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Colonial Government to consider whether for the insurance of the valuable property which would be liable to destruction by an unscrupulous enemy, unless redeemed by a heavy contribution, it is advisable to place the Harbour in as efficient a state of defence as possible, consistent with a moderate outlay. I have already received instructions under cover of your letter of the 19th inst., No. 1941, to construct a Battery on Okahu point, at an estimated cost of £4625, but if such a Battery as I would propose to place on the Bean Reef be authorised, that on Okahu Point may be dispensed with, and in that case an outlay of at least £000 for the construction of a bridge across the Bishop's Creek, which it had been agreed to make in consideration of the land which the Natives had given at Okahu Point, would be saved. The Battery I would propose to construct would be a powerful one, mounting 17 guns of large calibre; its position would be such as to command at a moderate range, the two channels leading into the inner Harbour, and its construction would be of the most substantial character, and be a permanent work for an extended period of time, the walls being proposed to be of hard durable stone (scoria) in large blocks and 9 feet in thickness, and that, proof against the heaviest projectiles that could be brought against them. The enclosed rough sketch shews the general form of the Battery (the probable cost of which would be j£l5,GOO) and the nature of the armament I should propose for it. I think no question can arise in the mind of any person, that this position is the true one to occupy ; two at least of my predecessors in the command of the Royal Engineers, have cast their eyes on it and referred to it in their Reports. Naval Officers have, I understand, also expressed their opinions in favor of its occupation, and Civilians, possibly to a certain extent biassed in opinion by what they may have heard, have observed that the position appears most appropriate for a defensive work. In fact there is so general and instinctive a feeling in its favor, that I do not hesitate to recommend most strongly that the project I submit should be adopted. The advantage that the position of the Bean Rock possesses over Okahu Point is, that it is so well advanced towards the main channel, that vessels coming in towards the Harbour would be the sooner under its fire, and that a raking one, which they would be unable to return, until they got abreast of the Battery and shewed their broadsides, while rounding the North Head ; whilst the 6re from the guns at Okahu Point could not be brought to bear, uutil the vessels were on the point of rounding the Head and shaping their course to run, if steamers, rapidly up the Harbor at all risks, fighting their broadsides while passing. A further advantage of a Battery on the Bean Rock, is, that if an enemy's ship passed the face of the work, it would be again under a raking fire from the guns on the left flank of the Battery directed at the stern, the most vulnerable part, where also the propeller, in the case of a screw steamer, would be liable to distruction, thus leaving the vessel helpless at a critical moment. It must be understood that though the Battery herein proposed, would dispense with the occupation of Okahu Point, yet the North Head should also be occupied, with at least one Battery, so placed as to come into action about the same time as that on the Bean Reef, and by its fire, driving vessels that may attempt to run into the Harbor, into the mid channel where the cross fire from the two sides would be most effective. A Battery of the nature contemplated, would take a considerable time in construction, at least a year and a half, with the greatest exertion, thus the outlay would be spread over a long period at the rate of about £850 a month, and would not be much felt. The Battery need not be occupied ordinarily, by more than a non-commissioned officer and half a dozen men to keep the stores in order, to air the magazine and to guard the place from unauthorised intrusion; and the maintenance of the party with fresh provisions, if they were furnished with a boat, should not exceed £50 a year. In point of fact, the current additional expense of occupation of a Battery on the Bean Rock would not exceed that of the occupation of Okaliu Point. I have &c, (Signed) Thos. R. Mould, Colonel Commanding Royal Engineers. The Major of Brigade, &c, &c., &c. Auckland. Memorandum shelving the difference of expense between the two projects referred to above, that have been proposed for the defence of the Entrances of Auckland Harbour. (Encloiure.) Ist. Expense of the project for occupying the North Head with two powerful Batteries and Okaliu Point with one Strong Battery, each with suitable land defences. Battery at Okahu Point as authorised - - - - 4,(123 Two Batteries at the North Head with Redoubt - - - 12,000 £16.G25