§ * SIR EDWARD SASSOON (Hythe)
In rising to call attention to our system of cable telegraphs and to move that it is desirable that an inquiry should be hold into the commercial and strategic defects of our Imperial telegraphic communication, I trust it may not be necessary for mo to make any appreciable demand upon the time and patience of the House. At any rate, I beg to assure hon. Members that the observations which it may be my duty to make will be condensed to the greatest possible degree consistently with placing the House in full possession of the broad outline of all those circumstances which, in the opinion of hon. Members on both sides of the House, representing practically the whole of the mercantile, shipping, manufacturing, and industrial enterprises of the Empire, justify us in the course we are pursuing to-night. These facts, to which I shall presently refer, have had a lurid light thrown them by the recent repeated failures that have occurred in the transmission of messages to and from South Africa, just at the very juncture when the efficiency of the cables and complete freedom from interruption were matters of such vital importance to the nation. I think we may take it that the importance of this question to our scattered Imperial fabric cannot be gainsaid. The right of this House to criticise and overhaul the administration of the cable service, nominally exists, but in practice it has always proved illusory, because for some unexplained reason the particular vote appertaining to this telegraph service has been year after year relegated to the extreme end of the session, when it has been either smuggled through or closured. The grievances under which we sutler are twofold in their nature. One is from the aspect of Imperial defence and strategic considerations. To that aspect I shall but very 970 briefly allude, because my right hon. friend the Member for the Forest of Dean will, with his great knowledge of the subject, review the patent defects, and doubtless suggest right and proper remedies. The breakdown of the cables to the Cape has been a very frequent occurrence. I gather from the official Berne records that from the 31st October last to the 31st of January of this year —a period of ninety-two days—-either one or the other of the cables has been interrupted for no less than a period of sixty-two days, or something like 74 per cent. of the whole time. I think the associated companies have thus laid themselves open to the charge of neglect, to the charge of a dereliction of public requirements at the most critical hour of the country's need. Moreover, there is a question of a breach, if not of the spirit, certainly of the letter; of the very essential clause in the Convention under which subsidies are granted to these companies. That clause is Clause 5, which runs as followsPayment of such subsidy should be conditional on telegraphic communication being in good working order and condition, so that messages may be transmitted by either route.How has that condition been fulfilled? In consequence of the interruption of the cable we were within an ace on one occasion—within forty hours--of having a breakdown of both these cables. The House will remember the interruption which took place after the Jameson raid for days and days together. I do not know that I am propagating an idle fable, but I believe it is on record that no less a personage than the right hon. Gentleman the Colonial Secretary himself drove over to Winchester House in order to find out what was up. I should like to ask the right hon. Gentleman the Secretary to the Treasury whether any remonstrances have been addressed to the company, and if he will undertake to state the nature of the reply. I fear it will be of only platonic interest because the wisdom of the Treasury has decreed that the cables may go being interrupted, either continuously or spasmodically, for five months and twenty-nine days and no penalty is to attach. I am aware that the associated companies have started a third cable from the Cape to England, but that cable rather sins against the 971 fundamental principle of an all-British cable. Most hon. Members are aware that the East African cable was started during the Zulu war, now some twenty years ago, and although subsidies and subventions granted to the companies during those twenty years have amounted to no less a sum than £3,700,000, the shares of one company alone coming to £1,368,000, yet not one single section except the least difficult—that from Mozambique to Zanzibar—has been duplicated in order to ensure rapidity and regularity of communication in time of military stress and the pressure of work resulting there from. The next grievance is of a commercial character. For some time back the earnings of the South African Company have very considerably exceeded the amount that the late Sir John Pender himself declared would constitute a remunerative revenue. In 1896 that amount was exceeded by no less a sum than £120,000, and it has more or less maintained that figure. I think, therefore, I might contend that, if not spontaneously, if not automatically, if not upon grounds of general equity or policy, if not out of consideration for the long-suffering and patience of their clients, then by all but absolutely nisi prius obligations they are bound to reduce their tariffs. I may be told that they have announced a slight reduction on the Cape cable, but that was owing very much to the salutary fear of outside competition, and the firm and uncompromising attitude assumed by the Cape Government. In 1896 the Postmaster General at the Cape, in reply to applications for further subsidies in connection with the laying of this third cable, stated to Her Majesty's Government that the gross annual receipt of £180,000 in respect of the traffic circulated by the Eastern and Western routes was considered by the late Sir John Pender to be a fairly paying revenue. And then again, Sir Gordon Sprig, who I believe was Prime Minister at the time, also in reply to a demand for further subsidies, telegraphs to the Agent General that the present traffic warranted a third cable on basis of revenue as laid down by Sir John Pender, and that the South African contributories would not entertain question of increase without satisfactory guarantee in regard to reduced rates, and that the monopolist company must make concessions to meet legitimate public require- 972 ments. What is the position of these companies in regard to the taxpayers of this country? The position I take it to be this. Different sums of money have been voted annually to them in which the Eastern Telegraph Company is financially very largely interested, in return for the companies executing their part of the contract. That is to say, the companies were to receive messages, transmit them with rapidity and despatch, and, above all, to see that their agencies and their means of transmission were kept in perfect working order. These moneys were thus voted for a definite and specific object. I ask whether it ever occurred to the officials who negotiated this instrument that the companies taking advantage of their position, of the material assistance and the moral protection vouchsafed to them by Her Majesty's Government, would set about expropriating owners of land lines throughout Europe and Asia, absorbing competing companies, and generally employing all their position and influence thus given to them in order to strangle and thwart competition and to maintain exorbitantly high tariffs? I maintain that if those officials did foresee this eventuality and did not guard against it as these contingencies are guarded, against and provided for in almost every railway contract in this country, they were singularly neglectful of the public weal. If they did not foresee it, it only shows how necessary it is that in all transactions of that kind in future Parliament, and Parliament alone, should be the arbiter in the last resort. My hon. friends and myself have been subjected to a great deal of odium and obloquy in championing this cause. It has been freely stated that we are spoliators, that we desire to invade the sanctity of private right enjoyed under the aegis of the law. I repudiate with all the vehemence I can command that imputation. It is superfluous to suggest that we could not even if we would. Not even Parliament, with all its supreme power and influence, could so much as touch those rights unless the binding effect of the statute were abrogated, or the judges of the land suppressed. But the doctrine that where the conduct of a private enterprise subserving large public interests is concerned public considerations must prevail, and even vested interests, where their setting aside does not involve a breach of public faith, 973 should give way to imperative considerations of public utility7 and Imperial concern. That doctrine has never been more strongly enunciated or more admirably illustrated than in the excellent despatch issued from the Colonial Office in July of last year, and by that doctrine we are perfectly prepared to abide. But it may not be irrelevant to inquire whether the public have no light or claim, whether they should have their heads (Liven through a noose with the rope in the hands of private companies for them to tighten or slacken at their own sweet will. I may be told that the obvious remedy for the inconvenience would be that of the State purchasing the cables. I should be perfectly prepared to argue for the advantages of that step when the time is ripe for it, but I do not think it is opportune now. In the meantime what is going to be done? These companies have by degrees impregnably entrenched themselves behind mountains of conventions and kopjes of joint-purse arrangements. As a shareholder and a business man I admire their astuteness, but as one of the telegraphic public, well, I reserve my opinion. At any rate, these barbed wire entanglements have to be severed in one way or another. Where are the Parliamentary nippers which will effect the purpose? That is just what this inquiry for which we earnestly plead will give the clue to. The situation to which all the great business communities of the country have been reduced is fast assuming the dimensions of an egregious scandal. It seems surprising that when Her Majesty's Government decided to break new ground and to enter into competition with private companies, as in the case of the Pacific cable, no new policy should have been formulated, that some kind of continuity of agreement might be maintained and preserved. But the most extraordinary part of the whole matter is that the greatest delinquent of all appears to be the Indian Government, because, while their own delegate at the Buda Pesth Conference in 189G made strenuous efforts to obtain a reduction of what was universally considered to be a prohibitory rate, and while those efforts were signally defeated by the Eastern Telegraph Company, by the admission of the Indian Government themselves, their own cable which runs from Kurachi to Bushire and Fao, and their land lines from Bushire 974 to Teheran were themselves the stumbling block to this reduction of rates which their delegate recommended. So that in this year of grace we have this spectacle —and, to say the least of it, it is hardly respectable—of the Indian Government charging twelve times as much per word on their cable as is charged on identically the same length of cable between England and Gibraltar. How does the House think these important issues are decided at the conference? According to the cable mileage of each State represented? Not a bit of it. Each State that goes to the conference has equal voting power, with the result that we who possess seven-eighths of the cables of the world — 102,000 out of 136,000 miles of cable, and no less than 308,000 miles of land lines—have no greater authority in the conference than States of the calibre of Roumania, Venezuela, and Luxemburg, possessing no cables at all and an insignificant proportion of land lines. Not a very brilliant sort of arrangement where the predominant partner is ludicrously outvoted, and whose influence is not greater than that of the pettiest of States. I ask what kind of joint-purse arrangement it is that exists. To my uninitiated mind it seems about the most uncanny combination that ever germinated in the brain of man, because the effect of that joint purse arrangement is that it pours money into the coffers of the Russian Government through the Indo-European line (which is really pledged to Russia), while it helps to reduce Australian rates by helping the Eastern Extension Telegraph Company, while it brings grist to the mill of the associated companies, and while it makes pay over £12,000 or £13,000 a year to the joint purse, more than it takes out of it, the very people for the benefit of whom ostensibly this arrangement has been entered into—that is, the Indian people and the people having relations with India—are really left out in the cold. I have made several inquiries in connection with this privately, but I have no authority as showing why this is the case. I do not see the noble Lord the Secretary of State for India in his place, but no doubt the Secretary of the Treasury is fully armed and will be able to inform us when that arrangement is determinable. I do not in the least attribute any blame to the noble Lord; I 975 think this arrangement, this damnosa hereditas, has been handed on to him by former moulders of Indian telegraphic policy. But what we require and have a right to know is whether it is going to be immutable as the laws of the Medes and Persians. It is important to have an answer to that, so that the House may formulate a judgment upon this particular issue. I have alluded to the fact of the prosperous earnings of the Indian Telegraph Department, but despite that and the fact that the Viceroy immediately on his arrival made the question of a reduction of the telegraph rates one of the most conspicuous planks of his platform, and despite the further fact that the Eastern Telegraph Company had had proposals submitted to the Indian Council for not less than a whole year, yet there appears to be no balm in Gilead. I ask the House whether there is not something rotten in the State of Denmark. The proposals to reduce the Indian rates appear for some reason to be hanging fire. Why, I do not know; but what I do say is this—and I speak with the mandate of every Chamber of Commerce in this country—that no reduction would be at all satisfactory unless the rate was reduced to 1s. per word. I believe myself that the extension of business that that reduction would bring about would be so enormous, wide-spread and far-reaching, that it would recoup the company for any loss they might incur. I have always thought in a matter of this kind, where a man is hazarding an opinion which might be looked upon as somewhat visionary, one ought to have the courage of one's opinions. Therefore, in order that we may not abnormally disturb the earning power of the associated companies, I would strongly urge upon Her Majesty's Government that they should assume a guarantee of one-third of any loss that might accrue to the companies from their action in reducing the rate to 1s. Let the Indian and the Home Governments jointly assume that guarantee. Although this is a matter which principally concerns the Indian Government it does not exclusively concern them. Then again, the plethoric condition of the Indian revenue might certainly justify them in undertaking the more or less problematical risk. Assuming the worst should happen, assuming there was absolutely no expansion of business —a perfectly impossible assumption—the utmost the Treasury would be called 976 upon to pay would be something like £44,000 for its half share, and curiously enough a windfall will come to the Chancellor of the Exchequer in 1905 in the shape of Red Sea annuities amounting to £28,000. I remember the other night the right hon. Gentleman the Member for East Wolverhampton rather took exception to the fact that we treated the Post Office as much as an administrative department as a revenue-earning department. My right hon. friend the Secretary to the Treasury asked him in what direction he wished the surplus profits of the Post Office to be applied. Well, I make this infinitesimal demand upon the right hon. Gentleman, and I hope that both he and the Chancellor of the Exchequer will for once disregard the very sound advice tendered by my hon. friend the Member for Exeter, and abate some of their "natural ferocity" in acceding to this request. I hope I shall not weary the House if I refer to the West African and the North African tariffs. They are really matters of the very greatest importance in connection with the prospective development of those territories. A message to Sierra Leone, to the Gold Coast, to Lagos, and other places in West Africa costs no less than seven shillings per word, whereas the charge to the Cape, much beyond that, is only four shillings. But the most striking feature of the whole thing is that a Frenchman can send a word to his West African possessions for one shilling and fivepence, or about one-fourth. I may be told that this remarkable disparity is attributable to the want of business to and from West Africa. But I have yet to learn that the volume of French business is so much greater than our own in that region as to account for the difference, or that a reduction of rate does not in its train bring its own increase of traffic. There are a whole host of conventions with Turkey, Persia, and Egypt —the position is simply honeycombed with them. I asked my right hon. friend the Under Secretary of State last year if he would make public those documents, but he refused to do so on the ground that he was not able to divulge them for diplomatic reasons. But I do not see that any harm could be done by divulging these documents. These invisible and intangible documents cannot be directed against foreign powers, and I will tell you why. Anyone who is ac- 977 quainted with the working and the conduct of Oriental bureaucracies is aware that every single Chancellory in Europe must have a copy of those documents. Therefore I ask, against whom is this secrecy directed? Who are the dupes and the victims? I know I should be trenching on somewhat delicate ground if I pursue this subject much further, but it is a matter to which I earnestly direct the attention of the Secretary to the Treasury, so that, in deciding whether any inquiry shall or shall not be granted, he may take this point into his careful consideration. With regard to Egypt I do not think there is much secrecy to be maintained there. I have been able to lift a corner of the veil as regards Egypt. I have here in my hand a copy of the Egyptian agreement. I beg the House to believe that I did not resort to the potent influence of baksheesh or to any surreptitious methods in obtaining it, but I got it in a very natural way. There is nothing very startling in this document. It simply enumerates the advantages which the Eastern Telegraph Company possess, and that on the payment by the Eastern Telegraph Company of something like £7,000 a year the Egyptian Government would respect their landing and shore rights there. So far so good. But on reading a little further on I light upon these somewhat ominous and oracular words, "Divers good considerations." I do not pretend to fathom the significance of those words. All I know is this, that whereas the French merchant can send a word to the further confines of Tunis and Algiers, across the Mediterranean, for one son, or a halfpenny a word, we have to pay for telegraphing to Egypt, only 200 miles further on, no less than 1s. 9d. per word, or forty times as much. Considering that the Government knew this determined agitation was going on in this country against excessive cable tariff's, holding Egypt in the hollow of their hands, having the whole of their departments manned by their own nominees, I say that Her Majesty's Government were bound to see that this convention, which did not expire this year or next year, but two years hence, was not renewed upon the old retrogressive lines last November. I should like to refer to a matter which I consider to be one of utmost importance. I have already alluded to the desirability of a system of all-British cables, and that 978 brings me to the Pacific Cable scheme. That scheme I look upon as constituting the keystone of the position, lying as it does between Great Britain on the one hand and Australia and the Far East on the other. Though some of the signatories to that project appear to have been seduced from their allegience thereto, and to have somewhat cooled in the ardour of their affection for that scheme, I hope the Secretary to the Colonies will yet persevere with the matter and prevent it collapsing. The proposal has worked a truly chastening influence on the associated companies and has wrought a most miraculous metamorphosis in their attitude. While for the establishment of the Cape to Australia route they were asking for an annual subsidy of something like £75,000, on the birth of this scheme they altogether waived that subsidy, and accompanied that renunciation by a substantial reduction and a still more substantial prospective reduction of the tariff. I think the deadlock which exists could easily be bridged over by the establishment of some pooling-arrangement or some rational—not the Indian—joint-purse arrangement. Were that arrangement to take place, were the House to give recognition to. the ultimate acquisition by the State of that cable from the Cape to Australia, should the interests of the Empire require such a course to be taken, I have reason to know that Canada would altogether waive her objections with regard to those rights of the private company in Australia. I do not think Her Majesty's Government—I do not speak of the present Government particularly, but of successive Administrations—have had so much as an idea of a policy with regard to the cables; it has been a sort of hand to mouth proceeding—going in for competition against private companies one day and encouraging private enterprise against their own people another day. I earnestly plead for some State policy on comprehensive lines embracing the very wide interests of the constituent portions of our Empire. I would humbly suggest that that policy should, among other things, provide for the establishment of a scale of charges in all future agreements with private contractors, that scale to be based upon the average earnings, and worked on a sliding scale, and that no concessions, either material or geographical, should be granted to any system 979 that diverged from or conflicted with the all-British route. It should also provide that there should be no absorption of any new line by the older companies, by which competition is strangled, without the express sanction and concurrence of the State; that where breakdowns occur from avoidable causes for more than three months the subsidy should be stopped; and, above all, the policy should provide a system by which the State could acquire the cables if it should think right so to do. There is only one other matter to which I wish to call the attention of the House before I sit down, and that is in connection with the terminal tax which is leviable by the British Government in accordance with the regulations of the International Telegraphic Convention. In answer to a question which I put to the Secretary of the Treasury a little while back I was informed that that rate of twenty centimes per word was not charged, and the reason given was that the special and exclusive privileges of the Postmaster General under Clause 5 of the Telegraphs Act of 1869 were specially excluded in regard to cables owned by the company concerned, and that therefore a sum of something like £90,000 a year was surrendered. But the convention of 1896 is twenty-seven years later than the Act upon which the Treasury relies, and at this conference at Buda Pesth our own delegates were present. I therefore desire to ask, if this ½d. a word was an empty right or a farce, why was it inserted? I do not rely merely upon the construction of the provision for believing this right was intended to be enforced, but upon the further fact that where the enjoyment of this right is debarred, the name of the State so treated was categorically mentioned. Egypt was thus categorically named, and with regard to messages to and from Tripoli, Turkey was precluded from enjoying this right. I feel sure that this haphazard system of doing business must offend the symmetrical notions of my right hon. friend the Secretary to the Treasury, and I should like to ask him whether he has taken high legal advice as to the validity of the position occupied by the Treasury in connection with this matter. I have now placed before the House, I fear most inadequately, but I certainly hope in no captious spirit, the vices and the deficiencies of our system of cable telegraphs. We have had innumerable promises 980 from the all - powerful cable companies, but they have all been kept to the ear and broken to the hope, until the public patience is perfectly exhausted. I venture to think that recently the companies have somewhat unwisely and tyrannously used the giant powers with which they have been entrusted. I do not forgot—I think nobody can forget—the very eminent services rendered in the early days of cable enterprise by the late Sir John Pender, and by his worthy successor, Lord Tweeddale; but we hold that those services of the parent company have been requited either in meal or in malt, and it is now time the public had their innings. I think it is only fair to say that the country appreciates the very graceful concession made by the Eastern and other companies during the war in reducing the rates for messages sent on behalf of our soldiers and sailors. I may say that if that large-hearted spirit had pervaded their policy in past years much of the edge would have been taken off our grievances. Last night the House passed at its Second Reading a measure which we all hope will bring more closely together the constituent parts of this Empire. May we not hope that as a result of this discussion some germs will be thrown out which may have the effect of bringing about in the fulness of time such a system of federated cables between all branches of this Empire as will make the pulse of every component part beat as the pulse of one man? Now that we have mobilised the forces of public opinion, now that public claims are marshalled in clear and unmistakable form, I venture to say a very serious and grave responsibility will rest upon Her Majesty's Government if they refuse to rise to the height of the situation and to give us this Select Committee of Inquiry, and this Empire, this association of 400,000,000 of people, will want to know the reason why. I beg to move the resolution standing in my name.
§ * SIR CHARLES DILKE (Gloucestershire, Forest of Dean)
The House is never so usefully engaged as when it is listening to a man who has made a subject his own, and the hon. Baronet opposite has for some years past worked on this question of telegraphic communication, especially across the seas, in different portions of the British Empire. He has mastered the subject; he has got the 981 enthusiastic support of a very large number of Members of this House, and I speak from personal knowledge when I say that the Chambers of Commerce throughout the country and the commercial classes generally are very warmly interested in the subject. The hon. Baronet has done me the honour of asking me to second this motion, and I do so, but from a slightly different point of view than that which he himself has taken. I agree absolutely in the terms of the motion, and think it one the, House and the Government should accept, but I shall support it on slightly different grounds—although in no sense opposing his view—from those which my hon. friend has placed before the House. The hon. Baronet has absolutely mastered the commercial side of this question; the strategic side he has not dealt with except so far as to point out the haphazard nature of our present arrangements with regard to the making and laying of cables. We have notoriously in past years adopted in different cases very different policies, and we appear never thoroughly to have thought out the principles which ought to underlie the laying of a cable for the British Empire for use in time of war. Let me say I am not interested in any particular cable. My main object is to get the largest number possible laid in different parts of the world between different portions of the British Empire, because I am so firmly persuaded that our naval supremacy, our superiority at sea, will be the more powerful in time of war the greater number of cables we possess. Let me at once admit that considerable progress has been made. My hon. friend pointed out in the concluding part of his speech that the mere menace of the Pacific Cable has had great effect in other portions of the world. It has compelled rival companies and systems to offer terms, or to consent to terms which they would never have offered or consented to if it had not been for the probability of this route being established. My object is to get different and alternative routes for use in time of war. I firmly believe with the mover of the resolution that that important national object can be attained without heavy cost to the country, because it has been shown by the history of the past that by a very small capital expenditure on the part of the country— 982 in some cases by no capital expenditure at all, but simply by wise provisions— fresh routes can be obtained, which would be of extreme value in time of war, and which nevertheless manage to pay their way in time of peace when once made. My hon. friend has spoken of the importance of all-British cables in the world. I suppose at this time of day there is hardly anyone who will deny the importance to us in time of war of an all-British route. It is quite true that cables will be very largely cut in time of war, but still the experience of war shows that while cables will be very largely cut there is a high probability that they will not be all cut, and if you have a considerable number of alternative routes you will have that enormous advantage which conies in time of war from having some cables still in working order for your use. We have received to-day the information that there has been a fresh laying of cable arranged by the Government within the last few weeks. We hear that the cable which already exists in short steps, from this country to Gibraltar, with a cable from this country to Lisbon, on to Gibraltar, thence to St. Vincent, which connects with the cable to Ascension, St. Helena, and the Cape, branches of which have recently been laid, is now to be strengthened by a direct line to St. Vincent. Avoiding Lisbon is undoubtedly an important point; it is a gain, because Lisbon is peculiarly open to foreign influences in time of war, even as compared with St. Vincent. But, still, it is not an all-British route. At St. Vincent Ave are still on Portuguese soil, although being on Portuguese soil only at that point gives us conditions which I admit are less unfavourable than those which exist at Lisbon, for reasons which I need not go into, but which can be guessed. The cable is still in foreign hands, because I understand that the Portuguese law forces us to have none but Portuguese employees on the central staff at St. Vincent, so that all the messages by that route pass through the hands of employees of a foreign State. We have also known within the last four or five days that we are to have an alternative route by the other coast. Members of the House who are interested in the question may know that a route was laid during the Zulu War; it was a strategic route, by Aden and Zanzibar to Durban. That is now to be supplemented by a 983 cable from Durban to Mauritius, and landing rights have been granted for the cable to which allusion has been made. That, of course, will be a most valuable alternative route. At the same time it is not strategically an altogether satisfactory route. It passes through the Gibraltar Straits in a very strong running tide, from which it is taken out and laid in shallower water close by, and there is a danger in shallow water in time of war; it is a route through the Mediterranean; it is a very old line down the Red Sea, and it is from these points of view not an altogether satisfactory route. While I, for one, welcome the obtaining of these two routes, while they seem to me to constitute an improvement in the state of things which has hitherto existed, I personally should be very glad to see also another alternative route. To show how important it is to have a number of alternative routes may I put a very plain case to the House? It appears to me the Spanish-American War is an illustration. What happened during that war? What would occur in war is likely to be very much what occurs in a great snowstorm; your lines will be broken here and there; they are not likely to be all broken at the same time; and you will find yourselves forced to rely—and what an enormous advantage it is if you can rely—on what may appear at first sight to be most indirect routes. In the case of the great snowstorm this spring communication was carried on between London and Cornwall by way of Malta, and that is an example of what I mean when I say that the existence of three or four alternative routes to a spot such as Mauritius, for instance, and to other important strategic positions between India, Australia, and Africa, would be of overwhelming importance in time of war. Of course, we have had different morals drawn from what occurred with regard to the cables during the Cuban War. Some have drawn the moral that all cables would be cut; others have drawn the exactly opposite moral that no cables would be cut; but those of us who have carefully read the documents on the subject have come to the intermediate conclusion that, while cable cutting under certain circumstances is easy enough, under other circumstances it is very difficult indeed, and that if you have three or four alternative routes of cables to your most important strategic points the 984 great probability is that with our command of the sea we should be able to maintain one or two of those lines in existence during the war and get the enormous-advantage over our opponent which that circumstance would give us in time of war. In the ease of the war between the United States and Spain—I put it very shortly and very plainly—I think it will be found that the United States, with their naval superiority were able to cut the cables that they wished to cut; they at all events cut some of the cables they wished to cut with great effect. I know there are some Members of this House who believe it is impossible from the point of view of international law to cut cables outside the three-mile limit on the high seas in time of war. All we can do in reply to that is to point to the fact that the Americans did it both outside and inside the three-mile limit. They paid compensation in the cases where they cut the cables outside the three-mile limit; they compensated the French for cutting the French cable in the West Indies, and in any other case where they cut the cable outside the three-mile limit. From the point of view of our success in war the question of compensation is a very small one. It might be life and death that might be at stake in cases of this kind, and the fact that cables will be cut is, T think, conclusively demonstrated by the Cuban War. I know letters have been written by Professor Holland and papers by the late Admiral Philip Colomb in which those gentlemen laid it down that no Power could cut cables on the high seas outside the three-mile limit. It is useless to go into this question of whether Powers can or cannot cut cables; we point to the fact that in the war to which I have referred the cables were actually cut by the Americans. We know that on board the warships of foreign countries charts are carried showing the landing, spots of the shore ends of all our cables. We know the instructions that are given to try and cut those cables in time of war. The cutting of these cables is, I think it will be admitted, a much more difficult matter in deep water in than shallow water. The shallow water ends constitute a formidable danger, and while you can most efficiently protect the shallow water ends when they do not run a great number of miles, it is very difficult at all times of day and night to protect them when they 985 run in shallow water for a very large number of miles. The moral seems to mo to be that the Government ought to try to get all the cables which are likely to be of use in time of war —which is practically every cable; they ought to try to provide for the landing of those cables on shores where the water is deep near shore, where the shallow water end of the cable to be protected in time of war would be but a short piece. From that point of view, the Cornish coast, to which all the strategic cables are being brought, is not a satisfactory coast. I have gone carefully through the charts of all our principal cables and of the Cornish lauding place of all these new strategic cables and the cable to Gibraltar, which means the West Coast of Africa and the Australian cable—the all-British cable as it is called—with the new St. Vincent cable leading to Ascension, St. Helena, and the Cape, and I find that all these shore ends, coming in as they do to Cornwall, run through about 130 nautical miles in less than 100 fathoms of water. Compare that with the deep water you get off the coast of Ireland. The Atlantic chart will show you that off Dingle Bay and certain points in Ireland you have deep water very near the shore, and the shallow water end would be a very short end indeed. One of the most important points, I think, that the Government have to bear in mind in connection with the matter which is occupying their attention, and in which they have made considerable and rapid progress during the last two or three years, is this question of bringing in their shore ends from shallow water to deeper water. But the main ground upon which I support the motion of my hon. friend to-day is that we ought to consider, both commercially and strategically, what ought to be the plans which should preside over the laying of our new cables in the future. Personally I am one of those who are favourable to the purchase of the cables by the State. The whole question is whether you have to pay too dearly for them. As regards the principle, there can be no doubt. As my hon. friend has said, the Government are sometimes pursuing the plan of subsidies, and sometimes they are constructing competing cables; but there has been an absence of a general view on the subject as to whether it would be wisest to attempt to construct cables for themselves, whether it would be wisest to 986 use the plan of subsidies, or whether it might not be wisest to consider some plan of general purchase of cables by the State. If I could see my way to obtaining the cables at anything like their real value, not paying too dearly for them, not being made to pay as though they were new cables for cables which were virtually worn out, I should unhesitatingly support State purchase. The difficulty of the question is the price. With regard to that, we should have a hard battle to fight, and I am not certain that we could fight it successfully. It, is, however, a matter worthy of inquiry, and it is on these grounds that I second the resolution of my hon. friend.
§ Motion made, and Question proposed "That it is desirable that inquiry should be held into the commercial and strategic defects of Imperial telegraphic communication."—(Sir Edward Sassoon.)
§ MR. VICAEY GIBBS (Hertfordshire, St. Albans)
The hon. Baronet who moved this Resolution and the right hon. Baronet who seconded Waving received such enthusiastic support from the House, that it is somewhat difficult for me to advocate a view which differs from those which have been advanced; but I will venture to put before the House some reasons for thinking that the hon. Member who moved the Resolution has been led into some errors of fact in the course of his long and interesting speech, and I shall also endeavour to show that in some respects an inquiry would, perhaps, not be so desirable as seems to be thought. I do not think I shall be misrepresenting the hon. Baronet if I say that the charges he brought against the Associated Cable Companies with regard to their service— At this stage of his speech the hon. Member turned to some hon. Members behind him and said: I must request the hon. Member behind me not to make extremely offensive speeches in my hearing while I am addressing the House.] I was saying that, as far as I could follow the hon. Baronet's speech, he complained that the companies did their work badly, that they had been shown to be inefficient during time of war, that their charges were excessive in various particulars, and I believe he agreed also with the right hon. Baronet who seconded the resolution that it was desirable that the companies should be taken over by 987 the State. I will turn first to the question whether their work has been done inefficiently during the last fourteen years. Where the companies formerly had only two cables running they have three now. Both cables were interrupted for only a very few hours during those fourteen years. As to the question of delay in messages during the war, I think the House will recognise at once that obviously the Government wore entitled to a preference over any other messages the companies had to send. The House will hear when the Member who is to speak for the Government addresses the House whether the Government have had any cause to complain of the way in which their work was done. I believe the right hon. Gentleman will have no such complaint to make. No doubt messages of the general public were delayed considerably and materially, but they were delayed in the interests of the Empire itself.
§ * SIR EDWARD SASSOON
That is not wholly the case. The fault was that the cable was not duplicated.
§ MR. VICARY GIBBS
I do not know how a cable could be duplicated instantaneously. If we had more cables, and it paid to have more cables, no doubt there would be more efficient lines for telegraphic communication, but obviously unless they would pay no company could be expected to lay them. If it is necessary that there should be more cables they can be laid, but they must be laid on a basis upon which it will pay a company to do it. Now, as to the question of exorbitant tariffs. It is quite impossible, and the House must understand that it is quite impossible, that there can be any uniform mileage rates in a cable company. The rate must depend upon the amount of business done on a particular line. Therefore, to take such a case as the hon. Baronet gives of the 7s. a word to the West Coast of Africa, the answer is that the charge is so high because the amount of business done on that cable is so small. Another complaint the hon. Baronet made was with regard to the charge of 1s. 9d. to Alexandria. The company, I believe, would be prepared to reduce that rate, but the Egyptian Government itself will not 988 agree. Another statement made was that the land rate across India ought to be reduced to a shilling. Well, as a matter of fact the Indian Government, in agreement with the companies, have reduced the land rate from four shillings to two shillings and sixpence, and that new rate will, it is believed, show a substantial loss. Of that loss the Indian Government are to bear one-third and the companies two-thirds. I do not think that it is reasonable to ask the Indian Government to reduce charges far below those which would provide a fair profit on capital expenditure. As to what these companies have done, let us see how far they have already met the demand which the right hon. Baronet make in the public interest for reductions in tariff. They have already made large reductions in the tariff both to South Africa and to Australia, and these are to be followed by further reductions. About twelve months ago the companies wrote a letter to the Post Office in which they offered to reduce their rates to Australia to half-a-crown, provided they could earn a certain minimum return on their undertaking. The expression used was that they were to come down to a standard basis as the traffic developed. Well, that proposal is being considered now by the Post Office, and it seems to me that it is a fair one; and the other negotiations are actually concluded for reducing the Indian rate from 4s. to 2s. 6d. [An HON. MEMBER: May I ask if there is a reduction to South Africa?] Yes; the exact reduction is from 4s. 9d. to 4s. to South Africa; and from 5s. to 4s. to Australia since September last. Besides reducing the tariff, these associated companies have arranged to provide alternative routes between Europe and Australia. by extending to Australia the recently laid cable from St. Helena to the Cape. They ask for no subsidies; and this is an important matter to the public. What they ask is that they should have a right of communicating direct with the public through that cable, and not through the medium of the Australian Governments. I should like to explain how important that is. At present, supposing a cablegram is sent to Sydney via Port Darwin, it goes by one of the Associated Companies' lines to India, then passes into the hands of the Indian Government, then into the hands of the Eastern Extension Company, then into the hands of the South Australian 989 Government at Port Darwin, next into the hands of the Victorian Government, and finally into the hands of the New South Wales Government, from which it passes to the hands of the public in Sydney. Now, if this new line of route were completed the cablegram could be delivered straight to Adelaide. But if these Governments have their own Pacific cable, and if they still retain their control over the company's cablegrams, they would be in the position, obviously, to have the interests of their trade rivals in their own hands. They would have no inducement to lower the rates; they would have a monopoly; and clearly no one would send cable messages by the company's cable when they could send them by the Pacific route. Therefore it is most important, in the interest of the public, that the demand of the companies should be conceded— namely, the principle that the companies should have the delivery of their own cablegrams in their own hands. That demand has been conceded by the Governments of South Australia, Western Australia, and Tasmania, but not at present by the other Australian Governments. As to the strategic cables, I should like to point out that the companies have done a great deal for the Empire in that respect. A question was asked the other day as to whether the rates had been reduced by the companies to Sierra Leone, and as to the desire of the Government to have a cable laid from Ascension to Sierra Leone. Now, it seems that the cost of a cable from Ascension to Sierra Leone would be £150,000, and it was estimated that the return on such an outlay would be £11,000; that is, an amortisation would be required for thirty years, while the maintenance curing that time would be expensive for repairs, and the cost of clerks living in such a place as Sierra Leone, where they have to be changed frequently. It was considered by the companies, therefore, that £11,000 would be a fair return. After long negotiations they have agreed to lay that cable for a subsidy of £4,500 a year by the Government. That is less than half of the traffic, and the return on the use of the cable will be otherwise practically worthless. There are many other cases, as for instance at Port Hampton, in which the companies have rendered service to the Government of 990 this country, and which constitute a fair claim for considerate treatment from the Government. As to the question as to whether it is desirable that the State should buy out the companies or not, it really comes to whether this is a matter for private enterprise or for the State. I do not wish to dogmatise on this question at all; but I have no reason to suppose that the companies would object to being bought out by the Government if they were paid what they considered to be a fair price. They would act as any sensible man in the House would act. It is not reasonable to suppose that they would act otherwise than as business men. I should like the House to consider whether it is desirable that an inquiry should be made into the relations of our Government with these cable companies, and whether it is not possible, if such an inquiry were embarked upon, that it would be really detrimental to the interests of this country in regard to foreign countries. I think there are many reasons why it would be very wise indeed to decline such an inquiry. I apologise to the House for taking up so much of its time, but the subject is a very difficult one, and I thought it was only reasonable that something should be said in behalf of the companies. I may say that the remark, of which I had so much reason to complain at the commencement of my speech, namely, that I had a brief for these companies, was altogether unwarranted. I have not one farthing interest in these companies, and no personal acquaintance with them in any way whatever. What I want is that the House should have an opportunity of considering both sides of the question, and I have no sort of interest except to see that justice is done on all hands.
§ MR. SYDNEY BUXTON (Tower Hamlets, Poplar)
I do not desire to detain the House for more than a short time. I want, however, to deal with one aspect of the question which has not been discussed by my hon. friend who moved this resolution, or my right hon. friend who seconded it. I think my hon. friend the Member for Hythe is to be congratulated on having had the opportunity of having this question discussed at a proper period of the session, and on the very temperate 991 and able speech which he has made. He dealt so fully with the commercial aspect of the question, and the right hon. Baronet the Member for the Forest of Dean likewise dealt so fully with the strategic points, that it is unnecessary for me to detain the House in detail in connection with these matters. The hon. Gentleman who has just spoken stated the case on behalf of the companies without any personal feeling or prejudice. We all agree and appreciate that the Eastern Telegraph Company and Subsidiary Companies have really done a great deal for submarine communication, and for practically placing the whole of the submarine companies in English, instead of in foreign hands. But it ought to be remembered that they have made a good thing out of it. They have conducted their business on business principles, like business men; and they have naturally endeavoured to buy out their rivals to obtain a monopoly, and, like a submarine octopus, to spread their tentacles all over the world. I am not blaming them for that; but we, as representing the public interest, have to consider whether the time has not come when something should be done to allow the public to benefit by those submarine cables. After all, we, the representatives of the taxpayers of this country and of the colonies, have paid very large subsidies to these companies. I am not complaining of the payment of these subsidies; but my hon. friend the Member for St. Albans did not seem to appreciate the point that we paid these subsidies on the understanding that the cables should be kept in proper repair, and ought to be duplicated and triplicated. But we find, in spite of the payment of these large sums, that these companies, in cases of difficulty or of war like the present, are not able to carry out to the full the obligations which they undertook in obtaining these subsidies. My hon. friend who moved this motion touched on the question of the agreement between the Russian Government and the Indo-European Company. I am bound to say that we do require some information in regard to this matter, and that is a very good argument in favour of the inquiry asked for by my hon. friend. He has omitted to mention one fact in regard to this cable which is very material. These companies have a joint-purse arrangement with the Indo-European Company, which has entered into an agreement with the 992 Russian Government to give them under certain circumstances sole control of their lines; so that we have been practically subsidising a line which might be used by the Russian Government to our disadvantage. There is another conclusive argument in favour of the proposed inquiry— namely, that the Government of the day do not seem to have any fixed policy or settled principle in regard to this important question. I daresay it is very natural that they should not have some such policy without first having some inquiry by a Committee or Commission, which would lay down the principles on which such a policy should be based. I was much struck by the reply given by the right hon. Gentleman opposite to a question asked by my right hon. friend the Member for Forest of Dean in regard to submarine cables. He said that in regard to one part of the question he was able to give an answer; in regard to the second part, he was only able to give an answer after communication with the Colonial Office; and to the third part only after communication with some other Department of the Government. There are on that bench representatives of the Treasury, the Post Office, the Foreign Office, the Admiralty, the Colonial Office, and the India Office, and every one of them is interested in this question. Now, what we want to know is, if they have between themselves some settled policy in regard to this matter. Their interests in almost every case are quite antagonistic. If the matter is dealt with in one case by one Department, and in another case by another Department, we shall never arrive at some system or policy in connection with this question of submarine cables. We have not, so far as we know, an inter-Departmental Department of the Government which could decide on a settled policy as to whether we shall have State cables, or commercial cables, or whether the commercial cables should be bought up by the Government. Those are questions which ought to be decided once for all; but as far as we know they have not yet been considered by the Government. Then there is the most important principle on which the Government have not yet arrived at an agreement, as to whether new lines shall be all British lines, or with some land extensions on foreign shores. Apart from this question of principle and policy, 993 there are many minor matters in dealing with submarine cable companies which ought to be considered; and the only way we can arrive at a policy in regard to these is by way of inquiry by a Royal Commission or Select Committee. There is, for instance, the question of the right of the Executive Government at a particular moment to acquire some particular cable. There is also the important question of rates. Surely that ought to be a matter on which there should be a developed policy on the part of those who represent the taxpayers, and on which some definite conclusion ought to be arrived at. The hon. Gentleman who spoke in behalf of the companies just now said that they have reduced their rates here and there; but it is significant that these reductions have only been made, or have mainly been made, when there was danger of competition. There was the instance when the cable was proposed from the Cape to Australia nearly two years ago. The companies then demanded a subsidy of £40,000 a year, and pretty high rates; but when the question of competition arose they offered to lay the cable for nothing, and to reduce the rates which they had hitherto charged. I am not saying whether that is a good or a bad thing, and I am not bringing it up either in favour or against the companies; but that is a matter which must be considered by some strong Committee or Commission. I am bound to say also that we ought to have some inquiry into the nature of the agreements and the amalgamations which have taken place between these different companies. I do not believe it was ever intended, when these companies wore subsidised and charters granted to them, that they should combine as monopolists against the public and the public interest. I trust that after one speech of my hon. friend, and that of the right hon. the Member for Forest of Dean, the Government will see their way to grant this proposed inquiry. We do not want an inter-Departmental Committee in regard to this matter—it would not give sufficient confidence to the public—but a strong Select Committee or Royal Commission, which would settle once for all the great lines of policy and principle which the Government ought to follow on his important question to the advantage of the country at large, and 994 not to the advantage of these profit-earning companies.
MR. BOSCAWEN (Kent, Tunbridge)
I want to say a very few words in reference to the subject brought forward by the hon. Member for Hythe. I think we must thank him for having brought before the House this question, which is of very great interest. It affects us commercially, for there are many trades in different parts of the Empire in which the margin of profit is so very small that excessive cable rates make all the difference between profit and loss. The right hon. Baronet the Member for the Forest of Dean has shown that this is a very important question strategically; but I would point out that it is also important socially. There are hundreds and thousands of Englishmen who, owing to their position, have to live out of England, and there are many colonists who have relations with the mother country and the other colonies, and it is most important that they should be able to communicate with their relations and friends at a, cheap rate. But what is the position at the present day? We find that, owing to the enterprise of certain great British companies, the world has been covered by a network of cables, and the various parts of the world have therefore been brought closely together. We must admit fully the great work which has been done by the enterprise, energy, and capital of these companies. But having said that, and having made up our minds to deal with these companies in a perfectly fair spirit, we say that they have grown strong and rich, and that they have entrenched themselves behind subsidies, and have stood in the way of the progress of cheap communication. We ought to try, therefore, whether we cannot induce them to modify their policy and substitute something else for it. We have been fighting a very small question, comparatively, in regard to the internal telephonic communication in this country. We have had to fight a great monopoly which had been allowed to grow up in regard to the telephones. The Telephone Company pretended that they had an absolute right to that monopoly, and that there should be no competition with them. In the result it was shown that they had no such right, and I am glad to say that their monopoly has been broken down. The cable companies did exactly the same, 995 and laid down principles that could not stand criticism for a moment. They actually sot up the claim that the State had no right to interfere with their monopoly. Lord Tweeddale wrote to the Prime Minister as follows—I do not of course question the right of Her Majesty's Government to make any arrangements required in the interests of the Empire, whatever effect such arrangements may have upon private enterprise—always assuming that due compensation will he made for interference to private rights —but I venture to point out that the grounds upon which the proposals contained in the letter are based appear to be a departure from the principles hitherto acted upon by Her Majesty's Government, and that the reasons by which that departure has been sought to be justified are wholly inadequateI am glad to think that the Colonial Office refused absolutely to admit that claim. They laid down distinctly that we had a perfect right to compete with existing companies in the public interest, and Lord Selborne used these words—The Colonial Secretary cannot admit that there is any rule or formula of universal and permanent application such as you suppose limiting the functions of the State in regard to services of public utility.I say again that we have to fight the same sort of battle against these cable companies that we had to fight against the telephone companies; but the difference is that the monoply of the telephones only affected inland communication, whereas this cable monoply affects our telegraphic communication with the whole world, and further affects the great strategic question as to whether the cables should be so laid as to be entirely in British territory. In defence of their monopoly these companies have offered most vigorous opposition to the scheme of a Pacific cable or all-British cable. The result is we are handicapped at the present moment by a system which is detrimental to the growth of the Empire. Let me give one or two examples. A French officer, quartered, we will say, in Tunis or Algiers, can communicate with his friends in Paris at the rate of a halfpenny per word. What does the British officer at, say, Malta pay? Sixpence; in other words, twelve times as much to communicate with England as the French officer pays to communicate with France. Another example is the Russian officer at Vladivostok, who can communicate with his friends in St. 996 Petersburg for fourpence a word. An English officer quartered in India pays four shillings a word, again twelve times as much. Even though these foreign lines may be subsidised by their respective Governments, even though there may be a loss, I am perfectly certain that the rate to India is absolutely excessive, and it is detrimental not merely to our commercial interests and to our strategic interests, but it is detrimental to that growth of community of feeling between the various portions of the Empire, that these exorbitant rates should continue. When we see the growth of the Empire, when we see Australia federating and desiring to have a larger share in the interests of the Empire, do we not feel that Australia is very severely handicapped when we know that she has to pay 6s. 3d. per word to communicate with Canada; do we not think it is most desirable that a cheap and more direct system should be sot up than that which exists at present, when a Canadian, living we will say at Vancouver, has to communicate with an Australian living at Sydney by a ridiculously roundabout route via Jamaica, England, Lisbon, and various other stations? Should we not lay an all-British cable which would give a direct route at about one-third the cost, and be a strategic line capable of defence in time of war? I do not wish to weary the House on this question, but I do feel most strongly that the Government ought to make every possible effort to break down this monoply. I feel also that these; companies have been supported in the past very largely by a misunderstanding of what their position is. Their great services in covering the world with British cables has been misunderstood, and it has been supposed that those cables were all-British cables. As a matter of fact, those cables touch at Lisbon, at Madeira, at Java, and at a great variety of points which are absolutely vulnerable in time of war. It was stated years ago that the Russian Government have a complete plan for cutting our cables in time of war in the Far East, and no doubt that would be done, just as the Americans showed how easily it could be done in the American-Spanish war, wherever they could approach the landing place of a cable. What position are we in now? We find companies only. We find rates which, in my humble judgment, are far too dear. We find, for 997 example, this 4s. rate to India, we find a rate of 4s. 9d. from Australia, and we find a rate of 6s. 3d. from Canada to Australia. Why are we to maintain these exhorbitant rates and at the same time not have cables which are essentially all-British? Why are we, who are supported by our own colonists, to refuse to go on with the Pacific cable scheme which would probably give a 2s. rate from Canada to Australia on a line which would not be cut in time of war, in order that we may benefit these companies and preserve the 6s. 9d. rate? I earnestly hope the Government will persist in this Pacific cable scheme which has the support not only of this country, but of Canada and all the greatest of the Australian colonies. I hope also that the question will not rest there, but that the full and fair inquiry into this great question which has been requested by my hon. friend will be agreed to by the Government, so that we may put our whole cable system on a sounder, more sensible, and more Imperial basis than it has been on in the past.
§ THE FINANCIAL SECRETARY TO THE TREASURY (Mr. HANBURY, Preston)
The hon. Member for Hythe, who moved this resolution in what all the House will agree was a very able speech, was chiefly interested in the subject of cheap telegraphs. The right hon. Gentleman opposite who seconded was, on the contrary, more interested in the question of the strategic cables. There is therefore prima, facie a little inconsistency between the mover and the seconder of the resolution, because while commercial cables, to which we must principally look for cheaper telegrams, depend upon tapping every available source of traffic, the chief strategic cables, of course, avoid to a very great extent all wholly foreign countries, which to an ordinary cable provide a very large source of traffic, and at the same time avoid all English stations which are not of considerable importance and which are not easy of defence. That being so, I think there is a little inconsistency in the resolution itself. As a matter of fact, this great system of submarine cables, like most other things worth anything in this country, has grown up quite haphazard, and the result is we have a system which is partly strategic and partly commercial, and some people 998 say has therefore got the merits of neither. I hope I shall be able to show that only a very little is wanting to give us not only good strategic cables, but also cheap commercial cables. Still I admit that at the present time we have not got either completely. I think the hon. Member opposite did a good service in calling attention to the really great work which those companies have done, because, after all, here are great private companies which have built up a great system with which the system of no other country can for one moment compare. They have given us great links between ourselves and the colonies, between ourselves and our coaling stations they have put us into a position that we are able to get the first news from all over the world, and surely for a great nation like ourselves, in time of war and in time of peace, in diplomacy and in commerce alike, to get as we invariably do the first news is a matter of the very greatest importance possible. These companies have given us such an effective service all over the world that it is now exciting the jealousy of foreign nations, and complaints are now arising both in France and in Germany that so completely British is this system that we are excluding all foreign nations from participation in its benefits, and, of course, great complaints have been raised as to the way in which, in time of war at any rate, we are able to censor their telegrams. Take the case of France. These companies have put us practically in communication with every one of our colonies. But what is the position of the country which ranks second as far as colonial possessions are concerned? It is the fact that with the exception of her West Indian colonies and Tunis and Algeria France everywhere depends for communication with her own colonies upon British cables alone. I say that a company which will put this country in a position of that kind is a company to which the country is very much indebted. I will go further, and say that to a great extent these companies have given us advantages which we could not have possessed, oven if these cables had been in our own hands, because, owing to the fact that these are private companies, at nearly all their foreign stations at which their cables land they are allowed to have all their employees British subjects. Everybody can 999 see what a great advantage that is to this country, but it is an advantage which certainly would not be allowed to us if those cables were owned by the Government or the State. The hon. Member opposite said a great deal about the taxpayer—that it was unfair that the taxpayer should not have some voice in settling the rates demanded by these companies. But, after all, the taxpayers have had very little whatever to do with building up the companies or with building up the system. No doubt we have to give subsidies for strategic cables, but beyond that we have done nothing at all. Take the great route to India. Did the taxpayer contribute a single farthing? Take the cable to China; he has not contributed to that. Take the route to Australia. The Australian colonies, no doubt, contributed something, but the Imperial taxpayer has not given one halfpenny. Therefore, after all, the connection between the taxpayer and the companies is not a very close one. Then there was the complaint raised as to these companies not duplicating their lines. That was raised by the hon. Member for Hythe. What is the position in regard to that? I think if the hon. Member will consult the War Office or the Admiralty he will find that they do not encourage the duplicating of cables, at any rate cables running side by side; in the first place, because it is much easier to destroy communication, and, in the second place, because it is much more advantageous to the War Office that the cables should run in different directions, connecting different places, rather than that the two should run side by side. My hon. friend complained of certain rates. I noticed that he made no general complaint as to rates, but he singled out particular portions of the cables. He omitted to mention what I think is an important fact, that everywhere—I believe without exception— wherever these cables run, the British Government not only has priority, but also send messages at half-rates. That, of course, is a considerable advantage. We talk of high rates, but, after all, high rates are a matter of comparison. If you compare them with land cables, it is very unfair to expect anything like the same rates. In the first place, a submarine cable, I have been told, costs between five and ten times as much per mile as a land cable. Not only does it cost a 1000 great deal more, but the number of words you can transmit per minute are very much fewer. I am told that you can transmit practically ten times as many words per minute on a land cable as on a submarine cable. That constitutes a very great advantage on the side of the land cable. It also has to be remembered that the submarine messages are nearly all long distance messages, and further, that you very often have great difficulty from the interruptions of the cables, as have happened on both the coasts of Africa. My hon. friend complained of the constant interruption of those two cables, and to a certain extent he was quite right. I believe, as a matter of fact, that on one side of Africa the cables are interrupted on an average for sixty days in the year, and on the other side for forty days. It is simply due to the very uneven formation of the bottom, and also to certain upheavals which are constantly taking place and injuring the cables. In regard to submarine cables themselves it is interesting to see what is the actual force of these rates when worked out to the number of miles a message can be sent for a penny. I have been supplied with the following information. Taking the Atlantic cables, where, of course, I admit there is a great deal more competition than exists in the case of the eastern cables and the Associated Companies, between London and New York you can send a message 268 miles for a penny at the current 4s. rate. You are able to send messages to Australia at exactly the same rate; that is to say, taking Sydney, you are able to send 259 miles for a penny at the rate of 4s. To Singapore at the present rate you can send 157 miles for a penny; Hong Kong, 150; the Cape, 140; and Bombay, 135; and it really points to the fact that the proper rate to India, judging by the rates of the Atlantic cables, is 2s. What are the remedies suggested by my hon. friend for what he calls the high rates? He complains in the first instance about a fact with regard to which I am just as much inclined to complain as he is, though i do not quite know how the difficulty is to be obviated; he complained that at the International Telegraph Conference small States with practically no cables at all have as much voice as our own country. That really is no doubt an anomaly; but the remedy, I think, is rather one for the Foreign Office than one which I can discuss at the present time. 1001 I was surprised to hear my hon. friend to-night ask the Imperial Government to subsidise or to guarantee the cables. I understood that the hon. Member had taken part in a deputation to the Chancellor of the Exchequer which repudiated any idea of the sort. What is the position? No doubt we have subsidised the Indian cables, but I utterly deny that it is our duty to provide low rates at the public cost for the companies to pay high dividends. That is certainly not our duty. I am told, "Oh! but you have I the analogy of the penny post." Well, you can get the telegraphs so cheap that they will be of use to every household, and be as popular and as low in price as the penny post, and when they apply not to particular portions of the Empire, but extend over the whole Empire, then the argument will be a very different one. But at present it would be perfectly and entirely wrong for the Imperial Government to supply public funds in order to benefit one particular class and one particular section of the community.
§ MR. HANBURY
Then there is another suggestion of my hon. friend; he wanted us to reserve the right to buy up these companies. With regard to strategic cables, in certain instances we have reserved that right already. My hon. friend knows that in the case of the cable going to Singapore by Borneo to Hong Kong we have reserved that right, and I think we can buy it up at £300,000. There is a similar stipulation with regard to the cable running in Egypt between Suez and Suakin; that, I think, the Egyptian Government, with the consent of our own Government, can purchase at any time for £200,000. But what is the good of a right to buy purely commercial cables unless the Government is going to buy up cables generally and run those cables as a commercial system? That, at any rate, is a step the Government have not taken yet, and I sincerely hope it will be a long time before they think of doing so. But even if the Government were to do that, I hardly think it is a fair thing to do to the companies, because 1002 the companies lay these cables with the intention of making them commercial successes. Are we to say to these companies, "Oh, if the cables are a failure you can keep them on your hands, but if they are a success we have a right to purchase them "?
§ * SIR EDWARD SASSOON
I suggested that some fair scale of charges be fixed, and the purchase price based upon that.
§ MR. HANBURY
That is a totally different suggestion from buying up the cables; that is a totally different system. That is a question of rates, not of purchase. As I have said, two things would infallibly happen if the Government did buy the cables. In the first place, we should lose the advantages on foreign territory which the private companies at present possess; and, when we hear of competition and so on—that competition should be encouraged, I can imagine nothing that would more stifle competition and prevent cables being spread all over the world than the fact of the Government buying up the existing commercial cables. As to the question of competition itself; competition, it seems to me, is the remedy for this evil as it is for many others. The hon. Member who was sitting behind me compared the existing cables with a company, with regard to which he and I have both had something to do, where a monopoly was claimed. But in this case there is no monopoly whatever claimed; the cable companies do not for a moment contend that the Government is under any obligation whatever with regard to them or has given them anything in the shape of a monopoly.
The company contend that the Government has no right to compete with them without paying compensation.
§ MR. HANBURY
Oh! the companies contend that; that is a very common thing indeed. My hon. friend went so far as to imply that there was some idea that their monopoly extended so far that it was hardly fair for us even to construct a cable between Canada and Australia. That idea is perfectly absurd. No 1003 monopoly of that kind, or anything approaching it, can be claimed by the companies. I was glad that my hon. friend opposite and one or two Members below the gangway did show the immensely good results which have followed the very friendly competition of the Pacific Cable scheme. That is really a very remarkable illustration. We are under great obligations to these companies, and if they treat us fairly we are bound to treat 'them fairly in return; and it is only when they try to create artificial monopolies or charge unduly high rates that we could at all fairly enter into competition with them. That was a remarkable illustration, no doubt, which followed the suggestion of the Pacific Cable, in the fact which has been more than once alluded to, that whereas in 1897 a company asked the Imperial Government to guarantee a subsidy of £25,000 a year for twenty years, and' the Colonial Governments to continue to pay £34,000 a year for ten or twenty years, and promised no reduced rates, and imposed some other stringent conditions, now we have practically the same cables to the Cape and to Australia with no conditions, no subsidy, and reduced rates. I want to deal perfectly frankly with these companies, and I am sure the House does too, and therefore I should like to say that, apart from competition of this kind, the companies have recently reduced their rates, and reduced them very considerably, within the last nine years. In 1891, the rate to Hong Kong and Shanghai was 7s.; in 1897 it was reduced to 5s. 6d.; in 1891, the rate to Penang was 5s., it is now reduced to 4s. 6d.; the rate to Singapore has been reduced from 5s. 9d. to 4s. 6d.; to Japan, from 10s. 8d. to 7s. 9d.; to the Cape from 8s. 9d. in 1890 to 4s. at present. These are substantial reductions. It is quite possible to say they might be still further reduced, but at any rate it is fair to remember that during the last nine years the companies have made these very large reductions. My hon. friend complained of particular rates; he complained especially of the rate to Egypt, the rate to West Africa, and the rate to India, and it is with those three rates I propose to deal. We have had some curious illustrations afforded—some by the hon. Baronet and some by other Members of the House—of the kind of rates which they expect these companies should agree 1004 to. I think my hon. friend mentioned the-case of a halfpenny rate between France and Tunis and Algeria. I do not suppose that he himself expects that the companies are going to give us a halfpenny rate for distances of that sort. What is the fact? France deliberately treats Tunis and Algeria as being a part of France itself, and all these rates are treated as interior rates. Moreover, these are Government cables, and the whole traffic between France and Tunis and Algeria is carried on at an enormous loss to the French Government. My hon. friend does not expect either the British Government or these commercial companies to do their business at a loss like that, I am sure. Then we have the case quoted by my hon. friend behind me of the line to St. Petersburg from Vladivostok, with a fourpenny rate. That again is an interior rate, and to a great extent is a Government line. It is also the fact that all messages over that line have to be sent in open language, and that no code messages are allowed [An HON. MEMBER: And it is a land telegraph.] Then there is the case my hon. friend has laid most stress upon, the Is. 5d. rate to St. Louis. He said, "It is. perfectly monstrous that these cable companies should charge 6s. or 7s. to British colonies in West Africa when it is possible for a Frenchman to send to his colonies at a cost of Is. 5d. per word." I think it is only fair that we should recollect that, in the first place and especially, the continuation of the line to St. Louis is a very different line for the cables. That for our colonial service along the West African coast has a great number of stations, and at those stations it is very expensive to get European workmen; whereas there is only one set of European workmen at St. Louis. But what are the facts connected with the cable running between France and St. Louis? The French rate is a very low one, and when you get below a certain place, two-thirds of the line belongs to the French Government and one-third to the French National Company, which, I believe, is really an English company. It is admitted that the service from. Cadiz is carried on at a loss to the Government concerned, and it is further a fact that it is carried on at a great loss to the company which owns a third interest in the cable. It is a fact that in 1898 that company lost no less than £6,000. 1005 Now I come to the case of India. There is first the case of Egypt, and I am not going For one moment to defend the monopoly these companies tried to acquire there. I do not know whether it was justifiable or not, but I do know it is quite possible for the British and Egyptian Governments to put an end to that. It is not a monopoly; it is a privilege; that is to say, when a concession is asked for for a now line the company has the right to say to the Egyptian Government, " Give us the first chance of making it." That privilege would entirely disappear if at any moment the line between Suez and Suakin was bought up by either Government at a cost of £200,000. Although he has not mentioned it to-night, my hon. friend is under some idea that the high rates to Egypt are maintained by the fact that in some way or other this company exercises control over the cable running between Constantinople and Tripoli. That is not the case. The company assure me that they have absolutely no control whatever over the line; they have never desired to buy it; they have never desired to lease it; and at the present moment they have no more influence over that line than has my hon. friend himself. Now I come to the case of India, and I admit at once that the Indian case is a wholly exceptional one. I do think that there the company have tried to create an artificial monopoly which was not in the public interest. That I frankly admit. I think the way in which they, in the first place, gained practical possession in 1877 of the Indo-European line, and then by a manœuvre, which was certainly ingenious, forced the Indian Government to come into the pool with them—I say, it was very ingenious and crafty, but at any rate it does not put that company, so far as the rate to India is concerned, in a position to claim any very great consideration from the Government. What is the case with regard to India? I am quite clear in my own mind that India has a strong case. In the first place, there has been no reduction in the Indian rate for the last fourteen years. It was fixed at 4s. in 1886, and at 4s. it has remained ever since. Meanwhile all the trans-Indian rates have been very largely reduced, and the result has been no doubt to block the cables on this side of India. Therefore the question arises, even if the rates were reduced to India, would the carrying capacity of the existing cables be 1006 such as would be able to meet the increased traffic which would presumably follow? I believe that at the present moment the position is this: that the Indo-European line could carry a great deal more, and I think it is very doubtful, at any rate, until we get the two-new routes—the line from Durban to Australia and the line from the Cape— whether the Eastern line itself would be able to carry very much more Indian traffic. It will be able to carry a great deal more when it has to carry less African and Australian traffic, owing to the fact of the two new lines being constructed. One hon. Member said that if the companies could afford to charge cheap-rates for a section of the line, you have only to add the rates together and you would get a fair rate for the whole distance. But you cannot arrive at what is-a fair through rate by merely adding interior rates together. The interior rates of a country are based on a system both of short and long distances; that is to say, a claim is made that we can afford to send a message for a halfpenny a word in England because a large number of those messages are short messages, but we could not undertake to send messages on a line from the south of England to the north of Scotland for the same price, because our calculations are not made on that basis. Exactly the some argument applies to the line to India. It is not fair to add the interior rates together and say that they would amount to a fair through rate. However, the result of the negotiations which have taken place with the Indian Government—which I think has made a very good fight with the Cable Company—has been already given by my hon. friend who spoke, I will not say on behalf of the company, but who, at any rate, put a more favourable view of them forward than some Members have taken. I cannot, say anything definitely or finally, because the agreement has not yet been signed, but, so far as I understand, it is practically arranged that there should be at. once a reduction to 2s. 6d., and if the 2s. fid. rate brings in a certain number of messages, the rate will shortly be reduced to 2s. That is a considerable reduction, and it will go a long way to test the validity of the argument of those who say that just as the reduction of the rates, has enormously increased the traffic between Australia and this country, so a 1007 reduction of rates will also largely increase the traffic between India and this country. Just one other word, if I have not already detained the House too long, with regard to the question of strategical cables. There again I think we owe a great debt to these companies. No doubt all-British cables are to a great extent a new and recent idea, but very much has already been done by the companies to meet the demands for strategic cables. It is interesting to note that nearly all their existing cables run along the main routes of trade, and therefore are more easily defended by our fleet. Of course we have got a British staff in nearly every foreign station, and even where those lines do touch at foreign stations in time of war they could be easily cut, and give us a complete all-British cable, even in those cases where cables are not at present all-British. "What has been done recently, and within the last few year's? We have got a new line complete from the Cape to St. Helena and Ascension, all-British; we have had a new line from Porthcurno to Gibraltar, instead of touching at Lisbon; we have got a new line to Singapore and Hong Kong; we have got a new line from Bermuda to Jamaica; and we have in fact got all-British lines to Malta, Cyprus, Egypt, Aden, India, Ceylon, the Straits, Hong Kong, Zanzibar, British South Africa, Canada, Bermuda, and Jamaica. We have not got them at the present moment to the Cape; but we shall get them by this new line passing from Durban to Mauritius, and so up to the north. We have not got them to West Africa at present, but we shall get them when that line is completed; we have not got them to Australia at the present moment, but we shall get them when the new line is completed. And though, undoubtedly, we have not got them to the West Indies, with the exception of Jamaica, there is only one important point there, St. Lucia, which is not in connection with England by an all-British cable, and that is being considered by the Government. Not only is it the case that we should get these all-British communications, but instead of depending upon single cables— certainly if we get this Pacific cable and this line from Durban to Australia—we should not only get these all-British cables duplicated, but probably triplicated and quadrupled. That is a very im- 1008 portant consideration indeed. I hen of course the last step which has been taken is the line running to St. Vincent and on to Ascension, St. Helena, and the Cape. I know the light hon. Baronet raised some difficulties, and said it was not are all-British cable, because of course it touches at St. Vincent—
§ MR. HANBURY
Oh, certainly; but I rather think the right hon. Baronet was wrong in saying that the Portuguese do not allow us to have our own British subjects operating there. I think these considerations show that generally, both from the commercial and from the strategic point of view, we really have not very much to complain of in the existing state of these cables. Rates have been reduced in a great many instances, and steps are being taken to give us strategical cables practically all over the world. Under these circumstances my hon. friend has a motion asking for an inquiry. That motion is framed in very general terms, and I hope the inquiry by the Government will continue to satisfy the hon. Member. I can assure him that the Government is making, and has been making for some time, inquiries and going into the subject of cable communication very thoroughly indeed. The hon. Member opposite is entirely mistaken in thinking that all the Departments are not working heartily together in this matter. There have been constant Departmental Committees, and all the Departments of the Government are working in entire harmony with regard to the matter. I would ask my hon. friend not to press for a public inquiry for several reasons. In the first place, these cables are largely strategic. Is it wise that a Committee should go publicly into all these questions of strategic cables? There is also another consideration. I have stated the enormous advantages which this country possesses over other nations in the extent of our- cables, and shown the great degree to which foreign nations depend upon British communications. Is it wise to parade this position before foreign nations? Is it not better, if we can, to continue to enjoy the opportunities which we still have, and not by parading our present advantages induce 1009 other nations to greater jealousy? I can assure the hon. Member that if he leaves this matter in the hands of the Government he leaves it in the hands of men who take the greatest interest in the subject, and who are determined to meet not only his views in the direction of cheap telegrams, but also the views of the right hon. Baronet with regard to strategic cables. These lines of communication are of the greatest possible importance to us they are necessary for our trade; they are necessary for our arms; and in my opinion they are of more importance than even that, because, after all, these sub- marine lines are the true nerves of the Empire; they are the nerves by which all these colonies are brought into simultaneous action with ourselves; they transmit to them almost in a moment of time those innumerable and unnumbered sympathies, those common joys and common sorrows which are shared between the mother country, the mother land, and her many and distant daughters.
§ MR. COGHILL (Stoke)
We have listened to a very long apology from the right hon. Gentleman, but I do not think his statement has been altogether satisfactory. The hon. Baronet the Member for Hythe has shown conclusively that in a great many respects the cable communications of this country are in a very unsatisfactory condition, both for time of war and for time of peace. We are all accustomed to the complaints that are constantly made by the chambers of commerce with regard to the high rates. The hon. Member has made a most reasonable request that this matter should be inquired into by a Select Committee. The Government have been willing to appoint Commissions on almost everything, and it is only reasonable when such a just case is brought forward as has been done to-night the Government should accede to the request. I do not think the right hon. Gentleman's explanation has been satisfactory, and I hope the hon. baronet will show he is in earnest by pressing his motion to a division.
§ * SIR EDWARD SASSOON
With the indulgence of the House I should like to say that the House ought to be congratulated upon the fact that this is the first time in its history since the invention of 1010 telegraphy that any full discussion has taken place on the subject. I should also like to compliment my right hon. friend the Secretary to the Treasury on the ease and rapidity with which he has mastered the complicated issues connected with this subject, and the versatility with which he has presented the difficult matters connected with it. But I think he made rather too much of the apparent inconsistencies which he seemed to think existed between my arguments and those of the right hon. Baronet the Member for the Forest of Dean in support of the resolution. The right hon. Gentleman said that I vent in for cheap tariffs and those cables which presented commercial advantages, while the right hon. Baronet went in for strategic cables. I think the right hon. Gentleman will find it difficult to discover any strategic lines, the advantages of which do not equally apply to commercial cables. My right hon. friend intimated that we should have an inquiry by the Government. I think he was rather oblivious of the fact that the conduct of the inquiry into the Indian tariff by the Government concerned has not been at all encouraging, and if we are to consider that an inquiry into this all-important matter is to be conducted on the same lines, and to report with the same leisurely dignity, I do not think we shall be very much in favour of it. On the other hand, at this juncture, and considering the fact that the Chancellor of the Exchequer shows a very considerable appreciation of contingencies before they occur in dealing with the associated companies, I am very loth to place any strain on the allegiance of the supporters of the Government—["Oh! oh!]—more especially in view of the fact that a Committee appointed at this stage of the session would not have the advantage of going very fully into the question. Therefore I must relu3tantly accept the proposal of my right hon. friend. Did I understand him to offer a Select Committee?
§ MR. HANBURY
Oh, no. I said the resolution asked for an inquiry, that we were perfectly willing to make that inquiry, that that inquiry could not be by a Committee of the House, but by the Government in the different Departments.
§ * SIR EDWARD SASSOON
Under those conditions no Member of this House would have a right to ask for Papers or information, or to go into any matters connected with the inquiry. That would be highly unsatisfactory, and therefore I think I must go to a division.
§ THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR, Manchester, E.)
My hon. friend who has just sat down appeared to be dissatisfied with the suggestion of the Secretary to the Treasury that the inquiry should be by Departmental Committee, or some other machinery than that provided by the ordinary Parliamentary Committee. He says that an inquiry from which Members of this House are excluded would be highly unsatisfactory. But my hon. friend must recollect that we have not merely to consider commercial interests in this matter, but also strategic interests. I cannot imagine anying which would be loss expedient from a public point; of view than an inquiry by a Committee of this House into strategic considerations. All the evidence would have to be taken, all the witnesses would have to be called, all the publicity which inevitably and most properly attends Parliamentary Committees would have to be gone through. Under these circumstances I hope my hon. friend will not think we are running counter to his wishes unnecessarily if we adhere to our view that the inquiry must be of a kind which would not give publicity to matters on which publicity is most inexpedient. Everything which he asks for in his resolution we are prepared to grant, but we cannot agree to a public inquiry, nor is that contained in the terms of his resolution.
§ * SIR EDWARD SASSOON
On patriotic grounds, relying on the assurance of my right hon. friend, I beg leave to withdraw the resolution.
§ Motion, by leave, withdrawn.