F.—6

28

VANCOUVER SERVICE. ■ AUCKLAND-SUVA-HONOLULU-YANCOUVER CONTRACT, No. 76. His Excellency the Governor-General, Canada, to His Excellency the Governor, New Zealand. My Lord, — Government House, Ottawa, 28th January, 1911. I have the honour to transmit herewith, for Your Excellency's information, a copy of an approved minute of His Majesty's Privy Council for Canada with reference to a contract into which it is proposed to enter with the Union Steam Ship Company of New Zealand for a service to New Zealand via Honolulu and Fiji. I have, &c, His Excellency Lord Islington, K.C.M.G., Governor of New Zealand. Grey. [Vane. Misc. 11/98.]

Enclosure in No. 76. Certified Copy of a Report of the Committee of the Privy Council (Canada), approved by His Excellency the Governor-General on the 24th January, 1911. The Committee of the Privy Council have had under consideration a report, dated 17th January, 1911, from the Minister of Trade and Commerce, submitting that tenders were invited for a renewal of the Canada Australian service or an alternative service including a call at New Zealand, and that the Union Steam Ship Company of New Zealand, now performing the service between Canada and Australia, the contract for which expires on the Ist of August next, was the only company that tendered. The Minister observes that the Canadian Government accepted the tender for a service to Australia via New Zealand, it being understood that Canada, Australia, and Fiji were to pay practically the same subsidy as at present. This tender the Australian Government declined to accept, as it included a call at New Zealand. It therefore appears expedient to enter into a contract for a service to New Zealand via Honolulu and Fiji, leaving the question of the extension of the service from New Zealand to Australia for further negotiation. The Minister accordingly recommends that he be authorized to enter into a contract with the Union Steam Ship Company of New Zealand (Limited), with a view to establishing a direct steamship service between Canada and New Zealand for a period of five years from the Ist of August, 1911, and to pay a subsidy therefor at the rate of £37,090 18s. 2d. The Committee, concurring in the report of the Minister of Trade and Commerce, advise that Your Excellency may be pleased to forward a copy of this minute to the Right Hon. the Secretary of State for the Colonies and to the Governments of Australia and New Zealand. All which is respectfully submitted for approval. F. K. Bennetts, Assistant Clerk of the Privy Council. [Vane. Misc. 11/96-7.]

No. 77. The General Manager, Union Steam Ship Company, Dunedin, to the Secretary, General Post Office, Wellington. Union Steam Ship Company of New Zealand (Limited), Sir,— Dunedin, 30th March, 1911. With reference to your letter of the 10th instant [No. 135, F.-6, 1911], regarding freight on flax from Auckland to Vancouver, we beg to remark that the comparison made by the.correspondent between the carrying of bulky freight by the mail-steamers to the Pacific coast with the carriage of the same goods in the steamers trading to the United Kingdom is not a fair one. The steamers in the United Kingdom trade are, for obvious reasons, much less expensively operated in proportion to their tonnage and the earning-powers the trade affords. Their large cargoes consist principally of meats, butter, cheese, wool, gum, and other valuable commodities, yielding good rates, and thus they can quote low for bulky cargo such as flax to fill up with. Freights to the Pacific coast do not, as yet, offer remunerative employment for large carriers running to a regular time-table, but to promote an expansion of trade we are pleased to quote for all classes of produce at the lowest rates practicable. For flax, for instance (which the correspondent specially mentions), we quote at present to San Francisco £1 15s. 9d. per 2,000 lb. (dumped), equal to only about 15s. per 40 cubic feet; but, of course, such figures have to be varied according to space available when better-paying business offers. The effect of the rates we have from time to time been able to arrange from New Zealand via Vancouver to inland American points can be seen by comparing the rates now quoted via England to America with those ruling over that route a few years ago.