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The Pamphlet Collection of Sir Robert Stout: Volume 63

—No. 1.— — The Secretary of the Company to Earl Grey

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—No. 1.—

The Secretary of the Company to Earl Grey.

New Zealand House,

My Lord,

I am instructed by the Court of Directors of the New Zealand Company to submit the following representation for the consideration of Her Majesty's Government.

The time has come when the Directors feel that it is no longer possible for the Company to defer a decision as to the continuance of its proceedings and existence. The communications which have been held with your Lordship have convinced them that it is your desire that the efforts of the Company shall still be addressed to the objects for which it is instituted; and have, they believe, at the same time, satisfied your Lordship that, in the position in which the Company finds itself placed, it is altogether impossible that this desire can be accomplished, except by means of the active interposition of the Government. It is unnecessary for them, therefore, on the present occasion, to enter again into the particulars of that position, or to detail the reasons which render an immediate decision, on the part of the Company, indispensable. They think that the circumstances of the case justify them in asking, on public grounds, for such aid as may be required to enable them to continue operations acknowledged to be advantageous to the Community at large. And they also think themselves entitled to prefer a claim for compensation, on the ground of justice to the Company.

That claim they base upon the injury which has been page 8 done to the Company, by the acts of the Government at Home and of the Local Government of New Zealand.

The principal acts of the Home Government, for which the Directors consider that compensation ought in justice to be given, are, that it has entered into four distinct agreements with the Company; that in each of these the Company has fulfilled its part; but that, to this day, no one of these agreements has been fulfilled by the Government.

In the first (in November 1840), relying on the pledge of Lord John Russell, that a Crown Grant of its lands should be made forthwith, the Company waived its claim to all purchases from the Natives; increased its capital; spent further large sums of money; and incurred heavy liabilities in colonising according to its charter. No Grant under that agreement has ever been made.

In the second and third (in June 1841, and August 1842), the Company purchased lands from the Government, with the full understanding that it should have the proper Deeds of Grant without delay; and on the strength of this they proceeded to colonise, and again spent money and incurred liabilities. No Deeds under those agreements have ever been made.

In the fourth (in May 1843), relying on the distinct promise of Lord Stanley, that Conditional Grants should be made immediately on Captain Fitzroy's arrival in the Colony, the Company resumed its operations, which had been suspended in the preceding January in consequence of the nonfulfilment of the former agreements and the hostility of the Government; spent further sums; and incurred further liabilities. No Grants were made in accordance with that promise. Partial Grants were tendered, but long after the time promised; even then they were rendered useless by the interpolation of unauthorised and vague clauses; and they were consequently refused by the Company.

Thus after four separate agreements, under no one of them has an available Grant ever yet been made.

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The principal acts of the Local Government, giving with equal justice, as the Directors conceive, a claim to compensation, are these.

The first Governor, Captain Hobson, withheld the Grant which Lord John Russell had not only engaged for, but ordered; compelled the Company, in violation of the agreement, to appear before the Court of Claims; and threw the whole land-question into such uncertainty and confusion, that to this hour its re-adjustment has been found impracticable. Instead of countenancing the efforts of the Company, and assisting its Settlers to overcome their first difficulties, he established himself at a distance from the main body of the Colonists whom he was appointed to govern; threw obstacles in the way of the Company's operations; enticed away mechanics taken out at its cost; and endeavoured, by unfair methods, to raise the Northern at the expense of the Southern or Company's Districts. With the same views he refused to the Company the site for its Second Settlement permitted by the Secretary of State, and forced on it a selection which in June 1843 led to the massacre of Wairoa.

In July 1843, immediately after that massacre, Captain Hobson's Successor, Lieutenant Shortland, issued a Proclamation, warning the Settlers off all lands where the claim was disputed by the original Native owners. In consequence, the Company's surveys were at once stopped; cultivation in great measure ceased; numerous labourers, previously employed by private persons, were thrown upon the Settlement in a state of destitution; they were of necessity employed upon public works at a time when no funds for this purpose were accruing from land sales; large sums of money were in this way consumed; and the Company, in February 1844, was compelled to suspend acceptance of its Agents' Bills.

The next Governor, Captain Fitzroy, withheld, as already stated, for upwards of a year and a half, the Grants promised immediately by Lord Stanley; clogged them, when page 10 at length offered, with unauthorised and vague clauses which rendered them useless; set aside also the award of the Commissioner where favorable to the Company; dispossessed the Company's Settlers; and altogether left the question of its title yet more impossible of adjustment than before his interference. He set aside the Act of Parliament which fixed the price of Waste Land at Twenty Shillings an Acre; by one Proclamation, in March 1844, empowered private persons to obtain such land direct from the Natives at Ten Shillings; by another Proclamation, in the October following, lowered that price to One Penny; and, exclusive of the lands so acquired, issued Free Grants for considerable quantities, in excess of the limits imposed by the Local Ordinances and of the awards of the Commissioner;—all to the manifest and utter defeat of the plans of the Company, which require that, in order to provide funds for Public Works and Institutions, it obtain from Thirty to Forty Shillings an Acre; upon which it is dependent for the means of prosecuting its undertaking; and to the maintenance of which it stands pledged. By sudden and ill considered changes in his financial legislation, he unhinged all commercial enterprise. By his measures equally inconsiderate, with regard to the Aborigines, it is not too much to say that he involved first the Northern, and then the Southern Districts in insurrection and bloodshed.

With the results of these several proceedings, your Lordship is already to a certain extent acquainted. Confidence has been destroyed, and a feeling created of universal insecurity, which the measures of Governor Grey, energetic and judicious as these have been, have as yet been unable wholly to dispel. Upon the Company and its undertaking, the effects have been all but fatal. It has been subjected to a ruinous expenditure. Much of that expenditure has been rendered altogether abortive. Its credit has received so rude a shock, that its shares have been long unmarketable. Its Shareholders have obtained no interest upon their money page 11 since October 1843. Sales of its land, its sole source of real income, have absolutely ceased. Colonisation, for the time, has been at an end.

The amount of actual loss which, the Company has in consequence suffered, it is difficult to define with precision. Excluding from the calculation all return whatever to its Shareholders, its expenditure upon colonising objects—a statement of which (A), made up to the 5th instant, the end of the Company's financial year, is enclosed—has to the present time been upwards of 630,000l. Of this amount, the sum which it has so expended since January 1843 (when its operations were perforce discontinued, but shortly afterwards resumed, for the reasons already stated) must be considered as absolutely thrown away. By the accompanying statement (B) this sum is shown to be upwards of 190,000l. A portion of this has indeed been received by the Company from the purchasers of its land, for the express purpose of being applied to the objects in question; but the amount of such portion the Directors know not how to estimate. Neither do they know how to form any estimate of the further loss which the Company has incurred, by having the operations it had effected, prior to January 1843, in the way of surveys, bridges, stores, and emigration, rendered in the same way valueless; but the amount must form a very large additional item. In like manner, they are unable to state distinctly what amount of profit would have been realised by the Company, had the success which attended its first operations been allowed to remain undisturbed by the interference of the Government. At the rate of five per cent, per annum, the loss of interest upon its paid-up capital, in the three and a half years during which all interest has been suspended, has been 35,000l. At ten per cent., the rate obtained for a time, and the more correct rate for a property like Waste Land upon which profit is realised only by parting with the property itself, it is 70,000l.

It appears, then, taking even the lower sum, that the damage which can be ascertained is not less than 225,000l. page 12 (of expenditure, 190,000l.; of interest, 35,000l.); and that to this an addition has to be made, of a large unascertained amount, upon the grounds before stated.

Such an estimate, however, is of necessity to a certain degree inexact, and therefore unsatisfactory. If Her Majesty's Government is prepared, as the Directors cannot doubt that it is, to admit the general justice of their claim, and to remedy the wrong by granting compensation, it appears to them that the correct and only really fair arrangement will be, that the Government relieve them of the enterprise which it has marred, and take to itself both their liabilities and their assets.

These liabilities consist of the sum which the Company owes to the purchasers of its lands; of other sums owed by it to the Government and other parties; and of the paid-up capital of the Shareholders, with interest thereon as above computed. The sum which the Company owes to its land-purchasers in the Settlement of Nelson has not yet been definitively ascertained; but, as at present calculated, it is shown by the accompanying Statement (C) to be about 25,000l.;—that is to say, the sum of 31,000l. (C), being 6,000l. in addition to the 25,000l. above mentioned, has in reality been spent by the Company on public objects within the Settlement, but not in the proportions or on the whole of the objects specifically defined in the original terms of purchase; in order strictly to carry out those terms, the sum of 25,000l. must still be applied to the prescribed objects; and this sum the Company is required to make good. The sums borrowed by the Company from other parties, applied by it to colonising purposes, and still owing to those parties, amount, as shown in the enclosed Statement (D), after deducting the investments and securities on hand, to about 134,000l. The paid-up capital of the Shareholders is 200,000l., and the interest due thereon, as stated above, 35,000l.

The total of the Company's liabilities may therefore be estimated at 394,000l. (Nelson, 25,000l.; other parties, 134,000l.; Shareholders, 235,000l.)

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The present assets of the Company, exclusive of the investments and securities for which allowance has been made above, consist of 1,049,000 acres of land (or a right thereto), which it has not yet disposed of, out of the 1,300,000 acres to which its claim has been admitted; and a further quantity of 24,000 acres, for which it has paid the same prices that it charged to its earlier Settlers, namely, twenty and thirty shillings an acre;—in all, 1,073,000 acres (E).

This then is the alternative which the Directors consider themselves entitled to submit for the election of Her Majesty's Government:—Either the payment of a sum of 225,000l., together with the addition which may be decided on, as the amount of the loss alluded to above as not yet estimated; leaving the Company's engagements to be satisfied out of these sums and the proceeds of its land: Or, the transfer to the Government of the 1,073,000 acres of land to which the Company has at present a right, together with an obligation to satisfy the engagements of the Company as above stated, in this country and in New Zealand.

Your Lordship is aware, from the various communications that have been made by the Company, that it has not been its wish to abandon the enterprise which it has so long prosecuted. But if its operations are deemed no longer likely to be conducive to the public advantage, the only remaining duty of the Directors is to bring the preceding claim in a precise form under your Lordship's notice, and request tha justice which they confidently expect at your hands.

I have the honor to be, &c.

T. C. Harington.

The Right Honorable the Earl Grey, &c. &c. &c.