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Thursday, 7 December 1905

Senator STANIFORTH SMITH (Western Australia) - I am glad to hear that the Government intend to do what they can to assist the development and further the interests of the Pacific Cable, because in the past the Governments of the Commonwealth have given no assistance of the kind. On the contrary, I cannot help thinking that they have done much to assist a rival private company in preference to a project in which we have a one-third interest. In my opinion, there was no reason why a previous

Government should, at the expense of the Commonwealth, have spent thousands of pounds in providing for this rival private company a special wire from Melbourne to Adelaide. When the Appropriation Bill containing that item came before the Senate, the proposal was so disguised that honorable senators did not know the purpose to which the money was to be devoted.

Senator Higgs - We were told that the expenditure was on behalf of the Post and Telegraph Department.

Senator STANIFORTH SMITH - The taxpayers have been put to considerable expense in order to assist a rival company, to the disadvantage of the cable of which we are part proprietors. Without the sanction of Parliament, and under the authority of a section of the Post and Telegraph Act - which section, I may say, was never intended to be applied in such a way - the Eastern Extension Telegraph Company have been allowed to open offices in Victoria, and in this and in other directions Governments of the past have, without any warrant whatever, extended material help to this private enterprise. This policy adopted in the past has in spirit, if not in letter, been most unfair to our partners in the Pacific Cable project. No objection would have been taken if facilities of the kind I have indicated had been extended in the case of the Pacific Cable; and such a policy would, I believe, have reduced very much the annual amount which we are called upon to contribute. Is it not extraordinary that Commonwealth Governments should have spent thousands of pounds on a rival private company and have extended no assistance whatever to the Pacific Cable?

Senator Fraser - The Eastern Extension Company were the first in the field. Is the Pacific Cable not the rival cable?

Senator STANIFORTH SMITH - We own one-third of the Pacific Cable, and, therefore, I regard the Eastern Extension Cable as a rival.

Senator Walker - How do we own onethird of the Pacific Cable?

Senator STANIFORTH SMITH - All that I can say is that it is an absolute fact that we do so.

Senator Walker - We have spent no money on the cable.

Senator STANIFORTH SMITH - The British Government advanced the money, and we are responsible for one-third of any loss after interest, sinking fund, and work-, ing expenses are provided for.

Senator Walker - And the honorable senator regards that as constituting us a third owner?

Senator STANIFORTH SMITH - We actually do own one-third of the Pacific Cable. If the honorable senator borrowed money in order to carry on his business, that business would still be his, though he would have certain responsibilities in connexion with the loan.

Senator Walker - Does the honorable senator think that a guarantor owns the thing he guarantees?

Senator STANIFORTH SMITH - This is not a case of guarantee.

Senator FRASER (VICTORIA) - There is no doubt that we practically own one-third of the Pacific Cable.

Senator STANIFORTH SMITH - The British Government have advanced the money at a fair rate of interest, and that interest we pay in conjunction with the other partners. The special line gives the Eastern Extension Company an immense advantage; and the question arises why a similar privilege should not have been extended to the Pacific Cable Board. The money was probably spent by the Ministry of the day at the request of the company, and it is difficult to understand why the Pacific Cable Board was thus neglected. Our partners may rightly say that the Pacific Cable has received no encouragement whatever from the Commonwealth Government. Senator Fraser, who attended at least one of the Conferences, will bear me out that a pledge was given on behalf of the countries who own the cable to influence traffic so as to make it a commercial success. This Pacific Cable was to be the beginning of a movement which would lead to the encircling of the globe, and to that end every effort should be made to secure its success. It is time that the Government granted facilities to the Pacific Cable equal to those which are now granted to the Eastern Extension Company. We have decided to adopt the agreement with that company, and the line running from Melbourne to Adelaide is irrevocable for ten years. The Eastern Extension Company has opened offices in Melbourne and elsewhere, and the Government, as the principal shareholder in this gigantic concern, should urge the Pacific Cable Board to open offices in the Eastern States, and to offer to the clients of the Pacific Cable all the facilities which are now offered to clients of the Eastern

Extension Company. In offering these facilities, the Eastern Extension Company have only done what any intelligent business firm would do. But if we are to take in hand a gigantic enterprise like the Pacific Cable, and have any desire to make it a commercial success, we must adopt commercial methods. We cannot afford to adopt the same attitude towards the Pacific Cable as we adopt in dealing with internal telegraphy, in connexion with which we have a monopoly, and can say to people that if they wish to send telegrams they must come to our offices. There is no need for us to provide extra facilities when our customers can go to no one else. When we are brought into active competition with one of the strongest and ablest companies in the world, we cannot hope to make the Pacific Cable a success unless we adopt the commerical methods which have already been adopted by the Eastern Extension Company. They have shown us what we should do. I mentioned twelve matters in connexion with which their clients are given an advantage as against the clients of the Pacific Cable. In strongly supporting the motion, I ask the Government, seeing that they have given a line to the Eastern Extension Company, to give a line to Southport, in Queensland, where the Pacific Cable lands, for the bene- fit of the Pacific Cable Company, to request the Pacific Cable Board to open offices at least in Melbourne and Sydney, to employ canvassers, and generally to see that the clients pf the Pacific Cable are given the same facilities as are given to the clients of the Eastern Extension Company. This will involve expenditure, but it will lead to a very great increase in the business done by the Pacific Cable. If the Colony of New Zealand has been so successful in diverting traffic to the Pacific Cable that three times as many messages are sent by that cable as are sent by the Eastern Extension Company's line, the example of the goahead New Zealand Government is one which we can well follow. If the State, after starting commerical enterprises in competition with private enterprise, permit them to take care of themselves, the result must be failure, and in this case the great undertaking in which we have embarked, instead of proving bv its success to be an incentive to the extension of such State lines throughout the world, will prove the end and the grave of all our hopes in that direction.

Apart from the commercial aspect of the matter, there is the defence aspect to be considered, and it is admitted to be most important. In time of war, it is necessary that our cable should be kept open, in order that we may be advised of the movements of an enemy, and of the various precautions which it is necessary that we should take. If we have to deal with a private company, it is possible that foreign shareholders may become possessed of the majority of the shares, and be in a position practically to control the private line, to the immense detriment of the Commonwealth in time of war. If the Pacific Cable isallowed to become a burden on Great Britain, Canada, New Zealand, and the Commonwealth, it may be decided that the best thing we can do with a line which has become an incubus involving a financial drain, is to sell it. Our position would then be that the Eastern Extension Company, having maintained a monopoly for thirty years, would be able once more to rivet the fetters which we have momentarily thrown off, and we should be dictated to in the matter of telegraphic communication for all time. I urge the Senate and the Government to do all that is possible to see that every encouragement is given to the Pacific Cable - that it is at least given similar advantages to those given to the Eastern Extension Company, and to urge the Pacific Cable Board to do all that can be done to influence business in favour of the Pacific line.

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