F.—2a
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addressed to you by the Chairman on the 2nd instant in reference to the general tariff between Europe and Australia, namely—a large reduction of rates in consideration of the average earnings for the past three years being guaranteed by the colonies. The Chairman would venture to suggest that this offer should be supplemented to the telegram forwarded to your Government on the 3rd instant, and if you would be good enough to forward such a telegram to this office the company would be happy to frank it. I have, &c, F. E. Hesse, Sir Saul Samuel, K.C.M.G., &c, Agent-General for New South Wales. Secretary.
The Chairman, Eastern Extension Company, to the Postmastek-General, New South Wales. 20th September, 1886. Having failed, after prolonged negotiation with New Zealand Government, to obtain renewal of New Zealand cable subsidy, which expired last February, or to bring about satisfactory solution of the question, the company have decided to raise tariff over cable for intercolonial telegrams from Ist October proximo to ten shillings per ten words, with one shilling for each additional word. The company have delayed taking this step for eight months, in the hope that the necessity for it would be avoided; but, as New Zealand Government refused to make any satisfactory arrangement, and the receipts after ten years' working are insufficient, when amortization is deducted, to give 2 per cent, return on the capital invested, they have no alternative, much as they regret it, but to raise the tariff to recoup the loss of the subsidy.
No. 3. The Agent-Genekal to the Hon. the Postmaster-Geneeal. Sic, — 7, "Westminster Chambers, London, S.W., 18th November, 1886. I received in due course your telegram of the 6th instant, directing me to ascertain from the Silverjon Company how soon, after receiving an order to lay a new cable, it could be ready for use; also, whether they would agree either to construct a cable with a right of purchase by the Government, or to lease it for a term of years with an undertaking from the Government to purchase. Before I got your message Mr. Pender had come to me many times about the differences between yourself and the company, and had shown me all the telegrams that had passed between you, as well as a great number of others, including extracts from colonial Press articles. I did not, however,think it was my business to interfere in the matter beyond doing my best to prevent, as far as I could, any exacerbation of the dispute on this side. But immediately upon your telegram to me Mr. Pender came again and asked me whether I could not suggest a way out of the deadlock to which things had got. I replied at once that the only way I could see was for the company to replace everything where it was before the Ist November; because, although the company's action in raising the rates had been checkmated by your terminal charge, the effect of the two together, so far as I could judge from the extracts of newspaper articles that had been telegraphed to him, seemed only to be to exasperate the public alike against the company and the Government. I therefore proposed that he should immediately restore the status quo ante, in order that Parliament might be able to consider the whole question next session. He accepted this suggestion, and I sent you a message on the 10th asking your consent, which you gave provided the rates were lowered to threepence, with a guarantee for the Press revenue not to suffer by the reduction. (I had read your message as referring only to the Press rate, because your telegram to Mr. Pender of the 6th October offered to give twelve mouths' notice before opening a new cable if the company would leave the present rates for ordinary messages unchanged and reduce the Press rates to threepence.) Thereupon Mr. Pender accepted your terms, and we agreed upon a telegram to be sent to you by him. I now transmit copies of the telegrams that have passed between yourself and me, and of the series of other telegrams extending up to the present time, the greater part of which Mr. Pender published in a recent number of the Anglo-New Zealander. I have, &c, The Hon. the Postmaster-General, Wellington. F. D. Bell.
Enclosures. The Agent, Melbourne, to the Eastern Extension Company, London. Bth October, 1886. Postmastee will keep me informed all correspondence between himself and Sydney Postmaster. Telegram from latter stating " I have great hopes satisfactory arrangement will be made soon. Victoria will contribute towards the three subsidies, Darwin, Zealand, and Tasmania, on basis of population, and has asked Sydney Postmaster to communicate with all colonies on this subject."
The Agent, Melbourne, to the Eastern Extension Company, London. Bth October, 1886. Wellington 7th.—Eeport Dunedin Chamber of Commerce expresses opinion undesirable to lay duplicate cable, considered New Zealand should rather co-operate with Australian Governments in endeavour to obtain reduction of present tariff. Melbourne Chamber of Commerce meet Monday, and delegates will interview Postmaster again. Proposal of latter that all colonies should contribute subsidies gaining favour.
The Agent, Sydney, to the Eastern Extension Company, London. 11th October, 1886. Sydney Postmaster just telegraphed following to Vogel: " Shall be glad to learn if you have arrived at any decision re Pender's telegram of 30th ultimo."