CO129-407 - Public Offices & Others - 1913 — Page 277

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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