In July 1858, owing to the failure of the European and Australian Mail Company, the Royal Mail Steam Packet Company agreed with the Lords Commissioners of the Admiralty to continue the Australian mail service, and entered into a mail contract for eight months for a subsidy at the rate of £185,000 per annum, giving a monthly sailing, with Government guarantee of £6000 a month under certain circumstances if there were loss in the working. The line of mail packets between Panama, New Zealand, and Sydney was maintained in connection with the R.M.S.P. service to the West Indies and Panama with the mails, and was regarded as a useful alternative to the line from Point de Galle to King George’s Sound and other Australian ports. The Panama, New Zealand, and Australian Royal Mail Company was granted a yearly subsidy of £9000 for the main line, excluding the intercolonial services, the amount to be increased to £110,000 if the New Zealand Government should afterwards stipulate for a higher rate of speed. The _Ruahine_, the second vessel laid down, but the first completed for this line, was constructed by Messrs. Dudgeon, and was a brig-rigged steamer of 1500 tons, and was 265 feet long, 34 feet beam, and 25 feet 7 inches deep, and had engines of 354 nominal horse-power, driving Dudgeon’s double screws. She had accommodation for 100 cabin passengers, 40 second cabin, and 65 in the steerage. She left London on her maiden voyage in April 1865, and made the voyage to her final Australian port in 63 days, of which she was only 55 days actually at sea, the other days being accounted for by calls _en route_. She was expected to make the passage between Panama and Wellington in 25 days.