E.—3

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only after her departure that the ratification of the contract was known here. This was at once telegraphed to London, and immediately a proposal was made to you to prolong until other steamers could be placed on the line the temporary service with the large steamers, and at the reduced cost of the permanent contract. This was declined, and on my arrival here I found the difficulty which I have done all in my power to overcome, and have advised you of every step I have taken, and I hoped to meet with some consideration and relaxation of the strict letter of the contract from the Government in my effort to put the service on a proper footing as speedily as possible. I have been much embarrassed by the interruption of the telegraph cable to London, and up to this time am without any reply to telegram despatched from this on the 12th instant, the day of my arrival here. I have, &c, H. H. Hall, General Agent, The Postmaster-General, Sydney. Pacific Mail Steamship Company. Sub-Enclosure to Enclosure 26 in No. 52. Instructions of Pacific Mail Company. San Francisco, 12th September, 1875. The steamer "Vasco de Gama" will sail from San Francisco October 9th, for Sydney, calling at Honolulu and Auckland. On the return voyage she is to leave Sydney November 19th for Kandavau; thence to Port Chalmers (Dunedin), calling at New Zealand ports; thence, December 15th, to Kandavau, calling at New Zealand ports; thence to San Francisco, arriving January 13th, 1876. Our mail service will commence from San Francisco, November 10th, per the steamer "Colima;" from Sydney, November 19th, per steamer "Vasco de Gama;" from Port Chalmers, November 17th, steamer "Mikado." The steamer " Colima " leaves here November 10th for Sydney, calling at Honolulu and Kandavau, arriving at Sydney December Bth; leaves Sydney December 17th for Port Chalmers, calling at Kandavau and New Zealand ports; leaves Port Chalmers January 12th, 1876, calling at New Zealand ports and Kandavau, and arriving at San Francisco February 10th, 1876. We expect the " City of San Francisco " to follow the " Colima," sailing hence December the Bth.

No. 53. Mr. Biss to the Secretary, General Post Office, Wellington. (Telegram.) Sir, — Auckland, 26th December, 1875. The " City of Melbourne " arrived here at 10 o'clock to-day, and by her I have received a request from the Postmaster-General of New South Wales to communicate with you as follows:—1. That the "City of Melbourne" has been chartered by the New South Wales Government to proceed to San Francisco via Auckland and Honolulu on terms of old arrangement with the Australian Steam Navigation Company. 2. That this was done in consequence of Pacific Mail Company having failed to provide a boat to take outward mails (the "Macgregor" was submitted, but not approved of). 3. That feeling assured " Cyphrenes" would not be recognized as a mail boat, and New Zealand mails would not be sent by her, the " City of Melbourne " was despatched via Auckland. 4. That to meet possibility of New Zealand mails having been sent by " Cyphrenes," it was arranged, if directed by the Postmaster-General of New Zealand, "City of Melbourne" would proceed to Kandavau to pick up New Zealand mails. 5. Should Captain Brown not be instructed by you to proceed to Kandavau, he will proceed to San Francisco via Honolulu. 6. Copies of correspondence with Contractor are enclosed, also copy of a telegram sent to Postmaster-General, Wellington, on the 18th, which I am having repeated in case you have not yet received it. Please instruct me as early as possible to-night, as Captain Brown "wishes to leave at daylight aud not later than noon to-morrow, if requested to go to Kandavau. I have arranged with telegraphist to wait for your reply. I have, &c, S. B. Biss, The Secretary, General Post Office, Wellington. Chief Postmaster.

No. 54. Mr. Rose to Captain Brown. (Telegram.) Wellington, 26th December, 1875. The Acting Postmaster-General of this colony directs that, in accordance with arrangement made by New South Wales Government, you will proceed to Kandavau, Fiji, and pick up New Zealand mails and the Mail Agent sent there per s.s. " Cyphrenes," which you will convey to Sau Francisco via Honolulu. I have, &c., Thomas Rose, Captain Brown, s.s. " City of Melbourne/ Auckland. (for Secretary G.P.0.)