46

No. 10. (Enclosure.)

»1K VT. DEKISON TO SIR E. B. LTTTOK. Government House, Sydney, Ist February, 1859. Sir,— I have the honor to acknowledge the receipt of your Despatch, No. 41, dated 16th November, 1858, enclosing copies of correspondence between the Lords Commissioners of the Treasury and the ~ Colonial Office with reference to the general question of Steam Postal Communication between England and Australia. Upon the subject of the establishment of a second line of Steamers via Panama, by which the advantage of a communication with England once a fortnight, and with North and South America once a month would be secured to the Australian Colonies, I have already addressed you; and I shall go into the question again more fully on a future occasion. At present I propose to confine myself to the question of the accounts as between the Imperial and Colonial Treasuries for Services performed in accordance with the terms of the Contract with the European and Australian Mail Company, and with the Company which undertook the Service upon the failure of the original Contractors. In the accounts as furnished by the Treasury, the charge against the Colony of New South Walei amounts altogether lo £38,345 19s. 7d., which is made up of the following items:— £ c. d. Amount due from Ist January, 1857, to 30th June, 1858, being half cost 23,(>25 18 2 Amount due from Ist July, 1858, to 30th September, being half cost 5.2C3 18 10 Liability from Ist October to Ist March, calculated at same rate 8,773 4 10 Half guarantee of ±'6,000 per month against loss from Ist July, 1858, to Ist March, 1859, as per Minute of 23rd June, 1858 682 17 9 £38,345 19 7 On bringing these accounts before the Executive Council it was recommends 1 that a sum of £3,000 should be at once paid on account; and instructions have accordingly been sent to the Colonial Agent in England to pay this amount into the Treasury. In Sir Charles Tievelyan's Letter of 16th November, directions wore given that the money should be paid into the Treasury chests in the different Colonies in charge of the Commissariat Officers; but upon application to the Officer in charge at Sydney, the Treasurer was told that no authority had been given to him for the receipt of such a sum; and as bills upon England are at a premium, it was considered to be most advantageous to the Imperial Government to pay the money in London: such an arrangement being also more in accordance with the financial arrangements of the Colonial Government. With reference to the balance of £8,345 19s. 7d., this .is maile up in part of a sum of £682 17s. 9d., said to be the share of New South Wales of a guarantee of £6,000 per month against loss from Ist July, 1858, to Ist March, 1859. I cannot but imagine that some mistake must have been made either in the heading of this column cf the account or in the items, as the possible charge against the Colonies on account of a guarantee against loss to the extent of £6,000 per month would for the period mentioned amount to £24,000 instead of £3000. A guarantee to this extent would be equivalent to an addition of two-fifths to the cost of the Mail Service; and as this has not been conducted by the Royal Mail Company in any respect more satisfactorily than by the previous Contractors, I am afraid that the Legislature may not feel disposed to place so large an addition to the ordinary subsidy at the disposal of the Government. I may observe with regard to the question of loss upon any given voyage that a close investigation should be made into all the circumstances out of which this loss has originated; and if it will be found—as I have no doubt will be the case as regards the " Australasian"— that the outlay of the Company was unnecessarily large, owing to the faulty construction of the vessel and engines, when the returns on account of Mail and Passengers reached a fair average, I would submit that the Company ought not to be allowed to compensate themselves for their bad management in employing so cO9tly a vessel by charging the whole amount of the expenditure in their statement of profit and loss. With reference to the remainder of the balance left outstanding you will see that in the Minute of the Executive C ouncil it is considered advisable that a statement sh<suld be furnished showing the items of the account of the deductions to be made on account of penalties for non-performance of contract, which penalties were by the terms of the agreement in no case to be remitted. In order that this may be accurately drawn up, I forward herewith a statement furnished by the Postmaster-General of the Colony, of the penalties incurred by the contractors for delays in the delivery and dispatch of the Mails at and from Sydney, between the Ist January, 1857, and 30th June, 1858. I enclose also a further Table showing the dates of the arrival and departure of the Mail Steamers since the Ist July, 185b 1 , and the amount of the penalties which would have been incurred by the Royal Mail Company had their agreement not absolved them from this condition of the Contract. This table will st-ive as an illustration of my remaik that this Company have not conducted the Service in a more satisfactory manner tiian their Predecessors. I have, &c, (Signed) W. Df.nison. The Right Honorable Sir E. Bulwer Lytton, Bart., &c, &t\, &c.