I have the honor to report to you, for the information of His Excellency, that I have this day completed the negotiations for the purchase of a further block of Sixty thousand (60,000) acres in this district for the sum of Six hundred pounds (£600) and two (2) horses, and beg to submit the same for the consideration of the Government.

Boundaries.

This block commences at the Wakatarariki, the northern boundary of the block submitted for consideration in my report of the 31st December last, and extends along the coast to the south shore of the Harbour Whangarei and with an average breadth in land of ten miles, and includes both the valleys of the Ruakaka and Waipu Rivers applied for by the recently-arrived Highland immigrants. The whole of this block is well wooded and watered, and leads to further available tracts of country on the west coast of this island.

The difficulty I had to contend with in this block was the confining the natives into a reasonable reserve in the valley of the Ruakaka, as they insisted on keeping the most valuable tract back for themselves, to which I could not consent, for Mr. McLeod, one of the leading men of the Highlanders, having arrived, and our inspecting the valley and district together, he quite agreed with me that, unless the natives could be confined to a limited reserve, the valley could not be made available as their settlement. After much discussion, however, the natives acceded to my idea of the quantity they required for their use, and a reserve was finally agreed upon of one mile frontage to the Ruakaka, and running back to the hills in parallel lines. The sellers of this block are not the same parties who formerly received a payment on account of this land by Mr. Busby, but are principally men who in the present peaceful times have returned to occupy the lands of their forefathers, Mr. Busby's purchase having been rather made from the great chiefs possessing a feudal right over the land than by the extinguishment of the rights of the inheritors of the soil.

Mr. Busby's Claims.

In the absence of any instructions to recognize Mr. Busby's claims I would not have entered into the discussion of them with the natives had such a course not been forced upon me by the production of letters from Mr. Busby urging the natives not to allow me to obtrude upon his land. I am happy to state that these letters had no effect upon the natives. As soon as I told them that the Government were prepared to satisfy their claims, if they gave up their land, they were perfectly satisfied.

To give a permanency to these negotiations, pending the decision of His Excellency, I left the sum of Two hundred pounds (£200) in the hands of the natives, taking from them a deed of conveyance of the land to the Crown as a security, but with the distinct understanding in the event of His Excellency the Governor not approving of the purchase, that the money be returned–a course which, while it binds the Natives in the meantime to their bargain, does not in any way compromise the Government; and which course I trust will meet with your sanction.

The principal owners of this block are enumerated in the deed enclosed herewith, which is executed by the three principal chiefs.