F.—3

20

No. 52. The Hon. the Colonial Seceetaby, Sydney, to the Hon. the Colonial Seceetaby, Wellington. Sib,— Sydney, New South Wales, 14th October, 1878. I have the honor, at the request of my colleague the Postmaster-General, to transmit to you, for tl^e information of your Government, a copy of a minute of that Minister's, concerning the proposed alteration of the arrangements between the Imperial and Colonial Governments for the division of postages on Australasian mails. I have, Ac, The Hon. the Colonial Secretary, Wellington. M. FitzPateick.

Enclosure in No. 52. Minute of Postmaster-General concerning Proposed Alteration of the Arrangements between the Imperial and Colonial Governments for the Division of Postages on Australasian Mails. General Post Office, Sydney, 24th September, 1878. It appears that, although the Agents-General for the Colonies of Australia and New Zealand have jointly protested against the proposed increase in the amount retainable by the Imperial Post Oflice out of its receipts on mail matter for transmission by the several services, the Colonial Oflice still looks for an expression of opinion on the subject direct from the Government of each colony. Ido not know that the case for the colonies can bo put more forcibly than has already been done for them by the Agents-General, but there are reasons other than those which have been advanced, which in my opinion should induce the Imperial Government to refrain from adopting the proposed change. The proposal made by Lord Kimberley, in 1873, to convey the mails to and from Galle, Singapore, and San Francisco free of charge, and to account to the respective colonies for the postage on the outward mails, less the British inland rate, was naturally regarded as the outcome of the deliberations of his Cabinet on the obligations of the mother-country in reference to mail communication with her colonies. The attention of the English Government had been specially directed to this question by the then approaching termination of the contract for the Suez service, and also by the dissension which had arisen respecting the ocean mail services at the Intercolonial Conference held at Sydney, in January, 1873, about which communications had passed between Lord Kimberley and the Colonial Governments. Indeed, all the circumstances could but confirm this impression. Under the arrangement which was then drawing to a close, the English Government had borne one-half ofthe whole cost of the Australian and New Zealand mails ; and when the question of future arrangements was first brought under its notice, it proposed to relieve the colonies of the entire cost of conveying the mails between Galle and England, and to divide equally with them the expense of the service between Galle and Australia, which no doubt would have been a better arrangement, financially considered, for the colonies. It would be somewhat irrelevant to my purpose to advert in this minute to the causes which led to that proposal falling through. It is sufficient for me to point out that the agreement of 1873, as was shown by Mr. Postmaster-General Monsell, in his letter to the Lords of the Treasury of the 15th May of that year, entailed a smaller charge on the Imperial funds than the one which it superseded, or the one w-hich had been rejected would have involved ; and that, as there was nothing in the language in which it was proposed, nor in any subsequent communication from the Colonial Office, suggestive ofthe idea that it was contemplated to treat the colonies less liberally from the time of its expiration in 1878, the Colonial Governments were justified in relying upon the continuance of no less support towards the maintenance of their ocean services than was then freely and unreservedly conceded. In view of that agreement, the Government of A rictoria entered into a fresh contract for the Suez service. The Governments of New South Wales and New Zealand jointly established the Pacific service, and the Government of Queensland established the Torres Straits service. The contract for the Suez service, which leaves a charge on the revenue of Arictoria of about £17,000 per annum, after deducting all the receipts for postages, and taking into account the allowances of the English Government, will not expire till February, 1880. The contract for the Pacific service, which leaves an annual charge of about £22,000 on the revenue of New South Wales, and of £17,000 on the revenue of New Zealand, will not expire till November, 1883. In like manner, the contract for the Torres Straits service, which leaves an annual charge on the revenue of Queensland of about £13,000, will not expire till the 31st October, 1880. I submit, then, that the proposal now made, that the English postal authorities should after this year retain four-sixths instead of one-sixth of the outward postages on letters for transmission by the Australian and New Zealand mails, contemplates so great a reversal of the policy which has hitherto been pursued in relation to postal matters, as to be in some measure unjust to the colonies which have contracted liabilities for ocean mail services for periods beyond this year. J. F. Burns.

No. 53. The Agent-Genebal to the Hon. the Postmaster-General, Wellington. Sir,— 7, Westminster Chambers, London, S.AV., 10th October, 1878. In continuation of former correspondence relative to the Treasury proposals concerning the Australasian Mail Service, I have the honor to enclose you copy of a letter which I have received from the Colonial Office, acknowledging the joint letter addressed to the Secretary of State by the AgentGeneral for New- South AVales and myself, and enclosing copy of a letter addressed by Sir Michael Hicks Beach to Mr. Forster, respecting that gentleman's report to his Government of the interview we had with the Colonial Secretary on the 20th August. I also enclose a copy of my reply to Sir Michael Hicks Beach. I have, Ac, Julius Vogel, The Hon. the Postmaster-General, AVellington. Agent-General.