The Express.
London, England, 1867-11-22 00:00:00

THE CONTRACT FOR THE MAIL SERVICES.

This morning was issued a copy of the correspon-
dence between the government and the directors of the
Peninsular and Oriental Steam Navigation Company relat-
ing to the oonveyanoe of mails to India and China. It
e.. 11 be seen by the following letter from the Postmaster-
General, dated the Ist of this month, in which the terms
of the new contract are set forth, that the only tender re-
ceived by the government for the carrying of the mails be-
sides that of the Peninsular and Oriental Company was
one from an Italian company:
" The Postmaster-General to the Lords Commissioners

of the Treasury.
" General Post-offioe, Nov. 1, 1867.
"My Lords,—l beg to inform you that. in conformity to
your instructions, tenders have been called for, botb in
this country and in India, for the India and China mail
packet services. For the services on this side Alexandria
and for • service between Aden and Yokohama tenders
were required to be sent in to this office. For the Bombay
and Suez service, and for a line between Calcutta and
Yokohama (as an alternative route with that between
Aden and Yokohama), the tandem were to be sent to the
India-office. The only tender which I received, with the
exception of one from the Societe Anonima Italians di
Navigazione Adriatic° Oriental., who offer to perform a
weekly service between Brindisi and Alexandria for
15,0001. • year, was the enclosed from the Peninsular
and Oriental Company, offering to perform a
complete service for 500,0001. a year, under a con-
tract for six years certain. This tender provides for
• weekly serve—l, Between Southampton and
Alexandria ; 2. Between Marseilles and Alexandria,
3. Between Bombay and Suez ; and for • service every
alternate week-1. Between Suez and Hong Kong; 2.
Between Hong Kong and Shanghai ; 3. Between Shanghai
and Yokohama ; 4. Between Bombay and Oalle ; 5. Be-
tween Girdle and Calcutta. The rate of speed to be 10 knots
an hour on the lines to and from Alexandria, and 9i knots
an hour on the lines eastward of Suez. The vessels not to be
subject to Admiralty survey. The penalties and premiums
to be as in the existing contract, or for an additional pay-
ment of 5,0001. per annum the penalties may be made
absolute. There are • few minor stipulations introduced
into the tender; and with regard to a line from Brindisi
to Alexandria the company state that they will be
prepared to name terms for that line, if called upon by the
government at a future time. The Secretary of State for
India has informed me that no tender for any part of the
service was received at the India-office. Looking at the
very large amount of the subsidy asked by the Peninsular
and Oriental Company, I thought it advisable to see the
chairman and managers of the company, and to explain
to them that I was not prepared to recommend
your lordships to sanction the payment of such
a sum and that I hoped they would be willing
to make • lower offer. In the course of our
conversation they expressed their perfect readiness to
have their books and accounts examined by anyone I
might appoint, by way of showing that their demand was
reasonable, and I requested Mr. Scuclamore to make this
inspection Having formerly held the office of receiver
and accountant-general of the Post-office, he was well
qualified for the business ; and, as one of the assistant
secretaries, he was in a position to avail himself of the
opportunity which might present itself for bringing the
company to better terms. Mr. Scudamore has performed
this task with his usual ability, and I beg to lay before
your lordships the report which he has made to me on the
subject. In his interviews with the managing directors,
he has ascertained that, if a contract be made for twelve
instead of for six years, the company would he wining
to perform the service for 400,0001. instead of 500,0001. per ,
annum, on condition that, when the fund of the company
accruing for dividend from ell sources rises above the sum
required for a dividend of 8 per cent., the Post.office shall
have one-fourth of the excess, and that, on the other hand,
when the like fund, from causes not within their control,
falls below the amount required for the payment of a 0 per
oent. dividend, the subsidy shall be increased by the
amount of the deficiency. In the event of its being here-
after decided by her Majesty's government that the Indian
/sc. mails shall be forwarded by the route of liiindisi, the
company will agree that the amounts to be added to the
subsidy on the one hand for the additional line between
Brindisi and Alexandria, and to be deducted on the other
side, for the abandonment of the postal service between'
Marseilles and Alexandria, shall be settled by arbitration.
All things considered I am of opinion that these terms
cannot be called unfavourable; and I recommend your
lordships to authorise um to accept them, and to prepare
a contract in accordance with them. It is right that I
should add that the establishment of • weekly mail with
India, instead of a mail four times • month, will involve
the necessity for 1:; voyages • year, instead of 12, being
performed between Gall, and Sydney. For the addi-
tional voyage the company will be entitled, by
the provisions of the contract of the 17th November,
1865, to an additional payment of 10,000/. • year, one-
half of which will be borne by the Australian colonies.
This additional payment could of course form no part of
the negotiations which have taken place with the company
respecting the India and China mail sea-viees.—l have, kc.,
(Signed) "MONTROSE.
"The Lords Commissioners of the Treasury, i.e."
On the 14th instant the government intimated their
acceptance of the offer contained in the above letter. In
the letter from the Secretary to the Treasury (Mr. Hnnt)
to the India-office, it is stated that the government have
reason to believe that the company will assent to the in-
sertion of a clause in the contract enabling her Majesty
to buy or charter the vessels of the company in the interest
of the public service. On the 19th the Postmaster General
was authorised, the Secretary of State for India in council ,
having assented to the terms, to proceed to the execution
of the contract as woo as possible.
In • letter from the Secretary to the Post-office, dated
the Bth inst., it is further stated, we should add, that
the directors have " agreed that in the event of the
arrangement proposed in his memorandum of the 26th'
ultimo being adopted, and of its being necessary, at any I
time, for the Post-office to make up the dividend of the
company to the stipulated rate of 6 pa. cent., the Post.
office shall not in any casein required to pay more than
500,0004, that being the amount of subsidy for which the
company at first asked."