204
account in apportioning the cost of the Service; and it is to be inferred from the award of Lord Morley in 1898, that his Lordship concurred in this view.
TREATMENT OF RECEIPTS FROM FOREIGN CLOSED MAILS.
QUOTATION FROM THE COLONIAL
OFFICE CASE.
16. In Appendices F and G, the items "Incidental Expenses" and "Receipts from Foreign Closed Mails" have been increased by figures supplied by the Im- perial Post Office, so as to include the Australian section, and have been distri- buted according to the general appor- tionment of the subsidy in the same way as Appendix C. It is, however, contended that the sea postage received in respect of foreign closed mails should more properly be credited to the sections over which the foreign mails travel, as in the case of the analogous receipts re- ferred to in paragraph (b) of Lord Mor- ley's award, instead of being divided in the same proportion as the subsidy.
REJOINDER OF THE POST Office.
As a matter of principle there is no objection to the suggestion of the Colo- nial Office. The Post Office abandoned the practice because it involved a large amount of clerical work without appre- ciable difference to the result.
ACCELERATION UNDER THE THREE YEARS EXTENSION OF THE CONTRACT.
QUOTATION FROM THE COLONIAL
OFFICE CASE.
19. The Contract with the P. & 0. Company has been extended for three years from the 1st February 1905, the subsidy being increased from 330,000l. to 340,0007. in return for an acceleration of 24 hours on the service. As this acceleration will be gained by increased speed on the Brindisi-Bombay section, the present speed being retained on the other sections, the arguments in paragraphs 14 and 15 above will apply inore forcibly to the apportionment of the increased subsidy of 340,000Z., and it is contended that during the extended contract the contributions of the three Eastern Colonies should only be in- creased beyond the figures shown in Appendix G. by about 3 per cent, ie., the ratio of the increase to the original subsidy.
REJOINDER OF THE POST OFFICE.
The acceleration will be gained not merely on the Brindisi-Bombay section but on the Brindisi-Colombo section; thus all places. benefit alike.
APPENDICES F. AND G.
"Division of cost in accordance with the principles embodied in the award of Lord Morley."
REJOINDER OF THE POST OFFICE.
As Lord Morley decided that the Australian service should not be brought into the assessment, the head- ings of these Appendices should ap- parently be amplified by the addition of the words "except as regards para- graph 9 (a) of the Award."