212
2. You will observe that the effect of the award is to increase the amount of the contribution in respect of the cost of sections payable by Hongkong for the period of the original contract to £11,500 a year, the total amount to be paid as shewn in the appendix to the Arbitrator's award being £12,170 a year, subject to adjustment in respect to parcels in the manner shewn in Appendix D to the Colonial Office case.
3. I enclose a statement, dated 7th February 1905, which shews that for the three years of the renewed contract a further yearly sum of £359 will be payable. This additional amount is liable to be refunded in the event of the contract being further renewed until 31st January 1910, as provided for in Clause 3 of the sup- plementary Agreement, enclosed in tny despatch No. 257 of the 31st of August last, and a further refund will be due to the Colony in the event of the contract being extended to 1912.
4. I enclose also a further statement shewing the amount of arrears due from Hongkong in respect of the seven years ending on January 31st last. This state- ment shews the arrears as amounting to £18,933 but this amount really includes some arrears due under the arrangements previously in force, since you will observe that some of the figures in the statement are not brought down later than 1902 or October 1904. The additional sum actually due in consequence of the Award would appear to be about £15,680.
5. It is desired to include this sum in the Packet Service Estimates for 1905- 1906 and I have therefore to request that you will arrange for the amount due to be paid to the General Post Office as soon as convenient after March 31st next but not before that date.
I have the honour to be,
Sir,
Your most obedient, humble servant,
(Sd.) ALFRED LYTTELTON.
(Enclosure.)
From the 1st February, 1905, the cost of the Peninsular and Oriental Com- pany's Contract Services is increased from £330,000 to £340,000, or, excluding the cost of Sea Sorting (£8,500), from £321,500 to £331,500 a year, i.e., by £10,000 a year.
As the Subsidy of £330,000 was apportioned in the ratios of £236,500 to the India and China Service, exclusive of £8,500 for Sea Sorting, and £85,000 to the Australian Service;
and as both Services benefit equally by the increased speed, it is submitted that the extra cost of £10,000 should be shared thus 321,500: 236,500 :: 10,000 = £7,356 India and China Service.
321,500 85,000 :: 10,000 £2,644 Australian Service and that of the share falling to the India and China Service the Eastern Colonies should contribute as follows:
Ceylon,
Straits Settlements, Hongkong,
2.00% of £7,356 2.80% do. 4.88% do.
==
£
147
206
359
The revised contributions, as from 1st February 1905, would therefore be
Present Contribution.
Ceylon,....... ...£ 5.220 +147 Straits Settlements, 6,990 + 206 Hongkong, ......
12,170+359
Contribution from 1st February 1905.
£5,367
7,196
12,529
(Sd.) CHARLES A. KING,
Comptroller and Accountant General.
General Post Office,
7th February, 1905.