Governor to draw upon the British treasury for this object."

4. Such being the general tenor of the Secretary of State’s instructions with regard to the advance of funds for land purchases, and no intimation having been given to me that any exception had been made with regard to the Porirua and Wairau purchases, I am compelled to suppose that no such exception was intended; and at least it is my duty to give you early intimation that up to the present time no funds have been placed at my disposal by the Governor-in-Chief to meet those payments, or, indeed, any communication from His Excellency on the subject.

5. It is therefore (much as I regret that any difficulty or delay should occur) wholly out of my power to provide for the payment of the instalments falling due on the first April next, and all that I can do will be to transmit copies of this correspondence to His Excellency the Governor-in-Chief, but without the possibility, as you are aware, of any reply being received from him, or any arrangements made to meet engagements due at that date.

6. It is barely possible, that if any understanding or arrangement has been entered into in England, between the Government and the New Zealand Company on the subject of the Wairau and Porirua purchases, of which I am not aware, the Governor-in-Chief might yet communicate with me on the subject prior to the 1st of April, on which day His Excellency is aware the instalments referred to become due; but I confess I have no reason to apprehend that such an occurrence is probable, nor do I indeed know that there is any likelihood of a vessel arriving at Wellington from Auckland within the period named.

I have the honor, &c.,

(Signed) E. Eyre.
W. Fox, Esq.,
Principal Agent to the N. Z. Company.

No. 13. Government House,
Auckland, 24th March, 1849.

Sir,—

I have the honor to acknowledge the receipt of your despatch, No. 16, of the 8th March last, in which you acquaint me that the New Zealand Company, through its Principal Agent, repudiates the idea of that body being liable for the expenses necessarily attendant upon the acquisition of land from the natives.

2. I gather from the letters of the Principal Agent of the New Zealand Company to yourself, of the 16th and 20th February last, that the New Zealand Company consider that the Government having retained the power of conducting negotiations with the natives for the purchase of their lands for the purpose of securing the interests of the natives, it ought therefore to be regarded as the selling party, and that the persons who purchase the lands from the natives on behalf of the Government should be regarded as its agents, and be paid by the Government as such. Further, the New Zealand Company, through their Agent, contend that the natives are only entitled to a proprietary right in such lands as they actually occupy, and that the Crown is entitled to take possession of all vacant territory without purchasing from the natives; and from this the Agent of the Company draws the inference that, as he the Agent of the Company thinks that the Government ought to have taken from the natives without purchase certain lands for which the Government have paid the natives, it is not just to impose upon the Company the cost of such a proceeding.

3. I entirely concur in the general view which your Excellency has taken of this subject, and a sufficient answer to the arguments raised upon behalf of the New Zealand Company might be, that at the time the Government undertook to purchase those lands from the natives, the late Principal Agent of the Company entirely concurred in the propriety of this proceeding, assented to the amount which it was proposed to pay the natives, and repeatedly requested me to carry out the arrangements with as little delay as possible.

But as the questions now raised by the New Zealand Company involve most important principles, these appear to require some further consideration.

4. In all British colonies, circumstanced as this is, the funds realised from the sale of the lands are subject to certain charges, as is at present the case in the Northern portion of New Zealand.

Firstly, They are subject to a charge for emigration purposes.

Secondly, They are subject to a charge for purposes connected with the benefit and improvement of the native race.

Thirdly, To a charge for the expenses connected with their acquisition, and the survey and administration of them.

Fourthly, A certain portion of the proceeds derived from the sale of waste lands is applied to the purposes of roads and public improvements.

5. Regular returns of the revenue realised from the sale of land are laid before the Legislature of the colony; and in point of fact, the whole of this revenue not connected with emigration purposes is brought under their control, although perhaps not in so direct a manner as might be desired.

6. In New Munster, on the contrary, at the present time, the whole of the land fund of that colony, and the whole of the administration of the Crown Lands in that Province, comprising nearly three-fourths of the