“I think with Captain Ellice and Mr. Bond, that we should desire to conclude an arrangement with the Oriental in preference to any other company, for the present contract has been loyally kept, and the capital and means of that company give better promise of efficiency and exactness than could be looked for in any other quarter. The Indian and Australian Company is indeed supported by good names, but it has yet no paid-up capital, or body of shareholders, or organised establishment on which we could depend; and though it may be desirable to establish a rivalry and competition on the line of communication, It would not be wise to do so at the hazard of uncertainty and interruption. We have, however, advertised for tenders; and though we are not bound to take the lowest offer, we should scarcely be justified in rejecting it without a fair examination of its value. The first question, however, must be, which is the lowest offer? The Oriental Company propose to perform the service in the first instance, for £27,500; the other company for £25,650. But the Oriental are ready to lower their charge by sums of £500 in the second, £1,000 in the third, £1,500 in the fourth, and £2,000 in the fifth year, or £5,000 in the five years. This would reduce the difference between the two companies to only £850 annually, in the event of the contract winning for five years, or to £1,350 if it should be taken for three years. But the Oriental further offer to the Government a share in their profits on this line, whatever they may be beyond 10 per cent. paid to the shareholders. It is difficult to calculate to what this might amount, or to determine upon what principle it should be calculated. The dividend to the shareholders has not yet amounted to more than eight per cent., but large sums have been applied to new capital, to reserve funds, for insurance, and to other purposes. There may be profit on the Mediterranean line, and there may be loss on other lines, and an annual inquiry into all these matters might lead to endless discussions and disputes, and would be a source of frequent vexation to both parties. It is clear, however, that the company makes considerable profits, and I would prefer, to a share in them under the exercise of an inquisitorial power, a liberal compromise by a reduction of the terms which have been proposed; and I think that this reduction should be to a sum considerably lower than the £25,650 which has been tendered by the Indian and Australian Company. Mr. Cowper would reduce the sum demanded to about £15,000, taking the mileage at 4_s._ 6_d._, the price of the Lisbon, instead of 8_s._ 0-1/4_d._, the mileage of the Mediterranean packets. I doubt whether these terms would not be too hard. The Lisbon packets are less efficient and less expensive than those of the Mediterranean, and though the profits of the latter are large at some seasons of the year, there are months when passengers to India are rare, and the receipt small.