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guarantee being given by the Australian Governments to bear half the loss suffered by the companies, and asking whether he had taken any steps to recommend the giving of a similar guarantee by the British and Indian Governments, whereby the rates to India might be reduced from 4s. to 1s. per word, Sir James Fergusson said:
"I have not any intention of proposing a similar reduction and guarantee in regard to India, and I have reason to believe that the conditions of commercial life in India would not produce any increase of business commensurate to, or approaching, the loss of revenue which would be the result" (Times, April 12, 1892).
This pessimistic utterance from a retired Indian official of high rank caused considerable astonishment, both in the counting-houses of the City and in those of Calcutta, Bombay, and Rangoon. Of course the Post Office luminary who prepared his chief's answer could not be expected to know all about India.
But he might have remembered the signal refutation of an equally unfortunate statement regarding India put into the mouth of Sir J. Fergusson's predecessor by one of his subordinates. When I wished to get the postage to India lowered from 5d. to 2d. or ld. the late Mr. Raikes, objected that the " area of productivity” in the case of India was not sufficient to warrant a reduction. I immediately procured from India statistics showing that in a few years the number of articles exchanged between India and the outer world through the post had risen from 4,000,000 to 17,000,000. And this great increase occurred while the postal rate was 5d. per half-ounce.
Sir James Fergusson's prompter, however, might have taken the trouble to glance at the latest returns on the subject of Indian trade. Not only would he have discovered that our trade with India exceeds that with any other British possession and amounts to one-third of our Colonial trade, but he would have observed that in thirty years Indian trade has quadrupled, and that in the last decade it has increased 42 per cent., while population has increased only 10.75 per cent. The tonnage entering Indian ports last year increased by 370,000 tons. The Indian merchants are most active, vigilant and enterprising, and are annexing markets in all parts of the world. (Their trade with Japan, for instance, has increased 812 per cent. in ten years.) They import cotton manufactures to the amount of 27,242 lacs, metals, 5,64:6 lacs, cotton twist, 3,76.8 lacs, machinery 2,00-4 lacs, and so on. How, then, do the “ conditions of commercial life" in India differ from those that environ any other pushing community ? One is puzzled to answer this question. It is very hot in India, and perhaps it is suggested that the merchants would be physically incapable of resorting oftener than at present to the telegraph offices. But it is as hot in some parts of Australia, and the Australians enjoy a reduced cable tariff.
The luminary referred to lays it down that the existing tariff is so beautifully
adjusted, both to the need and the means of the Indian merchants, that loss must result from any interference with it. It is poised, he thinks, like the famous “rocking-stone : ” but, even so, this argument will not apply to the merchants in this country engaged in Indian trade. The Minister's answer ignores the fact that they would benefit as much by a reduction as their correspondents in Hindostan. Electrical communication has, I repeat, become necessary, nay,
indispensable, to international trade, and if its price be reduced, far more than the amount of the reduction will be spent upon it, just as if it were bread, meat, or any other necessary. Economical laws cannot be pooh-poohed out of existence by a breath from the Treasury Bench.
FURTHER EVIDENCE OF INCREASE.
A few facts may here be given showing the surprising development of Indian telegraphic business. During the last five years 8591 miles of line, 33,269 miles of wire, a long stretch of cable, and 320 new telegraph offices have been opened at a cost of Rs.99,29,834 capital outlay. During 1891–2 State inland telegrams exhibited an increase of 109,468 in number; private inland telegrams increased 262,380 in number; foreign private telegrams increased 29,530 in messages, and 506,230 (or ten per cent.) in words.
The inland press telegrams numbered 26,127-a large increase ; and the foreign press telegrams 2982.
In the “ Telegraph” Report of the Indo-European Department just received, I observe that The Times is accorded a special column, 411 messages having been cabled to it, with a total of 82,000 words. Such an example of liberality and enterprise deserves to be disinterred from its tomb in a Blue-Book, and I observe, receives the warm encomiums of the Indian press.
Now what remedy can be adopted for the evils I have pointed out?
The first thing to be done is to put an end to the monopoly which is battening on our trade, and stifling the happiness of our population. The British Government, either alone, as would be preferable, or in concert with the Indian and Australian Governments, should either buy up the property of the existing companies on fair terms say at present price of stock—or lay alternative cables. In support of this statement, I may refer to the happy results for the State of its joint purchase of the Submarine Telegraph Company's cables between England, France and Germany two or three years ago, which now yield extraordinary profits. We need not anticipate the recurrence
of such a blunder as was committed in the acquisition—too late-of the British inland telegraphs. As to the tariff, it is easy to show that here, as in the case of postage, or any other indirect tax, the lowest practicable scale is by far the most remunerative. Since nobody is obliged to use the cable, the obvious policy is to induce as many as possible to do so: it being remembered that it is not the number of transmissions, but the length of immersion, which chiefly wears out the wire. As I have said, the reduction of an indirect tax invariably shows a large increase in the yield, out of all proportion to the reduction itself. Thus, when the Atlantic cable tariff was lowered temporarily by fifty per cent., there was an immediate increase in the returns of 150 per cent. And nobody with the slightest knowledge of the conditions of our Indian and Australian commerce, can doubt that a substantial reduction in the tariff would throw on the wires an immense amount of correspondence now transacted by post, and would also double or treble the length of the messages now despatched. As bearing upon this latter point, it is interesting to note that during the two years of the existence of the reduced 4s. rate to Australia, while the increase in the number of cablegrams was but six per cent., the increase in the number of words transmitted was ten per cent.
WHAT THE TELEGRAPHIC RATE SHOULD BE.
After careful calculation, I should strongly recommend the establishment for the present of a tariff of 6d. a word to India, and 1s. a word to Australia. If the Government acted promptly, this tariff might be in force soon after the beginning of next year. If it be in operation next December ten thousand Christmas greetings will be flashed to the great Southern continent, which otherwise must be transmitted in imagination only.
CARRYING CAPACITY OF THE PRESENT CABLES.
The public will ask (1) what is the carrying capacity of the present cables and land lines between Australia and Europe ? and (2) would a shilling-a-word rate be popular, sufficiently popular to justify the reduction ? In answer to the first question, I telegraphed to the great electricians in the country, and I find that the carrying capacity of the present cables between Australia and Europe is from 72,000 to 100,000 words a day, that is, 36,000 to 50,000 words each way, whereas the total present traffic is about 5000 words a day. By a recent invention I witnessed cable messages despatched at ten times this rate through a single wire or cable. It is needless to remind the reader that when it is night here it is day in Australia, so night and day traffic would proceed. Forty thousand words daily, that is 20,000 words from Europe, and 20,000 words to Europe, would not be an extravagant estimate of the traffic, and here we have an income of 40,000 shillings, or £2000, as against £1000 a day, the present receipts. I may confidently anticipate the reply to the second question, because the whole press and people of this country with one voice declare that the reduction will open new floodgates of sympathy, and that thousands of kindly messages will be sent at a cost of from 10s. to £1 ls. [It is only fair to say that Sir John Pender recently expressed to me his earnest wish to meet this desire to send social messages at a popular rate.]
It cannot be supposed, however, that even this tariff would, after a time, be found sufficiently low to meet the requirements of trade and social intercourse. The ideal state of things would be the transmission of all communications at charges just sufficient to meet working expenditure and interest, &c., and provide against the contingency of further capital expenditure being required, all profit being foregone, in view of the advantage to trade, and the strengthening of those ties of affection and friendship which bind the colonies to the old country. Patriotism is merely a strand woven of myriads of such ties, which, delicate and impalpable as they are, are not less indispensable and effectual than the mysterious force that keeps a constellation of planets circling about the parent orb.
THE PROPOSAL INVOLVES NO INJUSTICE.
What is here proposed involves no injustice to anybody. Am inventor of a useful machine or process is entitled to be handsomely rewarded, and our Patent laws recognise this principle. But a man who acquires the invention from its author and hinders the public from benefiting by it in his haste to grow rich, is a monopolist, and deserves no more than bare justice. The case is far stronger when the invention is one on which the bread of millions, and the safety of an empire may depend. If Sir John Pender were to buy up all the railways in the United Kingdom, and treble the existing fares, he would not, in my opinion, be doing us a worse turn than he is doing
I do not presume to censure him; he is acting within the recognised limits of commercial morality, and within those limits he has displayed strategical and administrative abilities of the highest order. And if I criticise him, it is because he personifies a system which is poisoning the very sources of our imperial strength, and of our commercial prosperity.
I earnestly invite the attention of the business community to this matter. To sum up, I lay down these two propositions, which, at
the proper time and place, I am prepared to defend in detail, with facts and figures. First, that the existing cable charges are so heavy as to be highly injurious to our commercial and imperial interests; and secondly, that the wisest and fairest method of reducing them is for the State to acquire the existing cables, and supplement them where necessary.
The question is one of such urgency, that I shall ask the House of Commons to appoint a Select Committee to inquire into it. There are vast numbers of intelligent Englishmen who would hail any practicable scheme for hastening Imperial Federation. Such a scheme is now, with much deference, laid before them. No august congress, no inflated manifesto, no elaborate organisation is required, but simply a resolve, on the part of the hardheaded merchants of this great city, to secure for themselves and for their countrymen the priceless services of the beneficent Genius of Electricity, who now lies bound and writhing under the spell of a too masterful magician.
J. HENNIKER HEATON.