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intercourse with the whole Continent of America, from which they are at present comparatively excluded ; and looking to the very liberal manner in which the Government of New South Wales have come forward in support of this scheme, My Lords are of opinion that they ought no longer to delay fulfilling the intention, which they formerly announced, of inviting Tenders for the Service. In coming to this decision, however, it must be clearly understood thnt My Lords will not consider themselves bound to accept any of the Tenders unless they are fully satisfied— Ist, That the amount is reasonable, and such as they would be justified in incurring. 2nd, That the times and rates of speed are such as to harmonise perfectly with the Suez Service, »o as to make the two alternate fortnightly with each other ; and, 3rd, That the Governments of the Australian Colonies will undertake one entire half of the cost of both the Services, via Suez as well as via Panama, whatever that may be. Write, accordingly, to the Admiralty, and request that they will take the necessary stepe for procuring Tenders for the performance of a Monthly Mail Service between Great Britain and Sydney via Panama and New Zealand. The Contractors must make provision for conveying to and from Melbourne the Letters of Victoria ard the other Australian Colonies. I hey must also state at what ports between Great Britain and Panama, and between Panama and Australia, it may be in contemplation to call, and the time at which they will be prepared to commence the service from Australia and from Great Britain. The 'lenders must specify the maximum number of days to be occupied on the voyages out and home, which must not exceed fifty-five days on the whole, exclusive of the Transit across the Isthmus, and the times of arrival and departure must be so arranged , , as to alternate fortnightly with the Suei route. My Lords propose to allow a period of two months, say till the Ist of July, for the delivery of the Tenders. MH. ELLIOT TO SIR STAFFORD XOKTHCOTE. Downing Street, 4th May, 1859. Stit,I am directed by Secretary Sir E. Bulwer Lytton to acquaint you that he has had under his consideration your Letters of the 9th and 19th bit., on the subject of the establishment of Postal Communication between this Country and Australia via Panama. In the first of those Letters you transmit a copy of one from Mr Merewether, the agent deputed by the New South Wales Government to advance that project, suggesting that Tenders for the execution of the c ervice should be immediately called for ; and in the latter Letter you transmit a copy of a Treasury Minute, from which it appears that the Lords Commissioners have decided to delay no longer inviting Tenders for the Service, and have requested the Lords Commissioners of the Admiralty to take the necessary measures for that purpose. Sir E. B. Lytton observes that these Tenders are to be invited on the clear understanding, that the Lords Commissioners will not accept any Tenders unless they are satisfied on certaifi specific points, otic of which is that the Governments of the Australian Colonies will undertake the entire half of the cost of both Services, via Suez as well as via Panama, whatever that may be. This reserve appears to be the more necessary in order to guard against any possible dissatisfaction on the part of the Public at the non-acceptance of Tenders, after having been invited; as unfortunately at present a want of cordial Understanding on the subject is shown to exist between some of the Australian Colonies. On this point I am directed to transmit, for the information of the Lords Commissioners, copies ofs two Despatches which have been received, respectively from the Governors of New South Wales and i Victoria, written with reference to the Circular Despatch which was addressed to the Australian ' Governors, founded on the Treasury Letter of the 10th of November last. From the last of these; Despatches it would aprear that difficulties existed to prevent any immediate arrangement of the ] question being effected by the Government* of these two principal Colonies. Sir E. B. Lytton trusts, - however, that the further report promised by Sir W. Denison may show that the difficulty thus existing between these two Colonies has been overcome, and (hat it may prove eventually to offer no bar to the completion of the arrangement which their Lordships propose. The Lords Commissioners will perceive in Sir 11. Barkly's Despatch an intimation that, after the House of Assembly had guarantied the payment of t'90,000, being the Australian moiety of the subsidy of £180,000 in support of the present Postal Service, the Postmaster-General of that Colony had subsequently obtained the leave of the House to defray temporarily out of that grant the sum of £6000 promised by that Government towards a Steam Postal Service between Melbourne and Wellington. Sir E. B. Lytton regrets that the sum guaranteed for a specific purpose should have been in any way interfered with, after having been so (sledged, although he cannot doubt the readiness of the Colonial Legislature at once to make good any deficiency which might arise from such subsequent appropriation. The two enclosed Despatches also report the arrangements made by these Governments for the adjustment of the payments due for the Postal Services executed under the previous Contract with the European and Australian Mail Company. I fim, &c, (Signed) T. Fkedk. Elliot. Sir Stafford Northcote, B»rt., &c, &c, &c.

(Encloiun.)

Sir W. Deniion. No. 10— lit Feb., 1859. SJ7h. Darkly. No. 19-1 lth Feb. 1859.