TO THE GOVERNOR OE NEW ZEALAND.

35

A.—No. la.

assured that a telegram from ns would catch the mail-steamer at Point de Galle, we venture to ask your Lordship to enable us to send information to our colleagues as to the grant of any assistance by the Imperial Government. We presume we may refer generally to the fact that we have unofficially offered, if the Government w rould give substantial aid to emigration and the opening up of the country by roads and public \ works, to accept it on behalf of the Colony as a measure of conciliation which would be taken throughout New Zealand as proof of the continued good will of the Imperial Government, and of its desire that the relations between the Imperial and Colonial Governments should be maintained on the most friendly footing. After the fullest consideration, we have asked for such assistance to the extent of one million, to be spread over a period of years, as being the least amount with which the objects in view could be really secured. We do not ask for this assistance in money, nor even for a permanent guarantee. Our proposal is this: that the Imperial Government should give the New Zealand Government their credit in order to take up money from time to time, in such sums as it may be able to apply prudently to tho above purposes ; that the New Zealand Government should issue Treasury Bills for tho amounts so taken up bearing interest not exceeding 3-J per cent. ; and that when the million should have been so taken up, —that is to say, at some period not later than ten years, —the Government of New Zealand should place a loan to that amount on the market upon its own account to withdraw the Treasury Bills, and relieve the Imperial Treasury from further engagement on behalf of tho Colony. We do not trouble your Lordship now with the grounds on which we make this proposal. But we venture to urge that we should be enabled to say by telegram to-morrow whether it will be agreed to (subject, of course, to any measures that may be necessary to secure the Imperial Treasury from indefinite or continuing liability). It is, in our opinion, of importance that the intimation of an arrangement having been come to should be received in the Assembly at the commencement of their session ; and we are sure that our acceptance of it on behalf of the Colony will put an end to irritation i and discontent, and thus secure the chief object of our mission, which was permanently to secure friendly / relations between Her Majesty's Government and the Settlers. We have, &c, I. E. Featheeston, The Eight Honorable Earl Granville, KG., &c. F. Dillon Bell.

Enclosure 2 in No. 55. Sir F. Eogees to tho New Zealand Commissionees. Gentlemen, — Downing Street, 10th May, 1870. I am directed by Earl Granville to acknowledge the receipt of your letter of yesterday's date, requesting information respecting any assistance which the Imperial Government would be prepared, in the present conjuncture, to grant to the Colony of New Zealand. Lord Granville has given his best attention to your letter, with a sincere desire to assist the Colony which you represent. There are, in the opinion of Her Majesty's Government, objections in principle to giving this assistance in the shape of direct State aid to emigration ; and they do but repeat the settled judgment of Parliament in stating their opinion that, except on the most special reasons, the practice of guaranteeing the loans of self-governing Colonies is generally injurious to them and to the parent State. Her Majesty's Government treat your request as an exceptional one, coming at the close of long financial relations between tho Imperial Government and the Colony, and at a period when, for the | first time, New Zealand has, on its own resources alone, made a gallant and successful effort to meet ; the difficulties to which it is exposed. And while giving effect, as they are bound to do, to their general policy, they are anxious to adopt any collateral measure which will mitigate its consequences in the peculiar case of New Zealand, and be an evidence to the colonists of the interest which is felt by the Crowm. and Parliament of this country in the re-establishment and advancement of their prosperity. With this view they are prepared, on your assurance that the sum will be expended as it is raised for tho purposes indicated in your letter, to submit to Parliament a proposal that, under proper conditions as to repayment, which will of course be a subject of further arrangement, the Imperial Treasury should be authorized to guarantee a loan of £500,000, to be raised at such rates and in such proportions as may be agreed upon. They fully appreciate the advantages of opening up the country by the profitable and humanizing employment of Native labour and the introduction ef European settlers. And they think it may fairly be hoped that the expanding resources of New Zealand, aided by this useful expenditure, will enable the Colony, now that it cannot have any further extraneous assistance, to take that position in the Southern hemisphere —financial, political, and commercial — which the capabilities of the Islands appear to justify. As you are desirous of conveying the decision of Her Majesty's Government to the Colony by telegram, Lord Granville loses no time in communicating it to you. I am, &c, The Now Zealand Commissioners. Feedeeic Eogees.

Enclosure 3 in No. 55. Sir F. Eogees to the New Zealand Commissionees. Gentlemen, — Downing Street, 18th May, 1870. Lord Granville has submitted a second time to Her Majesty's Government your desire that the Colony of New Zealand should be enabled to raise a loan of £1,000,000, under guarantee of the Imperial Parliament, to bo expended during the next ten years in the construction of roads in the Colony, and for the introduction of settlers.