extravagance of expenditure in the working of the Administration, and as to the likelihood of Samoan property being sold under some security granted to the New Zealand Government. In the circular, "0 le Fono Tele" (Exhibit No. 10), the following statements are made as being some of the decisions of the first meeting, which is significantly described as " The first fono ever held where white people and Samoans combined, " namely : — "11. (a) That the accounts (money matters) of the Government of Samoa be inquired into ; that the white officials be decreased, and their salaries ; " (e) That the debt of the Samoa Government to New Zealand be inquired into —where has this money gone ? " Lago Lago, a prominent chief, in his speech to the Minister (see A.-4b, page 30) said, "I am worried myself because the debt of Samoa is increasing." Faumuina, an influential chief, in his speech on the same occasion (see the same page) said, " We do not like the expenses of European officials and the small pay given to our Native officials —where is our money going to ? " Faumuina in his evidence before the Commission, at page 159, said: — Did you understand from the report that the Government here was spending more money than was being spent in Fiji and in Tonga ?—Yes, I heard that. And you believed that ?—Yes. And did you believe that New Zealand might take over Samoa forjtlie money that Samoa owed td New Zealand ?—-I had my suspicions about it; in fact, lam quite certain that if Samoa owes a debt to New Zealand she will be unable to pay it and New Zealand will take over Samoa. Is that what Mr. Gurr told you ?—No, it is my own opinion. And is that the opinion of the Samoan members of the Citizens Committee ? —Yes, that is what we are very much afraid of. Again, at the same page, Faumuina said,— Do you remember the Governor explaining to you at an assembly of Samoans all about this £100,000 loan and the financial position of Samoa with New Zealand ?—Yes, the Administrator spoke to quite a large assembly of Natives at Mulinu'u. And did you not believe what the Governor told you on that occasion ? —I did not believe it, on this account: because he said New Zealand does not want any money from Samoa, and if New Zealand sees that Samoa is unable to pay it back, she will remit the loan. But we are quite satisfied that there is interest being paid on that loan to New Zealand. That is the reason why I did not believe him. Ainu'u, another chief, in his evidence at page 167 expressed his agreement with Faumuina's evidence on these points. Tofaeono, another influential chief, in his evidence at page 177, referring to the European reports read at the public meeting, said, — Then you do not know what is in the European reports ? —Only what I heard was referred to the committee. What were you told about the debt ?—I heard it said that the debt of Samoa to New Zealand amounted to £100,000. Did you think that if Samoa could not pay that debt New Zealand would take Samoa ? —That is the fear of the Samoans. We think that there can be no doubt that the foundationless statements contained in the report read at the meeting, and probably circulated in otherways amongst the Natives, caused them to believe that the expenditure of the Administration was grossly extravagant, and that there was a grave fear of losing some of the property of Samoa under a mortgage or security to the New Zealand Government. Apart from the misstatements made by Mr. Nelson in his report relating to the proposed reforms of the Legislative Council, to which we shall hereafter refer, he, in his evidence at page 218, made some very reckless statements, which could easily have been ascertained by him to have been mistaken. He referred to property which he alleged had been paid for by the Samoan Government as having been transferred to the New Zealand Reparation Estates Board, and added that Government House would soon belong to the Reparation Estates Board. He referred particularly to the Central Hotel and to a laundry. It was quite clear, as Mr. Nelson was forced to admit, that the Central Hotel and the laundry remained the property of the Samoan Government and had never been transferred to the Reparation Estates Board.

A.—4b.

XIII