E.—No. 2.

No. 1. Copy of a Letter from the Colonial Secbetaey, New South Wales, to the Hon. E. W. Staepobd. Colonial Secretary's Office, Sydney, Sir,— New South Wales, 19th September, 1867. Referring to previous correspondence on the subject of the undertaking between this Colony and New Zealand, to establish steam communication with Europe and America by way of the Isthmus of Panama, I am now directed by His Excellency Sir John Young to transmit to you, in duplicate, Articles of Agreement, for a term of five years from the first January, 1866, the date fixed for the commencement of the service by Dr. Eeatherston's letter to Mr. Cowper under date the 10th March, 1865, and to inform you that this Government is prepared to execute such Agreement. 2. The instrument now submitted for execution is in accordance with the form of Agreement revised and settled by Mr. Crosbie Ward and myself in December last, with the addition of the necessary words prescribing the term of its duration. 3. At the request of Mr. Crosbie Ward, the contract proposed to be entered into between New Zealand, and the Panama New Zealand and Australian Royal Mail Company, has been examined by the law officers of this Colony,with the view of seeing whether it will fully cover the rights and powers to be conferred by the agreement between the two Governments. I have to point out that while our agreement requires the Panama steamers to come on to Sydney with their mails, the contract as now framed does not give the Government of New Zealand the necessary power to insist upon this condition, you will doubtless see that the contract is amended in this particular. 4. As His Excellency Sir John Young is about to retire from tho Government of the Colony, and will certainly leave for England early in November, and as it is obviously, desirable that the Agreement should be completed before the arrival of a new Governor, who will necessarily be a stranger to the negotiations which have led to it, may I request your immediate attention to the subject; when the Agreement has been executed by His Excellency Sir George Grey, and returned in that shape to Sydney, no delay will be allowed to take place in its completion. I have, &c, The Hon. the Colonial Secretary, New Zealand, Wellington. Henry Paekes.

Panama Papers. 1867, No. 63, page 28, E.— No. 1.

No. 2. Copy of a Letter from the Hon. John Hall to the Colonial Secretary, New South Wales. Colonial Secretary's Office, Sir,— Wellington, 9th October, 1867. I have the honor to acknowledge the receipt of your letter No. 211, of the 19th ultimo, transmitting in duplicate Articles of Agreement between the respective Colonies of New South Wales, and New Zealand, in reference to the contract for the establishment of Steam Postal Communication with Europe and America by way of Panama. I observe that by the addition made to the form of Agreement settled between Mr. Crosbie Ward, and yourself, the termination of the Agreement is fixed for the Ist of January, 1871. And I would point out that this limitation would not be consistent with the spirit of the arrangement made between the two Colonies, which provided for equal shares in the advantages and obligations of a contract for a five years' service, but as the contract did not actually commence until the 15th of June, 1866, it will not expire until the 15th June, 1871. Under ordinary circumstances it would have been desirable that this point should have been discussed and settled before the Agreement itself was signed, but as special circumstances, stated by you, require the immediate execution of the Agreement, and under the full assurance of the desire of the G-overnment of New South Wales to give full effect to the spirit of the arrangement, this Government has thought it advisable that the Agreement should be made terminable at the same time as the contract with the Panama New Zealand and Australian Royal Mail Company. I do not doubt that you will admit the reasonableness of this alteration. It is not probable that any further alteration will be considered essential, but if such should be the case, it can form the subject of future correspondence. I enclose the Agreements in duplicate signed by His Excellency Sir George Grey, and have to request that when they are completed by the signature of His Excellency Sir John Young, one may be returned to me. I have, &c, John Hall, The Hon. the Colonial Secretary, New South Wales. (for the Colonial Secretary.)

No. 3. Copy of a Letter from the Colonial Secretary, New South Wales, to the Hon. E. W. Stafford. Colonial Secretary's Office, Sib, — Sydney, Ist November, 1867. I have the honor to acknowledge the receipt of your letter of the 9th ultimo, returning tho Articles of Agreement (in duplicate) between this Government, and the Government of New Zealand,

FURTHER PAPERS RELATIVE TO THE PANAMA MAIL SERVICE.