D._Xo. i. A

I submit also another proposal, with a view to settle the modifications of the Contract. I have, &c, Honourable Major luchardson, John Vine Hall. &C, &C, &C. Enclosure in No. 7. Panama, New Zealand, and Australian Royal Mail Company, 41 Moorgate Street, London, E. C, November 25th, 1864. Dear Sin, — As your frequent intercourse with the Board during- your recent visit to this country, has enabled you to understand thoroughly their views in reference to the Contract, it is unnecessary for me to write you at any length on the subject. The Directors are, of course, entertaining- the hope that the Contract will be adopted in its entirety, but should the General Assembly concur in the views of the Government respecting- the proposed modifications, and make it a sine qua turn that some if not all of them, should be earned out, it will be for you to determine, after discussion of the various points with the Government, what concessions or compensation should be demanded on the part of the Company. The Directors, however, are quite prepared, as has already been intimated to you, to leave the settlement of the question in your hands, being convinced you will exert all your influence and b energies to bring' about such an arrang-ement as would receive their immediate approval and confirmation. I have, &C, James Worley, Secretary. True Copy, ft. S. Ledger, J. V. Hall. No. 8. Panama, New Zealand, and Australian Royal Mail Company, (Limited). Wellington, Cth February, 18G5. Sin,— On the 29th December last, I had the honor of addressing- you on the subject of the Panama service, stating as nearly as I was able to (unofficially) what modifications in the Contract tl re Directors would be disposed to adopt, to meet the views of the Government ot New Zealand. I have by the last mail received a communication from the Directors ot this Company, which authorizes me to treat with the Government on this subject, and states the terms on which the Directors are prepared to waive certain advantages contained in the Panama Contract. Ist The Company will perform the service between Panama and. Sydney, at the speed mentioned in the Contract, for £92.000 per annum, and if extended to eight instead of five years, £87,000. 2nd If a ten knot service between Panama and Wellington, and not less than eight knots on 'to Sydney, £112,000; and if extended to eight years, instead of five, the sum to be £107,000. 3rd If the above terms are accepted, the Directors agree to waive the " Coleman Contract," ' the right to the Inter-Provincial services, mentioned in Mr. Ward s Contract, and tlie so called monopoly. I have, &c, John Vine Hall, General Manager, P. F. Z. and A. R. M. Company. The Honourable the Postmaster General, Wellington, No. 9. An aoTeement to be made with Captain Vine Hall, as agent for the Inter-Colonial Royal Mail Company, upon the basis of the Secretary's letter, of the 2Cth June, 1804, subject to modifications as follows : —

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