F.—2a-

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.No. 5. Mr. E. J. Creighton to Mr. Gray. Sir, — San Francisco, June 7th, 1880. I have the honor to transmit herewith further papers relating to the overland charge upon the enclosed British mails, and to inform you that my efforts to procure Congressional action in the matter have been successful beyond my own expectations. 2. On the 19th ultimo, I telegraphed you that the clause proposed by the Hon. Horace Davis, in the House of Representatives, had passed the Senate. My correspondence of last month will have made the matter clear to you, and therefore I shall only briefly refer to what transpired subsequent to the departure of the last steamer. Upon the amended Postal Appropriation Bill going before the Senate Committee on appropriations, Mr. Blaekfan, Superintendent of Foreign Mails, appeared before it voluntarily, and opposed the clause enabling " the Postmaster-General to remit in favour of the colonies of New South Wales and New Zealand so much of the cost of overland transportation of the Australian closed mails as he may deem just." His statement induced the Committee to strike out the clause. He opposed it first, because the department, having made a strong fight for permission to make this charge at the Paris Conference, were concerned in enforcing it as a matter of pride ; second, that the payments on this account were valuable as reducing the expenditures of the department. 3. Upon the bill being reported back with amendments, Senator Booth, of California, and the Hon. Horace Davis, took immediate steps to have the clause reinstated, and had an interview on the subject with the Post Office Department. When the Bill came up in the Senate, Senator Booth moved nonconcurrence in the amendment of the Committee regarding the Australian mail, and his motion prevailed on a division by 23 against 20. The clause was therefore restored to the Bill, "which is still before the House for concurrence in the Senate amendments in other sections. 4. I think I may reasonably take credit for this result, the importance of which is obvious. I have secured legal recognition of the California Mail Service by the United States Congress, and placed the contracting colonies of New South Wales and New Zealand in cordial relations with this great country. Upon the question involved, the right to consideration has been conceded, and the way has been opened, for progress in other directions, looking to tariff concessions. Unfortunately the Postmaster-General, Judge Key, has resigned, but I doubt net his successor will take a liberal view of the matter; and from the Hon. Mr. Key's undertaking not to demand the contract amount from the British Government, under certain contingencies as expressed in his letter to the Hon. Mr. Money, copy of which was forwarded to you, I think you may reasonably look to relief in the near future. 5. Owing to the approaching presidential election, little can possibly be accomplished beyond what has been already done, without personal explanation. Indeed, I question much whether anyone could be induced to take an interest in the matter until the election is over, and the new Cabinet has been formed, but should an opportunity arise from promoting the end in view, I shall avail myself of it. 6. I append a page from the " Congressional Record," giving the Hon. Mr. Davis' speech and motion, and the remarks of the Hon. Mr. Blackburn, who had the Bill in charge; also, extracts from the newspapers, giving the history of the clause. 7. Referring to the letter from Sir Julius Vogel, herewith attached, I have to say that he appears to have misunderstood the nature of the arrangement proposed by me for transporting the enclosed mail across the Continent. The mails would have been quite as safe—indeed safer than they now are— because they would have been in charge of Wells, Fargo & Co., whose express and letter-delivery service is recognised as more perfect than anything of the kind in the world. But inasmuch as Congress took action in the matter, virtually setting aside the contract between Sir Edward Thornton and the Hon. Mr. Tyner, and ignoring the authority of the Postal Convention of Paris, I do not think that any further reference to it is necessary. It should be borne in mind, however, that it was precisely this proposition by me which stimulated action, as reference to the accompanying letters from Hon. Mr. Money and Hon. Horace Davis shows. What the British Government may do in the matter of course, I cannot say; but it appears to me that they cannot in fairness refuse to make a rebate equivalent to the amount the American Government may remit. 8. With reference to the suggestion of Sir Julius Vogel regarding a subsidy to the Pacific Mail Company by the United States Government, I have simply to say that Congress will subsidize no steamship lines; and that were a subsidy granted, the company, and not the colonies, would enjoy the benefit. This would not happen should the pending negotiations result in a remission of the railroad freight charge altogether. 9. I have pleasure in reporting that, through the promptness and energy of Mr. Andrews, mail agent, and the co-operation of the local post office authorities, the mail which arrived on the 18th ult., at 7.15 a.m., got off by the overland train, which was detained an hour, without charge, by the General Superintendent of the Central Pacific Railroad, whose friendly assistance I have had occasion to note in previous letters. But, unfortunately, it was detained in New York a day after the "Arizonza " sailed on the 25th with the Sydney portion of the mail. This, I understand, arose from the fact that specific instructions have been given by the New Zealand Postal Department, or from London, to transmit the New Zealand mail only by certain steamers. The " Arizona "is the fastest ship afloat, and the Sydney mail will be delivered at least two days ahead of the New Zealand correspondence. Care should be taken to avoid a similar mistake in future. 10. I have likewise pleasure in noting the fact that Mr. Justice Gillies endeavoured, while in Washington, to carry out my wishes respecting the mail question, but was unable to do so effectually, owing 'to the absence from the capital of gentlemen to whom he had letters of introduction. Judge Gillies wrote to me from New York informing me of what he had done in the matter. Wm. Gray, Esq., Secretary I have, &c, Post Office, Wellington, New Zealand. Robt. J. Creighton. 3.— F. 2a.