SAN FRANCISCO MAIL SERVICE

23

E.—No. 2.

No. 7. The Hon. J. Vogel to the Hon. J. Eobeetson, New South Wales. Sic,' — Sydney, Ist February, 1872. I have the honor to submit to you a proposal respecting the carriage of mails to and from New South Wales and England via San Francisco. Mr. W. H. Webb, on behalf of himself and Mr. Ben Holladay (representing "The United States, New Zealand, and Australia Mail Steamship Line"), has entered into an arrangement with "The Australasian Steam Navigation Company," to connect, by means of a fast steamer, with the steamers of the before-mentioned line. It is proposed that the vessel shall leave Sydney in time to catch the outward mail at Auckland ; and that immediately on the arrival at Auckland of the boat from San Francisco, the steamer shall start from Auckland, with the mails, passengers, and freight for Sydney. The outward mails from Great Britain would be despatched a fortnight after those via Brindisi; and on this side the times could be so arranged as to make the service alternate fortnightly with that performed by the boats of the P. and O. Company. We should require for the conveyance of the New South Wales Mails, a subsidy of £20,000 per annum. I may observe that of that subsidy there would—under the arrangement of the New Zealand Government with Messrs. Webb and Holladay —pass to New Zealand only £8,000 in reduction of its subsidy of £50,000 to the line. But the £50,000 includes a payment of £10,000 as special consideration for the service between Auckland and Australia ; so that the amount recovered out of the subsidy which I now propose New South Wales should pay, would be less than the special payment which New Zealand has undertaken to make. There appears to be some uncertainty here as to the terms on which mails are conveyed across the American Continent. I desire, therefore, to explain to you the arrangement under which the New Zealand Mails are conveyed, and which arrangement can, of course, be made applicable to New South Wales. All mails from Great Britain to New Zealand, or from New Zealand to Great Britain, are respectively sent as " Closed Mails " to San Francisco or to New Tork; and are forwarded by the United States Postal Department, in the one case to England, and in the other case to San Francisco. Under a Convention between Great Britain and the United States, letters, in " Closed Mails," passing across the American Continent, are subject to a territorial charge of 3f cents an ounce; while from New Tork to London they are subject to a charge of Id. per letter. These amounts the Imperial Government have to pay to the Government of the United States. When New Zealand originated tho service via San Francisco, the Imperial Post Office agreed to make all such payments to the United States Government on account of New Zealand letters, and to forward mails for New Zealand from Great Britain to New Tork, in consideration of the department retaining all the postages collected in Great Britain. With respect to newspapers and book parcels, the Imperial Post Office agreed to make to the United States Government all necessary payments for conveyance from Great Britain to San Francisco, in consideration of retaining the postages ; but as the amount of those postages is not sufficient to cover the charges both ways, the Imperial Post Office debits New Zealand with the payments made, under the Convention, to the United States Government, for the conveyance of newspapers and book parcels between San Francisco and Great Britain. The amount of such payments is, however, inconsiderable; and, as will be observed, it is the only charge made to New Zealand by Great Britain in respect to mails to and from the colony via San Francisco. But it may justly be urged that, besides paving the very small American charges, the Imperial Post Office should contribute to the subsidy or give up some of the postages. During my recent visit to England, I wrote to the Postmaster-General, pointing out that whilst . New Zealand was left to bear the whole cost of the carriage of mails between the colony and San . Francisco both ways, the amount of the postages on letters which the Post Office collected and retained, really amounted to much more than the Imperial Government had to pay to the Government of the United States. The Post Office defended the calculation, upon the basis of which the postages were retained, by claiming upon each, letter, inwards and outwards, a charge of Id. for English inland postage. In reply, I represented that there would still be a margin of |d. per letter, in favour of the Imperial Govei*hment, between the amount which it received and that which it paid to the United States ; and I strongly urged upon the department that it was not in accordance with a liberal practice to charge inland postage upon such letters, seeing that New Zealand was carrying free the mails from San Francisco to the colony. I also objected very much to another item in the calculation —that of Id. per letter between England and New Tork—as the mails are despatched to New Tork by steamers under contract with the Imperial Government to carry all mails that are put on board. After protracted negotiations, an understanding was arrived at, that the Post Office would consider the question of treating the service via San Francisco as an alternative fortnightly one with that performed by the P. and O. Company. The question of the subsidy to be paid in such case was not entered upon ; but I have no doubt that an arrangement can be matured, under which the Imperial Post Office will contribute a moderate subsidy to the San Francisco Service. It is part of the proposal which I now make to your Government, that in the event of an Imperial subsidy being received, it shall be shared between the colonies contributing to the service, in proportion to their respective contributions. The amount which New South Wales is now asked to pay will, therefore, be reducible by its proportion of any Imperial subsidy which may be obtained. I have been led to believe that your Government may object to make any permanent arrangement without calling for tenders. Should such be the case, lam willing that the arrangement now proposed should be terminable by either party to it, upon six months' notice, given at any period after the arrangement shall have been in force for six months. This would enable you to call for tenders, should you resolve so to do, and would enable the successful tenderers to make the necessary arrangements. I would suggest to you that it would be worthy of consideration, if you enter into the arrangement now proposed, whether it would not be desirable to reduce the rate of postage to England. Seeing that, in any case, the postages received here on letters would not be subject to any charge for

A.—No. 6, 1871, p. 13