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No. 33. Mr. Ckeighton to the Hon. the Postmaster-General, Wellington. Sir, —■ Philadelphia, Pennsylvania, 27th April, 1883. I have the honour to report that, in accordance with your letter of instructions, I proceeded to New York on my way to Washington, for the purpose of consulting with the Pacific Mail Company's directors on the subject of renewing the mail contract, and also with a view of taking joint action when the matter is before the Cabinet. I had a long conference with Mr. Houston, the president of the company, but he gave me no hope whatever of being able to accomplish anything with the Administration. He had himself abandoned the idea of obtaining either a subsidy or any adequate compensation for carrying the American mail; but he referred me to Mr. Lauterbach, the company's counsel, who took a much more hopeful view of the case. He explained to me at length the position of the subsidy clause of the Shipping Bill, which failed to pass the House last session, and which will be pressed early next session. The ship-building interests of Maine are supporting this measure, and Mr. Lauterbach, who has had the matter in charge for the Pacific Mail Company, anticipates its passing to a certainty. This would settle the question of subsidy, as payment would be made on a liberal scale by the United States Government for carrying its mail by sea. Mr. Lauterbach is prepared to come to Washington to press the matter on the Administration; Secretary Chandler, of the Navy Department, being friendly to the company. The points of my conference with Mr. Houston regarding the service are these: The Pacific Mail Company was prepared to make the service a twenty-six day service between the terminal ports of San Francisco and Sydney, conditioned upon this : that no penalty should be imposed if the mail was delivered inside twenty-seven days, and no bonus given unless it was delivered within twenty-five days. i€52,5G0 was the lowest figure for the service the companywould accept, which offer you have before you on behalf of the company. Mr. Houston likewise stated that he was prepared to contract for a direct service to New Zealand only, with three boats, making Auckland the terminus, for £40,000 a year. This would only be £7,500 a year more than the colony would require to pay under the proposed joint arrangement with New South Wales, assuming tliat it contributed £20,000 a year, and New Zealand ,£32,500 as at present, and there would be decided commercial advantages to the colony which would not arise were Auckland only a way-port a_pd Sydney the terminus. Mr. Houston states that three boats would be needed to perform the service, whether Auckland or Sydney is the last port of call. The company would also credit the colonies with any payment from the United States Government in excess of what it now receives for fhips letters. Mr. Houston also promised, should the contract be renewed, to urge upon the railroad companies the necessity for reducing, the time across the continent by at least a dav. I have had interviews with the railroad people at Chicago, and I found them all well disposed; but Congress failed to make an appropriation for accelerating the mail service last session, and it is not probable that the time will be reduced under six days' transit before it again meets in December next. . I shall endeavor to bring pressure to bear upon the Government in this matter on my return to the Pacific Coast, because it is through the business interests of that section of the country that the Administration may be moved to action. The sudden death of Postmaster-General Howe, and the appointment of Judge Gresham ia his place, somewhat deranged my plans, and I deeemed it prudent to enlist the services of the New York and Philadelphia Press in support of my mission. In this I have been successful, having not only received the expression of their cordial sympathy, but in the case of the New York Times considerable space was devoted to the New Zealand mail service, in a published interview which I herewith attach. I availed myself of that opportunity for presenting the case of the New Zealand mail service in a strong light before the American people and the Administration. The New York Times is the leading Republican organ of the country. I am also in a position to say that the New York Sun, the leading Democratic paper of the United States, will take a friendly view of my proposal to remit the entire land transportation charge in consideration of the ocean-carriage of the United States mail. I informed Mr. Houston that the New Zealand Government considered the remission of this charge as an indispensable condition for a continuance of the mail service, and I shall press the point upon the Administration, to members of which I have strong letters from Senator J. P. Jones and other prominent gentlemen. I delayed going to Washington until the President's return from Florida at the suggestion of Mr. Houston. As he is now at the capital, I shall proceed there to-night. I have arranged with the associated press to cable the result of my negotiation to London as news, so that you may be early informed of the result in that way. I have, &c., IIobt. J. Creighton. The Hon. the Postmaster-General, Wellington, New Zealand.

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