which shall start from given points of the telegraphic line from Ragusa to Alexandria.

9. The Austrian Government reserves to itself to grant to a company having its seat in Austria, the concession for the working of the telegraphic line from Ragusa to Alexandria (or also from Trieste to Alexandria), and to empower the same to emit shares. The concession shall be granted for the period of fifty years. The Austrian Government guarantees to the shareholders during the first twenty-five years a minimum of 5 per cent. per annum on the capital laid out. After expiration of these twenty-five years, the Austrian Government shall have the right at any time to purchase the said telegraphic line, together with all the moveable property and fixtures belonging to the company, and, as the price of purchase, at the choice of Government to pay either (a) the average proceeds of the seven years preceding the purchase (and respectively, after subtraction of the proceeds of the most unfavourable years of the five years remaining) as a perpetual income; or else (b) to pay a sum making the twentyfold amount of that income once for all as capital. As long as the Government does not make use of this right of purchase the ownership of the company shall last.

10. In case, within six months after the completion of the telegraphic line from Ragusa to Alexandria, a company of shareholders (sect. 9) is not founded, the Imperial Government shall pay Mr. Brett in London the amount of 166,66631. sterling, with a deduction of 10 per cent. The proceeds that may then accrue shall in such case belong completely and undividedly to the Imperial Government, as being the sole proprietor of the whole line.

11. The charge of a despatch from Alexandria to Ragusa, and vice versâ, shall never exceed the amount of 1s. (English money) per word. For despatches which shall be sent only along one part of this line, a tax corresponding to the part used shall be fixed.

12. Her Britannic Majesty's Government have given the assurance that their telegraphic correspondence between England and India shall be exclusively carried on by the telegraphic line Alexandria-Corfu; and that they, as long as the line Alexandria-Corfu is open, will never themselves open a line in competition in that direction. Her Britannic Majesty's Government and the East India Company have further engaged to give the preference to the telegraph line through Austria to and from Corfu.

13. Her Britannic Majesty's Government and the East India Company shall, for the first five years after the establishment of a telegraphic communication between Europe and the East Indies, pay for their despatches the tariff fixed in sect. 11. After expiration of these first five years, the Austrian and British Governments shall inquire whether, reference being had to the tariffs of other submarine telegraphs between Europe and the East Indies, a diminution of the tariff of 1s. per word is to take place, and in the affirmative a diminished rate shall be established. This inquiry shall be renewed every five years. This inquiry is also binding upon the company (sect. 9) to be formed.

14. Along the lines mentioned in sect. 1, priority in transmission before all other despatches is to be given to the despatches of the British Government, to the despatches of the East India Company, and, lastly, to the Austrian, Turkish, and Egyptian Government despatches. Priority among the said despatches is to be granted according to their arrival at the telegraph station. In order that they may superintend the exercise of this

privilege, the Austrian Government grants leave to the British Government, and to the East India Company, to place their own agents along the line to Alexandria, and to transmit their despatches in cypher.

15. The present contract is binding upon Mr. Brett immediately after signature, but binding on the Austrian Government only after the Ministry of Commerce shall have obtained the ratification of his Imperial and Royal Apostolic Majesty; further, when the prolongation of the telegraphic line from Alexandria to the East Indies shall have been assured by the British Government, and when the firman of the Sublime Porte, requisite for the establishment of the telegraphic communication from Candia to Alexandria, shall have been obtained by the mediation of the Austrian and British Governments.

16. It is hereby understood that the Imperial Finance Procuration of Lower Austria shall have authority to proceed in all cases of litigation arising out of the present contract, in which the Treasury may appear as plaintiff, as also to claim measures of surety and execution from those tribunals which have their seat within the jurisdiction of the Imperial Finance Procuration of Lower Austria, and which would be competent to decide such cases of litigation, and to grant such measures of surety and execution, were the defendant to have his place of abode at Vienna.

On the 15th February, 1858, Signor Bonelli, inspector-general of the telegraphs of the kingdom of Sardinia, sent a proposal for the construction, at his risk and expense, of a submarine telegraph from Malta to Alexandria, within the term of ten months from the date of the concession, under the following conditions:

1. The telegraph shall be made on the best system, and shall be capable of exchanging every day at least 250 simple despatches of twenty words

each.

2. The despatches of the English Government shall have the priority over all others.

3. The company will employ English telegraph clerks at the stations of Malta and Alexandria, and the Government of her Britannic Majesty shall have the right of establishing a superior inspector, to have supervision over the working of the line.

4. The tariff for a simple despatch of twenty words shall be fixed at 168. For despatches exceeding twenty words, the price shall be 48. more for every series of five words: fractions of a series shall count as a whole series.

5. If the average working, computed monthly, gives an amount of sixty simple messages of twenty words per diem, the English Government is not bound to make any payment in aid (subvention).

6. But if the above daily average should be under the number of sixty simple messages, the said Government binds itself to pay the difference of the smaller receipt to the company.

7. In the months in which the average daily working shall amount to one hundred simple despatches of twenty words, the price for the despatches of the English Government shall be lowered to a half of the aforesaid tariff. 8. This contract shall remain in force for fifty years from the time of the completion of the work.

9. From the day on which the telegraph shall be at work, it shall be put under the control of the British Government, and a statement of the accounts of the company shall be presented to the Treasury once a year at least, with

the obligation of giving to the same all the means which it may require to verify them.

10. The Government shall grant its assistance, and a steamer of the British navy, to co-operate in the laying down of the line.

11. The undersigned engages to take the necessary steps with the Turkish Government to obtain its adhesion; he likewise binds himself, if it should be required, to make the telegraph from Alexandria to Constantinople.

On the 22nd February, 1858, the following Treasury minute was passed on the proposal :—

My lords resume the consideration of the means of completing the system of telegraphic communication in the Mediterranean, so as to secure the best and most direct line to Alexandria. In the first place, my lords would remark, that, on all hands, it is now a settled point that, notwithstanding the fact that the Turkish Government are taking steps to lay down a line from Constantinople, through Asia Minor, to Bussorah, yet as that line would not communicate either with Alexandria or our possessions in the Mediterranean, it is necessary that a second line, through Egypt, should be made. In the next place, my lords must regard it as the settled decision of this Board, that her Majesty's Government is not prepared to undertake the construction of this intermediate and connecting link of a line to India, and to conduct it on its own account and responsibility for the public. My lords have, therefore, to consider the respective merits of the various proposals now before them for accomplishing the object in the best manner. The only progress that has been made up to this time is, that a line has been laid by the Mediterranean Extension Telegraph Company from Cagliari to Malta, and thence to Corfu, under a conditional guarantee of 6 per cent. from her Majesty's Government, payable so long as the line is in good working order. The object now, therefore, is to connect this line with Alexandria. This may be accomplished either by extending a line from Malta to Alexandria, or from Corfu to Alexandria.

My lords have before them several proposals for this work, which they now proceed to consider separately.

In the first place, a proposal has been made by personal communication by the inspector-general of Sardinian telegraphs, on the part of the Sardinian Government, to form a company for the purpose of laying down a line from Malta to Alexandria, provided the English Government will give a guarantee of 6 per cent. upon the outlay. It has not been stated whether this guarantee is to be absolute, the English Government undertaking the risk of accidents, or whether it is to be conditional upon the line remaining in working order. The sum that has been named as the cost is 200,000l. for a cable with a single wire.

It is, however, to be observed, in the first place, that whatever line is adopted as the main line to convey messages from Alexandria, it ought to consist of a cable of, at least, three wires; otherwise there would be no sufficient means of forwarding the messages which must pass both ways on behalf of the Government, the East India Company, and the public, especially at times when steamers from India, China, Australia, Mauritius, &c., arrived at Suez. Again, the line from Cagliari to Malta being only of a single wire, quite sufficient for local use, and an alternative line for Indian messages, would require to be aided by laying down another single line of greater strength. The capital, therefore, required to lay down a line so as to make the main communication through Cagliari, which is the only and

avowed object of the Sardinian Government, must be taken, at least, at 450,000l., equal to an annual subsidy of 27,000l.

Desiring to test other means by which this line could be completed, my lords have called for tenders from the Mediterranean Extension Company, who have constructed the line to Malta, and from Messrs. Newall and Co., which is the only firm that has yet succeeded in laying submarine lines in the Mediterranean.

The Mediterranean Extension Telegraph Company offer to lay down a single additional line from Cagliari to Malta, and a cable with three wires from Malta to Alexandria, for a sum of 440,000l. to 450,000l., or, if there were two cables of a single wire each, at an additional cost of 20,000l. to 25,000l., and in each case with a working capital of 10,000l., making a total capital, by the lowest calculation, of at least 450,000l. As to the terms upon which this could be provided, they state that they could not undertake it with a conditional guarantee of 6 per cent., as they did the Corfu and Malta lines, but that it would be necessary for the Government to give a positive guarantee of 44 per cent., securing the company from all risk, both in construction and maintenance.

Messrs. Newall and Co. are not disposed to undertake to lay a line direct from Malta to Alexandria, but they propose to subdivide the distance by landing the cable on the coast of Africa. This plan would be liable to the objection that at that point the line would be exposed to damage and injury, there being no point where it could be secured, unless an arrangement were made specially for its protection, which would be at some not inconsiderable annual cost. But on that plan they offer to lay down a cable, with three wires, at the cost of 460,000l., or two cables of a single wire each, for 404,000l.; and a single wire from Malta to Cagliari for 65,000l.; in the one case making an entire cost of 525,000l., and in the other case of 469,000l. These prices include the risk of laying down, but not of maintenance, and they require that payment shall be made by instalments of 25 per cent. each; the first to be paid at the time the contract is signed, and the last when the work is completed.

The lowest cost, therefore, for an efficient communication direct from Malta may be stated at 4 per cent. of positive guarantee upon 450,000l., or 20,250%. per annum, the Government taking all the risk; or, if it should prove practicable to find a company to undertake it upon a conditional guarantee, the annual cost, at 6 per cent., would be 27,000l.

On the other hand, the Austrian Government has proposed to construct a line from Ragusa to Alexandria, passing through Corfu, Zante, and Candia, to Alexandria, undertaking to connect Candia with Constantinople by a branch. The cable from Ragusa to Alexandria is to be one of three wires, and has been contracted for at a cost of 500,000l., including stations and all requisites. The Austrian Government propose to lay this line at their own cost and risk, and then, or before, to constitute a public company to carry it on; and they inquire what support her Majesty's Government will consent to give to such an undertaking, by way of joint guarantee to the company, or otherwise. Looking to the financial character of this proposal (supposing her Majesty's Government to adopt the principle of joint guarantee), the cost of this line would be 250,000l., or an annual subsidy of 15,000l. a year, as against 27,000l., or 450,000l. of capital, for the line from Malta; while, at the same time, the risk which this Government would incur in its construction and maintenance would be much less than in any other plan.

But, besides the question of cost, it appears to my lords that there are many considerations of equal, if not greater, importance, to which due weight must be given in determining which of the various plans before the Government should be adopted, and which may be stated as follows:

1. The length and directness of the route in relation to the time which messages will occupy, and the cost at which they can be sent.

2. The security, in connection with political considerations, which the different routes offer.

3. The number of alternative lines from Alexandria to England which the different proposals will furnish.

4. The effect of reducing into one general and extensive system of connection all the British possessions in the Mediterranean, with the greatest number of places with which it is important that communications should be maintained.

My lords proceed to consider these points separately:

Firstly. It is obviously of great importance to our communication with Alexandria that it should be as direct and cheap as possible; for even, independent of the messages of the Government and of the East India Company, it is essential, when her Majesty's Government incur a liability in the form of a guarantee, that every inducement should be held out to the public at large to use the line adopted, as the best means of covering the amount of guarantee. Moreover, if the Government were to adopt a main line which was not the best in these respects, it is certain that, before long, a competing line would be made by the superior route, which would deprive the guaranteed line of its traffic. In the report of the Board of Trade to the Foreign Office of the 6th of February, it is stated that the line from Malta to Alexandria is the most direct. That, no doubt, is so, if the route from Cagliari to Alexandria only is considered; but it appears to my lords plain that, to determine this point correctly, it is necessary to consider the route through, from Alexandria to England. And if reference be made to the map attached hereto, it will be seen that there can be no doubt that a line through Corfu and Austria is not only the shortest, but also the most direct.

Secondly. As it is necessary to pass through several foreign countries, whatever route may be adopted, it is not possible to obtain absolute security against inconvenience arising from political causes, by any. In the one case, the line passes through France and Sardinia; in the other, by different routes to Austria, and through that State. It appears to my lords, therefore, that the only security which the Government can take against such risks is, by combining, in the system adopted, as many alternative routes as possible, and by making such arrangements with foreign Governments as will, as far as possible, secure that object. My lords entirely agree with the Board of Trade that it would be most objectionable to allow any foreign Government to create establishments, and exercise a control over such important modes of communication as electric telegraphs in British possessions; and that whatever plan may be adopted, it should be an essential part of it, that no foreign Government should have such control at any time; and that during a war in any part of Europe, the British Government should exercise sole control, even to the exclusion of the officers of a public company, which may ordinarily administer the line. The Board of Trade point to this disadvantage of the Corfu line in connecting that island with Ragusa; but upon this my lords would observe, that the same objection would apply to any other route, and especially to one suggested by the