No. 5.
Memorandum by the Hon. Mr. Domett.

Write to Mr. Heale informing him that it has become very desirable, on many grounds, that the purchase of Stewart's Island from the native owners should, if possible, be effected without delay. The Government has accordingly directed its attention to finding a properly qualified person to effect the purchase, and I have now to request him to be good enough to undertake this service, trusting that he will not find it incompatable with the performance of his duties to the Provincial Government of Southland. If Mr. Heale will undertake this purchase, the course the Government wish him to adopt is the following:—

First. He should ascertain and make a list of all the Natives, such as Topi, and others who are immediately interested as owners of the land in Stewart's Island, determining and defining what right they have, either generally or individually, to any, and to what portions of the Island, and from what date their claims originate respectively.

Second. He is to offer as the purchase money of the land a certain sum to be paid at once, and a certain proportion—not exceeding one-third—of the proceeds of future sales or leases of Crown lands in the Island, on the understanding (to be explained to the sellers) that of the one-third so reserved, two-thirds will be spent for the benefit of the Ngaitahu tribe by trustees to be appointed by the Governor; and the remaining third to be distributed annually to Topi, Paitu, and the heirs of Tuhawaiki.

Third. The list of persons among whom these annual thirds are to be distributed should be submitted to the Honorable Mr. Mantell for his approval before anything is definitely settled, and before absolutely concluding the purchase Mr. Heale is to report fully to Government, stating the arrangement he proposes to make, the names of the Native sellers, and full particulars of the intended transactions.

Fourth. There are two classes of claimants to land who may be affected by this purchase, or who may consider themselves so, and to make it necessary Mr. Heale should be prepared to deal with them. The first class consists of actual squatters on land in the Island, who may either be original land claimants under purchase from the Natives or not. I enclose to Mr. Heale a list, furnished from the Land Claims, Commissioner's Office, showing him who are the former, which of their claims are still unsettled, and which have lapsed. My object is merely to put Mr. Heale in possession of the state of the case. I do not desire him to take any particular stops whatever with respect to them, but only to abstain from doing or saying anything that will tend towards the recognition or support of any of them; it will however enable him absolutely to ignore all of every kind but those in the first part of the schedule, if he is applied to about them, or meets with any obstruction from them. With reference to the second class, absentee claimants, Mr. Heale need take no notice of them or their agents should any of them interfere with his proceeedings.

If found necessary, Mr. Heale will be made a Commissioner of Crown Lands, and so be empowered to deal with actual squatters, as the law provides. If any other arrangements should be, in Mr. Heale's opinion, advisable, he should report especially upon them.

Mr. Heale will be remunerated, of course, by the Government for these services.