E.—No. 7.

If it be asked whether the expense of native government and of native wars in New Zealand is in its nature Local or Imperial, or to speak with requisite accuracy, whether that expense should be defrayed by taxes imposed on the inhabitants of New Zealand, or by taxes imposed on the inhabitants of the United Kingdom, the first and most obvious answer is, that the cost of all war and government should be borne by those for whose benefit it is carried on, that is to say, in this case, by the inhabitants of New Zealand. The members of every community are bound to pay for what immediately concerns their personal safety, and the security and extension of their property. Nor, if the question is viewed as one of dry justice, would this answer be much affected by the circumstance that the native policy has been conducted subject to instructions from the Home Government. The duty of the governed to defray the expenses of their own government does not depend upon the nature of that government, whether free or absolute, native or foreign ; but on the circumstance that the governing authority is acting honestly as trustee for their interests, and not for the interests of any third party. But it cannot be alleged that New Zealand has at any time been governed in the interest of the inhabitants of the United Kingdom. The colonists are not compelled to give a preference to English manufacturers, or to carry their produce to an English market. They contribute no quota to the Imperial army, no money to the Imperial treasury. The British tax-payer, in short, has never derived or endeavoured to derive from New Zealand any other advantages than those which the Colony and the mother-country enjoy in common from commerce and emigration. I repeat, therefore, that as matter of strict right the circumstance that the internal administration of New Zealand was controlled by the British Government, would not relieve the colonists from the duty of providing for the expense of that government, including that of intestine or frontier wai'S. I am aware, however, that the question cannot be dealt with as one of strict right—nor have I any intention of arguing it on that footing. When bodies politic are so closely related to each other as Great Britain and her Colonies, the stronger is under an obligation to assist the weaker, an obligation of generosity and wisdom as irresistible practically as one of technical justice, and unquestionably heightened in proportion to the amount of control exercised by the power which gives assistance over the affairs of the community which receives it. This species of obligation the British Government has ever been ready to acknowledge and fulfil. Before the institution of responsible government in 1853, the military expenses of New Zealand were unhesitatingly adopted by the Imperial Government. In the five years, from 1853 to 1857 inclusive, I find that £434,300 of British money must have been spent on the same account, besides naval expenditure. At the end of 1862 there appear to have been about 5,500 officers and soldiers in New Zealand, at an annual cost to the Imperial treasury of nearly .£350,000 per annum. I do not pause to inquire whether this large expenditure deserved or elicited any gratitude from the colonists, a question of slight practical importance; but I state as an opinion which will not be questioned beyond the limits of New Zealand that a Government which thus frankly adopted the whole cost of colonial wars, was entitled, as a necessary consequence, to a paramount control over the causes out of which these wars were always liable to arise—that is, over Native Affairs. With all its disadvantages to Great Britain, this arrangement is a common one, and there were peculiar reasons why the Home Government was ready to submit to it in New Zealand. For when the British Crown employed its credit to procure the sovereignty of New Zealand, for the advantage of those British subjects who had settled and might afterwards settle there, it became bound to secure to the utmost of its power that the rights thus obtained should not be used (as they have been elsewhei'e) to the injury of the natives. The Home Government has therefore been anxious to preserve an effectual authority in the management of native affaire, either until the amalgamation of races had proceeded so far as to break down the sharp division of colour which at present exists, or until a system of government had taken root in the Colony which, by assigning to the Maories some recognised constitutional position, would furnish some guarantee against o]>pressive treatment of the less educated race, and would thus at once satisfy and protect them. Up to the passing of the Constitution Act, the Imperial Government possessed that authority. Its influence in the Legislature, and its absolute control over public officers, conferred upon it all, and possibly more than all, the power that an Imperial Government could properly exercise in a colony of British settlers for the advancement of the Maories and for the prevention of quarrels between them and the colonists. But this form of government was abolished by the Constitution Act, and the coincident establishment of Responsible Government. The effect of that Act, and of the proceedings consequent upon it, was to transfer the government of the island to the colonists, subject to an understanding which was arrived at with the Governor and his Ministers, that he should retain the personal direction of the native policy of the Government. But this understanding must not be misapprehended. The Governor had no power of taxing the natives, or of relieving them from taxation. He had no power to make laws for them. He had no adequate revenue at his command for administrative, educational, or police purposes, and the inadequacy of the sum reserved in the Constitution Act for these objects enabled the Colonial Government from time to time to procure his assent to various Acts calculated to bring the conduct of Native Affairs, in vario\is important particulars, under the control of the responsible ministry. Such were, the Native Reserves Act (No. 10 of 1856), the Native District Regulations Act (No. 41 of 1858), the Native Circuit Courts Act (No. 42 of 1858), under all of which the powers conferred nominally on the Governor are to be exercised by him as a Colonial officer, "by the advice of the Executive Council," and not as an Imperial officer under instructions from the Secretary of State.

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COLONIAL RESPONSIBILITY