THE GOVERNOR AND MINISTERS.

3

A.—No. 1.

But whilst laying great stress upon the financial—the political aspect of this question is, in the opinion of Ministers^ even of more vital importance. It is confidently hoped that when the troops are Withdrawn, tlie entire control of all its internal affairs, Native us well as others, will be left to the Colonial Government. The system of double Government has, in the opinion of Ministers, been fraught with the most disastrous consequences to both races of Her Majesty's subjects in this Colony. There need be no alarm at the proposal to leave the management of Native affairs entirely in the hands of the colonists. If the course of legislation since the Constitution Act be fairly examined, it will be seen that there has been throughout a sincere and earnest desire on the part of the colonists to advance the condition of the Native inhabitants ; and that its tendency is to place the Native land owner in the same position as the European in the land market, by giving him a secure title, and to enable him to sell or let his land free from the restrictions imposed by the Home Government. It is a main feature of the policy of the present Ministers to carry out and extend these principles, believing, as they do, that they tend to the only possible peaceful solution of the Native difficulty by removing one great cause of quarrel between the Native inhabitants and the Government, and a fruitful source of inter-tribal Native wars. In the Session of 1863 the Legislature decided on the removal of the Seat of Government from Auckland to a place in Cook's Straits, and in the Session of 1864 it confirmed the decision of the Commissioners appointed by the Governors of the Australian Colonies in favour of Wellington as the Seat of Government. It is a necessary part of the policy of Ministers to carry into effect the determination arrived at by the Legislature, and in accordance with the arrangement proposed by Mr. Weld on taking office, and acceded to by His Excellency the Governor, the Government is being at once transferred to Wellington. If the Colony is to remain united, and the control of Native affairs, with all its attendant cost, is to rest exclusively with it, it is absolutely necessary that the Seat of Government should be removed to a place where the Southern Provinces, from which the revenue of the Colony is principally drawn, and which contain its greatest resources, may exercise their legitimate control over the management of public affairs, and where their wants may not, as hitherto, be almost entirely neglected ; nor has the counter-argument that the larger proportion of the Native population belongs to the Province of Auckland, much weight in the opinion of Ministers. Wellington is much more easily accessible to the great majority of the population of both races than Auckland ; while events do not appear to have shown any very successful result from constant personal negociations between the Governor and Natives. Ministers, on the contrary, believe that more may be expected from broad political views, steadily and firmly carried out, than from any amount of personal influence and diplomacy, and they are of opinion that the position of a Governor would be more respected by Natives, were he only to appear amongst them on rare and grave occasions, befitting the interposition of the Representative of the Crown. Ministers are aware that resolutions from the Provincial Council of Auckland have been transmitted to Her Majesty, praying in effect that the Province of Auckland may be erected into a separate Colony. Such a scheme would probably meet the determined opposition of every other part of the Colony, as the Southern Island would not even then be relieved from the Native difficulty, in which she has no immediate material interest of any kind, while she is heavily taxed to defray the consequent expenses. Another alternative suggested is the division at Cook's Straits ; a third, the creation of three Colonies, viz., Auckland, Wellington, and the Middle Island. Such a plan might find favour in Auckland at the price of surrender of all privileges of self-Government, should it be construed to mean continued British expenditure —continued military protection, coupled with exemption of the inhabitants of the Province from contributions towards the cost of such protection. Men, too, might be found in the Southern Island who, forgetful of the future of the Colony, content in the full enjoyment of representative institutions, and in relief from the Native difficulty, might accept with readiness such a proposal, whilst the Southernmost districts of the Northern Island would doubtless oppose it to the utmost. Ministers do not contemplate the probability of the Imperial Government meeting the wishes of the Province of Auckland; but, were it otherwise, they would not the less earnestly deprecate a step fraught with disaster to the Colony. Ministers are of opinion that the division of New Zealand into two or three small separate Colonies would dwarf the political intellect of the Colony, confining it to the consideration of narrow and personal interests ; whilst there is no slight security for the future of the Native race in the fact that the questions affecting them and their relations with the Europeans are influenced by men beyond the reach of local passions and interests. Ministers are further of opinion that, as a united Colony New Zealand, may have a future before her not unworthy of consideration on the part of the Mother Country, and that the formation of a group of two or three small independent Colonies is the utter destruction of such a hope. 30th December, 1864. Feed. A. Weld.

No. 3. MEMOEANDUM by Ministers. Ministers respectfully request that His Excellency will be pleased to bring under the consideration of the Imperial Government the accompanying resolutions of the House of : — The grounds on which the House respectfully declines the offer of an Imperial guarantee for One million, part of the Three-million Loan of 1863, are stated in the Eesolutions. The failure of I'iis resource, to which the Colony had looked with confidence, has the effect of placing the finances of the Colony in great embarrassment. The Legislature, in accordance with the proposal of Ministers, has done what lies in its power, under such an emergency, by raising the rate of interest on the loan, by authorising the issue of One million of short-dated debentures bearing 8 per cent, interest, and by raising the Customs Tariff so as to increa-se the revenue by about £190,000 a year. Ministers have under consideration further measures of taxation to bo proposed to the Legislature next Session. They hope, by these means, to be enabled to restore and sustain the credit of the