A.—9

12

continuance of German interests in the South Sea. The company, at a large sacrifice of human life and money, had first established commercial relations with New Britain and the adjacent islands, and the trade there was at present exclusively in German hands. They had also succeeded in inducing the natives there to work on plantations, and had thus opened a fresh field for recruiting labourers. But, apart from German commercial interests, there were in New Britain two harbours, namely, Mioko and Makado, which had been acquired in December, 1878. by the officer commanding H.M.S. " Ariadne." This acquisition had been sanctioned by the Eeichstag. At the same time it appeared that England and France were at present discussing the question of the New Hebrides, which would probably be surrendered to France as a set-off against New Guinea. In these islands, likewise, the company held valuable landed property, including Sandwich Harbour on Malicolo, and the Island Lenure. The company, moreover, is interested in these islands being left free as a field for recruiting the labourers they required, and they had quite recently taken steps to establish permanent labour depots on the New Hebrides and the Solomon Islands. A glance at a map showed that the Power or Powers who annexed New Guinea, New Britain, and the New Hebrides, could scarcely avoid annexing the Solomon Islands likewise. An annexation of these islands would prevent the company from procuring labourers there, and as no other islands in the South Sea could make up for the deficiency, the existence of our plantations on Samoa would be jeopardised. If Samoa itself were to be annexed by one of these Powers, German interests in the South Sea would cease to exist altogether.

No 11.— Dr. Busch to Count Minister. (Berlin, sth January, 1884). In continuation of my communications of the 28th and 29th August last,* respecting the labour trade in New Britain and New Ireland, to which replies have not yet been received, I have the honour to forward a report of Consul Hernsheim, dated Matupi, the 26th August last. Your Excellency will perceive from this that Mr. Bomilly, the English Deputy High Commissioner, who arrived at Matupi in the beginning of August, does not think that the steps taken by Messrs. Hernsheim, to obtain compensation from the Queensland Government, will be effective, unless some influence be used in London. In discussing this question in the spirit of my communications, I beg your Excellency to state that we, too, shall send an official to the New Britain archipelago, there to take care of German interests, and that Dr. Stuebel, the administrator of the German Consulate-General for the South Sea, at Apia, has been instructed to send a Commissioner to Matupi. That we hoped the united efforts of the German and English officials would strengthen a feeling of legal security there as well as in other parts of the South Sea, and w rould, above, all, prevent friction between the subjects of the two States. I enclose the copy of a report of Dr. Stuebel, dated Apia, the 30th September last, together with enclosures, which your Excellency may eventually make use of, and which shows how, on the one hand, the existence of German commercial interests is wilfully denied, and on the other nonexistent German projects of annexation are asserted to exist, in order to further the desires of Australia to annex the independent islands of the South Sea. Enclosure I.— Consul E. Hernsheim to Prince Bismarck. (Matupi, 26th August, 1883). In continuation of my former report I beg to forward to your Excellency further documents referring to the "Stanley" case. They were prepared by Deputy High Commissioner A. Eomilly, who has been here during several weeks, and forwarded by him to the Immigration Office at Brisbane. The damage suffered by my firm in consequence of the destruction of the local products in store, as sworn to by Mr. Tetzlaff, has been valued by me far too low, for at a low estimate it exceeds £1,000. Mr. Eomilly is of opinion that no compensation can be hoped for from the Queensland Courts unless a superior authority intervenes. Labour-vessels still continue to arrive here from Queensland and Fiji, and thS presence of an English Commissioner, having no executive power, can scarcely bring about a change for the better.

Enclosure 2. — Dr. Stuebel to Prince Bismarck. (Apia, 30th September, 1883.) Foewaeds an article published in the Sydney Daily Telegraph, written by a resident on New Britain (probably a missionary), and dated the 2nd July, 1883. This correspondent ought to know that, apart from the English labour-vessels and a plantation of Mr. Parrel, formerly agent of the German company, there exist no English interests whatever in New Britain. He must also know that the visits paid by the German men-of-war " Carola " and " Hyaena " had absolutely nothing to do with annexation. His complaints about the sale of firearms to the natives touch an admitted evil. But it may be doubted whether the cessation of that sale would not stop the recruiting of labourers altogether. At all events, Germans cannot be prohibited from selling arms as long as the English are not prevented from doing so. The whole question appears to be treated with a little too much sentiment, whilst on the part of England it is being made use of for selfish political ends.

Enclosure 3.— Article on New Britain. {Sydney Daily Telegraph.) The article is dated the 3rd July, 1883. The writer first of all exposes the abuses of the labour trade. The existing enactments do not meet the case. New Ireland and New Britain are densely peopled, but although exceedingly fertile, they hardly produce food enough for their inhabitants. The existing system of recruiting labourers here is the worst that can be imagined. In the course of this year twelve labour-vessels visited the island, and 1,200 muskets and 150 Snider rifles with

* These communications instructed the German Ambassador at London to communicate the contents of the note of the 4th September, 1883 (No. 9), to the British Government.