35

F.—3

" City of Melbourne " arose through their default. I have therefore to ask that you will be so good as to take the necessary action with a view to the proper authorities being made acquainted with the decision which has been come to in regard to the transmission of the return mails by the " City of Melbourne." With reference to the fourth paragraph of your letter, touching on the question of the " Cyphrenes " having been substituted for the " Mikado " for the conveyance of the December outward mails from this colony, I have to state that this Government failing to perceive any other means by which the outward mail via San Francisco could be conveyed hence, and feeling assured that your Government would be in a position to arrange for the conveyance of your outward mail via Kandavau, the opinion of the Solicitor-General of this colony was taken as to the effect which the sending of the mails by the " Cyphrenes " would have in regard to the penalty for breach of agreement, and, acting on his advice, special notices (copies attached) were served on the agents for the Company at Dunedin and Auckland before the mails were put on board the vessel at the respective places. The " Cyphrenes " left Auckland for Kandavau on the 19th December, with New Zealand mails and Mail Agent on board, and it is believed it was not the intention of the Company for her to proceed beyond that place. On receipt of your telegram of the 18th December, which reached Wellington through the Chief Postmaster of Auckland on the 26th December, Captain Brown, of the " City of Melbourne," was instructed to proceed via Kandavau and pick up New Zealand mails and Mail Agent sent thence by the " Cyphrenes," and he proceeded on the voyage the following day. I enclose copies of all correspondence which has taken place since the date of my last letter of the 6th December last. The Solicitor-General's opinion, and copies of the notices served on the agents, will be found attached. I have, &c., The Hon. the Postmaster-General, Edward Richardson, New South Wales. (for the Postmaster-General).

No. 59. Mr. Lambton to the Secretary, General Post Office, Wellington. Sir,— Sydney, Bth February, 1876. I am directed to acknowledge the receipt of the letter from the Postmaster-General of New Zealand, dated the 3rd ultimo, with reference to the steps taken by his Government in the matter of the Pacific Mail Steamship Company's arrangements for the performance of their San Francisco mail contract, and intimating his concurrence in the same. I am also to acknowledge his courtesy in furnishing information of the course adopted by the Government of New Zealand, together with the copies of correspondence relating thereto, in connection with the sending of the mails of your colony to Kandavau by the s.s. " Cyphrenes " on the 19th December last. I have, &c, S. H. Lambton, The Secretary, General Post Office, Wellington. Secretary.

No. 60. Messrs. Gilchrist, Watt, and Co. to the Postmaster-General, Wellington. Sir, — Sydney, 20th December, 1875. We have the honor to enclose copy of a letter addressed to the Postmaster-General, here, by Mr. Hall. The unfortunate non-arrival of the " Colima " has caused us much annoyance. On the 16th instant the Postmaster-General here was offered the " Macgregor " to convey mails from here via Kandavau to San Francisco, but declined, the Government fearing legal complications if accepted in connection with Pacific Mail Steamship Company. On the 17th we offered her on behalf of the owners outside the contract, and she was accepted to leave this evening. Some fastening of her screw shaft, however, was found defective; aud as this will require to be forged, trifling as it is, some days will be lost in its replacement. The Postmaster-General then directed his attention to the "City of Melbourne; " and in reply to an official communication from him, the proposal enclosed was made, to w rhich no reply has been received, and we learn the Government have chartered the " City of Melbourne " to proceed via Auckland and Kandavau to San Francisco. We fear she may not overtake " Cyphrenes," and, if not, another hitch may take place in carrying on the coastal service, which the proposal of 18th would have prevented. If " Colima " arrive shortly, we will have her put right at once, and in place of despatching her to San Francisco we will send her to take up her position in New Zealand, so as, as early as possible, to put the service ou a right footing. Failing this, aud if " Cyphrenes " has gone to San Francisco before " City of Melbourne " reaches Kandavau, we must again have recourse to conveyance of mails from southern ports to Auckland, there to be picked up by large steamer. We hope to have " City of San Francisco" and " Mikado" available here for next mouth's mails, independeutly of " Colima," and " Zealandia " should be here early in February.