As to the principle on which the assessment has been made, it appears to be unassailable, the calculation being based upon the Service rendered, i.e. the number of letters and the distance over which they are carried, and Your Lordships have already been pleased to state that you are unable to see that any fairer basis of agreement could be arrived at.
The only point which, it seems to me, is open to consideration is the ability of the Colony to pay the contribution demanded, and upon this point I am not in a position to offer any useful observations, not being aware of the extent to which taxation can be properly increased in the Colony so as to relieve the Taxpayers of the Mother Country from an unfair burden.
THE LORDS COMMISSIONERS of
HER MAJESTY'S TREASURY.
I have, &c.,
(Signed)
HENRY FAWCETT.
The Colonial Office to the Treasury.
(Copy.)
SIR,
DOWNING STREET,
9th November, 1883.
I am directed by the Earl of DERBY to acknowledge the receipt of your letter of the 1st instant, 18,233, enclosing the copy of a report by the Postmaster General respecting the contribution to be paid by the Colony of Hongkong towards the loss incurred on the Eastern Mail Service.
2. The Postmaster General's letter states that the only point now open to consideration is the ability of the Colony to pay the amount demanded by the Imperial Government. Lord DERBY, however, is unable to accept this view of the case, and would again point out that had the question of this contribution been brought forward by the General Post Office in 1878, when the Colonial Office was pressed for an immediate opinion on the respective merits of certain tenders, the Secretary of State would have felt himself quite unable to consent to the contract on the part of Hongkong without first consulting the Colonial Government.
3. Under these circumstances, Lord DERBY considers that, during the con- tinuance of the present Contract, no more than £6,000 per annum can fairly be asked from Hongkong, and the Colonial Government will be invited to vote that
amount.
THE SECRETARY TO THE TREASURY.
I am, &c.,
(Signed)
ROBERT G. W. HERBERT.
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