THE FEDERAL MAIL CONTRACT.

Otago Daily Times, Issue 13845, 7 March 1907, Page 6

THE FEDERAL MAIL CONTRACT.

Recent developments in connection with tho Federal mail contract are apparently not particularly reassuring from the point of view of the parties directly interested, any more than they are particularly clear to the outsider as to their details and import. An outstanding fact is that Mr Trevisa Clark, the agent of the syndicate which ontcral into the contract and a director of the firm of Sir James Laing and Sous, is at present visiting Melbourne, and the object of his visit has been tho subject of prolific speculation, and controversy, assertion and denial. Recent cable messages frum the Commonwealth suggest that a critical situation has arisen resulting in tho embarrassment of the mail syndicate and in tho placing of the Federal Government in a quandary, and it lias even been said that Mr Clark has asked the Ministry to guarantee, a million and a-ijnartar of debentures to be issued iu London, tho syndicate having, owing to strenuous opposition which it has encountered, been unable to secure all the capital required to cany out tho scheme. Mr Chapman, the Federal Postmaster-general, has stated his conviction that powerful influence is being used in England to block tho mail contract, and lias de-

clarod that the Government will protec; Australian interests and, as far as pos sible, the contractors. But lie deniei that Mr Clark has approached the Government with a view to a guarantei for the syndicate's debentures, and Mi Deakin has made- a similar announce ment. To this is to be added the public denial by the syndicate's agent of th< assertion that his mission is to secure better terms or to obtain an amend ment of the contract. The Aus tralian press, it is hardly surprising to note, declines to take Ministeria and other assurances of this kinc quite seriously. It has judged from tin surrounding circumstances that the inference that the syndicate has reaohce: tho limits of its resources and in it; extremity has appealed to the Government for assistance is amply justified, Among other circumstances which sup. port the view the press hag taken is tho fact that tho Victorian Premier has proposed that the various State Governments should unite in guaranteeing tho syndicate's debentures tc a large amount. But the whole situation is somewhat confusing. The ono conclusion that will generally be accepted everywhere is that there ha; been ;i, hitch in connection with the carrying out of the contract, Whether, it will be successfully overcome remains to be seen. In the meantime what the Sydney Daily Telegraph styles the ■"' mail contract mystery " has yet to he cleared up, and from the non-committal utterance of the Primo Minister nothing satisfactory can be gathered with regard to the probable outcumo of tho present situation—whatever' that may bo precisely. That tho syndicate which took up the contract hay met with opposition or a check of some sort is an. inference that can hardly be avoided, and colour is therefore lent tu the suggestion that it must either secure, it Commonwealth guarantee or forfeit the £25,000 staked on the enterprise in the way of deposit lest tho terms of the contract should not ill duo time materialise. Tho agreement entered into had all tho appearance of being » very fino thing for the Commonwealth. Therefore, no doubt, the Commonwealth would be reluctant to see it lapse, and, if there is danger of that event, the dilemma in which the Federal Government is placed is obvious. On the. other hand, tho contractors have a good deal of time still before them. Meanwhile various opinions hare been offered as to the probability of the ultimate success of tho enterprise. The secretary of the Orient Company, for instance, has stated that the only real difficulty facing Sir James "[filing's syndicate was the impression that the contract would entail a heavy commercial loss, while at the animal meeting of tho P. and 0. Company lipid recently the chairman (Sir Thomas Sutherland), ill an outspoken reference ti. the new Australian mail contract, was prophetic pf disaster. He slid: " Tt would not bo the first time in tho history of t.bo Australian colonies that an outsider lias rushed into n mail contract which an experienced company like the- V and 0. Company declined to entertain, and history tells us' that the result was followed by serious disaster, 'mo project to which T. am now referring will require a revenue, including what will be necessary for the purpose of depreciation

and insurance, of, I should think, a million sterling, and, speaking as :v practical man who is engaged in connection with affairs of this kind, I say it is absolutely impossiblo to surmise where a revenue of this kind is to be obtained in tho conditions specified in the Australian trade, unless the existing mail companies are to dissolve liko tho baseless fabric of a vision or tumble like the walls of Jericho,"