lines were actually owned by American companies, and the remaining 6 though owned by British companies were leased to American companies for a period which still had some 90 years to run. The explanation for this surprising state of affairs was, however, a very simple one. It showed how monopolies, to which the Heads of Government objected worked. The fact was that a cable running, say between Land's End and New York, would be of no use unless the company owning the cable was able at New York to make satisfactory arrangements for the further transmission of messages along the internal telegraph lines. In Great Britain, the State owned all land telegraph lines: but in America these were apparently owned by two private companies, who so arranged their rates as to "freeze out" British owned cables. In conse quence British companies had been driven to say to the American com. panies: "As we cannot work our cable lines under these conditions, we will lease them to you". The result was that all cables running between Great Britain and America were either owned or leased by American companies. The British did not grumble at the service, which was efficient and good, though the rates were somewhat high; but the fact remained that the whole control was American.

PRESIDENT WILSON thought the inference contained in the last part of Mr. Balfour's statement should be completed. In his opinion it was just as necessary to obtain land connections at the British end of the cable lines as it was at the American end.

MR. BALFOUR explained that the difference lay in the fact that in Great Britain the land telegraph lines were State owned and the policy of the British Government had been to encourage the laying down of cables, and with this object in view, very favourable terms had been given to the cable companies; so much so that the American Companies actually contemplated increasing the number of their cable lines. However that might be, the last thing he wished to do was to make a complaint about American companies. But he did wish to point out that one of the morals of the existing state of affairs was that it was no use to obtain the control of cable lines crossing the Ocean unless international agreements could, at the same time, be made in regard to the rates charged over land lines. Thus, if the Great Powers decided to take over, as suggested in President Wilson's resolution, the Trans-Atlantic cables, and if they quarrelled with the great American Companies owning the land lines, they would be just as helpless as the British cable companies had been and would be "frozen out". Consequently, the American Government would have to consider whether it would not have to modify its system, so as to obtain some control over its land lines. So much in regard to the question of the control of cables in time of peace. On the other hand, in time of war it would never be possible to take away the control

which every nation naturally possessed over the landing places situated in her own country. No nation would agree to give up her sovereignty over such landing places. Thus, for instance, Great Britain would never agree to hand over Land's End. Consequently, in time of war, every nation would use its powers to prevent messages hurtful to its own national interests being transmitted from the landing stages. He fully admitted that his statement was based on the system which had existed in the past, and he agreed that other conditions might prevail in the future, owing to altered international relations. It would, however, be an illusion to suppose, firstly, that any international arrangement in regard to cables would necessarily yield satisfactory results unless the land telegraph lines were also controlled and secondly, that effective control could only be exercised over cables which landed in a country which was at war.

Furthermore, he thought it would not be wise to try to limit the power of nations to lay cables between the different parts of their own Dominions, if they so wished. Thus, for instance, he thought the United States of America should have perfect liberty to lay cables, for instance, between America and the Philippines and America and Panama, and he held that a cable which began and ended on American soil should be wholly controlled by America. He doubted the propriety of preventing any such arrangement. On the other hand, it should be realised that as a result Great Britain would thereby be placed in a position to apply Empire preferential cable rates. He thought that this introduced a question which could not, however, be decided before the International Congress referred to in paragraph 3 of President Wilson's draft resolution, had been appointed.

MR. LLOYD GEORGE thought that the strongest argument against the kind of international control proposed by President Wilson in the event of war, was that it might become impossible any longer to cut enemy cables. Thus, for instance, had the Atlantic cable lines been controlled in 1914 by America, France, Great Britain and Germany, it would not have been possible to cut the cables, as had been done.

MR. BALFOUR agreed, but maintained that each nation could have stopped messages from passing through their territory. In his opinion this question chiefly affected the Great Sea Powers, for it was particularly advantageous to them to be able to cut cables in the event of war.

PRESIDENT WILSON enquired whether the Council was not arguing a question which was not yet in debate. In his draft resolution he had merely attempted to make arrangements so that the cables in question could be placed under the best system of administration and control. As Baron Makino had stated at yesterday's meeting, the Allied and Associated Governments had taken certain liberties with international law in the Peace Treaty, and in his opinion a new deci

sion in international law was being made in regard to taking possession of cable lengths which lay in No Man's Land, at the bottom of the sea, in order to connect the ends to form new cable systems. He agreed that no clear ruling on this point existed in international law; and such action could only be justified by analogies such as the seizure of private property. The point he wished to make, however, was this, namely, that it was not proposed to assign to one or two of a number of partners in the war, the indispensable means of international communication, though the other belligerents were also vitally interested. He thought, therefore, that all partners of the war should have a voice in the system of administration and control to be adopted in future. The five Allied and Associated Powers who would hold these cables as trustees in accordance with his draft resolution, were the very Powers upon whom the whole system of peace and international understanding would henceforth rest. Consequently power should be conferred upon this group of Great Powers to decide the whole question, and he felt confident they would be in a position to do so equitably. He fully agreed that it would be impossible to interfere with sovereign rights.

In regard to the question of rates and monopolies, he agreed that at the present moment the proposals contained in his draft resolutions would merely be applied to a small number of cables; but he thought means might eventually be devised to break down the existing high rates. It would be admitted that no international understanding could be effective unless international means of exercising pressure were at the same time accorded and, in this connection, it might be found useful for the Great Powers to lay additional cables in order to make new and better communications, and so obtain the means of controlling rates and of preventing the creation of monopolies. But these results could not be reached by conversations which would be held after the property in question had been definitely assigned to particular Powers.

MR. LLOYD GEORGE said that he could not altogether accept President Wilson's conclusion. At the present moment the Atlantic cables were almost wholly in the hands of American monopolies, which had been very skilfully engineered. These American companies preferred London for their operations, as it suited them better for practical reasons. The greater part of their business was in London, which was a great cable distributing centre; and, in addition, the British Post Office had been extremely liberal in its arrangements for the trans mission of messages over British land lines. The fact remained, however, that the existing 13 cable lines were all controlled by Americans. During the war the British had captured a German cable and connected it with Canada, and the line now constituted the only Canadian State owned line. The Canadian Government had recently contem

plated laying a second cable in order to bring pressure to bear with a view of reducing the rates charged by the monopolist companies. President Wilson, however, now proposed that the cable line in question should be placed under international control. If America desired to break down American monopolies, he thought the only way would be for additional cable lines to be laid. To lay a cable across the Atlantic cost between £700,000 and £800,000. Consequently, whoever wanted to break monopolies would have to pay that sum. On the other hand, he failed to see why Canada should be deprived of something which had been captured during the war just as legitimately as the capture of a ship; the latter representing communications over the seas, the former, communications under the seas.

To sum up, he failed to see the point of dispossessing Canada in order to set up a kind of international control over something which she regarded as essential to her business success, and which had cost her over £200,000 to organise.

PRESIDENT WILSON thought that Mr. Lloyd George had, in his statement, made various assumptions which were not necessarily justified. In the first place, it was not correct to say that America wanted to deprive Canada of the cable in question. Secondly, he did not propose to establish a permanent international control over the particular cable in question. His proposal had merely contemplated the setting up of some authority, which would possess the right to enquire as to how all existing systems could best be administered and controlled. In other words, should the cable in question be assigned to Canada by the Treaty of Peace; the United States of America would thereafter have no right to ask what it was intended to do with the cable, for the obvious reply would be that the cable belonged to Canada, and America could not interfere in its management. But since, at the present moment, the Allied and Associated Governments, were partners of war, he considered it to be part of his privilege to enquire what was to be done with the cable in question. He merely asked, therefore, that an initial enquiry should be made as to what was to be done with the cables mentioned in his draft resolution.

MR. LLOYD GEORGE said that he did not for a moment challenge President Wilson's right to examine what was to be done with any piece of property that had been seized from the enemy during the war. On the other hand, he thought it would be wiser to accept the proposal made by Admiral de Bon at yesterday's meeting, namely, that Germany should be informed that the cables which during the period of the war had been cut and utilised by the Allied and Associated Governments, would not be restored to her, and that they would remain the property of the Allied and Associated Governments. At the same time, an International body could be appointed to consider and report on the whole question of ocean cables.

PRESIDENT WILSON thought that the only difference between the two plans was that in accordance with his own proposals the cables would during the intermediate period be vested in trustees. With this exception, his proposal did not differ in principle from Admiral de Bon's. MR. BALFOUR proposed the following amendments to President Wilson's draft resolution:

"(a) Para. 1.

The word 'jointly' to be omitted. (b) Para. 2.

To be amended to read as follows:-"These cables shall continue to be worked as at present without prejudice to any decision as to their future status which may be reached by the five Allied and Associated Powers mentioned in the next paragraph.''

PRESIDENT WILSON said he would accept the amendments proposed by Mr. Balfour.

MR. BALFOUR, continuing, said that Sir Robert Borden had suggested the following addition to the end of the new paragraph 2, namely:

"And without prejudice to any vested right that may be claimed by reason of cutting, possession, expenditure and utilisation."

PRESIDENT WILSON thought that the latter addition would be quite unnecessary. He suggested that the whole of the resolution should be re-drafted to embody Mr. Balfour's amendments and taken the first thing at the meeting to be held on the following day.

VISCOUNT CHINDA wished to call attention to one important point in the draft resolution. He thought the submarine cable lines ChefooTsingtao-Shanghai; Tsingtao-Chefoo; and Tsingtao-Shanghai should be omitted from the first paragraph of the resolution, since it had already been agreed by the Council of Four that these cables were to be renounced by Germany in favour of Japan.

(This was agreed to.)

MR. ROGERS invited attention to the fact that Mr. Balfour's amended paragraph 2 merely related to cables at present being worked. He thought the wording should be amended so as to include cables and parts of cables not at present in use.

(This was agreed to.)

(It was agreed that the following draft resolution, as amended, should be considered at a Meeting to be held on Saturday, May 3rd. at 11 a. m.:—

—1—

"Germany renounces, on her own behalf and on behalf of her nationals, in favour of the Principal Allied and Associated Powers,