The New Zealand Portfolio

Henry S. Chapman

First published by Smith, Elder and Co. in 1843

Digitised and made available online by the University of Auckland Libraries and Learning Services.

Epub © 2013 Early New Zealand Books Collection

ISBN 978-1-927279-44-1

[TITLE PAGE]

THE
NEW ZEALAND PORTFOLIO;

EMBRACING
A SERIES OF PAPERS ON SUBJECTS OF IMPORTANCE TO THE COLONISTS.

CONDUCTED BY
H. S. CHAPMAN,
(OF THE MIDDLE TEMPLE),
BARRISTER AT LAW.

LONDON:
SMITH, ELDER & Co., 65, CORNHILL.
1843.

[Page ii is blank]

[INTRODUCTION]

INTRODUCTION.

The original object of the New Zealand Portfolio was to direct the attention of the Government, the New Zealand Company, and others, to measures which might be carried into execution in this country to the advantage alike of the colonists and of the parties to whom the several papers in the series are especially addressed. Although I have been all along most anxious to secure for the colonists several very important benefits, I have taken care to propose nothing which does not promise to confer some equal benefit on the other party contemplated. Upon this point I need not expatiate, as the papers themselves contain sufficient evidence that I have never lost sight of so important a feature. I have, in short, asked no favours, but have either urged reasonable claims or have made suggestions as beneficial to one party as the other.

A reference to the contents of this volume will show that I have strictly adhered to the class of measures capable of being carried into effect in this country; although I have more than once been tempted to depart from my original design and address the colonists – my fellow colonists, I may almost call them – on measures which they might adopt with incalculable advantage to themselves

and without exterior aid. But as other engagements compelled me to confine the present publication to six monthly issues, I came to the conclusion that there was quite enough to be said under the original design, and the other objects 1 to which I have alluded might be left to a future and better opportunity, and perchance to an abler hand.

No body of colonists ever had larger claims upon the sympathies of their fellow countrymen at home than the first settlers under the Company, – none a better title to the fostering aid of the government. It was a bold adventure theirs, to trust themselves, with no better protection than the proud consciousness of their own good intentions, among a set of untamed savages, inhabiting apart of New Zealand scarcely known to Europeans, and where their favourable reception by the denizens of the soil, was at that time extremely problematical. This circumstance alone was calculated to create an intense interest in their favour in all well regulated minds, which has been not a little augmented by the air of romance which characterized their enterprize, and which modern times have seldom furnished. But their claim upon the fostering

care of the government rests on more substantial grounds. For several months after their arrival they were left without the semblance of government; yet order was preserved among them in the most admirable manner, purely by their own good conduct under the trying circumstances in the midst of which they were placed. Ungenerous indeed must that mind be which can find no sympathy for such men; and yet their simple but wise and effectual measures for mutual protection 2 have been treated as little short of treason. But their claims upon the consideration of the governments have happily been acknowledged both by Lord John Russell and by Lord Stanley, and it is to be hoped that those generous acknowledgments will not be entirely unproductive of fruits.

It was in the fullest confidence that the right honorable the Secretary for the Colonies is imbued with a sincere desire to promote the welfare of the settlers, that I took the liberty of respectfully addressing the first paper to him; and I may mention here that the view I have therein taken has been fully borne out by subsequent communi-

cations from the Colony. The circuit system had worked so ill, that up to June last no supreme court had been held at Wellington. The two thousand people in the Northern part of the Island have the means of obtaining justice; the eight thousand people in Cook's Straits are denied such means. The county courts have jurisdiction to the extent of £20. only; the court of quarter sessions has jurisdiction similar to those of this country; beyond their respective functions, justice is denied the settlers, in defiance of the great Charter, which Blackstone fancied Englishmen carried with them, as it were a household god, wheresoever they might go. The Chief Justice I know will do all in his power to provide for the due administration of justice, but he cannot overcome physical impossibilities; and I repeat my conviction that there must be a separate jurisdiction for Wellington and Nelson respectively. Nay, if there be but one supreme court, it ought surely to be where population is the greatest.

Since my letter to Mr. John Abel Smith was written, production has been greatly extended in the Port Nicholson district, and the arguments which I have there used to show that the colonists have abundant security to offer might be re-stated with greater force. The Wellington mills are now grinding corn grown upon the Hutt, an exportation of potatoes to New South Wales had commenced in March last, and I find advertised in

the Gazettes of May, New Zealand flax in a condition for shipment.

It should be observed that exportation to England is not at all necessary to show that the colonists are actively producing. They have a large trade with Sydney, and it may be that the importation of British goods into Wellington and Nelson will for a while be paid for with the wool drafts of New South Wales, purchased with the productions of New Zealand, and disposed of in the Sydney market. This indeed has been the case to a considerable extent. All, or nearly all the whale oil produced in the bays and coves of New Zealand has gone to Sydney, and has no doubt indirectly paid for part of the goods shipped from this country and for supplies derived from Sydney, so that it would only mislead were we to judge of the purchasing power of New Zealand by the trade carried on between the colony and the mother country. Native production and native demand have both been under-estimated. As to the colonists, it is quite clear, from the advices just received, 3 that they are pursuing the right and prudent course. In a newly established colony men are too apt to hang about the town as if they were afraid to tempt the productive powers of the soil; but Wel-

lington and Nelson are fortunate in possessing some active spirits who will speedily test the capabilities of the country, and set an example to the less energetic, which I feel sure will not be neglected.

As to my proposal for an association of New Zealand land owners, as recommended in the third paper of this volume, I have great pleasure in stating that it is likely to be carried into immediate execution. A meeting has been determined on, to take place at the George and Vulture Tavern, in George Yard, Lombard Street, on Thursday, the 5th January, at one o'clock; and I have no doubt that the object will be then attained.

I have now completed the task I set myself – yet, task I ought scarcely to call it, for by the liberality of my publishers (to whom, by the way, the colonists are much indebted for zeal displayed in their behalf on many occasions) I am relieved from all trouble, except my appropriate function of authorship; and if I should have succeeded in paving the way for the attainment of any of the objects I have advocated, I shall deem myself amply rewarded.

Farrar's Buildings, Temple,
31st December, 1842.

1 I may mention "Mutual Insurance Associations," "Savings' Banks," and other useful local institutions as worthy of being discussed in a separate publication. My zealous friend, Mr. Holroyd, would have furnished me with a very valuable paper on Building Societies, had I thought fit to depart from my plan. The number of objects which may be brought within the operation of what may be called the mutual principle is very great.

2 See a very clear detail of the proceedings of the colonists in the honorable Mr. Petre's excellent little book, p. 28 to 34. "No other object (than self protection, says Mr. Petre,) had ever been intended, and the provisional government was kept up in a very proper. spirit, and in a most effectual manner. so long as it lasted, it served the purpose for which it was designed, and maintained good order throughout the settlement in a manner entirely satisfactory to the people."

3 Messrs. Capper and Gole, of the Australian and New Zealand Rooms, have favored me with the loan of some New Zealand Gazettes to the end of June, received from Launceston: no others of so late a date have been received.

LETTER TO THE RIGHT HONBLE. LORD STANLEY, ON THE ADMINISTRATION OF JUSTICE IN NEW ZEALAND.

LETTER

TO THE RIGHT HONBLE. LORD STANLEY,

&c. &c. &c.

ON THE

Administration of Justice in New Zealand.

MY LORD,

I take the liberty of addressing your Lordship on the present inefficient state of the administration of Justice in New Zealand, and the inadequacy of the tribunals hitherto established to give security to person and property; and I trust the claim I shall establish upon your Lordship's favourable consideration will justify me in thus trespassing on your attention.

Before I attempt to prove the inadequacy of the existing means of administering justice, it is necessary to give a brief outline of what has been done, so as to mark precisely the point where the existing 4 tribunals fall short of what the circumstances of the colony require. I beg also to observe at the very outset, that it is no part of my design to institute a very rigid criticism of such tribunals as have been established – still less to frame a system of judicature complete in all its parts. I choose rather to give the Courts of New Zealand credit for performing all that is ascribed to

or expected of them, and to confine myself to the task of showing, that in order to complete the security of person and property, there remains much – very much, which the existing tribunals cannot perform.

Your Lordship is doubtless aware that, for a long time after the arrival of the Governor of New Zealand at the Bay of Islands, the settlers who, to the number of 1200, had previously established themselves at Port Nicholson, were left without the presence of a magistrate. As the Governor was known to be at the Bay of Islands, the colonists were in daily expectation of being visited by the Governor in person, or by an officer of the government charged with the duty of establishing the supremacy of the law. They accordingly waited several weeks before they took a single step for mutual protection, and then they did no more than they were absolutely obliged to do. 5

It should be observed, that a Committee of the Colonists had been chosen in England to watch over the interests of the settlers, and to adopt such measures as might seem to them necessary for the organization of the colonists before their departure, and for their protection after their arrival, in case of need. As soon as all immediate hope of a visit from the Governor, or his representative, ceased, this committee was called together at Port Nicholson. In the absence of all restraining authority, some little irregularities had occurred; and for the purpose of protecting society against such acts of individual aggression, several constables and a magistrate were chosen. The persons so chosen were men on whose prudence and firmness the public could rely, and the admirable manner in which they performed their functions justified the choice of their fellow

colonists. The fulfilment of their duties, however, was greatly-facilitated by the orderly conduct of the settlers. On this point Mr. Petre is confirmed by every account which has reached this country – even by the reports of the Colonial Secretary, whom there is reason for viewing as a hostile witness. But among a community of twelve hundred persons, living without a government, and with some causes of discontent in active operation, with the crews of several ships always in the harbour, it was, at the period in question, beginning to be painfully apparent that restraints on their hitherto unbridled actions were necessary. The colonists, we are assured by Mr. Petre, felt the want of protection; and it was evident to every one, that unless some efficient plan was immediately adopted, a state of very great disorder and insecurity would arise.

I must here remind your Lordship, that at this time Her Majesty's sovereignty had been denied by the government, and in support of this view, Acts of Parliament had been quoted, 6 which spoke of New Zealand as a territory "not within Her Majesty's dominions," and asserted "that King William IV. made the most solemn and authentic declaration which it was possible to make, that New Zealand was a substantive and independent. state." At that time the Governor of New Zealand was engaged in acquiring the sovereignty of New Zealand by instalments; and at the period in question, he had only succeeded in establishing the Queen's authority throughout the small peninsula lying to the northward of the river Thames – all the rest of New Zealand, including the district of Port Nicholson, being still deemed a substantive and independent state. The colonists, therefore, considered themselves as Englishmen residing in a foreign country; and in that character it must be admitted

they pursued the only course open to them. They obtained from the native chiefs – the sovereigns under whom they lived – authority to exercise their own laws. This, or some equivalent course, was rendered necessary by the peculiar circumstances in the midst of which they were placed; and it was justified by the unprotected state in which they were left for nearly six months after the arrival of the Queen's representative, charged as he was, to govern and protect them. The colonists never pretended to have any other object in view than their own protection, and that object was completely attained; for good order was maintained throughout the settlement in a manner perfectly satisfactory to the people.

This, my Lord, I believe to be a faithful statement of the proceedings which the Governor considered to amount to high treason! His Excellency probably wrote upon the reports of others who thought themselves interested in misrepresenting. Be this as it may, as I am anxious to avoid saying anything in this place which may bear the interpretation of a censure on the Governor's conduct, I will simply ask your Lordship, whether from first to last there has been anything in the conduct of the Settlers to justify the expressions of hostility – I had almost said of hate – made use of in his Excellency's dispatch of 25th May, 1840; nay, may I not respectfully appeal to your Lordship, as a Minister of the Crown, in favour of the admirable and orderly conduct of the Port Nicholson settlers, under the most trying circumstances. Much has been written about them – much in their defence. I do not ask your Lordship to approve of all that has been so written, I do not even ask that your Lordship should receive upon trust what I am now writing, but I do ask you to weigh strictly, but impartially, the whole conduct of that noble body of men who formed the first colony, and then I boldly appeal to your Lordship's candour, whether they merit the epithet of traitors. But I

wrong your Lordship to put a question implying doubt, and if the general conduct of the Settlers were in question, and 1 were applied to for their character, I should, without the slightest hesitation, refer to your Lordship, as Colonial Minister, for testimony in their favour.

I now come to the second epoch of the history of the administration of justice in Port Nicholson. In consequence of the reports which reached his Excellency the Governor, he immediately dispatched his secretary with an armed force to subdue the supposed traitors of Port Nicholson. Supposing his Excellency really to have believed the absurd account which was given him, nay perhaps, under any circumstances, his promptness is entitled to praise. It is one of the few advantages we are entitled to expect at the hands of a naval or military governor – a sort of set-off against the many evils incidental to such appointments; but on the other hand, it is to be regretted that his Excellency did not previously inform himself of the actual state of the settlers, or he might have been saved the mortification he must have suffered, and avoided the ridicule he incurred by sending an armed force to subdue men who were ready and willing to be subdued – who had been waiting with longing anxiety for his Excellency's presence, and whose only complaint at that time was, that although sent out to protect and govern a colony already established, he had not informed himself of their condition, and had treated them rather as alien enemies than as subjects of the Queen.

Lieutenant Shortland, with a body of troops, reached the settlement in June, and to his great astonishment found the people open-armed to receive him. The British flag was hoisted and the Governor's proclamation was read, declaring the whole of New Zealand a British Colony, and so laughing

to scorn the former doctrine of "a substantive and independent state." Lieutenant Shortland himself speaks of the satisfaction of the colonists at this event – a satisfaction which had its origin in the belief that they should have the substantial protection of British law as well as the mere name. I will here offer for your Lordship's consideration Mr. Petre's description of the state of opinion at Port Nicholson, immediately subsequent to Lieutenant Shortland's visit.

"The satisfaction which the Colonists felt at the arrival of the government authorities, was changed to disappointment when it was found how little was likely to be done to promote the security of property. We had ourselves provided most effectually for the correction of such offences as the magistrate may take cognizance of; and we fully expected that the arrival of Lieutenant Shortland would be followed by the establishment of higher courts of criminal and civil jurisdiction; in short, we could not doubt that government in all its branches – that everything which was necessary to give security to person and property, would be established among us. No change, however, took place, except in the persons of the magistrates, and the source of their authority. All that they did – all that they had authority to do – was to hold sittings similar to those of the justices of the peace in this country, taking cognizance only of such offences as one or two justices may lawfully adjudicate upon. Even this amount of protection was of short duration; for, from the time when Lieutenant Shortland quitted Port Nicholson in September, until the month of December, 1840, Port Nicholson had only one justice of the peace; so that all offences which by act of Parliament require 'two justices' to adjudicate upon, were either left unpunished, or were punished illegally at the peril of the single justice. It followed from this, that practically, the protection of

person and property would have been weaker in Port Nicholson after the visit of Mr. Shortland than before, had it not been that the Queen's authority produced a considerable moral effect, which in some measure compensated for the inadequacy of what was established.

"The want of some tribunal for the recovery of debts, and especially of small debts, has been grievously felt by the settlers; and had the provisional government continued a few weeks longer, there is no doubt that it would have devised some method of supplying the want. Many of the retailers literally lived upon the importing merchants, of whom they bought on credit; and under the security that their creditors had no means of recovering the debts due to them, they made use of all the ready money they could muster, in making purchases out of the Sydney ships which arrived at Port Nicholson, the supercargoes of which only sold for cash.

"On the establishment of regular government, we had a fair right to expect that something more would be done for the security of property than we were able to do for ourselves. We expected that a court of requests would be established for the recovery of small debts. We expected that the institution of civil courts would immediately follow. Yet, up to the time I left Wellington, not a single step had been taken in these essential matters; and it seemed as if the government, which ought to have protected us, was desirous of driving the settlement into a state of disorganization and anarchy. Yet it has sustained itself under all these disadvantages, though, of course, under numerous inconveniences from which the colonists ought to have been protected."

The want of a competent criminal tribunal was also severely felt at Port Nicholson, both by individuals and by society at large. The punishment of offences was, as Mr.

Petre says, confined to such as two justices, and afterwards as one, could legally take cognizance of; but until very recently, no tribunal capable of trying felonies or misdemeanours existed. "Drunkenness," says Mr. Petre, "could be restrained, assaults punished, and some few other delinquencies could be summarily treated; but whenever a trial was necessary, the power of the justices ceased – it was confined to mere committal. Now, in practice, the effect of this was either oppressive to the accused, or led to the ultimate impunity of the offender. A committal for trial, unless the delinquent could find and be admitted to bail, amounted to imprisonment for an indefinite period; and when an offender was held to bail, he felt pretty secure that no ultimate appearance was at all likely to be required of him."

Such was the state of the administration of justice from the month of June, 1840, to October, 1841. They had justices clothed with a power to commit, but without a power to try. They could fill the gaol, but not deliver it. In civil matters no dispute of any kind could be settled; and nothing, I repeat, but the good conduct of the people, whom his Excellency stigmatized as traitors, could have held society together. Yet there can be no doubt that better protection could have been afforded with means which were within his Excellency's reach. As a dependency of New South Wales, courts of requests and of quarter sessions might have been established; indeed, a proclamation was issued by Sir George Gipps, dated 4th January, 1841, directing that courts of requests should be held quarterly, the first quarter being in April; yet this proclamation was disregarded, and it was not until very recently that a court of requests was held under an ordinance of the Governor and Council.

In the month of September last Mr. Martin, who had been appointed Chief Justice of New Zealand, reached the Colony

in that capacity. Soon after his arrival, two bills were introduced into the Legislative Council and passed; the one for the establishment of Courts of Requests, and the other of Courts of Quarter Sessions. To the extent of the powers conferred under these ordinances upon the respective tribunals, there is no doubt that they are calculated to promote the ends of justice. The Courts of Quarter Sessions at first appointed to be held at Wellington, Auckland, and Russell (a place without people), will probably be extended to Hokianga, New Plymouth, and Nelson; and as the ordinance is silent as to the offences over which the Sessions have jurisdiction, it may be presumed that they may legally try all offences except high treason, perjury, and forgery; but in practice, it is probable the same course will be pursued as in this country with regard to such offences as render the accused, if convicted, liable to transportation for a long term, or to death, or where the cases are likely to involve difficult points of law, namely, removal to the superior tribunals. The act lately passed in this country, limiting the jurisdiction of the Sessions, does not extend to our Colonies; and in New Zealand the disposition of the Council is rather to enlarge the summary jurisdiction of magistrates 7 than to limit either their jurisdiction or that of the Sessions. Nor does such limitation appear at all necessary. The proper course is, to render the tribunal efficient, by the appointment of a competent professional chairman: limitation of jurisdiction may be regarded as an expedient to reduce it to the capacity of the tribunal. I have read with great care all the proceedings of the Court of Quarter Sessions at Wellington, and they seem to me to be unexceptionable. The chairman, Mr. Halswell, is an English barrister; and from the manner in which he has performed his duty, he appears to have secured the respect of the bar, and of the attorneys

practising in his court. 8 With the proceedings of the other courts I am not so well acquainted; but if care be taken that the several chairs be filled by intelligent professional chairmen, I have no reason to doubt the sufficiency of the ordinance to provide admirable tribunal for the trial of all but the great offences.

The Courts of Requests have jurisdiction in debt, assumpsit, and, it seems, in other forms of action – though the jurisdiction clause is very inartificially worded, – where the debt, claim, or cause of action does not exceed £50. To some persons this may seem a large amount to entrust to the adjudication of a Court of Requests, the proceedings of which are necessarily summary, and which has power to examine the parties; but your Lordship is aware that, in the Australian Colonies, that the erection of Courts of Requests with large jurisdiction has been found to work well, and I see nothing in the ordinance of the 4th and 5th Vic, No. 6, to induce a belief that it will fail to give security to property up to the extent of the powers it confers. The same remark that I have ventured to make to your Lordship when speaking of the Courts of Quarter Sessions applies to the Courts of Requests. To render them perfectly subservient to the ends of justice, they must be kept in a state of intrinsic efficiency by means of duly-qualified chairmen. A professional

chairman, acquainted with the law, and especially with the technical rules of evidence, will, by securing the efficiency of the tribunal, secure also the respect both of the bar and of suitors. If the tribunal be perfectly trust-worthy, there can be no valid objection to the extent of jurisdiction. The jealousy with which the public and the profession are in the habit of watching all legislative attempts to extend jurisdiction, arises entirely out of the inefficiency of many of our inferior tribunals. As long as the dispensing of justice continues to be an aristocratic pastime, so long ought we to be jealous of any extension of jurisdiction, and seek rather – as has just been done in the Sessions' Jurisdiction Act – to pare down the law to suit the tribunal – in other words, to adapt it to the meanest capacity. By appointing competent professional chairmen, and by increasing the frequency of their sittings, the Courts of Requests, as well as the Courts of Quarter Sessions, may be kept in a state of efficiency for the due administration of justice to the extent of their jurisdiction; but if any other recommendation to office than the all-important one of fitness be permitted to govern future appointments, the courts in question will become mischievous, and will inevitably be regarded as the opprobrium of the local government of New Zealand.

I will take it for granted then, that at the present time there is no Settlement in New Zealand, of any magnitude, which does not enjoy a Court of Quarter Sessions, and a Court of requests. Nelson, with its population of more than 2,300, and New Plymouth, with its population of 800, cannot, with any decency, be placed on a worse footing than the nominal town of Russell, without any population at all; or even than Auckland, with 1,500, or according to the largest estimate, 2,000 people. I will admit further, that before the present time, these courts have been rendered in every respect efficient for the attainment of the objects for which they were designed. In other words, I assume, that at the present

moment, all the settlements in New Zealand are furnished with means for the recovery of small debts, and the punishment of small offences.

But your Lordship will perceive that this leaves untouched all those offences over which the Courts of Quarter Sessions have no legal or customary jurisdiction, and all causes from the cognizance of which the Courts of Requests are excluded. For these two classes of cases there is almost a total absence of judicial remedy. A mere enumeration of a few cases under both classes, will show how urgent must be the necessity for superior tribunals. In forgery and perjury, the first a crime of not unusual occurrence in a mercantile community, the sessions have no jurisdiction whatever. An indictment for these offences cannot be found at sessions. In crimes of violence – a numerous class – in burglary and housebreaking, in abduction, bigamy, false personation, offences against the coin of the realm and against the post-office acts, though indictments may legally be found, it is not usual to try them, it having been long the practice, even before the recent act, to remove them to the assizes, on the motion of counsel.

In civil cases, the ordinance establishing Courts of Requests, excludes jurisdiction where the cause of action exceeds £50, and where the title to land is brought in question. Now, your Lordship is without doubt well aware, that in new colonies, where surveying is necessarily somewhat loosely conducted, boundaries are but ill-defined, and disputes respecting them, each involving a question of title, occur very frequently. I do not here allude to the claims to land, because they are the subject of a special tribunal; I refer simply to disputes between individual and individual, independently of the question of claim, which class of cases will probably become more numerous after the original claims shall have been finally settled.

For the determination of these two classes of cases, a

tribunal has been erected, called the Supreme Court of New Zealand. The place of its location is Auckland, and it is presided over by Chief Justice Martin – a gentleman whom I believe to be admirably qualified for the office he fills. Auckland also enjoys the presence of an Attorney-General, competent to discharge the duties imposed upon him, with all the machinery necessary for a superior tribunal. It seems therefore that for all purposes, Auckland is amply provided with means for the due administration of justice. Beyond this nothing has been done. Wellington, Nelson, New Plymouth, and the secondary settlements on Cook's Straits, are wholly unprovided with the means of obtaining justice in the two classes of cases above particularised; for it is idle to tell the settlers they may resort to Auckland, remote from the seat of population, and not to be reached without a sea voyage, which sometimes occupies weeks.

To exhibit the magnitude of the evil of a single Court of Justice placed at any one spot, and more especially at Auckland, which is not central, which is remote from the great bulk of the population, and is not easily accessible, it is necessary that I should show, as nearly as the data within my reach will permit, the population of the several settlements in New Zealand. With regard to those on Cook's Straits we have accurate data, but the population of all the other settlements must be taken on the statements of individuals, or the reports of newspapers.

The number of Emigrants dispatched to Port Nicholson, to the present date, is 4,534; of these some have been between two and three years in the colony, whilst a few are still on their way. Allowing the population to have increased according to the rate which prevails in America, from the excess of births over deaths, and making no allowance for the fact that the emigrants were selected as to age and sex, about 300 must be added to the amount of emigration. The population has also been increased by immigra-

tion from the Australian colonies, and by the absorption of the whaling population along the coast; against this, a few have quitted the colony, leaving however a considerable balance in favour of Wellington; but as I cannot ascertain it, I will take no notice of it. A portion of the Port Nicholson population has been drawn off to form the Wanganui settlement, and a further portion will shortly be required to occupy the beautiful district of Manawatu.

To Nelson the emigration, at this time, amounts to 2,391, of which about one-fifth is now on the way. Emigrants will also leave this Country until the close of the year. This population, selected as to age and sex, will also have increased by the excess of births; but it would be premature to make any allowance for this or any other source of increase.

To New Plymouth the emigration amounts to 836, to which I shall make no addition, for the reasons stated when speaking of Nelson.

The population of the northern portion of the Island I have no means of ascertaining; probably your Lordship is possessed of some data on the subject, though I apprehend none of a very trustworthy character are in existence. The population of Auckland has been variously stated, at from 1,500 to 2,000. These statements have been made by persons interested in swelling the importance of the place, and may therefore be regarded with suspicion. Nevertheless, I will take the larger number, as if it be not strictly accurate, it will no doubt become so in a very short time. Russell, as I have already stated, has no population. It was, I believe, intended for the capital; but on the choice of the site of Auckland, it became what may be called the county or district town of the Bay of Islands. Its extreme inconvenience will probably prevent its ever acquiring any population; and the administrative and judicial establishments cannot be kept there without injustice to the population of the district. The chosen seat of population, as your Lordship is aware, is

Kororarika, which, with the population around the Bay, is said to amount to about 900. There are also about 200 at and around Hokianga on the west coast, and another 100 may be added for the population of Manoukau and Kaipara, which comprise the whole of the settled parts of the northern peninsula with which Auckland is connected.

Between Auckland and the settlements in its neighbourhood, as well as between the settlements on Cook's Straits, there will be a constant fluctuation of population. The rate of wages will regulate the tide of population; but this fluctuation does not at all affect my statements, even should it be much more considerable than there is any reason to anticipate. Throwing the above figures into a table, we have –

Wellington and Port Nicholson

4134

Wanganui

700

New Plymouth

855

Nelson

2391

Cloudy Bay, Queen Charlotte's Sound, and population to the southward

300

8380

Auckland

2000

Bay of Islands

900

Hokianga

200

Manoukau &c.

100

Other parts

100

3300

Total European Population.

11680

To this should be added a considerable native population living in close connection with the settlers of Wellington, Auckland, and the Bay of Islands, who have now a legal right to the protection of the government.

I am now, my Lord, in a position to ask most respectfully, but at the same time most earnestly, how it is possible the

Supreme Court of Auckland can protect the persons and property of the eight thousand subjects of the Queen residing at the several settlements on Cook's Straits? Allowing that the inferior courts fulfil their respective functions most perfectly and satisfactorily – admitting that the Supreme Court just established is as perfect an instrument for the administration of justice, within a reasonable distance of Auckland, as could be desired, we still come to the question: How is a similar purpose to be effected for the settlements of Wellington, Nelson, and New Plymouth, and the districts around them?

Three several modes of fulfilling the object in question present themselves – ;

1. By the establishment of circuits and half-yearly assizes, as in this country.

2. By the institution of separate jurisdictions, with one puisne judge for each district or settlement.

3. By an union of the two methods: that is, by establishing one or two judicial districts, with a judge for each, and with circuits from each centre to the smaller settlements within the respective districts.

1. To the first plan of circuits the objections appear to me, in the present state of New Zealand, insuperable. From the physical character of New Zealand, – without navigable rivers – without any extent of level country or connected valleys as yet discovered, to favour the formation of roads or canals, – internal communications are at present out of the question. As population becomes considerable, no doubt the several settlements will be connected by rivers, canals, and roads; but at the present moment such internal communication must be regarded as a remote contingency. At present, it frequently requires a voyage of ten, fourteen, and even twenty days, to proceed from Auckland to the Straits round the East Cape; so that the time, the expense, and even the danger, attending circuits, render them ill adapted to the circumstances of New Zealand. Even in this country.

perfect as our means of communication are, it may be doubted whether the circuits afford the best means of facilitating the administration of justice; and for the circumstances of New Zealand I repeat, they are wholly unfit. Even with additional judges, the delay would amount to a denial of justice; for it is clear that if the settlements on Cook's Straits were well served, those in the northern peninsula must be neglected. Indeed, to conduct the business of the district assize courts at all, a corps of judges would be required at least twice as numerous as would be needed to assign one local judge to each settlement.

2. It seems to me, therefore, that the only practical mode of administering justice in New Zealand, is by erecting a superior court, under a single judge, in every settlement or district having a certain amount of population. This method has the merit of economy; and it would admit of four law-terms in the year, and so promote the speedy administration of justice, which would be utterly impossible under the circuit system. The several district courts being presided over by a single judge, the attention of the Chief Justice not being so much distracted by circuit duties, might be concentrated, so to speak, to that general supervision of the administration of justice which his office entitles the settlers to expect at his hands. As Mr. Justice Martin was called "chief" judge, there is some reason to believe that the appointment of other judges was contemplated by the late government. Such an intention, I admit, is consistent with either system under contemplation; but what I beg respectfully to press upon your Lordship is, that the circuit system would require more judges than the local and district system; that it would be attended with delay, expense, and risk; that courts could not be held with that frequency which justice absolutely demands; that it has no one advantage to recommend it; and that the difficulties attending it are so great as to entitle me to designate it as utterly impracticable.

3. A consideration of the locality and extent of the several settlements may perhaps lead your Lordship to the practical conclusion, that the two systems may be combined so as to promote, instead of impede the ends of justice. In adapting institutions to new countries, it is absolutely necessary to yield in some measure to what may be called the spontaneous course of population. The Bay of Islands, for instance, has been the chosen resort of Europeans for nearly thirty years. Port Nicholson was fixed upon as the site of the first colony sent out under the auspices of the company before the Governor sailed from this country. Again, swarms, so to speak, will continually quit the older settlements, to form secondary towns on spots which the people themselves deem eligible. We may, perhaps, think that we might in some cases order matters better; but the whole history of colonization, and especially that of New Zealand, shows that although we may in some measure direct the course of population, we cannot controul it. Hence, I repeat, institutions must be adapted to the circumstances of the colony, if we desire to promote the peace and happiness of the population.

With this view, the judge of the Auckland district might, without inconvenience, hold Courts of Oyer and Terminer and General Gaol Delivery once a quarter, at the Bay of Islands; and as Hokianga is within thirty miles of Kororarika, and the road is practicable, and is capable of being rendered more so, no inconvenience could arise from requiring suitors and witnesses to attend the Court at the latter place. In like manner, the judge of the district of Wellington might make a short and comparatively easy circuit to Wanganui and New Plymouth; whilst the judge of the district of Nelson might have assigned to him such secondary settlements as may hereafter be established by voluntary swarms from the other colonies.

Let me here remind your Lordship, that in all our North

American colonies justice is administered under the district system, with a distinct judicial establishment for each. The districts of Quebec and Montreal have each a Superior Court of original jurisdiction, with a Chief Justice, and three puisne judges respectively, although the distance between the cities is only 180 miles, and which by means of steam-boats, is now performed in from ten to eighteen hours. Three Rivers, also, the district lying midway between Quebec and Montreal, has its Superior Court, with a single judge. Formerly the judges made circuits to the outlying parts of the districts; but for some years, two "inferior districts" have been erected, those of St. Francis and Gaspe, each having a single judge.

I will not contend, for I do not believe that the ends of justice are promoted by providing four judges instead of one; all that I desire to impress upon your Lordship is, that the seat of justice should be erected at Wellington and at Nelson; and I propose a single judge, not so much on the score of economy – though that is always a great recommendation – as because I believe justice is better administered by one, than by a multiplicity of judges. A large portion of the business of administering justice, is indeed performed by a single judge in this country. A single judge presides at Nisi Prius trials, and at criminal trials, except in some rare cases. In bankruptcy, a single commissioner is found to perform the judicial function far better than the old "Lists;" and in the case of the Quarter Sessions, the Borough Courts, with a professional Recorder, are so superior to the County Sessions' Courts, with a bench of Magistrates, that I feel quite convinced the contrast will, at no distant period, induce a reformation of the latter, by the appointment of a paid professional Chairman. But the strongest instance in favour of a single judge, is afforded by the Courts of Equity in this country. In equity, we think a

single judge perfectly competent to decide the most difficult questions affecting the property of individuals; although, if precisely analogous questions of law arise, they are argued before, and are determined by, the judges in banco.

But even the advantage of a bench of judges, to sit in error, maybe enjoyed with facility and economy by an union of the three district judges, forming a Court of Appeals, in certain cases, from the decisions of a single judge. By this tribunal, formed out of materials already at hand, motions for new trials, for judgment non obstante veredicto, for leave to enter a verdict, or a nonsuit on points reserved by the judges, and so forth, would be determined; leaving original issues of law raised upon the record, and which in this country are argued before the Courts sitting in banco, to be determined by the district judge.

The very least, then, that can be done to render the administration of justice efficient in New Zealand, is to erect a Supreme Court, with a single judge, at Wellington, and another at Nelson. If a court of original jurisdiction be necessary at Auckland, it is doubly so at Wellington, Wellington has twice the population of Auckland, and is the metropolis of a producing and commercial population of 8,000 souls. The transactions which are likely to give rise to litigation in the neighbourhood of Wellington are more numerous and extensive than those which arise at or near Auckland. But justice should not be regulated by such comparisons. I am not seeking to deprive Auckland of its Supreme Court, I am merely respectfully urging the claims of Wellington and Nelson to an equal measure of justice to that which has just been conferred upon Auckland.

I do not think it necessary to touch upon the question of a higher Court of Appeals than the tribunal proposed to be formed by the union of the three judges. Whether they shall be endowed with more extensive powers, or whether it will

be found necessary to erect a separate tribunal as the colony grows in population and wealth, is not at this moment a pressing question.

In like manner, I do not trouble your Lordship with questions respecting improvements, which the people of the colony are competent to urge upon the Governor and Council – such as the erection of Courts of Quarter Sessions and Requests, at New Plymouth, Wanganui, and at such other places as may acquire a certain population. The disposition which Chief Justice Martin has already evinced to improve the administration of the law, will no doubt induce him to propose to the Council some general rule on the subject, without waiting for the demands of the colonists, which seldom arise until evil has occurred. But the measure of improvement which, on behalf of the people of Wellington and Nelson, I now respectfully solicit, must originate with your Lordship; and I venture to hope that I have succeeded in shewing a strong case for your Lordship's immediate action.

I am.
MY LORD,
Your Lordship's obedient humble Servant,
H. S. CHAPMAN.
Farrar's Buildings, Temple,
30th July, 1842.

Postscript. – To render the view of the administration of justice in New Zealand, which I have attempted to place before your Lordship, complete, I here print an ordinance which has just passed the council, for extending the powers of Police Magistrates.

Viewed with English eyes, it certainly seems to carry the

summary jurisdiction of the justices to a dangerous extent. In dispensing with trial by jury, it is certainly a violation of what has been called the constitutional right of Englishmen. If there existed in New Zealand an establishment for the custody and reformation of juvenile offenders, including a well conducted school, the power of a single police magistrate to imprison for six months, would be excusable; but it may be some time before such an institution is to be found in New Zealand, and until then, the power to imprison for six months must be deemed too large to be confided to justices out of sessions. Where a person of full age makes confession, I do not see any objection to dealing with him summarily for small offences; but to give to magistrates out of sessions power to imprison for twelve months, appears to me to be another error of excess. If the police magistrates be professional men, one may perhaps be safely deemed equal to two ordinary justices; first, because they will probably have more knowledge, and, second, because they have less local prejudice. But if they be merely official personages, obliged to consult "Murphy's Australian Justice" before they act, and in the habit of clearing the court before they consult in secret that useful manual of convict law, I submit that the clause is bad.

The great defect of the Act is that it contains no appeal clause. In nearly every Act of Parliament giving summary jurisdiction to justices to imprison for three months, an appeal to the quarter sessions is given, but here the party grieved has no remedy – he must submit to any injustice which ignorance or malevolence may impose.

Bill for extending the powers of Police Magistrates.

Preamble. – Whereas great evils have been found to arise from the imprisonment of persons before trial, and it is desirable to diminish, as far as may be safely done, the number of cases in which such imprisonment is by law required.

Certain charges of Larceny to be dealt with summarily. – 2. Be it enacted, by his Excellency the Governor of New Zealand, with the advice and consent of the Legislative Council thereof as follows; all charges of larceny, where the value of the property shall not exceed twenty shillings, and where the age of the party charged shall not exceed fifteen years, shall be brought before the Police Magistrate of the district within which the offence shall be alleged to have been committed, who, upon being satisfied of the value of the property, and the age of the party charged, shall hear the evidence for the prosecution and defence, and in case of conviction, shall sentence the offender to be imprisoned for any period not exceeding six calendar months. Such adjudication shall be final, although it should subsequently be proved that the value of the property, and the age of the party charged, shall in fact exceed the aforesaid limits.

Trivial cases may be dismissed. – 2. When upon such charge as aforesaid, the circumstances of the case shall appear to the Police Magistrate to be of so trivial a nature as to be unfit for prosecution, he shall have power to dismiss the case, although a felony may have been proved.

If party make confession he may be dealt with summarily. – 3. On any charge of larceny before such Police Magistrate, where the value of the property stolen shall not exceed five pounds, whatever may be the age of the party charged, if such party shall, after hearing the information and evidence against him, voluntarily confess the offence, the Police Magistrate shall take such confession, and shall sentence the offender to imprisonment for any period not exceeding twelve calendar months.

Offenders to be committed or held to bail by Police Magistrate only. – 4. Before any person shall be committed for trial, or held to bail to take his trial on any charge of felony, or misdemeanor, he shall be brought before the Police Magistrate of the district within which the offence shall be alleged to have been committed, who shall enquire into the case, and commit the party so charged, or hold him to bail, or suffer him to go at large on his own recognizances, or dismiss the case, as circumstances may require.

One Police Magistrate to have the power of two Justices. – 5. Every Police Magistrate shall have all such powers of dealing summarily with cases of assault, and of admitting to bail persons charged with felony, as may by law be exercised by any two Justices of the Peace.

Depositions. – 6. In every case where any person shall be so committed or held to bail, the depositions taken in the case shall, as soon as conveniently may be, be transmitted by the Police Magistrate to the Crown Prosecutor of the district, or, where there shall be no Crown Prosecutor, to the Clerk of the Peace, or Clerk of the Crown, as the case may require.

All persons committed or held to hail to he brought to trial. – 7. Every person so committed, or held to bail, shall be brought to trial upon an indictment signed by the Crown Prosecutor, or where there shall be no Crown Prosecutor, by the Attorney-General.

Fees. – 8. All fees received by any Police Magistrate, shall be accounted for quarterly to the Colonial Treasurer, or Treasurer of the county or district (as the case may be), and shall be chargeable with the salary of the Police Magistrate and the current expenses of the Police Office.

Commencement of Ordinance. – 9. This ordinance shall come into operation on the first day of March, 1842.

4 In point of time, my observations apply to all that has been done up to the 9th of February of the present year.

5 I adopt dates and facts from the Hon. Mr. Petre's interesting account of the Settlements of the New Zealand Company, published last summer by Smith, Elder, & Co. In many cases I use his very words, substituting only the pronoun they for we.

6 Memorandum, addressed by J. Stephen, Esq., to John Backhouse. – Par. paper, Bill April, 1840, p. 69.

7 See Postscript.

8 There is already at Wellington the germ of a respectable bar, together with some solicitors and attorneys of character: –
BARRISTERS.
Samuel Evans, Esq., D. O. L.
Wm. V. Brewer, Esq.
Wm. Fox, Esq. (now on his way.)
SOLICITORS.
R. D. Hanson, Esq., Crown Pros.
R. Strang, Esq.
Ed. Chetham, Esq.
There may possibly be others with whose names I am not acquainted. At Auckland, under an ordinance requiring barristers and attorneys to register their respective qualifications (a very proper measure), the following entered: –
BARRISTERS.
C. B. Brewer, Esq.
H. A. Thompson, Esq.
T. Outhwaite, Esq.
SOLICITORS.
F. Whitaker, Esq.
T. E. Conry, Esq.
H. Littlewood, Esq.

LETTER TO JOHN ABEL SMITH.

LETTER

TO JOHN ABEL SMITH, Esq. M. P.,

&c. &c. &c.

On the Advantages which would accrue to English Capitalists from the establishment of a Loan Company for New Zealand, similar to the Australian Trust Company.

DEAR SIR,

I address the following observations to you in the fullest confidence that they will bear the closest examination – the strictest scrutiny, even by one of whose means of judging correctly and impartially, and of whose qualifications for the task, there cannot be a question. Intimately connected with the capital of the country, any proposal which might bear the character of rashness or speculativeness could not find favour in your sight; no man in his senses would submit such a proposal to your decision; at the same time your connexion with the colony of New Zealand must naturally dispose you to give your sanction to any sound and reasonable plan which especially contemplates the benefit of that colony; whilst your position, as chairman of the Australian Trust Company, enables you to judge of the practicability of the means suggested, provided there be every reason – duly regarding the interests both of capitalists and colonists – to desire the attainment of the end proposed. I thus submit my case to a strict, but at the same time an impartial judge, – to one not merely qualified to detect but interested in detecting any fallacy in my reasoning; and I think I am entitled to point to this circumstance as a proof, that I, at least, am firmly and sincerely impressed with the

belief that the institution I am about to advocate offers extraordinary advantages to the English capitalist, whilst it is calculated to confer lasting benefit on the colony.

One of the most conspicuous features in the financial and commercial history of this country is the great accumulation of capital since the peace, and the consequent lowness of the rate of interest which capitalists can obtain, either for comparatively permanent or temporary loans. It may be that capital has not increased so fast as population, and therefore that profits and interest have not declined as greatly or as rapidly as wages: but that is not the question here. Considered in relation to the field of production – the field for the employment both of capital and labour – both have no doubt increased, even to over flowing. In this place it would be idle to discuss the question of proportion, for proportion is not in question; and conceding all that need be conceded to those who are disposed to dwell on the superior increase of population, I am entitled to assert that the difficulty of obtaining a moderate interest without risk, and even a moderate profit with more or less risk, has increased and is increasing from day to day.

Let us first look at the interest and profit yielded by land. If the title to land be undoubted, it is notorious that any amount of money may be obtained on the mortgage of a sufficient value of land to render the security perfect, at four per centum. What does this show? Not that the difficulty lies with the borrower – not that there is any great competition among borrowers – but that the great competition is among the lenders, who have difficulty in finding sound and responsible borrowers, able to furnish unobjectionable security, and who are willing to give a reasonable rate of interest. My own observation forcibly convinces me that the difficulty lies with the lenders, and I am sure your

experience in a more extended sphere will confirm me in what I state. Four per cent, is the utmost that a borrower can be induced to give, who has good security to offer, for a loan to any considerable amount; and he who offers more on a freehold security, must expect to be looked at with suspicion.

But even with the best mortgage there is understood to be some risk, so that part of the 4 per cent, must be deemed a sort of premium of insurance to cover that risk, and where land is purchased with unobjectionable title the profit derived is still lower. It was only last month that I heard of an estate, free of land-tax and tithe, sold at no less than thirty years' purchase. It is situated in the county of Surrey, and is let to a good tenant, so that it may be considered, in point of security, to be unexceptionable. Thus, assuming that there is no risk at all – an assumption against my argument – we have a capitalist willing to accept an interest on his capital of 3 1/2 per cent., and if we allow any – the smallest risk, from want of tenants and many other contingencies, we have a net interest of something less than 3 1/2 per cent.

Oh! but we, the capitalists of the metropolis, do not commonly invest in land: we prefer the funds, or the discount of good mercantile acceptances, or the advance of money on (genuine) Exchequer bills. Be it so: and let us examine the interest which the best commercial securities yield.

At the time I am writing, the price of 3 per Cent. Consols for money is 92, which is within an insignificant fraction of 3 1/4 percent., and this too in the face of a popular outbreak, which has a tendency to reduce the price of securities, and therefore to raise the rate of interest. The price of 3 1/2 per Cent. Reduced, at the same time, ranged from 100 1/8 to 101 1/8; that is, it required the payment of a trifle more than £100. to obtain £3. 10s. per annum. We may affirm, therefore, that 3 1/2 per cent, is the highest rate of interest that can be obtained in government securities; and in the favourite kind of security, namely consols, the interest is lower.

At the present moment, writing while on circuit, at a distance from London, I have no means of ascertaining the rate of interest by way of discount on the best bankers' and merchants' paper; but I know that, at times, when the character of the acceptors, drawers, and indorsers has been beyond the slightest suspicion, bills have been discounted at 3 per cent. The ready convertibleness of negotiable instruments, however, renders them favourites for temporary investment: so that, perhaps, I ought in fairness to rest my case on the more permanent loans as the best measure of the abundance of the supply of disposable capital, and the consequent lowness of the rate of interest in this country.

It is true that, under the name of interest or dividends, more is frequently made by investments in joint-stock banks and other companies, by railway shares, by the foreign funds, and so forth; but this is nothing to the purpose, because, although called "securities," they are sometimes anything but secure. If some pay more than the average rate of interest or rather profit – for what they pay is really interest and something more – some pay less than interest, that is, leave actual loss, even to the destruction, total or partial, of the capital originally invested. Indeed, two elements belong to these companies, which the simple lending of money on unexceptionable security is wholly free from: first, they involve the necessity of some personal superintendence; and second, they are subject to the ordinary fluctuations of trade, – not only fluctuations in the quantity and value of trade, but to such changes in the channels of trade as may bring the invested capital itself into jeopardy.

I do not say that it is not very praiseworthy to undertake this trouble and responsibility – I do not say that it is inconsistent with proper prudence to incur a reasonable degree of risk; what I do say is, that the superintendence and the risk are elements which require and receive their appropriate remuneration, and it is that remuneration which raises the dividends of joint stock companies above the rate of interest

with which the mere capitalist is obliged to content himself, if he lend his money only on the best possible securities, subject to no risk and to no personal superintendence.

This rate, I repeat, cannot be stated at more than 4 per cent. If more be offered for any considerable amount, we may assume that there is some slight taint upon the security, which requires an additional remuneration for risk. A leasehold, for instance, is not so good a security as a freehold property; the amount of security in proportion to the loan being continually diminishing in the money market of the metropolis; hence the charge under the name of interest will, in effect, contain a premium of insurance to cover the annual depreciation.

I need not further multiply evidence to prove what every capitalist must be made daily aware of. Let any person who happens to have a few thousand pounds lying idle, and who is not disposed to incur trouble or risk, go to his own banker and advise with him how to invest it, so as to fulfil the desired conditions: will he not be told that "money is a drug," and that those only find it scarce who have but indifferent security to offer? What is called "scarcity of money," often means suspected credit.

This, then, is the state of that complex entity, called the money market, in this country: there is a vast and continually increasing amount of disposable capital in large and small lots, seeking investment without risk, and without personal superintendence to the owners, whilst the field of employment is comparatively narrow – a state of demand and supply which results in the low rate of interest I have named.

Let us now turn to New Zealand. It will be observed, that in what we call new countries, almost every circumstance, as compared with similar circumstances in the condition of old countries, is reversed. In old countries, as the

countries of Europe are not inaptly called, labour and capital are abundant, land comparatively limited, and therefore dear. The necessities of a continually increasing population compel the resort to inferior soils, and to land remote from markets, both of which are cultivated with a diminished return. This diminution must fall either upon profits or wages, or both; and although there may be a tendency to cast the greater share of the loss upon the labourers, it is nevertheless true, that in the progress of population, whilst the limitation in the quantity of land causes both the price and the rent of land to rise, it causes both wages and profits to fall – and this feature it is, which is the most conspicuous cause of the low rate of interest.

In New Zealand, on the other hand, land is abundant, whilst capital and labour are comparatively scarce, and are well remunerated. I need not pause to enquire into the respective shares of capital and labour: it is sufficient for my purpose that rent, strictly speaking, scarcely yet has its birth; that tithes, land-tax, and every other burthen upon land and upon capital are unknown; and consequently that the whole produce which capital and labour united can draw from the soil, belongs to and is shared between the capitalist and the labourer, without deduction. In short, while the labourer gets high wages, enough remains to yield the capitalist very large profits.

I thus glance at the cause for the purpose of shewing that the high profits, and consequent high rate of interest which prevail in new countries, are not a mere temporary accident, but are inseparable from the abundance of fertile land, and the absence of all burthens upon industry, a state of things which must continue for an indefinite and unassignable time, until the progress of population produces all the phenomena which characterise the countries of Europe.

It is for the reasons above stated that the sober-minded, prudent, and industrious settler can afford, and is willing to

give, at least three times the rate of interest which is usually given, with good security, in this country. Mr. Revans, a very intimate friend of mine, settled at Wellington, and on whose statements, always marked by the greatest caution, the most implicit reliance may be placed, writes to me on the 31st January, 1841, as follows: –

"There are many here with well-situated land, affording ample security, who would commence farming if they could procure loans of capital at ten or even fifteen per cent. We have valuable land, labour, and excellent markets; but in the want of capital, we lack the means of using them."

Again, on the 13th June, 1841, he says: "Our landowners want loans of a more permanent character than banks can furnish, to enable them to commence farming in earnest."

On the 17th July of the same year, he again writes: "Our fields of production are various; we are well supplied with labour of the best kind, but the other elements are defective. A loan company, prepared to grant loans on mortgage for a limited number of years, on the security of real estate, would be a blessing to us, and a source of profit to the lenders."

In this country, I have already hinted that where a very high rate of interest is offered there is reason to look with suspicion on the character of the security; and if the lender part with his money, it is because he is willing to run the risk, in consideration of a higher profit. It is known that the borrower cannot afford the interest he offers, consistently with the ordinary profits of commercial enterprise – it is surmised that he borrows to stave off some impending evil; and yet lenders can be found to part with their money on the same principle that the underwriter will take a heavy risk in consideration of a large premium.

But the New Zealand producer borrows not to avoid any evil, but to attain a good. On all productive enterprises

hitherto tried at Port Nicholson, very large profits have been the result. The New Zealand Gazette, of January 12th, thus records the progress of agriculture on the fertile banks of the river Hutt: "Mr. Molesworth is digging his potato crop on the Hutt. He has tested the quantity produced upon an acre, and the result is most satisfactory. His calculations were made upon six tons to the acre, while the produce has been twelve. He has sold some of them at the rate of £12. per ton, or at the rate of £144. per acre. This price is of course not looked for. At £5. per acre, £60. would be received. The cost of clearing, fencing, putting in, hoeing up, and digging this crop, will not amount to £30. per acre; so that, at £6. per ton, 100 per cent, profit will be the return for the first outlay. This return too is for six months. The same ground will again be planted with potatoes, and the second crop in the year harvested about June. The expences of clearing, fencing, and for seed potatoes, may be deducted from this crop. These deductions should reduce the cost of the next crop to £16. per acre. Supposing the land to yield eight tons per acre, and that they fetch £5. per ton, £40. will be the return of the outlay of £16. for six months."

Now, supposing Mr. Molesworth should desire to extend cultivation beyond the extent of his present means, would he not be abundantly justified in giving 12 per cent, interest for a loan, even should his land yield much less than the lowest of the above calculations, and should the price of produce decline below what it has as yet been known and would not a loan society be safe with such a borrower, with the valuable security which he and such as he can offer? I do not single him out as an individual, I merely take his name because I find it connected with a fact, and as the type of, a class. I may mention the names of Bowler, Smith, Johnson, Watt, Revans – who has a dairy farm of forty odd cows,

with about 400 sheep, Swainson the celebrated naturalist, Baron Alzdorff, and a host of others, who are giving value to their lands, who have ample security to offer, in whom the act of borrowing, at 12 per cent, interest, would be an act of the highest prudence; and in fact, who, with many others, are calculated to form just such a body of borrowers as a cautious and well managed loan company would desire to secure.

"The cultivation of the country," the New Zealand Gazette further assures us, "is proceeding to an extent, and with a degree of success, surprising to those who have not remarked how numerous are the persons who are raising produce on a small scale. - - - The combined, or rather contemporaneous, efforts of persons with smaller means, are producing unlooked-for results. We must soon have a show of cattle, pigs, and poultry. The quantity of poultry is already very large: almost every settler has a few, and some have two or three hundred head."

The low price of sheep and cattle, in New South Wales, has caused a large number to be imported into the several settlements of Port Nicholson, New Plymouth, and Wanganui. As yet it is too soon to speak of Nelson: but I know that some cargoes of sheep and cattle have been despatched from Sydney to that port; and so long as a low, and even a moderate, price prevails in Australia, the exportations thence to New Zealand will continue. Every importation of stock, of any kind, into the several settlements in New Zealand, gives increased value to the land, and so improves the security which borrowers can offer. According to official accounts published in Sydney, the value of exports of all kinds to New Zealand, in 1841, was £247,000.: a large portion of this was for permanent investment in the colony, and some was in the form of sheep and cattle. I may mention here, as an evidence of the profitableness of sheep farming in New Zealand, that the superior richness of the

soil, as compared with Australia, has been found to improve the weight of the fleece. Some sheep kept on the island of Kapiti, near Port Nicholson, yielded 9 lbs. weight of wool; and the quality of a small quantity of wool from New Zealand, sold last year in London, was found to be very good. The growth of wool is thus becoming an important resource; and as it can be connected with agriculture, and especially with turnip culture, as in this country, it will more intimately connect itself with the land, and impart value thereto, than in Australia. There the land is comparatively of little value, apart from the sheep upon it. It is, for the most part, unfit for tillage; so that the security is rather that of a species of moveable property than a real security. If the sheep be sold from the land, what is the value of the security that remains? In New Zealand, the security of a breeding and tillage farm would be similar to that of a well conducted freehold farm in this country. The land itself would constitute the real substantial security, and the stock upon it would assume the character of a collateral security.

What I have hitherto said relates to the security afforded by the rural lands in the hands of respectable cultivators and stock-keepers – now a considerable body; but the improved town lands must not be lost sight of, in estimating the quantity of safe business which a loan company would at once command. The town of Wellington has now been established upwards of two years, and the progress of improvement within its limits has been most rapid. Mr. Heaphy, who left Wellington in January last, states, that there were then 445 houses, – some of them of brick, but most of them of wood: by this time, that number has increased to between 600 and 700. The parts of the town not built upon are laid out as garden ground; and most of the houses, except those on the shores of the harbour, have well stocked gardens attached to them. Along the beach, many valuable wharfs have been thrown out, so that in the town alone a value has

been placed upon the surface sufficient to afford security to a considerable amount, and therefore to impart perfect safety to the operations of a loan company. The profitableness of investment in town buildings is not less than in agriculture. I learn that an extensive town proprietor has erected a considerable number of houses on his property, and that the rent he charges, and very readily obtains, is thirty per cent, on the amount of his outlay. I learn further, that this rent is considered by no means a large rent for the excellent and comfortable houses he builds. It is moreover his practice, and that of many others who are investing money in improving their town properties, to contract to build according to the taste of their intending tenants, with the understanding that the rent shall be a per centage charge on the capital employed. I cannot affirm that it is always thirty per cent., but as I know that charge is deemed reasonable, I am justified in saying the charge is more frequently above than below that per centage. It follows, that the act of borrowing, at 12 per cent., would be as much an act of prudence, as a means of extending their operations, on the part of the large and respectable body of town proprietors in the several settlements in New Zealand, as on the part of the agricultural class of land owners; and a loan company would have no difficulty in finding an eligible body of borrowers, who could give ample security, of the most unexceptionable character, for the loans they might require.

But, independently of these large and respectable classes of individual borrowers, there are other bodies which must necessarily become borrowers to a considerable extent, and it would be well worth the while of a body of English capitalists to provide an ample supply of capital for their demand alone: I allude to the municipal corporations, into which every settlement in New Zealand, having a population of

2,000, has lately been erected. 9 Besides the power of imposing a borough-rate, conferred by the ordinance of the New Zealand Legislative Council, upon each municipality, the corporation will have a valuable real property, which they may pledge as security for a loan. The Governor of New Zealand has lately communicated to the council that he was instructed by the Secretary for the colonies to state, that all the rights of the crown to the sea and river shore, within the limits of each municipality, should be conveyed to each corporation in fee. 10

Now, the property thus to be conveyed to the corporations is of great value, or rather, is capable of being made so by the application of an adequate amount of capital. It is so situated as to be eligible for the structure of wharfs and other commercial water-side property. But this property can scarcely be considered available, unless money be expended upon it; and it is equally clear that the corporations, ex necessitate rei, will start into existence, with the power of raising a considerable income, but utterly without capital to promote the slightest improvement. They will present the apparent anomaly of prospective wealth without immediate means; and their very first step, if they do their duty to their constituents, will be to take up one or more loans for the purpose of improving the property of the corporation, and of bringing it into a state to yield profit: moreover, it is probable that they will be borrowers for some years to come.

For this purpose they may pledge, not merely the property

of the corporation, but the rates, that is, the property may be mortgaged as security for the capital borrowed, while the interest may be made a charge on the borough-rates. Now, I will not say that the corporation securities are better than those which individuals can offer, because I really do not believe better could be desired; but I will say all that my purpose requires, namely, that with the power of charging the rates, the security is unexceptionable. Of this there can be no question.

I have now shown that a body of lenders – a loan company, for instance, – ready to lend money on mortgage, would find, ready to their hands, a large body of borrowers of respectable character, having ample security to pledge for such loans as they might require, and in whom the act of borrowing at what we are here entitled to call a high rate of interest, would be an act of the greatest prudence, because the average rate of profits in New Zealand is such as to leave a large and remunerative surplus, after paying such interest.

I will not, however, let my case rest here, I will further show why a continued demand for a floating capital is consistent with great prosperity; why, in fact, a considerable supply of capital in one shape creates a further demand for capital in another shape. In showing this – and it is almost self-evident at the moment I state it – I prove, that, whilst the demand for capital accumulates, and the business of such a body of lenders is subject to continued increase, the security at the disposal of the borrower thereby becomes daily better and better.

I have already said that the value of the property imported into New Zealand from New South Wales alone, was, in 1841, according to official returns, £247,000. Now, as production had then scarcely commenced in New Zealand, except in the case of the fisheries, there were no exports of any consequence to pay for this, and as many persons possessed of capital have settled in New Zealand from New

South Wales – some merchants, some agriculturists, and some stock-keepers, 11 – we are justified in concluding that a very large proportion of this capital was imported for the express purpose of permanent investment in the colony, and is therefore not by the export either of the produce of the colony or specie.

It may seem strange to some persons who have not been called upon to keep in view the distinctive features of capital, to hear the apparent paradox – that capital may itself create a demand for capital; but not only may it be shown that one lot of capital may assume such a shape as to create a demand for capital in another shape, but it may be further shown that what enters a colony as capital may speedily lose its character, of a means to employ labour, by being exchanged for land, and when so exchanged be in part consumed as revenue, and in part remitted to this country to be expended in the importation of more labour.

Scarcely a paper reaches us from Port Nicholson without some account of the importation of cattle and sheep from Sydney. Some of these are no doubt for slaughter, but a large proportion are destined to remain as stock, and therefore must be deemed capital, – but of such a nature as to create a demand for capital in another shape, for the payment of the wages of stock-keepers and shepherds. The low prices of cattle and sheep in New South Wales have stimulated exportation, and have enabled the New Zealand

settlers to stock themselves on the most advantageous terms. A large number of sheep have been sold by auction at an average price of 12s. each; and persons who have themselves gone to Sydney, and have purchased sheep there, taking the risk of the voyage, have laid them in at less. At one time, maiden ewes were sold, in New South Wales, as low as 3s. 9d. each; and cattle low in proportion. Now, under circumstances so remarkably advantageous to the infant purchasing colony, such of the settlers as may intend to become stock breeders, or sheep farmers, will be disposed to over stock themselves: hence, their very possession of capital in one form would render them distressed for capital in another form. In short, the existence of fixed capital constitutes the demand for floating capital; and this demand whilst it is evidence of the scarcity of capital in one shape, is a proof of its growing abundance in another, – the shape in which it exists, being that which especially adapts it to become security for a loan of capital in the shape required.

A steam engine, to whatsoever purposes applied, affords a very striking illustration of the manner in which fixed capital constitutes a demand for floating capital, – that is for capital in the form in which a body of lenders would furnish it. In the company's settlements there are now three – and perhaps four – steam saw mills; one is now working by a joint stock company, and the others are in private hands. What would be the condition of these mills, if the spirited proprietors had not sufficient capital to purchase saw-logs, or to send hands into the woods to bring them down, to employ the amount of labour necessary for the working of the mills, and to give some little accommodation to their customers in the way of credit? Why their mill capital must be idle, although the owners might be willing to pledge it for the necessary loan, and to pay what we should consider a very high rate of interest for the required accommodation. Again, what would be the condition of the owner of ten

thousand pounds' worth of steam boats, of a class especially to fit them for the Australasian seas, if he had no opportunity of pledging his valuable property for the species of capital he required? – His steam boats would be useless: and unless he could obtain some aid, his valuable property would perish on the beach at the very moment that he could afford to pay a rate of interest which, after all deductions for management and cost of establishments, would yield to the English capitalist more than double the profit he could obtain in this country, without risk or personal superintendence.

A considerable quantity of the capital imported into New Zealand from the Australian colonies – driven from the latter by the temporary depression of all kinds of trade and industry, and attracted to the former by the high rate of profits – is invested in land, – "speculating in the real estate," as the Americans call it, or "land jobbing," as its enemies designate it, being a favourite occupation with the Sydney, folk. The imported stock being sold in the market, the proceeds go to the purchase of land. The stock so sold continues to be capital, though in a shape to require other capital to render it available; but if the price – that is the portion of capital in another shape received in exchange for that stock – be invested in land, it ceases from that moment to be capital. A purchaser of land for money or money's worth, may, in ordinary language, call his land part of his capital; but in an economical sense, though it is his property, though it has a positive value, and may be exchanged at any time for capital, it has ceased to possess any of the features of capital. It is a field for the employment of capital as well as labour; but it is no more capital than it is labour; on the contrary, it helps to swell the demand for capital, and having positive value, it affords ample security for loans. If the proceeds of the stock so imported be exchanged for land in the hands of individuals, the capital so imported is saved whole; for, though the im-

porter sinks the proceeds in land, the amount becomes liberated in the hands of the purchasers of his stock, but still so liberated as to create a demand for floating capital, in the manner already shown. But if the proceeds of the imported stock be paid to the government, or to the company, for land, there is, it is true, an importation of most useful property, but it ceases to be capital from the moment it passes into the hands of the government or the company. It becomes, for the most part, a value withdrawn from capital for the purpose of consumption, and from that moment ceases to contribute to the employment of labour – the proprium, so to speak, by which capital is distinguished. In the case of the government sales, half the price is to be remitted to this country, to be expended in conveying labour to the colony. It will here be exchanged for ship accommodation and provisions for the voyage, to be consumed by the emigrants, and will therefore make its appearance in the colony, not in the shape of capital capable of employing labour, but having undergone an entire and very natural metamorphosis into the actual flesh and blood, the bone and muscle of the labourer, it has become the very labour itself, destined to join the owners of the land, and of the fixed capital of the colony, in the demand for more capital. In like manner, the first £100,000. paid for land to form the first colony, though often inaccurately referred to as part of the capital of the colony, never was capital in the only intelligible sense of the word. Three-fourths of the amount has been expended in conveying labour to the colony, and the only portion which has retained the characteristic of capital is that which has gone to pay the salaries and wages of the surveying staff, and to provide them with rations – a portion which at length ceases to be capital, when it is sunk in the immaterial form of metes and bounds, highly useful in giving marketable value to the land, and imparting thereto the character

of an unexceptionable security, but no longer efficient in employing labour.

I have dwelt thus long upon a somewhat dry discussion, because I wished to show that the capital – generally be it observed, moderate in amount, – which is carried out by settlers, has a tendency so to fix itself as to create an immediate demand for more capital. If this be true – and it seems to me to be almost self-evident, several important consequences flow from it. In the first place, the louder the demand for capital in one shape, the greater may we infer its amount to be in another. In the next place, capital having a tendency to fix itself, as I have shown, each lot of capital supplied to the colony will tend to create a demand for more capital; to raise, rather than depress, the interest which prudent borrowers can afford; and to create and improve the securities which a prudent body of lenders must require. From these several considerations arises the expediency of providing a fund of floating capital, for loan on mortgage to capitalist-settlers – a fund too, subject to increase with the increasing wants of the colony, so as to meet that perpetual tendency which capital always has in new countries, to assume the fixed or vested form, and to create a continuing demand for fresh supplies of floating capital.

I now come to the means of enabling the English capitalist to avail himself of the advantages I have pointed out, and at the same time to confer lasting benefit on the colony. On this latter topic I do not think it necessary to dwell, as it has sufficiently appeared in the course of the foregoing observations; I may mention, however, that it is the peculiar property of such aid as I now contemplate, to improve the security at every step. Every loan expended on the land.

yielding a considerable surplus over and above the interest paid for that loan – which surplus is, in a great measure,, expended on the soil – has the effect of adding, from year to year, to the value of the securities which the lenders hold in their possession. For example: suppose a colonist has a property, partly improved, which is worth £1,000. It is a rule of the Australian Trust Company, and it is a very wise rule, not to lend to a greater extent than half the value of the property, except under extraordinary circumstances. Under this rule, let us suppose that £500. is borrowed, and is immediately expended in a way to give additional value to the laud – in an extension of clearing and cultivation, for instance. The value of the security is thus raised in the loan company's hands from £1,000. to £1,500. The borrower would now be in a condition to go to the office of the company, and say: "my land is now worth £1,500., and is therefore good security for £750., instead of £500.: let your surveyor go over it, and report upon it, and if you are satisfied, I am willing to take, because I can advantageously use a further sum of £250." Thus, as each lot of capital is expended in clearing the waste portion of the borrower's possessions, the company acquires the incalculable advantage of a regular body of customers, with whose punctuality and mode of managing their property they become well acquainted.

It may be thought that the formation of a bank would afford the readiest means of employing English capital, with every prospect of large advantage, without the trouble of superintendence, and with only moderate risk. I will not for a moment deny that the New Zealand settlements offer extraordinary advantages for the employment of banking capital. The Union Bank of Australia has a branch at Wellington, and I believe the directors intend to open one at Nelson. The Wellington branch has been profitable, and has been conducted without loss, but the amount of capital employed

is utterly inadequate to the large and growing commerce of the commercial metropolis of New Zealand, which still presents an open field for the advantageous employment of banking capital, well worthy the attention of the English capitalist. But a bank does not perform the functions which a loan company fulfils. A loan company is to the land owner and agriculturist what a bank is to the merchant; and however beneficial to the latter class a bank may be, it does not meet the wants of the agricultural body. In trade the credit given is short. The retail dealer requires of the merchant only such a length of credit as will enable him to give a reasonable credit to his customers. He calculates the time which is necessary for this purpose, and he gives a written engagement to pay at the end of the period. The time which experience shows to be necessary soon grows into a custom, and in the commercial langage of continental Europe, the period at which a bill is usually drawn is called usance, a word denoting that which is customary. When written acknowledgments are called into existence, as they are at the very foundation of a colony of English lenders, the merchant finds it convenient to anticipate the day of payment, by borrowing the money which these instruments represent. To enable him to do this, a bank is an efficient instrument.

But the very essence of a sound system of banking is to lend money for periods as short as possible. A bank which discounts two months' bills, appears to give twice as much accommodation as one which takes four months' paper; and to lend money for long periods, on the security of land, or indeed on any security not negotiable, would be an unwise departure from the ordinary business of banking. 12

To give full effect to the productive resources of New Zealand, on the one hand, and to enable the English capi-

talist to reap all the benefit which the abundant resources of New Zealand hold out, on the other, an institution is necessary which shall grant loans for longer periods – for years in short, where a bank, if prudently conducted, can only afford them for months.

If the capital of this country were limited, I might perhaps be expected to draw a comparison between the respective advantages to the capitalist of a loan company and a bank, but this country has enough – and to spare – of capital to supply both. Both appear, to me, to offer very great advantages: there is at present a slight balance in favour of a loan company, arising out of the fact that there is less prospect of competition – that the field is wholly unoccupied; but to say a word that would warrant a suspicion that there is not an admirable field for banking also, would be invidious and unjustifiable.

The existence of the Australian Trust Company, its successful career, the vast benefit it has conferred and is conferring on the colony of New South Wales – always an important consideration with our spirited capitalists, for "our merchants are princes" – and lastly, its profitableness to the shareholders, all fortunately contribute to release me from the necessity of describing minutely the nature of the institution. I may mention however, that in the eye of the capitalist it possesses a double advantage, for he may either become a shareholder and so take part – a slight part, I admit, – in the superintendence or control of the company; or, abandoning the superior profit which such trifling superintendence as belongs to a shareholder enables him to obtain, he may become one of the body of lenders to the company; thus, avoiding all trouble and the small risk which all financial business involves, he may secure a good though not an enormous rate of interest, by contributing to the loans which such a company from time to time may take up.

The full advantage capable of being derived from a loan

company choosing New Zealand for the field of its operations, would no doubt be reaped by the shareholder only. Besides obtaining a very high rate of interest upon his own capital invested therein, he would reap the profit derived from borrowing here at a comparatively moderate rate, and lending in the colony at a high rate. But the lender would enjoy some advantages which the shareholder would be precluded from. The mode in which the Australian Trust Company take up loans, and the character of the acknowledgment which they give to the lender – namely, a negotiable instrument, – enables the lender, at any moment he may wish, to reconvert his security into money. This the shareholder cannot at all times do. The securities of the company are in fact as convertible as a banker's acceptance or an exchequer bill; and when they become thoroughly known in the market, I have no doubt they will become a very favourite security for temporary investment. A merchant, or a banker, having a sum of money which he will require to use on a given day, will readily invest the same in a security which would pay him a good interest, and at the same time secure the free convertibility of the principal at a short warning. At no very distant period, if the Australian Trust Company give five per cent, on the money they take up, the great convenience of the negotiability of the instruments issued by them will probably cause them to bear a premium; and this, speaking comparatively, will be a further benefit to the shareholder, and not a disadvantage to the lender, because it simply pays for a real and substantial advantage. In short, I feel convinced that when the Australian Trust Company has been long enough before the public to allow its negotiable notes to become known in the market, they will perform all the functions of Exchequer bills, except in such cases as render government securities necessary.

I venture therefore to suggest, either the establishment of a loan company for New Zealand similar in principle to the

Australian Trust Company, or the extension of the operations of that company to New Zealand, by means of a branch. A company, with a capital of £250,000., in shares of £25., so as to promote the aggregation of small capitals, of which £100,000. should be at once paid up and with power to borrow to twice or thrice the amount of its capital, might secure a very profitable business. As the operations of the company extended with the rapid march of colonization and cultivation, a further portion of the capital might be called in, and a further amount of money be taken up in the market. In this way the capital of the company might, at all times, be nicely adjusted to the extension of its business. Should no body of capitalists be disposed to set on foot an independent institution, it appears to me that the establishment of a branch of the Australian Trust Company in Wellington, and the assignment of a specific portion of capital to the branch in question, would be as profitable to that excellent institution as it would undoubtedly be advantageous to the colony. If such a course were to be determined on, I believe a considerable number of persons interested in New Zealand would become shareholders in the company, and would perhaps also contribute as lenders. The New Zealand Company have a strong interest in promoting the object in question; and the English proprietors of land in the company's settlements, whose purchase-money has conveyed labour to the colony, but who do not convey thither the means of employing that labour, would not fail to perceive that, by contributing to the funds, either of a separate company or of the contemplated branch, they would promote an immediate increase in the value of their own lands, and otherwise subserve their own interest.

I believe there is nothing in the terms of the charter of the Australian Trust Company to prevent the adoption of this proposal. The term Australia has, on many occasions, been held, legally, to include New Zealand, – it was so acted upon in the case of the Union Bank of Australia, and

it has recently been declared so to do by an Act of Parliament.

Should a separate company be ultimately preferred, I see no reason why the business of a banking and of a loan company should not be united by the same company, and under the same roof. There should be a distinct apportionment of capital to each, and each business should be confided to a separate department: a manager well qualified to judge of the stability of the parties to a bill of exchange, would not be the proper person to report on the validity of a title to land. But there is, I repeat, no good reason why a company, with an adequate capital, should not fulfil both functions, that is, why a loan company should not have banking-powers; and there are some reasons for believing, that the one might very materially aid the operations of the other.

In conclusion, I will observe, that I have been extremely careful to set down nothing for which abundant evidence does not exist. I have, in a great measure, avoided general reasoning, and have been studious to deal only with well ascertained facts. Apologizing then for the claim I have laid upon your attention,

I am,
DEAR SIR,
With much respect.
Your faithful Servant,
H. S. CHAPMAN.
Farrar's Buildings, Temple,
29th August, 1842.

In the last number of the New Zealand Portfolio, containing a letter to Lord Stanley, on the administration of justice in New Zealand, I ought, in the note at the foot of page 10, to have placed the name of the Attorney-General, W. Swainson, Esq., at the head of the Auckland bar. I had occasion to allude to the labours of my learned friend in the body of the pamphlet, and the omission arose solely from the circumstance, that I copied the names from a printed list of the entries under the ordinance there alluded to – a ceremony not required of the law officer of the crown.

9 The population of Wellington now exceeds 4,500, and that of Nelson, by the time all the emigrants, on their way, have arrived, will be about 2,500.

10 A right to the soil of the sea-shore can only be acquired by the subject by a direct grant from the crown, which grant will not be presumed as against the crown by any easement, such as right of fishing, of digging sand, &c., for which a subject may lawfully prescribe.

11 Mr. Watt, a respectable settler from New South Wales, was the first to begin the business of clearing land and cultivating in the fertile and beautiful valley of the Hutt; and another gentleman from the same Colony, Mr. Crawford, was the first who pronounced the neighbourhood of Port Nicholson to be admirably adapted to the business of breeding and stock-keeping, and who proved the sincerity of his opinion by establishing a stock station on the peninsula formed by Evans Bay. These gentlemen, and others of their class, have imported stock and capital in other forms for investment in the Colony; and it is their operations which make up part of the amount of £247,000. imported into New Zealand, and not to be paid for by exports.

12 Of course I do not allude to the banks in this country, which, through their customers, have an unlimited command of capital.

AN ADDRESS TO THE NEW ZEALAND LAND-PROPRIETORS RESIDENT IN THE UNITED KINGDOM.

AN ADDRESS

TO

THE NEW ZEALAND LAND-PROPRIETORS

RESIDENT IN THE UNITED KINGDOM,

On several Matters of importance to their Interests.

INSCRIBED TO

THE HONBLE. ALGERNON G. TOLLEMACHE.

MY DEAR MR. TOLLEMACHE,

I inscribe the following address to you, because, as one of the largest New Zealand proprietors resident in this country, your motive to adopt or promote such measures as may seem to you calculated to further the welfare of the Colony, must be proportionably strong.

Without going into detail respecting the several suggestions contained in the following pages, which would indeed be to tell my story twice over, let me earnestly recommend to your especial notice the necessity of immediately adopting some plan for uniting into one body the New Zealand proprietors resident here. Until some such organization shall take place, you will have no means of addressing either the company, the colonists, or the public at large. Without organization, the proprietors of land have no collective existence.

Individuals among them may, by their own exertions, better the position of their own class, or confer benefit on the colonists; but their exertions will not be recognized as having any connexion with the ownership of the soil, though that relation may have been the exciting cause of those exertions. As individuals, the owners of a few waste acres in a distant colony can have but little weight: – as a body, they will always be listened to, whomsoever they may address.

To promote a good understanding with the colonists, to establish advantageous relations with the New Zealand Company, to assume a favorable posture towards the government and the public, some such organization as I propose in the following address is absolutely necessary, and I invite you to aid in carrying it into immediate execution.

I am.
MY DEAR MR. TOLLEMACHE,
Yours very faithfully,
H. S. CHAPMAN.

The HON. ALGERNON G. TOLLEMACHE,
Ham House, Richmond.

AN ADDRESS TO THE NEW ZEALAND LAND-PROPRIETORS RESIDENT IN THE UNITED KINGDOM

AN ADDRESS

TO

THE NEW ZEALAND LAND-PROPRIETORS

Resident in the United Kingdom, &c. &c. &c.

IN the following pages I propose to address you on some matters which I deem of extreme importance to your interests, as proprietors of land in New Zealand. For this purpose I find it convenient, if not necessary, to contemplate you as a distinct class; but in so doing, I consider you so only in reference to my present purpose. Viewed in relation to the general well-being of the colony, I cannot separate your interests from those of the resident colonists, for I can scarcely discover an evil with which they are or may be threatened, which, if it occur, will not speedily reach you; while on the other hand, any measure of good of which they may become the objects, will as certainly extend to you, so soon as sufficient time shall have elapsed for the transmission. All this will, I think, abundantly appear, as we proceed together through the subject of this paper.

There are perhaps few who have not at some time or other read the fable of the old man and the bundle of sticks. It tells us how an old man, finding himself at the point of death, called his three sons to his bedside, and producing a bundle of sticks, desired each in his turn to endeavour to break it. Each accordingly made the attempt, but without success. The dying and enfeebled father then took the bundle, and unfastening the cord by which it was held together, snapped

each stick with apparent ease. Then turning to his sons, he said – "Do you, my sons, imitate the bundle of sticks: united you will be able to resist the assaults of the world, and to accomplish objects for which your individual and divided power will prove entirely inadequate."

Now, the divided bundle is a type of your condition. In your present individual state you are necessarily passive under every change of circumstances affecting the well-being of the colony. You are liable to every evil that can arise, without being able either to help yourselves, or to take advantage of what is good. You are numerous, and yet you can hardly be called a body. You consist rather of a considerable number of isolated individuals, without the least approach to organization or union, scarcely knowing each other; neither endowed with a common mind, nor actuated by a common purpose. Many among you can effect all that individual ability, energy, and worth of character are capable of, but that which requires the united forces of two or more must be left undone, because no two of you are united. I have reviewed in my own mind the whole history of the colonization of the Company's settlements, from the sale of the allotments forming the first colony in 1839 till the present time; and although question after question has arisen, deeply affecting your interests as owners of land, you have never once, to my knowledge, met together to offer a united or collective opinion to the government, the company, or the colony, on the prevailing question of the moment. This must be remedied. You must, as a body, assume a position commensurate with your real importance. You have rights which should be respected and maintained – rights which are liable to be injuriously affected by mere inadvertency; you have interests not inconsistent, and often in common with those of others, which cannot be promoted unless you have a collective voice to declare and urge them; and above all, you have duties to perform towards the colonists, without a due observance of which you can scarcely

expect your rights to be regarded. so long indeed as you remain individually isolated and ununited, you are in a false position towards the colonists. They only know you as "absentee proprietors;" they will be prone to regard your interest as antagonist to theirs; whereas, had you been from the commencement in a state of organization, capable of speaking to them, and above all for them, with a voice powerful by reason of its very collectiveness, you would have been regarded as a constituent part of a system, which in fact you are, in common with themselves; and as you contributed largely in the first instance to the successful establishment of the colony, so the impression of the beneficial function you then performed, would have been continued and perpetuated by the part which such organization would have enabled you subsequently to take. As it is, however, you are unknown to the colonists except as "absentee proprietors," driving bargains with the colonists through your several agents, in your respective relations of landlord and tenant; – bargains which they deem hard, but which I believe are not so advantageous to yourselves as a better knowledge of the circumstances of the colony would enable you to make. Now union, that is organization, would place this knowledge at your disposal. Each individual member of the collective body would bring in his quota of information, while in return, every one would have access to the accumulated mass. If no other advantage than this were to arise from union, it would be alone a sufficient inducement to unite. Assume, if you please, that there can be no points affecting your interests to be urged upon the company; take for granted that the government, that is, the colonial minister, hath as keen a regard for your interest as he has for his own; believe also that public opinion cannot reach you; but do not commit the egregious error of supposing that you are nothing to the colonists, or they nothing to you: – you are, indeed, all and all to each other. You have every interest in showing them

that you believe their interests and your own to be similar. This you can only do by promoting, and even originating measures of benefit to them, and by showing yourselves ever ready to step forward whenever the interests of the colony at large are, in your opinion, threatened or assailed. In this way you could make your existence advantageously known in the colony. We should hear no more complaints of "absentee proprietors," but the colonists would gradually regard you as the enlightened advocates of their interests with your own, and would repose in you that confidence which ought to prevail between you. This, I repeat, cannot take place without a species of voluntary incorporation. Good, you may individually do. Many of you are no doubt proudly conscious of so doing. I know, and I will add, the colonists themselves know of many pieces of service performed by individual proprietors; but they regard them as the services of the individual, and the fact of his being an "absentee proprietor" is forgotten. Now, if all the services which individual proprietors have performed – and performed too because they were proprietors – had been known to emanate from the body, they would have given a tone and character to the body, which would have placed you, collectively and individually, on a better, and I will add, a more just footing towards the colonists, than you at present occupy. I shall not close this address without pointing out how this ought to be done; in the meantime, let me review some of the occasions on which you ought to have assumed an independent position, and should have met together, deliberated, and not merely expressed an opinion of the questions affecting your interests and those of the colonists, but have set in motion all your influence to attain good or prevent evil, as the case might be.

The first occasion which occurs to my memory on which a mere expression of your united opinion would have been serviceable to the colonists, to the company, and to yourselves,

was when the question of title was in abeyance. I well remember the alarm which many of you felt, and I admit it was not without foundation, when there was some ground to apprehend that the hostility with which the proceedings of the company and the colonists were viewed by the government might induce them to refuse to confirm the title of the company to their lands. No doubt the principles of international law were in your favour. The government had been placed in the wrong by a "memorandum," 13 as it was called, issued by the colonial office, denying the sovereignty of the crown. This really opened the lands of the natives to any purchaser, and assured the company and the colonists that when the sovereignty of the islands should be assumed by or conceded to the crown, it could not be considered retrospective, without a degree of injustice which no minister of the crown would willingly perpetrate. Every one except perhaps its author saw the complete dilemma in which the government were placed by this ill-judged "memorandum;" and it is not impossible that the difficulty in the path of government may have operated as a facility to the company in their subsequent proceedings. While the company were labouring diligently to obtain from the government a recognition of their title to the lands they had purchased, or to a portion thereof sufficient for their purpose, the colonists were as actively at work within their appropriate sphere of action. They organized themselves into committees, – they memoralized Sir George Gipps, – and they sent a deputation to Sydney, consisting of Dr. Evans, by whose indomitable perseverance the question of the colonization of New Zealand had been kept alive when others deemed it hopeless; Mr. Hanson, who had been actively connected with colonization for a dozen years, and knew its principles and practice, and Mr. Moreing, a gentleman who enjoys the confidence of his fellow colonists, to enforce and urge upon the go-

vernor an immediate recognition of their titles. And why was not your voice heard on that occasion so vitally important to your interests? Because you were not in a condition to act together even in your own defence; so that what some attributed to an unaccountable blindness and apathy to your own interests, really arose from the accident of your not having adopted that preliminary step without which unity of action is out of the question.

I have often heard complaints of the "negligence of agents" in the colony, but these complaints are not less strong than those which have reached this country of the restrictions which have been placed on the power of leasing given to agents. We have evidence, no doubt, that many persons who have undertaken the business of agents have neglected their duties, and perhaps in some cases abused their authority; but it is equally true that there are others who have conscientiously fulfilled their duties, and who still enjoy the confidence of their principles. Many proprietors, it is equally clear, have imposed very absurd conditions as to the terms on which they will permit their agents to let their lands. Some, for instance, will only let on building leases for seven years! – others would fain exact a high rent at once. Now, these absurdities deprive their agents of the power of letting at all. We can hardly conceive that any man who intended to fulfil his contract would take a lease for seven years with a covenant to clear, fence, and build; but in time, no doubt, these mistakes will be found out and remedied. There are no doubt many landowners who have given their agents more liberal instructions, both as regards town and country lands. Some have directed their agents to grant beneficial leases free of rent for the first three years, and increasing gradually afterwards. Others are willing to grant leases for twenty-one years, with an option to the lessee to purchase during the continuance, or after the expiration of the term. These more liberal proprietors will reap a much higher profit in the end than those who are disposed to drive a closer

bargain in the beginning. Touching both these classes of complaints we may reasonably infer that there are "faults on both sides." What so likely to correct these faults as the organization I propose? Your committee would take official cognizance of all such complaints. The faithful as well as the unfaithful stewards would be alike known to every member of your body; punishment of the proper kind, namely, a loss of business would fall upon the latter, whilst the former would receive the reward of their integrity by a transfer to them of the business which the negligent had forfeited. Again, statements of the several modes of letting land, and of all the conditions imposed, would speedily find their way to the archives or records of the united body or association; those who suffered by their own errors would soon begin to correct them, and a custom would speedily grow up as well ascertained as what is called " good husbandry" in some of our agricultural counties. Nothing then is so likely to correct these faults on both sides as union and organization on your parts. Keep in your present divided isolated state, and you are a rope of sand: unite, and you at once assume that importance which intrinsically, though in a latent state, you in fact possess.

I will not further dwell upon past questions in the discussion, furtherance, or opposition of which your own interests should have induced you to take part, and would, perhaps, had you been in a condition to do so; but will at once come to the present, in which you are quite in time to interfere, reminding you at the same time that your interference will be of little avail except as a united body.

You must be well aware that a gentleman of the name of Rennie has proposed to the New Zealand Company the immediate establishment of a fourth settlement on a plan differing considerably from those of the settlements hitherto formed. Now, I am one of those who believe, and I have over and over again stated my opinion, that New Zealand,

from its physical character, can only be successfully peopled by the establishment of successive settlements, or colonies as they have been somewhat improperly called. I think, moreover, that every wisely constituted and well placed settlement cannot injure those which already exist, but must add to their prosperity and wealth. Whether Mr. Rennie's plan is in every respect such as the company should adopt, is a question for discussion, in which you, of all other classes should take part. Mr. Rennie's plan, undoubtedly, exhibits some obvious improvements upon former plans, but it has been found fault with on two grounds: first, that the price proposed would be unjust to the other settlements; and, second, that the establishment of a settlement at all at this moment is premature. The first objection appears to me unanswerable. It is proposed to form a settlement which shall be more attractive than anyone hitherto planted, and yet the purchasers are to have the land at a lower price than the lands of New Plymouth and Nelson have been sold for, and than is still demanded for the unsold portions of those settlements. This carries with it prima facie the impress of injustice; it is fortunately a point left entirely open by the company, and there cannot be a doubt that an expression of your opinion on a question so closely affecting your interests would have great weight with the court. The question of time does not present so insuperable an objection. It is a fault which is daily wearing out; but no lapse of time could cure the evil which would be inflicted on the present holders of land, should the company determine to sell "a better article at a lower price;" at all events this, like the first, is a fair question for an expression of your opinion. Indeed, Mr. Rennie's whole plan, good as it undoubtedly is in many of its features, embraces several disputable points, all of them, more or less affecting your interest as holders of land in the other settlements. But, again and again must I remind you that you are not in a condition to express an

opinion, until you reduce yourselves to a state of organization under some such arrangement as I shall presently propose. This I earnestly entreat you to lose no time in doing, the subjects demanding your vigilant attention will henceforward continually increase in number, and your duty to yourselves, no less than to the colonists, demands that your existence should at length be known.

Supposing you were in the state of voluntary incorporation, which I contemplate, it would be quite within your province to hear Mr. Rennie in support of his plan. This would be a measure of fairness to him, and of advantage to you. Generally speaking, the propounder of a scheme best knows its good points, though he be blind to its defects; whilst you would learn his views, so far as he might be disposed to disclose them, you would impart to him your objections. Some, perhaps, he might be able to answer; and if he be wise, he would, under the influence of such fair and candid intercommunication, modify his plan so as to disarm reasonable opposition. By this course, no one will be able to accuse you of having come to a resolution without the most cautious deliberation. Your decision may be wrong, for all men are liable to error, but you will have adopted every precaution to lead you to a right decision; and you will, at all events, have the inestimable satisfaction of having performed your duty to your fellow proprietors in the colony, as well as to yourselves. 14

But the subject above all others, in which your interests are most deeply involved, is that of an adequate supply of capital in proportion to the land disposed of, and the labour transmitted to the colony. The tendency of the principle of colonization upon which the New Zealand Company have proceeded, is undoubtedly to promote a due proportion between land, capital, and labour. By guaranteeing a due supply of labour, capitalists are gradually attracted to the colony; and after a time, there will perhaps be neither deficiency or excess either of the one or the other. But in the early progress of a colony, circumstances may occur to disturb the due proportion. The motions of the streams of capital and labour respectively, are not coincident, in point of time. To fulfil the condition of attractiveness, this supply of labour must not be merely guaranteed, it must be provided; and when so provided, it may be some time before the capitalist obeys the impulse. The capitalist is not impelled to emigrate by that stern necessity which drives the labourer from his country and his friends: he therefore waits until the advantages of emigration become very conspicuous. Moreover, when these advantages become sufficiently apparent, it is only the smaller capitalist who ventures to move. I have also pointed out in my letter to Mr. John Abel Smith, that nearly all the capital which does find its way into the colony (and it is considerable), has a tendency to assume such a form as to create a necessity for a further supply of capital in another shape, to render it productive, and to enable it to fulfil the distinctive function of capital – the employment of labour.

All this while the opinion of the public may be decidedly in favour of the colony. There exists great, and I may

add, well-grounded confidence, in the adequacy of the principles to promote its success; and this confidence is increased by the accounts of substantial prosperity which are continually received. Now, considered in reference to the due proportion between land, capital, and labour, this state of opinion, aided by a general state of commercial confidence and credit, may render a colony too attractive. That is, it may render the possession of land desirable to a large class of persons who have no intention of emigrating and who do not contemplate employing capital there through an agent. Your motive in purchasing land was to make money by the certain advance on its value which must take place as the colony makes progress. Some of you treated it as an article of merchandize to sell again; whilst others among you intend to hold it as a profitable investment, yielding in the shape of rent, an annual profit which can be made in no Other way. Now what is the effect of your purchases, considered in relation to the due proportion between land, capital, and labour? It is to interfere with that proportion – it is to supply a fund for the transmission of labour without the means of employing it. The actual settler, who purchases land has, generally, some small means of clearing and cultivating it. The purchaser of 100 acres may not be able to cultivate all, but he can generally cultivate a portion; thereby giving employment to the labour he provides. But few settlers would be improvident enough to expend all their capital in land; but as regards the colony, you may be said to have been guilty of that improvidence. All the capital which you have set apart for investment there, you have expended in land. For every £100. so expended, you have sent four persons, or two labourers, to the colony, and very few of you have sent capital there in a shape to give employment to labour.

If there had been no countervailing circumstances, such as a considerable transmission of capital in other ways, and especially from Sydney, the evil would have been conspicuous.

Your lands and your labour would have been in excess. The only effective portion of the colony would have been the lands for which capital has been provided, and we should have had "agricultural distress," and "commercial distress," as conspicuous as in this country. But the fact that wages have kept up, is a proof that some part of the evil which your Operations have a tendency to create, have been otherwise remedied. The capital from New South Wales is estimated at upwards of £200,000, divided between all the settlements in New Zealand; many of the capitalists who have gone out, have an amount of capital greater than the due proportion to the land they hold. The commerce of New Zealand, besides being carried on by persons possessed of more or less capital, is probably always indebted to the English merchants to a considerable amount, and there is some, though not an adequate amount, of banking capital employed in the company's settlements. All these resources of capital have contributed to make up the deficiency created by your purchases; but I must impress upon you, that although, taking all circumstances together, there is no positive evil, yet there is a considerable drawback from the good; that is, all the above resources, supposing you had supplied capital in proportion to the land and labour, would have gone to augment the prosperity of the colony; whereas at present their function is rather to prevent disaster. Still let me impress upon you, that the tendency of your operations is to limit the quantity of capital in proportion to the supply of land and labour. It may be that there are other sources whence the deficiency is supplied, but this does not change the character of your operations; hence it should be your especial care to promote a sound plan for introducing floating capital into the colony. I do not suggest this as a measure of pure and unrequited benevolence towards the colony, but rather as the best mode of promoting your own interests. It is capital and labour united which create a demand for land. If there be a deficiency of capital so as

to produce an excess of labour, there must be an excess or land also. Some of the land in your hands might as well be still in the hands of the company – nay, better, far better, for in your hands it has supplied labour to the colony without capital, and therefore has tended to produce the phenomena of our own country, an evil state, which it is the especial business of colonization to remedy.

So long as this excess of land continues, you must be disappointed in your expections of an advance in the price or rent of land. If capital had been transmitted to the colony in proportion to every acre of land sold, and every labourer sent to the colony, you would have been gladdened by a much more marked and rapid advance than has taken place; but so long as you neglect to supply capital, or as capital is not in some way or other supplied, you may consider your possessions as the excess of land, which perpetually tends to prevent any general advance of prices. I am not here to enquire whether this does not carry some advantages with it. Combined with the establishment of several settlements, within a few years, it has checked undue speculation, and discouraged land jobbing; but as far as regards your interests, it is decidedly injurious; and, therefore, I say, you, above all Other classes, have a powerful inducement to provide a remedy, or to give your best aid to any which may be provided by Others.

You are as well aware as I am, that the aid which the colonists require, is a fund to furnish loans on the security of real property, for periods of greater length than is consistent with a sound system of banking. In my letter to Mr. John Abel Smith, I have endeavoured, and I hope successfully, to show, that New Zealand affords an eligible field for the employment of capital in the manner contemplated; and several methods have, at different times, been under consideration, for effecting the object. It has, for instance, been suggested –

1. That the New Zealand Company should avail themselves

of a provision in their charter, which enables them to borrow money here, and to lend it in the colony; and should themselves undertake the business.

2. That a separate company be formed for the purpose.

3. That the Australian Trust Company should be invited to extend its operations to New Zealand, as the Union Bank of Australia has done.

It would be quite out of place here to discuss the relative merits of these several plans. There is every reason to believe, that one of them will be adopted; and whichever it may be, even supposing it should be the worst in your estimation, (though there is reason to believe it will be the best) it ought to obtain your warm support.

Unlike the other questions to which I have alluded in this address, there is not one of you who may not singly, and without the contemplated organization, do great service to the colony, and to the owners of land, including yourselves, by promoting the object in question. There are two modes of contribution which will be open to you: 1. You may respectively take a share or shares in the undertaking; or 2, In any one of the three cases, you may become lenders to the company.

Should you become shareholders in the undertaking, you will have the advantage of such dividend as the high rate of interest, which prevails in the colony, may warrant. For permanent investment, this may appear to you preferable than the alternative of becoming lenders; but the latter course has its advantages, though the interest is confined to five per cent. You can incur no risk, and you receive in exchange for your money a negotiable instrument, which you can convert into money at an hour's notice, should you desire so to do. The negotiable notes of the Australian Trust Company (and whatever course may be adopted, this part of the plan will be retained), are calculated to perform all the functions of Exchequer bills. They bear interest at five per cent., and in order to facilitate their negotiability, the voucher for

the interest is in the form of a coupon, which the holder can cut off at the end of each quarter. Now, supposing the holder of these negotiable notes to require money at any time, there is scarcely a money-broker or banker in the city who would hesitate to take, or advance upon them. Indeed, from their highly negotiable character, they will be voluntarily chosen as a convenient security in which to invest money for temporary purposes. Thus any one having a few hundred pounds, for which he has no immediate use, may safely invest the same in the loan-notes in question; secure, that in case of need, he can raise money upon them, through his own, or indeed through any bankers to whom his name is known.

Supposing that, with your aid, a fund is provided for the colony, it is impossible not to perceive that you will be especially benefited thereby. Those who have commenced cultivation, will be disposed to extend their operations; whilst those who on account of their limited capital, have feared to embark in agriculture, will at once begin to clear and cultivate. Thus the lands in the hands of actual settlers, will be speedily occupied, and a demand will grow up for your lands, which, for the most part, may now be considered in excess, but which will be so no longer.

Although, as I have stated, you may individually contribute to this object, it must be obvious that you will be much more able to afford effectual support thereto as a united body. What any one among you may do individually, affords no example to the rest, and will not be considered to be done by you in your capacity of absentee proprietors; but if a formal resolution be passed, expressive of your approval of the object, and of your determination to support it, every individual contribution, made in pursuance of the resolution, will afford an example to all others among you; and it will become a point of honour, either to take a share, or to subscribe to the fund by way of loan.

Besides these important questions and measures, in which, in your united capacity, you will be in a condition to take a conspicuous and useful part, there are many subjects of minor importance upon which your committee may advantageously employ themselves. It frequently happens that there are measures of benefit to recommend to the company, which can be urged with but moderate force by an individual, but for which a resolution emanating from you would secure immediate notice. It is true that such measures would go before the court, as emanating from, or approved by, a particular interest; but that interest is one of which the court is disposed to recognize the importance; and, as in most cases, it will be found to coincide with other interests, you will have the satisfaction of knowing that beneficial measures will often be carried by the addition of your weight. As a particular interest, you will, no doubt, be sometimes watched with suspicion. All particular interests ought to be so. But as you will, I have no doubt, always act with candour and honour, you will shortly disarm that suspicion, and come to be regarded, not merely as the best guardians of the interests of the colony at large, but as an enlightened ally of all associations connected with the Australian colonies; all of whose interests are linked together, and all must, consequently, indirectly benefit by that which is intended for the advantage of one alone. This action upon the New Zealand Company is one which cannot be called into play without the organization I propose; and it seems to me to be alone a sufficient reason for the course recommended.

Take another body, upon which, collectively, you may exercise considerable influence; but upon which, as individuals, you can exert more: namely the two Houses of Parliament. You have among you members of both houses, who, if they were now to address either house, would be liable to the suspicion of obtruding their private affairs thereupon. Charged with a petition from you, they would as-

sume an entirely different character. Can you think of no subject which might not advantageously have been urged upon the notice of parliament by you, or if so urged by others, would not have been aided by your sanction and support? Lord Eliot's proceedings in July, 1840, were of this character. He took up the subject of the petition of the merchants and bankers of London, and ably and faithfully did he fulfil the duty he imposed upon himself. To him we are to a considerable extent indebted for the justice which was ultimately done to New Zealand. Would not his exertions have been aided and supported by a petition from you? I am not blaming you for not having petitioned, because it seems to me you have never once thought of uniting for a common purpose. Not one of you seems to have known that he had a neighbour in the same position as himself, so that the first step towards union was never dreamed of. But that objection is at an end, and a mere modicum of trouble and activity on the part of three or four of your body can bring the whole into a state of union in a few weeks.

Again, there are many subjects which should be brought before the notice of the house, which your parliamentary members would not hesitate to do if backed by a resolution of yours, even without the formality of a petition. The estimates of the public income and expenditure are of this character. The colonists have been extremely desirous that these accounts should be laid before the house, because they believe that Captain Hobson's extravagance is calculated to produce prodigious mischief. The people of Auckland, in particular, are loud in their complaints, because they foresee that their emigration fund will be utterly sacrificed. Indeed, although the land and emigration commissioners have authority to send out emigrants, and to announce to the public that they have a fund for the purpose, the great and unnecessary deficiency of revenue, as compared with expenditure, must soon bring emigration to Auckland to a close. Captain

Hobson owes a debt to Sydney of about £40,000.; his first year's estimated expenditure was £50,000, and the second is nearly £60,000, whilst his actual revenue is not one half of this. Where is the balance to come from? Will Lord Stanley permit emigration to go on, and ask parliament for an annual vote to meet the governor's extravagance? I hardly think he will venture to do so. You may think that this is not a point for your interference, because the company's emigration fund is secured from violation. But you have a strong interest in an economical public expenditure; and even had you not, it would afford you an admirable opportunity of showing that, although we think Auckland an inconvenient site for the seat of government, remote as it is from the seat of population, yet you have no wish that the people of Auckland should suffer evil, and are, at all times, ready to exert yourselves to prevent it. The financial accounts of Captain Hobson's government should have been laid before parliament long since, 15 but for a long time there was no one to ask for them. The members of parliament connected with the New Zealand Company, may be presumed to have felt some delicacy on the subject, and an individual member of your body would have been open to the suspicion I have pointed out. Clothed with your authority, he would have asked for the accounts, as the representative of your interests; and, when produced, they would have spoken for themselves.

I could enumerate a vast number of cases, in which "absentee proprietors" have conferred benefits on the colony in numerous ways. For these benefits, credit is given to them individually, nothing being placed to the credit of the absentee account. The aggregate of little benefits is very

considerable; and if the authors had been known to be associated, as I propose, they would still have enjoyed the honour and credit due to their exertions, but there would have been an emanation thereof to the society to which they belong. The very phrase, "absentee proprietors," would be arrested on the colonist's lips by the good some members of the body had done; and mutual confidence would grow up between yourselves and the colonists, not only of New Zealand, but of the whole Australasian group.

Another great use to be. made of an association of the kind is, the collecting and recording of information valuable to yourselves, in your character of landowners. The New Zealand Company have, no doubt, much information as to the condition and prospects of the colony, but they have but little of the precise kind which you require; and if they had, it might affect persons and interests, in a manner to render it improper that it should be communicated to you. Each member of your body would, on receipt of information of a character likely to be useful to you, communicate it to your committee, considering it, as it were, the purchase-money in consideration whereof similar information would be placed at his disposal by other members. In this way, a knowledge of the several settlements would be placed at the disposal of every member, more extensive and accurate than even the best informed now possess. This, again, is almost of itself a sufficient reason for uniting.

Now as to the means. As a first step, every proprietor of land resident in or near London, should be collected together for the purpose of forming an association to watch over the interests of the whole body. When they are thus brought together, the object of the meeting should be explained to them, and they should be invited to name a committee of seven or more of their own body, to draw up rules, to be

submitted to a subsequent meeting. When these rules shall have been agreed to, a permanent chairman and committee should be elected, to serve for one year.

For the purpose of promoting the business of the association, a very small subscription would be sufficient. A sovereign per annum would certainly be adequate; and it is probable that even half-a-sovereign would be sufficient. Perhaps it would be well to subscribe a sovereign the first year, reducing it to half that amount the second year.

One important element of success is the appointment of a paid secretary, to record, keep, and arrange, all the information you obtain, to keep the minutes of all meetings, and otherwise to exert himself to further the objects of the association. He should be capable of using his pen, as the drawing up of petitions and memorials, the framing of resolutions, and the writing of the reports of the committee to the general body, would be a necessary portion of his duty. He should be well acquainted with the principles of colonization; and if not already acquainted with the history of the colonization of New Zealand, he should make himself familiar therewith. In a word, he should be possessed of qualifications, and above all, of zeal, to enable him to sustain the spirit of such an association; and should not be a mere automatic clerk or servant. There will be some care necessary in the selection of the secretary, but not to an extent to deserve the name of difficulty. There are many young men of intelligence and zeal already connected with colonization, who would be glad of a moderate addition to their income, in return for the moderate amount of labour which would be required; for as it would only be a portion of the secretary's whole time that could possibly be required, a person having other occupations must necessarily be chosen, so that a moderate stipend would be sufficient.

As to the meetings of the committee, they should be weekly. A small number, say three, should form a quorum,

and the committee might arrange among themselves in what manner to divide attendance among them. Once a month there should be a full committee; and twice a year there should be a general meeting of the association, to review the report of the committee.

There should be a further understanding, that should any circumstance arise on which the committee should deem it necessary to take the sense of the whole body, they should have the power of calling a special meeting of the association; and a similar power might be given to a certain number of members, by a requisition in writing, addressed to the committee. For all ordinary purposes, the committee should, of course, be declared competent to act.

The committee should, as soon as possible after the formation of the association, put itself in communication with the New Zealand Company, and other public bodies connected with New Zealand. It should also open a communication with such societies as the Horticultural Society of Wellington, the Mechanics' Institutions, and with any other similar associations which may be formed, capable either of affording the association information of the state and prospects of the colony, or through the instrumentality of which you may establish relations of mutual confidence with the colonists. With these societies, and even with individuals of character and influence, your secretary should open a correspondence; indeed, it should be deemed the most important function of your committee to give and receive information; so that, in the course of time, your records would contain the best, most complete, and accurate body of information respecting the state and prospects of the colony to be met with in this country.

The advantage of such an organization as I now propose, would be immediately seen and taken advantage of by the colonists. It would at once impress them with the conviction that you are really desirous of contributing to the prosperity

of the colony by every means within your reach; and I think it not improbable that the colonists, not trusting to the existing societies, which have really objects of their own to attend to, will organize a committee of correspondence, for the express purpose of communicating with your committee on all matters within the scope of your plan. This I think will be done in every one of the Company's settlements. In this way the colonists will soon come to regard you as their recognized representatives. The local committees will be the depositories of public opinion within their respective jurisdictions, and you will be the representatives of the aggregate public opinion of the colony. To you the colonists will appeal, whenever questions arise which they are desirous of bringing before the company, the legislature, or the public. With a press which has always been recognized as the especial organ of the colonists, at your service, your present feebleness will be converted into strength; for not only will the sticks in the fable be firmly united, but your association will derive increased importance from the representative character which it will acquire.

I trust I have now said enough to induce you at once to unite together in the manner I suggest. The trouble to each of you individually will be extremely small; the expence next to nothing; – among you there are many energetic men zealous for the welfare of the colony, who will gladly undertake the office of committee-men; and the advantages to be derived from such association are too conspicuous to he doubted or disputed. The balance on the side of good is, indeed, overwhelming.

I am.
GENTLEMEN,
Your obedient Servant,
H. S. CHAPMAN.
Farrar's Buildings, Temple,
29th September, 1842.

13 Parliamentary Papers, issued April, 1840.

14 In the Colonial Gazette of 21st September, Mr. Rennie has a very good letter on the resources of the Colony. It is however disfigured by an exhibition of temper, when he speaks of the opposition of interested rivals, which would have been better blotted out. Mr. Rennie should expect those who conceive their interests affected to discuss his plan freely and openly, and it is to the credit of these "rivals" that they have done so with courtesy. Mr. Rennie should have given credit to his opponents that only two important objections have been raised, – one, by the way, not by a rival, and not very strongly insisted on. This, alone, is evidence that the opposition is not of an unreasonable character. The paragraph to which I allude has been mentioned as an evidence of an infirmity, calculated to raise a doubt whether the author of the project is a very pleasant man to work with. The passage, Mr. Rennie may be assured, has done its author much more harm than the rival against whom it was directed.

15 Since the above was in type I have received the parliamentary papers containing the accounts in question. They will form the subject of the Portfolio for November.

ON THE FINANCIAL CONDITION OF NEW ZEALAND. BY CHARLES TERRY

ON THE FINANCIAL CONDITION OF NEW ZEALAND.

BY CHARLES TERRY, ESQ., F. R. S., F. S. A.

INTRODUCTION.

I HAVE been favoured by Mr. Charles Terry, author of a very valuable account of New Zealand, 16 with the following important paper on the financial condition of the colony, as far as the estimates for the year 1841 have permitted him to pursue his investigations. This paper claims the reader's attention, as well on account of the calm and candid manner in which the subject is treated, as of its intrinsic importance, and I think the unavoidable conclusion to which the reader must come is, that the local government has conducted its expenditure with a degree of reckless extravagance which, if permitted to continue unchecked by the colonial department, must be productive of disastrous consequences to the colony at large, and especially to those parts not within the sphere of the New Zealand Company's operations.

It will be observed that Mr. Terry's reasonings extend only to the year 1841. He shows conclusively, that the statement of probable revenue is not based on such facts as warrant so large an anticipation. Instead of probable revenue, it should more properly have been called improbable revenue. The customs scarcely yield the cost of collection, and mis-appropriation has destroyed the land fund, so that the revenue from all sources, will fall short of expenditure to no less an amount than £30,000 on the single year. For the year 1842 the deficiency will probably be £40,000; for, while the local government has increased its expenditure upwards of £6,000, scarcely an acre of land can be sold. The debt to the treasury of New South Wales, for 1840, is £33,064. 1s. 1d., so that in three years, the local government will manage to get the colony into debt upwards of £100,000, and as no check upon this unnecessary extravagance can be conveyed to the colony during the present year, it will probably reach £150,000 before a single step is taken to reduce it.

The first effect of this improvidence will be to destroy the government emigration fund. It seems to have been entirely overlooked both by Captain Hobson, and by the Right Honourable the Secretary for the Colonies, that purchasers only can be induced to pay a price for land for the purpose of obtaining a supply of labour. It has always been my own opinion, and, I may add, that of many who have made colonization the subject of their investigations, that even the principle of the recent Land Bill, by devoting only half the proceeds of the land sales to the formation of an emigration fund, would be likely to endanger the productiveness of such sales. Assuming one pound per acre to be the price, I think there is good reason to believe that had the Bill devoted 75 per cent, to emigration, and 25 per cent, to purposes of general revenue, instead of 50 per cent, to each, the amount of sales would have been so much greater, that

the smaller proportion of 25 per cent, would have yielded a larger sum absolutely, and one more likely to be perpetually maintained than the larger proportion of 50 per cent. But if the prospect of an Act to amend the Act passed in the last session of Parliament is to hang in terrorem over the government emigration fund of New Zealand, who will resort to the government land sales? Indeed, the last accounts received from the colony show that the local government can no longer raise money from that source, for the very simple reason, that confidence in the faithful appropriation of the fund is destroyed.

It is true the colonization commissioners have taken up a ship, and are about to send about 200 emigrants to Auckland, but will Lord Stanley permit a second ship to be taken up, when his Excellency's drafts for the deficiencies of the past and present year are presented at the Treasury? It seems to me doubtful whether his Lordship will venture to ask Parliament for £100,000 to maintain a scale of expenditure which can be shown to be in a great measure unnecessary; and even if he should determine to appeal to the house, I can scarcely believe a vote could be easily obtained for a deficiency, part of which is made up of an expenditure of £520 for his Excellency's kitchen, and £1,535 for the colonial brig Victoria, the utility of which does not very clearly appear, with a host of other mere senseless pieces of extravagance, for which there is neither necessity nor excuse.

The settlements of the New Zealand Company are, comparatively, free from the evils with which the rest of New Zealand is threatened by a failure of the government emigration fund. The emigration fund now at the disposal of the company cannot be touched, and the land at their disposal (after deducting the lands of their existing settlements) not being within the operation of the recent Act, will yield an emigration fund in proportion to the amount of future sales. Indirectly, however, the settlements of the com-

pany will suffer by an extravagant government expenditure, though to a much less extent than the government settlements. Population will spread itself where there is a demand for labour, and if emigration to Auckland is brought to an end by the annihilation of the fund, there may be a migration from the company's settlements. But this is an evil that will not last long, for, with the destruction of the emigration fund, capital will cease to flow into Auckland, and the demand for labour will not be a demand for the purpose of production, but will be confined to that which is created by the necessary expenditure of the government – a demand which can be speedily saturated, without being materially felt out of a population of 8,000 or 9,000 – the present aggregate population of the company's settlements.

There can be no doubt that the people of the northern Peninsula have somewhat encouraged his Excellency's extravagance. Censure, even of the most reasonable character, emanating from the people of Wellington has been set down to the account of "jealousy of Auckland" – whatever the settlers of the south deprecated, the settlers of the north thought it incumbent on them to support; but they have recently awakened to a sense of their own danger, and they are now unsaying all that they had previously said in favour of the measures of the local government. We sincerely hope it may not be too late; but whatever may be the consequences of an improvident system to themselves, they have placed it in his Excellency's power to refer to their addresses for an approval of his general policy. But if we may judge by the tone of the New Zealand newspapers, the jealousy which dictated this unwise policy is gradually wearing out, and as it subsides, the truth will be let in, that if the south be injured, the north cannot remain unscathed; and as far as the subject of Mr. Terry's paper is concerned, the brunt of the injury will fall on the former abettors of the

extravagance. But let this pass into oblivion as an error of judgment, rather than be remembered as an act of hostility. Whatever may be the separate interests of the several settlements, all have a common interest in prosperity, and against whatever interferes therewith: hence it is the duty of every one who is connected with New Zealand to promote a thorough revision of a financial system which if it could possibly be maintained, would ruin the colony – unless, indeed, the imperial parliament is willing to make his Excellency a present of £40,000. a-year to support his state in all the splendour of petty vice-royalty. In such a case, though so large an expenditure would produce bad moral consequences, it would not endanger the very existence of the government settlements.

In proportion to the European population, the cost of governing New Zealand is the largest in the known world. In Trinidad, it is 17s. per head. In New South Wales, it is £l. 2s. per head. In Western Australia, it is £1. 10s. per head. In South Australia, under Captain Gray's improved management, it is £2. 3s. per head. In Great Britain and Ireland, it is £1. 17s. per head; whilst in New Zealand, it is no less than £4. 16s. 4d. per head!

How the present debt of the government of New Zealand is to be liquidated, its authors should be called upon to point out. The continuance of revenue depends upon prosperity, and prosperity being diminished, revenue must decline in proportion. It is utterly impossible that Captain Hobson can be permitted to go on incurring a debt of £30,000. or £40,000. a-year much longer, and without any extraordinary foresight, we may look forward to the time when his Excellency will be replaced by a more economical governor, charged as Captain Grey was to reduce expenditure within, or nearly within the means of the revenue of the colony. If the English fashion of funding his Exchequer bills could be resorted to by Captain Hobson, his three years' debt would

be nearly £9. per head for the European population, or nearly one-third of the national debt of this country, which is the creature of several expensive wars, and not justifiable on any other ground.

Lord John Russell, from the very beginning, urged economy upon the governor of New Zealand, the very last despatch his Lordship transmitted to the colony reiterated the same recommendation; with great good sense Lord Stanley confirmed this wise policy, and we cannot but hope that he will prevent the enormous evils with which the colony is threatened, by a complete revision of the financial system exposed in the following pages.

With this brief introduction, I earnestly recommend Mr. Terry's paper to the reader's attention.

H. S. CHAPMAN.
Farrar's Buildings, Temple,
31st October, 1842.

ON THE FINANCIAL CONDITION
OF
NEW ZEALAND.

To the Editor of the New Zealand Portfolio.

SIR,

Perceiving by the last Number of the Portfolio, that the succeeding will be devoted to a paper on the Financial State of New Zealand, I enclose a few observations made on investigating the Colonial Estimates, which are perfectly at your disposal.

I am. Sir,
Your obedient Servant,
CHARLES TERRY.
London, October 25th.

THE consideration and elucidation of the subject of finance is, even in the greatest kingdoms, deemed dry and uninteresting to general readers, and capable of being fully understood only by those who are conversant with figures, and initiated into the mysteries of official documents and statements. But as the New Zealand Portfolio is intended to embrace subjects most interesting and important to the colonist, it is made the topic of the present number, in order to prove that the proper management of the finances is indispensable to the present success, as well as future wealth and prosperity of the colony, more especially on its forma-

tion and during its earliest years; and it is therefore a subject of deep importance to the actual settlers as well as to all proprietors of land in Zealand.

There is no analogy between civilized populous states with various sources of revenue and an infant colony just starting into existence: therefore, principles and measures of finance adapted to the former cannot be applied to the latter.

If the history of other colonies be searched and considered, there will be found some geographical feature – some commercial or statistical facts, – or some previous political relation that gives to such colony a peculiarity per se.

But of all colonies New Zealand is most peculiarly circumstanced, considering the events of its first establishment. In other instances. Great Britain has become possessed of colonies by conquest, or by gradual increase of territory and population from some primary and limited settlement. Those colonies by conquest, such as some of the West India Islands, Mauritius, Cape of Good Hope, &c. have possessed sources of taxation, duties, and consequent revenue, on account of the lengthened period of their existence under the government of Other states; while those which have been founded by the English themselves, have been commenced on a small scale, the expenditure necessary for their protection and government being, in the first instance, laid down with due regard to the population and trade, as to a revenue being derived therefrom to meet such expenditure.

In truth, it may be affirmed, that New Zealand is an unprecedented instance of colonization; for Great Britain has not founded any new colonies since the days of Penn, until the recent settlements within the last fifty years, in Australia: – and in those it will be seen, that in the first formation of each, the machinery of government has been only on one spot – few in number – small in expence, and increasing only with accession of numbers and extension of territory

actually occupied, – as Sydney, Hobart Town, Launceston, Port Philip, Adelaide, and Perth.

Reflecting on the early history and statistics of other colonies, the estimates put forth by the local government of New Zealand for the first and second year of its becoming a British colony, cannot but excite the greatest surprise and interest, as well as induce the most serious consideration as to their necessity, propriety and consistency.

To all in any way connected with the colony, it is a subject of great importance, more particularly to the actual settlers and proprietors of land, for internal domestic taxation must ensue to a great amount, consequently very burthensome to comparatively a limited population, if the colony is to defray its own local government expenditure.

To investigate and elucidate this important subject is the purport of this number of the Portfolio; and, first, will be considered the expenditure; secondly, the revenue; both, with reference to other colonies as to population and commercial resources; and conclude with some observations on the form and principle upon which the estimates are prepared, and which profess to be correct accounts of the annual colonial expenditure.

First, as to the expenditure:

In the very first year of the colony – that is, the second of its becoming a dependency of the British Crown, but the first as an independent colony, (the accounts of the previous year having formed part of the accounts and finance of New South Wales, under which it was subject) in the year 1841-1842, the estimates put forth an expenditure of £50,992. 3s. 4d. with only an European population throughout all the three islands – in the year 1841 of about 8,000, and before any trade or commerce had been founded. For the second year, 1842-1843, the expenditure will be £56,597. 8s. 10d. being an increase of about £5,600. with a population increased to 12,000 European settlers.

In some colonies, if the expenditure be excessive, it is occasioned by the internal state of its native population – or from some measures indispensable to protect its trade, or from being a geographical position necessary to be kept possession of: – but here is an infant colony, comparatively without European population, and whose aborigines are perfectly harmless and governable – a colony, as yet, without trade, or exports, or imports, with only in the first year two actual settlements – Auckland and Port Nicholson – and yet the enormous sum of £60,000 is expended to support the local government.

Before investigating the true cause of this great expence, it will not be uninteresting to refer to the history and statistics of other colonies, in order to show that New Zealand has become a British colony, under circumstances which are unprecedented in the annals of colonization, and which circumstances will render a large annual expenditure unavoidable, without reference either to the population or resources.

That expenditure is not necessarily a consequence in proportion to population, can be clearly proved. – For instance, the West India Islands.

Barbadoes, the area of which maybe computed about 300 square miles, with a population in 1835 of 100,242 souls: in the same year the government expenditure was £27,580, and the revenue £41,219. Trinidad, the area of which is 2,000 square miles; the population in 1835, was 43,678 souls; in the same year the government expenditure was £31,949, and the revenue was £42,430.

Of the British colonies, Prince Edward's Island may be said to approximate more to New Zealand on account of the climate, nature of the country, the capabilities and resources being like New Zealand, chiefly agricultural and pastoral, as well as its coasts and contiguity to the continent, rendering smuggling easy and customs' regulations difficult to enforce. It covers an area of about 3,000 square miles, and has, from

its form, about 350 miles of coast. The population in 1836 was about 30,000 souls. The government expenditure in the same year £13,281, and the revenue £10,367.

But it may be considered that the finance and statistics of the colonies already quoted can have no reference or analogy to New Zealand, and that those of the other Australian settlements would elucidate the subject more clearly and correctly; however, it will be seen that the same anomalous disproportion of expenditure exists with New Zealand and the Other Australian colonies, as between the former and the British colonies in the Atlantic. – For example: –

New South Wales, in the year 1828, forty years after its becoming a British colony, before the sale of Crown lands took place, the European population was 36,598 persons; the government expenditure in the same year was £40,912, and the revenue was £94,862.

Van Diemen's Land, twenty-one years after the first settlement was established at Hobart Town, had, in the year 1825, an European population of 14,542 souls; the government expenditure in the same year was £42,781, and the revenue was £41,943.

In Western Australia, in the year 1836, the colony then having been established six years, the European population was 3,000, with a government expenditure of £4,466,

Referring to these financial and statistical facts in other colonies, the considerations that naturally arise are, what can be the causes or circumstances to account for, or to justify such an annual expenditure in the very first years of the colony of New Zealand?

These causes may be considered to be three: –

First, – The peculiar circumstances of the territorial rights and possessions of the natives, as well as of the European claimants, on the colony being annexed to the British Crown. Secondly, – The geographical formation of the island having occasioned the small European population to be dispersed

and located, in many settlements, very distant from each other, instead of being concentrated, in the first instance, at and around one settlement, thereby rendering necessary a multiplication of the machinery of the local government: – And, lastly.

The manner, system, and scale in which the local government have begun and, apparently, intend to manage the finances, or, in other words, establish the expenditure and revenue of the colony.

Over the two first causes the government could have no controul nor prevent; they existed at the period when the British Government deemed it necessary to take possession of the islands as a British colony. Their duty only, therefore, is to deal with these irremediable existing circumstances and facts with justice, firmness, and ability; for the colony at large, or the Home Government must bear and provide for the expenditure entailed by these events.

However, with respect to the third reason, it is matter for dispassionate consideration and discussion whether the local government has evinced sound judgment and discretion, or sufficiently considered the interests of the colony by putting forth in the first two years such a scale of expenditure.

Here it may be asked to what objects is the expenditure of a colony appropriated?

They may be classed under two heads: – First, to provide for the administration of government in its branches – ecclesiastical, civil, and judicial. These several important departments are necessarily a direct charge on the colony, to provide for which, revenue or funds must be derived from other sources by additional expenditure, which comes under the second head, which is, the expenditure for the establishment of customs, excise, &c., the receipts from which it is presumed will so much exceed their expence as to provide in a great measure for the objects of the former class.

These observations lead to the most important part of these estimates. No Chancellor of the Exchequer ever thinks of instituting a tax without some very good reason to presume that the receipts will very far exceed the expence of enforcing and collecting; nor would he continue an old tax or duty which was found to diminish in its products, and become only nearly equal to its expences. Besides, a tax or duty that does not produce a surplus revenue, is as injurious to the government as it is vexatious and impoverishing to the settlers, and only provides for a number of officials at the expence of comparatively few persons on whom the tax falls, without any benefit to the community at large. Further, it may be observed, that any tax or duty ought to be rigidly or efficiently enforced, or it is an injustice to those on whom it is levied, as well as evidence of the imbecility or powerless enactments of the government.

As has been observed, one of the chief reasons for these extraordinary estimates is the extent and nature of the coasts of the islands, which, from their irregular form, may be estimated at 4,000 miles, and likewise the numerous settlements which are daily springing up, not only on the north island, but on the coasts of the middle island. These are at present – Bay of Islands – Hokianga – Kaipara – Auckland – Manakao – Port Nicholson – Wanganui – New Plymouth – Nelson – and very shortly there will be two more, with considerable numbers of emigrants from Europe on the middle island.

These are all places in which not only law and justice require to be administered, but if the government also intend to establish and keep up an effective customs and excise, a very large and expensive machinery of officers, &c. will be indispensable.

Besides the places named, there are very many others at which Europeans are settled – as Tutukaka – Coromandel Harbour – Waiheki – Tauranga – Kawia – Cloudy Bay, and

many other places in Cook's Strait – at all of which smuggling can and will be carried on very easily, and to a great extent. It is absurd to suppose and expect that a man at such places will go to a principal settlement and buy government whiskey, when a small coaster will supply him at one third of the price. High duties tend to encourage smuggling and adulteration – both equally pernicious to the health and morals of the community. The nature of the country – the shores being covered with high bush, fern, or flax to the water's edge, with numerous small creeks running up into some valley or ravine – will prevent a revenue from customs to any considerable amount.

At Auckland, the head quarters of the customs, very little duty is paid on spirits, &c., and that only by the publicans occasionally, as every night some contraband trade is carried on. What can revenue boats do on such coasts unless in force and numbers? The night is dark and blowing – say the change of the moon – high water at midnight – the shore shallow for a certain distance, at which place hogsheads and casks are pitched overboard, and men, up to their waists in water, quietly propel them with the flood tide up some little meandering creek, far from the haunts of men, and quite impervious to the prying search of any officer of customs. It is very clear, therefore, that the customs to be in the least degree effective throughout New Zealand, must be very numerous and proportionately expensive. Then follows the question – will its revenue pay even its own expences, much more yield surplus funds to counterbalance and provide for other items of expenditure? Of what advantage to the government will it be to have a large establishment of customs, the annual expences of which may be presumed to be 6 or £8,000., when its revenue does not produce £10,000? – What would be the result of such figures? – merely that the colonists would be taxed to the amount of £10,000., with all the inconvenience and vexation of such imposts, and the

government itself only benefit to the amount of £2,000. towards the defraying of other expenditure. The settlers must be taxed to pay for those indispensable establishments, which do not – and cannot – create revenue – such as those before mentioned; therefore it would be far wiser policy to raise funds, expressly for such purposes, by rates – than incur a further large scale of certain annual expenditure with great uncertainty of any or very little revenue.

To elucidate the foregoing observations, an analysis of the estimates for 1841-1842 is necessary under the heads of those expences which are indispensable, without revenue, and those which are incurred for the prospect of revenue. The anomalous and confused manner in which these estimates are issued, on which some subsequent remarks will be made, render some very different figures necessary, as to totals under revenue heads; as follows: –

Certain Expenditure, from the several Departments of which no Revenue can arise for the Payments of their Expenditure.

£. s. d.

Governor and Judge

2,200 0 0

Establishment of his Excellency.

1,187 7 6

Executive and Legislative Councils

545 0 0

Colonial Secretary's Department

1,560 0 0

Audit Branch ditto

325 0 0

Colonial Storekeeper ditto

450 15 0

Harbour Masters ditto

1,076 0 0

Colonial Brig "Victoria."

1,535 9 4

Colonial Surgeon

364 12 6

Public Works and Buildings

5,354 0 0

Law Officers of the Crown

3,068 11 3

Police and Gaols

7,957 9 3

Ecclesiastical Establishment

450 0 0

School ditto

140 0 0

Miscellaneous

2,977 13 6

Total

£29,191 18 4

The expenditure for which returns may be expected, and which ought, consequently, to be quite distinct from the previous items, are of two descriptions – one arising from customs, the other from the sale of Crown lands. These are extracted from the estimates under distinct heads.

Expenditure estimated to be incurred on customs and excise: –

£. s. d.

Colonial Treasurer's Department

1,125 0 0

Customs ditto

3,130 0 0

Post Office ditto

525 0 0

Total

4,780 0 0

Expenditure which is chargeable on the sale of Crown lands: –

£. s. d.

Commissioners of Claims

2,450 0 0

Protectors of Aborigines

2,335 12 6

Survey Department

6,164 12 6

Purchases of Land from Natives

4,000 0 0

Roads and bridges

2,000 0 0

Total.....

£ 16,950 5 0

The estimates for 1841-1842 may be therefore considered thus: –

£. s. d.

Certain Expenditure without Revenue

29,191 18 4

Expenditure, Department of Customs and Excise

4,780 0 0

Expenditure chargeable, and dependant on the sale of Crown Lands.

16,950 5 0

Total.....

50,922 3 4

Having thus analysed the expenditure, the second number

of the estimates, viz., "The probable amount of revenue for the service of the government of New Zealand," requires consideration.

In colonies, in which land, or the produce from the sales of it contribute – as Canada and Australia – the revenue is classed under two heads, viz., ordinary or fixed colonial revenue, which is the produce from customs and excise; and that from the sales of Crown lands, which is denominated extraordinary or incidental revenue.

In the estimates of New Zealand, both of these naturally were suppositious; and the colonial treasurer, who, in fact, is the Chancellor of the Exchequer for the colony, put forth the following figures as the probable revenue to meet the certain expenditure before detailed.

ORDINARY OR FIXED REVENUE: –

£. s. d.

£. s. d.

Customs

13,000 0 0

Post Office

500 0 0

Publican and other Licences

2,400 0 0

Auction Duties

1,000 0 0

Fees and Fines of Public Offices

2,500 0 0

Total of Ordinary Revenue

19,400 0 0

EXTRAORDINARY OR INCIDENTAL REVENUE: –

Probable amount of Proceeds of Sales of Crown Lands, after Payment of Charges of Immigration, Survey Departments, and Land Purchases

18,917 13 9

Total

38,317 13 9

Taking into consideration first the ordinary revenue, the largest item of this anticipated revenue is the customs, viz. £13,000. Referring to the "Table of Duties and Customs" passed by the local government of New Zealand to be en-

forced on and after the 1st July, 1841 – it will be found the only resources are as follows: –

£. s. d.

Spirits – British, per gallon

0 4 0

Ditto – Foreign, ditto

0 5 0

Tobacco (after the 1st January, 1842)

Snuff and Cigars, per lb

0 2 6

Manufactured, ditto

0 1 0

Unmanufactured, ditto

0 0 9

Wine, for every £100. value

15 0 0

Tea, Sugar, Flour, Meal, Wheat, Rice,
and other Grains and Pulse, every £100.

5 0 0

All Foreign Goods, for every £100. value

10 0 0

All British Produce and Manufactures,
as well as from New South Wales and Van Dieman's Land, (except Spirits)

Free.

From this Tariff, it is very evident that the customs is the principal source of revenue on which the colonial treasurer depends.

But, exclusive of the previous remarks as to the great expence that must necessarily be incurred to enforce and render productive such branch of revenue, it may be asked, on what grounds did the colonial treasurer anticipate the large sum of £13,000. on spirits, wine, and tobacco, in the first year of a colony with only a population not exceeding 8000 persons?

It maybe that he based his calculation on the results from the consumption of similar articles in New South Wales, but the European population in New Zealand is of a very different class to those of the former colony; and no data derived from a penal settlement can apply to one to which the persons who emigrate have to produce testimonials of character and respectability – of which description the mass of the present settlers in New Zealand are composed. As a parallel instance: –

In Prince Edward's Island – which is likewise not a penal settlement – with a population of 30,000 souls, the revenue from wines, spirits, tobacco, &c. in 1836 was only – wines and spirits, £1681. Tea and tobacco, £3091. Total – £4672.

It is very probable that, instead of the ordinary revenue producing the sum of £ 19, 400, it did not realize the amount of its expences, viz. £4,780, and the grounds for such conclusion are the acts of the executive council appropriating the fund for emigration to other than its legitimate express object.

The governor in council declared – "the exigencies of government" – in other words, the defalcation of the probable ordinary revenue – "has been such as to require every farthing that had been acquired from the sale of land, and that no money could yet be applied to immigration."

This deficiency of the estimates from fixed or ordinary revenue was not singular, for on the extraordinary or incidental revenue there was not realized the sums anticipated, viz., £18,917. 13s. 9d.

By the estimates, it was presumed the sales of crown land would, in the years 1841-1842, realize £60,000, which was thus appropriated in the estimates: –

£. s. d.

Probable Proceeds of Crown Lands.

50,000 0 0

EXPENDITURE.

Survey Department, Lands from Aborigines, Roads and Bridges

12,164 12 6

37,835 7 6

Fifty per Cent, for Immigration

18,917 13 9

Amount available for the general purposes of the Colony

£ 18,917 13 9

But the actual proceeds from crown land were only £35,758. 11s. 11d: – fifteen thousand less than the probable

estimated proceeds, and which, if appropriated as these estimates describe, would be thus, in figures: –

£ s d.

Actual proceeds of Sales of Crown

35,758 11 11

Expenditure for Survey, Lands, and Roads

12,164 12 6

23,593 19 5

Fifty per Cent, for Immigration

11,796 19 8 1/2

Amount available for the general purposes of the Colony

11,796 18 8 1/2

It is impossible to ascertain correctly the actual receipt of customs, &c., for there are no official documents published as in England; but it is very probable that but a very small portion of the presumed amount of £19,300 was realized. But, assuming it to be half, the following statement of figures will be very like the true result of the financial year of 1841-1842,

REVENUE

Ordinary

£.

£. s. d.

Customs.......5,000

Post Office...... 300

Public Licences.. 2,000

Auction Duties.. 500

Fees &c......1,500

– – -

9,300 0 0

Extraordinary.

Actual Amount of Proceeds of Sale from Crown Lands

11,796 19 8 1/2

21,096 19 8 1/2

Deficiency or Excess of Expenditure over revenue

29,825 3 7 1/2

50,922 3 4

EXPENDITURE

£. s. d.

Certain Expenditure without Revenue

29,191 18 4

Expenditure, Customs, and Excise

4,780 0 0

Expenditure chargeable on Sale of Crown Lands..

16,950 5 0

50,922 3 4

It is very evident, therefore, by the deficiency of the extraordinary, or land revenue, and likewise by the appropriation, of the portion intended for emigration, to defray the general expenditure, that the ordinary or fixed has not realized an amount at all approaching the probable estimates; and it may further be assumed, that the actual total deficiency of revenue is very near thirty thousand pounds, instead of what the official estimates put forth it would probably be – the small sum of £339. 17s. 0d.

Having thus analysed the expenditure and revenue for 1841-1842, the mode in which these estimates are officially prepared forcibly engages attention and interest. If it is thought that such a mass of anomalous figures, not actual facts, but merely nominal, in some cases repeated under different heads, and deducted from others – if it is conceived that such complicated estimates, made up to balance numerically the expenditure by revenue, will inspire confidence and prevent investigation, it is quite erroneous. To those not conversant with figures, the more unintelligible the financial statements, the greater will be the distrust; and to those competent to analyse them, the more complicated they are, the greater will be the stimulus for thorough investigation, which, although tedious and irksome, is not difficult.

The manner and system on which these colonial estimates are framed, is highly to be deprecated, both as regards expenditure as well as revenue.

In the expenditure, the great error is, not placing the different items under proper heads of the services on which they are chargeable. For example: – By the instructions of the Home Government, the gross proceeds from the sale of Crown lands, or extraordinary and incidental revenue, are to be first chargeable with the expences of the survey department, – purchase of land from the natives, and roads, bridges, &c., in order to make the land saleable, and then

the net proceeds are to be appropriated in equal parts to emigration, and to the general purposes of the colony. Under such circumstances, it is but natural to expect, and common sense would suggest, that in the estimates there would be a distinct head or charge of expenditure denominated "Crown lands," under which these several items would be placed. But, no. In the statement. No. 3, showing the appropriation of revenue arising from the sale of Crown lands, is the sum of £12,164. 12s. 6d. deducted from the gross proceeds; and in wading through the estimates for the several items, the survey department is found under a distinct head, and the two other sums, viz., land £4,000 and roads and bridges £2,000, are mixed up with several other sums quite of a different nature, under the head "miscellaneous." The whole three sums having thus been charged on the general expenditure, have again to be deducted in the statement, No. 4, which is the balance sheet of the revenue and expenditure.

With respect to the revenue, how fallacious is it to assume enormous sums under the title of probable, without any facts to justify such nominal figures. It may be said that, in the first year of the budget of New Zealand, such a course was unavoidable. But the very same system is pursued in the second year, and with greater inconsistency. In the very face of all the facts and figures of deficiency to a large amount on the probable revenue of the first year, the estimates for the year 1842-1843 are made up by similar figures, which will only prove more fallacious and incorrect. The sum of £60,000 is again assumed as the proceeds of the sales of Crown lands, when last year they fell short fifteen thousand pounds of that sum.

What will be the actual result, taking into consideration the misappropriation of the land fund for emigration last year? The local government will not sell, comparatively, an acre of land, and the proceeds will not realize one-fifth

of the probable estimates. Again, in 1841-1842, the ordinary revenue was estimated to produce £19,400, which, from the previous observations, is very clear was never realized; and yet, for the year 1842-1843, it is estimated to produce £23,520.

The present financial state of New Zealand may be considered to be as follows: –

There is a certain annual expenditure of above fifty-six thousand pounds, which in round numbers may be thus analysed: –

£.

Expenditure for Judicial Court and Ecclesiastical Government, without revenue

35,000

Expenditure to create Ordinary or Fixed Revenue

6,000

Expenditure chargeable on the Sale of Crown Lands

15,000

56,000

On the other hand, there is an uncertain revenue dependent on the consumption of spirits, &c., and also on large sales of Crown lands. How far such expectations are likely to be realized, may be adduced from the preceding observations. If the revenue again is deficient, which, it may naturally be expected, to the amount below expenditure for 1842-1843, of above forty thousand pounds – then the question will arise, whether the Home Government will defray such colonial expenditure in New Zealand. It may, for the first years, advance to the colony sums to liquidate the expenditure, but that will be increasing the future burthens of taxation of the settlers. If the colony is at once to provide within itself a revenue to balance the expenditure, then to the present table of duties of customs many other imposts must be added, such as exist in other colonies, of internal taxation, such as taxes on houses and property, cattle and stock, &c.

In conclusion, it is clearly evident, from the present inquiry, that the nature and extent of the coasts, and such numerous settlements having been simultaneously formed throughout the islands, render indispensable and unavoidable a large annual expenditure for a proportionate number and extension of government establishments, without reference to population, and far different to other colonies; while the very same causes and circumstances, in conjunction with the recent measures of the local government, will operate most powerfully on the revenue, and render it very questionable whether the receipts from the ordinary revenue and sales of Crown land will equal the expences of their several departments, much more produce excess available for the other general purposes of the colony.

CHARLES TERRY.

16 "New Zealand: its Advantages and Prospects as a British Colony, with a full Account of the Land Claims, Sales of Crown Lands, Aborigines, &c." By Charles Terry, Esq., F. R. S. F S. A. London: T. and W. Boone, New Bond Street, 1842.

SOME OBSERVATIONS ON THE NECESSITY FOR CONTINUING TO FACILITATE VOLUNTARY EMIGRATION

SOME OBSERVATIONS

ON THE NECESSITY FOR

CONTINUING TO FACILITATE VOLUNTARY EMIGRATION,

BY MEANS OF MODERATE CHARGES FOR

CHIEF AND FORE-CABIN PASSAGES TO NEW ZEALAND,

IN A LETTER TO

JOSEPH SOMES, Esq.

GOVERNOR OF THE NEW ZEALAND COMPANY.

MY DEAR SIR,

I address the following observations to you, because I am well aware of the anxious desire you have always evinced to give your support within the New Zealand House, and your influence without, to whatever measures are calculated to promote the prosperity of the colony; and as I believe the observance of economy in the charges for passages to New Zealand is calculated to produce the most beneficial results, I am naturally desirous of securing your concurrence with the remarks I am about to lay before you, convinced that if I succeed in so doing – if I am fortunate enough to enlist your energies in favour of what must at present be deemed an experiment, I shall have done much to secure the continuance of a system which bids fair to be productive of the happiest consequences to the colony, the prosperity of which you have, I know, so much at heart, and which you have already, in every way, so much promoted.

I must observe at the very outset, that the views I am about to submit to you, must not be taken as the mere solitary opinions of the individual who now addresses you. They are shared by a very large number of persons connected, or likely to be connected with the colony; including

many of the shareholders of the New Zealand Company, and a still larger number of owners of land within the Company's territory. If, indeed, I had been alone in the views I am about to unfold, I should scarcely have deemed myself justified in taking up your time; but I can safely say, that there is no subject connected with the colonization of New Zealand wherein so perfect an unanimity exists – a truth which must have come within your own observation.

For many years past, before the colonization of New Zealand had been thought of, the high prices charged for passages to the Australian colonies have been a subject of complaint. The East Indian voyage seems to have been the standard according to which the prices have been fixed; and the table furnished has been more distinguished for costly luxuries, than for a plain but wholesome bill of fare. A great deal of art has been practised to enlist the ordinary prejudices and weaknesses of society in favour of an extravagant scale and an exorbitant charge, and against frugality and economy. "Gentility" has been variously defined. The standard erected by the Quarterly Review, namely, "keeping a gig," has been often referred to; the brokers connected with Australian shipping would wish us to believe that it consists in drinking (or perhaps merely paying for) champagne and claret every day. The champagne is made the excuse for every deficiency and for every extravagance. I recollect once making my passage from America in a ship which was very shabbily provided with necessaries. We experienced a prevalence of easterly winds, and our passage was somewhat protracted, which was a reasonable excuse for some short comings; but making all allowances, there was a great and culpable neglect of comfort. We were out of fresh provisions, of tea, and ultimately even short of water, and the potatoes put on board were insufficient even for a very short voyage; but we had champagne twice a week! and when I ventured to complain of the short supply

of potatoes, I was silenced by the remark that I must be a person very difficult to please, inasmuch as champagne was allowed twice a week in the cabin; in fact, the last Sunday we were on board, our dinner consisted of red herrings and champagne – the charge, as may be supposed, being measured by the champagne, rather than by the red herrings.

Where the charge of seventy or eighty guineas has been objected to, the broker is always ready with his remedy of an intermediate passage, with a "comfortable cabin," and a "liberal dietary," for half the money; but the unfortunate who permits himself to be entrapped into the alleged "comforts" of the intermediate cabin, finds that he is poked into a confined hole; and although he may not be abridged of the stipulated quantity of those maritime luxuries, salt beef, pork, and hard biscuit, they are so uncomfortably served, with so little attention even to cleanliness, that the health of the passenger's family suffers materially during the voyage. As far as space, ventilation, and cleanliness are concerned, the free emigrants sent out under the controul of the Company, are infinitely better provided than the intermediate passengers by many private ships, and the two bottles of porter or (not and) one bottle of wine (and what wine!) a week, are but poor compensation for foul air and want of cleanliness every day.

But this is not all. The champagne standard of gentility is brought to bear against the intermediate passenger, albeit far superior in many instances to the "aristocracy of the cabin." A correspondent 17 of the New Zealand Journal points out the conduct which is frequently practised towards the passengers of the class in question, and I have myself 18 seen the evils which arise out of the invidious distinction between cabin and intermediate passengers. The interme-

diate passenger is not allowed to walk on the poop-deck of the vessel, except while the cabin passengers are at breakfast. The captain never speaks to him, but the crew do, and taking their cue from the captain's silent contempt, not always in the most courteous manner. The second mate, and perchance even the steward, honours the daughter by making love to her; and "on landing in the colony," says Tasman, "the intermediate is never recognised by the cabin passenger; and were the latter questioned whether they did not come out together, he would probably reply, 'I hardly know, he certainly was not in the cabin.' "The conduct of ignorant and vulgar-minded cabin passengers and ship masters, towards those who are often their superiors in everything except the senseless craving for distinction by the only means within their reach, namely, a lavish expenditure, is sufficiently annoying even to the strongest mind; and many excellent men have not the moral courage to contend against this false assumption of superiority, aided by the ridicule of economy with which it is accompanied. I recollect one case which came within my own knowledge, that of an intermediate passenger returning from Canada, whither he had emigrated a few years before, but being ill adapted for the life of a settler, was returning much disgusted, and evidently much impoverished, to his own country. He was a gentleman in every sense of the word, was well educated, and well informed, and had taken a high degree at his University; he had a mild, sensible, and amiable wife, and their two children were extremely well brought up. They were companions for any one; but they were treated as inferiors by the coarse grog-drinking captain, and the "aristocracy of the cabin;" until a better example was set by a military officer of rank and his lady, aided by one or two others, whose sympathies were more in unison with the poor gentleman than with the thriving, and in the main, not ill-natured traders with whom the cabin was for the most part filled. If, however, these two or three persons of unequivocal

station had not stepped forward to give their countenance to the poor "intermediate," he would have been made unhappy for the voyage, and his gentle wife would perhaps have been subject to the impertinences of some of the "gentlemen" of the cabin. His discomfort, however, would have been over in three or four weeks: where, as the case of the New Zealand voyage, it lasts four months, it becomes almost unendurable.

Whilst we condemn in the strongest terms this assumption of superiority on the part of cabin over intermediate passengers, the feeling which prompts the passenger in moderate circumstances to shrink from subjecting himself, and perhaps a tenderly nurtured family thereto, cannot be disapproved of. A decent pride of station is the parent of many virtues. Men who guard their position in society with watchful jealousy are not very likely to bring disgrace upon themselves and families; and he who is callous to inferiority of position, even though that inferiority be conventional or ideal, is not likely to be very sensitive touching distinctions which carry with them real degradation. To the right-minded, therefore the intermediate passage must and ought to give pain; and I have the means of knowing that many have been deterred from emigrating by the impossibility of sparing two or three hundred pounds for cabin passage, and by their indisposition to submit to the stigma of the intermediate berths. Yet these are the very men most likely to promote the rapid progress of the Company's settlements, by becoming active producers from the very moment of their arrival in the colony.

It is for these considerations that the first effort of the New Zealand Company to reduce the price of cabin passages, and to afford means for the emigration of a substantial yeomanry, by chartering the Phoebe, has met with such universal approval, not merely among those who are likely to reap the direct advantage of the system, but among all who are related to the Company as owners of the land or shareholders. Even among men of "gentle birth" and of refined

education and habits – men with means sufficient to command the respect of the vulgar – I hear the praises of the Company perpetually expressed. Contemplating emigration to the Company's settlements, they rejoice in the opportunity thus afforded them of economising their means without disparagement to their station in life, and without abatement of substantial comfort.

It must be of the greatest importance to those who emigrate to New Zealand to reach the colony with their resources as little reduced by the expense of transport as possible. We must not look for the emigration of large capitalists – they can find comfort at home. The class of persons most likely to resort to emigration are those who have a few hundred pounds, or at most two or three thousand, for which they cannot find safe and profitable employment here. The small capitalist cannot sustain a ruinous competition with the large capitalist, and therefore he removes to a more advantageous, field where he is secure against such fatal competition. The charge of seventy or eighty guineas for each adult member of his family precludes the idea of emigration to New Zealand, and drives him perhaps, to Canada, whilst a charge of about half that amount not only renders New Zealand attractive to him, but saves his capital, with only a small diminution, for immediate production on his arrival. But the positive advantage of a saving of capital is not all. The old system promoted the acquisition of luxurious and expensive habits, which many have found it difficult to throw off, after their arrival; and I have no doubt that the rivalry in show and expense, which is so conspicuous in some of our newest colonies, may be partly traced to the new standard of gentility established on board the Australian ships. This is a very great evil, and great indeed should be the gratitude of the colonists towards the New Zealand Company, that they have boldly laid the axe at its very roots.

Hitherto I have for the most part confined myself to the

comfort and convenience of the passengers themselves. I know you would bear with me in this course, as you have always permitted that consideration to have great weight in the measures to which you have given your sanction and support. Let me now ask your attention to a few observations as to the beneficial effect of economical passages upon the interests of the colony and of the Company.

One of the most conspicuous results of the first trial of the economical system is the large number of persons who have availed themselves thereof, who would not have emigrated at all unless under the new system. The Thomas Sparks sailed with three or four cabin passengers only; the Indus had only two: the Phoebe, on the other hand, had twenty-five adults, besides twenty-three in the fore cabin, with ten or eleven children to each class. Does any one pretend to say that half or even a quarter of these could have emigrated at all under the old system? – and yet they constitute, in every sense of the word, a valuable body of settlers. 19 In the fore cabin, as well as in the chief cabin, there is scarcely an individual who has not some capital. I believe it is well known to some of the Directors that one of the families in the fore cabin had with them not far short of one thousand pounds; and although no means exist for ascertaining the aggregate amount of capital they carried out, I know that it was considerable. Thus both classes of passengers will become producers and employers of labour from the very moment of their arrival, and not as many of the former cabin passengers have been – mere hangers on about the town, seeking some compendious mode of making a fortune, and when disappointed, swelling the current of discontent.

The fore cabin passengers by the Phoebe constitute a truly valuable class of settlers. Although many, perhaps most of

them, possess some capital, and a few have good capitals for a young country, scarcely any of them will abstain from actual labour. They have been habituated to industry from their infancy, and they will not easily throw off a deeply engrafted habit. Some of these must be classed as labourers, with some small means, whilst others may be considered as substantial yeomen, who can and will put their hands to labour with those whom they employ. The labourers with small means will continue to labour for hire, contracting for all sorts of jobs, such as ditching, fencing, well-sinking, and so forth, hiring a companion labourer or two if it be necessary for the completion of their contract. The fore cabin passengers, with larger means, must be classed as employers; but they will themselves labour with their men, whom their industry will encourage by the powerful stimulus of example. Many of the chief cabin passengers, too, will give effect to their own capital by the labour of their hands. On the whole; I can scarcely conceive a more valuable body of settlers than those which the Phoebe carries out; and should any check upon so useful a class take place, I know that many would deplore it as a deep misfortune to the Company's settlements. I regard the Phoebe's rich freight of honest industry as the most valuable boon the Company ever conferred on the colony. She conveys to Nelson and Wellington the elements of future greatness, in a higher degree than any previous ship, except, perhaps, those which conveyed the first colony to Port Nicholson – an emigration unprecedented in the annals of colonization.

Another great advantage to the colony is, that the large number of employers of labour which the Phoebe conveys to the colony, and which indeed the system will have a perpetual tendency to convey thither, must have the effect of improving the proportion between employers and employed, and therefore of keeping wages at a remunerating rate. This, I know, is a great recommendation to you personally, as well

as to many of the Directors. Colonization would be unworthy of notice were it not a means to improve the condition of the industrious classes; and that colonization is the most so which best fulfils its appropriate function. An apprehension has been entertained by some of the Directors that mere labour has been introduced rather too rapidly into the several settlements. I have watched the rate of wages pretty closely in Wellington and Nelson, and have not perceived any indication that the apprehension in question is well founded; neither do any of the letters from labouring men themselves show that their condition betrays excess. Nevertheless, it is a proper subject for vigilance. Capital should bear such a proportion to labour as to secure the comfort of the labourer; the stoppage of the emigration of labourers is but a rude and clumsy mode of improving the proportion; the better method is to facilitate the emigration of capitalists, by every means at the Company's disposal. What so simple a method as to continue to dispatch ships on the economical principle? Although all cabin passengers are not employers, neither are all steerage passengers labourers, yet if the Company would lay down a rule as to the proportion of steerage to cabin passengers which they would furnish, they would soon be able to ascertain its practical working. I once made a calculation that for the first 300 cabin passengers, 1200 emigrants of the labouring class were not sufficient to prevent a great scarcity of labour. I am inclined to think that if six free emigrants, of all ages, were sent out to every cabin passenger of adult age, there would be no indication of too rapid an introduction of labour. In the case of the Phoebe, it may be thought that the capitals taken out will be more moderate, individually, than the capitals of other cabin passengers. I do not think so; but if the Court should be of that opinion let the proportion be fixed at five instead of six, and there need be no fear of too rapid supply of labour to the Company's settlements. The

five steerage passengers would scarcely supply two labourers, the rest constituting the labourers' wives and children; and as to the fore-cabin passengers, they would supply rather a larger proportion of employers than of employed. Supposing, however, that among the fore-cabin passengers the capital was just equal to keep employed the labour conveyed – and that, I think, would be a safe assumption – the twenty-five adult cabin passengers by the Phoebe would have justified the transmission of 125 free emigrants, if five to one be the proportion adopted, or of 150, if six to one be the rule. Of course, exactness of proportion is impossible of attainment; but so long as wages continue at a remunerating rate, the Company might assume that they are on the safe side. By the Phoebe, the actual number of free emigrants sent out was 115, 20 a number far within the proportion I have fixed; indeed, as the Phoebe had forty-eight adult passengers with more or less capital, and only seventy-one persons assumed to be labourers without capital, it is right to conclude that the proportion of employment to labour has been greatly improved.

It may now be seen how easy it will be for the New Zealand Company to regulate the proportion between capital and labour, so as to keep a constant supply of the latter without impairing its remuneration, and without resorting to the miserable expedient of stopping emigration. A rule may be established that, for a certain number of chief-cabin passengers, a certain proportion of free emigrants of the average ages be furnished. If the above proportion be adopted, the Company should furnish fifty steerage passengers for every ten in the cabin. This, we believe, would keep wages at a highly remunerative rate; and if, at any time, there should arise any ground for the apprehension that labour was sup-

plied in excess, a reduction of the proportion to four to one would restore the proper ratio in favour of the labourer.

The power of regulating the proportion between employers and employed, might be retained by the Company, not merely in the case of the ships chartered by themselves, but in that also of ships dispatched by private owners. In the latter case, where a shipowner could show that he had ten cabin passengers engaged, the Company might agree to furnish fifty free emigrants, under their own regulations. But it would be better if the Company retained the whole controul, regulating even the chief-cabin passages, by chartering the ship. The public have great confidence in the Company: it is well known that the utmost attention is paid to the comfort of the passengers of all classes; three years' experience has made the Company's officers as skilful as they are zealous in the performance of their respective duties, and the general accommodation of the free emigrants is scarcely susceptible of further improvement. In the case of private traders, on the other hand, the passenger is always beset by a lurking fear that, even in the quantity as well as the quality of the provisions, to say nothing of the little comforts which cannot be comprised in a printed dietary, the interest of the passenger must frequently yield to that of the owner. It will therefore be far better if the Company continue to charter the ship, as in the case of the Phoebe, making such modifications as to price and regulations as the experience acquired by the first trial may show to be necessary. Under a system which is obviously so attractive to small capitalists – which promises to send out from thirty to forty employers of labour by every ship, the Company need be under no fear of supplying labour too rapidly, or of a reduction of wages in the colony. If they send out ship after ship with between one and two hundred free emigrants, and only three or four in the cabin, as in the case of the Thomas Sparkes – or one cabin passenger and

his wife, as in the case of the Indus – a glut of labour may be brought about; but so long as their ships are filled as the Phoebe was, with more employers than labourers, the deficiency will be the other way.

There is another consideration which should weigh with the Company, and that is the effect of the new system on the demand for land. Where a ship has twenty-five adult chief-cabin passengers, and nearly as many fore-cabin passengers, all of them possessed of some, and some of them of considerable means, a demand for the Company's land cannot fail to spring from their emigration. The direct demand previous to their departure (though that I am told was larger than arose out of the departure of any previous ship during the present year) may not be large, but the indirect demand cannot fail to be considerable. Even if no one of the Phoebe's passengers had purchased a whole allotment, their demand for lands at second-hand in the colony – for parts of sections, both town and country, will soon send a wholesale demand to the Company's land offices. You are well aware that a land association exists at Wellington, composed of men of the working class, who invest their savings in small holdings; others will no doubt spring up in all the Company's settlements; the class of passengers by the Phoebe are the very men to extend such associations, nay, they are themselves sufficiently numerous to establish one among themselves. I may mention in this place, that a very intelligent friend of mine, who is about to proceed to New Zealand by one of the earliest ships, has matured an admirable plan for building societies, which is especially adapted to the same class of passengers, and which will promote a demand for land in small sections. Now, these small demands have a tendency to exhaust the marketable supply of land in second hands. It is the aggregate of these small demands which creates the larger demand which reaches the Company. Each country section disposed of in small lots

may be regarded as a section withdrawn from the supply on hand, for immediate use. It is analogous to merchandize taken out of bond – the merchant no longer regards it as forming part of the supply – it is in course of consumption. The demand for small sections is, in fact, the really effective demand; and it is for this reason that I assert that no ship during the present year has carried out so large a demand for land as the Phoebe, without reckoning the whole allotments purchased in this country. Indeed, I believe she has carried out a larger immediate demand than that of all the ships of the present year taken together.

If this system had been thought of, and carried into execution, when the first emigrant ships for the colony of Nelson started, the effect would have been very conspicuous; there would have been three or four times as many employers; there would have been between two and three hundred fore-cabin passengers, yeomen and labourers with some means; Wellington would have received its share of both classes of passengers; production would have been much greater than it is at present; there would have been more buildings in Wellington and Nelson – and they would probably have been of a more substantial character; and though last not least, the great result of the whole would have been an increased demand for the Company's lands; in short, it is my firm belief, that the Company has never yet tried a measure so abundantly fraught with the elements of prosperity to the colony, and of advantage to themselves, as the system under notice.

I believe a reduction in the cabin fares to New Zealand, and to Australia, would be more profitable to shipowners than they are disposed to believe. All traders know that an extensive trade, at moderate rates of profit, generally yields a larger aggregate profit than a limited business at a large rate of profit; and I am assured that many shipowners are well disposed to fall in with the system originated by the Company. Even in the East India trade, a reduction in the

price of cabin passages is proposed, and I think it may be clearly traced to the example set by the Company. The following advertisement lately appeared in The Times: –

"Passage to India for sixty guineas, including wines and a liberal table. – Cadets and other passengers proceeding to India may have their passages secured for sixty guineas, in a very fast-sailing first-class vessel, with excellent accommodation, which will sail from Portsmouth punctually on – – – , on immediate application being made to – – – – – – – -, where every information on Indian and colonial matters may be obtained."

I do not pretend that the private shipowners can afford to provide cabin passages at the Phoebe's rates; but I have made diligent enquiry, and I find that for £50. the ordinary cabin table, without wines, can be furnished, with a prospect of a better aggregate profit than by taking a few cabin passengers at the old rates. A well-informed correspondent of mine assures me that for that sum the cabin fare should consist of fresh meat every day, and enough for all; poultry occasionally; tea, coffee, sugar, and other articles of the best quality; bread baked every third day; and a cow to afford milk; and I believe that the increased number would far more than make up for a reduced rate of profit per head.

As the New Zealand Company is deeply interested in the continuance of the system, the Court might lay down a strict rule not to supply free emigrants to any ship wherein the chief-cabin charge exceeded £50., without wine; and where some fore-cabin accommodation was not afforded to the yeomanry class. The effect of this rule, in combination with that which provides for a certain proportion between steerage and chief-cabin passengers, would be to cause the system to be fairly tried; and although the Directors may at present meet with opposition from persons connected with shipping, I have no doubt that in a twelvemonth from the present time, the Company would receive the thanks of the very persons who now erroneously consider their interests to lie

in a high price. If as many passengers could be obtained at the high as at the moderate price, they would be correct; but the effect of cheapness is in all cases to increase demand; passengers would be induced to emigrate to Australia, who now go to North America; and the result would be a large increase of business to the shipowners engaged in the Australian trade. The Company will, I doubt not, exhibit on this occasion that firmness which the public has been accustomed to expect from them; and the general result will be the greatest benefit to themselves, and the advantage of all connected with them.

I am, my dear Sir,
Yours faithfully,
H. S. CHAPMAN.
Farrar's Buildings, Temple,
30th November, 1842.

17 No. 72, p. 249, signature TASMAN.

18 I may mention once of all, that I am not without personal experience on the subject upon which I write. I have been much at sea, more so indeed than most landsmen; having crossed the Atlantic sixteen times, without reckoning other voyages.

19 It should be noted as a valuable fact, that the Phoebe takes out the first machine for dressing the phormium tenax, introduced into the Company's settlements.

20 i. e., seventy-one adults and forty-four children. These would scarcely furnish fifty labourers, or two-fifths of the whole; so that the Phoebe has carried out more employers than employed.

BANKS FOR NEW ZEALAND. LETTER FROM ARTHUR T. HOLROYD.

BANKS FOR NEW ZEALAND.

LETTER FROM ARTHUR T. HOLROYD, Esq.,

BARRISTER AT LAW,

On the necessity of further Banking Capital for New Zealand.

My DEAR CHAPMAN, – The untiring energy and zealous devotion you have always shown in advocating the interests of the colonists in the Company's settlements, and the powerful manner in which you have recommended, in a former number of The Portfolio, the advantages which would accrue to English capitalists from the establishment of a Loan Company for New Zealand, induce me to call your attention to a subject of equal importance to the settler and

the capitalist, viz., the advantages which would mutually arise by an extension of banking accommodation.

As a Director of the Commercial Bank of London since the formation of that establishment, I have had many opportunities of witnessing the effect of a judicious distribution of capital amongst the sound, the solid, and the industrious; and I have also seen the crippling result of withholding advances from the honest tradesman who may require temporary assistance, and have many proofs before me of the pernicious tendency of monopoly. I do not use this latter term invidiously in applying it to the Union Bank of Australia, for Wellington owes a debt of gratitude to its directors for having been the first to open a branch for the district of Port Nicholson. Still competition in banking as in all other enterprises is of the utmost advantage to a community. I am not finding fault with the branch which is already in operation – from all I can learn it has afforded all the accommodation its means would allow – but the establishment of a second bank would contribute largely to the commercial prosperity of the settlements.

Could a more favourable opportunity occur for the formation of banks in New Zealand, with a parent establishment in England, than is offered at the present moment? You have shown, at page 27 of The Portfolio, that the price of 3 per Cent. Consols towards the latter part of August was 92. It is natural that they should rise towards Christmas, on account of the prospective dividend; but would any one on the Stock Exchange, or out of it, have been so bold as to predict that during the last three months they would have risen from 92 to 95, with every appearance of a further advance of 1 per cent, at least, between now and New Year's Day. I will not follow your line of argument as to the rate of interest at the present time upon government securities – you have placed the points clearly, and they require no additional elucidation – but if the interest

derived from consols was then "within an insignificant fraction of 3 1/2 per cent." when consols were at 92, the rate of interest becomes still further reduced when consols are at 95.

The present state of the funds therefore shows that money is plentiful in England, and interest low. If another argument were required, it would be that money has been so abundant in the market lately, that it has been advanced for short periods at 1 1/2, and that the rate of discount upon good bills has not exceeded 3 per cent.

The success which has attended the Union Bank of Australia is a proof that capital may with safety, and with the certainty of large profit, be diverted from our own country and transferred to our antipodes. A bank for New Zealand, formed here on the same principle, is what the colonists solicit, and the result would be as satisfactory to its proprietary as it would be beneficial to the settlements.

The profit arising from the produce of the colony is enormous. I have seen a letter from a gentleman who has a large dairy farm at Wellington, and he mentions that if butter is reduced from 3s. 6d. a pound (the price it was at the date of his letter) to 2s., the profit upon his outlay would still be very great; and from the confirmation I have had of this statement from other sources, I have no reason to consider it too sanguine. Next let us see what Mr. Molesworth is doing. You have shown (Portfolio, page 32,) that his potato crop yielded £124. per acre net profit for the first year, after the expense of clearing the land and liquidating all outgoing charges. Is not this a proof of the fertility and luxuriance of the land, and must not potatoes be, for many years to come, an article of export to the Australian colonies? The rental of houses is another criterion by which we may be guided in estimating the prosperity of the colony. From all I can learn, the

worst investment in this description of property yields 30 per cent., but some pay a much larger rental on the outlay; and I conclude 30 per cent is the lowest standard to adopt, for I noticed in the last file of the New Zealand Gazette that there were two houses to be let for £1. a week each, £300. being asked for the purchase of the two. Were not the colony in a flourishing condition, Dr. Evans could not let his frontage at 30s. per foot per annum, but the emigrants would be contented with a less eligible situation in a more remote part of the town.

Whilst we have heard of distress in South Australia, Van Dieman's Land, and Sydney, the accounts from New Zealand have shown that the Company's settlements have not participated in the almost universal panic. We have heard of farms being thrown up and innumerable houses untenanted and unoccupied in Adelaide, – we have received intelligence of a monetary crisis in Sydney which caused a stagnation to trade and a serious depreciation of agricultural produce, – but yet, with all these drawbacks and disadvantages, the hardworking, industrious emigrants in New Zealand have not been affected; they have not felt the "pressure from without;" and Mr. Heaphy mentions – "Amongst the mercantile class but one failure has occurred, and in that case fifteen shillings in the pound, I believe, was paid." I was informed too, lately, that letters have been received from Wellington, and bearing date as late as June, which represent that "the colony never has been in a state of greater commercial prosperity than at the present time."

Though I have instanced Mr. Molesworth as busily engaged in the cultivation of the potato, his agricultural operations are not confined to the potato alone; "he has steadily persevered under all discouragements," has many acres cleared in the Valley of the Hutt, and his example has induced others to follow farming operations. And here I

cannot help quoting from Mr. Heaphy's work, which shows clearly the impulse which Mr. Molesworth's labours had given to agriculture: –

"When I left Wellington in November, 1841, the following gentlemen were engaged in clearing land and cultivating in the different valleys about Port Nicholson, viz.:

"In the Valley of the Hutt. – F. A. Molesworth, Esq., F. Johnson, Esq., C. Von Alsdorf, Esq., G. Shand, Esq., G. White, Esq., R. Barton, Esq., Mr. Smith, Mr. Bowler, Mr. Eaton, Mr. Poole, Mr. Turner, Mr. Mason, Mr. T. Cook, Mr. S. Cook, Dr. Relph.

"In the Porirua District. – F. Johnson, Esq., Mr. Hay, Mr. Johnstone, Mr. W. Buchanan, Major Hornbrook, J. Swainson, Esq.

"In the Karori Valley – Messrs. Yule.

"In the Ohiro District. – J. Watt, Esq., Captain Daniell, – Harrison, Esq., Messrs. Guyton and Earp.

"Round the Harbour. – Mr. Deans, Mr. Tod, Mr. Crawford, Mr. Jackson, Mr. Bannister, Mr. Scanlan.

"Lyall's Bay. – Mr. Hulke.

"Although this number is small, yet on considering the short time it had been known in Port Nicholson that the settlers were to have a full and conclusive title to their land, it does not appear that they had been tardy in availing themselves of their security by entering into agricultural pursuits."

Thus we see that activity is prevailing amongst the agricultural settlers, that clearing has lately been on the increase, and production is now becoming considerable. And what is the effect of production? Besides supplying home consumption the colonists will export; and the moment a colony can export, then its prosperity becomes more firmly and permanently established. But oh! say the unthinking and inconsiderate, it must be a long time before a new country can spare its produce; all the superabundant food must 21

be retained in the country to meet the wants and demands of the fresh arrivals. True; but suppose that after making such provision there is a surplus – why, then export – and such is the fact at Port Nicholson. I have seen a letter, in which it is stated that the settlers at Port Nicholson have undertaken to export 5,000 tons of potatoes during the present year. This quantity appeared incredible to me at first; but when I considered the fertility of the soil, and the earnestness and activity of the agriculturists, the mystery was solved, and the difficulty removed.

The effect of exporting the produce of New Zealand will be a commercial demand for articles of importation; and the most valuable is live stock, of which I have reason to know that an enterprising colonist has made arrangements for a monthly supply from Sydney to the settlements of Wellington and Nelson.

But the commerce of New Zealand does not depend altogether on the production of the settlers. The native population are large producers; before agriculture could be brought into play, they nearly supplied the settlers with food, and their demand is very considerable. The New Zealander has also learnt the value of money and time. He has begun to work for wages, and when he has earned a trifle he purchases European products. The extension of the value of English comforts and necessaries, which many already appreciate, must cause an increased demand for imports.

For these reasons the commerce of New Zealand is much larger than might be inferred from the extent of the European population, which now amounts to about 12,000. The trade of Wellington is to be measured by a large European and native demand; and if it had not been for this circumstance, there would have been a glut long ago. There has however been none. Trade has been prosperous; and although the quantity of goods sent out has been large and various, as the advertisements in the New Zealand papers testify, yet the

complaint is that the supply has been below the demand; and had not the glutted markets of Australia sent their surplus stock, there would have been a distress for goods in the Company's settlements, rather than a distress in the ordinary sense of the word, of which, up to the present moment, there has not been a symptom.

Lastly, I may mention that the number of ships which touched at Port Nicholson during the year ending in April last amounts to 203, measuring 32,815 tons.

Now, with the Company's settlements enjoying the advantages of agriculture, commerce, and shipping, in a healthy and flourishing condition, backed by enterprising and energetic individuals who have overcome every obstacle in placing the colonists in their present favourable position, the next question that arises is this: – Is the banking accommodation in New Zealand adequate for the extent of trade? And the settler answers, No. It is true, that, with the branches of the Union Bank of Australia, the colonists are better off than if they had no bank at all; but divided, as the business of this establishment must necessarily be, its proportion of capital to each individual settlement is too small to meet the exigencies of the settlers at any one particular settlement. This bank, with all its advantages, and many it certainly possesses, resembles a parent with ample and abundant means, but crippled with a numerous family, so that the share or proportion he can give to each is reduced. The management of its affairs have been conducted with prudence and circumspection; the profits to its proprietary have been steadily increasing since its formation, and the value of its stock has always evinced a tendency to rise; but still, with all these proofs of prosperity, the advantage to the colony is comparatively small, and the capital supplied to it limited. There is a general complaint by the settlers of the inadequacy of banking capital. Trade has increased and is still increasing; but the accommodation

offered by the bank bears no proportion or ratio to the demands of the mercantile and agricultural colonists. They must be assisted from this country, or the colony will only in a minor degree prosper. They have tried the experiment of forming a bank amongst themselves – they have not overlooked a thing of such importance – they have used their best efforts to carry out their intentions. Their object has failed, and it could not have been otherwise: in fact the colonists require all the capital they can scrape together for their own operations, for actual production. They are not in a position to subscribe a capital themselves to give a bank the semblance of stability; and a bank has not a solid reputation unless it can shew that it has a paid-up capital equivalent to its operations, or nearly so. Indeed, were they to establish a bank in the present infantile state of the colony, it would be like borrowing with the left hand from the right hand pocket; – there would be no addition of capital, and the settlers require more than they at present possess; it would, in fact, be merely a diversion or transfer from one employment to another. The settler now engaged on his farm and benefitting the settlement by steady agricultural pursuits, would be obliged to withdraw a portion of his capital from the channel in which it at present flows, and restrict his operations; a bank, therefore, formed and carried on by the colonists exclusively, without assistance, will not afford the kind and extent of accommodation required.

Whence, then, is he to obtain this assistance, but from those who are interested in the prosperity of the colony, and from the parent country, where superabundant capital remains unemployed? The "absentee proprietors" cannot expect to let their lands speedily, and receive large and regular rentals, if they passively regard the present condition of the settlements, and do not bestir themselves and lend their aid to afford greater facilities in banking transactions. Many of them have a deep stake in New Zealand, but they must go

still deeper if they really wish to see their estates become valuable. If the landed proprietor resident in this country cannot spare the capital himself, he can, without pecuniary sacrifice, bring his influence to bear in promoting an object so beneficial to his property. Oh, but he may say, of what use is my influence unsupported? Of very little – but by an union amongst the proprietary a bank might be started – a nucleus might be formed. In this country there is always a very large amount of inactive capital seeking employment, so that the inactive class supplies the active producers; and from the present high state of the funds, and the low rate of interest, no period since the formation of the Company's settlements has presented a more favourable opportunity for carrying the proposition I have recommended into effect. In New Zealand there is no inactive class. The emigrants have left England with the intention of bettering their condition; they did not go out to remain idle and indolent; and backed with energy, zeal, and enterprise, they must not have their agricultural pursuits contracted, their shipping interests destroyed, and their commercial operations restricted, for want of temporary supplies of capital. Much of the capital which the settlers took with them to New Zealand, has been parted with to pay for imports, and the balance of capital has only been maintained by that introduced from fresh arrivals. This, however, bears no proportion to numbers; for if the capital now in the colony is no larger than it was three years ago, it has the disadvantage of being distributed over the settlers in smaller quantities. Exports will cause capital to return; but unless supported by adequate and increased facilities in banking, the drainage will continue until the tills of the capitalist are emptied, or the colonists can obtain banking capital elsewhere.

Now the present low rate of interest of money in this country, and the high rate in New Zealand, offer large inducements to English capitalists to form a bank for the

settlements in New Zealand. I have already shown that during the first two years only one failure took place at Wellington, and that the estate paid fifteen shillings in the pound. Banking, too, may be carried on with the greatest security: in small communities, like the Company's settlements, the affairs of every individual are carefully scanned, scrutinized, and investigated, and caution may be observed to a much greater extent than in large, overcrowded, and populous mercantile districts.

I have now urged sufficient arguments to show the necessity and advantage which would arise from the establishment of a bank for New Zealand exclusively, as well as the benefit that would accrue to the proprietor of land, the capitalist, and the emigrant. The parent establishment should be in London, conducted in a similar manner to the Union Bank of Australia – the routine of management would be easy, safe, and simple. The branches should be at Wellington, Nelson, New Plymouth, Auckland, and the Bay of Islands: they should be under the direction of local boards, so as to give greater confidence, and to relieve the manager from partial responsibility.

I think I have said enough to ask you to give the subject your attention: it is one of paramount importance to the settlers and the "absentee landlords;" their interests are mutually blended together; and if you can afford assistance in carrying out the proposition I have suggested, must tend speedily to increase the value of property in New Zealand, and confer inestimable benefit upon the colonists.

I am, my dear Chapman,
Yours very truly,
ARTHUR T. HOLROYD.
Farrar's Buildings, Temple,
29th November, 1842.

21 Heaphy's New Zealand, page 75.

OBSERVATIONS ON THE ADVANTAGES OF A REPRESENTATIVE ASSEMBLY

OBSERVATIONS

ON THE

ADVANTAGES OF A REPRESENTATIVE ASSEMBLY

FOR

NEW ZEALAND.

NO one can have watched the progress of public opinion in New Zealand, especially in Auckland, during the last twelve months, without coming to the conclusion that the form of government which has been established in the colony is totally inapplicable to the circumstances and character of the people. At the date of the latest advices from that town, a great deal of discontent prevailed, and, although I have no very accurate accounts of the shape which it had assumed, its result was – a demand for a representative assembly. This demand I am about to support, under the full impression that no care on the part of a colonial minister, though stimulated by the most perfect good will, can possibly guard him against error as to the wants of the colonists. Nothing short of a miracle, indeed, can impart to a distant government a just conception of the condition of the people. It takes but a little time for a sort of ex officio governing class to grow up in a new colony, and as our colonial system almost always places them in a position antagonist to the mass of the people; as moreover they very naturally desire a perpetuation of the profits and power derived from virtual irresponsibility; they almost invariably describe the people as unfit for representative institutions. As it is much easier for the minister for the day to believe than to investigate, they are usually listened to; whilst the most respectful representations of the people are received at least with sus-

picion, and are generally neglected. I cannot help thinking that a colonial minister would find the business of governing our colonies greatly facilitated if a reasonable amount of confidence were placed in the representations of the people. Timely concession to the American colonies would have postponed, if not have prevented the revolution; and a decent regard for the representations and wishes of the people of Canada would assuredly have prevented the late disasters. It is not too much to say that in both cases the chief error lay in giving too much credit to the statements of the interested governing party – too little weight to those of the people. But of late we have had evidences of a more liberal spirit. The wise and liberal policy pursued by Sir Charles Bagot, in Canada, has completely allayed the spirit of discontent in that colony, and what is more important to my present purpose, it has created a hope among those who are connected with other colonies that at length a better era in colonial government has arrived. It is under this impression that I now take up my pen.

At the present moment New Zealand is governed by the governor and council, the latter comprising the attorney-general, the colonial secretary and treasurer, and three gentlemen holding the office of justice of the peace, and standing at the head of the lists of their respective districts. It may be thought that these last members were designed for the express purpose of infusing a spirit of independence into the council, the only prima facie claim to public confidence; but if this notion were ever entertained by the home government, it has been abandoned in the colony; one of the members having been dismissed in consequence of having pursued a line of conduct not approved of by the governor and the official majority. Whether the conduct 22 of the dismissed member were wise or foolish, upright or base, is not the question. But that the governor should,

at the request of the council, dismiss a member whose conduct is obnoxious to his colleagues, cannot fail to impart to the council a servile character, make really independent men feel themselves degraded by an office held by such a tenure, and utterly deprive the council and its acts of public confidence. Under such circumstances, it is not at all surprising that the people of Auckland, who have the best opportunities of observing the character of the council, should be the first to demand a representative assembly, an example which will probably be followed in other parts of the colony.

Nor is the intrinsic character of the council calculated to carry public confidence against the source of distrust above pointed out. Of all the members, there is but one 23 whose previous education and habits give him the least claim to public confidence; the rest may be very worthy men, but they themselves must have been wonderfully astonished when they first found themselves converted into ready-made legislators. I do not say they may not be as good as many of the members of larger legislative bodies, but in large assemblies there is usually a considerable number of skilful members, whose experience, knowledge, and general attainments give a tone to their proceedings, and make up an aggregate "collective wisdom." But in the Auckland council, the knowledge and skill is in too few hands; the council will receive its tone from the incompetence of the majority, and instead of a collective wisdom, I greatly fear a collective folly will be its distinguishing characteristic.

Now, considering the character of the European population of New Zealand, it must be obvious, that a council of this

character, can neither command respect, nor secure contentment; and yet the last is an object to which all others should be made to yield. A form of government which the people of a colony believe to be radically vicious, cannot be good for them; and even one which we may deem imperfect, may become highly productive of happiness, if the majority of the governed think it good. But in the eyes even of the most Conservative Englishman, a demand for representative government will not be deemed unreasonable. Between men of extreme opinions, there may be differences as to the necessary checks, but the principle of representation is sincerely approved by all, and therefore it is that a demand for a representative assembly, suddenly growing up in a colony, is always taken as a piece of evidence, that the people know well what they were about – that they value the institutions of their ancestors, and the demand itself is a sort of presumptive proof, that the people are really fit for free institutions.

But this presumption is strengthened into absolute proof when we regard the character and habits of the people of the colony. It may be said that for the most part New Zealand enjoys the advantage of a selected population. The leading colonists were men of good station in the society of their own country, and many of them of refined habits and education. The mass of the population was composed of men carefully selected as possessing certain qualifications, among which a good character for industry, morality, and general good conduct occupied a conspicuous place. I hardly know any colony which has enjoyed such advantages in this respect as New Zealand. South Australia had it to a considerable extent; but the selection of people for New Zealand has been more perfect; for the simple reason, that the experience derived from the past was more perfect.

But a still more potent reason in favour of representative

government is derived from the fact, that until New Zealand was proclaimed a British colony the people had been accustomed to govern themselves; and notwithstanding the inadequacy of their means, they performed the function well. In this remark I do not confine myself to the Company's settlements, which are acknowledged to be made up of the best possible materials for preserving good order. I include the northern parts of the island, where good order was preserved in a most striking manner for some years before the authority of the Queen was established. Yet the population of the Bay of Islands was originally made up of the worst possible materials, though it is now happily much improved by a very considerable infusion of a vigorous and well conducted body of settlers.

I have already briefly alluded to the manner in which self-government was practised at Port Nicholson before the establishment of British authority. 24 The sovereignty of New Zealand had been repudiated by the government in a memorandum signed by Mr. J. Stephen, and published by order of the House of Commons. 25 In consequence of this repudiation the colonists assembled and attorned, as the old lawyers would have called it, to the lawful authorities of the country. They did not pretend to give up their own allegiance to their Sovereign; but, for their own protection, as denizens of a foreign state, to which the Crown had even sent a consul – for the present governor was at first so called, they demanded authority from the chiefs to exercise their own laws within the limits of their own territory; a privilege which, when duly explained to the intelligent chiefs of Port Nicholson, was at once conceded. Of the legality of this proceeding up to the date of the royal proclamation, I have not much doubt; but this is not the question at issue. What I desire to show is, that under this provisional measure of

self-government good order was maintained in a very remarkable manner. It is true that the settlers very generally felt themselves bound by a strong moral tie; so that the laws were for the most part faithfully obeyed; but some cases of infraction did occur, and in these the law was enforced – leniently it is true, but nevertheless with such solemnity as most effectually to vindicate itself. To the political philosopher the state of social happiness secured at Port Nicholson, by means of self-government, affords an instructive picture; and great indeed would be the responsibility of a minister who should keep the people in a state of political bondage in a colony where the representative principle has worked so well, even in the face of many serious impediments. Unavoidable delays, for instance, took place in the surveys; the land could not be given out; farmers could not get possession; employment diminished; wages at one time shewed a tendency to decline; yet in the midst of all this, no complaint was heard; the people were convinced of the necessity for forbearance; and all murmurs were stifled for the sake of good order and the maintenance of tranquillity. Is not this an argument in favour of self-government, by means of municipal institutions and a representative assembly?

The argument in favour of representative institutions derived from the maintenance of good order, by the voluntary arrangements of the people themselves, without the aid of any lawfully constituted authority which the people were bound to obey, is even stronger in the case of the older settlement at the Bay of Islands, for the very reason that the difficulties were greater. The social state of Kororarika and of other parts spontaneously settled by Europeans, was much less favourable to the establishment of order. The Bay was for many years the resort of escaped convicts and runaway sailors; yet, in the face of this untoward population, anarchy was subdued, and the reign of order esta-

blished long before British authority prevailed; before indeed there was any authority but that which was derived from common consent. 26 Public opinion had been growing up for some years and had effectually asserted its dominion; it had succeeded in restraining immorality, and crime had even been punished. The sound portion of the population had been increasing for some years previous to the year 1839, and society had assumed an improved tone. We see this evidenced in meetings for schools, and other measures conducive to public morality. Now, what I contend for is, that in exact proportion to the difficulties overcome is the strength of the argument in favour of representative institutions for the colony. One of the results of this improved state of society is, that the Bay of Islands is no longer avoided as a moral pest-house; on the contrary, there is reason to believe that the outcast population from the other colonies seek some other place of refuge. Within the last two or three years there has been a great influx of settlers of character and intelligence from the Australian colonies. Every such accession of people creates further improvement in the tone of morality, and pro tanto, strengthens my argument. But the strongest argument of all is, that the people have tasted the sweets of self-government. The people of the North have enjoyed political freedom for upwards of twenty years – those of the Company's settlements were trained up to the exercise of political rights, so that to substitute any other form of government repugnant to the feelings of the people, which the present anomalous council assuredly is, would be attended with incalculable evil to the colonists, and with very great inconvenience to the home government, without any assignable good. A contented population is surely an object worth aiming at, and that I contend is utterly impossible with a legislative body in which they are

not represented, and composed of persons who, howsoever much they may be entitled to respect in private life, are not proper persons to entrust with the business of legislation.

The municipal ordinance passed last year by the council, in obedience to the instructions of Lord John Russell, is an excellent step towards the complete establishment of representative government in New Zealand. The establishment of municipal corporations in each locality, having a certain fixed amount of population, is undoubtedly the safest and best mode of applying, in the first instance, the principle to a country circumstanced like New Zealand. But assuming that the municipal bodies about to be established under the ordinance will be perfectly efficient for the purpose for which they are designed, they necessarily fall far short of what is meant, when representative government is asked for. The legislative council of New Zealand is composed entirely of men interested in one single settlement, namely, that of Auckland. It is, in fact, a mere close corporation, not well adapted to govern even the locality to which it belongs; and to entrust it with the power of legislating for the rest of the community, is as absurd, nay, as oppressive, as if the old close corporation of Bath, as it existed before the municipal reform act, had been endowed with power to legislate for the commercial town of Liverpool, and the great agricultural counties of Norfolk and Suffolk. The municipal corporation of Auckland would probably be as trustworthy, and would enjoy as much general confidence as the council. The council has all the local interest, which renders it an unsafe instrument of good government, with the additional defect of practical irresponsibility.

As population and wealth advance in New Zealand, the interest of each locality will be determined for the most part by its natural resources, and the ordinary occupations of its inhabitants. These will be best regulated by the most virtuous and intelligent men of each locality; but as an assembly of Yorkshire clothiers would but ill govern or

legislate for a population of Cornish miners, or Staffordshire potters, so (considered without reference to party) an assembly composed of the officials of Auckland, who are all landowners in that locality, and a few Auckland traders, cannot enjoy, because it does not deserve the confidence of the population of the other parts of the colony.

In many respects, local interests completely merge in the general interest; in other words, there are interests which all the settlements have in common. They are all interested in a good system of land sales, in an economical expenditure of the public money, in freedom of intercourse with other colonies, and so forth; but amidst these are local interests which must necessarily bias an assembly entirely chosen from one spot, so as utterly to deprive it of public confidence, and which are only to be kept in due check by a body of men chosen from every locality, so that, by the wholesome conflict of all interests, those only which are common to all will be promoted.

For the purpose of constituting a general assembly, it is necessary to remind the reader of the numerous seats of population which now exist in New Zealand. They will be found enumerated in my letter to Lord Stanley, on the administration of justice in New Zealand 27 – an enumeration which is, I believe, perfectly correct. The first step towards the practical working of the representative system should be the division of the colony into electoral districts, each having a certain amount of population. Great advantage might be derived in other ways from a proper division of the country on the basis of population, partly perhaps modified by extent; all other objects for which a district division is likely to be required being kept in view. A few of these purposes may be mentioned: general and local representation; the administration of justice; all purposes of registration and of rating and taxation; education; defence, i. e. militia.

The old Saxon principle of division and subdivision, of which the hundreds and tithings are an example, might be followed, so that one larger division might be made up of several smaller divisions. In short, the division once made would serve for every purpose of local and general administration.

My object in this paper is not to draw an ordinance in terminis, but merely to show that a representative assembly is the conspicuous want of the colony – the only means of making a contented people. Nevertheless, some indication of the mode of carrying the principle into operation may hereafter be useful, and is certainly not out of place.

The extent of the electoral districts being determined, each district should elect a single member. The period of election, the duration of, and mode of conducting the same, the time of assembling the legislature, and the duration of the provincial parliament, should all be fixed by law at the seasons and in the manner most convenient to the electors and members, regard being had for the ordinary occupations of the colonists. Where this has been neglected – where it has been left to the will of the Executive, I have seen some strange tricks practised for the purpose of packing, so to speak, a colonial assembly.

With regard to the franchise, it should extend to all householders or occupiers. In so sound, intelligent, and orderly a population as that of New Zealand, there could be neither excuse nor reason for narrowing the franchise; and a mere sham assembly – a mere pseudo-representative system – instead of producing that satisfaction and contentment which would arise from self-government, would only create an universal impression that the real object was to cheat the people with the shadow instead of the substance, to give them an assembly which might be made a servile instrument of oppression, that is, of as much oppression as can be practised with a free press. In a small colony, this may be really a good deal more than can easily be borne.

In the creation of a thoroughly efficient assembly there would really be no difficulty, provided the object be seriously desired and the means be honestly chosen. It would require a knowledge of the seasons, the climate, the physical aspect of the several settlements, and the occupations of the settlers. With such knowledge a draft-bill might be readily framed, with reasons for each proposed enactment. When completed, it should be transmitted to Her Majesty's Secretary of State for the Colonies, with a memorial praying that it be introduced into the House of Commons under the sanction of Her Majesty's government. If this were done in a perfectly candid spirit, without an expression which could be tortured into evidence of a factious opposition to the government, I cannot avoid a hope that it would be successful; especially if it were so managed as to obtain the support of the people of every settlement. Indeed, if the measure originated at Wellington, it should not be transmitted to the colonial minister until it had been submitted to a committee in every other settlement, approved at a public meeting, and supported by numerous signatures to the memorial.

A well-constituted assembly however may be neutralized by the defective constitution or undue power of the co-ordinate branches of the legislature. In all our colonies having local legislatures, and in the several states of America, the legislatures of which are copies of ours, there exists some second body, to the decision of which every proposed law is submitted before it receives the assent of the representative of the crown. These second chambers differ considerably in their constitution even in our colonies. The simplest, and that which is attended with the least difficulty, is an executive council, appointed by the governor and endowed with legislative powers.

In the United States of America the senate is elective or representative, the only difference being that the senators must be of more mature age than the members of the lower house, and that they are elected for larger districts. But

elective senates are supposed to be adverse to the spirit of the English Constitution; an upper house which shall operate as a check upon the supposed disposition of a popular assembly to legislate rashly or precipitately, being preferred. Hence the end which must be sought is the establishment of such a council as shall operate as a check, but not obstruct the course of legislation pursued by the representative assembly.

To preserve this safe middle course, the council chosen by the governor should be endowed with the power of amending, but not of veto-ing the measures sent it from the assembly – the responsibility of rejection being cast wholly upon the governor. In order to exhibit the practical working of this plan, it may be well to trace a bill through all its stages – assuming all possible contingencies.

A bill sent up from the assembly is either amended by the council or it is not. If passed without amendment, it goes at once to the governor for his assent or disapproval. If he agree to the bill, it should receive his signature and become law, after promulgation by publication in the Gazette. 28 If, however, the governor disapprove of the bill, he should return it to the assembly and council for re-consideration with his reasons in writing. If the assembly and council should deem the reasons insufficient, and adhere to the original bill, they should send it again to the governor with their respective reasons. The governor may now reject or reserve it on his own responsibility, transmitting it to the colonial minister with all the reasons appended. The reason for so transmitting bills, and for a power of reservation to be used instead of rejection, I shall discuss presently.

Where a bill is amended, or thrown out, by the council, it should be returned to the assembly with the written reasons of the council attached. The assembly either adopts the amendments or withdraws its bill, or adheres to it. In the former case there is no occasion for the bill again to go to the council; because it is in the state in which they have approved of it. It should therefore go to the governor for his assent or dissent, as already pointed out. If, however, the assembly reject the council's amendments, or any part thereof, the bill with their written reasons should be again transmitted to the council. The council would then agree with the assembly, or it would not; in either case the bill must now go to the governor, with the council's further reasons, if any, should it not agree to the assembly's rejection of its original amendments. The governor may now adopt, reject, or reserve the bill, without waiting for the perfect concurrence of the two bodies, transmitting the bill to the secretary of state for the colonies, with all the reasons and counter-reasons, in the event of rejection or reservation.

In this arrangement there is nothing in the least complex; in practice, nothing could well be more simple than its working. An absolute veto is taken away from the council, because, chosen partly from the official body, and partly from the wealthiest colonists, it will be impossible to prevent the growth of sinister interests adverse to the welfare of the people. A veto is given to the governor, to be exercised, not in council, but on his own responsibility, because he ought to be, and if properly chosen would be, free from local interests and biasses; and because measures might occasionally be passed not consistent with the general interests of the empire of which the governor is ex officio guardian.

It must be obvious, indeed, that so long as the colonial connexion exists, this power of rejection or reservation is necessary to prevent conflicts between the laws of the colony and those of the empire at large; but as it is a power not

intended to be exercised for the benefit of a class in the colony, it should reside with the governor alone. As to its mode of exercise, some improvement in the present practice might be introduced. The governor, I have suggested, may either reject or reserve a bill, transmitting it, in either case, to the colonial secretary, with all the reasons annexed. In the case of reserved bills from the colonies, the present rule is, that they do not become law until allowed by the Crown. I would propose that a distinction be recognised between bills rejected and bills merely reserved – a distinction founded on the probability that the real objections to a reserved bill would be weaker than those applicable to a rejected bill. I suggest, therefore, that the Crown might exercise the power of allowing bills, even rejected by the governor, should Her Majesty's advisers deem the governor's reasons insufficient; but that the bill should not become law until such allowance was promulgated. In the case of bills merely reserved, I think it would be better to fix a limit – say two years – for the disallowance of the Crown; with a proviso, that at the end of that time they should become law if not so disallowed. Thus bills rejected by the governor would not become law unless allowed; bills merely reserved by the governor would become law unless disallowed. This would remedy an evil which has sometimes occurred, namely, the loss of an important bill, to which the colonial minister had no objection, merely because it had been accidentally poked into a closet, or had dropped into the waste paper basket, or had perhaps been abstracted by some opponent, and could nowhere be found. The perfect controul of the colonial minister over all bills which might be supposed to affect the general interests of the empire, would not be in the least degree abridged; all that would be obviated would be the growth of a party in the colony adverse to the interests and happiness of the great body of the people. In all our colonies there is very considerable equality of condition. Hence all the attempts

that have been hitherto made to exalt one class above the Others, that is, to create a colonial aristocracy, have signally failed. In this country there exists a prestige in favour of an aristocracy in the minds of those least disposed to acknowledge it. In a colony antient associations have been cast off and the class forced into an elevated position by the arbitrary operation of an Act of the imperial parliament, is always regarded as a parvenue class, having no resemblance to an antient, or as it is deemed, a natural aristocracy. It is for this reason that it becomes necessary, in framing the council, not to go one step further than is necessary to secure due caution and deliberation in the making of laws; and to avoid all attempts to foster those party struggles which have existed in all those colonies where the council had an absolute veto on the acts of the lower house.

With the written reasons of the assembly, the council, and the governor before them, on every fully debated bill, the people would have the best means of judging of the conduct of their representatives, and of changing such as did not promote the public good; whilst a prudent governor would take care to remodel his council, whenever it was found factiously to amend bills which the assembly and the governor deemed conducive to the interests of the people. From the little motive which would exist for any difference between the two bodies, and the constant appeal to public opinion by submitting reasons, there seems every reason to believe that the utmost harmony would prevail. These reasons would have another good effect – they would be instructional in their character, so that the legislature would become what it ought always to be, the great political instructor of the people.

One of the greatest improvements in colonial government, is that which was proposed by Lord Durham, and which Sir Charles Bagot has the distinguished honour of having faithfully and honestly carried out in Canada. It is what has been called responsible government, and consists in choosing

certain important ministerial officers in accordance with the views of the majority of the assembly. It is, in fact, a copy of the constitutional system in this country, by which the principal officers of the state cannot hold office unless they can command a majority of the assembly. This plan so obviously takes away so many of the difficulties of governing a colony, and imparts to a local government so strong a claim upon public confidence, that I have no doubt it will ultimately be applied to all our colonies having local legislatures. In Canada its application was a matter of extreme difficulty, for on the one hand there was a strong party which had been accustomed to wield the powers of government for its own profit and advantage; and on the other, a large popular party, more or less connected with rebellion. Yet the governor has chosen boldly and wisely; and the firmness and prudence with which he has maintained the law, for such it is, have secured him the love of the people of Canada, and the profound respect of all thinking men. The plan of a responsible cabinet is capable of being engrafted on the proposed system with great success. With a representative assembly, and a council with legislative powers, but without a veto, the new system of responsible ministerial officers would probably work better than in a colony burthened with an irresponsible council, endowed with a veto. It would promote universal contentment, and reduce the business of governing New Zealand almost to a routine.

If New Zealand had enjoyed a representative legislature, the local government never would have been permitted to incur a debt of about £100,000. in three years; and even now, the introduction of a representative assembly would remedy most of the evils which exist, and release the colonial minister from his pressing difficulties.

Farrar's Buildings, Temple,
31st December, 1842.

THE END.

22 Writing an article in a paper commenting on the conduct of his colleagues.

23 By this time there may be two. I do not name the individuals of either class, because I wish to avoid anything approaching to personality, which I disclaim. All who are interested in the question may consult the list, and judge for themselves.

24 See Introduction, p. iv-v., and ante page 2-5.

25 8th April, 1840.

26 The reader who desires to know the manner in which such authority is established in new countries, may consult the article "Lynch Law" in the number of the British and Foreign Review for November, recently published.

27 Page 15 of this volume.

28 In some of the American States, a sum is voted, (seldom more than twenty dollars, or £4. 3s. 4d.) which may be claimed by every newspaper proprietor, provided he has printed all the laws of the session. They all claim it, because the demand of their subscribers compels them to print the laws, at all events, for general information, and the sum is worth claiming, his plan is applicable to our colonies.

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