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No. 55. Mr. Rose to Mr. Price. (Telegram.) Wellington, 26th December, 1875. The "City of Melbourne" will take on New Zealand mails and yourself to San Francisco. Have mails transhipped to " City of Melbourne," and proceed iv charge accordingly. I have, &c, W. H. Price, Esq., Thomas Rose, New Zealand Mail Agent, Kandavau. (for Secretary G.P.0.)

No. 56. Mr. Price to the Secretary, General Post Office, Wellington. Sir, — Levuka, 31st December, 1875. I have the honor to report that after waiting five days at Kandavau for the Sydney and San Francisco boats, and neither having appeared, the agent of the " Cyphrenes " decided to send her to Levuka to be re-surveyed. The report, which has just been furnished, fully confirms the report of the Engineers at Lyttelton and Auckland, and states that it is impossible for the " Cyphrenes "togo to San Francisco. The mails will therefore remain under my charge at Kandavau until either the San Francisco or Sydney boat arrives. If neither call at Kandavau, or should the " Cyphrenes" have left Levuka for Sydney, I shall keep them until the boat comes through next month. I have, &c, W. H. Price, W. Gray, Esq., Secretary, General Post Office. Mail Agent.

No. 57. The Hon. J. F. Burns to the Hon. the Postmaster-General, Wellington. Sir,— Sydney, 20th December, 1875. I have the honor to inform you, in continuation of my advices on the subject of the arrangements made by the Pacific Mail Steamship Company for the performance of their San Francisco Mail Contract, that on the 14th instant Mr. H. H. Hall applied for permission to substitute the " Macgregor " for the conveyance of the New South Wales outward mails of this month, owing to the non-arrival of the " Colima." On the following day I informed him that I declined to accede to this proposal, and I took the opportunity to allude to the violation of the contract that had occurred through the " Vasco de Gama" proceeding last month via Auckland instead of direct to Fiji. On the morning of the 18th instant (the day after the proper date of the sailing of the " Colima" from here), I gave Mr. Hall notice that, unless he provided a vessel by noon of that day, I should be compelled to charter one to perform the service. As he did not provide a vessel, I concluded negotiations with the Australasian Steam Navigation Company on Saturday (of which you were advised by telegram via Melbourne on the same day), for the " City of Melbourne " to perform a trip to San Francisco and back via Auckland, leaving here this day at 10 p.m., on similar terms to those of the temporary contract. Feeling assured, after mature consideration of your telegram of the Ist instant, that you would not recognize the " Cyphrenes " as a mail ship, and hence would not forward the New Zealand mails by her, as before stated, the Government determined to despatch the " City of Melbourne " by way of Auckland instead of direct with the New South Wales mails to Kandavau; but to meet the possibility of your having sent mails by the " Cyphrenes" (treating her as a private ship), I have arranged with the Australasian Steam Navigation Company that, if directed by you to do so, the " City of Melbourne " is, after receiving your regular mails at Auckland, to go on to Kandavau with a view of picking up the former vessel at the latter place, and taking from her such mails. In the absence of instructions to this effect from you, Captain Brown will proceed direct to San Francisco via Honolulu. As you will no doubt readily understand, I was unable to made any arrangement to meet the emergency without involving the engagement of the vessel for the return trip also; but I purpose, with your concurrence, insisting on the Pacific Mail Steamship Company foregoing their right to bring the return mails in order that the " City of Melbourne " may do so. This, it seems to me, we can fairly do, seeing that the necessity for her employment has arisen through their default. I enclose copies of correspondence that has taken place since the date of my last communication dated the 22nd ultimo, including copy of the telegram I sent to you via Melbourne on Saturday last. I have, &c., The Hon. the Postmaster-General, Wellington. J. F. Burns.