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The Post Office to the Treasury. My Lords,— General Post Office, sth March, 1877. In returning the despatch from the Governor of South Australia, which your Lordship referred to me on the 23rd ultimo, I have the honor to furnish the following information, in order to assist, the Colonial Government in judging how far it may be for the advantage of the colony to join the General Postal Union. Under the arrangement concerning the entry into the Union of British India and the French Colonies, which was signed at Berne on the 27th January, 1876, and which is being applied to all countries and colonies now seeking admission, power is given to fix the Union rates of postage, if desired, at double the rates fixed by the Berne Treaty of '9th October, 1874. At the same time it is stipulated that for tho sea conveyance of closed mails any Union country despatching such mails shall pay to the office or offices providing the conveyance a sum of 25 francs per kilogramme for letters and post-cards, and one franc per kilogramme for all other descriptions of correspondence. In the event of the sea service being provided by two or more offices, the rates mentioned above are to be divided between them accordinu- to the distances traversed, by each. The payments would be based, not upon the weight of each separate mail, but upon statistics taken twice a year. If the Australian Colonies were to join Ihe Union, the terms of the above-mentioned arrangement taken in connection with the Treaty of October, 1874, would be strictly binding upon them, so far as their relations with the foreign countries of the Union are concerned. But this would not necessarily be the case as regards the mails exchanged with the United Kingdom, inasmuch as the conditions on which the mail service is maintained jointly by the mother-country and the colonies, and the expense apportioned between the parties interested, do not concern the members of the Union generally. Having thus indicated the general bearing of the Postal Union stipulations, so far as they would affect the Australian Colonies, 1 now proceed to answer seriatim the various points raised in tho report of the Postmaster-General of South Australia. 1. As to the question whether the mail service would be continued on ils present footing, I apprehend that it will not be the desire of the Imperial Government to make any alteration in the arrangements during the period for which they were entered into. 2. In such case this department would continue to account to the Australian Colonies for the postage collected in the United Kingdom on letters, &c, for the colonies, less the British inland rates, and the supplementary postage charged for the purpose of covering the special payments due for the conveyance of the mails through France and Italy. 3. AVith respect to letters from Australia for countries of the Union, as the colonies provide the packet service to Galle, Singapore, and San Francisco, as the case may be, while the Imperial Government makes no charge for the further conveyance, the Australian Offices would only have to account for territorial transit rates to the several Union States through which the letters would pass, the rates being those mentioned in Article X. of the Berne Treaty. For example, on letters for Italy forwarded via Galle or Singapore, nothing whatever would have to be accounted for; on letters for Germany transit rales would have to be paid to Italy and Austria; and so on, according to the number of the intermediate countries traversed. The payments would be based on statistics taken during prescribed periods. 4. On letters from Union countries for Australia, the Australian Offices which provide the sea service from Galle, Singapore, or San Francisco, as the case may be, would receive the whole of the sea rate of 25 francs per kilogramme (equivalent to about 2\A. per half-ounce letter), this department foregoing all claim to any portion of the payment in respect to the conveyance as far as the three ports above mentioned. 5. As a higher charge would be made in this country on letters, &c., for Australia, forwarded via Brindisi, than if forwarded via Southampton, tho route adopted for their transmission would depend upon the postage prepaid, or the special address upon the letters. Correspondence between Australia and the continent of Europe would no doubt continue to bo sent principally via Brindisi. The " cost to the colony " would depend upon the number of countries traversed, as explained in paragraph 3. 6. Tho Union rates of postage chargeable in Australia on newspapers and book packets might, if so desired, be as much as the double of the rates fixed by the Berne Treaty of 1874, provided always that existing charges be not increased. The rates to be accounted for by the Australian Colonies on printed papers despatched would, as in the case of letters, be for territorial transit rates only, according to the number of countries traversed, and at the sums mentioned in Article X. of the Berne Treaty. In the opposite direction the despatching Union country would account to the colony providing the packet service for 1 franc per kilogramme net weight. Tho payments in both cases would be based upon statistics taken during prescribed periods. 7. If in any of the Australian Colonies newspapers are now exempt from postage, except foreign postage payable to other countries, it would not be necessary to make any alteration in this respect, inasmuch as Article XIV. of the Berne Treaty expressly states that tho stipulations of the treaty do not involve any alteration in the inland postal legislation of any country. 8. As already explained, the arrangement under which the mail service between the United Kingdom and the Australian Colonies is maintained and the expense apportioned between the parties interested, do not concern the Union generally, so that no alteration need be made in the contributions of one colony to another unless by mutual consent. In the foregoing observations I have treated the matter from a general point of view, as affecting not only South Australia, but the whole of tho Australian Colonies and New Zealand; and I would. suggest that your Lordships should invite the Earl of Carnarvon to communicate the purport of this

Sub-Enclosure to Enclosure in No. 5