Much has been said lately of establishing steam communication with Sydney. A committee of Sydney merchants has been appointed in London to consider the subject, and the restless and indefatigable Lieut. Waghorn has written a pamphlet showing how it may be done, provided the Government will contribute 100,000 pounds per annum towards the project. He proposes that a branch line of steamers shall be established, to proceed from Sincapore by the north of New Holland, touching at Port Essington, and through Torres Straits to Sydney, and probably on to Van Dieman's Land. But why follow such a route as this, through the most dangerous channel in the world, where even steamers would have to lie-to at night (as the Lieutenant admits), and where light-houses would have to be erected and kept up at an extravagant cost? Why take such a route, which presents not a single place to call at, except Port Essington, a miserable spot, intended only as a kind of refuge for shipwrecked mariners, possessing no commercial or agricultural inhabitants, and only enjoying the advantages and the society of a Governor, a handful of soldiers, and three white women? Why insist upon expending so much public money, and encountering so many dangers, without conferring a single additional benefit upon the Australian colonies, when the route by the south of New Holland is so obvious, so practicable, and so superior? The projectors talk of making Port Essington a depot for coal; but why not make this depot in Western Australia? During the summer months, from 1st October to 1st April, the steamers might touch at Fremantle; and during the winter months, at Port Gladstone, fifteen miles to the southward, affording a sheltered harbour where ships may ride securely within one hundred yards of the shore. Coal mines will probably soon be at work in the colony, vast beds of that mineral having been discovered, thus offering every inducement to steam-vessels to touch here. Nor could anything be more advantageous, considering the great interests that England now has at stake in these seas, than to form a general depot in this colony, where her Majesty's steamers and ships-of-war might refit on occasion. As there is no other spot in all New Holland, Van Dieman's Land, or New Zealand, where first-rate ship-timber may be obtained, and where IRON, COAL, and COPPER, are also procurable in abundance, this colony offers advantages for the formation of a Government Dock-yard and depot (at Port Gladstone), that must be acknowledged by every unprejudiced person. Objections may be raised to doubling Cape Lewin during the winter season; but let the steamers stand well out to sea, and there would be no difficulty. The time lost would not exceed that spent in lying-to in Torres Straits during the night. Our colonial schooner, the Champion, goes round Cape Lewin at all seasons.