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No. 13. Mr. Creighton to the Secretary, General Post-Office, Wellington. Dear Sir, — San Francisco, 12th February, 1883. The subject of the permanence of the Pacific mail service is beginning to attract attention among mercantile circles in this city. Reference was made to the subject by the retiring President of the Chamber of Commerce, Mr. Babcock, who said : " Business between this coast and the Australian Colonies is steadily increasing, owing to the monthly service of the Pacific Mail Steamship Company^ No doubt could this service be made semi-monthly it would be of vast profit to this country. The present mail contract between the colonies and the Pacific Mail Steamship Company will soon expire, and unless our Government grants a fair subsidy to this company it is feared the contract will be awarded to one of the numerous lines now running via the Suez Canal." Mr. Babcock has been succeeded as president by the Hon. Horace Davis, whose friendly aid in Congress is well known to you. The influence of the Chamber may therefore safely be counted upon. At the late annual meeting of the Board of Trade of this city President Taber said : " The contract btween the Colonies of New Zealand and New South Wales and the Pacific Mail Steamship Company, for the transportation of mails betwreen Sydney, Auckland, and London, via San Francisco, is drawing near its termination, and the question of its renewal or abandonment is being discussed in colonial, California, and English journals. This service has been of great advantage to the United States, and especially to this city and coast. It has opened a new market for many of our California products and manufactures, which has already become very important to us, and promises to increase year by year if the service is continued, until it will become immense. This growing commerce between the colonies and the United States is not viewed with favour by English merchants and manufacturers, and they prefer to see contracts made with the Peninsular and Oriental and Orient Steamship Companies for mail services by direct sea-routes via Suez. So far our country has done nothing to aid this service, and we have seen for over seven years an American company supported by English subsidy. I submit the suggestion that it may be well for this Board to address our representatives in Washington on the subject. This colonial trade is of great importance to us, and can only be retained by steamers from San Francisco and careful attention. Our trade with China and Japan is growing year by year, and we should sell them more goods than we do." A committee of the Board has been appointed to draft a memorial to Congress on the subject, and I have already had an interview with the chairman. Upon learning what the Government propose specially to do I shall procure a concurrent resolution from the Legislature of California in favour of a subsidy. New lines of transcontinental travel are projected and approaching completion, among them being a direct line of steamers between Guaymas and China and Japan, as a feeder to the Santa Fe and Topeka Railroad-system. This is a shorter route than via San Francisco. The Northern Pacific will be through to deep water on Puget Sound in about August next; and the directors speak of a steamer line to China, the route being 600 miles shorter than by this city. Although this has been the severest winter on record almost, the traffic on the Northern Pacific was only interrupted six hours at one point, and a force of 2,000 men are steadily at work grading and track-laying. Other linos have had their traffic seriously impeded. Ido not think a Tariff Bill will pass this session. If it does, however, it will be more favourable to New Zealand trade than the present one. I would vastly prefer, however,lthat it would fail in passing, as the Democrats, who are in favour of a revenue tariff, would control the House in the new Congress, and much better terms might be obtained from them in aid of the mail service. I append newspaper extracts which have a bearing upon this question. W. Gray, Esq., 1 have, &c, Secretary, General Post-Office, Wellington, Rout. J. Creighton.

No. 11. Mr. Gray to Mr. Creighton. Sir,— General Post-Office, Wellington, 28th March, 1883. I have the honour to acknowledge receipt of your letter of the 12th ultimo in relation to the renewal of the San Francisco mail service and the commerce between New Zealand and the United States. The Hon. the Premier and the Postmaster-General have read it with much interest, as w rell as the extracts from newspapers sent with it. It is very satisfactory to find the feeling of some of the American journals so favourable to this country's interests. It is to be regretted no further steps can be taken here in the matter of the renewal of the service at present. They have to be held in abeyance owing to want of further information from the Government of New>South Wales, who have proposed to their Parliament to renew the service conjointly with New Zealand. Up to the present no legislative decision has been arrived at. The late Congress having dealt favourably with the tariff question, the Government are naturally anxious to hear whether the new Congress meets this month, and what prospects there may be of the San Francisco service receiving any substantial aid, It is to be hoped there will