TO THE GOVERNOR OE NEW ZEALAND.

23

A.—No. 1a

September last, and duly published in the New Zealand Gazette, exempting the sinking funds of the loans raised under Acts of the New Zealand Legislature in 1863, 1864, and 1865 from the management of the Commissioners. But up to the 30th October last no similar Order in Council, having reference to the Canterbury Loans Sinking Funds, had appeared in the Neiu Zealand Gazette. I hope and believe the delay in tho publication of such an Order may be accidental or unavoidable, and that we may expect shortly to hear it has been made. For it will be seen that the preamble of the amending Act of 1869 relates as much to the Canterbury Loans as to the New Zealand Loans, viz., in both cases " representations were made that the sinking funds created under such Acts and Ordinances should bo invested in the names of trustees or other persons resident in the United Kingdom;" and the Commissioners themselves recommended, 23rd August, 1869 (see copy Eesolutions enclosed), that " it would be desirable to relieve them from the management of so much of the Canterbury Sinking Funds as has already been paid to Mr. Selfe." When this is done, I shall be happy to withdraw all objections to the Act of 1868. But unless and until it is done, section 10 of that Act remains unrepealed and operative in the Colony. The trustees in England would in the meantime certainly refuse to comply with the provisions of that Act. We can protect ourselves; but it would in that case be possible, though, I trust, not probable, that the penalty imposed by section 10 upon the Province might be enforced. I venture to refer you on this point to my argument, pp. 15 and 16, in my printed letter to Lord Granville, of the 12th January, 1869. I would therefore respectfully request that the sanction of the Crown to the Acts of 1868 and 1869 shall not be formally given until information reaches Lord Granville that the Governor of Now Zealand has, by Order in Council, exempted the sinking funds of the Canterbury Loans from the operation of the Act of 1868. I have, &c, Sir Frederic Sogers, Bart. Heney Selfe Selfe. Enclosure 3 in No. 35. Sir Feedeeic Eogees, Bart., to H. Selfe Selfe, Esq. Sic,' — Downing Street, 25th January. 1870. I am directed by Earl Granville to acknowledge the receipt of your letter of the Bth instant, on the subject of " The New Zealand Public Debts Sinking Funds Act, 1868," and the Act No. 72 of last year to amend that Act. Lord Granville learns from this letter that your objections to the Act of 1868 have not been removed by the amending Act, or by the explanations in answer to those objections which have been received from the New Zealand Government, and which have been duly transmitted to you. The objections alleged against the Act may be considered as affecting the interests of the Provinces, of the Trustees, and of those debenture-holders who did not accept tho commutation offered by the Colonial Government. As regards the Provinces, fifteen months have elapsed since the passing of the Act, and no remonstrance has reached this office on the subject of it. The Provinces, therefore, must, in Lord Granville's opinion, be considered as consenting parties to the arrangement, or at least not so dissenting as to justify any Imperial interference on their behalf. Indeed, in the concluding paragraph of your letter of the 26th of August, you state that, so far as the Province of Canterbury was concerned, you merely wished to give the Province time to speak for itself. With regard to the trustees, it does not appear to Lord Granville that any interference is necessary—you justly observe that they can protect themselves. With regard to the debenture-holders, Lord Granville concurs in the opinion maintained by Mr. Stafford, that if a part of the Canterbury or any other debentures are commuted or paid off, the holders of tho unconverted debentures have no just claim on more than their proportional part of the sinking fund. Lord Granville does not, therefore, consider that Her Majesty could properly be advised to disallow the Act of 1868, and the Governor of New Zealand will be so informed by the next mail. I have, &c., Henry Selfe Selfe, Esq. Eeedeeic EoaEES.

No. 36. Copt of a DESPATCH from the Right Hon. Earl Granville, E.G., to Governor Sir G. E. Bowen, G.C.M.G. (No. 12.) Sir, — Downing Street, 28th January, 1870. I have to acknowledge the receipt of your Despatches No. 141, of 28th October, and No. 153, of 24th November, relating to the trials of the Hauhau prisoners, the latter reporting the final decision arrived at, and the execution of only one of the prisoners. I observe with great pleasure the lenient course adopted by the Government of New Zealand, and I hope that it will have the satisfactory results which they anticipate from it, and which it deserves. I have, &c, Governor Sir E. Bowen, G.C.M.G. GRANVILLE.