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and in a letter dated the 3rd of December last the Company
stated that it is threatened with the loss of coastal
passenger traffic in Australia and New Zealand in conséquence
of recent législation or proposed legislation in those
Dominions. It has therefore been anticipated that when the
question of a new Contract arose the Company would endeavour
to recoup this loss (estimated at $40,000) by an equal
increase in the amount of the Subsidy.
At the end of last month Sir Thomas Sutherland, the
Chairman of the Company, sought an interview with the
Postmaster General, and in the course of discussion said that
while it would be against the traditions of his Company to
give notice to determine its Mail Contract, the Mails had
increased considerably in number and bulk since the
commencement of the present Contract in 1908 and that if the
service were put up to tender for a further term of years the
Company would be bound to ask for a large increase in the
subsidy.
It was finally agreed that notice to determine the
Contract should not be given by either party before the 31st.
of January 1914, the earliest date of determination being
thus deferred to the 31st of January 1916.
In view of the absence of any effective competition with
the Peninsular and Oriental Company for the performance of the
service, and any likelihood of such competition in the near
future, the proposal appears to the Postmaster General to be
económical; and I am to request that Their Lordships will
sanction the arrangement.
I am to add that alterations in the flow of correspondere
conveyed