A.—sb,

4

No. 9. The Agent-Geneeal to the Hon. the Colonial Seceetaet. Sie, — 7, Westmiuster Chambers, London, S.W., 6th October, 1880. I have the honor to acknowledge the receipt of your telegram (copy attached). lat once made the various officers aware of the instructions therein contained. A separate correspondence with Mr. Smith will show you the course I have taken with that gentleman, and I trust that it will commend itself to your approval, and that you will make the allowance I most earnestly recommend as a matter of justice. ] enclose herewith correspondence with Mr. Kennaway and Mr. McKellar. Having regard to the position of these gentlemen, and their ability and trustworthiness, I have thought it reasonable to agree to their wish to await the arrival of the instructions referred to in your cablegram. Mr. Kennaway reserves any remarks he may wish to make. Mr. McKellar not unnaturally expresses the opinion that you cannot be aware of his multifarious duties when you propose to make so large a reduction. Mr. McKellar's position is most responsible. Apart from his duties as Accountant, and as the officer who effects the marine insurance on the goods shipped to the colony, his duties in connection with the supply and shipment of railway and other materials are of a very onerous and responsible nature. A careless or dishonest officer might entail great loss on the colony; and, viewing the nature of his position, I cannot think it desirable to make so large a reduction in his salary Even if he agree to accept the reduction of 40 per cent, it cannot be supposed that he will be contented. I think it especially hard on whoever is appointed as Agent-General to succeed me that he should either lose the services of Mr. McKellar or find him discontented. To Mr. David Eenn I have given notice; and your wish that all the salaries from the Ist October shall be reduced by 10 per cent, will be attended to. I have taken upon myself to think that you do not desire to include the office-boy, who receives ten shillings a week. It seemed to me, however, so hard on all the officers in receipt of small salaries, to be so suddenly deprived of their means, and perhaps thereby be subjected to great hardships, that I have, out of my own pocket, paid to Mr. David Eenn the loss he suffers during the remainder of his stay, as also the loss sustained by Mr. Shortt, Mr. Hackworth, and Mr. McKillian for a period of six months. Vou will allow me to say that the records of my department show great reductions in the face of an enormous mass of work. You will also permit me to add that the officers of this department have enjoyed very rare increases of salary, that they have longer hours (10 to nearly 6 o'clock on ordinary days, and 10 to 2 on Saturdays,) than the other officers in the Civil Service, and that they are subjected to the exceptional hardship of an income-tax, which the other colonies do not allow their officers to lose. I must not, however, be supposed by this comparison to imply that I regard with favour the reduction other officers in the service have suffered. Knowing so many of them as I do, their devoted service, and, as a rule, their small means, it is to me a matter of keen regret that a wealthy colony like New Zealand has found it necessary to make them suffer for the policy of opening up the country which has of late years been pursued. I have, &c., Julius Vogel, The Hon. the Colonial Secretary, Wellington. Agent-General.

Enclosure 1 in No. 9. The Hon. the Peemiee to the Agent-Geneeal. Vogel, London. Paeliament reduced vote for office to three thousand. Eeduce Secretary's salary to six hundred. Engage accountant, not over three hundred. Dispense with shipping agents. All other salaries, including Agent-General's, to be reduced ten per cent, from October first, that reduction made all New Zealand salaries. Instructions will be sent by next mail. Hall.

Enclosure 2 in No. 9. The Agent-Geneeal to Mr. Kennawat. Sie, — 7, Westminster Chambers, London, S.W., 9th September, 1880. I have the honor to inform you that the Government have instructed me by cable that your salary is to be reduced to £600 a year. 1 shall be glad to know if you will be willing to submit to this reduction. Tou must allow me to say that I greatly regret having to make this announcement to you. lam totally at a loss to understand why the reduction made in your salary is larger than that of other officers. I can personally bear testimony to the excellence of your service, to your unwearied assiduity, and to the great responsibility of your position. Whenever, as has sometimes been the case, I have been too unwell to attend at the office, I have felt the greatest confidence in the knowledge that, you being in charge, the affairs of the department were in perfectly safe keeping. lam confident the Government does not possess in its-, service a more faithful officer, or one better qualified to discharge the duties of the appointment he holds. With many expressions of personal regard, I have, &c, Julius Vogel, W Kennaway, Esq. Agent-General,