F.—3a.

2

3. I notice some abservations addressed by Mr. Vogel to Mr. Samuel, which appear to convey the impression on the part of your Government that the contract may possibly not be carried out. I beg to assure you that this Government has no reason to entertain the slightest doubt of the integrity and ample means of the Contractors, who represent large firms in Sydney, Melbourne, London, Liverpool, and in New Zealand. The new boats of the line, built expressly for this service, will commence running from Sydney and San Francisco about the middle of next year; but this Government is prepared to start an interim service (though not of equal speed) in January next, should such temporary service be found to be required, after the expiration of the present Suez Contract. 4. The Government of New South Wales is prepared to convey the letters of New Zealand for the postages on the mail matter carried, without asking any direct contribution towards the subsidy of £68,000. The only arrangement necessary on the part of New Zealand to receive the full advantages of this service, will be the employment of a fast steamer between Kandavau and a New Zealand port; and any proposal for that object which will be satisfactory to you, will be entertained by this Government with a cordial desire to consult the interests of your Colony. I have, Ac, The Hon. the Colonial Secretary. Henby Paekeb. Ej Authority; Gxoieß DlDflßCiiy, GoTernraent Printer, Wellington.—lB73. [Price 3d.]