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No. 62. g m Barotonga, 28th November, 1901. I have the honour to acknowledge the receipt of your telegram, informing me that Mr. C F Maxwell has been appointed the Customs Officer for the Island of Niue. Mr. Maxwell arrived last night, and is now learning his future duties practically from Mr. Colebrook. Very fortunately the schooner " Countess " does not leave for Niue for the next fourteen days, as I have managed to secure a very fair cargo for New Zealand, and this will give Mr. Maxwell time to learn his work. lam of opinion that the appointment is an exceedingly good one. - By the same mail Mr. Smith writes me that, if our schooner does not reach Niue by the 10th December, he will leave in the " Ysabel "—that he has arranged for an election of eleven members of Council under the Presidency of Tongia, and in doing this Mr. Smith did not know of the provisions of subsection (2> of section 7of the Cook and Other Islands Act. In order to prevent any unsettlement of the native mind, I have suggested to Mr. Maxwell that he should not alter the constitution of the Council until I have visited Niue and carried out the provisions ol subsection (2) of section 7. ~-,,, .i ■»«■ •i. ± t*i I quite agree with Mr. Smith that the Eesident Agent should be also the Magistrate of the island; but Mr. Maxwell must learn the language before he can take this duty, and Mr. Smith s five native Judges may do the work for the next twelve months. Mr Smith has evidently done good work by preparing the native mmd for changes that must take place, and Mr. Maxwell will have no difficulty in taking up the work. lam however sorry that Tongia has not been made purely ornamental and given £50 per annum for life. Now he will be in a position to be mischievous. On these matters I will, however, write more fully when I have been to Niue. I have, &c, W. E. Gudgeon, Eesident Commissioner. The Eight Hon. E. J. Seddon, Premier of New Zealand.

No. 63. Youb Excellency,- Alofi Nine Island, 6th December, 1901. I have the honour to state that the schooner " Ysabel" arrived here from Tonga on the Ist instant, but to my great disappointment no one has come to succeed me here, nor were there any letters from yourself or from the Government of New Zealand. . It is over four months now since I left home and three months that I have been on the island, but not a single communication has reached me of an official nature either from New Zealand or Baroton-a, though there has been more than one chance of sending, lhis has placed me in a difficult position with respect to the imposition and collection of Customs duties, for, knowing that legislation was pending in New Zealand, I could not ask the Council here to impose Customs duties even if they had the power, except in such manner that made their action dependent on the New Zealand Parliament. This was done, as reported already ..to Your Excellency in anticipation, and I had fully expected to have received some communication thereon by the last mail. It was by the merest accident that I learned through an Auckland paper that an Act nas been passed relating to the Islands, and that a 10-per-cent. Customs duty has been imposed m all the islands included in the annexation of the 11th June last-at least, as I read the meagre scrap of intelligence that has reached here. But whether Alofi has been proclaimed a port of entry lam quite m * h { e ul ( J a o r onsideration of the questiorl) an d seeing the necessity of obtaining some revenue to carry on the government here, I decided to take the responsibility of collecting the 10 per cent. Customs duty on and after the sth December (the day after 1 the Auckland newspaper), and have given public notice to that effect. But, unfortunately, I received the information referred to above too late to collect the Customs dues from the "Ysabel," so that a considerable amount of revenue is thereby lost; and, as the season for vessels to visit here is just at an end, I anticipate there will not be the means to meet current expenditure. The effect this will haye on he native mind causes one much anxiety-that is, for my successor, for I shall not be here to meet it. If I have erred in thus proclaiming the Customs duties as payable, the money will have to be refunded successor has not arrive d, for he ought to have been with me some time to have received from me the result of my experience. I have, nowever, left for him as full notes as I can, in case he does not arrive before I leave. I exnect he "Ysabel" back here from Danger Island in about ten days, and in case the "Countess of Eanfurly" does not arrive in the meantime on her way to New Zealand, I shall leave by the " Ysabel," as already intimated to Your Excellency m October. At present the new system of government is working well, but it wil require nursing, and the constant supervision of the Eesident over the native Magistrates until they acquire a more complete knowledge of the laws and get instilled into them some justice. S. Peecy Smith, Government Eesident Agent, His Excellency the Governor, Wellington, New Zealand.

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