Wellington Jan. 16, 1868 My dear McLean The scheme which has been the subject of recent conversation between us and others may be stated in a few words as follows. 1. To found a new settlement in the heart of the native districts of the Northern Island. 2. To obtain from the natives sufficient land for the purpose either by purchase or long lease. 3. The extent if possible to be as much as 30 miles square or even 50 miles square, being say from a million to a million and a half of acres. A fair part of this must be good agricultural land suited for settlement and it must contain a good site for a town with available water power for mill and other machinery. A great part of the remainder must be fair sheep country clothed with natural grasses sufficient to feed say 500,000 sheep, and several thousand head of cattle and horses. 4. The proposed plan of forming the settlement is as follows:- To form a company the number of shareholders being unlimited. To farm the whole territory as a sheep and cattle run in common all stock being the property of the company thus saving large expenses in management. The Company to dispose of the land by lease or sale, according as it holds it from the natives - to settlers using all the lands as a run until or not to disposed of - 5. It is a principal part of the scheme that the Company propose to establish manufactures for their wool and to work up all the material produced instead of exporting it. They hope to command the trade in blankets and woollen articles for clothing in the interior of the Northern Island, thus saving vast expense in the transit of the wool to the manufacturies in England and back in the shape of goods for use. It is thought that the natives will gladly help in the establishment of such a home trade. 6. It is unnecessary at present to enter upon the terms of purchase of the land, which will one day have to be adopted by the Company. Their first object is to get the land or the right to deal with the land, from the natives. It appears to me that this can only be effected on a sufficiently large scale, by giving the natives themselves a direct interest in the settlement of the country. Ultimately individuals and families of the natives may be induced to come in as shareholders of the company and as settlers under it. But, dealing with them as the original proprietors of the land, I think they should be paid some small rental for the land in the first instance, with an additional sum as head money on all stock put on the run, and a further payment for all land leased or sold to individual settlers. So that the natives shall themselves have a direct interest in stocking and peopling the country. Reserves for schools, both for sites and endowments, will have to be made liberally; and of course reserves for all the native villages and cultivations. While desirous of seeing the land obtained as cheaply as possible I regard the chance of getting enough, and the prospect of holding peaceful possession, to depend mainly on making the work of colonisation and the interest of the native proprietor, identical. The natives should clearly understand that we want not only to fill the country with sheep and cattle but to people it with a population cultivating the soil and working at every trade. The question as to Maori dogs must be settled at starting. It is a fruitful source of trouble afterwards. And yet no successful sheepfarming can be carried on unless the sheep be protected from dogs. I am of opinion that a set of bye laws regulating trespass may be introduced into the lease. 7. The great point is where can sufficient land be acquired. I understand Te Waiti is offered and the West Side of Taupo. The latter is the best political position, and will one day be a place of the highest importance; but the difficulties of getting a population and supplies to the spot are not to be overlooked. Besides, the information as to the nature of either country is very limited. No site would be of use which would not carry a large quantity of sheep at once. The Company, which will consist in a great measure of actual settlers, must look to stock farming to make such early profits as to enable them to pull through. If the Waiti Country could be made to include the whole East Cape from the Wairoa to Opotiki including the Kaingaroa, and there were sufficient sheep country in the interior, it would do. I do not mean that all this country should be procured at once; but enough should be actually secured to commence, and such relations established with the natives as to prevent the rest falling into other hands to secure that, when parted with, it shall pass to no one but the Company. If the Taupo Country be selected, it should include the whole district West of Taupo, including Roto aire and the North and West slopes of Tongariro, all the Upper Whanganui and the plains through which it runs, as marked on Hochstetter's map, and the great plateau including Titiraupenga and Rangitoto bounded on the West by the head waters of the Mokau and the Waipa. (N. B. I am told by Hapi that most of this country belongs to the Ngatika Kohera, a tribe of which all the men were killed at Orakau and only a few women and children remain. They are Waikatos). How much of this is sheep country is not known. Much enquiry will have to be made on this head. I am induced to think that though the distance is somewhat greater the base of our operations must be Hawkes Bay, as, from the settled character of that country, a road will be carried into the interior sooner by that route than by any other. 9. Having so far explained the main features of the scheme I must leave it to the result of your enquiries to say which country offers the best chance. And we understand that you will induce Mr. Locke to open negociations with the natives in the district selected by you without loss of time. If it is thought desirable I shall probably be able to meet the natives in April or May. 9. So soon as there is a prospect of the land being secured I will set to work to organise the company but I have said enough to enable Mr.Locke to explain our views to the natives and I may add that this explanation should be of the most frank and unreserved character. That they should be told we seek our own interests but in doing so we desire that they should work with us in making their waste country valuable and productive and should share the rich harvest, which industry applied to the soil produces. Believe me My dear McLean Yours very truly James Edward FitzGerald