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[EndosurtO

2ndly. With respect to the penalty of £200 per day for every twenty-four hours beyond fiftyfive days consumed in the voyage between Sydney and Southampton, I beg to remark that the statement of the Peninsular and Oriental Company, to the effect that fifty-five days are to be allowed, exclusive of the time occupied in crossing the Isthmus of Suez, is quite correct, such having been the understanding come to at the Conference which took place at the Post-Office before the Tender of the Company was accepted. The reference to this point affords me the opportunity of calling attention to an oversight which has taken place in adopting a system of Penalties and Premiums for the Australian Mail Service ; for, while these Penalties and Premiums are payable in respect to the heavy Mails conveyed by the long Sea route, they are not applicable to the far more important portion of the Mail which is forwarded through Fiance. To remedy this omission, I recommend, if your Lordships approve, and the Company offer.no objection, that a Penalty or a Premium (as the case may be) of only one-half the amount specified in the Draft may be payable for the Service between Sydney and Southampton, and that like amounts be payable in respect to the Mails brought to or conveyed from Marseilles, the time fixed in the Table, forty-eight days being allowed for the voyage between Sydney and Marseilles, exclusive of the time occupied in the passage rf the Isthmus. I have further to suggest that, instead of the Penalty being £ 100 per day, it be fixed at a proportionate sum per hour, or probably your Lordships, if you approve of the idea, would not object to fix the Penalty at four pounds per hour. The Premium should then be payable in like manner, say one pound for every hour. 3rdly. The Draft specifies that the Company shall provide a proper room for sorting Letters on board each of the vessels to be employed under this Contract between Southampton and Alexandria, and a query is made in the margin whether a similar provision is to be made on board the vessels between Marseilles and Alexandria. In reference to this question, I beg to state, that the arrangement desired by the Post-Office is as follows :— , That the Mails forwarded to the United Kingdom via Marseilles should leave Alexandria one day in advance of the Mails via Southampton, and should be sorted on board the Packet going to Marseilles, during the voyage from Alexandria to Malta, and that the Officers employed in this duty should land at Malta, and there await the arrival of the Packet bringing the heavy portion of the Mail, which would then be sorted by them during the voyage between Malta and Southampton. By this arrangement, one clerk and his assistant would suffice for sorting both the Marseilles and the Southampton portions of the Mail, and the Company would not have to maintain and to provide sleeping accommodation tor more than these two persons throughout the entire distance from Alexandria to Southampton. 4thly. With regard to the demand of the Company that the days and hours of despatching the Australian Mails shall not be altered without a corresponding alteration being made in the days and hours of despatching one of the Bombay Mails, I beg to inform your Lordships that this claim is quite in accordance with the understanding arrived at when the Conferonce took place at this Office, and I recommend that the clause should be altered accordingly. . I have, &c, (Signed) Colchester. The Lords Commissioners Of the Treasury. MR. MERIVAI.E IO SIR C E. TREVELTAN. Downing-Street, Sth January, 1809. Sir,— I am directed by Secretary Sir E. Rulwer Lytton to acknowledge the receipt of your Letter of the 17th ultimo, requesting to be furnished, for the information of the Lords Commissioners of the Treasury, with Sir E. B. Lytton's opinion whether the proposal made for sending the principal Australian Packet from Suez as far as Melbourne only, and for performing the further Service between Melbourne and Sydney by means of a branch Packet, may be sanctioned. The conclusion of the voyage of the chief Packet at Melbourne cannot, it may be presumed, prejudice any interest of the Colony of Victoria. On the other hand it is pointed out in the Letter from the Postmaster-General, so far as regards the interest of New South Wales, that by the proposed transfer of the Mails to and from the Steamers on the main line at Port Philip Heads, the outward Mails to New South Wales must reach Sydney much earlier than they would do if the Steamer from Suez proceeded with them to Sydney after previously landing the Victoria Mails at Melbourne, and that the Homeward Mails, instead of being detained two days at Melbourne, may be despatched two days later from Sydney, thus lengthening the interval for replies at that place. Without injury to Victoria, these will undoubtedly be benefits to New South Wales, so far as regards the rapidity of Postal Communication. On the other hand, however, the arrangement may possibly be viewed with less satisfaction by New South Wales passengers. In order to obviate this, as far as practicable, the Admiralty should be requested to make conditions for securing a vessel of sufficient size, and with ample accommodation, to be employed on the branch Service ; and Sir li, B. Lytton would suggest, unless there be any objection of which he is unaware, that the Company should