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ment, relative to the Contract for the Steam Postal Service.

1. I understand the contract between the Imperial Government and the Glasgow Company to be, that the latter shall carry the Mails of the five Australian Colonies—viz. Victoria, New South Wales, South Australia, Van Diemen’s Land, and New Zealand, in consideration of an annual bonus of £175,000, of which half is to be paid by the Imperial Government, and half by the Colonies, each to receive and retain its own Postal Revenue. The postage to be uniformly prepaid, the Imperial Government on its part, and each of the Colonies on its part, to be obliged to forward letters to their destination without further charge, using the local posts for that purpose without payment.

2. The proportion of bonus payable by the Colonies is to be apportioned between them according to the number of letters sent and received in each year to and from England, to be determined by the Imperial Government from returns at the London Post Office. This to include letters sent and received though whatever channel, and whether by Post Office Steamers or other vessels.

3. The Tariff of Rates for passage and freight to be regulated by the Company—the whole management to be with them and the profit or loss to be theirs.

4. The Steamers to make Melbourne their principal port of arrival and departure.

5. But to be at liberty in compliance with the wish of the Company to go on to Sydney.

6. In addition to the Main Service between England and Melbourne, Branch services to be maintained between Melbourne and the Colonies of Van Diemen’s Land, South Australia, and New Zealand. The mode of arranging the Branch Service is left by the Imperial Government to be settled by the Colonies themselves.

7. The cost of such Branch Services to be added to the abovesaum of £175,000, and apportioned in the aggregate between the Colonies, according to the above rule.

8. The Melbourne Government has issued circulars to the other Colonies, stating proposed terms of tender, asking opinions thereon, and proposing a conference at Melbourne,—but so far as I can learn nothing further has been done.

9. It appears to me so far as I can judge that the course taken by the Melbourne Government is correct, that such a Conference should take place between persons properly authorized by the respective Governments, or that some one Government should be authorized to act on behalf of all.

10. If a Conference be held, Melbourne seems to be the most convenient place of meeting.

11. For the general interest of all the Colonies who are alike concerned in the Branch Service, no delay should take place in completing the arrangements.

12. From what I can learn it appears that the Service for New Zealand may be more cheaply and better performed from Sydney than from Melbourne, but this can only be tested by tenders.

13. I understand there are only two parties, the Australian Steam Packet Company, and the “William Denney,” capable of contracting for the Service. I suggest that it will be desirable to test at once the terms on which they will perform it from Sydney and Melbourne.

14. If New Zealand should prefer Melbourne to Sydney, I assume, that the right of choice is open to her.

New Zealand,

Colonial Secretary’s Office,

Auckland, November 20th, 1856.

SIR,—

I have the honor to acknowledge the receipt of your letter of the 4th instant, with the accompanying copy of a Memorandum furnished by you to the Government of New South Wales, on the subject of the establishment of a Steam Mail Service for New Zealand.

2. As under this head is comprised both the extension to New Zealand of the Australian Mail Contract lately concluded, and the further conveyance of Mails between the various Provinces, the main object to be considered is the establishment of such a Steam Service as will in the most economical manner possible ensure a rapid and certain means of communication between the several ports of this Colony and Australia and Great Britain.

3. This object will most certainly be attained if the two services were combined, and the same vessels ran the whole route the Mails for each Port would thus, without delay, be forwarded by the same boat which conveyed them to the colony; while at the same time, passengers between Australia and the several Provinces