Wellington, 16th February, 1849.

Sir,--

I have the honor to acknowledge the receipt of your Excellency’s letter of yesterday’s date, transmitting to me certain accounts and vouchers relative to the purchase of the lands lately acquired from the natives in the Southern Island, and requesting me "in accordance with the instructions of the Right Honourable the Secretary of State for the Colonies, directing that the expenses incurred in acquiring lands from the natives should be provided by the Company," to repay to the Local Government the advances made by your Excellency on that account, and which, I perceive, include the expenses of the Government Commissioner employed in completing the purchase, and paying over the instalment now due.

In reply, I have the honor to inform your Excellency that I am prepared at once to repay the amount of the instalment now in course of payment; viz., five hundred pounds. But on looking into the records of previous similar transactions, such as the Otago purchase, that at Wanganui, and the negotiations of the Port Cooper Plains purchase, in the first instance conducted by Mr. Kemp, I perceive that the practice hitherto has been for the Government and the Company each to pay the expenses of its own officers, which in some cases must have been very considerable, particularly at Otago and Wanganui. On looking at the correspondence which has passed between the Colonial Office and the New Zealand Company, I do not find it provided that the latter should do more than find the purchase money. And considering that the Government appears to have retained the power of conducting such negotiations in its own hands, for the purpose of securing the interests of the natives, and may, therefore, to a certain extent, be regarded as the selling party, the rule hitherto adopted seems to me fair, and analogous to the practice of private individuals in ordinary transactions of sale, where each pays his own agent. I regret, therefore, that on these grounds I do not feel myself authorised in meeting the Commissioner’s expenses though, of course, prepared to pay the proportion of Mr. Wills’s passage in H.M.S. Fly, as he was employed by, and acted on behalf of, the Company, the balance of his expenses having been already paid by me.

I have, &c.,

(Signed) William Fox,
Acting Principal Agent to the N. Z. Co.

His Excellency
Lieutenant-Governor Eyre,
&c. &c. &c.

A true copy—J. D. Ormond

Copy, No. 8.
Government House, Wellington,
20th February, 1849.

Sir,--

I have the honor to acknowledge the receipt of your letter of yesterday’s date, in reply to my communication of the 15th ultimo, transmitting certain accounts and vouchers relative to the purchase of the lands lately acquired from the natives in the Southern Island.

2. In this reply you intimate that you do not consider yourself authorised to provide for any expenditure connected with the acquisition of lands, excepting the purchase money to be paid to the natives and the expenses of such officers as the New Zealand Company may themselves employ, and this decision you base upon the following grounds:—

1st. That the Government have heretofore (as in the case of Otago, Wanganui, &c.) advanced the funds necessary to meet the expenditure incurred by their own officers in conducting land negotiations on behalf of the Company, and that you find no express provision in the correspondence between the Colonial Office and the New Zealand Company, that the latter should do more than find the purchase money.

2ndly. That considering that the Government appears to have retained the power of conducting such negotiations in its own hands, for the purpose of securing the interests of the natives, and may therefore to a certain degree be regarded as the selling party, the rule hitherto adopted seems to you fair, and analogous to the practice of private individuals in ordinary transactions of sale, where each pays his own agent.

3. With regard to the first of these reasons it seems unnecessary to observe, that although in some instances (as Porirua, Wairarapa, &c., &c.) the Government may have found it desirable, from political considerations, to take upon themselves to advance the funds required for the acquisition of particular districts, it by no means follows that they ought to do so in cases where the same reasons are not so pressing, and where the districts are required solely for the purposes of the New Zealand Company.

4. In Colonel Wakefield’s letter to Sir George Grey, of the 31st August last, it is stated that advices from the Court of Directors of the New Zealand Company had announced to him that an arrangement had been "made between Her Majesty’s Government and the Company, that the whole of such price should be provided by the Local Government." And upon this supposed arrangement I was instructed by his Excellency the Governor-in-Chief to reply in the terms of my letter of the 5th September, 1848.