F.—6

48

to the sum of £315,000 per annum during the whole period of seven years from the 31st day of January, 1905, and the company shall repay to the Postmaster-General the payments (if any) made by him to the company in excess of the said sum of £315,000 per annum as for the whole period from the 31st day of January, 1905. (4.) The Postmaster-General may, at his option and discretion, either deduct any sum of money which may be due to him from the company in respect of such excess payments as aforesaid from any moneys payable or to become payable to the company under the principal agreement, or recover the said sum of money as a debt to His Majesty with full costs of suit. 4. (1.) If by reason of new legislation of the Australian Commonwealth relating to shipping the maintenance of a service of mail-ships to and from Australia becomes impossible except under conditions commercially disastrous to the company in relation to the working of the Australian line, the company shall be at liberty at any time after the 31st day of January, 1905, upon giving to the Postmaster-General six calendar months' previous notice in writing in that behalf, to cease to convey mails upon mail route No. 3 to and from Australia in the principal agreement specified. (2.) In case the company shall cease to convey mails upon the said route as aforesaid, the subsidy payable under the principal agreement (as modified by these presents) shall be diminished in such manner as shall be agreed upon between the Postmaster-General and the company, or, failing agreement, shall be determined by arbitration. 5. This indenture shall not be binding until it has been approved by a resolution of the House of Commons. In witness whereof the Postmaster-General hath hereunto set his hand and seal, and the company have hereunto affixed their common seal, the day and year first before mentioned. Signed, sealed, and delivered by the before-named Edward George Villiers Stanley, C.8., His Majesty's Postmaster-General, in the presence of A. E. W. Codrington, Private Secretary, General Post Office. Stanley. (1.5.) The common seal of the Peninsular and Oriental Steam Navigation Company was hereunto affixed in the presence of— Thos. Sutherland ) -p.- , ,t q, Leven and Melville) ' \■ •) G. F. Johnson, Secretary.

No. 80. The Agent-General to the Hon. the Prime Minister. Westminster Chambers, 13, Victoria Street, London, S.W., (Memorandum.) 11th February, 1905. In reply to the Hon. Minister's letter of the 23rd November last [not printed], I am sending to the Secretary, Post and Telegraph Department, by book-post by to-day's mail, the three copies ordered of Parliamentary Paper No Cd. 2082, Report of the Eastern Mail Service Committee, 1904. Walter Kennawat, for the Agent-General. The Hon. the Premier, Wellington.

Enclosure in No. 80. REPORT OF THE EASTERN MAIL-SERVICE COMMITTEE, 1904. On the 21st May, 1903, an inter-departmental committee was appointed to consider the best means of providing for the conveyance of the mails to and from the East and Australasia on the expiration of the existing contracts with the Peninsular and Oriental Steam Navigation Company and the Orient Steam Navigation Company. The committee was constituted as follows: Mr. Evelyn Cecil, M.P. (Chairman); Mr. H. Buxton Forman, C.8., Assistant Secretary, Post Office; Sir John Anderson, K.C.M.G., Principal Clerk, Colonial Office; Mr. F. C. Holiday, Auditor of Home Accounts, India Office; Mr. E. A. Doran, Deputy Director-General of the Post Office of India; Mr. S. J. Graft', C.8., Civil Assistant to the Director of Transports, Admiralty : Mr. W. E. Smith, C.8., Superintendent of Construction Accounts, Admiralty; Sir Thomas W. P. Blomefield, Bart., C.8., Assistant Secretary for the Finance Department, Board of Trade; with Mr. Arthur G. Ferard, of the Secretary's Office, Post Office, as Secretary. Report. To the Postmaster-General. My Lord, — In accordance with the request of your predecessor, Mr. Austen Chamberlain, we have carefully considered the best means of conveying His Majesty's mails to the East and Australia on the expiration of the existing contracts on 31st January 1905. We were instructed that this question does not include the apportionment between Great Britain, India, and the eastern colonies of the money payable as mail subsidy. 1. Throughout our deliberations, which have extended to eighteen meetings, we have borne in mind that the primar}- object of mail-contracts is the regularisation of fast communication, which shall insure at a reasonable cost postal services at fixed dates; that increase of speed and reduction of cost (so far as compatible) are always to be desired; that unduly long contracts