E.—2

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in Lord Kimberley's despatch of the 13th June, 1873, that " looked at financially, the scheme " [i.e., the one now in operation] " will be somewhat beneficial to the Imperial revenue, as compared with the existing arrangement." I note that in the eleventh paragraph, in stating the charge to the Imperial Government of the present mail services, the Lords of the Treasury add that they " are unable to approve of so large an expenditure in future, feeliug that it is more than is required for the conveyance of the mails m an efficient and adequate manner, and that this multiplicity of services, and the consequently enhanced cost, does in fact result from the inability of the colonies to agree amongst themselves upon any one route for the carriage of their mails. And, the time being at hand when the existing arrangements would expire, their Lordships did not find themselves in a position to prolong those arrangements as desired by the Colony of Victoria, except upon terms which would tend to relieve the Imperial exchequer; and they resolved, as a simple and fair proposal, that the General Post Office should receive 4d. on each letter, instead of the present inland postage." In answer to this, I would point out that no one mail service could meet the requirements of the whole of the Australasian Colonies, geographically situated as they are. For instance, if South Australia, Tasmania, and Victoria had to rely upon the San Francisco Service as their only means of communication with the mother-country, the course of post between South Australia and England would be lengthened by nearly ten days, and in the cases of Victoria and Tasmania about seven days ; whilst, as regards the Point de Galle route, if that were the only line, the communication between New Zealand and England would be about eleven days longer in each direction. The same applies to Queensland :if that colony had to depend on either the San Francisco or Suez-Melbourne route as the only means of communication, its course of post would also be lengthened by several days. In the case of New South Wales, we get our letters conveyed by way of America in about forty-five days, at a cost of 6d., against about fifty-five days occupied via Suez and Southampton. By paying the extra 2d. no doubt letters can be conveyed via Brindisi in about the same time as via San Francisco, but a further and a greater advantage to the Australasian Colonies, more especially New South Wales and New Zealand, of the mail service via San Francisco, is the maintenance of rapid and regular communication with the great continent of America, the advantages of which, both to the mother-country and the colonies, must be apparent. Not the least important result has been that the competition caused by the establishment of this service has been greatly to expedite the delivery of the mails by the Galle route, and it has thus shortened the course of post. Moreover, the service cannot be given up at present, as the contract will not expire for four years. It may be further urged that all the colonies contribute to each other's services at a loss to themselves. Take the case of the Galle Service: for every letter sent to arrd from New South Wales via Galle, this colony pays to Victoria at the rate of sixpence per half-ounce, being the full letter rate ; and in the case of letters received from England we actually lose the one penny kept by Great Britain. The same applies to Queensland as the contracting colony for the Torres Straits line, and to New South Wales as the contracting colony for the Pacific line. New South Wales, even under the present arrangements with the Imperial Government, in using the Galle line, actually sustains an annual loss of about £3,000 (this sum representing one-sixth of the postage collected iv England, and the cost of conveying mails to and from Melbourne) ; whilst in maintaining communication with San Francisco, and taking into account all postage received under existing arrangements, she sustains an actual loss of about £23,200 per annum. I am quite aware that the San Francisco Service occasions extra expense to England, inasmuch as she has actually to pay for the conveyance of our mail-matter across the Atlantic and by the American railways ; whereas in the case of the other two routes —Galle and Torres Straits —she uses her own means of conveyance for the Australian mails to and from Point de Galle, and to and from Singapore. The vessels conveying the mails to and from these places and Great Britain would still run in Imperial and Indian interests, and even if not a single Australian letter were sent that way the cost would be the same ; so that I do not quite see the basis on which the charge of £58,000 for the Eastern Seas Service, mentioned in the eleventh paragraph of the despatch, is arrived at. The facts are, I believe, that it actually costs the Imperial Government only the small amount of £1,700 for Egyptian land transit, to carry out the part of their agreement with the colonies which provides for the conveyance of Australian mails between England and Galle, and England and Singapore. So far as can be ascertained from information at my command, the loss sustainedfor 1878 by New South Wales, New Zealand, Victoria, and Queensland —the colonies that respectively maintain the mail services between Sydney and San Francisco, Melbourne and Point de Galle, Brisbane and Singapore —is about as follows : — The cost to New South Wales and New Zealand of the service between Sydney and San Francisco ... ... ... ... ... £82,450 They receive in postage collected in the colonies on outward mail-matter ... ... ... ... ... £21,122 Do. do. from the United Kingdom on inward mail-matter ... 19,258 Do. do. from non-contracting colonies for use of the lino ... 5,740 46,120 Loss sustained by New South Wales and New Zealand ... ... £36,330 The cost to Victoria of the service between Melbourne and Point de Galle is ... ... ... ... ... ... ... £92,500 She receives in postage collected on outward mail-matter ... £16,000 Do. do. from the United Kingdom on inward mail-matter ... 14,000 Do. do. from non-contracting colonies for the use of line ... 48,000 78,000 Loss sustained by Victoria ... ... ... ... ... £14,500