D—No. 3

earned by the vessels under contract with tho Imperial Government between Australia and New Zealand. It will be remembered, also, that prior to the year 1856, when the Imperial Government bore tho whole expenses of the packet service between the United Kingdom and Australia, the proportion of postage accounted for as the sea rate for the entire distance was not more than fourpence out of every sixpence. A third and further claim is made against the Colony iv a demand for payment of £7,226 lis. 9d., as the New Zealand proportion of the subsidy payable in respect of the main line to the 30th September, 1858; that is, for a period prior to the establishment of tho branch service from Australia to New Zealand. This is a claim which cannot reasonably be urged against the Colony. It was an essential part of the arrangement of 1855, that branch services should be established for the branch Colonies of South Australia, Tasmania, and New Zealand. In the comprehensive scheme proposed in the Minute already referred to, and accepted by the Colonies as a whole, it was laid down as a primary object to be attained, that each Colony should have the benefit of an arrival aud departure by each steamer monthly. Till the commencement of the branch service at the end of 1858, New Zealand had no such benefit by each steamer. The establishment of the main line alone could not be considered a practical advantage to this Colony, which, without a branch service, was not, in fact, one of the Australian group, arid would certainly not have consented to the arrangement of 1855, had the branch service not formed part of it. The correspondence from the United Kingdom was brought as far as Melbourne or Sydney, and thence made its way, by any chance sailing vessel, slowly and uncertainly towards its destination. The conveyance of the homeward mails was attended with even greater difficulty and danger, through the utter impossibility of securing the arrival of a sailing vessel with mails at Sydney or Melbourne, in time to catch the homeward packet. It was no part of the arrangement of 1855 that any Colony should pay for that from which it derived no benefit; but it was agreed, on the contrary, that each Colony should contribute to the whole cost of the complete service in the proportion of the benefit which it received. New Zealaud, which virtually derived no advantage, should therefore be liable to no contribution for the period specified. It is, therefore, recommended :— 1. That the Colonial Government should decline to pay any proportion of the costofth* Postal Service between the United Kingdom and Australia for the period prior to tho establiskment of the branch service connecting New Zealand with the Australian group. 2. That the Colonial Government should decliue to account for any proportion of the postag* received on letters passing between New Zealand and the Australian Colonies. 3. That the Colonial Government should demand the carrying out of the arrangement of 1855, as to subsidising and contributing to branch lines, and should profess its readiness to act i* all respects in the spirit of that arrangement. Crosbik Ward.

12 FURTHER PAPERS RELATIVE TO STEAM POSTAL SERVICE.