F.—-2a,

6

contract was made without consulting the Colonies which pay the charge, although they have separate postal treaties with the United States, I think that your Government should feel no embarrassment in "withdrawing from a contract which must injuriously effect the commerce of the nation. On the other hand, I am precluded from making formal application through the British Minister at Washington, as the peculiar relations of the Colonial Governments to the Government of Great Britain render such a course inadvisable. The Colonies, although self-governing in their internal affairs, cannot treat direct with Foreign Powers. The Mother country manages this for them. And when, as in the present case,, its policy is to break down direct Foreign connection and intercourse, you will readily perceive how hopeless it would be for the Colonial Government to endeavour to reverse that policy through thediplomatic representative of the British Government. 8. For this reason I have treated this question solely as an American one, and now, as we have been driven to the last ditch, I am anxious to try and preserve the service by obtaining a very slight concession indeed, the granting of which would in no way compromise the relations of your Government to the Government of the United Kingdom. It would simply involve a notification from the Hon. Postmaster-General that, as the British enclosed mails no longer involved any outlay by the United States Government, the payments for transit charges under the agreement entered into on behalf of their respective Governments, by His Excellency Sir E. Thornton and the Hon. Mr. Tyner, would not hereafter be demanded. 9. Awaiting your reply, and again thanking you most sincerely for the very great trouble and pains you have taken in the matter. I have, &c, Robt. J. Creighton, Resident Agent New Zealand Government. P.S.—The mail is advertised to sail on May Bth, and, if it were possible, I would like a reply by that date, or the 10th, which is the more probable date of departure. The Hon. H. D. Money, Chairman Postal Committee, R. J. C. House Representatives, Washington, D.C.

Enclosure 3 in No. 1. Mr. R, J. Creighton to the Hon. Horace Davis. Dear Sir, —. San Francisco, sth. May, 1880. I read with great pleasure to-day that yon had prepared an amendment to the Postal Appropriation Bill, enabling the Postmaster-General to make such concessions to the Colonies of New Zealand and Now South Wales in the matter of freight and charges upon British enclosed mails across this Continent as, in his discretion, may "be advisable. I sincerely trust that you may succeed in carrying it, and that a liberal view of the question may be taken by the United States Postal Department. 2. I beg to enclose, for your information, copy of an article I prepared for publication, and which, "will appear in to morrow's Evening Post. I take occasion to contrast in it the Australian trade now in its infancy, with the China trade, which has been stimulated by subsidies and encouraged by a Very large expenditure of capital. The results, as you will readily perceive, are startling, and lam convinced that the exhibits for 1879 and 1880 will show a progressive increase. And here I take leave to state that the interest of American trade and manufactures lies in promoting intercourse between New South Wales and New Zealand by reason of their favorable tariff, and more friendly feeling towards this country;. and whereas Melbourne, which is being bolstered in every way by the mother country, has a strictly protective tariff, and has never exhibited any friendly feelings towards the United States. 3. On the 25th ultimo I wrote to the Hon. Mr. Money, requesting him to inquire whether theUnited States Post Office Department would aid the contracting colonies to get rid of the charges imposed upon them by the British Government, owing to the agresments between the two countries, and which appears to be the bar to any direct action by your Government. I requested him to consult with you and Senator Booth, if he deemed it advisable. In brief, I believ* lam able to arrange with transportation companies to carry our enclosed mails across the continent at half the rates paid by the United States Post Office by the British Government, and I want to know whether your postal authorities would assist by active co-operation as a measure of compromise. lam aware that this is in itself a most unsatisfactory proposal, and anticipate strong opposition on the part of Great Britain ; but I do not at present see how otherwise to bring the London Postal Department to reason, unless by the more dignified course contemplated in your proposed amendments. 4/ I have carefully perused the Hon. Mr. Key's letter to Mr. Money, and noted with satisfaction his offer, on behalf of the Department, to accept only such sum from the British Government, on account of this service, as is actually paid to the railroad companies. In consequence, of that intimation, I had interviews with the General Superintendent and Secretary of the Central Pacific Railroad, who, while anxious to promote the objects I had in view, could not promise any relief. Taking the actual weights, in and out, of the March mail, and estimating it on the scale of payments heretofore made by the Department to the railroad for the domestic mail (of which, in the accounting of the Department to the railroad, it forms a part), the Central Pacific would receive about $10,000 per annum net,the Government deducting 15 per cent, under the law affecting subsidized roads. I therefore calculate that from $40,000 to $50,000 per annum is the actual payment for this service, a sum far too inconsiderable in itself toimperilthe growing trade between this country and Australia. Were it $125,000 a-year, I respectfully submit that the sum might very well be borne on the Post Office appropriations, in consideration of the commercial and other advantages conferred upon this country by the direct Australian mail communication via San Francisco.