3

in these Laws. The Local Government
should be ready to render the Trustees
any assistance (not involving expense to
the community) which is really desired
by them: but it is far better that the
responsibility for the management of
this Fund should be towards the Land
Purchasers themselves, who are the
parties interested. You will observe
that the power to make laws for this
purpose is given to the General Legisla-
ture, but with power to delegate it to
that of the Province. In the uncertainty
which prevails, and must for the present
prevail, as to the ultimate form and
powers of the Provincial Legislatures, I
have thought that this provision will best
meet all the circumstances of the case.

10. On the subject of the expense of
    administering these settlements, I have
    nothing to add to the discretion given in
    my despatch of March 19th, circum-
    stances remaining the same. So long
    as the receipt of Land Revenue in these
    Settlements continues to be quite insig-
    nificant, I hope that the special expense
    which they may occasion is also very
    trifling, while if any circumstances should
    revive the demand, the Land Fund, es-
    pecially with the power which you will
    now possess to vary the Terms, and ap-
    propriate larger sums to management (if
    more management is required) will meet
    the exigencies of the case.

11. Section 10 of the Act is intended
    to meet a difficulty which is thought to
    have arisen, and to which I referred in
    the concluding paragraph of my despatch
    No. 47 of 31st May last; as to the deci-
    sion on conflicting claims on the New
    Zealand Company\'s Land Orders, through
    the Company\'s notice of surrender: and
    its provision, which is of a strictly legal
    character, will be easily apprehended by
    your law advisers.

12. By the printed correspondence
    which accompanies this despatch, you
    will learn that the Act as now passed
    contains only part of the provisions
    originally intended. Those which have
    been omitted formed a plan for changing
    the present liability of the Land Fund
    for £268,370 to the New Zealand Com-
    pany into a liability to the extent of
    £200,000 only, but charged in the form
    of debentures both on the general and
    land revenue of the Colony; with powers
    to holders of those Debentures to com-
    mute them for remission orders available
    at sales of the demesne lands.

13. This was an arrangement which I
    considered could only be properly adopted
    with the general concurrence of all parties

whose interest it would have affected, so
far as this could be ascertained without
the great delay of communicating with
yourself. When, therefore, it became
apparent that it would meet with the
opposition of some of these parties, I
had no doubt that it ought at once to be
abandoned.

14. I am still however of opinion that
    the arrangement is one which it would
    be for the interests of the colony to effect.
    The continuance of the claims of the
    New Zealand Company upon the whole
    proceeds of the land revenue, except
    that proportion of them which may be
    expended on emigration and surveys,
    will create so much difficulty in the
    management of the Crown Lands and
    in the extinction of Native Titles, and
    will thus prove so serious an obstacle
    to the progress of the Colony, that I
    think it would be well got rid of by the
    exchange of this claim for debentures on
    the terms proposed.

15. For although the annual charge
    on the resources of the Colony for the
    interest on the £200,000 would, no doubt,
    be a serious incumbrance, it is to be
    remarked on the other hand that the
    whole Capital of the Company has been
    sunk in forming these Settlements: in
    addition to which, large sums advanced
    to it by Parliament have been applied to
    the same object, as well as annual grants
    to a large amount which have afforded
    means for carrying on the important
    public works which have contributed so
    much to the prosperity and peace of the
    Colony, without interfering with other
    objects.

16. Considering the extent of the
    advantages thus conferred upon the Set-
    tlers, it does not seem that the annual
    charge which it was then proposed by way
    of commutation to transfer to the General
    Revenue, would have been one for
    which the settlers would have had to com-
    plain that they had not received an ample
    return. Nor would the debt, in the form
    in which it was thus proposed to esta-
    blish it, have proved any more serious
    obstacle to the progress of New Zealand
    than a debt incurred under somewhat
    similar circumstances, and which has
    already been in a great measure liqui-
    dated, did to that of South Australia.

17. The subject must, however, now
    be left for the consideration of the Local
    Legislatures, with which I have no doubt
    that Parliament will be ready to co-ope-
    rate for such a purpose.

I have transmitted the Act with a copy
of this despatch direct to Lieutenant-