The present situation of our mail communication with Australia illustrates the importance of early action by Congress.  The Oceanic Steamship Company maintains a line of steamers between San Francisco, Sydney, and Auckland consisting of three vessels, two of which are of United States registry and one of foreign registry.  For the service done by this line in carrying the mails we pay annually the sum of $46,000, being, as estimated, the full sea and United States inland postage, which is the limit fixed by law.  The colonies of New South Wales and New Zealand have been paying annually to these lines lbs. 37,000 for carrying the mails from Sydney and Auckland to San Francisco.  The contract under which this payment has been made is now about to expire, and those colonies have refused to renew the contract unless the United States shall pay a more equitable proportion of the whole sum necessary to maintain the service.

I am advised by the Postmaster-General that the United States receives for carrying the Australian mails, brought to San Francisco in these steamers, by rail to Vancouver, an estimated annual income of $75,000, while, as I have stated, we are paying out for the support of the steamship line that brings this mail to us only $46,000, leaving an annual surplus resulting from this service of $29,000.  The trade of the United States with Australia, which is in a considerable part carried by these steamers, and the whole of which is practically dependent upon the mail communication which they maintain, is largely in our favor.  Our total exports of merchandise to Australasian ports during the fiscal year ending June 30, 1890, were $11,266,484, while the total imports of merchandise from these ports were only $4,277,676.  If we are not willing to see this important steamship line withdrawn, or continued with Vancouver substituted for San Francisco as the American terminal, Congress should put it in the power of the Postmaster-General to make a liberal increase in the amount now paid for the transportation of this important mail.

The South Atlantic and Gulf ports occupy a very favored position toward the new and important commerce which the reciprocity clause of the tariff act and the postal shipping bill are designed to promote.  Steamship lines from these ports to some northern port of South America will almost certainly effect a connection between the railroad systems of the continents long before any continuous line of railroads can be put into operation.  The very large appropriation made at the last session for the harbor of Galveston was justified, as it seemed to me, by these considerations.  The great Northwest will feel the advantage of trunk lines to the South as well as to the East and of the new markets opened for their surplus food products and for many of their manufactured products.