D.—No. 3.

tages of the special settlement you contemplate. At the same time the Board is of opinion that all the advantages might be secured under the small farmers' grants of fifty acres each in the Waikato District, one place being set apart for the whole number —say 500, and the grants given to be contiguous. This plan would certainly exclude objectionable neighbours in your own block, supposing such to be set apart say to the extent of 25,000 acres. At the same time you would not altogether want neighbours in the district, as on Saturday last a ship was despatched from Scotland with 235 souls on board, and another will be despatched from London during the present week, with about 500 souls on board. All these, as well as those to be despatched in vessels to follow monthly, will be located in the Waikato District. The Native difficulty, so far as Waikato is concerned, may be considered nearly at an end. As to the selection of the emigrants intended to form your settlement, I do not imagine there could arise any insurmountable difficulty. You would not of course wish to include any but those who would be most likely to succeed in the colony. The Board will have much pleasure in placing before the Government of New Zealand your wishes, and will also recommend them to their favorable consideration. A railway for twenty-two miles from Auckland towards the Waikato has been commenced, and funds provided for its completion, and in a very short time it will be extended to the banks of the Waikato Eiver. I note in your remarks that there are one or two points in the new regulations which, in your opinion, you think will act prejudicially with respect to the emigration from this country of the better class of settlers. May I request you will be good enough to favor the Board with your opinion on the points referred to. With reference to Canterbury as a field for emigration, no doubt it has advantages for certain emigrants, but no free grants of land are given in that Province ; and as to the Native difficulty at Auckland, I believe it will soon pass away. I am, &c, Wm. S. GeAHAME, John McElroy, Esq. For New Zealand Government Emigration Board. 15, Alma Square, Moss Side, Manchester. Enclosure 5 to No. 2. John McElboy, Esq., to New Zealand Emigration Boabd. 15, Alma-square, Moss Side, Gentlemen, — Manchester, 15th September, 1864. I have duly received your letter of the 13th instant, and thank you for the kind way in which you accede to our wishes as to an application to the New Zealand Government requesting a block of land to be set apart for us as a special settlement. With regard to points in the new regulations which I think would act prejudicially respecting the emigration from this country of the better class of people (by whom I mean those who will pay their passage in contradistinction to those whom you are taking free), the points in question are two : Touching the first point, I presume in the first place that the grants of land are given to emigrants as an equivalent for the expense of their passage ; and secondly, that the recent alteration in the amount of acreage is to hold out greater inducements than before to emigrants that the district may be more speedily colonised. Now I have seen with a little surprise that the half-grants which before were given to emigrants' children between the ages of three and eighteen are now limited to between twelve and eighteen. This, despite the increase of the full grants from forty to fifty acres, at once diminishes the advantage to the bulk of married emigrants instead of increasing it. Men do not get married generally before the age of twenty-five, and therefore if the same limit of age (forty) is kept as before at least ninety per cent, of the children will be under the age of twelve, and at least seventy per cent, between the ages of three and twelve. And I imagine that the parents will consider it rather hard that whilst they have to pay a considerable sum for the children's passage, they can have no return for it in the shape of land, although in course of time the children will make better colonists than the parents. I do not suppose that the New Zealand Government has made this new regulation without well considering its effect. In fact, it carries its object in its face, which is to colonise the Province with people able to defend it. But I cannot help thinking it will prove a considerable hindrance to the emigration of the class I have indicated. It may be (I do not see the point mentioned in your statement of conditions) that the limit of age is increased to a point above forty years of age, but that class is not so eligible as the other, and it would be well if the New Zealand Government could be induced to grant say quarter grants, or 12J acres, to children between the ages of three and twelve of emigrants under forty years of age. You will know if this is possible or not. The other point I notice is that referring to the amount of available capital required for the emigrants to be possessed of. You say £2 to £3 per acre: this for a man and his wife would be £200 to £300. I grant at once that if you can get a sufficient number of such men they would be excellent for the colony. There are no doubt many with a considerable amount of capital who will go out; but I am strongly of opinion that the bulk of people who will be desirous of going out will hardly have so much money. In fact, I hardly think it would be strictly necessary for them to have so much ;at all events, in the way our society would be organized so much would not be needed. The rule in Canada is I believe that each emigrant is to prove himself to have sufficient means to provide himself with implements and keep himself till a crop is raised, and we ought not to insist on very much more than that. If the United States and Canada did so, and insisted on a capital as high as you state it, it would soon prove an effectual bar in arresting the progress of emigration to those places. Small farmers with so much money can nearly always find a farm in this country on which they can live in tolerable comfort. I have lived many years in the country near Manchester, and am acquainted with many small farmers, some my own relatives, and know from experience that it is extremely difficult to get them to think of emigration. I have so strong an opinion on this matter that I should ask you to leave that point in the selection of our fellow emigrants entirely with ourselves.

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CORRESPONDENCE RELATIVE TO DESPATCH