1853 - Grey, H. G. The Colonial Policy of Lord John Russell's Administration. [New Zealand chapters] - Volume II - Appendix B, p 334-346

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  1853 - Grey, H. G. The Colonial Policy of Lord John Russell's Administration. [New Zealand chapters] - Volume II - Appendix B, p 334-346
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Appendix B

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declaration, because I do not agree in it, to a spirit of faction or resentment. Whatever may be the censure in which the late Council may have thought fit to indulge towards myself, I cannot be guilty of such injustice towards them. Amidst the deep satisfaction with which I have watched of late years the extraordinary progress of New South Wales, in nearly all that constitutes the social and material welfare of a community, I have never ceased to appreciate the manner in which its Legislature has contributed to that advance by the zealous and constant discharge of its duty to its constituents; and it is my sincere hope that the now separate Legislatures, using with their best abilities the powers which the Act now under discussion has conferred on them, will follow in that course of improvement which their predecessors have marked out for them.

"I have, etc.,

(Signed) "GREY."


Extract from Speech of Earl Grey in the House of Lords, June, 1852, on Second Reading of New Zealand Bill.

"EARL GREY said, that before adverting to the important political questions arising out of the Bill now under their Lordships' consideration, he thought it right to notice what had fallen from the noble Duke on the clauses having reference to the claims of the New Zealand Company. He certainly regretted that it was necessary to lay upon this rising Colony a charge such as that which was proposed by this Bill; but at the same time it was right that Parliament should do justice to the parties by whose exertions

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and personal sacrifices the Colony had been created--without whom, in fact, there would he no Colony of New Zealand at all. Persons now found great fault with the New Zealand Company, and though he had never been a great admirer of that body, he must say that he thought the run now made against that Company was not less unjust and unmerited than the exaggerated credit which had been given them in the first instance. He had no doubt that the Company had been actuated throughout by the best motives; and, as evidence of their good intentions, he would remind their Lordships that the Directors had sacrificed large sums of their own money in the establishment of the Colony, for the repayment of which they had only the remote and distant prospect that was afforded by the arrangement proposed by this Bill. The fault to be found with the New Zealand Company was not that they committed any of the offences which the noble Duke imputed to them.


"EARL GREY: The noble Duke disclaimed the intention of imputing any offence to them, but the statement of the noble Duke implied it. Their real fault was, that they had shown themselves deficient in worldly wisdom and prudence, in too readily adopting for their guide a very clever projector, whose talents could not be denied, but whose cleverness was not accompanied by other qualities quite as necessary to make him a safe and trustworthy guide. They did not display that judgement that might have been expected from them in conducting the great enterprise into which they had somewhat rashly entered. Perhaps that was the necessary consequence of the constitution of such a body; for unless some person took the lead, and became manager, he believed a company of which the affairs were conducted

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by a Board of Directors without check or control was not likely to deal satisfactorily with matters of this kind. That the New Zealand Company had not succeeded was not very much to be wondered at, because the necessary expenses of founding new colonies in distant parts of the world were so great, that measures of this kind would never answer as a pecuniary speculation. Schemes of this kind had always been exceedingly attractive; but from the enterprises of the early adventurers who founded some of the present United States down to the present time, the result had invariably been the same; and however successful some of their attempts had been in creating flourishing colonies, they had uniformly proved ruinous as pecuniary speculations to the projectors. He was told that the Company with which his noble friend (Lord Lyttelton) near him was connected (the Canterbury Settlement), had within the last few days undergone the common lot of those schemes, and was obliged to acknowledge itself insolvent. Those who had attended to such matters must be well aware, that it was not one of the smallest difficulties of the Colonial Department to deal with the many proposals for the formation of new colonies. Sanguine projectors were continually putting forward schemes by which they confidently asserted that, without risk or expense to the public, valuable colonies might be established. Unfortunately the performance of such promises could not be ensured. Though projectors could found colonies, it was beyond their power to prevent their becoming a burden upon the country. In these days, if a body of Englishmen, sent out to a distant land, were exposed to the danger of starvation or destruction by savages, no Government or Parliament could allow such calamities to happen, or leave the settlers to their fate, because they had been sent out under an assurance that

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the Colony would be self-supporting. Neither could the Government allow that a band of persons should place themselves on any piece of ground they selected, and without mercy shoot out of their way any of the native inhabitants that might oppose them. Hence it was absolutely necessary that the Government should exercise some control over the formation of new settlements, though there were many obvious reasons why this control should not be carried further than was absolutely required. He could best explain what he thought the proper course to be taken in such cases, by stating what had been done while he had the honour of holding the office of Secretary of State. When the establishment of the Canterbury Settlement was projected, he was told that a large sum of money would be provided by the projectors, and that they were ready to undertake the scheme at their own risk; and it was urged that the mere sanction of the Government, which was all that was asked, ought not to be withheld. He agreed that it ought not to be so. He did not fail very strongly to express his opinion to the projectors: he stated, that although the plan might possibly lead ultimately to the formation of a flourishing community, the result would greatly disappoint their expectations in a pecuniary point of view; that it was quite impossible that such a measure should go on with the large price they proposed to ask for land, making promises to the purchasers which they could not perform, and that they would involve themselves in losses, liabilities and difficulties without end. But he also stated at the time to the projectors, that, provided nothing was done which could in any way delude the public as to the real state of the case--if proper precautions were taken, and regulations were adopted to ensure the safety of the Colonists, and guard against abuse--if he were satisfied that

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adequate securities were provided upon these points, and against any expense being brought upon the public--he should not consider it his duty on the part of the Government to make any objection to the scheme being undertaken at their own risk by that Company. This had appeared to him the proper course to be adopted, because though he felt convinced the scheme would disappoint the expectations of the founders, and that great individual losses might be sustained, still he had no doubt that a settlement would be formed which in the end would become a great and flourishing community, destined to spread the British name and the British language through a large extent of valuable territory; and he considered it no part of the duty of the Government, if these public advantages were to be obtained, to enforce on the projectors greater prudence in regard to their own individual interests. The result, it now seemed, had been precisely what he anticipated: a settlement which would, no doubt, become a very flourishing one had been founded, but great loss had, he understood, been sustained by the projectors; but no claim on the Government, by the Canterbury Association, was likely to arise from the failure of that project, for the relations between the Association and the Government were clearly defined in the first instance: they had not been allowed to enter upon the undertaking at all until they had satisfied the Government that the public interests at stake had been provided for; and care had been taken that, when they were allowed to proceed, no difficulty should be thrown in their way, so that they had not any grounds for saying that their failure--if failure it be--was in any way attributable to the conduct of Government or of Parliament, and therefore were entitled to ask for no pecuniary relief. If the same course had been taken with respect

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to the New Zealand Company, and it were in the same position, the same remark would be applicable to them; but the circumstances were different, because in the first instance that Company had been permitted to enter upon its undertaking without the sanction of the Government, and without proper securities having been provided, and because afterwards having been permitted to send out the first settlers in a very irregular manner, their operations had been thwarted by the Government. Partly by measures adopted by the local authorities, partly by measures adopted by the Government at home, the Company was prevented from having such a chance of success as they otherwise would have had,--a fact that was clearly shown by the investigation of the Committee to whom the question had been referred. These circumstances were held to give a claim to the New Zealand Company, and though the project might have failed if they had never occurred, they undoubtedly left the projectors without the chance of success to which they were entitled, and it clearly appeared to him that it was the duty of the Government and of Parliament to place them in the situation they would have been in if they had no such grounds of complaint. The noble Earl opposite (the Earl of Derby), when Secretary of State for the Colonies, felt these claims so much, that before he left office he had made arrangements for in some degree assisting the New Zealand Company by means of a loan of money. When he (Earl Grey) came into office, he found the Company complaining that what had been done for them was very far from making up for the injury they had sustained by previous measures, and by the great delay they experienced in getting possession of the land. He felt that there was force in that complaint; that they were entitled to some further compensation, and that something

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more should be done to enable them to try fairly the scheme to carry out which they were originally formed. Accordingly, the Government having settled what was the largest amount of money that Parliament should he recommended to advance, the matter was placed in the hands of his lamented friend the late Mr. Charles Buller, to consider what was the best arrangement, under existing circumstances, to enable the Company, with such assistance, fairly and fully to try whether their scheme was one capable of being successfully worked. A plan was accordingly prepared with great care by Mr. Buller, to whom, in concert with the New Zealand Company, it was entirely left to make what in his judgement was the best arrangement, subject only to two conditions, on which he (Earl Grey) specially guarded himself, namely, that the pecuniary assistance should not exceed a certain sum, and that the arrangement was to be a conclusive measure, and a discharge in full of all possible claims on the part of the New Zealand Company, whether it should succeed or fail. After much consideration, Mr. Charles Buller prepared the drafts of letters between the Colonial Office and the Directors of the Company, in which were embodied the terms of the arrangement he proposed. These terms were assented to by the Government and the Company: the letters on both sides were written from Mr. Buller's drafts. The Bill of 1847 was prepared to carry into effect the arrangement, and ultimately it received the assent of Parliament. Such had been the circumstances under which the grant of additional aid, and of very large powers to the New Zealand Company, had been recommended by the late Government, and sanctioned by Parliament. With regard to the manner in which the arrangement thus sanctioned had been carried into effect, it had appeared to him that there was one clear rule to be fol-

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lowed, namely, that the Company should receive every possible support from the Government in working out the plan; and, it being part of the arrangement that a Commissioner should be appointed by the Government, to watch over the proceedings of the Company, his (Earl Grey's) instructions to that Commissioner were not to interfere further than was necessary for the strict protection of the public interests, and for the purpose of seeing that the British Treasury and the Colony were not involved in larger or heavier liabilities than intended when the Act passed. The Commissioner was directed by no means to exercise the power he possessed of putting a veto on any act of the Company, in every case in which their measures might appear to him injudicious; the principle of the Act of Parliament was to invest the Company with the power and the responsibility of conducting a great experiment in colonization; and the only way in which this experiment could be fairly tried was to leave them free and unfettered to act upon their own judgement, except in cases in which interference was clearly necessary for the protection of the public interest. At the end of the period named by the Company as that in which the experiment might be fairly tried, they found that, notwithstanding the large pecuniary assistance they had received, they could not go on; and they claimed under the terms agreed on, to be relieved from the debt due to the Government, and they claimed also a certain sum to be obtained from the sale of lands in New Zealand. He was astonished to hear the noble Duke draw a distinction between the legal and moral right of the New Zealand Company to the ultimate payment of the money due to them and charged on the land fund, and deny their moral claim to more than they could obtain under a strict technical construction of the Act of Parliament. It seemed to

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him, that whatever might be the strict construction of the Act of Parliament, the Government and Parliament in dealing with the Company were bound to act in the same manner as one honourable man would deal with another in a transaction in private affairs, and ought to carry fairly into effect the obvious intention of the agreement. Looking at the subject in this light, he thought it was impossible to say that the New Zealand Company had no claim whatever. Their Lordships should recollect that the whole capital of the New Zealand Company had been applied in creating this colony, and giving value to those lands, the sale of which was to produce the fund which they calculated upon for the ultimate repayment of those advances, and he repeated that that was a claim which they could not honourably decline to recognize. It was true that the Act of Parliament pointed out no specific portion of the lands that was to be applied for the support of emigration, and therefore under the letter of the law the Crown might no doubt apply so large a proportion of the fund to emigration that the claim of the Company would be practically defeated; but this would be inconsistent with good faith; the proportion of the proceeds of the land sales applied to emigration had been left undetermined, and it was considered that it was the interest both of the Company and of the Colony, if the debt was ultimately to be paid, so to divide the whole receipts between the promotion of emigration and the payment of the Company as to leave as large a sum as possible for the former without neglecting the latter object, because by that means the demand for land would be increased, and the debt of the Company would be thereby extinguished. The Act of Parliament contemplated obviously the ultimate payment of the debt, and it was the interest of the Company and

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of Parliament that it should be discharged as speedily as possible, by the best possible administration of the lands. The noble Duke said the Company asked for inquiry, and that, pending that inquiry, Parliament ought not to deal with the subject. If by passing the Bill now before the House without the clauses relating to the Company, their position would be unaltered, he should concur in the opinion that Parliament had better not at present deal with this part of the question; but as it was clear that to pass this Bill, omitting the clauses, would alter the position of the Company greatly to their injury, he thought the clauses ought to be retained, though he entirely agreed that inquiry into this matter was right and proper, and he trusted that in another Session the House of Commons would institute a searching investigation respecting it. It was his desire that the inquiry should be conducted on the strictest principles--that every letter, public and private, in connection with the case, should be laid before the Committee, so that the subject should be fairly investigated and reported on by a competent and impartial tribunal. Although he was far from being prepared to defend all the proceedings of the Company, for he would admit that they had frequently acted with imprudence, still he was happy to be able to state that, having investigated the entire case, he had come to the conclusion at which he anticipated the Committee also would arrive--that there had been throughout all these complicated transactions nothing to reflect on the honour, the probity, or the good faith of the gentlemen who had conducted the affairs of the Company. If there were to be an inquiry, it would be inexpedient to enter prematurely into a review of the entire question, in order to convince their Lordships that there was no ground for the charges that had been brought against the Company.

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Indeed it would be impossible to do so without having the papers before them which were not yet on their Lordships' table. But without going into the whole case, there were two charges brought against the Company of so serious a nature, and which had been stated with so much confidence, that he must make some observations upon them, especially as an endeavour was made to implicate him in them. These clauses related, first, to an alleged misappropriation of the public funds; and, secondly, to the sending out of certain legal opinions. Now, he must say with regard to the first, that no misapplication of public money could possibly have taken place without the sanction of one or other of the gentlemen who had in succession held the office of the Crown Commissioner; and he had such perfect confidence in both those gentlemen, that he was no less convinced that no money could have been misapplied from the sums appropriated with their sanction, than he should have been had he been personally cognizant of the manner in which every shilling had been expended. The first Commissioner had become involved in disputes with the Company, which ended in his removal; and it was absurd to suppose that he could have allowed them to misappropriate the public money. He was succeeded by a gentleman in whose honour he (Earl Grey) felt no less confidence than in that of Mr. Cowell; while he had greater reliance on his judgement, his discretion, and temper. The instructions he had given to these gentlemen were, that they should not interfere in the application of public money except in cases of abuse, and that he believed to have been the right and proper mode of carrying into effect the arrangement sanctioned by Parliament, for the reason he had already explained. The second charge was, that the New Zealand Company having in a question between themselves and a body of their settlers

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obtained two opinions from eminent counsel, one adverse and the other in favour of their own view of the subject, had transmitted the latter as if it were the only one to the Colony, and had thus unfairly obtained the assent of the settlers to an arrangement unfavourable to them. Now it would be manifestly absurd were he to enter into the entire history of the complicated transactions to which these opinions related; but he would merely say that in 1849 papers were laid before Parliament, were given to the world, and were sent to the Colonies, in which there was a despatch mentioning the fact that an opinion adverse to the Company had been given by an eminent counsel. It was therefore evident, that the circumstance of an opinion of that sort having been given had been known to all the world for three years, and yet during that time no attempt had been made to unsettle the arrangement made, and now insinuated to have been unduly influenced by the withholding of that opinion. The question raised was, whether the settlement between the New Zealand Company and the Nelson settlers was a fair one, and he believed it was a most advantageous conclusion of affairs for the settlers; and as the existence of the opinion had been publicly known for three years, he said, let the investigation take place by all means; let it be conducted on the most rigorous principles, but in the meantime let the bargain be adhered to, and in justice to the Company let the arrangements suggested by Her Majesty's Government be sanctioned by their Lordships. He would ask what had rendered the land of New Zealand more valuable than the land in New Guinea or other countries uninhabited by civilized men. It was because the Government, Parliament, and the New Zealand Company, had expended large sums in establishing settlers in the former--it was this, and this only, which had given value to the land

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there; and therefore it was not unreasonable to say that the Company, having received no return for its expenditure during many years (and it was probable it would receive nothing for many more), should have a claim on the land of which the value had been thus enhanced by their means. He thought however that a clause should be inserted in the Bill, that any future claims under the Act of 1847 should be defrayed out of the Colonial funds by the Government of New Zealand, and that none should be in future paid by the Imperial Government. These claims should no longer be on the British Treasury and nation."


Copy of a Despatch from Earl Grey to Governor Sir H. G. Smith, Bart., G. C. B.

"Downing-street, January 31, 1850.


"I have now to transmit to you the Report of the Committee of the Board of Trade and Plantations, to which Her Majesty has been pleased to refer the subject of the proposed establishment of a Representative Legislature in the Colony of the Cape of Good Hope.

"This Report so clearly lays down the outlines of those institutions which it is proposed to establish in the Colony, and so fully points out the general reasons which have induced the Committee to adopt its conclusions, both in those instances in which they concur with, and those in which they differ from, the views so ably expressed in the several minutes and papers which I have received from

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