303

A.—4;

15 June, 1911.] Nationalization of the Atlantic Cable. [9th Day. Mr. PEARCE : No ; I come to that later. Mr. SAMUEL : But you said you were justified in omitting any charge for interest and sinking fund on the ground that from the Pacific side there was a sufficient revenue, with the present reserve fund at any rate, to make good that. Mr. PEARCE : No ; I was referring then to the fund which has been established by the Pacific Cable Board for maintenance, and I pointed out that the fund they have there is of such a volume that it would be sufficient, spread over the whole line, to maintain it, and therefore we did not need, on this new proposition, to make any further provision for that. Mr. SAMUEL : That is precisely what I understood. Mr. PEARCE : I thought you said I had not dealt with it. Mr. SAMUEL : So far as sinking fund is concerned it is suggested that we need not take that into account in regard to this proposition, because the Pacific side of the business is already on such a financial basis that it could take in its stride, so to speak, the provision of a sinking fund on the Atlantic side. I doubt really whether that is a satisfactory view to take if we are looking at simply from a commercial or business aspect. If the provision for sinking fund and depreciation on the Pacific side is excessive, then possibly the Pacific Cable Board ought to revise its present finance. Sir WILFRID LAURIER (to Mr. PEARCE): If there is a fund of that character is not it maintained now by the contributions of the Governments ? Do not we pay a deficit every year ? Mr. PEARCE : It is maintained by the contributing Governments. Mr. SAMUEL : There is a deficit of about 60,000 Z. a year. Mr. PEARCE : There is 37,000 Z. a year put into that fund. Sir WILFRID LAURIER : Then it is easy to see how there is that fund. It is created at the expense of the Governments. It is not paid out of the profits of the business. Mr. PEARCE : The Governments have to make up the loss on the cable and that goes down for the loss on the cable. Mr. SAMUEL : I understand that loss includes an amount which, it is suggested, is really excessive debited to the Pacific Cable for depreciation. If that is really excessive that is a factor which must be reviewed in itself and must be considered separately. The Pacific Cable Board, which contains many very able representatives of the various Governments, consider that the amount which they put by is the amount which is needed in respect of the Pacific Cable, and I suggest if it is now proposed to lay down an Atlantic cable, that must be considered on its own financial

39—A. 4.