CO129-550-3 Empire Air Mail Services- cost of participation to be exempted from assessment for military contributions... 19-10-1934 - 17-1-1935 — Page 27

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basis suggested in the scheme for the normal working of

the services.

5, The Company have quoted terms which would enable

subsidy payments to be kept within modest limits, whilst

the mail payments should be such as to preclude any

serious rise in postage rates. The mail payments to be

made by each participating Government to the United

Kingdom Post Office would take the form of an annual fixed

sun for the whole period to cover all ordinary first class

external mail of Empire origin and destination, all air

mail of Empire origin and foreign destination, and also

air mail of foreign origin offered for conveyance by the

services. The mail payments have been assessed on the

basis of the net yield in this country of a postage rate of 210. per oz. and on the assumptions that all the

Empire Governments concerned would participate and that

all their first class Empire mail along the routes covered

by the air services would without exception be sent by

air. The net postal cost could be met either by raising

postage rates to a level immediately remunerative or by

fixing them on a lower level with prospects of the service becoming self-supporting with the growth of traffic. Although the United Kingdom Government would be accepting

direct liability for the bulk of the subsidy entailed by

the scheme the latter course would be adopted by the

United Kingdon Post Office which would bear the immediate

additional loss involved in the carriage of mails at the

lower