The last contract entered into between the Commonwealth and the Company is dated 
{7th March, 1924, and provided for the conduct of certain mail services from lst April, 1923, to 
31st July, 1925. On the expiry of this contract tenders were invited, but Burns, Philp and 
Company Limited were the only tenderers, and whilst the company was prepared to make certain 
freight reductions, it required a three or five years’ contract. It also made proposals for the 
‘nstitution of a service between Sydney, Port Moresby, Samarai, Rabaul, and Singapore. As 
the Report of the Royal Commission on the Navigation Act was shortly expected it was considered 
inadvisable to enter into a new contract for an extended term, and the contract was renewed for 
a period of six months from 1st August, 1925. 
The coastal provisions of the Navigation Act were removed from Papua and New Guinea 
as from the 26th August, 1925, and tenders were again called for the services without any 
stipulation that coloured crews must not be employed. Only one tender—that of Burns, Philp 
and Company Limited—was received, and that was based on the employment of white crews, 
the company preferring not to take the initiative in proposing coloured crews; moreover, they 
had objections to the use of coloured crews for these services, owing to the absence of a terminal 
port in the East, and the consequent difficulties in the engagement and discharge of crews. 
Pending further consideration of the many factors involved, Cabinet decided to renew the contract 
for a further term of six months to 31st July, 1926. Inquiry made from Papua and New Guinea 
meanwhile concerning the effect of the suspension of the coastal provisions of the Act indicated 
that insufficient time had elapsed since the alteration to forecast the result. 
As steps were about that time being taken to dispose of the expropriated properties in the 
Mandated Territory, it was deemed inadvisable during the period of transition of ownership of 
the plantations and other properties to alter the nature of the shipping services, and Cabinet 
decided to extend the renewal of the contract for twelve months, i.e., to 31st July, 1927, and, as 
already indicated, to request the Joint Committee of Public Accounts to investigate the question 
of the subsidized Island services. 
Particulars of the shipping services provided under the current contract, and as at present 
sonducted. tosether with a brief description of the Territories and Islands served, are as follow :— 
Parva. 
The Territory of Papua, with its capital at Port Moresby, is a self-governing dependency 
of the Commonwealth, under whose control it was placed on the 1st September, 1906. It comprises 
the south-eastern portion of the Island of New Guinea, together with the Trobriands, Woodlark, 
d’Entrecasteaux, and Louisiade Groups, or a total of 87,786 square miles on the mainland, and 
2,754 square miles in islands. From east to west, Pavua extends for upwards of 800 miles. and its 
greatest width north and south is 200 miles. 
The total European population of the Territory on 30th June, 1926, was 1.452, with a 
native population estimated at 275,000 
During 1925-26, the value of the imports—practically all from Australia—amounted to 
£470,774, and exports to £649,373, this being the first occasion in. the history of the Territory 
shat the value of exports exceeded that of the imports. The principal items exported were 9,263 
tons of copper, valued at £155,305, 8,419 tons of copra, valued at £204,079, and 640 tons of 
rubber, valued at £194.849. The outward cargo goes to Australia. but only for transhipment to 
Europe. 
The current contract provides for Papua, a through mail service of one sailing every calendar 
month by s.s. Morinda (1,500 tons gross), with the following itinerary :—Sydney, Brisbane, Cairns, 
Port Moresby, Bootless Inlet, Samarai, and return by the same ports, calling at Yule Island on 
alternate trips and at Woodlark Island each quarter. with the richt to call at Milne Bay and/or 
Vlisima when approved by the Minister. 
The amount of subsidy paid in respect of this service is £12,000 per annum. 
At the time of the Committee's visit, Woodlark Island was being visited bi-monthly ; 
and Baibara has since been added as a port of call between Port Moresby and Samarai. In addition, 
Mm.s. Malabar calls at Port Moresby every three or four months on her Singapore-Australia run. 
ond the steamers engaged in the New Guinea service pay regular visits to Samarail.