MY LORDS,
182
Appendix II.
LORD MORLEY'S AWARD.
31 Prince's Gardens, S. W.
8th November 1898.
1. In accordance with the request contained in your Lordship's letter of 20th July, I have enquired into the questions at issue between the Postmaster General and the Secretary of State for India as to the proportion of the cost of the Eastern Mail Service to be charged to the Government of India.
2. The case of the Post Office and the case of the Indian Government, which were forwarded to me on 27th July, are annexed to this award.
3. I have had several interviews with Mr. J. J. Cardin, C.B., representing the Post Office, and Mr. H. M. Kisch, the Postmaster General of Bengal, who have argued the cases of their respective Governments before me.
4. Since Lord Halifax's award in 1876 circumstances have considerably changed, and on the occasion of each subsequent contract the Indian Government has raised questions of importance which have never been definitely settled. Dur- ing the two contracts, from 1880 to the present time, the Indian contribution to the Mail Service has been fixed by a series of compromises, the details of which are given in the two cases. It was, therefore, necessary for me to go very fully into the principles which have regulated the apportionment of the cost of the Service between the two countries.
5. On the conclusion of a new contract with the Peninsular and Oriental Com- pany for the conveyance of the Eastern and Australian Mails for seven years from 1st February 1898, the Post Office made the following proposals:-
(a.) That of the total subsidy of 330,000%., 85,0007. should be regarded as applicable to the Australian Service, leaving 245,000l. to be taken as the cost of the Indian and Eastern Service,
(b.) That each country should retain its own collection of postage as they
have done since 1891,
(c.) That the cost of each of the seven sections into which the Mail route is divided, should be ascertained by dividing the subsidy in propor- tion to the annual mileage of each section. That one half the cost of the section should be charged to the United Kingdom, the other half should be paid by India and the various Colonies interested, in proportion to the number of letters sent and received by them, the United Kingdom paying for any letters which it exchanges with
other countries.
That the incidental expenses should be divided in the same pro- portions as the cost of the service, and that the amounts received for sea-postage on foreign mails should be divided between the contri- buting countries in the proportion which each bears of the cost of the Service. In the main principles this is the mode in which the apportionment has been hitherto adjusted.
6. The Indian Government objects to these proposals on the following grounds:
(a.) That the amount (85,000.) appropriated to the Australian Service
is too small.
(b.) That India should not be charged with any portion of the loss
accruing on the sections between Colombo and Shanghai.
(c.) That, if each Administration retains its postal collection, the share of the subsidy charged to India is too large, having regard to the fact that the mails from England to India are far heavier than the mails from India to England.
The discrepancy between the homeward and outward traffic in letters is not very great; but England sends to India about six times as many newspapers, circulars, &c., as she receives. The follow- ing figures for the year 1896-97 were given to me:—