Enclosure. MAIL SERVICE "VIA PANAMA."

Otago Daily Times, Issue 764, 30 May 1864, Page 5

Enclosure. MAIL SERVICE "VIA PANAMA."

In the session of the Colonial Parliament, 1862 (18th August), the following resolutions were passed relative to steam communication via Panama, and also relating to intercolonial and interprovineial steam communication. (1.) That the establishment of regular monthly steam communication between New Zealand and the United Kingdom via Panama, is calculated to confer very great benefit upon this colony. (2.) That considering the probable expense of such an undertaking, it is desirable that the service should be so constructed as to confer advantage upon and obtain the support of the neighboring colonies. (3.) That this Committee recommends the appropriation of a sum not? exceeding thirty thousand pounds per annum, from Ist January, 1864, for five years, as a contribution towards the [ colonial portion of the subsidy for such a service. (4.) That the requirements of the colony will not be fully satisfied with less than three lines of intercolonial steam service, viz, between Melbourne and the South, between Auckland and Sydney, and betweea Ceok'a Straits and Sydney w»ptctiY«ly.

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Stit'i>ttf..ui pi- .il '--.Tviiitf, !i... iu,«.ii eipvernme t siiu.ll av.ui k-yif of the u*.-i t< <■■"- of the Provincial Govjrnnn!' t<,' an-.; obu>i. .J po^si <ie their concurrency in the same. (6 ) That cominuidcations should be maintained between the principal provinces of the colony four times a month, and between all the provinces twice a month, provided that the whole expense of such iuterprovincial service do not exceed twenty thousand per annum. (7.) That all future coatracts with the owners of steamships for the conveyance of her Majesty's mails, shall be contracts ending only from year to year, determinable by six inoattis' notice from either contracting party to the other. The first, second, third, fourth and sixtn of these resolutions Wire on the motion of Mr Ward.

Based on the first three of those resolutions the

Panama Steam Postal Act, 1862, was passed. These resolutions and the Act are the sole authority givea by the Legislature for the government of the colony entering into any contract on behalf of the colony for the establishment of the Panama, route.

Shortly after the passing of the Act. Mr Ward proceeded to isnglan 1 with the instructions and authority, copy of whicn is attached; at a later period the enclosed letter was sent to him. In these are contained all the powers and instructions given by the Legislature, Government, or Governor, in reference either to Panama, Inter-coloniai, or Inter-provincial Steam Postal Services. •

On Mr Ward's arrival in England, he appears to have negoeiated first on the basis of the above Act, and in co-operation with the A rew South Wal:S representative as that Act contemplated; bub finding it impossible to canclude an arrangement for the service under that basis, he proceeded to negotiate for a Panama service under his general powers as Postmaster General of the colony, aud it is uudev these powers as defined by the " Post Oflice Act, 1858," that he now appears to have considered himself entitled to enter into the contract with the Inter-culonial Eoyal Mail Company.

That Act empowers the Postmaster-General to enter into contracts for Postal Services "'under such instructions as lie shall from time to time receive from the Governor." JSo instructions were given by the (iovernor, ohter than those above quoted.

It is clear, therefore, that Mr Ward had no pow : r given him to enter into contract for services which were i:i excess of or antagonistic to the declared will of the Legislature.

This the company were fully aware of prior to their entering upon the contract j Mr Ward having Jaid ail the above mentioned documents before the company's solicitor, who took the opinion of counsel ou this very point, winch was unequivocally adverse to Air Ward's possessing tiie necessary authority to bind the colony.

In the foJowing poiuts the contract is in oppo sitionto the declarei views of the House.

(I.) The cost of the Panama set vice to the colony was limited by the act and resolutions of the House to L 30,000,. when as the contract proposes to bind the colony to a payment of 1.63,000 for that portion of the service. It has been suggested that this latter sum might be reduced by cutting off the Otago and Melbourne and Sydney and Auckland inter-colonial and all the interprovincial services save those provided for in the contract, but this would be in contravention of the 4th and 6th resolutions of the House aoove quoted, and which it will be observed were of equal authority with those at. the same time passed in favor of the Panama line. No doubt the colouy would save a portion of the present contribution to the Suez line, and also gain the postages of letters by tlie Panama liDe; but these cannot reasonably be calculated atp.esentata larger sum than L 13,000, leaving an excess of L 20.000 payable b} 7 the colony beyond the vo;e of the Hous3.

(2) Tne resolution of the House (No. 2) provided tuat the service should bs so constructed as to confer advantage upan and obtain the support of the neighboring colonies. Under the contract no colony save New Zealand would be in a position to have by that service a four months' course of post, as the. homeward steamers from Sydney would require to sail on the very day of the arrival of the outwarJ steamer, thus conferring almost no postal advantage on the Australian Colonies.

(3.) The renewal of the Coleman Contract of 1858, and the fixing an Inter-Provincial Service for five years, is in direct opposition to the 7th resolution above quoted, as well as in opposition to the opinion of the House expressed in the Session of 1863 (which is binding on this Government, although unknown to Mr Ward when he entered into the contract)—that the Colemaa Contract should be determined by notice in October next, and that all future Inter-Provincial Services should be for one year only. By the will of the Legislature as above expressed, this Government are as much bound as wasMr Ward; and they have no inherent power to bind the colony to a contract so greatly in excess of and in such decided opposition to the declared views of the Legislature.

Did the Government feel themselves empowered to deal with the contract on its own merits, they would feel that they had a most difficult task to _ perform. The votes of the House and the voice of the colony have ever been propitious to the establishment of the line via Manama. There can be no question that the bringing of tbis colony into closer communication with England, and also with those great states of America, North and South, whose growth will be co-incident with ours whilst other States decay, would be a great benefit to this colony, though perhaps more in the future than at present. To New Zealand at least could be secured a iour months' course of past—it would make New Zealand the nearest to England instead of the most distant of the Australasian colonies —and this at a rate confessedly lower than any previous proposal had dreamt ot.

But, on the other hand, the Government would feel that the cost, however reasonable, was too gi eat lor the colony in its present position alone to bear: that the colony could not afford to amputate all its intercolonial and interprovincial ste im services for the sake of Panama; that the colony could not afford to ignore "the lessons of past history and experience by granting a monopoly for five years of the internal communications (fo~ such are our interprovincial steamers), of the < olony.

The cost of steam postal services to the colony, if the contract were adopted as it now Btands, would be as follows :—

Panama to New Zealand, per contract £63,000 New Zealand to New South Wales, as per Coleman contract renewed, and which, though temporarily payable by the Imperial Government, would evidently requ're to be paid by the colony after 1865 13,000 Inter-provincial services as per contract 15,000 Additional for three contracts inter provincial services at 53 per mile over 5,000 statute miles per month, about 4,000 Two Inter-colonial services: Sydney and Nelson, and Melbourne and Otago, which, according to resolution of the House, must be retained 23,000 At least three ad iitional Inter provincial services, absolutely necessary at 5s per statute mile. 19,800 £137,800 Deduct—Estimated saving from P. O. Receipts via Panama, and reduced contribution via Suez, say 17,800 Total probable cost ot steam services . .£120,000 This might perhaps be reduced by the lower rate at which the intercolonial services would hereafter be taken: but on the most favourable view, the cost would be considerably over LIOO,OOO per annum. This certainly far exceeds anything hitherto contemplated by the House of Representatives.

The provision at the end of the 7th clause of the contract is a very objectionable one, precluding at it does the shorteningl of the periods of stay at the various ports in New Zealand, and thug stereotyping the trip from Auckland to Ota^o for five years to a period of ten days.

_ The 27th clause, however, is the most objectionable as giving the company a monopoly of the whole subsidised steam service of the colony for five years. The clause is no doubt so expressad as to be peculiarly open to evasion; but the intention is clear, and could only be honourably fulfilled in practice by such a monopoly. This the Government could ia no event sanction with their approval.

Were the monopoly of the 27th clause waived, the interprovincial time tables re-arranged, and the arrangements made so as to allow the colony of New South Wales the benefit of a four months' course ot post by the Panama route (in which event that colony would no doubt contribute liberally towards the expense), the Government of New Zealand would be inclined to view the matter favourably. But in its present shape the Government would be assuming a power not belonging to it, as the Executive of th colony, were it to profess to give the contrac validity by its sanction. (Signed)

W. Fox,