the number of words transmitted under a 4s. rate was greater than the growth of the business during the whole of the preceding eight years under a 9s. 4d. rate. " One of the direct benefits to the public from the Government ownership of the Pacific cable will be the reduction in charges for transmitting messages. I have already mentioned that with a full and efficient staff, such as the estimate for working-expenses provides for, it will cost no more to do a large business than a small. There will therefore be no reason for preventing the freest expansion of telegraphy by the new line by lowering the charges. In my humble opinion, the rates across the Pacific should be lowered to 2s. per word immediately on the cable being laid, in order that the public may have the advantage of cheaper communication at the earliest moment. " The proposed rate of 2a. per word for transmitting messages across the Pacific would reduce charges between Australia and England to 3s. 3d. in place of 4s. 9d. as at present. Moreover, messages from Australia received at Vancouver would be forwarded to all parts of Canada and the United States for an average charge not exceeding 2s. 9d. per word in place of 65., the present charge. I wish to avoid extravagant statements and too sanguine estimates. I would, in submitting my ideas, particularly desire to keep strictly within reasonable probabilities. If we base estimates on the existing volume of business merely we must anticipate that there will be no great advance over the business of 1891-92 for a few years if the charges on messages are again raised as they already have been to some extent. In the calculations which follow I shall, therefore, assume the business to be at a standstill for three years— that is to say, I shall assume that the business in 1894 will not be greater in volume than it was in 1891-92, and that thenceforth the normal increase of not more than 14 per cent, per annum shall apply. The number of words transmitted in 1891-92 was 1,275,191. It is assumed that the Pacific cable would, if in operation in 1894, obtain one-half of thie business. *

" In connection with the estimates of revenue I have pointed out from statistical returns two elements of increase of business—(l) a normal increase under an exceedingly high tariff; (2) a very much greater increase under a lower tariff. There will be a third increase which will be due to the development of traffic with Canada and in bringing the Australian Colonies into direct telegraphic touch with the whole telegraph system of North America. At present telegraphic intercourse is insignificant, but, with a 2s. or 2s. 6d. rate acro3s the Pacific in place of a 6s. rate by a circuitous route, the ciroumstances will be favourable to the growth of telegraph business between the two continents, and in consequence the revenue to the Pacific cable from this source will rapidly develop to large proportions. In the foregoing estimates of revenue I have reckoned only the normal increase under a high tariff, and take no account of the greater increase which certainly will result from the charges being lowered, as proposed. I have likewise added nothing from the Australasia-North American business, the whole of which would flow to the Pacific cable. lam quite warranted, therefore, in expressing the opinion that the estimates of revenue I have presented are not exaggerated or unreasonable, and that the Pacific cable established by Government in the manner proposed would effect very important results. It would practically extinguish all subsidies now paid and render guarantees unnecessary. It would permanently establish low rates for ocean telegraphy. It would yield a revenue which, after paying working-expenses, and providing for maintenance and renewals, would make good all interest-oharges on the whole cost of the undertaking from the beginning, and in a very few years would furnish large surplus earnings. I venture to think, then, that if the resolution passed by the Postal and Telegraph Conference in March last be generally assented to in these colonies the Governments need not hesitate in incurring the comparatively small, almost nominal, liability necessary to secure a telegraph-connection across the Pacific, which every British subject will recognise to be of the greatest national and commercial value." (c.j Extract from Mr. Fleming's Letter to the Hon. Mackenzie Bowe.ll, 20th July, 1894. " With respect to the revenue : If it will take three years to establish the cable, 1898 will be the first year of its full operation. On pages 70 and 71 of the report on the mission to Australia will be found an estimate of the proportion of business which would fall to the share of the Pacific cable for that year, 1898. The estimate was made a year ago and based on the assumed telegraphic business for 1893 between Australia and Europe, which hs.s been exceeded by actual results. (See foot-note p. 71.) Correcting the estimate in this respect, the business for 1898 may be set down at 1,105,000 words, which reckoned at 2s. a word would yield a gross revenue for the first year's operation of the Pacific cable of £110,000. It will be borne in mind, moreover, that this estimate is for European business, and includes nothing for the business between Canada, the United States, and Australia, at present insignificant, but which in a few years, with greatly improved facilities, will undoubtedly develop to considerable proportions. For these reasons I am satisfied that the estimates submitted will be fully realised and more than confirmed by actual results. " Bearing on these estimates, a friend wrote me from London a few weeks baok as follows :' I have been looking over the proceedings of the Colonial Conference of 1887, where a memorandum of yours is given, dated April, 1886 (page 101). In it you show a probable traffic for the year 1893 of 133,000 messages, equal to 1,333,000 words. The actual business for the past year, according to Sir John Pender, was 1,306,716 words, and according to Australian returns, 1,401,292 words. In either case the prediction made eight years ago is approximately correct.' I mention this merely to bring out the fact that the principles on which the estimates are formed are sound, and that the estimates themselves may generally be considered safe. " With respect to the charges on revenue, viz.: (1) Interest on capital; (2) working staff and management; (3) repairs and maintenance. The first and second are constant, the third is variable. Experience goes to show that failure and interruptions in cables, due to defects in manufacture or causes connected with laying, generally take place within the first year or two. For this and other reaons I propose that the manufacturers should be asked to undertake to keep the cable in efficient working-order for three years; we may thus eliminate from revenue account for that period all charges for repairs and maintenance.

*At the date of going to press (May, 1894) it has been ascertained that the traffic for 1893 between Europe and Australia consisted of 1,306,716 words, showing that Mr. Fleming's estimate is considerably within actual results. If merely the normal increase of 14 per cent, under a high tariff be added to existing business the number of words for 1894 in the table of estimated earnings which follows should be 744,828 in place of 637,595, and the earnings for the same year £74,483 in place of £63,759. Thus establishing that the estimates of revenue presented in thin memorandum are in no way exaggerated. 4—l. 7.

Year. Number of Words per Annum. Earnings of the Cable at 2s. per Word. Year. Number of Words per Annum. Earnings of the Cable at 2s. per Word. .894 .895 .896 .897 .898 .899 637,595 726,858 816,122 905,386 994,649 1,084,913 £ 63,759 72,686 81,612 90,539 99,465 108,391 1900 1901 1902 1903 1904 1,173,176 1,262,439 1,351,703 1,440,967 1,530,230 £ 117,318 126,244 135,170 144,097 153,023

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"Assuming that the cost of the oable and its maintenance for three years will be, in round figures, £2,000,000, the revenue account for the year 1898 would stand as follows: Earnings as estimated, £110,000; interest on £2,000,000 at 3 per cent., £60,000; stafi and management, £30,000: surplus revenue, £20,000. " In the above I have taken Mr. Siemens's estimate of the cost of staff required for stations, and office expenses at each point—viz., £24,000. I have increased Mr. Siemens's allowance for general management to £6,000, the two making in all £30,000 per annum. This charge will be constant, and will suffice, as pointed out by Mr. Siemens, for a business more than six times greater than that estimated for the year 1898, and by introducing duplex working, for a traffic ten or twelve times greater. " I have pointed out elsewhere that the average normal increase of telegraph business between the Australasian Colonies and Europe was 14 per cent, per annum during the period when the high rates charged for a period of eight years were in force—that is to say, under a tariff rate of 9s. 4d. per word from 1882 to 1890. Manifestly under the low rates proposed to be charged by the Pacific cable the normal increase will be greater than 14 per cent, per annum, more especially as the whole North American business will receive a great incentive from direct communication, and all this additional and constantly growing traffic must find its way by the Pacific cable to and from Australia. I venture to think that it would not be too sanguine an estimate to place the annual increase of business at 18 or 20 per cent., but to be perfectly safe I shall limit it to 15 per cent, in the calculations which follow—that is to say, only 1 per cent, more than the average annual inorease realised under the high tariff for the eight years previous to 1890. "Estimate of the business of the Pacific cable for ten years after its completion, calculated on the basis of 1,100,000 words for the year 1898, an average normal increase of 15 per cent, per annum thereafter:—

" As we have eliminated all but the fixed charges on revenue for the first three yeats, an examination of the above table will show that the surplus up to the fourth year will have accumulated to £109,500, which sum, together with the annually increasing surplus thereafter accruing, would be sufficient to meet all charges for repairs and maintenance, and leave a balance to be carried to a cumulative reserve for renewals at some future day. I may mention that I have submitted in outline this financial scheme to the delegates from New South Wales, Victoria, Queensland, and New Zealand, with whom I have had the advantage of frequent consultations since the Conference rose, and I have the satisfaction to Btate that it finds favour with each of them. That feature of the scheme by which all the uncertain charges for repairs and maintenance would be embraced in the contract with the manufactures of the cable would not only have a tendency to secure a cable of the very best make and character, but it would defer all charges against revenue, which revenue could not fully meet, until a date later than the payment of the last annual subsidy to the Eastern Extension Company. The Australian Governments now contributing to that subsidy could then with greater ease make up any possible shortage which may arise in connection with the new cable. The estimate, however, shows clearly that under this scheme there is every prospect of the Pacific cable being self-sustaining from the first." (d.J Letter from George Johnson, Esq., Dominion Statistician. Deah Sir, — Office of the Statistician, Ottawa, 29th November, 1894. I have examined your statements before the Intercolonial Conference in re the Pacific cable, and have the following remarks to make: First, respecting the growth of business ; and, second, respecting the proportion the new route could hope to secure. (1.) Taking the statistics of growth, I find the following:—

The actual increase in the three years 1891-93 over 1890 was 574,015. The number of words transmitted is taken from returns submitted to the Postal and Telegraph Conferences held in Adelaide in May, 1890, in Queensland in March, 1893, and in New Zealand in March, 1894. They show that during fifteen years (1875-90) of high tariff (9s. 4d. per word) the increase in the number of words was 251-8 per cent., and that during the three years 1891-93, in which period the rates were reduced to 4s. and 4s. 9d., the increase over 1890 was 69-2. For the whole period covered by these statistics the increase is 496 per cent. Prom these figures of percentage it appears : First, that during the period 1875-90 the growth of business under a 9s. 4d. tariff was equal to an annual average of 16-8 per cent.; second, that under a 4s. and 4s. 9d. tarifi the average annual growth from 1890 to 1893 (three years) was 23 per cent. Your estimate of 14 per cent, increase appears, in the light of these facts, to be a very conservative one. (2.) How much of the business could a cable competing with the existing one hope to secure ? (a.) A telegram from Melbourne to London by the existing line has to travel 13,695 miles of wire, of which 2,704 miles is in Australia, and is therefore land-wire. The land-wire in Asia is, I judge, about 1,000 miles more of wire. A telegram from Melbourne to London vid Canada would travel 14,414 miles, of which 3,764 would be land-wire! In respeot to the greater danger of stoppage and delay from land-wire, the two lines would be practically on an equality. (6.) Your estimate is that one-half of the words sent by cable between Australia and the rest of the world would be sent via the line across Canada. According to the return of 1892 there would be, on this estimate, 660,706. But some portion of the total of 1,321,412 words must be Asiatic business, since Australia imports of tea alone 33,000,0001b. a year direct from Asia. From various data I estimate the Asiatic business at one-eleventh of the whole. Deducting this, we have 1,191,000 words to represent European business, of which the new proposed route would stand a fair chance to secure one-half. I would therefore place the estimate at 595,000 (or 600,000) words instead of 637,595. Taking this estimate and

Cmai Interest and EarnTnls Workingearnings, expenses. Surplus. Gross Earnings. Interest and Workingexpenses. Surplus. .898 .899 .900 901 .902 £ 110,000 126,500 143,000 159,500 .. 176,000 £ 90,000 90,000 90,000 90,000 90,000 £ 20,000 1903 36,500 1904 53,000 1905 69,500 1906 86,000 1907 192,500 209.000 225,000 242,000 258,500 £ 90,000 90,000 90,000 90,000 90,000 £ 102,500 119,000 135,000 152,000 168,500

Increase. Year. Number of Won transmitted. Actual. PerCent. for Period. Per Cent. Yearly. Tariff per "Word. 1875 .. 1880 .. 1885 .. 1890 .. 1891 .. 1892 .. 1893 .. 235,160 353,348 537,355 827,278 1,275,191 1,321,412 1,401,293 118,188 184,007 289,923 50 55 54 100 11-0 10-8 54-0 3-6 6-0 9s. 4d. 9a. 4d. 9s. 4d. 9s. 4d. and 48. 4s. 4s. 9d.

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applying to it the 16-8 per cent, increase, the estimate for 1895 would be 695,000 words, or 31,860 less than your estimate. For 1896 it would be 811,760 words, or 4,362 less. In 1897 it wouid be 948,000 words, or 42,000 more than your estimate. My calculation would give fewer words for 1895 and 1896 and more words for 1897, and still more in succeeding years. I have taken the percentage of the period when the tariff was 9s. 4d. per word. If the percentage under a 4s. tariff were taken the growth would be much greater, and undoubtedly the result of a reduction in the rates would be an increase in messages, as the table above given shows. I have not dealt with the development of business between North America and Australia, which must in the nature of things be very great when facilities are provided, and will also be tributary to the Pacific cable. Yours, &c, Sandford Fleming, Esq., C.M.G , C.E., Ottawa, Ontario. Geobge Johnson, Statistician. (c.) Letter from J. M. Courtney, Esq., Deputy Minister of Finance. Deab Mb. Fleming,— Department of Finance, Ottawa, Ist December, 1894. I have read over very carefully and, I may say, with the greatest of pleasure the blue-books and documents you left with me for perusal in connection with the scheme for laying a Pacific cable to connect this country and Australasia. Both from the fact that it is the pioneer Pacific-cable scheme, and also from the magnitude of the work itself, the consideration of the subject is to me exceedingly interesting, especially as it has such an intimate bearing on the expansion of the Empire. In writing to you now, however, I wish to be very careful and to guard the position I take from misconception. I can, of course, have nothing to do with the policy of the Canadian Government, and in the present financial condition of the continent I could not, if the matter were referred to me on general principles, recommend any scheme that would increase the liabilities of the Dominion, either directly or indirectly. From the examination of the facts and figures, however, submitted by you, I may say I have arrived at the same conclusion as yourself as to the cost of laying down the cable, and, in my judgment, the conclusion arrived at cannot be regarded as oversanguine or forced in any way. As to the calculations of revenue, I have, of course, taken your own method, and have divided by two the number of words sent in 1892, taking one-half to come over the new cable. But, as it appears from the documents submitted, the cable could not be in operation for three years yet, or until 1898, even if commenced at once, and taking the average annual increase in the messages at 15 per cent., the estimate of the work to be done is, to my mind, very low. It would follow, therefore, judging by the expenditure and by the revenue, that, as far as I can see, with the limited knowledge at my disposal in the matter, and under the conditions named, the cable-line could be laid down and a revenue derived which would meet all the charges. Of course, in all this it must be understood that lam looking at the financial features of the scheme from the docunienta before me, and that I have no personal or direct knowledge of the laying or working of cable-lines. I do not know that a separate line may not be necessary or that other contingencies may not arise which I have no means of anticipating or foreseeing. Yours, &c, Sandford Fleming, Esq., Ottawa. J. M. Courtney. (f.) Letter from W. Hepworth Mercer, Esq., Colonial Office, London. Dear Mr. Sanford Fleming,— Eideau Club, Ottawa, 11th October, 1894. Before leaving Ottawa I desire to congratulate you on the evidence which is now in the possession of the Canadian Government that your views as to the cost of laying the proposed Pacific catle were moderate and reasonable. It must be a matter of great gratification to you to find, after so many years of controversy and opposition, that your estimates are more than borne out by the practical offers now received. With regard to the question of the prospective revenue of the cable, I have carefully examined the data and studied the principles upon which you have formulated the estimates contained in your memorandum dated Sydney, Huh October, 1893, and your letter to Mr. Bowell of the 20th July, 1894, and I have satisfied myself that your oonclusions are thoroughly sound. Assuming that the cable is to be a Government enterprise, participated in by Great Britain, Canada, and Australasia, I think that the estimates of revenue would at least be fully borne out by actual results. It seems to me that there is now an excellent case for presentation to the various parties interested, and the Australasian Colonies in particular will no doubt look forward to the accomplishment of an enterprise which will, we may fairly hope, give them an unprecedentedly low telegraphic tariff in return for a smaller expenditure than they have been paying for a comparatively high one. I hope, speaking for myself, that in a matter of such wide concern, and involving, besides the direct commercial benefits, results the importance of which cannot be estimated in figures or weighed in a balance-sheet, the Australasian, the Dominion, and the Imperial Governments will be all able to join in the project. I am, &c, W. Hhpworth Merceb.

Statement No. 2 (refebbed to in the Report of Mb. Fleming to the Minister op Tbade and Commebob, 30th January, 1897). note on the pacific cable. London, 16th December, 1896. On the 12th November last I submitted my views on the subject of the Pacific cable. They were mainly comprised in a statement which I had prepared for the information of the Committee in July laat. I feel it my duty now to submit some explanation which appears to be called for. In the evidence received by the Committee sinoe the 12th ultimo there ia a general unanimity of opinion on the following points:—-First: That the Fanning Island route cannot be widely departed from. It is true that Admiral Wharton mentioned Palmyra Island as a possible mid-ocean station in place of Fanning Island, but the two islands are relatively not far apart. As no special knowledge exists as to the suitability of Palmyra for cable purposes, and nothing could be gained in respect to distance from Vancouver, for the present at least it may be considered that the route to be followed by the cable is that already known as the Fanning Island route. Second : That the laying of a cable between Canada and the Australasian Colonies on the general route referred to is perfectly practicable from a technical point of view. Third: That there is a general agreement on the question of a survey, the gentlemen examined having generally expressed the opinion that a series of soundings is neoessary. It is oonoeded, however, by every one that all soundings required oan easily be made during the period oooupied in manufacturing the cable. With respect to the ownership of the cable, whether it should be owned and worked under Government or by a subsidised company, there does not appear to be any great difierenoe of opinion. Some of the witnesses spoke strongly in favour of Government ownership. It is true that gentlemen who appeared on behalf of the Eastern Extension Telegraph Company objected very deoidedly to any cable across the Paoifio, whether owned or worked by Government or by a subsidised company. They took the ground that it would be unfair to the Eastern Extension Company to establish a oompeting line without compensation to that company for loss of business and loss of profit. Several questions were asked me on this point, to which I deferred giving replies. I felt that whatever claims the present company might have on the Imperial Government and the Australian Colonies whioh had not already been met, that company could have no possible claim on Canada, as the Dominion is not, and never has been, under the slightest obligation to the Eastern Extension Telegraph Company. It may indeed be held that the company has always assumed an attitude of hostility to the aspirations of Canada in respect to the proposed cable, ana has for years strenuously opposed all efforts to advance her own and Imperial interests on the Paciflo in connection with the union of Australasia and British North America telegraphically. Be that as it may, I can only repeat the view I have often expressed, that if the exigencies of the Empire as a whole demand the establishment of a national work which will interfere with the operations of this private company, every reasonable consideration should be extended to that company by those upon whom it has just claims. But it oannot be supposed that the public interests must be entirely set aside in order that the oompany may for ever continue to reoeive large dividends. I will again refer.

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to the position of the Eastern Extension Company, and suggest a means by which, as it appears to me, the matter can be adjusted in the spirit of justice and fairness. . I have pointed out in what respect there is a general agreement in the views expressed by the several gentlemen examined by the Committee. I shall now refer to an extraordinary diversity of opinion. In this diversity I find ranged on one side the agents of the Eastern Extension Telegraph Company, and two officers of the Post Office Department. On the other side all the highest authorities on electrical science, together with the managers of two important ocean cables, whose evidence was submitted to the Committee. The two officers were Mr. J. C. Lamb, Secretary, and Mr. W. H. Preece, Engineer-in-Chief and Electrician to the General Post Office, London. Their evidence in the main agrees with that of the gentlemen who appeared on behalf of the Eastern Extension Telegraph Company, whose views are adverse to the establishment of the proposed Pacific cable. The antagonistic evidence is voluminous; if examined it will be seen that the gentlemen who submitted it are substantially of one mind on many subjects. The tone and substance of their observations leaves the impression that they do not look upon the Pacific cable as a necessary or desirable undertaking, and that if established as designed it would be inadequate in capacity and a heavy burden on the public exchequer. I could not venture to take up the time necessary to refute the whole evidence. I will, however, give an illustration. The views of Mr. Preece are, perhaps, the least extreme and the least adverse to the project. Let me direct attention to the replies of that gentleman to question 1365 and following questions. He refers in his replies to a cable which, on the long section between Vancouver and Fanning Island, would consist of 5521b. of copper and 3681b. of gutta-percha per knot. The limit of the capacity of this oable would be (he says) three words per minute, that you cannot take a longer working period than ten hours a day and three hundred days in a year. " The result is " (reply to question 1366) " that you cannot calculate on transmitting more than 540,000 words between England and Australasia by means of this cable" in the twelve months. If we turn to other gentlemen who have no connection with the Post Office or the Eastern Extension Telegraph Company, but who are skilled and practical electricians of admitted authority, we find testimony of a very different character. The Messrs. Gray, of the Silvertown Company, state that the cable referred to (552 lb. copper, 368 lb. gutta-percha per knot) would carry fully twelve words per minute, the standard word consisting of five letters. Lord Kelvin confirms this statement. Mr. Alexander Siemens says that the cable proposed by his firm, although somewhat lighter (500 lb. copper, 3201b. gutta-percha), would in practice give fifteen words per minute. Dr. Alexander Muirhead, the recognised authority on all such matters, states that the cable proposed by Lord Kelvin, and accepted by the Silvertown Company, would give a speed of eighty letters, or sixteen words, a minute simplex, and that by employing the duplex system with automatic transmitting apparatus 90 per oent. more work could be done with perfect ease. That is to say, the cable which the Indiarubber, Gutta-peroha, and Telegraph Works Oompany tendered to the Canadian Government to manufacture, lay, and maintain in workingorder for three years, for the total sum of £1,517,000, would bo capable of transmitting 152 letters, or over thirty standard words, per minute. The managers of the Anglo-American Telegraph Company and of the Commercial Cable Company each testified that their offices are always open, that there is nothing to prevent them transmitting messages in a continual stream for twenty-four hours a day, and that they saw no reason why the same course should not be followed on the Pacific cable. If, then, taking eighteen business words a minute in place of thirty standard words, we will find that it would be possible to transmit in a year, reckoning twenty-four hours a day and three hundred days in a year, a total volume of 7,776,000 words in place of 540,000 words, the maximum limit given by Mr. Preeoe, of the Post Office Department. lam afraid lam unable to congratulate the officers of the General Post Office—at least, those whom it has been my fortune to meet—on the soundness of their estimates or the accuracy of their statements. In the report on the mission to Australia by the Canadian Minister of Trade and Commerce I find at page 76 a reference to a letter addressed to the Colonial Office by Mr. J. C. Lamb, of the General Post Office, London (dated the sth July, 1893). I beg leave to refer to the whole letter, and I ask permission to quote one paragraph : " On the Vancouver-Fanning section he (the Engineer-in-Chief of the department) is of opinion that to secure even the moderate working-speed of twelve words a minute the oable must have a core of 9401b. of copper and 9401b. of gutta-percha to the knot; and the cost of manufacturing and laying such a cable would probably be about £600 per knot, or, say, £2,374,000. The total cost of the whole line from Vancouver to New Zealand would thus be about £2,924,100." This letter was first seen by me in Australia a few weeks after it was written. I have reason to remember the effect it produced when such estimate, coming from such authority, confronted the Canadian delegate on the first week of his arrival in the colonies. I have still further reason to remember the letter, as it had much to do with a journey on my part from Australia to London to inquire into the accuracy of the statements it contains. As the result of my inquiry, I ask permission to direct attention to page 76 of the report on the mission to Australia, and my letter therein contained (dated the 6th February, 1894). The year following Mr. Lamb's letter of July, 1893, the Canadian Government received tenders for establishing the Pacific cable with precisely the same working-speed as that mentioned by Mr. Lamb—viz., " twelve words a minute." lam aware that during the recent examination a new issue has been raised as to the number of letters in a word, but it cannot be denied that when Mr. Lamb's letter was written a " word " was a conventional term agreed upon by the cable world, and was understood by every one to mean an average word of five letters. Clearly, then, it may be assumed that if Mr. Lamb or Mr. Preece wished to be understood differently they would have stated that they did not mean the common standard word of five letters, but some other word containing a different number of letters. The tenders received by the Canadian Government embraced more than the estimate contained in Mr. Lamb's letter. In order to make a comparison, therefore, it becomes necessary to add to the estimate what it did not contain viz., the cost of a cable from New Zealand to Australia, and the maintenance of the whole work from Vancouver to Australasia for three years. The data for these additions is furnished in Mr. Lamb's letter and in the recent evidence of Mr. Preece : (1) Estimate in Mr. Lamb's letter of the cost of a cable between Vancouver and New Zealand, £2,924,100; (2) cable from New Zealand to Australia, 1,066 knots at £150 per knot, £159,900; (3) maintenance for three years, minimum estimate by Mr. Preece, £180,000: total, £3,264,000. We have thus presented to us the estimate of the officers of the Post Office Department, amounting in all to £3,264,000. The Canadian Government has a bona fide tender to carry out in a complete and satisfactory manner precisely the same work for £1,517,000. What can be said of such a discrepancy as this ? I entertain no doubt as to the great ability, the varied information, and the value of the services of these gentlemen. I oan only regret that in my extremely limited knowledge of them I should be so unfortunate as to be driven to the conclusion that, however important the offices they fill, their importance does not make the occupants of the office infallible. In short, I am constrained to form the opinion that they have made a grave mistake, and that to this mistake, and to the unfortunate letter of Mr. Lamb in which it is contained, may be traced the seeming antagonism to a Pacific cable which will be found in the evidence recently submitted. But the tendency to error in matters appertaining to the Pacific cable on the part of offioers of the Post Office, I regret to say, is not new. I can recall to my memory the immediate predecessor of Mr. Lamb. He was introduced to the Colonial Conference of 1887 by the Postmaster-General in these words : " I have been fortunate enough to secure the attendance here to day of my friend Mr. Patey, who is the Secretary of the Post Office, who is specially charged with the telegraphio department, and than whom I suppose no greater authority upon telegraph matters'exists. He will be most happy to place his knowledge at the disposal of the Conference, to answer any questions, and take part in any discussion which may arise upon any particular point concerning the telegraph-service of the Empire." Almost the first statement made by this Post Office officer had reference to the depth of the ocean between Australasia and Vancouver. He said :" I think in one or two cases the depth goes down to 11,000 or 12,000 fathoms." After some discussion, in which it was pointed out that the greatest known depth upon the route of the Pacific cable was 3,200 fathoms, the Secretary of the Post Office was again asked the question, "Did we understand you to say 12,000 fathoms ? " His answer was, " Yes ; 12,000 fathoms." I need scarcely remark that no such ooean depth as 12,000 fathoms is known anywhere, and I refer to these matters simply with a view of showing that, without any intention to mislead, the statements and estimates of these officers concerning oable matters at least are highly misleading, and must be received with caution.

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Reverting to the letter of Mr. Lamb (sth July, 1893), there can be no doubt whatever that a grave error was made by the officers of the department. A mistaken estimate was undoubtedly arrived at by them : I do not say with any design. lam bound to assume with good intention. Nevertheless, all the evidence from the best authorities, likewise from actual tenders, prove it to have a mistake calculated to mislead, and I humbly think it would have been better and more dignified had both Mr. Preece and Mr. Lamb acknowledged the mistake in their present evidence, and not attempted to defend it. It is true their views are in accord with tho.-=e of the Eastern Extension Company, whose antagonism to the PaciSo cable is at least comprehensible. They now find themselves, however, in contradiction to the highest electrical authorities, to the most experienced cable-managers, and to all those who, in the interests of the colonies and the Empire, are striving to establish a national line of communication between the great distant colonies and the Mother-country; I may add to the head of their own department, for Mr. Lamb frankly stated, in reply to question 3083, that the views he expressed were not the views of the PostmasterGeneral. Taking exception, then, to the views of the agents of the Eastern Extension Telegraph Company, and of the two Post Office authorities referred to, we have other evidence of the highest value to fall back upon, and on which implicit reliance can be placed. Lord Kelvin, Dr. Muirhead, and Messrs. Gray and Siemens, electricians, together with Messrs. Carson and Ward, the managers of two important trana-Atlantio cable companies, are each and all clearly of opinion that the proposed Pacific cable would have sufficient speed-capacity to transmit full sixty letters per minute simplex ; and employing the duplex system now almost universally applied, together with the more recently introduced automatic transmitting apparatus, it would be quite possible to transmit telegraphic business continuously at the rate of 114 letters per minute. With each message transmitted thero are certain letters sent which are free— or, rather, that the telegraphing public do not pay for—and there are certain service messages which likewise do not pay. These non-paying letters and words, according to Mr. Carson, manager of the Anglo-American Telegraph Company, do not exceed 15 per cent, of the whole matter transmitted. Mr. Ward, manager of the Commercial Gable Company, places the non-paying matter at 16 per cent. ; 84 to 85 per cent, of all traffic may therefore be considered paying traffic. If, then, we take per cent, of 114 letters we have ninety-six pacing letters per minute as the speed-capacity of the cable. In modern business many code words are embraced, and the length of a business word is estimated to contain on an average eight letters. Dividing ninety-six paying letters by eight, we have twelve paying words per minute, after all necessary deductions are made. In estimating the earning-power of the cable as designed, we are therefore warranted in taking twelve paying words a minute, and certainly 300 working-days a year. With this data, and reckoning 2s. a word as the uniform charge, we have the following results as the possible earnings for the twelve months : Working twelve hours each day, £259,200; fifteen hours, £324,000 ; eighteen hours, £388,800; twenty-one hours, £453,600; twenty-four hours, £518,400. This shows very plainly that there will be ample capacity in the one single cable designed to transmit all the business which may be developed for many years to come. I would direct attention to my estimate of gross earnings in page 6 of my statement prepared for the Committee last July. In the table there presented I went no farther than the year 1907, at which date I estimated the earnings from traffic to be £258,500. This is the highest estimate I have made, and it is obvious that the cable designed by Lord Kelvin, with a cone on the long section of 552 lb. of copper and 368 lb. of gutta-percha per knot, would be capable of transmitting the volume of traffic required to produce that amount of gross earnings by working only twelve hours a day. Bevenue. There remains to be considered the revenue which will arise from the traffic which may be expected to pass over the cable. This question is a difficult one, and I quite recognise that it is not possible to demonstrate precisely what the future business may be. In estimates which 1 have submitted to the Committee I have furnished the grounds for my belief that there will be a natural increase in traffic as the years go on. The increase may not be uniform year by year, but taking a number of years—say, ten years—l have thought that in view of the rapid development of the Australasian Colonies, and the additional facilities for telegraphing which the Pacific cable would provide, together with the reduction in charges, it would be a moderate estimate to reckon on the gross business increasing on an average 15 per cent, a year. Such an estimate may, of course, be held to be a mere conjecture on my part; I have therefore deemed it advisable to obtain the views of gentlemen fully acquainted with the development of the colonies and interested in Australasian trade and commerce. With this object in view, I obtained from the offices of the several Agents General the names of a few leading men and Australian firms. I sent them a series of questions, asking the favour of replies, the whole of which lam glad to place at the service of the Committee. I may state, as a result of this inquiry, that the expression of opinion is almost unanimous; no less than twenty-four leading Australasian firms or individuals give it as their opinion that an average increase in the yearly volume of business of 15 per cent, is quite a moderate estimate (see abstract of replies appended, page 29). With respect to the share of business which it would bo reasonable to expect would fall to the Pacific cable, among the replies received there are twenty expressing a definite opinion; of those, fifteen, or 75 per cent, of the whole, state the belief that it would be reasonable to count on the new cable obtaining one-half the total business. Moat of these gentlemen think the half-share may be reckoned on at once ; others, again, within a very short time after its establishment. The remaining five are somewhat doubtful. There is complete unanimity of opinion that the new cable would assist in developing trade and telegraphic communication between the Australasian Colonies and Canada, the United States, and other parts of America, and, as a whole, be of material advantage to the commerce of the Empire. I respectfully submit that these opinions must be taken to sustain the general soundness of the views I have submitted on the growth of telegraphic business, that we may fairly estimate an average increase of 15 per cent, per annum as moderate and reasonable. I have thought, and I still think, that the Pacific cable would obtain not far short of half the total business between Australasia and Great Britain, and that any possible shortage would be more than made good by new traffio between the North American Continent and the Australasian Colonies when facilities for its rapid development are provided by a direct cable across the Pacific. The Eastern Extension Company. I ask permission to add a word with respect to the claims for consideration of the Eastern Extension Telegraph Company. The cables of this company extend from Madras easterly to Hongkong via Penang and Singapore. At Singapore a branch extends southerly to Australia. Over this branch all the Australian business now passes; it consists of the following cables; From Singapore to Batavia, 1,002 kilometres; from Singapore to Banjoewangie, 1,707 kilometres ; from Banjoewangie to Port Darwin (1), 2,104 kilometres; from Banjoewangie to Port Darwin (2), 2,088 kilometres; from Banjoewangie to Roebuck Bay, 1,656 kilometres: total, 8,557 kilometres. 8,557 kilometres equal 4,620 knots, and this length of cable probably cost in the first place about £800,000 ; but, as some of the portions have been in use many years, the present value of the whole is assumed to be considerably less than that sum. It must be generally recognised that it is supremely important to have all the great possessions of Her Majesty connected by telegraph. A cable connecting Canala with the sister colonies in the South Pacific would bring them into direct touch with the Mother-country, without passing over foreign soil. It would be useful in an eminent degree to commerce. Its tendency would be to preserve peace, and peace is essential to human progress. The security of the present means of telegraphic communication with Australasia would be enhanced by a line across the Paoific. The Empire cannot have too many cables. Belligerents will not be so likely to destroy any one cable if the connection they would sever be maintained by cables ramifying through seas in other parts of the globe. Safety will be in numbers. For these reasons I hold that the Pacifio cable will have a most potent influence in binding together the British Empire and preserving it intact. But the Pacific cable cannot be established without interfering more or less with the Eastern Extension Company. It would not interfere with the China business of that company, but it would oertainly diminish the traffic, and consequently the profits earned, on the branoh from Singapore to Australia. I would respectfully suggest, therefore, that it would be fair to that corupany, if they desire to be relieved of it, to

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purchase from them the Australian branch at a reasonable price, and work it by Government. The justice of this proposal must be obvious: if by reason of the establishment of a work necessary in the public interests, and a part of the property of the company be rendered unprofitable in consequence, that company would have no reasonable ground of complaint if the unprofitable part be taken off the company's hands and the capital returned for investment elsewhere. The branch from Singapore to Australasia in the hands of the Government would, even with a greatly reduced traffic, be self-supporting. Under Government control, the only charge over current and ordinary expenses would be interest on cost at the lowest rate at which money is obtainable by Governments. In this case the branch would be worked as a self-supporting undertaking for the benefit of the public—in the hands of the company, necessarily the branch is worked as part of a system for earning dividends at the expense of the public. A Second Pacific Gable. In the evidence submitted to the Committee it has been alleged as absolutely necessary, if a trans-Pacific cable be laid at all, that it should be laid in duplicate. Curiously enough, the gentlemen who have laid greatest stress on the necessity for two cables across the Pacific are among those most averse to the establishment of a Pacific cable under any circumstances. It has been made to appear that a single cable has been rarely laid in any part of the world, and that in cases where two cables are not laid side by side at the same time duplication immediately follows. Mr. Preeoe could not recall an instance of any company relying on a single cable. The impression conveyed was that provision is made for laying both cables from the- start, or directly on the completion of one cable the work of laying the second invariably is proceeded with. I take the liberty of mentioning that this course is not universally followed. The Easterrl Extension Company's cable from Madras to Penang was single for twenty-one years ; the first cable was laid in 1870, it was duplicated in 1891. The cable of the same company from Penang to Singapore was laid in 1870, it was duplicated in 1892, twenty-two years afterwards. The same company laid a single cable from Australia to Tasmania in 1869, and duplicated it in 1887, after a of eighteen years. The same company laid a single cable from Australia to New Zoaland in 1876; the second cable was not laid until 1885. The Gape of Good Hope had telegraphic communication established by a single cable in 1879; duplication was not effected until ten years afterwards. A single cable was laid from Portugal to Brazil in 1874, and it was not duplicated until 1884. There are many other instances ; I have, however, mentioned a sufficient number to make plain that there is no such rule invariably followed as that alleged. The duplication of a cable is a matter which is entirely governed by circumstanoes ; generally it is proceeded with when additional facilities are required by the traffic or warranted by the prospect of a rapid development of business. lam perfectly satisfied that eventually many cables will be required across the Pacific, but to my mind there is no necessity for establishing more than one at present. In the event of the cables between Singapore and Australasia passing under Government control, a single Pacific cable would, in reality, constitute a third cable connecting Australasia with the rest of the world, and as such it would greatly diminish the chances of the telegraph separation of these colonies. Of course, the Eastern Extension Company may decline to part with their Australia branch on reasonable terms, or enter into any traffic arrangement which would be mutually beneficial. In that event the expediency of laying a second Pacific cable would, in course of a few years, become a matter of consideration. Should a second transPacific cable for any reason be deemed advisable, in my judgment the most advantageous arrangement would be, not to lay it alongside the first cable on the Fanning Island route, but to open negotiations for touching at Honolulu. I have formed the opinion that, although the application for landing privileges on one of the Hawaiian Islands proved unsuccessful three years ago, the improved friendly spirit beginning to prevail will before long reaoh that stage when a desire will be evinced for the landing of a Canada-Australia cable at the capital of these islands. In the United States it is seriously proposed to lay a cable from San Francisco to Japan, and it is not improbable that this undertaking will be assisted by the United States Government. It is obvious that two trans-Pacific cables, one from San Francisco to Japan, another from "Vancouver to Australia, crossing at Honolulu, would be exceedingly helpful to each other, as the interchange of messages would be rendered easy, and telegraphic correspondence between the countries at the termini of each cable would be greatly facilitated. This arrangement would practically become an international system to facilitate commerce, so much to be desired. In view of all the circumstances, if I may venture to express an opinion, it seems to me advisable that a determination should at once be reached to lay a single cable on the Fanning Island route as a national undertaking under Government control, and that the cable should be of the weight and character recommended by Lord Kelvin, seeing that the capacity of such a cable for the transmission of messages would be ample for all purposes. In my view, duplication of the cable should be deferred and an opportunity afforded the Eastern Extension Telegraph Company to consider the suggestion to part with their Australian branch on fair and acceptable terms. Should circumstances in a few years require the laying of a second cable from Canada to Australasia, it is clear, to my mind, that great advantages would result from constituting the second cable essentially a commercial line touching at Honolulu. The cost of a cable from Vancouver to Australia touching at Honolulu would be very little, if anything, over a million sterling. Beferring to the main cable, that proposed to be laid on the Fanning Island route, the reliable evidence submitted to the Committee now places the feasibility of the proposal beyond all doubt. It has been established that Canada and Australasia can be connected telegraphically without touching foreign soil, and that a cable of adequate speed-capaoity can be laid at a moderate cost. The views respecting traffic, of leading merchants and others familiar with Australian trade, give grounds for the belief that the cable established as a national undertaking would be selfsupporting. Nothing in the future is more probable than an augmentation of business resulting from the additional facilities provided by the new line of communication and the lowering of charges. The new line will give an impulse to commercial activity, and, besides being eminently useful to commerce, there may be times in the near future, such as the emergency of a few months back which found South Africa telegraphically isolated, when the value of the Pacific cable would be incalculable. No one can withhold assent from the views of the President of the Postal and Telegraph Conference held in Hobart last year (Hon. J. Gavan Duffy), expressed in these words : " I think that for strategical and Imperial reasons, and for encouraging the growth of the Imperial sentiment, it would be a wise thing to lay this cable. ... It would be a great spectacle to see the three great branches of the Empire united together, and in times of war it would be of immense value to the Imperial Government and the colonies. If it is undertaken it should be by England and her oolonies co-operating together. Of oourse, we must remember that Canada is not so vitally interested in this question as we are. This will be to us not only a oonneotion with Canada, but a direct connection with the heart of the Empire—London." Sandfobd Fleming.

Appendix to Preceding Statement No. 2. Abstract of replies from leading Australasian merchants and others respecting the growth of traffic, the probable earnings of the Pacing cable, and the effect of that undertaking on general commerce, referred to in the note on the Pacific cable by Mr. Sandford Fleming, London, 16th December, 1896. In order to ascertain the views of mercantile men and others interested in the Australasian trade, replies were invited to the following question (December, 1896): — Piest.— The Probable Development of Telegraph Business. Questions, —(1.) With great facilities for business created by the establishment of the Pacific cable and the charges lowered to 3s. per word, would ib be reasonable to expect that the gross telegraph business between Australasia and Europe would increase in future years? (2.) Considering the rapid development of the Australasian Colonies, the improved facilities and reduced tariff by the Pacific cable, and having reference to the growth of telegraph business during the past twenty years, would it be unreasonable to expect for a number of years to come an average annual increase of 15 per oent. in the total traffic between Australasia and Europe 1 (8.) If you think 15 per oent. unreasonable under all the circumstances, please state your opinion of the probable traffic in future years.

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Answers. —To the above questions answers have been received as follows :—(1.) Prom Ross and Glendining, 63, Finsbury Pavement, E.G., London :Q. 1. Undoubtedly. Q. 2. We believe an increase of 15 per cont. a moderate estimate. (2.) From W. Weddell and Co., 16, St. Helen's Place, London: Q.I. Certainly. Q. 2. Yes; 15 per cent, increase is a reasonable estimate. (3.) From Mr. John Beaumont, 138, Leadenhall Street: Q. 1. Yes. Q. 2. No; with charges lowered to 3s. per word, I think 50 per cent, more probable. (4.) From Mr. James Huddart, 22, Billiter Street, E.G. : Q.I. Yes. Q. 2. Yes; look at the development of cable traffic across the Atlantic by reason of reduced tharges. I think 15 per cent, reasonable. (5.) From Sargood, Butler, Nichol, andEwen, ll,Bunhill Row: Q.I. Yes. Q. 2. Yes. (6.) From Sargood, Son, and Ewen, 11, Bunhillßow :Q. 1. Yes. Q. 2. Yes. (7.) From Shaw, Savill, and Albion Company, 34, Leadenhall Street: Q. 1. Yes. Q. 2. 15 per cent, annual increase might reasonably be expected. (8.) From McLean Brothersand Rigg, 1, Fenohurch Avenue, E.C.: Q.I. Certainly. Q. 2. We should think considerably more. (9.1 From James McEwan and Go., 27, Lombard Street, E.C.: Q. 1. Yes, certainly. Q, 2. I think it would not be unreasonable. (10.) From the Bank of Australasia, 4, Threadneedle Street: Q. 1. As the business has increased largely of late years, it would be unreasonable to suppose that it would not continue to do so if the rates were reduced. Q. 2. As the rate of increase has for some years past been largely in excess of 15 per cent., the opinion may fairly be held that the latter figure would not be an excessive estimate. (11.) From Grimwade, Ridley, and Co., 82, Bishopsgate Street: Q. 1. Our experience has been that reductions in cost of telegraphing has resulted in increased use of cables. Q. 2. We should not consider this an unreasonable increase to look for. (12.) From J. E. Nathan, 7, Fenchurch Street: Q. 1. Yes. Q. 2. Yes, I think this very reasonable. (13.) From Sir Julius Vogel, Hillenden, East Molesey :Q. 1. Most decidedly. Q. 2. The annual increase of traffic would be very large, but not at a uniform rate. Daring the first five years it would, in my opinion, more than double, or an increase of more than 15 percent, per annum for these years. The normal increase subsequently would probably be at a less rate. (14.) From Turnbull, Martin, and Co., 112, Fenohurch Street: Q.I. Certain. Q. 2. No. (15.) From W. Lund, 3, East India Avenue :Q. 1. Yes. Q. 2. I should consider 15 per cent, increase very reasonable. (16.) From Loughland, Mackay, and Baker, 50, Lime Street: Q.I. Yes. Q. 2. No. (17.) From S. Hoffnung and Co., 102, Fore Street, E.C.: Q. 1. Yes, but not in proportion to the reduction in cost. Q. 2. Yes. (18.) From Colonial Consignment and Distribution Company (E. Montague Wilson) :Q. 1. Yes. Q. 2. 15 per cent, increase not unreasonable ; but it must be remembered that the last two years have shown exceptional traffic with West Australia, which is not so active at present. (19.) From Nathaniel Cork, managing director, Commercial Banking Company, of Sydney: Q. 1. Yes. Q. 2. Since the last reduction in rate the number of messages to and from the bank has inoreased 63-2 per cent., and the volume has increased by afar larger percentage, so that a further increase of 15 per cent, consequent upon a reduction of 40 per cent, in the tariff might very reasonably be expected. '(20.) From Milburn and Co., Billiter Avenue :Q. 1. Yes. Q. 2. No. (21.) From Sir Edwin Dawes, 23, Great Winchester Street: Q.I. Yes, judging by past experience. Q. 2. No, considering the increasing vitality of trade with Australasia and the internal development of colonial resources. (22.) From Gray, Dawes, and Co., 23, Great Winchester Street: Q. 1. Yes, judging by past experience. Q. 2. No. (23.) From the Australian Joint-stock Bank, 2, King William Street: Q.I. Yes. Q.'2. No. (24.) From Gilbert J. McCaul and Co., 27, Walbrook Street; Q.I. Certainly. Q. 2. Safe to reckon on 15 per cent, increase. (25.) From Richard Maxwell, 15, Moorgate Street: Q.I. Undoubtedly. Q, 2. Not unreasonable. (26.) From Mclllwraith, McEacharn, and Co., 3 and 4, Lime Street Square, E.C.: Q.I. Perfectly reasonable. Q. 2. Not at all. (27.) From Joseph Gould, Christchurch, New Zealand: Q.I. Yes, certainly, it would increase. Q. 2. I think 15 per cent, per annum a moderate estimate of the probable increase. Second.— The Probable Traffic of the Pacific Gable and its Effect on the Commerce of the Empire as a Whole. Questions. —(4.) Would the Pacific cable be likely to obtain a fair share of the total telegraph business between Australasia and the United Kingdom? (5.) Would it be reasonable to count on the Pacific cable obtaining one-half of the total business between Australasia and the United Kingdom? (6.) If you think the Pacific cable would not obtain as much as one-half of the total business, please state what proportion of the whole might, in your opinion, fall to its share. (7.) Can it reasonably be expected that the establishment of the Pacific cable as proposed would assist in developing trade and telegraphic communication between the Australasian Colonies and Canada, the United States and other parts of America, and as a whole be of material advantage to the commerce of the Empire ? Answers. —To these questions replies have been received as follows:—(1.) From Ross and Glendining, G3, Finsbury Pavement, E.G. :Q. 4. We believe so. Q. 5. We believe this would happen in a short time. Q. 7. We have no doubt of it, and would use the cattle ourselves if laid to a much greater extent than we use the existing cables. (2.) From W. Weddell and Co., 16, St. Helen's Place: Q. 4. Yes, if as efficiently worked as the Eastern Telegraph Company. Q. 5. Yes. Q. 7. Most certainly. (3.) From John Beaumont, 138, Leadenhall Street: Q. 4. Yes. Q. 5. More, if the Pacific cable did not mutilate as much as existing cables. Q. 7. Yes. (4.) From James Huddart, 22, Billiter Street, E.C.: Q. 4. Without doubt. Q. 5. I think so. It would be the policy of merchants to keep it alive. Q. 7. As certain as gravitation. (5.) From Sargood, Butler, Nichol, and Ewen, 11, Bunhill Row :Q. 4. Yes. Q. 5. Yes, provided the charges were equal. Q. 7. Yes, it could not fail to be of material advantage. (6.) From Sargood, Son, and Ewen, 11, Bunhill Row :Q. 4. Yes. Q. 5. Yes. Q. 7. Yes. (7.) From Shaw, Savill, and Albion Company, 34, Leadenhall Street: Q. 4 and Q. 5. Yes, the extent of this would entirely depend upon how the business was conducted. Q. 7. Yes. (8.) From McLean Brothers and Rigg, 1, Fenchurch Avenue, E.C.: Q. 4. It largely depends on the mode of business. Q. 5. Should scarcely think so, but the former answer somewhat governs this. Q. 7. Yes. (9.) From James McEwan and Co., 27, Lombard Street: Q. 4. This would depend on the rates charged. Q. 5. I doubt it unless the new line was more accurately worked than the present. Q. 6. I cannot form an opinion. Q. 7. I think so. (10.) From the Bank of Australasia, 4, Threadneedle Street: Q. 4. If the service should be as well performed. Q. 5. No means of judging. Q. 7. On the principle that two routes are better than one, a material advantage should accrue. (11.) From Grimwade, Ridley, and Co., 82, Bishopsgate Street: Qs. 4, 5, 6, and 7. In our opinion, if the new proposed route is cheaper than existing routes it would naturally command support from all needing to cable ; possibly increased facilities of inter-communication may benefit commerce. One thing is certain, that it will increase the work that has to be done on this side. (12.) From J. E. Nathan, 7, Fenchurch Street: Q. 4. Most decidedly. Q. 5. Yes. Q. 7. Yes, certainly, and decidedly of very great advantage. (13.) From Sir Julius Vogel, Hellenden, East Molesey (letter appended) :Q. 4. See answer 6. Q. 5. Certainlynot with one cable only. Q. 6. If the Eastern companies charge the same, I do not think the Pacific route will obtain more than a quarter to a third of the traffic, so long as the system comprises only one cable. The proportion will be liable to considerable decrease if the cable is interrupted frequently or for lengthened periods. The Governments may assist traffio by their own business, and by giving the route preference for unmarked messages. It would not be safe to calculate on more than (if so much as) a third. See my covering letter (appended). Q. 7. Most certainly, yes. (14.) From Turnbull, Martin, and Co., 112, Fenchurch Street: Q. 4. Yes. Q. 5. Yes. Q. 7. Yes. I am connected with companies paying considerably over £2,000 a year in telegraphing to Australian Colonies. (15.) From W. Lund, 3, East India Avenue: Q. 4. Yes, if the messages were delivered speedily and accurately. Q. 5. Yes; probably more. Q. 7. I consider it would be of very material advantage to the commerce of the Empire (16.) From Loughland, Mackay, and Baker, 50, Lime Street: Q. 4. Yes. Q. 5. Yes, in time. Q. 7. Most certainly ;we come to this conclusion after fifty years' experience of Australian trade. (17.) From S. Hoffnung and Co., 102, Fore Street, E.C : Q. 4. Yes. Q. 5. Certainly not at first. An established company will retain a large proportion of a trade or business in spite of opposition. Q. 7. Yes. (18.) From the Colonial Consignment and Distribution Company (E. Montague Wilson) : Qs. 4, 5, and 6. A fair share, but probably not for some time half the business if the existing company works at same tariff. Q. 7. Undoubtedly. (19.) From Nathaniel Cork, for Commercial Banking Company of Sydney: Q. 4. Yes, provided the messages between London and the colonies received each day at 4 p.m. are delivered by 10 a.m. at either end. Q. 5. Certainly yes, if the above condition can be relied on. Q. 7. Means of communication with the Pacific is much needed. There can be no doubt that a cable between Australia and British North America would lead to a large business between the two. Australia would take American timber and wheat. America would import coal, wool, and fruit. (20.) From William Milburn and Co., Billiter Avenue: Q. 4. On equal

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terms, yes. Q. 5. That would depend on facilities given. (21.) From Sir Edwyn Dawes, 23, Great Winchester Street: Q. 4. Yes, if rapidity and accuracy in transmission are insured. Q. 5. Yes, in course of time, owing to the national interest in the movement, if charges and facilities are equal. Q. 7. Undoubtedly, if a moderate tariff is fixed. (22.) Prom Gray, Dawes, and Co., 23, Great Winchester Street: Q. 4. Yes, with rapidity and aecuraoy secured on account of the lines traversing British territory only. Q. 5. This would depend on the speed and accuracy with which the business was oarried through. Q. 7. Yes. (23.) From McTlwraith, McEachran, and Co., 3 and 4, Lime Street Square, E.G. : Q. 4. We think a Pacific cable would absorb the largest proportion of the business. Q. 5. We should say a higher figure than 50 per cant. Q. 7. We consider that a Pacific cable would be of immense advantage in developing the trade of Australasia. (24.) From Joseph Gould, Ohristohuich, New Zealand ; Qs. 4, 5, and 6. Yes, more than a full share. The colonial public do not like the idea of the cables going through Dutch hands, and would prefer the Pacific cable. Q. 7. Ido not think that there can ever be a very big trade between the United States of America or Canada, as they produce the sacae things principally as the colonies, but the cable would certainly assist business generally, and a reduction in the cost of cabling would lead to an increased use of the cable. Letter referred to in the Answers to Questions by Sir Julius Vogel (No. 13). Sic,— 7th December, 1896. I have the honour to acknowledge the receipt of your letter of the 4th instant, with an enclosure. Ido not know why you wrote to me, since your inquiry purports to be one addressed to " mercantile men engaged in the Australasian trade," and lam not a mercantile man. Officially I have been interested in the question of a Pacific cable to connect Australia with America for many years past. I believe I originated the idea, and I have written a great deal about it. I am not sure that the Committee should not have invited from me any information it desired me to give, and I have to ask you to be good enough to lay before the Committee a copy j)f this letter and of my replies to your questions, which I have pleasure in answering because I know of your indefatigable exertions in the cause. There is one factor which essentially concerns most of your questions, and that is the terms upon which you propose to work with the Eastern and Eastern Extension Companies. Are they to be able to obtain a control over ;\our enterprise? If so, it is hardly to be supposed they will give you half the traffic, as several of their lines are duplicated. Even supposing you run in honest opposition at the same rates they would have all the West Australian and South Australian business, the bulk of the Victorian business, and a considerable quantity of that of New South Wales. The intercolonial rates will, I believe, give an advantage to the Eastern lines with regard to the first two-mentioned colonies, unless Adelaide is in direct communication with Sydney, of which I am not aware. Victoria will probably be on an equal footing with both systems. But both this colony and New South Wales, if the rates are the same, will largely adhere to the existing route, because the big houses will fear that if any mischance befall the Pacific cable they will be put by the Eastern companies on worse terms if they have been in the habit of using the Pacific line. You attach, I think, too much importance to the Canadian route proving of superior accuracy. The present route now gives fairly accurate transmissions. In recounting the number of repeating-scations you do not estimate those on the overland route through Canada, nor do you take into account the value of the trained operators accustomed to deal with the code words which constitute a great part of the messages. In point of accuracy I think a long time will elapse before the Canadian route will be entitled to preference.* The crucial question in estimating the traffic is, can the Eastern companies reduce the rate to 35.? and I believe there is no doubt they can. In fact, in your memorandum you admit it. They cannot, however, go much below it, and lam disappointed at your having fixed the rate at 3s. I had looked for its being fixed at 2s. I do not hesitate to say that at 2s. your revenue would be much larger than at 35., because you would have the bulk of the business. Supposing you are compelled to adhere to the latter rate, I am far from saying that your enterprise is not desirable, and that though it would be less remunerative it would not be a financial success. You would obtain a considerable portion, though not a half, of the through business, and you would also as time went on have a very large traffic from and to all the Australasian Colonies and America. In any case, therefore, I think the enterprise justified, but provision should bo made for supplying a second cable as soon as practicable. Your questions suppose a uniform annual progress, and you speak of an annual increase of 15 per cent., which means doubling the traffic every five years. I have no doubt that the volume of Australasian cabling will be more than doubled the first five years, with the reduction of the charge to 3s. a word, but it cannot continue indefinitely to increase at that rate. At 2s. the increase would be much larger and your share much greater. I have, &c, Sandford Fleming, Esq., &c. Julius Vogel.

Letter to the Pbemieb on the Present Position and Financial Prospects of the Pacific Cable, by Sandfobd Fleming. Sic,— Ottawa, 20th May, 1897. I deem it my duty to submit to your attention the following additional information in connection with the proceedings taken last year by the Committee appointed by the Imperial Government to consider the proposal to establish an electric cable from the western shore of the Dominion to the Australian Colonies. In my judgment, great importance must be attached to the facts I ask your leave to lay before you. Apart from the national value of the proposed Pacific telegraph-cable as the means of instantaneous communication between distant portions of the Empire, its financial aspect as a commercial undertaking calls for the most careful consideration. On the theory that the cable will be established as a State work under federated ownership, I have formed the firm opinion that the revenue from ordinary business will be amply sufficient to meet every charge of service and maintenance, and that it will make the line perfectly self-supporting, even from the first day it may be opened for general traffic. I have been led to this conclusion by the careful examination of the returns of traffic for the past years, and by a study of those circumstances which have a special bearing on the business of the future. This investigation has satisfied me that, the Pacific cable being in operation, a considerable volume of telegraph business would speedily be developed between Canada and Australasia; that, even without taking into consideration this new trans-Pacific business, the ordinary telegraph traffic between Australia, New Zealand, and Europe is of such a character and volume as to render it extremely improbable that the new cable-service would entail any permanent charge, or any charge whatever, on the public exchequer.

* Note.—ln reference to the remarks ot Sir Julius Vogel in the above letter, the undersigned deems it proper to point out that it is manual as distinguished from automatic repetitions -which causes delay and increases the chances of error in the transmission of messages. The repeating-stations on the overland route through Canada are automatic, and in a comparison should not be taken into account. By the Eastern route there are ten manual repeating-stations intervening between Great Britain and Australia —viz., Gibraltar, Malta, Alexandria, Suez, Aden, Bombay, Madras, Penang, Singapore, and Java By the Pacific route there would be five manual repeating-stations—viz., Canso, Vancouver, Fanning Island, Fiji, and Norfolk Island. With but half the number of such repeating-stations, naturally the tendency to greater accuracy and speed in transmission and generally to a better service by the new route would be increased.—Sandi-okd Fleming.

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The profits to be derived from the Australasian-European traffic will of course be determined by the amount of service performed. It will in fact depend, first, on the future growth and development of such traffic as already exists, and, secondly, on the proportion of the business which may be diverted from the old channel to the new line. The steady and extraordinary growth of telegraphy between Australasia and Great Britain is made apparent by the number of words transmitted by the existing line via Egypt and India. The following statement gives the volume of business at intervals of five years: 1875, total words ■ transmitted, 235,160; 1880, 353,348; 1885, 537,355; 1890, 827,278; 1895, 1,948,639. These figures are taken from the Government returns; certainly they display an amazing vitality in telegraphy between the sister colonies and the Mother-country, a vitality which received a great impulse by the reduction of the charges on messages six years ago, and which it may be confidently assumed will be further stimulated by the proposed reduction of charges consequent on the laying of the Pacific cable. At the recent meetings of the Imperial Committee doubts were expressed as to the volume of business being maintained. It was urged that there were exceptional circumstances to favour the increase of traffic in 1895, and that in all probability the returns for 1896 would show a considerable decrease. If the tendency of these anticipations was to create misgivings, I have the satisfaction of knowing that they can no longer be entertained, for the fears expressed on this point have proved groundless. By a recent communication to the Minister of Trade and Commerce from Mr. J. S. Larke, the Commercial Agent of Canada in the Australasian Colonies, it is shown that the business for 1896, instead of being less than 1895, exceeds it by 378,345 words, or about 20 per cent, on the traffic for the year. Mr. Larke thus summarises the telegraph business for .the last six years :In 1891, total words transmitted, 1,110,869; in 1892, 1,321,412; in 1893, 1,401,293; in 1894, 1,323,243; in 1895, 1,948,639; in 1896, 2,326,984. Mr. Larke proceeds : " This shows a remarkable development of cable-work. It was held by some here that the increase of cabling would be slow in the years to come, and that Mr. Fleming's estimates were absurdly high. The work done last year was nearly 45 per cent, higher than Mr. Fleming's estimate made in 1893, and the increase of the last five years was much greater than that of any preceding quinquennial period. The last returns more than support the opinion of Mr. Fleming, that the revenue of the cable for the year 1900 would be £143,000, making it self-sustaining from the first year of its operation. At the same time the Eastern Extension Company, which now controls the business, will secure a larger revenue on the reduced rate than it had on the present rate in 1891." Mr. Larke has referred to the estimates made by me in 1893. When present in Australia in that year I had the advantage of possessing the information obtainable at the Government Offices, kindly placed at my disposal by the Premiers of the several colonies. I was thus placed in a position to form an estimate of the future traffic. On the data thus obtained I reached the conclusion that the Pacific cable, if established by the Government as previously suggested, would at an early date be self-sustaining, and within four or five years would prove profitable as a commercial enterprise (Eeport on the Mission to Australia, pages 71-72). That I then took a moderate view of the development of traffic is obvious from a comparison of my estimate of the probable business in future years, submitted to the Australasian Government by me in October, 1893, with the actual number of words transmitted in each year since that date : — Estimate made Words transmitted in 1893. Yearly. 1894 ... ... ... ... ... 1,275,191 1,323,243 1895 .. ... ... ... 1,453,716 1,948,639 1896 ... ... ... ... ... 1,632,244 2,326,984 The comparison shows that in 1894 the actual business exceeded my forecast by 4 per cent., in 1895 by 34 per cent., and in 1896 by 42 per cent. In no spirit of self-laudation I refer to these facts, they are now mentioned as a proof of my endeavour to keep my estimates equally of revenue as of expenditure within justifiable limits, and that I cannot be charged with having been too sanguine. The results, indeed, are far above the estimates I submitted in 1893 ; at that time I counted on a growth of business at the average rate of 14 per cent, per annum, but the actual business for the three following years shows that I estimated the increase of traffic at too low a ratio. In my letter the following year to Sir Mackenzie Bowell (20th July, 1894J I corrected the calculation somewhat by reckoning the growth at 15 per cent, per annum, at the same time pointing out that an annual increase of 18 to 20 per cent, was justified by the evidence. I then wrote: " Manifestly under the low rates proposed to be charged by the Pacific cable the normal increase will be greater than 14 per cent, per annum, more especially as the whole North American business will receive a great incentive from direct communication, and all this additional and constantly growing traffic must find its way by the Pacific cable to and from Australasia. I venture to think that it would not be too sanguine an estimate to place the annual increase of business at 18 or 20 per cent., but to be perfectly safe I shall limit it to 15 per cent, in the calculations which followthat is to say, 1 per cent, more than the average increase attained under the high tariff for the eight years previous to 1890." Events have proved that my anticipation of growth have been mno way extravagant : in each succeeding year the actual business has considerably exceeded the estimates made by me. ,',.,. • . , Further evidence respecting the probable growth of telegraph business m future years is furnished by the important testimony of the Australasian gentlemen and leading Australasian and New Zealand business houses, appended to my note dated London, 16th December, 1896. Ihis positive opinion of so many well-known mercantile firms and public men of the highest standing must carry with it the greatest weight. From their knowledge of the circumstances and prospects of the Australasian Colonies there are no persons better qualified to speak authoritatively on the s—l. 7.

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points on which they were consulted. I beg leave to refer to my note (pages 29 to 32*) for fuller explanations; I will only now remark that the expression of opinion was almost unanimous, as twenty-lour out of twenty-seven gave as their belief that an average increase of 15 per cent, in the yearly volume of business may be regarded as a very moderate estimate. With respect to the second consideration—viz., the share of the whole telegraph business which would be obtained by the Pacific cable : this is a matter in which opinions are somewhat less in agreement. Twenty of those named gave definite replies, and fifteen of them expressed their belief that it would be reasonable to count on the Pacific cable obtaining one-half the whole business. Five of the twenty, however, expressed doubt as to the traffic being equally divided. Having brought under your notice the latest information respecting the development of Australasian traffic, it may be considered desirable and convenient that I should concisely allude to estimates of profit or loss in working the cable, which have recently been prepared. In so doing it will not be necessary to consider at length the annual charges. These are discussed in the report of the Imperial Committee (sth January, 1897), and in other reports. Moreover, the opinions respecting these are now generally in accord. In summing up the financial position of the cable the Imperial Committee formed the conclusion that the total annual charges, including interest, sinking fund to replace capital, maintenance and working-expenses, would involve an annual expenditure of £144,887, or in round figures £145,000. With regard to the revenue as set forth in their report, they conceived that in this matter " they must be actuated by extreme caution " ; accordingly they selected 750,000 words as a basis of calculation for the year 1896, and considered that they might assume the annual increase of traffic at 10 per cent. On this data they show that, reckoning the tariff at 3s. per word, there would be a surplus on the first year's working of £33,550, and that if the tariff be placed at 2s. per word there would be a deficiency in earnings for the first three years ranging from about £35,000 to £12,000 per annum, but during the fourth year of working the cable would become commercially a paying undertaking. Since the date of the report of the Committee the business for the year 1896 has been ascertained to consist of 2,326,984 words, so that the basis of calculation selected by them —viz., 750,000 words for the year 1896—is less than one-third the whole number of words transmitted. The Canadian Commissioners in their special report (12th January, 1897) favour a higher basis of calculation —viz., a mean between one-third and one-half, which on the total number of words for 1895 would have given 811,820 as the figures for that year. They furnish an estimate in which the annual increase is assumed to be 12-J- per cent., the mean between 10 per cent, and 15 per cent. With this data they show that, under a 2s. per word tariff, the undertaking would yield a surplus for the first year of operation, and at the end of six years the accumulation of surplus would be £347,631 after making all charges. In my own report (30th January, 1897) I have submitted an estimate (No. 3) which is based on the general opinion of the large number of Australasian merchants and public men whom I have referred to. In this estimate it is assumed that the Pacific cable will obtain one-half of the whole business, and that the traffic will increase annually at the average rate of 15 per cent. On this basis the estimate shows that, after meeting every charge against earnings, there would remain in the first year of operation (1900) a surplus of £50,960, that the surplus would go on increasing every year, and in a few years would accumulate to a large sum, so large that I do not think it is taking a too sanguine view to entertain the prospect of a second cable being laid out of surplus earnings ; unless it be considered the wiser policy to lower the tariff on messages from time to time, and thus, by facilitating the means of intercourse, promote in the most practical manner a closer intimacy between the sister colonies and the Mother-country. These several estimates establish the satisfactory financial prospects of the proposed cable in its commercial aspect alone. lam firmly convinced that as a national undertaking it must prove a commercial success, and that all its advantages can be attained without cost to the taxpayer in the United Kingdom, in the Dominion, or in the Australasian Colonies. That the financial prospects are of this character may be attributed to various circumstances, among which may be noted : (1) As a State work the capital employed would be obtained at the lowest possible rate of interest; (2) the capital would be limited to the necessities of actual expenditure in establishing the work— there would be no possibility of enlarging the capital account by adding "promotion expenses," or by " watering stock " in any form, so common with ordinary companies; (3) no dividends would require to be declared out of earnings ; (4) there would be no annual bonus expected by shareholders ; (5) the traffic necessary to keep the work in profitable operation already exists; (6) such traffic is continually growing, and it is difficult to assign a limit to its growth; (7) the facilities created, and the reduced charges on business, would open up new and profitable sources of traffic for the new line. There are the strongest reasons for taking a hopeful view of the proposed Pacific cable. In all cases telegraphy as a means of intercourse is being appreciated more and more every day. The extension of its use to many purposes is one of the characteristics of the period on which we are entering. In ordinary cases we are daily made to feel the benefits conferred by telegraphy, but its greatest value is in the case of countries geographically separated by the greatest distances. Obviously in the case of the outer Empire the value of cheap telegraphy is incalculable. I have in these sentences submitted to you, from a sense of duty, the latest facts within my knowledge. If in endeavouring to explain their bearing on the Pacific cable I have confined my remarks to the financial aspect of the project, I hope you will not think I have needlessly intruded upon your attention. I have &c, The Hon. Wilfrid Laurier, Premier. Sandfoed Fleming.

* Pages 19-22 of this paper.

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LETTER to the Eight Hon. Sir Wilfrid Laurier, on- the Subject of the Pacific Cable, by Sir Sandford Fleming, 28th December, 1897. [Reprinted from Queen's Quarterly, Vol. 5, No. 3.] Sir,— Ottawa, 28th December, 1897. For some months past I have frequently been asked by writers of the Press to furnish information respecting the Pacific cable. I have been so applied to as it is well known that I have long felt the deepest interest in the project, having been appointed by the Canadian Government to take part in the Colonial Conferences of 1887 and 1894, and in the Imperial Committee of 1896. I have invariably declined to comply with the request from the feeling that it was distinctly understood that the proceedings of the investigation by the Imperial Committee should be treated as confidential until made public by Her Majesty's Government. I have in consequence felt debarred from alluding either to the evidence obtained by the Committee or to the conclusions submitted in their report, or in the special reports presented to the Canadian Government by the Canadian Commissioners and by myself. These several documents were presented nearly twelve months ago ; since then questions have arisen which were not considered by the Imperial Committee, and many important facts are also obtainable from other sources, explanations respecting all of which should, I conceive, be communicated to the public. Since the Imperial Committee closed its investigation the Conference of Colonial Premiers has been held in London. Among other matters the Pacific cable was brought before this Conference, and from what has transpired the subject was complicated by a new proposition having been submitted by the Eastern Extension Telegraph Company. Consequently, the consideration of the project was deferred. Six months has since elapsed, and I feel called upon to make known some facts and explanations bearing on the questions which, in my humble judgment, the public should understand. I trust you will approve of the information being given to the public in the form I have now to submit to you. I have, &c, The Eight Hon. Sir Wilfrid Laurier, Premier. Sandford Fleming.

The Pacific Cable. Everywhere it is apparent that the British Empire is being formed by a process of growth and development, and there are many forces actively in operation, all tending to give it shape and strength and distinctive character. Lofty ideals are entertained by men of thought, experience, and patriotism; but the future is veiled from us, and we cannot foretell the precise form of relationship which will eventually be assumed by members of the British family of nations in so many meridians of longitude. If the form of the development to be attained is not clearly foreseen, it can at least be said that the entire British people in all parts of the globe are inspired by a unity of sentiment, and that they are simultaneously moving onwards in one general direction. Progress is the watchword in all quarters. It is impossible not to recognise the advancement perceptible in the colonies of the southern seas, and, equally, the amazing vitality in British Africa. The Dominion of Canada plays an important part in moulding the destiny of her own people and in promoting more intimate relationships between the Motherland and the colonies. It is but thirty years since the scattered provinces of British North America became federated in one Government. The Dominion thus created inherited many remarkable advantages. It can lay claim to the most important geographical position, owing to its extension between the two great oceans; a position which confers the only means of establishing under the British flag communications between the eastern and western territories of the globe. It enjoys the possession of vast fields of the richest virgin soil, with still unexplored mineral regions of immense extent, and presumably of immense value. The population retains the high qualities of the foremost nations of Western Europe, from which it has sprung ; and the wide expanse of unoccupied areas leaves ample room for a large accession to its number. These rich possessions of the Dominion give promise, under wise guidance, of a splendid future. It soon became evident that the development of a country continental in its extent exacted public works of a corresponding magnitude. Lines of railway and telegraph were projected from ocean to ocean, and immediately after confederation both were proceeded with. In 1874 the policy of establishing the telegraph in advance of the railway was determined upon, and, as a corollary to the trans-continental telegraph, the proposal to extend the electric wire across the Pacific naturally followed. It can be said that ever since the telegraph reached the coast of British Columbia the Pacific cable has engaged public attention, and that the necessity of this undertaking has been repeatedly affirmed. It received recognition in the Conference of representative colonial statesmen in London in 1887; in that of Ottawa in 1894; at Telegraph and Postal Conferences in Australasia almost annually; and at various times by chambers of commerce at Home and abroad. The dominant idea with those who have most strongly advocated the establishment of a Pacific cable has been the unity of the Empire. They foresaw the difficulty of effecting any practical union between communities separated by distance so long as they remained without the means of direct and cheap communication. At the same time it was plain to them that a telegraph across the ocean would foster trade and commerce—the life of an Empire such as ours. Among the memorable gatherings of representative men, not the least important was the Conference of Premiers in London on the occasion of Her Majesty's Diamond Jubilee. Before these statesmen met, hopes had been entertained that some definite action would be determined for the inauguration of the scheme. Preparations had long been made for joint action. It was one of the

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chief objects set apart for special consideration at the Conference of the Imperial and Australasian Governments held at Ottawa in 1894. With this view the Canadian Government, agreeably to a resolution of the Conference, obtained much information on the subject, and transmitted it to all the Governments interested in the projected work. Soon afterwards the Secretary of : State-for the Colonies (Mr. Chamberlain) invited the Canadian and Australasian Governments to send representatives to London for the purpose of taking part in an Imperial Committee to be appointed specially to receive evidence and consider the project in every'detail. The Committee first met on the sth June, 1896, and on the sth January, 1897, they reported the results of an exhaustive inquiry. The proceedings of the Committee and the conclusions which have been formed have not been made public. They have been repeatedly asked for, but, as nothing transpired respecting the labours of the Committee up to the Jubilee week, the opinion gained ground that when the Conference was concluded full information would be given to the public, with the decision arrived at by the Imperial authorities and the colonial Premiers. In many quarters it was expected that action would on that occasion be taken, and that the inauguration of the cable would result as a practical outcome of the Queen's Jubilee. The old proverb tells us that it is often the unexpected which comes to pass. The proceedings of the Conference of Premiers were first made known to the public by an article purporting to be published by authority in the London Standard of the 25th July, and the subject of the Pacific cable is thus alluded to : " The Conference left the Pacific-cable scheme in mid-air, and it is very unlikely that anything more will be heard of it for a considerable time. The position was entirely changed by a proposal by the Eastern Extension Telegraph Company to lay an all-British line from Western Australia across the Indian Ocean to Mauritius, thence connecting with the Cape and St. Helena and Ascension. . . . The Eastern Extension Company, it is understood, does not ask for a direct subsidy for the new lines, but seeks other concessions from the Australasian Governments which, if made, will justify them in proceeding with the work." In the account of the Conference of Premiers laid before the British Parliament there is a reference, in two sentences, to the cable ; no mention, however, is made of any proposal having been submitted by the Eastern Extension Company. But the Premier of New South Wales (Mr. Eeid) returned home from England through Canada, and, being interviewed by reporters in Montreal, Toronto, and Vancouver, confirmed the statement with respect to the proposal of the Eastern Extension Company. The character of the concessions asked by the company has not been made public, but it has been stated that they desire to obtain exclusive rights for Australia on condition that they connect the colonies with the Cape and lay a new cable from the Cape to England via St. Helena, Ascension Island, Sierra Leone, or Bathurst and Gibraltar. This scheme is put forward by the company as a substitute for the Pacific cable. Owing to the fact that telegraphic connection with the Cape is at present extremely defective, the proposal of the company is undoubtedly of great importance to South Africa. There are two telegraphic routes from England to Cape Colony. Both have landing-stations at Lisbon ; one passes through the Mediterranean to Alexandra, through Egypt to Suez, through the Eed Sea to Aden, and from Aden the cable follows the east coast of Africa, touching, among other points, at Mozambique and Delagoa Bay, in foreign territory. The other route leaves the first at Lisbon, and follows the west coast of Africa, touching at some fourteen points, eight of which are under foreign flags, those of Portugal, France, and Spain. Interruptions are frequent on both routes. There is evidence to, establish that during the past four years communication between England and the Cape has been broken many times, and that the aggregate interruptions have averaged in each year seventy-five days on the west coast route, and eighty-seven days on the east coast route ; showing that each cable is unavailable from six to seven days per month. While this refers to the average period that the cables have been thrown out of use, the durations of single interruptions have varied from one to thirty or forty days. As both lines are liable to be broken at the same time, serious inconveniences have not seldom resulted. Every one will remember this contingency occurring when the Transvaal difficulty was at its height. Intense anxiety was then caused during the cable interruption of eleven days, when South Africa was passing through an acute crisis in her history. Obviously a new cable to the Cape is much required, and, as the frequent interruptions to traffic by the two present routes is to a large extent owing to the fact that the cables are laid in the shallow water which prevails along the African coasts, they are in consequence exposed to accidents -to which cables in deep waters are not subjected. That part of the proposal, to touch at St. Helena and Ascension, where the water is of ample depth, would give to the cable the necessary security and avoid the difficulties experienced on the present routes. It is, however, not so clear that the northern half of the new cable would be so fortunate. By landing at Sierra Leone or Bathurst and Gibraltar, and terminating in Cornwall, the cable of necessity would be laid for some distance in shallow seas, where it would be exposed to injury from various causes, and where, too, the agent of an unfriendly nation, or, indeed, an evil-disposed fisherman, would have it in his power to destroy the cable with ease, totally unobserved. For hundreds of miles it would be exposed to such risks. The question may be asked, would not this proposed new cable from England to the Cape with an extension to Australia be of general advantage ? To such a question there is but one answer. It certainly would be of general as well as special advantage, for the reason that we cannot have too many lines of communication. They are needed in the every-day business of trade and shipping, and, moreover, we must come to recognise that a complete telegraph system ramifying wherever Her Majesty's wide domain extends is an essential condition of the life and integrity of the British Empire. It is on this and on other grounds impossible to admit the claim of the Eastern Extension Company, that the proposal submitted by them is preferable to a transPacific cable, and that it will render it unnecessary. At the Colonial Conference of 1894 the outline of a telegraph system for the Empire was submitted. It was not confined to one side of the globe ; the system projected embraced, and

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encircled its whole extent. The scheme was illustrated by a map of the world, with the chief cablelines laid down upon it. If the proceedings of the Conference be referred to it will be seen that a trunk line of telegraph was projected from London through Canada to Australasia, with extensions to South Africa, India, and China. It was shown that by the Canadian route all the chief British possessions on the four continents would be brought into electric touch with each other and with the Imperial centre in London. It was demonstrated, moreover, that this result could be accomplished without touching a single acre of foreign soil, and without traversing shallow seas where cables are most liable to injury from ship's anchors and other causes, and where they can be so easily fished up and destroyed. No fact can with greater confidence be affirmed than that the cables by the Canadian route would be far less vulnerable than the existing cables, or those now projected by the Eastern Extension Company. But even if no advantage in this respect could be claimed, it requires no argument to prove that telegraphic connection between England and Australasia would be infinitely less subject to interruption from accident or wilful injury by having the Canadian line established in addition to the Eastern Extension lines, especially as the former would be on the opposite side of the globe and far removed from the immediate theatre of European complications. It is not possible to believe that any one disassociated from, and uninfluenced by, the Eastern Extension Company can view the proposed Canadian Pacific cable with disfavour. If it be important to strengthen the connection between the United Kingdom and the outlying portions of the Empire, no one can question its necessity. But the Eastern Extension Company has never taken a friendly view of the Pacific cable. From the first it has been its determined opponent. The proceedings of the Colonial Conferences of 1887 and of 1894 give evidence of this fact. The report on the mission to Australia by the Canadian delegates gives some indication of the intense and persistent antagonism displayed by the company and the manner in which its powerful influence has been employed to thwart the enterprise. It may not be an unwarranted surmise that the immediate purpose of the company in submitting to the Conference of Premiers their new proposal was to divert attention from the Pacific cable. The Eastern Extension Company represents a combination of associated companies engaged in telegraph transmission between England and Australasia. The lines of the company comprise those of three amalgamated companies: (1.) The " British Indian Extension," from Madras to Singapore, with a share capital of £460,000. (2.) The " British Australian," from Singapore to Australia, with a share capital of £540,000. (3.) The " China Submarine," from Singapore to Hongkong and Shanghai, with a share capital of £525,000. The combined share capital of these three companies amounted to £1,525,000. On their amalgamation the united share capital, by a well-known process of "watering" to the extent of £472,500, was increased nominally to £1,997,500. ' The united company, since known as the Eastern Extension, Australasia, and China Telegraph Company (Limited), has been exceedingly prosperous; it has paid 7 per cent, on the enlarged capital, equal to 9 per cent, on the original capital. An examination of the published statements establishes that it has in addition expended out of the profits earned no less a sum than £1,571,540 on extensions and other productive works, and there remains unexpended and undivided to-day a reserve of surplus profits amounting to £804,193. These figures establish that the Eastern Extension Company has become a remarkably profitable investment. It regularly pays good dividends, but the dividends are no guide to the profits made. It holds in reserve undivided profits far exceeding in amount the whole value of its cables between Asia and Australia. The accounts of the company for 1896 and the first half of 1897 show that the net profits actually earned during these periods amounted to 13 per cent, on the present capital, and 17 per cent, on the capital prior to its being watered. The company is unwilling to have this state of affairs changed. They know perfectly well that the telegraphic traffic is steadily increasing, and that as the traffic grows the profits will become still greater. It is easy, therefore, to understand why the company has never viewed with friendly feeling the proposed Pacific cable. Its managers are not willing to divide the business with the new line. They must retain it entirely in their possession. They have secured a rich monopoly, and their desire is to make it even more profitable and to strengthen and perpetuate it. The Pacific cable has been projected in no spirit of hostility to any company or to any country. It has been advocated as a means of extending to the whole Empire the advantages derivable from the geographical position of the Dominion. Canada offers the connecting-link in an Imperial chain of telegraphs encircling the globe. When the project is completed it will bring the Mother-country into direct electrical connection with every one of the great possessions of the Crown in both hemispheres without touching the soil of any foreign Power. Thus it cannot fail in a high degree to promote Imperial unity. Indeed, it is difficult to conceive how a perfect union or any union of the whole is possible without union between the parts. The whole Empire is in strong sympathy with the aims and aspirations which a few years back were limited to a few men of advanced thought. The historical event of last June has shown to the world that " the British people are one people animated by one spirit." It is recognised that we are approaching the period when new relations may be established between the United Kingdom and those younger British communities beyond the seas, known in past history as colonies, but which are passing from colonial tutelage to a higher national status. In order to promote these closer relations, what is more desirable, what more necessary, than that each and all be connected by the appliances which art and science have devised? Canada stands first among the British communities of the outer Empire. Scarcely second to Canada we look forward, in no long period, to welcome the kindred Dominion of Australia comprising under one federal Government half a dozen colonies, each possessing great potentialities. What more in harmony with the spirit of the British people than that Canada and Australia be brought in close communion ? Is it not indispensable to vital public interest that those two great

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units of the Empire—the island continent in the South Pacific and British North America—should possess the means of instantaneous communication one with the other'? The proposition of the Eastern Extension Company submitted to the Conference of Premiers has no such purpose in view. Its object is, indeed, the very opposite. While the consolidation of the Empire demands that the Queen's subjects in Canada and Australasia shall possess all the advantages which the closest telegraphic connection can effect, the policy which animates that company would cause these communities to remain severed. Is such a policy to be commended ? Does not the Eastern Extension Company, when persistently exercising its manifold and widely ramified influence to keep Canada and Australia disunited, assume an attitude of hostility to both countries and to Imperial unity ? In the interests of the Eastern Extension Company the Pacific cable has been declared to be impracticable ; its cost has been greatly exaggerated ; it has been denounced as a work which could not be maintained without burdensome subsidies; it has been stigmatized as inimical to telegraphy and trade ; and it has been decried and misrepresented in every possible manner. The explanation is to be found in the fact that the company is unwilling to relinquish its monopoly, and to rest satisfied in the future with a reasonable return for capital invested. On this point the writer is tempted to quote a single paragraph from his address at the Colonial Conference of 1894, as given in the proceedings (page 85): "The progress and well-being of Canada, Australasia, and the Empire cannot be retarded in order that the lucrative business of a private company may remain without change. Even if the chairman of the Eastern Extension Company succeeded in converting us to his commercial ethics, that the profits of the monopoly he represents must be maintained inviolate, it does not follow that the project of a Pacific cable would not be carried out in some form, even if Canada and Australasia abandon it. There are, indeed, unmistakable signs that a Pacific cable may shortly be carried out by Prance and the United States. We all know that France has already completed a section of 800 miles at the southern end, and the United States has recently expended $25,000 in making an elaborate survey of about one-third the whole distance from San Francisco (to the Hawaiian Islands). With a rival line in foreign hands, it is easy to see that the Eastern Extension would gain nothing, while the Empire would lose much." With respect to the objections raised by the Eastern Extension Company, they have been completely refuted. The very best evidence shows beyond all question that the project is perfectly feasible, that the cable should be established as a State work, that so established the revenue from business obtainable will be ample to meet every charge, including working-expenses, maintenance, renewal, interest on cost, and sinking fund to replace capital; that, in fact, the cable can be established in the most satisfactory manner, and that all its advantages can be attained without any cost whatever to the taxpayer. That the prospects are of this character is attributable to these facts, viz. : (1.) As a State work, the capital employed would be obtained at the lowest possible rate of interest. (2.) The capital would be limited to the necessities of actual expenditure in establishing the work; there would be no possibility of enlarging the capital account by adding " promotion expenses "orby " watering stock "in any form. (3.) No dividend would require to be declared or bonus paid. Eevenue would only have to meet ordinary charges, including interest on the actual cost at a low rate, possibly per cent. (4.) Remunerative traffic which would be controlled by the Australasian Government already exists. (5.) Such traffic is continually growing, and it is difficult to assign a limit to its growth. (6.) The facilities created and the reduced charges would open up a new and profitable business across the Pacific which would be subject to the new line. Such being the case, the question may be asked, is there any reason other than the opposition of the Eastern Extension Company why the establishment of this important national work should be farther delayed ? It must be admitted that the Pacific cable in operation would put ati end to the monopoly of the Eastern Extension Company, and diminish the immense profits it enjoys. As, however, less than half the whole traffic would prove remunerative to the Pacific cable, there would remain ample business to the company to yield a good return for the capital invested. In the memorandum laid before the House of Commons last JTuly by the Secretary of State for the Colonies it is distinctly indicated that, while the Home Government is willing to co-operate with Canada and the Australian Colonies, the Imperial authorities are unable to see the way to take the initiative, and that they " now await definite proposals from the colonies interested before proceeding further in the matter." It unfortunately happens that the Australasian Colonies remain under the disadvantage of being disunited politically, and they are not all equally in favour of the Pacific cable, Western Australia and South Australia being somewhat in sympathy with the Eastern Extension Company. New Zealand, New South Wales, Queensland, and Victoria desire to have the cable laid on the Canadian route. As the traffic to make it a profitable undertaking would have its source chiefly in these colonies, and, moreover, the landlines within each colony are owned by each respective Government, they have it in their power to control the trans-Pacific telegraphic traffic to the extent required to make the cable a profitable undertaking. At this distance it is not easy to understand why these four colonies do not agree to take some definite line of action. It is now close on six months since the Premiers met in London, and as far as known they have not seen their way to agree to any joint proposal, owing doubtless to unexplained local difficulties. Under these circumstances it is not improper to consider if there be any duty or obligation resting on us in Canada. The Dominion is now looked up to as the elder brother in the British family of kindred nationalities. If as Canadians we have faith in our destiny as no inconsiderable element of the great Empire, are we not called upon again to take the initiative ? The Mother-country awaits a proposal. It cannot well come from disunited Australasia. If we are to be brought within speaking-distance of the kindred communities in the southern seas the first impulse must come from ourselves. Shall the opportunity which circumstances have presented be seized, and another proof given to the world that " the Canadian Government and people are determined in all ways to promote Imperial unity ? " Sandfoed Fleming,

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My Dear Sib,— Ottawa, 14th April, 1898. Beferring to the conversation we had this morning, and agreeably to your request, I submit for your further information the following explanations respecting the present position of the projected Pacific cable : — After you left for England early in March the British Empire League held its annual meeting on the 10th ultimo. The subject was discussed at length, and resolutions were passed pointing out, —(1.) That the telegraph-connection of Canada with the Australasian Colonies by an all-British cable is of the utmost importance to Imperial unity; that such connection would not only foster trade and advance the common interests of the Dominion and the Empire, but be of special value to Canada and Australasia at a time when affairs on the shores of the Pacific are engaging the attention of the world to an extent that may before long involve serious international complications. (2.) That the cable business between Australasia and the Mother-country is enormous and steadily increasing, and it has been ascertained that if less than half the traffic be transmitted by way of Canada it would yield a revenue sufficient to make the Pacific cable, as a State undertaking, a complete commercial success. (3.) That the Australasian Governments have it in their power to furnish traffic to the Pacific cable to the extent required to make the new line self-supporting without involving any charge on the public exchequer. (4.) That events and circumstances imperatively demand that the Government of the Dominion should continue to press the matter to completion, in order that the interests of the Empire may not suffer. The meeting, after discussion, unanimously resolved, " That the Government and Parliament of Canada be respectfully urged to take such action as may be necessary to secure the early commencement of the Pacific cable, and lead to the commencement of this great Imperial connectinglink." It was further resolved that a committee of the League be appointed with instructions to wait upon the Government for the purpose of presenting the views expressed, and urging the necessity of prompt action in the matter. The committee appointed having in pursuance of the resolution waited on the First Minister, a suggestion was submitted to him, which appeared to be favourably entertained. It was suggested that possibly the best means of establishing the cable as a State undertaking would be through the instrumentality of a " Pacific Cable Trust " created by the several Parliaments concerned. The trust to be duly empowered to raise the required capital, providing for the replacement of the loan by a sinking fund ; and, with respect to this, it may be mentioned that by the Imperial Committee in 1896, and since the Imperial Committee reported, establish beyond all question that the revenue resulting from the co-operation of New Zealand, Queensland, Victoria, and New South Wales with Canada would fully provide for the extinction of the original loan The proposed "Pacific Cable Trust" would be a small Board on which the associated Governments would be represented. Every detail would be left to this Board; it would be empowered to do everything necessary to lay the cable, to work it for commercial purposes, to collect the revenue and account for its proper expenditure. It is not necessary at present to say any more. It will be obvious to you that, from the ample remunerative traffic which would be secured by the co-partner-ship arrangement with the four Governments controlling it, the cable trust would be in a position to meet every engagement and place in reserve year by year sufficient provision for the replacement of capital. By this instrumentality the Pacific cable may without difficulty be laid and worked for the common advantage without cost to the taxpayer and without causing any addition to the public debt. In addition to the action taken by the British Empire League, several Boards of Trade in the Dominion considered the question and reached similar conclusions. The resolutions passed by them have been submitted to the Government from time to time. By the last mail from Australia I have received information from official and private sources of an important character. The Eastern Extension Telegraph Company, the great opponent of Canada in the matter, has an agent actively engaged in these colonies. He is continually using the strongest possible influence to divert attention from the Canadian route, and is taking every means to obtain from the Australasian Governments a subsidy for establishing a rival line by way of the Cape of Good Hope, with a proviso that no assistance be granted to any other line for a period of twenty years. I append a memorandum which refers to this and other points, and I especially invite your attention to that part dealing with " hostile projects." I append copies of communications which I have received from the Premier of Queensland, dated the 19th February, 1898, and from the Premier of New Zealand, dated the 16th March, 1898. You will see that the Governments of both colonies are strongly in favour of the Pacific cable, and the wish is expressed " that no effort willbe spared on the part of Canada to insure the accomplishment of the scheme." Other letters which I have received within the last few days are unofficial. I may, however, state that they point out very decidedly that New South Wales and Victoria will be equally ready to join in the undertaking provided Canada moves in the matter promptly. I learn that about the time the last mail left Sydney a resolution was adopted at a meeting of Premiers held at Melbourne fully confirming this statement. The Premier of New Zealand was not present, but his letter appended speaks for itself. The Premiers of Queensland, New South Wales, Victoria, and Tasmania spoke for their Governments, and it would appear that they are all looking to Canada to take definite action. It is noteworthy evidence of the importance which must be attached to this matter that, while the Pacific cable was being discussed at the meeting of the British Empire League and at the conference with the Canadian First Minister, in Ottawa, precisely at the same time it engaged the attention of the Premiers of the Australian Colonies in Melbourne, and both circumstances were reported side by side in the London Press the following day. Notwithstanding the widespread interest awakened, and the publicity given to it, I have ventured in the following memorandum to point out that there is danger in delay. Let me, there-

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fore, again urge the necessity of action of some kind by your Government. If Canada now moves the cable will be assured. As I have repeatedly stated, this great Imperial connecting-link will cost the taxpayer nothing, and it will add nothing to the public debt. Yours, &c, Hon. E. E. Dobell, Ottawa. Sandfoed Fleming.

Letter from the Premier of Queensland. Dear Sir, — Chief Secretary's Office, Brisbane, 19fch February, 1898. With reference to your le f ter of the 3rd of January ultimo, receipt of which I have already caused to be formally acknowledged, in which you were good enough to forward, for my information, a copy of a letter addressed by you to Sir Wilfrid Laurier, Prime Minister of the Dominion of Canada, on the subject of the Pacific cable, which I have perused with much interest. I now beg to state that the Government of Queensland have in no sense altered their views as to the advantage to be derived by the Australasian Colonies, and the Empire generally, from the construction of the proposed Pacific cable connecting Australia with Great Britain via Canada. The matter was, as you are aware, discussed at the conference between the Eight Hon. the Secretary of State for the Colonies and the Premiers of the self-governing colonies held in London last year. It was with some surprise I heard Sir Wilfrid Laurier announce during the course of the proceedings that his Government was not yet prepared to give practical effect, so far as the Dominion of Canada was concerned, to the proposal that the colonies interested should guarantee their shares of the cost of the construction of the cable. lam pleased, however, to be able to give you my hearty assurance of our entire sj'mpathy with the movement in favour of this important national undertaking, and I trust that before long it may be possible to take some definite steps in the direction of executing what is by Queensland regarded as not only a very desirable, but a very practical scheme. Believe me, &c, Hugh M. Nelson.

Letter from the Premier of Neiv Zealand. Sib,— New Zealand, General Post Office, Wellington, 16th March, 1898. Eeferring to my letter of the 12th ultimo, acknowledging receipt of copy of your letter to Sir Wilfrid Laurier on the subject of the Pacific cable, the Eight Hon. Mr. Seddon now directs me to say, in reply, that he hopes to hear that no efforts will be spared on the part of Canada to ensure the accomplishment of the scheme for a cable from Australia to the United Kingdom by way of the Pacific. The New Zealand Government strongly favours the Pacific cable. I have, &c, Sir Sandford Fleming, Ottawa, Canada. W. Gray, Secretary.

No. 15. FUETHEE PAPEES OF THE CANADIAN HOUSE OF COMMONS. House of Commons Debates : Third Session—Eighth Parliament.—Debate on the Pacific Cable. —Ottawa, Thursday, 26th May, 1898. Mr. Casey : Before that motion is carried, Mr. Speaker, I wish to bring a matter before the House which I consider is of sufficient importance to justify our devoting a little time to it, even at this late period of the session. I need not say that what I shall bring up is not a motion of want of confidence in the Government, nor even any attempt to find fault with the Government. It is a matter on which I hope to elicit the opinion of the House to some extent, and possibly the opinion of the Government : a matter which I consider to be of Imperial importance. I refer to the question of the laying of a Pacific cable to connect Vancouver with Australasia. It will be within the memory of all of us that this subject has occupied the consideration of colonial Conferences, of colonial Governments, and of this House at different times. Not to go further back than the first Intercolonial Conference of 1887, held in London, we know that resolutions were passed there favourable to the laying of such a cable. Subsequently, when the then Minister of Trade and Commerce (Sir Mackenzie Bowell) visited Australia, negotiations took place which led to the summoning of the Intercolonial Conference in Ottawa in the early summer of 1894, where that question was again considered, and the laying of the cable approved by resolution. I shall not detain the House by reading these resolutions in detail, but I may say they were to the effect that the Imperial Government should be asked to consider as to what aid they would give, and that the Canadian Government should be asked to ascertain what such a cable would probably cost. As a result of that conference, in the year following the Government of this country called for tenders, and the lowest tender for the construction of that cable, and its maintenance for three years by the contractors, including all possible risks during the making and laying of the cable, amounted in round numbers to about one and a half million pounds sterling. None of these tenders were accepted, as they were invited merely for the purpose of ascertaining about what such a cable would cost. The matter was not concluded after these investigations, but early in 1896 an Imperial Committee was called together in London to consider the subject, at which Sir Donald A. Smith (now Lord Strathcona and Mount Eoyal) and Sir Sandford Fleming were appointed to represent the Canadian Government; there being representatives present from the Imperial Government and from the Australasian colonies. That Committee held its sittings through the summer and autumn of 1896, and at great length investigated all questions connected with the cable, and established not only the practicability of a cable being laid in the waters in question, but also that the cost would be

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moderate and the traffic large. The report of that Committee has never been published, for some reasons which are known only to the official mind of the Colonial Office in England. For reasons of policy they have objected to the publication of the report of that Committee. However, the Canadian representative and Sir Sandford Fleming—who did not sit as a member of the Committee, having stepped out and acted as consulting expert only, because the other colonies only sent one representative each—the Canadian representatives reported to the Canadian Government their own proceedings in connection with that Committee. Some considerable time ago I obtained an address from the House asking for the report of that Committee, and the reports of the Canadian representatives thereon. The Secretary of State reports in the return which was brought down yesterday: that " the report itself asked for is held as confidential under instructions from the Imperial authorities not to publish until permission is given to do so." The reports of the Canadian representative and of Sir Sandford Fleming have been brought down, in this return, which I shall certainly not read to the House at this time, although I hope that it will be printed for the information of the public on this very important matter. I will, however, occupy a few moments in reading a letter received from Sir Sandford Fleming by myself, in response to a request of mine for a concise and brief statement of the whole question. The letter is as follows :— Dear Mb. Casey,— Ottawa, May 26th, 1898. lam very glad to reply to your inquiries. I have recently received many communications from Australia, all pointing to the great interest taken in the Pacific cable, and the desire on the part of these rich and growing communities, seated in that favoured region of the globe, to cultivate olose relations with Canada. The communications received embrace official and private letters. Among the former the following extracts from letters received from the Premiers of Queensland and New Zealand may be taken as illustrations. The Premier of Queensland states in a letter of the 19th February, 1898, that his Government " have in no sense altered their views as to the advantages to be derived by the Australian colonies and the Empire generally from the construction of the proposed Pacific cable, connecting Australia with Great Britain by way of Canada." He is pleased to be able to give his " hearty assurance of entire sympathy with the movement in favour of this important national undertaking, and trusts that before long it may be possible to take some definite steps in the direction of executing what is by Queensland regarded as not only a very desirable, but a very practicable scheme." The Premier of New Zealand, in a letter of the 16th March, 1898, expresses the hope " that no efforts will be spared on the part of Canada to ensure the accomplishment of the scheme for a cable from Australia to the United Kingdom by way of the Pacific." He adds: "The New Zealand Government strongly favours the Pacific cable." In the same month (March) the Premiers of New South Wales, Queensland, Victoria, and Tasmania, met in Melbourne, and agreed on behalf of those colonies to supply one third of the cost of the Pacific cable if Canada and Great Britain will co-operate with them. New Zealand was not represented at this Conference, but the letter of Mr. Seddon, the Premier, above quoted, indicates that the undertaking is strongiy supported by his Government. This fact he communicated to the Conference of Premiers by telegraph. The cost of the cable has been ascertained to be under £1,500,000, and the most careful experts have calculated that an annual gross income of £150,000 would more than meet interest, sinking fund, working expenses, and maintenance. In the year 1896 the cable traffic between Australasia and Europe, according to Government returns, reached 2,326,984 words. If we reckon the traffic at 3s. a word (the rate between Australia and Europe is 4s. 9d. per word), we have a gross revenue of £349,047, showing very clearly that, even assuming the cable business will never exceed that of 1896, there would be amply remunerative business for the Pacific cable. But the cable business is progressive. The following is a statement taken from the Government returns of the number of words transmitted in eaoh year from 1891 to 1896. The traffic for last year (1897) has not yet been received. Total words transmitted, in 1891, 1,110,869; in 1892, 1,321,412 ;in 1893, 1,401,293 ;in 1894, 1,323,243 ;in 1895, 1,948,630 ;in 1896, 2,326,984. This establishes that from 1891 to 1896 the cable business has more than doubled, and, in view of the stimulating effect of a new line of communication, it is reasonable to estimate that the gross cable business in 1901 will not be less than 4,000,000 words. As 1,000,000 words at 3s. a word will produce £150,000, the revenue required to cover every charge against the Pacific cable, it is evident that if the Pacific cable obtains one-quarter of the Australian-European traffic it will be a paying concern from the first year it can be put in operation. To my mind there is no reason to apprehend that the Pacifio cable will not obtain far more than one-quarter of the entire cable business. The Australian land lines are public property, managed by the Post Office Departments, and each Government will have the power to direct traffic over the Pacific cable, so as to make it remunerative. The cable business takes its origin chiefly in New South Wales, Queensland, Victoria and New Zealand, and it is obvious that if these colonies have a proprietory interest in the undertaking its complete financial success will be assured. New South Wales, Queensland, and Victoria have agreed through their Premiers to become responsible for one third of the whole cost. It is understood that the Imperial Government will be willing to bear one-third. There remains one-third to be borne by New Zealand and Canada, in proportions to be agreed upon. These facts and explanations clearly establish that whatever share of the co-partnership may be assumed by Canada the liability will be merely nominal. As the existing traffic alone, without taking into account the new business certain to be created, would be more than sufficient to cover working-expenses, maintenance, interest, and sinking fund to pay off the original loan, all increase of business and all new business to be developed between Canada, the United States, and Australia would swell out receipts in a few years so as to admit of a reduction in charges on messages much below present rates, by which great advantage to the public would result. It has been proposed to establish this national work through the instrumentality of a Pacific cable trust, to be created by the several Parliaments. This trust to be empowered to raise by loan the required capital, providing for its replacement by sinking fund. The loan to be guaranteed by the associated Governments in agreed proportions. The Pacific cable trust would be a small Board on which the associated Governments would ba represented. Aa empowered by statute it would do everything necessary to establish and operate the line, oollect the revenue, and properly account for it. By this means a great national undertaking, designed to promote trade and bring the outer Empire into electric contact, would be easily established without any actnal addition to the public debt or any annual charge on the tax-payer. Yours, &c, George E. Casey, Esq., M.P. Sandford Fleming. It may be asked, Sir, why, if this enterprise is so sure to pay, it should not be undertaken by a private corporation. The answer is, that if it were undertaken by a private corporation, the provincial Governments in Australasia, which have been referred to, would not be bound by their own interest to send over it the business necessary to make it a paying concern. That is a very sufficient answer in itself. It would have to compete for its business with the Eastern Extension Cable Company, a tremendously wealthy and influential corporation, in trying to get into the good graces of the provincial Governments which control that business, and it is easy to understand that a new company could not compete successfully with an old, influential, and wealthy one. In the second place, the capital could not be obtained at nearly as reasonable rates by a company as by a cable trust, with the guarantee of the different Governments. The ordinary rate of profit expected by investors would certainly range from 5 to 8 per cent., or probably more, whereas the. rate of 6—l. 7,

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interest at which money could be borrowed on a Government guarantee would be between 2| and 3 per cent. That difference is enough to make the distinction between a paying and a non-paying investment. As to the responsibility incurred by the Governments which guarantee this'loan, I think Sir Sandford's statement, which he assures me is taken from the Government blue-books of these colonies, is sufficient to make it appear that the responsibility would be purely nominal. I might instance the case of the Intercolonial Eailway. When Canada proposed to build that road the Imperial Government, whose credit was so much better than ours, guaranteed a very considerable amount of the bonds, and we got the money at a lower rate of interest than we otherwise could have done. Yet the Imperial Government has never had to pay a cent of the interest on those bonds. When we have a case like this, in which it is clear that the other parties who would go into the enterprise of laying the cable have it in their power to direct over it a paying stream of traffic, and would be interested in doing so as guarantors of the scheme, it seems to me very clear that neither this country nor any of the other colonies would ever have to pay a cent towards liquidating the cost of that cable. Why should Canada take the initiative in this matter ? In the first place, because she is the most important colony and most interested in this cable of any except Australia. In the second place, because Canada has acquired already what it is now fashionable to call the hegemony of Greater Britian. She is the most important in the councils of the greater Empire which lies outside the British Islands. Since the day of the Jubilee celebration, I think that cannot be doubted. Ever since then it is admitted by Englishmen that Canada is not only the leader of the colonies, but the leader of the Empire, in many questions of policy, both internal and external. Canada has already gone a long way on certain paths which are intended to promote, not only her own prosperity, but the unity of the Empire and the mutual co-operation of its different members. It is eminently proper, therefore, that Canada should take the initiative in this matter. Ido not speak now as if the initiative remained to be taken. Canada has taken the initiative in discussing this matter and obtaining the necessary information with regard to it. What is required is that she should now take the initiative by being the first to lay down a definite scheme to carry out the plans that have already been fully discussed, and take up her share of Imperial responsibility in this connection. The commercial advantages to Canada of this scheme will be great. We have had for some years a line of steamers plying between Vancouver and Australia, but only within this year that line has ceased to pay and has had to be taken over by another company. Why ? Simply because there has not been direct telegraphic communication between Canada and Australia. Where there is no direct telegraphic communication, and no ports of call having telegraphic connections between points so far distant as Vancouver and Australia, where ships can call for orders, commerce is sure to languish as it has in this case. Still more from the point of view of the safety of the Empire, and thereby indirectly our own, this cable would be an agency whose importance cannot be exaggerated. In these days of wars and rumours of wars, and of cutting of cables by one of the combatants to embarrass the other, the necessity of a cable with its terminals on British territory is very clearly apparent. This proposed cable line, according to the most feasible route, will start from Vancouver, and then by way of Fanning Island and Fiji to Norfolk Island, from which it will fork to New Zealand and Australia. The total length will be something over 7,000 miles. The committee in England have fully established the feasibility of laying a cable in these waters at a reasonable cost. Under all these circumstances lam sure that we are in a position to ask the Imperial Government to drop the veil of secrecy which has been laid over the matter at present, and to come out fully and frankly and meet ourselves and the other colonies half way, not only in promising support to this scheme, but in maturing and carrying out the project. There is urgency in the matter at present for two reasons. In the first place, this Eastern Extension Company has been trying to obtain the assistance of the Australian colonies to another route, by way of the Cape of Good Hope, from Australia to England. In the second place, the French Government has a cable from New Caledonia to New Zealand, and steps have been taken to construct another link in a route which would connect New Caledonia with Hawaii, and thence by the American cable with San Francisco. If either of these schemes took practical form, the proposal for the Canadian cable would be at an end, because either of the others would serve the purpose of Australia, if not ours. A profitable and growing trade between Australia and Canada cannot be accomplished by any other means than by this electric communication. We should then be the warehouse for European goods going to Australia and Australian goods coming to England over our great national highway, the Canadian Pacific Eailway. Ido not bring up this question with any idea of forcing the hand of the Government or urging it to say anything definite in the matter to-night, but in the hope that it will promote such a discussion as will give the Government some idea of the feeling in the House and country, and that there will be such discussion in the country, even in these days of interesting war news, as will call public attention to the matter, and enable the people to see that it is a national Canadian, as well as Imperial, work of great importance, and deserving of more activity on our part. Ido not know that I have anything further to add to what I have already said, and to the remarks I have quoted from the greatest living authority on submarine cables, Sir Sandford Fleming. I could give interesting details from the various papers brought down, but, although they would add to the interest of the subject, they would not add to the pleasure of the House to-night. I hope to hear from both sides on the question. lam sorry that some honourable gentlemen are 'not present whom I would desire to see here to-night. I refer to members from British Columbia on this side of the House —I see one on the other side—who are, to my knowledge, in sympathy with this scheme, but I am forced to bring it on in their absence on account of the nearness of prorogation. Sir Charles Tupper. —l waited, Mr. Speaker, before rising, in the belief that some member of the Government would, in response to the very strong appeal just made by the honourable member for West Elgin (Mr. Casey), favour the House with the position which the Government propose to

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take on this very important question. I have not had an opportunity of reading the papers that have been placed on the table, and, from what my honourable friend says, I am afraid I would not derive a great deal of information if I had. Mr. Casey. —Yes, the report of the Canadian Commissioner is pretty full. Sir Charles Tupper. —l speak of the matter so far as the views of the Government are concerned, which is an important point; and, from what fell from my honourable friend who has just gone over this subject with so much care and ability, I am afraid I should not have learned a great deal as to the attitude of the Government. But I may say that lam afraid that the Government have scarcely realised our just expectations in regard to this very important matter. The question was taken up with great zeal and great ability long ago by Sir Sandford Fleming, who gave the subject attention, not from the promoter's point of view, because he never dealt with the subject from that standpoint at all, but entirely from the higher point of view of what he could do—and it was a great deal—to bring such facts and evidence to bear upon the question as would commend it to the consideration of the Government, and lead to its being taken up by the Government of Canada and other countries interested with a view to its accomplishment. I do not intend to say a single word with regard to its importance. The honourable member for West Elgin (Mr. Casey) has pointed out that probably the failure of those who undertook the establishment of a line of communication between the great island continent of Australia resulted, to a large extent, from the want of that direct telegraphic communication which so greatly facilitates commercial transactions. I will now give the House a little idea of the position in which that question was when I resigned the position of High Commissioner in London. The great Conference that was held of the Australasian representatives and the representatives of the British Government meeting here with the representatives of Canada gave a great impetus to this project. After consideration of the subject that Conference arrived at a practically unanimous resolution in favour of the question being taken up and pressed upon the consideration of Her Majesty's Government. Lord Jersey, who represented the Imperial Government at that Conference, attached very great importance to this project, and dealt very ably with it in his report to Her Majesty's Government upon the Conference itself. When the present Government came into power I made a very strong appeal, under direction of the Government of Canada, to the Eight Hon. Mr. Chamberlain, the Colonial Minister, to take up this question of the Pacific cable connecting Canada with Australasia, and that right honourable gentleman, having given a great deal of attention and careful consideration to the subject, was good enough to receive a deputation. On that occasion I was accompanied to the Colonial Office by the representatives in London of all the Australasian Colonies, including New Zealand, with the exception of the representatives of South Australia and West Australia. We never expected to have the active support of these provinces, for the reason that they had built a very long and expensive line of telegraphic communication across the country connecting with the Eastern Extension Company, and the carrying-out of the project of cable-communication on the Pacific from Vancouver to Australia would tend very much to take away the business upon which this line constructed by South Australia and West Australia depended for its maintenance. I may say that when on the occasion on which, under instructions of the Government of Canada and of all the Australian Governments, except the two I have mentioned, we waited upon the Eight Hon. Mr. Chamberlain with a joint request that a Commission should be appointed by Her Majesty's Government for the purpose of taking up the question as to whether it was desirable that this Pacific cable should be established, and in what form it was most likely to be successfully carried out, the Colonial Minister at once warmly entered into the subject, and, in response to our application, agreed promptly to issue a Eoyal Commission to invite representatives from Canada and from Australia to meet in England for the purpose of conferring with Her Majesty's Government on that subject. And I may say—and it is a very important statement that lam about to make—-that Mr. Chamberlain, who is noted not only for his great ability, but for his thorough knowledge of financial questions, stated to the delegation or representativas from Canada and Australia that, having given to the subject the fullest and most careful consideration in his power, and in the light of all the information that could be brought to bear upon it, he had arrived at the conclusion that the accomplishment of the Pacific cable from Vancouver to Australia would not involve, practically, any financial responsibility. He reached this conclusion not only from the evidence that had been submitted by Sir Sandford Fleming, to which he had given careful attention, but from the stronger and more complete evidence afforded by the invitation for tenders by the Government of Canada at the request of the Ottawa Conference. This invitation resulted in obtaining from one of the strongest firms of Great Britain, the Indiarubber and Gutta-percha Cable Company and Works, a tender for the construction and maintenance for three years of the cable. This not only established that the calculations that Sir Sandford Fleming had made—and very elaborate calculations they were—were sound, but that the terms on which one of the strongest cable companies in Great Britain was prepared to carry out the work was nearly a million less than Sir Sandford Fleming had estimated. So that, instead of having been too sanguine, instead of having overestimated the results of his labours, it was found by practical test that his figures were outside figures, and that he could undoubtedly have constructed it at a much lower rate than he had estimated. Not only that, but, as I have said, the Colonial Minister himself declared that, having gone into the subject with great care, he had arrived at the conclusion that this great work in which Her Majesty's Government were most deeply interested could be carried out by the joint operation of Canada, Great Britain, and Australasia, without practically involving any other material financial responsibility whatever. Now, Sir, that was an enormous point gained. A Commission was appointed, and, as the House knows from the papers that have been laid upon the table, no definite conclusion was arrived at. A change of Government occurred about that time, and an alteration was made in the Commission, although I am glad to know that the present Government availed themselves of the invaluable services of Sir Sandford Fleming in this matter, as the previous Government had done, but with

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the result that, while we all looked forward to this great Jubilee occasion as one on which we had every reason to believe this important work would be finally arranged, on the contrary, for some cause, to me unaccountable, the work was not proceeded with, but suffered a decided set-back. The honourable member for West Elgin (Mr. Casey) has invited the Government to seek Her Majesty's Government to remove the veil of secrecy and let us see behind the scenes, let us learn why it is that in view of this great work, so vitally important to us and to Australia, equally important to Her Majesty's Government and to the Empire itself, as recent events have strikingly evidenced—why it is that this matter should be apparently in abeyance. Now, Sir, I hold in my hand a paper to which I would like very well to have drawn the attention of the First Minister, who, I am sorry to see, is not in his seat to-night; it contains a statement made apparently with a good deal of authority j and ,which throws a good deal of responsibility, in regard to the present position of this important question, upon that right honourable gentleman. I hold in my hand a copy of the London Standard of the 26th July, 1897. I may say, for the information of some members of the House who may not be aware of the fact, that the London Standard is practically the organ of Her Majesty's Government. Ido not know a paper published in London that is looked to with the same confidence as the London Standard to ascertain the views and sentiments of Her Majesty's Government. This paper professes to give, on what purports to be the best authority, the report of an interview between Mr. Chamberlain and the colonial Premiers. We have had since that a portion of the details laid by that right honourable gentleman himself upon the table of the House, but this inside view of the interview gives us some information above and beyond anything that is to be found in the statements laid upon the table of the House of Commons. I may say that from the very moment that this question of a Pacific cable was mooted it met with the most tintiring hostility of the Eastern Extension Cable Company, of which Sir John Pender, a very able man, was the founder, a man of consummate ability, and whose arms were long and far-reaching. I say from the outset this Pacific-cable project met with the determined hostility of the Eastern Extension Cable Company for the obvious reasons that they had practically a monopoly of communication with the great islands of Australasia, and disliked any competition from another and superior line of communication, and one more free from interruption than the line that now exists. Well, it appears that in their untiring efforts to defeat this scheme they brought forward and placed before the Cable Commission in London an alternative scheme. I will now read a report of what professes to be a result of the conference between Mr. Chamberlain and the colonial Premiers :—■ The Conference left the Pacific cable-scheme in mid-air, and it ia very unlikely that anything more will be heard of it for a considerable time. The position was entirely changed by a proposal by the Eastern Extension Telegraph Company to lay an all-British line from Western Australia across the Indian Ocean to Mauritius, thence connecting with the Cape and St. Helena and Ascension. Under any circumstances, Western Australia and South Australia were opposed to the Pacific cable—[for the reasons I have mentioned] —which would divert traffic from their landlines, and Victoria was indifferent. New South Wales, Queensland, and New Zealand were, by reason of their geographical position, prepared to subsidise the Pacific line, and if the Home and Canadian Governments had been willing to pay their share, no doubt the scheme would have been carried out. But the Conference soon discovered that the Imperial Treasury was very unwilling indeed to subsidise the line, while Sir Wilfrid Laurier indicated that he mistrusted the estimates of cost, revenue, and maintenance which had been submitted by the projector, and was not prepared to pledge Canada to bear a share of the burden. Now, Sir, I regret that the right honourable gentleman is not here to give to this House some explanation of the grounds upon which he should have questioned the conclusion of the projector, for that could be no other than Sir Sandford Fleming, as he was the party who had put forward all the data upon which this question was dealt with. I would like to know why he should throw doubt and discredit upon Sir Sandford Fleming's calculations of the cost, when they had been subjected to so severe and important a test as that of being submitted to competition between the great cable companies, and it had been found that, instead of those calculations being unworthy of confidence, he had erred upon the safe side of iargely overestimating the cost beyond what it was found an important cable firm in London were prepared to construct the work. If that be a correct statement, I regret very much that such doubts should have been expressed, or that any hesitation should have been expressed by Canada in regard to a matter that I look upon as very important not only to Canada and Australia, but perhaps still more important to the Empire itself. If Her Majesty's Government show a disposition, as here stated, to recede from the position of being prepared to bear a large and substantial portion of the risk, regarded as a very light one by the representative of the Imperial Government, Mr. Chamberlain, a very great change must have taken place in that right honourable gentleman's opinion from the time I had the fleasure of discussing that subject with him in connection with the delegates from all the colonies, do not intend at this hour to occupy further time than to say that this is a question deserving the hearty support of the Government and Parliament of Canada. I believe it is all but demonstrated that it is of great importance to us, that it would make Canada the great highway and thoroughfare for a very large amount of the cable-communication between the great island continent of Australasia and Europe; that it would have insured us a position that would have been one of great value commercially, that it would have been attended with a very moderate charge, if any, on the revenues of the country, and at the same time have resulted in giving our geographical position that importance to which I think it is justly entitled. I hope the further consideration of this question will lead to its being promptly taken up by the Imperial Government, the Governments of Australasia, and the Government of Canada at no distant day, and that at- no distant day we may see that which has been regarded with general favour and as a matter of great importance by all parties, except by those interested, and who have a direct interest, such as the Eastern Extension Cable Company has, in preventing its being carried out. The Minister of Trade and Commerce (Sir Richard Cartwright). —l do not think it would be safe to accept the Standard or any other newspaper as accurately representing what may be the true position of this question. One thing I may assure the honourable gentleman, and that is that

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Up to a very recent date the Imperial authorities objected to bringing down any further information, and I am justified in saying, in obedience to that intimation, nothing further has been brought down. As to the question itself, no doubt the honourable leader of the Opposition and my honourable friend who has brought this matter under the consideration of the House are quite justified in saying that this is a very important enterprise, and under certain possible conditions it would probably be extremely desirable that the several parties concerned should take steps to bring it about. But as regards the people of Canada at large, with whom we are most concerned, while I am not disposed to say it is of no great consequence to them, I am disposed to say this : that of the three principal parties concerned they are, in my judgment, the least directly concerned. I think the great Australasian group beyond question are the rnoet interested, and next to them, having regard to their enormous interests in the Pacific Ocean at large and in Australasia in particular, I think the Imperial authorities are most interested ; and, while not disposed to deny that Canada has a distinct and material interest in promoting trade and commerce with the Australian Colonies, I think I am justified in saying that of the three parties we are the least interested, from a commercial point of view, at all events. Under these circumstances, and bearing in mind that Canada, in my judgment, has been called upon to contribute enormously in proportion to her resources to the building of a trans-continental railway across this continent, in regard to which I have always held the British Government ought to have contributed, and I think the honourable gentleman opposite, if I am not mistaken, was very much of the same opinion Sir Charles Tupper.- —Hear, hear. The Minister of Trade and Commerce. —It is no particular secret now that if we had been a little less precipitate in making an agreement for the construction of the Canadian Pacific Eailway some thirty years ago, the British Government would have been compelled to have assisted largely in its construction. However, the whole burden fell on Canada. Canada, in carrying that out, in my judgment, rendered great service to the Empire, which has not been adequately acknowledged up to the present time, at all events, by the British Government. Under these circumstances, while I would not be disposed to refuse to take a reasonable share in this cable enterprise, I consider Canada should not be called upon to bear too large a proportion ; and that, without entering into any very minute discussion to-night on the subject of the proposed cost and of the proposed revenue which may be obtained from various sources, we in this Dominion are justified in saying, both to the Australasian group and to Great Britain, that after all we should not be called on to contribute to it more than in accordance with our interest. Up to the present time the Government have not found it possible to come to an exact understanding with the other parties to the enterprise, although they have not abandoned the hope that negotiations may yet be carried out to a successful issue. lam not at the present time going to enter into any details about these negotiations, which would rather injure than promote the cause; but of two things the honourable gentleman opposite may rest assured: first, that we shall not lose sight of it; and, second, that we shall feel it our duty to see that Canada is not called upon to bear more than her proper proportion of the cost. It may prove, and I hope it will prove, when this matter is thoroughly brought before the Australian Colonies, and the proposal is placed before the people at Home, that the expectations formed by the gentlemen promoting this scheme are correct, there is reasonable hope that advances will speedily be made which will bring about the realisation of the honourable gentleman's desire. Up to the present moment, although these things are in the air, they are not fully crystallized, I am not in a position to come down to the House with any definite proposition on the subject. Moreover, though Canada is a country of great potential resources, the Dominion and this Government have undertaken a great many expensive operations up to the present moment, and our resources at this time, as we shall be reminded by speeches from honourable gentlemen opposite later on, are very fully engaged. I must say that we should be very careful in regard to entering into any immediate liability, although we may believe there is a reasonably good chance of being recouped within a moderate space of time. I do not want to deter any Honourable gentleman who has taken an interest in the subject from giving the House and the Government the benefit of his views. Anything the honourable leader of the Opposition or his friends or our friends may choose, to say will be carefully considered by the Government and receive due attention at their hands. We are not, however, in a position to bring down at this moment any suggestion as to the proportion of the enterprise we should undertake, and I hardly think it would be profitable to those who desire to promote this enterprise to enter into any discussion of that phase of the question. As to the general benefit that may follow, I do not dispute it. The only point I make is that, while it may be of interest to Canada, it is of very much more interest to the Australian group, whose inhabitants are wealthy people, quite as wealthy, and perhaps more so, than are Canadians as yet; and to the people of Great Britain, whose interest would be very largely served by having a second line of cable through British territory which would be practically inaccessible to any attempts that may be made by any foe at any time to interrupt communication. Mr. McNeill. —l do not purpose to detain the House in reference to this matter, but I would like to call the attention of the honourable gentleman (Sir Richard Cartwright) to one fact in connection with the subject which he admits is one of very great importance, and that is that the emissaries of the Eastern Extension Telegraph Company are at present hard at work in Australia doing all they can to induce the Australian Colonies to give up their intention of supporting this project, so that delay now will be exceedingly dangerous. I would also call the honourable gentleman's attention to the fact that the present time seems to be singularly appropriate for urging this question upon the attention of the Imperial authorities. When every one must be alive to the enormous importance of telegraphic communication from one point of the Empire to the other, I should imagine that this was a time, if ever, when an effort should be made to bring this question home with the greatest possible force to the Imperial Government. I find that, in a memorandum

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which was recently presented to the Imperial House of Commons by the Colonial Secretary, the Colonial Secretary said that the Imperial authorities were ready to co-operate; willing to cooperate, but that they would not take the initiative, as the initiative should come from the colonies interested. If that initiative is not taken, and if this matter is allowed to drift, the result might be that this hostile cable company may succeed in blocking this very important Imperial scheme altogether. I very much regret that there should have been the delay which has taken place in regard to it. 1 think it is only too true what was said by the Standard in reference to the action taken by our own Prime Minister in England, because I find that in a letter, a copy of which was placed on the table of the House last night, addressed by the Prime Minister of Queensland to Sir Standford Fleming, this sentence occurs : — The matter was, as you are aware, discussed at the conference between the Right Hon. the Secretary of State {or the Colonies and the Premiers of the self-governing colonies, held in London last year, and it was with some surprise that I heard Sir Wilfrid Laurier announce during the course of the proceedings that his Government was not yet prepared to give practical effect, so far as the Dominion of Canada was concerned, to the proposal that the colonies interested should guarantee their shares of the cost of the construction of the cable. It would seem, therefore, that the information possessed by the Standard is correct, and that really Sir Wilfrid Laurier's course in London last year had very much to do with the blocking of this most important Imperial work. It is very unfortunate that that should have been the case. From the best information that we can obtain —from the opinion of the Eight Hon. Mr. Chamberlain himself, and from the opinion of many other experts —it would seem that this great Imperial work will not cost the people of Canada one cent; that it will not in any way increase the burdens of the people of Canada ; that it will be a self-sustaining concern from the very beginning ; and that all the Government of Canada will be asked to do will be to give a guarantee. No one has at all ventured to dispute that fact. Under those circumstances Ido think that it is unfortunate that there should be any appearance of stickling for the exact proportion which may be guaranteed by Canada, by Australasia, and by the Mother-country. I believe that the benefit to Canada of the Pacific cable would be enormous, both commercially and as a matter of safety for the whole community. No portion of this cable will be laid upon foreign soil, and it will have this other great element of safety connected with it: that it will be a deep-sea cable —a cable that it will be exceedingly difficult for any hostile Power to reach and interfere with. In that respect it would be very different from the cables proposed to be laid by the Eastern Extension Company, which will be cables laid in shallow waters, and which might be readily interfered with. If through any untoward circumstances the people of this country should be deprived of the advantage which the construction of this cable would bring to them, it would be a very great pity indeed. I would venture to urge upon the Government in the strongest way possible that they should do all that they can do to expedite the negotiations, whatever they may be, that are being carried on at the present time. Mr. Wallace. —l regret very much that the Government have not a more satisfactory statement to make with regard to this cable. Eecent events have made it most imperative that some action should be taken in this regard. I have here a letter written by Mr. Parkin, Principal of Upper Canada College, than whom, I think, no one is more capable of giving an intelligent opinion upon the importance of this cable, both from a Canadian point of view and from the standpoint of a great national British work. Mr. Parkin's letter, which I will take the liberty of reading to the House, is as follows :— Now for the Pacific Cable.—An Object-lesson which establishes its Utility and its Political Urgency.—Editor World: The events of the last few days have brought out with startling vividness some truths which a few thinkers have with pain and difficulty been trying to impress upon our British world of late years. These lessons are now being written in letters of flame on men's minds. The importance of coaling-stations, the need of instant communication with every part of the world, the overwhelming weight of naval defence energy, the amazing significance of sea-power, are things which are now in every man's thoughts. Are we British people going to learn, and learn effectively, one great lesson which they teach? Will the events of the past week at last make us realise the immediate necessity for constructing the Pacific cable ? It seems to me that Canada is the country which should move in the matter, and move at once. I believe that the whole thing can be done, so to speak, with the turn of a finger. A joint resolution by both Houses of the Canadian Parliament, addressed to the Queen or to the Colonial Secretary, asking that a Royal Commission should at once be appointed, with full powers to arrange for the construction and operation of a cable from Canada to Australia, and to assign the fair proportion of cost to be borne by the different parts of the Empire, would almost oompel action in the matter. Canada's guarantees for the initial cost taoked to the resolution would make it immediately effective. Such a guarantee can be given without any risk. Sir Sandford Fleming has proved over and over again that the cable must necessarily pay from the start. We do not contribute to the Imperial army or navy, which protects us, but we can at least show our national pluck and patriotism in a peaoeful enterprise like this. The proposal is made in no jingo spirit. To quote the words used by the American Admiral to Mr. Goschen, as they together viewed last summer the thirty-mile line of British battleships drawn up at Spithead : " Thie makes for peace." The mere idea of the whole might of the British navy—its North Pacific squadron, its China squadron, its Australian squadron, its West Afrioan and East Afrioan squadrons, to say nothing of the Channel and Mediterranean fleets, or of the flying squadrons, which we now know can be sent to sea inside of forty-eight hours—launched from every quarter of the globe under the impulse of one will and one national purpose against an enemy, presents, in the light of recent events, a picture of prodigious and irresistible power, which, more than anything else, will make nations disposed to trouble us shrink from war. The comparative paralysis which would fall upon this gigantic machinery if the power of concerted action were removed, as it is likely to be without a Pacific cable, cannot be contemplated with equanimity by a nation which has such vast industrial and commercial interests at stake as have our British people. A single battleship let loose on one of our great cities in any corner of the world would in one hour do more damage than would cover the cost of three such cables. If we have men at Ottawa who know how "to take occasion by the hand," now is the opportunity. Not a moment should be lost, for we know how easily the destructive forces of the world may be let loose. British people hold a position in the world where they must do something more than hope for peace; they must, if possible, command it. This is a time when every link in the Empire should be firmly welded, and Canada has the opportunity of welding one of the most important. lam satisfied that the Government at Ottawa would be heartily supported by men of all parties if they boldly and immediately dealt with the question.—Geo. R. Paekin. I think that is a pretty good argument in favour of immediate action without requiring any further remarks from myself.

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No. 16

From the Hon. the Pbemiee, Brisbane, to the Hon. the Peemieb, Wellington. (Telegram.) Brisbane, 10th August, 1898. Pacific cable. Queensland prepared join other colonies guaranteeing four-ninths of cost of construction.

No. 17. Prom the Hon. the Peemiee, Wellington, to the Hon. the Peemiee, Brisbane. (Telegram.) Wellington, 11th August, 1898. Cablegram tenth received. Select Committee here inquiring into Pacific-cable matter. Glad have Queensland with us. Hope communicate with you definitely few days.

No. 18. Sir Sandfobd Fleming to the Hon. the Peemiee. Deae Sib,— Ottawa, sth July, 1898. I addressed you by letter on the 23rd June. On the 29th June I deemed it expedient to send a telegram to Vancouver to be forwarded by the outgoing steamer of the 30th. The object of this telegram was to qualify my letter of the 23rd, which you will receive by the same steamer. In order to place myself right I feel it my duty to send the following explanations by the next following steamer: — In the third paragraph from the end of my letter of the 23rd, I stated as follows : " While this apportionment of the liability (viz., Australian Colonies, three-ninths; New Zealand, one-ninth; Great Britain, three-ninths; and Canada, two-ninths) would give to New Zealand an equitable interest, and the Australian Colonies exactly what they agreed at the Melbourne Conference of Premiers to take, it would be less onerous to Canada, and, in my own judgment, more equitable all round. I speak advisedly when I say that I have reason to believe it would be perfectly acceptable to the Ottawa Government." When I then wrote I felt quite justified in making the above statement. I had addressed Sir Richard Cartwright, who, as Minister of Trade and Commerce, has the subject of the Pacific cable in his hands, and it was on the strength of a note received from him on the 14th June that I addressed you in the terms of my letter of the 23rd June. I have not seen Sir Eichard since: he has been and still is away from Ottawa ; but I have heard through a mutual friend that he holds the view very strongly that Australia and New Zealand together should assume one-half the whole liability, and leave Great Britain and Canada to bear the other half as they may arrange. Having been so informed I feel it my duty to lose no time in making the correction. This counter-division adds one-eighteenth to the proportion assigned to the Australasian Colonies, and if Great Britain bears one-third it will reduce Canada's liability by one-eighteenth : that is to say, it would be one-sixth in place of two-ninths. In my judgment it would make no practical difference to Canada whether she assumes one-sixth or two-ninths the liability. It would be a mere nominal liability, and would never cost the Canadian people a single shilling, provided always that the four chief Australasian Colonies embarked in the enterprise with the Dominion, and took a sufficient proprietary interest in it to guarantee that the traffic which they will control would be directed over the new line in sufficient volume to make the undertaking remunerative. It has been demonstrated over and over again that the cable can be established as a State work without costing Canada, the Australasian Colonies, or the British taxpayer a single penny. If it had been possible to disprove that demonstration it would have been long since disproved by the agents of the Eastern Extension Company. They have, it is true, tried in many subtle ways to throw doubt on it, but the demonstration practically remains unchallenged. The business is so vast and its increase so steady that it will pay interest on capital, maintenance, renewal, sinkingfund, and working expenses, and leave a large margin. Moreover, as another result, the charges on messages would be reduced as profits increased until they reached a lower scale of rates than is now dreamed of. At the risk of repeating myself on this point I will add an extract from a recent letter which I addressed to a Canadian M.P.:— The cost of the cable has been ascertained to be under £1,500,000, and the most careful experts have calculated that an annual gross income of £150,000 would more than meet interest, sinking fund, working expenses, and maintenance. In the year 1896 the cable traffic between Australasia and Europe, according to Government returns, reached 2,326,984 words. If we reckon the traffic at 3s. a word (the rate between Australia and Europe is 4s. 9d. per word), we have a gross revenue of £349,047, showing very clearly that, even assuming the cable business will never exceed that of 1896, there would be amply remunerative business for the Pacific cable. But the cable business is progressive. The following is a statement taken from the Government returns of the number of words transmitted in each -year from 1891 to 1896: the traffic for last year (1897) has not yet been received: —1891, 1,110,869 words; 1892, 1,321,412; 1893, 1,401,293; 1894, 1,323,243; 1895, 1,948,630; 1896, 2,326,984. This establishes that from 1891 to 1896 the cable business has more than doubled, and, in view of the stimulating effect of a new line of communication, it is reasonable to estimate that the gross cable business in 1901 will not be less than 4,000,000 words. As 1,000,000 words at 3s. a word will produce £150,000, the revenue required to cover every charge against the Paoific cable, it is evident that if the Pacific cable obtains one-quarter of the AustralianEuropean traffic it will be a paying concern from the first year it can be put in operation. To my mind there is no reason to apprehend that the Pacific cable will not obtain far more than one quarter of the entire oable businese. The Australian land lines are public property, managed by the Post Office Departments,

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and each Government will have the power to direct traffic over the Paoifio cable, so as to make it remunerative. The cable business takes its origin chiefly in New South Wales, Queensland, Victoria, and New Zealand, and it is obvious that if these colonies have a proprietary interest in the undertaking its complete financial success will be assured. I have said that, for the reasons given, the difference of one-eighteenth, more or less, in the proportion of guarantee allotted to Canada would be of no practical moment. Equally it can be said that it would not be felt by the combined four Australasian Colonies. It could in truth be affirmed that it would make no difference to them, or any of them, whether their united guarantee be eight-eighteenths or nine-eighteenths of the whole cost. But Australia and New Zealand are much more interested in the establishment of the Pacific cable as an alternative line than Canada can possibly be. It is obvious to me that the Minister of Trade and Commerce means business, and that he will advise his Government to join in carrying out the undertaking on condition that Canada guarantees only what he has fixed in his mind to be a fair share. The Southern Colonies can have the cable on these terms. Yours, &c, Sandford Fleming. The Eight Hon. E. J. Seddon, Premier of New Zealand.

Enclosure in No. 18. [Extraot from the Westminster, 2nd July, 1898.] The Beitish Empire To-day and To-mobrow. —Canada the HatjF-way House of the Empire. By Principal G. M. Grant, D.D., LL.D., Queen's University, Kingston. Within the last year or two Canadians in general have fully awakened to the perception of certain facts and ideas, which are of fundamental importance to them, alike as citizens and as Christians. That the British Empire is not a myth but a reality, a reality which it is the duty of all its members to make more effective ; that Canada occupies a unique and most important position in that Empire, as its great half-way house, between Australasia on the one side and the United Kingdom on the other, and that it is our duty to rise to the demands of the position and of the time in which we live; that to-day, as during the two thousand years between Abraham and Jesus, God works out His purposes of love to mankind by a sovereign election of individuals and of nations, and that He has chosen the English-speaking race to contend all the world over for the sacred principles of civil righteousness, public order, liberty, and peace—these are the inspiring facts and ideas to which I refer. For these our fathers poured out their treasure and their blood as freely as water. We have entered into the glorious inheritance purchased by them. Is there nothing for us to do but to live at ease, to scoff at every mention of national sacrifice, and to preach the gospel of dirt, that as man is only an animal he does live by bread alone, and that he is a fool to think of anything but material prosperity ? This miserable evangel is preached by men from whom other things might be expected, men who ought to know that our civilisation, with its high thoughts, aims, and inspirations, has come not from rich Sodom, or rich Egypt, or rich Nineveh or Babylon, but from poor, rocky Judea, and next to it from feeble Athens, and from the little city which Eomulus and Eemus founded on the banks of the Tiber. Let them preach, but let us " arise and build." We have warnings and encouragement enough. For warning, the fate of Sodom ; and " this was the sin of Sodom —pride, fullness of bread, and abundance of idleness in all her borders." For encouragement, the rise of our Motherland from the comparatively weak Britain of Elizabeth and Knox, of Cromwell, Milton, and the Scottish Covenanters, into the world-wide Empire, whose flag stands everywhere for " the open door," and for law, for liberty to the slave, and for universal peace, even though we have to fight for it, just as the twenty thousand well-drilled, highly-paid policemen of London are the army prepared to fight for the preservation of its laws, its liberties, and its peace. How, then, shall we make Canada not only the geographical, but the political and commercial, half-way house of the Empire ? We have duties as a colony or Dominion, as a nation, and as an Empire, for so unique is our position that we may be said to be actually or potentially all three. We must attend to parish politics, and it is needless to say that the hand-to-mouth politicians will not let these be neglected ; but we must also attend to larger affairs, or we shall suffer from our faithlessness. Selfishness puts on airs as the practical guide of life, but it is blindness to all high and permanent interests. Let us pray that the members of our Government may not be blind ; but, if we pray honestly, we shall also act; for as we are a free, self-governing people we cannot expect the Government to be far in advance of the popular will. We must press on the Government its duty. We must support it in efforts to promote the general well-being, though there should be nothing for us individually in these efforts. We must discuss intelligently every proposal that has for its object the knitting together of the Empire, to be an effective instrument for the formation of its best moral ideals. All this is our religious duty ; for, as children of the Beformation, we must rise above the mediaeval division of life into sacred and secular regions, and believe, with George Herbert, that Who sweeps a room as for Thy cause Makes that and the action fine. In the Imperial projects, in which we should take a hand, it is our duty to act as all engineers do in construction, " work along the lines of least resistance," act —that is, where the maximum of benefit shall be obtained at the minimum of cost. We should also "do the duty which lies nearest us," for, when that is done, we shall see more clearly than now what is the next step which we should ta.ke. These thoughts have been suggested to me by reading a " return " which has just been published by the Secretary of State to an address of the House of Commons, dated the 18th April, 1898,

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for a copy of the report of the Committee appointed by the Imperial Government in 1896 to consider the question of a telegraph cable between Canada and Australasia ; also, of any reports or correspondence to the Canadian Government from the Canadian representatives on said Committee or Sir Sandford Fleming in regard to the same subject. But what have we to do with a Pacific cable? the ordinary Canadian may ask. Very much, directly and indirectly. Think what an all-important part the telegraph plays in our ordinary life. How could we get along if there were no telegraph-line, especially when the House is sitting, between Ottawa and Toronto, or none between Toronto and Montreal ? Yet, if a letter is posted in any one of these cities, we can get an answer from any other of them the very next day. But how is it with the three greatest divisions of the self-governing British Empire ? If we write to Australia or New Zealand, months elapse before we can get an answer. If we telegraph, the message —instead of going directly down the Pacific—goes across the Atlantic and then almost round the world the other way, and at rates that are practically prohibitive. If an Australian telegraphs to us, the message has to be sent, in the same way, first to Britain and then across the Atlantic. In other words, instead of being the half-way house of the Empire, as God has made us, Canada is shunted and sidetracked away up a distant back street. Ought we to be quite content with such a situation ? And what if war should break out ? Wars have been since the dawn of history, as they were in prehistoric times also; and wars shall be, for a few thousand years to come ; although I believe in the coming of the day when wars shall cease to the ends of the earth, because all nations shall be so knit together by commerce, literature, and the knowledge of the Lord that the disturber or wanton breaker of peace shall be sternly arrested by irresistible forces on the side of order. Then, indeed, " the sword shall keep the sword in the scabbard ; " but that glorious consummation shall not be in our day, no, nor in the days of our children. When war breaks out, what next ? The Eastern Extension telegraph cables skirt hostile shores, and are at many points in such shallow waters that they can be cut without difficulty. At once, then, Great Britain, Australasia, and Canada are dissevered, and as completely isolated from each other as they were before the first submarine cable was laid. What a condition for an oceanic Empire to be in ! Is it necessary to go into details of what this would mean ? I think not. My readers may be credited with the possession of at least a minimum of imagination. How different would "the case be if a cable were laid between our Pacific coast and Australia, via Fanning Island and Fiji. The termini and intermediate points would be guarded, and grappling for a deep-sea cable is all but impossible as long as Britannia rules the waves. The unity of the Empire would be preserved even in war, and in peace Canada would be the real half-way house of the Empire, with important consequences to its welfare, which need not be enlarged upon at present. Why should Canada take the initiative in this matter, when it is infinitely more demanded by the commercial necessities of Australia? I answer, in the words of Mr. Casey, in his speech in the House of Commons, Ottawa, on the 26th May : "In the first place, because she is the most important colony, and most interested in this cable of any except Australia. In the second place, because Canada has acquired already what it is now fashionable to call the hegemony of Greater Britain. She is the most important in the councils of the greater Empire which lies outside the British Islands. Since the day of the Jubilee celebration, I think that cannot be doubted. Ever since then it is admitted by Englishmen that Canada is not only the leader of the colonies, but the leader of the Empire, in many questions of policy, both internal and external. Canada has already gone a long way on certain paths which are intended to promote not only her own prosperity, but the unity of the Empire and the mutual co-operation of its different members. It is eminently proper, therefore, that Canada should take the initiative in this matter. Ido not speak now as if the initiative remained to be taken. Canada has taken the initiative in discussing this matter and obtaining the necessary information with regard to it. What is required is that she should now take the initiative by being the first to lay down a definite scheme to carry out the plans that have already been fully discussed, and take up her share of Imperial responsibility in this connection." Let me add to Mr. Casey's reasons one or two more. In the third place, because it is difficult for Australasia to act, as she is not a political unit, acd her whole thought is occupied at present with the problem of her political unification. The British Government cannot be expected to take the initiative, because the share capital of the Eastern Extension Company is owned by people in Britain, including men of great influence in the ranks of the Government and the Opposition, as well as high officials in the departments, and the present value of these shares .would be lessened by the laying of an. alternative line. The interest earned might actually come down from 18 to 9or 10 per cent., and men who fear such a contingency are sometimes blind to the public interest. No one wishes to injure legitimate commercial enterprises, but the Eastern Extension has had blood enough, and might well be content now with reasonable profits. In the fourth place, because, in taking the initiative in this matter, Canada would be acting as a partner in the Imperial concern " along the lines of least resistance." She would confer a boon of quite extraordinary magnitude on the Empire by a policy as wise as it is bold, because it could be carried to successful completion without costing the Canadian, the Australian, or the British taxpayer one dollar. So vast is the business, and so steady the annual increase between Australasia and Britain, without counting that between Australasia and North America, the whole of which would come by the new cable, that it has been demonstrated in the return to which I have referred that 40 per cent, of it would pay for interest on capital, maintenance, renewal, sinking fund, and working-expenses, and leave a large margin. That 40 per cent. Queensland, New South Wales, Victoria, and New Zealand could guarantee, because they own the land-telegraph lines, and control the traffic. Not, only so, but another immediate result would be the lessening of cable rates, with the prospect of a steady scaling down, as profits increased, until we could cable between the great sections of the Empire for Is. a word. What that would mean for binding them together in a close material and moral 7—l. 7.

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union, in an age when Governments rest, not on external authority, but on intelligent opinion, it is needless to point out. It may be asked why, if this enterprise is so sure to pay, it should not be undertaken by a private company. Simply because the Eastern Extension could easily kill a rival company, and the knowledge of that fact clears the field of all rivals. It has fought and is fighting unscrupulously against the proposed Pacific cable, because that would destroy its fat and oppressive monopoly. Its policy is opposed to the public interest, and therefore the public must no longer be tied to its chariot-wheels. As Sir Sandford Fleming says in the return ordered by Parliament : — " In the interests of the Eastern Extension Company the Pacific cable has been declared to be impracticable ; its cost has been greatly exaggerated ; it has been denounced as a -work which could not be maintained without burdensome subsidies ; it has been stigmatized as inimical to telegraphy and trade ; and it has been decried and misrepresented in every possible manner. The explanation is to be found in the fact that the company is unwilling to relinquish its monopoly, and to rest satisfied in the future with a reasonable return for capital invested. On this point the writer is tempted to quote a single paragraph from his address at the Colonial Conference of 1894 as given in the proceedings (page 85) : — " ' The progress and well-being of Canada, Australasia, and the Empire cannot be retarded in order that the lucrative business of a private company may remain without change. Even if the Chairman of the Eastern Extension Company succeeded in converting us to his commercial ethics, that the profits of the monopoly he represents must be maintained inviolate, it does not follow that the project of a Pacific cable would not be carried out in some form, even if Canada and Australasia abandon it. There are indeed unmistakable signs that a Pacific cable may shortly be carried out by France and the United States. We all know that France has already completed a section of 800 miles at the southern end, and the United States has recently expended 25,000 dollars in making an elaborate survey of about one-third the whole distance from San Francisco to the Hawaiian Islands. With a rival line in foreign hands, it is easy to see that the Eastern Extension would gain nothing, while the Empire would lose much.' " With respect to the objections raised by the Eastern Extension Company, they have been completely refuted. The very best evidence shows beyond all question that the project is perfectly feasible ; that the cable should be established as a State work ; that, so established, the revenue from business obtainable will be ample to meet every charge, including working-expenses, maintenance, renewal, interest on cost, and sinking fund to replace capital; that, in fact, the cable can be established in the most satisfactory manner, and that all its advantages can be attained without any cost whatever to the taxpayer. That the prospects are of this character is attributable to these facts, viz. :— "1. As a State work, the capital employed would be obtained at the lowest possible rate of interest. " 2. The capital would be limited to the necessities of actual expenditure in establishing the work. There would be no possibility of enlarging the capital account by adding ' promotion expenses ' or by ' watering stock ' in any form. "3. No dividend would require to be declared, or bonus paid. Eevenue would only have to meet ordinary charges, including interest on the actual cost at a low rate, possibly 2J per cent. " 4. Remunerative traffic, which would be controlled by the Australasian Governments, already exists. " 5. Such traffic is continually growing, and it is difficult to assign a limit to its growth. " 6. The facilities created and the reduced charges would open up a new and profitable business across the Pacific which would be subject to the new line." Here, then, is a matter of Imperial and Canadian concern, to which the Government of Canada should give immediate attention. It is bound in honour to act, for it has again and again pressed it on the attention of its partners in the Empire, and unless it makes a practical proposal the matter will drop between three stools. Queensland, New South Wales, Victoria, and Tasmania have recently undertaken to guarantee three-ninths of the cost. New Zealand will probably be good for one-ninth additional. Let Canada offer to guarantee two-ninths, on condition of Britain doing the rest, or of making some equivalent proposal, and the hand of the Imperial Government— or, rather, the heavy wheels of its State coach—would be forced to move. Once set in motion there is no doubt as to the result, and to Canada the credit would again accrue of being awake to the signs of the times, while its position as the half-way house of the Empire would be established for ever.

APPENDIX B. RETURNS SUPPLIED BY POSTAL DEPARTMENT, AND BALANCE-SHEETS OF EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY. The Clebk, Public Accounts Committee, to the Secebtaey, General Post Office. Sib,— 4th August, 1898. I have the honour, by direction of the Chairman of the Public Accounts Committee, to request you to furnish the following returns: — A return showing, with regard to cablegrams both between New Zealand and England and between New Zealand and Australia, —(1) Press rates, Government rates, and commercial rates separately; (2) revenue received separately; and (3) number of messages separately since the reduction in charges ; also, a return giving similar information for a like period previous to reduction in charges.

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I am also instructed to request you to furnish the Committee with maps showing, —(1) The existing cable-lines between England and Australasia ; (2) the proposed cable-line between England, the Cape of Good Hope, and Western Australia; (3) the proposed route of the Pacific cable; (4) the existing cable-line between France and New Caledonia ; and (5) the existing cable-line between America and Honolulu : such maps to show the points of touching and transmission. I have also to request you to make application to the Eastern Cable Company, pointing out that the colony are part contributors and guarantors, and requesting them, as a matter of courtesy, to let the Committee have copies of their balance-sheets for the past eight years. I have, &c, G. P. WOOLDRIDGE, The Secretary, General Post Office. Clerk of the Committee.

The Secbetaby, General Post Office, to the Chaieman, Public Accounts Committee. Sib,— General Post Office, Wellington, 17th August, 1898. I have the honour, by direction of the Postmaster-General, to forward you the accompanying returns, maps, and other documents applied for on your behalf by the Clerk of the Committee on the 4th instant: — 1. Return showing the number of cablegrams sent to the United Kingdom, &c, and to the Australian Colonies, and the gross revenue derived therefrom under the ordinary and Press rates, from January, 1888, to December, 1892 (old rates), and from January, 1893, to December, 1897 (reduced rates). 2. Return showing the effect of the reduced cable rates on the international cable traffic from and to New Zealand from 1889 to 1897. (It is regretted that the inward traffic cannot be separated and given in detail.) 3. Return showing the cable rates to the United Kingdom and to the Australian Colonies before and after January, 1893. 4. Map showing the existing cable-lines between England and Australasia; also the cable route between Queensland and New Caledonia. 5. Map (taken from the Melbourne Argus) showing the route of the proposed cable between England, the Cape of Good Hope, and Western Australia. 6. Map showing the proposed routes of the Pacific cable. That marked No. 1 on the map is the route agreed to be adopted. 7. Copy of letter from the manager in Australasia of the Eastern Extension Telegraph Company, covering copies of the company's half-yearly reports and balance-sheets for the past eight years. Mr. Warren, the manager of the company, wishes me to " point out for Committee's information that the largest proportion of the company's revenue is derived from sources outside of Australia, the China traffic alone being much heavier than the Australian." The balance-sheets are to be returned to Mr. Warren, and I shall be obliged if they be sent to me when the Committee is finished with them. A large amount of matter relating to the Pacific cable is in the hands of the Government Printer, and will be ready for bhe Committee in a day or two. I have, &c, The Chairman, Public Accounts Committee, W. Gray, Secretary Parliament Buildings, Wellington.

Return showing the Effect of the Reduced Cable Rates on the International Traffic from and to New Zealand.

Year. Number of Messages. Number of Words. Value. (1889 ,t old rates .. ... ... ... 1890 (1892 (1893 1894 i new rates (year ending 30th April) ... -i 1895 1896 1,1897 8,361 8,673 5,925 7,588 11,631 11,608 14,949 19,223 90,722 83,871 46,672 75,850 149,668 154,948 221,714 294,246 48,157 44,212 24,024 26,472 38,650 40,155 57,377 76,769 The reduced rates came into operation in New Zeal; ,nd in Januar , 1893.

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Return showing the Number of Cablegrams sent to United Kingdom, &c., and to the Australian Colonies, and also the Gross Revenue derived therefrom under the Ordinary and Press Rates, from January, 1888, to December, 1892 (Old Rates), and from January, 1893, to December, 1897 (Reduced Rates).

January, 1888, to December, 1892. January, 1893, to December, 1897. Country to Menage, j | Sydney Cable. Other Lines. Total Value. M^ag°e S .| NeW Lin e ef nd [ Sydney Cable. Other Lines. Total Value. United Kingdom, &c. New South Wales Queensland South Australia Tasmania Victoria Western Australia 19,211 36,313 4,034 3,584 3,451 32,522 589 £ s. 1,710 10 1,522 8 175 14 145 3 127 11 1,426 14 27 5 a. 7 0 9 7 1 4 5 £ s. a. 9,682 9 2 21,262 13 7 2,448 10 10 2,048 10 1 1,870 2 1 19,759 19 6 373 13 0 At Ordinary Bates. £ s. d. £ s. d. 90,157 11 6 101,550 11 3 1,500 4 11 24,285 6 6 552 8 5 3,176 14 0 467 4 7 J 2,660 18 3 638 3 3 ' 2,635 16 5 2,806 14 4 23,993 8 2 125 7 9 526 6 2 38,794 86,505 5,565 5,210 7,154 58,160 5,194 I £ s. d. J2,464 6 8 13,392 17 10 244 6 1 204 16 2 264 18 9 2,437 15 0 203 16 11 £ s. 7,111 8 12,311 17 908 19 779 13 1,013 17 8,728 5 755 3 d. 0 2 9 0 0 8 9 £ s. d. 138,507 11 5 3,352 2 3 759 6 11 654 19 1 1,328 4 0 4,795 9 4 986 1 8 £ s. 148,083 6 19,056 17 1,912 12 1,639 8 2,606 19 15,961 10 1,945 2 d. 1 3 9 3 9 0 4 Grand totals 99,704 5,135 7 9 57,445 18 3 96,247 14 9 158,829 0 9 206,582 9,212 17 5 31,609 4 4 150,383 14 8 191,205 16 5 At Press Bates. United Kingdom, &c. New South Wales Queensland South Australia Tasmania Victoria Western Australia 21 3,343 6 0 4 1,369 7 11 22 11 2,893 8 0 0 99 5 6 127 16 10 356 8 0 ! 4,619 3 11 62 I 4,642 11 2 1 601 2 28 7 307 2 0 6 0 1 0 0 18 18 0 1 0 8 6 0 6 5 0 44 13 7 1,788 2 9 19 6 0 5 2 0 14 99 16 10 0 2 6 547 10 2 395 6 8 1 12 2 0 6 0 0 4 3 79 0 5 0 7 6 620 10 9 2,490 12 1 3 8 2 0 12 2 0 6 1 197 15 8 0 11 0 944 99 0 7 268 0 6 123 18 1.1 491 0 0 Grand totals 579 12 5 i~ 5,238 0 9 5,321 1,024 7 2 3,313 15 11 4,308 1,474 8 10 3,183 19 6 354 17 1 1,934 11 8

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Return showing the Cable Rates to United Kingdom and to the Australian Colonies before and after January, 1893.

j Country to Ordinary Eates. GOVEBNment Rate. Press Rates. Before January, 1893. From January, 1893. From January, 1893. Before January, 1893. From January, 1893. Per word. 10s. 2d. Per word. 5s. 2d. Per word. 3s. lid. United Kingdom ... 3s. Id. per word 2s. 2d., and 2s. per word from 24th July, 1894. "2 o is ■a ■a S o a o o fil O Cβ c3 Cable rate to Australian Colonies, 3d. per word. New Zealand inland rate to Australian Colonies, 6d. per 10 words, and Id. each additional word. Cable rate to Australian Colonies, Id. per word. New Zealand inland rate to Australian Colonies, 6d. per 100 words. Australian Colonies — CO O EH O a i s o •sis CO O o a. 09 TO O 8 DO TO TO . > o > I d "3 "s "3 d -3 a o a 00 o J. s TO o i— i 13 a o TO > "3 a o Co t> ■3 .2 d 11 &8 O o CO rrt w O O O Words. e= o § . i§1 I Words. New South Wales s. 9 d. 6 s. d. 1 0 s. d. 3 0 s. d. 0 5 Q com m ° it? nil E-l s. d. Not exceeding 34 0 6 Exceeding 34 s. d. d. s. d. s. d. 0 6 s. d. d. 8. d. s. d. ID "3 GQ a Cβ <D izi s Queensland South Australia ... Tasmania 11 11 12 0 0 0 1 1 1 1 1 2 4 6 •4 5 (i 6 0 0 0 0 C 7 Not exceeding 34 2 0 Exceeding 34 Not exceeding 34 2 0 Exceeding 34 Not exceeding 34 4 0 Exceeding 34 ... j ... 1 6 3 0 3 "0 5 0 i i i 0 6 1 3 1 3 2 6 First 10 Exceeding 10 and up to 34 E xceeding 34 and up to 100 First 10 Exceeding 10 and up to 16 Exceeding 16 and up to 100 First 10 Exceeding 10 and up to 16 Exceeding 16 and up to 100 First 100 Since altered to first 10... Exceeding 10 and up to 34 Exceeding 34 and up to 100 First 10 Exceeding 10 and up to 34 Exceeding 34 and up to 100 First 10 Exceeding 10 and up to 16 Exceeding 16 and up to 100 2 "0 2"'0 c 1 6 3 0 3 0 5 0 "i 2 a 2 0 6 2 9 3"0 b 4 0 "* Victoria ... i 5 0 2"6 10 0 1 1 3 6 0 6 Not exceeding 34 2 0 Exceeding 34 3 "o * 2"'o "i 1 3 1 6 e Western Australia 12 0 1 2 Not exceeding 34 ! 3 0 3 3 0 1 3 0 5 6 0 7 3 i'e 2 3 g Showing the comparative cost of sending 100 words to the Australian Colonie3 under the above Press rates: Sending 100 words before January, 1893, to— New South Wales Queensland South Australia Tasmania Victoria Western Australia £ s. a. 1 14 6 1 16 0 1 16 0 1 18 0 1 16 0 2 12 6 Sending 100 words at the present rate to— New South Wales Queensland .. South Australia Tasmania Victoria Western Australia £ s. d. 0 10 4 0 11 10 0 11 10 0 13 10 0 11 10 0 13 4 a Altered since January, 1893, to Id. b Altered since January, 1893, to Is. 6d. e Altered sine e Altered since January, 1893, to Is. 3d. ' Altered since January, 1893, e January, 1893, to Is. 6d. d Altered since January, 1893, to Is. 3d. to 2s. 6a. « Altered since January, 1893, to 2s.

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50

The Managbe, Eastern Extension Australasia and China Telegraph Company (Limited), to the Secretary, General Post Office. The Eastern Extension Australasia and China Telegraph Company (Limited), Sir, — Melbourne, sth August, 1898. Incompliance with the Eight Hon. Mr. Seddon's request contained in your telegram dated the 4th instant, I have the honour to send you by to-day's post (registered) copies of the company's half-yearly report and balance-sheet for the past eight years. The company's report is distributed each half-year to the several Australasian Governments and the representatives of the mercantile communities, and, as only one copy is retained by myself, I shall be glad if you will be kind enough to return the enclosed reports to me when the parliamentary Committee has completed its task. As I conclude the Committee wish to have the balance-sheets to ascertain particulars regarding the earnings from Australasia, I would beg to point out that no information on this head is obtainable from them, as the whole of the earnings is included in one total, and comprises receipts from Japan, Java, Singapore, the Philippine Islands, &c, as well as Australasia. You can obtain full particulars of the Australasian receipts from the periodical Postal Conference reports. I have, &c, W. Warren, W. Gray, Esq., Secretary for Post Office, Wellington. Manager in Australasia.

HALF-YEABLY EEPOBTS AND BALANCE-SHEETS OF THE EASTEBN EXTENSION AUSTRALASIA AND CHINA TELEGBAPH COMPANY (LIMITED), [Prom 30th June, 1890, to 31st December, 1897, referred to in above letter.] Half-year ended 30th June, 1890. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, K.C.M.G. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., Sir Thomas Fairbairn, Bart., the Bight Hon. Viscount Monck, John Denison Pender, Esq., George Garden Nicol, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C. Bepoet and Accounts of the Directors for the Half-year ended 30th June, 1890, to be submitted to the Thirty-fourth Ordinary General Meeting, 22nd October, 1890. 1. The usual statements of account for the half-year ended 30th June, 1890, are herewith submitted. 2. The gross receipts, including Government subsidies, have amounted during that period to £254,856 18s. 10d., against £256,757 3s. 2d. for the corresponding half-year of 1889. 3. The working and other expenses, including £24,508 3s. 10d. for cost of repairs to cables and expenses of ships, absorb £76,670 9s. 3d., against £73,773 10s. 2d. for the corresponding period of 1889, leaving a balance of £178,186 9s. 7d. From this is deducted £2,960 19s. 7d. for incometax, and £38,549 14s. 7d. for interest on debentures and contributions to sinking funds, leaving £136,675 15s. sd. as the net profit for the half-year. Against this £1,642 lls. lid. has been charged for additions to staff quarters, and £712 16s. Id. for expenses in connection with the recent Paris International Telegraph Conference, leaving an available balance of £134,320 7s. sd. 4. One quarterly interim dividend of 1J per cent., amounting to £31,250, has been paid during the half-year, and another of like amount will be distributed on the 15th instant, leaving £71,820 7s. sd. to be carried forward. 5. The duplication of the New Zealand cable, and the partial renewal of the Madras-Penang section, referred to in the last report, have been successfully carried out during the half-year under review, and the cost, amounting to £188,433 15s. 6d. and £80,848 Is. 3d. respectively, has been charged to the General Beserve Fund, which, after being credited with the profit of £21,103 3s. 4d. made on the sale of investments, and the interest received during the half-year, now stands at £472,713 15s. 3d. 6. The subsidy granted by the Spanish Government in respect of the Manila cable expired on the Ist May last, when the balance of the 5-per-cent. debentures issued to provide the capital for this cable was paid off, and, as the interest and sinking-fund contributions have now ceased, there will in future be a saving of revenue on this account of about £5,000 per annum. 7. The company's £320,000 6-per-cent. debentures mature for payment at par on the Ist February, 1891, and your directors have decided to pay them off on that date by issuing a similar amount of 4-per-cent. mortgage debenture stock. An extraordinary general meeting will be held immediately after the ordinary meeting, at which the necessary resolution will be submitted for the shareholders' approval. 8. Negotiations have been entered into with the Governments of Australasia for the establishment of reduced rates to Australia and New Zealand, and the matter is now under consideration in the colonies.

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9. Arrangements have also been made with the Indian Government for improving the international service, in connection with which the company has decided to duplicate the MadrasPenang cable ; and a contract has accordingly been entered into with the Telegraph Construction and Maintenance Company for carrying out the work, which is expected to be completed early next year. 10. During the half-year the Tonquin-Hongkong section has been partially renewed by the insertion of sixty-seven nautical miles of new cable, and the operation will be continued as opportunities occur until the line is put into good order. 11. The company's maintenance-ships have been employed on various cable repairs, but no interruptions materially affecting the revenue have occurred during the past six months. Unfortunately, however, since the close of the half-year telegraphic communication with Australia has been totally interrupted, from the 11th to the 20th July, in consequence of the sudden and simultaneous breaking, through volcanic action, of the three Java-Australian cables near Banjoewangie (Java). This was the more disappointing as it was only last year that the cable to Western Australia was laid, mainly with a view to averting such a contingency ; but, as only two interruptions from volcanic causes have been experienced during a period of nearly twenty years, it is hoped that the cables will now have a long immunity from further trouble of this nature. John Pendee, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 13th October, 1890.

Ebvenue Account fob the Half-year ended 30th June, 1890. Dr. £ s. d. Cr. £ s. d. To General expenses in London (see By Message and other receipts .. .. 231,273 9 3 Abstract A) .. .. .. 4,876 9 9 Less payment under General expenses at stations (see agreement with Great Abstract B) .. .. .. 40,059 14 2 Northern Telegraph Use of patents .. .. .. 800 0 0 Company .. ..£1,250 0 0 Electricians'retaining-fee .. .. 50 0 0 Less loss on exchange.. 1,956 1 3 Directors'remuneration .. .. 2,000 0 0 3,206 1 3 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. .. 776 1 6 228,067 8 0 Repairs to cables (see Abstract C) .. 24,508 310 Australian duplicate cable subsidies .. 16,200 0 0 Maintenance-ships' Reserve Fund .. 3,500 0 0 Tasmanian cable subsidy .. .. 2,100 0 0 Income-tax .. .. .. 2,960 19 7 Manila cable subsidy .. .. 2,666 13 4 Interest on 6-per-cent. debentures .. 9,600 0 0 Tonquin cable subsidy .. .. 5,300 0 0 Interest and sinking fund on account Malacca cable subsidy .. . . 200 0 0 of 5-per-cent. Australian subsidy de- Macao cable subsidy .. .. 250 0 0 bentures.. .. .. .. 25,495 0 0 Transfer fees .. .. .. 72 17 6 Interest and sinking fund on account of 5-per-cent. Manila debentures .. 3,454 14 7 Further additions to staff quarters at Foochow, Banjoewangie, Flinders, and Elephant Point .. .. 1,642 1111 Expenses in connection with Paris Internationa] Telegraph Conference .. 712 16 1 Balance .. .. •• •• 134,320 7 5 £254,856 18 10 £254,856 18 10 First interim dividend of 1890, 2s. 6d. per share, paid 15th July, 1890 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, payable 15th October, 1890 .. 31,250 0 0 Balance .. .. .. .. 71,820 7 5 By Balance .. .. .. .. 134,320 7 5 £134,320 7 5 £134,320 7 5 Abstbacts relating to Revenue Account for the Half-yeak ended 30th June, 1890. Abstract A. Statement op General Expenses in London. £ s. d. Salaries and wages .. .. .. .. .. .. 2,592 19 5 Office expenses .. .. .. .. .. - .. .. 771 310 Bent, taxes, &c. .. .. .. .. .. .. .. 716 9 11 Stationery and printing .. .. .. .. .. .. 162 10 6 Postage, bill, and other stamps .. .. .. .. .. 159 2 5 Advertising .. .. .. .. .. .. .. 130 18 3 Legal expenses .. .. .. .. .. .. .. 37 15 0 Repairs and renewals to furniture, &c. .. .. .. .. .. 240 10 5 Agencies .. .. .. • • .. .. .. 65 0 0 Per Revenue Account .. .. .. .. £4,876 9 9

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Abstract B. Statement of Genebal Expenses at Stations. £ s. A. Salaries and wages .. .. .. .. .. .. 25,899 16 6 Travelling-expenses .. .. .. .. .. .. 2,125 14 7 Rent, taxes, house-allowances, &c. .. .. .. .. .. 4,033 810 Expenses of electric lighting at stations .. .. .. .. 984 2 10 Provision-and ration-allowances .. .. .. .. .. 936 2 1 Maintenance and renewals of instruments and electrical apparatus .. .. 1,151 4 3 Expenses of land-lines .. .. .. .. .. .. 186 19 11 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 828 16 0 Repairs to buildings .. .. .. .. .. .. 263 0 0 Insurances at stations .. .. .. .. .. .. 200 9 3 Stationery and printing .. .. .. .. .. .. 1,274 1 0 Office and message postages .. .. .. .. .. .. 215 15 6 Office and petty expenses .. .. .. .. .. .. 592 19 8 Medical attendance .. .. .. .. .. .. 516 9 2 Service messages .. .. .. .. .. .. .. 90 14 6 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 351 15 9 Advertising at stations .. .. .. •. .. .. 918 Messengers' uniforms .. .. .. .. .. .. 38 11 3 Income-tax at stations .. .. .. .. .. .. 110 11 11 Per Bevenue Account .. .. .. ..£40,059 14 2 Abstract C. Expenses attending Maintenance op Cables. Expenses of a.s. " Sherard Osborn," effecting numerous repairs, ag- £ s. d. gregating forty-throe days, after deducting expenses of ship on Madras-Penang partial renewal .. .. .. .. £2,336 18 6 Expenses of s.s. " Sherard Osborn " during remainder of six months 4,427 14 9 6,764 13 3 Expenses of s.s. "Becorder," effecting numerous repairs, aggregating seventy-three days, after deducting expenses of ship whilst engaged on Hongkong-Saigon and Madras-Penang partial renewals .. £3,685 15 7 Expenses of s.s. " Recorder " during remainder of six months .. 3,432 14 7 7,118 10 2 Less amount of charter .. .. .. .. 971 17 6 6,146 12 8 Cable expended on repairs, and sundry expenses at stations, after deducting value of pioked-up cable .. .. .. .. .. .. 4,615 19 7 Insurance of cable on board maintenance-ships .. .. .. .. 309 18 11 Expenses of cable depot at Singapore .. .. .. .. .. 1,635 9 i Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of the ship .. .. .. 4,600 0 0 Depreciation of cable stores .. .. .. .. .. 435 10 1 £24,508 3 10 General Besebve Eund, 30th June, 1890. Dr. £ s. d. Cr. £ s . a. To Cost of New Zealand duplicate cable 188,433 15 6 By Balance of Beserve Fund at 31st Cost of Madras-Penang partial renewal 80,848 1 3 December, 1889 .. .. 710,113 15 10 The following amounts for new cables and Interest on investments received durcable renewals have from time to time ing half-year .. .. .. 10,778 12 10 been charged against the Beserve and Profit on sale of in vestments .. 21,103 3 4 Revenue Accounts: — Rangoon-Penang cable, 1877 .. •• £156,761 8 1 Bangoon-Penang cable renewals, 1884-85 and '■ ■ 1887 .. •• 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 10,07110 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .... 59,677 111 Victoria-Tasmania duplicate cable, 1885 .. 31,190 5 0 Penang-Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable partial renewal, 1889.. 15,44117 3 Western Australian cable, 1889 .. •■ 119,112 5 3 New Zealand duplicate cable, 1890 .. .. 188,433 15 6 Madras-Penang partial renewal, 1890 .. 80,848 1 3 £848,075 0 6 Balance carried down .. .. 472,713 15 3 £741,995 12 0 £741,995 12 0 Balance as per balance-sheet .. £472,713 15 3

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Balance-sheet, 30th June, 1890. Dr. Or, To Capital— £ s . d. By Capital expenditure, £ s . d 300,000 shares of as per last account £3,054,161 0 9 £10 each ..£3,000,000 0 0 Less transferred Less 50,000 shares f rom Manila sof £10 each, un- per-cent. debenissued .. 500,000 0 0 ture sinking fund 12,500 0 0 2,500,000 0 0 3,041,661 0 9 6 per-cent. debentures— Maintenance-ships, as per last ac--3,200 debentures of £100 each .. 320,000 0 0 count.. .. 66 449 14 10 5-per-cent. Australian subsidy deben- ' tures— q iQQ iin it i 7 4,170 debentures of £100 each, as Investments on account of reserve per last account .. .. 417,000 0 0 funds (See Abstract D) .. .. 513 259 6 1 5-percent, debentures, 1880 issue— Trustees for 5-per-cent. Australian 125 debentures of £100 subsidy debentures .. .. 31,649 16 11 each, as per last ac- Spare cable and other stores .. 90,772 0 2 count .. ..£12,500 0 0 Bills receivable .. .. 60,212 7 2 Less 125 debentures Remittances in transit .. .. 23,420 11 5 drawn 10th March, Traffic and other debit balances .. 78,261 8 5 1890, and paid Ist Cash at banker's, on deposit, and in May, 1890 .. 12,500 0 0 hand .. .. .. 95,049 0 8 3,237,000 0 0 Reserve funds— General reserve .. .. 472,713 15 3 Maintenance-ships'reserve .. 37,711 18 1 Insurance reserve for maintenanceships and cables .. .. 40,916 16 8 Sinking funds— Australian eubsidy debenture sinking fund .. .. .. 35,649 16 11 Traffic and other credit balances .. 32,974 8 4 Debenture interest accrued and unpaid .. .. .. .. 8,074 6 9 Proprietors for dividends— Unclaimed dividends .. .. 1,373 17 0 First interim dividend of 2s. 6d. per share, paid 15th July, 1890 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, payable 15th October, 1890.. .. .. .. 31,250 0 0 Revenue account balance .. .. 71,820 7 5 £4,000,735 6 5 £4,000,735 6 5 Audited and found correct. Hbnry Dbvbr, ) , ~, London, 11th Ootober, 1890. Welton, Jones, and C 0.,/ ltors - Abstract D. LIST OF INVESTMENTS ON ACCOUNT OF BESEEVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2|-per-cent. Consols .. .. .. .. .. Costing 31,708 17 3. 2,500 Chilian Government 4J-per-cent. oonverted loan .. .. „ 2,512 10 4 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. „ 1,429 1 0 5,000 Government Stock Investment Trust Company 4-per-cent. debenture stock „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. 13,859 11 3 25,000 Metropolitan Consolidated stock .. .. .. „ 25,968 15 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 30,000 The Trustees, Executors, and Securities Insurance Corporation (Limited) 4J-per-cent. first mortgage debenture, series A .. .. .. „ 31,575 0 6 Colonial. 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. .. 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. „ 5,563 17 6 '5,000 Natal 4-per-cent. consolidated stock, inscribed (1887) .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. ..„ 15,73219 8 5,000 Tasmanian Government 4-per-cent. debentures ... .. .. „ 5,050 1 11 13,500 Viotorian Government 4J-per-cent. debentures .. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Obio Railroad Company 6-per-cent. sterling bondß (1874) ..Costing 10,420 19 9 845,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885) .. „ 10,375 17 6 £12,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage pinking fund bonds .. ~ ~ ~ .. .. „ 15,059 11 3 B—l. 7,

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Railway Debenture and Guaranteed Stocks. £ s d 7,500 Caledonian Railway 4-per-cent. debenture stock .. .. ..Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-oent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,.574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4£-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S. C. Railway 4J-per-cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock „ 8,428 17 6 9,000 London and North-western Railway 4 par-cent, consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4|-per-ceut. deb. stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. 21,836 18 6 5,110 Metropolitan District Railway 4J-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 10,000 Metropolitan District Railway 4 per-cent. debenture stock .. .. „ 10,906 7 6 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. „ 5,503 15 7 14,500 North British Railway 4-per-cent. debenture stock .. .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per.cent. con. pref. stock .. .. .. „ 8,748 6 3 5,000 North E. Railway 4 per-cent. debenture stock .. .. .. „ 5,576 12 9 £513,259 6 1

Five-per-Cent. Australian Govbbnmbnt Subsidy Debentures. Numbers of 305 Debentures of £100 each drawn on Ist April, 1890, for Payment at Messrs, Barclay, Bevan, .and Co., 54, Lombard Street, E.C, on the Ist July, 1890. 28 655 1120 1666 2187 2755 3158 3528 3864 4442 4937 5525 6047 40 661 1123 1704 2193 2804 3159 3562 3950 4456 4950 5541 6050 49 674 1133 1753 2199 2826 3174 3572 3974 4464 4961 5547 6058 59 767 1159 1761 2268 2844 3189 3576 3989 4471 4974 5578 6059 94 800 1220 1782 2277 2856 3201 3581 4026 4546 4997 5596 6091 145 815 1251 1789 2295 2873 3218 3596 4028 4555 5052 5606 6111 228 829 1253 1827 2361 2905 3219 3603 4085 4566 5081 5636 6130 283 848 1256 1846 2364 2913 3234 3668 4086 4601 5085 5643 6145 288 865 1268 1848 2366 2938 3242 3671 4106 4605 5134 5653 6146 293 882 1309 1852 2380 2997 3248 3683 4110 4608 5138 5775 6150 296 884 1342 1869 2420 3004 3276 3711 4121 4617 5154 5788 6195 315 909 1361 1881 2456 3021 3279 3719 4165 4669 5177 5812 6208 341 957 1375 1909 2487 3039 3282 3768 4177 4686 5206 5821 6220 368 961 1388 1928 2527 3044 3347 3771 4261 4690 5260 5864 6241 378 988 1393 1943 2565 3050 3399 3772 4269 4701 5265 5885 6272 391 991 1395 1961 2578 3052 3409 3777 4272 4769 5272 5896 6286 406 1002 1398 1997 2581 3062 3414 3797 4316 4778 5302 5904 6310 424 1009 1433 2001 2589 3074 3445 3804 4332 4794 5354 5918 6343 429 1011 1460 2018 2594 3080 3455 3815 4364 4823 5380 6005 6356 486 1031 1499 2026 2597 3083 3456 3834 4389 4849 5412 6009 6359 546 1033 1503 2062 2603 3118 3503 3848 4395 4868 5465 6025 6379 564 1044 1558 2066 2609 3123 3510 3860 4407 4903 5500 6026 6383 578 1052 1587 2111 2616 3127 3513 3861 4427 4925 5508 6042 6392 579 1093 1598 2143 2707 3137

Half-year ended 31st December, 1890. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, K.C.M.G. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., Sir Thomas JFairbairn, Bart., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

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Eepobt and Accounts of the Dibectoes for the Half-year ended the 31st December, 1890, to be submitted to the Thirty-fifth Ordinary General Meeting, the 22nd April, 1891. 1. The usual statements of account for the half-year ended the 31st December, 1890, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during that period to £279,095 Is., against £264,103 12s. lid. for the corresponding half-year of 1889. 3. The working and other expenses, including £23,118 6s. 6d. for cost of repairs to cables and expenses of ships, absorb £74,090 3s. 2d., against £73,498 19s. 3d. for the corresponding period of 1889, leaving a balance of £205,004 17s. 10d. From this is deducted £2,915 9s. Id. for income-tax, and £35,281 9s. 10d. for interest on debentures, debenture-stock, and contribution to sinking fund, leaving as the net profit for the half-year £166,807 18s. lid. Against this £1,120 19s. 6d. has been charged for cost of new land-line at JBanjoewangie and additions to staff quarters, and £100,000 on account of the cost of duplicating the Madras-Penang cable, which is referred to below, leaving a balance of £65,686 19s. 5d., which, with £71,820 7s. sd. brought forward, shows an available balance of £137,507 6s. 10d. 4. One quarterly interim dividend of 1£ per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1890. The balance of £25,007 6s. 10d. has been carried to the general reserve fund, which, after being credited with interest and profit on sale of investments, and debited with £10,722 13s. Id. on account of the cable renewals, &c, specified under the heading " General Eeserve Fund," now stands at £495,239 6s. 7d. 5. Your directors have the satisfaction to report that, notwithstanding the financial depression existing at the time, the recent conversion of the company's 6-per-cent. debentures into 4-per-cent. mortgage debenture-stock was attended with marked success, the whole of the issue having been subscribed by the shareholders at par. By this operation a saving in revenue of £6,400 per annum has been effected. Since the close of the year nearly the whole of the 6-per-cent. debentures have been paid off. 6. In accordance with the provisions of the trust deed, dated the 15th May, 1879, 320 of the company's 5-per-cent. Australian Government subsidy debentures were drawn by lot on the 7th instant for payment at par on the Ist July next. The numbers of drawn debentures are given at the end of this report. 7. The negotiations with the Governments of Australasia, referred to in the last report, have resulted in an agreement being concluded between the company and the Governments of New South Wales, Victoria, South Australia, Tasmania, and Western Australia, for reduction of the tariffs to those colonies from the Ist May proximo, as follows, — s. d. s. d. From ... ... 9 4 to 4 0 per word for public telegrams, „ ... ... 7 1 „ 3 6 „ Government telegrams, „ ... ... 2 8 „ 110 „ Press telegrams,— for a tentative period of one year, to be extended if found to work satisfactorily. The contracting colonies guarantee the company against one-half the risk of any loss should the receipts at the reduced rates fall short of the present earnings from the Australasian traffic, and the company takes the other half. It was hoped that Queensland and New Zealand would have agreed to take part in the experiment, but after considerable negotiation between the various Governments those colonies declined to join in the guarantee; consequently the tariffs to Queensland and New Zealand will remain unchanged. 8. The contract with the Telegraph Construction and Maintenance Company for the manufacture and laying of the Madras-Penang duplicate cable has been satisfactorily carried out, and the service is now in a thoroughly efficient condition to meet any requirements that may arise in connection with the reduced rates to Australia. 9. The company's maintenance-ships have, as usual, been employed on various repairs, but, with the exception of the interruption of the Saigon-Tonquin cable from the 20th to the 27th October, and of the cables between Java and Australia referred to in the last report, there have been no interruptions materially affecting the company's revenue during the half-year under review. 10. In accordance with the articles of association, the Eight Hon. Viscount Monck and George Garden Nicol, Esq., retire by rotation, and, being eligible, offer themselves for re-election. 11. The retiring auditors, Mr. Henry Dever and Messrs. Welton, Jones, and Co., also offer themselves for re-election. John Pendeb, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 11th April, 1891.

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Ebvenub Account for the Half-ye Dr. £ s. d. To General expenses in London (see Ab- essage and other stract A) .. .. .. 4,978 14 10 receipts,including Working-expenses at stations (see Ab- profit on exchange £257,230 14 8 stract B) .. .. .. 38,515 810 Less payment under Use of patents .. .. .. 800 0 0 agreement with Electricians' retaining-fee .. .. 50 0 0 Great Northern Directors'remuneration .. .. 2,000 0 0 Telegraph ' ComAuditors'fees .. .. .. 100 0 0 pany .. . .. 1,250 0 0 Staff endowment assurance .. 798 12 0 255,980 14 8 Expenses on account of Australian Australian duplicate "guarantee negotiations .. .. 229 1 0 cable subsidies .. £16,200 0 0 Eepairs to cables (see Abstract C) .. 23,118 6 6 Less deductions for Maintenance-ships' Reserve Fund .. 3,500 0 0 nine days' total Income-tax .. .. .. 2,915 9 1 interruption .. 798 18 1 Interest on 6-per-cent. debentures .. 9,600 0 0 . 15,401 111 Interest and sinking fund on account Tasmanian cable subsidy .. .. 2,100 0 0 of 5-per-cent. Australian subsidy Tonquin cable subdebentures .. .. .. 25,495 0 0 sidy .. .. £5,300 0 0 Interest on 4-per-cent. mortgage de- Less deductions for benture stock .. .. .. 186 9 10 seven days' total Cost of new land-line at Banjoewangie 918 18 2 interruption .. 203 5 7 Additions to staff quarters .. .. 202 1 4 5,096 14 5 Part cost of the Madras-Penangdupli- Malacca cable subsidy .. .. 200 0 0 cate cable .. .. .. 100,000 0 0 Macao cable subsidy .. .. 250 0 0 Balance .. .. .. .. 65,686 19 5 Transfer-fees .. .. .. 66 10 0 £279,095 1 0 £279,095 1 0 Third interim dividend of 1890, 2s. 6d. per share, paid 15th January, 1891 31,250 0 0 By Balance down .. .. .. 65,686 19 5 Proposed final dividend of 2s. 6d. per Balance of Eevenue Account to 30th share for 1890, payable 23rd April, June, 1890 .. .. .. 71,820 7 5 1891 .. ..' .. .. 31,250 0 0 . Proposed bonus of 4s. per share, payable 23rd April, 1891 .. .. 50,000 0 0 Balance to Eeserve Fund .. .. 25,007 610 £137,507 6 10 £137,507 6 10 Absteacts eclating to Eevenue Account foe the Half-yeae ended 31st Decembee, 1890. Abstract A. Statement of General Expenses in London. £ s. d. Salaries and wages .. .. .. .. .. .. 2,589 17 8 Office expenses .. .. .. .. .. .. .. 788 16 4 Rent, taxes, &c. .. .. .. .. .. .. .. 706 2 10 Stationery and printing .. .. .. .. .. .. 175 18 10 Postage, bill, and other stamps .. .. .. .. .. 219 5 3 Advertising .. .. .. .. .. ... .. 364 7 6 Legal expenses .. .. .. .. .. .. .. 18 18 0 Repairs and renewals to furniture, &c. .. .. .. .. .. 50 8 5 Agencies .. .. .. .. .. .. .. 65 0 0 Per Revenue Account .. .. .. .. £4,978 14 10 Abstract B. Statement of Wobking-expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 26,206 15 2 Travelling-expenses .. .. .. .. .. .. 1,261 15 8 Rent, taxes, house-allowances, &c. .. .. .. .. .. 4,007 18 6 Expenses of electric lighting at stations .. .. .. .. 643 6 6 Provision- and ration-allowances .. ~ .. ~ .. 962 17 11 Maintenance and renewals of instruments and electrical apparatus .. .. 1,184 8 8 Expenses of land-lines .. .. .. .. .. .. 175 10 4 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 540 6 3 Repairs to buildings .. ~ .. .. .. .. 297 13 4 Insurances at stations .. .. .. .. .. .. 199 3 2 Stationery and printing .. .. .. .. ... .. 721 5 2 Office and message postages .. .. ~ .. .. 216 2 10 Office and petty expenses .. .. .. .. .. ~ 843 10 5 Medical attendance .. .. .. .. .. .. 505 8 2 Service messages .. .. .. .. .. .. .. 126 12 2 Expenses of Porthcurno School .. .. .. ~ .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 164 3 6 Advertising at stations .. .. .. .. .. .. 7 16 4 Messengers' uniforms .. .. .. ~ .. .. 32 1 11 Income-tax at stations .. .. .. .. .. .. 168 12 10 Per Revenue Account ~ ~ .. ~ £38,515 8 10

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Abstract C. Expenses attending Repairs of Cables. jg s d Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating 26 days 1,278 18 2 Expenses of s.s. " Sherard Osborn " during remainder of six months .. .. 4,008 12 3 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating 62 days, after deducting expenses of ship whilst engaged on Madras-Penang duplicate cable and Haiphong-Hongkong partial renewal .. .. .. .. 3,613 10 7 Expenses of s.s. " Recorder " during remainder of six months .. .. 3,340 8 4 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. .. 6,786 10 2 Insurance of cable on board maintenance-ships .. .. .. .. 445 7 6 Expenses of cable depot at Singapore .. .. .. .. .. 1,104 12 1 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of the ship .. .. .. 1,300 0 0 Depreciation of cable stores .. .. .. .. .. .. 1,240 7 5 Per Revenue Account .. .. .. .. £23,118 6 6 Geneeal Eesebve Fund, 31st Dbcembbe, 1890. Dr. £ B. d. Cr. £ s. d. To Cost of Haiphong-Hongkong partial re- By Balanoe of Reserve Fund at 30th newal .. .. .. .. 6,668 16 1 June, 1890 .. .. .. 472,713 15 3 Balance of cost of Western Australia Interest received during half-year .. 8,008 6 10 cable .. .. .. .. 785 15 2 ' Profit on sale of investments .. 232 10 9 Further expenses in connection with Balance transferred from Revenue the partial renewal of Madras- Account to 31st December, 1890 .. 25,007 610 Penang cable .. .. .. 2,828 19 4 Further expenses in connection with the partial renewal of HongkongSaigon cable .. .. .. 439 2 6 The following amounts for new cables and cable renewals have from time to time been charged against the Reserve and Revenue Accounts:— Rangoon-Penang cable, 1877 .. .. £156,761 8 1 Rangoon-Penang cable renewals, 1884-85 and 1887 .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,07110 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .. .. 59,677 1 11 Victoria-Tasmania duplicate cable, 1885 31,190 5 0 Penang-Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable partial renewals, 1889--90 .. .. .. 15,880 19 9 Western Australia cable, 1889-90 .. .. 119,898 0 5 New Zealand duplicate cable, 1890.. .. 188,433 15 6 Madras-Penang partial renewal, 1890 .. 83,677 0 7 Haiphong - Hong Kong partial renewal, 1890.. 6,668 16 1 * Madras-Penang duplicate cable, portion of cost, 1890 .. .. 100,000 0 0 £958,797 13 7 Balance carried down .. .. .. 495,239 6 7 £505,961 19 8 £505,961 19 8 By Balanoe as per Balance-sheet .. £495,239 6 7

1.—7.

Balance-sheet, 31st December, 1890. Dr. £ s. d. Cr. £ s. A. To Capital— By Capital expenditure, 300,000 shares of asper last account £3,041,661 0 9 £10 each ..£3,000,000 0 0 Less transferred Less 50,000 shares of from Australian £10 each, unissued 500,000 0 0 5-per-cent.subsidy ■ 2,500,000 0 0 debenture sinking 6-per-cent. debentures— fund .. .. 30,500 0 0 3,200 debentures of £100 each .. 320,000 0 0 ■3,011,161 0 9 5-per-cent. Australian subsidy deben- Maintenance-ships, as per last account 66,449 14 10 tures — 4,170 debentures of 3,077,610 15 7 £100 each, as per Expenditure on aclast account .. £417,000 0 count of MadrasLess 305 debentures Penang duplicate drawn Ist April, cable .. .. £148,394 16 6 1890, for pay- Less amount ment Ist July, charged against 1890 .. .. 30,500 0 0 the Revenue Ao- . 886,500 0 0 count.. .. 100,000 0 0 4-percent, mortgage 48,394 16 6 debenture stock Investments on account of reserve allotted to 31st funds (See Abstract D) .. .. 507,806 2 4 December, 1890.. £320,000 0 0 Trustees for 5-per-cent. Australian Less calls since paid 218,752 10 0 subsidy debentures .. .. 8,220 2 0 101,247 10 0 Spare cable and other stores .. 75,357 18 2 I Bills receivable .. .. .. 56,900 0 0 3,307,747 10 0 Remittances in transit .. .. 42,600 0 0 Reserve funds — Traffic and other debit balances .. 82,666 011 General reserve .. .. .. 495,239 6 7 Cash at banker's, on deposit, and in Maintenance-ships reserve .. 41,871 17 3 ; hand .. .. .. .. 178,914 17 3 Insurance reserve for maintenanceships and cables .. .. 45,749 19 5 Sinking fund — Australian subsidy debenture sinking fund .. .. .. 21,515 2 0 Traffic and other credit balances .. 44,549 3 11 Debenture interest accrued and unpaid 8,367 16 1 Proprietors for dividends— Unclaimed dividends .. .. 929 17 6 Third interim dividend of 2s. 6d. per share, paid the 15th January, 1891 .. .. .. .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable the 23rd April, 1891 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable the 23rd April, 1891 .. 50,000 0 0 £4,078,470 12 9 £4,078,470 12 9 Audited and found correct. Henby Deveb, F.C.A.," I . -~, London, 10th April, 1891. Welton, Jones, and Co., } Audltors - Abstbact D. LIST OF INVESTMENTS ON ACCOUNT OP RESERVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2f-per-cent. Consols.. .. .. .. .. .. Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. „ 2,512 10 4 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. „ 1,429 1 0 5,000 Government Stock Investment Trust Company 4-per-cent. debenture stock .. „ 5,200 910 15,000 India 3-per-cent. stock .. .. .. .. „ 13,859 11 3 25,000 Metropolitan consolidated 3J-per-cent. stock .. .. 25,968 15 0 2,500 Southern Mahratta Railway (Limited) 4-percent, debenture stock 2,703 14 8 30,000 The Trustees, Executors, and Securities Insurance Corporation (Limited) 4J-per-cent. first mortgage debentures (series A) .. .. .. „ 31,575 0 6 Colonial. 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. „ 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed (1887) .. .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent, debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent, inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per-cent debentures .. .. .. „ 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds (1874) .. Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885).. .. „ 10,375 17 6 £12,600 Pennsylvania Railroad Company 6-per-oent. consolidated mortgage sinkingfund bonds .. .. ~ ~ ~ „ 15,059 11 3

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59

Railway Debenture and Guaranteed Stocks. 7,500 Caledonian Railway 4 per-cent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5 per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkfihire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S. C. Railway 4J-per-cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per cent, arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincoln Railway 4J-per-cent. debenture stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stock .. .. „ 5,503 15 7 14,500 North British Railway 4-per-cent. debenture stock .. .. .. 15,696 5 1 5,000 North E. Railway, West Hartlepool, 4-per-cent. preference stock .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 5,000 North E. Railway 4-percent, debenture stock .. .. .. „ 5,576 12 9 £507,806 2 4 Five-per-Cent. Australian Government Subsidy Debentures. Numbers of 320 Debentures of £100 each drawn on the 7th April, 1891, for Payment at Messrs. Barclay, Bevan and Co.'s, 54, Lombard Street, E.C, on the Ist July, 1891: — 1 449 768 1246 1835 2246 2752 3307 3865 4610 5030 5454 5907 32 450 772 1249 1850 2265 2757 3338 3886 4627 5046 5457 5936 98 499 776 1284 1870 2280 2760 3340 3908 4629 5137 5496 5955 125 504 849 1300 1901 2283 2764 3349 3911 4631 5139 5523 5967 134 507 855 1324 1942 2320 2768 3367 3935 4636 5147 5530 5968 137 508 862 1369 1983 2360 2772 3373 4048 4643 5166 5539 5972 165 527 875 1392 1984 2362 2800 3390 4116 4645 5192 5582 6002 173 528 885 1452 2011 2368 2824 3396 4144 4663 5219 5585 6007 180 558 917 1488 2012 2370 2830 3460 4184 4693 5242 5590 6024 193 573 922 1523 2017 2377 2864 3465 4238 4748 5266 5591 6032 204 585 950 1535 2021 2433 2870 3494 4252 4750 5280 5617 6038 212 592 970 1544 2022 2435 2888 3517 4271 4754 5288 5626 6087 244 597 1008 1545 2042 2455 2919 3519 4275 4801 5297 5695 6099 256 640 1035 1552 2070 2458 2940 3523 4314 4830 5301 5736 6125 277 672 1038 1557 2094 5464 2944 3550 4334 4873 5330 5750 6153 278 673 1042 1588 2097 2501 2972 3555 4338 4887 5347 5752 6189 282 676 1054 1612 2139 2517 2986 3556 4367 4902 5360 5759 6203 311 681 1134 1663 2164 2530 3006 3564 4379 4904 5369 5760 6213 364 688 1140 1703 2169 2546 3045 3609 4384 4908 5373 5792 6217 366 703 1158 1725 2173 2637 3100 3626 4394 4915 5377 5803 6224 390 706 1164 1745 2191 2644 3142 3627 4490 4917 5393 5824 6231 408 714 1195 1759 2200' 2686 3208 3634 4499 5002 5411 5839 6266 411 719 1197 1783 2201 2723 3253 3746 4530 5008 5419 5887 6316 433 735 1203 1814 2205 2727 3260 3754 4582 5018 5439 5900 6320 439 736 1209 1829 2228 2739 3304 3853

Half-year ended 30th June, 1891. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, K.C.M.G. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., the Eight Hon. Viscount Monok, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, E.sq. Offices. —Winchester House, 50, Old Broad Street, London, E.C. Report and Accounts of the Directors for the Half-year ended 30th June, 1891, to be submitted to the Thirty-sixth Ordinary General Meeting, 21st October, 1891. 1. The usual statements of account for the half-year ended 30th June, 1891, are herewith submitted. 2. The gross receipts, including Government subsidies, have amounted during that period to £264,878 6s. lid., against £254,856 18s. 10d. for the corresponding half-year of 1890. 3. The working-expenses, including £17,318 ss. lid. for cost of repairs to cables and expenses of ships, absorb £71,476 15s. Bd., against £76,670 9s. 3d. for the corresponding period of 1890, leaving a balance of £193,401 11s. 3d. From this is deducted £2,981 17s. Id. for income-tax, £33,074 14s. sd. for interest on debentures, debenture stock, and contribution to sinking fund, and £2,179 10s. 2d. for special expenditure, as shown in the Eevenue Account, leaving £155,165 9s. 7d. as the net profit for the half-year. 4. One quarterly interim dividend of 1-J- per cent., amounting to £31,250, has been paid during the half-year, and another of like amount will be distributed on the 15th instant, leaving £92,665 9s. 7d. to be carried forward.

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5. All the 6-per-eent. debentures that were outstanding when the last report was issued have been paid off and cancelled, and the Stock Exchange have granted an official quotation in the new 4-per-cent. debenture stock, which now stands in the market at a considerable premium. 6. It is with deep regret that your directors have to record the death, on the 12th ultimo, of their much-esteemed colleague, Sir Thomas Fairbairn, Bart., who had been associated with the company from its inception. It is not proposed to fill the vacancy in the directorate thus occasioned. As, however, Sir Thomas Fairbairn was also one of the trustees for the 5-rjer-cent. Australian subsidy debenture holders, it has been deemed advisable to appoint a new trustee, and Mr. John Denison Pender has undertaken to act in this capacity. 7. The guarantee arrangement made with certain of the Australasian Colonies for testing the effect of a four-shilling rate to Australia came into operation on the Ist May last, and the increase of traffic resulting from the reduction of tariff is so far encouraging. As, however, the accounts embrace only two months' receipts at the reduced tariff, it is too early to form any reliable opinion as to the result of this important experiment. 8. In accordance with the arrangements entered into with the Indian Government, the company's station at Elephant Point (Eangoon) has been closed, and a considerable portion of the cable between Elephant Point and Penang picked up, and utilised elsewhere. 9. An arrangement has been concluded with the Dutch Government for connecting by submarine cable Sumatra with Penang, so as to bring the Netherlands Indian Government telegraphs into direct communication with the company's system at Penang. The cable for this purpose will be taken from the company's depot at Singapore and laid in the course of the next few months. John Pendeb, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 12th October, 1891. Eevbnue Account fob the Half-yeab ended 30th June, 1891. Dr. £ s. d. [ Cr. £ s. d. To General expenses in London (see Ab- By Message and other receipts .. .. 243,883 6 2 straot A) .. .. .. 5,175 0 0 Less payment under General expenses at stations (see Ab- agreement with Great stract B) .. .. .. 41,751 3 9 Northern Telegraph Use of patents .. .. .. 800 0 0 Company .. ..£1,250 0 0 Electricians'retaining fee .. .. 50 0 0 Loss on exchange .. 1,882 19 3 Directors'remuneration .. .. 2,000 0 0 3,132 19 3 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance.. .. 779 6 0 240,750 6 11 Repairs to cables (see Abstract G) .. 17,318 511 Australian duplicate cable subsidies .. 16,200 0 0 Maintenance-ships' Reserve Fund .. 3,500 0 0 Tasmanian cable subsidy .. .. 2,100 0 0 Income-tax .. .. .. 2,981 17 1 Tonquin cable subsidy .. .. 5,300 0 0 Interest on 6-per-cent. debentures .. 1,600 0 0 Malacca cable subsidy .. .. 200 0 0 Interest and sinking fund on account Macao cable subsidy .. .. 250 0 0 of 5-per-cent. Australian subsidy de- Transfer-fees .. .. .. 78 0 0 bentures .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 5,979 14 5 Expenses in connection with the issue of 4-per-cent. stock .. .. 1,035 6 3 Ditto Australian tariff guarantee .. 803 9 5 Ditto Chinese concessionary negotiations .. .. .. .. 190 14 6 Subscription to Royal Alfred Aged Merchant Seamen's Institution .. 150 0 0 Balance .. .. .. .. 155,165 9 7 £264,878 6 11 £264,878 6 11 First interim dividend of 1891, 2s. 6d. per share, paid 15th July, 1891 .. 31,250 0 0 Second interim dividend of 1891, 2s. 6d. per share, payable 15th October, 1891 .. .. .. 31,250 0 0 Balance .. .. .. .. 92,665 9 7 By Balance down .. .. .. 155,165 9 7 £155,165 9 7 j £155,165 9 7 Abstbacts belating to Revenue Account fob the Half-yeae ended 30th June, 1891. Abstract A. Statement of General Expenses in London. £ s. d. Salaries and wages .. .. .. .. .. .. 2,652 13 3 Office expenses .. .. .. .. .. .. .. 830 4 3 Rent, taxes, &c. .. .. .. .. .. .. .. 776 14 7 Stationery and printing .. .. .. .. .. .. 188 10 10 Postage, bill, and other stamps .. .. .. .. .. 127 0 3 Advertising .. .. .. .. .. .. .. 144 17 3 Legal expenses .. .. .. .. .. .. .. 37 16 0 Repairs and renewals to furniture, &c. .. .. .. .. ... 352 3 7 Agencies .. .. .. . .. .. .. 65 0 0 Per Revenue Account .. ~ ~ .. £5,175 0 0

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Abstract B. Statement of Genebal Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 26,941 1 4 Travelling-expenses .. .. .. .. .. .. 2,067 2 8 Kent, taxes, house-allowances, &o. .. .. .. .. .. 4,245 1 8 Expenses of electric lighting at stations .. .. .. .. 845 11 7 Provision- and ration-allowances .. .. .. ■. .. 902 3 11 Maintenance and renewals of instruments and electrical apparatus .. .. 1,59116 4 Expenses of land-lines .. .. .. .. .. .. 201 11 9 Repairs and renewals of furniture, fittings, &o. .. .. .. .. 532 13 2 Repairs to buildings .. .. .. • • .. .. 573 2 1 Insurances at stations Stationery and printing .. .. .. .. .. .. 1,205 15 10 Office and message postages .. .. .. •. ■ ■ .. 184 15 1 Office and petty expenses Medical attendance .. • • ■ ■ .. . • • • 528 10 11 Service messages .. .. .. .. .. .. .. 108 9 1 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. • ■ .. ..' • • 145 16 8 Advertising at stations .. .. .. .. ■• •• 934 Messengers' uniforms .. .. .. .. .. .. 76 0 1 Income-tax at stations .. •■ •• .. .. •• 182 8 0 Per Revenue Account .. .. .. .. £41,754 3 9 Abstract C. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating 110 days, £ s. d. " after deducting expenses of ship whilst engaged on Madras-Penang and RangoonPenang cables .. .. .. .. .. .. 698 12 11 Expenses of s.s. " Sherard Osborn" during remainder of six months .. .. 2,240 12 1 Expenses of s.s. "Recorder," effecting numerous repairs, aggregating 160 days .. .. .. .. £7,710 15 7 Expenses of s.s. " Recorder" during remainder of six months 667 12 8 8,378 8 3 Less amount of charter .. .. .. i .'. 2,425 0 0 5,953 8 3 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. •• 3,618 18 8 Insurance of cable on board maintenance ships .. .. .. .. 195 12 10 Expenses of cable depot at Singapore .. .. .. .. .. 2,218 6 9 Charter of Great Northern Company's maintenance-ship for repair of cable in the China seas, and agreed charge for call of ship .. .. .. 1,300 0 0 Depreciation of cable stores .. .. .. .. .. -. 1,092 14 5 £17,318 5 11 Gbnbeal Ebseeve Fund, 30th June, 1891. Dr. £ s. d. Cr. £ s. d. To Further expenses in connection with By Balance of Reserve Fund at 31st Dethe partial renewal of Madras- cember, 1890 .. .. .. 495,239 6 7 Penang cable .. .. .. 3,775 4 6 Interest received during half-year .. 7,971 3 1 The following amounts for new cables and Profit on sale of investments .. 1,424 19 6 cable renewals have from time to time been charged against the Reserve and Revenue Accounts: — Rangoon-Penang cable, 1877.. .. ■■ £156,761 8 1 Rangoon - Penang cable renewals, 1884-85 and 1887 .. ■■ 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,07110 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. •■ 41,754 17 0 Singapore - Saigon cable renewals, 1884-85 and 1887-88 .. •• 59,677 111 Victoria-Tasmania duplicate cable, 1885 .. 31,190 5 0 Penang - Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong - Saigon cable partial renewals, 1889-90 15,880 19 9 Western Australia cable, 1889-90 .. .. 119,898 0 5 New Zealand duplicate cable, 1890 .. .. 188,433 15 6 Madras - Penang partial renewal, 1890-91 .. 87,452 5 1 Haiphong-Hongkong partial renewal, 1890 .. 6,668 16 1 Madras-Penang duplicate cable, portion of cost, 1890.. .. •• 100,000 0 0 £962,572 18 1 Balance casried down .. " .. ..500,860 4 8, £504,635 9 2 £504,635 9 2 Balance as per balance-sheet .. £500,860 4 8 9—l. 7.

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Balance-sheet, 30th June, 1891. Dr. ■ Cr. To Capital— £ s. d. By Capital Expenditure as per last ac- S, s. d. 300,000 shares at oount .. .. .. 3,011,161 0 9 £10 each .. £3,000,000 0 0 Maintenance - ships, as per last Less 50,000 of account .. .. .. 66,449 14 10 £10 each unissued .. 500,000 0 0 3,077,610 15 7 2,500,000 0 0 Expenditure on account o£ Madras-6-per-cent, debentures— Penang duplicate cable .. .. 144,112 4 2 3,200 debentures of Investments on account of reserve £100 each .. £320,000 0 0 funds (see Abstract D) .. .. 476,231 110 Less 3,200 deben- Trustees for 5-per-cent. Australian tures of £100 each subsidy debentures .. .. 33,662 14 2 paid February,'9l 320,000 0 0 Spare cable and other stores .. 96,59118 0 .. Traffic and other debit balances .. 82,416 6 1 5-per-cent. Australian subsidy deben- Bills receivable .. .. .. '50,574 13 9 tures— Eemittanoes in transit .. .. 14,300 0 0 3,865 debentures of £100 each, as Cash at banker's and in hand .. 66,412 11 2 per last account .. .. 386,500 0 0 4-per-cent. mortgage debenture stock 320,000 0 0 £3,206,500 0 0 Reserve funds — General reserve .. .. 500,860 4 8 Maintenance-ships' reserve .. £46,104 12 5 Less cost of repairs and alterations to ships .. .. 8,767 3 7 37,337 8 10 Insurance reserve for maintenanceships and cables .. .. 46,632 7 2 Sinking fund — Australian subsidy debenture sinking fund .. .. .. 37,662 14 2 Traffic and other credit balances .. 51,520 18 10 Debenture interest accrued and unpaid .. .. .. .. 5,200 0 0 Proprietors for dividends— Unclaimed dividends .. .. 1,033 1 6 First interim dividend of 2s. 6d. per share, paid 15th July, 1891 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, payable 15th October, 1891.. .. .. .. 31,250 0 0 Eevenue account balance .. 92,665 9 7 £4,041,912 4 9 £4,041,912 4 9 Audited and found correct. Hknby Dever, F.C.A., ) Al ,j- fn . a London, 10th October, 1891. Welton, Jones, and Co., J Auaicors, Abstbact D. LIST OP INVESTMENTS ON ACCOUNT OP RESEBVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2f-per-cent. Consols .. .. .. .. ..Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. „ 1,429 1 0 5,000 Government Stock Investment Trust Company 4-per-cent. debenture stock , 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. 13,859 11 3 25,000 Metropolitan Consolidated 3|-per-cent. stock .. .. .. , 25,968 15 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. .. „ 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed (1887) .. 4,993 14 1 10,000 New South Wales Government 4-per-cont. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per-cent. debentures .. .. .. „ 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures .. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per cent, debenture bonds .. .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company C-per-cent, sterling bonds (1874) .. Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885) .. „ 10,375 17 6 £12,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinking fund bonds .. .. .. .. .. .. 15,059 11 3

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Fiailway Debenture and Guaranteed Stocks. £ s (j 7,500 Caledonian Railway 4-percent, debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4j-per-cent. joint rent-charge stock .. .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S.O. Railway 4J-per cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guaranteed stock „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincoln Railway 4|-per-cent. debenture stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. 21,836 18 6 5,110 Metropolitan District Railway 4j-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stock .. .. „ 5,503 15 7 14,500 North British Railway 4-per-cent. debenture stock .. .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 6,000 North E. Railway 4-per-cent. debenture stock .. .. .. „ 5,576 12 9 £476,231 1 10

Five-pee-Cent. Austbalian Government Subsidy Debentuees. Numbees of 320 Debentures of £100 each drawn on 7th April, 1891, for Payment at Messrs. Barclay, Bevan, and Co.'s, 54, Lombard Street, E.C., on the Ist July, 1891. 1 449 768 1246 1835 2246 2752 3307 3865 4610 5030 5454 5907 32 450 772 1249 1850 2265 2757 3338 3886 4627 5046 5457 5936 98 499 776 1284 1870 2280 2760 3340 3908 4629 5137 5496 5955 125 504 849 1300 1901 2283 2764 8349 3911 4631 5139 5523 5967 134 507 855 1324 1942 2320 2768 3367 3935 4636 5147 5530 5968 137 508 862 1369 1983 2360 2772 3373 4048 4643 5166 5539 5972 165 527 875 1392 1984 2362 2800 3390 4116 4645 5192 5582 6002 173 528 885 1452 2011 2368 2824 3396 4144 4663 5219 5585 6007 180 558 917 1488 2012 2370 2830 3460 4184 4693 5242 5590 6024 193 573 922 1523 2017 2377 2864 3465 4238 4748 5266 5591 6032 204 585 950 1535 2021 2433 2870 3494 4252 4750 5280 5617 6038 212 592 970 1544 2022 2435 2888 3317 4271 4754 5288 5626 6087 244 597 1008 1545 2042 2455 2919 3519 4275 4801 5297 5695 6099 256 640 1035 1552 2070 2458 2940 3523 4314 4830 5301 5736 6125 277 672 1038 1557 2094 2464 2944 3550 4334 4873 5330 5750 6153 278 673 1042 1588 2097 2501 2972 3555 4338 4887 5347 5752 6189 282 676 1054 1612 2139 2517 2986 3556 4367 4902 5360 5759 6203 311 681 1134 1663 2164 2530 3006 3564 4379 4904 5369 5760 6213 364 688 1140 1703 2169 2546 3045 3609 4384 4908 5373 5792 6217 366 703 1158 1725 2173 2637 3100 3626 4394 4915 5377 5803 6224 390 706 1164 1745 2191 2644 3142 3627 4490 4917 5393 5824 6231 408 714 1195 1759 2200 2686 3208 3634 4499 5002 54.11 5839 6266 411 719 1197 1783 2201 2723 3253 3746 4530 5008 5419 5887 6316 433 735 1203 1814 2205 2727 3260 3754 4582 5018 5439 5906 6320 439 736 1209 1829 2228 2739 3304 3853

Half-year ended 31st December, 1891. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, K.C.M.G. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —E. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, B.C.

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Ebpoet and Accounts of the Debectoks for the Half-year ended 31st December, 1891, to be submitted to the Thirty-seventh Ordinary General Meeting, 4th May, 1892. 1. The usual statements of account for the half-year ended the 31st December, 1891, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £243,658 Bs. 10d., against £279,095 Is. for the corresponding period of 1890. In the latter figures, however, £8,031 was included for profit on exchange, whereas a loss of £3,232 has been experienced during the past half-year, in addition to which the receipts have been diminished by the reduction of rates to Australia, to which further reference is made below. 3. The working and other expenses, including £22,091 17s. 6d. for cost of repairs to cables and expenses of ships, absorb £74,314 9s. 5d., against £74,090 3s. 2d. for the corresponding period of 1890, leaving a balance of £169,343 19s. sd. From this is deducted £3,092 2s. 10d. for incometax, and £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, leaving as the net profit for the half-year £134,356 16s. 7d. Against this £2,535 4s. has been charged for special expenditure, as shown in the Revenue Account, leaving a balance of £131,821 12s. 7d., which, with £92,665 9s. 7d. brought forward, shows an available balance of £224,487 2s. 2d. 4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1891. The balance of £111,987 2s. 2d. has been carried to the General Reserve Fund, which, after being credited with interest and debited with £191,163 2s. 4d. on account of the cable expenditure specified under the heading " General Eeserve J?und," now stands at £428,842 7s. 4d. 5. In accordance with the provisions of the trust deed dated the 15th May, 1879, 337 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £33,700, were drawn by lot on the 4th instant, for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 6. The "guarantee" arrangement made with certain of the Australasian Governments for testing the effect of a four-shilling rate to Australia has now been in operation for eleven months, with the result that the number of words transmitted has increased 48 per cent, over the corresponding period of 1890 and 60 per cent, over that of 1889, the year taken as the basis of the " guarantee," while the revenue has diminished at the rate of £55,000 per annum. By the terms of the agreement one-half of the loss is borne by the guaranteeing colonies, and the other half by the associated companies and the Indo-European Department of Her Majesty's Indian Government, according to their respective interests in the Australasian traffic. As the experiment, as far as it has gone, is considered not unsatisfactory, it has been decided to continue it for another year. 7. Numerous interruptions have occurred on the company's system during the past half-year, but, owing to most of the cables being duplicated, the traffic has not been materially affected, except with Manila, which was, unfortunately, cut off from telegraphic communication for several weeks, the cable between Hongkong and Cape Bolinao having broken at each end of the line during a severe typhoon. Negotiations have since been entered into with the Spanish Government for the duplication of the cable, and it is hoped that a satisfactory arrangement may be shortly brought about. All the cables are now in good working-order. 8. During the half-year under review the company's system has been extended to Sumatra, in accordance with the arrangement concluded with the Netherlands Government, and referred to in the last report. The cable for this connection was taken from the company's stock at Singapore, and the cost of the operation (£14,924) has been debited to the reserve fund. A contract has also been entered into with the Netherlands-Indian Government for the manufacture and laying, on account of the Government, of a submarine cable to connect Acheen with the company's system at Sumatra, and an arrangement has been made with the Telegraph Construction and Maintenance Company for carrying out the work. 9. The shareholders having at the last meeting approved- the principle of establishing a staff pension fund, your directors are having the details worked out by experienced actuaries, and a scheme will be submitted to the meeting for dealing with the matter, together with a formal resolution empowering the directors to carry out the necessary arrangements. 10. In accordance with the articles of association, John Denison Pender, Esq., and the Most Honourable the Marquis of Tweeddale retire by rotation, and, being eligible, offer themselves for re-election. 11. The retiring auditors, Mr. Henry Dever and Messrs. Welton, Jones, and Co., also offer themselves for re-election. John Pendbe, Chairman. . Winchester House, 50, Old Broad Street, London, E.C., .21st April, 1892.

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Revenue Account foe the Half-yeae ended 31st December, 1891. Dr. £ s. d. Gr. £ s. d. To General expenses in London (see Ab- By Message and other re- ■ straot A) .. .. .. 5,472 1 1 ceipts .. .. .. .. 224,244 13 7 General expenses at stations (see Ab- Less Payment under stract B) .. .. .. 40,085 4 5 agreement with Use of patents .. .. .. 200 0 0 Great Northern Electricians' refcaining-fee .. .. 50 0 0 Telegraph Company £1,250 0 0 Directors'remuneration .. .. 2,000 0 0 Loss on exchange .. 3,232 6 4 Auditors'fee .. .. .. 100 0 0 4,482 6 4 Staff endowment assurance .. 815 6 5 Repairs to cable (sco Abstract C) .. 22,09117 6 219,762 7 3 Maintenance-ships' Reserve Fund .. 3,500 0 0 Australian duplicate cable subsidy .. 16,200 0 0 Income tax .. .. .. 3,092 210 Tasmanian cable subsidy .. .. 2,100 0 0 Interest and sinking fund on account Tonquin cable subsidy £5,300 0 0 of 5-per-cent. Australian subsidy Less deductions for debentures .. .. .. 25,495 0 0 seven days and a Interest on 4-per-cent. mortgage de- half total interrupbenture stock .. .. .. 6,400 0 0 tion .. .. 217 15 11 Expenses in connection with duplex- 5,082 4 1 ing Singapore-Banjoewangie sec- Malacca cable subsidy .. .. 200 0 0 tion .. .. .. .. 1,816 13 0 Macao cable subsidy .. .. 250 0 0 Expenses in connection with Chinese Transfer-fees .. .. .. 63 17 6 and Australian negotiations .. 613 11 0 Japanese Relief Fund .. .. 105 0 0 Balance .. .. .. .. 131,821 12 7 £243,658 8 10 £243,658 8 10 Third interim dividend of 1891, 2s. 6d. per share, paid 15th January, 1892 31,250 0 0 Balance down .. .. .. 131,82112 7 Proposed final dividend of 2s. 6d. per Balance of Revenue Account to 30th share for 1891, payable sth May, June, 1891 .. .. .. 92,665 9 7 1892 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable sth May, 1892 .. .. 50,000 0 0 Balance to Reserve Fund .. .. 111,987 2 2 £224,487 2 2 £224,487 2 2

Abstracts .relating to Bevenue Account fok the Half-year ended 31st Decembek, 1891. Abstract A. Statement of Genebal Expenses in London. £. s. d. Salaries and wages .. .. .. .. .. .. 2,672 8 10 Office expenses .. .. .. .. .. .. .. 913 14 0 Rent, taxes, &o. .. .. .. .. .. .. 909 -16 6 Stationery and printing .. .. .. .. .. .. 261 10 10 Postage, bill, and other stamps .. .. .. .. .. 235 4 1 Advertising .. .. .. .. .. .. .. 21 3 0 Legal expenses .. .. .. .. .. .. .. 37 9 8 Repairs and renewals to furniture, &o. .. .. .. .. 355 14 2 Agencies .. .. .. .. .. .. .. 65 0 0 Per Revenue Account .. .. .. .. £5,472 1 1 Abstract B. Statement of General Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 26,714 8 8 Travelling-expenses .. .. .. .. .. .. 1,621 13 0 Rent, taxes, house-allowances, &c. .. .. .. .. .. 4,240 0 9 Expenses of electric lighting at stations ~ .. .. .. 508 611 Provision- and ration-allowances .. .. .. .. .. 910 5 7 Maintenance and renewals of instruments and electrical apparatus .. .. 967 0 6 Expenses of land-lines .. .. .. .. .. .. 367 12 3 Repairs and renewals of furniture, fittings, &c ~ .. .. .. 1,035 2 5 Repairs to buildings .. .. .. .. .. .. 579 11 1 Insurances at stations ~ .. . i .. .. .. 224 8 7 Stationery and printing .. .. . * .. .. .. 751 6 8 Office and message postages .. .. .. .. .. 187 10 1 Office and petty expenses .. .. .. .. .. .. 720 17 5 Medical attendance .. .. .. .. .. .. 554 3 9 Service messages .. .. .. .. .. .. 118 7 2 Expenses of Porthcurno Sohool .. .. .. .. .. 250 0 0 Foreign agencies .. .. . * .. . ■ .. 145 16 8 Advertising at stations .. .. ~ .. .. .. 10 8 0 Messengers' uniforms .. .. .. .. .. .. 56 12 11 Income-tax at stations .. .. .. .. .. .. 121 12 0 Per Revenue Aooount ~ .. .. .. £40,085 i 5

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Abstract G. Expenses attending Maintenance of Cables. £ B- d. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating 137 days, after deducting expenses of ship whilst engaged on partial renewal of Hong-kong-Tonquin cable .. .. .. .. .. .. 4,768 14 4 Expenses of s.s. " Sherard Osborn " during remainder of six months :. .. 2,057 11 3 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating seventy-five days, after deducting expenses of ship whilst engaged on the partial renewal of the Madras-Penang cable, recovery of Rangoon-Penang cable, and laying Penang-Sumatra cable .. .. .. .. .. 2,043 11 8 Expenses of s.s. " Recorder " during remainder of six months .. .. 3,983 16 1 Cable, expended on repairs, and sundry expenses at stations, after deducting value of pieked-up cable .. .. .. .. .. .. 1,922 0 11 Insurance of cable on board ships .. .. .. .. .. 678 1 0 Expenses of cable depot at Singapore .. .. .. .. 1,198 2 3 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of ship .. .. .. 5,440 0 0 £22,091 17 6

General BesekveJFund, 31st December, 1891. Dr. £ s. d. Or. & «. d. To Cost of Penang-Sumatra cable .. 14,924 6 5 By Balance of Reserve Fund at 30th June, Further expenses in connection with 1891 .. .. .. .. 500,860 4 8 partial renewal of Hongkong-Ton- Interest received during half-year .. 7,158 210 quin cable .. .. .. 27,659 4 11 Balance transferred from Revenue AcFurther expenses in connection with count to 31st December, 1891 .. 111,987 2 2 partial renewal of Madras-Penang cable .. .. .. .. 4,443 16 3 Balance of cost of Madras - Penang duplicate cable .. .. .. 144,135 14 9 The following amounts for new cables and cable renewals have from time to time been charged against the Reserve and Revenue Accounts: — Rangoon-Penang cable,lB77 £156,761 8 1 Rangoon-Penang cable renewals, 1884-85 and 1887 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,07110 0 Singapore-Batavia cable renewal, 1881 .. .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887--88 .. .. .. 59,677 1 11 Victoria-Tasmania duplicate cable, 1885 .. 31,190 5 0 Penang-Singapore cable renewal, 1886 .. .. 53,245 3 8 Hongkong - Saigon cable partial renewals, 1889-90 15,880 19 9 Western Australia cable, 1889-90 .. .. 119,898 0 5 New Zealand duplicate cable, 1890 .. .. 188,433 15 6 Madras-Penang partial renewal, 1890-91 .. 91,896 1 4 Hongkong-Tonquin partial renewal, 1890-91 .. 34,328 1 0 Madrae-Penang duplicate cable, 1890-91.. ' ..244,135 14 9 Penang - Sumatra cable, 1891 .. .. .. 14,924 6 5 £1,153,736 0 5 Balance carried down .. .. .. 428,842 7 4 £620,005 9 8 £620,005 9 8 Balance as per balance-sheet ..£428,842 7 4

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Balance-sheet, 31st Decembeb, 1891. Dr. £ s. a. Cr. & s. d To Capital— By Capital expendi--300,000 shares at ture, as per £10 each .. £3,000,000 0 0 last account £8,011,161 0 9 Less 50,000 shares Add cost of land at £10 each, un- and new buildissued .. .. 500,000 0 0 ings in Tas2,500,000 0 0 mania, Singa-5-per-cent. Austra- pore, Java, and lian subsidy de- Malacca .. 7,880 S 1 bentures— 3,865 debentures 3,019,041 310 of £100 each, as Less transferred per last account £386,500 0 0 from Australian Less 320 deben- 5-per-cent. subtures drawn Ist sidy debenture April, 1891, for sinking fund .. 32,000 0 0 payment Ist July, —2,987,041 3 10 1891 .. .. 32,000 0 0 Maintenance-ships, as per last account 66,449 14 10 354,500 0 0 Investments on account of reserve 4-per-cent. mortgage debenture stock 320,000 0 0 funds (see Abstract D) .. 476,231 110 Trustees for 5-per-cent. Australian 3,174,500 0 0 subsidy debentures .. .. 9,278 8 3 Reserve funds— Spare cable and other stores .. 60,94112 0 General reserve .. .. .. 428,842 7 4 Traffic and other debit balances .. 97,038 14 0 Maintenanoe-ships'reserve .. 41,490 16 11 Bills receivable .. .. .. 43,256 4 1 Insurance reserve for maintenance- Remittances in transit .. .. 15,932 15 1 ships and cables .. .. 52,772 2 3 Cash at banker's and in hand .. 120,152 17 2 Sinking fund—Australian subsidy debenture sinking fund .. .. 22,573 8 3 Traffic and other credit balances .. 37,528 2 4 Debenture interest accrued and unpaid 5,200 0 0 Proprietors for dividends — Unclaimed dividends .. .. 915 14 0 Third interim dividend of 2s. 6d. per share, paid 15th January, 1892 .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable sth May, 1892 31,250 0 0 Proposed bonus of 4s. per share, payable sth May, 1892 .. .. 50,000 0 0 £3,876,322 11 1 £3,876,322 11 1 Audited and found correct. Henry Dever, F.C.A., ) . ■~, London, 14th April, 1892. Wblton, Jones, and Co., J ilualTOrs - Absteact D. LIST OF INVESTMENTS ON ACCOUNT OF EESEEVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2§-per-cent. Consols .. .. .. .. ..Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 5,000 Governments Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. .. „ 5,200 9 10 15,000 India 3-per-eent. stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stook .. .. .. „ 25,968 15 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stook .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. , 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. .. 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. . 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed (1S87) .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per-cent. debentures .. .. .. » 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures .. .. , 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds (1874) ..Costing 10,420 19 9 145,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885) .. „ 10,375 17 6 £12,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinking fundbonds .. .. .. .. .. .. „ 15,059 11 3

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68

Railway Debenture and Guaranteed Stocks. « a 7,500 Caledonian Railway 4-per-cent. debenture stook .. .. ..Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stook .. ~ „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stook .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent-charge stock .. .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guarantee stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S.C. Railway 4|-per-cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guaranteed stock „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4J-per-cent. debenture stock „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. ■■ „ 21,836 18 6 5,110 Metropolitan District Railway 4i-per-oent. Pulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stook .. .. „ 5,503 15 7 14,500 North British Railway 4-per-cent. debenture stock .. .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent. debenture stock .. .. .. 5,578 12 9 £476,231 1 10

Five-per-Cent. Austealian Government Subsidy Debentures. Numbers of 337 Debentures of £100 each drawn on the 4th April, 1892, for Payment at Messrs. Barclay, Bevan, and Co., 54, Lombard Street, E.C, on Ist July, 1892. 3 608 1039 1571 1970 2509 2953 3350 3931 4354 4990 5610 5941 23 623 1045 1584 1993 2513 2955 3410 3979 4357 5041 5634 5945 78 636 1070 1600 2033 2521 2991 3437 3980 4362 5097 5646 5954 88 680 1096 1616 2051 2538 3008 3461 3990 4383 5112 5648 5978 100 692 1121 1619 2054 2542 3014 3487 4011 4420 5126 5655 5994 129 699 1122 1638 2058 2545 3034 3505 4015 4446 5132 5682 6023 164 712 1153 1644 2063 2567 3051 3522 4061 4484 5144 5687 6075 190 743 1161 1650 2096 2582 3056 3529 4075 4529 5195 5699 6143 198 ' 745 1179 1705 2177 2604 3071 3579 4080 4534 5198 5710 6172 255 751 1247 1707 2180 2625 3082 3594 4093 4692 5210 5715 6205 340 762 1274 1713 2220 2653 3108 3637 4107 4739 5228 5764 6206 359 779 1287 1744 2245 2661 3109 3696 4139 4741 5233 5769 6219 380 782 1317 1768 2255 2700 3119 3717 4150 4797 5237 5773 6247 397 807 1319 1786 2307 2702 3139 3728 4172 4799 5238 5789 6254 401 825 1321 1790 2316 2732 3186 3742 4174 4821 5257 5790 6255 437 838 1380 1793 2334 2778 3191 3764 4176 4829 5310 5795 6298 443 874 1411 1796 2343 2787 3203 3774 4206 4831 5313 5810 6299 447 878 1415 1838 2345 2797 3222 3811 4258 4840 5321 5840 6301 489 891 1421 1873 2381 2811 3224 3836 4287 4845 5331 5851 6306 498 901 1445 1911 2387 2812 3264 3855 4294 4891 5376 5855 6332 505 925 1453 1925 2390 2836 3268 3858 4307 4953 5400 5856 6350 531 948 1472 1929 2412 2852 3290 3874 4309 4956 5417 5875 6354 562 963 1520 1935 2429 2865 3292 3895 4318 4957 5509 5882 6357 581 976 1529 1950 2459 2875 3326 3926 4325 4959 5520 5894 6362 598 1001 1555 1954 2469 2889 3328 3928 4331 4966 5540 5919 6400 602 1015 1564 1965 2477 2928 3348 3929 4342 4984 5592 5921

Half-year ended 30th June, 1892. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

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Report and Accounts of the Dibectobs for the Half-year ended 30th June, 1892, to be submitted to the Thirty-eighth Ordinary General Meeting, 2nd November, 1892. 1. The usual statements of account for the half-year ended 30th June, 1892, are herewith submitted. 2. The gross receipts, including Government subsidies, have amounted during that period to £246,988 16s. 6d., against £264,878 6s. lid. for the corresponding half-year of 1891. 3. The working-expenses, including £26,359 9s. sd. for cost of repairs to cables and expenses of ships, absorb £79,281 11s. 10d., against £71,476 15s. Bd. for the corresponding period of 1891, leaving a balance of £167,707 4s. Bd. From this is deducted £3,041 2s. lid. for income-tax, £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, leaving £132,771 Is. 9d. as the net profit for the half-year. 4. Two quarterly interim dividends of 1J per cent, each, amounting to £62,500, have been paid for the half-year, leaving £70,271 Is. 9d. to be carried forward. 5. The contract, referred to in the last report, for the manufacture and laying on account of the Netherlands-Indian Government of a submarine cable between Acheen and the company's system at Sumatra, has been carried out to the satisfaction of the Government, and the line opened for traffic. 6. During the half-year under review a further length of 443 knots of the Eangoon-Penang cable was picked up, mostly in good condition, and taken into stock, making, with the cable previously recovered, a total of 825 knots out of 855 knots originally laid. The value of the recovered cable is estimated at £42,324, and, after crediting capital expenditure with £20,000, the amount originally taken from capital towards the cost of the cable, the balance of £22,324 has been placed to the credit of the General Reserve Fund, as shown on page 7 of the accounts. 7. With a view to strengthening the system a triplicate cable has been laid out of stock between Penang and Singapore. The Foochow-Shanghai section has also been partially renewed, and the route slightly altered at the mouth of the Yangtsze Kiang Eiver, where interruptions from ships' anchors were becoming frequent. The cost of these operations, amounting to £25,974 and £5,307 respectively, has been debited to the General Reserve Fund. 8. An arrangement has been entered into with the Government of New Zealand for reducing the tariffs over the New Zealand cables from Bs. 6d. to 2s. per ten words for intercolonial telegrams, and from Is. to 3d. per word for international telegrams, the Government guaranteeing the company against three-fourths risk of any loss that may arise from the reductions, and the company bearing the remaining one-fourth. It has also been arranged for the Government of New Zealand to join in the Australian guarantee and receive the benefit of the reduced rates with Australia; but, owing to the losses during the first year of the experimental tariff having been greater than was anticipated by the colonies, the guaranteeing Governments have requested the company to increase the charges for ordinary telegrams by 9d. per word, making the rates between Europe and Australasia as follows : 4s. 9d. per word for South and West Australia, 4s. 10d. per word for Victoria, 4s. lid. per word for New South Wales, ss. 2d. per word for New Zealand, ss. sd. per word for Tasmania, 9s. sd. per word for Queensland. The changes of tariff will probably take effect from the Ist December next. John Pendeb, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 24th October, 1892. Revenue Account fob the Half-yeab ended 30th June, 1892. Dr. £ s. d. Or. £ «■ dTo General expenses in London (see Ab- By Message and other receipts .. .. 232,123 12 5 stractA).. .. .. .. 5,461 13 1 Less payment under General expenses at stations (see Ab- agreement with Great straotß).. .. .. .. 40,885 13 0J Northern Telegraph Use of patents .. .. .. 100 0 0 Company .. ..£1,250 0 0 Electricians'retaining-fee .. .. 50 0 0 Less loss on exchange 8,300 0 11 Directors'remuneration .. .. 2,000 0 0 9,550 011 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. .. 824 16 4 222,873 11 6 Repairs to cables (see Abstract C) .. 26,359 9 5 Australian duplicate cable subsidies.. 16,200 0 0 Maintenance-ships' Reserve Fund .. 3,500 0 0 Tasmanian cable subsidy .. .. 2,100 0 0 Income-tax .. .. .. 3,041 211 Tonquin „ .. .. 5,300 0 0 Interest and sinking fund on account Malacca „ of 5-per-cent. Australian subsidy de- Macao „ • • • • 250 0 0 bentures .. .. .. 25,495 0 0 Transfer fees .. •• •• 65 5 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance 132,771 1.9 £246,988 16 6 . £246,988 16 6 10—1. 7.

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70

Dr. £ a. d. Cr. £ s. d. To First interim dividend of 1892, 2s. 6d. per share, paid 15th July, 1892 .. 31,250 0 0 Second interim dividend of 1892, 2s. 6d. per share, paid 15th October, 1892 .. 31,250 0 0 Balance .. .. .. .. 70,271 1 9 By Balance down .. .. .. 132,771 1 9 £132,771 1 9 £132,771 1 9 Abstracts belating to Eevenue Account foe the Half-year ended 30th June, 1892. Abstract A. Statement of Genebal Expenses in London. g Salaries and wages .. .. .. .. .. .. 2,893 9 10 Offioe expenses .. .. .. .. .. .. .. 823 11 3 Rent, taxes, &o. .. .. .. .. .. .. .. 904 2 4 Stationery and printing .. .. .. .. .. .. 275 13 3 Postage, bill, and other stamps .. .. .. .. .. 182 10 7 Advertising .. .. .. .. .. .. .. 99 3 2 Legal expenses .. .. .. .. .. .. .. 50 1 0 Repairs and renewals to furniture, &o. .. .. .. .. .. 233 1 8 Per Revenue Acoount .. .. .. .. .. £5,461 13 1 Abstract B. Statement of Genebal Expenses at Stations. £ s d Salaries and wages .. .. .. .. .. .. 27,727 17 10 Travelling-expenses .. .. .. .. .. .. 1,573 9 9 Rent, taxes, house-allowances, &c, .. .. .. .. .. 4,152 16 8 Expenses of electric lighting at stations .. .. .. .. 573 5 3 Provision- and ration-allowances .. .. .. .. .. 873 2 1 Maintenance and renewals of instruments and electrical apparatus .. .. 420 11 3 Expenses of land-lines .. .. .. .. .. .. 342 7 11 Repairs and renewals of furniture, fittings, &o. .. .. .. .. 672 8 4 Repairs to buildings .. .. .. .. .. .. 313 17 8 Insurances at stations .. .. .. .. .. .. 216 18 5 Stationery and printing .. .. .. .. .. .. 1,697 9 5 Office and message postages .. .. .. .. .. .. 170 4 6 Office and petty expenses .. .. .. .. .. .. 778 17 5 Medical attendance .. .. .. .. .. .. 578 17 4 Service messages .. .. .. .. .. •■• .. 105 2 3 Expenses of Porthourno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 179 3 4 Advertising at stations .. .. .. .. .. .. 86 5 2 Messengers' uniforms .. .. .. .. .. .. 52 18 5 Income-tax at stations .. .. .. .. .. .. 120 0 0 Per Revenue Account .. .. .. .. .. £40,885 13 0 Abstract C. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggre- £ s. d. gating seventy-seven days, after deducting expenses of ship whilst engaged on Penang-Singapore triplicate and Rangoon-Penang cables £2,234 0 0 Expenses of s.s. " Sherard Osborn " during remainder of six months .. 3,975 9 5 6,209 9 5 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating sixty-nine days, after deducting expenses of ship whilst on charter to the Netherlands-Indian Government .. .. ..£3,878 17 2 Expenses of s.s. " Recorder " during remainder of six months .. 4,361 15 3 8,240 12 5 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. .. 5,246 19 6 Insurance of cable on board ships .. .. .. .. .. 635 19 8 Expenses of cable depot at Singapore .. .. .. .. .. 1,912 0 5 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of the ship .. .. .. 2,560 0 0 Depreciation of cable stores .. .. .. .. .. .. 1,554 8 0 Per Revenue Account .. .. .. £26,359 9 5

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General Beservb Fund, 30th June, 1892. Dr. £ s. a. Cr. £ s. d. To Cost of Singapore-Penang triplicate cable 25,974 19 4 By Balance of Beserve Fund at 31st DeCost of partial renewal of the Shang- cember, 1891 .. .. .. 428,842 7 4 hai-Poochow cable .. .. 5,307 13 10 Interest received during half-year .. 6,758 9 2 The following amounts for new cables and Value of Cfible recovered from Ranoable renewals have from time to time goon-Penang section after crediting been charged against the Beserve and capital expenditure with £20,000 .. 22,324 3 5 Revenue Accounts:— Rangqon-Penang cable, 1877 .. .. £156,761 8 1 Less value of cable recovered, and credited to Beserve Fund, 1892 22,324 3 5 134,437 4 8 Bangoon - Penang cable renewals, 1884-85 and 1887 .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,07110 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 .. 31,190 5 0 Penang-Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon oable partial renewals, 1889-90 15,880 19 9 Western Australia cable, 1889-90 .. .. 119,893 0 5 New Zealand duplicate cable, 1890 .. ' .. 188,433 15 6 Madras-Penang partial renewal, 1890-91 .. 91,896 1 4 Hongkong-Tonquin partial renewal, 1890 and 1891 .. .. 34,328 1 0 Madras-Penang duplicate cable, 1890-91 .. 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 .. 25,974 19 4 Shanghai-Foochow partial renewal, 1892 .. 5,307 13 10 £1,162,694 10 2 Balance carried down.. .. .. 426,642 6 9 £457,924 19 11 £457,924 19 11 Balance as per balance-sheet .. £426,642 6 9 Balance-sheet, 30th June, 1892. Dr. Cr. To Capital— £ s. d. By Capital expenditure £ s. d. 300,000 shares of as per last account £2,987,041 310 £10 each ..£3,000,000 0 0 Add cost of land and ■ Less 50,000 shares buildings in New of £10 each, un- Zealand .. 723 13 6 issued .. 500,000 0 0 . 2,500,000 0 0 2,987,764 17 4 5-per-cent. Australian subsidy deben- Less value of cable tures—■ recovered from 3,545 debentures of £100 each, as Rangoon-Penang per last account .. .. 354,500 0 0 section charged to 4-per-cent. mortgage debenture stock 320,000 0 0 capital in June, 1877 .. .. 20,000 0 0 3,174,500 0 0 ■ 2,967,764 17 4 Beserve funds— Maintenance-ships, as per last acGeneral reserve .. .. 426,642 6 9 count.. .. .. .. 66,449 14 10 Maintenance-ships'reserve .. 45,716 18 7 Insurance reserve for maintenance- 3,034,214 12 2 ships and cables .. 53,805 12 8 Investments on account of reserve Sinking fund— funds (see Abstraot D) .. .. 476,231 110 Australian subsidy debenture sink- Trustees for 5-per-oent. Australian ing fund .. .. .. 39,529 1 11 subsidy debentures .. .. 35,529 1 1 Traffic and other credit balances .. 58,625 19 5 Spare cable and other stores .. 95,299 6 6 Debenture interest accrued and un- Traffic and other debit balances .. 128,324 1 5 paid .. .. .. .. 5,201 19 0 Bills receivable .. .. .. 59,282 0 0 Proprietors for dividends— Remittances in transit .. .. 16,230 0 0 Unclaimed dividends .. .. 1,525 6 6 Cash at banker's and in hand .. 93,208 2 9 First interim dividend of 2s. 6d. per share, paid 15th July, 1892 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, paid 15th October, 1892 .. .. .. 31,250 0 0 Revenue account balance .. .. 70,271 1 9 £3,938,318 6 7 £3,938,318 6 7 --—r ii i i - Audited and found correct. mi ■ i r i Henky Devee, F.C.A., ) AnditoM London, 15th October, 1892. Welton, Jones, and Co., J AUU,corb -

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72

Abstract D. LIST OF INVESTMENTS ON ACCOUNT OF RESERVE FUNDS. £ Government and Miscellaneous. £ s. A. 31,000 2f-per-cent. Consols .. .. .. .. .. C jsting 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 1,500 Egyptian Government 3-per-oent. guaranteed bonds .. .. .. „ 1,429 1 0 5,000 Governments Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. .. „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .",,..', 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock .. .. .. „ 25,968 15 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Eailway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock, 1882 .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. .. 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5 per-cent. debentures .. „ 5,563 17 6 5,000 Natal 4-per-cent, consolidated stock, inscribed (1887) .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3£-per-cent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-percent, debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per-cent. debentures .. .. .. „ 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures .. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds (1874) ~. Costing 10,420 19 9 $45,000 Baltimore and Ohio Kailroad Company 5-per-cent. bonds (1885) .. „ 10,375 17 6 £12,600 Pennsylvania Railroad Company 6 per-cent. consolidated mortgage sinking fund bonds .. .. .. .. .. .. „ 15,059 11 3 Railway Debenture and Guaranteed Stocks. 7,500 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4 per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,502 Great Eastern Railway 4-per-cont. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S.C. Railway 4J-per-eent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ .10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4£-percent. deb. stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-percent, debenture stock .. .. .. 21,836 18 6 5,110 Metropolitan District Railway Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. „ 5,503 15 7 14,500 North British Railway 4-per-cent. debenture stock .. .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 (j 8,000 North E. Railway 4-per-eent. con. pref. stock .. ■ .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent, debenture stock .. .. .. „ 5,576 12 9 £476,231 1 10

JjYve-per-Cent. Australian Government Subsidy Debentures. Numbers of 337 Debentures of £100 each drawn on 4th April, 1892, for Payment at Messrs, Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the Ist July, 1892. 3 608 1039 1571 1970 2509 2953 3350 3931 4354 4990 5610 6941 23 623 1045 1584 1993 2513 2955 3410 3979 4357 5041 5634 5945 78 636 1070 1600 2033 2521 2991 3437 3980 4362 5097 5646 5954 88 680 1096 1616 2051 2538 3008 3461 3990 4383 5112 5648 5978 ' 100 692 1121 1619 2054 2542 3014 3487 4011 4420 5126 5655 5994 129 699 1122 1638 2058 2545 3034 3505 4015 4446 5132 5682 6023 164 712 1153 1644 2063 2567 3051 3522 4061 4484 5144 5687 6075 190 743 1161 1650 2096 2582 3056 3529 4075 4529 5195 5699 6143 198 745 1179 1705 2177 2604 3071 3579 4080 4534 5198 5710 6172 255 751 1247 1707 2180 2625 3082 3594 4093 4692 5210 5715 6205 340 762 1274 1713 2220 2653 3108 3637 4107 4739 5228 5764 6206 359 779 1287 1744 2245 2661 3109 3696 4139 4741 5233 5769 6219 380 782 1317 1768 2255 2700 3119 3717 4150 4797 5237 5773 0247 397 807 1319 1786 2307 2702 3139 3728 4172 4799 5238 5789 6254 401 825 1321 1790 2316 2732 3186 3742 4174 4821 5257 5790 6255 437 838 1380 1793 2334 2778 3191 3764 4176 4829 5310 5795 6298 443 874 1411 1796 2343 2787 3203 3774 4206 4831 5313 5810 6299 447 878 1415 1838 2345 2797 3222 3811 4258 4840 5321 5840 6301 489 891 1421 1873 2381 2811 3224 3836 4287 4845 5331 5851 6306 498 901 1445 1911 2387 2812 3264 3855 4294 4891 5376 5855 6332 505 925 1453 1925 2390 2836 3268 3858 4307 4953 5400 5856 6350 531 948 1472 1929 2412 2852 3290 3874 4309 4956 5417 5875 6354 562 963 1520 1935 2429 2865 3292 3895 4318 4957 5509 5882 6357 581 976 1529 1950 2159 2875 3326 3926 4325 4959 5520 5894 6362 598 1001 1555 1954 2469 2889 3328 3928 4331 4966 5540 5919 0400 602 1015 1564 1965 2477 2928 3348 3929 4342 4984 5592 5921

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Half-year ended 31st December, 18.2. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Sir James Anderson, Francis Augustus Bevan, Esq., Charles William Earle, Esq., the Right Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Report and Accounts of the Directors for the Half-year ended 31st December, 1892, to be submitted to the Thirty-ninth Ordinary General Meeting, 19th April, 1893. 1. The usual statements of account for the half-year ended 31st December, 1892, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £247,766 19s. Id., against £243,658 Bs. 10d. for the corresponding period of 1891. 3. The working and other expenses, including £38,103 Is. Id. for cost of repairs to cables and expenses of ships, absorb £91,768 18s., against £74,314 9s. sd. for the corresponding period of 1891, leaving a balance of £155,998 Is. Id. From this is deducted £6,030 Bs. 3d. for income-tax, and £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, leaving as the net profit for the half-year £118,072 12s. 10d., which, with £70,271 Is. 9d. brought forward from the previous half-year, shows an available balance of £188,343 14s. 7d. 4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 20th instant, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent,, making a total distribution of 7 per cent, for the year 1892. The balance of £75,843 14s. 7d. has been carried to the General Eeserve Fund, which, after being credited with interest received on investments, now stands at £509,732 19s. 5. The alterations of tariff with the Australasian Colonies, to which reference was made in the last report, came into force on the Ist January last, and the result so far is encouraging. 6. Since the close of the half-year the tariffs at the stations affected by the serious depreciation in the silver currency have also been adjusted, so as to avert as far as possible the loss on exchange from which the company has so long suffered, and which during the past six months amounted to the large sum of £11,692. 7. In accordance with the provisions of the trust deed, dated the 15th May, 1879, 353 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £35,300, were drawn by lot on the 6th instant for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 8. The company's maintenance-ships have, as usual, been employed on various repairs during the half-year under review, but, owing to most of the cables being duplicated, the traffic has not been materially affected. 9. In accordance with the articles of association, Sir John Pender, G.C.M.G., M.P., and Sir James Anderson retire by rotation, and, being eligible, offer themselves for re-election. 10. The retiring auditors, Mr. Henry Dever and Messrs. Welton, Jones, and Co., also offer themselves for re-election. John Pendeb, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 10th April, 1893. Revenue Account for the Half-year ended 31st December, 1892. Dr. £ s. d. i Or. £ s. d. To Genera] expenses in London (see Ab- j By Message and other receipts .. ~ 236,597 4 10 struct A).. .. .. .. 5,657 2 2 Less payment under General expenses at stations (see Ab- agreement with Great etouctß).. .. .. .. 41,297 9 1 Northern Telegraph Use of patents .. .. .. 100 0 0 Company .. .. £1,260 0 0 Electricians' retaining-fee .. .. 50 0 0 Less loss on exchange.. 11,692 19 3 Directors'remuneration .. .. 2,000 0 0 . ■ 12,942 19 3 Auditors'fees .. .. .. 100 0 0 1 Staff endowment assurance .. .. 890 17 8 223,654 5 7 Expenses in connection with Australian Australian duplicate cable subsidy .. 16,200 0 0 negotiations .. .. .. 70 8 0 [ Tasmanian cable subsidy .. .. 2,100 0 0 Repairs to cables (see Abstract C) .. 38,103 1 1 Tonqi;m cable subsidy .. .. 5,300 0 0 Maintenance-ships' Reserve Fund .. 3,500 0 0 Malacca cable subsidy .. .. 200 0 0 Income tax .. .. .. 6,030 8 3 Macao cable subsidy .. .. 250 0 0 Interest and sinking fund on account Transfer fees .. .. .. 62 13 6 of 5-per-cent. Australian subsidy debentures.. .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 118,072 12 10 £247,766 19 1 £247,766 19 1

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Eevbxub Account— continued. Dr. £ s. d. Or. £ s. d. To Third interim dividend of 1892, 2s. 6d. By Balance down .. .. .. 118,072 12 10 per share, paid 16th January, 1893 .. 31,250 0 0 ' Balance of Revenue Account to 30th Proposed final dividend of 2s. 6d. per June, 1892 .. .. .. 70,271 1 9 share for 1892, payable 20th April, 1893 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 20th April, 1893 .. .. 50,000 0 0 Balance to Beserve Fund .. .. 75,843 14 7 £188,343 14 7 £188,343 14 7 Absteacts kelating to Eevenue Account fob the Half-yeae ended 31st Decembee, 1892. Abstract A. Statement of General Expenses in London. £ s. d. Salaries and wages .. .. .. .. .. .. 3,131 7 7 Office expenses .. .. .. .. .. 966 10 4 Kent, taxes, &c. .. .. .. .. 922 13 4 Stationery and printing .. ~ .. .. .. .. 246 2 10 Postage, bill, and other stamps .. .. .. .. .. 193 0 2 Advertising .. .. .. '.. .. .. .. 47 7 4 Legal expenses .. .. .. .. .. .. .. 27 15 0 Repairs and renewals to furniture, &c. .. .. .. .. 122 5 7 Per Revenue Account .. .. .. .. £5,657 2 2 Abstract B. Statement op General Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 27,462 5 11 Travelling-expenses .. .. .. .. .. .. 1,249 8 7 Rent, taxes, house-allowances, &c. .. .. .. .. .. 4,827 11 0 Expenses of electric lighting at stations .. .. .. .. 540 10 7 Provision-and ration-allowances .. .. .. .. .. 755 10 3 Maintenance and renewals of instruments and electrical apparatus .. .. 1,429 3 6 Expenses of land-lines .. .. .. .. .. .. 128 14 7 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 731 17 5 Repairs to buildings .. .. .. .. 1,186 6 9 Insurances at stations .. .. .. .. .. .. 225 8 1 Stationery and printing .. .. .. .. .. .. 574 10 0 Office and message postages .. .. .. .. .. 180 10 3 Office and petty expenses .. .. .. .. .. .. 764 11 8 Medical attendance .. .. .. .. .. .. 481 14 2 Service messages .. .. .. .. .. .. 154 13 7 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. 170 16 8 Advertising at stations .. .. .. .. .. .. 12 17 6 Messengers' uniforms ... .. .. .. .. 48 14 4 Income-tax at stations .. .. .. .. .. .. 122 4 3 Per Revenue Account .. .. .. .. £41,297 9 1 Abstract C. Expenses attending Maintenance of Cables. £ s. d. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating eighty-nine days .. .. .. ..£4,538 14 8 Expenses of s.s. " Sherard Osborn" during remainder of six months 3,470 1 0 8,008 IS 8 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating seventy-six days, after deducting expenses of ship whilst engaged on charter by Netherlands-Indian Government .. .. £2,632 13 5 Expenses of s.s. "Recorder " during remainder of six months .. 3,739 4 1 • 6,371 17 6 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. ~ .. .. 15,796 3 9 Insurance of cable on board ships .. .. .. .. 685 15 3 Expenses of cable depot at Singapore .. .. .. .. .. 2,118 18 5 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of the ship .. .. .. 3,880 0 0 Depreciation of cable stores .. .. .. .. 1,241 10 6 Per Revenue Aocount .. .. .. .. £38,103 1 1

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General Reserve Fund, 31st December, 1892. Dr. £ %. d. j Cr. £ 3. d. The following amounts for new cables and ) By Balance of Eeserve Fund at 30th cable renewals have from time to time June, 1892 .. .. .. 426,642 6 9 been charged against the Beserve and Interest received during half-year .. 7,246 17 8 Eevenue Accounts :— Balance transferred from Revenue Rangoon-Penang cable, Account to 31st December, 1892 75,843 14 7 1877 .. ..£156,761 8 1 Less value of cable recovered and credited to Reserve Fund, 1892 22,324 3 5 134,437 4 8 Rangoon-Penang cable renewals, 1884-85 and 1887 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,071 10 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java - Australian cables partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 .. 31,190 5 0 Penang-Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable partial renewals, 1889-90 15,880 19 9 Western Australian cable, 1889-90 .. .. 119,898 0 5 New Zealand duplicate cable, 1890 .. .. 188,433 15 6 Madras-Penang partial renewal, 1890-91 .. 91,896 1 4 Hongkong-Tonquin partial renewal, 1890 and 1891 34,328 1 0 Madras - Penang duplicate cable, 1890-91 .. 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 .. 25,974 19 4 Shanghai-Foochow partial renewal, 1892 .. 5,307 13 10 £1,102,694 10 2 Balance carried down.. .. .. 509,732 19 0 £509,732 19 0 £509,732 19 0 ' Balance as per balance-sheet .. £509,732 19 0 Balance-sheet, 31st December, 1892. Dr. Or. To Capital— £ s. d. By Capital expenditure £ s. d, 300,000 shares of as per last account £2,967,764 17 4 £10 each .. £3,000,000 0 0 Add cost of land Less 50,000 shares aud new buildof £10 each, un- ings at Flinders issued .. 500,000 0 0 and Hongkong .. 7,950 1 5 2,-500,000 0 0 5-per-cent. Australian subsidy deben- 2,975,714 18 9 tures — Less transferred 3,545 debentures of from Australian £100 each, as per 5-per-cent. sublast account .. £354,500 0 0 sidy debenture Less 337 deben- sinking fund .. 33,700 0 0 tures drawn 4th 2,942,014 18 9 April, 1892, for Maintenance-ships, as per last acpayment Ist July, count.. .. .. .. 66,449 14 10 1892 .. .. 33,700 0 0 320,800 0 0 3,008,464 13 7 4-per-eent. mortgage debenture stock 320,000 0 0 j Investments on account of reserve J funds (see Abstract D) .. .. 531,417 4 1 3,140,800 0 0 1 Trustees for 5-per-cent. Australian Reserve funds — subsidy debentures .. .. 10,270 6 9 General reserve .. .. 509,732 19 0 ! Spare cable and other stores .. 76,335 0 9 Maintenance-ships'reserve .. 50,016 19 6 Traffic and other debit balances .. 108,117 11 4 Insurance reserve for maintenance- Bills receivable .. .. .. 49,035 0 0 ships and cables .. .. 60,075 610 Remittances in transit .. .. 8,165 0 0 Sinking fund— Cash at banker's and in hand .. 135,963 10 5 Australian subsidy debenture sinking fund .. .. .. 23,565 6 9 Traffic and other credit balances .. 24,968 9 4 Debenture interest accrued and unpaid 5,205 17 0 Proprietors for dividends — Unclaimed dividends .. .. 903 8 6 Third interim dividend of 2s. 6d. per share, paid 16th January, 1893.. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable 20th April, 1893.. 31,250 0 0 Proposed bonus of 4s. per share, payable 20th April, 1893 .. 50,00) 0 0 £3,927,768 6 11 £3,927,768 6 11 ■i' —i Audited and found correct. Henry Devee, F.C.A., | . ~ London, 6th April, 1893. Welton, Jones, and Co., j Aum - or 3-

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Absteact D. LIST OP INVESTMENTS ON ACCOUNT OF BESERVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2§-per-cent. Consols .. .. .. .. .. Costing 31,708 17 8 2,500 Chilian Government 4J-per-cent. convened loan .. .. .. „ 2,512 10 4 4,600 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent Australian Government subsidy debentures .. .. „ 4,865 18 8 1,500 Egyptian Government 3-per-oent. guaranteed bonds .. .. .. „ 1,4-29 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-par-cerit. pref. shares .. „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4 per-cent. debenture stock .. .. .. .. 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock ... .. .. „ 25,968 15 0 10,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. „ 10,200 0 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribud stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. ..„ 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. „ 5,563 17*6 5,000 Natal 4-per-cent. consolidated sock, inscribed (1887) .. .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-porcmt. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-oent. inscrioed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per cent, debentures .. .. .. „ 5,050 1 11 13,500 Victorian Government 4J-per cent, debentures .. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 111 American Raihuays. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds (1874) .. Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885) .. .. „ 10,375 17 6 $25,000 Central Railroad Company of New Jersey 5-per-cent. gen. mort. coupon gold bonds .. .. .. .. .. ~ 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4j-per-oent. gen. mort. gold bonds .. .. .. .. .. .. 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds .. „ 10,075 3 0 125,000 New York Central and Hud-ion River Railroad Company 4-per-cent. gold debenture certificates of 1390 .. .. .. .. 5,256 17 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mort. sinking fund bonds .. .'. .. .. .. ... 21,062 1 1 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4-per-cent. con. mort. gold bonds (series A) .. .. .. .. „ 5,388 9 3 Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-eent. debenture stock .. .. .. 15,687 17 11 8,000 Great Eastern Railway 4-per cent, consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S.O. Railway 4|-per-cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent.-debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4£-per-cent. deb. stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J percent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 j.2,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. parl. guar. pref. stock .. .. .. „ 5,503 15 7 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North B. Railway W. Hartlepool 4-per-eent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. con. pref. stock .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent. debenture stock .. .. .. „ 5,576 12 9 £531,417 4 1

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Five-per-Cent. Austbalian Government Subsidy Debentdbes. Numbers of 353 Debentubes of £100 each drawn on 6th April, 1893, for Payment at Messrs, Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the Ist July, 1893. 24 491 890 1414 1893 2350 2714 3043 3648 4221 4702 5368 5808 56 506 905 1447 1920 2395 2715 3060 3670 4239 4715 5357 5826 117 512 919 1456 1926 2404 2725 3067 3684 4242 4759 5394 5848 121 520 929 1467 1959 2421 2726 3078 3692 4322 4772 5399 5871 149 535 934 1468 1960 2425 2736 3105 3693 4340 4784 5441 5872 150 542 956 1480 2050 2440 2744 3112 3770 4343 4838 5458 5891 151 544 965 1481 2060 2481 2766 3116 3784 4349 4865 5467 5927 181 599 1075 1491 2061 2499 2767 3205 3791 4371 4878 5470 5947 199 605 1099 1514 2077 2522 2818 3209 3856 4400 4911 5475 5962 216 607 1100 1524 2083 2548 2820 3233 3859 4453 4968 5479 6016 230 616 1141 1527 2116 2549 2823 3254 3866 4463 4972 5499 6049 246 632 1171 1549 2119 2556 2825 3258 3872 4468 4980 5507 6067 248 649 1191 1550 2124 2561 2832 3269 3879 4495 4981 5513 6072 261 652 1216 1566 2130 2563 2838 3305 3905 4511 4988 5528 6116 300 654 1217 1605 2141 2575 2846 3343 3971 4540 4989 5554 6156 316 671 1239 1610 2151 2579 2847 3355 3978 4556 4995 5566 6188 319 685 1252 1636 2153 2595 2848 3359 4019 4560 5012 5573 6204 358 695 1265 1642 2157 2596 2859 3371 4034 4572 5016 5580 6212 381 696 1273 1671 2167 2613 2860 3406 4041 4584 5023 5581 6237 383 708 1278 1715 2229 2614 2893 3464 4059 4594 5036 5587 6246 384 729 1294 1723 2232 2615 2927 3469 4076 4595 5048 5618 6256 389 741 1318 1750 2236 2652 2943 3526 4109 4600 5065 5625 6260 396 747 1322 1799 2257 2655 2957 3531 4112 4613 5098 5638 6292 404 760 1340 1811 2288 2665 2958 3561 4119 4641 5127 5641 6326 430 809 1354 1813 2293 2684 2962 3578 4146 4656 5156 5644 6348 436 836 1358 1858 2311 2690 2979 3608 4154 4667 5224 5724 6393 456 858 1402 1867 2330 2698 3009 3643 4175 4697 5245 5732 6399 490 886

Half-year ended 30th June, 1893. THE EASTEEN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors.— Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, K.C.1.E., Charles William Earle, Esq., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary.- —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Eepobt and Accounts of the Directoes for the Half-year ended 30th June, 1893, to be submitted to the Fortieth Ordinary General Meeting, Ist November, 1893. 1. The usual statements of account for the half - year ended 30th June, 1893, are herewith submitted. 2. The gross receipts, including Government subsidies, have amounted during that period to £257,986 13s. 5d., against £246,988 16s. 6d. for the corresponding half-year of 1892. 3. The working expenses, including £21,649 3s. 3d. for cost of repairs to cables and expenses of ships, absorb £78,229 19s. 3d., against £79,281 11s. 10d. for the corresponding period of 1892, leaving a balance of £179,756 14s. 2d. From this is deducted £3,968 15s. sd. for income-tax, £32,171 Is. Id. for interest on debentures, debenture stock, contribution to sinking fund and special expenditure, leaving £143,616, 17s. Bd. as the net profit for the half-year. 4. Two quarterly interim dividends of 1J per cent, each, amounting to £62,500, have been paid for the half-year under review, leaving £81,116 17s. Bd. to be carried forward. 5. The working of the Australian tariff arrangement for the second year of guarantee ended 30th April last has resulted in a loss of £43,558, as compared with £55,040 for the first year, and in accordance with the terms of the agreement one-half of the loss, or £21,779, has been made up by the guaranteeing colonies, and the other half borne by the associated companies. 6. Your directors have to record with deep regrec the lamented death, on the 7th May last, of their much esteemed and valued colleague, Sir James Anderson, who had been connected with the company since its formation. Under the powers given to them by the articles of association, they have elected Sir Albert J. Leppoc Cappel, X.C.1.8., to fill the vacancy thus occasioned. 11—I. 7.

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7. Your directors have to report that the chairman having performed the duties of managing director since the death of Colonel Glover in 1881 without salary, they have added to the chairman's remuneration the salary formerly paid to the managing director in consideration of the everincreasing duties and responsibilities falling upon the management. 8. The company's maintenance-ships have, as usual, been employed on various cable repairs during the half-year under review, as shown in Abstract C, but, owing to most of the cables being duplicated, the revenue has in no instance been materially affected. John Pbndee, Chairman. Winchester House, 50, Old Broad Street, London, 8.C., 23rd October, 1893. Eevenue Account fob the Half-yeae ended 30th June, 1893. Dr. £ s. d. Or. £ s. d. To General expenses in London (see By Message and other receipts, after deAbstract A) .. .. .. 6,684 7 5 ducting loss on exchange .. .. 233,860 3 5 General expenses at stations (see Australian duplicate cable subsidies .. 16,200 0 0 Abstract B) .. ~ .. 43,294 6 8 Tasmanian cable subsidy .. .. 2,100 0 0 Use of patents .. .. .. 100 0 0 Tonquin cable subsidy .. .. 5,300 0 0 Electricians' retaining-fee .. .. 50 0 0 Malacca cable subsidy .. .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Macao cable subsidy .. .. 250 0 0 Auditors' fees .. .. .. 100 0 0 Transfer fees .. .. .. 76 10 0 Staff endowment assurance.. .. 852 1 11 Repairs to cables (see Abstract C) .. 21,649 3 3 Maintenance ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 3,968 15 5 Interest and sinking fund on account of 5-percent. Australian subsidy debentures .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 H.M.S. "Victoria " Relief Fund .. 100 0 0 Queensland Floods Relief Fund .. 100 0 0 Expenses in connection with Chinese concessionary negotiations .. 76 1 1 Balance .. .. .. .. 143,616 17 8 £257,986 13 5 £257,986 13 5 First interim dividend of 1893, 2s. 6d. per share, paid 15th July, 1893 .. 31,250 0 0 Second interim dividend of 1893,25. 6d. per share, paid 14th October, 1893.. 31,250 0 0 Balance .. .. .. .. 81,116 17 8 By Balance down .. .. .. 143,616 17 8 £143,616 17 8 £143,616 17 8 Absteacts belating to Eevenue Account foe the Half-year ended 30th June, 1893. Abstract A. Statement of Genebal Expenses in London. £ s. d. Salaries, including managing director's remuneration .. .. .. 3,133 5 6 Wages.. .. .. .. .. .. .. .. 192 14 2 Office expenses .. .. .. .. .. .. .. 977 12 1 Rent, taxes, &c. .. .. .. .. .. .. .. 938 10 2 Stationery and printing .. .. .. .. .. .. 335 0 2 Postage, bill, and other stamps .. .. .. .. .. 185 011 Advertising .. .. .. .. .. .. .. 106 4 9 Legal expenses .. .. .. .. .. .. .. 48 8 0 Repairs and renewals to furniture, &c. .. .. .. .. .. 767 11 8 Per Revenue Account .. .. .. .. £6,684 7 5

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Abstract B. Statement of Geneeal Expenses at Stations. £ s. d. Salaries and wages .. .. ~ .. .. .. 26,800 0 7 Travelling-expenses .. .. .. .. .. .. 1,297 11 2 Rent, taxes, house-allowances, &c. .. .. .. .. .. 4,972 711 Expenses of electric lighting at stations .. .. .. .. 741 15 1 Provision- and ration-allowances .. .. .. .. .. 805 0 8 Maintenance and renewals of instruments and electrical apparatus .. .. 1,616 8 8 Expenses of land-lines .. .. .. .. .. .. 107 4 8 Repairs and renewals of furniture, fittings, &o. .. .. .. .. 1,070 6 7 Repairs to buildings .. .. .. .. .. .. 1,336 4 7 Insurances at stations .. .. .. .. .. .. 244 7 9 Stationery and printing .. .. .. .. .. .. 1,973 14 1 Office and message postages.. .. .. .. .. .. 197 17 7 Office and petty expenses .. .. .. .. .. .. 650 6 3 Medical attendance ~ .. .. .. .. . t 597 6 11 Service messages .. .. .. .. .. 137 16 4 Expenses of Porthcurno Sohool .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. . ■ .. 170 16 8 Advertising at stations .. .. .. .. .. .. 117 010 Messengers' uniforms .. .. .. .. .. .. 41 14 9 Income-tax at stations .. .. .. .. .. .. 106 5 7 Per Revenue Account .. .. .. .. ..£43,294 6 8 Abstract C. Expenses attending Maintenance of Cables. £ s. d. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating seventyseven days, after deducting expenses of ship whilst engaged on picking up MadrasPenang old cable .. .. .. • .. .. .. 2,595 10 2 Expenses of s.s. " Sberard Osborn " during remainder of six months .. .. 3,946 9 3 Expenses of s.s. "Recorder" effecting numerous repairs, aggregating thirty-eight days, aftor deducting expenses of ship whilst engaged on picking up SaigonHongkong old cable .. .. .. .. .. .. 1,532 9 5 Expenses of s.s. " Recorder " during remainder of six months .. .. 4,515 9 2 Cable and pipe-line expended on repairs and sundry expenses at stations after deducting value of picked-up cable .. .. .. .. .. 3,910 211 Insurance of cable on board ships .. .. .. .. .. 680 15 9 Expenses of cable depot at Singapore .. .. .. .. .. 1,783 13 10 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of the ship .. .. .. 1,120 0 0 Depreciation of cable stores .. .. .. .. .. .. 1,564 12 9 ' £21,649 3 3 General Besebve Fund, 30th June, 1893. Dr. I Gr. £ s. d. The following amounts for new cables and cable renewals By Balance of Reserve Fund at 31st Dehave from time to time been charged against the Reserve cember, 1892 .. .. .. 509,732 19 0 and Revenue Accounts: — Interest received during half-year .. 7,475 2 10 £ s. d. Value of cable picked up on Hong-Rangoon-Penang cable, 1877 .. .. 134,437 4 8 kong-Saigon renewals .. .. 1,271 i 8 Rangoon-Penang cable renewals, 1884-85 Value of cable picked up on Madrasand 1887 .. .. .. .. 21,175 4 2 Penang renewals .. .. 737 15 9 Hongkong-Manila cable, portion of cost, 1880 .. .. .. .. 16,071 10 0 Singapore-Batavia cable, renewal, 1881 .. 64,363 11 5 Java-Australian cables, partial renewals, 1884 and 1888 .. .. .. 41,754 17 0 Singapore-Saigon cable, renewals, 1884-85, and 1887 and 1888 .. .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 31,190 5 0 Penang-Singapore cable, renewal, 1886 .. 53,245 3 8 Hongkong - Saigon cable, partial renewals, 1889-90 and 1892 .. .. £15,880 19 9 Less value of cable recovered and credited to ■ Reserve Fund, 1893 .. 1,271 4 8 14,609 15 1 Western Australia cable, 1889-90 ..119,898 0 5 New Zealand duplicate cable, 1890 .. 188,433 15 6 Madras-Penang, partial renewal, 1890-91 ..£91,896 1 4 Less value of cable recovered and credited to Reserve Fund, 1893 .. 737 15 9 91,1682,5 7 Hongkong-Tonquin, partial renewal, 1890 and 1891 .. .. .. .. 34,328 i 0 Madras-Penang duplicate cable, 1890-91 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Sijigapore-Penang triplicate cable, 1892 .. 25,974 19 4 Shanghai-Fooehow, partial renewal, 1892 5,307 13 10 £1,160,685 9 9 Balance carried down. , .. .. £519,217 2 3 £519,217 2 3 £519,217 2 3 Balance as per balance-sheet ..£519,217 2 3

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80

Balance-sheet, 30th June, 1893. Dr. Or. To Capital— £ s. d. By Capital expenditure, £ s. d. 300,000 shares of as per last account £2,942,014 18 9 £10 each .. £3,000,000 0 0 Add cost of cottage Less 50,000 shares at Manila .. 100 0 0 of £10 each, un- 2,942,114 18 9 issued .. 500,000 0 0 Maintenance-ships, as per last account 66,449 14 10 2,500,000 0 0 I 5-per-cent. Australian subsidy deben- 3,008,564 13 7 tures— Investments on account of reserve 3,208 debentures of £100 each, as funds (see Abstract D) .. .. 535,998 13 0 per last account .. .. 320,800 0 0; Trustees for 5-per-cent. Australian 4-per-cent. mortgage debenture stock 320,000 0 0 subsidy debentures .. .. 37,380 12 11 Spare cable and other stores .. 91,531 8 6 3,140,800 0 0' Traffic and other debit balances .. 119,819 17 5 Reserve funds— Bills receivable .. .. .. 37,135 0 0 General reserve .. .. .. 519,217 2 0 : Remittances in transit .. .. 22,376 5 3 Maintenance ships'reserve .. 54,392 5 5 Cash at banker's and in hand .. 141,463 17 7 Insurance reserve for maintenanceships and cables .. .. 61,232 10 11 Sinking fund— Australian subsidy debenture sinking fund .. .. . 41,380 12 11 Traffic and other credit balances .. 27,138 1 1 Debenture interest accrued and unpaid 5,187 10 6j Proprietors for dividends — Unclaimed dividends .. .. 1,305 7 6 First interim dividend of 2s. 6d. per share, paid 15th July, 1893 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, paid 14th October, 1893 31,250 0 0 Revenue account balance .. .. 81,116 17 8 £3,994,270 8 3 £3,994,270 8 3 Audited and found correct. XX■Jγxtt>tt "T^ Tji -it TjT v> Tp A \ London, 20th October, 1893. Welton, Jones, and Co.J Audltors,

Abstract D. LIST OF INVESTMENTS ON ACCOUNT OF BESEBVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2§-per-cent. Consols .. .. . .. .. .. Costing 31,708 17 3 2,500 Chilian Government 4J per cent, converted loan .. .. .. „ 2,512 10 4 9,100 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. „ 9,447 7 7 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe Tel. and Trust Company (Limited) 6-percent, pref. shares 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-oent. debenture stock .. .. .. .. „ 5,200 910 15,000 India 3-percent, stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J per-cent. stock .. .. .. „ 25,968 15 0 10,000 Paoific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. 10,200 0 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock 2,703 14 8 Colonial. 9,000 Canadian Paoific Railway 5-percent, first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) 4,796 6 9 5,000 Ceylon Government 4-percent, inscribed stock .. .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. ~ 4 14 g 5,000 Metropolitan Gas Company of Melbourne 5 per-cent. debentures 5 563 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed (1887) .. .. .. 4 993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock .. 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. „ 10 169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. ,' 19 8 5,000 Tasmanian Government 4-per-cent. debentures .. .. ~ „ 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures .. .. 14,314 5 0 5,000 Victorian Government 4-per-oent. debenture bonds .. .. ~ 5 Q5O 1 11

81

1.—7

American Railways. £ s. d. 8,400 Baltimore and Ohio Eailroad Company 6-per-cent. ster. bonds (1874) .. Costing 10,420 19 9 $45,000 Baltimore and Ohio Eailroad Company sper-cent. bonds (1885).. .. „ 10,375 17 6 $25,000 Central Railroad Company of New Jersey 5-per-oent. general mortgage coupon gold bonds .. .. .. .. .. 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4|-per-cent. general mortgage gold bonds .. .. .. .. .. „ 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds .. „ 10,075 3 0 $25,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 .. .. .. .. 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinkingfund bonds .. .. .. .. .. ."..".» 21,062 1 1 $25,000 Pittaburg, Cincinnati, Chicago, and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds (Series A) .. .. .. „ 5,388 9 3 Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-por-eent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irred. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-percent, consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4 percent, debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guar. stock .. „ 5,516 10 0 9,750 London, Brighton, and South Coast Railway 4J-per-cent. perpetual guaranteed debenture stock .. .. .. .. .. 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincoln Railway 4j-per-cent. debenture stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J-per cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perpetual guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perpetual guaranteed preference stock .. „ 5,503 15 7 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North E. Railway, West Hartlepool, 4-per-cent. preference stock .. „ 5,466 12 6 8,000 North E. Railway, West Hartlepool, 4-per-cent. consolidated pref. stock .. „ 8,748 6 3 5,000 North E. Railway, West Hartlepool, 4-per-cent. debenture stock .. „ 5,576 12 9 £535,998 13 0

Five-pee-Cent. Austealian Govebnment Subsidy Debentures. Numbebs of 353 Debentuees of £100 each drawn on 6th April, 1893, for Payment at Messrs Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the Ist July, 1893. 24 491 890 1414 1893 2350 2714 3043 3648 4221 4702 5368 5808 56 506 905 1147 1920 2395 2715 3060 3670 4239 4715 5887 5826 117 512 919 1456 1926 2404 2725 3067 3684 4242 4759 5394 5848 121 520 929 1467 1959 2421 2726 3078 3692 .4322 4772 5399 5871 149 585 934 1468 1960 2425 2736 3105 3693 4340 4784 5441 5872 150 542 956 1480 2050 2440 2744 3112 3770 4343 4838 5458 5891 151 544 965 1481 2060 2481 2766 3116 3784 4349 4865 5467 5927 181 599 1075 1491 2061 2499 2767 3205 3791 4371 4878 5470 5947 199 605 1099 1514 2077 2522 2818 3209 3856 4400 4911 5475 5962 216 607 1100 1524 2083 2548 2820 3233 3859 4453 4968 5479 6016 230 616 1141 1527 2116 2549 2823 3254 3866 4463 4972 5499 6049 246 632 1171 1549 2119 2556 2825 3258 3872 4468 4980 5507 6067 248 649 1191 1550 2124 2561 2832 3269 3879 4495 4981 5513 6072 261 652 1216 1566 2130 2563 2838 3305 3905 4511 4988 5528 6116 300 654 1217 1605 2141 2575 2846 3343 3971 4540 4989 5554 6156 316 671 1239 1610 2151 2579 2847 3355 3978 4556 4995 5566 6188 319 685 1252 1636 2153 2595 2848 3359 4019 4560 5012 5573 6204 358 695 1265 1642 2157 2596 2859 3371 4034 4572 5016 5580 6212 381 696 1273 1671 2167 2613 2860 3406 4041 4584 5023 5581 6237 883 708 1278 1715 2229 2614 2893 3464 4059 4594 5036 5587 6246 384 729 1294 1723 2232 2615 2927 3469 4076 4595 5048 5618 6256 389 741 1318 1750 2236 2652 2943 3526 4109 4600 5065 5625 6260 396 747 1322 1799 2257 2655 2957 3531 4112 4613 5098 5638 6292 404 760 1340 1811 2288 2665 2958 3561 4119 4641 5127 5641 6326 430 809 1354 1813 2293 2684 2962 3578 4146 4656 5156 5644 6348 436 836 1358 1858 2311 2690 2979 3608 4154 4667 5224 5724 6393 456 858 1402 1867 2330 2698 3009 3643 4175 4697 5245 5782 6399 490 886

1.—7

82

Half-year ended 31st December, 1893. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, K.C.1.E., Charles William Earle, Esq., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary.- —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Ebpobt and Accounts of the Directors for the Half-year ended 31st December, 1893, to be submitted to the Forty-first Ordinary General Meeting, 18th April, 1894. 1. The usual statements of account for the half-year ended 31st December, 1893, are submitted herewith. . 2. The gross receipts, including Government subsidies, have amounted during the half-year to £251,698 10s. 6d., against £247,766 19s. Id. for the corresponding period of 1892. 3. The working and other expenses, including £21,122 4s. Bd. for cost of repairs to cables and expenses of ships, absorb £76,574 15s. 6d., against £91,768 18s. od. for the corresponding period of 1892, leaving a balance of £175,123 15s. od. From this is deducted £4,015 Is. 9d. for income-tax, and £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, leaving as the net profit for the half-year £139,213 13s. 3d., which, with £81,116 17s. Bd. brought forward from the previous half-year, shows an available balance of £220,330 10s. lid. 4. One quarterly interim dividend of per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 19th instant, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share 0r.2 per cent., making a total distribution of 7 per cent, for the year 1893. The balance of £107,830 10s. lid. has been carried to the General Eeserve Fund, which, after being credited with interest received on investments during the half-year, now stands at £633,686 2s. 5. The working of the Australian tariff arrangement for the third year of "guarantee," ending 30th instant, is estimated to result in a loss of between £11,000 and £12,000, half of which will be borne by the guaranteeing Governments, and the other half by the associated cable companies, in accordance with the terms of the agreement. This loss would, however, be far greater but for the abnormally large traffic which was transmitted during a portion of the year in connection with the financial crisis in Australia. 6. In accordance with the provisions of the trust deed dated 10th May, 1879, 371 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £37,100, were drawn by lot on the 2nd instant for payment at par on the 2nd July next. The numbers of the drawn debentures are given at the end of this report. 7. With a view to carrying out the arrangements referred to at the last general meeting for increasing the security of the company's China system, a contract has been entered into with the Telegraph Construction and Maintenance Company for the manufacture and laying of an alternative cable between Singapore and Hongkong, connecting the Island of Labuan and British North Borneo en route. The first section between Singapore and Labuan is now being laid, and the whole work is expected to be completed and the line opened for traffic before the end of the present month. 8. Your directors have the satisfaction to report that the Netherlands-Indian Government have placed at the company's disposal a special wire through Java for the transmission of the international traffic by the company's employes, and a small station has been opened by the company in the Government office at Sourabaya in connection with the same. This special wire gives the company an efficient alternative communication to their Singapore-Banjoewangie cable. 9. In accordance with the articles of association, Francis Augustus Bevan, Esq., and Sir Albert J. Leppoc Cappel, K.C.1.E., retire by rotation, and, being eligible, offer themselves for re-election. 10. The retiring auditor, Mr. Henry Dever, desires to offer his firm, Messrs. Deloitte, Dever, Griffiths, and Co., for election as auditors to the company. Messrs Welton, Jones, and Co. also retire, and offer themselves for re-election. John Pender, Chairman. Winchester House, 50, Old Broad Street, London, E.G. 9th April, 1894.

83

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Revenue Account fob the Half-yeab ended 31st December, 1893. ■*>• £ s. d. Cr. £ s. d. To General expenses in London (see By Message and other receipts, after deAbstract A) .. .. .. 6,538 6 8 ducting loss on exchange .. .. 227,578 17 0 General expenses at stations (see Australian duplicate cable subsidies .. 16,200 0 0 Abstract B) .. .. .. 41,412 510 Tasmanian cable subsidy .. .. 2,100 0 0 Use of Patents .. .. .. 100 0 0 Tonquin cable subsidy .. .. 5,300 0 0 Electrician's retaining-fee .. .. 50 0 0 Malacca cable subsidy .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Macao cable subsidy .. .. 250 0 0 Auditors' fees .. .. .. 100 0 0 Transfer fees .. .. .. 69 13 6 Staff endowment assurance .. .. 875 4 3 Staff Pension Fund . .. .. 691 15 1 Expenses in connection with Australian and Chinese negotiations, and formation of pension fund .. .. 184 19 0 Repairs to cables (see Abstract C) .. 21,122 4 8 Maintenance-ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 4,015 1 9 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures .. .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 139,213 13 3 £251,698 10 6 £251,698 10 6 Third interim dividend of 1893, 2s. 6d. per share paid 16th January, 1894 .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share for 1893, payable 19th April, 1894 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 19th April, 1894 .. .. 50,000 0 0 By Balance down .. .. .. 139,213 13 3 Balance to General Reserve Fund .. 107,830 10 11 Balance of revenue 30th June, 1898 .. 81,116 17 8 £220,330 10 11 £220,330 10 11 Abstracts Relating to Revenue Account for the Half-year ended 31st Decembeb, 1893. Abstract A. Statement of Genebal Expenses in London. £ s. d. Salaries, including managing director's remuneration .. .. .. 3,561 9 6 Wages .. .. .. .. .. .. .. .. 205 4 0 Office Expenses .. .. .. .. .. .. .. 925 13 4 Rent, taxes, &o. .. .. .. .. .. .. .. 1,067 2 8 Stationery and Printing .. .. .. .. .. .. 280 3 5 Postage, bill, and other stamps .. .. .. .. .. 180 12 7 Advertising .. .. .. .. .. .. .. 34 14 10 Legal expenses .. .. .. .. .. .. .. 140 11 0 Repairs and renewals to furniture, &c. .. .. .. .. .. 142 15 4 Per Revenue Account .. .. .. .. £6,538 6 8 Abstract B. Statement of Genebal Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. • .. 27,264 6 6 Travelling expenses .. .. .. .. .. .. 1,090 15 3 Rent, taxes, house-allowances, &c. .. .. .. .. .. 5,115 7 9 Expenses of electric lighting at stations .. .. .. .. 697 12 5 Provision- and ration-allowances .. .. .. .. .. 773 0 10 Maintenance and renewals of instruments and electrical apparatus .. .. 1,227 4 2 Expenses of land-lines .. .. .. .. .. .. 117 16 10 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 1,364 3 8 Repairs to buildings .. .. .. .. .. .. 881 17 11 Insurances at stations .. .. .. .. .. .. 244 9 6 Stationery and printing .. .. .. .. .. .. 455 8 5 Office and message postages .. .. .. .. .. .. 198 4 1 Office and petty expenses .. .. .. ... .. .. 661 19 0 Medical attendance .. .. .. .. .. .. 538 11 1 Service messages .. .. .. .. .. .. .. 100 10 10 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 170 16 8 Advertising at stations ... .. .. .. .. .. 80 14 11 Messengers' uniforms .. .. .. .. .. .. 75 6 0 Inoome-tax at stations .. .. .. .. .. .. 104 0 0 Per Revenue Acoount " .. .. .\ .. £41,412 5 10

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84

Abstract C.

Expenses Attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, ag- £ s. 6. gregating sixty-four days .. .. .. .. £3,181 18 2 Expenses of s.s. " Sherard Osborn " during remainder of six months 4,031 0 3 7,212 18 5 Expenses of s.s. "Recorder," effecting numerous repairs, aggregating eighteen days .. .. .. .. .. 655 19 11 Expenses of s.s. " Recorder " during remainder of six months .. 5,090 7 2 5,746 7 1 Cable expended on repairs, and sundry expenses of stations, after deducting value of picked-up cable .. .. .. .. .. .. 2,860 12 9 Insurance of cable on board maintenance-ships .. .. .. .. 579 19 4 Expenses of cable depot at Singapore .. .. .. .. .. 1,758 0 8 Charter of Great Northern Company's maintenanoe-ship for repair of cables in the China seas, and agreed charge for call of ship .. .. .. ■ .. 1,420 0 0 Depreciation of cable stores .. .. .. .. .. 1,544 6 5 Per Revenue Aocount .. .. .. .. £21,122 4 8

General Beseeve Fond, 31st December, 1893. Dr. £ s. d. Or. £ a. d. The following amounts for new cables and By Balanoe of Reserve Fund at 30th cable renewals have from time to time June, 1893 .. .. .. 519,217 2 8 been charged against the Reserve and Interest received during half-year .. 6,638 8 10 Revenue Accounts :— Balance transferred from Revenue Rangoon-Penang cable, 1877 .. .. 134,437 4 8 Account to 31st December, 1893 .. 107,830 10 11 Rangoon-Penang oable renewals, 1884-85 and 1887 .. .. .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. .. .. .. 16,071 10 0 Singapore-Batavia cable, renewal, 1881.. 64,363 11 5 Java-Australian cables, partial renewals, 1884 and 1888 .. .. .. 41,754 17 0 Singapore-Saigon cable, renewals, 1884-85 and 1887-88 .. .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 31,190 5 0 Penang-Singapore cable, renewal, 1886.. 53,245 3 8 Hongkong-Saigon cable, partial renewals, 1889--90 and 1892.. .. £15,880 19 9 Less value of cable recovered and credited to Reserve Fund, 1893 1,271 4 8 14,609 15 1 Western Australia cable, 1889-90 .. 119,898 0 5 New Zealand duplicate cable, 1890 .. 188,433 15 6 Madras-Penang, partial renewal, 1890-91 .. £91,896 1 4 Less value of cable reoovered and credited to Reserve Fund, 1893 737 15 9 qi ieo k 7 Hongkong-Tonquin, partial renewal, 1890 and 1891 .. .. .. 34,328 1 0 Madras-Penang duplicate cable, 1890-91 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 25,974 19 4 Shanghai-Foochow, partial renewal, 1892 5,307 13 10 £1,160,685 9 9 Balance oarried down .. .. 633,686 2 0 £633,686 2 0 £633,686 2 0 Balance as per balance-sheet ..£633,686 2 0

85

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Balance-sheet, 31st December, 1893. Dr. ! Gr. To Capital— £ s. d. jßy Capital expenditure, is s. d. 300,000 shares of as per last account £2,942,114 18 9 £10 each ..£3,000,000 0 0 Add cost of convertLess 50,000 shares ing lease at Banof £10 each mi- joevvangie into issued .. 500,000 0 0 freehold .. 78 7 1 . 2,500,000 0 0 , 5-per-cent. Australian subsidy deben- 2,942,193 5 10 tures — Less sale of cottage 3,208 debentures of at Low Heads .. 250 2 6 £100 each, as per Transferred from last account .. £320,800 0 0 Australian 5-per-Less 353 deben- cent, subsidy deturos drawn 6th benture sinking April, 1893, for fund .. .. 35,300 0 0 payment Ist 2,906,643 8 1 July, 1893 .. 35,300 0 0 ——-— 285,500 0 o Maintenance-ships, as per last ac-4-per-cent. mortgage debenture stock 320,000 oo| count.. .. .. .. 66,449 14 10 Reserve Funds — General reserve .. .. 633,686 2 0 2,973,092 18 2 Maintenance-ships'reserve .. 58,844 2 8 Investments on acoount of reserve Insurance reserve for maintenance- funds (see Abstract D) .. .. 541,840 4 6 ships and cables .. .. 67,950 4 9 Trustees for 5-per-cent. Australian Sinking funds — subsidy debentures .. .. 11,430 3 0 Australian subsidy debenture sink- Spare cable and other stores .. 87,215 19 8 ing fund .. .. .. 24,725 3 0 Traffic and other debit balances .. 120,72111 8 Traffic and other credit balances .. 33,636 12 7 Bills receivable .. .. .. 53,642 0 0 Debenture interest accrued and un- Remittances in transit .. .. 12,900 0 0 paid .. .. .. .. 5,177 15 6 Cash at banker's and in hand .. 192,609 19 6 Proprietors for dividends— Temporary investment, £50,000 2|Unclaimed dividends .. .. 932 17 0 per-cent. Consols, costing .. 49,500 1 0 Third interim dividend of 2s. 6d. per share, paid 16th January, 1894.. .. .. .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable 19th April, 1894 .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 19th April, 1894 .. 50,000 0 0 £4,042,952 17 6 £4,042,952 17 6 Audited and found correct. Heney Deveb, P.O.A. 1 , ~. London, 7th April, 1894. Welton, Jones, and Co., J flualDorB -

Absteact D. LIST OF INVESTMENTS ON ACCOUNT OF RESERVE FUNDS. Government and Miscellaneous. s. & b. a. 31,000 2|-per-oent. Consols .. .. .. .. .. Costing 31,703 17 3 2,500 Chilian Government 4J-per-eent. converted loan .. .. „ 2,512 10 4 14,800 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-oent. Australian Government subsidy debentures .. .. „ 15,288 19 1 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe, Telegraph, and Trust Company (Limited) 6-per-eent preferential shares .. .. .. .. .. .. „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. .. „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cenc. stock .. .. .. „ 25,968 15 0 10,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. ■„ 10,200 0 0 2,500 Southern Mahratta Eailway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Bailway 5-per-cent. first mortgage debenture bonds .. „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4 per-cent. inscribed stock .. .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .. .. 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. , 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed (1887) .. .. .. » 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. » 10,230 3 8 15,000 New South Wales Government 3J-per-oent. inscribed stook .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4 f per-cent. debentures .. .. .. „ 5,050 1 11 13,500 "Victorian Government 4J-per-cent. debentures .. .. .. 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. 5,050 111 American Railways. 8,400 Baltimore and Ohio Eailroad Company 6-per-cent. sterling bonds (1874) .. » 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885).. .. „ 10,375 17 6 $25,000 Central Railroad Company of New Jersey 5-per-oent. general mortgage coupon gold bonds .. .. .. ~ .. „ 5,726 16 0 12—1. 7.

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86

American Railways —continued. & s. d. 810,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. general mortgage gold bonds .. .. .. .. .. ... 2,295 15 0 $50,000 Illinois Central Railroad Company 4-percent. Cairo Bridge gold bonds .. „ 10,075 3 0 125,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 .. .. .. .. „ 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mort. sinking fund bonds .. .. .. .. .. ... i, 21,062 1 1 $25,000 Pittsburg, Cincinnati, Chicago, and Sb. Louis Railway Company 4J-per-cent. con. mort. gold bonds (series A) .. .. .. .. „ 5,388 9 3 Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irred. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railwaye 4|-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guar. stock .. „ 5,516 10 0 9,750 London, Brighton, and S. C. Railway 4J-per-cent. perpl. guar. deb. stock .. , 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4 per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4J-per-cent. deb. stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J per-cent. Pulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway, 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perpl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-percent, perpl. guar. pref. stock .. .. .. „ 5,503 15 7 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. con. pref. stock .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent. debenture stock .. .. .. „ 5,576 12 9 £541,840 4 6

Five-pee-Cent. Austealian Government Subsidy Debentures. Numbers of 371 Debentures of £100 each drawn on 2nd April, 1894, for Payment at Messrs. Barclay, Bevan, and Co., 54, Lombard Street, E.C, on the 2nd July, 1894. 18 497 1048 1479 2034 2535 3166 3546 3958 4299 4737 5248 5794 44 501 1066 1496 2036 2566 3170 3577 3959 4326 4738 5249 5797 54 540 1067 1498 2047 2577 3172 3583 3969 4335 4742 5252 5823 67 551 1077 1551 2105 2602 3177 3585 3998 4365 4777 5269 5830 71 583 1080 1567 2121 2641 3198 3604 4000 4388 4825 5291 5880 77 593 1117 1583 2126 2659 3204 3606 4004 4393 4837 5304 5889 89 613 1125 1586 2147 26GS 3228 3611 4020 4412 4851 5315 5892 97 628 1126 1631 2155 2676 3246 3625 4025 4436 4852 5316 5966 106 646 1177 1653 2166 2677 3250 3631 4042 4437 4888 5324 5996 109 657 1181 1654 2212 2693 3285 3641 4046 4459 4897 5367 5997 142 678 IJB9 1673 . 2225 2704 3287 3046 4047 4475 4901 5420 5999 167 710 1200 1739 2243 2730 3302 3652 4062 4481 4905 5421 6012 168 716 1228 1756 2276 2799 3317 3653 4082 4485 4922 5424 6041 201 722 1245 1758 2289 2814 3320 3669 4087 4518 4976 5404 6092 233 740 1261 1780 2303 2886 33C8 3681 4105 4525 5059 5483 6103 219 744 1270 1803 2305 2891 3379 3695 4137 4531 5060 5515 6109 232 750 1.311 1834 2319 2900 3381 3704 4149 4545 5066 5529 6215 236 753 1313 1853 2336 2914 3384 3708 4152 4549 5069 5535 6228 276 781 1316 1855 2339 2947 3398 3713 4166 4551 5070 5551 6232 287 843 1337 1880 -2358 2973 3413 3716 4190 4577 5072 5556 6240 332 894 1341 1892 2391 3002 3420 3753 4191 4583 5076 5628 6265 342 912 1352 1912 2411 3024 3431 3765 4224 4621 5101 5632 6304 344 923 1376 1921 2413 3025 3447 3801 4230 4624 5109 5661 6307 348 931 1389 1948 2450 3032 3480 3807 4232 4635 5115 5743 6311 415 951 1412 1953 2479 3035 3485 3828 4237 4640 5176 5745 6329 446 954 1428 1955 2491 3054 3497 3831 4241 4674 5194 5763 6335 451 1014 1463 1985 2514 3068 3514 3863 4268 4707 5202 5772 6372 458 1028 1465 1998 2528 3087 3533 3906 4283 4728 5204 5779 6376 464 1040 1471 2031 2531 3093 3537

Half-year ended 30th June, 1894. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors.— Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, X.C.1.8., Charles William Earle, Esq., the Eight Hon. Viscount Monck, George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

87

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Eepobt and Accounts of the Directors for the Half-year ended 30th June, 1894, to be submitted to the Forty-second Ordinary General Meeting, 31st October, 1894. 1. The usual statements of account for the half-year ended 30th June, 1894, are herewith submitted. 2. The gross receipts, including Government subsidies, have amoanted during that period to £247,681 2s. 4d., against £257,986 13s. sd. for the corresponding half-year of 1893. 3. The working expenses, including £21,295 16s. sd. for cost of repairs to cables and expenses of ships, absorb £80,295 3s. 10d., against £78,229 19s. 3d. for the corresponding period of' 1893, leaving a balance of £167,385 18s. 6d. From this is deducted £3,940 2s. 7d. for income-tax, £32,488 13s. 9d. for interest on debentures, debenture stock, contribution to sinking fund, and 're-valuation of currency balances, leaving £130,957 2s. 2d. as the net profit for the half-year. 4. Two quarterly interim dividends of 1J per cent, each, amounting to £62,500, have been paid for the half-year under review, leaving £68,457 2s. 2d. to be carried forward. 5. The loss resulting from the third year of working, ended 30th April last, under the Australian tariff guarantee arrangement amounted to £12,384, half of which was borne by the guaranteeing Governments and the other half by the associated cable companies in terms of the agreement. 6. The laying of the company's alternative cable between Singapore and Hongkong via Labuan was successfully completed by the Telegraph Construction and Maintenance Company, and the line opened for traffic on the sth May last. It has already been found a most valuable addition to the company's system. A short length of cable has also been laid between Labuan and Borneo, so as to give direct telegraphic communication with Sandakan, the headquarters of the British North Borneo Company, when the land-line which is in course of construction by that company across North Borneo is completed. 7. Numerous cable repairs have been carried out during the half-year under review, but owing to the system being duplicated the traffic has not been affected. John Pendee, Chairman. Winchester House, 50, Old Broad Street, London, 8.C., 20th October, 1894.

Revenue Account fob the Half-yeab ended 80th June, 1894. Dr. £ s. d. Or. £ s. d. To General expenses in London (see Ab- By Message and other receipts, after destractA) .. .. .. 6,759 6 2 ducting loss on exchange .. .. 223,550 910 General expenses at stations (see Ab- Australian duplicate cable subsidies .. 16,200 0 0 stractß) .. .. .. 44,665 210 Tasmanian cable subsidy .. .. 2,100 0 0 Use of patents .. .. .. 100 0 0 Tonquin cable subsidy .. .. 5,300 0 0 Electrician's retaining-fee .. .. 50 0 0 Malacca cable subsidy .. .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Macao cable subsidy .. .. 250 0 0 Auditors' fees .. .. .. 100 0 0 Transfer fees .. .. .. 80 12 6 Staff endowment assurance .. .. 862 16 7 Expenses in connection with Chinese negotiations, and formation of Pension Fund .. .. .. 212 1 7 Staff Pension Fund.. .. .. 750 0 3 Eepairs to cables (see Abstract C) .. 21,295 16 5 Maintenance-ships'Eeserve Fund .. 3,500 0 0 Income-tax .. .. .. 3,940 2 7 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures.. .. .. .. 25,495 0 0 Interest on 4-per-oent. mortgage debenture stock .. .. .. 6,400 0 0 Re-valuation of ourrency balances at stations, &o. .. .. .. 593 13 9 Balance .. .. .. .. 130,957 2 2 £247,681 2 4 £247,681 2 4 First interim dividend of 1894, 2s. 6d. per share, paid 16th July, 1894 .. 31,250 0 0 ■ ■ '] Seoond interim dividend of 1894, 2s. 6d. jjaa per share, paid 15th October, 1894 .. 31,250 0 0 Balance .. .. .. .. 68,457 2 2 By Balance .. .. .. .. 130,957 2 2 £130,957 2 2 £130,957 2 2

Absteacts kelating to Ebvbnub Accoukt for the Half-year ended 30th June, 1894, Abstract A. Statement of General Expenses in London. £ a. dn Salaries, including managing director's remuneration .. .. .. 3,859 10 2 Wages .. .. .. .. .. • ■ • ■ ■' 167 511 Office expenses .. .. .. .. • ■ • • • • 978 11 6 Rent, taxes, &c. .. .. .. .. .. •• .. 928 1 3 Stationery and printing .. .. .. .. • • • • 361 19 2 Postage, bill, and other stamps .. .. .. .. • • 194 2 7 Advertising .. .. .. .. •• •• •• 108 0 9 Legal expenses .. .. .. '■■ ■• • • • • 22 410 Bepairs and renewals to furniture, <&o. .. .. . ■ • • 139 10 1 Per Revenue Account .. .. .. .. £6,759 6.2

1.—7

88

Abstract B. Statement of Gexebal Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 28,634 9 2 Travelling-expenses .. .. .. .. .. .. 2,181 17 4 . Rent, taxes, house-allowances .. .. .. .. .. 5,161 17 7 Expenses of electric lighting at stations .. .. .. .. 568 6 8 Provision- and ration-allowances .. .. .. .. .. 837 8 2 Maintenance and renewals of instruments and electrical apparatus .. .. 514 19 5 Expenses of land-lines .. .. .. .. .. .. 223 12 10 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 713 3 4 Repairs to buildings .. .. .. .. .. .. 956 6 7 Insurances at stations .. .. .. .. .. .. 251 0 5 Stationery and printing .. .. .. .. .. .. 2,174 0 10 Office and message postages .. .. .. .. .. 200 19 11 Office and petty expenses .. .. .. .. .. .. 682 17 3 Medical attendance .. .. .. .. .. .. 461 15 5 Service messages .. .. .. .. .. .. 146 10 2 Expenses of Pothcurno School .. .. .. .. .. 260 0 0 Foreign agencies.. -.. .. .. .. .. .. 245 16 8 Advertising at stations .. .. .. .. .. .. 35 11 1 Messengers' uniforms .. .. ... .. .. .. 41 010 Income-tax at stations .. ■ .. .. .. .. .. 123 9 2 Guarantee of staff and bank-balances abroad .. .. .. .. 250 0 0 Per Revenue Account .. .. .. .. £44,665 2 10 Abstract O. Expenses attending Maintenance of Cables. £ s. d. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating 111 days, after deducting expenses of ship whilst engaged on charter by the Queensland and Netherlands Indian Government .. .. .. .. 3,357 2 2 Expenses of s.s. " Sherard Osborn " during remainder of six months .. .. 1,134 18 6 Expenses of s.s. "Recorder," effecting numerous repairs, aggregating 100 days .. 3,917 111 Expenses of s.s. " Recorder " during remainder of six months.. .. .. 2,796 13 8 Cable expended on repairs and sundry expenses of stations, after deducting value of picked-up cable .. , .. .. .. .. .. 4,996 4 2 Insurance of cable on board maintenance-ships .. .. .. .. 776 10 0 Expenses of cable depot at Singapore .. .. .. .. .. 1,690 11 6 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of ship .. .. .. 1,120 0 0 Depreciation of cable stores .. .. .. .. .. 1,506 14 6 Per Revenue Account .. ~ - .. .. £21,295 16 5

Geneeal Eeserve Fund, 30th June, 1894. Dr. £ s. d. Cr. £ c. d. The following amounts for new cables and By Balance of Reserve Fund at 31st Decable renewals have from time to time eember, 1893 .. .. .. 633,686 2 0 been charged against the Beserve and Interest received during half-year .. 7,303 310 Eevenue Accounts: — Eangoon-Penang cable, 1887 .. .. 134,437 4 8 Rangoon-Penang cable renewals, 1884--85 and 1887 .. .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. .. .. .. 16,071 10 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java-Australian cables partial renewals, 1884 and 1888 .. .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884--85, 1887, and 1888 .. .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 31,190 5 0 Penang-Singapore cable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable, partial renewals, 1889--90 and 1892.. ..£15,880 19 9 Less value of cable recovered and credited to Beserve Fund, 1893 .. 1,271 4 8 ■ 14,609 15 1 Western Australia cable, 1889-90 .. 119,898 0 5 New Zealand duplicate cable, 1890 .. 188,433 15 6 Madras-Penang partial renewal, 1890-91 .. 91,896 1 4 Less value of cable recovered and credited to Reserve Fund, 1893 .. 737 15 9 ■ 91,158 5 7 Hongkong-Tonquin partial renewal, 1890 and 1891 .. .. .. .. 34,328 10 - . Madtas-Penang duplicate cable, 1890-91 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892.. 25,974 19 4 Shanghai-Foochow partial renewal, 1892 5,307 13 10 £1,160,685 9 9 Balance carried down.. .. .. 640,989 510 £640,989 5 10 £640,989 5 10 Balance as per balanoe-sheefc ~ £640,989 5 10

89

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Balance-sheet, 30th June, 1894. Dr. Cr. To Capital— £ s. d. By Capital expenditure £ s. d. 300,000 shares of as per last account £2,906,643 3 4 £10 each .. £3,000,000 0 0 Add cost of buildLess 50,000 shares ing sanatorium of £10 each, un- at Litjin, near issued .. 500,000 0 0 Banjoewangie .. 1,315 11 10 2,500,000 0 0 2,907,958 15 2 5-per-cent. Australian subsidy deben- Maintenance-ships, as per last actures— count.. .. .. .. 66,449 14 10 2,855 debentures of £100 each, as per last account .. .. 285,500 0 0 2,974,408 10 0 4-per-cent. mortgage debenture stock 320,000 0 0 Expenditure on account of Singapore- — Hongkong cable .. .. 286,029 16 4 3,105,500 0 0 Investments on account of reserve Reserve funds— funds (see Abstract D) .. .. 543,073 17 8 General reserve .. .. 640,989 510 Trustees for 5-per-cent. Australian Maintenance-ships'reserve .. 63,373 18 1 subsidy debentures .. .. 39,404 14 6 Insurance reserve for maintenance- Spare cable and other stores .. 85,618 3 5 ships and cables .. .. 69,158 3 9 Traffic and other debit balances .. 124,688 11 5 Sinking fund— Bills receivable .. .. .. 31,532 4 4 Australian subsidy debenture sink- Remittances in transit .. .. 15,200 0 0 ing fund .. .. .. 43,404 14 6 Cash at banker's and in hand .. 69,804 18 10 Traffic and other credit balances .. 109,95112 7 Debenture interest accrued and unpaid 5,155 11 1 Proprietors for dividends— Unclaimed dividends .. .. 1,270 8 6 First interim dividend of 2s. 6d. per share, paid 16th July, 1894 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, paid 15th October, 1894 .. .. .. 31,250 0 0 Revenue account balance .. .. 68,457 2 2 £4,169,760 16 6 £4,169,760 16 6 Audited and found correct. Dbloitte, Dever, Gbiffiths, and Co., ) . ■~, London, 19th October, 1894. Welton, Jones, and Co., J Auaicors '

Abstract D. LIST OF INVESTMENTS ON ACCOUNT OF EESEEVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2§-per-cent. Consols .. .. .. .. .. .. Costing 31,708 17 3 2,500 Chilian Government 4J-per-eent. converted loan .. .. .. „ 2,312 10 4 16,000 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-eent. Australian Government subsidy debentures .. .. „ 16,522 12 3 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-per-oent. preference shares „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock.. .. .. .. .. „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. 13,859 11 3 25,000 Metropolitan Consolidated 3£-per-cent. stock .. .. „ 25,968 15 0 10,000 Pacific and European Telegraph Company (Limited) 4-percent, guaranteed debentures .. .. .. .. .. „ 10,200 0 0 2,500 Southern Mahratla Railway (Limited) 4-percent, debenture stock . .. „ 2,703 14 8 Colonial. 9,000 Canadian Pacific Railway 5 per-cent. first mortgage debenture bonds .. Costing 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock (1882) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock .. .. .. „ 5,039 1 9 4,000 City of Sydney 5-per-cent. bonds .. .. .-. .. 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures .. „ 5,503 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed (1887) .. .. .. „ 4,993 14 1 10,000 New South Wales Government 4-per-cent. debentures .. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-oent. inscribed stock .. .. „ 14,429 14 8 10,000 Queensland Government 4-per-cent. debentures .. .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock .. .. .. „ 15,732 19 8 5,000 Tasmanian Government 4-per-oent. debentures .. .. .. „ 5,050 1 11 13,500 Victorian Government 4j-per-cent. debentures .. .. .. , 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds .. .. .. „ 5,050 111

1.—7

90

American Railways. £ s. d. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds (1874) .. Costing 10,420 19 9 145,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds (1885) .. .. „ 10,375 17 6 §25,000 Central Railroad Company of N. Jersey 5-per-cent. gen. morfc. coupon gold bonds .. .. .. .. .. .. 5,726 16 0 110,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds „ 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds .. „ 10,075 3 0 $25,000 New York Central and Hudson River Railroad Company 4-per cent, gold debenture certificates of 1890 .. .. .. .. „ 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mort. sinking fund bonds .. .. .. .. .. .. „ 21,062 1 1 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4J-per-cent. con. mort. gold bonds (series A) .. .. .. .. „ 5,388 9 3 Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-percent, debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4 per-oent. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter and South Devon Railways 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 1 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guar. stock .. „ 5,516 10 0 9,750 London, Brighton, and S.C. Railway 4J-per-cent. perl. guar. deb. stock .. „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 14,250 Manchester, Sheffield, and Lincolnshire Railway 4J-per-cent. deb. stock .. „ 17,434 5 4 19,900 Metropolitan Railway 4-percent, debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. „ 5,503 15 7 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North B. Railway W. Hartlepool 4-per-cent. preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. con. pref. stock .. .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent. debenture stock .. .. .. „ 5,576 12 9 £543,073 17 8

Five-peb-Cent. Austealian Govebnment Subsidy Debentuees. Numbers of 371 Debentuees of £100 each drawn on 2nd April, 1894, for Payment at Messrs Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the 2nd July, '1894. 18 497 1048 1479 2034 2535 3166 3546 3959 4326 4738 5249 5797 44 501 1066 1496 2086 2566 3170 3577 3969 4335 4742 5252 5823 54 540 1067 1498 2047 2577 3172 3583 3998 4365 4777 5269 5830 67 551 1077 1551 2105 2602 3177 3585 4000 . 4388 4825 5291 5880 71 583 1080 1567 2121 2641 3198 3604 4004 4393 4837 5304 5889 77 593 1117 1583 2126 2659 3204 3606 4020 4412 4851 5315 5892 89 613 1125 1586 2147 2668 3228 3611 4025 4436 4852 5316 5966 97 628 1126 1631 2155 2676 3246 3625 4042 4437 4888 5324 5996 106 646 1177 1653 2166 2677 3250 3631 4046 4459 4897 5367 5997 109 657 1181 1654 2212 2693 3285 3641 4047 4475 4901 5420 5999 142 678 1189 1673 2225 2704 3287 3646 4062 4481 4905 5421 6012 167 710 1200 1739 2243 2730 3302 3652 4082 4485 4922 5424 6041 168 716 1228 1756 2276 2799 3317 3653 4087 4518 4976 5464 6092 201 722 1245 1758 2289 2814 3320 3669 4105 4525 5059 5483 6103 213 740 1261 1780 2303 2886 3368 3681 . 4137 4531 5060 5515 6109 219 744 1270 1803 2305 2891 3379 3695 4149 4545 5066 5529 6215 232 750 1311 1834 2319 2900 3381 3704 4152 4549 5069 5535 6228 236 753 1313 1853 2336 2914 3384 3708 4166 4551 5070 5551 6232 276 781 1316 1855 2339 2947 3398 3713 4190 4577 5072 5556 6240 287 843 1337 1880 2358 2973 3413 3716 4191 4583 5076 5628 6265 332 894 1341 1892 2391 3002 3420 3753 4224 4621 5101 5632 6304 342 912 1352 1912 2411 3024 3431 3765 4230 4624 5109 5661 6307 344 923 1376 1921 2413 3025 3447 3801 4232 4635 5115 5743 6311 348 931 1389 1948 2450 3032 3480 3807 4237 4640 5176 5745 6329 415 951 1412 1953 2479 3035 3485 3828 4241 4674 5194 5763 6335 446 954 1428 1955 2491 8054 3497 3831 4268 4707 5202 5772 6372 451 1014 1463 1985 2514 8068 3514 3863 4283 4728 5204 5779 6376 458 1028 1465 1998 2528 3087 3533 3906 4299 4737 5248 5794 464 1040 1471 2031 2531 3093 8537 3958

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Half-year ended 31st December, 1894, THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, K.C.1.E., Charles William Earle, Esq., George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale, Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Bepoet and Accounts of the Dieectobs for the Half-year ended 31st December, 1894, to be submitted to the Forty-third Ordinary General Meeting, Ist May, 1895. 1. The usual statements of account for the half-year ended 31st December, 1894, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £261,322 14s. 6d., against £251,698 10s. 6d. for the corresponding period of 1893. 3. The working and other expenses, including £29,791 6s. Bd. for cost of repairs to cables and expenses of ships, absorb £89,740 14s. 9d., against £76,574 15s. 6d. for the corresponding period of 1893, leaving a balance of £171,581 19s. 9d. From this are deducted £4,584 17s. 2d. for incometax, £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, and £1,372 9s. for celebrating the company's twenty-fifth anniversary, leaving as the net profit for the half-year £133,729 13s. 7d., which, with £68,457 2s. 2d. brought forward from the previous halfyear, shows an available balance of £202,186 15s. 9d. 4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 2nd proximo, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1894. The balance of £89,686 15s. 9d. has been carried to the General Reserve Fund, which, after being credited with interest received during the half-year and profit on sale of investments, and debited with £100,000, part cost of the new Singapore-Hongkong cable, now stands at £641,598 13s. 3d. 5. In accordance with the provisions of the trust deed dated 10th May, 1879, 389 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £35,900, were drawn by lot on the Ist instant for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 6. Your directors regret to have to record the death, on the 29th November last, of their esteemed colleague the Eight Hon. Viscount Monck, who had been associated with the company from its inception. It is not proposed to fill the vacancy in the directorate thus occasioned. 7. The company's maintenance-ships have, as usual, been employed on various cable repairs during the half-year under review, as shown in Abstract C, but owing to most of the cables being duplicated the revenue has in no instance been materially affected. 8. Since the close of the half-year, an Intercolonial Postal and Telegraph Conference has been held at Hobart, at which the contemplated withdrawal by the Government of Victoria from the tariff guarantees entered into with the company were discussed, with the result that it was decided to continue the same, with certain modifications, for a fixed period of at least five years from the Ist May next. 9. In accordance with the articles of association, Charles William Earle, Esq., and George Garden Nicol, Esq., retire by rotation, and, being eligible, offer themselves for re-election. 10. The retiring auditors, Messrs. Deloitte, Dever, Griffiths, and Co., and Messrs. Welton, Jones, and Co., also offer themselves for re-election. John Pendee, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 22nd April, 1895.

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92

Bevenue Account for the Half-year ended 31st December, 1894. Dr. & s. d. Or. £ 8. d. To General expenses in London (see Ab- By Message and other receipts, after destract A) .. .. .. 6,779 4 3 ducting loss on exchange .. .. 237,440 0 4 General expenses at stations (see Ab- Australian duplicate cable subsidies .. 16,200 0 0 stract B) .. .. .. 45,000 16 4 Tasmanian cable subsidy .. .. 2,100 0 0 Use of patents .. .. .. 100 0 0 Tonquin cable subsidy .. .. 5,300 0 0 Electrician's retaining-fee .. .. 50 0 0 Malacoa cable eubsidy .. .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Macao cable subsidy .. .. 10 19 2 Auditors' fees .. .. .. 100 0 0 Transfer fees .. .. .. 71 15 0 Staff endowment assurance .. .. 847 12 9 Staff Pension Fund .. .. 767 4 8 Expenses in connection with Australian and Chinese negotiations, and Pension Fund .. .. .. 229 4 9 Repairs to cables (see Abstract C) .. 29,791 6 8 Maintenance-ships' Reserve Fund .. 3,500 0 0 Revaluation of ourrenoy balances at stations, &c. .. .. .. 575 5 4 Income-tax .. .. .. 4,584 17 2 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures .. .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Twenty-fifth anniversary commemoration .. .. .. .. 1,372 9 0 Balance .. .. .. .. 133,729 13 7 £261,322 14 6 £261,322 14 6 Third interim dividend of 1894, 2s. 6d. per share, paid 16th January, 1895 .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share for 1894, payable 2nd May, 1895 31,250 0 0 Proposed bonus of 4s. per share, payable 2nd May, 1895 .. .. .. 50,000 0 0 By Balance down .. .. ..133,729 13 7 Balance to General Reserve Fund .. 89,686 15 9 Balance of revenue, SOth June, 1894 .. 68,457 2 2 £202,186 15 9 £202,186 15 9

Absteacts relating to Eevbnub Account foe the Half-teak ended 31st Deoembeb, 1894. Abstract A. Statement of Genebal Expenses in London. jg g Salaries, including managing director's remuneration .. .. .. 3,805 0 4 Wages .. .. .. .. .. .. .. 184 3 8 Office expenses .. .. .. .. .. .. " .. 913 10 9 Kent, taxes, &c. .. .. .. .. .. .. .. 950 5 6 Stationery and printing .. .. .. .. .. .. 277 811 Postage, bill, and other stamps .. .. .. ... .. 197 1 3 Advertising .. .. .. .. .. .. .. 118 8 0 Legal expenses .. .. .. .. .. .. .. 14 3 0 Repairs and renewals to furniture, &o. .. .. .. .. .. 819 2 10 Per Revenue Account .. .. .. .. £6,779 4 3 Abstract B. Statement or General Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 29,590 13 5 Travelling expenses .. .. .. .. .. .. 1,283 6 4 Rent, taxes, house-allowanoes .. .. .. .. .. 5,133 9 4 Expenses of electric-lighting at stations .. .. .. .. 1,910 12 0 Provision- and ration-allowances .. .. .. .. .. 861 0 10 Maintenance and renewals of instruments and electrical apparatus .. .. 531 18 7 Expenses of land-lines .. .. .. .. .. .. 167 19 3 Repairs and renewals of furniture, fittings, <fco. .. .. .. .. 1,053 010 Repairs to buildings .. .. .. .. .. .. 1,426 1 5 Insurances at stations .. .. .. .. .. .. 275 14 4 Stationory and printing .. .. .. .. .. .. 181 4 6 Office and message postages .. .. .. .. .. .. 199 7 8 Office and petty expenses .. .. .. .. .. .. 572 11 11 Medical attendance .. .. ... ... .. .. 585 1 2 Service messages .. .. .. .. .. .. .. 87 8 0 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 220 16 8 Advertising at stations .. .. .. .. .. .. 5 4 10 Messengers'uniforms .. .. .. .. .. .. 39 19 3 Income-tax at stations .. .. .. .. .. .. 125 6 0 Guarantee of staff and bank balances abroad .. .. .. .. 500 0 0 Per Revenue Account .. .. .. ~ £45,000 16 4

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L-7

Abstract G. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, ag- £ s. d. gregating fifty days .. .. .. .. ..£2,671 3 11 Expenses of s.s. " Sherard Osborn" during remainder of six months .. 5,447 8 8 8,118 12 7 Expenses of s.s. " Eecorder," effecting numerous repairs, aggregating 126 days .. .. .. .. .. .. £6,286 9 2 Expenses of s.s. " Eecorder " during remainder of six months .. 2,074 1 5 8,360 10 7 Cable expended on repairs and sundry expenses of stations after deducting value of picked-up cable .. .. .. .. .. .. 6,405 10 5 Insurance of cable .. .. .. .. .. .. 2,316 12 7 Expenses of cable depot at Singapore .. .. .. .. .. 1,383 9 3 Agreed charge for call of Great Northern Company's maintenance-ship for repair of oables in the China seas .. .. .. .. .. .. 1,000 0 0 Depreciation of cable and other stores .. .. .. .. .. 2,206 11 3 Per Eevenue Account .. .. .. .. £29.791 6 8

Genekal Eesebve Fund, 31st Decembeb, 1894. Dr. £ s. d. I Or. £ s. d. To Part cost of Singapore-Hongkong cable 100,000 0 0 By Balance of Eeserve Fund at 30th June, The following amounts for new cables and 1894 .. .. .. .. 640,989 5 10 cable renewals have from time to time Interest received during half-year .. 7,177 9 8 been charged against the Reserve and Profit on sale of Eeserve Fund investEevenue Accounts: — ments .. .. .. .. 3,745 2 0 Eangoon-Penang cable, Balance transferred from Eevenue Ae--1877 .. ..£134,437 4 8 count .. .. .. .. 89,686 15 9 Eangoon-Penang cable renewals, 1884-85 and 1887 .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 16,07110 0 Singapore-Batavia cable, renewal, 1881 .. 64,363 11 5 Java-Australian cables, partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable, renewals, 1884-85 and 1887-88 .. .. 59,677 111 Victoria-Tasmania duplioate cable, 1885 .. 31,190 5 0 Penang-Singapore oable, renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable, partial renewals, 1889--90 and 1892, £15,880 19a. 9d. Less value of cable recovered and • credited to Eeserve Fund, 1893, £1,271 4s. Bd. .. .. 14,609 15 1 Western Australia cable, 1889-90 .. .. 119,898 0 5 New Zealand duplioate cable, 1890 .. .. 188,433 15 6 Madras-Penang, partial renewal, 1890-91, £91,896 Is. 4d. Less value of cable recovered and credited to Eeserve Fund, 1893, £737 15a. 9d... .. .. 91,158 5 7 Hongkong-Tonquin partial renewal, 1890 and 1891 .. .. 34,328 1 0 Madras-Penang duplicate oable, 1890-91 .. 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 .. 25,974 19 4 Sbanghai-Foochow, partial renewal, 1892 .. 5,307 13 10 Singapore-Hongkong cable, 1894 .. .. 100,000 0 0 £1,260,685 9 9 To Balance carried down .. .. 641,598 13 3 £741,598 13 3 £741,598 13 3 Balanc* as per balanoe-eheet ..£641,598 13 3 13—1. 7.

94

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Balance-sheet, 31st December, 1894. Dr. I Or. To Capital £ s. d. By Capital expenditure, £ s. a. 300,000 shares of as per last account £2,907,958 15 2 £10 each ..£3,000,000 0 0 Add cost of land at Less 50,000 shares Sharp Peak and of £10 eaoh, un- confirming freeissued .. 500,000 0 0 hold at Litjin .. 55 2 7 2,500,000 0 0 5-per-cent. Australian subsidy deben- 2,908,013 17 9 t ures Less transferred 2,855 debentures of from Australian £100 each, as per 5-per-cent. sublast account .. £285,500 0 0 ■ sidy debenture Less 371 deben- sinking fund .. 37,100 0 0 tures drawn 2nd 2,870,913 17 9 April, 1894, for Maintenance-ships, as per last acpayment ' 2nd count.. .. .. .. 66,449 14 10 July, 1894 .. 37,100 0 0 " ! , 248,400 0 0 2,937,363 12 7 4-per-cent. mortgage debenture stock 320,000 0 0 Balance of expenditure on account of ' the new Singapore-Hongkong cable 186,043 14 1 3,068,400 0 0 Investments on account of reserve Reserve funds funds (see Abstract D) .. .. 554,796 311 General reserve !.. .. 641,598 13 3 Trustees for 5-per-cent. Australian Maintenance-ships'reserve .. 67,982 18 11 subsidy debentures .. .. 12,531 0 8 Insurance reserve for maintenance- Spare cable and other stores .. 82,247 5 11 ships and cables .. .. 75,965 510 Traffic and other debit balances .. 111,55112 7 Sinking fund Bills receivable .. .. .. 44,210 0 0 Australian subsidy debenture sink- Remittances in transit .. .. 12,100 0 0 ing fund .. .. .. 25,826 0 8 Cash at banker's and in hand .. 155,152 7 4 Traffic and other credit balances .. 97,550 18 10 Debenture interest accrued and unpaid .. .. .. .. 5,155 11 1 Proprietors for dividends— Unclaimed dividends .. .. 1,016 8 6 Third interim dividend of 2s. 6d. per share, paid 16th January, 1895 .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable 2nd May, 1895 .. 31,250 0 0 Proposed bonus of 4s. per share, payable 2nd May, 1895 .. .. 50,000 0 0 £4,095,995 17 1 £4,095,995 17 1 Audited and found correct. Deloittb, Dever, Gbiffiths, and C 0.,). •>.. London, 17th April, 1895. Welton, Jones, and Co., f Aualcors -

Abstract D. LIST OP INVESTMENTS ON ACCOUNT OF BESEBVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2§-per-cent. Consols .. .. .. .. .. Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent, converted loan .. .. .. „ 2,512 10 4 14,500 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. „ 14,973 12 5 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe Tel. and Trust Company (Limited) 6-per-cent. preference shares .. „ 5,37*4 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. .. „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3£-per-cent. stock .. .. .. „ 25,968 15 0 10,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. „ 10,200 0 0 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. Costing 9,962 710 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds (1915) „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent. bonds (1904) .. .. .. .. „ 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures (1910-1912) „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed 1887 (1937) .. .. „ 4,993 14 1 5,000 Natal 3J-per-cent. inscribed stock (1914-1939) .. .. .. „ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-1910) .. „ 10,230 3 8 15,000 New South Wales Government 3J per-cent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cent. inscribed stook (1933) .. „ 5,394 15 1 10,000 Queensland Government 4 per-cent. debentures (1913-1915) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stook (1924) .. .. „ 15,732 19 8 10,000 South Australian 3J-per-cent. inscribed stook (1939) .. .. .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) .. .. „ 5,050 1 11 13,500 Victorian Government 4J-per-cent. debentures (1904) .. .. , 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. .. „ 5,050 1 11

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American Railways. £ s. d. 8,400 Baltimore and Ohio Railroad Company 6-percent, sterling bonds 1874 (1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-percent, bonds 1885 (1925) .. „ 10,375 17 6 $25,000 Central Railroad Company at New Jersey 5-per-cent. general mortgage coupon gold bonds (1987) .. .. .. .. .. „ 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. general mortgage gold bonds (1942) .. .. .. .. .. „ 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-eent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 $25,000 New York Central and Hudson River Railroad Company 4-per-ceut. gold debenture certificates of 1890 (1905) .. .. .. .. „ 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinking fund bonds (1905) .. .. .. .. .. 21,062 1 1 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4£-per-cent. consolidated mortgage gold bonds (Series A), (1940) .. .. „ 5,388 9 3 Railway Debenture and Guaranteed Stocks. 7,500 Caledonian Railway 4-per-oent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irred. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways 4Jper-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 10,000 Lancashire and Yorkshire Railway 4-per-cent. debenture stock .. .. „ 10,965 11 3 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guar. stock .. „ 5,516 10 0 9,750 London, Brighton, and S. C. Railway 4J-per-cent. perpl. guar. deben. stock „ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4J-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perpl. guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perpl. guaranteed pref. stock .. .. „ 5,503 15 7 19,333 6/8 North British Railway 3-percent, debenture stock .. .. „ 15,696 5 1 5,000 North B. Railway W. Hartlepool 4-percent, preference stock .. .. „ 5,466 12 6 8,000 North B. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 5,000 North E. Railway 4 per-cent. debenture stock .. .. .. „ 5,576 12 9 £554,796 3 11

Fivb-pbb-Cbnt. Austbalian Govebnment Subsidy Debentures. Numbers of 389 Debentubes of £100 each drawn on Ist April, 1895, for Payment at Messrs. Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the Ist July, 1895. 4 510 949 1614 2071 2480 2858 3319 3812 4274 4951 5433 5964 43 518 973 1624 2093 2489 2868 3324 3821 4337 4902 5444 5981 92 536 975 1625 2109 '2506 2877 3376 3829 4392 4963 5446 5985 107 539 997 1641 2117 2516 2879 3386 3843 4401 4965 5476 5989 111 547 1086 1648 2123 2523 2887 3404 38«7 4416 4907 5522 6046 127 569 1090 1661 2127 2550 2961 3430 3889 4418 5015 5611 6051 128 615 1111 1672 2159 2554 3010 3434 3913 4426 5019 5654 6061 148 624 1127 1686 2161 2568 3011 3438 3924 4431 5025 5657 6065 157 645 1129 1697 2186 2572 3015 3470 3951 4462 5027 5675 6081 161 666 1156 1710 2192 2583 3022 3491 3953 4478 5032 5703 6120 188 687 1188 1730 2196 2593 3047 3512 3972 4480 5049 5704 6132 224 702 1214 1764 2209 2599 3049 3516 3982 4506 5058 5713 6136 227 720 1222 1777 2213 2624 3055 3536 4016 4517 5082 5718 6139 233 726 1224 1804 2266 2646 3061 3551 4027 4539 5086 5726 6157 252 756 1234 1824 2273 2662 3110 3558 4051 4553 5113 5729 6163 266 766 1235 1825 2274 2670 3154 3559 4069 4574 5116 5734 6173 275 787 1254 1842 2275 2675 3182 3569 4083 4664 5150 5735 6185 298 830 1267 1871 2294 2687 3185 3573 4084 4071 5157 5762 6209 308 835 1269 1882 2302 2694 3187 3589 4101 4672 5175 5768 6242 343 841 1333 1883 2318 2706 3197 3624 4113 4714 5217 5774 6251 354 854 1334 1903 2332 2731 3202 3649 4128 4721 5251 5829 6281 357 857 1372 1922 2352 2733 3211 3673 4136 4736 5270 5842 6289 363 868 1377 1931 2359 2737 3241 3688 4151 4780 5276 5849 6290 373 869 1382 1978 2365 2742 3251 3697 4157 4788 5296 5854 6312 410 876 1386 1995 2386 2746 3262 3710 4181 4790 5299 5893 6342 421 898 1455 2000 2401 2756 3281 3723 4192 4846 5305 5903 6374 425 900 1458 2013 2403 2758 3288 3758 4200 4850 5311 5912 6378 440 907 1494 2035 2434 2771 3311 3761 4218 4898 5335 5924 6390 • 454 938 1532 2039 2451 2784 3312 3792 4247 4906 5337 5938 6395 509 943 1569 2057 2474 2796 3316 8809 4255 4931 5342 5961

Half-year ended 30th June, 1895. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGEAPH COMPANY (LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, X.C.1.8., Charles William Earle, Esq., George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —P. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E,C<

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96

Eepoet and Accounts of the Directobs for the half-year ended 30th June, 1895, to be submitted to the Forty-fourth Ordinary General Meeting, 30th October, 1895. 1. The usual statements of account for the half-year ended 30th June, 1895, are herewith submitted. 2. The gross receipts, including Government subsidies, have amounted during that period t° £264,138 10s. 5d., against £247,681 2s. 4d. for the corresponding half-year of 1894. 3. The working expenses, including £26,323 19s. 7d. for cost of repairs to cables and expenses of ships, absorb £95,254 145., against £80,295 3s. 10d. for the corresponding period of 1894, leaving a balance of £168,883 16s. sd. Prom this is deducted £3,984 3s. 2d. for income-tax, £31,895 for on debentures, debenture stock, and contribution to sinking fund, leaving £133,004 13s. 3d. as the net profit for the half-year. 4. Two quarterly interim dividends of 1} per cent, each, amounting to £62,500, have been paid for the half-year under review, leaving £70,504 13s. 3d. to be carried forward. 5. The working of the Australasian tariff arrangement for the fourth year of guarantee, ended 30th April last, resulted in the guaranteed figure being slightly exceeded owing to the exceptionally heavy gold-mining traffic that was exchanged with Australasia during the latter part of the year. 6. The maintenance-ships have, as usual, been kept employed during the half-year under review on the various sections of the Company's cables, but owing to the cables being duplicated the traffic has in no instance been interrupted. John Pendeb, Chairman. Winchester House, 50, Old Broad Street, London, E.C., 21st October, 1895.

Eevenue Account foe the Half-yeae ended 30th June, 1895. Dr. £ b. a. I Or, S, s. d. To General expenses in London (see ; By Message and other receipts, after deAbstract A) .. .. .. 7,291 15 4 ; ducting loss on exchange .. .. 240,206 12 11 General expenses at stations (see Australian duplicate cable subsidies .. 16,200 0 0 Abstracts) .. .. .. 50,191 4 1 I Tasmanian cable subsidy .. .. 2,100 0 0 Use of patents .. .. .. 100 0 0 | Tonquin cable subsidy .. .. 5,300 0 0 Electrician's retaining-fee .. .. 50 0 0 Malacca cable subsidy .. .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Transfer fees .. .. .. 71 17 6 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. .. 831 15 10 Staff pension fund .. .. .. 787 7 9 Expenses in connection with Chinese, Australian, and Spanish negotiations', and pension fund.. .. .. 1,078 11 5 Repairs to cables (see Abstract C) .. 29,323 19 7 Maintenance-ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 3,984 3 2 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures.. .. .. .. 25,495 0 0 Interest on 4-percent, mortgage debenture stock -.. .. .. 6,400 0 0 Balance .. .. .. .. 133,004 13 3 £264,138 10 5 £264,138 10 5 First interim dividend of 1895, 2s. 6d. per share, paid 15th July, 1895 .. 31,250 0 0 Second interim dividend of 1895, 2s. 6d. per share, paid 15th October, 1896 .. 31,250 0 Oj Balance .. .. .. .. 70,504 13 3i By Balance down .. .. .. 133,004 13 3 £133,004 13 3 j £133,004 13 3

Absteacts relating to Eevenue Account fob the Half-yeab ended 30th June, 1895. Abstract A. Statement of General Expenses in London. £ s. d. Salaries, including managing director's remuneration .. .. .. 3,98115 3 Wages.. .. .. •. ■ • ••. • i • • 207 10 9 Office expenses ... .. .. .. .. .. .. 1,032 810 Rent, taxes, &o. .. .. .. .. .. •• •• 1,022 2 1 Stationery and printing .. .. .. .. .. .. 205 19 5 Postage, bill, and other stamps .. .. .. .. .. 273 18 4 Legal expenses .. .. .. .. .. •. ' • 58 8 3 Repairs and renewals to furniture .. .. .. .. . • 827 19 7 £7,291 15 4

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Abstract B.

Statement of Gbnebal Expenses at Stations. ■ £ s. d. Salaries and wages .. .. .. .. .. ..30,108 10 10 Travelling-expenses .. .. .. .. .. .. 2,388 10 5 Rent, taxes, house-allowances .. .. .. .. .. 5,089 7 4 Expenses of electric-lighting at stations .. .. .. .. 1,218 10 7 Provision- and ration-allowances .. .. .. .. .. 812 0 4 Maintenance and renewals of instruments and electrical apparatus .. .. 1,466 10 3 Expenses of la.nd-)ines .. .. .. .. .. ■ • 69 17 0 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 2,153 11 9 Repairs to buildings .. .. .. .. .. .. 2,018 10 0 Insurances at stations .. .. .. .. .. .. 349 3 4 Stationery and printing .. .. .. .. .• .. 1,998 14 2 Office and message postages.. .. .. .. .. .. 196 19 11 Office and petty expenses .. .. .. .. •. .. 670 10 10 Medical attendance .. .. .. .. .. •. 439 6 6 Service messages .. .. .. .. .. .. .. 43 6 0 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 220 16 8 Advertising at stations .. .. .. .. .. .. 817 7 Messengers' uniforms .. .. .. .. .. •. 62 13 2 Income-tax at stations .. .. .. .. .. .. ' 125 7 5 Guarantee of staff and bank balances abroad .. .. .. .. 500 0 0 ~ „ £50,191 4 1 Abstract G. — Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating seventy- £ s. d. seven days .. .. .. .. .. .. 3,561 2 9 Expenses of s.s. "Sherard Osborn" during remainder of six months .. .. 3,996 7 2 Expenses of s.s. "Recorder," effecting numerous repairs, aggregating seventy-seven days.. .. .. .. .. .. .. .. 3,017 16 8 Expenses of s.s. " Recorder " during remainder of six months.. .. .. 3,048 14 7 Cable, expended on repairs, and sundry expenses at stations after deducting value of picked-up cable .. .. .. .. .. .. 9,688 5 11 Insurance of cable on board maintenance ships .. .. .. .. 1,622 7 3 Expenses of cable depot at Singapore .. .. .. .. .. 761 6 6 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of ship .. .. .. .. 1, 180 0 0 Depreciation of cable stores .. .. .. .. .. 2,447 18 9

£29,323 19 7 Geneeal Eesbbve Fund, 30th June, 1895. Dr. £ s. a. Gr. £ s. d. The following amounts for new cables and By Balance of Reserve Fund at 31st Decable renewals have from time to time cember, 1894 .. .. .. 641,598 13 3 been charged against the Reserve and Interest received during half-year .. 7,265 11 11 Revenue Accounts :— Profit on sale of Reserve Fund invest-Bangoon-Penang cable, 1877 .. .. 134,437 4 8 ments .. .. .. .. 286 9 0 Rangoon-Penang cable renewals, 1884-85 and 1887 .. .. .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. .. .. .. 16,071 10 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java-Australian cables partial renewals, 1884 and 1888 .. .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .. .. .. 59,677 111 Victoria-Tasmania duplicate cable, 1885 31,190 5 0 Penang-Singapore cable renewal, 1886 53,245 3 8 Hongkong - Saigon cable partial renewals, 1889-90 and 1892 .. ..£15,880 19 9 Less value of cable recovered and credited to Reserve Fund, 1893 .. 1,271 4 8 14,609 15 1 Western Australia cable, 1889-90 .. 119,898 0 5 New Zealand duplicate cable, 1890 .. 188,433 15 6 Madras-Penang partial renewal, 1890-91 ..£91,896 1 4 Leas value of cable recovered and credited to Reserve Fund, 1593 .. 737 15 9 91,158 5 7 Hongkong-Tonquin partial renewal, 1890 and 1891 .. .. .. .. 34.32S ] 0 Madras-Penang duplicate cable, 1890-91 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 25,974 19 4 Shanghai-Foochow partial renewal, 1892 5,307 13 10 Singapore-Hongkong cable, 1894 .. 100,000 0 0 £1,260,685 9_ 9 To balance carried down .. .. 649,150 14 2 £649,150 14 2 2 Balance as per balance-sheet .. £649,150 14 2

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98

Balance-sheet 30th June, 1895. Dr. £ 8. d.'l Cr. £ s. d. To Capital— By Capital expenditure, as per last ac--300,000 shares of count.. .. .. .. 2,870,913 17 9 £10 each .. £3,000,000 0 0 Maintenance-ships, as per last access 50,000 shares count.. .. .. .. 66,449 14 10 of £10 each unissued .. 500,000 0 0 2,937,363 12 7 2,500,000 0 0 Balance of expenditure on account 5-per-cent. Australian subsidy deben- of the new Singapore-Hongkong tures— cable .. .. .. .. 186,043 14 1 2,484 debentures of £100 each, as Investments on account of reserve per last account .. .. 248,400 0 0 funds (see Abstract D) .. .. 580,198 16 1 4 per cent, mortgage debenture stock 320,000 0 0 Trustees for 5-per-cent. Australian Reserve funds— subsidy debentures .. .. 41,367 6 9 General reserve .. .. 649,150 14 2 Spare cable and other stores .. 87,227 18 5 Maintenance-ships'reserve .. 72,332 14 8 Traffic and other debit balances .. 108,628 15 6 Insurance reserve for maintenance- Bills receivable .. .. .. 43,600 0 0 ships and cables .. .. 77,128 15 11 Remittances in transit .. .. 17,900 0 0 Sinking funds— Cash at banker's and in hand .. 111,457 6 3 Australian subsidy debenture sinking fund .. .. .. 45,367 6 9 Traffic and other credit balances .. 55,750 1 5 Reserve for fire insurance, guarantees, &c. .. .. .. 5,586 9 11 Debenture interest accrued and unpaid .. .. .. .. 5,155 11 1 Proprietors for dividends— Unclaimed dividends .. .. 1,911 2 6 First interim dividend of 2s. 6d. per share, paid 15th July, 1895 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, paid 15th October, 1895 .. .. .. 31,250 0 0 Revenue account balance .. .. 70,504 13 3 £4,113,787 9 8 £4,113,787 9 8 Audited and found correct, Deloitte, Deveb, Griffiths, and C 0.,) , -~, London, 21st October, 1895. Welton, Jones, and Co., f Auaicors -

Abstract D. LIST OF INVESTMENTS ON ACCOUNT OF EESBBVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2f-percent. Consols.. .. .. .. .. ..Coating 31,708 17 S 2,500 Chilian Government 4J-percent. converted loan .. .. .. „ 2,512 10 4 14,500 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. „ 14,973 12 5 1,500 Egyptian Government 3-per-oent. guaranteed bonds .. .. .. "„ 1,429 1 0 3,500 Globe Telegraph and Trust Company (Ijimited) 6-percent, preference shares „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4 per-cent. debenture stock .. .. .. ~. 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock .. .. .. „ 25,968 15 0 5,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. „ 5,100 0 0 2,500 Southern Mahratta Eailway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 5,000 Barbadoes 3 J-per-cent. inscribed stock (1942) .. .. ..Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. „ 9,962 7 10 9,000 Canadian Pacific Eailway 5-per-cent. first morfc. debenture bonds (1915) .. „ 9,620 410 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) .. „ 4,796 6 9 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. „ 5,639 1 9 4,000 City of Sydney 5-per-cent, bonds (1904) .. .. ... .. „ 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures (1910-12) .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed 1887 (1937) .. .. „ 4,993 14 1 5,000 Natal 3£-per-cent, inscribed stock (1914-39) .. .. .. ~ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 15,000 New South Wales Government 3J-per-cent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cent. inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand Government 3J-per-cent. inscribed stock (1940) '.. .. „ 5,149 810 10,000 Queensland Government 4-per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock (1924) .. .. „ 15,732 19 8 10,000 South Australian 3£-per-cent. inscribed stock (1939) .. .. .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) . ... „ 5,050 1 11 5,000 Tasmanian Government 3J-per-cent. inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4J-per-cent. debentures (1904).. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. .. „ 5,050 1 1]

99

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American Bailways. £ s. d. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds 1874(1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-oent. bonds 1885 (1925) .. „ 10,375 17 6 $25,000 Central Railroad Company of New Jersey 5-percent, gen. mortgage coupon gold bonds(l9B7) .. .. .. .. .. 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company general mortgage gold bonds (1942) .. .. .. .. .. 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-oent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per-cent. extended bonds (1951) .. „ 14,949 10 10 $25,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 (1905) .. .. .. .. „ 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinking fund bonds (1905) .. .. .. .. .. „ 21,062 1 1 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds (series A) (1940) .. .. » 5,388 9 3 Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-per-oent. debenture stock .. .. ..Costing 8,339 & 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways 4J-per-cenfc. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 5,139 17 6 13,333 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. .. „ 10,964 13 11 5,000 Lancashire and Yorkshire Railway 4-percent, consolidated guar. stock .. „ 5,516 10 0 9,750 London, Brighton, and S. C. perl. guar. deb. etock .. „■ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 5,312 London, Tilbury, and Southend Railway 4 per-cent. debenture stock .. „ 5,833 8 2 19,900 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,836 18 6 5,110 Metropolitan District Railway 4|-per-cent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. „ 5,503 15 7 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North E. Railway W. Hartlepool 4-percent, preference stock .. .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. con. pref. stock .. .. .. „ 8,748 6 3 5,000 North E. Railway 4-per-cent. debenture stock .. .. .. „ 5,576 12 9 £580,198 16 1

Fivb-peb-Cent. Austealian Govebnment Subsidy Debentures. Numbbes of 389 Debentuebs of £100 each drawn on Ist April, 1895, for Payment at Messrs, Barclay, Bevan, and Co., 54, Lombard Street, 8.C., on the Ist July, 1895. 4 510 949 1614 2071 2480 2858 3319 3812 4274 4951 5433 5964 43 518 973 1624 2093 2489 2868 3324 3821 4337 4962 5444 5981 92 536 975 1625 2109 2506 2877 3376 3829 4392 4963 5446 5985 107 539 997 1641 2117 2516 2879 3386 3843 4401 4965 5476 5989 111 547 1086 1648 2123 2523 2887 3404 3857 4416 4967 5522 6046 127 569 1090 1661 2127 2550 2961 3430 3889 4418 «015 5611 6051 128 615 1111 1672 2159 2554 3010 3434 3913 4426 5019 5654 6061 148 624 1127 1686 2161 2568 3011 3438 3924 4431 5025 5657 6063 157 645 1129 1697 2186 2572 3015 3470 3951 4462 5027 5675 6081 161 666 1156 1710 2192 2583 3022 3491 3953 4478 5032 5703 6120 188 687 1188 1730 2196 2593 3047 3512 3972 4480 5049 5704 6132 224 '702 1214 1764 2209 2599 3049 3516 3982 4506 5058 5713 6136 227 720 1222 1777 2213 2624 3055 3536 4016 4517 5082 5718 6139 233 726 1224 1804 2266 2646 3061 3551 4027 4539 5086 5726 6157 252 756 1234 1824 2273 2662 3110 3558 4051 4553 5113 5729 6163 266 766 1235 1825 2274 2670 3154 3559 4069 4574 5116 5734 6173 275 787 1254 1842 2275 2675 3182 3569 4083 4664 5150 5735 6185 298 830 1267 1871 2294 2687 3185 3573 4084 4671 5157 5762 6209 308 835 1269 1882 2302 2694 3187 3589 4101 4672 5175 5768 6242 343 841 1333 1883 2318 2706 3197 3624 4113 4714 5217 5774 6251 354 854 1344 1903 2332 2731 3202 3649 4128 4721 5251 5829 6281 357 857 1372 1922 2352 2733 3211 3673 4136 4736 5270 5842 6289 363 - 868 1377 1931 2359 2737 3241 3688 4151 4780 5276 5849 6290 373 869 1382 1978 2365 2742 3251 3697 4157 4788 5296 5854 6312 410 876 1386 1995 2386 2746 3262 3710 4181 4790 5299 5893 6342 421 898 1455 2000 2401 2756 3281 3723' 4192 4846 5305 5903 6374 425 900 1458 2013 2403 2758 3288 3758 4200 4850 5311 5912 6378 440 907 1494 2035 2434 2771 3311 3761 4218 4898 5335 5924 6390 454 938 1532 2039 2451 2784 3312 3792 4247 4906 5337 5938 6395 509 943 1569 2057 2474 2796 3316 3809 4255 4931 5342 5961

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100

Half-year ended 31st December, 1895. THE EASTEEN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY LIMITED). Directors. —Sir John Pender, G.C.M.G., M.P. (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoe Cappel, K.C.1.E., Charles William Earle, Esq., George Garden Nicol, Esq., John Denison Pender, Esq., the Most Hon. the Marquis of Tweeddale. Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C,

Eepobt and Accounts of the Dieectobs for the Half-year ended the 31st December, 1895, to be submitted to the Forty-fifth Ordinary General Meeting, 29th April, 1896. 1. The usual statements of account for the half-year ended the 31st December, 1895, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £311,582 10s. lid., against £261,322 14s. 6d. for the corresponding period of 1894. This large increase is mainly due to the exceptionally heavy traffic transmitted to and from Western Australia in connection with the gold-mining industry that has recently sprung up in that colony. 3. The working and other expenses, including £20,713 2s. for cost of repairs to cables and expenses of ships, absorb £84,044 6s. 4d., against £89,740 14s. 9d. for the corresponding period of 1894, leaving a balance of £227,538 4s. 7d. From this is deducted £4,318 Bs. 4d. for income-tax, £20,000 transferred to the Fire Insurance Fund, £31,895 for interest on debentures, debenturestock, and contribution to sinking fund, leaving as the net profit for the half-year £171,324 16s. 3d., which, with £70,504 13s. 3d. brought forward from the previous half-year, shows an available balance of £241,829 9s. 6d. 4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 30th instant, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1895. The balance of £129,329 9s. 6d. has been carried to the General Eeserve Fund, which now stands at £561,546 9s. 9d. 5. During the past half-year the company's system has been strengthened by the renewal of 340 knots of the New Zealand (original) cable and 109 knots of the Tasmanian (original) cable. The cost of these renewals, amounting to £38,733 ss. 10d., has been debited to the General Eeserve Fund, together with £186,043 14s. Id., the balance of cost of the alternative Singapore-Hongkong cable. Further extensive renewal work will have to be carried out during the current year. 6. In accordance with the provisions of the trust deed, dated the 10th May, 1879, 409 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £10,900, were drawn by lot on the Ist instant for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 7. With a view to placing the company's tariffs on a more uniform and satisfactory basis, your directors have decided to reduce the local rates as and from the Ist July next. The immediate effect will certainly be a considerable falling-off of revenue, but it is hoped that the lower rates will lead to such an increase of business as may eventually recoup the initial loss. 8. In accordance with the articles of association, John Denison Pender, Esq., and the Most Hon. the Marquis of Tweeddale retire by rotation, and, being eligible, offer themselves for reelection. 9. The retiring auditors, Messrs. Deloitte, Dever, Griffiths, and Co., and Messrs. Welton, Jones, and Co., also offer themselves for re-election. Tweeddale, Acting Chairman. F. E. Hesse, Secretary. Winchester House, 50, Old Broad Street, London, E.C., 17th April, 1896.

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Eevenue Account foe the Half-yeab ended 31st December, 1895. Dr. ■ £ s. d. Cr. & s. d. To General expenses in London (see Ab- By Message and other receipts .. 287,720 15 11 stract A) .. .. .. 7,020 17 3 Australian duplicate cable subsidies .. 16,200 0 0 General expenses at stations (Kee Ab- Tasmanian cable subsidy .. .. 2,100 0 0 stract B) .. .. .. 45,221 14 9 Tonquin cable subsidy .. .. 5,300 0 0 Use of patents .. .. .. 100 0 0 Malacca cable subsidy .. .. 200 0 0 Electrician's consulting-fee .. 50 0 0 Transfer-fees .. .. .. 61 15 0 Directors'remuneration .. .. 2,000 0 0 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. 974 16 2 Staff Pension Fund .. .. 785 11 8 Expenses in connection with Australian, Chinese, and Spanish negotiations, &c. .. .. .. 3,578 4 6 Repairs to cables (see Abstract C) .. 20,713 2 0 Maintenance ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 4,318 8 4 Fire Insurance Fund .. .. 20,000 0 0 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 171,324 16 3 £311,582 10 11 £311,582 10 11 Third interim dividend of 1895, 2s. 6d. per share, paid 15th January, 1896 31,250 0 0 Proposed final dividend of 2s. 6d. per share for 1895, payable 30th April, 1896 .. ..' .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 30th April, 1896 .. ".. 50,000 0 0 By Balance down .. .. .. 171,324 16 3 Balance to General Reserve Fund .. 129,329 9 6 Balance of revenue to 30th June, 1895 70,504 13 3 £241,829 9 6 £241,829 9 6

Abstracts relating to Eevenub Account foe the Half-yeak ended 31st Decbmbee, 1895. Abstract A. Statement op Genebal Expenses in London. £ s. d. Salaries (including managing director's remuneration) .. .. .. 3,958 17 11 Wages .. .. .. .. .. .. .. .. 198 14 7 Office expenses .. .. .. .. .. .. .. 970 18 0 Rent, taxes, &o. .. .. .. .. .. .. .. 1,054 13 6 Stationery and printing .. .. .. .. .. .. 224 8 9 Postage, bill, and other stamps .. .. .. ... .. 212 12 5 Advertising .. ' .. .. .. .. .. .. 105 14 6 Legal expenses .. .. .. .. .. .. .. 146 11 8 Repairs and renewals to furniture, &o. .. .. .. .. .. 148 5 11 Per Revenue Account .. .. .. .. £7,020 17 3 Abstract B. Statement of Woeking-expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 30,507 19 8 Travelling-expenses .. .. .. .. .. .. 2,036 15 6 Rent, taxes, house-allowances .. .. .. .. .. 5,116 6 5 Expenses of electric-lighting at stations .. .. .. .. 432 17 3 Provision- and ration-allowances .. .. .. .. .. 668 3 2 Maintenance and renewals of instruments and electrical apparatus .. .. 968 11 0 Expenses of land-lines .. .. .. .. .. 103 8 9 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 801 13 5 Repairs to buildings .. .. .. .. .. .. 270 12 10 Insurances at stations .. .. .. .. .. .. 351 4 2 Stationery and printing .. .. .. .. .. .. 313 4 0 Office and message postages .. .. .. .. .. 182 7 7 Office and petty expenses .. .. .. .. .. .. 727 3 8 Medical attendance .. .. .. .... .. 510 4 1 Service messages .. .. .. .. .. .. .. 512 6 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 140 16 8 Advertising at stations .. .. .. .. .. .. 419 10 Messengers' uniforms .. .. .. .. ... .. 62 15 6 Income-tax at stations .. .. .. .. .. . .. 1,221 8 9 Guarantee of staff and bank balances abroad .. .. .. .. 500 0 0 Per Revenue Account ~ ~ .. .. £45,221 14 9 14—1, 7. "" ■ " ;

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102

Abstract G. Expenses attending Maintenance of Gables. & s. d. Expenses of s.s. " Sherard Osborn," repairs, aggregating 159 days, after deducting expenses of ship on renewal work .. .. .. .. .. 2,863 6 7 Fjxpenses of s.s. " Sherard Osborn " during remainder of six months .. .. 791 011 Expenses of s.s. "Recorder," effecting numerous repairs, aggregating eighty-nine days 3,611 211 Expenses of s.a " Recorder " during remainder of six months.. .. .. 2,642 15 2 Cable expended on repairs, and sundry expenses of stations, after deducting value of picked-up cable .. .. .. .. .. .. 4,086 12 6 Insurance of cable on board maintenance-ships .. .. .. .. 1,583 12 5 Fjxpenses of cable depot at Singapore .. .. .. .. .. 1,064 11 6 Charter of Great Northern Company's maintenance-ship for repair of cables in the China and agreed charge for call of ship .. .. .. .. 3,220 0 0 Depreciation of cable stores .. .. .. .. .. .. 850 0 0 £20,713 2 0

General Beserve Fund, 31st December, 1895. Dr. £ s. d. Cr. £ s. d. To Balance of cost of Singapore-Hongkong By Balance of Reserve Fund at 30th cable .. .. .. .. 186,043 14 1 June, 1895 .. .. .. 649,150 14 2 Sydney-Nelson (original) cable partial Interest received during half-year .. 7,843 6 0 renewal .. .. .. 28,847 5 4 Balance transferred from Revenue Victoria-Tasmania (original) cable par- Account .. .. .. 129,329 9 G tial renewal .. .. .. 9,886 0 6 The following amounts for new cables and cable renewals have from time to time been charged against the Reserve and Revenue Accounts:— Rangoon-Penang cable, 1877 .. .. £134,437 4 8 Rangoon-Penang cable renewals, 1884-85 and 1887 .. .. 21,175 4 2 Hongkong-Manila cable, portion of cost, 1880 .. 10,07110 0 Singapore-Batavia cable renewal, 1881 .. 64,363 11 5 Java-Australian cables partial renewals, 1884 and 1888 .. .. 41,754 17 0 Singapore-Saigon cable renewals, 1884-85 and 1887-88 .. .. 59,677 1 11 Victori a-Tasm ania duplicate cable, 1885 .. 31,190 5 0 Penang-Singapore oable renewal, 1886 .. 53,245 3 8 Hongkong-Saigon cable partial renewals, 1889--90 and 1892, £15,880 19s. 9d. Less value of cable recovered and credited to Reserve Fund, 1893, £1,271 4s. 8d... .. .. 14,609 15 1 Western Australia cable, 1889-90 .. .. 119,898 0 5 New Zealand duplicate cable, 1890 .. .. 188,433 15 0 Madras - Penang, partial renewal, 1890-91, £91,896 Is. 4d. Less value of cable recovered and credited to Reserve Fund, 1893, £737 15s. 9a... .. .. 91,158 5 7 Hongkong-Tonquin, partial renewal, 1890-91.. 34,328 1 0 Madras-Penang duplicate cable, 1890-91 .. 244,135 14 9 Penang-Sumatra cable, 1891 .. .. 14,924 6 5 Singapore-Penang triplicate cable, 1892 .. 25,974 19 4 Shanghai-Foochow, partial renewal, 1892 .. 5,307 13 10 Singapore - Hongkong cable, 1894-95 .. 286,043 14 1 Sydney-Nelson (original) cable, partial renewal, 1895 ' .. .. 28,847 5 4 Victoria-Tasmania (original) cable, partial renewal, 1895 .. .. 9,886 0 6 £1,485,462 9 8 Balance carried down .. .. .. 561,546 9 9 £786,323 9 8 £786,323 9 8 Balance as per balance-sheet .. £561,546 9 9

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Balance-sheet, 31st Decembee, 1895. Dr. £ s. d. Or. £ g. d. To Capital— By Capital expenditure, 300,000 shares of as per last account £2,870,913 17 9 £10 each ..£3,000,000 0 0 Add cost of land for Less 50,000 shares cable-house at of £10 each, un- Tanjong-Katong, issued .. 500,000 0 0 Singapore .. 320 2 3 . 2,500,000 0 0 5-per-cent. Australian subsidy deben- 2,871,234 0 0 tures — Less transferred 2,484 debentures of from Australian £100 each, as per 5-per-cent. subsidy last account .. £248,400 0 0 debenture sinking Less 389 deben- fund .. .. 38,900 0 0 tures drawn Ist ; 2,832,334 0 0 April, 1895, for Maintenance-ships, as per last account 66,449 14 10 payment Ist July, 1895 .. 38,900 0 0 2,898,783 14 10 ■ 209,500 0 0 Investments on account of reserve 4-per-cent. mortgage debenture stock 320,000 0 0 funds (see Abstract D) .. .. 690,947 18 8 Trustees for 5-per-cent. Australian Eeserve funds— 3,029,500 0 0 subsidy debentures .. .. 13,631 18 9 General reserve .. .. 561,546 9 9 Spare cable and other stores .. 54,195 16 3 Maintenance-ships reserve .. 76,736 17 11 Traffic and other debit balances .. 137,384 4 6 Insurance reserve for maintenance- Bills receivable .. .. .. 39,380 0 0 ships and cables .. .. 83,247 12 4 Remittances in transit .. .. 13,820 0 0 Sinking fund— Cash at banker's and in hand .. 107,121 7 2 Australian subsidy debenture sinking fund .. .. .. 26,926 18 9 Traffic and other credit balances .. 32,054 211 Eeserve for fire insurance, guarantees, &c. .. .. .. .. 26,159 11 11 Debenture interest accrued and unpaid 5,161 7 1 Proprietors for dividends— Unclaimed dividends .. .. 1,281 19 6 Third interim dividend of 2s. 6d. per share, paid the 15th January, 1896 .. .. .. .. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable the 30th April, 1896 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable the 30th April, 1896 .. 50,000 0 0 £3,955,115 0 2 £3,955,115 0 2 Audited and found correct. Deloitte, Devee, Geiitiths, and Co., I , ~. London, 16th April, 1896. Welton, Jones, and Co., j Auail!ors -

Abstbact D. LIST OF INVESTMENTS ON ACCOUNT OP KESEKVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2J-per-cent. Consols.. .. .. .. ... .. Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 14,500 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-oent. Australian Government subsidy debentures .. .. „ 14,969 18 6 10,000 East London Waterworks 3-per-oent. debenture stock .. .. „ 10,576 8 6 1,500 Egyptian Government 3-por-oent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-per-oent. pref. shares .. „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. ..„ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock .. .. .. „ 25,968 15 0 5,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. „ 5,100 0 0 2,500 Southern Mahratta Railway (Limited) 4-per-oent. debenture stock .. „ 2,703 14. 8 Colonial. 5,000 Barbados 3J-per-cent. inscribed stock (1942) .. .. .. Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. „ 9,962 7 10 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds (1915) „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stack 1882 (1923) .. „ 4,796 6 9 10,000 Cape of Good Hope Government 4-per cent. con. inscribed stock (1916-36) .. „ 11,667 17 2 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. „ 5,639 1 9 5,000 Ceylon Government 3 per-oent. inscribed stock (1940) .. .. „ 5,213 14 3 4,000 City of Sydney 5-per-cent. bonds (1904) .. .. .. ~ „ 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures (1910-12) .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock inscribed 1887 (1937) .. .. „ 4,993 14 1 5,000 Natal 3i-per-cent. inscribed stock (1914-1939) .. .. .. „ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 2,500 New South Wales Government 3-per-cent. inscribed stock (1935) .. „ 2,406 15 3 15,000 New South Wales Government 3J-per-cent, inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cenfc. inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand Government 3J-per-cent. inscribed stock (1940) .. .. „ 5,149 810 10,000 Queensland Government 4-per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock (1924) .. .. „ 15,732 19 8

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104

£ Colonial —continued. £ s. d. 10,000 South Australian Government 3J-per-cent. inscribed-stock (1939) .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) .. .. ~ 5,050 1 11 '5,000 Tasmanian Government 3^-per-cent, inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4J-per-cent. debentures (1904) .. .. „ 14,314 5 0 5,000 Victorian Government 4-por-cent. debenture bonds (1907) .. .. „ 5,050 1 11 American liailioays. 8,400 Baltimore and Ohio Railroad Company 6-percent, sterling bonds 1874 (1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds 1885 (1925) .. „ 10,375 17 6 §25,000 Central Railroad Company of N. Jersey 5-per-cent. gen. mort. coupon gold bonds (1987) .. .. .. .. .. •• . 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds (1942) .. .. .. .. .. .. 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per-cent. extended bonds (1951) .. „ 14,949 10 10 $25,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 (1905) .. .. .. .. „ 5,256 17 6 £17,600 Pennsylvania Railroad Company 6-per-cent. consolidated mortgage sinkingfund bonds (1905) .. .. .. .. .. 21,062 1 1 10,000 Pennsylvania Railroad Company 3J-per-cent. consolidated mortgage sterling bonds (1945) .. .. .. .. .. .. , 10,420 15 6 125,000 Pittsburg, Cincinnati, Chicago and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds (series A) (1940) .. .. „ 5,388 9 3 British Railway Debenture and Guaranteed Stocks. £7,500 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 8,339 4 8 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 14,562 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 15,687 17 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 20,000 Great Northern Railway 3-per-cent. debenture stock .. .. .. „ 23,073 0 6 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 3,500 Great Western Railway 5 per-cent. consolidated guaranteed stock .. „ 5,139 17 6 5,000 Great Western Railway 4-percent, debenture stock .. .. .. „ 7,667 12 5 13,333 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. .. „ 10,964 13 11 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 9,750 London, Brighton, and S. O. Railway perl. guar. deb. stock .. ~ 12,748 8 6 7,000 London, Chatham, and Dover Railway 4|-per-cent. arbit. debenture stock .. „ 8,428 17 6 9,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 10,099 6 3 10,000 London and North-western Railway 3-per-cent. perl. deb. stock .. .. „ 11,814 7 0 5,312 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 5,833 8 2 19,900 Metropolitan Railway 4-per-cent. debenture.stock .. .. .... „ 21,836 18 6 5,110 Metropolitan District Railway 4J-per-cent. Pulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stock .. .. „ 5,503 15 7 20,000 Midland Railway 3-per-cent. debenture stock .. .. .. „ 23,253 6 6 19,333 6 8 North British Railway 3-per-cent. debenture stock .. .. „ 15,696 5 1 5,000 North E. Railway, West Hartlepool, 4-per-cent. preference stock .. „ 5,466 12 6 8,000 North E. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 5,000 North E. Railway 4-percent, debenture stock .. .. .. „ 5,576 12 9 4,000 South E. Railway 3-per-cent. perl, debenture stock .. .. .. „ 4,658 19 5

. £690,947 18 8 Five-per-Cent. Australian Government Subsidy Debentures. Numbers of 409 Debentures of £100 each drawn on Ist April, 1896, for Payment at Messrs, Barclay, Bevan, and Co., 54, Lombard Street, E.C., on the Ist July, 1896: — 17 475 937 1373 1872 2310 2828 3318 3756 4240 4763 5344 5805 21 479- 939 1378 1895 2315 2839 3331 3766 4246 4774 5378 5858 26 494 946 1390 1899 2324 2840 3336 3767 4249 4782 5383 5860 29 523 947 1399 1917 2338 2841 3342 3793 4251 4787 5384 5881 41 530 958 1404 1919 2344 2849 3345 3839 4253 4796 5390 5932 52 559 959 1417 1923 2347 2857 3397 3849 4262 4808 5404 5953 69 563 977 1427 1941 2369 2882 3421 3888 4267 4816 5432 6000 90 566 978 1449 1958 2374 2883 3423 3890 4297 4870 5443 6027 99 590 994 1461 1963 2416 2925 3429 3894 4356 4934 5461 6040 102 614 1004 1464 1967 2418 2930 3440 3919 4360 4940 5466 6045 103 664 1013 1466 1973 2424 2931 3443 3927 4370 4945 5472 6113 116 677 1024 1473 1986 2431 2937 3478 3939 4381 4970 5484 6127 144 686 1025 1511 2003 2457 2965 3479 3941 4382 4982 5534 6158 155 690 1026 1572 2029 2470 2982 3483 3945 4385 4992 5538 6165 189 691 1051 1574 2037 2476 2999 3527 3907 4386 5038 5544 6176 200 711 1089 1590 2041 2497 3023 3541 3983 4399 5056 5546 6207 211 717 1098 1651 2052 2503 3027 3544 3985 4430 5092 5550 6221 214 734 1102 1677 2067 2507 3095 3548 4005 4482 5095 5560 6243 229 761 1104 1689 2085 2526 3096 3549 4009 4483 5100 5508 6253 285 778 1112 1706 2086 2541 3099 3615 4024 4533 5107 5583 6267 299 790 1116 1736 2095 2552 3111 3628 4038 4547 5111 5597 6274 310 811 1160 1738 2100 2576 3141 3645 4049 4548 5123 5600 6291 326 813 1167 1740 2102 2587 3153 3647 4066 4604 5160 5601 6302 350 817 1186 1743 2115 2601 3167 3650 4098 4609 5183 5633 6318 369 844 1190 1770 2188 2648 3210 3651 4178 4618 5214 5637 6321 387 860 1211 1773 2207 2657 3217 3659 4182 4632 5235 5080 6327 422 870 1231 1778 2226 2691 3231 3662 4201 4679 5241 5706 6345 431 872 1282 1788 2233 2699 3239 3701 4204 4684 5275 5727 6349 434 879 1308 1791 2261 2713 3263 3720 4226 4705 5278 5741 6351 435 883 1327 1821 2281 2722 3284 3731 4234 4725 5283 5765 6352 448 888 1357 1836 2282 2791 3313 3735 4235 4730 5306 5791 6365 465 896 1365 1837 2306 2822

105

1.—7

Half-year ended 30th June, 1896. ' THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —The Most Hon. the Marquis of Tweeddale (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, K.C.1.E., Charles William Earle, Esq., George Garden Nicol, Esq., John Denison Pender, Esq. Manager and Secretary.—¥. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Eepoet and Accounts of the Dibkctobs for the Half-year ended 30th June, 1896, to be submitted to the Forty - sixth Half-yearly Ordinary General Meeting, to be held at Winchester House, 50, Old Broad Street, London, on Wednesday, the 28th October, 1896, at 2.30 o'clock. 1, The usual statements of account for the half-year ended 30th June, 1896, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during that period to £313,914 18s. lid., against £264,138 10s. sd. for the corresponding half-year of 1895. 3. The working-expenses, including £19,916 13s. Bd. for cost of repairs to cables and expenses of ships, absorb £87,256 3s. 9d., against £95,254 14s. for the corresponding period of 1895, leaving a balance of £226,658 15s. 2d. From this is deducted £4,028 Bs. 6d. for income-tax, £20,000 transferred to the Fire Insurance Fund, £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, leaving £170,735 6s. Bd. as the net profit for the half-year. 4. Two quarterly interim dividends of \\ per cent, each, amounting to £62,500, have been paid for the half-year, leaving £108,235 6s. Bd., of which. £75,000 has been transferred to the General Eeserve Fund, and the balance of £33,235 6s. Bd. is carried forward. 5. The working of the Australasian tariff arrangement for the fifth year of guarantee, ended the 30th April last, resulted in the guaranteed figure being again exceeded. This was due to the heavy gold-mining traffic with Western Australia during the past year. 6. In addition to the revision of the local rates referred to in the last report, and which took effect on the Ist July last, your directors have decided to make substantial reductions of tariff between India and China, Japan, &c, to come into force on the Ist January, 1897. Beductions in most of the company's through rates were also agreed upon at the International Telegraph Conference recently held at Budapesth, several of which will come into force on the Ist January next, and the remainder on the Ist July, 1897. The immediate effect will undoubtedly be a falling-off of revenue, but it is hoped that in time the loss will be diminished by increase of business. 7. Your directors have the pleasure to report that the long-pending negotiations between the company, its partners in the China traffic—the Great Northern Telegraph Company—and the Chinese Telegraph Administration, for a friendly working arrangement, have at last been brought to a satisfactory conclusion. The arrangement not only restores amicable relations between the administration and the companies, but settles the troublesome question of exchange, from which the company has so severely suffered in the past, by enabling it to collect in Chinese currency a fair equivalent for its sterling charges. The agreement was ratified by all the interested Governments on the 31st July last, and brought into operation on the following day. 8. Your directors have to record with deep regret the death, on the 7th July last, of their esteemed colleague and chairman, Sir John Pender, G.C.M.G., who had presided over the affairs of the company since its inception. The satisfactory position which the company has attained is largely due to his untiring energy and devotion to its interests. 9. Your directors have appointed the acting chairman, the Most Hon. the Marquis of Tweeddale, chairman of the company.. They have also appointed Mr. F. E. Hesse manager as well as secretary of the company. Tweeddale, Chairman. F. E. Hesse, Manager and Secretary. Winchester House, 50, Old Broad Street, London, E.G., 19th October, 1896.

1.—7

106

Eevenub Account foe the Half-yeae ended 30th June, 1896. Dr. £ s. d. Or. £ s. <3. To General expenses in London (see Ab- By Message and other receipts .. .. 290,058 3 11 stract A) .. .. .. 7,418 19 0 Australian duplicate cable subsidy .. 16,200 0 0 General expenses at stations (see Ab- Tasmanian cable subsidy .. .. 2,100 0 0 stract B) .. .. .. 52,203 4 9 I Tonquin cable subsidy .. .. 5,300 0 0 Electrician's consulting-fee .. 50 0 0 Malacca cable subsidy .. 200 0 0 Directors'remuneration .. .. 2,000 0 0 Transfer-foes .. .. .. 56 15 0 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. 868 16 8 Staff Pension Fund .. .. 808 19 9 Expenses in connection with various negotiations, &c. .. .. 389 9 11 Repairs to cables (see Abstract C) .. 19,916 13 8 Maintenance-ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 4,028 8 6 Fire Insurance Fund .. .. 20,000 0 0 ■ Interest and sinking fund on acoount of 5-per-cent. Australian subsidy debentures .. .. .. 25,495 0 0 Interest on 4-per-cont. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 170,735 6 8 ,6813,914 18 11 £313,914 18 11 First interim dividend of 1896, 2s. 6d. per share, paid 15th July, 1896 .. 31,250 0 0 Second interim dividend of 1896, 2s. 6d. per share, payable 15th October, 1896 .. .. .. .. 31,250 0 0 Amount carried to General Reserve Fund .. .. .. .. 75,000 0 0 Balance .. .. .. .. 33,235 6 8 Balance down .. .. .. 170,735 6 8 £170,735 6 8 £170,735 6 8

Abstracts relating to Bevenue Account pom the Half-yeab ended SOth June, 1896. Abstract A. Statement oi? General Expenses in London. £ s. d. Salaries, including managing director's remuneration .. .. .. 4,316 14 8 Wages .. .. .. •• ■• •• .. 218 9 4 Office expenses .. .. .. .. •. •■ .. 1,049 7 0 Rent, taxes, &o. .. .. .. .. .. .. 1,080 1 4 Stationery and printing .. .. .. .. .. .. 293 19 0 Postage, bill, and other stamps .. .. .. ... .. 185 9 9 Advertising .. .. .. .. .. .. .. 121 4 4 Legal expenses .. .. .. •. .. .. .. 9 12 0 Repairs and renewals to furniture, &c. .. .. .. .. 144 1 7 Per Revenue Account .. .. .. .. £7,418 19 0 Abstract B, Statement of General Expenses at Stations. £ s. d. Salaries and wages .. .. .. •■ •• •• 31,529 5 5 , Travelling-expenses .. .. .. ■• •• •• 1,777 17 6 Rent, taxes, house-allowances .. .. .. •• .. 5,163 0 1 Expenses of electric-lighting .. .. .. .. .. 455 1 5 Provision- and ration-allowances .. .. .. .. .. 755 7 S Maintenance and renewals of instruments and electrical apparatus .. .. 3,994 4 8 Expenses of land-lines .. .. . • • • • ■ • • 466 1 5 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 1,433 111 Repairs tn buildings .. .. •■ ■• ■• •• 1,676 15 5 Insurances .. .. ■.. • ■ ■ • • • • • 354 11 7 Stationery and printing .. .. .. ■■ •• .. 1,902 14 8 Office and message postages .. • • • • • • • • 172 11 8 Office and petty expenses .. .. .. • ■ • • • • 690 17 8 Medical attendance ... .. • ■ • ■ • • • • 459 6 9 Service messages .. ■ • • • • • < • • ■ 62 7 0 Expenses of Porthcurno School .. .. .. • ■ • ■ 250 0 0 Foreign agencies .. • • • • • • • • •< 170 16 8 Advertising .. .. .. • • ■ • •■ ■■ 17 19 7 Messengers' uniforms .. .. • • ■ < • < • •• 61 18 2 Income-tax .. .. . ■ ■ ■ ■ < • • • • 309 5 9 Guarantee of staff and bank balances abroad .. .. .. .. 500 0 0 Per Revenue Account ' ~ .. .. >.. £52,203 4 9

1.-7

Abstract G. Expenses attending Maintenance of Cables. £ s . <j. Expenses of s.s. " Sherard Osborn," during six months, including three days picking up cable .. .. .. .. .. .. .. 6,288 12 6 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating twenty-six days .. .. .. .. .. .. .. 1,025 13 4 Expenses of s.s. " Recorder " during remainder of six months .. .. 4,612 14 3 Cable expended on repairs, and sundry expenses of stations, after deducting value of picked-up cable .. .. .. .. .. .. 1,440 3 2 Insurance of cable on board maintenance-ships .. .. .. .. 1,031 12 7 Expenses of cable depot at Singapore .. .. .. .. 1,958 16 11 Charter of Great Northern Company's maintenance-ship for repair of cables in the China seas, and agreed charge for call of ship .. .. .. 1,720 0 0 Depreciation of cable stores .. .. .. .. .. 1,839 0 11 Per Revenue Account .. .. .. .. £19,916 13 8

General Eeseeve Fund, 30th June, 1896. Dr. £ s. d. Or. £ s. d. To Balance carried down .. .. 644,776 12 7 By Balance of Reserve Fund at 31st December, 1895 .. .. .. 561,546 9 9 Interest received during half-year .. 8,230 210 Amount transferred from Revenue Account .. .. .. .. 75,000 0 0 £644,776 12 7 £644,776 12 7 Balance as per balance-sheet ..£644,776 12 7

Balance-sheet, 30th June, 1896. Dr. £ s. d. Gr. £ s. d. To Capital— By Capital expenditure, as per last ac--300,000 shares of count.. .. .. .. 2,832,334 6 0 £10eaeh .. £3,000,000 6 0 Maintenance-ships,asperlastaccount 66,449 14 10 Less 50,000 shares of £10 each, un- 2,898,783 14 10 issued.. .. 500,000 0 0 Investments on account of reserve 2,500,000 0 0 funds (see Abstract D) .. .. 789,950 3 3 5-per-cent. Australian subsidy deben- Trustees for 5-per-cent. Australian tures— subsidy debentures .. .. 43,414 9 8 2,095 debentures of £100 each, as Spare cable and other stores .. 60,920 17 4 per last account .. .. 209,500 0 0 Traffic and other debit balances .. 124,854 17 4 4-percent, mortgage debenture stock 320,000 0 0 Bills receivable .. .. .. 38,240 0 0 Eemittanoes in transit .. .. 16,200 0 0 3,029,500 0 0 Cash at banker's and in hand .. 117,119 19 1 Reserve Funds — General reserve .. .. .. 644,776 12 7 Maintenance-ships'reserve .. 81,196 2 1 Insurance reserve for maintenanceships and cables .. .. 84,328 18 9 Sinking fund—Australian subsidy debentures .. .. .. 47,414 9 8 Traffic and other credit balances .. 50,129 15 3 Reserve for fire insurances, guarantees, &o. .. .. .. .. 49,418 111 Debenture interest accrued and unpaid 5,167 3 1 Proprietors for dividends — Unclaimed dividends .. .. 1,817 11 6 First interim dividend of 2s. 6d. per share, paid 15th July, 1896 .. 31,250 0 0 Second interim dividend of 2s. 6d. per share, payable 15th October, 1896 .. ' .. .. .. 31,250 0 0 Revenue account balance .. .. 33,235 6 8 £4,089,484 1 6 £4,089,484 1 6 Audited and found correct. Deloitte, Dever, Gbiffiths, and Co., | . -,-, London, 14th October, 1896. Welton, Jones, and Co., J Auauors.

Absteact D. LIST OP INVESTMENTS ON ACCOUNT OP RBSEEVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2|-per-oent. Consols .. .. .. .. ..Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 14,500 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. „ 14,969 18 6 10,000 East London Waterworks 3-per-oent. debenture stock .. .. „ 10,576 8 6 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0

107

I—7.

£ Government and Miscellaneous —continued. £ s. d. 3,500 Globe Telegraph and Trust Company (Limited) 6-per-oent. pref. shares .. „ 5,374 13 0 5,000 Government Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. „ 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. .. .. ■■„ 13,859 11 3 25,000 Metropolitan Consolidated 3j|-por-eenfc. stock .. .. „ 25,968 15 0 5,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. 5,100 0 0 5,000 Pacific and Oriental Steam Navigation Company 3J-per-cent. debenture stock „ 5,995 15 10 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 5,000 Barbados 3 J-per-cent. inscribed stock (1942) .. .. ..Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. „ 9,962 7 10 9,000 Canadian Pacific Eailway 5-per-cent. first mortgage debenture bonds (1915).. „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) .. „ 4,796 6 9 10,000 Cape of Good Hope Government 4-per-cent. con. inscribed stock (1916-36) .. „ 11,667 17 2 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. ~ 5,639 1 9 5,000 Ceylon Government 3-per-cent. inscribed stock (1940) .. .. „ 5,213 14 3 4,000 City of Sydney 5-per-cent. bonds (1904) .. .. .. .. 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures (1910-12) .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed 1887 (1937) .. .. „ 4,993 14 1 5,000 Natal 3J-per-eent. inscribed stock (1914-39) .. .. .. .. , 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 2,500 New South Wales Government 3-per-cent. inscribed stock (1935) .. „ 2,406 15 3 15,000 New South Wales Government 3|-per-eent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cent. inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand Government 3J-per-cent. inscribed stock (1940) .. .. „ 5,149 810 10,000 Queensland Government 4-per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock (1924) .. .. „ 15,732 19 8 10,000 South Australian Government 3J-per-cent. inscribed stock (1939) .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) .. .. „ 5,050 1 11 5,000 Tasmanian Government 3J-per-cent. inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4J-per-cent. debentures (1904) .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds 1874 (1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds 1885 (1925) .. „ 10,375 17 6 125,000 Central Railroad Company of N. Jersey 5-per-cent. gen. mort. coupon gold bonds (1987) .. .. .. .. .. .. 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds (1942) .. .. .. .. .. .. 2,295 15 0 $50,000 Illinois Central Railroad Company 4 per-cent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per-cent. extended bonds (1951) .. „ 14,949 10 10 $25,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 (1905) .. .. .. .. 5,256 17 6 £10,000 Pennsylvania Railroad Company BJ-per-cent. consolidated mortgage sterling bonds (1945) .. .. .. .. .. ~ 10,420 15 6 $25,000 Pittsburg, Cincinnati, Chicago and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds (series A) (1940) .. .. , 5,388 9 3 British Railway Debenture and Guaranteed Stocks. £15,000 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 20,265 14 10 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 15,000 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 16,359 10 11 8,000 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 8,574 13 0 5,000 Great North of Scotland Railway 4-per-cent. debenture stock .. .. „ 7,487 17 4 20,000 Great Northern Railway 3-per-cent. debenture stock .. .. .. „ 23,073 0 6 5,000 Great Southern and Western Railway of Ireland 4-per-cent. deb. stock .. „ 7,025 18 2 8,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 14,639 1 6 10,000 Great Western Railway 4-per-cent. debenture stock .. .. .. 15,829 7 0 20,000 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. .. „ 18,879 14 9 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 10,000 London, Brighton, and S.C. Railway 4J-per-cent. perl. guar. deb. stock .. 13,180 2 9 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 15,000 London and North-western Railway 4-per-cent. consolidated guar. stock .. „ 19,381 11 2 10,000 London and North-western Railway 3-per-cent. perl, debenture stock ■ .. „ 11,814 7 0 20,000 London and South-western Railway 3-per-cent. con. debenture stock .. „ 23,532 6 9 5,500 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 6,118 10 0 20,000 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,989 7 8 5,110 Metropolitan District Railway 4|-per-cent. Pulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stock .. .. „ 5,503 15 7 20,000 Midland Railway 3-per-cent. debenture stock .. .. .. „ 23,253 6 6 20,000 North British Railway 3-per-cent. debenture stock .. .. .. „ 16,449 12 9 5,000 North E. Railway W. Hartlepool 4-per-cent. preference stock ... 5,46612 6 8,000 North E. Railway 4-per-cent. consolidated preference stock .. .. „ 8,748 6 3 10,000 North E. Railway 3-per-cent. debenture stock .. .. .. „ 9,707 8 3 4,000 South E. Railway 3-per-cent. perl, debenture stock .. .. .. „ 4,658 19 5 2,000 South E. Railway 4-per-cent. perl, debenture stock .. .. .. „ 3,083 16 8 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent-charge stock .. .. .. „ 4,794 10 0 17,000 West Highland Railway 3-per-eent. guaranteed ord. stock ~ 15 0 £789,950 3 3

108

109

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Five-per-Cent. Austealian Government Subsidy Debentures. Numbers of 409 Debentures of £100 each drawn on Ist April, 1896, for Payment at Messrs. Barclay and Co., 54, Lombard Street, E.C., on Ist July, 1896: — 17 475 937 1373 1872 2310 2828 3318 3756 4240 4763 5344 5805 21 479 939 1378 1895 2315 2839 3331 3766 4246 4774 5378 5858 26 494 946 1390 1899 2324 2840 3336 3767 4249 4782 5383 5860 29 523 947 1399 1917 2338 2841 3342 3793 4251 4787 5384 5881 41 530 958 1404 1919 2344 2849 3345 3839 4253 4796 5390 5932 52 559 959 1417 1923 2347 2857 3397 3849 4262 4808 5404 5953 69 563 977 1427 1941 2369 2882 3421 3888 4267 4816 5432 6000 90 566 978 1449 1958 2374 2883 3423 3890 4297 4870 5443 6027 99 590 994 1461 1963 2416 2925 3429 3894 4356 4934 5461 6040 102 614 1004 1464 1967 2418 2930 3440 3919 4360 4940 5466 6045 103 664 1013 1466 1973 2424 2931 3443 3927 4370 4945 5472 6113 116 677 1024 1473 1986 2431 2937 3478 3939 4381 4970 5484 6127 144 686 1025 1511 2003 2457 2965 3479 3941 4382 4982 5534 6158 155 690 1026 1572 2029 2470 2982 3483 3945 4385 4992 5538 6165 189 691 1051 1574 2037 2476 2999 3527 3967 4386 5033 5544 6176 200 711 1089 1590 2041 2497 3023 3541 3983 4399 5056 5546 6207 211 717 1098 1651 2052 2503 3027 3544 3985 4430 5092 5550 6221 214 734 1102 1677 2067 2507 3095 3548 4005 4482 5095 5560 6243 229 761 1104 1689 2085 2526 3096 3549 4009 4483 5100 5568 6253 285 778 1112 1706 2086 2541 3099 3615 4024 4533 5107 5583 6267 299 790 1116 1736 2095 2552 3111 3628 4038 4547 5111 5597 6274 310 811 1160 1738 2100 2576 3141 3645 4049 4548 5123 5600 6291 326 813 1167 1740 2102 2587 3153 3647 4066 4604 5160 5601 6302 350 817 1186 1743 2115 2601 3167 3650 4098 4609 5183 5633 6318 369 844 1190 1770 2188 2648 3210 3651 4078 4618 5214 5637 6321 387 860 1211 1773 2207 2657 3217 3659 4082 4632 5235 5680 6327 422 870 1231 1778 2226 2691 3231 3662 4201 4679 5241 5706 6345 431 872 1282 1788 2233 2699 3239 3701 4204 4684 5275 5727 6349 434 879 1308 1791 2261 2713 3263 3720 4226 4705 5278 5741 6351 435 883 1327 1821 2281 2722 3284 3731 4234 4725 5283 5765 6352 448 888 1357 1836 2282 2791 3313 3735 4235 4730 5306 5791 6365 465 896 1365 1837 2306 2822

Half-year ended 31st December, 1896. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —The Most Hon. the Marquis of Tweeddale (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Gappel, K.C.1.E., Charles William Earle, Esq., the Hon. George Peel, John Denison Pender, Esq. Manager and Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C.

Eepoet and Accounts of the Directors for the Half-year ended 31st December, 1896, to be submitted to the Forty-seventh Half-yearly Ordinary General Meeting, to be held at Winchester House, No. 50, Old Broad Street, London, on Wednesday, the. 28th April, 1897, at 2.30 o'clock. 1. The usual statements of account for the half-year ended 31st December, 1896, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £325,405 12s. 6d., against £311,582 10s. lid. for the corresponding period of 1895. 3. The working and other expenses, including £36,055 19s. for cost of repairs to cables and expenses of ships, absorb £106,270 9s. 7d., against £84,044 6s. 4d. for the corresponding period of 1895, leaving a balance of £219,135 2s. lid. From this is deducted £4,177 7s. 6d. for income-tax, £10,000 transferred to the Fire Insurance Fund, and £31,895 for interest on debentures, debenture stock, and contribution to sinking funds, leaving as the net profit for the half-year £173,062 15s. 5d., which, with £33,235 6s. Bd. brought forward from the previous half-year, shows an available balance of £206,298 2s. Id. 15—1. 7,

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4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 29th instant, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1896, leaving £93,798 2s. Id., of which £75,000 has been transferred to the General Reserve Fund, and the balance of £18,798 2s. Id. is carried forward. 5. In accordance with the provisions of the trust deed dated the 10th May, 1879, 429 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £42,900, were drawn by lot on the sth instant for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 6. An arrangement has been concluded with the Spanish Government for extending, on a subsidy basis, the company's system in the Philippine Islands, by the laying of three short cables between Luzon, Panay, Negros, and Cebu. As these cables will bring Iloilo (second only in commercial importance to Manila) into telegraphic communication with the rest of the world, it is expected that while proving of great advantage to the Government they will become feeders to the company's system. 7. A contract has also been entered into with the Dutch Government for the manufacture and laying on account of the Government of two short cables in Netherlands-India. 8. Your directors regret to have to record the death, on the 16th January last, of their esteemed colleague, George Garden Nicol, Esq., who has been connected with the company from its formation. The Hon. George Peel has been appointed to the vacant seat at the Board. 9. In accordance with the articles of association two of the directors, the Hon. George Peel and Francis Augustus Bevan, Esq., retire by rotation at this meeting, and, being eligible, offer themselves for re-election. 10. The auditors, Messrs. Deloitte, Dever, Griffiths and Co. and Messrs. Welton, Jones and Co. also retire and offer themselves for re-election. Tweeddale, Chairman. F. E. Hesse, Manager and Secretary. Winchester House, 50, Old Broad Street, London, E.C., 14th April, 1897.

Ebvbnue Account fob the Half-yeae ended 31st Decembee, 1896. Dr. & s. d. Or. £ a. d. To General expenses in London (see By Message and other receipts .. .. 301,595 6 4 Abstract A) .. .. .. 7,302 0 6 Australian duplicate cable subsidies .. 16,200 0 0 General expenses at stations (see Tasmanian cable subsidy .. .. 2,100 0 0 Abstract B) .. .. .. 50,918 1 8j Tonquin cable subsidy .. .. 5,252 16 2 Use of patents .. .. .. 9010 j Malacca cable subsidy .. .. 200 0 0 Electrician's consulting-fee .. .. 50 0 0 Transfer fees .. .. .. 57 10 0 Directors'remuneration .. .. 2,000 0 0 Auditors' fees ■ .. .. .. 100 0 0 Staff endowment assurance .. .. 871 12 10 Staff Pension Fund.. .. .. 835 17 9 Expenses in connection with Australian, Chinese, and Spanish negotiations, &c. .. .. .. .. 3,593 11 0 Repairs to cables (see Abstract 0) .. 36,055 19 0 Japanese Belief Fund .. .. 50 0 0 Expenses in connection with Budapesth Conference .. .. .. 984 6 0 Maintenance-ships'reserve .. .. 3,500 0 0 Income-tax .. .. .. 4,177 7 6 Fire Insurance Fund .. .. 10,000 0 0 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures.. .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 173,062 15 5 £325,405 12 6 £325,405 12 6 Third interim dividend of 1896, 2s. 6d. per share, paid 15th January, 1897.. 31,250 0 0 Balance down .. .. .. 173,062 15 5 Proposed final dividend of 2s. 6d. per Balance of Revenue, 30th June, 1896.. 33,235 6 8 share for 1896, payable 29th April, 1897 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 29th April, 1897 .. .. .. 50,000 0 0 Amount carried to General Reserve Fund .. .. .. .. 75,000 0 0 Balance carried forward .. .. 18,798 2 1 £206,298 2 1 £206,298 2 1

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Abstracts eclating to Revenue Account for the Half-year ended 31st December, 1896. Abstract A. Statement of Geneeal Expenses in London. £ s. d. Salaries, including managing-director's remuneration .. .. .. 4,274 13 0 Wages .. .. .. .. .. .. 193 5 10 Oifice expenses .. .. .. .. .. .. .. 995 18 11 Rent, taxes, &c. .. .. .. .. .. .. .. 1,024 5 6 Stationery and printing .. .. .. .. .. .. 322 7 5 Postage, bill, and other stamps .. .. .. .. .. 190 16 10 Advertising .. .. .. .. .. .. .. 123 210 Legal expenses .. .. .. .. .. .. .. 22 16 1 Repairs and renewals to furniture, &o. .. .. .. .. .. 154 14 1 Per Bevenue Account .. .. .. .. £7,302 0 6 Abstract B. Statement of Genebal Expenses at Stations. £ s. d. Salaries and wages .. .. .. .. .. .. 31,941 3 3 Travelling-expenses .. .. .. .. .. .. 2,038 18 7 Bent, taxes, house-allowances .. .. ... .. .. 7,624 1 2 Expenses of electric lighting .. ~ .. .. .. 263 1 1 Provision- and ration-allowances .. .. .. .. .. 686 18 2 Maintenance and renewals of instruments and electrical apparatus .. .. 1,756 17 7 Expenses of land-lines .. .. .. .. .. .. 98 11 1 Bepairs and renewals of furniture, fittings, &c. .. .. .. .. 1,901 17 1 Eepairs to buildings .. .. .. .. .. .. 816 14 9 Insurances .. .. .. .. .. .. .. 380 16 9 Stationery and printing .. .. .. .. .. .. 724 7 11 Office and message postages .. .. .. .. .. .. 177 1 8 Office and petty expenses .. .. .. .. .. .. 645 15 5 Medical attendance .. .. .. .. .. .. 582 7 1 Servioe messages .. .. .. .. .. .. .. 52 7 1 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 177 10 0 Advertising .. .. .. .. .. .. .. 54 13 3 Messengers' uniforms .. .. .. .. .. .. 63 15 3 Income-tax .. .. .. .. .. .. .. 181 4 6 Guarantee of staff and bank balanoes abroad .. .. .. .. 500 0 0 Per Bevenue Account .. .. .. ..£50,918 1 8 Abstract G. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating sixty £ s. d. days.. .. .. .. .. .. .. 2,467 14 2 Expenses of s.s. " Sherard Osborn " during remainder of six months .. .. 3,539 2 7 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating 108 days .. 4,191 8 9 Expenses of s.s. " Becorder " during remainder of six months.. .. .. 2,366 13 7 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. .. 6,695 8 8 Insurance of cable on board maintenance-ships .. .. .. .. 989 2 3 Expenses of cable depot at Singapore .. .. .. '.. .. 4,119 11 3 Charter of Great Northern Company's maintenance-ship for repair of oables in the China seas, and agreed charge for call of ship .. .. .. .. 1,300 0 0 Depreciation of cable stores .. .. .. .. .. 2,045 5 5 Cost of duplexing Banjoewangie-Darwin, Singapore-Labuan-Hongkong, SydneyNelson, and Singapore-Batavia cables .. .. .. .. 8,341 12 4 Per Revenue Account .. .. .. .. £36,055 19 0

General Reserve Fund, 31st December, 1896. Dr. £ s. a. Or. £ a, d, To Balance carried down .. .. 729,193 6 3 By Balance of Reserve Fund at 30th June, 1896 .. .. .. .. 644,776 12 7 Interest received during half-year .. 9,416 13 8 Amount transferred from Bevenue Account .. .. .. .. 75,000 0 0 £729,193 6 3 £729,193 6 3 Balance as per balance-sheet ..£729,193 6 3

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Balance-sheet, 31st Decbmbee, 1896. Dr. Cr. To Capital— £ s. d. By Capital expenditure, £ s. d. 300,000 shares at as per last account £2,832,334 0 0 £10 each .. £3,000,000 0 0 Add cost of new Less 50,000 of offices at Singa£lo each un- pore .. .. 7,710 8 9 issued .. 500,000 0 0 2,500,000 0 0 2,840,044 8 9 5-per-cent. Australian subsidy deben- Less transferred tures— from Australian 2,095 debentures of 5-per-cent. sub£loo each, as por sidy debenture last account .. £209,500 0 0 sinking fund .. 40,900 0 0 Less 409 deben- 2,799,144 8 9 tures drawn Ist Maintenance - ships, as per last April, 1896, for account .. .. .. 66,449 14 10 payment Ist July, 1896 .. .. 40,900 0 0 2,865,594 3 7 168,600 0 0 Investments on account of reserve 4-per-cent. mortgage debenture stock 320,000 0 0 funds (see Abstract D) .. .. 857,702 10 2 Trustees for 5-per-cent. Australian 2,988,600 0 0 subsidy debentures .. .. 14,738 16 3 Eeserve funds— Spare cable and other stores .. 66,090 8 5 General Beserve Fund .. .. 729,193 6 3 Traffic and other debit balances .. 119,239 8 0 Maintenance-ships'reserve .. 85,711 1 2 Bills receivable .. .. .. 34,710 0 0 Insurance reserve for maintenance- Remittances in transit .. .. 15,000 0 0 ships and cables .. .. 90,261 8 9 Cash at banker's and in hand .. 192,640 4 2 Reserve for fire insurance, guarantees, <&o. .. .. .. 60,535 16 5 Sinking fund—Australian subsidy debentures .. .. .. 28,033 16 3 Traffic and other credit balances .. 45,821 1 11 Debenture interest accrued and unpaid .. .. .. .. 5,177 15 9 Proprietors for dividends— Unclaimed dividends ~ .. 1,083 2 0 Third interim dividend of 2s. 6d. per share, paid 15th January, 1897.. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable 29th April, 1897.. 31,250 0 0 Proposed bonus of 4s. per share, payable 29th April, 1897 .. 50,000 0 0 Revenue Account balance.. .. 18,798 2 1 £4,165,715 10 _7 £4,165,715 10 7 Audited and found correct. Deloitte, Dbver, Gbifpiths, and C 0.,) . ~, London, 12th April, 1897. Welton, Jones, and Co., | Auditors.

AfeSTEACT t). LIST OF INVESTMEKTS ON ACCOUNT OF RESERVE FUNDS. £ Government and Miscellaneous. £ S- d. 31,000 2f-per-cent. Consols .. .. .. .. ..Costing 31,708 17 3 2,500 Chilian Government 4J-per-eent. converted loan .. .. ~ 2 512 10 4 11,500 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. , 11,872 14 0 10,000 East London Waterworks 3-per-cent. debenture stock .. .. 10 576 8 6 1,500 Egyptian Government 3-per-cent. guaranteed bonds \ 429 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-per-cent. pref. shares .. "„ 5*374 13 0 5,000 Government Stock Investment Trust Company 4-per-cent. debenture stock 5,200 9 10 15,000 India 3-per-cent. stock .. .. .. 13".859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock .. .. .. „ 25 968 15 0 5,000 Pacific and European Telegraph Company (Limited) 4-per-cent. guaranteed debentures .. .. .. .. .. .. 5,100 0 0 5,000 Pacific and Oriental Steam Navigation Company debenture stock „ 5,995 15 10 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8

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£ Colonial. £ s. d. 5,000 Barbados 3£-per-cent. inscribed stock (1942) .. .. ..Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. 9,962 7 10 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds (1915).. „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) '.. „ 4,796 6 9 10,000 Cape of Good Hope Government 4-per-cent. con. inscribed stock (1916-36) .. „ 11,667 17 2 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. „ 5,639 1 9 5,000 Ceylon Government 3-percent, inscribed stock (1940) .. .. „ 5,213 14 3 4,000 City of Sydney 5-per-eent. bonds (1904) .. .. .. .. „ 4,691 14 6 5,000 Metropolitan Gas Company of Melbourne 5-per-cent. debentures (1910-12) .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed 1887 (1937) .. .. „ 4,993 14 1 5,000 Natal 3J-per-cent. inscribed stock (1914-39) .. .. .. „ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 2,500 New South Wales Government 3-per-cent. inscribed stock (1935) .. „ 2,406 15 3 15,000 New South Wales Government 3£-per-cent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cent. inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand 3J-per-cent. inscribed stock (1940) .. .. .. „ 5,149 8 10 10,000 Queensland Government 4-per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock (1924) .. .. „ 15,732 19 8 10,000 South Australian Government 3J-per-cent. inscribed stock (1939) .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) .. .. „ 5,050 1 11 5,000 Tasmanian Government 3J-per-cent. inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4J-per-cent. debentures (1904) .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. .. * 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds 1874 (1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds 1885 (1925) .. „ 10,375 17 6 825,000 Central Railroad Company of N. Jersey 5-per-cent. gen. mort. coupon gold bonds (1987) .. .. .. .. .. .. 5,726 10 0 810,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds (1942) .. .. .. .. .. .. 2,295 15 0 850,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per-cent. extended bonds (1951) .. „ 14,949 10 10 825,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 (1905) .. .. .. .. „ 5,256 17 6 £10,000 Pennsylvania Railroad Company 3J-per-eent. consolidated mortgage sterling bonds (1945) .. .. .. .. .. .. 10,420 15 6 825,000 Pittsburg, Cincinnati, Chicago and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds, series A (1940) .. .. „ 5,388 9 3 British Railway Debenture and Guaranteed Stocks. £15,000 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 20,265 14 10 40,500 Forth Bridge Railway 4-per-cent. guaranteed debenture stock .. .. „ 46,548 5 1 15,000 Great Eastern Railway 4-per-cent. debenture stock .. .. .. 16,359 10 11 10,500 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 12,399 13 5 5,000 Great North of Scotland Railway 4-per-cent. debenture stock .. .. „ 7,487 17 4 20,000 Great Northern Railway 3-per-cent. debenture stock .. .. .. „ 23,073 0 6 2,000 Great Northern Railway 3-per-cent. preference stock.. .. .. „ 2,303 3 4 7,000 Great Northern Railway 4-per-cent. con. perp. pref. stock .. .. „ 10,670 8 7 5,000 Great Southern and Western Railway of Ireland 4-per-cent. debenture stock „ 7,625 18 2 13,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 24,309 17 0 10,000 Great Western .Railway 4-per-cent. debenture stock .. .. .. „ 15,829 7 0 5,000 Great Western Railway 5-per-cent. consolidated pref. stock .. .. „ 9,620 8 0 20,000 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. .. „ 18,879 14 9 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 10,000 London, Brighton, and S.C. Railway 4J-per-cent. perl. guar. deb. stock .. „ 13,180 2 9 2,500 London, Brighton, and S.C. Railway 5-per-cent. con. first pref. stock .. „ 4,740 17 6 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 25,000 London and North-western Railway 4-per-cent. consolidated guaranteed stock „ 34,886 12 4 10,000 London and North-western Railway 3-per-cent. perpl. debenture stock .. „ 11,814 7 0 20,000 London and South-western Railway 3-per-cent. consolidated debenture stock „ 23,532 6 9 5,500 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 6,118 10 0 20,000 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,989 7 8 5,110 Metropolitan District Railway 4J-per-eent. Fulham rent-charge stock .. „ 6,009 15 1 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl, guaranteed stock .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl, guaranteed preference stock .. .. „ 5,503 15 7 1,500 Midland Railway 4-per-cent. consolidated perpetual rent-charge stock .. „ 2,310 9 9 20,000 Midland Railway 3-per-cent. debenture stock .. .. .. „ 23,253 6 6 20,000 North British Railway 3-per-cent. debenture stock .. .. .. „ 16,449 12 9 5,000 North-eastern Railway 4-per-cent. guaranteed stock .. .. .. „ 5,466 12 6 8,000 North-eastern Railway 4-per-cent. guaranteed stock .. .. .. „ 8,748 6 3 8,000 North-eastern Railway 4-per-cent. preference stock .. .. .. „ 12,203 7 2 10,000 North-eastern Railway 3-per-cent. debenture stock .. .. .. „ 9,707 8 3 4,000 South-eastern Railway 3-per-cent. perpetual debenture stock .. .. „ 4,568 19 5 2,000 South-eastern Railway 4-per-cent. perpetual debenture stock .. .. „ 3,083 16 8 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways 4J-per-cent. joint rent-charge stock .. .. .. „ 4,794 10 0 17,000 West Highland Railway 3-per-cent. guaranteed ordinary stock .. .. „ 19,128 15 O £857,702 10 2

1.-7

Five-per-Cent. Australian Government Subsidy Debentures. Numbers of 429 Debentures of £100 each drawn on sth April, 1897, for Payment at Messrs. Barclay and Co.'s, 54, Lombard Street, 8.C., on the Ist July, 1897 : — 11 525 983 1443 1937 2385 2990 3655 4023 4439 4985 5453 6014 50 529 992 1497 1940 2392 2996 3656 4035 4440 5013 5494 6033 66 537 993 1502 1952 2407 3028 3658 4039 4473 5017 5504 6035 83 541 1005 1504 1957 2414 3048 3660 4043 4477 5024 5553 6043 108 554 1019 1512 1962 2419 3072 3674 4071 4479 5039 5569 6057 122 556 1027 1526 1974 2439 3076 3680 4074 4489 5042 5576 6080 126 557 1030 1531 1977 2446 3133 3687 4094 4512 5044 5616 6095 130 619 1057 1541 2004 2452 3173 3691 4108 4573 5045 56-21 6098 131 622 1064 1568 2009 2518 3230 3714 4126 4575 5053 5651 6112 138 651 1085 1578 2055 2553 3240 3725 4129 4588 5062 5656 6121 139 693 1088 1580 2068 2559 3275 3737 4131 4597 5079 5668 6133 154 701 1091 1581 2069 2562 3283 3750 4133 4606 5106 5696 6152 158 705 1105 1591 2074 2610 3299 3773 4158 4607 5108 5714 6174 178 723 1118 1620 2076 2612 3321 3785 4163 4620 5119 5728 6186 192 733 1132 1698 2092 2623 3335 3787 4170 4628 5129 5731 6192 196 749 1151 1751 2110 2632 3339 3789 4173 4694 5146 5742 6199 197 754 1162 1757 2120 2678 3346 3796 4197 4716 5165 5757 6200 206 765 1168 1771 2145 2695 3365 3813 4203 4720 5172 5781 6211 209 789 1185 1795 2150 2709 3374 3820 4205 4733 5173 5786 6263 210 812 1192 1797 2152 2717 3424 3852 4223 4757 5185 5806 6268 231 814 1226 1800 2163 2773 3426 3877 4284 4761 5197 5814 6269 245 834 1232 1819 2210 2853 3432 3909 4291 4785 5208 5818 6276 265 845 1233 1839 2215 2855 3496 3915 4306 4800 5220 5883 6278 302 853 1236 1847 2224 2892 3493 3917 4308 4807 5234 5884 6288 322 859 1275 1854 2253 2895 3511 3930 4310 4813 5243 5911 6308 333 861 1290 1874 2263 2898 3552 3936 4320 4820 5325 5914 6317 334 866 1293 1875 2269 2918 3565 3947 4328 4866 5346 5917 6322 345 871 1355 1896 2290 2932 3567 3949 4359 4919 5358 5929 6330 370 881 1368 1900 2323 2949 3582 3964 4375 4926 5371 5935 6353 395 893 1371 1906 2341 2966 3598 3986 4376 4928 5386 5937 6363 444 928 1384 1908 2363 2969 3612 3991 4404 4939 5415 5951 6364 474 966 1391 1927 2372 2980 3616 4002 4428 4941 5440 5986 6368 524. 968 1436 1933 2383 2981 3644 4022 4434 4946 5442 5991 6382

Half-year ended 30th June, 1897. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —The Most Hon. the Marquis of Tweeddale (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, X.C.1.8., Clement S. Colvin, Esq., C.5.1., the Hon. George Peel, John Denison Pender, Esq. Manager and Secretary. —F. E. Hesse, Esq. Offices.— Winchester House, 50, Old Broad Street, London, E.G.

Beport and Accounts of the Directors for the Half-year ended 30th June, 1897, to be submitted to the Forty - eighth Half-yearly Ordinary General Meeting, to be held at Winchester House, 50, Old Broad Street, London, on Wednesday, the 27th October, 1897, at 2.30 o'clock. 1. The usual statements of account for the half-year ended the 30th June, 1897, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during that period to £290,749 2s. 2d., against £313,914 18s. lid. for the corresponding half-year of 1896. 3. The working expenses, including £25,839 19s. for cost of repairs to cables and expenses of ships, absorb £99,425 17s. 4d., against £87,256 3s. 9d. for the corresponding period of 1896, leaving a balance of £191,323 4s. 10d. Prom this is deducted £4,308 10s. Bd. for income-tax, £31,895 for interest on debentures, debenture stock, and contribution to sinking fund, and £1,605 for special donations as shown in the Revenue Account, leaving £153,514 14s. 2d. as the net profit for the half-year, which, with £18,798 2s. Id. brought forward from the previous half-year, shows an available'balance of £172,312 16s. 3d. 4. Two quarterly interim dividends of 1J per cent, each, amounting to £62,500, have been paid for the half-year, leaving £109,812 16s. 3d., of which £75,000 has been transferred to the General Eeserve Fund, and the balance of £34,812 16s. 3d. is carried forward. 5. The Government of Queensland having decided to join the other Australasian governments in the guarantee arrangements entered into with the company, the tariff between Queensland and Europe , was reduced on the Ist July last from 9s. sd. to ss. lα. per word. From the same date the reductions of tariff announced for China, Japan, Straits Settlement, &c, were also brought into force. 6. The contract made with the Dutch Government for the manufacture and laying, on account of that government, of two short cables in Netherlands-Indian waters was satisfactorily completed during the half-year under review.

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7. Your directors have to record with deep regret the death, on the 7th June last, of their esteemed and valued colleague, Charles William Earle, Esq., who had been connected with the company since its formation. Clement Sneyd Colvin, Esq., C.5.1., has been appointed to the vacant seat at the Board. Tweeddale, Chairman. F. E. Hesse, Manager and Secretary. Winchester House, 50, Old Broad Street, London, E.C., 19th October, 1897.

Be venue Account foe the Half-yeae ended 30th June, 1897. Dr. £ s. d. Cr. £ a, <3. To General expenses in London (see Ab- By Message and other receipts .. ..266,960 1 5 stract A) .. .. 7,524 12 0 Australian duplicate cable subsidies .. 16,200 0 0 General expenses at stations (see Ab- Tasmanian cable subsidy .. .. 2,100 0 0 stract B) .. .. .. 54,840 19 5 Tonquia cable subsidy .. .. 5,228 18 3 Eleotrician's consulting-fee .. 50 0 0 Malacca cable subsidy .. .. 200 0 0 Use of patents .. .. .. 275 0 0 Transfer-fees .. .. .. 60 2 6 Directors'remuneration .. .. 2,000 0 0 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance.. .. 647 8 6 Staff Pension Fund .. .. 1,291 19 6 Expenses in connection with various negotiations, &c. .. .. 3,355 18 11 Repairs to cables (see Abstract C) .. 25,839 19 0 Maintenance-ships' Reserve Fund .. 3,500 0 0 Income-tax .. .. .. 4,308 10 8 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage de benture stock .. .. .. 6,400 0 0 International Submarine Telegraph Memorial .. .. .. 1,000 0 0 Indian Famine Fund .. .. 500 0 0 Prince of Wales' Hospital Fund .. 105 0 0 Balance .. .. .. .. 153,514 14 2 £290,749 2 2 _____ 2 2 First interim dividend of 1897, 2s. 6d. per share, paid 15th July, 1897 .. 31,250 0 0 Balance down .. .. ..153,514 14 2 Second interim dividend of 1897, Balance from Revenue Account, 31st 2s. 6d. per share, paid 15th October, December, 1896 .. .. .. 18,798 2 1 1897 .. .. .. .. 81,250 0 0 Amount carried to General Reserve Fund .. .. .. .. 75,000 0 0 Balance .. .. .. .. 34,812 16 3 £172,312 16 3 £172,312 16 3

Abstracts kelating to Revenue Account foe the Half-year ended 30th June, 1897. Abstract A. Statement op General Expenses in London. £ s. d. Salaries .. .. .. .. .. .. .. 4,275 4 5 Wages.. .. .. .. .. .. .. •• 227 4 9 Office expenses .. .. .. .. .. .. ■• 1,036 6 6 Rent, taxes, &c. .. .. .. .. .. .. •• 1,002 12 7 Stationery and printing .. .. .. .. . • • • 350 19 3 Postage, bill, and other stamps .. .. .. • ■ • • 207 19 0 Advertising .. .. .. .. .. .. .. 106 17 0 Legal expenses .. .. .. .. ■. • • • ■ 26 19 8 Repairs and renewals to furniture, &c. .. .. .. ■ ■ ■ • 290 810 Per Revenue Account .. .. .. .. £7,524 12 0 Abstract B. Statement op Genebal Expenses at Stations. _ s. d. Salaries and wages .. .. .. .. .. .. 33,843 14 8 Travelling-expenses .. .. .. .. .. ■• 3,028 0 8 Rent, taxes, house-allowances, &c. .. .. .. .. .. 8,312 8 4 Expenses of electric lighting .. .. .. .. .. 501 4 8 Provision- and ration-allowances .. .. .. .. • • 729 3 2 Maintenance and renewals of instruments and electrical apparatus .. .. 906 19 2 Expenses of land-lines .. .. .. .. .. .. 142 810 Repairs and renewals of furniture, fittings, &c. .. .. .. •• 1,045 14 8 Repairs to buildings .. .. .. .. .. •■ 1,675 7 3 Insurances .. .. .. .. .. .. . • 440 6 7 Stationery and printing .. .. .. ... .. .. 1,582 0 0 Office and message postages .. .. .. .. • ■ • • 197 13 2 Office and petty expenses .. .. .. .. .. .. 684 6 7 Medical attendance .. .. .. .. .. ■. 531 12 8 Service messages .. .. .. .. .. .. ... 41 11 4 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 190 16 8 Advertising .. .. .. .. .. .. .. 26 17 10 Messengers' uniforms .. .. .. .. .. .. 87 10 2 Income-tax .. .. .. .. .. .. .. 123 3 0 Guarantee of staff and bank balances abroad .. .. .. ... 500 0 0 Per Revenue Account .. .. .. .. £54,840 19 5

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Abstract G. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating sixty-nine £ s. d. days, after deducting expenses of ship whilst engaged on charter by the Nether-lands-Indian Government .. .. .. .. .. 1,351 7 4 Expenses of s.s. " Sherard Osborn" during remainder of six months .. .. 3,938 15 7 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating fifty-one days, after deducting expenses of ship whilst engaged on charter by the NetherlandsIndian Government .. .. .. .. .. .. 1,157 5 4 Expenses of s.s. " Recorder " during remainder of six months.. .. .. 3,852 18 0 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. .. 4,431 9 6 Insurance of cable on board maintenance-ships .. .. .. .. 1,493 16 4 Expenses of cable depot at Singa.pore .. .. .. .. .. 4,997 19 2 Agreed charge for call of Great Northern Company's maintenance-ship for repair of cables in the China seas .. .. .. .. .. 1,000 0 0 Depreciation of cable stores .. .. .. .. .. .. 3,616 7 3 Per Revenue Account .. .. .. ..£25,839 19 0

General Kesebve Fund, 30th June, 1897. Dr. £ s. d. Cr. £ s. d. To Balance carried down .. .. 815,316 8 8 By Balance of Reserve Fund at 31st December, 1896 .. .. .. 729,193 6 3 Interest received during half-year .. 11,123 2 5 Amount transferred from Revenue Account .. .. .. .. 75,000 0 0 £815,316 8 8 £815,316 8 8 Balance as per balanae-sheet .. ..£815,316 8 8

Balance-sheet, 30th June, 1897. Dr. j Or. To Capital— £ s - d -j By Capital expenditure, 300,000 shares of as per last account £2,865,594 3 7 £10 each .. £3,000,000 0 0 Add cost of land Less 50,000 shares and buildings in of £10 each, un- Labuan .. 602 14 4 issued .. 500,000 0 0 2,866,196 17 11 2,500,000 0 0 Investments on account of reserve 5-per-cent. Australian subsidy deben- funds (see Abstract D) .. .. 909,067 19 4 tures Trustees for 5-percent. Australian 1686 debentures of £100 each, as subsidy debentures .. .. 45,584 12 4 ' per last account .. .. 168,600 0 0 Spare cable and other stores .. 128,766 13 7 4 Der cent mortgage debenture stock 320,000 0 0 Traffic and other debit balances .. 124,035 17 2 v Bills receivable .. .. .. 32,700 0 0 2,988,600 0 0 Remittances in transit .. .. 18,500 0 0 Reserve funds Cash at banker's and in hand .. 110,809 7 0 General Reserve Fund .. .. 815,316 8 8 Maintenance-ships' Reserve Fund 90,282 8 11 Insurance reserve for maintenanoeships and cables .. .. 91,583 5 0 Reserve for fire insurances, guarantees, &c 64,550 19 6 Sinking fund — Australian subsidy debentures .. .. ■■ 49,584 12 4 Traffic and other credit balances .. 31,570 17 3 Debenture interest accrued and unpaid 5.183 7 11 Proprietors for dividendsUnclaimed dividends .. .. 1,676 11 6 First interim dividend of 2s. 6d. per share, paid 15th July, 1897 .. 31,250 0 0 Second interim dividend of 2s. 6d. Der share, payable 15th October, 1897.. •• •• •• 31,250 0 0 Revenue account balance ~ .. 34,812 16 3 £4,235,661 7 4 £4,235,661 7 4 Audited and found correct. Deloitte, Dbveb, Griffiths, and G0.,) Au( jj torß London, 18th October, 1897. Wjslton, Jones, and (Jo., J

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Absteact D. LIST OP INVESTMENTS ON ACCOUNT OP EBSEEVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2|-per-oent. Consols .. .. .. .. ■• Costing 31,708 17 3 2,500 Chilian Government 4s-per-cent. converted loan .. .. .. „ 2,512 10 4 11,000 Eastern Extension Australasia and China Telegraph Company (Limited) 5-per-cent. Australian Government subsidy debentures .. .. „ 11,872 14 0 10,000 East London Waterworks 3-per-cent. debenture stook .. .. „ 10,576 8 6 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. „ 1,429 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-per-cent. pref. shares .. „ 5,374 13 0 5,000 Governments Stock and other Securities Investment Trust Company ' (Limited) 4-per-cent. debenture stock .. .. .. .. „ 5,200 910 15,000 India 3-per-cent. stock .. .. .. .. ..„ 13,859 11 3 25,000 Metropolitan Consolidated stock .. .. .. 25,968 15 0 10,000 New River Company 3-per-cent. debenture stock .. .. .. „ 10,716 18 9 5 000 Pacific and European Telegraph Company (Limited) 4-percent, guaranteed debentures .. .. .. ■• •• •• 5,100 0 0 5,000 Pacific and Oriental Steam Navigation Company 3J-per-cent. debenture stock „ 5,995 15 10 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 5,000 Barbados 3 J-per-cent. inscribed stock (1942) .. .. ..Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. •■ „ 9,962 710 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds (1915).. „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) .. „ 4,796 6 9 10,000 Cape of Good Hope Government 4-per-cent. con. inscribed stock (1916-36) .. „ 11,667 17 2 5,000 Ceylon Government 4-per-cent. inscribed stock (1934) .. .. „ 5,639 1 9 5,000 Ceylon Government 3-per-cent, inscribed stock (1940) .. .. „ 5,213 14 3 4,000 City of Sydney 5-per-cent. bonds (1904) .. .. .. .. 4,69114 6 5,000 Metropolitan Gas Company of Melbourne 5 per-cent. debentures (1910-12) .. „ 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed 1887 (1937) .. .. /, 4,993 14 1 5,000 Natal 3J-per-cent. inscribed stock (1914-39) .. .. .. ~ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 2,500 New South Wales Government 3-per-cent. inscribed stock (1935) .. „ 2,406 15 3 15,000 New South Wales Government 3J-per-cent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-per-cent. inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand Government 3J-per-cent. inscribed stock (1940) .. .. „ 5,149 810 10,000 Queensland Government 4 per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-cent. inscribed stock (1924) .. .. „ 15,732 19 8 10,000 South Australian Government 3J-per-cent. inscribed stock (1939) .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cont. debentures (1914) .. .. „ 5,050 111 5,000 Tasmanian Government 3J-per-cent. inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4J-per-cent. debentures (1904).. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. •• „ 5,050 111 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds 1874 (1910) Costing 10,420 19 9 945*000 Baltimore and Ohio Railroad Company 5-per-cent. bonds 1885 (1925) .. „ 10,375 17 6 $25*000 Central Railroad Company of N Jersey 5-per-cent. gen. mort. coupon gold bonds (1987) .. •■ •• •• ■• ... 5,726 16 0 $10 000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds (1942) .. .. •• •■ •• ■■ 2,295 15 0 $50 000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds 11950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per-cent, extended bonds (1951) 14,949 10 10 $25 000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of 1890 (1905) .. .. .. .. ~ 5,256 17 6 £10 000 Pennsylvania Railroad Company 3J-per-cent. consolidated mortgage sterling bonds (1945) .. .. •■ •• •• •• 10 > 420 ia 6 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4J-per-cent. consolidated mortgage gold bonds, series A (1940) .. .. „ 5,388 9 3 British Railway Debenture, Preference and Guaranteed Stocks. £15,000 Caledonian Railway 4-per-cent. debenture stock .. .. ..Costing 20,265 14 10 36*000 Forth Bridge Railway 4-per-cent. guaranteed stock .. .. .. 42,267 7 6 8,500 Forth Bridge Railway 4-per-cent. debenture stock .. .. .. „ 10,246 16 1 15*000 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 16,359 10 11 10*500 Great Eastern Railway 4-per-cent. consolidated irre. guaranteed stock .. „ 12,399 13 5 s*ooo Great North of Scotland Railway 4-per-cent. debenture stock .. .. „ 7,487 17 4 20*000 Great Northern Railway 3 per-cent. debenture stock .. .. .. „ 23,073 0 6 2*ooo Great Northern Railway 3-per-cent. preference stock .. .. .. „ 2,303 3 4 7*ooo Great Northern Railway 4-per-cent. consolidated perp. preference stock .. „ 10,670 8 7 s*ooo Great Southern and Western Railway of Ireland 4-per-cent. debenture stock „ 7,625 18 2 13*500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 24,309 17 0 10*000 Great Western Railway 4-per-cent. debenture stock .. .. .. „ 15,829 7 0 s*ooo Great Western Railway 5-per-cent. consolidated preference stock .. „ 9,620 8 0 10*000 Hull Barnsley, and West Riding Junction Railway and Dock Company 3-per cent, first debenture stock (1889) .. .. ■• „ 11,098 10 7 15 000 Hull, Barnsley, and West Riding Junction Railway and Dock Company 3- and 4-per-cent. second debenture stock (1889) .. .. .. „ 18,867 12 11 20 000 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. „ 18,879 14 9 s*ooo Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 10*000 London, Brighton, and S. C. Railway 4J-per-cent. perl. guar. deb. stock .. „ 13,180 2 9 2*500 London, Brighton, and S. C. Railway 5-per-cent. con. first pref. stock .. „ 4,740 17 6 7*ooo London, Chatham, and Dover Railway 4J-par-cent. arbit. debenture stock „ 8,428 17 6 25*000 London'and North-western Railway 4-per-cent. consolidated guar. stock .. „ 34,886 12 4 10*000 London and North-western Railway 3 per-cent. perpl. debenture stock .. „ 11,814 7 0 20*000 London and South-western Railway 3-per-cent. consolidated debenture stock „ 23,532 6 9 5*500 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 6,118 10 0 16—1. 7.

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& British Baihoay Debenture, Preference and Guaranteed Stock —continued. £ a. d. 20,000 Metropolitan Railway 4-per-cent, debenture stock .. .. .. 21,989 7 8 8,110 Metropolitan District Railway 4J per-cent. Fulham rent-charge stock .. „ 10,726 3 6 5,000 Metropolitan District Railway 4 per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,308 10 10 5,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. 5,503 15 7 1,500 Midland Railway 4-percent, consolidated perpetual rent-charge stock .. „ 2,310 9 9 20,000 Midland Railway 3-percent, debenture stock .. .. • • 23,253 6 6 20,000 North British Railway 3-per-cent. debenture stock .. .. .. ~ 16,449 12 9 13,000 North-eastern Railway 4-percent, guaranteed stock .. .. ■• „ 14,214 18 9 8,000 North-eastern Railway 4-per-cent. preference stock .. .. .. „ 12,203 7 2 10,000 North-eastern Railway 3 per-cent. debenture stock .. .. .. „ 9,707 8 3 4,000 South-eastern Railway 3-per-cent. perpetual debenture stock .. .. „ 4,658 19 5 2,000 South eastern Railway 4-per-cent. perpetual debenture stock .. .. „ 3,083 16 8 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 17,000 West Highland Railway 3-per-cent. guaranteed ordinary stock .. .. „ 19,128 15 0 £909,067 19 4

Five-pee-Cent. Austealian Goveenment Subsidy Debentuees. Numbbes of 429 Debentubes of £100 each drawn on sth April, 1897, for Payment at M.essrs. Barclay and Co., 54, Lombard Street, E.G., on the Ist July, 189*7:— 11 525 983 1443 1937 2385 2990 3655 4023 4439 4985 5453 6014 50 529 992 1497 1940 2392 2996 3656 4035 4440 5013 5494 6033 66 537 993 1502 1952 2407 3028 3658 4039 447S 5017 5504 6035 83 541 1005 1504 1957 2414 3048 3660 4043 4477 5024 5553 6043 108 554 1019 1512 1962 2419 3072 3674 4071 4479 5039 5569 6057 122 556 1027 1526 1974 2439 3076 3680 4074 4489 5042 5576 6080 126 557 1030 1531 1977 2446 3133 3687 4094 4512 5044 5616 6095 180 619 1057 1541 2004 2452 3173 3691 4108 4573 5045 5621 6098 133 622 1064 1568 2009 2518 3230 3714 4126 4575 5053 5651 6112 651 1085 1578 2055 2553 3240 3725 4129 4588 5062 5656 6121 13i 693 1088 1580 2068 2559 3275 3737 4131 4597 5079 5668 6133 154 701 1091 1581 2069 2562 3283 3750 4133 4606 5106 5696 6152 156 705 1105 1591 2074 2610 3299 3773 4158 4607 5108 5714 6174 178 723 1118 1620 2076 2612 3321 3785 4163 4620 5119 5728 6186 192 733 1132 1698 2092 2623 3335 3787 4170 4628 5129 5731 6192 196 749 1151 1751 2110 2632 3339 3789 4173 4694 5146 5742 6199 197 754 1162 1757 2120 2678 3346 3796 4197 4716 5165 5757 6200 206 765 1168 1771 2145 2695 3365 3813 4203 4720 5172 5781 6211 209 789 1185 1795 2150 2709 3374 3820 4205 4733 5173 5786 6263 210 812 1192 1797 2152 2717 3424 3852 4223 4757 5185 5806 6268 231 814 1226 1800 2163 2773 3426 3877 4284 4761 5197 5814 6269 245 834 1232 1819 2210 2853 3432 3909 4291 4785 5208 5818 6276 265 845 1233 1839 2215 2855 3496 3915 4306 4800 5220 5883 6278 302 853 1236 1847 2224 2892 3498 3917 4308 4807 5234 5884 6288 322 859 1275 1854 2253 2895 3511 3930 4310 4813 5243 5911 6308 333 861 1290 1874 2263 2898 3552 3936 4320 4820 5325 5914 6317 334 866 1293 1875 2269 2918 3505 3947 4328 4866 5346 5917 6322 345 871 1355 1896 2290 2932 3507 3949 4359 4919 5358 5929 6330 370 881 1368 1900 2323 2949 3582* 3964 4375 4926 5371 5935 6353 395 893 1371 1906 2341 2966 3598 3986 4376 4928 5386 5937 6363 444 28 1384 1908 2363 2969 3612 3991 4404 4939 5415 5951 6364 474 66 1391 1927 2372 2980 3616 4002 4428 4941 5440 5986 6368 524 68 1436 1933 2383 2981 3644 4022 4434 4946 5442 5991 6382

Half-year ended 31st December, 1897. THE EASTERN EXTENSION AUSTRALASIA AND CHINA TELEGRAPH COMPANY (LIMITED). Directors. —The Most Hon. the Marquis of Tweeddale (Chairman), Francis Augustus Bevan, Esq., Sir Albert J. Leppoc Cappel, K.C.1.E., Clement S. Colvin, Esq., C.5.1., the Hon. George Peel, John Denison Pender, Esq. Manager and Secretary. —F. E. Hesse, Esq. Offices. —Winchester House, 50, Old Broad Street, London, E.C. Bepobt and Accounts of the Dibectobs for the Half-year ended 31st December, 1897, to be submitted to the Forty - ninth Half - yearly Ordinary General Meeting, to be held at Winchester House, No. 50, Old Broad Street, London, on Wednesday, the 11th May, 1898, at 2.30 o'clock. 1. The usual statements of account for the half-year ended the 31st December, 1897, are submitted herewith. 2. The gross receipts, including Government subsidies, have amounted during the half-year to £275,142 7s. 2d., against £325,405 12s. 6d. for the corresponding period of 1896. This large decrease is due to the reductions of tariff brought into force during the past year, and the falling-off of Australasian traffic.

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3. The working and other expenses, including £30,956 Bs. 6d. for cost of repairs to cables and expenses of ships, absorb £102,844 13s. 10d., against £106,270 9s. 7d. for the corresponding period of 1896, leaving a balance of £172,297 13s. 4d. Prom this is deducted £4,559 2s. for income-tax, £32,606 13s. 9d. for interest on debentures, debenture stock, and contribution to sinking fund, &c, leaving as the net profit for the half-year £135,131 17s. 7d., which, with £34,812 16s. 3d. brought forward from the previous half-year, shows an available balance of £169,944 13s. 10d. 4. One quarterly interim dividend of 1-J- per cent, has been paid for the half-year, and it is now proposed to distribute another of like a?nount on the 12th proximo, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1897. The balance of £57,444 13s. 10d. has been transferred to the General Reserve Fund. 5. The policy of strengthening the service by making judicious renewals from time to time in the weakest sections of the cables, has been continued during the half-year under review, and the cost of the renewals carried out during that period has been charged against the General Reserve Fund, as shown in the annexed accounts. 6. The contract made with the Spanish Government for extending the company's system from Manila to the islands of Panay, Negros, and Cebu was successfully completed, and the new cables opened for traffic in November last. Since the close of the half-year a further contract has been entered into with the Spanish Government for improving telegraphic communication with the Philippines by extending the Hongkong cable, which was originally landed at Cape Bolinao (Luzon), direct to Manila. The contract was completed last month, and the station at Bolinao removed to Manila. 7. In accordance with the provisions of the trust deed dated the 10th May, 1879, 451 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £45,100, were drawn by lot on the 4th instant, for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 8. In accordance with the articles of association two of the directors, Sir Albert J. Leppoc Cappel, K.C.I.Fj., and Clement S. Colvin, Esq., C.5.1., retire by rotation at the forthcoming meeting, and, being eligible, offer themselves for re-election. 9. The auditors, Messrs. Deloitte, Dever, Griffiths and Co. and Messrs. Welton, Jones and Co. also retire and offer themselves for re-election. Tweeddalb, Chairman, F. E. Hesse, Manager and Secretary. Winchester House, 50, Old Broad Street, London, E.C., 30th April, 1898.

Revenue Account fob the Half-yeae ended 31st Decembee, 1897. Dr. £ s. d. Gr. £ s. d. To General expenses in London (see Ab- By Message and other receipts.. .. 251,332 19 0 straot A) .. .. .. 6,795 7 11 Australian duplicate cable subsidies.. 16,200 0 0 General expenses at stations (see Ab- Tasmanian cable subsidy .. .. 2,100 0 0 stract B) .. .. .. 57,047 1110 Tonquin cable subsidy .. .. 4,541 2 6 Electrician's consulting-fee .. 50 0 0 Malacca cable subsidy .. .. 200 0 0 Use of patents .. .. .. 275 0 0 Visayas cable subsidy .. .. 715 1 5 Directors'remuneration .. .. 2,000 0 0 Transfer-fees .. .. .. 53 4 3 Auditors' fees .. .. .. 100 0 0 Staff endowment assurance .. 633 4 9 Staff Pension Fund .. .. 1,390 18 9 Expenses in connection with negotiations, &o. .. .. .. 96 2 1 Bepairs to cables (see Abstract C) .. 30,956 8 6 Maintenance-ships'Eeserve Fund .. 3,500 0 0 Income-tax .. .. .. 4,559 2 0 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Cost of celebrating Queen's Diamond Jubilee at stations .. .. 711 13 9 Balance .. .. .. .. 135,131 17 7 £275,142 7 2 £275,142 7 2 Third interim dividend of 1897, 2s. 6d. per share, paid 15th January, 1898.. 31,250 0 0 Balance down .. .. .. 135,131 17 7 Proposed final dividend of 2s. 6d. per Balance fiom Eevenue Account, 30th share for 1897, payable 12th May, June, 1897 .. .. .. 34,812 16 3 1898 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 12th May, 1898 .. .. 50,000 0 0 Amount carried to General Reserve Fund .. .. .. .. 57,444 13 10 £169,944 13 10 £169,944 13 10

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Eevenue Account fob the Half-year ended 31st December, 1897. Abstract A. Statement of General Expenses in London. jg B _ 3 Salaries .. .. .. .. .. .. •• 3,921 14 6 Wages.. .. .. .. .. .. .. •• 185 7 7 Office expenses .. .. .. .. .. .. .. 1,037 16 11 Rent, taxes, &c. .. .. .. .. .. .. .. 996 5 6 Stationery and printing .. .. .. .. ~ .. 279 12 7 Postage, bill, and other stamps .. .. .. .. .. 204 7 8 Advertising .. .. .. .. .. .. .. 62 111 Legal expenses .. .. .. .. .. .. .• 466 Repairs and renewals to furniture, &c. .. .. .. .. .. 103 14 9 Per Revenue Aooount .. .. .. .. .. £6,795 711 Abstract B. Statement of Genebal Expenses at Stations. jg s & Salaries and wages .. .. .. .. .. .. 35,528 14 8 Travelling-expenses .. .. .. .. .. 2,090 12 5 Rent, taxes, house-allowances, &c, .. .. .. .. .. 8,445 9 0 Expenses of electric lighting .. .. .. .. .. .. 486 12 1 Provision- and ration-allowances .. .. .. .. .. 532 15 2 Maintenance and renewals of instruments and electrical apparatus .. .. 1,966 0 1 Expenses of land-lines .. .. .. .. .. .. 240 15 7 Repairs and renewals of furniture, fittings, &c. .. .. .. .. 1,392 18 3 Repairs to buildings .. .. .. .. .. .. 1,533 410 Insurances .. ...' .. .. .. .. .. 495 19 3 Stationery and printing .. .. .. .. .. .. 1,483 15 8 Office and message postages .. .. ... .. .. .. 207 18 10 Office and petty expenses .. .. .. .. .. .. 742 2 7 Medical attendance .. .. .. .. .. .. 611 9 6 Service messages .. .. .. .. .. .. .. 38 8 3 Expenses of Porthcurno School .. .. .. .. .. 250 0 0 Foreign agencies .. .. .. .. .. .. .. 193 18 11 Advertising .. .. .. .. .. .. .. 105 12 8 Messengers' uniforms .. .. .. .. .. .. 75 16 9 Income-tax .. .. .. .. .. .. .. 125 7 4 Guarantee of staff and bank balances abroad .. .. .. .. 500 0 0 Per Eevenue Account .. .. .. .. .. £57,047 11 10 Abstract C. Expenses attending Maintenance of Cables. Expenses of s.s. " Sherard Osborn," effecting numerous repairs, aggregating eighteen £ s. d. days, and expenses of ship during remainder of six months, after deducting expenses of ship whilst engaged on renewal and charter work.. .. .. 2,670 7 1 Expenses of s.s. " Recorder," effecting numerous repairs, aggregating eighty-six days, after deducting expenses of ship whilst on renewal work .. .. .. 4,638 18 4 Expenses of s.s. " Recorder" during remainder of six months .. .. .. 3,450 110 Cable expended on repairs, and sundry expenses at stations, after deducting value of picked-up cable .. .. .. .. .. .. 8,674 13 2 Insurance of cable on board maintenance-ships .. .. .. .. 1,424 19 10 Expenses of cable depot at Singapore .. .. .. .. .. 4,351 11 10 Agreed charge for call of Great Northern Company's maintenance-ship for repair of cables in the China seas .. .. .. .. .. .. 2,680 0 0 Depreciation of cable stores .. .. .. .. .. .. 3,065 16 5 Per Revenue Account .. .. .. £30,956 8 6

CrENEEAL BeSEBVE ]?UND, 31sT DECEMBER, 189?. t)r. £ s. a. Cr. £ a. d. To renewal of Singapore-Penang direct i By Balance of Reserve Fund at 30th June, cable, and alterations to Singapore- 1897 .. .. .. .. 815,316 8 8 Malacca-Penang cables .. .. 30<860 5 8 Interest received during half year .. 10,525 19 8 Partial renewal Singapore - Saigon Amount transferred from Revenue Accable .. ... .. .. 6,594 13 4 count .. ... .. .. 57,444 13 10 Partial renewal Hongkong - Macao cable .. .. .. .. 623 0 1 Cost of Visayas cables .. .. 41,541 611 Balance carried down .. .. 803,667 16 2 £883,287 2 2 £883,287 2 2 Balance as per balance-sheet .. £803,667 16 2

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Balance-sheet, 31st December, 1897. Dr. Cr. To Capital— £ s. d. By Capital expenditure £ s. d 300,000 shares of as per last account £2,866,196 17 11 £10 each ..£3,000,000 0 0 Less transferred Less 50,000 shares from Australian of £10 eaoh, un- 5-per-cent. subissued .. 500,000 0 0 sidy debenture 2,500,000 0 0 sinking fund .. 42,900 0 0 5-per-cent. Australian subsidy deben- 2,823,296 17 11 tures— Investments on account of reserve 1,686 debentures of funds (see Abstract D) .. .. 1,004,127 0 5 £100 each, as per Trustees for 5-per-cent. Australian last account .. 168,600 0 0 subsidy debentures .. .. 15,897 17 1 ' Less 429 deben- Spare cable and other stores .. 108,532 9 3 turea drawn sth Traffic and other debit balances .. 107,305 11 1 April, 1897, for Bills receivable .. .. .. 20,350 0 0 paym'nt Ist July, Remittances in transit .. .. 16,100 0 0 1897 .. .. 42,900 0 0 Cash at banker's and in hand .. 112,759 18 1 125,700 0 0 4-per-cent. mortgage debenture stock 320,000 0 0 2,945,700 0 0 Reserve funds— General .. .. .. 803,667 16 2 Maintenance-ships .. .. 94,910 19 6 Insurance for maintenance-ships and cables .. .. .. 98,074 15 4 Fire insurances, guarantees, &c. ~ 65,857 17 3 Sinking fund —Australian subsidy debentures .. .. .. 29,192 17 1 Traffic and other credit balances .. 52,066 4 9 Debenture interest accrued and unpaid .. .. .. .. 5,182 4 9 Proprietors for dividendsUnclaimed dividends .. .. 1,216 19 0 Third interim dividend of 2s. 6d. per share, paid 15th January, 1898.. 31,250 0 0 Proposed final dividend of 2s. 6d. per share, payable 12th May, 1898.. 31,250 0 0 Proposed bonus of 4s. per share, payable 12th May, 1898 .. 50,000 0 0 £4,208,369 13 10 £4,208,369 13 10 Audited and found correct. Deloitte, Dever, Geiffiths, and C 0.,) . ■~, London, 28th April, 1898. Wemon, Jones, and Co., J Auclltors '

Abstract D. LIST OP INVESTMENTS ON ACCOUNT OF RESERVE FUNDS. £ Government and Miscellaneous. £ s. d. 31,000 2f-per-cent. Consols .. .. .. .. .. Costing 31,708 17 3 2,500 Chilian Government 4J-per-cent. converted loan .. .. .. „ 2,512 10 4 19,962 Danish Government 3-per-cent. loan of 1897 .. .. .. „ 19,759 16 8 8,200 Eastern Extension Australasia and China Telegraph Company (Limited) S-per-oent Australian Government subsidy debentures (77 bearer bonds and 5 registered bonds) .. ~ .. .. .. 8,465 15 0 10,000 East London Waterworks 3-per-oent. debenture stock .. .. „ 10,576 8 6 1,500 Egyptian Government 3-per-cent. guaranteed bonds .. .. .. „ 1,429 1 0 3,500 Globe Telegraph and Trust Company (Limited) 6-per-cent. pref. shares .. „ 5,374 13 0 5,000 Governments Stock and other Securities Investment Company (Limited) 4-per-cent. debenture stock .. .. .. „ 5,200 9 10 10,000 Great Indian Peninsula Railway irred. 4-per-cent. debenture stock .. „ 14,981 4 10 15,000 India 3-per-cent. stock .. .. .. .. .. „ 13,859 11 3 25,000 Metropolitan Consolidated 3J-per-cent. stock .. . ■ .. „ 25,968 15 0 10,000 New River Company 3-per-cent. debenture stock .. .. .. „ 10,716 18 9 5,000 Pacific and European Telegraph Company (Limited) 4-por-cent. guaranteed debentures .. .. .. .. .. .. „ 5,100 0 0 5,000 Pacifio and Oriental Steam Navigation Company 3J-per-cent. debenture stock „ 5,995 15 10 2,500 Southern Mahratta Railway (Limited) 4-per-cent. debenture stock .. „ 2,703 14 8 Colonial. 5,000 Barbados 3 J-per-cent. inscribed stock (1942) .. .. ..Costing 5,273 6 0 10,000 Canadian 3-per-cent. inscribed stock (1938) .. .. .. „ 9,962 7 10 9,000 Canadian Pacific Railway 5-per-cent. first mortgage debenture bonds (1915).. „ 9,620 4 10 5,000 Cape of Good Hope Government 4-per-cent. inscribed stock 1882 (1923) .. „ 4,796 6 9 10,000 Cape of Good Hope Government 4-per-cent. con. inscribed stock (1916-36) .. „ 11,667 17 2 5,000 Ceylon Government 4-per-cent. inscribed stock (1934).. .. .. „ 5,639 1 9 5,000 Ceylon Government 3-per-oent. inscribed stock (1940) .. .. „ 5,213 14 3 4,000 City of Sydney 5-per-oent. bonds (1904) .. .. .. .. „ 4,691 14 6

:.—7.

£ Colonial —continued. • £ s. d. 5,000 Metropolitan Gas Company of Melbourne £3,300 (1912), £1,700 (1910), 5-per-cent, debentures .. .. .. .. .. 5,563 17 6 5,000 Natal 4-per-cent. consolidated stock, inscribed 1887 (1J37) .. .. „ 4,993 14 1 5,000 Natal 3£-per-eent. inscribed stock (1914-39) .. .. ~ „ 5,313 6 0 10,000 New South Wales Government 4-per-cent. debentures (1908-10).. .. „ 10,230 3 8 2,500 New South Wales Government 3-per-cent. inscribed stock (1935) .. „ 2,406 15 3 15,000 New South Wales Government 3J-per-cent. inscribed stock (1924) .. „ 14,429 14 8 5,000 New South Wales Government 4-percent, inscribed stock (1933) .. „ 5,394 15 1 5,000 New Zealand Government 3J-per-cent. inscribed stock (1940) .. .. „ 5,149 810 10,000 Queensland Government 4-per-cent. debentures (1913-15) .. .. „ 10,169 2 3 15,000 Queensland Government 4-per-oent. inscribed stock (1924) .. .. „ 15,732 19 8 10,000 South Australian Government 3J-per-cent. inscribed stock (1939) .. „ 10,035 2 6 5,000 Tasmanian Government 4-per-cent. debentures (1914) .. .. „ 5,050 1 11 5,000 Tasmanian Government 3J-per-cent. inscribed stock (1920-40) .. .. „ 5,130 13 10 13,500 Victorian Government 4i£-per cent, debentures (1904) .. .. .. „ 14,314 5 0 5,000 Victorian Government 4-per-cent. debenture bonds (1907) .. .. „ 5,050 1 11 American Railways. 8,400 Baltimore and Ohio Railroad Company 6-per-cent. sterling bonds 1874 (1910) Costing 10,420 19 9 $45,000 Baltimore and Ohio Railroad Company 5-per-cent. bonds 1885 (1925) .. „ 10,375 17 6 $25,000 Central Railroad Company of New Jersey 5-per-cent. gen. rnort. coupon gold bonds (1987) .. .. .. .. .. 5,726 16 0 $10,000 Cleveland and Pittsburg Railroad Company 4J-per-cent. gen. mort. gold bonds (1942) .. .. .. .. .. .. 2,295 15 0 $50,000 Illinois Central Railroad Company 4-per-cent. Cairo Bridge gold bonds (1950) „ 10,075 3 0 £13,000 Illinois Central Railroad Company 4-per cent, extended bonds (1951) .. „ 14,949 10 10 $25,000 New York Central and Hudson River Railroad Company 4-per-cent. gold debenture certificates of IS9O (1905) .. .. .. .. „ 5,256 17 6 £10,000 Pennsylvania Railroad Company 3J-por-cent. consolidated mort. sterling bonds (1945) .. .." .. .. .. .. 10,420 15 6 $25,000 Pittsburg, Cincinnati, Chicago, and St. Louis Railway Company 4^-per-cent. oon. mort. gold bonds, series A (1940) .. .. .. .. „ 5,388 9 3 British Railways. £15,000 Caledonian Railway 4-per-cent. debenture stock .. .. .. Costing 20,265 14 10 36,000 Forth Bridge Railway 4-per-cent. guaranteed stock .. .. .. 42,267 7 6 8,500 Forth Bridge Railway 4-per-cent. debenture stock .. .. .. „ 10,246 16 1 15,000 Great Eastern Railway 4-per-cent. debenture stock .. .. .. „ 16,359 10 11 10,500 Great Eastern Railway 4-percent, consolidated irre. guaranteed stock .. „ 12,399 13 5 5,000 Great North of Scotland Railway 4-per-cent. debenture stock .. .. „ 7,487 17 4 20,000 Great Northern Railway 3-per-cent. debenture stock .. .. .. „ 23,073 0 6 2,000 Great Northern Railway 3-per-cent. preference stock.. .. .. „ 2,303 3 i 7,000 Great Northern Railway 4-per-cent. consolidated perl. pref. stock .. „ 10,670 8 7 5,000 Great Southern and Western Railway of Ireland 4-per-cent. debenture stock „ 7,625 18 2 13,500 Great Western Railway 5-per-cent. consolidated guaranteed stock .. „ 24,309 17 0 10,000 Great Western Railway 4-per-cent. debenture stock .. .. .. 15,829 7 0 5,000 Great Western Railway 5-per-cent. consolidated preference stock .. „ 9,620 8 0 10,000 Hull, Barnsley and West Riding Junction Railway and Dock Company 3-per-cent. first debenture stock (1889) .. .. .. 11,098 10 7 15,000 Hull, Barnsley and West Riding Junction Railway and Dock Company 3 and 4-per-cent. second debenture stock (1889) .. .. .. „ 18,807 12 11 20,000 Lancashire and Yorkshire Railway 3-per-cent. debenture stock .. .. „ 18,879 14 9 5,000 Lancashire and Yorkshire Railway 4-per-cent. consolidated guaranteed stock „ 5,516 10 0 14,000 London and Blackwall Railway 4<|-per-cent. preference stock .. .. „ 23,535 13 2 3,000 London and Blackwall Railway 4J-per-cent, consolidated stock .. .. „ 5,043 2 0 10,000 London, Brighton, and S.G. Railway 4J-per-cent. perl. guar. deb. stock .. „ 13,180 2 9 5,000 London, Brighton, and S.C. Railway 5-per-cent, consolidated pref. stock .. „ 9,369 3 2 7,000 London, Chatham, and Dover Railway 4J-per-cent. arbit. debenture stock .. „ 8,428 17 6 25,000 London and North-western Railway 4-per-oent. consolidated guar. stock .. ~ 34,886 12 4 10,000 London and North-western Railway 3-per-cent. perl, debenture stock .. „ 11,814 7 0 20,000 London and South-western Railway 3-per-cent. consolidated debenture stock „ 23,532 6 9 3,000 London and South-western Railway 3J-per cent, preference stock .. „ 3,946 10 4 5,500 London, Tilbury, and Southend Railway 4-per-cent. debenture stock .. „ 6,118 10 0 20,000 Metropolitan Railway 4-per-cent. debenture stock .. .. .. „ 21,989 7 8 8,110 Metropolitan District Railway 4J-per-cent. Fulbam rent-charge stock .. „ 10,726 3 6 5,000 Metropolitan District Railway 4-per-cent. debenture stock .. .. „ 5,453 3 9 12,000 Metropolitan District Railway 4-per-cent. perl. guar. stock .. .. „ 12,808 10 10 6,000 Midland Railway 4-per-cent. perl. guar. pref. stock .. .. .. „ 5,503 15 7 1,500 Midland Railway 4-per-cent. consolidated perpetual rent-charge stock .. „ 2,310 9 9 20,000 Midland Railway 3-per-cent. debenture stock .. .. .. „ 23,253 6 3 20,000 North British Railway 3-per-cent. debenture stock .. .. .. „ 16,449 12 9 13,000 North-eastern Railway 4-per-cent. guaranteed stock .. .. ~ „ 14,214 18 9 8,000 North-eastern Railway 4-per-cent. preference stock .. .. .. „ 12,203 7 2 10,000 North-eastern Railway 3-per-cent. debenture stock .. .. .. „ 9,707 8 3 8,000 North Stafford Railway 3 percent, consolidated debenture stock .. „ 5,764 11 6 4,000 South-eastern Railway 3-per-cent. perl, debenture stook ... .. „ 4,568 19 5 2 f ooo South-eastern Railway 4-per-cent. perl, debenture stock ~ .. ,/ 3,083 16 8 4,000 South-eastern Railway consolidated 4J-per cent. pref. stock .. .. „ 6,724 9 5 2,000 South-eastern Railway 4-percent, vested companies'stock .. .. „ 3,011 6 2 3,000 South-eastern Railway perp. arm. £1 O-i. 6d. each .. .. .. „ 5,585 9 7 22,000 West Highland Railway 3 per-cent. guaranteed ordinary stock .. .. „ 24,614 5 9 4,000 West Cornwall Railway, Great Western, Bristol and Exeter, and South Devon Railways, 4J-per-cent. joint rent-charge stock .. .. „ 4,794 10 0 £1,004,127 0 5

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Five-pbe-Cent. Austealiak Government Subsidy Debentubes. Numbees of 451 Debentures of £100 each drawn on 4th April, 1898, for Payment at Messrs. Barclay and Co., 54, Lombard Street, 8.C., on the Ist July, 1898:— 5 567 1046 1501 1946 2438 3073 3415 3916 4466 5009 5437 5890 8 576 1056 1506 1947 2447 3079 3416 3923 4486 5055 5459 5900 19 586 1082 1537 1951 2478 3086 3448 3943 4526 5067 5462 5905 22 603 1108 1538 1981 2488 3092 3452 3966 4528 5071 5488 5908 65 618 1136 1543 2019 2492 3104 3492 3970 4537 5088 5497 5909 70 630 1142 1546 2030 2502 3107 3493 3977 4552 5091 5505 5920 73 038 1150 1553 2045 2532 3120 3500 4014 4585 5096 5510 5923 96 642 1155 1560 2059 2534 3121 3520 4031 4591 5133 5521 5950 163 650 1193 1570 2087 2536 3124 3535 4073 4614 5136 5532 5957 170 658 1196 1575 2107 2539 3125 3539 4125 4626 5153 5542 5969 174 659 1227 1576 2113 2509 3130 3571 4140 4630 5167 5552 5980 186 660 1238 1608 2114 2592 3138 3588 4148 4634 5178 5567 6022 191 668 1240 1615 2122 2647 3140 3600 4168 4651 5199 5575 6034 202 707 1281 1621 2154 2703 3147 3002 4183 4688 5218 5602 6036 208 738 1285 1627 2175 2718 3168 3635 4196 4691 5223 5603 6062 235 755 1291 1629 2181 2762 3171 3642 4209 4711 5226 5608 6083 237 769 1298 1656 2183 2769 3178 3657 4227 4726 5232 5672 6084 239 783 1301 1659 2185 2794 3183 3689 4245 4731 5239 5676 6090 250 784 1314 1668 2190 2821 3196 3706 4277 4747 5244 5677 6093 259 798 1332 1669 2214 2850 3207 3712 4278 4758 5254 5690 6124 273 828 1338 1684 2219 2910 3249 3715 4289 4760 5263 5692 6155 279 832 1347 1692 2231 2920 3252 3721 4293 4779 5277 5694 6160 281 873 1360 1708 2235 2939 3295 3727 4312 4783 5281 5722 0182 309 887 1381 1732 2285 2948 3298 3747 4319 4822 5282 5780 6193 324 924 1397 1746 2292 2954 3301 3781 4327 4843 5287 5746 6222 329 927 1413 1765 2314 2956 3314 3818 4361 4857 5307 5748 6223 331 942 1418 1779 2331 2903 3322 3844 4363 4879 5322 5767 6262 346 955 1419 1816 2342 2968 3325 3846 4372 4895 5328 5796 6275 351 971 1422 1841 2351 2977 3344 3854 4380 4900 5341 5804 6285 467 979 1426 1885 2379 2983 3351 3867 4409 4921 5366 5827 6287 478 987 1451 1887 2405 3030 3369 3808 4414 4958 5379 5837 6305 482 998 1469 1898 2409 3037 3389 3898 4415 4987 5385 5844 6315 521 999 1476 1916 2423 3040 3401 3904 4441 5005 5402 5847 6331 534 1000 1477 1930 2427 3046 3402 3912 4444 5007 5422 5852 6341 553 1023 1487 1936 2430 3064 3405 3914 4452

APPENDIX C. Memorandum for the Eight Hon. the Postmaster-General. As it is many years since the question of the Pacific cable was first brought forward, the accompanying resume may be of interest at the present time. Only the more important incidents are dealt with—from 1877. The cost of constructing and laying the cable is based on the tenders received by the Canadian Government in 1894, and the cost of maintenance and the receipts on Sir Sandford Fleming's estimates. The revenue is based on the cable traffic of 1895, plus alO per cent, annual increase. Sir Sandford assumes that 38-J- per cent, of the Eastern Telegraph Company's traffic would be diverted to the Pacific cable. This may have been an over-sanguine estimate at the time, but the increase of traffic since, and what may be looked for before the Pacific cable is laid, should enable his estimate to be realised. The fact that the Eastern Extension Company would no doubt adopt the usual business precaution of reducing its tariff to the level of the Pacific cable rates should not, however, be lost sight of. Indeed, even lower rates might be determined upon by the company if only to better conserve its business when actual competition began—factors which to some extent would reduce the earnings of the Pacific cable. The lowest tender for constructing and laying a cable from Vancouver to Norfolk Island, with branches to Queensland and New Zealand —the approved route—is £1,517,000. The estimated annual charges (interest, calculated at 2f per cent., on £1,500,000) is £145,000, which, divided in the proportion of two-ninths Canada, one-third Great Britain, and four-ninths Australasia, gives the following : Canada, £32,222 ; Great Britain, £48,333 ; Australasia, £64,445 ; and New Zealand's proportion of the latter sum divided between the colonies—excluding South Australia and Western Australia—on the basis of population, would be £12,032. But as Queensland would secure an inland rate on the whole of the Australian messages, she should contribute more than £7,955 — her proportion on population basis. Sir Sandford Fleming fixes the rate for the cable at 2s. a word, and estimates that the first year's receipts (in 1900) would be £120,788, which would leave a loss of £24,212. With a 10 per cent, annual increase of traffic the loss the second year would be reduced to £12,134; a profit of £1,153 the third year, and at the end of the sixth year an accumulated net profit of £61,949. A through rate to Great Britain of 3s. sd. per word may probably be obtained, apportioned as under : Pacific Cable, 2s. per word; Canada, 4d.; Atlantic Cable, Is.; New Zealand, Id. :as against ss. 2d. a word at present. The tender of £1,517,000 is for a cable with a capacity equal to twelve words a minute only, which I think is too low. An eighteen-word-a-minute cable would cost £1,880,000, and I submit that before any particular type of cable is decided upon the question of speed should be settled. The additional interest on the eighteen-word cable would increase the annual charges from £145,000 to £154,500; the colonies' proportion from £64,445 to £68,667, and New Zealand's from £12 032 to £12,821. ■

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It would take about three years to construct and lay the cable, and meanwhile a considerable proportion of the annual charges would have to be met. General Post-Office, 20th August, 1898. W. Geay. P.S.—Since writing the foregoing, a letter has been received from Sir Sandford Fleming intimating that Canada's proportion will now be three-eighteenths instead of two-ninths. The colonies' payment will be correspondingly increased from four-ninths to one-half.

Theee has for many years been an agitation for a telegraph cable-service from Australia by a route other than that followed by the cables of the Eastern Extension Telegraph Company. Alternative route discussed Melbourne Conference, 1878. At the outset the idea was to duplicate the connection via India, and a conference of representatives from each of the colonies, except New Zealand and Western Australia, met at Melbourne in May, 1878, to discuss the matter, when the Queensland representative proposed the following resolution:—"lt is essential that there should be a complete system of telegraphic communication unconnected with any existing line of the Eastern Extension Company, and under independent control." Owing to differences of opinion as to the route to be adopted between Australia and India, the resolution was lost. Pacific Cable suggested by Sir Julius Vogel, 1877. Attached to the report of the proceedings of this Conference is a memorandum, dated Ist August, 1877, from the Agents-General for Victoria and New Zealand, reviewing at length the question of the alternative cable routes, and a suggestion by Sir Julius Vogel for a telegraph-cable between New Zealand and San Francisco, touching at Honolulu. Owing probably to the absence of definite information, the Agents-General dismissed the suggestion as "almost impracticable on account of the great depth of water which would have to be passed through." No reference appears to have been made to the proposal at the Conference; but the fact remains that the idea of a Pacific cable seems to have originated with Sir Julius Vogel. In a memorandum laid before the Sydney Postal Conference of 1888 by Sir William Fitzherbert, representing New Zealand, is the statement that "as far back as 1877 New Zealand favoured a Pacific cable, and objected to a prolonged engagement with the Eastern Company." Sir Sandford Fleming's proposals, 1879. —Canadian Government's action, 1886. In 1879 Mr. (now Sir) Sandford Fleming interested himself in the movement, and he has since made it particularly his own, collecting, compiling, and publishing, from time to time, valuable statistics, estimates, and general information, always urging on all concerned, especially the Canadian and Imperial Governments, to either directly undertake, or to guarantee the work. In 1880 Mr. Fleming brought the subject officially before the Canadian Parliament in his report as Engineer-in-chief of the Canadian-Pacific Eailway. Considerable correspondence ensued; and in 1886 an Order in Council was issued by the Canadian Government recommending that steps should be taken to ascertain the opinion of the several governments interested, and also the pecuniary assistance each would be likely to give. A conference of the agents of Canada and the colonies was suggested and the co-operation of the Imperial Government sought. The route favoured was Australia, New Zealand, Fiji, Fanning Island, Sandwich Islands, Vancouver Island, and Vancouver City. The subsidy was set down at £100,000 per annum for twenty-five years, or £90,000 with an Imperial guarantee, and the rate between Australia and Europe was not to exceed 4s. per word. Sir Julius Vogel's scheme, 1887. In February, 1887, Sir Julius Vogel, then Postmaster-general of New Zealand, advocated the purchase of the Eastern Telegraph Company's Australasian cables and laying a Pacific cable via Fiji and Honolulu, with branches to New Caledonia and Tahiti. Such a scheme, he anticipated, would lead to a reduction of the rate to Is. 6d. or Is. per word. The capital cost was not to exceed £5,000,000. London Colonial Conference, 1887. A conference of colonial representatives, promoted by the Imperial Government, met in London during April and May, 1887, when a resolution was carried affirming that " a direct line of cable across the Pacific is a project of high importance to the Empire, and that any doubts as to its practicability should be set at rest by a survey; " and a memorandum signed by the representatives of Canada, Cape Colony, Natal, Newfoundland, New Zealand, and the Australian Colonies, except South Australia, was forwarded to Her Majesty's Government, requesting that a survey of a cable route should be made. The reply of the Admiralty was to the effect that unless the cable was to be laid within a reasonable time they were not prepared to detach a vessel for the survey. Offer by Pacific Telegraph Company, 1887. In May of the same year, Mr. H. Finch-Hatton, on behalf of the Pacific Telegraph Company (then recently formed in London), offered to lay a cable from Vancouver Island to Australia, touching at Hawaii, Fanning Island, Samoa, Fiji, and New Zealand, conditionally on the Governments of Great Britain, Canada, and the Australasian Colonies guaranteeing a traffic of £75,000 per annum for twenty-five years —the through rate not to exceed 4s. per word. Efforts to obtain survey, 1887 and 1888. Canada subsequently offered to provide a suitable ship for the survey, if the Australasian Colonies contributed £6,000 towards the cost. Sir Harry Atkinson, then Premier of New Zealand, favoured this, and in a telegram to the Premier, Sydney, urged that the colonies should contribute the amount, but nothing came of it. It was now ascertained that the Admiralty were willing to carry out the survey, provided the colonies defrayed the cost, which was estimated at £36,000.

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Sydney Conference, 1888. At the Postal Conference which met at Sydney in 1888, it was resolved that a survey of ■the Pacific route was desirable—Great Britain, Canada, and the Australasian Colonies to defray the cost. The Governor of Victoria telegraphed the purport of this co the Secretary of State, and urged that the survey should be made. The Imperial Government, however, did not consider the matter sufficiently urgent for a special survey. Brisbane Conference, 1893. No further action of importance seems to have been taken until 1893, when, at the Brisbane Postal Conference of that year, the Hon. J. G. Ward (representing this colony) moved the following resolution : " That in the opinion of this Conference the time has arrived when a second cable route should be established via the Pacific to Vancouver, touching at such such places en route as may be hereafter agreed upon," which was carried unanimously, South Australia and Western Australia, however, not voting. The route suggested by Mr. Ward was from Queensland to Ahipara Bay-Fiji-Honolulu-Fanning Island-Vancouver Island and Vancouver City. The estimated cost, £1,500,000 ; a guarantee of £70,000 per annum, and a through rate of 4s. per word. Wellington Conference, 1894. The following year a Postal Conference met at Wellington, all the Australasian Colonies being represented; and it was resolved, on the motion of the Hon. Mr. Ward, "That, considering the important interests involved, both of a national and commercial character, in the establishment of a Pacific cable, the representatives of the respective colonies assembled at this Conference recommend their governments to consider the desirability of entering into a guarantee with other countries interested for a period not exceeding fourteen years, and to guarantee interest at 4 per cent, on a capital of not more than £1,800,000 to any company undertaking the laying of a Pacific cable; the tariff not to exceed 3s. per word for ordinary telegrams, 2s. per word for Government telegrams, and Is. 6d. per word for Press telegrams to and from Great Britain and the colonies; and that the United Kingdom be asked to join in the guarantee ; the routes to be either of the following: Brisbane to Ahipara Bay (New Zealand), Ahipara Bay to Suva, Suva to Apia, Apia to Fanning Island, Fanning Island to Sandwich Islands, Sandwich Islands to Vancouver; or from New Zealand to Suva, Suva to Apia, Apia to Fanning Island, Fanning Island to Sandwich Islands, Sandwich Islands to Vancouver." Mr. Ward, in speaking to the motion, pointed out that a guarantee of £72,000 per annum was better than a direct fixed subsidy, and left it open to the world to compete for laying the cable. Attached to the report of the Conference proceedings is a memorandum by Sir Sandford Fleming, in which he suggests relieving the Australasian Governments of their liability under their guarantee agreements to the Eastern Extension Telegraph Company by adding a sum of £145,000 to the £1,600,000 —the estimated capital cost of the Pacific cable —to purchase an annuity equal to the subsidy payable the company until the expiration of the guarantee agreements. On the working of the Pacific cable Sir Sandford estimated a deficiency for the first three years, and thereafter a surplus which, at the end of ten years, after paying interest on capital cost and every other charge, would result in an accumulated surplus of over £250,000. Ottawa Conference, 1894.—Tenders invited. Closely following the Wellington Conference came the Canadian Conference, which met in June, 1894, at Ottawa. There was a unanimous opinion in favour of a Pacific cable, and five resolutions were adopted urging immediate action. The final resolution was one requesting the Canadian Government to make all necessary enquiries, ascertain the cost, and otherwise promote the scheme. The Canadian Government lost no time in calling for tenders. The conditions specified eight alternative routes, as well as three alternative proposals, i.e. —(1) For a cable owned and controlled by the Governments, and worked under Government authority, with a proviso that the contractor should keep the cable in repair for three years. (2) The cable to be owned, worked, and maintained by a subsidised company; and (3) The cable to be owned, worked, and maintained by a company under a Government guarantee. The second and third proposals stipulated for rates between Great Britain and Australasia of 3s. per word for ordinary messages, 2s. Government, and Is. 6d. press. The cable was to be of a capacity of not less than 12 words per minute. No tenders were sent in under the second and third proposals. Under the first proposal four tenders were received for each of the routes, the tenderers being in every case companies of repute; and, for the first time, what may be regarded as definite and reliable estimates of the cost were obtained. Particulars of Tenders to construct and lay Cable. Of the several routes, the following, known as No. 1, has been unanimously agreed to by the Colonies: — Landing Stations. Length in knots. Vancouver Island to Fanning Island ... ... ... . . 3,232 Fanning Island to Fiji ... ... ... ... ... ... 1,715 Fiji to Norfolk Island .. ... ... ... ... ... 1,022 Norfolk Island to New Zealand ... ... ... ... ... 415 Norfolk Island to Tweedmouth (Queensland) ... ... ... 761 Total ... ... ... ... ... ... 7,145 For which the following tenders were received : The India-rubber, Gutta-percha, and Telegraph Works Company, £1,517,000; W. T. Henley Telegraph Works Company, £1,826,000; Siemens Brothers and Company, £2,170,000; Fowler-Waring Cable Company, £2,350,000. Accompanying the lowest tender is the following memo.: " The contract prices given . . . include the erection at each cable landing-place of a suitable dwelling house and operating room for 17—1. 7.

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the working staff, with duplicate sets of all proper instruments at each station ; also the use of twosteamships fitted with cable-tanks and all necessary machinery for repairing the cable, and the cost of maintaining these ships as well as the cables themselves for three years." The Company, if entrusted with the contract, also undertook to manufacture the cable at the rate of 20 miles a day, and to proceed to ship and lay it with the least possible delay. It should be explained that the tender of £1,517,000 is for a cable with a capacity of twelve words a minute. A fifteen-word cable the same Company would supply for £1,672,000, and an eighteen-word cable for £1,880,000. Probably a cable with a capacity of only twelve words a, minute would not carry the business which might be expected a few years hence. Hobart Conference, 1895. At the Hobart Conference in 1895 the Pacific cable question was again brought forward, and the following resolution adopted : " This Conference reaffirms the desirableness of the construction of a Pacific cable to connect the Australasian Colonies and Canada; and, in view of the ascertained practicability of the scheme, respectfully urges upon the various colonial Governments that steps be taken for the furtherance of the project at the earliest opportunity." Sydney Conference, 1896. Then followed the Postal Conference at Sydney in January, 1896. All the colonies were represented, and the Pacific cable question was advanced a stage by a decision as to which of the routes tendered for should be adopted. Differences of opinion whether the cable should come to Queensland or New Zealand were settled by a compromise, under which the cable is to be landed at Norfolk Island and branch from there to New Zealand and Queensland. This is the route known as No. 1. Eesolutions were also adopted affirming— (1.) That the Pacific cable should be constructed and owned jointly by the various Governments interested. (2.) That the landing-places should be only on places belonging to or under control of the British Empire. (3.) That the cost of construction, working, and maintenance should be borne by Great Britain, Canada, and the Australasian Colonies, each division taking one-third of the liability. (4.) That the route from Fiji to Australia be vid Norfolk Island, thence bifurcating to the nearest convenient landing-place in the north of New Zealand and Moreton Bay respectively. (5.) That it is desirable that South Australia join the other colonies in the Pacific cable project, and the terms on which that colony will come in be ascertained. Imperial Cable Committee, 1896. Towards the close of 1896 a committee known as the Imperial Cable Committee met in London. Its members comprised two representatives from each of the great communities interested, viz., Great Britain, Canada, and Australasia—the latter represented by the Agents-General for New South Wales and Victoria. The Committee sat for fifteen days, took voluminous evidence, both expert and official, and the report of the proceedings includes the most complete data yet brought together on the question. The Committee reported in January, 1897, but the proceedings up to the present are still regarded as confidential, under instructions from the Imperial authorities. Australasian Chambers of Commerce, 1897. The Australasian Chambers of Commerce, at a conference held at Sydney in June, 1897, passed a resolution strongly urging the early construction of the Pacific cable—a proof that the commercial community is in accord with the colonial Governments. Conference of Premiers, 1897. At a conference of the Premiers of New South Wales, Victoria, Queensland, and New Zealand, at Melbourne in March last year, a strong hope was expressed that the construction of the Pacific cable might be decided upon at an early date, and the decision of the Sydney Conference of the previous year re-affirmed. Premiers in London, 1897. During the visit of the colonial Premiers to London last year, the Pacific cable was discussed with the representatives of the Imperial and Canadian Governments, but without practical results, mainly owing to the apparent want of interest shown by the representatives of Canada. Proposed Alternative Route vid Cape Colony-Perth. Meanwhile, the Eastern Extension Telegraph Company brought forward a proposal for an alternative cable service between Great Britain and Australia via Gibraltar-Sierra Leone-Ascension-St. Helena-Cape Town-Durban-Mauritius-Bodriguez Island-Cocos and Albany (Western Australia). For this cable the company asked a subsidy of £32,400 per annum for ten years, and were prepared to continue the cable to Glenelg (South Australia) on the guarantee being extended from ten to twenty years. No reduction of rates, however, was proposed by the company. Duplicate Cable Subsidy—Cape Cable. It may be explained that the £32,400 is the amount guaranteed by the colonies (except Queensland and New Zealand) to the Cable Company in respect to the duplication of the cable between Port Darwin and Java for a period of twenty years, expiring in 1899. The proposed cable vid the Cape is also regarded as an " all-red " line— i.e., the several landing-places would be on territory owned by or under the control of Great Britain. The length of the cable would be about 13,000 miles, and the estimated cost between two and a half and three million pounds sterling. The Cape Government, it is understood, has agreed to provide the required guarantee for the section from England to Cape Town, which alone was favourably reported upon by the committee which recently met in London, at the instance of the Secretary of State for the Colonies, to consider the Eastern Telegraph Company's proposal.

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Postal Conference, Hobart, 1898. ■; The next forward movement was at the Conference held in Hobart in March-April last. •After hearing the representative of the Eastern Extension Telegraph Company on the projected cable vid the Cape, the Conference carried the following resolution :—" That this Conference re-affirms the opinion that in the interests of Australasia the Pacific Cable project should be consummated as speedily as practicable, and that the Governments of the various Australasian Colonies be requested to represent to the Imperial and Dominion Governments the foregoing opinion, together with the proposal of the Premiers as agreed to at their recent Conference held in Melbourne —viz., ' That if Great Britain and Canada each contribute one-third of the cost, the colonies would be prepared to contribute the remaining one-third.' " London Conference, July, 1898. The Conference of representatives from Canada and the Agents-General for the colonies which met in London last month, brings down the history of the Pacific cable question to date. The outcome of this Conference, as cabled by the Agent-General, is that Canada would probably contribute two-ninths of the cost, and the Imperial Government's proportion would not exceed a third, leaving the colonies to find the balance of four-ninths. The Governments of the colonies favourable to the scheme are now consulting as to contributing the four-ninths. Annual Cost and Colonies' share. The estimated annual charges, including interest on a capital of £1,500,000, allowance for maintenance and renewal, sinking fund to provide for replacement of capital in fifty years, together with all ordinary working expenses, as given by Sir Sandford Fleming, are as follows : — £ Interest at 2| per cent.... ... .:. ... ... ... 37,500 Maintenance and renewal ... .. ... ... ... 70,000 Sinking fund ... ... ... ... ... ... ... 15,386 Working expenses ... ... ... ... ... ... 22,114 Total ... ... ... ... ... ... £145,000 Dividing this amount on the basis of two-ninths Canada, one-third Great Britain, and fourninths Australasia, the proportions are : — £ Canada ... ... ... ... ... ... ... 32,222 United Kingdom ... ... ... ... ... ... 48,333 Australasia ... ... ... ... ... ... ... 64,445 and apportioning the £64,445 between the Australasian Colonies (but excluding South Australia and Western Australia) on the basis of the estimated population on the 31st December, 1896, the amount payable by each colony would be:— Colony. Population. Proportion. £ s. d. New South Wales ... ... ... 1,297,640 21,863 4 4 Victoria ... ... ... ... 1,174,888 19,795 0 8 New Zealand ... ... .. 714,162 12,032 10 4 Queensland 472,179 7,955 9 8 Tasmania ... ... ... . ... 166,113 2,798 15 0 £64,445 0 0 Revenue. Of the 1,948,639 words in international messages to and from the Australasian Colonies transmitted over the cables of the Eastern Company during 1895, Sir Sandford Fleming assumed that the Pacific cable might reasonably be expected to secure 750,000 words, or 38-| per cent, of the whole, and with an annual increase of traffic of 10 per cent, from 1895, he estimates that the gross earnings of the cable for the six years from 1900 at 2s. per word, and the deficiency or surplus, would be: — Gross Earnings. Annual Charges. Deficiency. Surplus. & £ £ £ First year 120,788 145,000 24,212 Second year ... 132,866 145,000 12,134 Third year ... 146,153 145,000 ... 1,153 Fourth year ... 160,768 145,000 ... 15,768 Fifth year ... 176,845 145,000 ... 31,845 Sixth year ... 194,529 145,000 ... 49,529 £36,346 £98,295 or a net surplus in the six years of £61,949. Accepting Sir Sandford Fleming's figures, New Zealand would be called upon to make good about £2,009 the first year, and £1,007 the second year. Present Business—London-Vancouver Bates. Eeturns of Australasian international telegraph traffic, just published, show that the number of words increased to 2,326,984 in 1896, but fell to 2,122,216 in 1897, as compared with 1,948,639 in 1895 —on which Sir Sandford Fleming's revenue-estimate was based. The present rate between London and Vancouver is Is. 6d. per word, of which the Atlantic cable companies receive Is. If a 45.-per-word through-rate were charged as originally proposed,. and New Zealand received a penny per word, the Pacific cable would obtain 2s. sd. per word.

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In re proposed Bates. But it is expected that the Canadian inland rate on through messages may not exceed 4d. per word, and were the through rate between New Zealand and Great Britain reduced to 3s. 6d. per word the apportionment would be— s. d. Pacific cable ... ... ... ... ... ... ... 2 1 Canada ... ... ... ... ... ... ... 0 4 Atlantic cable ... ... ... ... ... ... ... 10 New Zealand ... ... ... ... ... ... ... 0 1 3 6 Business for the Pacific Cable. Sir Sandford Fleming in his estimate allows, as already mentioned, the Pacific cable 2s. per word as its share. This would give a through-rate of 3s. 5d., as against ss. 2d. per word now paid on messages between London and the colony. Of the number of words in international messages in 1897, 87,033 were for and from America, all of which would of course be sent over the Pacific cable. A probable immediate increase of 50 per cent, in the American traffic might also be looked for. According to information submitted to the recent Hobart Conference, the number of words in the Australasian International traffic for 1897 was: — Words. . (New Zealand ... ... ... ... ... ... 246,365 (Queensland ... ... ... ... ... ... 52,012 B. New South Wales ... ... ... ... ... ... 484,715 r (Victoria ... ... ... ... ... ... ... 508,554 Tasmania... ... ... ... ... , ... ... 12,410 •p. fSouth Australia ... ... ... ... ... ... 306,232 (Western Australia ... ... ... ... ... ... 511,926 Eeducing these figures in each case 10 per cent, for non-European traffic, and grouping the colonies into four classes, the probable share of the traffic for the Pacific cable may be estimated at,— Words. A. New Zealand and Queensland, three-fourths of European traffic... 201,405 B. New South Wales, three-fifths „ ... 261,744 C. Victoria and Tasmania, one-half „ ... 234,433 D. South Australia and Western Australia, one-twentieth „ ... 40,907 Add American traffic ... ... ... ... ... ... 87,033 Total ... ... ... ... .. ... 825,522 Add 10 per cent, for increase due to reduced rates ... . . ... 82,552 908,074 It may be accepted that the Eastern Company would reduce its rate to that of the Pacific cable, but the guaranteeing colonies, having control of the traffic, would have the right to send over the Pacific cable all- messages not specially directed via the Eastern Extension Company's lines. The fact that the Australasian Chambers of Commerce strongly favour the Pacific cable may fairly be advanced in support of the estimate that no more than about a fourth of the New Zealand and Queensland messages, two-fifths New South Wales, and one-half Victoria and Tasmania, would be the proportion of the traffic which might be expected to be directed to be sent via Eastern cables. This practically gives, although by an entirely different method, the 907,500 words estimated by Sir Sandford Fleming for 1897. Adverse Critioism.—Objections. Of course, Sir Sandford Fleming's estimates have not escaped adverse criticism, but only two need be quoted. The Engineer-in-Chief of the New South Wales Telegraphs does not favour the route via Fanning Island, on the grounds that the length of cable between there and Vancouver, without an intermediate relay, would preclude satisfactory working. He is also opposed to the Governments owning the cable. Mr. Walker expects keen competition on the part of the Eastern Telegraph Company, and a reduction in their rates, which would materially reduce the revenue on the Pacific cable. At the same time he admits that a Pacific cable is most desirable, as being shorter —the distance being 12,500 miles, as against 14,638 miles via Darwin. He considers, however, it would be a mistake to leave out Samoa and Honolulu. Sir Charles Todd, Postmaster-General of South Australia, who has been a consistent opponent of the Pacific cable scheme, estimates the annual working-expenses at £175,000, which, however, was based on the assumption that the capital cost would be £2,000,000, and that the life of the oable would be only twenty years. With a revenue of 3s. a word Sir Charles looks for a deficiency of £80,000 per annum. He is of opinion that no subsidy is to be expected from the Imperial Government. His arguments, it should be explained, were based largely on the assumption that the work would be undertaken by a company. W. Geay, General Post Office, 20th August, 1898. Secretary. Approximate Cost of Paper.— Preparation, not given ; printing (1,125 copies) £95 18s. 9<l.

By Authority : John Mackay, Government Printer, Wellington.—lB9B. Price Sis. 3d.

EASTERN TELEGRAPH COMPANY'S EUROPEAN SYSTEM AND ITS CONNECTIONS.

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P G.—9B-5793

Extract from the Melbourne Argus, 25th February, 1898.

THE CAPE CABLE SCHEME.

LARGEST PROJECT EVER SUBMITTED.

THIRTEEN THOUSAND MILES.

To Cost between £2,500,000 and £3,000,000.