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No. 2. Copy of a DESPATCH from Governor the Most Hon. the Marquis of Normanby to the Right Hon. the Earl of Carnarvon. Government House, Auckland, My Lord, — New Zealand, 27th April, 1876. Referring to your Lordship's circular despatch of the 9th of July, 1875, on the subject of the annexation of Fiji, in which, while waiving any desire to press further the consideration of a contribution from this colony towards the deficiency in Fiji, your Lordship expressed a desire that, as regards future action, my Government should consider " Whether the time has not arrived for the adoption of some " general principle, under which each colony more immediately concerned shall " bear its reasonable proportion of the expense attending any policy which it " may advocate or approve," I have now the honor to enclose six copies of a memorandum in which my Government have embodied their views upon the subject. 2. I regret that there has been so much delay in obtaining this reply, but my Government were anxious to reserve their answer until after the return of Sir Julius Vogel, with whom they wished to consult. 3. It certainly appears to me most desirable that, in future, any question of contribution from the revenue of one colony towards the support of any new colony that it is proposed to annex, should be distinctly settled before the annexation takes place, so as to preclude any subsequent misunderstanding. At the same time, however, where such annexation takes place at the instigation and for the benefit of any particular colony or colonies, it does seem to me most reasonable that, before complying with their request, they should be required to fix definitely the funds that they are prepared to appropriate towards the carrying out of the policy they are advocating. 4. The advantages and disadvantages to this colony of the proposed annexation could then be dispassionately considered; and while the Imperial revenue would thus be relieved from a fan proportion of the burden entailed, the colonies could have no possible complaint, as their contribution would have been voluntarily tendered in consideration of the benefit they expected to derive. 5. My Government will, in accordance with the wish expressed by your Lordship, communicate with the other Australian Governments, with the view, if possible, of adopting some general principle on the subject. I rijivp c\C* The Right Hon. the Earl of Carnarvon. NORMANBY.

Enclosure. The Hon. Sir J. Vogel to His Excellency the G-oveenoe. Mr Loed,— Wellington, Bth April, 187 G. I have the lienor to transmit to your Excellency a memorandum which has been agreed to in Cabinet, in reply to Lord Carnarvon's despatch of the 9th of July, 1875. I also enclose copies of the memorandum, as your Excellency may desire to communicate with the Secretary of State by the out-going mail. I have, &c, His Excellency the Most Hon. the Marquis of Normanby, Auckland. Julius Vogel.

Sub-Enclosure. Memo, for His Excellei>c_. The Premier, with the approval of the Cabinet, has the honor to respectfully submit to His Excellency the following remarks upon the circular despatch of the Earl of Carnarvon, dated 9th July, 1875, on the subject of Colonial contributions to the cost of governing the Islands of the Pacific, of which Her Majesty assumes possession for the benefit of these colonies. The delay in commenting on this despatch has arisen through the Premier's absence, and his colleagues desiring lo await his return before taking action about it. Lord Carnarvon states his views with great kindness and courtesy, and evidently desires to consider that the colonies have been actuated by not illiberal motives: but it is impossible to fail to see that the case, as put by his Lordship, means —That the Australasian Colonies more or less urged on the Imperial Government the expediency and the necessity of assuming possession of Fiji; that partly