TELEGRAPH CABLE SUBSIDY AND CHARGES (PAPERS RELATING TO).

Appendix to the Journals of the House of Representatives, 1887 Session I, F-02

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1887. NEW ZEALAND.

TELEGRAPH CABLE SUBSIDY AND CHARGES (PAPERS RELATING TO).

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

EXTBACT FBOM THE JOUBNALS OF THE HOUSE OP REPRESENTATIVES, 1886. Resolved, " That the Government be authorized to undertake to continue a subsidy for the cable service for five years, provided that the charge per word for Press messages shall not exceed threepence, and the charge per word for other messages shall not exceed sixpence."

. No. 1. Mr. Walker, Superintendent of Telegraphs, Sydney, to the Superintendent of Telegraphs, Wellington. (Telegram.) Sydney, 13th October, 1885. Wile you kindly see whether your Colonial Secretary has sent answer re New Zealand cables, and advise ? Time is getting short, and, as agreement will have to be sent Home for company to affix seal, necessary that action should be taken at once. Dr. Lemon, Wellington. P. B. Walkee.

No. 2. Dr. Lemon to Superintendent of Telegraphs, Sydney. (Telegram.) Wellington, 16th October, 1885. Be cable.—What action is your Government going to take? Mr. Walker, Superintendent of Telegraphs, Sydney. C. Lemon.

No. 3. Mr. Walkee, Superintendent of Telegraphs, Sydney, to the Superintendent of Telegraphs, Wellington. (Telegram.) Sydney, 16th October, 1885. They agreed to continue the agreement for ten years upon present subsidy. Basis of conditions, that company make the reductions foreshadowed in Colonial Secretary's letter. Company have conceded this, and we only await your reply to our proposals in order to close the matter. Dr. Lemon, Wellington. P. B. Walker.

No. 4. Mr. J. E. Sqtjiee, Superintendent, Eastern Extension Company, La Perouse, to Dr. Lemon, Wellington. (Telegram.) Sydney, 28th October, 1885. As our contract with your Government so far as the subsidy is concerned terminates shortly, may I ask whether terms for renewal on the basis of reduction of rates, as proposed by the PostmasterGeneral of New South Wales, are acceptable to your Government ? J. E. Squiek, Dr. Lemon, Wellington. Eastern Extension Company.

No. 5. Dr. Lemon to Superintendent, Eastern Extension Company, La Perouse. (Telegram.) Wellington, 28th October, 1885. Conteaot terminates some time in February, 1886, nearly four months yet. Mr. Squier, La Perouse. C. Lemon. I—F. 2.

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No. 6. Mr. Walkee, Superintendent of Telegraphs, Sydney, to Superintendent of Telegraphs, Wellington. (Telegram.) Sydney, SOth October, 1885. Please give cable matter attention, and get your Government to forward answer to correspondence on the subject. Dr. Lemon, Wellington. P. B. Walker.

No. 7. The Agent-General to the Hon. the Postmaster-General, Wellington. Sir, — 7, Westminster Chambers, London, S.W., 19th November, 1885. In continuation of my letter of the 31st October last, respecting the interview between the Agents-General and Mr. Pender upon the question of the cable tariff, I now transmit to you herewith copy of a joint letter which the Crown Agents and the Agents-General are sending in to the Colonial Office. I have, &c, The Hon. the Postmaster-General, Wellington. P. D. Bell.

Enclosure in No. 7. Copy of Letter from the Agents-General to the Under-Secretary of State for the Colonies. Sir, — We have the honour to request, on behalf of our respective Governments, that you will move Colonel Stanley to use his good offices with the Secretary of State for India, to obtain such a a reduction as wo will now proceed to indicate in the rates for telegraphic messages to Australasia at present charged by the Indian Government on its lines between Bombay and Madras. You are already aware that, for some time past, there has been much complaint of the loss to public and private interests necessarily involved in the excessively heavy charges for telegraphic communication between Australasia and Europe—charges which, it may be fairly said, are not due to any want of public spirit on the part of the colonies. At present, the companies which own the communicating cables, and the South Australian Government, which owns the trans-Australian land line, are ready, in the common interest, to make a considerable reduction on their respective charges, and our hope now is that Lord Eandolph Churchill may be disposed to advise the Government of India to do likewise on the lines crossing its territory. The subject was, as jrou may be aware, much discussed at the Telegraphic Conference recently held in Berlin, and, an appeal having been made by the delegates interested to the chairman of the Eastern and Eastern Extension Telegraph Companies, an intimation was conveyed to the Conference, on the part of his Boards, to the effect that a reduction of 2s. per word might be fairly made, so as to come into force simultaneously with the promulgation of the new convention on the Ist of July next, and that the companies would bear their share of this reduction provided the other interested Administrations—lndia and South Australia—would agree to diminish in due proportion their transit rates. The Government of South Australia at once signified by telegraph its readiness to make the required concession, but the Indian Telegraph Administration has hitherto declined to reduce its transit rates. We do not believe any decision to this effect can have been adequately considered either by the Secretary of State or the Viceroy in Council, for we submit with great respect that, whether from the point of view of policy or of equity, the Indian rate must be regarded as manifestly excessive. No other Government, that we are aware of, charges a sum one-half more for a message in transit than it charges for the same message if sent from point to point of its territory. But, as we are informed, the Indian Government charges 7|d. a word for transmitting an Australasian message from Bombay to Madras, while the rate for " urgent " internal telegrams from any station in India to any other is only sd. per word, for ordinary 2-Jd., and for deferred messages ljd. per word. Mr. Pender was urged by the Australasian delegates to the Conference to make and announce the proposed reduction at once, trusting that the Indian Government would subsequently concur in regard to its proportion of the charge; but he declined, on the ground that for a considerable time the subject had been under discussion between the companies and the Administration of the Indian Telegraphs, and that it would plainly be inequitable to expect his shareholders to submit to the risk of so heavy a loss for the convenience of the public, while the Imperial Government still stood in the way between Europe and Australia, levying a manifest overcharge. To this argument the delegates of the Australasian Governments felt they had no becoming reply. They therefore trust that the question may be viewed by the Secretary of State and Viceroy in Council not merely as a question of tariff rate, though even in this view it would probably be found that the increase of business with reduced rates would fully compensate the Indian Administration. Apart from this consideration, however, it is not believed that, at a time when all the other Governments of the world are making really liberal and costly concessions to facilitate the transmission of telegraphic messages, the Government of Her Majesty the Empress will wish to stand alone in maintaining a system of excessive overcharge on communications between the subjects of her other dominions. We have, &c.

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No. 8. The Hon. the Postmaster-General, Sydney, to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, 12th November, 1885. Adverting correspondence re renewal New Zealand cable subsidy conditionally on reduction charges, has your Government yet arrived at decision in the matter? The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 9. Mr. Squier, Superintendent, Eastern Extension Company, Sydney, to Dr. Lemon, Wellington. (Telegram.) Sydney, 14th November, 18S5. The next International Telegraph Conference will meet in 1890. This company's chairman has lately had interview with Agents-General respecting reduced rates, and both Agents and company are bringing pressure to bear on India to reduce her transit rate, so that the reduced tariff may come into force on first July next, when new convention takes effect. J. E. Squier, Dr. Lemon, Wellington. Sydney.

MTrf.^iKiT.,t»-.-.7TT.»T-. 11l II lIIIIIIIH—-'—™™ No. 10. The Hon. the Postmaster-General, Sydney, to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, 16th December, 1885. No answer received re your Government's views renewal New Zealand cable subsidy: vide my telegram 12th ultimo. Kindly reply early. The Hon. the Postmaster-General, Wellington. Postmaster-General.

* No. 11. The Hon. Sir J. Vogel, Wellington, to the Hon. the Postmaster-General, Sydney. (Telegram.) Wellington, 23rd December, 1885. In reply to your telegrams re cahle subsidy, we will be glad join you in continuing a subsidy for five years on condition that charge for Press messages shall not exceed threepence a word, and for other messages not exceed sixpence a word, these prices to apply to any length of message. You will observe I have said " a subsidy," by which I mean not more than we are at present paying, but less if you think such should be our offer. The Hon. the Postmaster-General, Sydney. Julius Vogel.

No. 12. The Hon. the Postmaster-General, Sydney, to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, 31st December, 1885. Be your telegram cable subsidy, local superintendent states his company willing accede to further reductions in rates other than those mentioned in correspondence—namely, five shillings ten words ; sixpence each additional word. Press messages threepence per word if furnished with Press guarantee that three times as much business will be done under reduced charge. Matter urgent, as company desirous of rearranging tariff upon higher scale, as provided for in agreement, unless their proposals referred to are adopted by your Government. Daniel O'Connor, The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 13. The Agent-General to the Hon. the Postmaster-General, Wellington. Sir, — 7, Westminster Chambers, London, S.W., 31st December, 1885. In continuation of my letter of the 19th ultimo, I now transmit to you copy of a letter I have received from the Colonial Office, covering the reply of the India Office on the subject of the telegraph transit charge over the Indian Government line between Bombay and Madras. I have, &c, The Hon. the Postmaster-General, Wellington. P. D. Bell. Enclosure in No. 13. Gentlemen, —■ Colonial Office, Downing Street, 24th December, 1885. I am directed by the Secretary of State for the Colonies to acknowledge the receipt of your letter of the 20th ultimo, advancing reasons for a reduction in the rates at present charged for telegraphic messages to Australasia by the Indian Government, on its lines between Bombay and

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Madras. Colonel Stanley duly caused a copy of your letter to be forwarded for the favourable consideration of the Secretary of State for India in Council, and I am now desired to transmit for your information a copy of a letter which has been received from the India Office on the subject. I have, &c, John Bramston. Sir Saul Samuel, K.C.M.G.; Sir P. Dillon Bell, K.C.M.G.; Eobert Murray Smith, Esq, C.M.G.; James F. Garrick, Esq, C.M.G.; Sir Wm. Sargeaunt, K.C.M.G.; Charles Todd, Esq, C.M.G.

Sub-Enclosure in No. 13. The India Office to the Colonial Office. Sir,— India Office, S.W., 16th December, 1885. I am directed to acknowledge receipt of your letter dated the 4th December, 1885, transmitting for favourable consideration representations from the several Australian Government Agents on behalf of their Governments in support of a reduction of the existing transit charge for conveyance of Australian telegraphic messages across India. In reply, lam desired to inform you that the Secretary of State for India in Council will at once forward these communications to the Government of India, with whom he is already in correspondence on this subject, and that, as soon as a decision has been arrived at, a further communication will be made by this department to the Secretary of State for the Colonies. I have, &c. The Under-Secretary of State, Colonial Office. J. A. Godley.

No. 14. The Hon. Sir J. Vogel to the Chairman of Directors, United Press Association, Christchurch. (Telegram.) Wellington, 2nd January, 1886. Cable Company ask, as condition of reducing Press messages to threepence a word, guarantee of Press that three times the business will be done. Are you willing to give this? I think deputation told me they were. Julius Vogel, Hon. W. Eeeves, Christchurch.

No. 15. The Chairman of Directors, United Press Association, Christchurch, to the Hon. the Postmaster-General, Wellington. (Telegram.) Christchurch, 2nd January, 1886. Association agreed to this proposal when we met you in Wellington. The Hon. Sir Julius Vogel, Wellington. W. Reeves.

No. 16. The Hon. Sir J. Vogel, Wellington, to the Hon. the Postmaster-General, Sydney. (Telegram.) Wellington, 2nd January, 1886. Be cable subsidy. You are to pay a portion, and I should like your views. In my opinion, we should insist on a sixpence-a-word rate without five shillings for first ten words. lam communicating with Press Association re guarantee. The Hon. the Postmaster-General, Sydney. Julius Vogel

No. 17. Mr. O'Connor to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, 6th January, 1886. Be New Zealand cable, have had interview with company's representative here, and following are most favourable terms I can make : Subsidy, seven thousand five hundred, to be continued ten years, on understanding that company renew cable at own expense, if required, during this period. Ordinary messages to be reduced to sixpence a word all round without minimum. Press messages threepence per word without Press guarantee. Matter Press messages cannot be finally settled by Mr. Squier without reference to directors at Home, as his instructions are to stipulate for Press guarantee of three times amount of business ; he has, however, communicated with England, and expects immediate reply. Meantime, I will be glad to know your decision re the ten years. Think you have already agreed on other points. The Hon. the Postmaster-General, Wellington. Daniel O'Connor.

No. 18. The Hon. Sir J. Vogel to the Hon. the Postmaster-General, Sydney. (Telegram.) Waiwera, 7th January, 1886. The resolution of our House of Eepresentatives binds us to not exceeding five years, to sixpence a word ordinary and threepence a word Press messages, and to not exceeding our present payment. The company must either agree to these terms or take its own course. Eive years ought to be ample. I understand you pay one-third, we two-thirds. The Hon. the Postmaster-General, Sydney. Julius Vogel.

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No. 19. Mr. Browning, Superintendent Cable Company, Wakapuaka, to Dr. Lemon, Wellington. (Telegram.) Wakapuaka, 18th January, 1886. Kindly deliver following. A copy has been delivered to Sydney Postmaster-General: " Chairman, Eastern Extension Company, to Sir Julius Vogel.—With every desire to give cheap rates, company will have no alternative but to put up existing tariff unless subsidy renewed for another full term with Press guarantee and ten words minimum, or for five years without proposed reductions. After nearly ten years' working, receipts with subsidy give only five and three-quarters per cent, on capital invested, or, calculating amortization for renewing cable, less than two per cent. Fortunately, cable has not been interrupted, otherwise return would be much smaller; but we cannot expect immunity to continue, and must therefore be prepared to meet increased expenditure." Dr. Lemon, Wellington. W. W. Browning.

No. 20. The Hon. Sir J. Vogel to the Agent-General, London. (Telegram.) Waiwera, 18th January, 1886. Inquire of principal makers cash cost making according to their own specification, and laying, cable between New Zealand and Australia along present route. The Agent-General, London. Julius Vogel.

No. 21. The Hon. Sir J. Vogel to the Hon. the Postmaster-General, Sydney. (Telegram.) Waiwera, 18th January, 1886. Cable Company insists on ten years, and refuses to make minimum less than ten words. Have refused to entertain, and have cabled Agent-General to ascertain what new cable can be obtained for. Probably cost much less have new cable. The Hon. the Postmaster-General, Sydney. Julius Vogel.

No. 22. ■ The Hon. Sir J. Eobertson to the Hon. Sir J. Vogel, Waiwera. (Telegram.) Sydney, 20th January, 1886. Our Cabinet have agreed with the Eastern Extension Telegraph Company in reference to cable charges on the terms submitted to you, with a ten years' currency, subject to the ratification of Parliament by this Government. So far as it is concerned the matter now remains with you either to approve or decline. The Hon. Sir Julius Vogel, Waiwera. J. Eobertson.

No. 23. The Hon. Sir J. Vogel to the Hon. Sir J. Kobertson, Sydney. (Telegram.) Waiwera, 20th January, 1886. Cable. In reply to your telegram 20th, our House limited extension subsidy to five years, and that on condition of sixpence a word for ordinary messages, threepence Press without minimum ; and we cannot exceed authority. I explained this to your Postmaster-General. The Hon. Sir J. Eobertson, Sydney. Julius Vogel.

No. 24. The Agent-General to the Hon. the Postmaster-General, Wellington. Sir, — 7, Westminster Chambers, London, S.W, 22nd January, 1886. I duly received your telegram of the 18th, directing me to inquire from the principal makers here the cost of making and laying a new cable between New Zealand and Australia. I communicated at once with Mr. Preece as to the firms to whom I should apply, and he told me there were only three of whom it would be worth while to inquire prices—namely, Messrs. Siemens Brothers; the Indiarubber, Guttapercha, and Telegraph Works Company ; and the Telegraph Construction and Maintenance Company. I have accordingly written to those firms, and hope shortly to be able to send you a telegram of what they would be prepared to do. I have, &c. The Hon. the Postmaster-General, Wellington. F. D. Bell.

No. 25. Dr. Lemon to the Agent-General, London. Sir, — General Post Office, Wellington, 25th January, 1886. I have the honour to acknowledge the receipt of your letter of the 19th November last, covering a copy of a letter from the Agents-General to the Under-Secretary of State for the Colonies, which has been read with interest. I have, &c. Sir F. Dillon Bell, K.C.M.G, G. Lemon, Agent-General for New Zealand, London. (For the Postmaster-General.)

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No. 26. Mr. Cracknell, Superintendent of Telegraphs, Sydney, to the Superintendent of Telegraphs, Wellington. (Telegram.) Sydney, 30th January, 1886. Can you expedite matters re cable subsidy ? Time nearly expired. Dr. Lemon, Wellington. Cracknell.

No. 27. The Chairman, Eastern Extension Company, London, to the Hon. the Premier of New Zealand, Wellington. (Telegram.) London, 30th Januaiy, 1886. Our efforts to obtain reduction of Indian transit rate having failed, we have earnestly considered how we could best meet wishes of the colonies for reduced tariff; and with every desire to cheapen telegraphy, knowing that existing high tariff must restrict business, we cannot see our way to make substantial reductions without some assistance from colonies. Our dividend to shareholders is a small one considering risky nature property and uncertainty life of cables, our reserve fund being as yet quite unequal to meet renewals, which will be absolutely necessary sooner or later. My company would, however, be prepared to offer to the colonies a reduction of two shillings and threepence per word, making, with the reduction promised by South Australia, two shillings and sixpence per word; provided the non-contributing colonies would share a cable subsidy of thirty-two thousand four hundred pounds per annum, and join the contributing colonies in extending it for six and a quarter years, making, with unexpired term, twenty years from present time. The proposal has been submitted to Agents-General of contributing colonies, who have recommended it to the favourable consideration of their Governments, based upon the population census of 1881. The sum your colony would have to contribute would be about five thousand seven hundred pounds per annum ; whereas the advantages you would, derive would be a reduction of two shillings and sixpence per word an ordinary, four shillings and fourpence on Government, and five shillings and threepence on Press telegrams, which, calculated on existing traffic, represents a saving of about ten thousand six hundred pounds per annum to your colony. These reductions are so substantial that they should have an important influence in developing the trade of the colonies ; and hope your Government will see the advantage of accepting the proposal. The reductions would involve an immediate loss to the company of nearly forty thousand pounds per annum, even after allowing for the same growth of traffic we have hitherto experienced, and consequently it would take some years before we could recoup ourselves. We are trying to bring about a much larger reduction for the Press than that above named, and if non-contributing colonies would join in subsidy contribution it would greatly facilitate our negotiation with the Administration now stopping the way. This is the cheapest and easiest method of obtaining reduced rates, with an efficient communication between the colonies and the Mother-country. John Pender, The Hon. the Premier of New Zealand, Chairman, Telegraph Company. Wellington.

No. 28. Dr. Lemon to Mr. Crackneel, Superintendent of Telegraphs, Sydney. (Telegram.) Wellington, Ist February, 1886. The company submitted an ultimatum to the Postmaster-General, which he refused to entertain, and asked the Agent-General to call for tenders from principal makers to ascertain price of making and laying new cable. This was cabled to your Postmaster-General. Mr. Cracknell, Sydney. C. Lemon.

No. 29. The Eon. the Postmaster-General, Sydney, to the Hon. Sir J. Vogel. (Telegram.) Sydney, sth February, 1886. Following telegram received from Mr. J. Pender, Chairman, Eastern Extension Telegraph Company, London ; and I shall be glad of an early expression of your views on the subject, namely : " Our efforts to obtain reduction of India transit rate having been unsuccessful, we have earnestly considered how we could best meet wishes of the colonies for reduced tariff; and, with every desire to cheapen telegraphy, knowing that existing high tariff must restrict business, we cannot see our way to make substantial reductions without some assistance from colonies. Our dividend to shareholders is a small one considering risky nature of property and uncertain as to life of cables, our reserve fund being as yet quite inadequate to meet renewal, which will be absolutely necessary sooner or later. My company would, however, be prepared to offer to the colonies a reduction of two shillings and threepence per word, making, with the reduction promised by South Australia, two shillings and sixpence per word, provided the non-contributing colonies would share in the cable subsidy of thirty-two thousand four hundred pounds per annum, and join the contributing colonies in extending for six and a quarter years, making, with unexpired term, twenty years from present time. The proposal has been submitted to Agents-General of contributing colonies, who have expressed themselves willing to recommend to the favourable consideration of the Governments. These reductions are so substantial that they should have an important influence in developing the trade of the colonies, and I hope your Government will see the advantage of accepting the proposal. The reductions would involve an immediate

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loss to the company of nearly forty thousand pounds per annum, even after allowing for the same growth of traffic that we have hitherto experienced, and consequently it would take some years before we could recoup ourselves. We are trying to bring about a much larger reduction for the Press than that above named. If non-contributing colonies would join in subsidy contribution it would greatly facilitate our negotiations with the Administrations now stopping the way. My company would also be prepared, with a view to giving increased security to the telegraphic communication, to lay a submarine cable at its own expense, costing about seventy thousand pounds, between the Roger Eiver and Normanton, to connect the Queensland and South Australian telegraph system under a traffic arrangement between two colonies. This would give a double and all but certain communication between Europe and all the colonies." Daniel O'Connor, The Hon. Sir J. Vogel. Postmaster-General.

No. 30. The Chaieman, Eastern Extension Company, London, to the Hon. Sir J. Vogel, Waiwera. (Telegram.) sth February, 1886. Since telegraphing to your Premier proposal for reduction of cable rates, I have had further discussion with Agents-General, including Bell, and upon their suggestion have agreed to amend proposal as follows : Company will immediately announce reduction, to commence Ist July next, of one shilling and fourpence per word, same amount as we have agreed to concede to China system, and from same date will be prepared to make further reduction of one shilling and fourpence, in all two shillings and eightpence, instead of two shillings and sixpence, stated in my original proposal, if all colonies join in extension of duplicate cable subsidy. This will be most substantial concession to colonies, and give them cheaper system of telegraphy than it would be possible for them to establish themselves. Present cable are equal to many times existing traffic. Competition would simply be ruin to both systems. With view induce New Zealand join other colonies in extending subsidy, my company would be prepared to accept your Government's proposal with regard to renewal of New Zealand cable subsidy, although I may mention that, taking traffic from opening of line to present time, average net return on capital without subsidy has been only .three per cent.; and, if amortization for renewing cable in twenty years is taken into consideration, no return whatsoever is shown on capital invested. As contract expires on 21st instant, and as there may not be sufficient time before that date for colonies to fully discuss reduction proposal, we do not propose to make any alteration in the rates between New Zealand and Sydney until Ist July: this will prevent any inconvenience to telegraphing public, and by Ist July we hope the larger proposal will be approved and carried out. May I calculate upon your good offices in bringing this matter to a satisfactory conclusion ? John Pendee, The Hon. Sir J. Vogel, Waiwera. Chairman, Eastern Extension Company.

No. 31. The Agent-Geneeal to the Hon. Sir J. Vogel, Waiwera. (Telegram.) London, 7th February, 1886. Cable prices : Siemens Brothers and Co., one hundred thousand, eighty-five thousand ; Silvertown Company, one hundred thousand, forty-five thousand. Expect third offer Monday. The Hon. Sir J. Vogel, Waiwera. F. D. Bell.

No. 32. The Hon. Sir J. Vogel to the Hon. the Postmastee-Geneeal, Syduey. (Telegram.) Waiwera, Bth February, 1886. Agent-Geneeae wires Siemens Brothers offer make and lay cable for one hundred and eighty-five thousand pounds; Silver, for one hundred and forty-six thousand pounds. Expects wire third offer. Will you entertain idea joining us in procuring cable, on basis charging about threepence a word ? Local steamer can be fitted to make repairs when wanted. The Hon. the Postmaster-General, Sydney. Julius Vogel.

No. 33. The Hon. Sir J. Vogel to the Hon. the Postmastee-Geneeal, Sydney. (Telegram.) Waiwera, Bth February, 1886. In reply your telegram 4th, and Mr. Pender's proposals re English-Australian cables, will bring before Cabinet in two or three weeks. The Hon. the Postmaster-General, Sydney. Julius Vogel.

No. 34. The Hon. Sir J. Vogel to the Manages, Press Association, Wellington. (Telegram.) Waiwera, Bth February, 1886. The Agent-General has cabled that he has two offers and expects a third for making and laying a cable between Australia and New Zealand along existing route. The lower tender is under one hundred and fifty thousand pounds. The intelligence has been cabled to the Postmaster-General

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of New South Wales, with the inquiry if he would be prepared to entertain it. The Cable Company received for carriage of messages from New Zealand to Australia on account of the New ZealandAustralian cable, irrespective of payments for transmission beyond Australia, during 1885, ten thousand six hundred pounds, and probably equal amount for use of cable from Australia to New Zealand, besides subsidy seven thousand five hundred. The Manager, Press Association, Wellington. Julius Vogel.

No. 35. Dr. Lemon to the Supekintendent, Cable Company, Wakapuaka. (Telegram.) Wellington, Bth February, 1886. Please inform Mr. Pender that his various letters will be considered by a Cabinet in course of a few weeks. C. Lemon, Mr. Browning, Superintendent Cable, Wakapuaka. Superintendent.

No. 36. Dr. Lemon to the Hon. Sir J. Vogel, Waiwera. (Telegram.) Wellington, Bth February, 1886. New Zealand paid the Cable Company, in 1885, £10,613 for the transmission of cablegrams from New Zealand as the Australian cable's portion; and the company would receive a nearly equal amount from New South Wales and places beyond for the Australian cable's portion for the cablegrams to New Zealand from all places. The Hon. Sir Julius Vogel, Waiwera. C. Lemon. 4 I I III! 11l I II

No. 37. Dr. Lemon to the Hon. Sir J. Vogel, Waiwera. (Telegram.) Wellington, Bth February, 1886. Foe year 1885 the cablegrams sent from New Zealand to Australia for all places (including Australia) were 22,110, value £36,290; and received from Australia from all places 21,683, value £35,413. Value of messages is partly estimated, as value is not recorded of messages to New Zealand ; but the estimate may be relied upon. My former telegram shows the money out of the above sums charged for transmission over the Australian cable. The Hon. Sir Julius Vogel, Waiwera. C. Lemon.

No. 38. Dr. Lemon to the Hon. Sir J. Vogel, Waiwera. (Telegram.) Wellington, Bth February, 1886. My second telegram was also for year 1885. Mistake in transmission the figure 4. I will give you in the morning the annual payments to cable from commencement. As we pay the cable all the money it earns for messages from New Zealand, and pay Sydney for all beyond the cable, there will be no difficulty in giving you the figures. Speaking from memory, I think you might put down .£lB,OOO per annum as the earnings of the cable both ways, to which has to be added joint subsidy of £7,500. C. Lemon. The Hon. Sir Julius Vogel, K.C.M.G., Waiwera.

No. 39. Dr. Lemon to the Hon. Sir J. Vogel, Waiwera. (Telegram.) Wellington, 9th February, 1886. The payments made by New Zealand to the Cable Company, exclusive of subsidy, for the transmission over the New Zealand and Australian cable only of messages from New Zealand, were as follow:— 1876 ... ... ... ... ... . . ... ... £4,392 1877 6,736 1878 ... ... ... .... ... ... ... ... 8,725 1879 ... ... ... ... ... ... ... ... 9,016 1880 ... ... ... ... ... ... ... ... 7,937 1881 7,806 1882 ... ... ... ... ... ... 9,957 1883 ... ... ... ... ... :.. ... ... 9,653 1884 ... ... ... ... ... ... ... ... 9,925 1885 ... ... ... ... ... . . . . . 10,613 The company would, as you say, receive approximately a similar amount for the use of the Australian and New Zealand cable on the messages to New Zealand. The Hon. Sir Julius Vogel, K.C.M.G., Waiwera. C. Lemon.

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No. 40. The Hon. the Colonial Secretaet, Sydney, to the Hon. the Colonial Secretary, Wellington. (Telegram.) Sydney, 9th February, 1886. Have received the following message from our Agent-General: " Eastern Extension Company formally undertakes to announce immediately reduction of one and fourpence per word from Ist July unconditionally. Offering also further similar reductions provided subsidy proposals be agreed to. Proportionate reductions Government and Press. Prospects Press reduction to tw ro and eightpence, provided the contributing colonies consent that non-contributing colonies shall share in the benefit." John Eobertson, The Hon. the Colonial Secretary, Wellington. Colonial Secretary.

No. 41. The Agent-General, Loudon, to the Hon. the Colonial Treasurer, Waiwera. (Telegram.) London, 10th February, 1886. Cable price Telegraph Maintenance and Construction Company, one hundred thousand, eighty thousand, three thousand five hundred. F. D. Bell. The Hon. the Colonial Treasurer, Waiwera.

No. 42. The Hon. the Postmaster-General, Sydney, to the Hon. Sir J. Vogel, Auckland. (Telegram.) Sydney, 18th February, 1886. Following message has been received from Agent-General: Eastern Company now see their way to make promised reduction of Press rates to two shillings and eightpence on early date, probably about April, provided contributing colonies to Darwin Cable agreed that benefit shall be extended to non-contributing colonies. Company willing to reduce rate to eight shillings per word. Government, in proportion of contributing colonies, will extend subsidy for six and a quarter years. Company will also agree to New Zealand Government terms for renewing New Zealand cable subsidy ; Murray Smith and Todd wiring their Governments company have now conceded all that you require as regards New Zealand cable. We hope your Government will see its way to join us in Port Darwin subsidy, in order that the reduced rates over both Port Darwin and New Zealand cables can be brought into operation without further delay. Daniel O'Connor, The Hon. Sir J. Vogel, iVuckland. Postmaster-General.

No. 43. The Hon. Sir J. Vogel to the Hon. the Postmaster-General, Sydney. (Telegram.) Waiwera, 20th February, 1886. Your telegram received. I will submit to Cabinet as soon as possible. Meanwhile, I may say it is uncertain if our Government will now renew subsidy. I find the cable must have paid splendidly. For the use of the cable from New Zealand to Sydney the company have averaged, for the whole term, eight thousand six hundred pounds a year. Assuming equal amount other way, the average is seventeen thousand two hundred pounds, and, with the subsidy, twenty-four thousand six hundred pounds. The line, too, is improving, as this year the receipts New Zealand to Australia were over ten thousand; and with the same the other way, and subsidy, the receipts cannot be much less than thirty thousand pounds. When you consider the value of the cable this is enormous. The AgentGeneral cables that Preece has revised the specification, and that the cost will be one hundred and seventy thousand. By Queensland a much cheaper, shorter, and shallower route can be had. The three colonies might join in procuring a cable. As regards through cable, before entertaining new proposals, recommend you ascertain cost two through lines: one, Queensland-England; the other, Perth by Ceylon, Mauritius, Natal, Cape, and England. The colonies jointly constructing these could afford to charge three shillings a word, and less for Press. Please send copy to the Premier, Queensland. Julius Vogel. The Hon. the Postmaster-General, Sydney.

No. 44. The Hon. Sir J. Vogel to the Hon. the Postmaster-General, Sydney. (Telegram.) Wellington, 18th March, 1886. _ Please say, did you send copy of telegram 20th February to Queensland ? Also, are you inclined to join in laying new cable between Australia and New Zealand ? The Hon. the Postmaster-General, Sydney. Julius Vogel. 2— F. 2,

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No. 45. The Seoeetaey, General Post Office, Sydney, to the Hon. Sir J. Vogel. (Telegram.) Sydney, 19th March, 1886. Yes ; copy of telegram sent to Queensland on the 20th February. The Postmaster-General, who is now unwell, has not yet had opportunity of submitting to the Cabinet the proposal re new cable between Australia and New Zealand ; but matter will have his earliest attention. Seoeetaey, The Hon. Sir J. Vogel. General Post Office.

No. 46. Dr. Lemon to the Supebintendent, Eastern Extension Cable Company, Wakapuaka. (Telegram.) Wellington, 24th March, 1886. Please inform Mr. Pender, the chairman of your company, that the New Zealand Government cannot approve his proposal to join in subsidizing the existing linos. The Government consider the proposed reductions are not nearly enough, and that the through rates between England and Australia should be only a fraction of the present scale. C. Lemon, W. W. Browning, Esq., Superintendent, Eastern Extension Superintendent. Cable Company, Wakapuaka,

No. 47. The Supebintendent, Eastern Extension Cable Company, Wakapuaka, to Dr. Lemon, Wellington. (Telegram.) 25th March, 1886. Do the words " existing lines " include the Sydney-New Zealand cable? Dr. Lemon, Wellington. W. W. Beowning.

No. 48. Dr. Lemon, Wellington, to the Supebintendent, Eastern Extension Cable Company, Wakapuaka. (Telegram.) 27th March, 1886. The " existing lines" include the Australian-New Zealand cable. P Tw The Superintendent, Eastern Extension Cable Company, Wakapuaka.

No. 49. The Hon. Sir J. Vogel to the Hon. the Postmasteb-Genebal, Queensland. (Telegram.) Wellington, 25th March, 1886. Is there any probability of your joining New South Wales and us in construction of cable between Australia and New Zealand ? Shortest route would be to Queensland. I believe returns would enable us charge as low as threepence a word. We decline agreeing to Pender's request join in subsidizing Australian-English line. We consider reductions should be much larger, and that it will pay colonies to construct lines and charge low rates. Would you approve of conference of Post-masters-General here in the spring ? If you do, please communicate with New South Wales and Victoria. Julius Vogel. The Postmaster-General, Queensland.

No. 50. The Hon. Sir J. Vogel to the Hon. the Postmasteb-Genekal, Sydney. (Telegram.) Wellington, 25th March, 1886. We decline Pender's proposal to subsidize existing English lines. We think rates should be much more largely reduced, and that colonies should confer with view of providing lines and low rates. Would you approve a conference here in the spring of Postmasters-General ? I have now wired Queensland to same effect. If you approve you might consult Victoria. You might also consult Queensland about joining you and us in a new cable between Australia and New Zealand. The Hon. the Postmaster-General, Sydney. Julius Vogel.

»M»MiMMiMmwiMi«TimiTj'n-iM l hiuHiii.»iii l rii<n)l»tm»..ira»jidem» No. 51. The Agent-Geneeal to the Hon. the Postmasteb-Genebal, Wellington. Sib,— 7, Westminster Chambers, London, S.W., 25th February, 1886. In continuation of my letter of the 10th February, I hereby transmit copy of a further letter from the Telegraph Construction and Maintenance Company, enclosing a specification (copy herewith)_of the cable they would propose to lay. The specimens accompanying the specification I will send in the next mail-box. I also transmit copy of a letter from Mr. Preece, covering a com-

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munication which he received from the Indiarubber, Guttapercha, and Telegraph Works Company, respecting that company's offer, by which you will observe that, if the company adopted a description of cable sitch as Mr. Preece would approve, their quotation would be increased from £146,000 to £170,000. I attach a copy of a cablegram which I thereupon sent to you. I have, &c, The Hon. the Postmaster-General, Wellington. p, D. Bell.

Enclosure in No. 51. Peeece objected Silvertown offer. Tender amended : £170,000. To Treasurer, New Zealand.

No. 52. The Hon. the Postmaster-General, Queensland, to the Hon. the Postmaster-General, New Zealand. (Telegram.) Brisbane, 31st March, 1886. No likelihood at present of this Government joining in connection cable Australia-New Zealand. Pender's proposal was refused by us. The Hon. the Postmaster-General, New Zealand. T. Macdonald Pateeson.

No. 53. The Chaieman, Eastern Extension Telegraph Company, London, to the Hon. Sir J. Vogel, Wellington. (Telegram.) London, 31st March, 1866. Eefebeing to my telegram of the sth February and your reply of 25th March, communicating your Government's decision, I regret that they do not take a broader and more appreciative view of the telegraphic enterprise shown by my company. You negotiated and arranged the terms for present cable between New Zealand and Australia, and know why the cost was so much in excess of what the cable could be laid for to-day. It would not be in the interest of New Zealand or Australia to lay an opposition cable in face of the proposals for reduction of tariff which the company have offered to make. If, however, your Government decide to have a cable of its own, we are prepared to sell the existing line at a price to be fixed by arbitration. I have already informed you that the income of the cable is not such as to give the company, after setting aside the necessary amortization for replacing it, and without any cost for repairs, more than enough to pay working expenses. I beg that you will communicate this telegram to the Press of New Zealand, as I purpose doing so to the Press of Australia. John Pendee, Chairman, Eastern Extension Telegraph Company. Sir Julius Vogel, Commissioner of Telegraphs, New Zealand.

No 54. The Seceetaey, Posts and Telegraphs, Wellington, to Mr. Pendee, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 2nd April, 1886. The Postmaster-General, in reference to your telegram of the 31st ultimo, wishes to say that he does not know why the cost of the cable was, as you state, so much in excess of what the cable could be laid for to-day, and he would be glad of an explanation of the causes to which you refer. He would also like to know what price you would take for the cable, and whether you could guarantee its condition. W. Geay, John Pender, Esq., Chairman Eastern Extension Company, London. Secretary.

No. 55. Mr. Pendee to Mr. Geay, Wellington. (Telegram.) Sydney, 7th April, 1886. I have received your telegram, and have nothing to add to my former remarks. The PostmasterGeneral, having negotiated the contract for the existing cable, is as well acquainted with all the details as I am. I have already stated that the traffic has not up to the present time been remunerative. It would be much less so if the Government entered into competition with vs —a competition which might lower the rates for a time, but which would not permanently benefit the telegraphing public, and might prevent the development of important works by private enterprise ; and I cannot believe that such a course would commend itself to the other Governments, who we are assured are quite satisfied with the efficient telegraphic service which the company have provided for the colonies. If, however, your Government has determined to oppose us, we are prepared, rather than enter into competition, which would be disastrous alike to the Government and the company, to sell

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the existing cable for one hundred and fifty thousand pounds, with a guarantee of working for thirty days from the date of its transfer. This is the usual period guaranteed by cable contractors. The cable has been exceedingly fortunate in not having been interrupted since it was opened. Had it called for repairs in the same proportion as the rest of the system the result to the company would have been still more onerous and disappointing than it has been. As already stated, we shall make no alterations in the tariff until Ist July, when the reduction in the general tariff will take effect. Meanwhile, we beg that you will let us know your Government's decision as to whether they are prepared to purchase the cable, or to make any arrangement for renewing the subsidy for a further term. J. Pender. W. Gray, Esq., Wellington, New Zealand.

No. 56. The Hon. F. B. Stjttor to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, Bth May, 1886. Have sent copies of your telegram of twenty-fifth March to Postmaster-General of other colonies named. I question if Conference is desirable, but will be glad to give every consideration to your representation. The Hon. the Postmaster-General, Wellington. F. B. Suttor.

No. 57. The Hon. F. T. Deeham to the Hon. the Postmaster-General, Wellington. (Telegram.) Melbourne, 13th May, 1886. Our Agent-General has been advised by wire that Victoria will not agree to any extension of cable subsidy, but accepts unconditional reduction of one and fourpence per word, also that the reduction in Press rates to two and eightpence per word, provided contributing colonies agree that the benefit shall be extended to non-contributing colonies, is agreed to by Victoria. Feed T. Derham, Postmaster-General. The Hon. the Postmaster-General, Wellington.

No. 58. The Hon. D. Gillies to the Hon. the Premier, Wellington. (Telegram.) Melbourne, 21st May, 1886. Think it well to inform you of decision of this Government regarding recent proposals by Pender for reduction of cable rates. Following telegram sent to our Agent-General: "Cable rates. Victoria does not agree extension of term, but accepts unconditional reduction one shilling fourpence per word on charges to and from Australia. Press rates, agree reduction to two shillings eightpence, provided benefit extended non-contributing colonies." D. Gillies, The Hon. the Premier, Wellington. Premier.

No. 59. The Agent-General to the Hon. the Postmaster-General, Wellington. Sib, — 7, Westminster Chambers, London, 7th April, 1886. Mr. Pender called on me to-day, and had a further conversation with regard to the recent telegraphic communications which have passed between yourself and him. In order to prevent any future misunderstanding, I made quite clear to him the one point on which he and I think alike— viz., that, provided adequate reductions are made in the rates, it is better that the continuity of the Eastern Extension system should be maintained, because, in the present state of traffic over the cable, the competition of a second line between Australia and New Zealand could not pay. Mr. Pender showed me the draft of a telegram he proposed to send you, offering, in reply to one from you asking at what price the company would sell the existing cable, to dispose of it to the Government for £150,000 ; but he said that, so far from desiring to sell, the company would, if New Zealand joined the other colonies in the subsidy, be willing to agree at once to duplicate the cable within a reasonable time. Mr. Pender referred to an argument which had been used, that the contributions of the colonies should not be made on a population basis, but in proportion to their telegraphic traffic ; and he handed me a table, of which I enclose a copy herewith, purporting to show that, in the case of New Zealand, the contribution by traffic would be less than the contribution by population. I recommended him to send you a precise proposal for the duplication of the cable, and not to confine his offer to the one point of a sale of the existing cable at £150,000. I have, &c, The Hon. the Postmaster-General, Wellington. F. D. Bell.

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Enclosure in No. 59. Subsidies contributed to Eastern Extension Company by the Australasian Colonies.

No. 60. Dr. Lemon to the Agent-General, London. Sir, — General Post Office, Wellington, Ist June, 1886. «I have the honour to acknowledge receipt of your letter of the 7th April, informing me of the result of an interview Mr. Pender had with you as to subsidising the Australian cable, and also as to duplication thereof. I have noted the figures of Mr. Pender's table, of which you enclosed a copy. I have, &c, Sir F. D. Bell, K.C.M.G., C. Lemon, Agent-General for New Zealand, London. (For Postmaster-General.)

No. 61. Dr. Lemon to Mr. W. W. Browning, Wakapuaka. (Telegram.) Wellington, sth June, 1886. Please convey the following to Mr. Pender, your chairman : Be Australian New Zealand cable, am directed by the Postmaster-General tell you Government, having considered subject, have resolved not to buy present cable nor to conthrae subsidy. They consider it was intended rates should not be raised when subsidy ended ; and, though they look on want of second cable as a more or less early necessity, they will defer two years buying another cable if ordinary rates are not raised, and Press rates reduced to threepence per word on guarantee by Press of business yielding equal present gross payments, and if present cable is kept in repair. C. Lemon, Mr. Browning, Wakapuaka. Superintendent.

No. 62. The Hon. Sir J. Vogel to the Hon. the Postmaster-General, Sydney. (Telegram.) Wellington, sth June, 1888. The following cablegram has been sent to the Chairman Eastern Extension Company : " Be Aus tralian New Zealand cable, am directed by Postmaster-General tell you Government, having considered subject, have resolved not to buy present cable nor to continue subsidy. They consider it was intended rates should not be raised when subsidy ended; and, though they look on want of second cable as a more or less early necessity, they will defer for two years buying another cable if ordinary rates are not raised, and Press rates reduced to 3d. per word on guarantee by Press of business yielding equal present gross payments, and if present cable is kept in repair.—C. Lemon, Superintendent." Julius Vogel. The Hon. the Postmaster-General, Sydney.

No. 63. The Chairman, Eastern Extension Telegraph Company, London, to the Hon. the PostmasterGeneral, Wellington. (Telegram.) London, 10th June, 1886. Your telegram of sth instant has been submitted to my Board, who much regret learn your Government's decision not to continue subsidy notwithstanding figures show working of cable without subsidy has so far been unremunerative. They also consider your new proposition unreasonable, and cannot entertain it. Company, however, desires an amicable arrangement, and to show willingness meet colonies far as possible, we submit for your consideration favourable proposal—namely,

Colony. Amount of Contribution on 1881 Census in respect of Duplicate Cable. Contribution in respect of Now Zealand and Tasmanian Cables. Contribution if Subsidies spread over all Colonies on 1884 population. Amount if all Colonics contributed in Proportion to their Telegraphic Traffic. Victoria Slew South Wales 3outh Australia Western Australia Sfew Zealand Queensland ... Pasmania ■ £ 14,478 12,617 4,815 498 £ 2,500 £ 13,112 12,564 4,266 449 7,698 4,227 1,780 £ 13,560 14,332 6,835 441 6,063 2,425 441 5,000 4',200 32,400 11,700 44,100 44,100

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company would be prepared to lower tariff between Europe Australia and between Australia New Zealand to any figures colonies might fix, provided average earnings of cable, including subsidies, for last three years guaranteed by colonies. This would be fair way of testing opinion frequently expressed in colonies that large reduction of tariff would lead to corresponding increasing traffic, and if quite nominal. We should be glad to receive your Government's reply at least ten days before first July, to enable us to make necessary announcements in event of your Government's not accepting this proposition. With regard to your remark that it was intended rates should not be raised, question never mooted until we opened negotiations for renewal of subsidy; and company has never abandoned its right to control the tariff. To prevent any ambiguity we have obtained consideration of this view from highest legal authority. Chairman , The Hon. the Postmaster-General, Wellington. Eastern Extension Co., London.

No. 64.

The Hon. Sir J. Vogel to the Chairman, Eastern Extension Company, London. (Service telegram.) Wellington 12th June, 1886. You may take for granted if rates raised we construct cable. Quite uninfluenced by threat raising rates. I am favourably inclined to last proposal, but cannot vouch for opinions of Government, nor bring before them without more information. If you will answer following questions, will give subject further consideration. Say also do you wish this Government bring before other Governments, or have you already submitted'? Question: First. By earnings do you mean verified actual cash receipts for cablegrams, exclusive of service telegrams between New Zealand and Australia, both ways, hereinafter called "system number one;" and between Darwin and Europe, both ways, hereinafter called " system number two " ? Question: Second. Will system number two include reduction in cost of messages right through on both Eastern and Eastern Extension lines, also between Darwin and Java, India, China, Good Hope, both ways ? Question: Third. What are the average yearly amounts required to be guaranteed systems one and two respectively ? Question: Fourth. Imperative guarantee reducible by times line not working? Question: Fifth. If large reduction rates made, can you guarantee capacity of cables ?

The Chaieman, Eastern Extension Telegraph Company, to the Hon. the PostmasterGeneral, Wellington. (Telegram.) London, 22nd June, 1886. Let me assure you that proposal raise New Zealand tariff if we cannot come to an arrangement was not meant as a threat but simply to give company moderate return on capital instead by making guarantee proposal is evidence company's desire bring about amicable solution, hollowing are categorical replies to your questions, and generally speaking may be taken as reliable, but whole of details require careful consideration, and some may require some modification during course negotiation. Answer : Eirst. Yes ; nett cash receipts of Eastern, Indo, European and Extension Company. Answer: Second. We should endeavour arrange with Eastern Company's partners for through reduction over whole Eastern and Extension lines, but line from Aden to Cape, which is opened by separate company, not included in proposal guarantee; principle is, however, equally applicable to Cape Colony, and we would endeavour in such large comprehensive measures as that suggested to bring them in. Answer: Third. For number one system if no increase of traffic arose from reduced tariff—if say fourpence per word for intercolonial messages, colonies would have to make up about £15,500 per annum; with twenty-five per cent, increase amount required £12,400 ; fifty per cent. £10,200; seventy-five per cent., £8,000; one hundred per cent., £6,000; the international rate of one shilling left unchanged. On number two, without any increase traffic, colonies would have to make vp —at five shillings tariff about £107,000; with increase twenty-five per cent., £89,000; fifty per cent., £70,000; seventyfive per cent., £51,000; one hundred per cent., £32,000. At a four shilling tariff without increase, £109,000; with increase twenty-five per cent., £103,000; fifty per cent., £87*000; seventy-five per cent., £71,000; one hundred per cent., £55,000. Above figures based on assumption that South Australia would reduce her transit to tenpence and fivepence per word respectively. Answer: Fourth. Company would agree to this on certain conditions. Answer: Fifth. Yes; up to one hundred per cent, increase.

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Question : Sixth. Will you still join Queensland to northern system service? Question: Seventh. Will you in given named time construct second line Australia New Zealand ? Question : Eighth. What length guarantee do you require ? Question : Ninth. May colonies require further reduction rates from time to time on same guarantee? Question : Tenth. If reduced rates yield larger returns, will you give any part to guaranteeing colonies ? Question: Eleventh. Are you willing that we may guarantee system number one if other colonies refuse guarantee system number two ? Julius Vogel, Postmaster-General. 4

Answer: Sixth. Company shall be prepared connect Queensland and South Australian systems with sanction both Governments. Answer : Seventh. Yes. In ten years or sooner if traffic warranted it, which has always been our policy. Answer: Eighth. Five or ten years as an experiment, either party at end of term being at liberty to revert to existing arrangement. Answer: Ninth. Yes, to limit of our out-pay-ments, which at present are one shilling twopence to South Australia, penny halfpenny Java, sevenpence halfpenny India, fivopence Continent and Persian Gulf. Total, two shillings and fourpence per word. Answer: Tenth. If any excess our guarantee, it would probably be required to renew cables or increase their carrying capacity. Answer : Eleventh. Company prepared accept guarantee either separately or together. Company already submitted proposal to Sydney Government, and propose communicating it direct to other Governments. We believe if guarantee principle carried out it would prove best solution for the colonies, as it would give them full control over the tariff, and would enable them to give large benefit to telegraphing public. We therefore hope we shall have your valuable help with other colonies in bringing about its adoption. Chairman, Eastern Extension Company.

No. 65. Dr. Lemon to Mr. W. W. Browning, Wakapuaka. (Service telegram.) Wellington, 28th June, 1886. Please forward following service to London. —C. Lemon: " Chairman, Eastern Extension Company, Thanks for telegram. You have misunderstood question three entirely. I wanted amounts actual cash receipts you require us to guarantee, leaving colonies to fix tariff. Your answer, number one, introduces a new complication; you say ' Yes' to my question as to cash receipts, but add the word nett. What does nett mean in this connection? As you have communicated with other colonies I leave out system number two at present and turn to system number one. We make out receipts, including subsidy, to average last three years about twenty-seven thousand pounds. If we guarantee this, are you willing to let us charge what we like for all messages both ways, including international, less time line out of order ? You must not consider this an offer, as not yet submitted to Government and House. Kindly reply quickly, as House soon prorogues. " Mr. W. W. Browning, Wakapuaka. " Julius Vogel."

No. 66. The Chairman, Eastern Extension Telegraph Company, to the Hon. the Postmaster-General, Wellington. (Telegram.) _ London, Ist July, 1886. Express thirty: your telegram twenty-seventh [twenty-eighth] received. We meant by word nett the verified actual cash receipts less outpayment to administrations not included in guarantee as detailed in answer to your ninth question. In respect of system number two these receipts present about one hundred and eighty-three thousand five hundred pounds and in number one including subsidy about twenty-six thousand five hundred pounds. If latter guaranteed less [time] the line out of order you can make charge on New Zealand cable what figure you please for all messages both ways including international. The Postmaster-General, Wellington. Chairman, Extension Company.

No. 67. The Hon. Sir J. Vogel to the Chairman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 29th July, 1886. The Government, after due consideration, have come to the conclusion that they cannot enter into any guarantee. . The Chairman, Eastern Extension Company, London. Julius VoGEIi.

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No. 68. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir J. Vogel. (Telegram.) London, 30th July, 1886. Eegbet learn your Government not prepared to accept guarantee proposal which we believe would be best solution for colonies of tariff question. Are you prepared to abide by the offer you made last year to continue the New Zealand cable subsidy for another five years, or what do you propose, as the receipts without subsidy are insufficient to give adequate return on capital invested ? Chaibman, Eastern Extension Company, London. The Hon, Sir Julius Vogel, Wellington.

No. 69. The Hon. Sir J. Vogel to the Chaibman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 24th August, 1886. In reply to your telegram 30th July the Government are not now disposed to give any subsidy. Julius Vogel, The Chairman, Eastern Extension Company, London. Postmaster-General.

No. 70. The Chaibman, Eastern Extension Telegraph Company, to the Hon. Sir Julius Vogel. (Telegram.) London, 20th September, 1886. On my return from abroad I was sorry to learn the decision of your Government, as communicated by your telegram of twenty-fourth ultimo. The company have done everything possible to conciliate your Government and to meet the requirements of the telegraphic public, and if our guarantee proposal had been accepted it would have given the public a cheaper tariff than it is possible to obtain by any other means without entailing considerable expenditure on the colony. Under the circumstances, however, the company have uo alternative but to raise the tariff for intercolonial telegrams from the first of October to ten shillings per ten words, and a shilling for every additional word, in order to recoup the loss of the subsidy ; and I think it desirable the public should know why the company are compelled to adopt this course. I have given instructions that the whole of the correspondence on the subject is to be published. The company will be prepared to reduce the tariff as previously offered to five (5) shillings for ten (10) words for Government and ordinary messages, and to threepence per word for press telegrams, whenever your Government is ready to renew the subsidy. Chaibman, Eastern Extension Company, London. The Hon. Sir Julius Vogel, Wellington.

No. 71. The Hon. F. B. Suttob to the Hon. the Postmasteb-Genebal, Wellington. (Telegram.) Sydney, 24th September, 1886. Company apparently have not considered the consequence of raising the New Zealand tariff as intimated. Governments under clause eight can cease to provide company with accommodation at termini if tariff raised, and under clause thirteen Governments can charge anything they please for use of land lines if tariff raised. Propose that you and I reply in foregoing terms, expressing hope that, to prevent inconvenience to public and future trouble, their proposal will be withdrawn. F. B. Suttok. The Hon. the Postmaster-General, Wellington.

No. 72. The Hon. Sir J. Vogel to the Hon. E. B. Suttob. (Telegram.) Wellington, 25th September, 1886. Appreciate friendly consideration shown by your telegram; same idea as to clauses eight and thirteen occurred to us here. Besides, why should we be at all trouble and expense of collecting telegrams and money for company ? They cannot raise on first October, for we have not Berne Convention notice. If we get it we should confer as to steps to be taken. lam sending cablegram to chairman in accordance with your suggestions, and hope you will send similar one. Please reply. Copy of telegram to chairman as follows : — Julius Vogel, The Hon. F. B. Suttor, Sydney. Postmaster-General.

No. 73. The Hon. Sir J. Vogel to the Chaibman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 25th September, 1886. Eeply to yours 24th. You apparently have not considered consequences of raising tariff. The Governments can cease to provide present accommodation at termini, where they are now treating you with great generosity. Clause thirteen also gives power to charge for use of land-lines by

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terminal rates or otherwise, or we can leave you collect your own cablegrams and moneys. We give you now in every way great aid ; in fact, virtually do major portion of your business for you, saving you large expenses. We consider intention of contract was that tariff should not be raised, and advise you to withdraw proposal. Julius Vogel, The Chairman, Eastern Extension Company, London. Postmaster-General.

No. 74. The Hon. Sir J. Vogel to the Hon. F. B. Suttob. (Telegram.) Wellington, 25th September, 1886. I hope you will aid us in putting the Press telegrams between Australia and New Zealand on a fairer footing. The rates between Adelaide and Sydney terminus for Press messages both ways should be Press rates, and we will make Press rates between terminus here and all parts of New Zealand both for messages out and in. The cable rate ought not to be full rate. The Government of India has insisted on all the colonies sharing the benefit of the new arrangement, and they could not approve the Press being charged from Sydney to New Zealand nearly half the whole cost to England. A joint appeal by our two Governments to the Government of India would lead to redress. The Press are willing, if the cable rate is reduced to threepence a word, to guarantee equal receipts from increased business. Julius Vogel, The Hon. F. B. Suttor, Sydney. Postmaster-General.

No. 75. The Hon. F. B. Suttob to the Hon. the Postmastee-Genebal, Wellington. (Telegram.) Sydney, 29th September, 1886. Have wired company in similar terms to your cable. Hope matter may be arranged. Could not attend conference at present if one were held. F. B. Suttob, The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 76. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir Julius Vogee. (Telegram.) London, 28th September, 1886. Have received your telegram. We are acting upon highest legal advice, and have perfect right to raise tariff. You are bound to give us office accommodation for ten years from expiration of subsidy. New South Wales were prepared to renew subsidy for ten years. You obtained the sanction of your Parliament to renew for five years, but declined to carry it into effect. The advantages which you state we enjoy are far from making up heavy loss we sustain by working traffic at present rates. There really ought to be no difficulty in coming to satisfactory arrangement. You complain of not having received legal notice. We have told you throughout our correspondence, extending over eighteen months, that, unless subsidy renewed, tariff would have to be raised. Now, to prevent all misunderstanding, and to satisfy the telegraphic community of New Zealand and of the other colonies, company will postpone raising tariff until first January next if you choose to reconsider proposals with a view to amicable arrangements (170, correction to follow). The Hon. Sir Julius Vogel, Wellington. Chaibman, Extension Company.

No. 77. The Hon. F. B. Suttob to the Hon. the Postmastee-Genebal, Wellington. (Telegram.) Sydney, 30th September, 1886. Be this morning's telegram from Extension Company. I am prepared to recommend Cabinet to renew the subsidy on terms suggested in January. Company have given way in agreeing to a five years' subsidy, and I consider this proposal the best way out of the difficulty. Strongly urge your reconsideration, and thus save incovenience, and possibly increased instead of reduced charges to public. The Hon. the Postmaster-General, Wellington. F. B. Suttob.

No. 78. The Hon. F. B. Suttob to the Hon. the Postmastee-Genebal, Wellington. (Telegram.) Sydney, 11th October, 1886. Shall be glad to learn if you have arrived any decision re Pender's cablegram 30th ultimo. E. B. Suttob, The Hon. the Postmaster-General, Wellington. Postmaster-General.

No. 79. Dr. Lemon, Wellington, to the Hon. the Postmaster-Geneeal, Sydney. (Telegram.) Wellington, 12th October, 1886. The Postmaster-General desires me to say he will reply to your telegram before the end of the week. C. Lemon, The Hon. the Postmaster-General, Sydney. Superintendent. 3—F. 2.

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No. 80. The Hon. Sir J. Vogel to the Hon. F. B. Suttoe. (Telegram.) Wellington, 16th October, 1886. Govehnmhnt agree with your telegrams 24th and 29th September, but regret apparent change of view shown by telegram thirtieth. They consider unfair raise rates. I attach copy of message am sending company. Hope you will support same views, which are those of your telegram of 24th September. Julius Vogel, Hon. F. B. Suttor, Sydney. Postmaster-General.

No. 81. The Hon. Sir J. Vogel to the Chaieman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 16th October, 1886. Your telegram 28th September carefully considered by Government. They are resolved not to give further subsidy. You are mistaken in stating I complained about want of notice. I wished draw your attention to requirements Berne convention. Do not consider notice formal unless properly made by International Office. I now give you notice that if you raise rates we shall not give you present accommodation, though we will give you room for an operator, and that we will impose terminal charge. If you leave present rates ordinary messages unchanged, and reduce press rates to threepence on a guarantee of press to supply revenue equal to average of press payments during last three years, we wdll agree to give twelve months' notice before opening for use any new cable. Julius Vogel, The Hon. F. B. Suttor, Sydney. Postmaster-General.

No. 82. • The Hon. F. B. Suttoe to the Hon. the Postmastee-Geneeal, Wellington. (Telegram.) Sydney, 20th October, 1886. I think you must misapprehend matter. According to my view there are two distinct questions. I doubt company power to raise tariff, and if they do so am quite prepared to assert our rights under agreement as mentioned in my telegram to you of twenty-fourth and twenty-ninth September. This is one question. The other question is that of accepting offer which company now make to reduce the tariff under the conditions agreed to by your Government in January last, namely, subsidy to be continued for five years, rates to be reduced to five shillings for ten words, Press messages threepence per word. Acceptance of this offer is what I advised in my telegram of thirtieth Sejrfeinber, and still most strongly advise, as present rates are too high ; and, as you are aware, this colony has for long time past been endeavouring to obtain reduction, which can now be effected, as already stated, on the stipulation insisted on by you in January, but then refused by company, who, however, now give way. Hon. Sir J. Vogel, Postmaster-General, Wellington. F. B. Suttoe.

No. 83. The Hon. Sir J. Vogel to the Hon. P. B. Suttoe. (Telegram.) Wellington, 22nd October, 1886. Geeatly thank you for consideration evinced by your cablegram yesterday. Our Government determined not give subsidy. We are retrenching expenditure wherever practicable. Besides, if you will examine them you will see that reductions offered for subsidy are very trifling for ordinary messages, and only a few people will enjoy them. As to Press messages the Press is willing to guarantee equivalent revenue if reduction is made, so that no subsidy is required. Again, renewal subsidy will tend keep up present monopoly and prevent erection new line. Government think whole charges cablegrams between colonies and Europe should be greatly reduced. Could you arrange conference Postmasters-General here about Eebruary ? Hon. P. B. Suttor, Postmaster-General, Sydney. Julius Vogel.

No. 84. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir Julius Vogel. (Telegram.) London, 20th October, 1886. I have received with regret your telegram of sixteenth instant. The International Telegraph Convention has nothing whatever to do with local traffic, it only regulates international arrangements; and, as we do not propose altering the international rates, notice from Berne office unnecessary. Contract entitles company to office accommodation for another ten years whether tariff raised or not; and as one operator utterly inadequate for proper working of the service, the withdrawal of the accommodation might compel us to interrupt the traffic altogether, and in that case we should have to hold your Government responsible for all loss or damage the company might sustain. Any additional tax you might see fit to impose would have to be borne by the telegraphic public, and would only add to the expense and annoyance the raising of the cable tariff would entail upon them. With regard to the Press we have lately shown international arrangements our desire to meet their requirements, and we are anxious to extend cheap rates to the Press over New Zealand

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cable, but the guarantee principle can only be dealt with as part of the general guarantee proposals submitted by the company to New Zealand and the other colonies. As a last resource, and to show our earnest desire to bring about an amicable solution of this vexed question satisfactorily to all parties, the company are prepared to refer it to arbitration in the usual manner, to be held in London. As the company have incurred considerable loss by the long delay that has already taken place in coming to an arrangement, I should feel obliged if you would give me an early reply to the above proposal. Sir Julius Vogel, Wellington. Chairman, Extension Company.

No. 85. The Hon. Sir J. Vogel to the Hon. F. D. Suttor. (Telegram.) Wellington, 17th October, 1886. Have sent following telegram to Chairman of company, in reply to theirs of 22nd: — Hon. F. B. Suttor, Postmaster-General, Sydney. Julius Vogel.

No. 86. The Hon. Sir J. Vogel to the Chairman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 27th October, 1886. In reply to your telegram, the idea of continuing the subsidy is quite foreign to intention of the contract, and, as the Government see nothing about which to arbitrate, your proposition to that effect declined. Julius Vogel, Chairman, Eastern Extension Company, London. Postmaster-General.

No. 87. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir J. Vogel, Wellington. (Telegram.) London, 27th October, 1886. I have received your telegram. Your Government have declined arbitration notwithstanding their having obtained the sanction of Parliament for the extension of the subsidy for five years. The company have no alternative but to raise the tariff for intercolonial telegrams passing over the New Zealand Cable to 10s. per ten words from Ist November, in order to recoup the loss of subsidy. I stated the whole case to the shareholders at the half-yearly general meeting held to-day, and they unanimously approved of decision to raise tariff. The Hon. Sir Julius Vogel, Wellington. Chairman, Eastern Extenson.

For extract from report of meeting, see No. 154, p. 29.

No. 88. The Postmaster-General, Wellington, to the Hon. F. B. Suttor. (Telegram.) Wellington, 30th October, 1886. Chairman Cable Company announced raised rates on Monday. What course shall you pursue? We have replied as follows. (See telegram below.) Julius Vogel.

No. 89. The Hon. Sir J. Vogel to the Chairman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, 30th October, 1886. In reply to your telegram, when you were offered terms authorized by Parliament you refused to accept them. I now protest against increased rates without notice from international, and shall report course you have taken. Meanwhile, give you notice if you raise rates on Monday that we require terminal charge four shillings ten words, and fivepence each word additional on all inward intercolonial messages. Julius Vogel. The Chairman, Eastern Extension Company, London.

No. 90. The Hon. F. B. Suttor to the Hon. Sir J. Vogel. (Telegram.) Sydney, 30th October, 1886. Have wired Cable Company regret decision to raise rates, which may cause this Government to exercise rights under agreement. Have determined to collect increased rates on Monday. If imposed under protest to avoid risk of detention of messages and possible injury to business people, cannot see way at present to further increase rates by making terminal charges here. Sir Julius Vogel, New Zealand. F. B. Suttok.

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No. 91. W. Beeves, Esq., to the Hon. Sir J. Vogel. (Telegram.) Dunedin, 29th October, 1886. At the annual meeting of shareholders in the United Press Association to day, the following resolution was unanimously passed : That the directors and shareholders of the United Press Association, assembled at annual meeting, desire to impress upon the Government their strong opinion that it is to the interest of the public and the Press of the colony that the Government should agree to pay the annual contribution of £5,000, now asked toward the cable subsidy for a further period not exceeding five years. W. Beeves, Sir Julius Vogel, Postmaster-General. Chairman.

No. 92. W. Beeves, Esq., to the Hon. Sir J. Vogel. (Telegram.) Dunedin, 30th October, 1886. Meeting of Association held yesterday, when resolution sent you was passed. Consisted of Beeves, Brett, Blundell, Fenwick, Horton, Guthrie, Bracken, Bell, Gilmore. Motion moved by Bracken, seconded by Blundell, carried unanimously. W. Beeves, Sir J. Vogel. Chairman,

No. 93. Hon. Sir Julius Vogel to W. Beeves, Esq. (Telegram.) Wellington, 30th October, 1886. Copy of resolution received. I will refer it to Cabinet. I may inform you that the question of giving the subsidy recommended has been constantly brought before the Cabinet, and the same decision arrived at by the Government not to give a subsidy. W. Beeves, Esq. Julius Vogel.

No. 94. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir Julius Vogel. (Telegram.) London, 30th October, 1886. I have received your telegram of this date. We declined the renewal of the subsidy for five years because the service had been so unremunerative, and we considered the bargain a hard one. When, however, we subsequently (nine months ago) offered to accept it we did so in the hope that before the termination of the five years such arrangements would be made on the guarantee principle as would give to the colonies very much lower rates. As to increasing the terminal charge to four shillings, you will only be telegraphing public of New Zealand and the other Australian Colonies, as the terminal charge must be added to the cable tariff of ten shillings. We have already explained to you that the International Telegraph Office has nothing whatever to do with local tariffs, only international, therefore notice from Berne unnecessary. Sir Julius Vogel, Wellington. Chairman.

No. 95. Hon. Sir Julius Vogel to the Chairman, Eastern Extension Telegraph Company, London. (Telegram.) Wellington, Ist November, 1886. I give you notice that from and including to-day until further notice, we shall debit your company with a terminal charge of four shillings for the first ten words or less, and fivepence for every additional word on all inward intercolonial messages : this in addition to the New Zealand land-line tariff rates now in force. The Chairman, Eastern Extension Company. Julius Vogel.

No. 96. Mr. W. Browning to Dr. Lemon. (Telegram.) Wakapuaka, 31st October, 1886. Be Sir Julius Vogel's message of yesterday to our Chairman, I have been instructed to ask if we are to understand that the terminal charge of four shillings is in addition to the present charge of sixpence made by New Zealand. Please reply quickly, as it is very important. Dr. Lemon, Wellington . . W. Browning.

No. 97. The Superintendent, Cable Company, to Dr. Lemon. (Telegram.) Nelson, 30th October, 1886. On and after Ist November, on all intercolonial messages we debit your department with ten shillings for first ten words, and one shilling for each additional word. Superintendent, Cable Company. Dr. Lemon, Superintendent, New Zealand Telegraphs.

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No. 98. Dr. Lemon to the Supeeintendent, Cable Company. (Telegram.) Wellington, Ist November, 1886. The Postmaster-General does not accept your notice this morning. He does not consider an officer of the company has power to make changes of rates. He has already received a communication from the Chairman, to which he has replied. C. Lemon, Superintendent, New Zealand Cable, Superintendent, New Zealand Telegraphs. Wakapuaka.

No. 99. The Supeeintendent, Cable Company, to Dr. Lemon. (Telegram.) Wakapuaka, Ist November, 1886. In reply to your memorandum of to-day, I have the honour to inform you that I have received instructions from our London office that on and after first of November I am to debit Government of New Zealand on all intercolonial messages with ten shillings for first ten words and one shilling for each additional word. Please consider my first notification as formal. Supeeintendent, Cable Company. Dr. Lemon, Superintendent, New Zealand Telegraphs.

No. 100. Mr. James, Melbourne, to Dr. Lemon, Wellington. (Telegram.) Ist November, 1886. Uegent. Are we to charge your terminal rate four shillings first ten words and fivepence each additional word on all messages from Victoria ? Beply immediately. Dr. Lemon, Wellington. James, Melbourne.

No. 101. Dr. Lemon, Superintendent, Wellington, to Mr. James, Melbourne. (Telegram.) Wellington, Ist November, 1886. The Cable Company, I presume, will give you all the information you require. We debit the cable on all inward intercolonial messages 4s. for first ten words or less, and sd. each additional word. This in addition to New Zealand land lines tariff now in force. C. Lemon, Mr. James Melbrum. Superintendent.

No. 102. Mr. James, Melbourne, to Dr. Lemon, Wellington. (Telegram.) Wellington, 2nd November, 1886. Otjb rate to New Zealand is now 16s. 6d. ten words, and Is. Bd. each additional word. Great dissatisfaction public re terminal charge your department. James, Melbourne.

No. 103. The Hon. F. B. Stjttob, Sydney, to the Hon. Sir J. Vogel, Wellington. (Telegram.) Sydney, Ist November, 1886. Am collecting under protest increased rates demanded by company, and have notified public that until further notice tariff will be 14s. 6d. for ten words and Is. 6d. each additional word, made up as follows : 10s. company, 4s. New Zealand terminal, and 6d. New South Wales rate ; and Is. to company, sd. to New Zealand, and Id. to New South Wales, for each additional word. The Hon. Sir J. Vogel. P. B. Suttob.

No. 104. Mr. J. Wabbubton, Wellington, to Accountant, Sydney. (Telegram.) Wellington, 4th November, 1886. We debit you for New Zealand rates on Australian messages as formerly. The extra terminal rate of 4s. first ten words and sd. each additional word we debit to Cable Company. The Accountant, Sydney. J. Wabbubton.

No. 105. The Hon. P. B. Suttor to the Hon. Sir J. Vogel, Wellington. (Telegram.) Sydney, 3rd November, 1886. From late telegrams in newspapers it seems you are only charging your public old rates on messages sent from New Zealand, using the four shillings to make up company's charge of ten shillings. I think it unfair that senders of messages from here to New Zealand should be asked to recoup your loss and bear all the disadvantages of the position, and am clearly of opinion now that the proper

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course to adopt is not to collect any New Zealand terminal charge from senders in this colony, but to collect cable rate to Wakapuaka and our own terminal charge only, leaving New Zealand to fix and collect their own land tariff both ways. We shall commence this arrangement 4th November. Hon. Sir Julius Vogel, Wellington. P. B. Suttoe.

No. 106. The President, Chamber of Commerce, Auckland, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) Auckland, 3rd November, 1886. Ec cable charges. Council of Chamber meet to-day, 2.30. Advise us as to prospects of settlement. John Lamb, The Hon. Sir J. Vogel, Christchurch. President.

No. 107. The Hon. Sir J. Vogel, Christchurch, to the President, Chamber of Commerce, Auckland. (Telegram.) Christchurch, 3rd November, 1886. Be cable charges. The Government have considered the matter many times in all its aspects, and will not give a subsidy. The company is trying to get up an agitation by means of the Melbourne Argus and otherwise, but Ido not think it will have any effect on the Government. Eegret not being able reply earlier. John Lamb, Esq., Auckland. Julius Vogel.

No. 108. The Peesident, Chamber of Commerce, Auckland, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) Auckland, 3rd November, 1886. Council thank you for telegram. Commercial community much exercised over the excessive rates now imposed, and urge Government to bring matters in dispute to a speedy settlement. Presume you have strong reasons for refusing concessions offered by the company. John Lamb, The Hon. Sir J. Vogel, Christchurch. President.

No. 109. The Hon. Sir J. Vogel, Christchurch, to the President, Chamber of Commerce, Auckland. (Telegram.) Christchurch, 17th November, 1886. Youe telegram incomprehensible. Please kindly explain its meaning. What excessive rates do you refer to ? The public have not been charged more than they have hitherto paid; and the company now proposes to reduce Press rates. If a subsidy were paid it would only insure a penny a word reduction. You surely would not ask us to pay a subsidy for that. I fail also to understand your meaning about "concession offered by company." I know of no concession unless you consider a return to the status quo ante one, and that we have agreed to. John Lamb, Esq., Auckland. Julius Vogel.

No. 110. The President, Chamber of Commerce, Auckland, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) Auckland, 18th November, 1886. Be cable rates. Telegram misunderstood by you. Chamber thoroughly satisfied with arrangements made. John Lamb, The Hon. Sir J. Vogel, Christchurch. President.

No. 111. The Superintendent, Cable Company, to Dr. Lemon. (Telegram.) Wakapuaka, 4th November, 1886. The Postmaster-General of New South Wales has to-day notified this company that on and after to-morrow, the 4th instant, his department will cease to collect the terminal rates imposed by your Government on telegrams from Australia. I therefore beg to give you notice that the company cannot be held accountable for the same, and that the said telegrams will be handed to your department with that understanding. Dr. Lemon. W. W. Browning.

No. 112. Dr. Lemon to the Superintendent, Cable Company. (Telegram.) Wellington, 4th November, 1886. I am instructed to say we decline to receive messages on any such condition; we adhere to our terminal rates. This in reply to your message of this morning. The Superintendent, Cable Company. C. Lemon.

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No. 113. The Hon. Sir J. Vogel to the Hon. P. B. Suttee. (Telegram.) Christchurch, 4th November, 1886. I think you should help us and not the company in their exactions, and collect our inland rates irrespective of the new terminal rate on the same scale as hitherto, we collecting your inland rate. Let me know if you will do this. We find company's Superintendent at Wakapuaka forwarding to persons here copies of newspaper articles, as if he were Press agent. Do you allow these free on your lines? They should not be. We intend surcharging as ordinary messages. I wish to add, in case you may be influenced by statements made, that I have no personal feeling in the matter; am only carrying out decision of Cabinet. The Hon. F. B. Sutter, Sydney. Julius Vogel.

No. 114. The Superintendent, Cable Company, to Dr. Lemon. (Telegram.) Wakapuaka, 4th November, 1886. In reply to your telegram of to-day, I have the honour to inform you that this company will hand to your department all incoming intercolonial telegrams on the conditions mentioned in my telegram of to-day, and that, as the onus of stopping such messages will rest with your department, the company will not be in any way responsible. W. W. Browning.

No. llg. The Hon. Sir J. Vogel, Christchurch, to the Agent-General, London. (Telegram.) Christchurch, sth November, 1886. Extension Company behaving badly; their officer in our buildings organizing Press agitation. Ask Silver how soon after order given could cable be ready for use, also would they agree construct, leaving Parliament option purchase or lease for term years with undertaking purchase. The Agent-General, London. Julius Vogel.

No. 116. The Agent-General, London, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) London, Bth November, 1886. Cable. Seen Silverton. Time making about forty days. Voyage and laying eighty or ninety days. Price reduced to £155,000 or £160,000. Eeply other question Wednesday. The Hon. Sir J. Vogel. P. D. Bell.

No. 117. The Agent-Geneeae, London, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) London, 10th November, 1886. Cable. Answer other question postponed till Friday, meanwhile can arrange with Eastern restore status quo ante, so that Parliament may consider question next session. Instruct me. The Hon. Sir J. Vogel, Christchurch. P. D. Bell.

No. 118. The Hon. Sir J. Vogel, Christchurch, to the Agent-General, London. (Telegram.) Christchurch, 11th November, 1886. Company behaved very badly, but will agree to status quo ante for six months, provided Press rates lowered to 3d., with guarantee that Press revenue will not suffer by reduction. The Agent-General, London. Julius Vogel.

No. 119. The Agent-General, London, to the Hon. Sir J. Vogel, Christchurch. (Telegram.) London, 12th November, 1886. Cable. Pender accepts your terms. Silverton reply second question received; shall I telegraph particulars ? The Hon. Sir J. Vogel, Christchurch. p. £). Bell.

No. 120. The Hon. Sir J. Vogel, Christchurch, to the Agent-General, London. (Telegram.) Christchurch, 13th November, 1886. Silverton by letter. The Agent-General, London. Julius Vogel,

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No. 121. Mr. James, Melbourne, to Dr. Lemon, Wellington. (Telegram.) Melbourne, 6th November, 1886. Presume our messages are being duly received and delivered by your department. We are collecting your terminal rate. Are you doing same with New South Wales messages, although they are not collecting your terminal rate ? Are you doing so from receivers on delivery'? Please reply. T. E. James, Dr. Lemon, Wellington. Melbourne.

No. 122. Dr. Lemon, Wellington, to Mr. James, Melbourne. (Telegram.) Wellington, Bth November, 1886. Are delivering your messages and also New South Wales, but charging company terminal rate whether collected or not in Australia. C. Lemon, Mr. James, Melbourne. Superintendent.

No. 123. Dr. Lemon to the Superintendent, Cable Company. (Telegram.) Wellington, Bth November, 1886. I have the honour to acknowledge receipt of your telegram of the 4th, and adhere to the notice already given you. C. Lemon, W. W. Browning, Superintendent, Cable Company, Wakapuaka. Superintendent.

No. 124. The Hon. P. B. Suttor, Sydney, to the Hon. Sir J. Vogel, Wellington. (Telegram.) Sydney, 10th November, 1886. Am I to understand that you wish us to collect your old land rate of 6d., you still collecting lately-imposed terminal charge of 4s. ten words ? In declining to collect these charges considered 1 was acting in interest of public here. All messages sent by company or others over our lines are paid for, as of course they should be. The Hon. Sir J. Vogel. P. B. Suttor.

No. 125. Mir. James, Melbourne, to Dr. Lemon, Wellington. (Telegram.) Melbourne, 10th November, 1886. We have now discontinued collecting New Zealand terminal charges, 4s. T. E. James, Dr. Lemon, Wellington. Melbourne

No. 126. C. Todd, Adelaide, to Dr. Lemon, Wellington. (Telegram.) Adelaide, 12th November, 1886. Fbom to-day, November 12, this department will collect the rate on telegrams to New Zealand only as far as Wakapuaka, leaving the New Zealand department to collect their terminal rates of 4s. 6d. for ten words and 6d. for every additional word. C. Todd, Dr. Lemon, Wellington. Postmaster-General, South Australia.

No. 127. The Hon. Sir J. Vogel, Christchurch, to the Postmaster-General, Adelaide. (Telegram.) Christchurch, 15th November, 1886. Much regret unfriendly intimation made by Todd to Lemon. We collect your land rate, and have right to expect you collect our land rate as hitherto. As to terminal charge we debit company with it, and collecting it is their affair. Kindly reply at once. A return to the status quo ante, with Press guarantee, will probably be arranged shortly. The Hon. the Postmaster-General, Adelaide. Julius Vogee.

No. 128. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir Julius Vogee. (Telegram.) London, 12th November, 1886. In view of the deadlock which has arisen between the company and the Government, and the serious public inconvenience, the Agent-General suggested to the company to revert to the position occupied by both company and Government prior to November, so that the New Zealand Parlia-

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ment should have the opportunity of fully reverting to the whole question next session The company agreed to accept the suggestion, believing that it will be viewed as an evidence of their desle Jmlet the convenience of the telegraphic public as far as possible and believing also that the New Zealand Parliament will appreciate their motives for terminating the deadlock. The AgentGeneraTnow informs me that your Government will approve his suggestion that the company shoud restore the status quo ante for the next six months upon the company agreeing to lower the Pi ess rates to threepence per word on a guarantee of the Press that the Press revenue will not suffer by that reduction. In further evidence of our desire to meet the public requirements, I accept, this proposal on the understanding that you insure the Press guarantee. Immediately on receiving ?om acceptance of this arrangement/orders will be sent to our agents, and the Governments and the Press will be notified accordingly. Sir Julius Vogel, Wellington. Chaibman, Easteen Extension Company.

No. 129. The Hon. Sir J. Vogel, Christchurch, to the Hon. P. B. Suttoe Sydney. . v Christchurch, 15th November, 1886. We DroDo!e aarincnng for guarantee of the local Press Association. Eeuter will deal directly with comnanv Wil you arrange about guarantee, if there is to be any, of newspapers on your side? I am unaware how they have hitherto received messages, and if they prefer present rate to threeL^e "a gulrantle the guarantee will only relate to the portion receivable by the Cable Oomnanv in the"past and future. We will be willing to charge halfpenny a word without minimum SSr e ssagc P s for land rate, if you and Adelaide will do same. Melbourne might also agree. At present bulk of messages are English resent from Adelaide. Hon. P. B. Suttor, Postmaster-General, Sydney. JTJLIU& VOCrLIj*

No. 130. The Hon. Sir J. Vogel to the Chairman, Eastern Extension Telegraph Company, London. . Christchurch, 15th November, 1886. T* plslfuaStees can be satisfactorily arranged I will agree to status quo ante Have instructed •^^mKdS^aSSe with your Superintendent on basis that Australian Press arrange wth^ou directTo! through Sydney Government. Eeuter make his arrangement, and we act as Sponsors for Piess iSocltiom We understand Press messages same meaning as hitherto: code words mixed with plain ones. Julius Vogel The Chairman, Eastern Extension Company, London. Julius vogel.

No. 131. The Chairman, Press Association, to the Hon. Sir J. Vogel, Christchurch. a Lyttelton Times Office, Christchurch, 15th November, 1886. I be" to acknowledge your letter of this date, informing me of the proposed reduction by the Eastern Extension Compai/y of the rate on Press messages provided a guarantee is gwen that "^^St^^^^S^f^^l^^ will no doubt be willing to carry out-its Pro™ se_ suggestions you make respecting the nature of the guarantee, and will \n\^^^^^^^ —h aS possiblefthough some little time must elapse, as the Manager will have to commuicate with the directors m various partsjf W. Beeves, The Hon. the Postmaster-General, Christchurch. Chairman. jmtMalmmmmmmß rXlmT—™ ■ -""■llil 111 l I Ml '■'''* « ■■

No. 132. Mr W W Browning, Wakapuaka, to Dr. Lemon, Wellington. Wakapuaka; 20th November, 1886. ShalSS' o know if any satisfactory arrangement has been made with Press Association re S guarantee. Secretary wires anxious to know what bemg done. Dr. Lemon, Wellington.

No. 133. The Superintendent, Brisbane, to Dr. Lemon, Wellington. Brisbane, 20th November, 1886. (Telegram.) i«„- M „„■ lin + ** further notice, we have ceased to charge New Zealand Following example other colon es, and untH turthei nouce Superintendent, rates on business tor your colony. i. holjj^ ; Brisbane. Dr. Lemon, Wellington.

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No. 134. Dr. Lemon, Wellington, to the Stjpebintendent, Cable Company. (Telegram.) Wellington, 21st November, 1886. Postmastee-Geneeal has been expecting to hear from Chairman. Better commence on Monday status quo ante and the charge of 3d. per word to Press Association. We will arrange about the Association's guarantee, and company arrange itself with Eeuter and with Australian papers or through Australian Governments. W. W. Browning, Superintendent, Cable Company, Wakapuaka. C. Lemon.

No. 135. Mr. W. W. Beowning, Wakapuaka, to Dr. Lemon, Wellington. (Telegram.) Wakapuaka, 22nd November, 1886. Eegbet cannot commence status quo ante until receive instructions from London. Sir Julius Vogel's message of the 15th begins "if Press guarantee can be satisfactorily arranged." Think our Chairman has been waiting to hear that Press Association willing to guarantee former receipts. Dr. Lemon, Wellington. W. W. Beowning.

No. 136. The Chairman, Eastern Extension Telegraph Company, to the Hon. Sir J. Vogel. (Telegram.) London, 23rd November, 1886. Youb telegram of the 15th was only received yesterday, owing to derangement of the service by a cyclone in India. The proposal to revert to the status quo ante for six months was Sir Dillon Bell's suggestion, and, with a view to meeting the interests and convenience of the telegraphing public, the company accepted it. The reduced rate for Press, with guarantee, was your suggestion, and we accepted it on condition that your Government ensured the guarantee. However, the removal of the deadlock is so essential to the telegraphing public that the company will not, on account of any difficulty with the Australian Press, delay reverting to the status quo ante as proposed by Sir Dillon Bell, and will accept your Government's guarantee for Press Association at once, and you may then be able to arrange the guarantee in regard to the Australian Press and Eeuter during the next six months. It must be distinctly understood that Press telegrams are to be wholly in plain language, in accordance with the rules laid down when the 2s. Bd. rates for international telegrams and other special rates was arranged. Code language has never been permitted over any lines in Press telegrams carried at reduced rates. In continuation of my telegram of yesterday, and to make the status quo ante complete, I authorize you to refund to the senders of messages the additional charge of 4s. collected for the New Zealand cable since the Ist November. The Hon. Sir J. Vogel, Dunedin. Chaieman.

No. 137. Dr. Lemon, Wellington, to the Hon. Sir J. Vogel, Dunediu. (Telegram.) Wellington, 23rd November, 1886. Mb. Wabbueton, the Accountant, has had all the Press Association messages received in New Zealand from Ist October, 1885, to end of September, 1886, taken out, and the actual money paid to the Cable for its share amounts £778 2s. 10d., being at the rate of about £65 per month. The number of messages was 662, containing words aggregating 26,490, an average of 40 words per message. The Hon. Sir J. Vogel, Dunedin. G. Lemon.

No. 138. Return of Number of Messages, and their Value, received by the Press Association from Australasia during the Twelve Months ended the 30th September, 1886.

The cable proportion of these messages would be £778 2s. lOd.

Month, No. of Massages. No. of Words. Pull Value. October ... November December 1885. 1886. 79 62 41 2,724 2,914 1,222 £ s. a. 110 18 0 111 18 11 50 14 5 January February March ... April May June July August ... September 47 51 52 50 61 53 64 50 52 1,401 1,804 1,503 1,722 2,403 2,583 2,901 2,257 3,056 56 4 0 73 5 4 60 7 0 69 14 7 96 7 7 103 5 6 97 19 7 72 15 11 116 13 8 662 26,490 1,030 4 6

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No. 139. Dr. Lemon to the Supebintendent, Cable Company. (Telegram.) Wellington, 23rd November, 1886. I find that Press Association paid you for messages, irrespective of colonial rates, from Ist October, 1885, to end of September, 1886, £778 2s. lOd. Will you be content with guarantee of half this amount for the six months ? We have obtained this from the actual messages. W. W. Browning, Wakapuaka. C. Lemon.

No. 140. The Hon. Sir J. Vogel, Dunedin, to the Hon. P. B. Suttob, Sydney. (Telegram.) Dunedin, 25th November, 1886. Have you arranged with Australian Press to give guarantee ? Will you and other colonies agree to halfpenny a word for Press intercolonial messages ? Prompt reply both questions greatly oblige me. The Hon. P. B. Suttor, Sydney. Julius Vogel.

No. 141. The Hon. F. B. Suttob, Melbourne, to the Hon. Sir J. Vogel, Dunedin. (Telegram.) Melbourne, 26th November, 1886. Am informed by wire from Sydney that Press there decline to give any guarantee. Premier of South Australia thinks with me that no alteration in intercolonial rates on Press messages desirable at present. Cannot see Postmaster-General here to-day, but believe he concurs. Leave for Sydney this afternoon. T. B. Suttob, The Hon. Sir J. Vogel, Dunedin. Melbourne.

No. 142. Mr. W. W. Bbowning, Wakapuaka, to Dr. Lemon, Wellington. (Telegram.) Wakapuaka, 26th November, 1886. Company is content to accept amount given in your memo, of 24th. Dr. Lemon, Wellington. W. W. Bbowning.

No. 143. The Supebintendent, Cable Company, to Dr. Lemon, Wellington. (Telegram.) Wellington, 26th November, 1886. Can you expedite matters, company anxious to begin new arrangement without farther delay? Dr. Lemon, Wellington. W. W. Bbowning.

No. 144. Dr. Lemon to the Supebintendent, Cable Company. (Telegram.) Wellington, 26th November, 1886. PosTMARTEB-GENEraI directs me to say, in reply to your telegram this morning, he hopes to arrange in three or four days, and will wire reply to your Chairman. Mr, W. W. Browning, Wakapuaka. C. Lemon.

No. 145. Acting Assistant Supebintendent, Sydney, to Dr. Lemon, Wellington. (Telegram.) Sydney, 27th November, 1886. On and after to-day (27th November) we revert to old charges on messages from New South Wales to New Zealand: Press rate, sd. per word, without any minimum charge, apportioned as follows: New South Wales, Id.; cable, 3d. ; New Zealand, Id. Dr. Lemon, Wellington. Acting-Assistant Supebintendent, Sydney.

No. 146. Supebintendent, Tasmania, to Dr. Lemon, Wellington. (Telegram.) Tasmania, 27th November, 1886. Eeoeived instructions to revert to old cable rate and refund extra rate collected from Ist November. Are we to do the same in regard to your terminal charge ? Dr. Lemon, Wellington. Supebintendent, Tasmania.

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No. 147. Press Association Guarantee. The Press Association, by Mr. Fenwick, agrees to guarantee, for the six months beginning the 29th November, the sum of £280 for the cable messages for the Press Association, irrespective of the charges on land lines. Julius Vogel. 29th November, 1886. Geoege Penwick.

No. 148. The Hon. Sir J. Vogel to the Chaieman, Eastern Extension Telegraph Company, London. (Telegram.) Dunedin, 30th November, 1886. Db. Lemon has settled with Superintendent the amount of guarantee on behalf of Press Association. I see no prospect of my getting guarantee from Eeuter or Australian Press. The matter now stands that you charge for six months from this date—November 29 —same rates as before Ist November, excepting as to Press Association, which you charge 3d. a word on a guarantee that it will spend on cable messages, irrespective of land lines, not less than £389 Is. 5d., and there is to be no subsidy. It is understood that you arrange for a guarantee, if you require one, from Eeuter and Australian Press. Julius Vogel, The Chairman, Eastern Extension Telegraph Company, London.

No. 149. The Acting Assistant-Superintendent, Sydney, to Dr. Lemon, Wellington. Wellington, 30th November, 1886. Abe Australian Colonies to refund extra terminal rate collected during early part of this month, and only credit you with your ordinary land rate of 6d. for first ten words, and Id. each additional word ? Eeply. Dr. Lemon, Wellington. Acting Assistant-Supeeintendent.

No. 150. The Superintendent, Cable Company, to Dr. Lemon, Wellington. (Telegram.) Wellington, 30th November, 1886. Still charging full rates on Press messages. Should like to commence new arrangement at once, if it can be arranged satisfactorily. Dr. Lemon, Wellington. W. W. Bbowning.

No. 151. The Supeeintendent, Cable Company, to Dr. Lemon. (Telegram.) • Wakapuaka, Ist December, 1886. Sib Julius Vogel has replied to Chairman. Prom the 29th November inclusive we debit New Zealand Government on all collect Press messages, addressed " Atack," at the new rate of 3d. per w rord. Dr. Lemon, Wellington. W. W. Bbowning.

No. 152. Dr. Lemon to the Supeeintendent, Cable Company. (Telegram.) Wellington, Ist December, 1886. Please inform the several Australian telegraphic administrations that the rates in force prior to the Ist November obtain now; also be good enough to inform them that the New Zealand Telegraph Department is collecting their land-line rate's as formally, and request them to do the same for New Zealand. As regards the extra terminal rate collected since the Ist November, that they can deal with it as instructed by the Cable Company, New Zealand foregoing the extra terminal charge from the Ist November. C. Lemon. W. W. Browning, Superintendent, Cable Company, Wakapuaka.

No. 153. The Chaieman, Eastern Extension Telegraph Company, to the Hon. Sir J. Vogbl. (Telegram.) London, 6th December, 1886. I have received your telegram 29th November, which correctly states the arrangement come to. Let me add my satisfaction at the termination of the difference, and the hope that the willingness of the company not to let the telegraphing public suffer from the former differences between the company and the Government weigh with the authorities in New Zealand when the whole question is reconsidered before the end of the six months. The Hon. Sir J. Vogel, Wellington. Chaieman, Eastebn Extension Company.

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No. 154. Extract from the Speech of Mr. John Pender, Chairman, Eastern Extension Telegraph Company. The next question I have to deal with, and which I referred to at the last meeting, is the negotiation that has been going on with the New Zealand Government. Nearly nine months ago, the subsidy of £7,500 per annum which we received from the New Zealand and New South Wales Governments came to an end. I made proposals for renewing it. The New South Wales Government were quite prepared to renew it for ten years, but the New Zealand Government objected to renew it for that period, but agreed to a renewal for five years. We did not consider that the five years' renewal was sufficiently beneficial to us, because we had found during the whole of ten years that the return from the cable did not give us, after calculating amortization, more than 2 per cent, on the capital invested. I therefore held that we were entitled to have the subsidy renewed for the full period. However, after some negotiations, and the Parliament having decided on the five years, we reconsidered the question, and, looking at it in connection with the larger questions which we hope to see carried out eventually in the Australasian Colonies, we agreed to accept the five years. Negotiations then went on again with the Postmaster-General of New Zealand, Sir Julius Vogel—a gentleman very well known in London and all over the colony, when at the head of the Government —and it was with him that I conducted these negotiations. After trying in every possible way to conciliate the New Zealand Government, and to get them to renew for five years, we have been driven into this position—that they have declined the five years, and they have declined arbitration; and the reason given for this is that they think that any subsidy would interfere with the laying of an opposition cable between Australia and Europe via the Pacific. Now, it is well that you should know the whole of the facts. There is no immediate possibility—l do not think that there is any possibility —of a cable being laid in opposition to our cable, for the simple reason that I do not suppose that the colonies at the present moment, but particularly New Zealand, have too much money to throw away. I do not think this would be approved, and I doubt if the people of New Zealand would approve of the spending of money on an opposition cable when they can get from the present company a cheaper and more efficient system of telegraphy than can possibly be procured by another cable. I make this statement advisedly, and I wish it to go before the public by the Press taking full notice of it. I will give you figures which will bear out my statement. Taking the figures of the proposed opposition, and taking the subsidy which they would require to cover expenses and obtain 5 per cent, on their share-capital as compared with the cost of our guarantee proposal, calculated on the same basis and giving precisely the same tariff, the cost to the colonies, apart from any subsidy that might be obtained from Canada, would be as follows: — „ , . Subsidy for Guarantee for on^' Pacific Scheme. p]xisting Companies. Victoria ... ... ... ... £35,680 ... £16,353 New South Wales ... ... ... 34,194 ... 15,672 South Australia ... ... ... 11,610 ... 5,321 Western Australia ... ... ... 1,223 ... 560 New Zealand ... ... ... 20,945 ... 9,599 Queensland ... ... ... 21,503 ... 5,274 Tasmania ... ... ... ... 4,845 ... 2,221 I think you will agree with me that no body of sensible men, either at Home or in the colonies, would be justified in subsidizing a company with a single line of cables in opposition to an existing one doing the work so well as we are doing it—with a duplicate system. I therefore have no fear of any opposition coming if it is dependent on receiving a subsidy from the British or Australasian Colonies. I will go a little further than that. If, instead of subsidizing an opposition company, they will give us the subsidy which the opposition company desires to get —that is, £100,000 a year— we will give them a tariff of 2s. 6d. instead of 45., the tariff which the opposition proposes to give. That would be an extraordinary revolution —to have a message carried to Australia on such a tariff as 2s. 6d. We are prepared to do it if they will give us the terms the opposition company want, and without obtaining which it could not cover expenses, and even then the tariff would be 4s. I speak from practical experience of a great many years of submarine telegraphy. Gentlemen who try to get up opposition companies frequently know nothing about telegraph-working ; but if they can get millions sterling to manipulate, they expect a considerable amount may be shared between them in the form of promotion-money. Your company has not been established in that manner, but upon fair and sound principles ; and by sound principles we are determined to stand. I think we can meet all competition, come from what quarter it may, if it is dependent on subsidy from the Governments of Australia, New Zealand, and England. I think I have shown you pretty clearly how we stand at the present moment. I will say one word more in regard to the correspondence which has taken place in regard to the New Zealand cable negotiation. I have told you that we have exerted every possible means of bringing about a conciliatory arrangement. We have got with vs —which was not always the case—the Press of New South Wales and the Press of Victoria. I believe I may say that the Governments of those two great colonies also approve the position we have taken up. W 7hen we offered to refer the case to arbitration, we thought it was not possible that Sir Julius Vogel could decline the proposal. He has, however, this morning, after a week's delay, refused arbitration. He does not see that there is any necessity for it. Now, gentlemen, on Monday next we shall put up our rates between Sydney and New Zealand from 6s. to 10s. per ten words for intercolonial telegrams—(Hear, hear) —and* we shall show them that private enterprise, having done so much tor the colony, is not to be trodden down in the way which they have attempted. Nay, more than that. Our bargain with New Zealand was that even after the termination of the subsidy they were bound to give us the same accommodation for the following ten years, whether the tariff was raised or not. They now threaten to take away that

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accommodation. If they do, we shall shut the door and lock it till they give us the amount that will enable us to carry on the traffic with a fair profit. I think you will approve of that poliev. (Applause.) lam perfectly satisfied that if you do the public of Australia and of New Zealand will not tolerate a suspension of traffic for one week, but will force Sir Julius Vogel's hand, if it does not force him from power. lam sure you will give us your approval of putting up the tariffs, and they will remain up until we get such a satisfactory arrangement as a company of this importance, dealing with such interests, is entitled to at the hands not only of New Zealand but from every Government in Europe. We have had that consideration, and we shall insist on maintaining the dignity and position of this company by not being trodden on by the Government of New Zealand. Gentlemen, I have spoken strongly and warmly ; but I think it just as well that these remarks should go abroad strengthened by the approval of the shareholders whom I am now addressing. With these remarks I beg to move, That the report and accounts now submitted be received and adopted.

No. 155. [Extract from the Times, 3rd November, 1880.] We are requested to publish the following communication with reference to the relations of the New Zealand Government with, the Eastern Extension Australasia and China Telegraph Company : —• "The Eastern Extension Australasia and China Telegraph Company (Limited), 50, Winchester House, Old Broad Street, E.C., 2nd November, 1886. " Sin, —As the dispute between the New Zealand Government and the Eastern Extension Company, to which reference was made by the chairman at the company's general meeting last week, is engaging considerable attention in the Australasian Colonies and elsewhere, and as telegraphic communication is now so universally used, it may interest many of your readers to know the facts of the case. I am therefore directed by the chairman to send you the following outline :— "lij consequence of the serious inconvenience felt by the Government and public of New Zealand from the want of telegraphic communication with Australia and the rest of the world, an arrangement was made with my company in 1875 for the laying of a submarine cable from Sydney to Nelson, in consideration of the payment to the company of an annual subsidy for ten years of £5,000 from New Zealand, and £2,500 from New South Wales. " The cable was laid and opened for public use in February, 1876, and from that day to this has never been interrupted. " In November, 1884, the company, finding that the earnings of the cable without the subsidy after nine years' working were insufficient, when working expenses and amortization for renewing the line were deducted, to give more than a return of 2 per cent, upon the capital invested, opened negotiations with the Governments with a view to the renewal of the subsidy on its expiration in February, 1886. " The New Zealand Government at first replied that the subsidy was no longer necessary ; but the New South Wales Government expressed their willingness to renew their share of the subsidy for a further term of ten years upon the company undertaking to reduce the tariff for intercolonial telegrams over the New Zealand cable from 6s. per ten words to ss. for ordinary messages, and 3d. per word for Press messages. The proposal was accepted by the company, and submitted by the New Zealand Government to their Parliament; but the latter negatived it, and would only agree to five years' renewal. "Thereupon the company intimated that they would accept the shorter period, but, as they considered the bargain under the circumstances a hard one, they could only give the reductions of tariff proposed by the New South Wales Government, provided the subsidy was renewed for the whole ten years. " Subsequently the company submitted to the New Zealand and other Australasian Governments proposals, based on the principle of guaranteeing the average earnings of the company for the past three years, for giving the colonies full control over the tariffs between Australia and Europe, by making the rates any figure they pleased, and offered to accept the terms sanctioned by the New Zealand Parliament, if the guarantee principle was applied to the New Zealand cable. " This and all other proposals made by the company for bringing about an amicable arrangement having been refused, and an offer to refer the question to arbitration having also been rejected, the company have been reluctantly compelled to increase the tariff for intercolonial telegrams between Sydney and Nelson to 10s. per ten words from the Ist instant, in order to recoup the loss of the subsidy. " The company have delayed taking this step for over eight months in the hope that the necessity for it might be averted; but, having exhausted all conciliatory means of bringing about a satisfactory solution, the responsibility for the inconvenience caused to the public must rest with the New Zealand Government, and not with the company. " At one time the New Zealand Government threatened, if the tariff was raised, to withdraw the office-accommodation which they are bound to give to the company for ten years after the expiration of the subsidy ; but the company intimated that such action might compel them to close the cable and hold the Government responsible for damages, and the Government have not so far carried out their threats. " The Now Zealand Government now notify that their terminal rate of 6d. per ten words has been raised to 4s. 6d., and this amount the company are obliged to collect from the telegraphing public of Australia and add to their cable tariff, making the total rate for messages from the coast of Australia to New Zealand 14s. 6d. per ten words, against 10s. 6d. on telegrams from New Zealand to Australia.

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" The New Zealand Government also intimate that they will not collect more than 6s. for the cable charge on telegrams emanating from New Zealand, but will apply their increased terminal rate on telegrams to New Zealand in payment of the increased cable charge, and thus relieve the New Zealand public at the expense of the telegraphing public of the other colonies. " The company cannot, however, believe that the public will for any length of time allow this regretable state of things to continue, and, as some of the leading Australian Governments and Chambers of Commerce in Australia and New Zealand are supporting the company's action, we are hopeful that before long an arrangement satisfactory to all parties will be arrived at. "I enclose a copy of the whole correspondence on the subject, and would invite your special attention to the last telegram, giving a summary of an article in the Melbourne Argus on the subject, which shows how the question is viewed in Australia. " I have, &c, "F. E. Hesse, Secretary."

No. 156. The Supebintendent, E.E., A., and C.T. Company, to the Postmasteb-Geneeal, Waiwera. (Telegram.) 25th January, 1887. I am directed to forward you the following telegram from the Chairman of the Eastern Extension Telegraph Company: — " London, 22nd January.—ln view of approaching Imperial Conference, I forwarded to you on 23rd ultimo an official letter fully dealing with questions of telegraphic communication and cheapening the traffic ; also a memo, relative to Pacific cable scheme ; and regret that they will not arrive before delegates leave. Following is an extract from the letter referring to reduced tariffs, and will, I think, give you all the information required with regard to the question of change of tariffs which has for some time past engaged the attention of the colonies : ' There is no doubt that the existing charges are an obstacle to the general use of the telegraphs. The Eastern Extension Company and its allied companies cannot, however, be reasonably asked to run the risks which a larger reduction would involve, seeing that theirs is a commercial enterprise, and that, after fifteen years' working, they are only enabled to give a moderate return to their shareholders. They have already considerably cheapened telegraphy by reducing the original rate of £9 9s. for twenty words to a word-rate of 9s. 4d. for public messages and 2s. Bd. for the Press, which, for the distance traversed, is one of the lowest Press-rates on record. The latter reduction the companies had long striven to bring about, and only lately able, after patient and persistent efforts, to overcome the opposition to it by certain governmental administrations. They have, moreover, shown in every possible way their desire to further reduce the tariff, and, amongst other propositions submitted to your Government, the Eastern Extension Company has, subject to the assent and co-operation of the other interested administrations, offered to make the rate any figure acceptable to the colonies down to the limit of their sub-payments at present —2s. 4d. per word —provided the average receipts for the last three years are guaranteed to them by the colonies. The acceptance of the offer would, of course, reduce the company's risk to minimum so far as the traffic is concerned, but their responsibility of maintaining an efficient service would remain unchanged. On the other hand, it would give the colonial Governments full control over the tariff, and enable them to establish a cheaper rate and on more favourable conditions than could be obtained in any other way. If the tariff were reduced to 4s. per word and 100 per cent, increase of traffic took place, the amount of guarantee required would be about £55,000, which, based on the 1884 census and spread over all the colonies, would be : From Victoria, £16,353 ; New South Wales, £15,672; New Zealand, £9,599 ; South Australia, £5,321; Queensland, £5,274 ; Tasmania, £2,221; Western Australia, £560 : total, £55,000.' As I am anxious you should have fullest information, have instructed company's agent to accept from you and transmit as service messages all telegrams you may wish to forward to the company bearing upon this particular question." W. Wabeen, Superintendent, E.E., A., and C.T. Company. The Hon. the Postmaster-General, Waiwera.

No. 157. Postmasteb-Geneeal, New Zealand, to the Postmasteb-Geneeal, New South Wales. Sib, — Waiwera, New Zealand, 20th January, 1887. I have the honour to forward to you a copy of a letter I have addressed to the PostmasterGeneral of Victoria, I regret that the various telegrams and communications are not yet fully printed and ready for issue, otherwise I would have sent you a copy. I will do so as soon as I can. Meanwhile I think it right I should mention that, amongst the printed telegrams handed by Mr. Pender to our Agent-General, is the one set forth at the foot of this letter. The telegram to which it refers was forwarded to me a day before it appears to have been forwarded to the Eastern Extension Company. It seems to me so surprising that an officer's memorandum to his Minister should be published in this way, that I think it right I should inform you of it without delay. It appears to me, in view of the possible renewal of further correspondence with the Extension Company, that it might be desirable that a code should be established between the Postmaster-General of your colony and ours. I have, &c, The Hon. the Postmaster-General, New South Wales. Julius Vogel.

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Enclosure. The Postmasteb-Geneeal, New Zealand, to the Postmasteb-Geneeal, Victoria. g IE Wellington, 20th January, 1887. Through our Agent-General I have received a printed copy of the telegrams, &c, relating to the late dispute about rates on the Australian-New Zealand cable, drawn up by the Eastern Extension Company. They show the way in which the various agents of the company managed to work up the agitation, and reveal, to my mind, the dangerous power which access to and freedom of the cable lines may give. ■ Amongst the telegrams, the following is a copy of one on the 29th October. After stating that a conference of Postmasters-General was to be held in Melbourne, it proceeds : " Derham promises to bring the New Zealand cable subsidy under discussion. He regrets Vogel being so unreasonable, and admits that company have tried every means to deal liberally with him." I feel very doubtful whether anything you said justified the statement made in the above telegram ; but, in any case, I think it only right to place you in possession of information of the whole subject, when I hope you will see reason to form a different opinion. It might have been better, perhaps, that, from the beginning, I should have put you in possession of all that was passing but it did not occur to me that you would take any more than an indirect interest in the subject' and I thought that New South Wales would sufficiently inform you of what was going on. As briefly as I can relate it the position is as follows : Before the lapse of the subsidy which New South Wales and New Zealand, were paying the Eastern Extension Company, the Government asked authority from the House of Eepresentatives to continue it for a further period on the condition of certain tariff reductions. With a considerable amount of reluctance the House gave the authority with limit of time to five years, and conditional on certain specified reductions. Negotiations ensued between the company and the two Governments, which ended in an ultimatum from the company to me, in which they said that they would not make any reduction for less than a tenyears' subsidy and that they would raise the rates unless we gave them a five-years' subsidy. lat once closed communication with the company and instructed the Agent-General to ask for tenders for a new cable The result—which occasioned me a great deal of surprise—was that the new cable could be made and laid for less than £160,000. The Eastern Extension Company then reopened negotiations with the view of inducing the colony to entertain proposals by which the subsidy given on the European lines might be prolonged, and subsequently a system of guarantee was suggested. These proposals I brought before the Cabinet, and found that they were unacceptable. The company then indicated that they would be willing to accept the terms authorized by the House which they had previously definitely refused. My Government considered the question very carefully It was quite clear that the renewal of our previous offer was optional. The company had absolutely refused it and in the meanwhile inquiry into the subject had shown how cheaply a new line could be constructed and how large were the returns on the existing line independent of the subsidy. _ The Government now came to the conclusion that the advantages proposed to be rendered m return for the subsidy were not of an extent or nature which made it desirable to give the subsidy even for five years, intimation was given to the company that the Government would be willing to a-*Tee not to construct a new line without notice being given if the company adhered to the present rates The company intimated their determination to raise the rates. The Government of INew South Wales and our Government informed the company that they did not consider that they were legally entitled to adopt that course, and that if they did so they would render themselves liable to reprisals When the rates were raised we adopted the step of imposing a terminal charge—a suggestion which, I may say, came to us from New South Wales, and which I thought the Government of that colony would follow. The following is the cablegram from the Postmaster-General of New South Wales which contained the suggestion to which I allude: "The Hon. F. B. Sutter to the Hon. the PostmasterGeneral Wellington. Sydney, 24th September, 1886.—Company apparently have not considered the cons'eqnence°of raising the New Zealand tariff as intimated. Governments, under clause eight, can cease to provide company with accommodation at termini if tariff raised; and, under clause thirteen Governments can charge anything they please for use of land lines if tariff raised. Propose that you and I reply in foregoing terms, expressing hope that, to prevent inconvenience to public and future trouble, their proposal will be withdrawn.—F. B. Suttob." Much to our surprise the various Governments in Australia began by collecting for the company our terminal rates, for which they (the company) were liable. It was not considered desirable that I should intimate to the Governments that we did not expect ttiat they would collect the terminal rates There was legal reason for not making the intimation. But it really ought to have been evident to the various Governments that we wished nothing of the kind, or that we should have asked for it The various Governments in a very few days desisted from collecting our terminal rates The users of the cable on this side suffered no inconvenience. There was no delay of a single message and we continued to collect the same rates for messages as before, trusting to the terminal changes yielding us sufficient to cover the extra charge made by the company, the company being liable to us for the terminal charges. There was not I think, any doubt that we were justified m adopting this course, and we were surprised the other Governments did not adopt a similar one. The Postmaster-General of New South Wales telegraphed to the company on the 30th October : " Consider company acting illegally in raising tariff." He also on the same day telegraphed "cannot see how matter could be determined by arbitration." The agent of the company in Sydney also telegraphed to the Secretary of the company in London on 24th September as follows : " Informed Sydney Postmaster, who regrets publication Chairman's telegram. Contends company no power to raise rates beyond figure m clause eleven \ttorney-General of same opinion, and the Government threaten retaliate under clause

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thirteen; see also clause eight." I have also quoted to you the original suggestion, so that you will see, although the Government of New South Wales did not adopt the course that we did, they cannot say that the company acted legally or we illegally. To proceed with the narrative. On the 6th November I telegraphed to the Agent-General to ascertain the terms on which a new cable could at once be laid, and. the time it would take to lay it. The reply was, that it could be laid in ninety days for about £160,000. The Agent-General informs me that, immediately upon receipt of my telegram, Mr. Pender came to him and asked him whether he could suggest a way out of the "deadlock," as he chose to call it. Whether or not Mr. Pender was aware of the nature of my telegram is a matter about which each person must form his own opinion. He had seen the Agent-General frequently before, but on this occasion he asked that gentleman to suggest a plan to end the dispute, and, as that plan amounted to a complete abandonment of his previous arbitrary action, and he subsequently agreed, on my insisting on it, to reduce the Press rate on a guarantee, as I had previously vainly asked him to do, the question is, Did he know of my instructions to the Agent-General ? It is important in this connection to remember that not many days previously Mr. Pender had, in reference to the New Zealand cable, indulged in the threat, " We will shut the door and lock it." I give you this history of what has taken place. I wish to say that, if it is really the case that any impression remains on your mind that the Government has behaved unreasonably or unfairly, I would like to place the facts before you in a more extensive form. If I had only known of the interest you took in the subject I would have kept you aware of all that was taking place. Amongst the telegrams which appear in the document given to the Agent-General are two from the Agent, Sydney, to the Extension Company, London, as follows: " 28th September, 1886, —Victorian Government telegraphs Sydney Government that they take considerable interest in present negotiation : are unfavourable to second Zealand cable if reasonable terms acceptable to company. They propose all colonies contribute to Tasmanian, New Zealand, and Darwin cables, and if New Zealand refuses her fair share suggest contributing colonies consider advisability of charging her proportionally higher rates for her messages over Darwin and Tasmanian cables. Will support Sydney Government in any action in this direction." And 18fch October : " SydneyGovernment now awaiting reply from Victoria to proposal that New South Wales and Victoria shall pay subsidy to reduce transit rate from Melbourne to Sydney from two to one shilling, and increase rate for New Zealand rate for Darwin cable." I cannot suppose that there can be any truth in these statements. It seems incredible that two Governments on friendly terms with our Government should even discuss such a question without letting us know, for I may say that I was not even made aware that it was under consideration. In conclusion, allow me to say that I am writing this letter with the desire to remove the unfriendly impressions which one-sided statements may have created in your mind. I propose to send a copy to the Postmaster-General of New South Wales. I have, &c, Hon. P. T. Derham, Postmaster-General, Victoria. Julius Vogel.

No. 158. The Chaieman, Eastern Extension, Australasia, and China Telegraph Company (Limited), to the Hon. Sir J. Vogel. Winchester House, 50, Old Broad Street, London, E.C., Sib,— 23rd December, 1886. As the question of Imperial intercommunication, which will doubtless embrace submarine or international telegraphic communication, is referred to in the published despatch addressed by the Secretary of State for the Colonies to the colonial Governors as one of the subjects for consideration at the Conference proposed to be held next year, and as the Eastern Extension Company, over which I have the honour to preside, is the pioneer of telegraphic communication with Australasia, and is anxious to further serve the colonies in ever}' possible way, I take an early opportunity of placing before you the accompanying information in regard to the existing submarine telegraph cables, and as to the best manner, in my judgment, of establishing cheap tariffs, in order that your Government may be in possession of all the facts of the case before deciding upon the instructions which they may deem it right to give to the delegates -who will represent them at the Conference. The Australasian Colonies are at present in telegraphic communication with the rest of the world by means of the Eastern Extension Company's cables as far as India and China ; with Egypt, Africa, Europe, and the rest of Asia by the lines of the Eastern Telegraph Company, the IndoEuropean Government Telegraph Department and the Indo-European Telegraph Company (with which administrations the Eastern Extension Company has a working agreement); and with America, North and South, by the numerous cables laid, across the Atlantic. This communication between Australia and the outer world was established by the Eastern Extension Company in 1871, without subsidy or assistance of any kind from the colonies or the Imperial Government, and, subsequently, when the importance of telegraphy became more fully recognized, and a duplicated system a public necessity, not because a single line was unequal to the transmission of the traffic, but in order to provide against the interruptions inseparable from a single line of cables, the Colonies of Victoria, New South Wales, South Australia, and Western Australia agreed to give the company a subsidy of £32,400 per annum for twenty years to enable it to duplicate the cable between India and Port Darwin. Since then external submarine telegraphic communication may be said to have been practically uninterrupted—a result due to the duplication, and in some sections triplication, of the companies' cables, and to the fact that they are laid for the most part in shallow w Tater, and consequently easily repaired at almost all seasons of the year. 5—F. 2.

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Thus the colonies are at present furnished with a complete and efficient telegraphic service by the existing cables, which are not only equal to the transmission of a much larger traffic than they now carry, but enjoy the immense advantage of being under English control and worked by English operators throughout their whole length. It is true that objections have been made to the present communication on the ground of its being dependent upon a single land line through Australia, but this defect could be at once and at no great cost remedied by connecting the telegraph systems of South Australia and Queensland, a proposal which the Eastern Extension Company has long urged, and to carry out which has offered to lay a cable at its own expense from the Eiver Eoper to Norrnanton. I may here point out that while the route between Australia and China and Europe followed by the cables of this and the allied companies is incomparably the most secure in time of peace, it would be the more surely and easily protected in time of war, inasmuch as it is one of the sea routes most frequented by the mercantile marine, and would, therefore, be the special object of the vigilant care of the Eoyal navy. I would therefore submit that the existing company, as the pioneer of telegraphic communication with Australasia, is entitled to a large share of consideration at the hands of the colonies, and should have the earliest opportunity afforded to it of learning the views of the colonial authorities as to any increased telegraphic facilities which may be desired, so that it may endeavour to meet their wishes as far as lies in its power. With regard to the question of cheap tariffs which has for some time past engaged the attention of the colonies, there is no doubt that the existing charges are an obstacle to the general use of the telegraph. The Eastern Extension Company and its allied companies cannot, however, be reasonably asked to run the risks which a large reduction would involve, seeing that theirs is a commercial enterprise, and that after fifteen years' working they are only enabled to give a moderate return to their shareholders. They have already considerably cheapened telegraphy by reducing the original rate of £9 9s. for twenty words to a word rate of 9s. 4d. for public messages, and 2s. Bd. for the Press, which, for the distance traversed, is one of the lowest Press rates on record. The latter reduction the companies had long striven, to bring about, and were only lately able after patient and persistent effort to overcome the opposition to it by certain governmental administrations. They have, moreover, shown in every possible way their desire to further reduce the tariff, and amongst other propositions submitted to your Government the Eastern Extension Company has, subject to the assent and co-operation of the other interested administrations, offered to make the rate any figure acceptable to the colonies down to the limit of their out payments (at present 2s. 4d. per word), provided the average receipts for the last three years are guaranteed to them, by the colonies. The acceptance of this offer would of course reduce the company's risk to a minimum so far as the traffic is concerned, but their responsibility of maintaining an efficient service would remain unchanged ; on the other hand it would give the colonial Governments full control over the tariff, and enable them to establish a cheaper rate and on more favourable conditions than could be obtained in any other way. If the tariff were reduced to 4s. per word, and 100 per cent, increase of traffic took place, the amount of guarantee required would be about £55,000, which, based on the 1884 census and spread over all the colonies, would be from— Victoria ... ... ... ... ... £16,353 New South Wales ... ... ... ... 15,672 New Zealand ... ... ... ... 9,599 South Australia ... ... ... ... 5,321 Queensland ... ... ... ... 5,274 Tasmania ... ... ... ... ... 2,221 Western Australia ... ... ... ... 560 £55,000 Opinions have been frequently expressed by leading colonists and by the public and Press that a large reduction of rates would lead to a correspondingly large increase of traffic. If these views should prove to be well founded the suggested guarantee would be practically nominal. I cannot, therefore, help thinking that the guarantee proposal submitted by the Eastern Extension Company would be the solution of the tariff question most beneficial to the telegraphing public generally, and well worthy of the consideration of the Imperial Government and the Australian Colonies. As I am anxious that your Government should have the fullest possible information on the subject which the company, from their long practical experience, can furnish, I have instructed the company's agents to accept from you and transmit as "service messages" all telegrams you may wish to forward to the company bearing upon this particular question. I have, Ac, The Hon. the Postmaster-General of John Penoeb, New Zealand. Chairman.

No. 159. The Hon. Sir J. Vogel to the Chairman, Eastern Extension Company. Sib, — Wellington, 14th February, 1887. I have the honour to acknowledge the receipt of your telegram of the 25th January and of your memorandum and letter dated the 23rd December last. 2. I do not answer your telegram by the cable as I have nothing of immediate interest to say to it in reply.

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3. Tour telegram and letters divide themselves into three main features : (1) An assertion of the benefits your company has rendered ; (2) the excellent intentions your company has to render still further services; and (3) your opinions unfavourable to a company proposing to construct a Pacific cable. 4. I do not undervalue the services your company has hitherto rendered, and, although the business of the company has been conducted on commercial principles, with a view to profit, I am far from thinking that up to a certain extent it has not claims on the colonies to which it has rendered services. At the same time lam strongly of opinion that the business should not continue in the hands of one company, that a monoply is undesirable, and that either the Governments should take into their own hands the whole charge of cabling or encourage competition. This answers the two first points. 5. As regards the third, the company proposing to lay the Pacific cable have not submitted sufficiently definite propositions to enable this Government or any of the other Governments to pronounce in its favour, or to indicate as yet an intention of supporting it. But, with regard to the attack you make on it, I may point out to you that the questions you principally raise affect the company itself, not the Governments. I gather from what you say that you do not think the company will be a success. If the Governments enter into any arrangement with it, I suppose they will assume that it is as able to take care of itself and of its shareholders as other companies have been. As regards the mode in which the Governments may be affected, you exaggerate the amounts asked of them, and you do not, I think, realize that the company's offer is that, up to the extent of its subsidy, each Government shall enjoy free cabling. I am at a loss to understand how you arrive at the conclusion that the users of the cable will be injuriously affected by competition. To me it appears quite the contrary. On the Atlantic side all the benefits have sprung from competition, and the public have suffered greatly by every successful effort to suppress it. In the present case I take it that the offers you have made, and which you consider so liberal, are consequent upon the threatened opposition. The history of the last seventeen years has proved to the Australasian public how little reduction of rates they are likely to obtain in the absence of competition. I have, &c, The Chairman, Eastern Extension Company. Julius Vogel.

No. 160. The Postmasteb-Geneeal, New South Wales, to the Postmasteb-Geneeal, New Zealand. 'Sib, — General Post Office, Sydney, 16th February, 1887. I have the honour to acknowledge the receipt of your letter dated the 20th ultimo, covering copy of a letter addressed by you to the Postmaster-General of Victoria, relative to the New Zealand cable negotiations, and expressing surprise that a minute of the Superintendent ©f Telegraphs of this colony, embodied in a telegram sent by the Sydney agent to the Eastern Extension Cable Company, London, of which you also send a copy, should have been published; and in reply I beg to forward to you herewith a copy of portion of a report which has been furnished by Mr. Cracknell in explanation of the matter. I have to express regret that a copy of the minute above referred to was allowed to be seen by the Cable Company's representative here. As regards the suggestion in the last portion of your letter, I quite concur with you that a code should be established, and shall bo glad if you will be so good as to have a suitable code prepared. I have, &c, Chaeles J. Eobebts, Postmaster-General. The Hon. Sir J. Vogel, K.C.M.G., Waiwera, New Zealand.

Enclosure in No. 160. Extract from Beport dated 9th February, 1887, by Mr. E. C. Grachnell, Superintendent of Telegraphs, Sydney. It is difficult for me, at this time, to explain precisely how it happened that a copy of my minute of 30th September, marked 811956, got into the hands of the agent of the Eastern Extension Company, but it is possible that Mr. Squier, who throughout these negotiations was generally kept au courant with regard to certain portions of the correspondence, was informed by myself of the minute upon which the Postmaster-General's telegram to New Zealand was based.

No. 161. The Postmasteb-Geneeal, New Zealand, to the Postmasteb-Geneeal, New South Wales. Sib,— Wellington, 7th March, 1787. I have the honor to acknowledge the receipt of your letter of the 16th February, and to thank you for the action you have taken. ' Until officers of the various Governments are careful not to give information without authority to the officers of the companies, the Governments are at a great disadvantage in exchanging their views. I have no doubt Mr. Cracknel! will in future use more discretion. I will have the code prepared in accordance with your wish, and send you a copy. I am, &c, Julius Vogel. The Postmaster-General, New South Wales. Postmaster-General.

JP.—2.

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No. 162. The Postmasteb-Geneeal, Victoria, to the Postmasteb-Geneeal, New Zealand. Post Office and Telegraph Department, Sib,— General Post Office, Melbourne, 10th March, 1887. I am in receipt of your letter of the 20th January with reference to the publication of certain statements by Mr. Pender on behalf of the Eastern Extension Company. I must confess that my views as to your action in the matter were, in the absence of any explanation from you, decidedly against the imposition of the heavy terminal charge made by your Government, which appeared to be antagonistic to all the other colonies, the more especially that the terminal charge was not imposed on telegrams from New Zealand. I thank you for your courteous expressions of regret at not having communicated your views to me earlier—a feeling with which I entirely sympathize, as this subject is one in which we have a common interest, and in the handling of it an interchange of views is most desirable and would probably prove advantageous in a high degree. I frequently desired to open up communication with you, and was only restrained by the feeling that such action might be regarded as an interference between you and the Postmaster-General of New South Wales, the Government of this colony having no locus standi, although the people are large contributors to the business of the cable. I need not say that I am completely at one with you in endeavouring to obtain telegraphic communication with your Island as cheaply as possible; and you will, no doubt, have noticed that to this end the New South Wales department has joined with us in reducing our land rates so as to lower the present almost prohibitive tariff, and I am now in communication with the PostmasterGeneral of New South Wales with a view to obtain a still further concession in the shape of a largely reduced rate for Press telegrams on a basis similar to that in force over the lines to Tasmania. I shall be gratified if you should be able to obtain a still further reduction in the cable rates; and to this end you will have my cordial support, as nothing will tend to increase the commercial and social relations between these colonies more than a cheap system of telegraphy. May'l venture to hope that you will shortly pay a visit to this continent, when the whole question of cables connecting the colonies with each other and with the outside world may be discussed, with a view to the advancement of our mutual interests ? It would afford me great pleasure to meet you in Sydney or to offer you a welcome here, as may seem the most convenient or agreeable to you and the Postmaster-General of New South Wales. I am strongly inclined to think that great good might result from such a conference ; and if you favour the suggestion I will endeavour to meet your wishes as to time so far as possible. I may mention that our Parliament meets in June, so that any time before then I think I can promise to ■ be entirely at your service. Tendering you my best thanks for affording me this opportunity of addressing you, I have, &c, Feed. T. Debham, The Hon. Sir Julius Vogel, K.C.M.G., Postmaster-General. Postmaster-General.

No. 163. The Postmasteb-Geneeal, New Zealand, to the Postmasteb-Geneeal, Victoria. Sib, — Post Office and Telegraph Department, Wellington, 25th March, 1887. I am greatly obliged by your kind and considerate letter of the 10th instant. I speak positively for this Government—and I believe the New South Wales Government will hold the same view—when I say that you should know all that takes place regarding the cable between the two colonies, and that your advice and counsel will be greatly esteemed. I believe a conference of the Postmasters-General of the colonies is very much needed. Our Parliament is about to assemble ; but later in the year I may be able to respond to your courteous invitation; and if your Parliament is sitting the Postmaster-General of New South Wales might be able to visit you in Melbourne. Melbourne or Sydney will be equally convenient, to whomever may represent this Government. Ido not refer to the Postmasters-General of other colonies, as I am not sure whether you desire a general conference or one only of the three colonies. I have, &c, Julius Vogel, The Postmaster-General, Victoria. Postmaster-General.

No. 164. The Postmasteb-Geneeal, Victoria, to the Postmasteb-Geneeal, New Zealand. Post Office and Telegraph Department, Sib,— General Post Office, Melbourne, 28th March, 1887. I have the honour to acknowledge receipt of your letter of the 7th instant, and to express my thanks for the memorandum containing particulars of your exhaustive scheme with regard to Australasian cables. The matter will, I beg to assure you, receive the most careful consideration, and you will be duly advised of the views of the Government of this colony upon the subject as soon as a decision has been arrived at. I have, &c, Feed. T. Debham, The Hon. Sir Julius Vogel, K.C.M.G., Postmaster-General. Electric Telegraph Commissioner, Wellington, New Zealand. [Approximate Cost of Paper.—Preparation, nil; printing (1,400 copies), £24. 6s. Gd.J

Authority; Geoege Didsbuky, Government Printer, Wellington.