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No. 2. The Right Hon. the Premier to His Excellency the Governor. Premier 'js Office, Wellington, 28th June, 1901. Memorandum for His Excellency the Governor. The Premier presents his compliments to His Excellency the Governor, and in reply to despatch No. 551/1901 in respect to the reserved Bill entitled "The New Zealand Ensign Act, 1900," desires His Excellency will be good enough to forward the following memorandum in reply thereto:— " My Ministers appreciate the force of the objections raised by the Lords Commissioners of the Admiralty to the New Zealand Ensign Bill in its present form, and in order to meet them suggest that the Bill be modified by providing that the ensign may be used for all purposes ashore, but shall not be worn by any vessel other than the vessels owned and used by the New Zealand Government except in pursuance of a warrant from His Majesty or the Admiralty. The right to use the blue ensign with the Southern Cross, represented by four five-pointed red stars with white border, was granted in 1869. (See New Zealand Gazette, 1869, page 556.) This authority has evidently been overlooked. " With respect to Sir Robert Stout's despatch No. 80 and your remarks thereon, my Ministers regret that, owing to an unfortunate inadvertency, Sir Robert Stout, in forwarding copies of the memoranda that had passed between himself and the Premier in regard to the reservation clause, should have omitted to forward copy of the initial memorandum on which the whole question at issue turned. It is as follows :— " The New Zealand Ensign Act, 1900." —For the Right Hon. the Premier, — Section 4of this Bill seems to invade the prerogative of the Governor. I doubt if the two Houses ought to put in a Bill that it should be reserved. It is for the Governor to express his opinion on the subject in accordance with the law. Robert Stout, Deputy Governor. and shows that the question was not whether Lord Derby's clause should be substituted for the clause in the Bill, but whether Parliament had or had not the right to insert a reservation clause at all. The Premier felt that he could not for one moment admit that the clause in the Bill was in any way an invasion of the Governor's prerogative. R. J. Seddon.

No. 3. The Right Hon. the Secretary of State to the Right Hon. the Earl of Ranfurly. My Lord, — Downing Street, 14th September, 1901. I have the honour to acknowledge the receipt of your Despatch No. 52 of the 27th June, and to transmit to you, for the information of your Ministers, a copy of a letter from the Admiralty regarding the reserved Bill of the Legislature of New Zealand, entitled " The New Zealand Ensign Act, 1900." 2. Pending the enactment of an amending measure as proposed by your Ministers, I shall defer submitting the Bill to His Majesty in Council. I have, &c, Governor the Right Hon. the Earl of Ranfurly, K.C.M.G. J. Chamberlain.

Enclosure in No. 3. Sir, — Admiralty, 6th September, 1901. With reference to your letter, No. 27342 of the 23rd ultimo, forwarding an extract from a memorandum presented by the Premier of New Zealand to the Governor of that colony relative to the New Zealand Ensign Act of 1900, my Lords Commissioners of the Admiralty desire me to acquaint you, for the information of Mr. Secretary Chamberlain, that the proposed amendment to the Bill—viz., " that the ensign may be used for all purposes ashore, but shall not be worn by any vessel other than the vessels owned and used by the New Zealand Government, except in pursuance of a warrant from His Majesty or the Admiralty"—will meet the difficulty pointed out in Admiralty letter of the 6th March last, and my Lords have no objection to the ratification of the Act as modified thereby. I am, &c, The Under-Secretary of State, Colonial Office. Hy. Vansittart Neale. Approximate Cost of Paper.— Preparation, not given ; printing i 1,200 copies), £1 ss.

By Authority: John Mackay, Government Printer, Wellington.—l9ol. Price 3d.]