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No. 7. His Excellency Sir G. Grey to His Grace the Duke of Newcastle. My Lord Duke, —- Government House, Auckland, 31st December, 185~. I have the honor to state that I recently called at Norfolk Island, with the Bishop of New Zealand, and that we there found that the convict establishment upon the island was being broken up, and a general idea prevailed that the Government proposed to give up the island to the inhabitants of Pitcairn's Island. I beg to state to your Grace that I propose, in conjunction with the Bishop of New Zealand, to submit for your Grace's consideration a plan by which Norfolk Island might not only be made available as a habitation for the people of Pitcairn's Island, but might be made a nursery from which Christianity and civilization might be spread throughout all these islands in the Pacific, which still remain in a state of idolatry and barbarism. The plan is simply the adoption of the system of industrial schools for the education of the native race, which is at present in existence in New Zealand. It would entail no expense upon the British Government, but the surrender of the island and buildings upon it for the purposes of carrying out this plan, together with other property now upon the island, and the removal of which, from the difficulty of landing aud embarking stores there, would cost more than the value of the property, whilst the benefits which would accrue to the commerce of the British Empire from opening up to it the valuable trade which could be maintained with the inhabitants of such fertile islands, which yield such highly valuable commodities, would be incalculable. Yet such a trade could in no way be more certainly at once opened up than by rendering their highly-intelligent inhabitants Christians, and by inducing them to adopt our language, laws, and customs, which they evince an earnest desire to do. I know no project the execution of which would yield greater advantages to the empire, or would render the Minister who carried it out a greater benefactor, not only to his country, but to the whole human race. I trust, therefore, that until the details of this plan have been brought under your Grace's notice, you will take no steps for finally disposing of Norfolk Island. I have, &c, His Grace the Duke of Newcastle, &c. G. Grey.

By Authority: Geoege Didsbuby, Government Printer, Wellington.—lB77.