Sessional_Paper_1905 — Page 259

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Country and to the Dependencies with which communication is maintained. accordingly been held that the revenues of the United Kingdom and of the several British Possessions benefited by the Service should contribute in equal proportions to any expenditure in the common interest which has the encouragement of inter- course for its object.

11. Up to the year 1866 the Service was regarded as one for the mutual bene- fit of the United Kingdom and India only, the extension to China, &c. being looked upon as conferring equal advantages upon British and upon Indian trade. While this view prevailed the net cost of the whole Service was divided equally between the United Kingdom and India.

12. In 1866 a Select Committee of the House of Commons was appointed to consider the subject of mail communications with India and the East, and the outcome of the Committee's inquiry (so far as division of cost was concerned) was a recognition of the fact that circumstances had modified the relative value to the United Kingdom and India of the Mail Service with the farther East, and a recom- mendation that India should no longer be considered as interested to the extent of one half of the cost of the China, &c. sections of the Service.

13. An equal division of the whole cost being no longer equitable it became necessary to divide the cost of the Service into sections, and to find a basis for determining the new apportionment.

14. Of the three considerations-commercial, political, postal-for which expenditure was incurred, only the postal element could be conveniently expressed in figures. And among the classes of matter making up the mails, it was held that the Letter, which differs from other classes of postal matter in that it repre- sents a presumably equal interest whether it be sent or received, was the best prac tical index of the general value of the Service to a community, so far as that value could be gauged by a purely postal test. Experience has proved the soundness of this view, as opposed to an apportionment based on the gross weight of mails, or on the "value" of the mails--whether determined by the standard of postage collections or by that of the recognised rates of payment made by one country to another for sea transit. As regards gross weight carried, it is noticeable that the volume of mails has no influence on the cost of the Service, for subsidies have diminished while mails have increased; and as regards postage collections and rates of payment for transit successive reductions have continually disturbed the ratio between the different classes of mail matter.

15. Starting with the principle that the interest of the Mother Country is equal to the sum of all the other interests in a Service maintained for mutual benefit, one half of the cost of each section was assigned to the United Kingdom. The other half was assessed proportionately according to the number of letters sent and received by India and other places for the benefit of which the Service was maintained, each contributor being charged only with the percentage represented by the proportion which its letters bore to the total numbers of letters proper to the

section.

16. The principles of apportionment laid down after the Parliamentary inquiry of 1866 were reconsidered ten years later by Lord Halifax, in connection with his arbitration upon certain points of difference which had arisen between the Indian and Imperial Post Offices, and these principles were confirmed by his award. Lord Halifax considered that the Eastern Service should continue to be treated as a whole on account of the numerous advant- ages gained thereby. Apart from the general advantages of the single contract system in giving a cheaper Service and a better fleet of ships than separate contracts for each section, India and the Eastern Colonies have derived con- siderable benefit from their correspondence being associated with other corres- pondence for instance, it is owing to the aggregate bulk of mail matter carried by the special trains across the Continent of Europe that France and Italy have been induced by the Imperial Post Office to reduce the rates for this transit. The rate per kilogramme of letters thus carried has been reduced from 25 francs 52 cen- times to 3 francs 70 centimes.