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And in reply, the following message has been received from the Chairman of the Company:— " Desiring to meet Colonies' wishes as far as possible, and believing commercial outlook improving, and consequently traffic likely increase, I believe I could induce Board and associated, administrations to accept Conference proposal, provided arrangements be made for fixed period of at least five years, so as to run concurrently with subsidy agreement." The Committee advises that the proviso be agreed to. The Committee further reports that, the Representatives of the several Colonies contributing to the Guarantee have agreed to share with Victoria, as regards the Tasmanian Cable, the guarantee of that Colony in the usual proportion (population basis), to pay the first £1000 of the loss in any one year, and half of any additional loss beyond the £1000: this Guarantee being in addition to the subsidy of £4200 a year at present contributed by the Colonies of Victoria, New South Wales, Tasmania., South Australia, and West Australia. A careful estimate of the financial effect of the new arrangement has been prepared by Sir Charles Todd, and is appended.

The following are the estimated payments by Colonies under present and proposed agreements, taking the traffic during year ending April 30, 1895 : —

Payments under present Agreements.

Proposed Arrangement. Port Darwin Guarantee—■ £ Amount to be guaranteed ... .. 227,000 Estimated Receipts. .. . 222,000 Deficiency .. . 5000 New Zealand Guarantee— Amount to be guaranteed .. ... 20,000 Estimated Receipts. 11,324 Deficiency .. . 8676 of which New Zealand pays one-third . 2892 New Zealand and other Colonies two-thirds . .. 5784

Then, Estimated, Contributions to several Guarantees will be as follows:—

VICT. N.S.W N.Z. S.A. TAS. W.A. TOTAL. Cable Company South Australia .. Tasmania 2508 669 /1717 I 790 J2497 2491 664 1705 1364 364 1357 3733 705 188 482 323 86 221 109 29 75 7500 2000 4200 790 7465 3733 New Zealand., 2479 702 321 109 8181 7339 6818 2077 951 322 25,688

VICT N.S.W N.Z. S.A. TAS. W.A. TOTAL. I I Eastern Extension Company South Australia 1672 669 (1717 1 260 1934 1660 665 1705 258 1920 907 361 471 189 482 76 543 215 86 221 35 248 75 30 75 7 86 J 5000 2000 4200 790 Tasmania 154 ( 1053 I 2892 New Zealand Cable 8676 Present payments. 6252 6208 5367 1761 805 273 20,666 8181 7339 6818 2077 951 322 25,688 Saving .... 1929 1131 1451 316 146 49 5022