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Enclosure No. 2. The Seceetaby to the Teeasuby to the Under Seceetaey, Colonial Office. Sic, — • Treasury Chambers, 10th June, 1873. Referring to previous correspondence on the subject of the Australian Mail Service, I am directed by the Lords Commissioners of Her Majesty's Treasury to transmit to you, for the information of the Earl of Kimberley, a copy of a letter addressed by their Lordships' direction to the Post-master-General, with a copy of Mr. Monsell's reply, from which His Lordship will learn what is the operation and financial effect of the arrangement finally determined upon as communicated to the Colonies in His Lordship's telegram of the 16th May. I am, &c, Chas. W. Stbonge, The Under Secretary of State, Colonial Office. Pro Sec. Sub-Enclosure 1 in Enclosure No. 2. The Seceetabt to the Teeasuey to the Postmastee-Gteneeal. Sic, — Treasury Chambers, 2nd June, 1873. With reference to your letter of the 15th ultimo, I am commanded by the Lords Commissioners of Her Majesty's Treasury to transmit to you a copy of a telegram which the Earl of Kimberley has, at their Lordships' request, sent to the Governors of the Australasian Colonies on the subject of the mail service between those Colonies and this country. You will perceive that under the terms of this telegram the proposal communicated to you in my letter of the 14th May has been somewhat extended, and the offer made by their Lordships is that the mails from this country to Australia and New Zealand shall be carried free of charge (other than foreign charge for laud transit where the Brindisi route is used), not only to Galle and Singapore, but also to San Francisco ; and that the homeward mails shall in like manner be brought to this country from each of those places without charge beyond that for land transit by the Brindisi route. On all outward correspondence, therefore, the Imperial Post Office should account to the Colonial Post Office for all the postage collected, except that portion which represents the British inland rate, and (in the case of the Briudisi route) the amount paid for foreign land transit; and on the homeward correspondence the Colonial Post Office should retain all the postage collected, except that portion which represents the charge for land transit via Brindisi. Under this plan the Colonies will not be required to account for the United States sea rate on letters or newspapers, printed papers, or patterns sent to this country via San Francisco. I am to request that my Lords may be furnished with a memorandum showing the financial effect of these arrangements. I am, &c., Chas. W. Steonge, The Postmaster-General. Pro Sec. Sub-Enclosure 2 in Enclosure No. 2. The Seceetaet to the Postmastee-Geueeal to the Seceetaey to the Treasury. Sic, — General Post Office, sth June, 1873. In accordance with the request made in the concluding paragraph of your letter of the 2nd instant, I am directed by the Postmaster-General to transmit to you a memorandum showing the financial effect of the proposals which your Lordships have decided to make for the conveyance of the Australasian mails on the assumption that the mails sent via San Francisco shall be conveyed between the United Kingdom and that port, free of any charge to the Colonies, whether for land or sea transit. I am, &c, The Secretary to the Treasury. Joira Tillet. Enclosure to Sub-Enclosure 2 in Enclosure No. 2. Austealian Mails —Amended Memoeanduji. Year 1873. £ £ Imperial contribution to the service between Galle and Sydney ... 64,500 Less —Colonial contribution to the service between England and Galle 29,000 Net Imperial contribution ... ... ... ... ... 35,500 Outward postage on correspondence via Galle ... ... ... 42,700 Net Imperial revenue on correspondence via Galle ... ... ... 7,200 Outward postage on correspondence via San Francisco ... ... 11,000 Deduct —Payments to the United States for land transit outwards, and land and sea transit homewards ... ... £5,080 Less—Amount recovered from the Colonies ... ... 2,320 2,760 Net Imperial revenue on correspondence via San Francisco ... ... 8,240 Total ... .„ £15,440