Number of Ships of war in and about the waters of China and Japan, and also because of the Consular and Diplomatic Establishments maintained at the various Ports, I do not anticipate that it is contemplated that the Hongkong Government should contribute to the costs of the conveyance of the mails, yet, as the arrangements for defraying the postal subsidy, after the expiry of the present Contract, are undefined, it is worthy of remark that, great as the mails received at and dispatched from here are, a large portion of them, carried by the British Contract Packets, are worked by this Office without any advantage to the Colony, as for instance the mails between Spain and the Philippines; they sail for Her Majesty's Mail, and tranship between France and Shanghai, none of which does the Colonial Government reap any benefit. And, in the cases of those parts of China and Japan, the Colony gets no greater portion of the postage than if the correspondence for those places originated in, or was destined to Hongkong. Notwithstanding the management