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practically subjugated, and all prospect of any
formidable combination amongst them put an end
to for the future, lead me confidently to hope that
the day is not far distant when this unhappy
rebellion may be considered as finally suppressed,
and the way re-opened for the peaceful re-establish-
ment, side by side, of the two races to whom Pro-
vidence has allotted the task of elevating these
islands to the position among nations, which they
are, without question, some day destined to fill.

Although the unsettled state of affairs in this
Island has not been favorable for land purchasing
operations, you will be glad to learn that they
have not been unattended with success. In open-
ing your last session, I informed you that the
terms of purchase of the Waitotara block had
been arranged, and I have now to state that the
balance of the purchase money was paid in July,
but for various reasons was deposited in the Bank
by the natives until last month, when it was most
fairly and satisfactorily distributed, and that,
though no question as to the validity of the pur-
chase ever has been raised by the natives, before
I left Wanganui I received an intimation that the
rebel Kingites had resolved upon abandoning
their reserves in the block, and retiring to the
north side of the Waitotara River.

After long and weary negotiations and many
disappointments, I am happy at last to announce
to you that a Memorandum of Agreement for the
sale of the Upper Manawatu block has been duly
signed—that all the owners have, after repeated
runangas, agreed to the terms, and that the final
Deed of Purchase is being prepared. The amount
of the purchase money, £12,000, is probably the
largest sum ever yet paid at any one time to the
natives; but when you consider that the block
comprises some 250,000 acres chiefly of rich alluvial
land; that it abounds in valuable timber; that the
river is navigable for some 30 miles; that pro-
bably no district in New Zealand of equal area is
capable of supporting so large a population; and
especially when you reflect how much a large
European population located in the centre of the
West Coast, in a district so easily accessible to
steamers, will tend to the maintenance of peace,
and the security of the whole Province, you will
scarcely deem the sum agreed to be paid for it
excessive. You have now acquired (including
the Awahou block) 270,000 acres of the long and
much desired Manawatu territory.

With respect to the remainder of the Mana-
watu district—while I am unwilling to raise
undue expectations—I feel very confident that
events are gradually, if not rapidly, tending to
the only possible solution of the long pending
dispute between the Ngatiapas on the one side,
and the Ngatiraukawas and Rangitanis on the
other, viz., the cession of the block to the Crown.
The former in January last, formally handed
over to me whatever interests they might be
proved to have in the land, and I know that some
of the most influential chiefs of the latter are
now disposed to sell, and that this disposition to
sell will be not a little fostered and stimulated by
the sale of the Upper Manawatu. It would be
both ungenerous and unfair if I did not take this,
the earliest opportunity, of publicly acknowledg-
ing the invaluable services rendered in this matter
by Mr. Walter Buller. Had it not been for his
cordial co-operation, and for his indefatigable ex-
ertions to induce the natives to come to reason-
able terms, the sale would, in all probability, have
been postponed for an indefinite period.

The agreement for the sale of another exten-
sive and valuable block called the Muhinui, situate
between the Horowhenua and Ohau rivers, and
extending from the sea coast to the Ruahine
Ranges, has also been duly executed by the own-
ers; the purchase money being £1100. And I
am informed that as soon as the boundaries of
this block are surveyed, an adjacent block will be
offered to me.

The purchase of the three small blocks in the
Wairarapa, surveyed last year, and containing in
the aggregate some 13,000 acres, has been delayed
by the question of price. An instalment on a
portion of the Forty Mile Bush, within this Pro-
vince, has been paid on behalf of the Province
by Mr. McLean, who, I have little doubt, will
succeed in acquiring the greater portion of that
district during the ensuing year, the principal
owners (the sellers of the Upper Manawatu)
having long been and still being most anxious to
dispose of it.

I need not say that these acquisitions, and the
certainty of further acquisitions of territory,
change so entirely, not merely the whole aspect of
affairs as, but the actual position of, this Province,
that we can have no hesitation in at once resum-
ing immigration and the prosecution of public
works on an extensive scale.

I should here observe, that out of the Three
Million Loan, authorised by the General Assembly,
a very considerable amount was appropriated to
the introduction of settlers into the Northern
Island, to their location, and to roads and other
public works. Of this amount, there was alloca-
ted to such portion of this Province as lies south
of Wanganui, the sum of £45,000 for immigra-
tion, and £135,000 for public works; and to
Taranaki and the part of this Province which lies
north of Wanganui £75,000 for immigration, and
£225,000 for public works;—the interest and
sinking fund on the amounts so expended in each
Province, being a charge upon its revenue. As-
suming that the Loan (guaranteed by the Impe-
rial Government) will not bear more than 4 per
cent. interest, and that the sum of £250,000 is
expended in this Province on immigration, mili-
tary settlements, and public works, the annual
charge imposed upon our revenues will not
amount to more than £10,000, a charge which
your present revenue can easily bear, but which
must be deemed wholly insignificant if regard be
had to your future prospects, and to the rapid
development of your resources which such an ex-
penditure on the objects proposed will at once
cause.

In a memorandum which I recently addressed to
His Excellency's Ministers, I pointed out that there
were three trunk lines of road, which it was ex-
tremely desirable, both for the interests of the
North Island generally, and of this Province in
particular, should be opened up as soon as possi-
ble:—The first extending from Wanganui to the
Waitotara river, a distance of about 25 miles would
be ultimately continued to the Patea river, the
northern boundary of the Province; the second,
which may be termed the north eastern, would
lead from Masterton, in the Wairarapa, to the
boundary line of the Province, situated in the
Forty Mile Bush, opposite the Manawatu Gorge,
and would be continuous with a main line of road
to be taken through the Napier portion of the
same bush to the Rua Taniwha Plains. Were
this line of road from the Wairarapa to the Rua
Taniwha Plains opened up, a distance of about 50
miles, through the bush (which is nearly equally
divided between the Provinces of Wellington and
Hawke's Bay), the entire inland communication
would then be established between the towns of
Wellington and Napier, a distance of nearly 200
miles—the roads being already open for traffic
from Wellington to Masterton, and from Napier
to Rua Taniwha respectively. In other words,
the formation of about 50 miles of road would
enable the Colony to avail itself of an internal
communication, nearly 200 miles in length, the
detached ends of which are at present only ser-
viceable in a provincial sense; the third trunk
line (being a continuation of the Wanganui-Rangi-