F.—7

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to the Treasury. The loss to British revenue which would be involved in the establishment of the system is estimated at about £500,000 a year, of which no part would be recovered by an increase in the amount of correspondence, as there would be no profit on the letters sent at the lower rate. In view of these financial considerations, in which the Lords of the Treasury have expressed their concurrence', the Postmaster-General regrets that the British delegates will not, under present conditions, be able to support the proposal of the New Zealand Government. I am, &c, The Secretary, Colonial Office. H. Buxton Forman.

No. 4. The Postmaster-General, Washington, to the Hon. the Postmaster-General, Wellington. (Telegram.) Washington, 20th October, 1906. New Zealand letters prepaid penny rate delivered in United States without surcharge after November first. Letter follows. [P.O. 06/268(7).]

No. 5. The Postmaster-General, Washington, to the Hon. the Postmaster-General, Wellington. Office of the Postmaster-General, Washington, D.C., Dear Sir Joseph Ward, — 20th October, 1906. I am in receipt of your letter of the Bth September [not printed], accompanied with a copy of the Budget, for which I thank you. I have given careful consideration to the question of a reduction of postage-rates between our two countries, referred to in your letter from London, dated the 16th June Inst [not printed], and would have been strongly inclined to favour such reduction if similar agreements had been found practicable between this country and certain other countries of the Postal Union with which our people also desire to have close relations. A reduction of postage-rates on letters authorised by the Rome Congress becomes effective on the Ist October, 1907. After that date, as you are aware, there will be such a substantial modification of postage-rates as will greatly relieve the situation, and be especially favourable to those countries which have not as yet adopted the metric system, the established rates of that Convention being 5 cents per ounce and 3 cents for each additional ounce. The rate which you have adopted, 2 cents for each half-ounce, will be fully met by the rates of the Universal Postal Union on letter packets weighing as much as 2 oz. It is true that the large proportion of letters will weigh less than 2 oz. (and perhaps less than 1 oz.), so that some advantage would be derived from the rate of 2 cents per half-ounce, which is now the rate between England and her colonies, and which rate you desire to avail yourself of in the despatch of letters to addressees in the United States. While lam not yet prepared to make any special agreement for the reduction of postage between the United States and other countries, I see no objection whatever to complying with your alternative request —namely, to allow letters originating in New Zealand for delivery to addressees in the United States and prepaid at the postage-rate of Id. per half-ounce, to be delivered to such addressees without surcharge or the collection of additional postage. An order to this effect will be issued, effective on and after the Ist November, 1906. A cable message has been sent you to-day as requested. Yours, &c, Geo. B. Corteltou, Postmaster-General. Hon. Sir J. G. Ward, K.C.M.G., Postmaster-General, Wellington, New Zealand. [P.O. 06/263(7).]

No. 6. The Hon. the Postmaster-General, Wellington, to the Postmaster-General, Washington. (Telegram.) Wellington, 22nd October, 1906. Sincerely thank and congratulate both United States and New Zealand upon establishment of penny rate from New Zealand. Hope day will soon arrive when you will establish it with the world. [P.O. 06/263(7).] —

No. 7. The Hon. the Postmaster-General, Wellington, to the Secretary, General Post Office, London. Sir,— General Post Office, Wellington, 27th October, 1906. Penny Postage betvjeen New Zealand and the United States of America. I have the honour to inform you that the Postmaster-General on the 20th instant received a cablegram from the Postmaster-General of the United States announcing that letters from New