D.—No. 1

in the absence of explanation, might be capable of being represented in a light unfavourable to the character and credit of the Colony, I enclose a Memorandum on the subject, which will, I think, clearly show that this Government had no other course open to thein than that which they have adopted, and that the Company were at the time .they entered into the Contract fully aware that Air. AVard was not empowered to enter into the Contract on behalf of the Colony. You will be so good as communicate to the Company the conclusion at which the Government have arrived, at the same time informing the Company that the whole matter will be laid before the House at its first meeting, probably not later than March next, when it will bo open to that body to adopt the 'Contract. At the same time, this Government will not feel it their duty to recommend that course to the House unless the monopoly of Inter-Provincial and Intercolonial Services be abandoned by the Company, the Inter-Provincial Time-Table altered, and arrangements be made by which the entire course of Post from Englaud to Sydney, and back, be brought within four months, inclusive of sufficient time at Sydney for reply by the return Mail Steamer. Any proposal to this effect which the Company may have to make will be laid before the Assembly, and this Government will be prepared to recommend its consideration in the most liberal spirit. 1 have, Ac, AVilliam Fox, For the Postmaster-General. The Honble. R. G. Wood, Ac, Ac., Ac, New Zealand Government Ast-'ncy, 3, Adelaide Place, King AVilliam-street, London, E.G. Enclosure to No. 68. MAIL SERVICE " VIA PANAMA." 11l the Session of the Colonial Parliament, 1832 (18th August), the following Resolutions were passed relative to steam communication via Panama, and also relating to Intercolonial and Interprovincial 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 neighbouring 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 Alelbourne and the. South, between Auckland and Sydney, and between Cook's Straits and Sydney respectively. (5.) That in making any contract to carry out the Steam Postal Service, the General Government shall avail itself of the assistance of the Provincial Governments, and obtain if possible their concurrence in the same. (6.) That communications 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 Interprovincial Service do not exceed Twenty Thousand Pounds per annum. (7.) That all future contracts with the owners of steam-ships for the conveyance of Her Majesty's mails shall be contracts ending only from year to year, determinable by six months' notice from either contracting party to the other. The first, second, third, fourth, and sixth of these Resolutions were on the motion of Air. 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 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, Air. Ward proceeded to England with the instructions and authority, copy of which is attached; at a later period the enclosed letter was sent him. * In these are contained all the powers and instructions given by the Legislature, Government, or Governor, in reference either to Panama, Intercolonial, or Interjirovincial Steam Postal Services. On Mr. Ward's arrival in England, he appears to have negotiated first on the basis of the above Act, and in co-operation with the New South Wales Representative as that Act contemplated ; but finding it impossible to conclude an arrangement for the Service on that basis, he * Printed as Nos. 1, 2, and 3 respectively in these Papers.

41

ESTABLISHMENT OF A PANAMA MAIL SERVICE.