Atlantic cables : a review of recent telegraphic legislation in Canada

Front matter

THE ATLANTIC CABLES.

A REVIEW or

RECENT TELEGRAPHIC LEGISLATION

II. The Government Bill Of 1875 As Passed.1

An Act to regulate the construction and maintenance of Marine Electric Telegraphs.

Her Majesty j by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows : —

1. This Act shall apply —

(1.) To every Company or association of persons hereafter authorized by any special or general Act of the Parliament of Canada, or under the provisions of this Act, to construct or maintain telegraphic wires or cables in, upon, under or across any gulf, bay or branch of any sea or any tidal water within the jurisdiction of Canada, or the shore or bed thereof respectively, so as to connect any province with any other province of the Dominion, or to extend beyond the limits of any province.

(2.) To every Company authorized to construct or maintain such telegraphs before the passing of this Act by any such special or general Act of the Parliament of Canada, or by any other special Act or Charter of any of the provinces constituting the Dominion, and at the time of the passing of this Act in force in Canada.

2. The term " The Company " in this Act shall mean any Company or association of persons in the preceding section mentioned.

3. The Company shall not place any telegraphic wire, cable or work connected therewith, in, under, upon, over, along or across any gulf, bay or branch of the sea, or any tidal water, or the shore or bed thereof respectively, except with the consent of all persons and bodies having any right of property, or other right, or any power, jurisdiction or authority in, over or relating to the same, which may be affected, or be liable to be affected, by the exercise of the powers of the Company.

4. Before commencing the construction of any such telegraph or work as last aforesaid, or of any buoy or sea-mark

1 The passages included in brackets [ ] did not form part of the original Bill of 1874, but were inserted by the Government in the Bill as submitted by them to the Dominion Parliament in 1875. The Amendments introduced into the Bill in its passage through the Legislature are indicated by italics. Section 16 of the original Bill was omitted.

connected therewith, except in cases of emergency for repairs to any work previously constructed or laid, and then as speedily after the commencement of such work as may be, the Company shall deposit in the office of the Department of Marine and Fisheries a plan thereof, for the approval of such Department. The work shall not be constructed otherwise than in accordance with such approval. If any work is constructed contrary to this provision, the Department of Marine and Fisheries may, at the expense of the Company, abate and remove it, or any part of it, and restore the site thereof to its former condition.

5. The Company may, in or about the construction, maintenance or repairs of any such work, use on board ship or elsewhere any light or signal allowed by any regulation to be made in that behalf by the said Department.

b\ If any such work, buoy or sea-mark is abandoned or suffered to fall into decay, the said Department may, if and as it thinks fit, at the expense of the Company, abate and remove it, and restore the site thereof to its former condition, and the said Department may at any time, at the expense of the Company, cause to be made a survey and examination of any such work, buoy or sea-mark, or of the site thereof.

7. Whenever the said Department under the authority of this Act does, in relation to any such work, any act or thing which the said Department is, by this Act, authorized to do at the expense of the Company, the amount of such expense shall be a debt due to the Crown from the Company, and shall be recoverable as such with costs, or the same may be recovered with costs, as a penalty is or may be recoverable from the Company.

8. The Company may, with the consent of the Governor in Council, take and appropriate for the use of the Company for its stations, offices and works, but not alienate, so much of the land held by the Crown for the Dominion, and the shore or bed adjacent to or covered by any gulf, bay or branch of the sea, or by any tidal water, as is necessary for constructing, completing and using the telegraph and works of the Company.

9. The Company may also acquire from any province of the Dominion any land or other property necessary for the construction, maintenance, accommodation and use of the telegraph and works of the Company, and also alienate, sell

E 2 and dispose of the same when no longer required for the purpose of the Company.

10. The Company may also acquire from any person or corporation any land necessary for the construction, maintenance and use of the telegraphic cable and works of the Company, adjacent to or near the shore end or place of landing of the telegraph. And in case the Company and such person or corporation should fail to agree upon the possession or price of such land, the Company is hereby empowered to enter upon and take such land, limited to an area of five acres, under the powers, authorities and provisions of C( The Railway Act, 1868/'' the sections of which, in respect to compulsory powers for the acquisition of lands, are hereby declared to be applicable to any company within this Act, and the powers, authorities and provisions contained in the said sections of " The Railway Act, 1868," are hereby declared to be vested in and exercisable by any such Company for the purpose aforesaid.

11. The Company shall not be entitled to exercise any of the powers by this Act conferred until the Company shall have submitted to the Governor in Council a plan and survey of the proposed site and location of such telegraph, and its approaches at the shore, and of its stations, offices, and accommodations on land, and of all the intended works thereunto appertaining, nor until such plan, site, and location have been approved by the Governor in Council, and such conditions as he shall have thought fit for the public good to impose touching the said telegraph and works shall have been complied with.

12. The Company shall transmit all messages in the order in which they are received, and at equal and corresponding tariff rates, under the penalty of not less than fifty nor exceeding two hundred dollars, to be recovered, with costs of suit, by the person aggrieved ; and the Company shall have full power to charge for the transmission of such messages, and to demand and collect in advance such rates of payment therefor as shall be fixed from time to time as the tariff of rates by the by-laws of the Company: Provided, however, that arrangements may be made with the proprietors or publishers of newspapers for the transmission, for the purpose of publication, of intelligence of general and public interest, out of its regular order and at less rates of charge than the general tariff rates.

13. Any message in relation to the administration of justice, the arrest of criminals, the discovery or prevention of crime, and Government messages or despatches shall always be transmitted in preference to any other message or despatch, if required by any person officially charged with the administration of justice, or any person thereunto authorized by the Secretary of State of Canada, or by the Secretary of State for the Colonies on behalf of the Imperial Government.

14. No company or association of persons other than those mentioned in the first section of this Act, or which becomes incorporated in Canada under the next following section, shall maintain, construct, or use any telegraphic wire or cable connecting two or more provinces of the Dominion, or extending beyond the limits of any province, in, upon, under, or across any gulf, bay, or branch of any sea or any tidal water within the jurisdiction of Canada or the shore or bed thereof respectively : Provided that nothing in this section contained shall be construed to prohibit any existing telegraph company or association from continuing to receive and transmit messages over its line of marine telegraph until such time as another company, under the authority and within the provisions of this Act, has constructed and is operating a line or lines of marine telegraph which shall have been determined by the Governor in Council to afford reasonable facilities for the transmission of marine telegraphic messages in lieu of the line or lines of such existing telegraph company or association, or to be a line or lines for doing business over a route of a competitive nature, [and until the Order in Council declaring Mich determination shall have been published for three months in the Canada Gazette~\.

15. In case any company is now or shall hereafter be authorized by any special Act of the Parliament of Great Britain, or incorporated under the Imperial Joint Stock Companies' Act or any other general Act of the Imperial Parliament or by Royal Charter, for establishing or maintaining telegraphic communication in, upon, under, or across any gulf, bay, or branch of any sea or tidal water within the jurisdiction of Canada, the Governor in Council may by letters patent under the Great Seal of Canada, and upon the terms and conditions to be contained therein, grant a charter to the persons forming such company, upon the company petitioning therefor, and such persons and others who may become shareholders in the company shall be constituted a body corporate and politic by the same name, and with the same power and constitution in Canada, for the said purpose and object of establishing and maintaining' their said telegraph and works, within the jurisdiction of Canada, but any such grant shall be expressly subject to this Act, and conditional upon the company doing, observing, and performing the several provisions thereof; and such letters patent being published in the Canada Gazette with any Order or Orders in Council relating to the said letters patent, shall have the like force and effect as if the company had been incorporated by special Act of Parliament, but no such letters patent or grant of corporate powers to be exercised within the jurisdiction of Canada shall be made to or conferred upon any company or association which possesses any exclusive privilege of landing wire or cable for a marine telegraph in or upon the coast of any state, province, or country in America, Europe, or elsewhere, unless an equal or reciprocal right or privilege of landing wire or cable and establishing a marine telegraph upon the same coast is conceded to any and each of the companies in the first section of this Act mentioned, or which may become incorporated in Canada under the provisions of this section of this Act, so that any company incorporated or to be incorporated in Canada may enjoy the same advantages in maintaining its marine telegraph line in and upon the same coast as the said company which may possess such exclusive privilege :

[Provided that any grant of corporate and other powers made to or conferred upon any company or association under this section may be revoked and declared forfeited by any Act of the Parliament of Canada for non-user for three consecutive years at any one time, or if the Company do not go into actual operation within three years after the issue of the Letters Patent granting such powers, or in case the Company shall at any time possess or acquire any exclusive privilege of landing wire or cable for a marine telegraph in or upon the coast of any state, province, or country in America, Europe, or elsewhere, and an equal or reciprocal right or privilege of landing wire or cable and establishing a marine telegraph on the same coast is not conceded to any and each of the Companies mentioned in the first section of this Act, or coming within the provisions thereof.]

[16. Each of the Companies mentioned in the first section of this Act, or which may become incorporated in Canada under the next preceding- section, is prohibited from entering into any agreement for the transmission or interchange of messages, or for participation in profits, or for the union or consolidation of capital stock, with any company or association of persons, which at any time may possess or acquire any such exclusive privilege of landing wire or cable for a marine telegraph in Newfoundland or the Danish Possessions, and where an equal or reciprocal right is not conceded as in the proviso to the 'said next preceding section mentioned ; and every such attempted agreement shall be illegal and void.] 2

[17. This Act shall not affect any franchise, right or privilege which the New York, Newfoundland and London Telegraph Company, or any other Company, or person lawfully entitled thereto, may have actually acquired and exercised or operated in Prince Edward Island prior and up to the first day of July, eighteen hundred and seventy-three, under any Act or Acts of the Legislature of the Colony of Prince Edward Island made and passed prior to the said first of July, eighteen hundred and seventy-three, and subject to the provisions thereof respectively.]

[18. Nothing in this Act contained shall have the effect of depriving the Anglo-American Company (Limited) of any right, if any, which the said Company may have to proceed against the Dominion of Canada, for damages or compensation for any loss by it sustained by reason of its being" prevented under the operation of this Act from maintaining or using its telegraphic wires or cables on the shores of Nova Scotia, the question of such right and the amount of such damages, or comfle?isation, if any , to be determined on Petition of Right. ~\

2 I have been compelled to resist the temptation to expose the absurdity, as well as the injustice, of this section. In effect it not only declares that a Company which has landed its cables in Canada must surrender without compensation all the exclusive privileges it may have acquired, but it actually prohibits such Company from holding even business relations with any other Telegraph Company which, not being within the reach of Canadian authority, is fortunate enough to be able to retain similar privileges. It is not difficult to imagine a case in which the operation of this section would prove highly injurious to the commercial interests of the Dominion.

19. The Parliament of Canada may at any time amend vary or repeal any of the provisions of this Act.

Certified to have been examined and found correct, by the original Act in custody of the Clerk of the Parliaments, and examined with him by

House of Commons of Canada.

Ottawa, 12th May, 1875.

III. Early History Of The Cables

In addressing the Banking and Commerce Committee of the Senate on March 18th, 1875, Mr. Cyrus Field gave the following account of the early viscissitudes of Atlantic Telegraphy : —

During the months of January and February, 1854, I was occupied in investigating the practicability of laying a submarine cable across the Atlantic. Having become convinced it was practicable, and, if successfully carried out, would be beneficial to England and America, I invited several wealthy and enterprising friends of mine to meet at my house, and for the four successive evenings of March 7th, 8th, 9th, and 10th, 1854, we discussed the subject, and on the latter evening we decided that we would undertake the enterprise, provided that we could obtain a suitable charter, aud on the 14th of the same month, myself and two of my associates left for Newfoundland. On the 15th of April, the Legislature of that colony unanimously passed the Act incorporating the New York, Newfoundland and London Telegraph Company. The first lines of the Act are as follows : — " Whereas it is deemed advisable to establish a line of telegraphic communication between America and Europe by way of Newfoundland." This charter granted us exclusive privileges for fifty years of landing cables on the shores of Newfoundland, subject to the right of pre-emption by the Government at any time after twenty years. At this time there had never been a deep ocean cable laid ; the longest cable in the world was that between England and Holland, about 140 miles, and no cable had ever been submerged in water over thirty fathoms in depth. The idea of laying a cable across the

Atlantic was considered by most persons as Quixotic. There were many conditions in our charter, one of which was, that we should build a road across the island, about 400 miles Ion01, with bridges, &c. The Government guaranteed interest on 50,000/. sterling, of the bonds of the Company for twenty years, at five per cent. The interest on these bonds was always promptly paid by the Company, and the principal at maturity, the Government of Newfoundland never paying* one farthing of the principal or interest. We had several hundred men at work in Newfoundland, building the land line and roads and bridges in the years 1854, 1855, and 1856. In the fall of 1854 I went to England and ordered a cable, and during the summer of 1855 we attempted to lay it across the Gulf of St. Lawrence, to connect Newfoundland with Cape Breton. It was unfortunately lost in a gale of wind, and in the fall of 1855 I again went to England and ordered another cable, and during the summer of 1856 it was successfully laid, and also one in Prince Edward Island and New Brunswick, and a telegraph line constructed between Prince Edward Island and New Brunswick in 1855 and 1856. We also, under our agreement with the Nova Scotia Telegraph Company, to land our cable in Cape Breton, built a road about 100 miles in that island, and completed a telegraph line from Cape North to Port Hood, Cape Breton. The telegraph communication between St. John's, Newfoundland, and Nova Scotia, and the other British North American colonies and the United States having been completed, I proceeded to Washington and induced the United States Government to send a steamer to sound across the Atlantic.

I returned to New York and sailed for London, and after my arrival there obtained from the English Government a steamer to verify the soundings of the American vessel between Ireland and Newfoundland, and made the arrangement with the Imperial Government for ships to assist in laying the cable and for a guarantee of four per cent, on 350,000/., the amount then considered necessary to lay an experimental cable from Ireland to Newfoundland. This guarantee being conditional upon the successful laying of the cable, and only during the working of the same, was of little or no value, and the Government never paid one farthing on it ; for if the cable was successfully laid and working, it would certainly earn more than four per cent. At this period (the fall of 1856), it was proposed to me, in London, that instead of the New York, Newfoundland, and London Telegraph Company laying the cable from Newfoundland to Ireland, that we should form in London a company to be composed of English and Americans, called the Atlantic Telegraph Company, which would work in connexion with the Newfoundland Company, and that the receipts for telegraph messages passing over both lines, between Valencia, Ireland, and Port Hood, Nova Scotia, the terminus of the two lines, should be divided, two-thirds to the Atlantic Company, and one-third to the Newfoundland Company. This arrangement was finally consented to ; the Company was formed, and I, individually, subscribed and paid for, in hard cash, 88,000/. sterling, being a fraction more than one quarter of the capital of this Company.

The Atlantic Telegraph Company was formed under the Joint Stock Act, but in the year 1857 was incorporated by Special Act of the British Parliament. I returned to New York, arriving there on Christmas Day, 1856, and within a week left for Newfoundland, and obtained an Act of the Legislature ratifying the arrangement with the Atlantic Telegraph Company, and authorizing a consolidation of the two Companies. Returning to the United States, I proceeded at once to Washington, and we obtained an Act of Congress, approved by the President, on the 3rd of March, 1857. We attempted to lay the cable across the Atlantic in the summer of 1857, and after a few hundred miles had been laid, it was lost. The confidence of the public in the enterprise was much shaken, and it was with great difficulty that we obtained the additional means necessary for another attempt. On the fifth day of August, 1858, the cable was landed on the shores of Ireland and Newfoundland, and there were sent through the cable 400 messages, the last one being to me, and dated September 1st, 1858, and received on the very day of the great rejoicing in New York over the successful completion of the Atlantic cable. No words can describe the change in the public mind after the cable ceased to work. The great majority on both sides of the Atlantic believed the enterprise never could be a success, and considered those who had been engaged in it as lunatics. Stock of the New York, Newfoundland, and London and Atlantic Telegraph Companies declined in London and New York to the merest fraction of what they had cost; in fact, ten thousand dollars of the stock of the New York, Newfoundland, and London Telegraph Company was sold at public auction during my absence in Europe, in the city of New York, for a ten dollar greenback, and a thousand pounds sterling of the Atlantic Telegraph stock was sold in London for thirty guineas.

From the time of the failure of the Atlantic Cable in the fall of 1858, until the spring of 1865, I was constantly crossing and recrossing the Atlantic and endeavouring in every way to raise the money necessary for another cable. I addressed public meetings in New York, Boston, Providence, Philadelphia, Baltimore, Washington, Albany, Buffalo, and in London, Liverpool, Manchester, Glasgow, and other places, almost literally going from door to door, asking for subscriptions. Many were made with almost the same feeling as if they had been given to a charity. To encourage the public to subscribe to the new stock, the New York, Newfoundland, and London Telegraph Companies agreed to contribute out of their share of the receipts for messages, 25,000/. a year. At last the necessary capital was raised ; a new and better cable was made and loaded on board the " Great Eastern," and we steamed away from the coast of England with buoyant hopes that we were on the eve of triumph; but these brilliant expectations were doomed to disappointment. After we had successfully payed out 1200 and odd miles of cable, it was lost in water more than two miles in depth. For weeks we struggled faithfully to recover our lost treasure from the bottom of the Atlantic, but in vain, and we steamed back to England with sad hearts. On our arrival in London, we exerted ourselves, for weeks, to raise the money necessary for another cable, and to recover and complete the one that was lost; as a last resort, we were obliged to issue 600,000/. of stock, having a first preference of twenty-five per cent., on all our receipts. On these terms we, with great difficulty, obtained the necessary amount. I subscribed and paid for 10,000/. of this stock. In the summer of 1866 we again commenced laying the cable, and, on the 27th of July, successfully completed it, and then returned to mid-ocean where we had lost the cable the year previously, and, after great difficulty, recovered and completed it, and the people of two continents, on opposite sides of the Atlantic, rejoiced over our success.

IV. Tariffs And Monopolies

Lord William Hay, in addressing the Senate Committee also on March 13th last, made the following remarks on this branch of the subject : —

There are two doctrines which have been enunciated by various parties, which seem to have the sanction of the lion. Secretary of State, viz., that our company is not entitled to consideration, inasmuch as our enterprise has been a very successful one. I cannot believe that this was seriously meant, nor the argument that inasmuch as the present holders of stock are not the same gentlemen who first embarked in the enterprise, they are not entitled to the same consideration as if they were the same ! These seem to me the most extraordinary doctrines ever held by a responsible Minister. Could the hon. gentleman seek to deprive the Hudson's Bay Company of any of its rights, because the gentlemen who compose that company are not the same individuals to whom the cession was originally granted, or because its affairs had prospered ? It has been urged against us that there have been rings formed for stock-jobbing purposes. All I can say is that the board has never in any way encouraged or aided persons operating in its stock. The affairs of the company have been conducted on the soundest principles of commercial integrity, and the directors have never lent themselves to anything like stock operations. I do not know any legislation more calculated to assist stock operators than this very legislation now proposed to this House. Take, for instance, the 14th clause ; it would be a fortune to a man to know beforehand that this clause was to be put into operation. As to the question of immense profits, the whole cash capital that this company has earned is 7 '40 per cent., while the dividend on the watered stock will be 5 per cent, for last year. It is perfectly true that a considerable amount of the money earned was spent in a new cable, but

APPENDIX.

10 0 0

5 5 0

3 7 0

2 0 0

1 10 0

8 0 0

2 0 0

The reason of the rise f]

It happened that

for

a

that was to enable us to do the large amount of business which follows the reduction of rates. I have facts before me which bear out the statement that we have regularly reduced the rates whenever we were able to do so.

The duration of the different tariffs, beginning July 28th, 1866, was as follows : — For ten words — £ s. d. 20 0 0 .3 months, 4 days.

1 year, 1 month. 9 months. 9 months.

2 months, 9 days. 1 year, 4 months.

6 months, 19 days.

7 months, from 11. 10s. to 31. is ".interesting.

time two out of the three cables were interrupted, and the press of business was so immense that in deference to the wishes of commercial men, who found that their messages could not get through, the rate was raised in order to check business. Very soon after, when the cables were repaired again, it was reduced to 21., which was 10s. higher than it had been before the interruption referred to. This rate lasted seven months. On the 1st of May, 1S72, the word rate was adopted, a change which involved a considerable sacrifice of revenue, amounting to 30,000^. during last }rear. In short, we have reduced our rates slowly, taking care not to do so until we had ample means for carrying the additional traffic certain to be created by a lower rate.

Hon. Mr. Scott — What was the tariff of the French cable ?

Lord W. Hay — The tariff of the French cable was exactly the same as ours. The Hon. Mr. Scott is perhaps correct in saying that public competition is the best way ; I only hope that it may prove to be so. But foreign Governments have not arrived at this conclusion, and I shall show in a moment that the policy of most countries is rather opposed than otherwise to competition in respect to cable business.

Hon. Mr. Scott — Did not the French cable send for less ?

Lord W. Hay — I have mentioned the reductions that were made. It is often alleged that free trade in cables is the policy of the Governments of Great Britain, Canada, and the United States. But I have papers here which entirely contradict that notion, and I know from my experience that there are few or no cables landing on British shores which have not their exclusive privileges, either from Great Britain, or from the country where the cables are landed, or from both ; and so far from this principle of protection to cables being opposed to British policy, only recently very important concessions are reported to have been sanctioned by the Colonial Office, which were granted by British Colonial Governments. The Cape Government, for example, has agreed to give a subsidy of 9b00l. a year for ten years, for a cable from the Cape to Aden, to send all Government messages thereby, and not to give landing rights to any other company for three years, or subsidy or guarantee to any other company for ten years. Mauritius is to give 60001. subsidy for ten years, and three years7 exclusive right. Natal will give 25001. for twenty years, all Government messages, and engages not to give any other subsidy or guarantee for twenty years, or landing rights for three years. Again, the Submarine Telegraph Company possesses exclusive rights for long terms, in France, Belgium, and Germany, and there is not now a single place on the Continent of Europe to which competing cables can be laid. It has been said that the United States Congress has adopted a policy opposed to granting exclusive privileges, but Mr.