2

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iron hulls, the economy and other advantages of the compound engines in screw propellers, while the American plan of placing the cabins on the main deck will secure comfort and convenience for the passengers travelling by the line. The Pacific Mail Company have just finished tho " Colon," one of their new iron screw ships, of 2,700 tons, built in the way I have described. I availed myself of an opportunity of inspecting this vessel specially constructed for warm latitudes ; and I am satisfied that such a vessel, but of smaller size, would be in every way fitted for our service. The projectors propose to establish a 12-knot service, so as to deliver the mails in Australia as soon or sooner than mails by the Suez route. The route to be taken will avoid the dangers of the Fiji group, and must become a favourite one with passengers. The projectors of the line propose running steamers from Queensland and New Caledonia to the Navigators, and also from Tahiti to Navigators, connecting there with the main line, and they expect to make Pango Pango a central station for the Island trade. Dunne my stay in New York, I was introduced to President Grant by General Burnside, and had a long conversation with him on the subject of the mail service. The President expressed regret at the failure of Mr. AVebb's line. He spoke warmly in favour of a renewal of the service; said he much wished to see an American line established, and would again recommend that a subsidy should be granted to such a line. I need scarcely point out to you the great importance of securing an American subsidy. (At the lowest it will be of considerable amount.) No such subsidy will be given to any but an American service; and their subsidy is, in my opinion, essential to the early success of the line. For this reason it is important that the line should be American; but there is another consideration which makes it desirable that the service should be American, and it is that their plan of constructing cabins on the main deck is essential to the comfort of passengers travelling through the warm latitudes between New Zealand and San Francisco. I am persuaded that no English shipowners could be induced to build vessels like the " Colon ;" and having travelled in the steamers of the Peninsular and Oriental Company (Suez route), in the Royal Mail steamships to the West Indies, in the Panama steamships to New Zealand, and in the Atlantic steamships between New York and Liverpool, I confidently assert that they all fall far short of affording the ease and comfort enjoyed by passengers in the American ships, and are not so well suited for voyagers in warm latitudes as vessels constructed like the "Colon." Two questions remain: first the amount of the subsidy asked, £70,000 (for I presume the service from the Navigators direct to Australia, is the only one likely to secure a large contribution from Australia). Ido not think the amount asked is too much, for if the projectors faithfully carry out their proposals, they will require four expensive boats, and in other respects the service will be a costly one. The other question is the ability of the parties to carry out the undertaking. General Burnside, one of the projectors, represents several gentlemen of financial ability, and also of steamship experience; and Mr. Thomas Scott, Chairman and principal owner of the Pennsylvanian Railroad one of the most prominent railroad capitalists in the United States, assured me the service would be established (he is one of the projectors), if the terms proposed, £70,000 per annum, were agreed to. I think the parties are men quite capable of carrying out their proposals. I left New York for England on the 21st June. I do not think it is possible to establish a service following the same route as the AVebb line, with branch boats from New Zealand to Australia, unless New Zealand is prepared to pay a much larger subsidy than the amount at present voted; and such a service would revive the feelings of jealousy already shown in Australia, and would, I think, fail to procure any large money assistance from those Colonies. The next best service for New Zealand would be one in which the main boat should touch at one or more New Zealand ports before going to Australia, thus taking the Australian traffic through New Zealand ; but by this plan time will be lost in the delivery of the mail in Australia. Australia can be reached more rapidly by a direct course from Honolulu via Fiji or the Navigator Islands than through New Zealand ; and if any one of the Australian ports are to join New Zealand on equal terms, they are, I think, entitled to the service most suited to their interests, and this service is that I have already described in my telegram as the "Fork " Service, to be performed by new iron screw boats of at least 2,000 tons burthen, of twelve-knot speed : the main boat proceeding from San Francisco, via Honolulu, to the Navigator Island, meeting there ready for sea a boat of equal size and speed ; the main boat to proceed thence to New Zealand, calling at Auckland, and doin"- the coast service to Port Chalmers, returning thence by the same route to San Francisco; the branch boat proceeding from Navigators to terminus in Australia. The following month, the main boat to proceed direct from Navigators to Australian terminus ; the branch boat (equal size, &c, with the main boat), leaving Navigators for Auckland and New Zealand ports. In my opinion this line is by far the most likely to succeed, as it gives to Australia a direct service with powerful ships, capable of delivering the mail as soon as if not sooner than by tho Suez route • while before very long even this time will be shortened, and several days saved between San Francisco' and London, when railways now far advanced in progress are completed, and steamship connections are made from to England instead of from New York. By adoptiug this service, New Zealand will lose whatever advantage has accrued from the Australian passengers passing through New Zealand ; but she will secure a permanent New Zealand service at a moderate cost —a superior service to Webb's; more rapid in point of time, and better for the convenience of passengers. For apart from the question of safety of the ships, there will be but one transhipment of passengers and cargo between New Zealand and San Francisco, in every two months, and then only into ships of equal size and comfort with those of the main line ; while in the Webb Service there was a transhipment every month, and always into inferior ships. If this service is carried out, care must be taken to reserve for Australia, as well as for New Zealand, one-half of the passenger accommodation of the ships, at the point of transhipment.