B.—No. sa.

2

PAPERS RELATIVE TO THE IMPERIAL CLAIM

6. On the 4th of April, four days before the departure of Mr. Jones, he enclosed me an account ot the outstanding claims against the Colony to the 30th September last, and requested that it might be substituted for the incomplete one, the receipt of which I had acknowledged on the Gth of October. I am informed that these claims, amounting- to £1,304,9G3 17s. Id., include all claims against the Colony, with the exception of any charges that may be raised by the Admiralty, which charges have been frequently referred to as amounting to probably £45,000; and that the account has been drawn up with the utmost attention and anxiety for its correctness. In this account Credit is given to the Colony to the amount of £127,781 6s. Id., but, with reference to both the Debit and Credit sides, Mr. Jones intimated that the account must be considered as liable to alteration and adjustment by the Home Government. 7. On the sth of April I forwarded to the Accountant the substituted account above referred to, which I had received on the previous day. I append his report, dated the 29th March, 18G7, (Appendix B.) from which it appears that on the Debit side there are 47 new items, some of them dating as far back as 1861, amounting to £279,305 7s. 2d., to which is to be added compound interest, amounting to £1G7,278 7s. Id., augmenting the gross claim to £1,304,963 17s. Id., while there are 14 new items on the Credit side, amounting to £111,084 18s., inclusive of eleven months interest on the Colonial payment in debentures of £000,000, the principal of which is omitted, raising the total credit, with compound interest at 4 percent., to £127,781 6s. Id., and shewing a net balance against the Colony of £1,177,182 lis. The account on both Debit and Credit side is brought up from the 31st of March to the 30th of September. The account is still incomplete, there being an Admiralty claim for about £45,000, which is not yet introduced, and a credit clue for some Colonial horses sold by the Commissariat. 8. After due consideration as to the form which my report should assume, I resolved to take the account delivered to me by Mr. Jones, on the 4th of April, as the claim of the Imperial Treasury; because it presented a certain aspect of finality, even though it reached me at too late a period before his departure to admit of my examining the new items. It appeared to me to be advisable, while adopting this course with regard to the Debit side of the account, to exclude from consideration the items on the Credit side, as it would be better that credit should be taken for them in the counter-claims of the Colony ; and, moreover, that side is so manifestly incomplete, as it omits any notice of debentures to the amount of £500,000 paid to the Imperial Treasury in 1865. I might also state that no credit is given to the Colony for the amount expended for Native purposes above the sum of £26,000, as agreed upon by the respective Governments with reference to the period between January, 1862, and December, 1864. 9. I notice in the instructions conveyed in my Commission that the examination was to be exclusive of the capitation charge : but, on an investigation into the principles which should guide me in the examination, it apjieared impossible to examine the accounts at all unless the capitation charge were included in the consideration ; for I found that the validity or invalidity of most of the claims depended altogether on the admission of the capitation charge ; and therefore I decided that these instructions were oidy limited to the period which had elapsed between the Ist of January, 1865, and the 30th of September, 1866, during which time no definite arrangement appears to have existed between the Governments in connection with such a charge, and when, if any existed, it must necessarily have been that in force from the Ist of January, 1862, to the 31st of December, 1864. As I find that Mr. Jones, in the substituted account, has made the Colony debtor for capitation charges up to the 31st of March, 1866, I shall therefore, in due course, submit some observations bearing upon this subject. 10. It appears expedient that my report should be divided into two distinct parts :— (i). That I should enter into the consideration of each item on the Debit side, and give my reasons in detail, why those objected to should not be admitted as a claim against the Colony. (ii). After this examination, which may be regarded as a mere matter of account, that I should submit certain important considerations, arising out of the past connection between the Crown, the Colonists, and the Aborigines, which, on every ground of equity and good faith, would justify the Colony in believing that, after the enormous sacrifices it has made in aid of Imperial operations, it may look forward to a very considerable portion of the Imperial claim not being pressed. 11. I purpose, therefore, to confine my remarks to the examination of the Debit side of the Imperial account; and, as well defined arrangements have been entered into between the two Governments within certain specified periods, I have, for facility of application, divided the account accordingly. The following results appear from such division : —

Abstract of the Statement of Claims made by the Imperial Treasury against the Colony from the 31st of March, 1848, to 30th of September, 1866: —

Seevice. From Mar. 1848, to Dec. 1861. From Jan. 1862, to Dec. 1864. From Jan. 1865, to Sept. 30,1866. \ Total. Capitation Charges Advances for Pay „ for Rations „ in Cash New Zealand Fencibles Taranaki Barracks War Office Claim Great South Road' Militia Contingences Miscellaneous Contingencies.. ,, Working Pay.. „ Material Interest £ s. d. . 26,740 0 0 52,938 11 4 g f21,868 14 10 " 5,000 0 0 68,029 5 9 [6,931 5 5 £ s. d. 89,582 10 0 13,099 0 7 138,285 18 10 186,000 0 0 69,547 0 5 35,694 4 8 139 5 8 1,290 16 1 58,286 1 0 £ . s. d, 237,495 0 0 47,289 7 3 117,675 4 9 i- " " " 5,916 4 3 499 5 7 1,878 5 1 65,084 1 2 £ s. a. 353,817 10 0 113,326 19 2 277,829 18 5 191,000 0 0 68,029 5 9 6,931 5 5 75,463 4 8 35,694 4 8 3,941 6 9 7,095 14 0 1,270 14 2 3,285 4 0 167,278 7 1 3,302 15 6 3,920 12 10 1,270 14 2 3,285 4 6 43,908 4 11 Total ...£ 237,195 9 3 591,930 17 3' 475,837 8 1 1,304,963 14 7