11. One instance will shew what is meant. The masters of private steamers are entitled to two- pence a letter for all the correspondence they bring. It is the custom of many persons on the Cost, containing as many as forty or fifty. To pay the masters at two-pence per cover, whilst it was obviously and especially at Manila, to seal their letters inside sealed covers directed to this Office, and sometimes unfair, much diminished the expenditure in gratuities, which are now calculated i

per letter.

12. The low rates of Exchange prevailing have also told against the Revenue, as must necessarily be the case when the accounts are kept at 4/2d., and the balance due to London remitted at lin more than 3/10d. This depressed state of Exchange has been unfavourable to the purchase of Money Orders on England (Appendix 4), and in some instances complaints have been received that the proper change had not been sent, the fact being that the rate for the day left no change to send.

13. The Revenue of the Department was at its highest in 1872, the next best year was 1845, The following diagram shows its fluctuations for the past thirteen years. It must be remembered that the sums given are gross revenue, including the Imperial share, and local working expenses.

$

1862 1863 1801 1865 1866 1867 1808 180 1870 3871 1872 1873 1874 1875

109,000 |

192,000

187,000

184,000

182,000

181,000

178,000

170,000

175,000

173,000

170,000

167,000

104,000

140,000

85,000

E

S

1

193,000

192,000

187,000

184,000

182,6. J

181,000

178,000

170,000

| 175,000

173,000

170,000

107,000

165,000

140,000

| 85,000

14. It can scarcely be doubled that the present year will be marked by a further, and perhaps a considerable decrease of Revenue. The great simplifications of Postal rates to the Continent, lately effected, have cut down the profit left to this Colony on the collection and forwarding of continental correspondence to a very small percentage. But it is hardly to be expected, whilst Postage is every- where being lowered, that any one office can go on making large profits of the old systems.

15. During the past year the Postal Treaty of Berne came into force almost throughout Europe, and the London Office suggested to the various Colonies a revision of their Continental rates via Brindisi. The Italian Post Office was willing to modify its transit Tariff, if the Colonies would adopt a different system of making up the mails, and would reduce their local charges. The matter was put clearly before the Executive of this Colony, and, whilst the change was strongly recommended, it was plainly stated that the loss to this Departinent would be considerable. The proposal was approved. and, in arranging the new rates, simplicity and liberality were more considered than the profits of the service. The result was a uniform nine-penny Tariff to nearly the whole of the Continent, and whereas Registered Letter to Russia, weighing two ounces, would lately have been charged 15/4d., such a letter can now be sent for 3/6d. A nine-penny (quarter ounce) Tariff has since come into force for Postage to the Continent by French Packet.

16. The uuification of Germany has made Postal Tables much simpler than they were, and if we look back to a time when Italy, as well as Germany, was subdivided into petty states, the immense improvement effected is at once perceived. It is to be hoped that ere long something like a uniform European rate by all routes may be established.

17. The rates to the United Kingdom have not been lowered, and thus the effect of the changes noted above has been to evoke a loud and unanimous expression of disappointment from the foreign communities in China and Japan. It must be admitted that, when the postage to various out-of-the way places has been reduced by more than one-half, the charges to Great Britain appear comparatively high.

18. The subject is, however, surrounded with difficulties with which this Office is in nowise in a position to deal. One reduction alone was within the immediate control of the longkong Government, 'aniely the local and Indian rates by French Packet, and these have been reduced as much as is conn patible with the avoidance of absolute loss, the Colony surrendering three-sevenths of the postage collected. Nothing has been left undone to lay before the London Office full and exact statements of the position of affairs here, on the Coast, at Shanghai, and in Japan.

19. A Convention between the Batavian Post Office and this Department has been under con sideration during the year, and, though not yet completed, will probably soon come into force. Ti reduced rates of postage fixed by this Convention have been already adopted by this Office in antici

pation.

20. The Post Office Ordinance, 1862, being very much out of date, suggestions for a new one have been submitted, and it is to be hoped that such of them as may be approved will form the basis of an amended Act. Nothing of a harassing or inquisitorial nature has been devised, but it has been prd.

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