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Enclosure in No. 11. The Agent-General for New South Wales to the Agent-General for New Zealand. Sir,— 3, Westminster Chambers, Victoria Street, S.W., 7th May, 1879. Referring to the Colonial Office letter of the 29th ultimo,* in regard to the Australian postal question, in which it is proposed that after the Ist February next the Imperial Government shall receive twopence in lieu of one penny on outward correspondence, I have the honor, by direction of the Agent-General for New South Wales, to forward for your information a copy of his reply to the communication of the Secretary of State. I have, &c, J. Tardley, Secretary, New South Wales Government Agency. The Agent-General for New Zealand.

Sub-Enclosure to Enclosure in No. 11. Mr. Forster to the Colonial Office. Sir, — 3, Westminster Chambers, Victoria Street, S.W., sth May, 1879. In reply to your letter of the 29th ultimo, in which you inform me that the Secretary of State for the Colonies has received a communication from the Lords Commissioners of the Treasury, intimating that, on being informed by Mr. Graham Berry that he had reason to believe that a fresh contract might be made with the Peninsular and Oriental Company for a fortnightly service both to Melbourne and Sydney, touching at King George's Sound and South Australia, on terms which would be advantageous as compared with the existing rate, they are prepared, under such circumstances, so far to modify their previous decision on the subject, as to agree that the Australian mails shall, as at present, be conveyed free of charge to the colonies between this country and Point de Galle or Colombo (in the event of the latter port being made the port of call for Ceylon), on the condition that the Imperial Post Office shall, after the Ist of February next, when the present arrangements will expire, receive twopence in lieu of one penny, as at present, on the outward correspondence, which may be considered as equivalent to the inland rate on both the homeward and outward correspondence; and that this arrangement would, of course, apply equally to the correspondence conveyed under other contracts via Singapore and San Francisco, I have the honor to state that I am not aware that Mr. Berry has any authority to act for or represent the Government of New South Wales in this or any other matter ; and, not having been informed by him, or having any means of ascertaining, what he may consider reason to believe anything, I cannot avoid entertaining very strong doubts whether Mr. Berry has any grouuds whatever for assuming or believing, and I myself do not believe, that the Government of New South Wales would be likely to approve of, or accede to, any arrangement which would seriously interfere with, or place them in a less favourable position than they enjoy in common with the Government of New Zealand, under the existing arrangement, which includes, and was made pursuant to, their contract with the Pacific Mail Company for conveyance of mails between Sydney and San Francisco. There can be no doubt that the virtual renewal and extension of this contract to November, 1883, was agreed to by these two Governments under an impression that the arrangement of which it formed a part would be adhered to by the Imperial Government until the termination of the contract. And there is reason to fear that the benefits and effectiveness of the arrangement would be impaired by the alteration of terms suggested in your letter. I think it my duty, therefore, and I have the honor on behalf of the Government which I represent, to protest against the proposal embodied in your letter, and to express my hope that, as far as the Colonies of New South Wales and New Zealand are concerned, the new arrangement may not take effect before the termination, in the year 1883, of the contract above referred to. I have the honor to add that this letter is written, and protest made, with the concurrence of the Agent-General for New Zealand. I have, &c, Wm. Forster. The Under Secretary of State for the Colonies, Colonial Office, Downing Street.

No. 12. The Hon. J. T. Fisher to the Agent-General. Sib,— General Post Office, Wellington, 19th July, 1879. Adverting to the letter written you by Mr. Gray on the 24th May last.f I now desire more particularly to refer to the decision of the Imperial Government, to retain after the 31st January next, twopence instead of one penny per half-ounce on all letters forwarded from the United Kingdom to the Australasian Colonies by the several mail services. 2. I have also to acknowledge the receipt of your letters of the Bth and 20th May respectively, the former of which covered a copy of a letter, dated the 30th April, addressed by you to the Secretary of State for the Colonies, reviewing the recent decision of the Imperial Government in determining to retain an additional penny per half-ounce on all letters sent to the colonies, and urging the claims of this colony, in conjunction with that of New South Wales, to a continuance of the existing postage payments, so far as relates to the carriage of mails via San Francisco, until that contract expires in November, 1883. 3. After perusing your letter of the 30th April,J before referred to, it appears to me that there is now little left for me to add in urging the claims of this colony for a continuation of the existing postage payments. From the concluding part of Mr. Bramston's letter to you of the sth May, there is every reason to hope that the Lords of the Treasury may be induced to favourably consider the special claims of the New Zealand and New South Wales Governments in this matter.

* Identical with Enclosure 1 in No. 85 of P.-3, 1879. t Vide No. 81 of F.-3, 1879. % Vide Enclosure 2 in No. 85 of F.-3, 1879.