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coastal service, they may be permitted to do so on making further reduction of five thousand pounds from subsidy payable to them, the two colonies in such case undertaking to provide for that service at their joint expense." This will give Contractors seventy-five thousand pounds if they perform coastal service, and seventy thousand pounds if that service be taken off their hands by colonies, all savings and expense being shared equally by two colonies. Please communicate decision without delay, as we must at once make arrangements for mails if San Francisco Service be discontinued. Please let Gilchrist have copy. Feedk. Whitakee, The Hon. the Postmaster-General, Sydney. Postmaster-General.

No. 103. Mr. Geay to Messrs. Gilcheist, Watt, and Co. (Telegram.) Wellington, 28th October, 1876. Question of San Francisco Service again discussed by Parliament last night. Result communicated to Postmaster-General, who will furnish you with copy of Mr. Whitaker's telegram. Messrs. Gilchrist, Watt, and Co., Sydney. W. Geay.

No. 104. The Hon. J. Robeetson to the Hon. the Postmaster-General, Wellington. (Telegram.) Sydney, 30th October, 1876. Youe telegram to us is received, not very clear however. Gilchrist says as Company names eighty thousand Bay Islands or Auckland, and no coastal service, it would be almost useless to telegraph your offer to Company of sixty-five thousand for Bay of Islands, or seventy thousand for Auckland, both without coastal service, which he, with us, interprets your telegram to mean. The Hon. the Postmaster-General, Wellington. John Robeetson.

No. 105. The Hon. J. Robeetson to the Hon. the Postmastee-Geneeal, Wellington. (Telegram.) Sydney, 30th October, 1876. We are willing to submit to our Parliament the following, which Gilchrist thinks Company might accept. Frisco, Honolulu, option of Company, Bay of Islands, Sydney and back, thirteen trips each year, for seventy-five thousand, each Government dividing saving of fifteen thousand pounds, less your East Coast coastal service from Bay Islands. On your approving, we would give consent for immediate temporary adoption of route. The Hon. the Postmaster-General, Wellington. John Robeetson.

No. 106. The Hon. F. Whitakee to the Hon. the Colonial Seceetaey, Sydney. (Telegram.) Wellington, Ist November, 1876. Aftee investigation by a Committee, and several discussions, Parliament, now prorogued, has decided as follows in regard to San Francisco Service : — That present contract may be annulled, substituting any one of three alternatives: — Ist. C Service, as tendered for by Contractors, omitting Honolulu, if desired. 2nd. Service from San Francisco to Sydney, calling at Auckland or Bay of Islands, at the option of Contractors, they performing coastal service ; subsidy, seventy-five thousand pounds. 3rd. Service from San Francisco to Sydney, calling at Auckland or Bay of Islands ; two colons providing coastal service at joint expense. Deduction to be made from subsidy of seventy-five thousand pounds—if Auckland port of call, five thousand pounds; if Bay of Islands port of call, ten thousand pounds. If either above services agreed upon, it may be temporarily commenced at once, pending final arrangements. The Hon. the Colonial Secretary, Sydney. Feedk. Whitakee.

No. 107. The Hon. J. Bobeetson to the Hon. the Postmastee-Geneeal, Wellington. (Telegram.) Sydney, Ist November, 1876. Please repeat the third of your propositions of this day, as received unintelligible. The Hon. the Postmaster-General, Wellington. J. Robeetson.

No. 108. The Hon. F. Whitakee to the Hon. the Colonial Seceetaey, Sydney. (Telegram.) Wellington, 2nd November, 1876. I eepeat third proposal of yesterday. Third service from San Francisco to Sydney, calling at Auckland or Bay Islands ; two colonies providing coastal service at joint expense. Deduction to be made from subsidy of seventy-five thousand pounds—if Auckland port of call, five thousand pounds; and