May 5, 1913

INTER-IMPERIAL TELEGRAPH SERVICE.


Hon. L. P. PELLETIER (Postmaster General} moved for leave to introduce Bill No. 188, to provide for more advantageous conditions for telegraphic communications between Canada, the United Kingdom and other parts of the British Empire. He said: This is a Bill of a somewhat important mature. It is, In part, the result of some work done whilst I was in England last summer. Its object and purport is to bring about better conditions for Canada in respect of ocean telegraphic communication. It tends to bring more closely together Canada and the Mother Country, and thereby cement the bonds of Empire. Incidentally the Bill also tends, as its title shows, to provide better, conditions for telegraphic communication' between Canada, the United Kingdom and other parts of the British Empire, more especially Australia and New Zealand. , We in this country have been for years practically in the hands of the cable companies which have had everything pretty much their own way. Some efforts have been made now and then to improve this condition of affairs. In 1902, or 1903, Parliament voted an amount in order to help the lowering of the rates charged by the cable companies. Later on Parliament also passed another law which had the same object, but which had as one of its provisions that a similar law would have to be adopted by the Mother Country, and as no such enactment was made by the Parliament of Great Britain, that Bill had no effect. In the first place, the cable companies are foreign companies and they have had practically a monopoly which has not been very popular in this country. Whatever reductions were obtained from' them have been brought about by persuasion and solicitation, and to most of our requests the cable companies have turned a deaf ear. Since this Government came into power there have been two reductions in the rates which the cable companies had adopted and maintained in respect to Canada. The first reduction was obtained in-December, 1911, and came into force on the 1st of January, 1912. When this matter was discussed during the course of the session of 1911-12, everybody agreed, that the measure of relief which had been, obtained was quite welcome as it stood,, but that it was inadequate and insufficient. Several members of the House suggested' that the time had come for this country to go into the great proposition of a state-owned cable for the Atlantic ocean. Speaking for the Government at the time I said that I could not pledge the Government to that, that it would be a costly undertaking and that the matter would have to be thought over very carefully. Last summer I took up the question with the British post office. I may say that I have had the help of the Empire Press Unions, and also the benefit of the good advice of the president of the Canadian Associated Press, Mr. John Ross Robertson, and I may say here also that Sir J. Henneker Heaton, well known as the father of penny postage, gave me all the help he could, and that we owe him a debt of gratitude. I thought I should first obtain the views of the British post office. I presented to Mr. Samuels, the very able and distinguished gentleman who is Postmaster General of Great Britain, the views of Canada, Australia and New Zealand. The views of our two sister colonies are well known. They are absolutely, and in the case of one of them, Australia, almost exclusively, in favour of a state-owned cable for the Atlantic. I will come in a moment to the views of the Right Hon. Mr. Samuel; but before going into that, let me briefly explain what the position is, as between Canada, the Mother Country, Australia, and New Zealand. The original intention in 1900, if I understand the matter rightly, was to have what, would be called an all-red telegraph line between Great Britain, Canada, Australia and New Zealand. The greater part of that enterprise was started in 1900, and, as you know, Mr. Speaker, and as the House knows, the four countries now in partnership laid a cable from British Columbia under the Pacific ocean to Australia and New Zealand. As the House knows, the four countries own that cable and share in the profits and expenditure, Great Britain being responsible for five shares, Canada for five shares, Australia for six, and New Zealand for two, making eighteen shares. That cable gives us communication be-



tween British Columbia and New Zealand and Australia. The management of that cable, or of the business connected with it, was entrusted to what is known as the Pacific Cable Board. That board leased from the Canadian Pacific railway a wire from British Columbia to Montreal at a cost of $55,000, so that now we have communication established between the two sister colonies, New Zealand and Australia, and Vancouver, and from Vancouver over this leased wire to Montreal. Between Montreal and the Atlantic coast, and be-ween the Atlantic coast of Canada and the Mother Country, there is a gap whieh has not been filled so far, but which has several times occupied the attention of this country and of the other countries mentioned. To fill that gap we have to use the cables of the cable companies to which 1 have just referred. It costs, in proportion, much more than the. part which we own, and Canada has the lean part of the business going over the cable. The reduction brought about by the Pacific cable benefits mainly Australia and New Zealand. I am not here to blame or to criticise what has been done in this matter, because it may have been properly considered as part of an Imperial duty, but we certainly did not get as much return from the cable as the three other partners. This was the state of things when I had the pleasure and advantage of meeting the Eight Hon. Mr. Samuel, the British Postmaster General, last summer. I put before him the proposition of filling that gap toy laying an Atlantic cable, and I had reason to believe that to some extent I was speaking also for New Zealand and Australia. This Government had adopted no policy in regard to that. I simply put the proposition before him for the .purposes of discussion. I found that Mr. Samuel was, for the present at ,least, opposed to an Atlantic state-owned cable proposition. He was quite prepared to listen with an open mind to all the suggestions and arguments put before him; but, with all the facts and figures before him, and these he had pretty well at his fingers' ends, he thought the time had not come for a state-owned Atlantic cable. After several conferences, at which we went thoroughly into the whole matter, he came to the conclusion that for the moment our best course was to try to obtain more favourable conditions from the cable companies, reserving the state-owned cable as a means of last resort. The reasons which he gave then certainly appealed to me. His chief reason was the rapid strides and. extraordinary progress of wireless telegraphy. To put it in a nutshell, the proposition was this: why make extraordinary and costly outlays at the present moment for a cable when the cable is about to have a competitor whose possibilities are Mr. PELLETIER immense and which may turn out to be as good if not a better means of communication? Speaking for myself, I would not be surprised if, in a few years, wireless should become the equal if not the superior of the cable. Cable companies have fought one another in the past, and have lowered their rates, but now they have merged into what I think may properly be called a combination. While there are a great many cables, there are practically only two companies now, they having absorbed all the others. One is the Commercial Cable Company, and the other the Western Union. Their rates are practically the same, and are pretty high at that. Cables are much more expensive than wireless organizations, and consequently the wireless organizations can charge lesser rates and these rates may be more remunerative to them than the charges made toy the cable companies. Another reason which was fully discussed at that time, and about which all the experts seemed to agree, was that whilst one cable in the Pacific ocean has sufficed, and may suffice for a long term of years, a different condition of affairs existed, so far as the Atlantic ocean is concerned. If ever a state-owned cable is laid in the Atlantic ocean, the conditions will necessitate duplication in order to give a good and efficient service. The expense of laying two cables would be in the vicinity of $5,000,000, whilst the laying of a proper system of wireless telegraphy would not probably amount to more than $300,000 or $400,000. Therefore, the British Postmaster General was not ready to consider a state-owned proposition, and, as I said a moment ago, I agreed pretty much with him. Consequently, we entered into negotiations with the cable companies with the view of obtaining some reduction in the rates charged by them. The companies expressed surprise to find us renewing our demands for a reduction of the rates so soon, they said, after the reduction granted in December, 1911. They told us they were going to be ruined, and that there were no hopes of sajvation for them if steps were taken by the Mother Country and the overseas dominions to bring about a better state of affairs. At all events, one of the companies consented to negotiate; with the other one the negotiations were not protracted. We had some difficulty in finding anybody responsible for that company or anyone' willing to enter into any pourparlers. We had one meeting in the office of the British Postmaster General, and the representative expressed very great surprise and seemed to think we were trespassing on sacred ground. He told us that we need not expect much from him. At ah events he promised consideration and said he would give an answer later. His answer has yet to come, but the other company, the Western Union Company consented to negotiate with us. Those negotiations were veTy long and wearisome. At each conference the gentlemen with whom we were dealing had to send a cablegram to New York, because, as you know, Mr. Speaker, the rates between Canada and England are decided at New York. New York apparently was not very well disposed towards us. One day we would think we were pretty near the object in view, and then another cable would come from New York putting us far apart again. Finally, it became perfectly clear that, whilst we were sure to get something, we could not. expect anything like what we considered fair and reasonable. These negotiations were so prolonged and so unsuccessful that they were brought to a close. Meanwhile I had given a good deal of attention to what was going on in England as far as wireless telegraphy was concerned. Having informed the representative of the Western Union Company that I was directing my efforts in another channel, I continued my negotiations with the British Postmaster General. Mr. Samuel kept me advised of what was going on and the result of the whole thing was that, the cable companies having refused terms that we thought fair and reasonable, submitted a certain scale of reduction to the British Postmaster General who communicated the same to me and my suggestion was that if they desired to themselves adopt that policy, and experiment with these reduced rates, Canada would not refuse the benefit of this reduction but that we wanted to be understood as not accepting those rates and as not being bound by them. The reductions which then obtained have already been given to this House and I shall not refer to them at length. I said a moment ago that the first reduction, granted in December, 1911, gave a slight measure of relief. The reduction given last summer, and which went into force on the 1st of January, 1913, is a little more satisfactory but it is far from giving Canada the rates to which, I think, she is entitled. There is one rate which it has been absolutely impossible to have reduced and that is the regular business rate. A first reduction was obtained on deferred cablegrams, cable-letters and week-end letters and that reduction went into effect on January 1, 1911. The reduction which went into force on the 1st of January last was on the same lines. They all applied to deferred cablegrams, cable letters and week-end letters, but no reduction of any kind has so far been obtained on the regular cablegrams, the business man's cablegram, whether in code or in plain language. It remains as it has been for years at twenty-five cents a word. The Bill which I have the honour of presenting to this House provides, to a certain extent at least, a remedy for that condition of affairs. We have entered into a contract which the Bill proposes to confirm and ratify, if it is agreeable to Parliament. I shall briefly explain it. A number of very wealthy persons in the Mother Country have formed themselves into a syndicate, incorporated as the Universal Radiotelegraph Syndicate, Limited. They will bring to this country the most effective and promising system of wireless telegraphy known as Poulsen's Arc System. It was tried and gave good results. The syndicate undertake and guarantee, first, to establish wireless stations and to establish wireless communication between Canada and the Mother Country. The central point to which they shall come in Canada is Montreal. This will fill the gap of Which I spoke a moment ago. Then, in the second place, the syndicate guarantee that they will give an excellent service at a speed of four hundred letters per minute. This is very important. Four hundred letters per minute means one hundred per cent better on the average than the cable companies can do at the present time.


IND
CON

Louis-Philippe Pelletier (Postmaster General)

Conservative (1867-1942)

Mr. PELLETIER:

Four hundred letters per minute or one hundred per cent better. The cables are supposed to give us two hundred letters per minute. If we adopt the well known rule of counting five letters to a word, that will mean forty words, or two hundred letters per minute or four hundred letters. The rates which these people undertake to give to Canada are the following: For code messages, eight pence a word instead of twelve pence, which is the charge made by the cable companies. In the second place, and this is probably the most important part of the arrangement in so far as the general public are concerned, plain language cablegrams will be transmitted at the rate of four pence a word, without any deferment, which is better by two-thirds than the cable companies are doing now. Government messages, or cablegrams, will be transmitted for two and a half pence per word and press messages will be transmitted for two pence a word. The cable companies have in the past concentrated their efforts on making a bigger reduction in the press rates than in the rates charged to the general public. Had they in their minds the idea that if the press were satisfied they would probably have less trouble with the rest of the public? I do not know, but we certainly have succeeded in getting a larger reduction for the press than for the general public. The press rates, as reduced last summer, were as follows: The ordinary rate for press

messages was brought down from ten cents to seven cents a word with a special reduction to five cents a word between midnight and six in the morning, or between

one in the day to four in the morning, according to the country of origin. Now the rate is reduced under this arrangement to two pence a word. These are the rates under this contract for wireless messages from any part of Great Britain or Ireland to Montreal.

Topic:   INTER-IMPERIAL TELEGRAPH SERVICE.
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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (South York):

Is this system covered by a patent?

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CON
IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN:

Who are the inventors or the owners of the patent?

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CON

Louis-Philippe Pelletier (Postmaster General)

Conservative (1867-1942)

Mr. PELLETIER:

The inventors are

Mr. Poulsen and Mr. Pedersen. This patent has been acquired by the syndicate which is entering into a contract with us now.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN:

When could they put the system into operation?

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CON

Louis-Philippe Pelletier (Postmaster General)

Conservative (1867-1942)

Mr. PELLETIER:

I am coming to that. This information is not official; it was given to me by the manager. The largest shareholders are the Imperial Tobacco Company, Werner, Beit & Co., Kleinwort, Sir Robert Jardine, Lord Harris, Basil Montgomerie and FitzGeralds.

They are all .millionaires. This system will give us cheap rates from Great Britain to Montreal. As we all know, the Canadian Press Association get their news over the cables to Montreal, and from Montreal the news is distributed to all parts of Canada by virtue of an arrangement between the cable companies, the land line companies and the press. This syndicate undertakes to pay, for transmission to other parts of Canada, a certain proportion of what is paid by what I might call the ' consumers.' The word may not be good English but it conveys my idea.

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LIB
CON
LIB
CON

Louis-Philippe Pelletier (Postmaster General)

Conservative (1867-1942)

Mr. PELLETIER:

No. There is a clause in the contract by virtue of which the land line company cannot charge more than the rates which I have just mentioned without first getting the consent of the Board of Railway Commissioners.

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LIB
CON
LIB
CON
IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (South York):

Is the

British post office a party to the contract?

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May 5, 1913