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Lyttelton Times, Volume XXIII, Issue 1360, 16 February 1865, Page 4

The conditions of the new agreement respecting the Panama Service were not very fully expressed in the extract from the Wellington papers, reprinted in our last issue. It appears that the Government have obtained the surrender of the clause entitling the company to a preference over other* in future contracts, and have done away with the remnant of the old Coleman contract. The value of the former concession will be understood by those who are interested in other steam enterprizes on the coast, but will not be felt by the general public. The second condition is a very harmless one, inasmuch as the only reason for maintaining the old contract was the probability that the Imperial Government would continue their payments under it; and this expectation need no longer be entertained. But the valuaof the contract is not really affected by the change. The Imperial Government used to pay £13,000 a year for a steamer between Sydney and New Zealand. Mr. Ward's contract made this a part of the Panama line, and so arranged for a through service connecting New South Wales as well as New Zealand with Panama, for which the I company would receive £76,000 a year. The new agreement still completes the connection with New South Wales; but the price to be paid for it is £90,000 a year, or £1-1000 more than by Mr. Ward's contract. The hope of obtaining £13,000 a year from the Imperial Government to reduce the total amount, which still existed wheu Mr. Ward entered into the original contract, has now, we presume, finally disappeared. But it has still to be remembered that the Home' Government lias bound itself to pay, if not the whole, at least half the cost oj' one Sydney and New Zealand steamer in each month"; and even if this be' only £4000 a year, the claim ought not to be overlooked in reduction of the subsidy. The additional sum of £14,000 now undertaken by the Government, beyond the amount named in Mr. Ward's contract, must; be comodered as the price of abandonin.r the preferential or ' monopoly' clause, which eni itled the company to a preference for five years in any new service offered by the Government 44 upon fair and .reasonable terms " Jo waking the new bargain, therelore the company have gained this sura of £14000 a year, by way of commutation of

their anticipated profits; and think they have made an excellent ar S * They Will certainly be contractors still for many Intercolonial and Interpr cial services; and we doubt whether £ » is not an amount for which they woul been content to abandon the whole o coast services, as approaching the net an profit derivable from them all. . In other respects, we are told, the new agreement is the same as the old contrac . But we learn that, though the company aske £90,000 a year for the service on a contract of five years, they would have been conten to take £85,000 a year for a seven years contract. The clause in the Panama Mail Service Act of last year, making it necessary that New South Wales should obtain a four months course of post, has been only con' tingently complied with. New South Wales is to have a service whether it contributes or not ; it would have been too absurd to construct a more rapid and expensive service than New Zealand requires, specially to obliged the sister colony, without stipulating, first for some contribution. This was certainly the meaning of the House last session, though the act reads very absurdly to the contrary. As we have before suggested would be done, the Government have very properly attended to the sense and not to tne letter of the act. But in the new agreement it is provided that New South Wales may have the additional advantage of a ten-knot service, by which she would get a four months' course of post, for a payment of £20,000, making the total subsidy £110,000 for a five years' contract, or £105,000 for one of seven years. Dr. Featherston is now on his way to the Australian colonies, to negotiate with them on this and other points. While these arrangements are being made at this side of the world, we hear that the English Post Office authorities have decided to put an end to the existing Suez contract in February, 1866, and to make a new agreement for the support of the service from that date. New stipulations are to be made with the colonies, for the payment of their respective contributions; and webelieve the dispatches containing the new demands have been received by the late mail. This seems an excellent opportunity for starting the Panama service. The Imperial Government will have it in their power to set off the Pacific line of steamers against the Suez line, and to obtain better terms from the Peninsular and Oriental Company. They may even arrange for a fortnightly service, alternately with the Panama line. Atany rate, it is more likely that they will share in subsidizing the latter route than pay for the support of a second service by Suez. And even if they decline to take this course, the colonies will be relieved of the bond which they are under to contribute to the Suez line; and New South Wales and Queensland will be at liberty to adopt the Panama line instead. The juncture is very favourable for negotiating terms with England and our neighbouring colonies ; and it is only to be regretted that Dr. Featherston is not going on to England as well as to Sydney and Melbourne. Some representative of the colony ought to be present in London while the negotiations are proceeding, .to urge the claims of the Panama line upon the British Post Office and Treasury.