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1886. NEW ZEALAND.

POST OFFICE AND TELEGRAPH DEPARTMENT (REPORT OF THE), FOR THE YEAR 1885.

Presented to both Houses of the General Assembly by Command of His Excellency.

Sm, — General Post Office, Wellington, 21st June, 1886. I have the honour to submit to your Excellency the report on the Postal and Telegraph Service for the year 1885, with a statement of revenue and expenditure to the 31st March last. I have, &c, Julius Vogel, Postmaster-General and Electric Telegraph Commissioner. His Excellency the Governor of New Zealand.

EEPOET. Theee has been a very large increase of business in all branches for the year, as shown by the several statements and tables appended. An unusually large number of new telephone-lines were constructed and offices established, while the telephone-exchange system extended in a very marked degree. One of the more important matters dealt with during the year has been, in conjunction with New South Wales, the renewal of the San Francisco mail service under a contract with the Union Steamship Company of New Zealand (Limited) on very favourable terms to the colonies. An acceleration of time has been secured —a saving of twenty-two hours —for a subsidy considerably less than paid the Pacific Mail Company for the late service. A highly satisfactory feature of the new service is the fact that the United States Post Office contributes directly towards its cost. Negotiations relating to the renewal of the Australian and New Zealand cable subsidy have been in progress for some time, but so far without definite results. The cable contract made in 1875 providing for the payment by New Zealand of an annual subsidy of £5,000 for ten years expired in February last. The question was brought under the notice of Parliament last session, and it was agreed that the subsidy should be renewed for five years conditionally on the rates being reducedto sixpence per word for ordinary messages and threepence per word for Press, without any minimum as to the length of message. The Eastern Extension Telegraph Company declined to accept these terms, and demanded a ten years' renewal, which was refused. As there appeared to be little inclination on the part of the company fco agree to the proposal the House of Eepresentatives had sanctioned, inquiries were made as to the cost of laying a new cable. It was ascertained that this could be done at a moderate expenditure such as it is supposed would leave a fair profit even after reducing the rates considerably below the present tariff. Subsequently the Cable Company proposed to leave matters in abeyance for a time, in the hope of the colony agreeing to one or other of their proposals. In the meantime no subsidy is being paid the company, and negotiations are still proceeding. Many improvements in the Post Office and Telegraph service and changes in the interests of the public have been effected during the year. An amendment in the delayed-telegram regulations has been made, by which these_ messages are transmitted over the wires at any time of the day whenever the ordinary work admits of this being done, and immediately posted for delivery. The change has had the effect of largely increasing the business in delayed telegrams without any apparent decrease in the ordinary messages. Postal-notes were introduced on the 2nd January last with very great success, as will be seen by a reference to page xi. A circular halfpenny post has also been established, which promises to be largely used. The weight of a circular is limited to half an ounce, and delivery is restricted to delivery from the post office at which posted, including delivery from a branch office or by letter carrier. Reply post-cards are to be introduced immediately. i.—F. 1.