E„ No,—?,

I. Mr. Vogel's visit to Austbalia. Sib,— Wellington, 12th May, 1872. T have the honor to report that, accompanied by Mr. W. 11. Webb, I arrived in Sydney on the 13th February; and that for five weeks I was almost constantly engaged in assisting that gentleman to make an arrangement with the A.S.N. Company for the conveyance of mails between the various Australian Colonies and New Zealand, in connection with the San Francisco Line. I forward to you a copy of the agreement arrived at. You will observe that it answers the twofold purpose of (1) making a provision by which Mr. Webb* will be enabled to continue the service from San Francisco to Auckland and Port Chalmers, tho A.S.N. Company making the connections between Auckland and the various Australian Colonies; and (2) of placing tho Government of New Zealand, when asking subsidies from the Australian Governments, under the terms of their contract with Mr. Webb, in a position to assure those Governments of regular connections being made with tho main service boats. In fact, the contract enables the resolution adopted by the House of Representatives, on the 7th November, 1871, to be strictly carried out; and I was gratified at having so far succeeded. While the negotiations between Mr. Webb and the Company were in progress, I was in communication with the New South Wales Government upon the subject of a contribution, but I was not able to make any arrangement. I believe the conclusion announced to me by the Colonial Secretary, that no present decision could be come to, was owing principally, if not entirely, to certain political complications, including a general election, which had arisen. The Government, during the personal communications I had with them, did not give me any opportunity of ascertaining how far they were favourable to my proposals. They did not object to those proposals, nor to the mode of making connections with New Zealand. They sent me a letter in reply to my written proposals; and I was given to understand that in the then condition of political affairs, it was impossible anything could be done. Whilst I was in Sydney, I met the Hon. Mr. Prior, Postmaster-General of Queensland; and I had communications with him respecting the payment of a subsidy by that Colony for connection with the Californiau service. In terms of the agreement between Mr. Webb and the A.S.N. Company, I proposed to Mr. Prior that Queensland should pay £8,000 a year for an indirect service between Auckland and Brisbane, by way of Sydney; or £15,000 for a direct service. After consulting with his colleagues by telegraph, Mr. Prior was not able to enter into an arrangement; the fact being that the Queensland Government were considering proposals for a Torres Straits route, the whole cost of which was likely to fall upon that Colony, unless arrangements were made with the Governments of New South Wales and Victoria. Under the circumstances, I thought it desirable not to communicate further with Queensland, pending negotiations with Victoria : not, however, losing sight of the fact that, apart from any contribution which Queensland might be inclined to make, it would be most valuable to New Zealand to secure direct connection with that Colony. Mr. Webb and I then proceeded to Melbourne, where we arrived on the 19th February; and, without delay, we put ourselves in communication with the Victorian Government. The proposal we first submitted was in accordance with the terms of the A.S.N. Company's contract with Mr. Webb, and also in accordance with the resolution of the House of Representatives. We proposed to give to Victoria a mail service, by means of direct connection between Melbourne and Auckland, the cost to Victoria to be £25,000 per annum. After considering this proposal, the Government informed me that they would not entertain any proposal which did not make provision for the main boats coming to Melbourne. So far, I had acted in implicit deference to the resolution of the House of Representatives. But before I left New Zealand I had, in contemplation of the possibility of such a contingency arising, carefully considered the question, whether any arrangement might be made by which, so to speak, a partnership in the terminus of the line could be established. Clause 13 of the contract already entered into with Messrs Webb and Holladay provides that for a period of twelve months a main service involving the use of a fourth boat might be established: the steamer arriving at Auckland from San Francisco to proceed to Australia, after transhipping the New Zealand mails into the steamer in waiting to proceed to Port Chalmers and intermediate ports; the latter vessel, on reaching Auckland on the return trip, to proceed to San Francisco, after receiving the Australian mails, fee., from the steamer arriving from Sydney or Melbourne. Thinking it possible that I might have, in Australia, to propose some such service as that just described, I communicated, before leaving New Zealand, with Mr. Macandrew, who moved in the House of Representatives the original resolutions for a Californian service, and who in the subsequent Session moved the amendment which resulted in the determination that the boats should proceed to Port Chalmers ; and I also com- * It will be convenient to use Mr. Webb's name alone, whenever it is necessary for me to refer to the Contractors, Messrs. Webb and Holladay.

No. 6, in " Correspondence."

No. 7.

No. 8.

FURTHER PAPERS RELATIVE TO THE SAN FRANCISCO MAIL SERVICE.