ZEALAND TO THE SECRETARY OF STATE.

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A—No. U.

control—the heavy taxation that has consequently been required to enable the Colony to meet its obligations, Ministers may fairly claim that the Colony shall not suffer from the manner in which its bonds have been disposed of by the Imperial Government, but that the additional amount which they would have sold for in the open market may be estimated by competent persons and placed to tho credit of the Colony. For His Excellency the Governor. E. W. Stafford.

No. 25. Copy of a DESPATCH from Governor Sir George Grey, K.C.8., to the Right Hon. the Earl of Carnarvon. (No. 32.) Government House, Wellington, My Lord, — ' 4th April, 1867. I have the honor to transmit for your information the copy of a protest against the unconstitutional powers exercised here by General Chute, which my Responsible Advisers have placed in my hands. 2. In my Despatch No. 24, of the 19th of February last, I stated to your Lordship, in part, the manner in which General Chute was giving effect to your instructions. 3. I have now to add that all the movements of the 57th, the 12th, and part of the 50th Regiment, have been made within still partially disturbed districts of the Colony, without any reference to me. 4. I was allowed to have no knowledge of the times at which, or the routes by which, these troops were to be marched, or of the places where they were to be temporarily massed. 5. I could give no warning to those tribes who had hitherto aided us, that after such a day or hour, they must protect themselves or withdraw to some place of safety. I could give no similar warning to the European populations of different districts. I could enter into no explanations for the purpose of preparing the minds of friendly or doubtful tribes for the movements and concentrations of troops which were taking place over large districts of country. I feel confident that the result of all this will probably be renewed fighting in parts where a little precaution might have prevented further contests from taking place. It is, indeed, difficult to estimate the evils which may yet result in the Tauranga Districts, and other parts, from proceedings of the Military Authorities. 6. I enclose, for your Lordship's further information, the copies of recent correspondence which has passed with General Chute upon the subject of the removal of troops from New Zealand, from which your Lordship will see that I have informed the General that there can be no doubt that your Lordship's instructions could have been equally efficiently and promptly carried out without entailing upon the Colony the evils and expense to which it will now be subjected. I have, &c, The Right Hon. the Earl of Carnarvon. G. GREY.

Enclosure 1 in No. 25, Memorandum by Mr. Stafford. Wellington, 28th March, 1567. Wnn reference to tho intimation conveyed in Major-General Chute's letter, No. 44, of the sth instant, to the effect that he could not consent that the 2nd Battalion of the 18th Begiment should continue to be located at the posts it has for some time occupied, Ministers, as the Constitutional Advisers of the Crown in New Zealand, desire to state that they cannot admit,-and must protest against, the highly unconstitutional power claimed to be exercised by Major-General Chute, as being directly opposed to all constitutional practice, which requires that the Boyal prerogative of determining where Her Majesty's Troops shall be located, shall only be exercised by and through the Queen's Bepresentative. E. W. Stafford. For His Excellency the Governor.