F.—2a.
1887. NEW ZEALAND.
TELEGRAPH CABLE SUBSIDY AND CHARGES (FURTHER PAPERS RELATING TO).
Presented to both Houses of the General Assembly by Command of His Excellency.
No. 1. The Agent-Genebal to the Hon. the Postmastee-Genebal. g IB 7, Westminster Chambers, London, S.W., sth October, 1886. In continuation of my letter of 22nd September, No. 1,180, I transmit herewith a further portion of correspondence on the Sydney-New Zealand cable subsidy, which I have received from Mr. Fender. I have, &c. The Hon. the Postmaster-General, Wellington. *• V. .Bell.
Enclosures. Hesse to Knevett, Squiee, Waeeen, and Bkowning. 20th September, 1886. Negotiations with New Zealand Government for renewal of subsidy having failed, Chairman wishes you to address letters to leading newspapers of all colonies in following terms :— "I am instructed to communicate to you the accompanying copy of a telegram forwarded by the Chairman of the company to the Government of New Zealand, notifying that the tariff over the Sydney-Nelson cable for intercolonial telegrams will, on and after the Ist October proximo, be 10s. for ten words and Is. for each additional word, instead of 6s. for ten words and 7d. for each additional word, as heretofore. .. . , « The company have delayed taking this step for the last eight months, hoping that the necessity for it might be avoided ; but, having, after prolonged negotiation, failed to obtain a renewal of the subsidy which expired last February, and the receipts, without the subsidy, being insufficient— after ten years' working without a single interruption during the whole of that period—to give, when amortization is deducted, a net return of 2 per cent, on the capital invested, they have no alternative but to raise the tariff to recoup the loss of the subsidy. . " The Government of New South Wales as far back as June, 1885, agreed to renew their share of the subsidy for a further ten years, and in consideration of such concession the company were prepared to reduce the tariff to ss. per ten words for ordinary and to 3d. per word for Press telegrams ; but the Parliament of New Zealand would only agree to renew the subsidy for five years on conditions unacceptable to the company. " Subsequently the company offered to make the tariff any figure the colonies pleased, provided the average of their receipts for the last three years were guaranteed. This would have given the colonies full control over the tariff, and a cheaper rate could thus have been obtained than it would be possible to establish by any other reasonable means ; and if the opinion, frequently expressed m the colonies, that cheap rates would lead to a corresponding growth of traffic were borne out, the amount of guarantee the colonies would have to make up would be quite nominal. The proposal, however, was declined, and the New Zealand Government now withdraw the oiler sanctioned by their Parliament for a renewal of the subsidy for five years. _ "Under these circumstances, the company is reluctantly compelled, in the interests of their shareholders, to raise the tariff as above announced ; and the responsibility for this course must rest with the Government of New Zealand and not with the company, as the latter have exhausted all possible means of bringing about a satisfactory solution of the question. I—F. 2a.