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4. With this object, copies of correspondence on this subject are herewith enclosed, with which, together with this letter, it is desired that the inhabitants of the Province of Canterbury may be made acquainted, in whatever manner your Honor may deem most suitable for the purpose.

5. From these documents it will be perceived that the Government believes that the most efficient Steam Service, both inter-colonial and inter-provincial, would (having regard to the amount available for the purpose) be maintained by two powerful steamers plying between Australia and all the Provinces of New Zealand; thus providing that the passengers and mails for any one Province would be conveyed, with the least possible delay, to their destination; and also affording a regular and rapid means of communication to and from all parts of this colony and Australia.

6. The latter object would not be attained by the routes indicated by the Memorialists, inasmuch as these routes, although not otherwise objectionable, are not connected with each other and a third steamer would consequently be required to complete the chain of inter-Provincial communication.

7. If a sufficient sum were available for subsidizing three steamers, the communication between the several ports of the colony might thereby be increased; but such a service could not in all probability be maintained in the present circumstances of the colony. For it must not be forgotten that any bonus is only a portion, and generally a small one, of the whole sum necessary for the maintenance of steamers, and that to divide the traffic between three steamers—which would otherwise be enjoyed by two—would necessitate a proportionately increased bonus to compensate for the diminished receipts of each; unless indeed that traffic were very much augmented by the presence of the third vessel, a result which, with the present population of New Zealand, cannot be calculated upon as likely to occur to any appreciable extent.

8. It consequently appears essential to the proper consideration of this question, that it should be determined in what manner, with two vessels only, the whole service required can be performed with the greatest possible benefit to each portion of the colony; bearing in mind that if the Inter-Provincial Service starts from any port in the centre of the colony, there must (in the absence of a third vessel) be a much longer time consumed in communicating with all the ports to be visited, than if the service were commenced from one of the extremities of the route.

9. In addition to the routes respectively indicated by the Government and the Memorialists, another has been suggested by your Honor, by which it is proposed that two steamers, of which one should call first at Otago, and the other at Manukau, should convey the English mails monthly to New Zealand, and at the same time maintain a fortnightly communication between this colony and Australia. This line of route—with respect to which, I may here remark, when alluded to in the House of Representatives, during the discussion on the Steam Service, no opinion was expressed—would, if practicable, be the most efficient, having reference to the service to be performed; and would consequently have been preferred by the Government if steamers could be obtained possessing the speed and other qualities requisite to ensure the performance of such a service with any degree of regularity; but as the time specified for that service would not allow for accidental delay at any port from bad weather, or for coaling in New Zealand, it is considered impossible that steam vessels could be procured in this part of the world to perform it. Tenders for this line can, however, be invited in order to test its practicability.

10. With reference to the Memorials, I may observe that it appears to be believed that if the steamers which bring the English mails to New Zealand returned by the end of the same month to Australia, the replies to English letters brought by them would be forwarded to Great Britain within the month; but, as far as the Government is aware, from the public papers, having no official information on the subject, this would not be the case, as a mail steamer is to return with the English mails from Sydney 15 days after the arrival of each outward mail from Eng-