Coll 35/36 'Persian Gulf: introduction of uniform cable and wireless rates within the Empire; application of scheme to stations in the Persian Gulf' [‎21v] (42/46)

6
(47084— 1) Wt. 1867—1938 1250 4/38 P. St. G. 390
intention to put the new rates into effect on the 25th April,
1938. To facilitate the reductions in the public rates the Govern
ments are asked, subject to special arrangements in certain cases,
to make reductions in the terminal and transit rates at present
charged by them where such rates exceed i|d. sterling per word
on the traffic affected. The benefit of the reductions on tele
graphic rates to the public, at home and overseas, is estimated to
amount to nearly £500,000 per annum. In addition to the specif
financial arrangement made by the United Kingdom Govern
ment, without which the reductions would not have been possi
ble, the new tariffs involve concessions of varying amounts on
the part of overseas Governments. But the main burden will
fall on the Company itself and its associates.
8. The Directors have agreed to these proposals.
9. The figure of 2,600,000 for the number of shares in the
Company to be issued to the United Kingdom Government is
a figure negotiated as part of the general settlement, based upon
the discounted present value of the outstanding payments of the
Beam rental until the end of the present lease in 1953 *
10. The surrender of the fixed Beam rental of £250,000 pay
able annually under the existing lease until IQ53» i n return
for such income as may be received from the dividends on the
Government’s new holding of 2,600,000 shares in the Com
pany, represents a substantial sacrifice on the part of His
Majesty's Government in terms of revenue. The Beam rental
has hitherto been paid to the Post Office; but, in view
of the wider public issues involved in the proposed financial
arrangements with the Company, it has been agreed between
the Treasury and the Post Office that the net consequential
loss in excess of £100,000 per annum shall be borne by the
Exchequer. This will require a modification of the arrange
ments governing the Fixed Exchequer Contribution payable
by the Post Office under Part IV of the Finance Act, 1933, as
extended by Section 32 of the Finance Act, 1937 » f° r which
statutory authority will be sought in due course.
11. His Majesty’s Government are satisfied that as a con
tribution to the general settlement the cost of the proposed
concession is outweighed by the great importance, alike on
political, commercial and strategic grounds, of maintaining
intact the system of Imperial communications carried on by
the Company.