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hese 17 AUG 19...

he Local Auditor, Hong Kong, to the Comptroller and Auditor General.

Audit Office,

Hong Kong, June 29th 1899

Sir:-

I have the honour to inform you that in 1898 an arrangement was made between the Post Office here and the Peninsular and Oriental Steam Navigation Co as regards the conveyance of mails between Hong Kong and India.

2. One portion of the arrangement was that where the conveyance was by contract packet as far as Colombo the rate was to be 4.62 Francs per Kilogramme on letters and 0.31 Francs on papers.

3. These payments covered the transit between Colombo and Bombay. At the end of 1894 owing to representations from the Indian Administration all mails were ordered to be sent to Tuticorin and were conveyed between Colombo and that Port by British India vessels.

4. The mails in 1895 and 1896, with two exceptions, were directed to Tuticorin, and in these two cases, where they were wrongly directed to Bombay, they were intercepted at Colombo.

5. During 1895 and 1896 therefore the Peninsular and Oriental Steam Navigation Co did no service for Hong Kong between Colombo and Bombay.

6.

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