GERMAN INTERESTS IN THE SOUTH SEAS. (ABSTRACTS OF WHITE BOOK, 1884 AND 1885.)

Appendix to the Journals of the House of Representatives, 1885 Session I, A-09

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1885. NEW ZEALAND.

GERMAN INTERESTS IN THE SOUTH SEAS. (ABSTRACTS OF WHITE BOOK, 1884 AND 1885.)

Presented to both Houses of the General Assembly by Command of His excellency.

A Collection of Documents presented to the German Reichstag in December, 1884.

No. I.— Dr. Stuebel (Acting German Consul at Apia), to Prince Bismarck. (Dated Apia, 18th December, 1883.) De. Stuebel forwards two memoirs, viz., one dealing with the German Trading and Plantation Company of the South Sea Islands, the other with the competition which German traders and planters have to meet in the independent islands of the Western Pacific. In the first of these memoirs the writer endeavours to give a view of German business interests in the region under consideration. He believes business success to be dependent not merely upon judicious management, but also upon an early settlement of political questions, and that this applies more especially to the Samoa Islands. The second memoir declares that German trade still holds a commanding position in the Western Pacific. Competition, as far as it exists at all, is for the present confined to experiments, the success of which is very uncertain. A real danger only threatens from Anglo-Australia, inasmuch as political considerations may dictate the creation of English interests at any cost, in order that they may counteract the solid establishment of the influence of Germany. It appears to be our duty to aim at sscnring the commercial successes already achieved by increasing our professional consular staff as well as our naval forces in the Pacific. Enclosure 1.-— Memoir on the German Trading and Plantation Company of the South Sea Islands (domiciled at Hamburg), by Dr. Stuebel. The company trades throughout the Western Pacific, which has been divided by it into thre c regions, viz. :1. Apia, being the headquarters. It embraces the Gilbert, Ellice, Tonga, and Samoa Islands. 2. Jaluit, including the Marshall Islands and the Carolinas. 3. Mioko, including the whole of Melanesia, with the New Hebrides, Solomon Islands, New Britain, and the Islands further west. The copra trade is carried on in all the districts ; the plantations are confined to Samoa and Tonga ; the labourers are, for the most part, procured in the district of Mioko. Other products than copra, such as mother-of-pearl, tortoise-shell, sponges, &c, are of small importance. Some cotton, grown by natives, has been imported some time ago, and quite recently the company has distributed cotton-seed in Sawaii, and a harvest is looked forward to. The Tonga Islands supply at present most of the copra. The natives there have many wants, and the payment of $8 for each male over sixteen years of age, towards the support of Government, is vigorously exacted. The annual yield is 8,000 to 9,000 tons, and is expected to increase in the course of three or four years to 20,000 tons. In 1882 the company exported 4,800 tons, Messrs. H. M. Euge and Co. 613 tons. Samoa produces 2,000 to 3,000 tons. The export is exclusively in the hands of the company and of Messrs H. M. Euge and Co. American rivals have, however, appeared in the field. The Kingsmill (Gilbert), Ellice, and other minor islands yield about 1,680 tons. At present the company confines its operations to Fakaofo, Niue, 'and Fietuna, whilst American firms have obtained a footing in the abandoned Kingsmill Islands and elsewhere. In Eoiumah the company monopolised the whole trade until that island was annexed by England. Since then vessels proceeding to Eotumah are obliged to call at a port of entry in the Fiji group, and this restriction necessitated a stoppage of the trade, and the company's buildings on the island have recently been sold with great loss. In Fiji, likewise, the company had formerly the largest share in the copra trade. At present it purchases there about 2,000 tons annually through its agents. I—A. 9.

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The district of Jaluit yields about 3,000 tons of copra, and in 1882 the company bought there 1,100 tons, and Messrs. Hernsheim and Co. 1,700 tons. An expansion of this trade is in-tended. In the district of Mioko (Duke of York Island) the company first established itself in 1871, whilst Messrs. Hernsheim did so in 1878. The copra trade there is believed to be capable of much development. The number of agents and sub-agents employed by the company to purchase copra numbers about eighty, whilst Messrs. Euge employ twenty-six, and Messrs Hernsheim twenty-eight. Most of the company's agents are Germans, whilst a majority of the sub-agents are English or other nonGermans. The chances of the copra trade for the future appear to be good. The merchandise imported by the company in 1882 had a value of $160,500. Hitherto American and Australian goods were procured direct from San Francisco and Sydney, whilst German and English goods were despatched from Hamburg in sailing vessels chartered by the company. It is proposed, for the future, to order all that may be wanted by telegraph from Sydney, and to forward it to that port in steamers. Orders can then be executed in six months, whilst now their execution takes twelve to eighteen months. The Labour Trade. —The present head manager of the company has formed a labour depot on Mioko Island, to which labourers are taken before being forwarded to their final destination. Similar depots are to be formed on Lord Howe Island and at the Sandwich Harbour of Malicolo. The introduction of steamers for the conveyance of labourers is intended. Formerly, a labourer engaged for five years, cost the company $25 ; whilst now, although the men are engaged only for three years, the cost is $60, with $15 additional for conveyance back. The expense of hiring labourers and introducing them into Fiji or Queensland is nearly double the above. The competition on the part of these colonies has increased the expense of procuring labourers, whilst the excesses and frauds committed by some of the persons engaged in it, have discredited the whole business. This labour traffic is by no means a slave trade in disguise. The position of the men engaged is materially and morally improved. Besides this, islands like Samoa could never become seats of culture without the aid of imported labour, as the natives themselves show little inclination to work. The control of the labour trade is difficult. No excesses have hitherto been proved in the case of German ships, and this is due in a large measure to the fact that the company requires the captains employed to find security for good conduct. The regulations for the labour traffic laid down by the German Consulate at Apia are not without value, but they, nevertheless, give no guarantee against excesses committed at the time the labourers are engaged. On this ground, more especially, a professional Consul should at once be sent to New Britain, and a gunboat stationed there. Shipping. —The company at present own seventeen vessels, of which four are still building, of a total tonnage of 1,808 tons. Messrs. Euge own four vessels of 236 tons. In 1882, twenty-three vessels, of 12,964 tons, arrived from Europe on account of the company, and two, of 936 tons, from San Francisco. Of these vessels twenty-one, of 12,214 tons, sailed under the German flag. Plantations. —The company's plantations on Upolu, and others of the Samoa Islands, have an area of 6,311 acres ; and they employed on the Ist September, of the present year, 1,152 labourers. There are five European managers, four overseers, and a surgeon. The treatment of the labourers leaves nothing to be desired. Their houses are airy and clean, their rations ample, and tobacco is regularly supplied to them. They live, according to the tribes to which they belong, in small hamlets, and spend their leisure in native games and dances. Quarrels, and still less crimes, are exceedingly rare. They are respectful and obedient, and where breaches of discipline occur, they are mostly due to the injudicious conduct of the overseers. There are among them men of very superior intelligence, and the sense of what is right and wrong is as developed among them as among Europeans. At all events, the position of the labourers in Samoa furnishes no reason why the existing system of hire should be abandoned. Nevertheless, it is desirable that the German Consulate should be furnished with definite instructions with reference to this question. The company is taking steps to induce some of its labourers to settle down permanently. Each family is to have a house with an allotment of land; and a free week-day, in addition to the wages paid to the other labourers. If the experiment now making in Hawaii with German labourers should succeed, their employment in Samoa might also be possible. The plantations of the company have hardly as yet passed beyond the experimental stage. Coco-palms, cotton, coffee, food-plants, and tobacco are grown, whilst experiments with cocoa and tea are proposed to be made. Cattle have been introduced as well as pigs.

Enclosure 2.— Memoir on Foreign Competition. By Dr. Sluebel. The Anglo-Australian Competition. —Messrs. McArtlxur and Co., of Auckland, New Zealand, have a factory on Upolu, to the west of Apia. Its operations, however, are not extensive. On Tonga, on the other hand, the same firm now acts with vigour, and seriously competes with the German houses. Messrs. McArthur are said to intend running a regular steamer between Auckland, Samoa, and Tonga, but it is doubted whether this could be done without a Government subsidy. Messrs. Henderson and McFarlane, of Auckland, and Messrs Kelly and Williams, of Sydney, are said to be interested in the trade of the Marshall Islands, Carolinas, and Solomon Islands. Besides this, several Australian vessels visit the Tonga and Samoa Islands once or twice a year, for the purpose of supplying goods to retail dealers and taking back cargoes of country produce. These transactions, however, hardly affect the German trade. American Competition. —At Apia, in addition to several retail dealers, there are two American firms, viz., Wightman and Co. and Grevsmiihl and Moors. They both engage in the copra trade, more especially in the Kingsmill Islands. They flooded the market last year with timber and other goods, mainly to their own injury. The German firms do not at present fear their American competitors.

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Retail Trade at Apia.- —The two German and two American houses above mentioned engage also in the retail trade, which employs in addition seventeen traders, of whom four are Germans, three English, three Americans, &c. The local trade is estimated at $220,000, of which $112,500 fall to the share of German houses. Non-German Plantations. —Mr. Cornwall's plantations in Samoa were purchased in 1880 by Messrs. McArthur and Co. Most of the land appears co have been surveyed or paid for, and there are at present no labourers. An American land company in 1872 made large purchases of land, and 300,000 acrcsj are claimed, although no title-deeds are forthcoming. Still, between 20,000 and 25,000 acres of good land, some of it near Apia, are undoubtedly the property of this company. No portion of it has hitherto been cultivated. Numerous smaller pieces of land have become the property of foreigners, among whom the German element is as numerously represented as any other.

No. 2.— Settlements and Stations of the German Trading and Plantation Company in the Islands of the Pacific, 1883. Samoa Islands. —Upolu, Savai, Tutuila, Manua, Eose Island, altogether about 210,000 acres, of which 10,000 acres form plantations. Various Islands. —Nassau, Fakaofo, Wallis, Futuna, Niuafoou, Keppel's Island, Niue. Tonga Islands. —Vavau, Haabai, Tongatabu (two plantations, 1,300 acres). Ellice Islands. —Nukulailai, Funafuti, Oaitupu (or Vaitupu), Niuatao. Gilbert Islands. —Maraki, Nanouti, Makm. Marshall Islands. —Ebon, Jaluit, Killi, Namerik, Milli, Arnoh, Mejuro, Molwoulap, Bigar. Carolinas. —Ujilong, Ponape, Lukunor, Losap, Nukuor, Lamotrik, Uluthi, Yap, Pelew (?). Neio Britain. —Hermit Island, Duke of York, New Britain (Blanche Bay, Port Weber), Mioko, Utuan. Solomon Islands. —Ongtong Java. New Hebrides. —Sandwich Island (Havana Harbour).

No. 3. — Establishments of Messrs. Hernsheim and Co., in the Pacific, 1883. The house maintains two independent "branches," one with its headquarters on Jaluit (one of the Marshall Islands), and the other with headquarters at Matupi (New Britain). The title-deeds have been registered in the German Consulate at Jaluit. Marshall Islands. —Jaluit (German Consulate, coal depot), Ebon, Namerik, Mejuro, Arnoh, Milli, eight factories. In 1884 various Islands in the Eadack Chain were occupied. Kingsmill (Gilbert) and Ellice Islands, with Pleasant Island (Novoda). —These are regularly visited. There are a few stations. Carolinas. —Ponape (two factories) ; Ants' Islands; Kiti Harbour, on Ponape. Duke of York. —Niata (Port Hunter); Uruputput (Makada Island; German Harbour, 1878, Captain Werner of the " Ariadne.") Neio Britain. —Eolavio (Matupi Island, residence of Consular Secretary yon Oertzen) ; Bae (Nodup) ; Korokokol and Kuragaul (Kabakada), Ulu-lu-lai (Kabakoul); Vlavollo (Eatavul), Eaulai (Matupi), Lagumgum (Kinigunau) ; Eakunai (Kabakada); Birara (New Britain), Euluana (ditto) Tavanu (Blanche Bay) ; Kabaira (Port Weber). New Ireland. —Nusa (New Ireland ) ; Kabatheron (Stephan Strait); Kablamau, Butbut, Navangai, and Pakail, Banyelagoon, Kapsu, and Lainaru (on north-west). Hermit Islands. —Cacome, Loof, Maccau, Peme. Anchorite Island. —A factory. Laughlan Island. —Ovurak (1883 destroyed by Queensland labour-vessel " Stanley.") Carolinas. —Yap (stations at Eul and Nif, with coal depot) Ouleai.

No. 4.— Western Melanesia, with special reference to the Supply of Labourers to Samoa. By G. yon Oertzen. (Dated H.M.S. " Carola," February, 1883.) This memoir records " impressions " during a cruise in the Western Pacific. The future of the German plantations depends upon a supply of foreign labour. Chinese labour would be too expensive, Indian coolies can be exported only to English colonies, and the supply of labourers from the nearer islands has almost ceased. Hence the largest and more populous islands of the Western Pacific, including the New Hebrides, New Britain, and the Solomon Islands, have become the principal recruiting ground. The Melanesian labourers introduced into Samoa are much praised, and fully equal to the work demanded of them. The people of New Britain are quite equal to the New Hebrideans, the Solomon Islanders are even larger and more powerful, and the New Irelanders are " the finest lot of all." The population of these islands is comparatively dense, amounting for the Solomon Islands and New Britain to about 400,000 souls. The German trading firms have not hitherto met with any difficulty in engaging such labourers as they required, and larger numbers would be forthcoming with a proper organization of the labour traffic. The keen competition among the employers insures the good treatment of the labourers. A regular supply can be insured only by honest dealing, good treatment, punctual payment of wages, and restoration to the labourer's native island when promised. The German Trading Company may have committed a few injudicious acts, but upon the whole its conduct is above reproach. Maclay's assertion that the position of the labourers in Samoa is worse than in the English colonies is not justified by facts. The contrary is the case. They are better off than in Queensland, and planters in Fiji have repeatedly told me that the treatment there is only in a few instances as good as is the case in Samoa. The proposed establishment of labour depots would insure a regular supply.

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The existing regulations as to hire, transport, and treatment of labourers can be applied only to those who are actually in Samoa. It is, therefore, desirable that a Consular officer should be appointed to watch over the embarkation of the labourers. Mioko or Matupi would be suitable headquarters for such an official, whose supervision would, in the end, be equally conducive to the interests of labourers and employers. At the same time, a gunboat should be permanently stationed in these waters, so as to be at hand in the case of excesses committed by labourers or islanders. Punishment ought to be prompt and severe. Messrs. Hernsheim, who have no plantations, and only employ a limited number of natives, most earnestly desire the presence of such an official and of a man-of-war, in order that life and property may be protected. On Hermit Island the agent of this firm was buried alive, and nine Solomon Islanders in his employ were murdered. When the German war-ship " Carola " meted out punishment to these islanders, they were found in possession of remains of the German ship " Eliso." A few years before they had plundered an English vessel and murdered its crew. Although no means should be neglected for winning the confidence and goodwill of the islanders, it must never be forgotten that fear with them is still the most effective deterrent. The commercial interests of England in the New Britain archipelago and in the Solomon Islands are at present of little importance. The only Englishman who has acquired a piece of land there is Mr. Parrel, who owns several thousand acres at the Gazelle Cape (New Britain), and has begun its cultivation. On the other hand, the engagement of labourers for Queensland and Fiji has recently been carried on with much energy in New Britain, and, notwithstanding the presence of Government labour agents, not always without the use of violence. The requirements of Queensland and Fiji are continuously increasing. The English Consul-General and High Commissioner for the Western Pacific is about to establish a Deputy-Commissioner at Matupi, whose house has already been got ready. Whether this is the first step towards annexation is not at present clear. If England is permitted unchecked to spread a net of her officials over the Pacific, the whole of the labour market must pass under her control. The protection afforded by the English flag will attract Australian firms, and our German firms will thus be pushed into the background. Even as it is they have recently lost ground. The Germans will, in the end, apply to the English authorities whenever they require assistance ; whilst the natives will associate the existence of law, order, and peace with the name of England. Eeligion and language depend upon the nationality of the first missionaries, and these, throughout the Pacific, have hitherto been principally English. The Germans have done nothing, and yet German missionaries would find a fertile field there for useful activity. It has been asserted that the South Sea Islanders will not work as long as they remain in their own islands. Yet Mr. Earrel, on New Britain, employs natives who had formerly worked in Samoa. The islands of Western Melanesia are not inferior to the others in fertility of soil or wealth of tropical productions. They possess even certain advantages, for large tracks of prairieland are met with, instead of the primeval forests of Samoa. Provisions are cheaper, too. In Samoa the daily ration costs 5 cents, in New Britain hardly half a cent. The question is, not merely to find a recruiting ground for labourers to work in Samoa, but also to open up to German trade and civilization a considerable number of the South Sea Islands. But whatever is to be done must be done at once. In a couple of years we may be too late.

No. 5. — German and Foreign Interests in New Britain. By Dr. Stuebel. (Dated Sydney, 20th April, 1884.) The trade of New Britain is (with one exception) in the hands of the German Trading and Plantation Company, and of Messrs Hernsheim and Co. The headquarters of the company are in the port of Mioko. There are eight trading stations on the north coast of the Gazelle Peninsula, also stations in TJtuan (Duke of York), Kurass (south coast of New Ireland). The company, in addition to its chief agent and two clerks, employs five white and five native traders. Messrs. Hernsheim and Co. have their headquarters in Blanche Bay, Matupi Island. Twelve trading stations are maintained, and there are eight white and four native traders. Each of these German houses exports annually about a thousand tons of copra. ' The Gorman Trading Company owns one or two thousand acres of land in Duke of York Island, whilst Messrs. Hernsheim owns about fourteen thousand acres in various parts of the archipelago. Mr. Fairel, until recently one of the agents of the German company, owns a station in Blanche Bay, and exports about a hundred tons of copra annually. His plantation consists of thirty acres planted with cotton. He claims to have acquired many square miles of land beyond this. The High Commissioner, by a notice published on the 2nd January, declines to register titledeeds referring to land purchased outside British territory.

No. G.— Dr. Busch (by order of Prince Bismirck) to Dr. Stuebel. (Berlin, 29tli December, 1883). It appears desirable to me, after having read your communications, that the representation of German interests in New Britain and New Ireland should be intrusted to a Government official, who would reach New Britain in the course of the next labour season. As this official will have to act under your responsibility, I leave it to you to select a suitable person, and this all the more, as your decision will depend upon the other requirements of the Imperial Consulate at Apia. As regards the instructions which you will have to give to this official I specify the following : It will be the duty of this official, supported by an Imperial man-of-war, to control the execution of the regulations made with reference to the recruiting of labourers and their transport in German

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ships, and to protect generally the rights and interests of German merchants from being infringed or violated. It should be his endeavour, by judicious conduct, to prevent friction between German subjects and members of other nationalities, or at all events to prevent these matters from assuming serious dimensions. We merely intend to protect and support German commercial interests there. The instructions given at the time to Consul-General Zembsch are to serve as a guide for that purpose, and they confer powers and give hints which will render serviceable the activity of the Imperial representative in the South Sea. I trust to your knowledge of the intentions of the Imperial Government, and feel sure you will not lose sight of the principles which guide our action in the South Sea when preparing the instructions referred, to.

No. 7. — Dr. Stuebel to Prince Bismarck. (Dated Sydney, 14th April, 1884.) In my former reports I ventured to point out the necessity of having the Imperial Government permanently and professionally represented in the archipelago of New Britain. Having now become acquainted with the circumstances on the spot, I beg to return to this subject. The archipelago of New Britain was placed originally in the district of the Imperial Consulate at Jaluit. The only reason for this was that Franz Hernsheim, who was appointed Consul at Jaluit, was partner in the firm of Hernsheim and Co., who had commercial establishments in both localities. There is no other reason why districts so far apart should be placed in the same consular district. Winds and currents do not favour communication in sailing vessels between the two, and for this reason the commercial establishments which Messrs. Hernsheim maintain at Jaluit and Matupi are carried on quite independently of each other. Regular communications between the two are not to be thought of. As respects New Britain the supervision of the labour trade is now in the foreground. If this is to be regulated—which appears to me to be absolutely necessary—it will be requisite to appoint an official having a legal training. An examination into excesses whilst recruiting labourers and their eventual punishment call for some legal knowledge. In other respects, too, such knowledge is most desirable. Club-law still reigns in these islands. Differences between Germans living there, or between Germans and members of other nations, require to be settled judicially. An Englishman, residing there, has handed to me quite a long list of complaints against a German trader; the latter replied by a still larger number of accusations against the Englishman. Owing to the shortness of my stay it was impossible for me to decide the case judicially. The establishment of a German judicial authority in the country will alone furnish a remedy. Last year the English Deputy-Commissioner Eomilly stayed several months in Matupi. He went thence to New Guinea, and is now once more in Australia. If, as I suppose, Mr Eomilly, or some other English Commissioner, should again be sent to New Britain, it is desirable that he should meet there with a German judicial officer, with whom he could not only decide differences between Germans and English, but who would likewise counterbalance the political influence likely to result from the dispatch of an English Commissioner. The Consular official, whose appointment is recommended, would have frequently to visit the various parts of the archipelago. Still, it is necessary that he should have an official place of residence. Only Mioko or Matupi could come into question. At Mioko the control over the labour traffic would have to be exercised. Matupi, on the other hand, is healthier, and therefore preferable. If selected, occasional visits to Mioko, which could be paid in a boat, would become necessary. But whilst at Mioko there is only a settlement of Hernsheim and Co., Matupi is occupied by the Gorman Trading and Plantation Company. It would not be advisable to establish an official for a number of consecutive j Tears at either of these places. The climate is unhealthy; the privations which the absence of civilized life and company entail are very considerable, and the danger of an official losing his energies under these conditions, or becoming unconsciously biassed in favour of one of the two trading firms, must not be underrated. Provision must also -be made to enable the official to leave the archipelago at once, in case of an attack of fever. These reasons make it desirable that an arrangement should be made by virtue of which the Consular officials in the Pacific would do duty in turn. Eor this purpose these officials would have to be placed in closer connection with the Consulate at Apia. Practical reasons, moreover, speak in favour of some such arrangement. As regards the care of independent German interests, the whole South Sea forms but one region. The demand for labourers on the plantations of Samoa, and the interests of the German Trading and Plantation Company in the Western Pacific, more or less bring about relations between the several groups of islands. Such important questions as the control of the labourers, the policy to be observed towards the Natives, disputes with them about land, &c, ought to be dealt with on a common principle. It is desirable that the Consular official in New Britain should have gained some insight into the affairs of the whole South Sea, and more especially of Samoa, by having served some time in the German Consulate at Apia. After this he would go for a year to New Britain. After the expiration of this time, or in case of illness, he would return to Apia, either to be employed there, or to perform independent consular duties in some other part of the Pacific. The official, whose work he undertakes, would then go to fill his place in New Britain. At Jaluit, too, the occasional presence of a professional official will in future become necessary. The officials placed .under the orders of the Consul at Apia muse be in a position to represent the Consul throughout the consular district. An official, for instance, who proceeds to New Britain, and calls on the way at Jaluit or Yap, ought to be in a position to do the consular business awaiting him there. A junior official of the Consulate at Apia would undoubtedly make himself useful by occasionally acting there as a Police Magistrate (Municipal Judge,).

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I avail myself of this opportunity to draw once more attention to the desirability of attaching a legally-trained official to the Consulate at Apia, who would eventually act on behalf of the Consul, and spend several months annually in Tonga.

No. 8. — Dr. Stuebel to Prince Bismarck. (Dated Apia, 2nd September, 1884.) The writer encloses a memorandum on the political and commercial relations of the Gilbert, Marshall, Carolina, Ellice, and Tokelau Islands, based upon information collected during a visit to them. The produce of copra is about 7,000 tons, or 1,000 tons less than that of Tonga, but is capable of being much increased. Nearly one-half of the trade of the islands collectively passes through German hands. Of foreign firms, only the Chinese Ong-Chong, of Sydney, is of importance in the trade of the Gilbert Islands. Messrs. Henderson and Macfarlane do far less business than the German houses, except in Tokelau. Mr. O'Keefe is interested only at Yap. Messrs. Wightman Brothers, at Apia, are a new American firm, whose vitality has still to be proved. The occasional despatch of a Consular Commissioner to these islands, from Apia, is recommended. The interests of the Empire there, as well as in Tonga, can only be intrusted to a professional official. Care will also have to be taken that German men-of-war pay regular visits to these islands. In 1881 the " Habicht " visited the Marshall Islands, whilst the " Ariadne " in 1878, and the " Hyena " in 1884, had so little time to spare as to restrict their calls to a few islands. In the Gilbert Islands German commerce is opening up fresh ground; in the Carolinas, likewise, it is on the increase. These islands likewise will have to be visited by German men-of-war, having a Consular official on board. In order to make these desirable round-trips it will be necessary to station three rhen-of-war in the Pacific. An effective police supervision by Consular officials, and periodical visits by men-of-war, can alone prevent occurrences such as happened last year in Yap, when the English authorities proceeded against the English employes of German firms.

No. 9. — Dr. Stuebel to Prince Bismarck. (Dated Apia, 2nd September, 1884.) This report deals with the interference of the English man-of-war " Espiegle " on Yap, in August, 1883. In February of that year, an English subject, Mr. Amery, one of the traders of the German Company had been attacked by the natives of the village of Fal. To punish them for this act of violence all the white traders living on Yap, one alone excepted, marched upon Fal, and burnt a house there. The English traders—Amery and Shaw (in the service of Messrs. Hernsheimj—were subsequently taken on board the " Espiegle," and fined £20 and £10, for a " breach of the peace." The fines were paid by the German firm, whose employes would otherwise have been carried away. The authority by which the English authorities proceeded against English subjects in the employment of German firms is undoubted. German firms must be prepared for a similar interference on the part of German authorities, where their German employes are in question. Only by this police supervision and exercise of jurisdiction can order be maintained on many of these islands. At the same time it may well be doubted whether, in the present instance, the English traders committed an act deserving of punishment. As far as Germany is concerned, this incident merely shows how desirable it is that Consular officials and men-of-war should from time to time visit these islands. Yap (where the natives have resumed possession of the small island Obe, bought years ago by the German Company) ought certainly to be visited by a man-of-war in the ensuing year at latest.

No. 10. — Dr. Stuebel to Prince Bismarck. (Dated Apia, Bth September, 1884.) I have in former reports drawn attention to the importance of Tonga for German commerce. Out of 8,000 tons of copra produced at present by these islands, more than one-half is exported by German merchants. The political condition of Tonga is still subject to changes. Mr. Baker, the present minister, is most anxious to maintain the independence of Tonga, but his efforts are being rendered nugatory through English interference, encouraged, it is said, by English officials and occasional visits of English men-of-war. If England should annex this group of islands German commerce would be most seriously'injured. German trade in the Tonga Islands is based upon the system of taxation in vogue there, which requires that all taxes should be paid in coin. The native sells the copra produced by him to whomsoever he likes. In Fiji taxes are paid in produce, and traders thus lose the advantage of dealing direct with the natives. It is feared that, in case of English influence becoming paramount in Tonga, the Fijian system of taxation would be introduced, and thus German commerce, as carried on hitherto, would be destroyed. Besides this, German commerce in Tonga is based largely upon the circulation of Chilian dollars, first introduced by it. The attempts of the English to substitute English coins for it have hitherto proved unsuccessful. Should they succeed, there would occur serious losses, for the Chilian dollar is deemed the equivalent of 45., although it only costs 3s. Bd. to import it, whilst 4s. would cost as much as 4s. 3d. Besides this, the English coin, being intrinsically more valuable than the dollar, would exhibit a tendency to leave the country, and, at the same time, the introduction of English coins would facilitate English competition with German trade. If the English should become paramount, this change in the medium of circulation would naturally be taken up first. The existing Government of Tonga is not interested in any change taking place, as the German company grants it bills of exchange, payable at English places, at the rate of $1 for 4s. A further danger to German trade would arise from a revision of the Customs system, and the establishment of ports of entry. If the company's vessels were compelled, for instance, to call at a port of entry in the South, before proceeding to the northern Islands of Ninatabutubu and Niuafoou, this would entail additional expenses sufficient to jeopardise all commercial profits. This is the way German trade was destroyed in Eotumah when that island was

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annexed by England. Moreover, German merchants are afraid that difficulties might occur on a renewal of their leases. The existing Government of Tonga could be prevented from unreasonably inflicting injury upon German interests, whilst the English authorities might be tempted to act in strict accordance with the letter of the law. Measures should at once be taken if German influence in the Tonga Islands is not to succumb to that of England. A Consular official should reside there permanently, for the occasional visits by officials from Apia is not sufficient for keeping touch with the persons in power in the Tonga Islands, and to influence them.

A Collection of Documents presented to the German Reichstag in February, 1885. No. 1. — Herr A. yon Hansemann to Prince Bismarck. (Berlin, 11th November, 1880.) Herb A. yon Hansemann, Chairman of the German Marine Commercial Company (SeehandlungsGesellschaft), now in liquidation, forwards a memoir of his company's board of directors, prepared by the request of Prince Bismarck, conveyed in a noi.e dated 7th May, 1880. He forwards the memoir, which proposes : 1. That Mioko, on the Duke of York Island, a coaling port of the German navy, be made the centre of future colonial efforts. 2. That an Imperial subsidy be granted to a line of steamers which a consortium of the commercial firms now established there are prepared to start, and which would connect Mioko with Apia, Tongatabu, and other places having German factories. 3. That coaling-stations be secured along the north-east coast of New Guinea, between the East Cape and longitude 141° E., where the commercial firms interested would establish factories. [The memoir referred to above is not printed.]

No. 2. — Count yon Limburg-Stirum on a Conversation with Her yon Hansemann. (15th February, 1881.) Memoeandum. —Prince Bismarck, after the rejection of his propositions respecting Samoa (by the Reichstag), does not consider it expedient to take any steps in the direction pointed out by Herr yon Hansemann. A Government, not cordially backed by the nation, could not accept the co-operation of commercial firms in the way indicated. The vote on the Samoa Bill had shown that a large majority of the people's representatives took no interest in this question. Government, looking to the attitude of the Reichstag, could not occupy territories in the South Sea. This would have to be left to private enterprise. At the same time, Government would extend its protection, naval and consular, to property in land acquired by private adventurers.

No. 3.— Dr. Krauel to Prince Bismarck. (Sydney, 10th February, 1883.) The Sydney Morning Herald of the 7th February, 1883, has published an article from the Augsburg Allgemeine Zeitung of the 27th November, 1882, in which the occupation of New Guinea by Germany is advocated, stating that the German paper had been sent to it by Mr. Alex. Stuart, the Premier of New South Wales. On 10th February, the Morning Herald published a leader on the subject, in which it said that " if the place is to be annexed by any other power than England, we should be glad to see it in the hands of Germany."

No. 4.— Dr. Krauel to Prince Bismarck. (Sydney, 13th March, 1883.) The Queenslander, of Brisbane, has taken up the article in the Augsburg Allgemeine Zeitung, speaks strongly against the occupation of New Guinea by Germany, and advocates its annexation by England; Queensland, as the party most interested, taking the financial responsibity. A German paper, also published at Brisbane, Nord-Australische Zeitung, combats the views of the Queenslander, and advocates the colonization of the island by Germany. Both papers agree in describing New Guinea as a very desirable place of settlement for Europeans. The Queenslander says that "it has extensive and salubrious uplands, which might be profitably occupied by Europeans with their flocks and herds, and those uplands might be approached with comparative ease." On the other hand, the views represented by the German paper show the importance of strengthening the German element in Australia, with reference to the extension of German influence in the South Sea. In the meantime the Government of Queensland had resolved to realize the project of the Queenslander, having called upon the Home authorities to annex the island, whilst offering to defray the cost of making a settlement and of administration. The English Government is not likely to act upon the monstrous (abenteuerliche) suggestion of annexing the whole of New Guinea, but the steps taken by Queensland may result in a settlement under the protection of England, and in the case of its proving a success, to the annexation of other districts of the island.

No. s.— Herr Carl L. Sahl to Prince Bismarck. (Sydney, 16th April, 1883.) A telegbam from Cookstown, published this day, announces that New Guinea was formally annexed on the 4th instant, by Mr. H. M. Chester, Police Magistrate of Thursday Island.

No. 6.— Dr. Krauel to Prince Bismarck. (Sydney, 26th June, 1884.) Lettee, forwarding translation of Lord Derby's despatch of 9th May, 1884, which was placed before the Parliament of Victoria on the 24th June, and appears to have caused much disappointment .

—d.

No. 7. — Dr. Krauel to Prince Bismarck. (Sydney, 20th August, 1884.) The annexation of all the remaining islands of the Pacific having recently been advocated in Australia, Dr. Krauel has once again inquired into the commercial statistics of these islands. It results, from this inquiry, that the commercial achievements of the Australian Colonies, as exhibited in their own official returns, do not entitle them to take the political lead claimed by them. Victoria, which most loudly calls for the exclusion of the rest of the world from the Pacific, has commercial relations wioh Fiji only. Equally limited are the commercial relations of South Australia, which sends flour to the penal settlement on New Caledonia. West Australia and Tasmania have never sought to establish commercial relations with the South Sea Islands. New Guinea up till now is of no importance to Australian commerce. Only Queensland exports a few articles to it, of an annual value of £20,000, taking beche-de-mer in return. Her exports to the other South Sea Islands merely consist in goods intended as payment for the labourers engaged there to work on the Queensland sugar plantations. Only New South Wales and New Zealand have a substantial interest in the Pacific trade. About 70 per cent, of the articles exported from these colonies are of European manufacture. Most of the exports from the South Sea Islands to these colonies are ultimately shipped for Europe. These colonies cannot therefore claim a political supremacy on the ground that they already possess a commercial supremacy. The official figures prove conclusively that all the talk about the preponderating commercial interests of Australia in the South Sea regts upon ignorance or an intentional misrepresentation of the facts.

Enclosure.— Commerce and Navigation betiueen the Australian Colonies and the South Sea Islands, 1881-83. Sydney and Auckland almost monopolise the trade of Australia with the South Sea Islands, and the bulk of which is carried on with Fiji and New Caledonia. The following official statements of exports and imports show this : — Value of Imports from the South Sea Islands. 1881. 1882. 1883. New South Wales ... ... £287,067 ... £380,352 ... £419,999 New Zealand ... ... 78,561 ... 74,895 ... 81,260 Victoria ... ... 11,347 ... 17,320 ... \ not yet Queensland ... ... 3,770 ... 7,782 ... J published. Total ... ... £380,745 ... £480,313 Value of Exports to the South Sea Islands. 1881. 1882. 1883. New South Wales ... ... £390,476 ... £537,057 ... £609,067 New Zealand ... ... 74,326 ... 71,318 ... 115,969 Victoria ... ... ... 33,002 ... 29,644 ... \ South Australia ... ... 17,064 ... 36,744 ... n? v J£\ Queensland ~. ... 7,648 ... 13,016 ... J Published' Total ... ... £522,516 ... £687,779 —

The trade between the Australian Colonies and Fiji and New Caledonia (included in the above figures) is as follows :— Imports. Exports. 1881. 1882. 1883.* 1881. 1882. 1883.* Fiji... £86,694 ... £104,163 ... £141,265 ... £177,214 ... £230,869 ... £292,935 New Caledonia 190,243 ... 274,205... 152,352... 204,735... 269,449... 239,324 The commerce with the other Pacific Islands is exhibited in the following statement: — Imports. Exports. 1881. 1882. 1881. 1882. Hawaii ... £1,385 ... £386 £28,986 ... £84,893 All others ... 102,423 ... 101,559 111,581 ... 102,568 We thus find that the Australian Colonies had a total commerce (exports and imports) of £903,261 in 1881, and. of £1,168,092 in 1882, of which £689,257 (in 1881) and £963,965 (in 1882) fell to the share of Fiji, New Caledonia, and Hawaii. In other words, the commerce with the islands named absorbed 76 per cent, of the total commerce in 1881, and 82 per cent, in 1882. Fiji, since its occupation by England, has become immensely important to the commerce of Australia; and towards the development of this commerce the line of steamers, which now connects Melbourne and Auckland with the principal ports of Fiji, has materially contributed. New Caledonia exports most of her produce to Sydney, where it is transshipped for Europe. The exports included (m 1882) nickel (£154,800), copper ores (£31,740), chrome ore (£17,490), cobalt ore (£4,611), copra (£19,822). Sydney and Adelaide, and in a less degree Auckland, take part in the imports into New Caledonia. Flour is the most important Australian product which finds a market there, its export in 1882 amounting to £48,583, of which £34,200 came from South Australia. New South Wales exports coal, coke, horses, and sheep; New Zealand, potatoes, beef, timber, and biscuits. The rest of the exports consists mainly of foreign merchandise. In 1883 the colonial produce exported from New South Wales had a value of £54,442, the foreign produce of

• Exclusive of Victoria and Bouth Australia.

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£158,056. New Caledonia, with its large European population, is by far the best market for Australian produce in the South Sea. Fiji ranks next to it. Whilst Victoria has commercial intercourse with Fiji alone, South Australia only takes a share in the trade with New Caledonia. Hence, as far as concerns the remaining South Sea Islands, only New South Wales, New Zealand, and Queensland need be considered. Queensland, up till now, takes a very small share in this commence. Beche-de-mer is almost the only South Sea product imported, principally from New Guinea, in appreciable quantities (value, 1882, £5,816). Fish and mother-of-pearl are likewise imported. The exports were hitherto carried in labour vessels, and as the labour traffic has recently been prohibited in certain islands, and British subjects, in the interests of the islanders, are not allowed to export spirits or munitions of war, this trade is not likely to have increased. In 1881 the tonnage of the vessels which entered Queensland from the South Sea Islands, including New Guinea, was 9,115 tons, in 1882 7,050 tons. There cleared in the same year vessels of 7,928 and 8,529 tons respectively. Most of these vessels, the average burden of which is only 111 tons, are engaged in the labour traffic. Sydney and Auckland are the only Australian ports which carry on a really important trade with the South Sea Islands, but of the exports of New South Wales quite 80 per cent, consist of European or American merchandise. As a rule, sailing vessels are employed in the South Sea trade. In 1883 there cleared from New South Wales for South Sea Islands fifty vessels of 14,149 tons, and from New Zealand fiftynine vessels of 6,861 tons. In the same year there entered in New South Wales 25 vessels of 3,792 tons, and in New Zealand sixty vessels of 5,513 tons. The difference in the tonnage "entered" and " cleared " is accounted for by the fact that most of the German vessels return to Europe direct from the South Sea Islands. [No statements as to German trade or navigation are made in this memorandum, only the leading facts of which have been given above. — Translator.]

No. 8. — Consul Hcrnsheim to Prince Bismarck. (Matupi, New Britain, 29th May, 1883.) The commerce of New Britain and New Ireland is increasing, and since the acquisition of the remaining English trading posts by the German Commercial and Plantation Company, it is exclusively in the hands of Germans. My fears that the labour-vessels from Queensland and Fiji would injure our interests have been realised. Although the " season" only begins on the Ist May, eight of these vessels, all of them sailing under the English flag, have arrived here, and we have to deplore several excesses. Many more of these vessels are expected, and if the Government agents on board of them are not very conscientious in the fulfilment of their duties, the natives may be provoked to such a degree that all commerce will have to be stopped. This we should regret all the more, as, after many years' toil and great sacrifices, we have succeeded in establishing friendly and mutually advantageous relations with the natives. The labour traffic, as carried on here, differs altogether from what is done in other South Sea Islands, and if the facts were known it would, no doubt, be stopped by the English colonial authorities. I have made careful inquiries, and find that the rules laid down are evaded, and that in most instances the labour traffic in New Britain and New Ireland is in no respects different from the African slave trade. Only in Blanche Bay are men to be found who voluntarily engage as labourers. They are " single " men, without families, who have sold their land, or are too poor to buy wives, or who have fled their tribe on account of some crime. Men of this type can be persuaded by the chiefs, who receive the purchase-money, to go away for a few years, in the hope of receiving wives on their return, or being " adopted "by influential landowners. The men of this class are, however, few in numbers, and would not fill a single labour vessel. The bulk of the " labourers " are simply bought of the chiefs. Slavery is an ancient institution of these islands, and a chief, desirous of procuring arms, will sell his own people or prisoners of war. The natives are as warlike as ever they were, except on Blanche Bay, and on the north coast of New Britain, which has been occupied some time past by traders. The tribes all speak different languages, mutually unintelligible ; they are strangers to foreign languages and the ways of civilization, and hence the " explanations " required by the laws of Queensland and Fiji cannot be given. The Government Agent trusts to the interpreter engaged by the captain, and instructed by him. A careful watch is set over the natives as soon as they come on board. Yet many escape, and this always leads to fights between the crews and the natives. The " Hopeful "-thus lost thirteen men out of 104, who jumped into the sea during the night. Six of these are said to have been recovered by the crew, three were returned by the chief, the rest are supposed to have been drowned. In Queensland the owner of the vessel receives £22 for each labourer imported; of this sum the captain generally receives 18s. to £1, the recruiting mate ss. to 10s. These payments are sufficiently large to tempt men into unlawful acts in order to secure a large number of natives. Firearms and ammunition, at the rate of three muskets to two labourers, are the usual means of payment for labourers. Captain Karcher, of H.M.s corvette " Carola," requested me, in the interests of peaceable commerce, to urge that the trade in firearms be stopped. But what I have stated above shows that one-sided German measures in this direction would not attain the results desired. Nor can I, after many years in the South Sea, speak in favour of such prohibition. I mention two cases, in order to show how violent the proceedings of English labour vessels interfere with legitimate trade; at the same time I express a hope that your Excellency -will support me in my endeavours to protect German property here against the arrogant conduct of the, crews of English labour vessels as well as against the attacks of natives. 2—A. 9.

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In April, the schooner " Stanley," Captain Davis, arrived from Maryborough at the Laughlan Islands, where Messrs. Hernsheim "and Co., have had and agent these three years past, and the inhabitants of which are known for their peaceable conduct. Our agent, Herr Tetzlaff, who feared that our interests would be injured if the natives obtained merchandise in return for labourers instead of procuring it by selling him copra, is said to have advised the king not to allow any of his people to engage themselves. This annoyed Captain Davis, and the Government Agent himself admits that they both determined to land, in order to induce Tetzlaff to withdraw his statements. On approaching the shore, a musket is stated to have been fired from the factory. The party, nevertheless, landed, and found the factory abandoned, our agent having probably lied into the bush. The captain and the Government Agent (as the latter himself boastfully informed us,) ordered the factory and twenty tons of copra to be burned, in order to show that " Queensland labour vessels don't understand a joke." "When I told the Government Agent, who visited me here at Matupi, that the factory had been the property of Hernsheim and Co., and that he and the captain would be held responsible, he declared that he regretted having done an injury to the firm, but that Queensland was far too much interested in the labour traffic to take notice of such an incident, and that compensation was not to be thought of. In order to lose no time I applied, through the German Consul at Brisbane, to the Government of the colony. As soon as a report has been received from Karl Tetzlaff I propose to bring an action against the vessel in the Court of Justice at Brisbane. As a further proof of the deeds of violence provoked by these labour-vessels, I mention the following case, which occurred about a fortnight ago in my own neighbourhood :— Pere Lanuzel, who came here in one of the vessels of the Marquis de Rays, had settled down at Nadup, a village about four miles from Matupi. After a visit to Europe he returned, his intention being to establish himself there permanently. The captain of the labour-vessel " Fanny," which brought him, engaged a few young chiefs at Nadup to act as interpreters and recruiting agents. They 3accompanied him to Man, an island on the north coast of New Britain. The natives there refused to go on board the vessel; a fight ensued, and one of the chiefs of Nadup was killed. It is said that the captain threw the body of the chief into the sea. He then, accompanied by the Government Agent, went to Nadup, intending to pay a compensation in merchandise for the slain chief. The natives of Nadup, however, were so incensed at what had taken place, that they took up arms, and attacked the captain and his people as well as the French missionary, who narrowly escaped in the boat. The captain, as well as the Government Agent, were seriously wounded. The missionary, whose church had been destroyed, applied to me for assistance. lam endeavouring to induce the natives, with whom for years past we have been on the best of terms, to restore the property of the missionary; but, unless I am supported by a chance man-of-war, I scarcely expect to be successful. The " Fanny " at once set sail for the nearest Australian port. The agent of the German Commercial and Plantation Company, who resided near Nadup, has likewise been obliged to abandon his house for fear of violence. I merely state these facts without commenting upon them, and once more express a hope that one of the German men-of-war, now in the South Sea, may be ordered to this place, to inquire into this matter, and to take steps for the protection of German interests, and to put a stop to the slave trade, carried on contrary to the laws and without the knowledge of the Australian colonial authorities. Three vessels from Samoa have recently arrived here to engage labourers for the German Commercial and Plantation Company, and I shall take the earliest opportunity to urge the captains to adhere strictly to the instructions given them in Samoa, and to avoid everything likely to give cause for legitimate complaints.

No. 9. — Baro?i Plessen to Earl Granville. ([London] German Embassy, 4th September, 1883.) My Lobd, — I am instructed to communicate confidentially what follows. According to reports recently received from the Imperial Consul E. Hernsheim, it appears that the archipelago of New Britain and New Ireland has quite recently been visited by vessels sailing under the English flag, and fitted out in Queensland or Fiji, for the purpose of recruiting South Sea Islanders to be employed as labourers on the plantations there. Although these vessels always carry Government Agents, whose duty it is to watch over the observance of the colonial regulations respecting the engagement and the transport of Polynesian labourers, there nevertheless occur cases in which natives, described as free labourers, are forcibly carried on board and detained there. Owing to the social condition of New Britain and New Ireland, which differs from that in other South Sea Islands, there exists every temptation to evade an all too scrupulous observance of the laws enacted for the protection of the islanders about to be engaged. [Here follows a paraphrase of Consul Hernsheim's report, No. B.] The South Sea Islanders have no means of obtaining legal redress against unlawful proceedings on the part of English labour-ships. They consequently have recourse to self-help, and revenge themselves upon any stranger whom accident places in their way. In this way the German factories in New Britain and New Ireland which, since the last of the Australian factories have been purchased by the German Commercial and Plantation Company of Samoa, have the whole of the trade there in their hands, are made to suffer first. The amicable relations which hitherto existed between the German merchants, and the natives of these regions are disturbed through the excesses and abuses of English labour agents, aLd it is feared that the lives and property of the Germans residing there may be seriously endangeredjif these proceedings are irot stopped in time. In communicating to your Excellency the above, by order of my Government, I venture to beg that I may be informed, if feasible, whether Her Majesty's Government is already in possession of

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information on the system pursued in New Britain and New Ireland, in the recruiting of labourers for Queensland and Fiji, and whether steps have been taken to inquire into the irregularities which are alleged to take place there, and to prevent their recurrence. His Majesty's Government, notwithstanding that similar proceedings have not hitherto been reported in connection with German labour-vessels, intends to subject these latter to a strict control, whilst visiting these islands, and to permanently station an Imperial man-of-war there during the so-called labour-season, extending from May to the end of September. The commander of this vessel will also be instructed to afford energetic protection to legitimate German commercial interests in New Britain and New Ireland, and to repel acts of violence directed against German life and property by force. The Imperial Government, in its efforts to maintain peace and order in these regions, trusts to meet with the willing support of Her Majesty's Government, which must be equally concerned that the line, which separates the legalized Polynesian labour-traffic from the slave trade, shall not be crossed. In conclusion, I beg to communicate to your Excellency an extract from a report of the officer commanding H.M.S. " Carola."

Enclosure.— Owpl'am Karcher to the Chief of the Imperial Admiralty, Berlin. (Batavia, 6th July, 1883.) Fbom what I learnt during two visits to New Britain, and from what Captain Geiseler communicated to me, the state of affairs there appears to be as follows : — The German Commercial and Plantation Company has its headquarters at Mioko. It mamtains about eighteen small factories in eastern New Britain and on the west coast of New Irelan a> of which, at the present time, ten or twelve are actually occupied. Messrs. Hernsheim and Co. have their headquarters at Matupi, and maintain two or three stations on New Britain, two on the north coast of New Ireland, and one each on the Laughlan, Anchorite, and Hermit Islands, of which the two last are not at present occupied, but will be as soon as suitable agents can be found. One reason for the danger in which white settlers residing in these islands live, arises from the tact that the natives know no differences of nationality, and, in accordance with their customs, avenge any injury that they may have suffered upon the next white man they meet with. The provocation is mostly given by the labour-vessels. The settlers, as is only natural, are not well disposed towards these vessels ; but if only a fraction of what I have heard from our own Consul and from other persons is true, then this labour trade is nothing but slave trade. The labourers are not only bought of the chiefs for breechloaders, but natives are likewise enticed on board, where they are detained, or taken out of any canoe that may be met with out at sea. If the Government Agent acted up to his instructions, in accordance with which only volunteers, to whom the nature of the engagement has been fully explained, should be taken, most of the vessels would have to leave empty as they came. The Agent, however, contents himself, in most cases, with an assurance on the part of the captain that all formalities have been fulfilled. But, as each of the many small districts has a language of its own, this, notwithstanding the interpreters, is quite impossible. It is only natural, therefore, that fights between the natives and the crew's should sometimes sake place. I noticed that the natives in places visited by labour-traders were far more timid than elsewhere. At Buka, for instance, where the natives came alongside our ship freely, they fled at once as soon as we lowered a boat. Just now the whites are especially anxious, as the New Hebrides, &c no longer furnish a sufficient supply of labourers, and as over twenty labour-vessels have come ■from Queensland alone to New Britain, &c. Besides this, the interests of the German Commercial and Plantation Company of Samoa, which procures most of its labours in New Britain, &c, are sure to suffer in consequence of the extensive labour imports of Queensland.

No. 10.—Dr. Stuebel to Prince Bismarck. (Apia, Bth August, 1883.) Fobwabds a statement of the German Commercial and Plantation Company dealing with the danger to German interests likely to arise through the annexations proposed in Australia, and expressing a hope that the injury threatened may yet be averted. Dr. Stuebel states that he is not in a position to judge in how far these fears are justified., but that England is more especially interested m putting a stop to the proposed action of the Australian Chauvinists, and thus to prevent annexations being made by other Powers. In the meantime the civilizing work of England could proceed steadily ; English interests would arise in localities now chiefly or wholly occupied by Germans, and these English interests would struggle for a preponderance, thus preparing the ground for an ultimate annexation of all islands by England, whilst at the present time only a portion of them could be annexed. This danger existed not only in New Britain, but also in a lesser degree m bamoa. Messrs. McArthur and Co., of Auckland, were already commercially interested in Samoa, and quite recently a company had been founded in New Zealand for the purpose of trading with Samoa, and of founding plantations. It was reported that the land of the American company, now lying waste, would be acquired by this New Zealand company. Whatever confidence we had in the management of the German company, we might yet doubt _ whether a commercial company, however powerful, would permanently ensure Gorman interests in the South Sea.

Enclosure.— Statement of the German Commercial and Plantation Company, signed Weber, Chief Factor. (Apia, 6th August, 1883.) It had become known through the papers that Queensland had "provisionally " annexed not only New Guinea, from 141° to 150° longitude E., but also the adjacent islands, including New Britain, &c. Although it had been reported at first that it was merely intended to establish trading stations under English protection on the south coast of New Guinea, our latest information made it likely that the recent annexation by Queensland would be recognized to their full extent. The company felt bound to again direct the attention of the German Consul to these events, as they involved the

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continuance of German interests in the South Sea. The company, at a large sacrifice of human life and money, had first established commercial relations with New Britain and the adjacent islands, and the trade there was at present exclusively in German hands. They had also succeeded in inducing the natives there to work on plantations, and had thus opened a fresh field for recruiting labourers. But, apart from German commercial interests, there were in New Britain two harbours, namely, Mioko and Makado, which had been acquired in December, 1878. by the officer commanding H.M.S. " Ariadne." This acquisition had been sanctioned by the Eeichstag. At the same time it appeared that England and France were at present discussing the question of the New Hebrides, which would probably be surrendered to France as a set-off against New Guinea. In these islands, likewise, the company held valuable landed property, including Sandwich Harbour on Malicolo, and the Island Lenure. The company, moreover, is interested in these islands being left free as a field for recruiting the labourers they required, and they had quite recently taken steps to establish permanent labour depots on the New Hebrides and the Solomon Islands. A glance at a map showed that the Power or Powers who annexed New Guinea, New Britain, and the New Hebrides, could scarcely avoid annexing the Solomon Islands likewise. An annexation of these islands would prevent the company from procuring labourers there, and as no other islands in the South Sea could make up for the deficiency, the existence of our plantations on Samoa would be jeopardised. If Samoa itself were to be annexed by one of these Powers, German interests in the South Sea would cease to exist altogether.

No 11.— Dr. Busch to Count Minister. (Berlin, sth January, 1884). In continuation of my communications of the 28th and 29th August last,* respecting the labour trade in New Britain and New Ireland, to which replies have not yet been received, I have the honour to forward a report of Consul Hernsheim, dated Matupi, the 26th August last. Your Excellency will perceive from this that Mr. Bomilly, the English Deputy High Commissioner, who arrived at Matupi in the beginning of August, does not think that the steps taken by Messrs. Hernsheim, to obtain compensation from the Queensland Government, will be effective, unless some influence be used in London. In discussing this question in the spirit of my communications, I beg your Excellency to state that we, too, shall send an official to the New Britain archipelago, there to take care of German interests, and that Dr. Stuebel, the administrator of the German Consulate-General for the South Sea, at Apia, has been instructed to send a Commissioner to Matupi. That we hoped the united efforts of the German and English officials would strengthen a feeling of legal security there as well as in other parts of the South Sea, and w rould, above, all, prevent friction between the subjects of the two States. I enclose the copy of a report of Dr. Stuebel, dated Apia, the 30th September last, together with enclosures, which your Excellency may eventually make use of, and which shows how, on the one hand, the existence of German commercial interests is wilfully denied, and on the other nonexistent German projects of annexation are asserted to exist, in order to further the desires of Australia to annex the independent islands of the South Sea. Enclosure I.— Consul E. Hernsheim to Prince Bismarck. (Matupi, 26th August, 1883). In continuation of my former report I beg to forward to your Excellency further documents referring to the "Stanley" case. They were prepared by Deputy High Commissioner A. Eomilly, who has been here during several weeks, and forwarded by him to the Immigration Office at Brisbane. The damage suffered by my firm in consequence of the destruction of the local products in store, as sworn to by Mr. Tetzlaff, has been valued by me far too low, for at a low estimate it exceeds £1,000. Mr. Eomilly is of opinion that no compensation can be hoped for from the Queensland Courts unless a superior authority intervenes. Labour-vessels still continue to arrive here from Queensland and Fiji, and thS presence of an English Commissioner, having no executive power, can scarcely bring about a change for the better.

Enclosure 2. — Dr. Stuebel to Prince Bismarck. (Apia, 30th September, 1883.) Foewaeds an article published in the Sydney Daily Telegraph, written by a resident on New Britain (probably a missionary), and dated the 2nd July, 1883. This correspondent ought to know that, apart from the English labour-vessels and a plantation of Mr. Parrel, formerly agent of the German company, there exist no English interests whatever in New Britain. He must also know that the visits paid by the German men-of-war " Carola " and " Hyaena " had absolutely nothing to do with annexation. His complaints about the sale of firearms to the natives touch an admitted evil. But it may be doubted whether the cessation of that sale would not stop the recruiting of labourers altogether. At all events, Germans cannot be prohibited from selling arms as long as the English are not prevented from doing so. The whole question appears to be treated with a little too much sentiment, whilst on the part of England it is being made use of for selfish political ends.

Enclosure 3.— Article on New Britain. {Sydney Daily Telegraph.) The article is dated the 3rd July, 1883. The writer first of all exposes the abuses of the labour trade. The existing enactments do not meet the case. New Ireland and New Britain are densely peopled, but although exceedingly fertile, they hardly produce food enough for their inhabitants. The existing system of recruiting labourers here is the worst that can be imagined. In the course of this year twelve labour-vessels visited the island, and 1,200 muskets and 150 Snider rifles with

* These communications instructed the German Ambassador at London to communicate the contents of the note of the 4th September, 1883 (No. 9), to the British Government.

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ammunition were paid for the labourers. Each tribe makes war upon its neighbours, and sells its prisoners to the labotlr-vessels in return for firearms. The present system is no better than kidnapping. Annexation might cure this evil, and as the interests in question are mainly British interests., all islands between Fiji and New Guinea ought to be annexed by England. If England declines to annex, the colonies must take the matter in hand. No English man-of-war has visited us since November last, and one need not wonder if British subjects take the law into their own hands. The return of the " Carola," on the 7th June, took us by surprise, and even before she left ib became known that Captain Deutsch, the German Consul-General in Samoa, was to take counsel about the annexation of these islands. The officers made no secret at all of their mission. The object of Germany in annexing these islands is unintelligible, unless Germany intends to make opposition to England. It is not, however, likely that the German Government would sanction such an annexation, for the Germans have no interests in the South Sea, and least of all in this quarter of it. Nineteen out of twenty ships navigating the Pacific carry the English flag, most of the mercandise is of English origin, and nearly all the exports go to England. As a matter of fact, no other Power has actual or legitimate interests in the Pacific, and the annexation of all its islands by Great Britain would conduce most to the interests of the natives.

No. 12.— Messrs. Robertson and Hernsheim, of Hamburg, to Prince Bismarck. (Hamburg, 29th January, 1884.) The interests of the undersigned would suffer seriously if the resolutions of the Intercolonial Convention, held at Sydney, were to be acted upon. These resolutions propose the annexation of all islands between 141° and 170° E. longitude, and between the equator and 20° S. latitude Within this area are situate New Britain and other islands upon which the undersigned have established factories since 1875. No English or Australian houses are established there. Besides this, plots of land have been purchased from time to time by German houses, and the agreements of sale registered in the German Consulates of Hongkong and Jaluit. These purchases, up to the close of 1882, consisted of twenty-six plots of land—viz., four in the Hermit Islands, one on Anchorite Island, one on Laughlan Island, two on Duke of York, two on Matupi, seven on New Britain, and nine on New Ireland. When Fiji was annexed, the German owners of land had to contend with considerable difficulties in proving their titles, but if the resolution proposed by Sir G. William Dcs Vceux should become law, none of these purchases would be acknowledged. English subjects would not suffer in consequence, for they have no interests whatever in the islands in question. On the other hand, the German houses suffer even in consequence of such a resolution, for the fact that all titles to land might be anulled in case of an English annexation must put a stop to all enterprise. The undersigned, therefore, pray Prince Bismarck to take measures to secure to the German houses the possession of the land which they have purchased, or may purchase in the future.

No. 13. — Messrs. Goddefroy and Eberhard Schmid, Directors of the German Commercial and Plantation Company, at Hamburg, to Prince Bismarck. (Hamburg, 30th January, 1884.) On the Bth December last year the Intercolonial Conference, held at Sydney, passed the following resolution: " That in the opinion of this Convention no purchases or pretended purchases of land made before the establishment of British jurisdiction or dominion in New Guinea or other islands of the Pacific not having a recognized government, should be acknowledged, excepting in respect of small areas of land actually occupied for missionary or trading purposes." As this resolution was proposed by the Governor of Fiji, it materially affects the marketable value of several thousands of acres which our company has purchased on islands in the Pacific, besides deterrjng us from making further purchases. Looking to the sad experience made by Mr. W. Hennings, our agent in Fiji, in respect to a similar question, we venture to draw your Excellency's attention to this resolution, and to beg that steps be taken to protect the. interests of our company and of other German landowners in the South Sea.

No. 14. — Earl Granville to Count Munster. (Foreign Office, 6th February, 1884.) Acknowledges receipt of a memorandum on the labour traffic in the South Sea, dated 18th January, 1884 ; announces that a Commission had been appointed some time ago to examine into this question, and was expected to report shortly. This report would be communicated to the German Government, and Baron Plessen's note of the 4th September, 1883, will be printed along with it, unless objected to. Her Majesty's Government fully realizes the importance of regulating the labour question, but no measures to that effect can be communicated until the Commission has made its report. The attention of the Government of Queensland will be directed to the enclosures in Baron Plessen's note. The report of the officer commanding the " Carola "is returned herewith.

No. 15.— Count Hatzfeldt to Count Munster. (Berlin, sth April, 1884.) We hope that stationing a German man-of-war and the despatch of an official to the Western Pacific will contribute towards restoring amicable relations between the natives and the German settlers. Unfortunately, the bitter feelings still existing there with reference to the whites has recently led to fresh excesses, which necessitated the punitive interference of H.M.S. "Hyaena." A telegraphic despatch from the oificer commanding that ship informs us that a German factory on Nusa, to the north of New Ireland, and a German schooner had been destroyed by the natives, and that Europeans had lost their lives. The natives were punished by destroying several villages and shooting some of the ringleaders.

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I beg your Excellency to make use of these events, and to return to this question when communicating with Earl Granville. I presume that this exchange of ideas will not be looked upon as terminated when the report of the Commission shall have been placed before Parliament. On the contrary, Earl Granville's note of the 6th February leads me to expect that we shall hear of the measures which have been taken to prevent a recurrence of incidents like those dealt with in Baron Plessen's note of the 4th September. I shall also be pleased to hear what instructions have been given with reference to the claims for compensation put forward by Messrs. Hernsheim. As regards the wish of the English Government to come to an amicable arrangement with reference to the prot action of Germans and their commercial enterprises in the South Sea, it would be of interest to us to learn in how far the report of the Commission is to be acted upon.

No. 16. — Earl Granvillc to Count Munster. (Foreign Office, 9th June, 1884.) ■ Announces that the High Commissioner for the Western Pacific proclaims that he is energetically carrying on an inquiry into the alleged losses suffered by Messrs. Hernsheim in consequence of the proceedings of the labour-vessel " Stanley." This vessel was supposed to have been lost at sea.

No. 17. — Dr. Krauel to Prince Bismarck. (Sydney, 23rd May, 1884.) Consul Heusslee, at Brisbane, informs me that £550 have been awarded to Messrs. Hernsheim by the Queenslaud Government. Captain Davis, of the "Stanley," and Mr. McMurdo, the Government Agent on board of her, are to be criminally prosecuted. They will be tried before the High Commissioner of the Fiji Islands, within whose jurisdiction the criminal actions alleged took place. Mr. Eomilly, the Deputy-Commissioner, who is to convey the accused to Eiji, informs me that in consequence of our representations in London strict orders had been given to punish the guilty parties. Mr. Le Hunt, who recently passed through here for Eiji, confirms this.

No. 18. — Dr. Krauel to Prince Bismarck. (Sydney, Bth September, 1884.) Captain Davis and Mr. McMurdo were found guilty on the 7th August, and condemned to three months' imprisonment. By a special act of grace of the High Commissioner they were liberated on the 14th of August.

No. 19.— Herr yon Hansemann and Baron Bleiohroder to Prince Bismarck. (Berlin, 27th June> 1884.) The German Marine Commercial Company (See-Handels-Gesellschaft) having gone into liquidation owing to the rejection by the Beichstag of the Samoa Bill, it has become our task, not merely to reorganize the German Commercial and Plantation Company, but also to pursue the original aims of that company in a different mode-. The plan submitted to your Excellency in 1880, with reference to a South Sea enterprise on a larger scale, could not be realized. The first steps for resuming this enterprise had been taken when the Queensland Government, in-April, 1883, took possession of New Guinea and the adjacent islands, and some months ago they were resumed. Our undertaking is to be carried on in accordance with the principles laid down by your Excellency, in a recent debate of the Eeichstag, as entitling it to a claim to the protection of the German Government. As far as the public is concerned our undertaking will be an expedition fitted out by the German Commercial and Plantation Society of Hamburg, with a view to founding additional factories, as in the ordinary course of business, in the Western Pacific. In pursuit of this object an agreement has been entered into between the company and a society, specially founded for this expedition, and consisting of Messrs. , with the undersigned as managing directors. The German Commercial and Plantation Society has purchased a steamer for the purposes of the expedition at Sydney, which will take the name of " Samoa," and sail under the German flag. Dr. Finsch, of Bremen, has been intrusted with the command of the expedition, and has already started, accompanied by Captain Dallmann, of Bremen, and a few picked sailors. Dr. Einsch will ostensibly take a passage in the trading-vessel " Samoa " on a scientific cruise. Dr. Einsch and Captain Dallmann are charged to explore the coasts, to seek out the best harbours, to establish friendly relations with the natives, to found factories (for which purpose officers of the Commercial and Plantation Company are on board), and to make extensive purchases of land. The land thus acquired, together with that already in possession of the company, are to form a solid foundation for a colony in the Western Pacific. The labour trade ought not to be permitted to invade these new German settlements, as the command of labour will give them an advantage over other islands in the South Sea as well as over Queensland. The Commercial and Plantation Company has, consequently, bound itself to engage no labourers for Samoa. Mioko is intended to become the central point of these settlements. Dr. Einsch and Captain Dallmann are instructed to conceal their object, and to examine, first of all, the southern part of New Britain and the north-east coast of New Guinea as far as 141° E. They are on no account to visit the south-east coast of New Guinea or Torres Strait. We beg your Excellency to accord protection to this enterprise, and, more especially, to instruct Consular officers and commanders of war to register the land purchases to be made.

No. 20.— Count Hatzfeldt to Count Munster. (Berlin, 2nd August, 1884.) In the South Sea, as elsewhere, it appears to be the policy of the English Colonial Office to deal with our communications in a dilatory manner, whilst "facts" are being created through the agency of the Australian Colonies which run altogether counter to our legitimate interests. In your

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report of the 12th January you state that the Under-Secretary of State informed you ■■ that the British Government had no intention of annexing fresh territories or burdening itself with additional colonies, as Lord Derby had quite recently told the Australians." Recent experience leads us to conclude that Lord Derby merely intended to avoid the acquisition of fresh Crown colonies, without at all interfering with the colonial expansion of British colonies having responsible Governments. Lord Derby by no means disapproved unconditionally of intended annexations by Australia. He merely denied that these colonies were authorized to annex fresh territories without the consent of the Home authorities. He stated that this consent would be withheld unless the colonies contributed towards the cost. The Australian Colonies having declared their willingness in this, their policy of annexation must be looked upon as authorized by Lord Derby. In this sense we understand the declarations made by Mr. Ashley in the House of Commons on the 7th instant. It cannot be a matter of indifference to us when we find that regions of the South Sea, within which German commercial enterprise had hitherto free scope for development, are all at once declared to be natural domains of Australia, and if, with a view to a proposed occupation, all acquisitions made there by others are declared to be null and void. It is consequently necessary to take timely steps against a realization of such unlimited claims. We hope that this may be attained by means of a friendly understanding, and we therefore desire to come to some arrangement with the English Government with reference to the general principles in accordance with which subjects of either country are to be dealt with, as also with reference to a delimitation of the territories which either of us may desire to place under its protection. The enclosed memorandum contains the facts of the case, as well as instructions on the way in which this question is to be dealt with. I beg you to discuss this question without delay with Lord Granville, in a friendly spirit, no doubt, but without admitting a foreign control over our existing commercial relations. Your Excellency will, at the same time, let it be understood that we cannot separate the responsibilities of the Colonial Governments from those of the Imperial Government.

Enclosure.— Memorandum. The English Government has virtually sent no reply to the confidential note of Baron Plessen to Lord Granville, of September last year. We have all the more claim to such a reply as the English Government.specially asked our consent to the publication of that note (see No. 14). The report of the Western Pacific Commission, to -which that note is appended, was before the English Government as long ago as the 16th October last year. The publication of that report in March last year could not be looked upon as a reply to our question, in how far the English Government would be guided by the recommendations of that Commission. We first learnt from the Kolnische Zeitung (No. 169, of the 19th June last) that a resolution in that respect was already arrived at in February. The way in which this question was dealt with by Lord E. Eitzmaurice, the Undersecretary of State, in the House of Commons, on the 17th March, afforded us once more an opportunity of urging, in a letter dated the 17th March, the importance which we attached to a clear understanding. Lord Granville's note of the 9th June of this year, sent together with the report of the 17th June (see No. 14), avoids the general question altogether, and confines itself to the communication that the labour-vessel " Stanley,"* which had destroyed a German factory on New Ireland, was alleged to be lost. When about to direct attention to the fact that this loss would not settle the question, we learnt from the German Consul-General at Sydney that the Queensland Government had awarded £550 to the German firm which had been the sufferers, and that the guilty, parties ■were to be tried in Fiji. The British Ambassador at Berlin, in notes dated the 15th May and the 27th June last, merely communicated, in accordance with his. instructions, a few documents on alleged acts of violence on the part of a German labour-vessel in New Britain, and informed us that the Government of Queensland had prohibited the recruiting of labourers in New Britain, New Ireland, and adjacent islands for Queensland plantations, and that the Governor of Eiji had been instructed by the Colonial Office to extend this prohibition to Eiji. These English communications contain not a single expression showing a recognition of the importance of our interests in the South Sea on the part of the English Government, or a desire to comply with our request for an understanding. It is to be feared that negotiations with us will drag along until, through the action of the colonial Governments, accomplished facts shall have brought about a situation unfavourable to us. The Blue Books on New Guinea and the independent islands, forwarded by the German Minister in London, show that the movement for the annexation of these independent territories in Australia resulted from an article in the Allgemeine Zeitung, of November, 1882, in which New Guinea had been referred to as a possible German colony. The Australians unhesitatingly declared that not only New Guinea, but also all other independent territories in the South Sea, were natural dependencies of their colonies. The alarm which arose upon this in German commercial circles was somewhat allayed when the English Government, about the middle of last year, disavowed the annexation of New Guinea by a Police Magistrate of Thursday Island, and declared this act to be null and void. The speeches of Mr. Gladstone, Lord Granville, and Lord Derby (see Times of the 3rd July of last year) expressed a distinct disapproval of the arbitrary action of the colonies. The Blue Book on New Guinea of July last year (of the 24th of the same month) prints despatches of Lord Derby's of the 11th July and the 31st August of last year (see Nos. 21 and 39), which led to the reasonable hope that England would treat this question with moderation. According to a report of the German Ambassador, of the 12th January of this year, Sir Julian

* Beferenee to the " Stanley " in No. 16.— Translator.

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Pauncefote, when Count Minister introduced the agitation in New Zealand for an annexation of Samoa, stated " that it was the definite intention and opinion of the British Government not to annex territories or to burden itself with new colonies, as England had colonies enough. Lord Derby had recently made a similar declaration with reference to Australia and New Guinea." But the conduct of England in the affairs of South-western Africa; the attitude taken up with reference to the resolutions of the Intercolonial Convention in December last; the non-reply to Baron Plessen's note; and the announcement by the Colonial Office that a High Commissioner with a staff of Deputy-Commissioners would be despatched to New Guinea and the independent islands, in accordance with the propositions made by the Western Pacific Eoyal Commission —an announcement made in Parliament immediately after the indiscreet speeches made in the Budget Committee of the Eeichstag, when German enterprises in New Guinea and New Britain were being discussed—all this appears'to feed our apprehensions for German undertakings in the South Sea. The time has consequently come to make another effort for arriving at an understanding with the English Government. The resolution of the Intercolonial Convention of December, 1883, adopted on the proposition of the Governor of Fiji, declares all acquisitions of land previous to an annexation of these islands by England to be null and void. This is a declaration of a principle against which we cannot protest too early and too strongly. The experience of Fiji allows us to hope that England will be disposed to listen to our protest. Our experience in other respects makes it desirable that all territories in which German commerce preponderates, or which have become the goal of costly expeditions, the legitimacy of which no one can question, should be placed under the direct protection of the Empire. The English Government is aware of the important position held by German commerce in the South Sea. It is bound, therefore, to admit that our claim to equal rights with other States is founded on facts, and that it would serve the peaceable development of civilization in those regions if the two friendly Governments arrived not only at an understanding with respect to the limitsof their territories or protectorates, but also on the application of principles by either side.^ We desire not merely to come to an understanding with Great Britain as to the geographical limits of our respective spheres of interest, but also as to the principles in accordance with which either of vs1 would act within the protected territories. Accordingly we propose to mutually guarantee the enjoyment of acquired rights, to provide a special way of proceeding for doubtful cases, and to accept the principle of equality in all that relates to commerce, navigation, right of settlement, &c. We should likewise be glad to come to an arrangement as to a uniform regulation of the labour traffic. As regards geographical boundaries, it would be advisable in any conversations with Lord Granville to make use of Lord Derby's despatches of the 11th July and the 31st August, referred to above. , . The despatch of the 31st August of last year positively declined to entertain the proposition of Australia to annex Samoa and the Tonga Island (see paragraphs 3 and 4). In paragraph 5 Lord Derby referred to the consideration which would have to be shown towards France with reference to the New Hebrides and the Loyalty Islands. In paragraph 6he acknowledges that there were other territories with which other Powers had established relations which could not be summarily set aside. He there specially mentions New Britain, New Ireland, the Solomon and Santa Cruz Islands. As already stated in the notes of the 28th August of last year (No. 9), and in the note of Baron Plessen of the 4th September of last year (see No. 11), there existed at that time only German commercial establishments on New Britain, New Ireland, and the Duke of York Islands. The only English trader there, Mr. Farrel, who was formerly an agent of the German Commercial Plantation Company, is reported to have recently quitted the archipelago, where he had been involved in abuses connected with a labour-traffic concession. It is to be hoped that the note of the Imperial Ambassador, of the 4th September of last year, and the verbal explanations supplementary to it, will cause the English Government to look upon these groups of islands as lying outside the regions to be taken possession of by England or her colonies. New Guinea is the second object which the Australians propose to annex. We consider the Australians are justified when they object to a foreign Power occupying the southern coast of New Guinea, along Torres Strait and opposite to Queensland. But their claim to the whole of New Guinea, as far as that island is not claimed by Holland, as a natural dependency of Australia, and the view that acquisitions of land by Germans on the north-east coast and the extension to them of German protection, are an interference with Australia's legitimate interests, is held by us to be equally unjustifiable. Last year Lord Derby appeared to be of the same opinion. In his despatch of the 11th July of last year he not only declared that the annexation of New Guinea by Queensland was null and void, because Queensland had no authority to effect it, but he also expressed himself to the effect that there appeared to be no reason why an eventual annexation should extend over so large a portion of New Guinea as Queensland intended. As no regular Government exists in New Guinea, we apply to that island the same principle which we acted upon jointly with England when denying the claims of Spain to the Carolinas and the Pelew Islands, and which quite recently, in connection with the Angra Pequena business, we recalled to the memory of the English Government. Those portions of New Guinea therefore where no civilized State exercises sovereign power are as open to German as they are to English enterprise. In order to prevent friction between the subjects of the two States, and in their interest, we desire to come to an understanding with England as regards the boundaries of the regions to be placed under the protection of each, in New Guinea as in the South Sea generally.

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No. 21.— Count Ilatzfeldt to Count Minister. (Berlin, 2nd August. 1884.) If penal settlements should be referred to in the course of the discussion on the South Sea affairs, the Chancellor requests you to state that we have no intention to establish such a settlement, but that we could no more bind ourselves in this matter than England would do so if called upon by us.

No. 22.—Dr. Stucbel to Prince Bismarck. (Apia, 17th June, 1884.) I learn from a telegram in the Australian papers that Lord Derby is prepared to take possession of New Guinea if the colonies are willing to bear part of the expense. I beg to state that a step of this kind would seriously endanger German interests in the South Sea. There, too, islands not yet taken possession of are being scrambled for. This process may be delayed for a time, but can never be made retrogressive. Delay is of use only to England and her colonies. The assurances of the London Cabinet may be honest enough, but events will override them. Out here everybody, from the highest official to the smallest tradesman, works at the anglicanization of the whole Pacific, without taking the least notice of these assurances. Germany must not trust to them, unless she is prepared to face one day accomplished facts. The Samoa Islands by themselves would not sufficiently justify an active colonial policy of Germany in the South Sea, although we defend from them our commercial position in Tonga and in the scattered islands to the north. But even Samoa would become a forlorn hope unless we succeed in maintaining our footing in New Britain. Politically, as well as geographically, the north coast of New Guinea forms p.v/o of New Britain. The arguments applied by England to the south coast, of New Guinea and to Torres Strait apply with equal force, from a German point of view, to the north-east coast and Dampier Strait. English interests in New Guinea are limited to the south coast. German interests in New Britain demand that England be excluded from the north coast. The extension of German commercial enterprise to that coast is merely a question of time. Had it not been for the loss of the " Mioko," the German Commercial and Plantation Company would before this have established itself there. It is desirable that other German capitalists should assist in the conquest of this coast. A territory like that of the archipelago of New Britain, including the north coast of New Guinea, would indeed be an object worthy of German colonial enterprise. Bounded by the Dutch Indies, this territory would not be exposed to suffocation from surrounding English colonies, and would afford us means to hold Samoa, commercially as well as politically. This is the very thing England desires to prevent by this movement in our flank, and the danger likely to arise, if England is allowed to occupy the north coast of New Guinea, is very serious indeed. England may take tha whole of the south coast, but if the north coast, from the East Cape to longitude 141° E., falls into the hands of a foreign Power, our interests would be seriously jeopardized.

No. 23.— Count Milnster to Prince Bismarck. (London, 9th August, 1884.) I have informed Lord Granville of our desirs to arrive at an early understanding with reference to the South Sea. Lord Granville listened to me with interest. He declared that England was not jealous of German colonial enterprise, and that he was aware that Germany possessed important interests in several of the South Sea Islands. The English Government was desirous to define the limits within which the influence of either country was preponderating. As regarded New Guinea, he said it was news to him that German interests existed there. Confidentially he added that the negotiations between the Home Government and the colonies, about the annexation of the south coast of that island, were about to terminate. There were islands where the German influence preponderated, others where England took the lead, and others, again, in which both were equally interested. This would have to be inquired into, and he (Lord Granville) had no doubt that an understanding could be arrived at. Lord Granville added that an understanding wotdd be facilitated if we could mutually agree that no penal settlements should be established. I told him that it was not intended by us to establish penal settlements, but that we were not prepared to bind ourselves in that respect. He replied that he had not in his mind any engagement to which he would not also bind himself, but that this question was of such importance to the colonies that its settlement would facilitate the arrangement of other questions. Lord Granville repeatedly expressed a regret that, as shown in the Press, there existed so much want of confidence in England. Until now we had got on so well in trans-oceanic countries, and he hoped this would also be the case in future. In a letter received this day, Lord Granville informs me that the Cabinet had determined that the extension of the British sovereignty in New Guinea should be limited to that part of the island in which the Australian Colonies were specially interested. This would be done, however, without prejudice to territorial questions beyond these limits. I desire to add that Mr. Gladstone likewise availed himself recently of an opportunity to speak with me respecting German colonial efforts. He repeatedly stated that he was glad of these colonial efforts of Germany, and hoped a friendly agreement respecting them might be arrived at.

No. 24. — Telegram to the German Consul-General, Sydney. (Berlin, 19th August, 1884.) Inform Imperial Commissioner yon Oerfczen in New Britain that it is intended to hoist the German flag in the archipelago of New Britain and all along that part of the north-east coast of New Guinea which lies outside the sphere of interests of Holland and England, where German settlements already exist or are in course of formation ; and that he is authorized to support purchases of laud, by Germans and to register the agreements made, without prejudice to third parties. 3—A. 9.

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No. 25.— Prince Bismarck to Herr yon Hanscmann and Herr yon Bleichrodcr. (Varzin, 20th August, 1884.) Instructions have been given to support your undertaking. The acquisitions made by you will be placed under the protection of the Empire, on the same conditions as in south-western Africa, subject to the condition that they are not made in territories to which other nations have legitimate claims.

No. 26.— Prince Bismarck to Baron Plessen. (Varzin, 31st August, 1884.) I have learnt from Count Minister that Lord Granville has received our communication with favour. I request you to inform Lord Granville that we willingly agree to the appointment of Commissioners to discuss our mutual interests in the South Sea. Consul-General Dr. Krauel at Sydney, and Dr. Stuebel at Apia, would eventually act as our Commissioners, and you may propose that the Commissioners meet at Levuka.

No. 27. — Baron Plessen to Prince Bismarck. (London, 4th September, 1884.) Acknowledges receipt of No. 26. Has communicated it to Mr. Lister, Under-Secretary of State. Mr. Lister has promised to forward it to Lord Granville.

No. 28. Mr. Charles Scott to Count Hatzfeldt, Secretary of State. (19th September, 1884.) Afteb reference to the verbal negotiations between Lord Granville and Count Minister, Mr. Scott says that Lord Granville stated " that the extension of some form of British authority in New Guinea, which will be shortly announced, will only embrace that part of the island which especially interests the Australian Colonies, without any prejudice to any territorial questions beyond these limits." The negotiations between the English and the Colonial Governments have determined Her Majesty's Government to extend the British protectorate over the whole of New Guinea, only excepting the Dutch territory, and that part of the north coast which lies between the Dutch boundary and longitude 145° E. This protectorate will also include the small islands adjacent to the British coast. " The 145 th degree of east longitude has been fixed as the western British limit on the northern coast, in order that it should embrace the territory owned by the natives on the Maclay Coast, whose claim for British protection has long been under the consideration of Her Majesty's Government, and was one of the principal reasons which determined the Cabinet to advise the Queen to assume the responsibility of establishing a protectorate in New Guinea." The Maclay coast extends in the south to Cape William, and the coast thence to the Dutch boundary would be included in the British protectorate, for obvious reasons. Lord Granville has instructed mo to add that Her Majesty's Government is earnestly desirous of settling these territorial questions as proposed by the Imperial Government.

No. 29. — Dr. Buscha to Baron Plessen. (Berlin, 25th September, 1884.) I enclose copy of a note of the English Charge d'Affaires at this Court (No. 28), according to which the whole of the north coast of New Guinea, only excepting that part of it which extends from longitude 145° E. to the Dutch frontier, is to be included in the British protectorate. Inform the English Government that we have taken note of this communication, but that this proposed extension of the protectorate, after what Lord Granville had stated, found us unprepared, and that we reserve our attitude towards it. A friendly arrangement of the territorial claims along that coast appeared to us to be desirable.

No. 30. — Baron Plessen to Prince Bismarck. (London, 27th September, 1884.) Communicates a private note from Lord Granville, in which it is proposed that the Commissioners shall meet in Europe, instead of in the immediate vicinity of Australia, and that it might be of use if a preliminary discussion, with a person thoroughly acquainted with Prince Bismarck's views, could take place in London.

No. 31. — Mr. Charles Scott to Count Hatzfeldt. (Berlin, 9th October, 1884.) I am instructed to inform you that Her Majesty's Government have carefully considered the communication which Baron Plessen was instructed to make on' the proposed limit of this protectorate, and have decided that the declaration to be made shall limit the British protectorate to the whole'of the southern coast, including the islands contiguous to it, instead of that which they had at first proposed.' This will be done without prejudice to any territorial question beyond these limits. It is with great satisfaction that Her Majesty's Government have come to an arrangement in which they find themselves in perfect accord with Germany. In case any questions should arise as to those districts of New Guinea which lie beyond the limit described, Her Majesty's Government are of opinion that it would be better to deal with them diplomatically than to refer them to the Commission which it is proposed to appoint with regard to the islands in the Pacific.

No. 32.— Baron Plessen to Prince Bismarck. (London, Bth October, 1884.) Lobd Geanville, in the course of a conversation yesterday, referred to Count Miinster's statement that the Imperial Government recognized the legitimacy of the desire of the Australians that no foreign Power should gain a footing on the south coast of New Guinea, in Torres Strait.

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No. 33.— Dr. Busch to Baron Plesscn. (Berlin, loth October, 1884.) Foewaeds copy of Mr. Scott's note of the 9th October (No. 31), and expresses satisfaction at its contents. Agrees to Lord Granville's suggestion (see No, 30) that the Commission should meet in Europe ; suggests that the Fiji question might likewise be discussed in Europe, and that the place of meeting be London. Dr. Krauel, who is to act as German Commissioner, has been called Home by telegraph, and left Sydney on the 7th October.

No. 34.— Count Minister to Prince Bismarck. (London, 22nd November, 1884.) Lobd Gkanville agrees to the South Sea and Eiji Commission meeting in London, and will appoint a Commission as soon as Mr. Thurston has returned from Eiji. Lord Granville added that the reports of the Commission would have to be submitted to the two Governments, to be examined by them.

No. 35.— Herr Greiner (of the German Consulate-General at Sydney) to Prince Bismarck. (Sydney, 18th November, 1884.) Announces proclamation of an English protectorate over the south coast of New Guinea on the Bth November, and forwards a copy of Commodore Erskine's Proclamation.

No. 36.— Telegram from the Officer commanding the German man-of-war "Elisabeth" and the Imperial Commissioner in New Britain. (Cooktown, 17th December, 1884.) The purchases of land by German subjects have been backed (tmterstiitzt) by treaties made with native chiefs. Our men-of-war have hoisted the German flag at several points on the north coast of New Guinea, east of the Dutch boundary, and in New Britain, to protect these purchases.

No. 37. — Prince Bismarck to the German Ministers at London, Paris, Madrid, Lisbon, The Hague, Washington, Home, Vienna, St. Petersburg, Copenhagen, and Stockholm. (Berlin, 23rd December, 1884.) Insteucts Ministers to inform the Governments to which they are accredited with the fact that certain territories on the north coast of New Guinea and in the New Britain archipelago, where German subjects had made purchases of land and established factories, have been placed under the protection of the German flag, without prejudice to the claims of third parties. Lord Granville to be informed verbally that our taking possession of these territories is not to prejudice the discussions of the Commission appointed to settle the limits, no more than the recent annexation of the south coast of New Guinea.

No. 38. — Count Minister to Prince Bismarck. (London, 29th December, 1884.) The note referred to in No. 37 was communicated to the British Government on the 26th, and the verbal message delivered to Sir Julian Pauncefote and Lord Granville. " The latter could not quite recall the communications which I made to him in consequence of the instructions of the 2nd August of last year (see No. 20), and was not therefore in a position to enter into the question."

No. 39.'— Prince Bismarck to Count Minister. . (Berlin, 29th December, 1884.) Me. Meade, the English delegate at the Conference, whom you referred to in 3 rour report of the 10th instant, some time ago expressed a wish to the Under-Secretary of State of the Foreign Office to have a confidential talk on colonial matters, which, he added, might clear away misunderstandings and prepare the way for a subsequent official settlement of the mutual spheres of interest. In a first conversation with Dr. Busch, Mr. Meade developed the following suggestions, which he declared to represent solely his private views, but which he thought might eventually be accepted by his Government in case our consent thereto should be obtained. 1. The English protectorate in the South Sea to embrace the whole of New Guinea (the Dutch part excepted), inclusive of the Louisiades, and of all other islands within twenty or twenty-five nautical miles from the coast. In return for this Great Britain would acknowledge a German protectorate over New Britain, New Ireland, Duke of York, and other neighbouring islands. The remaining islands of the Pacific not yet having a recognized Government, and more especially Samoa and Tonga, to be neutralized by an international arrangement. 2. In Western Africa, on condition of our settling private claims, England would cede to us the islands near Angra Pequena, exclusive of Walvisch Bay. On the other hand we were to bind ourselves to make England the first offer of Bagada, Togo, and of other places on the Gold Coast (sic), should we ever intend to abandon them. These proposals did not appear to me to be acceptable, but as Lord Granville had expressed a wish that I should have a personal interview with Mr. Meade, which might help to clear up the situation, I saw that gentleman on the 24th instant, when he once more explained the above programme to me. I told him that, as far as we were informed, the islands near Angra Pequena, once their guano deposits had been exhausted, would be of value only for the seal fishery. The political importance of these islands I told him was not sufficient to justify us in making disproportionate sacrifices in order to acquire them. As regards the South Sea, Mr. Meade was obliged to admit that there existed no English establishments worth mentioning either in New Guinea or in the New Britain archipelago, and that a desire on the part of England to possess these territories only sprung up after German enterprise had been directed towards them. Nor was Mr. Meade in a position to deny that Germany, in consequence of having had settlements there for many years past, was the only country to which the archipelago of New Britain was of value. It follows from this that we do not feel called upon to make concessions in order that our protectorate over these islands may be acknowledged.

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In order to establish an English claim to the whole of New Guinea (exclusive of the Dutch part), Mr. Meade read me a telegram from the Governor of Victoria to the Colonial Office, the strong expressions of which make it likely that it was intended to impress us with the fact that a partition of the unoccupied portion of New Guinea between England and Germany would bo looked upon as a serious injury to important interests of Australia. I drew attention to the fact that public opinion in Australia was opposed by an equally legitimate public opinion in Germany, tut that I should never expect the English Government to shape its resolutions in accordance with it. When the other islands were mentioned which Mr. Meade proposes to neutralize, I observed that on most of these islands German settlements preponderated, and that their neutralization would consequently be a concession on the part of Germany and not on that of England. As regarded Samoa in particular, the agreement between Germany, England, and the United States would have to be considered, an infringment of which by one of the parties concerned even Mr. Meade thought would be act of " meanness." The abandonment of the aspirations of New Zealand to Samoa on the part of England could not therefore be looked upon by us as a concession to be purchased. In conclusion, Mr. Meade observed that recent proceedings, of German men-of-war on the north coast of New Guinea were contrary to a promise made to the English Government to abstain from annexations until the negotiations proposed should have been concluded. In connection with this he referred to notes exchanged between the two Governments in September and October last. I replied that I could not believe that his reproach was justified by facts, but that I reserved further remarks on the point until 1 had informed myself about the details, as owing to my absence from Berlin at the time, I was not fully aware of the exact course which diplomatic negotiations had taken. I have since looked through the documents, and I find that Mr. Meade has attempted to charge me with a contradiction which does not in fact exist. I forward an abstract of these documents for the information of your Excellency. The course of events as summed up in this abstract leave no doubt that the English Government, through the note of its Charge d'Affaires of the 9th October last, had officially bound itself to confine its protectorate to the south coast of New Guinea, and this is confirmed by statements made in Parliament and by Proclamation. On our side we have not bound ourselves to abstain from taking those steps in Northern Guinea which had already been resolved upon in the course of last summer. Had we been called upon to bind ourselves in this respect we should have declined, on the ground that England could not ask us to maintain the status quo whilst herself changing this status quo by taking possession of the south coast of New Guinea by Proclamation only, and without making settlements there. Looking to the repeated assurances of Lord Granville, that England sympathized with German colonial development in the South Sea and in Western Africa, I am bound to assume that Mr. Meade's proposals cannot represent the views of the English Foreign Office. I look upon the proposals rather as a fresh symptom of the fast that Lord Granville's sentiments are more kindly towards us than the policy of the English Colonial Office. I request your Excellency to discuss this matter with Lord Granville in the above spirit, and to leave no doubt as to the fact that we should be unable to reconcile a post factuin attempt to place difficulties in the way of German enterprise on the north coast of New Guinea, between the Dutch frontier and the East Cape, with the assurance given us by the English Government that its protectorate would be confined to the south coast of the island. Although not hoping for any success from continued negotiations with Mr. Meade, we were nevertheless still willing to refer the questions of the inland boundaries of the two New Guinea protectorates and the independent islands of the South Sea, and of the principles to be mutually applied, to a Commission as proposed.

Enclosure.— Abstract of Documents concerning Negotiations with England about New Guinea. As early as June last a society of German subjects informed us that they were prepared to carry out a scheme, respecting the north-east coast of New Guinea and the New Britain group, which had been resolved upon in 1880, but which, owing to the rejection of the Samoa Bill, had been deferred (see No. 19). This society asked that its enterprise should be granted with the protection of the German Empire, which had under similar conditions been granted in Western Africa. The Imperial Government granted this request. Our Consular officials and commanders of vessels were even then authorized to place the independent territories on the north coast of New Guinea, to the east of the Dutch frontier, as also the New Britain group, under the protection of His Majesty the Emperor, whenever settlements should have been formed, or laud had been acquired by German subjects. In our instructions to the German Ambassador in London, of the 2nd August (see No. 20), we-ex-pressed a wish to come to an understanding with the English Government with reference to the extension of our respective authority (MachtsjjJuire) in the South Sea, and the principles on which the subjects of one Power should be treated by the other. In the memorandum accompanying these instructions, and the contents of which were subsequently communicated to Lord Granville, it was expressly stated with reference to New Guinea that we considered Queensland justified in claiming the independent south coast opposite to that colony, but that wo could not look upon the claim to the north as justified. As a matter of fact the independent parts of New Guinea were quite as much open to German as to English enterprise. That it was our intention, in West Africa, no less than in the South Sea, to place these territories under the protection of the Empire, where German commerce preponderated or was about to establish a preponderance (see No. 20). We learned from a report of the German Ambassador in London, of the 9th August (see No. 23), that Lord Granville had willingly entered upon a friendly discussion upon this subject. With reference to New Guinea he was reported to have stated that negotiations between the English

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Government and Queensland, respecting the southern part of New Guinea, were aboiit to terminate; Lord Granville also admitted that there were islands where German influences preponderated, others where England had the preponderance, and others where the interests of both countries appeared to be equal; and that more especially with reference to this latter an inquiry and understanding would be desirable (see No. 23). In a private letter of Lord Granville to the German Ambassador, dated the 9th August, we read : " The extension of some form of British authority in New Guinea, which will shortly be announced, will only embrace that part of the island which specially interests the Australian Colonies, without any prejudice to any territorial questions beyond these limits." By instructions of the 31st August (see No. 26), we acceded to Lord Granville's suggestion to have our interests in the South Sea discussed by a Commissioner. YV^e designated Consul-General Dr. Krauol in Sydney, and Acting-Consul Dr. Stuebel, at Apia, as our Commissioners, and recommended that Levuk'a should be chosen as the seat of the Commission, as Dr. Krauel would have to go there as Commissioner for regulating the Fiji claims. In a note of the English Charge d'Affaires here (at Berlin), of the 19th September (see No. 28), which is one of the documents upon which Mr. Meade bases his reproach, we were, to our surprise, informed that the British Government were about to declare the whole of New Guinea, excepting the Dutch part and the north coast between the Dutch boundary and longitude 145° E., a British protectorate. This communication conflicted with our proposals of August for an understanding and with the expressions of Lord Granville. Baron Plessen was consequently instructed on the 25th September (see No. 29) to tell Lord Granvillo that we felt surprised, after his previous explanations, to hear of the proposed extension' of the protectorate to the north and north-east of New Guinea, and felt bound to reserve our attitude with reference to it. For the rest, the discussion of the Commission might be extended to the coast in question. On the 27th September Baron Plessen forwarded a private letter of Lord Granville's, dated the 25th September (see No. 30), expressing a wish that the Commission, which was to inquire into the smaller islands of the South Sea, should meet in Europe instead of in the immediate vicinity of Australia. In consequence of this we recalled Consul-General Dr. Krauel to Europe. A note, the despatch of which was announced by our Ambassador on the 7th October, and which was presented here by the English Charge d'Affaires on the 9th—the second document referred to by Mr. Meado (see No. 31), contains the explicit declaration that the English Government, after a careful consideration of the communications made by Baron Plessen with reference to the English protectorate over New Guinea, it had been resolved to confine this protectorate to the south coast and the contiguous islands, instead of giving to it the extent originally contemplated. And that this would be done without prejudice to any territorial question beyond this limit. The note likewise expressed a wish that questions referring to the parts of New Guinea lying outside this limit had better be- regulated diplomatically than be referred to the Commission which it was proposed to charge with a consideration of the question of the South Sea Islands. (This note was communicated to the Imperial Ambassador on the 13th October, see No. 29.) On the Bth October Baron Plessen reported that Lord Granville had expressly drawn attention to that part of our memorandum of the 2nd August in which the Imperial Government admits that the Australians are justified in their desire to exclude foreign Powers from the south coast of New Guinea (comp. Nos. 20 and 29). On the 11th October, Baron Plessen forwarded a copy of the English, Proclamation, by which the south coast of New Guinea, to the oast of longitude 141° E., together with the contiguous islands, was proclaimed a British protectorate. In reply to a question in the House of Commons as regarded the extent of the British protectorate in New Guinea, on the 25th October, Mr. Ashley, Under-Secretary of State for the Colonies, replied that this protectorate was limited to the south coast and the contiguous islands, and that it was as yet impossible to define its interior limit; it would be extended according to local requirements. A Blue Book, " New Guinea and the Western Pacific Islands, C. 4217," which accompanied the Ambassador's report of the 30th November, contains a map, which very clearly confines this protectorate to the south coast, from the Dutch boundary to the East Cape, and to the contiguous islands.

No. 40.— Count Munster to Prince Bismarck. (London, sth January, 1885.) I have discussed the South Sea question in accordance with your instructions of the 29th December. Lord Granvillo was pleased and grateful on account of your having discussed the colonial question with Mr. Meade, but regretted that Mr. Meade's proposals should be looked upon as unacceptable. Lord Granville wished to interpret Mr. Scott's note of the 9th October in the sonse that both parties should abstain from making further acquisitions in New Guinea until an arrangement had been come to, but I decidedly objected to this interpretation. I emphasized the fact that Mr. Scott's note contained a definite promise that the Bngiish protectorate would be confined to the south coast of New Guinea, and that the attempt, subsequently to this, to place difficulties in the way of German enterprise on the north coast could not be reconciled with this plain statement. Lord Granville told me the affair had been discussed in the Cabinet. That the excitement in Australia was great, and that in consequence of New Guinea the relations between the Australian Colonies and the Mother-country were strained. Lord Derby had been authorized by the Cabinet to state, in reply to eventual questions addressed to him from Australia, that Germany had taken possession without having previously informed our Government of this intention, but that negotiations on the whole question were sfcill going on with the Imperial Government. I informed Lord Granville that my Government were willing to refer the question of the inland boundaries between

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the two protectorates in New Guinea and the South Sea question generally to a Commission. Lord Granville replied that ho hoped soon to be in a position to forward instructions to Sir Edward Malet, in which the views of his Government would be stated.

No. 41.— Prince Bismarck to Count Milnster. (Berlin, 10th January, 1885.) Please to express yourself to Lord Granvillo in the following sense : Lord Granville's regret at Mr. Meade's proposals proving unacceptable I look upon merely as a form of courtesy (Hiifliclikeitswendung), as I could not for a moment believe that Lord Granville himself could have thought these proposals acceptable. As regarded Mr. Scott's note of the 9th October of last year, its not very clear wording (nicht priignante Fassung) did not admit of the interpretation given to it by Lord Granville or Lord Derby. In reading that note I had been led to believe that, in consequence of the exchange of opinions which had taken place, the British Government—contrary to its original intentions conveyed in Mr. Scott's note of the 19th September, against which we had protested—had resolved to confine its protectorate to the south coast of New Guinea, and that this meant that our occupation of the north coast would interfere with no English interest. So fully convinced of this had I been that I had caused to be published a statement to that effect in the press, to allay excitement among parties interested in Australia. If Lord Derby had been authorized by the Cabinet to reply to Australian questions in the sense indicated, this was a question of internal policy, but could not alter facts to our injury. The communications which your Excellency made to the British Government, in accordance with the instructions of the 2nd August, made it perfectly clear that we intended to place the north coast of New Guinea under German protection. We had declared at that time that we could not admit the Australian claims to that coast. Wo never concealed the fact that expeditions had started for that locality. I empower your Excellency to supply Lord Granville with a copy of the enclosure accompanying my instructions of the 29th December of last year (see No. 39).

No. 42. — Sir Edward Malet to Count Hatzfeldt. A full translation of this note, dated Berlin, the 17th January, 1885, is published in the White Book. See English Blue Book.

No. |3.— Sir Edward Malet to Count Hatzfeldt. (Berlin, 17th January, 1885.) Eefees to Prince Bismarck's statement, of the 19th December, that the German flag had been hoisted at three points on the north coast of New Guinea, and requests that any information which may reach the Imperial • Government with reference to the extent and the limits of the German protectorate may "be communicated for the information of Lord Granville.

No. 44. — Prince Bismarck to Count Munster. (Telegram. Berlin, 20th January, 1885.) The British Charge d'Affaires informs me that England proposes to take possession of the north coast of New Guinea from Huon Bay to East Cape. English and German claims will collide if this measure is taken. It would be contrary to the promise made by Lord Granville in August last year, and again in the note of the 9th October of the English Charge d' Affaires here, in accordance with which the English protectorate was to be confined to the south coast of New Guinea and the neighbouring islands.

No. 45. — Count Minister to Prince Bismarck. (Telegram. 22nd January, 1885.) On my asking about New Guinea, Lord Granville told me it had not been known that Germany intended to take possession of further territories in New Guinea. The reason for occupying the coast from Huon Bay to East Cape were explained in a despatch to the British Ambassador at Berlin. It was hazardous to allow territory to remain unoccupied, as freebooters might take possession of it. The men-of-war charged with the annexation had been instructed to respect German possessions.

No. 46. — Prince Bismarck to Count Minister. (Berlin, 26th January, 1885.) Foewabds copies of Sir Edward Malet's notes of the 17th January (Nos. 42 and 43), and instructs Count Minister to reply to Lord Granville's observations of the 22nd January in following sense : If the English Government was unaware of Germany's intention of making further annexations to the east of Huon Bay, this can only be accounted for by supposing that our communications on the subject did not meet with that degree of attention which we had a right to expect from the friendly relations between the two Governments. According to Sir Edward Malet's note of the 17th January, the British Government intended that the territorial claims of England and Germany, moae especially in eastern New Guinea, should be settled diplomatically. Consequently, before giving orders for occupying a coast, which is alleged to be exposed to enterprising pirates, an arrangement ou°l'it to have been come to with the Imperial Government. As there can now be no further uncertainty as regards the aims of Germany, we hops that the English Government, after examining our reply to Sir Edward Malet's note of the 17th December, will feel inclined (geneigt) not to carry this measure to its ultimate consequences.

Enclosure. — Draft of a Note to he addressed by Count Milnstcr to Earl Granville. (London, January, 1585.) I have had the honour of announcing to Her Majesty's Government, on the 26th December, that the German settlements on the north coast of New Guinea and in the archipelago of New Britain

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have been placed under the protection of His Majesty the Emperor. Sir Edward Malet has since then, on the 17th instant, addressed a note to Her Majesty's Government, in which he states, that the Commodore of tho Australian station had been instructed to proclaim Her Majesty's protectorate over that part of the coast of New Guinea which extends from the East Cape to Huon Bay (which might be assumed as forming the limit of the German annexations), as well as over the Louisiade and the Woodlark Islands. The same note states that the D'Entrecasteaux Islands were included in the former Proclamation. The undersigned is instructed to reply to this note as follows : — After the negotiations which have taken place between the two Cabinets since the beginning of August last, the news of German annexations cannot have come more unexpectedly upon Her Majesty's Government than did the news of the annexation of the whole south coast of New Guinea and of the contiguous islands, which reached the Emperor's Government in October last. The undersigned, in consequence of instructions conveyed to him by his Government on the 2nd August (see No. 20), was able to inform his Excellency, Her Majesty's Secretary of State for Foreign Affairs, on the Bth of the same month, that it was the intention of the Imperial Government to proceed in the South Sea as they had done in Western Africa, and to place under the protection of the Empire those territories in which Gorman commerce already preponderated, or to which expeditions Had been despatched the legitimacy of which could not be disputed. At the same time the undersigned expressed the desire of his Government to arrive at an understanding with the Government of Great Britain as to the geographical limits of their respective dominions or protectorates in the South Sea, and generally as to the principles to be observed within the respective territories, more especially as regards the subjects of either State. The fact that there existed at that time no German territories in the South Sea, but only "territories in which German commerce preponderated," or to which expeditions were about to be despatched, clearly demonstrated that we only referred to impending annexations. As regards New Guinea, the undersigned had declared the claim put forward to the whole of that island, as far as it was not Dutch, since an article in a German paper had recommended it, in 1882, as a field for German colonization, as being in no wise justified. He recalled the fact that England hitherto had not officially occupied any part of New Guinea, and that the Emperor's Government would be guided there, as they had been guided in the affairs of Angra Pequena, by the principal successfully maintained ten years before, conjointly with England, with reference to Spanish claims to the Carolinas, the Pelew and Sulu Islands, in accordance with which claims to sovereignty can only be acknowledged where effectually exercised. Although the independent part of New Guinea was therefore, on principle, as open to German as it was to English enterprise, the Emperor's Government would nevertheless admit that the desire of Australia that no foreign Power should obtain a footing on the south coast of New Guinea, in Torres Strait, facing Queensland, was justified. As the Imperial Government disputes on principle a natural right of the Australians to New Guinea and to other independent islands of the Pacific, this step could not have been intended to obtain the consent of the British Government to the proposed acquisitions. This step was taken rather from a desire to prevent collisions. After the undertaking which was initiated in spring 1884 under the protection of the Empire, with a view to New Guinea and New Britain, had become known in Australia, owing to the disclosures and the attacks upon the policy of the Empire which were made on the 27th June in the Budget Commission of the Reichstag, it was to be feared that English subjects might attempt to place obstacles in the way of this undertaking. It was the object of the German proceedings to forestall these. The conversation of the Bth August last year was followed by an exchange of opinions, culminating, as the Imperial Government had hitherto supposed, in the definite promise of the British Government that the proposed protectorate in New Guinea would be confined to the south coast facing Australia, and to the islands lying off this coast. The Imperial Government has, therefore, been surprised more painfully by the contents of Sir E. Malet's note of the 17th instant than the British Government could have been surprised through any action on our side. The undersigned must, first of all, protest against the assumption that, in a conversation with Lord Granville on the Bth August, he limited the intentions of Germany on the north coast of Guinea to a few spots in this wild country which might be suitable for German colonial enterprise. On the contrary, he has always designated the whole of the independent north coast as the object of a German colonial enterprise now in course of execution. It is quite correct, however, that Lord Granville remarked that Germany had until then founded no settlements in New Guinea. On the other hand, his Excellency could not help admitting that there existed no English settlements either. Lord Granville then confidentially informed the undersigned that negotiations with Australia were in progress with respect to New Guinea, and would probably terminate at an early date with the annexation of the southern part of the island. The undersigned could not be in doubt as to the geographical limits of the territory referred to, for Lord Granville, on the 9th August, after a Cabinet Council, made the following communication to him in writing (see Nos. 23, 28, 39) : " The extension of some form of British authority in New Guinea, which will be shortly announced, will only embrace that part of the island which specially interests the Australian Colonies, without any prejudice to any territorial questions beyond these limits." The concluding words of this paragraph (" without prejudice," &c), after the conversations which had taken place, could be understood by the undersigned and his Government only in the sense that the English annexation would not extend to the coast " beyond these limits," and that there the status quo, in which internationally the coast was a res nullius, would continue. The Imperial Government would consequently have been completely entitled to take possession of the tvhok of the north coast as far as the East Cape. This was not done, because Germany assumed

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that the definition of the geographical limits of the territories of tho two Powers in the South Sea, which were to be discussed by the Commission, would be confined, as far as New Guinea came into question, to the interior of the island. These inland boundaries, however, would be more difficult to define in the narrow eastern point of the island than in the interior further west. The Imperial Government was consequently all the more surprised when a note from the British Charge d'Affaires at Berlin, dated 19th September, was received by it (see No. 28), in which, quite contrary to Lord Granville's communication of the 9th August (see No. 23), it was announced that the English Government proposed to extend the protectorate over all those parts of New Guinea not occupied by Holland—that is to say, over the whole southern coast and also over the northern coast, only excepting the tract between the Dutch border and longitude 145° E. The remark in tlie note of the 19th September, to which Sir Edward Malet refers in his communication of the 17th instant, is as follows: "The 145 th degree of east longitude has been fixed as the western British limit on the northern coast, in order that it should embrace the territory owned by the natives on the Maclay coast, whose claim for British protection has long been under the consideration of Her Majesty's Government, and was one of the principal reasons which determined the Cabinet to advise the Queen to assume the responsibility of establishing a protectorate in New Guinea" (see No. 28). This was not a sufficient reason to induce the Imperial Government to forego the fulfilment of the promise made by England on the 9th August. The Imperial Government, too, has received numerous petitions respecting the occupation of ownerless territories, but only within the last two years have any of these petitions been acceded to. . The undersigned has already had the opportunity of informing the British Government that the enterprise directed to the north coast of New Guinea was first intended to be started in 1880, and has since been considered by the Imperial Government. On the other hand, the Blue Books prove that petitions-now put forward by England in support of claims were actually refused repeatedly. After our recent experiences at Angra Pequena, on the Gold Coast, and in Zululand, it appears that New Guinea only became a desirable possession in the eyes of England since Germany has cast an eye upon it. It cannot be asserted that the Australian Colonies stand in need of it, as the population of these colonies, and more especially of Queensland, does not as yet suffice to settle even the coast districts of the Australian continent. Baron Plessen, the Imperial Charge d'Affaires, consequently received instructions on the 25th September to draw attention to the contradiction between Mr. Scott's note of the 19th September and the promise of Lord Granville of. the 9th August. In consequence of this, the Imperial Government received, to its satisfaction, a note of Mr. Scott, dated the 9th October, which states, in agreement with the promise of 9th August, "that Her Majesty's Government have carefully considered the communication which Baron yon Plessen was instructed to make on the proposed limit of this protectorate, and have decided that the declaration to be made shall limit the British protectorate to the whole of the southern coast, including the islands contiguous to it, instead of that which they had at first proposed. This will be done without prejudice to any territorial question beyond these limits " (see No. 31). A few days later the English Government issued a Proclamation corresponding to the above declaration, together with a map showing the extent of the English protectorate. After this the Imperial Government was justified in the belief that thenceforth the remaining north coast of the island could be occupied by Germany as " ownerless," and with the full consent of the British Government, and that only the inland limits of the two protectorates remained to be settled, and that the possibility of a misunderstanding, or still less of a conflict of interests, was precluded. All formal obstacles to the annexation of the coast from Huon Bay to the East Cape appeared to have been removed. In this conviction the Imperial Government was strengthened by a paragraph in Mr. Scott's note of the 9th October, which Sir E. Malet quotes on the 17th instant, and whichls as follows : " It is with great satisfaction that Her Majesty's Government have come to an arrangement in which they find themselves in perfect accord with Germany " (see No. 31). The Imperial Government did not, therefore, at all expect that Baron Plessen's remark on the 27th September that a friendly settlement of the territorial claims on that coast, through a Commission, appeared to be desirable, would be interpreted as implying that Germany, in the hope of a favourable issue of these negotiations, had bound herself not to take possession of territories in New Guinea or elsewhere, although these negotiations might go on for years, whilst England was justified to take possession at once of the whole south coast, as well as of the eastern extremity of the island. Such an assumption would be contrary to the principle of the equal rights of both nations, which we assumed when we made overtures for a friendly understanding. The fact that England could seriously demand this from us only became known quite recently during the presence of Mr. Meade at the Conference, whose proposals aimed at altogether keeping us out of New Guinea. The views of the Imperial Government have been conveyed to the knowledge of the British Government by the undersigned, who acted on instructions forwarded to him on the 29th December and the 10th January. The note of Mr. Scott of the 9th October contains the following paragraph : " In case any questions should arise as to those districts (of New Guinea) which lie beyond the limit described, Her Majesty's Government are of opinion that it would be better to deal with them diplomatically, than to refer them to the Commission, which it is proposed to appoint with regard to the islands in the Pacific" (see No. 31). If it was the opinion of the British Government that all annexations in New Guinea ought to cease until diplomatic negotiations had led to a result, the Proclamation, by which a protectorate over the whole south coast was proclaimed, and which was issued subsequently to the above declaration, is evidently contrary to the spirit of the latter. The Imperial Government had issued orders for hoisting the German flag so long ago as August last, immediately after the receipt of Lord Granville's declaration of the 9th of that month (see No. 23), and protests against the charge

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of having acted contrary to any obligation entered into by it. The declarations (explanations) of the English Government, as well as the official map already referred to, show very clearly that the English protectorate was intended to be bounded by a line to the south of the East Cape, which coincides with the 152° of E. longitude. The statement in Sir Edward Malet's note of the 17th instant—viz., that the D'Entrecasteaux Islands, lying off the north coast, had been included in the Proclamation of the English protectorate on the 6th November last is, therefore, contrary to the promises made by England on the 9th August and 9th October last year (see Nos. 23 and 31), but also contrary to the wording of the Proclamation, and to the boundaries laid down on the official map as published. This settles also Sir Edward Malet's question, in a second note of the 17th instant (see No. 43), as to the extent of the German protectorate, for the Imperial Government intended from the very first to place the whole northern coast, from the Dutch boundary to the East Cape, under its protection. The number of localities at which the German flag has been hoisted as an outward sign of the German protectorate over the north coast is not decisive. This question of the English G overnment is all the more remarkable, as it is well known that the whole south coast of the island has been placed under the protectorate of Her Majesty the Queen of England, by performing the symbolic act of hoisting a flag in a few localities. The claim of Germany to the whole north coast would not even be weakened if, contrary to the understanding between the two Governments in August and October, the English flag should have been hoisted at a few points of the north coast and on the off-lying islands—an act which we should much regret. The argument that the proceedings of the_ English Government were dictated by a desire to stop abuses existing, owing to the absence of a jurisdiction, cannot be accepted by the Government of the Emperor. The question of jurisdiction within the two protectorates had already been mooted by undersigned in course of the exchange of opinions which took place in August last; and as there exists no English settlements, this question cannot be a very urgent one. With reference to the New Britain group the undersigned desires to state that the Imperial Government never intended that their occupation should become a subject of negotiation between Germany and England. On these islands, for a considerable time past, there have existed only German settlements, and these of an extent one-tenth of which would have sufficed for the English Government to take possession of that archipelago. If England were to claim that, owing to any possible interest of England or of her colonies, we ought to have come to an understanding with the English Government before taking possession, such a claim has no precedent in the proceedings of England on the coast of Africa with reference to Germany. The first news of some German acquisitions made there was sufficient, oven after the invitations to the West African Conference had been issued, to cause measures to be taken or to be sanctioned by which large tracts of coast, as between Bimbia and Lagos, were seized, and an expansion of the German settlements in the Gulf of Guinea prevented. After this experience, had the German Government not placed the German settlements in good time under its protection it might possibly have to hear that the English flag had been hoisted there. The undersigned is instructed to protest against the Proclamation of Her Majesty's protectorate over the north coast of Guinea, extending from East Cape and over the D'Entrecasteaux, Woodlark, and other islands lying off the coast, as being contrary to the promises made us in official documents. That such a Proclamation was proposed was made known to us in Sir Edward Malet's note'of the 17th instant, and, according to telegraphic information from Melbourne, it has already been published. The Imperial Government, desirous of preventing everything likely to lead to a conflict between the two Governments, desires to refer to the question of the inland boundaries between the two protectorates, especially in the eastern extremity of the island, to a Commission, which would likewise deal with the independent South Sea Islands, where German or English interests preponderate, and with the principles mutually to be applied. Dr. Krauel's arrival in Europe, with a view to the meeting of such a Commission, was announced by the undersigned to Lord Granville on the 29th December. The concluding remark in Sir Edward Malet's note, which refers to a Convention concluded by the Consul-General at Apia with the King of Samoa, will be dealt with in a separate communication.

No. 47. — Prince Bismarck to Count Miinster. (Berlin, 26th January, 1885.) Foewaeds draft of a note, a translation of which follows in full, also a copy of the Convention with Samoa, and of petitions of the King and Chiefs of Samoa to the Queen of England and the Governor of New Zealand. Prince Bismarck states that the Convention will be also communicated to the Government of the United States.

Enclosure I.—Draft of a Note of Count Miinster to Earl Granville. (London, January, 1835.) The Note on New Guinea of the 17th instant, presented at Berlin by the British Charge d'Affaires, refers in conclusion to information on the signature of a treaty between the representatives of Germany and the King of Samoa, which had recently been received by the British Government, and assumes that this treaty will not be ratified in as far as it may conflict with the understanding between Germany and England as to the maintenance of the independence of Samoa. 4—A. 9.

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The undersigned is instructed to reply to this point in a separate note, and has the honour to placs the following information before his Excellency Earl Granville :— Tho Government of the Emperor supposes that the information received by the British ■Government refers to a German-Samoan Convention, made in execution of Art. VII. of the German-Samoan Treaty of Amity of the 24th of January, 1879, and which was signed on the 10th November of last year by Consul-General Stuebel and the Samoan Government. The undersigned has the honour to enclose a German translation of this document, and gives expression to the hope of his Government that its tenour will convince the Government of Great Britain that the arrangements made are within the limits of the German-Samoan Treaty of 1879, and in no wise affect the sovereignty of Samoa, or the rights which other nations may have acquired there. The Convention is intended to establish the benefits of a greater authority of the law and its administration, and whilst the subjects of the other treaty Powers settled there will benefit by this, the expense of the arrangements made will be borne by Germans exclusively. The Imperial Government, subject to an examination of its details, intends to ratify this Convention, and will watch over the scrupulous execution of its stipulations by Samoa. It trusts that its efforts to ■establish order on these islands will not be thwarted (durchkreuzt) by other parties. The undersigned is instructed to refer in this respect to the petitions which were sent of the sth November by the King and the Chiefs of Samoa to Her Majesty the Queen of England, and to the Governor and Ministers of New Zealand. The text of these petitions is now before the Imperial Government, and it confirms our former supposition that they were written by British subjects, and signed in consequence of misrepresentations as to an act of violence against the independence of Samoa alleged to be contemplated by Germany. These petitions likewise show that as early as the beginning of last year King Mahetoa had written a similar petition secretly, offering his country to the British Government. As the action of these persons, who had induced the King to take this first step, met with no disapproval, further attempts in the same direction were encouraged. The Imperial Government trusts that the instructions about to be issued will also put a stop to an agitation of the same kind now being carried on from New Zealand.

Enclosure No. 2.— Convention between the German Empire and Samoa. (11th November, 1884.) In order to secure to the German residents of Samoa the benefits of a good Government, and in execution of Art. VII. of the Treaty of Amity between Germany and Samoa of the 24th January, 1879, the Imperial Acting Consul for the South Sea Islands on the one hand, and the King, the Vice-King, and the Government of Samoa have agreed to the following stipulations : — Art. I.—A German-Samoan Council of State shall be created. Of this Council there shall be members—the German Consul or his representative; two Samoans, one to be nominated by the King the other to be nominated by the Vice-King, in concert with the Taimua and the Faipule ; and two Germans, to be nominated by the German Consul. A r t. 11. The German-Samoan Council of State is to discuss and adopt such laws and institution as may be to the mutual benefit of the Samoans and of Germans residing in Samoa. It will more especially lay down legal regulations with reference to such punishable acts on the part of Samoans which affect injuriously a German, or a subject of some other State in the service of a German, or a coloured labourer in the service of a German, or the property of any such person. The same regulations are to be applied to punishable acts committed by coloured labourers in the service of a German. ~ , ~ .„ , , Art. 111. The regulations laid down by the German-Samoan Council ot State will be signed by the King and Vice-King, and made law. In the preamble it is to be stated that the law is published after having been determined upon by the German-Samoan Council of State. Art. IF.—The King, in concert with the German Consul, will nominate a German official of the Samoan Government. This official will act as secretary and adviser of the King in all affairs which affect Germans residing in Samoa. He will exercise the office of a German Judge in all offences in which Germans residing in Samoa are interested, and which do not involve a sentence of over two years' hard labour. He will also, conjointly with a Samoan Judge, act in cases where Samoans and coloured labourers guilty of having injured Samoans or their property are concerned, and be sole Judge where offences against coloured labourers have been committed by coloured labourers. Offences involving more than two years' hard labour will be judged by the German Consul (or by a person appointed by him) and by a Samoan Judge. Art. V. A prison will be built for the confinement of offenders who have committed offences in which Germans resident in Samoa are interested. Offenders condemned to hard labour shall be suitably employed, and the produce of their labour may be devoted to covering of the expenses of administration. The German official of the Samoan Government shall have the superintendence of Art. VI. The King, in concert with the German Consul, will appoint policemen, who shall be employed in the prison service and in the maintenance of security on German plantations. These policemen shall be under the orders of the German official of the Samoan Government. Art. VII. The expenses arising from this Convention shall be covered by Court fees, fines, the produce' of the work done by prisoners, and by taxes to be levied upon the Germans interested. A representative of the German ratepayers shall be intrusted with the administration of these moneys. The German-Samoan Council of State will fix the rates as well as the expenses. Art VIII. This Convention, subject to the ratification of the Imperial German Government, is to come into force at once. As long as it has not been ratified payment of taxes shall not be demanded. The Imperial German Government shall have the right to give six months' notice of the termination of this Convention.

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In proof of this we have hereunto set our seals. Signed at the German Consulate, at Apia, 10th November, 1884. Dr. Stuebel, Malietoa, Imperial Acting Consul. Le Tupu o Samoa. Wtcbee, as witness. Tupua, Le Sui Tupu.

Enclosure 3.— Petition of the King and the Chiefs of Samoa to Queen Victoria. This petition is dated Mulimu, sth November, 1884. It states that a year ago the King had offered to the Queen the sovereignty over Samoa, and that no answer had been received. This offer is now renewed, and the Queen is left to decide whether to make Samoa a separate colony or to join it to New Zealand. It states that the Samoans are afraid of another Government, which, contrary to their wishes, desired to take away their country, and prays the Queen to save them, and to place them under her protection.

Enclosure 4.— Letter of the King and the Chiefs of Samoa to the Governor and the Ministers of New Zealand. This letter is likewise dated sth November, 1884. It requests the Government of New Zealand to support their petition, and to telegraph it to England.

By Authority : Gboeqk Didsbubt, Government Printer, Wellington.—lBBs