A.—No. 17.

(5

REPORT BY MR. MACKAY RELATIVE TO

3rd. If the first and second were objected to, then to let the Europeans mine for gold, and I would hold the rents, in the shape of miners' rights fees, until the division of the money was agreed on. As I expected, the two first were unanimously rejected, and the third immediately accepted. To the northward of this disputed piece, now known as " Whakatate," was land owned by Te "Waka Tawera. This was arranged for as far as Te Mamaku (southern boundary of the lands of Ngatitamatera). Agreements were not signed at this time, as the Cultivation and Burialground Reserves were not arranged, and there were other matters which required consideration before completing these. It was understood there was to be one document executed consolidating and combining all previous arrangements, as soon as all disputes about boundaries were arranged. The population had now increased. Mr. Baillie's time was fully employed as Warden ; and my own duties in negotiating with the Natives, which were already sufficiently arduous, were not facilitated by having to assist in important matters affecting mining interests. In addition to this, the forbidden, land at Waiotahi was supposed to be the richest on the field, and the Natives were constantly complaining of Europeans trespassing upon it. The two policemen had quite enough to do to keep miners off that block ; and to crown all, wo had the most wretched office and lodging accommodation conceivable. This was the state of affairs on the Ist September, ISG7. On the 2nd a quarrel took place between a miner and two of the sons of Aperahama te Reiroa (one of the principal owners of Waiotahi). The Natives succeeded in getting the man into the Kauaeranga River, where they nearly drowned him. A great disturbance ensued, and fearing a serious fracas between natives and Europeans, I went with the police, and arrested the three disputants. On the 3rd September the man was convicted of assaulting a Native, and was fined £3, or one month's imprisonment. The Natives were proved to have nearly drowned him, and they were fined £5 each and costs, or two months' imprisonment. They were unable to pay the fine, and would have been removed to Auckland. Their father, Aperehama te Eeiroa, came to solicit their release; and asked me to lend him the money to pay the fine. I agreed to do so if he would take it as an advance, on miners' rights for the Waiotahi Block. He consented to do this, provided a line was cut along the base of the hills, and the flat laud left as a cultivation reserve. He paid the fine, and his sous were released. That afternoon, the line of demarcation was laid off on the ground, and the Waiotahi was rushed by the miners. I have been thus circumstantial in reporting this proceeding, as there were many misrepresentations about it at the time. Obtaining the right to mine over the Waiotahi Block, was a fortunate circumstance, which prevented a serious misunderstanding arising between the two races at that time. The European population was increasing, and the miners were becoming daily more discontented at the land not being rendered available for mining purposes, as it was known to be rich. The Waiotahi is now included within the " Karaka Block." On the 4th September I arranged the boundaries of cultivation reserves as follows: —For Taipari and his people at Tc Hape, within the town of Shortland. For the Ngatinaunau, at Tararu Point; this included a piece of five acres belonging to the Ngalipaoa Tribe. 3'or Te Waka Tawera and others, two pieces at Oti and Te Puru. I also caused notice boards to bo put up at burial grounds at Hongikore and Te Wharau. Thence I proceeded to Coromandel, and commenced negociations with the Tawera and Ngafimaru of Manaia for the cession of their lands. I also saw Te Moananui and his people of Ngatitamatera. I found them favourably inclined to opening up their lands between Tuapo on the north, on the sea coast, and Te Mamaku on the south. There was some excitement among the miners about the Ohinemuri District, and I endeavoured to ascertain from Tc Moananui what were the probabilities of obtaining the right to mine for gold over that country. As I expected, the answer was, that "Te Hira was a most obstinate man; that he had been most difficult to deal with in the arrangements for Coromandel, and there was not the slightest chance of his yielding in the case of Ohinemuri, :is he and all the Hauhau portion of the tribe were opposed to either the sale or lease of any land to Europeans." After returning from Coromandel I was engaged in various gold mining and Native questions until the 18th September, when I left Auckland for Wellington, on business connected with compensation for confiscated lands at Waikato. On the completion of this duty I returned to Auckland, where I arrived on the 2nd October, and was engaged there until the 11th, when I went to Shortland, calling at Taupo on the way, to arrange a dispute between the Wrikaraka and Ngatihura hapus of Ngatipaoa. I found considerable progress had been made at the Thames Gold Field; several valuable claims were being worked for auriferous quartz. The nature of the mining was such, however, as not to afford any immediate return to the miner; and as the Province was in a bad financial position, both publicly and privately, it is not to be wondered at that there was considerable discontent at the nondiscovery of the alluvial gold, and under such circumstances it was natural to suppose that there was equal anxiety about opening up the Ohinemuri District, where alluvial deposits were reported to exist in fabulous quantities. There were many instances where men owned valuable claims which they could not work for want of means ; or, where they had obtained payable quartz, there was no adequate machinery to crush it. The capital left in Auckland was already absorbed in claims, and in the purchase of plant and machinery, and there was but little chance of selling even valuable interests. The prospects of the individual struggling miner were indeed dark at that period. Many had wealth in their grasp, which, they could not realize or in any way render available. The suffering and privation endured at this time were extreme. A number of men had arrived from the West Coast, attracted by the reports which had reached them of the richness of Hunt's and other claims. Certain political agitators were not backward in fomenting the discontent which prevailed, and affairs assumed a serious aspect, as any attempt to take forcible possession of Ohinemuri would have brought on a collision with the Hauhaus, and endangered the peace of this portion of the Colony.