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to be the net Revenue derivable by the Colony after the expenditure had been deducted, as is done in similar circumstances by the Straits Settlements Government who pay an identical percentage of Revenue to Military Account. On this subject I am addressing Your Lordship in a separate despatch.
With regard to (b) and (c). These are alternative methods by which the Communities who benefit by the Agencies may be called upon to contribute to the cost of the Postal Service by which they benefit. No exception could be taken by them to the 2 pence rate which is charged by the other Post Offices in each Agency, and they have no claim to the 1 penny rate. Of the two alternatives at (b) and (c) (excluding (a) and (d)) the Executive Council favours that at (c). The Postmaster General points out that one reason why the Agencies do not pay is that in addition to the British Post Office at each of these Treaty Ports there are French, German, Japanese, American, Russian and efficient branches of the Chinese Post Offices, and that British merchants use one or other of these Post Offices when it suits their convenience. It is suggested that if (simultaneously with the increase of rate from 1 penny to 2 pence) it were intimated to each Agency that if a loss was