A State-Owned Atlantic Cable

Mr. Chairman and Gentlemen,-

I was asked by the Empire Trade and Industry Committee of the Colonial Institute to get in touch with Mr. Fetherstonhaugh, if I came to Toronto, and to ask him if the subject of a state-owned Atlantic cable would be of interest to your members. Mr. Fetherstonhaugh very kindly asked me to give this address, and my object in doing so is to promote the discussion of this very much talked of subject and, if possible, to enlist the support of the press in Toronto and get them to back up the Government of your country in pressing upon the Home Government the urgent necessity of summoning. a subsidiary conference to deal with the all red cable route. Before I left-England I had the advantage of meeting Mr. Charles Bright, who is the son of the man, Sir Charles Bright, who laid the first Atlantic cable, and who has done probably almost as much as Sir Sandford Fleming, who is after all the father of this whole scheme, (applause) in promoting the all red cable route. It is unnecessary for me to dilate at great length upon the tremendous importance of cheap cable communication throughout the Empire. I am concerned now in showing to you, or in endeavouring to show you, that cable communication is not cheap, that cable communication is not free enough -in the Empire, and I believe-and I believe you will agree with me-that the only solution is for the Governments of Australia and New Zealand, Canada and the United Kingdom, to lay down that link in the all red cable route which is still missing in the communication between the 'antipodes and England and our Canada.

In 1902 the Pacific cable was laid after a great deal of discussion and after a great deal of opposition; all sorts of difficulties beset a cable from Vancouver through Fanning Island, thence to Fiji north of the Island, 'thence to New Zealand and to Brisbane in Australia. Tremendous difficulties were raised and the people who were responsible for working up the Governments in order to induce them to lay that cable, received the greatest opposition perhaps from the eastern telegraph companies whose vested interests were of course against the laying of a state-owned cable; but, gentlemen, I think you will agree with me that when Imperial interests clash with personal interests, personal interests have to give way. (Applause.) The Pacific cable has been a success. I will give you a few figures presently which will show to you the enormous growth of business -along that cable. In addition to that, although from Vancouver to Fanning Island we have the longest stretch of cable laid in the world, 3,200 miles, yet at the same time there has been, since that cable has been laid, only one fault in the whole nine years, and that was not long ago near the coast of New Zealand in shallow water, where it was within three miles, I believe, of the coast. That is the only check in the whole nine years, although that cable was laid over practically an unknown ocean bed at that time, and against the advice of people who said it would be eaten by torpedoes and destroyed by coral insects, and so on.

The Pacific cable was only one part of the whole scheme. Mr. Chamberlain stated that the cable scheme would be completed by laying a cable across the Atlantic. That has not yet been done, and my object in addressing you today is to put before you the urgent necessity of laying that cable at once. As, you know, there were five British cables in the Anglo-American Company. Those cables have recently passed under the control of the Western Union and American Company so that there is not now a single British cable across the Atlantic, in spite of the fact that there are two British nations, which I hope will be the greatest nations in the world, on both sides of the Atlantic, which ought to be joined by a British cable. (Applause.)

Now, I am glad to see that Mr. Pelletier stated, on Thursday in the House of Commons at Ottawa, that Canada was not satisfied with the reduced cable rates which have lately come into force; and he was supported in his speech by Mr. Lemieux, the late Postmaster-General. So it is apparent that there is no difference in party, at any rate, on that subject. Mr. Lemieux has been a strong advocate of the laying of a stateowned Atlantic cable, and the whole subject was brought up at the Imperial conference. It was proposed by Australia and New Zealand, in two resolutions which I have no time to read to you, today, that this cable should be laid. A discussion took place and those resolutions were practically supported by the Canadian representatives, and were only opposed from the Home Government by Mr. Samuel, Postmaster-General in England. Mr. Samuel got the Imperial Conference to pass an emasculated resolution which stated that, in the event of considerable reduction in the Atlantic cable rates not being effected in the near future, it is desirable that the laying of a state-owned cable between the United Kingdom and Canada be considered at a subsidiary conference. He, of course, had in view the fact that the cable companies were going to give these reduced deferred rates. I questioned him in the House of Commons in England in December, after these reduced rates were announced, as to whether the Government had any intention of calling a subsidiary conference, and he stated they had no intention of laying the state-owned cable. I venture to point out to you that, first of all, these cheap deferred rates, although a great advance between England and Canada and England and Australia, are not sufficiently good for your purposes, for the purposes of the press, or for Imperial purposes. When I say for your purposes, I mean commercial purposes. It must be obvious to all of you that it must be cheaper for a commercial man to send his urgent cable using a code rather than allow it to be deferred and send it in plain language. You can send a shorter message, by all these splendid codes you have nowadays, by an urgent telegram at a cheaper rate than you can send it by these deferred telegrams in full plain language; so that I don't think it was much use from the commercial point of view.

Then again from the press point of view. The press are not apparently satisfied with these rates either. The Empire Press Union has stated so in their circular which I have here, and this Empire Press Union is supported by the papers of all parties in all parts of the Empire in working for these reduced cable rates, and they say, with reference to these reduced rates, so far as we can gather from the newspapers in the Metropolis and large news distributing agencies, the proposition of the deferred cable is of little value. Some firms say they do not care' to run the risk of their cables being held back until, they are valueless. It is not of sufficient advantage to the press, and the press want something more. What the Empire Press Union is working for is a flan rate of five cents a word, which is the rate they are given now on deferred messages,- for urgent telegrams to Canada. I think you must all agree that it is exceedingly important that everything should be done to have cheap press messages between the mother country and, the various Dominions of the Empire.

Now, those are the press and commercial points of view. Now, let us look at it from the Imperial point of view, the military point of view, and the defensive point of 'view. I don't think anyone can contend that it is a desirable thing that communication which should be secret, if necessary, between the Home Country and the Dominions should run for a very large part of its course over foreign controlled cables. (Hear, hear.) It is not only in time of war, it is before war is declared that sometimes most important and most secret communications are required between the various Governments of the Empire. Therefore from the military point of view, and from the defensive point of view, I say it is absolutely necessary we should have a state-owned cable which we can control at both ends, and which will be reserved, if necessary, in time of war for Government messages and for secret conversations between the Governments.

In order to lay that cable, I now come to the cost of it, which of course is always brought forward as an objection. Gentlemen, the cost of that was placed before the Imperial Conference, and estimates were brought forward by Mr. Pearce, based on the estimates $f the Pacific Cable Board, and he said the cable if laid from Newfoundland to K Island would be about 1,844 miles long, and would cost 480,000, or $2,400,000. That doesn't seem anything to stop four great countries of the greatest Empire in the world from laying such a cable. (Applause.) The annual upkeep of that cable was put down at something over 15o,oco, and the receipts on the most pessimistic estimate of Mr. Samuel, PostmasterGeneral in England, were placed at about 125,000. On Mr. Samuel's estimate 125,000 a year was the estimated loss on having that cable-$ia5,ooo-annual loss on having a stateowned cable, and he estimated the load of that cable as only a million words a year. Sir Joseph Ward at once cabled to New Zealand and found that the New Zealand estimate was that the load would be 2,000,000 words a year. It must be obvious to you, if with one million words there is only a loss of 125,000, with 2,000,000 words there would probably be no loss at all. Of course these same objections, as regards the loss to the country, were the same as were brought forward to the Pacific cable when laid, but it has not proved in practice that that has happened.

What has happened to the Pacific cable is that, even although there is at present a slight loss which is shared between the four countries every year, it is improving, and before very long it will pay its own way; and there can be no doubt whatever that the Atlantic cable would pay twice as much, because you have the whole business of Canada as well as business going through' to Australia'.' Another objection that was brought forward against the laying of a state-owned cable was, that the land lines in Canada and the United States were in the hands of the companies-the Western Union and American Telegraph and Telephone, and the allied companies of the Great North Western Company which is allied' with the Western Unions-and therefore the collection and delivery of telegrams sent by the state-owned cable would not be carried out by them, or, at any rate, they would give great advantage to their own lines as against the state-owned cable. As regards that objection, first of all the Grand Trunk Pacific is not tied up to any telegraph company at present, so that there is one great line which will be across Canada, every mile of which is available for the collection and delivery of telegrams by the state-owned cable. But, in addition to that, I believe you have-I found out at Ottawa, I had heard of it before-a Board which corresponds to our Railway and Canal Commission in England, your Railway Commission. I conceive that there is no difficulty in Canada in having this Railway Commission control telegraph rates and make telegraph companies, if necessary, toe 'the line. I am only adopting that rather pugnacious attitude on this subject, because we want to break down the objection of these people who say that there would be no business for the cable-even the state-owned cable. The state-owned cable at the same time should not, in my opinion, compete at too low rates with private enterprise; we don't want to knock out the business of the great cable companies across the Atlantic. What we want to do is to have a state line which will just about pay its way at fair rates; which will see that no unfair rates are charged over the other competing lines; and which will, perhaps, only take business for the main cities and towns in Canada, leaving the smaller towns to be dealt with by the other cable companies.

The great interests are of course opposed to a state cable, and we have got to meet that; but, as I said at the beginning, I think where these great Imperial interests are concerned there can be no doubt that others must give way, and that the state-owned cable must be laid, if we are to manage in this country to give your private enterprises fair rates. Your Railway Commissioners ought to see no unfair competition goes on between the state and private enterprise, and I think that a, Board, such as the Pacific Cable Board, could be trusted to see private enterprise had fair treatment, and therefore I don't think there is really any objection from that point of view.

The only other objection that was brought forward by Mr. Samuel was that the cable would not pay its way, and that I think we have cleared up. He also said that the Anglo-American Company had the right to have all cables sent by them. When the government in England took over the Post Office system for the United Kingdom in 1870, they made an agreement with the Anglo-American Company that all cables that were not specially marked to go by any other cable company should be sent by that company. That is still the agreement; and he said that would interfere very seriously with the collection of cablegrams by the state-owned cable. I say, as regards that, in the first place it was never contemplated then that the Anglo-American Company would be absorbed by a foreign 'corporation. Consequently, notice must be given to that corporation that that agreement will have to be denounced in a certain number of years, and legislation must be carried in England for the position to be reversed, and all messages to be sent by the state-owned cable unless they are specially marked to go by the other cable companies.

(Applause.)

There is one other objection which can be urged against it, and that is, that there is a system of wireless telegraphy throughout the Empire on the point of being established with other points so- that there shall be complete communication around the world as regards the British Empire. Now, we may regard wireless telegraphy as a most useful auxiliary and ancillary as regards communication, but it cannot be compared at the present time with the secrecy and rapidity of dispatch of the cables, and therefore we need not consider that as a very valid objection. I hope wireless telegraphy' stations will be established. I think we should establish these at Labrador, and up in the north at Cape Wolstenholme, and perhaps at Port Nelson, and so on as additional means of communicating with Canada in the event of a break in the cable, but I don't think we can regard that as in any way a competitive project to the state-owned cable.

The idea of Sir Sandford Fleming, if we lay the -cable, will be very nearly realized. His idea was to have a complete, circle of communication around the world in the British Empire, so that, if the cable was broken at any point, the territories on either side of that point could telegraph around the world to the other side. To reach dither point in the British Empire, you would have, two means of communication, and that cannot be until we have the complete circle. The only 'other thing we want, in order to complete that circle,--is This-we want a cable down here from Ascension island to Barbadoes, 2,975 miles. If we had that, Barbadoes is already in communication with Jamaica and Bermuda, and from Bermuda they have a British cable to Halifax, so that we should have then a complete line by British cables from Canada around this way to Australia. It would not be stateowned, but that doesn't matter; they would be British cables which 'could be controlled in time of war; and, when we have those two links completed, we shall be able, if the cable is torn up in time of war, or broken in time of peace, to communicate around the other way very easily and cheaply.

There is only one other advantage I wish to allude to; and that is the importance not only to Canada but to the West Indies of the Panama Canal. When the Panama Canal is opened, the West Indies are going to increase in importance and I expect that Jamaica, principally, will benefit very largely by the opening of that canal, and it is very important indeed that they as well as you should have very cheap communication with England. I heard the other day, I think I am right in saying, that these reduced rates have already resulted in increased business across the Atlantic of something like 40 percent in the cable companies. If that is so, I believe the limit of reduction has not yet been reached, and whether this state-owned cable is laid or not, cable rates can be still further, and must be still further, reduced between Canada and the Home Country.

Now I only want to show you the figures of the Pacific Cable Board in order to illustrate the tremendous effect which the laying of the state-owned cable has had with regard to Australia and New Zealand. Before the cable was laid, the rates were five and tu'pence a word. Directly that cable was laid, it went down to three shillings a word from England to Australia. The press, rates were a shilling. They have now been reduced to ninepence a word to Australia or eighteen cents. That is made up in this way: ten cents of that goes to the cable companies across the Atlantic, and the Pacific Cable Board only gets six cents for carrying it the 10,000 miles from Montreal to Australia and New Zealand7,ooo miles by cable and 3,000 miles across Canada-whereas the cable companies get ten cents. That shows that there is room for a little reduction there. If we had a state-owned cable that reduction would take place at once. The Pacific Cable Board, in 1902-3 when they first started, sent a total of 228,000 words in the first year over, that line. It increased every year. In 1908-9 it was 1,200,000 words, and in, 1909-10 it amounted to 1,356,000 words. That shows that business is increasing enormously every year. Press messages alone increased from 18,000 words in the first year's operation, and 37,000 words in the second year's operation, to 126,000 words last year. That was at the mine-penny rate. It is obvious, if we could only get it down to the lowest possible rates consistent with a fair return on capital, we should have far more communication between the different parts of the Empire, and it is from that point of view that I strongly urge you to support this cable. We must be closer together' than we are; we must know what we are doing in each other's countries; we must have more information from the press of what is going on in Australia and New Zealand and Canada and England, if the British Empire is to continue. (Applause.) There is no doubt it is going to continue, gentlemen, (applause) and therefore there is no doubt we are going to get that cheap communication; but I say we ought not to have to go on waiting year after year for it, so I hope that New Zealand and Australia will be supported by Mr. Pelletier and the Canadian Government in demanding that subsidiary conference which their resolution allowed for at the Imperial Conference, and that this state-owned Atlantic cable may be laid at no distant date. (Applause.)