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E— No. 4

SAN FRANCISCO MAIL SERVICE.

the terms of your contract, I have the honor to inform you that it seems to me rather inconsistent that you should write about continuing the contract whilst you are performing it so inadequately. Not only do you not keep time, but the Company from whom you obtain vessels have written to me for a guarantee for v'our fulfilment of the charter, and your ageuts in Auckland make pressing demands for sums beyond what are due to you, and intimate that a failure to comply with their applications will cause difficulties in the way of your procuring coal. I have, Ac, H. H. Hall, Esq., U.S.C, Sydney. Julius Vogel.

No. 29. Mr. H. H. Hall to the Hon. J. A t ogel. United States Consulate, Grafton Wharf, Sic, — Sydney, 31st August, 1870. I have the honor to acknowledge receipt of your letter of 29th ultimo, No. 2,139, and in reply have to state, in reference to the copy of agreement with Holladay and Brenham, that my object in sending it was merely to show you the arrangements I had entered into with the North Pacific Transportation Company, and not in any way to withdraw from my responsibilities under my contract with your Government. The agreement shows on what terms the North Pacific Transportation Company are prepared to connect with my steamers at Honolulu. You are aware that my charter with the Australasian Steam Navigation Company allows me to run as far as Honolulu, and I understood that you were willing to allow me to connect with the North Pacific Transportation Company's steamers at that point. As it appears you are not altogether satisfied with this arrangement, 1 shall be glad to have your views on the subject. 2. In reference to the paragraph in your letter bearing on the subsidy, I have only to request that instructions be given to the Bank of New Zealand for the continued payment of the £1,250 per month. 3. In reference to the paragraph in your letter bearing on penalties, I may state that I acknowledge having laid myself open to'such penalties ; but I trust that before my twelve mouths' service is completed you will have reason to acknowledge that I have in some measure redeemed the failures of tho first six months, caused not through any remissness on my part, but by the many and aggravated difficulties I have had to contend with in conducting this service. 4. I have forwarded to my agents in Auckland the account for the passage-money of the Mail Agents amounting to £320, and for the payment of which I shall thank you to give the necessary instructions. i 5. I have to thank you for the second instalment you have made to me under your guarantee, and which I will have to return to you on receiving payment of the subsidy from this Government, if not already covered by postages from the other non-contributing Colonies. 6. I have to thank you for the enclosures referred to in your letter, and believe they have had the desired effect, at least on this Colony, for Mr. Cowper informs mo they have advised your Government of their acceptance of the contract entered into with me ; and judging from the letters received from my agents at Melbourne, I hope your letter may have a similar effect on the A 7ictorian Government. 7. I have to request that you will be good enough to instruct this Government to pay to me the proportion of subsidy now duo from them. If I had this I should bo able to go on comfortably, and complete my arrangements for a hulk, Ac, at Honolulu, and would enable me to avoid asking you for any further assistance. I have, Ac, The Hon. J. Vogel, Postmaster-General, N.Z. 11. 11. Hall, U.S.C.

No. 30. The Hon. J. Vogel to Mr. H. H. Hall. Sic,— Wellington, 17th September, 1870. I have the honor to acknowledge receipt of your letter of the 31st August, in which you reply to mine of the 29th July, and also refer to other matters. The only part of your letter to which I will now reply, is that referring to the contribution which you allege New South AVales is willing to make towards your contract. You state that Mr. Cowper informs you that his Government have advised our Governmeut of their acceptance of the contract entered into with you. That is however not quite correct. Mr. Cowper states that his Government agree to make a contribution towards your service ; but he also states that doing so is based upon a provisional agreement, which referred not only to the Californian Service but to a Torres Strait Service, which provisional agreement has entirely fallen through, and cannot now be revived. A communication of even date with this is addressed to Mr. Cowper, asking that his Government will agree to make their contribution to the Californian Service from month to month, and from tho commencement of the service. Should Mr. Cowper accede to this request, I have asked him to remit to me tho whole amount due, from which we will deduct the amount of payments made to you by this Government on account of New South Wales, and will hand the balance over to your agents in Auckland. I have, Ac. H. H. Hall, Esq., U.S. Consul, Sydney. Julius A togel.

No. 31. The Hon. Sir James McCulloch to the Hon. the Colonial Seceetaet. Chief Secretary's Office, Sie — Melbourne, Bth September, 1870. I have the honor to acknowledge the receipt of a letter from the Postmaster-General of New Zealand addressed to the Postmaster-General of Victoria, in which communication it is stated that the 4