No. 22.
Copy of a Despatch from Governor Grey to Earl Grey.

Advertising to my Despatch No. 35, of the 7th instant, upon the subject of some objections raised by the principal agent of the New Zealand Company to certain arrangements which I bad made, in order to procure two districts which were required by the settlers who had purchased land from that company, I have now the honour to enclose the copy of a letter which was addressed to me by Lieut.-Colonel McClevcrty upon the 17th February last, to which I did not at the time attach so much importance as I do now and of which I had delayed taking any notice until I received a report from Lieut.-Colonel McCleverty upon his proceedings in reference to the land claims at Wellington, which only reached me yesterday.

Colonel Wakefield's recent objections to the course I adopted in settling the Porirua and Wairau land claims, taken in connection with Colonel McClevcrty's letter, herewith transmitted, make me now desirous of knowing whether Her Majesty's Government are prepared to suggest any mode of avoiding the following general difficulties which I fear exist to the New Zealand Company making a satisfactory arrangement with regard to their claims to land in this country.

The New Zealand Company originally claimed large tracts of land as having been purchased by their agent here, and they proceeded to sell considerable portions of the tracts so claimed, under the supposition that their title was a good one. I believe that in repeated instances one or more resales of sections thus originally purchased from the Company have taken place, by which various obligations have been incurred by the purchasers from the Company.

Upon the subsequent examination of the alleged claims of the New Zealand Company to land, by a Commissioner expressly appointed for that purpose by Her Majesty's Government, this Commissioner thought it necessary to disallow the claims of the New Zealand Company to several districts in which they had sold large quantities of laud to other persons.

I have already made every effort that I could, consistently with justice to the rights of the Natives, to procure for the Company the lands requisite to enable them to fulfil their engagements, but it is my duty to state that I am now satisfied that it is doubtful whether the Government will ever be able to procure for the New Zealand Company some portious of land which that body has disposed of to other persons—at all events, without making much larger payments to the Natives than I am authorized to do at present.

In the specific case alluded to by Lieut.-Colonel MeClcverty, the Te Aro Pa is situated in one of the most valuable, portions of the Town of Wellington; and, according to another report I have received from the same officer, it is now inhabited by 171 men, women, and children, who will naturally feel the greatest reluctance to quit a place which they have inhabited for years, which is well suited to their wants, and with the value of which they are well acquainted.

The portions of land thus circumstanced (excluding from consideration the District of Taranaki) are neither numerous nor of great extent, but consist chiefly of small portions of land in the actual occupation of the Natives (as in the instance above stated), or absolutely requisite for their subsistence from proximity to their pas, or some analogous circumstances; and these portions of land have been decided by Mr. Commissioner Spain to be the property of the Natives, and the Government has approved and confirmed his decision.

Under these circumstances it would be very desirable if some general arrangement could be concluded with the Company by which Crown titles could be issued to the great majority of their purchasers, who either now are or can at once be put in possession of their sections, instead of delaying the issue of all such titles until the comparatively small portions of land originally claimed by the Company, and now in possession of the Natives, can be procured for the New Zealand Company, which latter result can, I fear, only be accomplished by a considerable sacrifice of time, and perhaps at a considerable expense.

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I consider some arrangement of this nature so very desirable, indeed so essential to the final settlement of the difficulties still existing in this country, that I think it would be cheaply procured by giving favourable terms either to the New Zealand Company or to the purchasers under that body. The latter persons are evidently deserving of sympathy, and can in no way be held responsible for the difficulties which have occurred; and the New Zealand Company have at least this claim: that the settlements which they originally founded are now very prosperous and exceedingly important to Great Britain; whilst at the same time the whole of my experience with the Natives from whom the Company's purchases were originally made has satisfied me that, under the then state of the colony, it would not have been practicable to have made extensive purchases without some such difficulties occurring as have actually taken place.