1940 - Mathew, Felton. The Founding of New Zealand: The Journals of Felton Mathew, First Surveyor-General of New Zealand, and his Wife, 1840-1847. - Chapter V. Russell - The First 'Capital,' p 112-118

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  1940 - Mathew, Felton. The Founding of New Zealand: The Journals of Felton Mathew, First Surveyor-General of New Zealand, and his Wife, 1840-1847. - Chapter V. Russell - The First 'Capital,' p 112-118
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Hobson's illness delayed the immediate selection of a site for the principal capital, since the Lieutenant-Governor was unwilling to leave so important a matter to be determined by his subordinate officers. It became necessary, therefore, to fix on a place at the Bay of Islands to form a secondary settlement and to serve temporarily as the seat of the government. The arrival of the storeship Westminster on March 17th with immigrants, for whom no accommodation had been provided, made this a matter of urgency.

On March 23rd, Felton Mathew reported at length on the possibilities of forming a settlement at the Bay. A precis of his letter will suffice to indicate his views:--

The Bay of Islands (he considered) was not eligible as the site of the principal settlement or capital, because of its geographical position at the extreme end of the Island, and because of the rugged, impracticable nature of the country. But as there was already a

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Sketch-Map of the BAY OF ISLANDS.
to illustrate Felton Mathew's Journal-Letters.

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large population there, and much capital had been invested, and as it was an important port of call for whaling ships, it was necessary that a Government establishment should be formed there.

The principal difficulty was that so much of the available land was already claimed and occupied by Europeans.

Kororareka was unfit for the site of the principal settlement, and could never become a place of more than secondary importance, because (i) the water near the beach was very shallow, the bay exposed to N. and N. W. winds, and it was often difficult to effect a landing by boats through the surf; and (ii) the amount of land available for building was insignificant, and what there was was in the hands of private individuals, by whom it had been divided and sub-divided, sold and resold until there was such a mass of conflicting claims that it would be very difficult for the Government to effect a purchase.

As to the "town" of Victoria, which Busby had laid out at Waitangi, its shores were exposed and shoal, so as to be quite inaccessible to ships, and only approachable by boats in perfectly fair weather. "This spot does not present one solitary advantage as a site for a settlement."

J. R. Clendon's property near Point Omata (Okiato) was, in Mathew's judgment, "the only spot in the Bay of Islands at all suitable for a settlement, or calculated for the purposes of the Government." It had deep water close to the shore, which afforded safe

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anchorage, the lie of the land was favourable for a township, there was abundant water, firewood and brick-earth, and admirable facilities for internal communication via the Kawa-kawa river. Clendon had built "a very comfortable cottage with suitable buildings, an extensive and substantial store, office, smith's shop, boat-builder's shed, etc., the whole of which are in good repair, and would be immediately available for the purposes of the Government." There were incalculable advantages to be derived from possession of the spot. The expense of erecting buildings, which in the existing scarcity of materials would be very heavy, would be saved; and the sale of Town lots would afford an immediate and considerable revenue. "I cannot but express a decided opinion that the purchase of this land from Mr. Clendon, on anything like fair and reasonable terms, would be highly advantageous to the Government, that the outlay of money would be covered by the first sale of town allotments, and that the completion of the measure would lay the foundation for a very important and flourishing settlement." 1

Clendon, well aware of the value of his site, had laid it out as a Township and commenced selling lots. His operations were held up by the rumour that Hobson intended to select Busby's "town" for the Government. This rumour was, in due course, disposed of, but before resuming his private sales, Clendon offered his land to the Government for the sum of £23,000. Negotiation brought this figure down to £15,000, and on

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March 22nd, a preliminary agreement for purchase was signed by Felton Mathew, confirmed by Hobson a month later.


"H. M. Government agrees to purchase from Captain Clendon his property at Okiato in the Bay of Islands, said to contain by measurement Two hundred and thirty acres, together with all buildings and improvements thereon and also another portion of Land supposed to contain 80 Acres, immediately adjoining the said property of Okiato, for the sum of Fifteen Thousand Pounds, payable as follows, viz.: One Thousand Pounds to be paid in Cash on taking possession, One Thousand Pounds on the 1st of October proximo, and the remainder to bear Interest at 10 per Cent, per Annum, H. M. Government having the option of paying off the whole or any portion of the Principal on giving 3 Months' notice in writing to that effect. The first half year's Interest to be payable on the 1st of April, 1841. Possession of the whole to be given by the 1st of May proximo. Bay of Islands, 22nd March, 1840.

(Signed) FELTON MATHEW, S.Gl."

This agreement was subsequently endorsed:--

"Approved subject to the decision of the Commissioners as to the title to the Land. The Buildings are valued at Thirteen Thousand Pounds Sterling, and the Land at Two Thousand Pounds. Bay of Islands, 23rd April, 1840.

(Signed) W. Hobson, Lt. Governor." 2

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The price agreed upon was high, but not exorbitant in view of the scarcity of labour and materials. The annual rental value of the several premises at Okiato was taken as the basis for fixing the purchase price, being reckoned at £850 p.a. for the store, £70 for the dwelling house, £30 for the small cottage, £60 for the blacksmith's shop, and £90 for the Carpenter's shop--total, £1,300 a year; the Government agreeing on ten times this sum as a fair capital evaluation of the property. It is safe to assume that it would have cost the Government at least as much to erect similar buildings for themselves, even if a suitable site could have been found. Indeed, it is not easy to see what reasonable alternative the Government had. Land on which to disembark the immigrants, and buildings for barracks and Government offices they had to have somewhere in the Bay, to serve during the months that must ensue before the permanent capital was established. Okiato was the only eligible site Mathew could find. Paihia, incidentally, he disregarded altogether, presumably out of deference to the missionaries, who would certainly not be disposed to welcome an official invasion. Clendon, with an eye to a good bargain, refused to rent his premises, and insisted on sale--if not to the Government, then to private speculators. So the Government, impecunious as it was, found itself committed to a capital expenditure of £15,000 for a site which it would only occupy for ten or twelve months. On May 23rd, Hobson took up his official residence at Okiato, 3

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re-named "Russell" in honour of the Colonial Secretary.

Financially, this arrangement might have been carried through successfully had there been no interference from New South Wales. Mathew, confidently counting on meeting the expense of purchase by re-sale of town lots, rapidly completed the survey of the place, and by the end of July the Plan of the Town was ready and preparations were made for the first sale. 4 At this stage, however, Governor Gipps intervened decisively by refusing to sanction the purchase of Okiato and forbidding the town lots to be advertised in the Gazette, thus, in effect, prohibiting the sale; nor would he go further than consent to the payment of a fair rent for the buildings which the Government were using. This put a complete stop to the development of Russell, though the Government remained in possession till the following March. Failing the anticipated revenue from land sales, the New Zealand Government could not discharge its obligations to Clendon, who was much embarrassed in consequence. Eventually, in July, 1841, Clendon, who had received only the first instalment of £1,000, was prevailed upon to accept £1,250 as compensation for rent and interest, and a Crown grant of 10,000 acres in lieu of capital outstanding. Even this did not turn out to his satisfaction, for, as the value of country lands fell heavily, his 10,000 acres at Papakura became little more than an investment in long-distance futures. The market

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price in 1845 was under 1/6d. an acre, and Clendon complained to Lord Stanley that he had lost £18,000 in capital and accumulated interest. Felton Mathew, who was largely responsible for the original contract, recorded his opinion in his diary that Clendon "was scandalously used by the Government."

1   Great Britain, Parliamentary Papers, 1842/569.
2   Copy in Clendon MSS.
3   After the removal of the Government to Auckland, the name "Russell" was gradually transferred to Kororareka, and Okiato was practically abandoned.
4   Mathew carefully explains in his despatch of July 28 why he has reserved a site for the abattoir or slaughter-house, but none for a parsonage. Spiritual food could be dispensed from Paihia, but meat must be killed on the spot.

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