vitally important question is to ensure the complete success of this service and make it accomplish for Canada all that we have hoped. I am forced, therefore, reluctantly to the conclusion that to accomplish that object it will be necessary to devise some means by which a combination may be effected between the Government and the Canadian Pacific Railway Company.

The great difficulty which the company experienced arose, I believe, from the fear that from the time of undertaking this enterprise until it could go into operation, their interest might be severely jeopardised by the parties at present engaged with the Steamship communication between this country and Canada. Would it not be possible for the Government to intervene directly and assume the liability for the construction of the ships and have a contract, if necessary secret, between the Government and the Canadian Pacific Railway Company, to take the work over and become responsible for its ownership and management as soon as the service was ready to go into operation ?

Of course I should be very glad if, in connection with any such change, it were found possible to utilise the services of Mr. Huddart, and promote his interests, but, of course, that is a matter entirely secondary and subsidiary to the great object of making this important work a thorough success. In the hope that means may be found to accomplish for Canada all that we have had in view, I am, etc.,



17 Victoria Street, London, S.W.,

19th November, 1895. MY DEAR SIR MACKENZIE BOWELL,—The meeting between the Agents-General and myself and Mr. Chamberlain took place to-day as before advised.

I stated to Mr. Chamberlain that my colleagues and myself were very much gratified at the prompt manner in which he had responded to our request that he would receive us in connection with the question of the Pacific cable, and I had invited the Agents-General of all the colonies to attend, including the representatives of the Cape and Natal, which colonies, although not directly interested, were warmly in favour of the project; that all were present except those representing South and Western Australia, who, for reasons with which he was already acquainted, did not propose to assist.

I then read the following letter which I had received from Mr. Playford, Agent-General for South Australia :

“In reply to yours of the 13th instant, I beg to say that I have written to Mr. Chamberlain, in answer to his of the 11th, informing him that my Government have by cable advised me that they are not in favour of the appointment of a Commission to consider the Pacific cable question.

“ Under the circumstances I feel it would be out of place for me to attend a deputation the object of which my Government cannot support.”

I also drew attention to the following statement made by Mr. Playford at the Ottawa Conference :

“I told the Conference that if this line was required for public and Imperial purposes our Government will never in any way stand in the way. I am giving not only my own opinion, but the opinion of my own Government, and, I believe, of the majority of the people of South Australia. If the work is done at all it should be done as a Government work."

I said that the Agents-General for Victoria, New South Wales, Queensland and New Zealand and myself had all been instructed by our respective Governments to urge upon the Secretary of State for the Colonies the appointment of a Commission on which the Imperial Government, Australasia and Canada should be represented for the purpose of considering and reporting upon the best means to be adopted to secure the prompt construction of a cable between Canada and Australasia; that I might call his attention to the fact that my colleagues and myself have pressed, in the strongest manner, upon the consideration of his predecessor, the Marquis of Ripon, and upon Lord Rosebery, the great importance in connection with this work, of Her Majesty's Government promptly taking possession of Neckar Island ; that Neckar Island was in the same category as other islands which had been taken possession of by Her Majesty's Government in recent years without any remonstrance on the part of the Hawaiian Government; and we had further pointed out that as soon as it became known that we were seriously contemplating the construction of a cable between Canada and Australasia, no doubt that island would be taken possession of by some other Power.

What we had feared had taken place, and the Hawaiian Government had formally taken possession of Neckar Island, clearly showing that they had not previously done so, and with the unfortunate result that at least half a million pounds sterling had been added to the necessary expenditure for the construction of the cable by the greater distance to Fanning Island, which would now be required to be used in order to attain the important object of having the cable only touching British territory.

Mr. Chamberlain expressed his great interest in the subject, and felt that prompt action was demanded by the movements on the part of foreign countries, whose action would seriously affect the support that the cable would otherwise receive. He stated his readiness promptly to appoint a Commission, and suggested that it should consist of six members—two to be nominated by the Imperial Government, two by Australasia, and two by Canada.

He intimated the desirability of having two representatives of the Imperial Government, as he wished both the Colonial Office and the Treasury to be represented on the Commission.

He also expressed great satisfaction at the result of the tenders asked for by the Canadian Government having elicited the fact that the contemplated expenditure would not materially exceed a million and a half, and he could not doubt that the returns from such an enterprise would to a very large extent cover the expenditure that would be involved.

After some general conversation respecting the

terms of reference to the Commission, he said that these would be submitted to us in the course of a day or two. It was agreed that we should immediately inform our respective Governments what had been decided upon, and he would communicate in like manner with the governors of the various colonies concerned.

When discussing the terms of reference Sir Westby Perceval, the Agent-General for New Zealand, suggested the question of compensation to South Australia and the Eastern Extension Telegraph Company might arise, but Mr. Chamberlain immediately replied that it would be as well to state at once that Her Majesty's Government would not listen to the question of compensation from any source whatever.

After the meeting the Agents-General adjourned to my office, where we settled on the terms of the cable communication to our Governments as follows:

Re Pacific cable. Colonial Minister at interview to-day with representatives of all colonies except South and West Australia agreed to appoint Commission, but suggested six—two to be nominated by Imperial Government, two Australasia, and two Canada. Terms of reference will follow shortly.”

Enclosed you will find the communique that was handed to the Press by the Colonial Office.

I feel sure you will agree with me that under the existing circumstances no good object could be gained by communicating Mr. Fleming's letter of October 11th to the Agents-General or to the Colonial Office, and I think we may all congratulate ourselves of having advanced this matter in

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