Sessional_Paper_1884 — Page 74

(Copy.)

The Post Office to the Treasury.

GENERAL POST OFFICE,

25th October, 1883.

MY LORDS,

I have the honour to return the papers No. 17,496 referred to me by Your Lordships on the 15th instant, respecting the contributions to be paid by the Straits Settlements and Hongkong towards the loss incurred by the Imperial Government in providing the Mail Packet Service between England and the Eastern Colonies, under the Contract with the Peninsular and Oriental Steam Navigation Company which came into force on the 1st of February, 1880.

In my recent letter on this subject dated the 17th ultimo, I laid before Your Lordships all the observations I desired to make as regards the appeal made by the Governments of both the Straits Settlements and Hongkong, for reconsideration of the claim raised against them, for, practically, the despatch from the Government of Hongkong resolved itself into an appeal against the claim for a contribution of £12,700 a year from that Colony, on the ground that it is unable to meet so large a demand, coupled with an offer to contribute the sum of £4,000 a year from the 1st of February 1880 in lieu of the present fluctuating payment of about £3,000, based on the loss sustained in recent reductions of postage between this Country and Hongkong, consequent on the Colony becoming a Member of the Postal Union. and receiving its advantages.

I had not intended to make any comments on the Report of the Colonial Post Master General, which forms one of the enclosures to the Governor's Despatch of the 26th of June last, because it seemed to me to contain no arguments on which to found a case for remission or abatement beyond the mere plea of poverty. The benefit derived by the Colony from the reduction of Postage and the efficiency of the British Mail Service is fully admitted, and the real question at issue is whether the Colony ought to pay, and is able to pay its fair quota towards the heavy expense incurred in maintaining the Packet Service.

It is futile to argue the point with the Colonial Postmaster General whether Hongkong should be required to pay according to the distance over which its Mails are carried. It is clear that the Packet Company has to be paid for the length of the Sea.Service, and the burden must either be shared by the Colony pro rata as proposed, or continue to be borne, as it has been for many years past, by the Mother Country.

As to the arrears of payment, which now amount to about £30,000, I appre- hend that the Colony is mainly accountable for the delay which has occurred in settling the question, for the intention to prefer a claim was mooted as long ago as 1874, and was revived in 1880, on the conclusion of the New Contract with the Peninsular and Oriental Company.

On the 26th of June 1880, the Colonial Office informed Your Lordships that Lord KIMBERLEY was prepared to admit the justice of the principle that the total amount of loss should be shared in equal proportions between this Country and the Colonies concerned, while he regretted that this principle was not laid down and insisted upon at an earlier period, the Correspondence of 1874 having apparently been lost sight of.