Sessional_Paper_1905 — Page 251

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Appendix V.

CASE OF THE EASTERN COLONIES.

The cost of the Eastern and Australian Mail Service by the packets of the Peninsular and Oriental Stearn Navigation Company is £330,000 a year for seven years from the 1st February, 1898. Towards this cost the Colony of Ceylon has hitherto contributed £1,400 a year, besides paying about £3,300 a year at Postal Union transit rates for all its mails sent over the system. Of this last amount a portion is paid in respect of mails sent over the Singapore-China and Australian sections, and will in any case continue to be paid; and for the purpose of the present argument only the sum paid in respect of the mails sent westwards need be considered, as will appear below, and this sum has been on the average about £2,500 a year. Similarly Hongkong has contributed £6,000 and about £3,000 for sea postage at transit rates, while the Straits Settlements has made an inclusive contribution of £ 6,000 a year. In addition each Colony bas paid sea postage for the carriage of parcels, and the amounts paid on this account were in 1901: Ceylon about £125, Straits about £175 and Hongkong about £480. Thus the total annual contributions from these Colonies have amounted to: Ceylon £4,025, Straits £ 6,175 and Hongkong £ 9,480.

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2. The Treasury and Imperial Post Office having from the first contended that the contributions of India and the Eastern Colonies were insufficient, the question as between the Imperial Government and the Government of India was submitted to the arbitration of Lerd Morley; India has accepted that award, but the Eastern Colonies, which were not invited to take part in the arbitration and had no opportunity of stating their case or of being heard by the arbitrator, object to the proposal of the Treasury to extend to them without qualification the principles of apportionment laid down by Lord Morley as between His Majesty's Government and the Government of India.

4. The Imperial Post Office proposed in their case as submitted to Lord Morley (the full text of which is given in Appendix A.) that £85,000 of the total subsidy should be regarded as the cost of the Australian section and (para. 28):

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“that the subsidy of £245,000 applicable to the Eastern Mail Service * should be apportioned in accordance with the principles which have governed the apportionment since 1866, the procedure being as follows:-

"(A) Divide the service into the following sections, corresponding to the principal points of call:-

Brindisi and Port Said.

Port Said and Aden. Aden and Bombay. Aden and Colombo. Colombo and Singapore. Singapore and Hongkong. Hongkong and Shanghai.

"(B) Ascertain the number of miles traversed annually upon each section of the service by multiplying the length of each section by the number of voyages performed annually.

"(C) Ascertain the cost of each section by dividing the subsidy in proportion to the annual mileage of the section.

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"(D) Charge one half the cost of each section to the United Kingdom.

(E) Divide the other half of the cost of each section proportionately, charging India, Ceylon, Straits Settlements, and Hongkong according to the number of letters sent and received by them, and charging the United Kingdom with the letters which it sends to and receives from other places-such as Egypt, Dutch East Indies; Siam, Japan, Zanzibar, East Coast of Africa, &c. The number of letters being ascertained from the latest weights procurable, and the average number per pound weight being ascertained by means of special returns agreed upon by each office, as on previous occasions.

"[It is because India is provided with a weekly mail service, and Ceylon, &c., only with a fortnightly mail service, that the sections, Brindisi-Port Said, and Port Said-Aden, over which the. Indian mails are annually conveyed 104 times, and the Ceylon, &c., mails 52 times, have to be subdivided in order to ascertain the respective charges assignable. One moiety (a) of the cost of each of these sections is and would still be apportioned to. the 52 sailings provided exclusively for Indian correspondence, and the other moiety () is and would still be apportioned to the 52 sailings provided for the combined services.]