'Memorandum on the Indo-European Telegraph Department and Narrative of Events to the end of 1898' [‎4r] (7/20)

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Secondly. Supposing that the Department could withdraw, would it he
advisable to do so ? It must be remembered that this Department is a
purely intermediate and transit Administration, depending for its traffic
entirely on the Indian Department (which must send all messages by the
route marked on the message) and the Indo-European Telegraph Company
or the Turkish Administration. The Indo-European Company is really a
Bussian Company, with the Bussian and German Directors-General of
Telegraphs as official members of its Board of Directors. Supposing
that this Department withdrew from the Purse and became a rival,
the Indo-European Company would be still bound by its Joint Purse
Arrangement entered into with the Eastern Telegraph Company ^ before
this Department joined them, and would allow traffic to be diverted to the
Eastern route. This would cause financial ruin to this Department by its
being starved out, and so long as the Turkish line from Eao to Constantinople
remains in its present inefficient condition there will always be the risk that
it may be secured by the Eastern Company, and the two Companies would then
completely control all the routes to India.
32. On the other hand, so long as this Department remains a partner with the
Companies we have an equal voice with them in the control of the telegraph
routes to India, and perhaps a greater power than if we were acting in
opposition.
33. Again, in the question of the reduction of rates to India, it is a well known
fact that the Indian traffic is a most inelastic one, and no reduction in
past years seems to have been responded to by an increase in traffic, in fact,
for the past few years, the tendency seems to be rather to decrease than
to increase.
34. As has been shown before, the practice has always been for the Com
panies and this Department to consult and agree beforehand on any alteration
of rates, and the Joint Purse Agreement simply ratified this practice. But,
supposing that this Department were free and were to wish to reduce its rate
in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , what would be the result ? The present rate between
Karachi and Bushire is Ecs. 1.455, so that if, as was suggested many
years ago, the Indian terminal rate were to include the transit over the lines
of this Department, the through rate would only be reduced to about two
shillings and eightpence a word, and if our rate were put down against the
Eastern Company, the Indo-European Company would be almost certain to
obtain permission to raise their rate in order to prevent a competitive rate,
which would be contrary to the Begulations of the International Convention.
The Government of India is therefore powerless, whether as a partner in the
Joint Purse or as an independent and rival line, to force the Companies to
reduce their rates so long as they are only an intermediate administration
and have only partial control over the through route.
35 . The position is no doubt unsatisfactory, and the difficulty is to see any
way in which reductions can be effected. So long as the interests of the Indo-
European Company were identical with our own, matters were much easier,
but this is no longer the case, and we cannot depend upon them for support.
There can be no doubt that, should the Company not succeed in getting an
extension of their Bussian Concession, and the line be taken over and
worked by the Bussian and German Governments, there would be a large
reduction and probably the working would be just as efficient. At present
the Bussian transit rate for messages with India is Ecs. 1.505, while the
transit rate for all other messages over the same lines (those destined for
Persia, for instance), is only Ees. 0.70, so that the rate is Ecs. 0.805 higher
for Indian messages than for any others, and this difference goes to make up
the revenues of the Indo-European Company. An extra charge is also levied
on all Indian messages passing over the Turkish lines, the transit rate for
Indian messages being Ecs. 1.195, and for all others Ees. 1.00. Again the
present rate via Turkey to the Indian frontier for messages terminating in
India is Ecs. 3.925, but on messages destined for places beyond India it is only
Ecs. 3.25. It seems very difficult at the present time to justify this difference