E.—No. _

SAN FRANCISCO MAIL SEEVICE.

25

These purchases have been, and are still being, freighted to the United States, under contract with our line, and in our steamers, at rates which allow no profit to the line, but with great advantage and enormous profit to all the colonies. I have, &c, U.S., N.Z., and A.M.S.S. Line, by The Hon. Julius Vogel, &c, &c, Melbourne. W. H. Webb.

No. 11. The Hon. J. Vogel to Mr. Webb. Sic,— Melbourne, 28th February, 1872. I have the honor to acknowledge the receipt of your letter of February 26th. I have to thank you very much for the information it contains, as also for the exertions you have made, not only to obtain a reduction in the rates of duty upon wools in the United States, but also to diiect the attention of persons requiring wool to the advantage of making purchases in the markets of these colonies. No doubt, the colonies have already reaped advantage from this source, and equal advantage has been gained by the purchasers ; who have not only avoided the heavy reshipment duty which they would have had to pay, had they made their purchases in England, but have also obtained their wool in a very much shorter time. I sincerely hope that the exertions which you and others are making to secure the free admission —or the admission at a very much reduced rate of duty —of New Zealand and Australian wools into the United States, will be successful. It appears to me, that if they obtained suitable wools, the United States manufacturers might command an enormous market, not only in the United States, but in China, for their woollen and worsted goods. I have, &c, W. 11. Webb, Esq., &c, &o. Julius Vogel.

No. 12. The Hon. J. Vogel to the Hon. C. Gavan Dueey, Victoria. Sic,— Melbourne, 27th February, 1872. I have the honor, on behalf of the Government of New Zealand, to submit to you proposals for the conveyance of mails between Victoria and Great Britain via San Francisco. Mr. William H. Webb, who represents " The United States, New Zealand, and Australia Mail Steam-ship Line," has concluded an agreement with " The Australasian Steam Navigation Company" to run a fast steamer from this port, to connect, every four weeks, with the vessels of the line just mentioned. It is intended that the steamer shall leave Hobson's Bay in time to catch the outward mail at Auckland, and shall start thence with mails, passengers, and freight for Victoria immediately on the arrival of the boat from San Francisco. The subsidy we should require for the conveyance of the Victorian mails is £25,000 per annum. A very considerable portion of that amount —namely, £7,500 —would pass to the Australasian Steam Navigation Company, in consideration of their putting on the special direct boat; and the balance—£l7,soo—would be equally divided between the New Zealand Government and Mr. Webb. The subsidy paid by New Zealand for the line is £50,000, which amount includes £10,000 as a special contribution on account of the service between New Zealand and Australia. The sum passing to New Zealand out of the Victorian subsidy now proposed, would, therefore, be less than the special payment made by New Zealand. There is an understanding with Mr. Webb that, whatever subsidies are obtained from the colonies, New Zealand shall not receive more than £15,000 in reduction of the £50,000 for which she has become responsible to initiate the line. There is an existing arrangement between Great Britain and New Zealand, under which the Imperial Post Office authorities are to pay all the American charges upon letters both ways, in consideration of retaining the postages collected in Great Britain. The only charge made to the Colony is for the American rates on newspapers and book parcels one way. The Post Office authorities would, no doubt, make a like arrangement with Victoria, and you would thus be assured of being able to send your letters free of any charge for conveyance between San Francisco and England and England and San Francisco. But the arrangement described is certainly much more favourable to the Imperial Post Office than it is to the Colony ; and representations on the subject have consequently been made by New Zealand, with the view of obtaining some contribution towards the subsidy. The representations have been not unfavourably entertained. I forward to you some papers on the subject. It is one condition of the proposals now submitted to you, that should such an Imperial contribution be received, it shall be divided amongst contributing colonies in proportion to the amounts respectively paid by them in aid of the line ; so that the £25,000 asked from Victoria would be reducible by its proportion of any sum contributed by the Imperial authorities. Another considerable reduction of the proposed £25,000 would result from the lessened payment which Victoria would have to make towards the Peninsular and Oriental Company's service. By the present arrangement with that Company, each Colony has to pay in proportion to the number of letters it sends. It is reasonable to suppose that the letters which would go by the San Francisco route would diminish the number of, and consequently the payment for, letters by the Suez route. While I do not desire to hold out the hope that letters sent via San Francisco can be delivered in as short a time as those sent from or to Melbourne via Suez and Brindisi, I am of opinion that the San Francisco route will be a quicker one than that between Melbourne and England via Suez to Southampton. The contract time for the latter is understood to be fifty-four days.- But Mr. Webb will be willing to contract that mails between San Francisco and Melbourne, or between Melbourne 7

E.—No. 4, 1870, No. 20. A.— No. 6, 1871, page 11.