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No. 46. Dkak Sirs,— He Mokau. Ist February, 1910. We are now informed by the Prime Minister thai the Cabinet has definitely resolved to purchase this property if the Government valuers place upon it a value anything like what we suggest it is worth —that is, not less than £1 to £1 2s. 6d. per acre. He also informs us that he has, in accordance with the Cabinet minute, instructed Mr. Kensington (Under-Secretary for Crown Lands) to have a valuation made immediately. Mr. Kennedy's valuation is £1 7s. 6d. per acre, while the Native Minister suggests the value is £2 per acre. The understanding upon which the Government will purchase is that the Natives' interest is to be acquired by the Crown, that your clients (the mortgagees) are to be paid the mortgage-moneys, and that the balance is to be paid to the Public Trustee, to be held by him until a reasonable time after the meeting of Parliament in June or July next —the object being to enable Jones, or any one else who claims to be entitled to any interest in these moneys, to move either in Parliament or in the Courts for relief. The Government desires, in acquiring the interests of the Natives, to have the benefit of the Native Land Act passed last session, under which the Natives are entitled to dispose of their interests in Native lands by resolution of a meeting of all the owners called in the prescribed manner. The Act does not come into force until the 31st March next, so that this procedure cannot be adopted until that date. We are hopeful, however, that, as soon as the Government valuation has been obtained, an arrangement can be come to by which the Crown will take over the mortgagees' interest and pay them out. We trust this will be satisfactory to you. Yours truly, FINDLAY, DaLZIELL, AND Co. Messrs. Travers, Campbell, and Peacock, Solicitors, Wellington.

No. 47. Dear Sir, — Eβ Mokau. 21st June, 1910. I must apologize for not having replied earlier to your letter of the 4th instant. Negotiations have been going on during the last two weeks, which I hoped might enable me to give you the information that finality had been arrived at in this very complicated matter. We have been recently endeavouring to proceed under the new Native Land Act for the purchase of the interests of the Native owners, in view of the difficulty of getting the Government to interfere owing to the agitation fomented by Joshua Jones. The principal Native owners are now in Wellington. They have been conferring with the Native Minister and Premier during the last few days, in the hope that the Government would purchase their interests ; and I am assured to-day by the Native Minister that the Government will in all probability agree during tho next few days to buy the interests of the Natives, and in this case we understand that they will take compulsorily the interests of the lessee, leaving it to Jones and Lewis to establish their respective claims to compensation. This would be the simplest way out of the difficulty ; but if the Government finally decides that it will not purchase, then the Natives are prepared to deal with Lewis, and an early settlement will be arrived at. I will write you again in the course of a few days, and let you know how matters are progressing. Yours truly, F. G. Dalziell. P. S. McLean, Esq. (Messrs. Carlile, McLean, and Wood), Solicitor, Napier.

No. 48. Dear Sir Joseph,— m Re Mokau. 29th July, 1910. For your information I would like to summarize the position. Mr. Treadwell admits that Jones has no chance unless he can induce the Government to assist him by acquiring the land and giving him a lease of the minerals and a small area as a farm. There seem to be only two alternatives for the Government: (1) To buy the Natives' interests, and take the interests of the lessees compulsorily ; (2) to refuse to purchase the Natives' interests, and to leave the parties to their respective rights. If No. lis adopted the Government will step into the shoes of the Natives, and have all the rights the Natives are now entitled to. Mr. Treadwell suggested that the Government could simply pay the compensation awarded for the leasehold interests into the hands of the Public Trustee, and allow the parties entitled to it to fight the matter out;among themselves. This is not, however, what will happen. As soon as the Proclamation is issued, the Government, having purchased the Natives' interests, will have to determine whether it will claim any part of the compensation to be awarded for the leases —that is, whether it will contest the validity of the leases. If it does this, it, of course, questions the title of all the mortgagees, and at once also raises the question that, if the leases are invalid, the Natives may be liable to an action upon the part of the lessees. For instance, if the principal lease is cancelled on the ground that a covenant contained in it to form a company has not been performed, those Natives who entered into a deed releasing the lessees from performance of this covenant may be liable to be sued on the deed —at any rate, to the extent of the moneys they have received under it. There is also the further question raised by Mr. Skerrett that, if the leases are set aside for suggested statutory defects, the lessees will probably have a claim against the Assurance Fund. If this alternative is adopted, the only way by which these probabilities of litigation could be avoided would be by the Government entering into an undertaking with the Natives that the leases should be acknowledged as being valid to the extent of the lands expressed to be comprised in them.