A.— 4.

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9th Day.] Nationalization of the Atlantic Cable. [15 June, 1911. Sir JOSEPH WARD : Does that agreement apply to messages sent beyond the United States to America ? Mr. SAMUEL : I understand it is only to North America, but that consideration applies to the point I am now discussing, namely, whether it would be possible for us to obtain sufficient business, between the United Kingdom on the one hand and Canada and the United States on the other, to fill up a cable and keep it busy in order to avoid loss. That agreement would be an important factor in preventing our doing that. Sir E. MORRIS : On that point, and also as regards the other point with respect to the land-lines of the United States and Canada, controlling the route of the message by the cable, there would not be any object in a State-owned cable unless the rates were to be lowered. Mr. SAMUEL : No. Sir E. MORRIS : Now, if the rates were lowered, would not every one have their cables sent that way ? Mr. SAMUEL : Not if the competing companies lowered their rates too. Sir JOSEPH WARD : That is part of what we want. Sir E. MORRIS : But you would keep on lowering. Every one would keep on having their messages sent over the lower-rated line, and that would get over the Anglo-American agreement as well, because every one would direct the AngloAmerican to send them by another line. Mr. SAMUEL : That raises very important financial considerations, and the question is whether it would be advisable for the Government to enter into competition with the present Atlantic companies in order to get sufficient traffic to fill up the new State-owned cable, and if they did so, whether they would succeed in obtaining sufficient traffic. Of course it may be said that the effect may be that they would not get traffic themselves, but that other companies would lower their charges. That is a different consideration, a very important one, but a somewhat different one. But the point I am on is whether we can add to the 1,000,000 words, which is all we would be able to obtain from the Pacific Cable Board, another 1,000,000 or 2,000,000 words to make up a sufficient load, and I very much question whether that would be possible, for the reasons I have given. Mr. PEARCE : You contend that the cable is not payable unless it is fully loaded. ' Mr. SAMUEL : The present Atlantic cables, of course, do pay, and pay quite well, although they only carry half the load of their capacity. But the present load that the Pacific Cable Board would give would be only one fifth. Mr. PEARCE : Do you say it would not pay without more than that ? Mr. SAMUEL : I will come to the estimate of the probable financial position of such a cable. The estimates which were given by Mr. Pearce ignore wholly the payment of interest and sinking fund, so I understand,