Sessional_Paper_1905 — Page 235

HONGKONG.

FINANCIAL MINUTE No. 13.

Laid before the Legislative Council by Command of His Excellency the Governor.

EASTERN MAIL SERVICE.

No. 1905

13

On the 7th November, 1896, the Secretary of State forwarded for Sir WILLIAM ROBINSON'S consideration and report a copy of a letter from the Treasury dated the 30th October of that year showing the principles which it was proposed to adopt for the apportionment between the different contributory Governments of the subsidy to be paid to the Peninsular and Oriental Company for the Eastern Mail Service for seven years from the 1st February, 1898.

2. These principles were as follows:-

(1.) Ascertain the number of miles traversed annually upon each section

of the service.

(2.) Ascertain the cost of each section by dividing the subsidy in pro-

portion to the annual mileage of each section.

(3.) Charge one half of the cost of each section to the United Kingdom and divide the other half between India, Ceylon, Straits Settlements, Hongkong and the United Kingdom, respectively; India and the Colonies being charged proportionately according to the number of letters sent and received by them and the United Kingdom being debited with the letters which it exchanges with other places (such as Egypt, Dutch East Indies, Japan, Zanzibar, East Coast of Africa, etc.)

(4.) Divide incidental expenses in the same proportion as the cost of the

service.

(5.) Divide amounts received for sea postage on Foreign Closed Mails between the contributing parties in the proportion which each bears of the cost of the service.

3. The Acting Postmaster General, Hongkong, calculated, as far as he was able to do so with the incomplete information available, that on the foregoing principles the annual payment of the Colony would be £15,264 less £3,368 received for sea postage or £11,896. This meant an addition of £5,896 per annum to the sum of £6,000 per annum at which the subsidy had stood since 1883.

5.

4. The despatch with the Acting Postmaster General's calculations was for- warded to the Chamber of Commerce for their views, and on the 5th June, 1897, the Chamber made an emphatic protest against the basis on which the Colony's share of the subsidy was proposed to be calculated. They considered that as postal rates within the Union were fixed without reference to the distance over which mail matter was carried, payments for this carriage should also be irrespective of distance, that a British mail service was not so necessary to the Colony as to justify a payment for it which was deemed excessive, and that the lower speed at which the mail was carried from India Eastward compared with that at which it was carried to India should be taken into account in calculating the Colony's con- tribution. The Chamber further grouped the subsidy with the Military contribu- tion as both devoted to Imperial interests and forming a heavy tax on the inhabit- ants of the Colony.

5. The Acting Postmaster General's report to the effect that the adoption of the Treasury's proposals would involve an increased payment to the Colony of approximately £5,896 per annum and the Chamber's views were submitted by Sir WILLIAM ROBINSON to the Secretary of State in a despatch, dated the 30th of June,