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No. 10. The Hon. the Ministee for Immigbation to the Agent-Geneeal. Sic, — Immigration Office, AVellington, sth July, 1879. Referring to the Hon. Mr. Stout's letter of the 2nd ultimo (vide D. 1., p. 31), I have now to inform you that the purport of your letter of the 25th March, No. 259, (vide D. 2., p. 34), complaining of the delay of the New Zealand Shipping Company in providing suitable vessels for the conveyance of railway material and cargo to this colony when called upon to do so under the existing contract has been communicated to the Company, and I now transmit, for your information, copy of their reply. The circumstances under which the strict letter of the contract may be said to have been broken are so exceptional, and were so little foreseen by either party when it was entered into, that there do not seem sufficient grounds to justify its terminatiou at present. Having in view the unusually large amount of tonnage which the contractors were unexpectedly called upon to find, arising out of the speculative purchase of steel rails, I am disposed to think that the Company has done its best to fulfil the spirit of the contract, if not the letter. As it is, lam of opinion that, unless there should occur some flagrant breach of contract, involving the colony in pecuniary loss or inconvenience, the Government would not be justified in cancelling it. AYe have entered iuto a bargain from the spirit of which we cannot recede on the mere ground that it may have proved unfavourable to us. The views expressed by you as to the advantage of chartering ships in the open market as they are required were fully considered prior to entering into the present contract. AVhile this plan no doubt presented many advantages, it was, on the whole, deemed better to adhere to the existing system, for the reasons stated in the despatch from this department under date sth April, 1878. I am not prepared to say that now, with the experience and in the light of the circumstances set forth in your letter of the 25th March, it would not have been better to have confined the contract to passengers only. The whole question, however, is one which will have to be reconsidered before the expiration of the contracts in May next year. I have only further to assure you that the Government recognizes your endeavour to act for the interests of the colony in this matter, and to thank you for the same. I have, &c, J. Macandeew, The Agent-General for New Zealand, London. (for Minister for Immigration.)

No. 11. The Genebal Managee, New Zealand Shipping Company, to the Hon. the Ministee for Public AVoeks. The New Zealand Shipping Company (Limited), Sic,— Christchurch, Bth July, 1879. Referring to my letter of the 7th April, of which I sent a copy to our London agent, I have the honor now to annex, for your further information, an extract from Mr. Strickland's letter to me, dated the 22nd May last, respecting the freight requirements of the Government for the carriage of rails from the outports ofthe United Kingdom to the colony. In regard to the quantity of cargo for shipment by the Agent-General, I may state that I advised Mr. Strickland in exact accordance with the verbal intimation you gave me on the 22nd March last. I have, &c, H. Selwyn Smith, The Hon. the Minister for Public Works, AVellington. General Manager.

Enclosure in No. 11. (Extract from Mr. Strickland's letter, dated London, 22nd May, 1879.) Goveenment Cargo. Prom my previous correspondence you would gather that the reasons advanced by the Agent-General, with the object of being empowered to charter vessels independently of the Company, were untenable, and that any delay in the shipment of Government cargo at the latter end of last year was entirely caused by the persistent refusal of the Agent-General to accept the tonnage offered to him at rates advantageous to the Government, compared with the cost and freight from here of the cargo referred to. I cannot learn that there is anything approaching the quantity of cargo you name preparing for shipment. The last contract for railway iron, some 15,000 tons at Middlesboro', the Agent-General declines to take delivery of at present, although we have represented to him that during the summer mouths tonnage for loading on the east coast is much more readily procurable than at a later period of the year, when shipowners raise objections to Middlesboro', in consequence of the heavy seas on the bar. With, however, the latitude the Agent-General has been directed to extend to us, we have little doubt of our ability to satisfy any requirements the Government may make upon us.

No. 12. The Undee Seceetaby for Immigbation to the Genebal Managee, New Zealand Shipping Company. Sic, — Immigration Office, Wellington, 11th July, 1879. I have the honor, by direction of the Hon. the Minister for Immigration, to acknowledge the receipt of your letter of the 21st ultimo, with reference to the complaiut ofthe A gent-General as to the delay of the New Zealand Shipping Company in providing for the conveyance of cargo aud railway material under the contract.