83

A.—4

the character of Great Britain and its people. The production of the islands, and the demand from, tho islands for manufactures and supplies from temperate climates, must bo borne in mind when it is attempted to realize the results. The advantage to Great Britain of dealing with one powerful corporation, in lieu of with those who now ennoble or degrade the island trade, is sufficiently apparent. Supposing the Government to make a satisfactory arrangement with a body of gentlemen, determined to work; out the concession, I think such arrangement might properly bo submitted to Parliament for ratification. I attach copy of a memorandum on the subject, addressed to His lExcellcnsy some months since. Wellington, Oth February, 1874. Julius Yodel.

lll.—Trading Companies.

:*** Sub-Eiiclostircs. I avail myself of your Excellency's invitation to r it'into written shape the representation I have had the honour to personally make to you on the subject of the South Sea Islands. 1. The unsettled state of the South Sea Islands, especially the uncertainty which hangs over their future, is calculated to cause considerable uneasiness to the neighbouring colonies. 2. Intimately identified as the future of those colonies will be with the Imperial country, of which I am of opinion it is their ambition to remain dependencies, they cannot regard without anxiety the disposition evinced by '"some foreign nations to establish a footing in their neighbourhood amongst the islands of the South Pacific. 3. In New Zealand there is a strong feeling that the geographical position of the colony, the prevailing winds, the shipping facilities, and other causes, ought to enable its inhabitants to develop largo commercial relations with the islands. 4. The conditions to be met appear to be, — (a.) To prevent, by anticipatory action, tho establishment of European communities with lawless tendencies, such as have been displayed in Fiji. (b.) To develop the self-governing aptitudes of the Polynesian natives, (c.) To encourage them to labour and to realize the advantages winch labour confers. (d.) To stimulate tho production of the islands, (c.) Without bloodshed or embroilment with other nations, to gradually introduce a uniform Government organization throughout Polynesia. 5. To stop the traffic in forced labour, more is required than mere force and vigilance. As long as Her Majesty's vessels are engaged as at present, they no doubt offer a check to labour traffic ; but they also make the profits of the traffic larger, and thus evidently encourage it. To permanently stop forced labour, there must be opportunities available to free labour. 6. Your Excellency is aware that I have felt much interest in a proposal made by Mr. Phillips, that a trading company should bo formed in England, with tho view of absorbing by it scommercial power a large share of political control in the islands. The object proposed by Mr. Phillips, excepting that of a chartered labour traffic, I approved; and your Excellency, I believe, communicated the substance of Mr. Phillips's ideas to the Secretary of State. I have . since thought very carefully over the matter, and there are two points in respect to Mr. Phillips's proposal which seem to me to require serious consideration, and without providing for which I am not certain the proposed Company might not lend itself to retard instead of to advance the civilisation of the islands. Those points are—(l.) That, in order to obtain the necessary capital, every consideration besides that of the mere acquirement of profit might have to be abandoned ; (2.) That Mr. Phillips's proposal does not provide that amount of direct and powerful governmental ■ control which, in my opinion, should be stipulated for, in the interest of the helpless natives. Taking all these circumstances into consideration, and not forgetting that New Zealand, by assuming the largo responsibilities proposed, would have the right to tho contingent advantages the island trade will confer, I am. inclined to recommend — (a.) That New Zealand should encourage the formation of a powerful Company to colonize the islands of the. South Pacific, by offering a guarantee of five per cent, for forty years on the share capital. (6.) That the Government of New Zealand should appoint the Managing Director and Secretary here, and the. Managing Director in. London. (c.) The object of the Company to be to civilize and settle the South Sea Islands, by opening up profitable production and trade in connection with them. (d.) Tho Company to establish factories and plantations at different islands, and to acquire by purchase soai.a already established. (c.) To acquire lands, and to let the same on terms calculated to promote production. (/.) To arrange with chiefs to cultivate produce,*and to dispose of it on agreed terms. (g.) To supply live stock and merchandise to the islands. (h.) To lend money and give assistance to settlers to establish plantations. (i.) To open up steam communication between the different islands, and between them and Now Zealand, (j.) To discourage tho removal of islanders from their homes for labour purposes, by affording them occupation on their own islands, or on islands adjacent. The Government of New Zealand to stipulate, in return for guarantee— (a.) That the Company give facilities and reasonable pecuniary aid to tho missionaries. (6.) That, whilst affording inducements to free labour, tho Company abstain from employing forced labour, (c.) The Company to own at least six steamers between the islands, and between the islands and New Zealand; and to fix the times so that New Zealand shall be in communication with the principal islands at intervals of not more than a month. (d.) The Company to establish in New Zealand at least one cotton factory, at least one woollen factory, and at least one sugar refinery. (e.) That all the produce the Company obtain at the islands, or which is obtained from the lands of the Company, bo forwarded to New Zealand. (/.) That all goods sent by the Company to the islands be shipped from New Zealand. ig.) That on all produce the Company pay the Government of New Zealand five per cent, royalty. (h.) That on all goods shipped to the islands, other than those the produce or manufacture of New Zealand, the Company pay a royalty of 7J per cent. 7. The ultimate object which I have in view is, the establishment of the Polynesian Islands as one Dominion, with New Zealand the centre of Government; the Dominion, like Canada, to be a British dependency. 8. I venture to think that these proposals, if carried out, would save Great Britain large expenses in connection with the repression of slavery, whilst the Imperial prestige in the South Pacific would bo maintained. Christchurch, 22nd November, 1873. Julius Vocjel.

After conferring with several gentlemen on the subject ;of this memorandum, I agreed with Mr. Whitaker that ho should act "with a few promoters, and draw up the heads of an agreement, to be put into shape by the AttorneyGeneral, if approved by the Cabinet, and then to bo subject to the ratification of Parliament. I conceded, after a long discussion, the condition of imposing a royalty on the shipments of the Company. I substituted for it a condition binding the GSmpany to repay, out of profits, any payments made by the Government, and impounding all profits for that purpose; secondly, a power by which the Government can intervene in the case of the business of the Company not being carried on efficiently. I agreed to this change, because I found that every one to whom I had spoken was of opinion that the royalty would shut out the Company from much business which might otherwise be profitable ; and because I believe, irrespective of the contingent advantages the colony will gain, that it is sufficiently secured against any loss arising from the guarantee, by the provision making such guarantee a lien on future profits. Julius Vogel. Wellington, 28th February, 1874.