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the wireless scheme.
Proposed Marconi' Agreement.
Government's Extraordinary
Procedure.
INTERVIEW WITH MANAGER OF
RADIO COMPANY.
With reference to the proposed wireless
agreement with the Marconi Company, Mr.
Sncadcu, manager of the Radio Commu
nication Company, in the course of an
interview yesterday, said:—
"Before discussing the merits or de
merits of the Parliamentary Committee's
report, I should like to express my warm
appreciation of the many courtesies ex
tended to me by members of the com
mit rec and of the patience with which
they lutuued to my answers to their in
quiries. I regret that the committee,
having before them our competitor' pro
posals. as embodied in tho agreement
placed before the Federal Parliament, and
a draft agreement submitted b/mc on be
half of Radio Communication Company
embodying our projjosals on the 'joint com
pany' basis, should have seen lit to put
up to our competitors' counter-proposals
which, in some respects, followed the lines
of our suggestions, without giving us an
equal opportuuity of discussing possible
modifications of any details to which they
took exception. I had been advised on
the last occasion when 1 attended a meet
ing of the committee, to be prepared on
the following day to go into the details
of the proposed agreement, and I was
naturally not a little surprised when, in
reply to my inquiry, 1 was informed that
the committee had finished its sittings and
signed the report to trie Prune Minister.
"As to the decision of the committee, I
con ouly say that 1 am still endeavoring
to find tne real explanation. The high
standing of a.most every member of tne
committee should be sufficient on the face
of things to exclude the possibility ot
their being induced to do something con-
/ trary to their convictions or their prin
ciples, but in this connection, two points
are worthy of notice. Firstly, the CJo-
vcrnimuii, through the Pnuic Minister,
bad been committed to the agreement
with the Amalgamated Company. tie-
condly, tuc committee, finding itself iu
some difficulty on -the question of the
attitude of the British Government in the
matter of licensing a private company to
erect and operate the ncce&ary high-power
gtatiou in Engmud for communication
with Australia, inquired of the Prune
.Minister as to this, and ne attended a
meeting of tne committee to deal witit
liu. muter, it is problematical us to how
far the views he then expressed oil this
aim other points influenced the members in
their final decision. Whatever the ex
planation may be, the fact remains -that
my company was able to offer to con
tract to erect the required station for the
Government at a hgure considerably be
low the sum the Government is putting
into the enlarged Amalgamated Company,
am! for which, at the must, the Government
can only receive half the profits which may
be earned; further, that if the continuance
of the radio service by the Government
should be ruled out, the Commonwealth
could have had all that it is getting under
the agreement with the Amalgamated Com
pany, and more, for a capital outlay of
£250,000—half the amount it is subscrib
ing under tnat agreement. Substantial
financial guarantees for the efficient work
ing of the station tendered for were of
fered, and arrangements had been inadc
which ensured the subscription of 250,000
shares, in addition to those to be taken
up by the Government, my company hav
ing expressed its willingness to arrange
for the subscription of half of the pro
posed issue, and provisional arrangement
having nUo been made here for guaran
teeing the subscription of the issue by
Australian investors if necessary. There
could he no doubt as to our ability to suc
cessfully carry out the contract for we have
only to refer to the stations being con
structed for the Imperial Government, to
Rome. Lyons, Nantes, and other stations
equipped with Klwell plant which are
operating commercial services. It is no
exaggeration to say that we have the
world's leading high-station power engi
neer, an Australian, with many years' ex
perience of continuous wave wire'ess com
munication, who considers wireless, not
from the standpoint of 'stunts,' but solely
as a method of maintaining a commercial
communication Ret vice.
. "'ihe Radio Company is financed by
cable and shipping interests, and the
names of its directum are alone sufficient
proof of the soundness of the concern and
abhorrence oi anything that is not
straight business and honest dealing.
Therefore there can be no explanation in
that direction, nor can the members of the
committee have been troubled as to our
excellent relations with the British Go
vernment, aware, as they were, of the
fact that that Government, having can
celled its contract with the Marconi Com
pany, i« employing us to build the stations.
I have no doubt our competitors put for
ward numerous attractions gilded by
'world-wide organisation,' 'indispensable
patents' and otuer familiar phrases, the
emptiness of which is apparent to anyone
Acquainted with the actual situation in the!
wireless business Unfortunately, the coin-'
mittee conducted its proceedings in pri
vate, and consequently the assertions of
one party were practically immune from
criticism by the other, so that the com
mittee forewent guidance which would
otherwise have been available.
"With regard to the agreement itself, I
suppose it must be a good bargain for
roniebody. Who is it ? The Govern
ment is expending considerably more of
the taxpayers' money than necessary, ns I
nave already pointed out. The Prime
Minister is possibly genuine in his belief
that the country will save bumc part of the
cost (it cannot be called a 'loss in view
of the nature of the scrvico performed)
of the present wireless system, for the
other shareholders will help to hear it;
but during the process of overhauling the
stations and 'construction of the main and
no-called feeder stations, the cost of opera-
lion is to be borne by the Common
wealth. It is difficult to see how the pub-
he benefits in obtaining a more efficient
service; in fact the agreement stipulates
only that the service shall be reorganised
in such a way as to provide a service at
least equivalent to that beinc supplied by
the Commonwealth Radio service.'
Granted that the Governments of Great
Ilntain and Canada atp-eed to the erection
of stations in accordance with the pro
gramme contained in clause 5 of the agree
ment, what of the efficiency ? Who is to
build them ? Our competitors refer to
Bordeaux, and point out that the main
station here will he more powerful. Bor
deaux station is equipped with are trans
mitters of power similar to those included
in our specification: but will the Aranlga-
mated, will the Marconi Company, con
struct and supply such transmitters? What
high-power station have they ever simi-
. Isrly equirped ? But the new station
here is to be even more powerful, and
with the 'feeder' stations, is estimated to
involve an expenditure of one million
pounds— more than the amount of the
proposed issue ! The new comnany mar
soon be borrowing, it would «cm. I say
emphatically that there is no need to in
dulge in such extravagance, no need to
Folic with 'super-power' and luiild such a
station as they suggest, and. what is more,
tnat thev could do nothing of the kind
«« >; they meant it.
, It is good to note that they are given
six months within which to complete their
contracts for the erection and oporatiun of
the required high-power stations, and
tailing such completion, the agreeman can
ne cancelled, and that is the limit of the
penalty of failure No financial guarantee
» given onsuring ilheir ability tc carry
out what they undertake to do; it is tp
be assumed that so much of the Govern
ment s money and of that of the sub
scribers for the new shares wi'l he used
in mrrvms out those parts of the agree
ment which are to be performed forthwith
in expanding the company nnd in endeavor,
me to comn'ete the arrangements for the
necessary high-power stations, including
guarantee", and in winding tip, if agree!
ments providing for such stations arc noL
completed.
"I have never known such an extraor
dinary arrangement. Ordinarily, a bad bar-
pnn for one side is a good 'one for the
. 'titer, but in this case that is only partially
mie At present the shareholders in the
amalgamated arc receiving a dividend of (1
E?r,!ntjt aml> 1 am .about one-third
of the itharcs are held by shipping com.
pantre, and somewhat more than half the
sued, capital m in the hands of the Mar
ram company. About £10,000 is lenuiicd
' and' the profits have
"ran derived almost entirely from the
" thatlh ll'o agreement stipulates
ileted 'lp'v "P?Wer Bta,lon,a are to 'to rem.
- CitITJ twl0 .vers, but. a period of
- pre ywrs 18 mentioned in connection with
complete acquisition of the coimtn. snd is
land station. If those stations are likely
to he made to pay, I should luivc- thought
tho Amalgamated Company would nave
hern as anxious to take Ihem ovtw com
pletely »s the Prime Minister sccmec, when
dealing with the matter in the House, to
be to get rid of them.
"It would lie reasonable to rule out amy
question of profit from those stations, at
least for some time to come, if ti i)£rctt
merit reflects the opiition of the parties to
it. ft will be some time Ixsfore the mam
station arc operating, iuuI longer Mib be
fore they arn carry in,? their Btl traffic
load; but, given apparatus of the iiccck-
sarv efficiency and a well-organised service,
the stations could undoubtedly be rnadc to
yield a very satisfactory revenue, ami with
economical administration, and operating
costs, and a rat cm schedule wCiieu would
make the service popular, the company
could reasonably expect to reach the divi
dend-earning st-igc in the near future Jn
tbe interim, even the development of ad
ministration charges, which the increased
activities must involve, ia ignored, tin ere
would be but £10,000 to pay dividend's on
£1,000,000, and when the profit earning
stage is readied in respect of the high
power qyslein, it would ajqwar from a
statement made recently, that the pro
ject is to he carried through on such a
ifsije that the 1 inrt sanguine .shareholder
could only hope to sec a moderate 'dividend,
and never to experience the joys of the
capital appreciation.
"A? the buyer of the stations to be
erected, and of the new apparatus to be
installed—except under the bending of 're
placement and renewals' in maintenance ac
count — they cannot make a profit out of
the contracts for the construction of those
stations. At least, the shareholders other
than the Marconi companies, cannot do so,
but if the stations are to, oost the huge
sum mentioned, end if the Government re
presentatives on the board are not experts
capable of comparing the real advantage?
of one system or proposal '»ver another,
nnd secinig the relative values of oft'orc or
tenders, if called for, then it is fairlv ob
vious that at least one section of the
shareholders may materially benefit under
this arrangement with the Government.
The ship-owner shareholders who now.
with a one-third interest, may expect to
(have some voice in the conduct- of the
company's affairs, will lone that advantage
unless they contribute a further quarter ot
a million pounds or more. The alterna
tive is to become an insignificant minority.
However, as their investment docs not
seem to have yielded thcin much in the
way of efficient apparatus on fail terms,
if one has in mind the provisions of rneii
standard agreement, but baft enabled them
to comply with the law pending being able
to obtain somctfliing bettor, timy may not
he greatly concerned, it is to be hoped
that they are not, for in these days, the
lot of the ship owner is not a very happy
onG . , . .
'The agreement bristles with points
upon which one might pertinently txwu-
ment, but I think I have said enough to
indicate my general viewvs in the matter.
No doubt a full explanation wib be dc
manded when Parliament reawcnunch. In
tihe meantime, we shall .go ahead with our
arrangements for making our nfipftrauL-
and services available in Australia.
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