SAN FRANCISCO MAIL SERVICE.

E.—No. 4

43

correspondence by telegraph had gone on continuously for five days that Air. AVebb finally agreed to accept the contract, provided that twenty-four hours for coaling were allowed at Honolulu, he agreeing, on his part, to forego calling at the Fijis. Tho Postmaster-General came to the conclusion to grant the concession. Even supposing that the stipulation of Air. AVebb had been less reasonable than it really was, it did not seem desirable to leave the contractors to the course the} r had evidently determined on, of fighting the question whether they were bound by the contract. But, apart from this consideration, the Postmaster-General could not but recognize that, in asking for the twenty-four hours' delay at Honolulu, the contractors were still under engagement to perform a service exceeding ten knots per hour (250 a day). The steaming distance between Auckland aud San Francisco is over 6,000 miles, so that twenty-four days from San Francisco to Auckland represents more than ten knots an hour; and the twenty-four hours, now agreed to bo allowed at Honolulu for coaling, represents time which the vessels will really have to stay at that port. Nor was it at all an unimportant concession on Mr. AVebb's part that the boats should not call at the Fiji's. It was a concession which the Postmaster-General endeavoured to obtain in Auckland, and also from Air. Stewart, but without success. The PostmasterGeneral has always felt, that if the boats, on their way from San Francisco called at the Fijis, the Australian Colonies would continue to be dissatisfied that their mails, after being brought so near to the Australian coast, should be delayed by the boats proceeding on to Auckland, no connection being made at the Fijis. Under the new arrangement there can be no doubt that a branch line will be run from some port ofNNc r Zealand to New Caledonia and to the Fijis. Air. AVebb, it was found, could not arrange to start the first boat from San Francisco until the 31st of Alarch. Reluctantly the Postmaster-General had to consent to this. It was fortunate that before he left New Zealand the Manager of the A.S.N. Co. had assured him that, if it was required to carry the mails to Honolulu for another month after the termination of Air. Hall's contract, the Company would find a boat for the purpose. As will be seen from the correspondence, copies of which are enclosed, the Postmaster-General was enabled at once to arrange with Air. Hall to continue his service for another month. The boat which will leave San Francisco on the 31st Alarch will not be able to start from Port Chalmers until the oth Aiay, and from Auckland on the 12th. This will make an interval of somewhat more than a month after the preceding mail; but it is to be presumed that the people of New Zealand will be content to submit to the disadvantage incidental of necessity to the establishment of a new mail line. It must be borne in mind, too, that under the new contract the time will be less than the service has been performed under the old contract. The arrangements made for the outset will necessitate that the boats shall remain in Port Chalmers only a few days; but it is understood that the times now fixed will be revised after two or three months. The Postmaster-General has arranged with Air. Stewart the times for the first two boats; and he now proceeds to AVashington, accompanied by Air. Gray. At AVashington Air. AVebb and Mr. Holladay will have to enter into bonds, in terms of the contract, and there, also, more complete arrangements as to tho time-table can be made. The Postmaster-General does not anticipate that the contractors will raise any further difficulties in respect to their contract; but those gentlemen consider that, in good faith, he is bound to do all he can to aid them in obtaining the subsidy from the United States, and it is at their request that he is proceeding to AVashington. San Francisco, 13th February, 1871. Julius A t ogel.

Enclosure 1 in No. 85. AVebb and Holladat's Contract. Memoeandum of Ageeement made this sixth day of February, one thousand eight hundred and seventy-one, between the Honorable Julius Vogel, the Postmaster-General of New Zealand, and a Alember of the Executive Council of the Colony, acting on behalf of the Government of New Zealand, and hereinafter called the Postmaster-General, of the one part, and AVilliam H. AVebb, Esquire, of New York, in the United States of America, Shipowner, and Ben Holladay, Esquire, of San Francisco, in the United States of America, hereinafter called the Contractors, for themselves, their heirs, executors, administrators, and assigns, of the other part, WITNESSETH that each of the parties do severally contract, promise, and agree with and to the other party respectively in manner following, that is to say : — 1. The Contractors shall and will establish a line of mail steam vessels to be called " Tho United States, New Zealand, and Australian Alail Steam Packet Line," to run between the Port of San Francisco and New Zealand, to commence at San Francisco on a day during the month of Alarch, one thousand eight hundred and seventy-one, to be hereafter agreed upon between the parties hereto, and to be continued for the term of ten years : Provided that it shall be lawful for the PostmasterGeneral to determine this contract at the end of three years if the General Assembly of New Zealand shall refuse to ratify the same for a longer time, and notice of such refusal shall have been given in writing to the Contractors, or left with their agent in AVellington, hereby authorized to receive the same, within six calendar months after the first steam vessel under this contract shall arrive at AVellington. 2. The Government of New Zealand shall and will use their best endeavours to obtain from the General Assembly a ratification of this contract for the full period often years. 3. The steam vessels to be employed under this contract shall be the " Nevada," the " Nebraska," the " Dacotah," the " Aloses Taylor," and such other vessel or vessels as may be required for carrying out the contract, and as shall be approved of by the Postmaster-General: Provided that the " Aloses Taylor " shall bo used only in cases of emergency, no other of the said vessels being available, by reason of unavoidable accident; and if any of the said vessels shall be lost or become unserviceable, another vessel to be approved of in writing by the Postmaster-General, shall be substituted. 4. It shall be lawful for the Contractors to substitute other vessels for those named, provided that such substitution shall be previously assented to in writing by the Postmaster-General.