E.—3

36

implied, which should have prevented the Government of either Colony from entering into a provisional contract without first consulting the other; and your Government appear to have recently held this opinion, for in the telegram referred to it is stated (as you also personally informed me) that Mr. Russell, your representative in England, is specially charged with carrying out the views of the New Zealand Government as to a Californian Service ; and that, if he had not already made other arrangements, he would be in a position to confer with me, and to " propose terms for a joint service, to be undertaken by both Colonies" : thus showing that the New Zealand Government were contemplating arrangements for a Pacific Service entirely independent of, and without its being considered necessary to consult with, the New South Wales Government. The fact, however, of my being deputed specially to visit your Colony with a view of inviting your co-operation in the establishment of a mail service across the Pacific should be sufficient evidence of the desire on the part of the New South Wales Government to act in concert with that of New Zealand. 4. It is alleged that the New South Wales Government have entered into a contract " of so hurried a nature that all the provisions which would tend to give assurance to New Zealand were omitted, and consequently that no adequate provision is made regarding the character of the vessels for the branch service, for the speed, or for the enforcement of penalties for delay, nor for detention of the main steamer should the branch steamer, fail to arrive at Kandavau in time, or for the passage of a mail agent." Now, the provisional contract distinctly specifies, as regards the character of the vessels to be employed for the branch service, that they shall be of from " 800 to 1,000 tons burden, of a class similar to the steamship ' City of Adelaide,' " a vessel well known in the Australasian Intercolonial trade. I cannot, therefore, imagine how such a representation should have appeared. The contract also provides that the branch service shall be performed under the same conditions as the main service. These conditions provide for the rate of speed either at ten or twelve knots an hour, according to the amount of subsidy paid. There are also clauses amply sufficient for the enforcement of penalties. As regards the detention of the main steamer at Kandavau pending the arrival of the branch steamer from New Zealand, it is stipulated in the contract that " the Postmaster-General of New South Wales is to have power, by an order to the commander, to delay the departure of any vessel from any port for a period not exceeding twenty-four hours, and to delegate this power to any person to whom he may think fit to iutrust it." Under this provision, sufficient arrangements could of course bo made for the detention of the packet at Kandavau until the New Zealand, steamer had arrived. This is, however, a mere matter of detail. The statement that there is no provision made for a mail agent is also incorrect, there being a clause in the contract to the effect that " proper accommodation and mess to be provided for an officer of the Post Office in charge of the mails, such officer to be victualled and otherwise treated as a chief-cabin passenger." But supposing the contract, as regards the service from Kandavau to New Zealand, were open to the objections which I have just met, your Government had the option of making a separate contract for this portion of the service, and of taking it under your entire control. 5. The remarks relative to the business occupation of the gentlemen who are sureties, as well as the observations as to the contract having been entered into as a mere matter of speculation, appear to me to be as unwarrantable as they are uncalled-for, and certainly are not reconcileable with the fact that you personally expressed to me that you were satisfied as to the sufficiency of the sureties ; and further, that if I would consent to cancel the present contract, and make another in conjunction with New Zealand, providing for the main steamers calling at your Colony, you were willing that the present contractors should have the preference in such new contract. 6. I do not consider it needful to notice some few other objections which have been raised, as they appear to relate to matters of detail which might readily be arranged between the Colonies quite irrespective of the contract agreement. 7. It appears to me that an unnecessary exception has been taken to the manner in which the provisional contract agreement has been prepared, as it is apparent that the sole reason for your Government not according their support to my proposal is that it does not provide for the main steamers calling at New Zealand, —an arrangement it is unreasonable to expect, considering that it would involve an unnecessary detour of three days' duration for the whole of the Australian mails and passengers, while the only advantage that New Zealand could derive would be that the passengers to and from Auckland (if that were made the port of call, as proposed by you) would not be subject to any transhipments. Those to and from the important Southern Provinces of New Zealand would of necessity under your proposal have to change steamers at Auckland ; and I imagine they would not be much inconvenienced or feel dissatisfied if this change took place at Kandavau some few days earlier or later, as the case may be, so long as the service was an efficient and economical one. Expressing my regret that your Government have not arrived at a different determination in the matter, I have, &c, The Hon. Julius Vogel, C.M.G., Wellington, New Zealand. Saul Samuel.

No. 51 of this series.

No. 51 of this series, clause 13.

No. 57. The Hon. Saul Samuel to the Hon. J. Vogel. Sic,— Melbourne, 17th June, 1873. I have the honor to acknowledge the receipt of your letter dated the 4th instant, on the subject of my proposals to your Government for the establishment of a mail service between Great Britain and Australia via San Francisco.

No. 64 of this series.