E.—No. 6.

steps should be taken to terminate the existing contract with the Peninsular and Oriental Steam Navigation Company for carrying the English mails ; and that in any new arrangements sufficient time should be allowed for Colonial Companies and firms to send in tenders for the service. 2. A similar application has been made to this Government from the Australasian Steam Navigation Company, both by letter and by deputation of the Directors, and the expediency of retiring from the contract is now under consideration. The Crovernment of Victoria has at the same time invited the Governments of South Australia, Tasmania, Queensland, and New South Wales to send delegates to a conference in Melbourne, to consider the whole subject of the English Postal Service, including the practicability of its being performed by Australian enterprise. An opinion favourable to the termination of the existing contract has also been expressed by the Legislative Assembly of this Colony. 3. I do myself the honor to enclose, for your information, a copy of a Parliamentary Paper, containing correspondence on this subject between the Governments of New South Wales and Victoria; and any decision that may be arrived at shall be communicated without delay to the Government of New Zealand. I have, &c, The Hon. the Colonial Secretary, New Zealand. Henhy Parkes. Enclosure No. 1 in No. 6. Copy of a Letter from the Chief Secretary, Victoria, to the Hon. Colonial Seceetaet, New South AVales. Chief Secretary's Office, Sir, — Melbourne, 16th February, 1866. The unsatisfactory manner in which the Peninsular and Oriental Steam Navigation Company has for some time past carried on the Steam Postal Service between England and Australia, has been so apparent, as to render superfluous any lengthened argument in support of the proposition for concerted action on the part of the Colonies interested, in order to secure greater regularity of communication. There can be no doubt that, as suggested by the Government of South Australia, the time has arrived when the Colonies should unite in order thoroughly to investigate the question, and to devise means for carrying on the service, if necessary, independent of the present contracting Company, which, it is feared, will not, in the absence of any competing power, be induced to apply itself in a cordial spirit effectually to redress the grievances of which the Colonies have such just cause for complaint, even although the subsidy should be augmented in its favor. It must be admitted that the magnitude of the resources of the Peninsular and Oriental Steam Navigation Company, gives it a most decided advantage over any enterprise dependent for success on the local means at present developed in Australia, and that should it be found necessary to adopt an entirely new system, the Colonies must be prepared to incur, at the outset, the risk of even greater inconveniences and delays than those we are subject to at the present time. Notwithstanding this, the Government of Victoria feel that it is better not to shrink from encountering the probable temporary evil adverted to, when, by such sacrifice, the steam postal communication with England may ultimately be placed on a permanently satisfactory and efficent footing. With these views I am directed by His Excellency Sir Charles Darling, to invite the co-operation of your Government, and to suggest, as the best means by which the desired end may be attained, that the Australian Colonies should appoint delegates to meet in Melbourne, as the most central spot, for the purpose of considering whether, and at what period, it would be advisable to terminate the existing contract with the Peninsular and Oriental Steam Navigation Company, and to inquire into and suggest the best means by which the Ocean Postal Service may be provided for, assuming that the connexion with the Company were to bo dissolved. A communication to the same effect has been addressed to the respective Governments of South Australia, Tasmania, and Queensland. I have, &c, The Colonial Secretary, New South AVales. James McCuxloch. Enclosure No. 2 in No. 6. Copy of a Letter from the Hon. Colonial Secretary, New South Wales, to the Chief Seceetaey, Victoria. Colonial Secretary's Office, Sic,— Sydney, New South Wales, 28th February, 1866. I am directed by His Excellency Sir John Young, to acknowledge the due receipt of your letter of 16th February, bringing under the notice of this Government the unsatisfactory manner in which the Peninsular and Oriental Steam Navigation Company has for some time past carried on the Postal Service between England and Australia, and suggesting, as the best means of devising a remedy for the serious inconveniences now suffered by the Australian Colonies from this cause, that delegates from South Australia, Tasmania, Queensland, and New South Wales, should meet a representative of your Government in Melbourne to consider the whole subject. The Government of this Colony is fully alive to the magnitude of the interests that have been disarranged and injured by the failure of the contracting Company to perform the service within the terms of their engagement, and already the expediency of retiring from the contract has been under consideration. The means of redress to which your suggestions directly point, will, sooner or later, be forced to a practical trial. Whether the resources of the Australian steam ship companies are at present equal to an undertaking which the most powerful Company in the world has so imperfectly carried through, may be fairly held in some doubt, without questioning for a moment the power of the Colonies to terminate a grievance so generally felt, or the advisability of adopting immediate steps for

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CONVEYANCE OF MAILS VIA SUEZ.