134

purpose of defraying the expenses for the
fulfilment of the contract of the New Zea-
land Company in the Wellington Settle-
ment alone, it is estimated that those ex-
penses willnot fall below the sum of £10,000.
I have &c.,
(Signed)
His Grace the Duke of Newcastle,
&c., &c., &c.
G. GREY.

(Copy.)-No. 98.
Downing Street,
29th December 1853.

SIR,—I have to acknowledge your despatch
No. 71 of the 24th of June last, in which you
report that in pursuance of the instructions
conveyed by Lord Grey in his despatches of
the 19th of March 1851, you had incurred an
expenditure of 10,520l. 18s. 11d. between the
5th of July 1850, and 4th of March 1853, on
account of the fulfilment of the contracts
of the New Zealand Company towards the
Wellington settlers; and that you had called
on the Officer in charge of the Military Chest
to pay over to the Colonial Treasurer the
sum of 7,620l. 9s. 8d. part of this amount.

'The despatches of my predecessor to which
you have referred, informed you that under
the provisions of 10 and 11 Victoria Chap.
112, Session 10, the Crown took the lands of
the Company on the 5th of July 1850 subject
to any contracts which might be then sub-
sisting in regard to any of the said Lands.

And thereupon he instructed you that the or-
dinary land expenses of the Settlements must
be borne by Her Majesty's Government, with
as much regard to economy as practicable,
Government receiving the one-sixth on Land
Sales which according to theterms of purchase
constituted the Vendor's Fund.

Accordingly I find from the account en-
closed in Mr. Bell's letter of June 22nd (en-
closure No. 2, of your despatch) that 2,295l.
9s. 3d. had been expended in accordance with
those instructions, within the period named, on
"general charges" on account of the Settle-
ment; and I am glad to learn from that
gentleman's report that considerable reduc-
tions had been made in the scale of Estab-
lishments previously maintained by the Com-
pany.

The remainder of the expenditure making
up the total sum of £10,520 18s. 11d.,
consists of items for which, as far as the cor-
respondence now before me shows, you had
received no authority whatever.

Of this sum 3140l. Os. 2d., is charged to
a re-survey of the Wellington District and
the purchase of land at Rangitikei. You
have given me no explanation respecting
these amounts, I can only conjecture that
their expenditure was considered necessary in
order to fulfil some contracts for compensa-
tion of disappointed land purchasers which had
been entered into by the Company, or by its
Agents in New Zealand. All that I am told
respecting them is, that in Mr. Bell's opinion
they were exclusively chargeable to the fulfil-
ment of the contracts of the Company.

The further expenditure of 5,087l. 9s. 6d.
has been incurred in respect of payments for
the acquisition of the Ahuriri District, "in
order to satisfy contracts for re-selection and
compensation entered into by the Company
with its purchasers in its agreement of the 6th
of October 1849, which could not be fulfilled
fairly within the Districts attached originally
o the Wellington Settlements," as to which
Mr. Bell reports that "in his opinion, it must
to a considerable extent be charged to the ful-
filment of those contracts."

The Agreement of 8th of November 1849,
was made subsequently to the Act of 1847,
and therefore subject to the approval of Her
Majesty's Commissioner and I cannot find that
Her Majesty's Commissioner sanctioned any-
thing beyond an arrangement by which the
Company offered 75 acres, out of their own
Estate at Wellington on every 150 originally
bought. I am not aware of any sanction
whatever having been given by Her Majesty's
Government to the acquisition of a new tract
of land, part of its own demesne (for the pur-
chase was made after the 5th of July 1850)
in order to fulfil an engagement thus limited
in its origin. If that purchase was made under
the authority of a report of the Legislative
Council, this furnishes no additional reason
for fixing any liability on Her Majesty's
Government in respect of it.

In all these cases (except the maintenance
of the land Establishments as to which you
had definite instructions) the question, whether
a particular engagement made by the Com-
pany's Agents in the Colony, was or was not
a "contract" for which the Crown was ren-
dered liable under the Act, was obviously a le-
gal one, and involving questions to which it was
absolutely necessary that legal consideration
should be applied. It was therefore plainly
the proper course for you, before defraying
any liability in respect of such supposed con-
tracts out of the Commissariat Chest, to
apply for instructions from Home. If the
exigencies of the question rendered such a re-
ference impossible (although I am not aware
that this was the case in any of the instances
before me) you were at least bound in pru-
dence to fortify yourself with the opinion of
the law advisers of your own Government.

Instead of this, you appear to have been
guided in these appropriations by nothing
whatever except the opinion of Mr. Bell, and
the grounds on which that gentleman had
formed his judgment are not stated in his
letters or in your despatches.

By this course of proceeding you have
placed Her Majesty's Government in consi-
derable difficulty, as I understand Mr. Bell's
letter, he estimates the total expense of the
" fulfilment of the Company's contracts"
(himself being the judge of what falls pro-
perly under the designation of contracts) at
10,000l., over the realized and probable re-
ceipts for which he credits Her Majesty's
Government. And however this may ulti-
mately turn out, it appears at all events that