F.—l.

which, it is believed, arrangements could be made for a fortnightly service on terms that would admit of the colony accepting the 2-|d. letter-rate without involving heavy loss. But there may be a difficulty with the London Post Office in agreeing to forward by the Direct steamers the bulk of the outward-mail matter, inasmuch as London mails are now delivered in New Zealand quicker by the Federal packets than by the Direct service. This will be seen by a reference to the following statement, showing the maximum, minimum, and average times within which mails were delivered at and from London and Auckland, Wellington, and Dunedin (or Bluff) during 1889 by the Peninsular and Oriental and Orient lines and by San Francisco and Direct contract services: — San Francisco Service. 1"'10' p- ana °- Lino- Orient Line. London to Auckland .. .. 39 34 3s-62 .. 53 46 48-23 .. 48 38 43-46 .. 53 39 44-69 Auckland to London .. .. 39 34 35-46 .. 49 40 42-05 .. 48 41 45-00 .. 47 43 45-61 London to Wellington .. 41 36 37-38 .. 51 44 45-77 .. 48 38 4246 .. 49 40 44-65 Wellington to London .. 41 36 37-46 .. 47 38 40-33 .. 46 44 45-33 .. 47 44 45-33 London to Dunedin .. .. 42 38 38-77 .. 53 46 4754 .. 46 39 42-67 .. 47 39 44-08 Dunedin to London .. .. 42 37 38-46 .. 49 38 42-00 .. 49 41 44-17 .. 40 40 43-60 London to Bluff .. .. 43 39 39-52 .. 53 47 48-46 .. 45 38 41-92 .. 46 38 43-12 Bluff to London .. .. 43 38 3921 .. 50 39 43-38 .. 48 40 43-42 .. 45 39 42-85 As the London Post Office contributes to the maintenance of the Federal service, it would for obvious reasons desire to send mails for New Zealand by that line, as beyond the cost of railway transit from Adelaide to Melbourne or Sydney, and sea-transport from Australia to New Zealand, there would be no additional expense—nor would there be to New Zealand either. A service homeward by the Direct steamers would undoubtedly be the best for the colony (assuming, of course, that there was not a mail-line via, San Francisco) ; indeed, a service both ways by these steamers would be the more reliable. Unless there is to be a subsidised intercolonial-connecting service, the delivery of the Federal packet-mails in the colony would be very uncertain. The London Post Office is not at present in a position to indicate its policy as to future mail-service arrangements with New Zealand; but this need not prevent the colony from entering into a contract for a homeward service by the Direct steamers, and to leave that office to provide the outward service, but stipulating for deliver}' within a fixed time. In 1889 the San Francisco and Direct services, main lines only (i.e., excluding mterprovincial services, light dues, Ac, the expenditure on which now amounts to about £8,372 per annum), cost £38,421 10s. 6d. The postages collected in the colony amounted to £21,164 6s. 9d., and the postage-recoveries from the London Post Office, £19,320 7s. 6d.; a total of £40,484 14s. 3d. The postages, therefore, exceeded the cost of the main lines by £2,063 3s. 9d. With a 2-J-d. letter-rate, the postages collected in the colony would only amount to £10,907 12s. 4d. If the colony provided the homeward service only, and the Imperial Government the outward one, nothing would be receivable from the London Post Office. Assuming that a fortnightly service homeward by Direct steamers could be secured for a payment of, say, £8,000 per annum, there would be a difference of £844 Bs. 7d. in favour of the new arrangement compared with the postage-receipts and cost of the main lines, San Francisco and Direct contract services, last year. The net loss to the colony on the San Francisco and Direct contract services for 1889 was £2,379. The following correspondence has taken place in connection with the proposed reduction of the ocean letter-postage to 2-J-d : — The Agent-General to the Hon. the Peemiek, New Zealand. (Telegram.) London, 23rd April, 1890. Postal. —Baikes requests Agents-General meet him Friday with reference to Goschen's proposal reduce postage 2-|d. Instruct whether may say Parliament invited consider proposal.

The Hon. the Premier to the Agent-Geneeal. (Telegram.) Wellington, 24th April, 1890. Postal.—Prepared to consider proposal when received. Loss of revenue involved considerable.

Telegram despatched 30th April, 1890, by Sir Arthur Bltth. Joint Telegram.—Eepeat forthwith to the Governments of New South Wales, Victoria, New Zealand, Queensland, and Tasmania. The London Post Office has written the Agents-General for all the Australian Colonies, asking them to bring Goschen's proposal to reduce postage to 2-Jd. under the consideration of the Colonial Governments; and says, if colonies unanimous to reduce postage to 2|-d. the Imperial Government will reduce forthwith. If diversity of opinion amongst the Australian Colonies, the London Post Office will frame its policy in accordance with the views of the majority, or the views of the more important colonies. If their assent is obtained, will reduce postage to all colonies alike. New Zealand may be considered separately. Reply by wire as soon as you possibly can.

The Hon. the Premies to the Agent-General. (Telegram.) Wellington, 21st June, 1890. Goschen's Pboposals.—Supposing we accept, will Imperial Government continue .clef ray both ways cost conveying mails between Frisco London ? and what contribution would it make to us for providing service between Frisco colony ? Or, supposing we gave up Frisco service and arranged send all mails by Direct fortnightly steamers, what would Imperial Government pay colony for providing

IV