AUSTRALIAN MAIL CONTRACT

Taranaki Daily News, Volume L, Issue 59, 27 May 1907, Page 3

AUSTRALIAN MAIL CONTRACT

NEGOTIATIONS NOT CLOSED. r ... London. May 24. Ihe Hon. T. Bent, Victorian Premier, has lutonned Mr. Deakin tint Victoria is prepared to join in the guarantee of a mail subsidy for 1» years on a population basis, if the other States participatc. v.-. D?akiu has telegraphed to Sir John Forrest (Acting federal Premier) asking if the other States would join, but a reply has not yet been received. The syndicate has offered Mr. Bent certain cargo space if Victoria would guarantee a subsidy.

! THE ACTUAL POSITION. Received May 2<ith, 4.37 p.m. London, Mav 25. It is understood the following" represents the actual present position as regards the mail contract:— If any two or more of the States guarantee the debenture holders t*n annual payment for ten years of 125,000 pounds, representing interest and sinking fund, the contractors will undertake to-pay annually to the -guaranteeing States 5,00!) pounds, which will be in the nature' of all insurance premium for ths risk undertaken. The contractors al>o undertake to give the participating States first call on a considerable amount of refrigerating space in the mail boats for perish.ible produce.

(The position in respect of the Australian mail contract is daily becoming more, interesting. It is especially so just now because, in addition to the differences between the Federal Government and the contractors for the service which has to begin in February next, the general question of mail communication between Britain and the Antipodes was brought to a prominent place at the Imperial Conference. The contract which is the subject of the foregoing cablegram was made in 1900 between the Federal Government and Sir James Laing and Sons, of Sunderland. It i.s for ten years from February Ist, 1908. The payment is to be £125,000 per annum, with possible extra payments up to £20,000 for acceleration of speed, and penalties for late arrivals at the terminal ports (Adelaide and Brindisij. Sir James Laing and Sons have formed a syndicate (approved by the' Commonwealth Government) to take over the contract and build steamers to fulfil it. The Federal Government recently, acting under a clause in the agreement to that effect, called upon tte syndicate for a bond of £25,000 (inNhldition to a deposit of the same amount made when the contract was accepted), as an indication that satisfactrv progress has not been made with preparations for beginning the service on due date. The syndicate was given a week in which to pay the extra bond. Xhe week expired on Thursday, and the bond is not forthcoming. It would appear now by the terms of the ngpee-j ment that the Federal Government has | power to cancel the contract. Then; is, however,, another alternative open. The syndicate may be left alona at proseilt. and punished if it fails in February to commence the servicee, for the contract provides for a penalty of £SOO for every 24 hours (up to £20,000) for such delav.

Mr Bent's proposal, mentioned'in a recent cable message, is a peculiar one —thou«h it feems to have been suggested by a request quite as peculiar. Th;; underwriters of the syndicate's debentures recently asked for a guaranie.' that the annn il subsidy of £125,000 per annum would be paid for ten years '■under any circumstances," thereby ipparentlv stripping the contract of all provisional condition-. To tliU Mi Bent, the Victorian Premier, who is now -in London, replied by saving Victori \ , would guarantee the whole subsidy if allowed preference in the shape of a reduction of fares and freights. Sir William Lvne. however, declined to consider the suggestion—saying that it wis impossible to consider One State receiving preference over another. It is not clear whit status the Premiers have in dealing with this matter at the Brisbane Conference.