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to schedules to contract as to the larger subsidy paid while Contractors doing only modified service, and the probable disputes likely to arise as to payment of bonuses, and how this all weighs on New Zealand, you will, I hope, understand our impatience, and press the matter on your Parliament for final decision within a few days. Geo. McLean, The Hon. the Postmaster-General, Sydney. Postmaster-General.

No. 141. The Hon. Saul Samuel to the Hon. the Postmastee-Geneeal, Wellington. (Telegram.) Sydney, 9th April, 1877. Quite understand your position. My predecessor appears to have considered it unnecessary to propose any change in amount of payment pending Parliamentary approval of modification, because it was supposed that the route via Auckland and Fiji, and Contractors doing your coastal service, was about equal to original fork service. I propose consulting colleagues at earliest possible moment with regard to the whole matter, including modification. Our Parliament does not meet until twenty-fourth instant. Saul Samuel, The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 142. The Hon. George McLean to the Hon. the Postmaster-Geneeal, Sydney. (Telegram,) AVellington, 17th April, 1877. Will be glad to learn if you have instructed sureties as you proposed to lodge their consent with Agent-General, so that the'outgoing steamer commence the modified service, and .accept the subsidy of seventy-two thousand five hundred pounds on our undertaking coastal service. Should your Parliament decide against the alteration, we should be compelled to insist on Company at once performing service as at present contracted for. The Hon. the Postmaster-General, Sydney. Geo. McLean.

No. 143. The Hon. Saul Samuel to the Hon. the Postmastee-Geneeal, Wellington. (Telegram.) Sydney, 19th April, 1877. Refeeeing to your last telegram, Gilchrist, Watt, and Co. telegraphed to Contractors assent of sureties under seal to temporary deviation from contract, and have just received following reply : —■" Sureties consent Government wish, posting formal sanction, McGregor being absent." We also telegraphed to Agent-General to procure proper document. Matter of modification, as arranged by predecessors, still under consideration of Cabinet. Understood assent we proposed to procure from sureties was to cover part, and further temporary concession of a like character. No arrangement yet has been entered into for payment of reduced subsidy named by you. This will involve fresh negotiations. Doubtless if Fiji is dropped, and you do your own coastal service, Contractors will take reduced subsidy. If we assent to this, it can only be pending decision of Government and Parliament upon modification. Saul Samuel, The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 144. The Hon. Geo. McLean to the Hon. the Postmastee-Geneeal, Sydney. (Telegram.) Dunedin, 25th April, 1877. It would be very desirable proposed modified service should be commenced by the outgoing steamer now that the consent of sureties has been secured, and that Contractors should be paid reduced subsidy. We quite understand that this is subject to the assent of your Parliament. We trust the seeking of such decision will not be longer delayed. We would suggest in your negotiating, you stipulate that any penalties and bonuses that may be agreed upon should be receivable and payable on termination of voyage at Sydney and San Francisco, and be equally shared or paid by both colonies. In your negotiations nothing should be agreed to which would release Contractors and sureties from their liabilities under existing contract, which should have legal effect until modified contract executed. Consent of sureties understood to be to the proposal made by Contractors for modifying service. Geo. McLean, The Hon. the Postmaster-General, Sydney. Postmaster-General.

No. 145. The Hon. Saul Samuel to the Hon. the Postmastee-Geneeal, AVellington. (Telegram.) Sydney, 4th May, 1877. Refeeence to your telegram of the twenty-fifth ultimo, I have now to state that on second instant I wrote Gilchrist, Watt, as follows : —" I have the honor to inform you, in reply to the request contained in your letter of the tenth ultimo, and in referenced conversations on the subject with your Mr. Gil6—P. 4.