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whole of New Zealand, are under the control of the New Zealand Company, through their agents in the colony; neither the Legislature nor Executive Government having any control or cognizance of the mode in which that source of revenue is to be appropriated or in which the Crown Lands are to be administered. Moreover, the land fund of the colony of New Ulster is, in point of fact, made liable for any engagement which the New Zealand Company may, through their agents, enter into, and the Secretary of State has recently sanctioned the expenditure of a portion of the land fund of this Province, for the purpose of defraying the expenses of the purchase of a certain tract of land which the New Zealand Company are anxious to acquire in New Munster.

7. It thus appears that the whole of that source of revenue from which payments on account of the natives are provided, from which the expenses of roads and public improvements should be defrayed, which should be charged with the cost of the Survey Department, and with the sums which are expended in the purchase of lands from the natives, are removed from the control of the Legislative and Executive Governments of New Munster, and are to be administered by the New Zealand Company through their agents in the colony, without their being made responsible in any way to any authority in the colony; and the New Zealand Company now further require, that the Government shall from other sources provide funds for the payment of the expenses necessarily attendant upon the acquisition from the natives of those lands which, so soon as they are acquired, are vested absolutely in that Company.

8. Under ordinary circumstances it would be my duty to instruct your Excellency forthwith to stop any negotiations for the purchase of lands from the natives which are at present pending, and to refuse to enter upon any such negotiations for the future, until the New Zealand Company had paid all sums which upon these accounts it might owe to the public, and until it had deposited in the hands of the Government such an amount as it was estimated might be required to defray the expenses of the purchase of the land which the New Zealand Company wished to obtain; and the grounds I should assign for these directions would be, that your Excellency had no funds whatever at your disposal applicable to the purposes to which the New Zealand Company wish them to be applied. But I am unwilling at the present moment to issue instructions of this nature, because I am aware that negotiations are at present pending for the purchase of large districts of land, the acquisition of which I regard as indispensable to the interests of both races, and to the future prosperity of the country, as also to enable the New Zealand Company to fulfil its engagements to its settlers; and I am unwilling that any permanent evils should be entailed upon the inhabitants of New Munster from a line of proceeding on the part of the New Zealand Company, which I trust may have been only temporarily adopted.

9. It will therefore be your Excellency’s duty to proceed with the negotiations for the purchase of land at present pending in that manner which may appear to you to be most consistent with the public interests, and having done this, then so soon as the Provincial Legislative Council of the Province of New Munster may assemble, to lay before them a copy of this Despatch, and of your Despatch to me, No. 16, of the 8th instant, together with its enclosures, at the same time informing the Council the Executive Government have incurred the responsibility of continuing the negotiations for the purchase of land at present pending for the reasons I have above stated; and that you request them either to make such provision for the expenses incurred by the negotiations so continued, and for those which must be incurred in such future purchases of land as may be found necessary, or to adopt such other proceedings as may in reference thereto appear to them most advisable, and best suited to the circumstances of the case.

10. With reference to the line of proceeding which the New Zealand Company think the Government are required by the instructions of the Secretary of State to adopt in reference to taking possession of lands of the natives without obtaining their consent thereto, I need hardly remind you that your duty to the Crown, which has given such repeated and formal assurances on this subject, would not permit of your adopting such a line of proceeding.

(Signed) G. Grey.

His Excellency
The Lieutenant-Governor of
New Munster.

Printed at the “Spectator” Office, Wellington, New Zealand.