It originated no less than nine years ago, when in 1874 urgent application was made by the Government of the Straits Settlements to the Home Government to reduce the postage on letters between this Country and the Straits Settlements. This application was supported by Memorials from the Singapore Chamber of Commerce and the Straits Settlements Association in London. The rate of postage was then 1/- the half ounce via Southampton, and 1/1 via Brindisi; it is now 5d. by the accelerated route of Brindisi.
The Post Office, in replying to the Secretary of State for the Colonies, declined to recommend the Government to reduce the postage, pointing out that, even at the comparatively high rates of postage then existing, the loss sustained by the Imperial Government on the India and China lines amounted to about £147,000 a year, to which India alone contributed £60,000 a year, equivalent to one half of the loss sustained on correspondence between this Country and India, while the Straits Settlements contributed nothing.
Lord CARNARVON was apparently struck by this observation, and asked to be furnished with returns shewing, as accurately as possible, the loss sustained by the Imperial Government in connection with the India and China Mail Service, and how far such loss was attributable to the Eastern Colonies, supposing the cost of the Service could be rateably distributed amongst all the localities served under the Contract then existing. His Lordship further stated that it might be a subject worthy of the consideration of the Government of the Straits Settlements whether it might not be desirable, for the sake of furthering the commercial interests of the Colony, to divide the charge occasioned by their Mail Service between the Imperial and Colonial Governments, the postal rates being reduced, and the Colony being allowed to have the advantage in a reduction, either of the annual contribution, or of the postal rates, in the event of the loss being subsequently reduced by increased revenue arising from the growth of correspondence. Lord CARNARVON proposed to communicate such information to the Governments of Ceylon and Hongkong as well as to that of the Straits Settlements.
Lord JOHN MANNERS gladly welcomed the suggestion thrown out by Lord CARNARVON, and furnished the necessary returns which, it is believed, were forwarded to the Colonies concerned; but nothing came of the suggested division of the loss between them and the Mother Country.
In 1879, however, the matter was taken up by the Treasury on the eve of the new Peninsular and Oriental Contract coming into operation, when Your Lordships, considering the material advantage about to be conferred upon Ceylon, the Straits Settlements, and Hongkong, by the acceleration of their Mails, thought the time had arrived when those Colonies might fairly be called upon for some contribution towards the heavy expense entailed upon the Imperial Exchequer by the Eastern Mail Service.
In a letter from the Colonial Office to the Treasury dated the 26th of June, 1880, the Earl of KIMBERLEY, then the Secretary of State for the Colonies, admitted the justice of the principle that the total amount of loss should be shared in equal proportions between this Country and the Colonies concerned, while regretting that this principle was not laid down and insisted upon at an earlier period. His Lordship seemed to think that the arrangement made for the Colonies to pay half