on £40,000 instead of £37,000, and that the Contractors are to receive in cash £3500—£2000 on completion of the work, and £1500 twelve months after.

When it is remembered that for the purpose of arranging this matter, the Government offered Mr. H. Kennard, in December, 1866, to increase the amount on which interest was to be guaranteed to £43,000 and to pay £1500 in cash, it will scarcely be contended that the Government has granted terms to Mr. Owen, or that they have failed to justify the confidence placed in them by the Council last Session, when it decided to leave the matter entirely in their hands.

As the Patent Slip Act of 1864 declares that the interest guaranteed shall be not on any specific sum, but on the amount actually outlaid or expended in the erection of the Slip, I shall have in order to carry out the present contract to ask you so far to amend the Act as to declare that the sum of £40,000 shall be considered as the amount upon which seven per cent is to be payable or guaranteed, notwithstanding the contractors may have expended more or less on the construction.

You are aware that in September last, one of the steamers of the Panama Company ran into the iron extension of the Queen’s Wharf, and inflicted very serious damage. To repair this injury in iron, will, according to the estimate of the engineers who were employed on the survey, entail an expense of £5,500, whereas by substituting wood for iron, and which would in the opinion of those most competent to judge, render the structure quite as strong if not stronger than it was before the accident, the cost will be reduced to about £2000.

Although the Government had no doubt, that the Company was legally liable for whatever sum might be required to replace the Wharf, in as good a condition as it was before the collision, still they felt there were higher considerations than the mere money question. The benefits conferred upon this port in being the head quarters of the Company and the centre of steam communication for the whole Colony, the difficulties the Company have already had and may still have to encounter in establishing a service which is recognised as the boldest experiment yet tried in steam—the knowledge that the shareholders have as yet received no return on their large outlay,—the desire ever manifested by all classes of the community that the service may prove a success—these and other considerations which will readily suggest themselves to you, led the Government to the conclusion that they would best consult the interests of the Province by not unduly pressing upon the Company, by not attempting to extract the full amount which they might have recovered by law, but in short consenting on behalf of the Province to bear one moiety of the expense of the repairs. I have therefore accepted from Captain Benson, the Head Manager, the sum of one thousand pounds in full satisfaction of all claims against the Company, and I confidently rely upon your approving and endorsing this compromise.

The vexed question of the Manawatu purchase unfortunately again crops up and requires a few words of explanation.

By the Native Lands Act of last session, the Governor was empowered to refer the claims of the dissentients to the Native Land Court, and some ten claims were so referred. After sitting about six weeks at Otaki the Court have recently given their judgment in one case—that of Parakaia and twenty-six other claimants to the small block of 12,000 acres, known as the Himatangi block. The decision of the Court on the question of the tribal title is entirely satisfactory. It most fully establishes the propriety of the course pursued by me in negotiating with the several tribes as joint owners of the district, and it particularly corroborates my action in giving to the claims of the Ngatiapa and Rangitane the weight which I attributed to them. It also most completely refutes the case so industriously circulated through the Colony by Mr. Williams, the Editor of the Canterbury Press, and the Missionary body, who entirely ignored the title of the Ngatiapa and Rangitane, and asserted the exclusive ownership of the resident and non-resident Ngatiraukawa.

In these respects the decision of the Court is the most triumphant and complete vindication of the course pursued by me, and the most absolute refutation of the assertions of those who have so long thwarted and impeded the settlement of the question. Had I been permitted without their interference to continue my attempts to bring the matter to a final adjustment, on the principle on which the Court now puts it, I have no doubt it would have long ago been arranged to the satisfaction of all parties who had any real interest in the question. So far then I repeat the decision of the Court on the tribal question is entirely satisfactory to myself, and I understand also to the whole of the natives who sold their rights to the Crown.

But when I examine the manner in which the Judges of the Land Court have applied the principle laid down by them to the particular case of Parakaia’s claim, I cannot but regard their decision as illogical, inconsequential, and in its practical operation unjust. Affecting to carry out the principle of divided tribal ownership, they award one half of the small block under consideration to the Ngatiapa tribe as a whole, while they award the other half not to the Ngatiraukawa tribe as a whole, but only to twenty-seven members of that tribe. The true application of the principle to the facts proved would have been to subdivide that moiety of the block which was awarded to the Ngatiraukawa into two parts, one of which being the quantity actually occupied by Parakaia and his hapu should have been given to them as resident claimants, the other being the balance of unoccupied and uncultivated land, and have been given to the entire Ngatiraukawa resident on the Rangitikei-Manawatu block. Three-fourths of these having sold their claims to the Crown their share would have passed to it under the purchase deed, and Parakaia and his co-claimants would have received a portion less grossly disproportionate to or rather less absolutely exclusive of, the rights of the whole resident tribe.

I have further to complain of the very unfair manner in which the block has been divided, nearly all the available land within it being given to Parakaia, while the Crown is put off with the part remote from the river, and consisting of little else than swamp and sandhills. I still further complain of the Court having ignored the thoroughly proved claim of Matene Matuku to the specific holding of the Himatangi Bush; the long established residence of Ngatiteupokure on the river bank, and their refusal to recognise the claim of Ihakara and Pati Kohuru, while they admit that of Parakaia, whose personal participation in the block was at least as weak as that of Ihakara. Nor do I think it creditable to the moral sense of the Court, that it should not only have passed over without comment the perjury alleged to have been committed by Parakaia, but notwithstanding the very convincing evidence on that point should have awarded to him a share of the block without so much as a word of censure, for what from the most charitable point of view they must have regarded as very loose and very hard swearing.

Notwithstanding, however, my objection to the decision of the Court as far as the particular claim of Parakaia was concerned, I felt it my duty to bow to that decision, and to instruct my Counsel to attend the adjourned sitting of the Court at Rangitikei, there to oppose the cases of the other claimants in the same legitimate manner as that of Parakaia’s had been resisted. On the sitting of the Court, however, it appeared that the gentleman who had undertaken the cases of the claimants (Mr. T. C. Williams) had aban-