said he was very sorry to intervene at so late an hour, but this was a very important matter, involving as it did the expenditure of £2,000,000. He did not take exception to the contract itself. So far as that went he thought the Post Office had made a good bargain. Still less did he take any to the persons who had obtained the contract; they were friends of his own and well qualified to hold a Government contract. In fact a Government contract could not be in worthier hands. But he desired to call attention in particular to the service of- steamships. Under the contract they gave a thirty days service from Brindisi to Shanghai. But while the Post Office were making this contract to send mails to Shanghai in thirtydays,by sending them over the Siberia Railway it was possible to get mails to Shanghai in twenty days. He asked whether it was a business-like proceeding. There was no question about the figures he had given being accurate, because these figures were given by the Postmaster-General himself about a month ago. The Government he supposed would say that the route by the 'steamer was the cheaper of the two. That might be so, but people had only to address their lettersvia Siberia, and then he shrewdly suspected the Government would not only have to pay for their carriage over the Siberian route but have to pay for the contract route as well, a route by which the letters did not go. He wished to ask whether it was considered a business like thing for a Government to tie itself to a seven years contract for a thirty days service when they had a good prospect of getting their mails delivered not only in twenty days but eighteen days, when the Siberia Railway service was further improved. The same statement as he had made with regard to Shanghai applied to Hong Kong. He would also like to remind the House that the service was practically only a fortnightly one, because the French boats were so very slow the traders would be forced to use the Siberian route during the week that the British boat was not running. So there was very good reason to doubt whether I was a wise action on the part of the Government to have made any contract whatever for the conveyance of mails to China. He desired to impress upon the House the importance of having a thoroughly good mail service to China. There was a great future there for British trade, and we ought to have the best mail service to meet the competition of the world. It was quite certain that if we did not use the Siberian route France and Germany would, to our detriment. He desired also to call attention to the Australian portion of the contract. Whilst this contract was a contract for the conveyance of mails between Brindisi and Adelaide it was provided that these boats should always start from a British Port and always call at Melbourne and Sydney. That provision was only put in for the purpose of subsidising the carrying of passengers and cargo, and he desired to ask whether it was desirable under the guise of a postal service to subsidise a steamship line for carrying passengers and cargo to Melbourne and Sydney. He called attention to the fact that there was no competing tender. He would like any hon. Gentleman who thought of trying to start a new subsidised line at any time to consider the facts he had mentioned, and consider well before they took the first step to establish contracts from which they had no possibility of departing without breaking the contract altogether.

wanted to know what accommodation was to be provided for lascars on the P. and O. boats, and whether it was intended to insert in this contract a provision ensuring that the lascars would have more accommodation and a better food scale than they had at present. His view was that this large subsidy enabled the P. and O. Company to compete with tramp steamers in the eastern trade, with the result that British seamen were thrown out of work and were unable to get employment. When a company like the P. and O. received this large subsidy, it was the duty of the Government to see that there were fair conditions for the men employed. No doubt he would be told by the hon. Gentleman that the lascars were British subjects. He did not in any way want to prevent lascars from being employed; they had just as much right to be employed as any other workmen, but their conditions ought to be fair.

said that this question of lascar seamen had been discussed frequently. So far as the provision of accommodation was concerned it had been decided by the Merchant Shipping Act of last year, and the Government saw no reason to depart from the decision then arrived at. The P. and O. Company employed lascars largely, and in making a contract with them it wan impossible that they should place the company at a disadvantage with their competitors. The Orient Line, for example, had been induced by the Australian Government to give up the employment of lascars, but in order to make up for this disadvantage the Australian Government had to pay £50,000 a year more than was paid to the P. and O. Company for the same service. The Government did not regard the employment of lascars as "sweating" either in mail vessels or in tramp vessels which carried lascars out to Australia or to the Far East. His hon. friend behind him had pointed out the great advantages of the Siberian route. He would like to make it perfectly clear that this matter had been carefully considered by the Post Office at very great length. They had entered into this contract with their eyes open. One of the greatest objections to the Siberian route was its cost. The House would be interested to know that letters, packets, and postcards, via Siberia, worked out at 18 francs per kilogramme as against 11.70 francs per kilogramme via Brindisi. The weight of mails carried last year was 5,741,000 lbs., but he could not give the hon. Member the weight of mails to Shanghai alone. It was quite clear that if we were to carry the whole of our mails, packets and newspapers by way of Siberia, we should add enormously to the cost of the carriage, and the Post Office wound make an absolute dead loss on the transaction. The Post Office had not only to consider the cost of carrying the mails, but the general interests of the taxpayer; and the Government could not for one moment be expected to put a burden on the general taxpayers of this country in order that those engaged in the China trade might obtain a special advantage. The other point to which the hon. member referred had to do with Australia, and the hon. Gentleman wished to know why they insisted on the P. and O. boats starting from Australia. They made the contract for the mails to pass through Brindisi, and there was no reason in the world why, in making the contract, they should not do all they could to secure what was of. advantage to British trade and to those who travelled, rendering it always-possible for a traveller to make the whole voyage from England. They did not pay any special subsidy for that; it came under the contract and was apart from the Postal service; and he thought they ought to be commended and not criticised for obtaining this special advantage for those who wished to send goods out to, Australia, and for those who wished to, send goods from Australia to England direct. The hon. Member was wrong in supposing that there were no competitors for this contract. There was one competitor for it, whose tender was lower than that of the P. and O. Company. It was the tender of one who gave his address as somewhere in the West, country. They inquired into hisbona fides, and they found that this unfortunate gentleman had no address, and that so far as they know he was not able to put a single vessel on the line. Ultimately it was discovered that his permanent abode was one of the institutions over which his right hon. friend the President of the Local Government Board had control. The reason that there were no competitors was that the Postmaster-General drove an uncommonly hard bargain with the P. and O. Company, and obtained services far beyond those paid for by the subsidy. The P. and O. Company were not favoured in any way as to the placing of this contract. The absence of competition was simply due to, the fact that there was no other company strong enough to take the contract at the price and carry on the work. He would have been only too glad to allow others to have a chance. In order to give smaller traders a chance to tender, an attempt was made to split the contract up into sections; but no offers were made by any of the great shipping lines. The old contract might have run on until 1912, but in view of the great changes which were going on in the shipping world and the development of the Siberian railway, they thought it would be wiser to have a comparatively short contract, and they adopted seven years. That was a very short period for a contract of these dimensions, and no great line would undertake to build for the traffic unless they had a contract for at least ten years. Some of the offers they received were for periods ranging from twelve to twenty years. The period of the contract was seven years—a very short term—and before its expiration the conditions would be reconsidered. The Postmaster-General had reduced the lowest sum possible under the old contract by no less than £10,000, and had also reduced the period of transit. If the old contract had run on until 1910, the subsidy would have been reduced to £330,000, and if it had run on for the full period, the subsidy would have been £315,000. The Postmaster-General had succeeded in making a bargain in which the subsidy was fixed at £305,000, and at the same time he had reduced the period of transit to Bombay by eight hours, Shanghai by thirty-five hours

said the Merchant Shipping Act. of last year excluded the lascars, and this contract was a means by which they might compel the P. & O. Company to give the lascars proper accommodation. Question put. The House divided:—Ayes, 93: Noes, 19. (Division List No. 457).