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8. There is another subject to which report after report from this Department has called attention. To no other Department of the Public Service, I presume, is room of more importance than to the Postal Department, yet there is no Department in which there is less space in proportion to require- ments. It is only necessary to point to the extensive postal premises at Sydney, with a population of 225,000, at Singapore, with a population of 180,000, and at Durban, with a population of 25,000, to demonstrate that Hongkong with a population of 200,000 is not marching with the times in the matter of a commodious Post Office. The Assistant Postmaster General has to be content with a high stool and a desk in a recess which overlooks a stand frequented by cacophonous chair bearers. When the European and American Mails are despatched on the same morning, the throng of people attempting to buy stamps and post letters has necessitated the stationing of an officer to divert the stream of Chinese to the back of the Post Office where a counter for the sale of stamps has been extemporised. The internal dimensions of the Post Office, which may have sufficed for the necessities of a quarter of a century ago, are now wholly inadequate, as may be seen by any one, who likes to spend an hour contemplating the sorting and disposal of a French Mail.

9. The number of Dead Letters which have to be opened in the Department to discover the sender is considerable. In many cases there is neither an address nor a signature: it then becomes necessary to peruse the body of the communication in search of some indication of the source of the letter. In this way no little time is consumed and much that was intended for a private view comes under the official gaze. Where the letters einanate from mercantile houses, their origin can almost always be traced by the presence of initials stamped on the envelope, and if private individuals would only put their names on the cover of every letter they wrote, they would have the satisfaction of receiving back their undelivered correspondence in an unmutilated condition. Soldiers' and sailors' letters always bear the name of the sender on the envelope with the result that the members of Her Majesty's land and sea forces have their dead letters restored to them intact.

10. I have to chronicle the reduction in rates of Postage to the Cape Colony which began on the 23rd of August and by which letters are now carried for 20 cents instead of 30 cents the half ounce.

11. Negotiations are now in progress with the object of establishing a system of Parcels Post Insurance between Hongkong and the United Kingdom, and of instituting a direct exchange of Money Orders and closed Parcels between this Colony and the Dominion of Canada. The Insurance scheme is sure to command public favour whilst the advantages of a direct exchange with Canada by means of the new

Empress" Steamers over the devious route viâ London are palpable.

12. For the benefit of the Peak residents, a new mail signal station has been inaugurated at the Mount Gough Police Barracks, which are in a central position and visible to all houses on the southern slopes, even to those situated at Magazine Gap.

13. Another familiar topic is that of the French Mail and the Marine Sorters. In my report for 1889 I said "a settlement of the question in the direction desired may be expected very shortly." I was guided by a letter from the French Consul dated the 22nd May 1889 to His Excellency the Governor (copy attached). Since then, however, a further letter (copy attached) has been received withdrawing this concession.

14. As I pointed out in my report for 1889, it would accelerate the delivery of mails very much if this Department were placed in direct communication with Cape Collinson and Green Island. The arrivals of steamers could then be telephoned or telegraphed and the launch would at once be despatched to convey the mails on shore.

15. International Statistics to regulate the payments for sea and territorial conveyance of mails during three years were taken during the month of May.

16. The early period of the year at which this report is submitted precludes the possibility of giving a detailed statement of the finances of the Department for 1890.

The Revenue for 1889 was as follows: Gross Revenue 1889,.....

Deficit,..

.$142.309.11 20,818.15

Share of United Kingdom,

$12,136.83 Contribution towards P. & O. subsidy 45,870.31 Share of other Countries,* *

..

54,041.89

Conveyance of Mails, Working Expenses,

7,913.37

43,164.86

$163,127.26

* $36,656.29 paid France for 28 years from April 1886 to December 1888.

17. The number of Parcels received and despatched during the year is as follows:-

By P. & O. Packet,

Inward. 9.219

Outward.

5,125

By German Packet,

349

151

9,568

5,276

$163,127.26

Total. 14,344 500

14,844

The total number despatched and received in 1889 was 13,173. The heaviest outward mail was despatched at Christmas and consisted of 510 parcels, whilst the heaviest inward mail was the New Year Mail by which 772 parcels were received.