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now engaged in the service, and thirteen voyages per annum are made in lieu of twelve. These changes, which took place last year, were the result of a proposition made by Mr. Huddart's representative here; and, on the matter being referred to the Crown Solicitor of this colony, the latter advised that any departure from the existing contract should be embodied in a short agreement, to be executed in the same manner as the original one. A draft amended agreement was accordingly prepared, embodying all the changes proposed—namely, alteration of route, employment of an additional steamer in the service, increased frequency of communication, and extra time required for each voyage. Although this proposed new agreement has not been executed in consequence of delay on the part of Mr. Huddart's representative, the changes have already taken effect, and a time-table has been prepared by the New Zealand Post Office, which provides for twenty-seven days being occupied on each voyage ; but it has not yet been determined between the parties to the New South Wales agreement what number of hours shall be allowed for the conveyance of mails between Sydney and Vancouver, and vice versd, under the new arrangement. In view of the fact that the contract will expire in less than twelve months from the present, it is thought that the execution of a formal agreement might be waived, and that the matter, including the question of the extra time to be allowed on account of the detention at Wellington, should be settled by correspondence. I am therefore directed to state that the Postmaster-General of this colony is disposed to agree to 648 hours (twenty-seven days) as the maximum time for the performance of each voyage between Sydney and Vancouver, vid Wellington, Fiji, and Honolulu, and that the penalty of £30 above mentioned shall apply when the 648 hours are exceeded. I am to request that you will be so good as to state whether you concur in that period being considered as the contract time in lieu of that contained in the existing agreement, dated the 22nd January, 1896. On receipt of your reply concurring in this proposal, the New Zealand Post Office will be asked to acquiesce in the whole proposal as regards the altered route, time, &c. I have, &c, S. H. Lambton, Messrs. Burns, Philp, and Co. (Limited), Sydney. Deputy Postmaster-General.

Enclosure 2 in No. 32. Messrs. Burns, Philp, and Co. (Limited), Sydney, to the Deputy Postmaster-General. Dear Sir,— Sydney, 10th June, 1898. We are in receipt of your letter of the Bth instant, regarding the Canadian-Australian mail-service, and note that the amended agreement embodying the changes from the conditions of the original contract necessitated by the employment of a third steamer, alteration of route, increased number of voyages, and extra time required for each voyage has not been signed. Under the circumstances we agree to your suggestion that the execution of a formal agreement may be waived, and on behalf of the liquidator and special manager of the Canadian-Australian Royal Mail Steamship Company (Limited), to which company Mr. Huddart assigned his original contract, we agree to the altered conditions as detailed in your letter of the Bth instant—namely, that the maximum time for the performance of each voyage between Sydney and Vancouver, vid Wellington, Fiji, and Honolulu, be 648 hours (twenty-seven days), and that the penalty of £30 per day provided for in the original contract for every complete period of twenty-four hours by which the time allowed for each voyage is exceeded shall apply. Yours, &c, For Burns, Philp, and Co. (Limited), The Deputy Postmaster-General, Sydney. W. McMaster.

No. 33. The General Manager, New Zealand Shipping Company (Limited), Christchurch, to the Secretary, General Post Office, Wellington. New Zealand Shipping Company (Limited), jg IKj Christchurch, 14th June, 1898. I have the honour to acknowledge receipt of your two letters of the 11th June [see Nos. 206, F.-6, 1898, and 31 herein], enclosing power of attorney from the official liquidator of the Canadian-Australian Royal Mail Steamship Company to the writer, authorising the completion of the mail contract with the Government of this colony. As requested by the Right Hon. Mr. Seddon, we now beg to enclose copy of the power of attorney, and to express our regret that he has decided not to have the contract executed at present. With reference to the payment of subsidy earned by the Canadian-Australian Company s steamers, we shall be glad if you will kindly pass a voucher for the amount due to enable us to close steamers' accounts before the 30th June. I have, &c, Isaac Gibbs, The Secretary, General Post Office, Wellington. General Manager.