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proclamation of a Hundred would have no effect whatever in enabling your Honor to carry out the object for which his Excellency’s Government understand it to be proclaimed (as stated in your letter to Mr. C. W. Richmond, of 21st January, and to the Chief Surveyor, of 5th February last), namely, the laying out of two townships, and “bringing them at once into the market.” It would only have the effect of depriving the licensees of Runs 53 and 54 of the compensation to which they would be entitled on the suspension of their licences, and that of evading the clearly expressed intention of the Legislature, which has provided for compensation being given. His Excellency’s Government desire to express no opinion as to the terms which were offered to the licensees by your Honor, because, the law having provided for the recourse to arbitration, there is no power to prevent the licensee from claiming that right if he chooses.

His Excellency’s Government have not failed to consider the proposal made in your Honor’s letter to Mr. C. W. Richmond of the 3rd February, that you would obviate the difficulty which exists, by “excluding the land in question from the operation of the Gold Fields Act, and “thus placing it under the Land Sales and Leases Ordinance.” But they refrain from expressing any opinion on this, because it forms no part of the question immediately raised by your Honor’s letter of 20th February under reply (viz., the proclamation of a Hundred), and because it does not appear clear under what power your Honor would have taken so extreme a course as to exclude 200 acres from the operation of the Gold Fields Act, in order only to defeat within those 200 acres the general provisions which the Legislature has thought fit to enact for the regulation of proclaimed gold fields in the Colony.

II. On the second point, however, which is of far greater importance to the interests of the people of Otago, His Excellency’s Government recognise, to the fullest extent, the necessity of making provision for the permanent location of the miners, and for extending to them the same privileges which they possessed in Victoria. It must be remembered that the Gold Fields Acts were passed at a time when the only provision required was for a small field at Nelson, and when no idea was entertained of the existence of a gold field which within a few months should produce gold to the value of more than a million sterling, and attract so many thousands of people to this Colony. Nor can there be the least doubt that the General Assembly will be ready to make whatever provisions are required for the permanent establishment in comfort and prosperity of the rapidly increasing population of the Otago fields. Among these, it will be obviously necessary to enable townships to be laid out and sold on the diggings. While, therefore, His Excellency’s Government are bound to give effect to the law for the time being in force, I hasten to inform your Honor that they will introduce, immediately on the assembling of the Legislature, a measure which they hope will effectually meet the requirements of the miners, and promote their permanent settlement in such townships as it may be necessary to lay out.

I invite your Honor to favour me with suggestions on this or other points which the practical experience of your Government may enable you to make for the amendment of the law. In the meanwhile, there is one point on which the views of the General Government may perhaps be satisfactory to the mining population.

There seems no reason why your Honor should not at once take steps to suspend the licenses of Runs 53 and 54, over such part of the land as is required for the gold fields, making compensation in the manner provided by the Act; and then direct a survey to be made of the two pieces of land on which you propose to establish townships, the lots being of such size as you may think proper. In all probability, by the time this preliminary work is completed, the General Assembly will have been able to consider the whole subject; but in case your Honor should in the meanwhile find it necessary to grant any leases in pursuance of section III. of the Gold Fields Act of 1860, a clause will be proposed in any amending Bill, enabling the lessee of any lots within a township to become the purchaser thereof, either at the price realised by the adjacent lot when it shall be sold, or at a price to be fixed by arbitration. Thus, assuming that the Assembly will allow land within gold fields to be sold at all, the provision I speak of would effectually secure the interests of any persons who may erect buildings or improvements on any land they may hold under lease. Meanwhile, I have transmitted instructions to the Crown Lands Commissioner (copy whereof I transmit to your Honor), which I trust will have the effect of facilitating the granting of licenses under the Gold Fields Act.

His Excellency’s Government trust that the explanation they have thus given to your Honor of the law, and of their own views, will prevent disappointment at their inability to comply with your Honor’s request for the immediate proclamation of a Hundred at Waitahuna.

I have, &c.,

(Signed) HENRY SEWELL,
(For the Colonial Secretary.)

His Honor the Superintendent, Otago.