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attached to the words "the postage collected in the two countries," in Clause (c.) of paragraph 9 of the award, which runs as follows:-"(c.) That the postage "collected in the two countries, and the receipts from other administrations for "land and sea transit on mails sent over the line should be pooled, and the balance "of the united collections, after deducting the cost of continental transit and rates "paid to other countries, should be equally divided."

3. The meaning attached by the Secretary of State in Council to the words "the postage collected in the two countries" is "the postage collected in the two "countries on mails posted in either country for delivery in the other"; and this interpretation is held for the following reasons:-

(1) It accords with paragraph 6 (c.) of the preamble to the award, in which the mails from the United Kingdom to India are contrasted with those from India to the United Kingdom;

(2) It accords with the second clause of paragraph 7 of the preamble which refers to the arrangement for pooling in force from 1857 to 1891, as the pooling of entire postage (excluding only out-of-pocket expenses for continental transit) as distinguished from the portion called sea postage, was limited to mails between the two countries ; (3) It accords with the statistical statements regarding the pooling system which were put before the Arbitrator by the representative of the British Post Office (through the representative of the Treasury); for those statements appeared to show, were understood at the time to show, and did, it is believed, actually show, only the collections of each country on correspondence for delivery in the other country. (4) The words are necessarily subject to limitation by the context and spirit of the award, for, otherwise, the pooling of postage would cover all postage-inland and foreign-collected in the two countries, or at least all postage collected in the two countries on mails sent over the line, and neither of these interpretations, although favoura- ble to India, is suggested by the British Post Office, or was, it is thought, intended.

(5) The limitation given by the interpretation of this Office not only accords with the context of the award, but is in itself equitable, for the pooling of postage (as distinguished from the portion of postage called sea postage) is, it is thought, rightly applicable only to articles in respect of which the two countries (the United Kingdom and India) share all the services-inland (despatch and delivery) as well as transit-i.e., articles exchanged between the two countries.

4. The interpretation placed by Her Majesty's Postmaster General on Clause (c.) of the award is given in the following words in Sir George Murray's letter, No. 32929, of the 15th May 1899 :—

"The clause is understood as deciding that, from the amounts received by the Indian and Imperial Post Offices on all mails, in respect of which India is charged in the apportionment of cost, according to the principles laid down in Clause (d.) of the award, there should be deducted the payments made by each Post Office for continental or other transit, and that the balance should be equally divided between the two Governments."

5. For this unequal limitation and alteration of the words of Clause (c.) there would seem to be no justification in the wording of the award, in past practice, under the pooling system, or in equity. Clause (c.), which relates to the revenue derived from the Service, makes no reference to Clause (d.), which (together with Clauses (a.) and (b.), relates to the apportionment of the gross subsidy. The prac- tical effect of the Postmaster General's interpretation would be that India would divide equally with the United Kingdom not only the postage on mails between the two countries, in respect of which the two countries share all services (inland and transit), but also both the inland and the sea postage on mails for Aden, Egypt, Continental, Europe, and other places, although in respect of all these mails the United Kingdom contributes to only the sea service, and not to any of the inland services of collection, sorting, inland transit, despatch, and delivery, to meet which part of the postage is paid and required. On the other hand, owing to the insertion in the Postmaster General's interpretation, of the words "in respect of which India is charged," the United Kingdom would not divide with India the postage on any articles for which India does not perform half of the inland services.