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Australia, on terms which would be advantageous as compared with the existing rate, they are prepared, under such circumstances, so far to modify their previous decision on the subject as to agree that the Australian mails shall, as at present, be conveyed free of charge to the colonies between this country and Point de Galle or Colombo (in the event of the latter port being made the port of call for Ceylon), on the condition that the Imperial Post Office shall, after the Ist of February next, when the present arrangement will expire, receive twopence in lieu of one penny as at present on the outward correspondence, which may be considered as equivalent to the inland rate on both the homeward and the outward correspondence. This arrangement would, of course, apply equally to the correspondence conveyed under other contracts via Singapore and San Francisco. I have, Ac, The Agent-General for New Zealand. Eobt. G. W. Heebebt.

Enclosure 2 in No. 85. The Agent-General to the Under Secretary of State for the Colonies. Sir, — 7, AVestminster Chambers, London, S.W., 30th April, 1879. I have the honor to acknowledge the receipt of your letter of the 29th instant, in which you intimate to me that on Mr. Berry informing the Lords Commissioners of the Treasury that a fresh contract might be made with the Peninsular and Oriental Company for a fortnightly service both to Melbourne and Sydney, they have agreed to modify their previous decision so far as to be willing to carry the mails between this country and Ceylon for double the rate now charged —namely, twopence instead of a penny, and that this proposal would equally apply to the colonial mails carried by way of San Francisco. In reply, I have to say that I doubt if Mr. Berry has any authority to act for the Government of New South Wales. Until November, 1883, New South Wales and New Zealand are jointly concerned in a contract for the carriage of mails via San Francisco. By an arrangement which has been made between the several colonies, each has been able to use the various mail routes without necessarily being a party to the contracts. Victoria has thus used the San Francisco route, whilst New South Wales and New Zealand have used the monthly service via Ceylon. A fortnightly service by the latter route would throw on the two last mentioned colonies a heavier cost for the San Francisco service, inasmuch as it would lessen the use made of it by Victoria. It is exceedingly improbable that, pending the continuation of the San Francisco service, the Government of New South Wales would entertain any arrangement for the establishment of a fortnightly service by Suez. In any case, however, I have to urge most earnestly the claim of my Government and that of New South Wales to a continuance of the recent arrangement, so far as relates to the carriage of mails by San Francisco, until that contract expires in November, 1883. The two Governments, when they entered into the contract, did so with the full persuasion that the Imperial Government would not increase the charge for which they had agreed to make the connections with San Francisco. In my letter of 24th July last, to the Secretary of State for the Colonies (copy enclosed*), I showed at length that the transit of the mails to and from San Francisco did not cost the Imperial Government a larger sum of money than when the agreement was entered into with the colonies to carry those mails. On the other hand, the two colonies interested pay a very large sum for the service, and they will feel it to be a want of consideration to them that the terms should be increased during the currency of the service. I trust, therefore, without reference to the arrangements made for other services, or those to follow the conclusion of the present San Francisco Contract, that until the present contract expires the present arrangement will be allow _d to continue. I am happy to state that the Agent-General for New South AVales concurs in these views. I have, Ac, Julius Vogel, The Under Secretary of State for the Colonies. Agent-General for New Zealand.

Enclosure 3 in No. 85. Mr. Bramston to the Agent-General. Sir, — Downing Street, sth May, 1879. I am directed by the Secretary of State for the Colonies to acknowledge the receipt of your letter of the 30th April, requesting that the present arrangements for the carriage of mails via San Francisco may be continued until the contract for that service expires in November, 1883. In reply, I am to inform you that a copy of your letter has been forwarded to the Lords Commissioners of the Treasury, and that a further communication will be addressed to you upon the sub* ject. I have, Ac, The Agent-General for New Zealand. John Bramston. * Vide Enclosure 4 in No. 24 of P.-iA., 1878. By Authority: Geoegb Didsbuby, Government Printer, Wellington—lB79. Price Is. 3d.]