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the ocean with it; neither, if a man will go and watch upon the lee reef, will he find any of them being carried over there. This has proved to me that the savages toll the truth-—though the white men are not willing to believe then*—when they say that if a diver could get down and work under the breaker, on the outside of the coral reef, he would find there even more shell than is to be found in the lagoon. Of all the islands of the South Pacific, with the exception of the San Pablo of Magalhaens (no doubt the same to which Cook gave the name of " Palmerston"), the Paumotus were first known to European navigators. The earliest discovered was San Miguel Archangel, seen by Quifos in 1606. Others were visited by Le Maire, Schouten, and Jacob Eoggcwein; but it was not until the beginning of the reign of the present Queen Pomare that they became generally accessible to civilized man. So great was the dread entertained by mariners of the ferocity of their inhabitants that when, some forty years ago, at the windward end of the Archipelago, the "Essex " whale-ship was struck and sunk by an infuriated fish, the crew preferred to make their way in their boats to the coast of Chili—a distance of over 3,000 miles—to risking their lives in the endeavour to reach the Society Islands through a region of reefs and shoals inhabited by merciless cannibals. Attention was first attracted to the pearl deposits of Paumotu by the shell which was obtained from thence by the natives of Tahiti, and used by them for all manner of domestic purposes. But little notice was taken of them until it came to the knowledge of merchants of Valparaiso that certain Romish missionaries, who had established themselves among the savages of Manga Eeva (Gambier's Isles), had there obtained several parcels of valuable pearls. Their avarice was immediately stimulated, and several vessels were despatched in search of these precious gems, but with ill success, for the traders soon discovered that pearls alone are not worth fishing for in that part of the world, but did not fail to perceive that the shell, or mother-of-pearl, was easily obtainable and extremely profitable; and so the trade flourished, and has continued with many fluctuations of the market up to this day. Various causes have of late years contributed to enormously increase its value, so that the profits of a pearl fishery are, at the present time, four times greater than they have ever been up to a few years past. Many fishers have made the remark : How is it that in those days we so seldom get hold of large pearls, when twenty years ago great numbers of them were to be found in the possession of the savages? The agents of Messrs. Godeffroy on one occasion shipped to Europe, in one parcel, pearls to the value of $20,000, the product of a few months' collection among the Paumotus. Beachcombers, also, who had been daring enough to land upon remote lagoon isles, and had managed to escape the ovens of the cannibals, frequently realized great sums of money by the sale of parcels of these gems, which, as a general rule, they disposed of for much less than their worth, which they were unable to truly estimate. Such was the case with Joe Bird, of Mangarongaro, who was known to have made over $6,000 in this way, a great part of which was found in his chest by his wives, who divided it among them, after he had been put to death by Kis own men. In like manner Harry Williams, of Manihiki, amassed silver coin until he had as much as nearly filled a powder-keg, which one day, in a drunken fit, he broke to pieces with an axe, and, scattering the contents upon the sand, told the savages among whom he lived to take as much as they wanted, which they presently did, carrying the treasure off to their houses, crying, " Aue, aue! the white man has gone mad, and broken the barrel in which he kept his gods. Shall we give them back to him ? Oh, no ! Let the white man go and find more." So, many people have asked the question, " How was it that pearls of value were so much more plentiful in former years ? " There is a way of accounting for it; in part by the fact that, on every new fishery, the great shells are found in the shoal water to an extent which is never afterwards possible while the fishery continues to be frequented, and also for this reason, that the savages had been hoarding them. Not from hope of gain, for they had no such knowledge, but from superstition: thus, in every village was a house specially built and set apart wherein they kept their gods, or what answered the purpose of such. In this place it was customary to make offerings of the largest of everything they found (as well as whatsoever was new and strange to them), as the largest cocoanut, crab, fish of any kind, shell, or pearl: these things were made sacred, and hung up in this building ; small articles, such as pearls, teeth of dead men, teeth and claws of animals, were enclosed in little bags, and carefully stowed away. Thus these places might be likened to a sort of museum, in which everything rare and curious had been preserved from generation to generation from an unknown time; and, when communion with white men began to slacken their faith in their ancient devil-worship, much of what was really precious among these strange collections fell into the possession of the first strolling ruffian who was bold enough to land and live among them. Many men in those days lost their lives in this trade, and others made themselves notorious for their evil deeds in connection with it—notably one Captain Eugg, who made a practice of cruising round the Paumotus, and, wheresoever he found a quantity of shell ready for shipment, seizing it by armed force. This man finally reaped the just reward of his misdeeds ; for, having had the assurance to fire into the " Dolphin," an American vessel of war, to which he had declined to render an account of himself, he was, by the " Porpoise," one of the same squadron, chased into the North Pacific, and there sunk with all his crew. In those days the yield of pearl shell of the Paumotus was enormous, and its value comparatively low, though great profits were made in the traffic, the natives being barbarous and ignorant, insomuch as they in some instances were willing'to give 1,000 shells for an iron tomahawk, and for other articles of barter in the same proportion, which is still the case in some groups of the North Pacific, into which civilization has not yet penetrated. Coming down to later times, it is probable that the yield of shell in the Paumotus twenty years ago amounted to about 1,000 tons annually, of which part found its way to Valparaiso, where agencies were established by European firms, some to Sydney, and a considerable proportion to China. As the aborigines became more intelligent, B—A, 4,

I.—Trade and trading arrangements : ■ Mr. Sterndale.