D.—No. 1

that when the proper time arrives notice should be given, and the contract terminated, in-order to place this line on a footing with the other branch services, provided under the postal arrangements subsisting with the Australian Colonies. If previous to that time the Branch Packet between Australia and New Zealand is found to be of little valuo, and can without inconvenience be withdrawn, steps should be takeu if practicable for determining the contract at an earlier date, but as the payment by the Home Government of the large contribution of £13,000 a-year arose from accidental circumstances, my Lords are not prepared to authorise its continuance any longer than is absolutely necessary. I have, Ac, F. Peel. Crosbie AVard, Esq., 3, Adelaide Place, King William Street, E.C. No. 44. Inter-Colonial Royal Alail Steam Packet Companv (Limited), Offices, 41, Aloorgate Street, Londou, E.G., Nov. 12, 1863. My Dear Sir, — Having consulted the Chairman, Mr. AVilson, and some of the other Directors, I can now say what course will be adopted. AVe shall withdraw the stipulation in reference to the Auckland and Sydney line, make the commencement of the Panama Service at both ends simultaneous, reduce the maximum charge for first class passengers between Sydney and Panama and Wellington and Pauama to £65 and £55 respectively; agree that the fourth boat shall be of the same horsepower as well as capacity as the others ; amend paragraph 4, of division No. 2, by adding " and H.P." after the words " larger dimensions ;" and undertake instead of requiring seven days for the passage between AVellington and Sydney, that the vessel shall reach the latter port seven days after her arrival at the former one, and leave Wellington seven days after her departure from Sydney ; the Company being at liberty to detain her at Wellington for any period not exceeding forty-eight hours. These are all the modifications you suggested. The Board would be very glad if you would consent to the Ist March, 1865, instead of the Ist January, being fixed for the commencement of the Panama Service. The reason for this is simply, that we find, in consequence of the Builders having so much work on hand, it will hardly be possible to place the vessels on their station before the middle of January or February. If we give the orders at once we shall not obtain delivery of the ships before next August at the earliest, and it would be tho end of September or the beginning of* October before we could get them awav. As a set-off against this concession, we should provide the fourth boat within six months after the others, instead of twelve, and it is not unlikely it would be even earlier than that, as the Board feel that in order to make the service thoroughly efficient, and be fully prepared for contingencies, it will be necessary to supply the fourth vessel with the least possible delay. I am not sure also that some of the boats will not be bigger then those promised, but we could not guarantee that they should. I was in hopes thai the Board meeting would have been held next Alonday, but as the Alail is unusually late this time, it cannot take place before AVednesday. AVe shall take care, however, to send the official letter by that day's post. As the half-yearly general meeting of the shareholders will be held this month, it is proposed to submit the agreement for the new Contract to them for confirmation. The Directors deem it advisable to follow that plan, as we are giving up so large a portion of our existing subsidies ; but it will be purely a matter of form. They would of course undertake to recommend the agreement for adoption, and as they and their own immediate friends represent nearly half the entire proprietary, and they have never had any of their recommendations negatived, or even modified, I cannot imagine that any objections will be started in this instance. I have, Ac, Jas. Wohlet. The Honourable Crosbie Ward, Esq.. Ac, Ac, Ac. No. 4.5. Inter-Colonial Royal Mail Steam Packet Company (Limited), Offices, 41, Moorgate Street, London, E.G., November 18th, 1863. Sin, — I have the honor to acknowledge the due receipt of your communication of the 2nd inst. in which you state that you would be prepared to accept at once with modifications of trifling importance the offer of the Board conveyed to you in my letter of the 16th October for the per-

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