No. 21.
The Hon. the Colonial Secretary, New Munster, to Mr. Mantell.

Sir,—

I have the honor, by direction of the Lieutenant-Governor, to acknowledge the receipt of your report of the 30th ultimo, upon the subject of your late mission to the Middle Island, and to inform you that having recently had an interview, in the presence of Mr. Kemp, and of the New Zealand Company's Principal Agent, with those of the Ngaitahu Natives (Taiaroa and Tikao) who objected to the distribution of the second instalment of the purchase money of lands lately acquired in this Province, as proposed in the schedule accompanying your communication, His Excellency finds—

1.	That the Natives Taiaroa and Tikao acknowledge, that when Mr. Kemp, in paying over the first instalments for the purchase of the Middle Island, handed the total amount in two equal sums and delivered one to each of them, he only did so in order that they might afterwards subdivide it amongst the whole of the Natives interested, according to their respective interests and rights. They were therefore only the recipients on behalf of the whole body, and were expected to act fairly and equitably in distributing the money received.
2.	His Excellency has learnt that many complaints had arisen of the manner in which the first instalment was appropriated by Tikao and Taiaroa, and that several influential claimants had received nothing whatever, and others not so much as they might reasonably have expected. Among those who had received nothing was the principal chief of the Middle Island, a young man named Topi, who is of higher rank than Taiaroa himself, and who, being personally present at the interview, confirmed and supported the truth of the complaints that had been made. Even Taiaroa and Tikao themselves admitted that this distribution made by them was not just, but excused themselves by saying they intended to amend it the next time.
3.	The objecting Natives distinctly stated that they did not demur to your proposed distribution because it was unjust or unfair; nor could they, when repeatedly asked to urge any valid objection, do so; their reply being simply, that Mr. Kemp had paid the whole £500 to them formerly, and that they wished the other instalments to be paid to them in the same manner.
4.	His Excellency found from Tikao's own acknowledgment, that the claims of himself and those he represents extend very little way into the block purchased by Mr. Kemp, but on the contrary are chiefly on the north side of the northern boundary of that purchase, and consequently are principally within the block purchased by Sir George Grey from the Ngatitoas; their interests therefore, in the block acquired by Mr. Kemp, are comparatively small.
5.	Though Mr. Kemp paid the first instalment to the two Natives Taiaroa and Tikao, no mention is made in the deed of sale or otherwise of the subsequent instalments being paid in the same manner; but, on the contrary, Mr. Kemp distinctly provided that the Government should, out of the next instalments, have the power of considering and satisfying any other claim which might be found to exist and be proved to be valid.

From these considerations, and from the advantages you have enjoyed in personally traversing the whole district, and visiting all the Natives along the eastern side of the purchase, the Lieutenant-Governor desires me to say that he has no hesitation in at once adopting your recommendation, and authorizing you to carry it out,—a view in which His Excellency is happy to say the New Zealand Company's Agent fully concurs.

The Lieutenant-Governor therefore requests that you will be good enough to prepare to return to Akaroa in H.M.S. "Acheron," taking with you Topi, Taiaroa, and such other two Natives as you may wish to accompany you. The steamer, I am to add, is expected to sail some time to-day. You will receive the same rate of remuneration for your services as when you were first ordered to proceed on the duty, namely, 26s. per diem from the date of your embarkation to that of your return to Wellington, passages by sea being provided for you at the expense of Government.

As the cutter "Fly" is at present at Port Cooper, and is expected to return to "Wellington in a few days after the arrival of the "Acheron," His Excellency has desired me to say that Mr. Fox has kindly offered to provide you with a passage by her back to this place: you are therefore requested to use your utmost endeavours to be ready to return by that opportunity.

His Excellency also instructs me to call your attention to the fact that you have not yet stated how you recommend the two last instalments should be paid, whether in the same proportions, and to the same individuals as on the present occasion, and to request you will not overlook this important point in your next report. The two next instalments can, His Excellency observes, be paid in one, in the month of December, should the Natives have no objection, instead of in June and December.