F.—B.

likewise inherits the responsibilities assumed by each of the three Australian States—YicGoria, Queensland, and New South Wales—when they entered into the Pacific-cable arrangement. If, therefore, the agreement with the telegraph company cannot be changed, the moral obligations inseparable from the partnership agreement of an earlier date, resting on all the partners, are still more irrevocable. 5. Mr. Mulock informed the Canadian House of Commons that Mr. Barton recognised it to be the duty of the Commonwealth, while adhering to the agreement of New South Wales with the telegraph company, to live up to the spirit of the Pacific-cable agreement, and that he earnestly desired to see an honourable way out of the grave difficulty to which his Government had fallen heir. 6. As already stated, the difficulty is directly traceable to the Eastern Extension and associated telegraph companies. These companies have combined to thwart the efforts of the Governments concerned in establishing the Pacific cable. It cannot be said that those in the combination are inspired by lofty ideals or patriotic sentiments. They are governed entirely by considerations of private interest, and, in order to accomplish their ends, they are bent on controlling all the oversea lines of telegraph to Australia and New Zealand. There are good grounds for the belief that they aim to control even the Pacific cable itself. As will hereafter be pointed out, they have entered on a crusade which may so seriously affect the financial success of that undertaking as to develop a feeling against the policy of working it by the State, in order that its control may fall into their own hands. As the danger apprehended is imminent, the public interests will best be served by recalling and considering the facts. Possibly a knowledge of them may open up an honourable way out of the difficulty, acceptable to the Commonwealth of Australia, and to which each of the other partners in the Pacific-cable contract may yield a ready assent. 7. At the Colonial Conference held in London in 1887 the delegates discussed at some length various matters bearing on the telegraphs of the Empire. Again, in 1894, at the Ottawa Conference the discussions were renewed. At innumerable meetings of Chambers of Commerce, Empire Leagues, and other associations the subject has again and again been considered. In the interval which has elapsed the project of a British Empire telegraph service has been steadily developing. Its outline was submitted in a communication to the Secretary of State for the Colonies, dated October 28, 1898, and the main features of the scheme therein set forth may be described as one unbroken chain of State-owned telegraphs around the globe, touching or traversing all the great British possessions so as to bring each of them into direct electric touch with the Mother-country and with each other. In this manner Canada, New Zealand and Australia, India, South Africa, and the United Kingdom would be brought within the same electric circle. An essential feature of the scheme laid down is that no part of the system should touch foreign soil, and that the cables should each and all avoid shallow seas in proximity to any country likely at any time to prove unfriendly. The route of the telegraph was more precisely described as extending from London to Canada, through Canada to Vancouver, from Vancouver to New Zealand and Australia, thence to Perth in Western Australia, from Perth to South Africa, with a branch from Cocos Island to India ; from Capetown it was designed to extend to Bermuda, touching at St. Helena, Ascension, and Barbadoes; at Bermuda a choice of routes to England would be opened for selections. It might cross the Atlantic direct, or as an alternative extend northerly to a suitable point of junction with the State line between Canada and England. 8. Such a telegraph girdle of the globe would constitute a means of connecting all His Majesty's great possessions and nearly all the naval coaling-stations with each other and with the Imperial centre in London. The sub-ocean connections would be deep-sea cables in the least vulnerable position, and it may be added that the system would possess an advantage peculiar to a globe-encircling line of telegraph, each point touched would be telegraphically connected with every other point by two distinct routes extending in opposite directions. This feature possesses special value, and in practice would prove the best security against interruptions from whatever cause. 9. Since 1898, when the scheme was promulgated, progress has been made in its development : (1) A State-owned cable from Canada to New Zealand and Australia is on the eve of completion, and (2) a cable has been laid across the Indian Ocean from Australia to South Africa. The latter is, however, a private undertaking, from which have sprung the complications which perplex the Government of the Commonwealth of Australia. On this point a brief explanation is called for. 10. It is well known that the telegraph companies have from the first placed themselves in opposition to the Imperial telegraph scheme, and have employed every conceivable means to stifle the proposal to establish a Pacific cable. One main reason for their hostility to the Pacific cable lies in the fact that it forms the most important section of the larger proposal, and that the Canadian route is absolutely the only route by which the globe may be girdled by a chain of all-British cables, the proposal to which they are so strongly opposed. When it became known that the six Governments concerned had resolved to establish the Pacific cable, the telegraph companies combined and determined to adopt drastic measures in order to defeat the new State policy. They saw plainly that a State-owned cable across the Pacific would speedily lead to similar cables across the Indian and Atlantic Oceans. Accordingly they arranged to preoccupy the ground by laying a private cable on the precise route which had previously been projected in the Indian and partly in the Atlantic Ocean for the Stateowned line. Moreover, they made tempting overtures to the Governments of the Australian Colonies, offering to reduce the burdensome telegraph charges hitherto exacted, provided these Governments granted them certain concessions, which concessions it was believed would enable the combined companies to ruin the commercial value of the Pacific cable. There is likewise evidence to show that the cable combine took means to invoke the powers of the Press to influence

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