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Under this Article the Postmaster-General may give notice to the Company that he no longer requires provision to be made for sea-sorting, and may deduct £7,500 from the subsidy. I under- stand that he would be willing to give this notice if the Indian Government desires him to do so,
"(e) That an account should be prepared by the Imperial, Post Office and audited by the India Office, and that the amounts thus ascer- tained shall be payable by the contributing countries to the end of the contract.
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5. The result of this award has been to assess to India a sum of £59,330, and the question submitted to me is what proportion of the balance should be paid respectively by the Imperial Post Office and the Eastern Colonies.
6. The figures stand thus: The total subsidy under the existing contract is £330,000; the share placed to the account of the Australian service is £85,000, leaving a balance of £245,000, from which sum, after deducting the sum of £59,330 assessed to India, there remains a balance of £185,670, which falls to be found between the Imperial Post Office and the Eastern Colonies.
7. The Secretary of State for the Colonies (paragraph 8 of the Colonial case), states that he is not prepared to agree without qualification to the extension of the principles of Lord Morley's award to the Eastern Colonies, as he maintains that their case is different from, and their interest in some measure in conflict with those of India, and he states that the matter is submitted to arbitration on the under- standing that the Colonies are not to be prejudiced by the assumption that £85,000 is the proper amount to be assessed to the Australian portion of the contract, or that India's share is fairly assessed under Lord Morley's award; while the Post Office (paragraph 32 of their case) "subunits that the principles of Lord Morley's award should be regarded as applicable to the whole service. As shown in Appendix C. the application of these principles in the case of the Eastern Colonies would result in a total annual payment of £6,055 by Ceylon, £7,719 by the Straits Settlements, and £12,893 by Hongkong." Taking only the cost of the sections as shown in the same table gives the following figures :--
Ceylon £6,633, Straits Settlements £7,611, Hongkong £13,131.
8. Other calculations worked out, in figures are shown in Appendix F. and Appendix G. of the Statement put before me on behalf of the Eastern Colonies. Appendix F. is based on a division in accordance with the principles embodied in the award of Lord Morley, but including Australia; Appendix G. in accordance with the same principles, but with a different calculation of the question of speed, which is taken specially into consideration, as explained in paragraphs 14 and 15 of their statement.
9. It will be convenient, for purposes of reference, to put these three figures in the form of a table :
India.
Ceylon.
Straits Settlements.
Hongkong.
£
£
£
£
Appendix F. Appendix G.
57,830
2,940
5,550
11,010
63,200
3,030
5,085
9,605
General Post Office.
60,693
6,633
7,611
13,131
10. To some extent the questions submitted to me have arisen out of certain new features and methods of calculation introduced by Lord Morley's award :—
1. India, was practically relieved of all liability in respect of sections
eastward of Colombo.
2 To provide for any disparity between the volume of outward and homeward mails, the pooling of postage receipts was instituted.
e United Kingdom was relieved of all liability for the cost of sea-
rting.
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