E.—No. 2.

Answer. Individual interests, the assistance they would have been entitled to expect from the Imperial Treasury (if the principle of assistance had been admitted in the case of any one of them) would, in the aggregate, have exceeded the amount which the Postal Conference had fixed as the limit. By concurrence in this proposal, the question, as affecting the interests of all the Colonies, would have been finally settled, and no room could have been left for " the renewed application " for the exclusive benefit of one Colony, which His Grace appears to consider would have been inevitable. Whatever may be the effect upon the interest of the Mother Country, it is very evident that no other plan than one similar to that proposed by the Melbourne Conference can satisfy the requirements of either Queensland or New Zealand ; the service or services via King George's Sound can never confer upon those Colonies the advantages of a once in four weeks post. The establishment of a fortnightly mail by this route would restore to New South Wales the postal service she enjoyed under the old system of a monthly service ; but at an enormous increase of expenditure, caused by the cessation of the shares of Queensland and Now Zealand to the subsidy. I apprehend that even the measures of coercion indicated in His Grace's report, viz., the levying of a postage not less than Is. 6d. (treble the postage to be paid by Victoria) upon all letters addressed to Colonies not contributing to the cost of the service, and the " simple " (but unprecedented) " expedient of increasing inter-colonial postage to a high rate during the time any packet remains for Suez, in any Australian port," would fail in inducing these Colonies to contribute to a service from which they could not possibly derive any advantage. It is impossible to avoid contrasting these coercive suggestions with the very different conduct pursued by the Colonies of New South Wales and New Zealand towards the non-contributing Colonies to the Panama lino ; letters from which are carried by this line at a charge of 20s. per pound weight, being an average rate of Is. 6d. the half-ounce letter, but by the weights of the majority of the letters reduced to a rate of 6d. His Grace further says, " that without a second service by this route " (viz., King George's Sound) " Australia will soon be almost the only part, not merely of Her Majesty's dominions, but of the whole civilized world, which has not a good post with this country at least twice a month. The Government of this Colony are fully aware of the truth of this remark, and have for many years made the most strenuous exertions to remedy the evil; but they cannot admit that a second service via King George's Sound would confer this necessary benefit. By the present arrangement, the important and daily increasing Colony of Queensland is entirely deprived of the advantage of even a monthly post, and the same disadvantage extends to the greater portion, of this Colony. The establishment of a fortnightly mail, either via King George's Sound or alternately by Torres Straits, would restore to this Colony and Queensland this monthly post; but neither of them would confer the advantages of a fortnightly communication, unless some scheme similar to the one subsequently laid down is adopted. The second route via King George's Sound w rould confer upon Melbourne, and Melbourne only, a fortnightly post—the alternative of a second mail coming by Torres Straits would place

Objection.

29

THE PANAMA MAIL SERVICE.