A.—9.

5

ships, and to protect generally the rights and interests of German merchants from being infringed or violated. It should be his endeavour, by judicious conduct, to prevent friction between German subjects and members of other nationalities, or at all events to prevent these matters from assuming serious dimensions. We merely intend to protect and support German commercial interests there. The instructions given at the time to Consul-General Zembsch are to serve as a guide for that purpose, and they confer powers and give hints which will render serviceable the activity of the Imperial representative in the South Sea. I trust to your knowledge of the intentions of the Imperial Government, and feel sure you will not lose sight of the principles which guide our action in the South Sea when preparing the instructions referred, to.

No. 7. — Dr. Stuebel to Prince Bismarck. (Dated Sydney, 14th April, 1884.) In my former reports I ventured to point out the necessity of having the Imperial Government permanently and professionally represented in the archipelago of New Britain. Having now become acquainted with the circumstances on the spot, I beg to return to this subject. The archipelago of New Britain was placed originally in the district of the Imperial Consulate at Jaluit. The only reason for this was that Franz Hernsheim, who was appointed Consul at Jaluit, was partner in the firm of Hernsheim and Co., who had commercial establishments in both localities. There is no other reason why districts so far apart should be placed in the same consular district. Winds and currents do not favour communication in sailing vessels between the two, and for this reason the commercial establishments which Messrs. Hernsheim maintain at Jaluit and Matupi are carried on quite independently of each other. Regular communications between the two are not to be thought of. As respects New Britain the supervision of the labour trade is now in the foreground. If this is to be regulated—which appears to me to be absolutely necessary—it will be requisite to appoint an official having a legal training. An examination into excesses whilst recruiting labourers and their eventual punishment call for some legal knowledge. In other respects, too, such knowledge is most desirable. Club-law still reigns in these islands. Differences between Germans living there, or between Germans and members of other nations, require to be settled judicially. An Englishman, residing there, has handed to me quite a long list of complaints against a German trader; the latter replied by a still larger number of accusations against the Englishman. Owing to the shortness of my stay it was impossible for me to decide the case judicially. The establishment of a German judicial authority in the country will alone furnish a remedy. Last year the English Deputy-Commissioner Eomilly stayed several months in Matupi. He went thence to New Guinea, and is now once more in Australia. If, as I suppose, Mr Eomilly, or some other English Commissioner, should again be sent to New Britain, it is desirable that he should meet there with a German judicial officer, with whom he could not only decide differences between Germans and English, but who would likewise counterbalance the political influence likely to result from the dispatch of an English Commissioner. The Consular official, whose appointment is recommended, would have frequently to visit the various parts of the archipelago. Still, it is necessary that he should have an official place of residence. Only Mioko or Matupi could come into question. At Mioko the control over the labour traffic would have to be exercised. Matupi, on the other hand, is healthier, and therefore preferable. If selected, occasional visits to Mioko, which could be paid in a boat, would become necessary. But whilst at Mioko there is only a settlement of Hernsheim and Co., Matupi is occupied by the Gorman Trading and Plantation Company. It would not be advisable to establish an official for a number of consecutive j Tears at either of these places. The climate is unhealthy; the privations which the absence of civilized life and company entail are very considerable, and the danger of an official losing his energies under these conditions, or becoming unconsciously biassed in favour of one of the two trading firms, must not be underrated. Provision must also -be made to enable the official to leave the archipelago at once, in case of an attack of fever. These reasons make it desirable that an arrangement should be made by virtue of which the Consular officials in the Pacific would do duty in turn. Eor this purpose these officials would have to be placed in closer connection with the Consulate at Apia. Practical reasons, moreover, speak in favour of some such arrangement. As regards the care of independent German interests, the whole South Sea forms but one region. The demand for labourers on the plantations of Samoa, and the interests of the German Trading and Plantation Company in the Western Pacific, more or less bring about relations between the several groups of islands. Such important questions as the control of the labourers, the policy to be observed towards the Natives, disputes with them about land, &c, ought to be dealt with on a common principle. It is desirable that the Consular official in New Britain should have gained some insight into the affairs of the whole South Sea, and more especially of Samoa, by having served some time in the German Consulate at Apia. After this he would go for a year to New Britain. After the expiration of this time, or in case of illness, he would return to Apia, either to be employed there, or to perform independent consular duties in some other part of the Pacific. The official, whose work he undertakes, would then go to fill his place in New Britain. At Jaluit, too, the occasional presence of a professional official will in future become necessary. The officials placed .under the orders of the Consul at Apia muse be in a position to represent the Consul throughout the consular district. An official, for instance, who proceeds to New Britain, and calls on the way at Jaluit or Yap, ought to be in a position to do the consular business awaiting him there. A junior official of the Consulate at Apia would undoubtedly make himself useful by occasionally acting there as a Police Magistrate (Municipal Judge,).