F—B

22

anc} the same condition of growth continues, the gross Australia-European traffic will in 1902 in round figures, 3,600,000 words. It may, of course, be said that there is no absolute certainty that the gross telegraphic tr will he as stated; there is, however, reasonable probability, and there is more than a probab that if the rates be lowered as proposed, telegraphic intercourse will be stimulated, and a m increased business will follow. There are indeed good grounds 1 for the belief that with the t: lowered from 4s. 9d. to 3s. per word, the gross telegraph business in 1902 will not be less t 4,000,000 words. It is advisable, however, in forming estimates, to be well on the safe side ; may, with perfect safety, then take 3,600,000 words, as the probable business within the year 1 when the Pacific cable may be opened. With respect to the second question, what proportion of the gross traffic will fall to the si of the Pacific cable ? The following reasons will make plain that the new line will obtain a share, certainly not less than one-half the whole number of words transmitted. 1. The Pacific cable would undoubtedly give a better service to the public than the exis line. On this point it will only be necessary to quote from a return to Parliament (No. 94) t< address dated the 18th April, 1898, as follows: — "In reference to the remarks of Sir Julius Vogel in the above letter, the undersigned dei it proper to point out that it is the manual as distinguished from the automatic repetitions wl cause delay and increase the chances of error in the transmission of messages. The repea stations on the overland route through Canada are automatic, and in a comparison they should be taken into account. By the eastern route there are ten manual repeating stations intervei between Great Britain and Australia—viz., at Gibraltar, Malta, Alexandria, Suez, Aden, Boml Madras, Penang, Singapore, and Java. By the Pacific route there would be only five mat, repeating stations —viz., at Canso, Vancouver, Fanning Island, Fiji, and Norfolk Island. With half the number of such repeating stations, naturally the tendency to greater accuracy and sr. in transmission, and generally to a better service by the new route, would be increased." 2. The Australasian Governments, being at the chief sources of traffic, and possessing con of all the land-lines, would not only have it in their power to throw business over the Pacific ca but, as joint owners, would be directly interested in so doing. The Pacific cable would bec< the " normal route " for all telegrams from these colonies to North and South America, to Gi Britain, Germany, France, Scandinavia, Belgium, and Holland. By the term " normal route is understood that unless telegrams are specially directed by the sender to follow some other ro they follow the " normal route." This circumstance would give to the Pacific cable an enorrr advantage in securing business, as experience proves that a very large proportion of traffic is han in by the public without any indication of route. With respect to messages from. Europe Australasia, it will be obvious that every Atlantic cable company, with their offices in every in the United Kingdom and elsewhere, would be interested in collecting return traffic for Pacific cable. In view of the facts submitted, it is a reasonable and perfectly safe prediction that there be a gross telegraphic traffic in the year 1902 of not less than 3,600,000 words, and that of business the Pacific cable will obtain fully one-half, or 1,800,000 words. The transmission of 1,800,000 words, at 2s. per word, would yield a revenue of £180,00' meet annual charges of every description. The maximum charges have been placed at £158,( and there would remain a surplus of £21,327. But this surplus would result from the Australa European business alone. To this must be added the Australasia-American business, the whol which would pass over the Pacific cable. By a return to the New Zealand House of Eepresei tiveS of date 30th August, 1898, it appears that the Australasia-American business for the 3 1897 consisted of 87,033 words, the cost of which at present rates would average 6s. word. It is impossible to say how much the gross business of 1902 will exceed that of 1897 w the rates will be reduced to 2s. per word. Nothing can be more certain than that in six years f: 1897 there will be a great advance, that, with charges on messages lowered to less than one-ii present rates, the trans-Pacific traffic will eventually develop to large proportions, and that it all go to swell out the profits of the.Pacific cable. The estimates submitted are extremely moderate. They go to show beyond all quesi that the Pacific cable, from the first year of its establishment as a Government undertaking, prove a complete commercial success. Moreover the growth of traffic, stimulated by the redud of rates, will so improve business that the net surplus revenue will go on increasing every succeec year, and thus admit of the further lowering of rates from time to time. Sandford Flemincj.

No. 38. : ' The Hon. the Peemiee to the Agent-Genebal. (Telegram.) Wellington, 20th April, 1899. What is the present position of Pacific cable ? Will Imperial Canadian Governments contribute third cost ?

No. 39. v ; ■ The Agent-Genebal to the Hon. the Peemiee. ■ ■, (Telegram.) London, 21st April, 1899. Pacific cable: Colonial Office, replying Agents-General, hopes shortly communicate the Imperial Government decision. Canadian Government, according to Eeuter, propose guarantee fiveeighteenths. ■ ■ •"''''-' v '