D.—No. 5.

I have abstained throughout this controversy from entering into abstract arguments upon the limits of Responsible Government, for which a time like the present is eminently unfit. But it is impossible forme to abstain from observing that if the doctrines of your Ministers, as now broadly propounded, are to be admitted. New Zealand must be regarded not only as owning no dependance upon the mother country, and as having that inherent right which independent countries exercise of conducting their own affairs according to their own judgement,—but as having this right coupled with the singular privilege of enjoying the services of a G-overnor, a General, and an army furnished to them by this country. On the other hand, the Mother Country, would simply be a tributary nation, affording at its own cost the means of carrying into effect the policy of the Colonial Ministers, without excercising any voice in the direction of that policy. It is sufficient to state these conclusions. It is not necessary to enter into any discussion of them. But while I thus avoid entering into controversial discussion, I feel it incumbent upon me to instruct you that the position thus laid down for you by your Ministers is not the position in which this country can permit Her Majesty's Eepresentative to be placed. In truth, the only satisfactory solution for the present difficulties is to be found in that spirit of reason, of good sense, and of cordial co-operation which I am sure will not be appealed to in vain. The Responsible Ministers of the Colony must remember that England has furnished them with that which they could never have otherwise acquired—-an army of the finest troops, under an accomplished General: she has consented to guarantee a Loan for the service of the Colony : she expects from them not a disposition to enter into controversial discussions, but an anxious desire to support the Governor and the General in bringing this unhappy war to a speedy and satisfactory termination. As regards the proposal to throw the cost of maintaining the prisoners on the Imperial Government, I cannot but express my surprise that any such proposal should have been made by your Ministers. lam not disposed to find fault with the inclination you evinced to fall into their proposal, rather than leave the prisoners in the Hulk contrary to your own judgement, and in view of the mischievous consequences which you apprehended as likely to result. The arrangement, however, does not appear to have been concluded, and you will bear in mind that in future no such arrangement should be made without previous reference to me. I should not have admitted, under any circumstances, the liability of the mother country, for the expenses attendant upon the custody of these prisoners. But, in the present instance, such a claim would be peculiarly inadmissible, since, if your opinion had prevailed, they, or some of them , would (it appears) have been long ago released, and the expense of detaining them would not have been incurred —at least not to the same extent. I have, &c. Edwabd Caedwell. Governor Sir George Grey, K.C.B, &c, &c, &c.

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TO HIS EXCELLENCY SIR GEORGE GREY, K.C.B.